WONG, CHI HUNG v. LO, WING PUN AND ANOTHER

CACV 399/2023

[2025] HKCA 589

On Appeal From [2023] HKDC 1284

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 399 OF 2023

(ON APPEAL FROM DCCJ NO 1960 OF 2019)

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J U D G M E N T

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Hon G Lam JA (giving the Judgment of the Court):

1.  By our judgment dated 17 April 2025 (“CA Judgment”),[1] we dismissed the 2^nd defendant’s appeal from the judgment given in the District Court against her in favour of the plaintiff. The 2^nd defendant now seeks leave to appeal to the Court of Final Appeal.

2.  The case concerns a money exchange transaction, in which the plaintiff had deposited RMB 1 million into an account in Mainland China designated by the 2^nd defendant but the latter failed to remit the equivalent amount of HKD to the plaintiff in Hong Kong as agreed. The trial judge held that the contract was unenforceable in Hong Kong due to its illegality under the laws of another jurisdiction, namely, the Mainland. But the judge upheld the plaintiff’s claim in restitution and ordered the 2^nd defendant to pay the plaintiff RMB 1 million or its HKD equivalent at the time of payment.  The 2^nd defendant’s appeal was dismissed by this court.

3.  The 2^nd defendant now seeks leave to appeal to the Court of Final Appeal, based on the following questions set out in the Amended Notice of Motion:

“ 1. Whether a claim for restitution in unjust enrichment is an independent obligation imposed by its proper governing law separate and distinct from the underlying contract between the parties (where a contract exists), and more generally whether Hong Kong law recognizes / adopts the unjust factors approach or the absence of basis approach in the law of restitution.

2. Whether there should be a unified and consistent test for illegality as a defence to a claim in contract and to a claim in restitution, or under what circumstances should the test be different, and the principles and policy considerations underpinning such difference.

3. Whether the ‘range of factors’ approach under Patel v Mirza [2016] UKSC 42 should be recognised in Hong Kong, and if so, whether there should be a unified and consistent test for the defence of illegality both in the context of domestic illegality and foreign illegality in claims for restitution in unjust enrichment in general.

   4.  What is the test (and the principles)  for foreign illegality as a defence to a claim for restitution in unjust enrichment, including the limits and any exceptions to the defence.”

4.  The plaintiff opposes the application but proposes that if leave to appeal is to be given, the proper question should be as follows:

“ When (i)  a contract between the plaintiff and the defendant governed by Hong Kong law is rendered unenforceable as a matter of Hong Kong public policy because of the contract’s illegality under foreign law but (ii)  the defendant has been conferred an unjust benefit by the plaintiff at the latter’s expense due to a total failure of consideration, whether and in what circumstances will an otherwise established claim of the plaintiff in unjust enrichment brought before the Hong Kong Court to recover the benefit conferred be bound or defeated, taking into account the impact of the foreign illegality as a defense and the consideration of international comity that such foreign illegality entails (which, on the fact of the present case, includes inter alia the aspect that restitutionary relief for a return of the benefits conferred is permissible under Article 157 of the Civil Code of the People’s Republic of China).”

5.  In our view, the contest in this case raises an important and apparently novel point of principle which merits being considered by the Court of Final Appeal.  We note that the judge below gave leave for the appeal to this Court and we do not think the 2^nd defendant should be shut out, based on lack of arguability, from taking the matter to the Court of Final Appeal. 

6.  We agree, however, that the first to third questions proposed by the 2^nd defendant are not appropriate questions but merely aspects of arguments that the 2^nd defendant may wish to raise.  The fourth question is too general. Instead, we consider that leave to appeal should be given in respect of the following question (which is modified from the question proposed on behalf of the plaintiff):

“ Where a contract between the plaintiff and the defendant governed by Hong Kong law is held by the Hong Kong court to be unenforceable because of the contract’s illegality under foreign law, but the defendant has received a benefit under the contract at the plaintiff’s expense, under what principles and in what circumstances will the plaintiff’s claim brought in Hong Kong for restitution in respect of that enrichment be defeated by the defence of foreign illegality?”

7.  There will be an order nisi that costs of the application be in the cause of the appeal, except that the 2^nd defendant is to bear the costs of preparing her notice of motion filed on 14 May 2025 in any event since it failed to set out the questions for the appeal.