Date: 21 October 2026 (Wednesday) Time: 9:30am–12:45pm Language: English Level: Elementary
Speaker: Stephen Gallagher, Professor of Practice in Law, Associate Dean (Academic & Student Affairs), the Faculty of Law, The Chinese University of Hong Kong
Lawyer CPD / ACCA CPD / SFC CPT / Insurers’ CPD Pts: 3 points Fee: HK$1,800
Highlights:
This three hour CPD course explores the development of the doctrine of illegality in Hong Kong law and its interaction with unjust enrichment, with a particular focus on underground banking (地下錢莊) and related transactions. Underground banks- informal lending and currency exchange practices operating outside the regulated financial system- have long presented challenges for courts seeking to balance public policy concerns with equitable remedies. These challenges are especially pronounced when the transactions occur in Mainland China but are litigated in Hong Kong. The course begins with a historical overview of the doctrine of illegality, tracing its common law origins and examining its evolution through leading Hong Kong and English cases. Participants will consider how courts have traditionally barred recovery in contracts tainted by illegality, while also reviewing modern approaches that emphasize proportionality and fairness.
The discussion then turns to unjust enrichment as a remedial framework. Solicitors will analyze how restitutionary claims have been advanced in underground banking disputes, where parties often seek recovery despite the presence of illegality. Case studies will highlight the tension between deterring unlawful conduct and preventing unjust windfalls.
The centerpiece of the program is the Court of Final Appeal’s landmark judgment in Wong Chi Hung v. Lo Wing Pun & Mai Jieping Trading as Fai Tat RMB Exchange [2026] HKCFA 14. This decision examines the limits of illegality in restitutionary claims and clarifies when unjust enrichment may be available despite unlawful transactions. Importantly, the CFA confirmed that the applicable test for illegality is the “range of factors” approach established by the UK Supreme Court in Patel v. Mirza [2016] UKSC 42.
The seminar concludes by considering the CFA’s guidance on proportionality, the role of public policy, and the protection of vulnerable parties in underground banking arrangements. Outline:
- Understanding Underground Banks (地下錢莊): What they are, how they operate, and why they present legal and regulatory challenges.
- The Development of the Doctrine of Illegality in Hong Kong: Tracing its evolution from common law foundations to modern applications.
- Limits on the Range of Factors Test: Analysis of Arrow ECS Norway AS v M Yang Trading Ltd [2018] HKCFI 975 and its restriction of the test in Hong Kong.
- Application of the Range of Factors Test: Examination of Monat v All person(s) in occupation of part of the remaining portion of Lot No 591 in Mui Wo DD 4 No 16 Ma Po Tsuen, Mui Wo [2023] HKCA 479.
- The Development of the Unjust Enrichment Doctrine: How restitutionary principles have evolved in Hong Kong law.Key Factors for Successful Unjust Enrichment Claims: Identifying the circumstances under which claims are most likely to succeed in Hong Kong.
- Practical Implications of the CFA’s Ruling: Assessing how Wong Chi Hung v Lo Wing Pun & Mai Jieping Trading as Fai Tat RMB Exchange [2026] HKCFA 14 affects legal advice for clients involved in informal financial transactions.
