It is often said that Hong Kong is unique both as one of the few bilingual common law jurisdictions in the world, and as the only common law jurisdiction in China. The common law system, which originated in England in the 12th Century, differs from the civil law system adopted in the Mainland (and many other jurisdictions worldwide) in one important aspect. The common law system is based upon the system of precedent (or stare decisis) developed through case law (judge-made law), rather than a system of codified statutes enacted by the government.
The appeals process is an important component of the common law system. Decisions of appeal courts always take precedence over decisions of judges in the lower courts, and must be taken into account by the first instance courts and applied as “binding” precedent.
In Hong Kong, pre handover, the Privy Council in England functioned as Hong Kong’s final appellate court. Post 1997, all final appeals in Hong Kong are decided by the Court of Final Appeal, which replaced the Privy Council as Hong Kong’s apex court upon the resumption of sovereignty. So where does this leave decisions of the English appellate courts when referred to by parties in the Hong Kong courts today?
The answer to this question was confirmed in the decision handed down recently by the Court of Final Appeal, on 15 April 2026, in Wong Chi Hung v Lo Wing Pun and Mai Jieping. The appeal in question determined the proper approach to be adopted by the Courts in Hong Kong when dealing with a defence of foreign illegality in an unjust enrichment claim. The facts involved an unlicensed money exchange. The plaintiff had agreed to deposit renminbi into an account designated by the 2nd defendant in the Mainland, in return for the 2nd defendant depositing an equivalent amount in Hong Kong dollars into the plaintiff’s bank account in Hong Kong. The plaintiff sued the 2nd defendant for unjust enrichment when he failed to honour his side of the bargain. At first instance, the 2nd defendant successfully relied on a foreign illegality defence (arguing that he should not be required to make the payment, as it was illegal under Mainland law).
In upholding the decision of the Court of Appeal overturning the decision of the lower court at first instance, the Court of Final Appeal also took the opportunity to address the proper approach to the use of English case law in the Hong Kong courts. The position is this. First, only decisions of the Privy Council given before 1 July 1997 on appeal from Hong Kong are binding on Hong Kong courts. Other pre handover decisions of the Privy Council and the House of Lords are not binding on the Hong Kong courts. They only have persuasive value. The same is true of decisions from other common law jurisdictions such as Australia, New Zealand, Canada and Singapore (whether made pre, or post, handover). After 1997, under Articles 8 and 18(1) of the Basic Law, no overseas decisions are binding on the courts of Hong Kong.
This decision confirms that, although decisions from other common law jurisdictions will continue to have persuasive value (and will continue to play an important role in the development of Hong Kong case law), Hong Kong’s common law will continue to develop its own unique and independent body of case law, guided by the binding precedents developed by the eminent judges sitting on the Court of Appeal and the Court of Final Appeal.
By Sebastian Hughes
Prince’s Chambers
This article was originally published by TVB and can be found at this link.
