Court of Appeal clarifies the “Fraud Exception” in summary judgment cases

This judgment is now reported in [2021] 6 HKC 162.

In its judgment of 30 July 2021, in the case of R. Stahl Inc. v AJ Development Ltd [2021] HKCA 1093, the Court of Appeal ruled on the scope of Order 14 rule 2(b) which disallows application for summary judgment where it is an action which includes a claim by the plaintiff based on an allegation of fraud, ie. the “Fraud Exception”.

The Court of Appeal clarified that the Fraud Exception does not apply where there is an allegation of fraud but not on part of the defendant (at §§27-28).  The issue had given rise to conflicting first instance judgments in relation to cyber fraud cases (in which a plaintiff claims to be misled to make mistaken payments out of its pocket), a common type of litigation in Hong Kong in recent years.

Ernest CY Ng acted for the Plaintiff / Respondent, instructed by Tanner De Witt.

The full judgment can be found here.