In Ho Kong, the sole executor of the estate of Fong Mi Yee deceased v Director of Lands and Home Purchase Allowance Appeals Committee [2026] HKCFA 35, the Court of Final Appeal unanimously dismissed the appeal by the Director of Lands (“Director”) and held that the holder of an absolute possessory title in respect of a domestic flat resumed under the Lands Resumption Ordinance (Cap. 124) qualifies as an “owner” eligible for the ex-gratia Home Purchase Allowance (“HPA”) under the Government’s policy.
The decision concerns the interpretation of the HPA policy in a pamphlet published by the Lands Department titled “Land Resumption and Compensation in the Urban Area – Guidelines for Owners, Occupiers and Surveyors” (“Guidelines”). HPA is a top-up payment, in addition to statutory compensation, intended to enable qualifying owner-occupiers whose domestic properties are resumed to buy a similar replacement flat in the same locality, so that they are not forced out of home ownership or away from their original neighbourhood.
The property in question was a flat located in Kowloon (the “Flat”). Madam Fong Mi Yee had occupied the Flat for many years and commenced District Court proceedings claiming possessory title by adverse possession. After her death, the proceedings were carried on by her son-in-law, Mr. Ho Kong, as sole executor of her estate. The District Court declared that Madam Fong had acquired an absolute possessory title to the Flat, and that judgment was registered in the Land Registry.
The Urban Renewal Authority’s freezing survey recorded that the Flat was occupied by Mr. Ho (the “Applicant”), his wife and their two sons. After resumption, the Director offered statutory compensation of HK$5,434,000 but refused to pay HPA, relying on Tang Lai v Director of Lands [2021] 3 HKLRD 44 where the Court of First Instance had held that a person who acquired possessory title by adverse possession was not an “owner-occupier” for HPA purposes.
The Applicant commenced proceedings for judicial review and succeeded before the Court of First Instance (Coleman J, as he then was) and the Court of Appeal. The certified question before the Court of Final Appeal was whether the holder of an absolute possessory title (“possessory owner”) in respect of a domestic flat resumed under the LRO qualifies as an “owner” eligible for HPA under the Guidelines.
The Court began with the proper approach to interpreting administrative policies. The meaning and effect of a policy is a question of law, but policy statements are commonly written in lay language and must be read in context, purposively and with common sense. A technical approach of the kind used for statutes, contracts or wills is inappropriate, and “a broader and wholly untechnical approach should prevail”.
The Court also reviewed the nature of possessory title. A person who has been in factual possession for the relevant limitation period, with the necessary intention to possess, acquires an absolute possessory title. Such title is good against the whole world, including the former registered owner whose title is extinguished by limitation, and carries rights of exclusive possession, sale, transfer, letting, devise and intestate devolution. It is, however, not identical to registered paper title, and has been described as “good holding title” instead of “good title”.
The Director’s case was that the Guidelines, read as a whole, confined “owner” to registered or legal owners with paper title. The Director relied on references to “former owner”, “registered owners”, “legal owners” and the requirement to prove “good title”, and argued that paying HPA to possessory title holders would give them a disproportionate benefit because their statutory compensation would be lower and their HPA top-up correspondingly higher.
The Court rejected that construction. The Guidelines themselves stated that they were for general information only and had no legal effect. It was therefore wrong to subject them to fine textual distinctions. The critical point was the policy’s purpose: HPA was intended to supplement statutory compensation so that affected owner-occupiers could buy a replacement home locally.
On that approach, there was no reason to exclude someone who had already been paid statutory compensation as the holder of a possessory title. The Court approved Coleman J’s view that, once the overall compensation scheme and HPA’s purpose are understood, most people would regard a possessory title holder as eligible for HPA if he had occupied the resumed flat as his residence and was driven out of home ownership by resumption.
The Director’s reliance on the apparent requirement in the Guidelines to prove good title also failed. A request for title deeds was, in context, a request for documentary evidence of the title actually held. In a possessory-title case, that evidence could include the judgment declaring possessory title and registered against the property.
Nor was the larger potential HPA paid to possessory owners (due to the lower open market value of a possessory title) an anomaly. The HPA is not designed to reward the quality of the claimant’s title or to ensure that every owner receives an amount proportionate to the value of the legal interest extinguished. Its purpose is relocation and preservation of home ownership. Indeed, HPA was calculated based on “a notional replacement flat of 7 years old…situated at the middle floor of a notional building with average orientation”, such that some owners would necessarily receive more or less HPA based on the characteristics of their resumed properties versus those of the notional replacement flat.
The Court expressly disagreed with Tang Lai, holding that it adopted too rigid and technical an approach to the Guidelines and gave insufficient weight to the policy’s purpose.
The certified question was therefore answered in the affirmative: the holder of an absolute possessory title in respect of a domestic flat resumed under the LRO does qualify as an “owner” eligible for HPA under the policy. The appeal was unanimously dismissed, with an order nisi that the Director pay the Applicant’s costs of the appeal.
The Court also noted an unargued point concerning occupation by an estate. Madam Fong had died before resumption, and an estate itself cannot readily be described as occupying a flat or needing a new home. The Court suggested, obiter, that an HPA claim might nevertheless be reframed where the flat is occupied by the deceased owner’s immediate family members who are entitled under the will or on intestacy to continue occupying it as their home. On the facts, the point was not open to the Director because it had not been raised below or before the Court.
The decision is important for public law and land resumption practice because it confirms that eligibility under compensation policies depends on the purpose and context of the policy, not on rigid labels of title. It will also no doubt be important for possessory owners whose properties are resumed or may be resumed in the future.
Mr. Adrian Lai and Mr. Han Sheng Lim, instructed by Chak & Associates LLP, appeared for the Applicant.
Read the judgement here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=185950&currpage=T
