Director of Lands v. Ho Kong, The Sole Executor of the Estate of Fong Mi Yee Deceased
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FACV No. 6of 2026 [2026] HKCFA 35 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 6 OF 2026 (CIVIL) (ON APPEAL FROM CACV NO. 15 OF 2024) ___________________________
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___________________________ JUDGMENT ___________________________ Chief Justice Cheung: 1.I agree with the judgment of Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 2.I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: A. Introduction 3.This appeal concerns the interpretation of a government policy. The policy in question relates to the payment of an ex gratia allowance, called the Home Purchase Allowance (“HPA”), upon the resumption of a domestic property. In the present case, the HPA was claimed by the respondent in this appeal upon the resumption of the flat in To Kwa Wan, Kowloon, in which he and his family were living. The property was resumed under the Lands Resumption Ordinance (Cap.124) (“LRO”) by the Government acting through the Director of Lands (“the Director”). The courts below held that the respondent was entitled to the HPA and the Director, contesting this outcome, appeals. A.1 Land resumption and the Policy 4.Land in the urban areas of the Hong Kong Special Administrative Region may be resumed by the Government for various public projects including road schemes, public housing, urban renewal, drainage improvements or other public works. The proposed resumption of land is notified by publication of a Government Notice in the Gazette and a “freezing survey” is conducted to determine the identities of the persons who may be affected by the resumption. Upon resumption of the property in question after the period of time specified in the notice, ownership of the property reverts to the Government and all legal rights and interests formerly held in the property are thereafter extinguished. 5.There are a number of ordinances under which land may be resumed for such public projects, namely: the LRO, the Roads (Works, Use and Compensation) Ordinance (Cap.370), the Railways Ordinance (Cap.519), the Land Acquisition (Possessory Title) Ordinance (Cap.130), the Land Drainage Ordinance (Cap.446), the Urban Renewal Authority Ordinance (Cap.563) and the Mass Transit Railway (Land Resumption and Related Provisions) Ordinance (Cap.276). 6.When private land is resumed by the Government under one of the various ordinances referred to, that ordinance will provide for the payment of compensation for the legal interest extinguished.[1] This is referred to as statutory compensation and is based on the open market value of the resumed property.[2] 7.Recognising that the open market value of an aged property being resumed for redevelopment may be significantly less than the cost of an equivalent replacement property in the vicinity of the resumed property, the Government has a policy to pay a supplemental allowance, by way of ex gratia “top up” in addition to the statutory compensation for its resumption, in order to assist qualified owners of properties to purchase a replacement property nearby so that they are not forced out of home ownership or to relocate a long distance from their original homes. This is the HPA (“the Policy”) which is set out in a Lands Department (“LandsD”) publication entitled “Land Resumption and Compensation in the Urban Area – Guidelines for Owners, Occupiers and Surveyors” (“Guidelines”). The applicable version of the Guidelines is the revised version dated July 2013. A.2 Background facts 8.The property in question in this appeal is a flat, the address of which is the First Floor, 118 Wing Kwong Street, Kowloon (“the flat”). The flat was acquired by a Madam Lao Po in 1960 but she had died by 1972, since, from that year, the registered owner of the flat was a Mr Lao Kim, in his capacity as administrator of the late Lao Po deceased. For many years, however, the flat was in the possession of Madam Fong Mi Yee and, after many years of occupation of the flat, she commenced proceedings in the District Court in March 2016 against Lao Kim claiming possessory title to the flat on the basis of adverse possession. In the course of those proceedings, Madam Fong died (on 16 April 2016) and the proceedings were ordered to be carried on by the respondent, namely her son-in-law, Mr Ho Kong, in his capacity as her sole executor. 9.On 22 June 2018, the Urban Renewal Authority (“URA”) gazetted the commencement of a redevelopment project covering the building in which the flat was situated. In a freezing survey carried out by the URA on the same date, it was recorded that the entire flat was occupied by a household of four, comprising the respondent, his wife and their two sons. It was also recorded that the respondent had claimed that he had brought legal proceedings to claim the flat on the basis of adverse possession. 10.On 4 November 2020, in default of Lao Kim’s appearance and after trial, the District Court gave judgment in favour of the respondent in the adverse possession proceedings. It was declared that Lao Kim’s title, interest and/or rights in and/or over the flat had been extinguished by virtue of section 17 of the Limitation Ordinance (Cap.347) and that Madam Fong had been in adverse possession of the flat for a period of no less than 12 years prior to the commencement of the action and had thereby acquired and was entitled to possessory title, interest and/or right in and/or over the flat. By that judgment, it was therefore declared that Madam Fong had acquired an absolute possessory title to the flat by 1 March 2016 (the date on which she had commenced proceedings) and to which her estate had, after her death, succeeded. The District Court judgment was registered in the Land Registry in respect of the flat on 2 December 2020. 11.On 26 February 2021, a resumption notice was issued stating that the flat would revert to the Government under the LRO on the expiration of three months. Notwithstanding this, in accordance with its usual practice, the Government made an offer to the respondent to purchase the flat prior to resumption. On 30 March 2021, the URA made an offer of HK$6,836,000 as the purchase price and HK$5,088,000 as HPA and another sum as an allowance for incidental costs. Due to a lack of time to deal with formalities, this offer lapsed on 13 April 2021. 12.The flat duly reverted to the Government after midnight on 26 May 2021 and the LandsD assumed responsibility for negotiating with the respondent in respect of compensation for the resumption. This commenced with a letter from the LandsD to the respondent dated 16 June 2021 requiring him to submit his claim for compensation in respect of the resumption of the flat. 13.On 10 January 2022, the Director offered HK$5,434,000 as statutory compensation under the LRO for the flat but indicated that the respondent was not entitled to any HPA, relying on the Court of First Instance judgment in Tang Lai v Director of Lands (“Tang Lai”).[3] In that case, Chow J (as he then was) held that a person who acquired possessory title to land through adverse possession is not an “owner-occupier” for the purposes of the HPA and does not qualify for that allowance. 14.The respondent accepted the statutory compensation without prejudice to his right to challenge the Director’s refusal to pay HPA in respect of the flat. The respondent then appealed to the Home Purchase Allowance Appeals Committee (“the Appeals Committee”) contending that HPA should be granted. The Appeals Committee is a non-statutory body comprised of members appointed by the Secretary for Development, which hears appeals from the Director’s decisions in respect of HPA. After a hearing on 15 June 2022, the Appeals Committee issued a decision dated 26 July 2022 dismissing the appeal, essentially on the basis that the Court had already decided in Tang Lai that a possessory title holder was not entitled to HPA. A.3 The decisions below 15.The respondent challenged the decision of the Appeals Committee in judicial review proceedings which were heard by Coleman J (as he then was). By his judgment dated 18 December 2023,[4] his Lordship held that the Appeals Committee had erred in law in its construction of the Policy regarding eligibility for the HPA and agreed with the respondent’s submission that the Appeals Committee had wrongly concluded that a person who has acquired a possessory title by way of adverse possession is not an “owner” or “owner-occupier” under the Policy.[5] Coleman J declined to follow the decision in Tang Lai.[6] 16.The Court of Appeal (Au, G Lam and Anthony Chan JJA) agreed with Coleman J and, by a judgment written for the Court by G Lam JA dated 15 December 2025, dismissed the Director’s appeal.[7] 17.The Court of Appeal granted the Director leave to appeal to this Court on the following question of law of great general and public importance,[8] namely:
B. Preliminary matters 18.Since they are relevant to the discussion of the question posed in this appeal, it will be convenient to deal briefly with two preliminary matters, which are essentially common ground between the parties, namely the principles for interpreting Government policy and the property interests in law of a possessory title holder. B.1 Interpreting Government policy 19.The parties were in agreement as to the principles governing the construction of administrative policies as set out in the judgments below. It is convenient to re-state them briefly:
20.Whilst at first blush these principles are suggestive of the same approach that is taken in the interpretation of statutes or contractual documents, it is important to bear in mind that the language in which an administrative policy is expressed normally adopts less formal language and that in interpreting that language “a broader and wholly untechnical approach should prevail”.[11] 21.In this respect both parties and the courts below referred to and relied on the judgment of Cheung CJHC (as the Chief Justice then was) in Hong Kong Television Network Ltd v Chief Executive in Council.[12] His Lordship there emphasised the need to give effect to statements of administrative policy as “administrative announcements setting out in layman’s language and in broad terms the policies which are to be followed”[13] and the following passage in his judgment is of particular relevance to the correct approach to be adopted when interpreting statements of Government policy:
22.As mentioned above, there was no dispute between the parties that these are the correct principles to be applied in interpreting the Policy. Indeed, consistently with those principles it should be noted that the Guidelines contain, on their title page, the following caveat:
That notwithstanding, the Guidelines were nevertheless subjected to close textual analysis in the parties’ submissions to the Court and so it will be necessary to look closer at the language of the Policy as there set out. For that reason, as in the CA Judgment, the relevant parts of the Guidelines are quoted in the Appendix to this judgment. B.2 The property interests of a possessory title holder 23.Another preliminary matter to address briefly is the nature and scope of the rights of a possessory title holder. 24.Where, for the relevant period set out in the Limitation Ordinance (Cap.347),[15] a person has been in factual possession of a property with the requisite possessory intention, he acquires an absolute possessory title to the property. 25.The absolute possessory title so acquired is good against the whole world including the former registered owner whose title is, by limitation, extinguished by operation of law.[16] A judgment declaring that the owner by adverse possession has acquired an absolute possessory title and that the paper owner’s title is extinguished can be, and often is, registered in the Land Registry.[17] With such absolute possessory title, the owner by adverse possession is entitled to exclusive possession of the property and can sell or transfer his title and give vacant possession to a purchaser, [18] as well as let it for rent and give exclusive possession to his tenant.[19] The holder of a possessory title also has an estate that can be conveyed by assignment during his lifetime and devised by will or devolve by intestacy after his death.[20] 26.On the other hand, as was noted by Le Pichon J (as she then was) in Chan Chu Hang v Man Yun Sau (supra), absolute possessory title derived by adverse possession is not the same as good title but has been described as “a good holding title”.[21] The registered owner’s title is extinguished as against the adverse possessor but, as regards his landlord (in this case the Government), it remains good title such that he would, in theory at least,[22] be able to surrender the lease to the Government and, if that surrender were accepted, thereby extinguish the title of the adverse possessor.[23] 27.In addition, there is no statutory conveyance of the property by the registered owner to the adverse possessor and it has not yet been settled as to whether the latter is entitled to be registered as owner in substitution for the registered owner.[24] Consequently, if the adverse possessor were to abandon the property, title would remain with the registered owner.[25] 28.Whilst the nature and scope of rights of a possessory title holder as summarised above were essentially not in dispute, the parties’ emphasis on aspects of them differed as regards the way they invited the Court to interpret the Policy. C. The Director’s case 29.The Director’s case is that the question of law posed for the Court (at [17] above) should be answered in the negative. Broadly, the arguments in support of that conclusion were a repetition of the submissions advanced on behalf of the Director by Mr Jin Pao SC[26] in the Court of Appeal. 30.First, it was contended that the language of the Guidelines, read holistically, offers a strong textual indication that possessory title holders are excluded from the intended scope of “owners” for the purposes of HPA.[27] In this regard, it was contended, the drafter of the Guidelines clearly distinguished between “former owner” and “persons having an interest in the land” (see para.4). The connection between the concepts of registered and legal ownership of land (as distinct from a mere possessory title) was recognised in the reference to “registered owners” in para.5. In particular, in para.6.1.1(a) the entitlement of “legal owners” to compensation for the resumption of property is tied to the concept of “registered” ownership by the reference back to para.5 where the assessment of open market value is restricted to “registered owners”. This was reinforced by the obligation, in para.12, on a claimant for the HPA to “prove that he has a good title to the land being resumed”. This, it was said, must be a reference to the production of title deeds and therefore could not embrace a possessory title holder who would have no such title deeds. 31.Secondly, it was contended that there would be anomalies if possessory title holders were treated as owners for the purposes of the payment of HPA under the Policy and that this weighed against construing the Policy in the way the courts below did.[28] Although the suggested anomalies were articulated in various ways, the argument was essentially that the grant of HPA to possessory title holders would create anomalies as it would confer on them a disproportionate benefit rather than a commensurate replacement for their possessory titles, resulting in their receiving more HPA than full paper owners despite only holding less valuable titles. 32.Thirdly, it was argued that the Court of Appeal’s approach was inconsistent with the broad, untechnical and purposive approach that should be adopted in construing the Policy. Instead, the conclusion in Tang Lai was the more ordinary and common sense reading of the word “owner” that was correct and should be adopted in relation to the Policy.[29] 33.Finally, in the appeal to this Court, it was contended on behalf of the Director that the Court of Appeal had further erred in suggesting that the Director proceeded on the basis that the respondent was offered statutory compensation based on the open market value of the flat when in fact the offer was expressly based on the open market value of only his possessory title in the resumed flat.[30] In offering statutory compensation to the respondent, the Director had not treated the respondent as if he were its registered owner and, insofar as the Court of Appeal thought the Director’s position before it was inconsistent, this was based on a false premise. 34.For these reasons, it was contended by Mr Pao that the question posed in the appeal should be answered in the negative and the appeal allowed. The HPA was never, it was submitted, intended to be paid to anyone holding less than the full registered legal title of a property and the respondent, as merely the holder of a possessory title to the flat (albeit absolute), is ineligible for the HPA. D. Construing the Guidelines 35.Despite the skill with which they were advanced by Mr Pao, I have come to the conclusion that the Director’s contentions as to the construction of the Policy must be rejected. Instead, I consider that the Court of Appeal’s construction of the Policy, agreeing with that of Coleman J at first instance, is to be preferred. I do so for the following reasons. 36.The Director’s arguments focusing on the language of the Guidelines and seeking to draw fine distinctions between references to “owners”, “former owner”, “registered owners” and “legal owners” are at odds with the express caveat (quoted above at [22]) that the document setting out the Guidelines is for general information only and not to be construed as if it were a legal document. Similarly, the Director’s reliance on the distinctions in the language of the various paragraphs in the Guidelines referred to is an approach which offends against the principle that, in interpreting statements of administrative policies, a broader and untechnical approach should prevail. 37.In the CA Judgment at [52] to [54], the Court of Appeal carefully analysed the seven separate ordinances under which land might be resumed in Hong Kong referred to in the Guidelines and explained that, instead of suitably adapting the definitions of affected owners under those ordinances when construing the meaning of “owner” under the Guidelines, an “autonomous meaning that best gives effect to the purpose of the policy itself” should be sought. The Director was, for the purposes of this appeal, “prepared to accept”[31] the need to apply an autonomous meaning of owner in the context of the Policy and this concession, in my view correct, is a critical factor in addressing the question posed in this appeal. 38.As in most cases when a court is interpreting language, the purpose for which it has been employed will usually be the most important factor in the interpretation exercise and this case is no exception. Here, the purpose of the Policy is reflected in a paper submitted by the Government to the Legislative Council dated 19 July 1996 (“the 1996 LegCo Paper”) when seeking approval for revisions to the eligibility for the payment of HPA. In particular, para.3 of that paper stated:
39.In 1996, the Policy was refined to limit the payment of the HPA to “owner-occupiers” for the reason explained in para.9 of the 1996 LegCo Paper, which read:
40.That the focus of the purpose of the Policy was to supplement the payment of compensation to an affected owner-occupier to whom statutory compensation was payable under the relevant ordinances governing land resumption was expressly recognised in para.11 of the 1996 LegCo Paper, which read:
41.Thus, the purpose of paying the HPA to an owner-occupier is to assist him to purchase a replacement property in the vicinity of his original property. He is to receive this “top up” as an ex gratia payment in addition to the statutory compensation payable to him under the relevant legislation. There is no suggestion of the fact that, if he has been paid statutory compensation as a holder of a possessory title rather than as the holder of the registered title, he should not be eligible for the HPA. The position is to the contrary (see esp. para.11(h)). 42.Bearing in mind the purpose of the Policy and the need to adopt an untechnical approach to the construction of its language, there is merit, in my view, in the observations of Coleman J in the CFI Judgment at [109], namely:
43.Applying such a purposive, untechnical approach provides a clear and logical answer to the question posed in the appeal. On the other hand, the Director’s highly technical parsing of the language in which the Guidelines set out what is meant to be “for general information only” leads to a stark dividing line excluding certain occupiers of resumed properties, notwithstanding that they have a legally recognised right to exclude any and all other persons from the property, unable to obtain the “top up” compensation acknowledged to be necessary for them not to be driven out of home ownership in the neighbourhood in which they live, and contrary to the very purpose for which that compensation is paid. 44.The reference to the need to prove good title (para.12 of the Guidelines) does not add anything to the Director’s case. I agree with the Court of Appeal that the request for title deeds is simply a request for documentary evidence of title, whatever the title may be,[32] and the requirement to submit “all the title deeds and documents listed in the schedule attached” is, in context, a request for so much of such documentary evidence as the claimant has. In a case such as the present, it is reasonable to think this could certainly include a copy of the relevant court judgment declaring the possessory title registered against the property. 45.Focusing on the purpose of the Policy also provides an answer to the Director’s submissions that the Court of Appeal’s construction would lead to anomalous results. 46.It is true that, because the open market value of a possessory title to a property is lower than that of its registered title, the amount of statutory compensation payable to the owner of a possessory title will be less than that paid to the owner of the registered title. In turn, this will mean that the amount of “top up” ex gratia payment by way of HPA, as calculated under the Policy, will be more for a possessory title holder than for a registered title holder. If the purpose of the Policy were to ensure that every property owner’s outcome under the Policy was a reflection of the value of their underlying legal interest in the resumed property, one might see some logic in the Director’s assertion that the payment of HPA to the holder of a possessory title would result in an anomalous bonus to that owner. 47.However, as already seen, that is not the purpose of the Policy, which is instead designed to enable displaced property owners to relocate locally. In order to be able to do so, some may be paid more than others. That is not an anomaly, as such, but merely the consequence of applying the Policy for the purpose for which it was designed. 48.In any event, the Policy does not operate on the basis that every owner is to be paid an equal amount or an amount exactly equivalent to the value of their property being resumed. The description of how the HPA is assessed is set out in para.6.1.2(c) of the Guidelines. As that shows, the HPA is assessed as a unit rate “of a notional replacement flat of 7 years old … situated at the middle floor of a notional building with average orientation”. Some owners of resumed properties will necessarily receive the HPA based on an enhanced notional property to that being resumed, whilst others will receive it based on a lesser notional property. Again, that is not an anomaly in the Policy but rather a consequence of averaging out the way in which the ex gratia “top up” is calculated. 49.That the Policy is not rewarding the quality or type of ownership, treating possessory title as somehow lesser than registered title, is also an answer to the suggestion that it is anomalous that a squatter who has acquired possessory title to a flat will receive an unwarranted windfall if he is treated as eligible for the HPA. Neither the statutory compensation scheme nor the Policy inquires as to how an owner has come by his title to a resumed property. He might have bought it with his own money but equally he could have been gifted it or inherited it or otherwise come into ownership of it without having had to pay for it himself. However he acquired it, the owner will be dispossessed by resumption and, if he is an occupier, will have an equal need for the HPA if he is to be compensated so that he can purchase a replacement property in the vicinity of that being resumed. For this reason, correctly in my view, the Court of Appeal regarded the Director’s construction of the Policy as producing a real anomaly in that the possessory owner might be forced out of home ownership, contrary to the purpose of the Policy, and the property treated as “ownerless” so far as any ex gratia allowance is concerned.[33] 50.Moreover, in terms of anomalous results, to exclude a possessory title holder from the payment of HPA on the basis that he cannot produce title deeds (under para.12 of the Guidelines) makes little sense, when a possessory title holder is acknowledged to be entitled to statutory compensation on resumption. If the means by which he establishes that possessory title is sufficient for the purposes of statutory compensation, there is no reason to regard that evidence as insufficient for the purposes of the ex gratia “top up”. 51.The discussion above concerning the language of the Guidelines and the suggested anomalous results if possessory title holders were to be regarded as eligible for HPA under the Policy provides the answer to the Director’s reliance on Tang Lai. With respect to Chow J, I disagree that his construction provides the ordinary and common sense reading of the word “owner” in the Guidelines as contended by Mr Pao (by reference to Tang Lai at [42] and [43]).[34] 52.On the contrary, in my judgment, the analysis of Chow J errs in adopting too rigid and technical an approach to the language of the Guidelines and to the niceties of the distinctions between paper title and possessory title, giving too little weight to the purpose of the Policy. I therefore agree with both Coleman J[35] and the Court of Appeal[36] that Tang Lai is wrongly decided and should not be followed. 53.Finally, the Director’s contention that the Court of Appeal erred in thinking that the respondent was offered statutory compensation as if he were the registered owner can be disposed of briefly. 54.This argument does not assist the Director’s case. How the Director proceeded in calculating the statutory compensation payable to the respondent is not determinative of the proper construction of the Guidelines which is a matter of law for the court. 55.In any event, I do not think the Court of Appeal proceeded on the erroneous basis suggested by Mr Pao. All that the Court of Appeal was saying at CA Judgment [62(4)] is that the respondent was paid statutory compensation for the resumption of his possessory title in the property in question and that it is wrong to suggest that this open market value of his possessory title cannot be used as the base amount against which to assess the amount of HPA payable as “top up” compensation. 56.Moreover, it is clear from a contextual reading of CA Judgment [57] and [64] that, in its reference to the LandsD’s letter dated 16 June 2021, the Court of Appeal was drawing attention to the distinction in the Guidelines between owners and tenants, rather than suggesting that the payment of statutory compensation to the respondent was calculated as if he owned the paper title. E. Answering the question in the appeal 57.For the reasons set out above, I would answer the question posed in this appeal 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 payment of HPA under the Policy. F. A conundrum arising from a point not raised below 58.What is set out above is sufficient to dispose of this particular appeal. The respondent is properly to be regarded as an “owner” under the Policy. It was, however, never an issue whether the respondent was an “occupier” for the purposes of HPA. This gives rise to a potential question of some interest, which arises as follows. F.1 Occupation by an estate and compensation on resumption 59.As recited in the factual background above, Madam Fong, deceased, appears to have occupied the flat for many years. She died, however, before her possessory title was established and before the resumption of the flat by the Government. After her death, Madam Fong’s claims were taken over by the respondent, her son-in-law acting in his capacity as sole executor of her estate. It was in that capacity in which he obtained judgment in the District Court proceedings in which it was declared that Madam Fong had been in adverse possession of the flat for the requisite period so that “she (now her Estate) has thereby acquired and is entitled to possessory title, interest and/or right in and/or over the Property”. 60.It was also in that capacity as Madam Fong’s sole executor “who had acquired the possessory title to an interest in the [flat]” that the LandsD wrote to the respondent on 16 June 2021, informing him of the resumption of the flat and inviting him to submit a claim for statutory compensation under the LRO. This was the basis on which the respondent was eventually paid statutory compensation for the resumption. 61.The payment of statutory compensation to the executor of Madam Fong’s estate for the resumption of the flat was properly made. LRO s.2 defines “former owner” as meaning the person “who was the owner of the land immediately before the land reverted to the Government under section 5” and “owner” as meaning “the person registered or entitled to be registered in the Land Registry in respect of any land sought to be resumed, or, if such person is … dead, his … representative in Hong Kong”. The respondent, as sole executor of Madam Fong, came within the definition of “owner” as the representative of her estate. He would also qualify as “former owner”, since he was “the owner of the land immediately before the land reverted to the Government under section 5”. 62.Whilst Madam Fong’s estate was therefore entitled to statutory compensation, the question arises as to whether her estate was entitled to HPA. 63.Under the Policy, the HPA is principally payable to enable an owner-occupier whose property, occupied as his home, has been resumed to purchase a replacement home. Whilst an estate can be seen to fit readily into the legal definitions under the LRO entitling it to claim statutory compensation upon the resumption of a property of which it owned the possessory title, it is difficult to see how, after the death of a person occupying the flat, their estate could be said to have been occupying the flat when it was resumed. 64.On this basis, it could be argued that a claim for HPA on behalf of an estate cannot be established because the estate is not in occupation of the property when resumed. The estate may have been an owner or former owner for the purposes of statutory compensation under the LRO but it cannot be said to be an occupier or in need of a new home at the time of the resumption so cannot be eligible for the payment of HPA. F.2 A possible re-framing of the claim for HPA 65.Despite the conundrum identified above, there is a viable route by which a claim for HPA could be re-framed on behalf of an estate in a case like the present. That route would be based on para.6.1.2(a) of the Guidelines which states that the HPA “will be paid to an owner who is occupying the entire flat or if he can prove that the entire flat is occupied by his immediate family members, including children, parents and dependent brothers and sisters, grandparents, grandchildren, step-parents, spouse’s parents and spouse’s step-parents”. Reference may also be made, in this context, to para.6.1.2(d)(ii) of the Guidelines which makes HPA “payable for a maximum of three flats per owner per resumption exercise”. 66.This shows that the payment of HPA to protect home ownership extends beyond cases of an owner in immediate occupation of a resumed property. In fact, the Policy is extended to cater for an owner who is not in occupation but has provided homes for the occupation of his immediate family in up to three flats affected by a particular resumption exercise. In such cases, providing the entire resumed flat is occupied by immediate family members (as defined in para.6.1.2(a)), the owner may claim HPA to enable him to acquire a replacement home for those family members after the resumption. 67.The death of the owner of a property introduces complications. The basis on which immediate family members are occupying a property after the death of its owner may affect the estate’s right to claim the HPA. The extended payment of HPA in respect of properties occupied by immediate family members is premised on those persons being intended or entitled to occupy the property as their home, if not indefinitely, then at least without evident legal impediment. Whether this is the case after the death of a particular owner may depend on the terms of the deceased’s will or the legal consequences of an intestacy. 68.Put shortly, if the immediate family members are entitled under the terms of a will or on intestacy to continue in occupation of the property as their home, then the HPA should be payable. But if, by the terms of that will or on intestacy, their occupation was not intended to continue, for example because the property is bequeathed to someone else or is to be sold and the proceeds distributed, there may be no basis for the continued occupation of the property as their home. In such a case, and possibly other scenarios not addressed here, it may not be possible to establish a basis for claiming the payment of HPA. F.3 A point not argued 69.Since the question of whether the immediate family members of Madam Fong were in occupation of the flat was never raised as an issue in the present case, it is not possible to state more than a tentative view on whether the alternative basis for the payment of HPA might be established. What follows here is necessarily expressed obiter. 70.As noted in the background facts summarised above, the freezing survey conducted on 22 June 2018 recorded that the entire flat was occupied by the household of four, comprising the respondent, his wife and their two sons and that the respondent claimed he had brought legal proceedings to claim the flat on the basis of adverse possession. As also noted above, the respondent is the son-in-law of Madam Fong. It follows that his wife is the daughter of Madam Fong and their two sons are Madam Fong’s grandsons. 71.It would appear therefore in the present case that the resumed flat was occupied not only by Madam Fong, until her death, but also by her daughter and her family consisting of the respondent and their two sons. Madam Fong’s daughter is her “child” and the couple’s two sons are Madam Fong’s “grandchildren” within para.6.1.2(a) of the Guidelines. It might not be unreasonable to infer that Madam Fong was providing the flat, which she acquired as possessory owner, as a home for her immediate family members. Those immediate family members continued to occupy the flat as their home after Madam Fong’s death, as recorded in the freezing survey. 72.Consistently with the Policy, the HPA claim in the present case was made by the respondent on behalf of the estate in order to enable the estate to provide a replacement home for Madam Fong’s daughter and her family. Advanced thus, the claim relies on the extended form of occupation referred to above, which involves the physical occupation by immediate family members of the property owner, as recognised under para.6.1.2(a) of the Guidelines, rather than an invalid purported occupation by a legal estate. However, the terms of Madam Fong’s will were not in evidence and there is no evidence on the status of the flat’s occupation after her death in the light of how the flat was disposed of under that will. 73.As I have said, this point was not argued below or before us and so the basis and circumstances of the flat’s occupation were not explored any further. The issue of occupation having been accepted as a matter of fact by the Director before the Appeals Committee and in these judicial review proceedings, it would not be fair to the respondent to allow it to be raised now.[37] If the question of whether the estate was entitled to claim the HPA as an “occupier” had been raised, further evidentiary materials would almost certainly have been explored and the claim for HPA might have been advanced on the viable route discussed above. That would have allowed this unargued point, potentially of some public importance since it may not be uncommon for properties owned by estates of deceased owners and occupied by family members to be resumed, to be resolved. G. Disposition of appeal 74.For the reasons set out above, I would answer the question of law posed in the affirmative and dismiss this appeal. Mr Justice Lam PJ: 75.I agree with the judgment of Mr Justice Fok PJ. Mr Justice Keane NPJ: 76.I agree with the judgment of Mr Justice Fok PJ. Chief Justice Cheung: 77.Accordingly, the appeal is unanimously dismissed and the Court makes an order nisi that the appellant pay the respondent’s costs of the appeal. If any party seeks to vary this order nisi, written submissions should be filed and served within 14 days of the date of this judgment. Any written submissions in reply should be filed and served within 14 days thereafter. The Court will then determine any outstanding question of costs on the papers.
Mr Jin Pao SC and Mr John Leung, instructed by the Department of Justice, for the 1st Respondent (Appellant) Mr Adrian Lai and Mr Han Sheng Lim, instructed by Chak & Associates LLP, for the Applicant (Respondent)
APPENDIX Relevant extracts from the Guidelines (see above at [22]): “1. PURPOSE
2. LAND RESUMPTION
3. NOTICE OF RESUMPTION
4. OFFER OF COMPENSATION
5. ASSESSMENT OF OPEN MARKET VALUE FOR RESUMED PROPERTIES
6. STATUTORY AND EX-GRATIA COMPENSATION TO DIFFERENT PARTIES
6.1 DOMESTIC PROPERTY 6.1.1 STATUTORY COMPENSATION
6.1.2 HOME PURCHASE ALLOWANCE AND SUPPLEMENTARY ALLOWANCE
12. INFORMATION REQUIRED … 12.2 PROOF OF TITLE
[1] See, e.g., LRO s.6 headed “Compensation”. [2] This is consistent with the obligations imposed under Basic Law Art.105(1) (“The Hong Kong Special Administrative Region shall, in accordance with law, protect the right of individuals and legal persons to … their right to compensation for lawful deprivation of their property”) and Art.105(2) (“Such compensation shall correspond to the real value of the property concerned at the time and shall be freely convertible and paid without undue delay”). [4] HCAL 1135/2022, [2023] HKCFI 2343, Judgment dated 18 December 2023 (“CFI Judgment”). [5] Ibid. at [33(1)], [130]. [6] Ibid. at [129]. [7] [2026] 1 HKLRD 1217 (“CA Judgment”). [8] CACV 15/2024, [2026] HKCA 459, Judgment dated 17 March 2026 (“CA Leave Judgment”). [9] Ibid. at [6]. [10] CA Judgment at [36], citing and applying Deluxe Ascent Limited v Director of Lands [2023] HKCA 305 per Kwan VP at [20]. [11] Per Lord Steyn in In re McFarland [2004] 1 WLR 1289 at [24]. [13] Ibid. at [49], citing the speech of Lord Browne-Wilkinson in R v Secretary of State for the Home Department, ex p Pierson [1998] AC 539 at 576-577. [14] Ibid. at [55]. [15] Sixty (60) years for government land (s.7(1)) and twelve (12) years for non-government (i.e. private) land (s.7(2)). [16] In re Atkinson and Horsell’s Contract [1912] 2 Ch 1 at 9; Buckinghamshire County Council v Moran [1990] Ch 623 at 644; and Limitation Ordinance (Cap.347) ss.7 and 17. [17] As it was in this case, see at [10] above. [18] CA Judgment at [42], citing Chan Chu Hang v Man Yun Sau [1997] 2 HKC 144 at 150B-D. [19] Cheung Yat Fuk v Tang Tak Hong & Others (2004) 7 HKCFAR 70 at [7]. [20] CA Judgment at [43], citing Jourdan & Radley-Gardner, Adverse Possession (2nd Ed.) §20-33. [21] [1997] 2 HKC 144 at 150B-D. [22] In theory, since this might be thought to be rather unlikely in practice. [23] Wong King Lim v Incorporated Owners of Peony House [2013] 4 HKC 295 per Lam JA (as he then was) at [37], citing Fairweather v St Marylebone Property Co Ltd [1963] AC 510. [24] Lam Sai Wan v Minloy Ltd [2022] 1 HKLRD 544 at [36]. [25] Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd (No 5) [2007] 5 HKC 122 at [35]; Wong King Lim v Incorporated Owners of Peony House [2013] 4 HKC 295 at [37]. [26] Appearing with Mr John Leung. [27] Case for the Appellant at Section D1. [28] Ibid. at Section D2. [29] Ibid. at Section D3. [30] Ibid. at Section D4. [31] Ibid. at [44]. [32] CA Judgment at [63]. [33] Ibid. at [67]. [34] Case for the Appellant at [89]. [35] CFI Judgment at [129]. [36] CA Judgment at [69]. [37] In fairness to those acting for the Director in this Court, this point was not raised on behalf of the Director before us. |
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