May 2024

Whether a possessory title obtained from an adverse possession action is a “marketable” title is always an issue. In Ho Kong (Sole Executor of the Estate of Fong Li Yee, deceased) v. Director of Lands & Another [2024] 2 HKC, the applicant was the owner of a flat acquired by possessory title. Upon redevelopment of the land, the Urban Renewal Authority offered to acquire the applicant’s flat at market value plus home purchase allowance in the form of ex-gratia compensation available to the “owner-occupier”. The applicant did not take up the offer at the end so the flat was resumed to the Government. The Government offered the applicant a statutory compensation but the compensation did not include any “home purchase allowance”. The applicant was dissatisfied and asked for leave to apply for judicial review. Whether the applicant, being a possessory title owner of the flat, is an “owner-occupier” entitled to the home purchase allowance becomes an issue.

The court granted leave to the applicant to apply for judicial review and ruled that the court should adopt a purposive approach to the interpretation of Government policies instead of an overly technical one. On the basis that the term “owner-occupier” was not defined in the Government’s policy on granting home purchase allowance, the payment of the allowance to the applicant would meet the policy intent. Upon the interpretation of the allowance policy against the overall compensation scheme, if a person was identified by the Government as the right person to receive compensation, he was to be regarded as an “owner” under the allowance policy and would be eligible to claim the allowance if he also used to live in the resumed flat: he was an owner-occupier.

For this purpose, it mattered little whether a person was the registered owner or was only an owner by possessory title. The differences between paper titles and possessory titles were irrelevant to the question of ownership. The reference to owner did not have to be consistently read as referring to paper owners. Proof of title for the purpose of compensation policy could be satisfied in the absence of title deeds and documents, as it was the applicant’s case. Administrative efficiency was not a valid reason to disqualify claims based on possessory titles.

Though this action may be confined to home purchase allowance claim upon resumption, this accords with the legal understanding that the possessory title is transferrable and it is a legal title by operation of law, that is a declaration by the court through legal process.