Property ownership is one of the most significant investments any individual can make. To Sze On, the Personal Representative of Estate of To Cheong Lam, deceased v Yim Tin Took, since deceased (Yim Lok Man Winne, appointed by Order dated 10 May 2024 to represent the Estate of Yim Tin Fook, deceased) & Others [2026] HKCFA 17 (“To Sze On”), a recent decision by Hong Kong’s Court of Final Appeal (“CFA”), has shed light on the role of land registration, timing and proper documentation.
Background
The dispute arose from a chain of events spanning more than four decades, involving a single piece of land in the New Territories. In 1958, the Original Owner obtained a Government lease over a piece of land near Nai Wai village in Tuen Mun (“Head Lease”), set to expire on 27 June 1997. In 1974, the Original Owner sold two portions of the land, retaining only the remaining section. Then, in 1983, the Original Owner granted a 15-year lease over the remaining portion to a tenant, running until 1998 (“1983 Lease”). The 1983 Lease was never registered with the Land Registry. At the time, the Head Lease was due to expire in 1997, meaning the 15-year lease extended beyond the remaining term of the Head Lease. In 1986, the Original Owner gifted the remaining portion of land to herself and her adopted son (“Adopted Son”) as joint tenants. This gift was registered with the Land Registry. In 1988, the Head Lease was automatically extended to 30 June 2047 by the enaction of the New Territories Leases (Extension) Ordinance (Cap. 150). The Original Owner passed away in 1990, leaving the Adopted Son as the sole owner. Between 1997 and 2003, the Adopted Son sold the remaining portion of land to a developer who subdivided it into 14 subsections and sold them to various purchasers; these sales were registered with the Land Registry. In 2006, two registered owners sought possession of their land from the original tenant, and the tenant counterclaimed against all registered owners, arguing that the later transfers were invalid.
Ruling
The CFA unanimously dismissed the tenant’s appeal on two key grounds.
- The Milmo Rule was abolished.
The tenant argued that as his 15-year lease extended beyond the Head Lease, it should be treated as a full assignment of the Government lease itself. The CFA rejected this, departing from the Milmo rule entirely. The CFA described the rule as “irrational,” producing results that are “unexpected” and “frequently unfair.” The tenant’s interest expired at the end of his lease term.
- Registration is crucial.
Even if the Milmo rule had applied, the tenant would have lost in his claim as the 1983 Lease was never registered. Under section 3(2) of the Land Registration Ordinance (Cap. 128), any registrable instrument that is not registered is “absolutely null and void” against a later bona fide purchaser who registers their interest. The tenant relied on the principle that “no one can give what they do not have” (nemo dat rule) as the Original Owner had parted with her title in 1983 (under the Milmo rule) and had nothing to pass on to the subsequent purchasers. The CFA rejected this as section 3(2) of Cap. 128 was designed to modify the nemo dat rule in favour of later registered purchasers. The legislative purpose of Cap. 128 is to prevent “secret conveyances” and to provide a means by which title to land can be “easily traced and ascertained.” Allowing an unregistered document to defeat the claim of a later registered buyer would “substantially frustrate” that purpose. The CFA confirmed that this protection applies even where the later purchasers bought only part of the land.
Key Takeaways
To Sze On reaffirms that in Hong Kong’s land registration system, priority belongs to those who register first, not those who claim first. Prompt registration and strict compliance with statutory formalities are essential to secure and maintain property rights.
This ruling highlights the need to register land documents promptly. An unregistered lease or assignment may be voided if a later party registers a competing interest. The system prioritises public traceability, ensuring hidden arrangements cannot defeat later purchasers who act in good faith, pay value, and register. The Court also confirmed it will discard outdated doctrines like the Milmo rule, meaning that such arguments no longer hold weight. The same protection applies to purchasers of only part of a larger parcel. Given the complexity and serious risks of non‑compliance, parties should seek legal advice early in any land transaction or dispute.
For more details, feel free to reach out to:
Managing Partner: Mr. Ian Lo
Consultant: Ms. Crystal Cheung
