The hinge mount on the rear fender
WARNING: This page is about a different car, the 2004 Volvo S40, 2003 Volvo S40, 2002 Volvo S40, 2001 Volvo S40, and 2000 Volvo S40. However, it is still accessible from the selected car via links, so may be relevant.
Slacken off the screws slightly.
Adjust the tailgate.
Tighten the tailgate. Tighten to 10 Nm.