Jackson & Lyon LLP was instructed by the Appellant, Ms Wang, who was one of many who was granted entry clearance as a Tier 1 (Investor) Migrant who obtained a loan of £1 million from Maxwell Asset Management Limited and invested in Eclectic Capital Limited. The owner of the two companies are husband and wife, respectively. Her application for further leave to remain as a Tier 1 (Investor) Migrant under participation of this scheme was refused by the Secretary of State for the Home Department (SSHD) and her administrative review application was determined that the previous decision for refusal should be maintained. The SSHD refused the application on two grounds namely, that the loan from Maxwell Asset Management Limited did not result in her having the proceeds wholly under her control and that the investment in Eclectic Capital Limited was not a qualifying investment.

Under paragraph 245ED(e) of the Immigration Rules, “the assets and investment [the applicant] is claiming for must be wholly under his control”. Table 8B of Appendix A provides that “the applicant has money under his control… and has invested in active and trading UK registered companies, subject to the restrictions set out in paragraph 65”. Paragraph 65(b) of Appendix A provides the “investments exclude investments by way of… open ended investment companies, investment trust companies, investment syndicate companies or pooled investment vehicles”. The SSHD concluded that the investment in Eclectic Capital Limited had not been under Ms Wang’s control as she had no control of the investment to Eclectic Capital Limited and the investment fell within the type of investments excluded from qualifying investments by paragraph 65(b).

Ms Wang brought judicial review proceedings challenging the decision of the Home Office however, the Upper Tribunal dismissed the application upholding the reasons provided in the refusal decisions. The Upper Tribunal found that the word “control” should be interpreted in the usual way in accordance with its natural and ordinary meaning namely, that a person had the authority “to manage and/or direct the use of the money, asset or investment” including an element of “choice and use”. In addition, the use and requirement of the word “wholly” imposed a higher level of control. The Upper Tribunal also noted that due to the poor returns of the investment, the investment could not possibly have been for good commercial reasons and it was motivated solely by her desire to obtain a Tier 1 (Investor) visa. Combined with the link between the two companies and the terms of the agreement (clause 3.7.4 of the services agreement stated the choice of specific instrument is at the discretion of Maxwell Asset Management and therefore control was expressly ceded by Ms Wang), the Upper Tribunal concluded that Ms Wang did not have any free choice to invest in Eclectic but was required to do so. As to whether the investment in Eclectic Capital Limited was a qualifying investment, the Upper Tribunal held that the SSHD was rationally entitled to conclude that the investment was excluded from being a qualified investment because it shared common features of the entities listed in paragraph 65(b) of the Immigration Rules.

Jackson & Lyon LLP were instructed on behalf of the Appellant to make an application to the Court of Appeal challenging the Upper Tribunal’s decision. There were three grounds of appeal;

1. The Upper Tribunal erred in law in finding that the SSHD was entitled to conclude that the funds were not under Ms Wang’s control;

2. The Upper Tribunal was wrong to conclude that the SSHD would have been entitled to reach the same conclusion based on clause 3.4.7 of the services agreement; and

3. The SSHD was not entitled to conclude that the investment was not a qualifying investment on the ground that is shared common features of the entitles listed in paragraph 65(b) of the Immigration Rules, when it was not suggested that it was one of the four entitles.

In respect of grounds 1 and 2, the Court of Appeal concluded as to the purpose of control in Table 8B, it is intended by the SSHD to ensure the “personal availability” to the applicant of the UK assets of loan entitlement. The Court of Appeal found that “the SSHD and Upper Tribunal erred in the construction of “control” as a matter of law in treating it as directed to restrictions on use, rather than personal availability, and therefore treating the (correct and lawful) conclusion that the Maxwell Asset Management loan had to be used for investment in Eclectic as fatal to Ms Wang’s application”. As to ground 3, it was determined that the SSHD’s concession that Eclectic Capital Limited was not an entity listed in paragraph 65(b) was fatal to her conclusion as paragraph 65(b) is to be interpreted as containing a list confined to the four entities. The Immigration Rules should be constructed in its ordinary meaning and the construction adopted by the SSHD and the Upper Tribunal was not consistent with the proper approach to the interpretation of rules in a points-based system. Lord Justice Popplewell stated that “the desirability of clear objective criteria, predictability and minimising the need for subjective evaluative judgment, is no less important from the applicant’s point of view as that of the SSHD”. It followed that the appeal was allowed.

Leon Chua, Partner of Jackson & Lyon LLP states “Challenging the decision of the Secretary of State for the Home Department especially when the Upper Tribunal has also dismissed the application for judicial review was always going to be an arduous task. I am pleased that we were able to overturn the Upper Tribunal’s decision in the Court of Appeal where this decision will not just effect Ms Wang and her son but to also all the other applicants who borrowed money from Maxwell Asset Management Limited and have been refused for the same reasons. The interpretation of “control” is important to ensure all Tier 1 (Investor) Migrants satisfies the Immigration Rules for their further leave or indefinite leave to remain applications. We have repeatedly challenged the Respondent on a number of occasions due to the poor drafting of the Immigration Rules and I hope this to be reviewed soon to avoid unnecessary litigation.”

For more information, please contact Leon Chua on info@jacksonlyon.com.