On 21 June 2023, the Supreme Court handed down judgment in the case of R (on the application of Wang and another) v Secretary of State for the Home Department  UKSC 21. Below is a press summary of the judgment, and references in square brackets refer to paragraphs in the judgment. Court Judgement 法院判决
Lord Briggs, Lord Kitchin, Lord Burrows, Lady Rose, Sir Declan Morgan
Background to the Appeal
This appeal pertains to the interpretation of the Immigration Rules, specifically the Tier 1 (Investor) Migrant regime (in force in December 2017 - since then, it has been closed). This regime was designed to grant leave to remain for high-net-worth individuals making a substantial financial contribution to the UK. To qualify, individuals were required to have £1 million (either their own money or money borrowed from a UK-regulated financial institution) under their control in the UK. They must also have invested at least £750,000 of that sum in the UK through UK Government bonds, or in shares in or loans to active and trading UK-registered companies (subject to certain further restrictions and exclusions).
Ms Wang and over 100 others subscribed to a scheme designed to ensure qualification for leave to remain under the Tier 1 (Investor) Migrant regime. Under this scheme, Ms Wang borrowed the necessary £1 million from Maxwell Asset Management Ltd ("MAM", a UK-regulated financial institution). The terms required this sum to be used for investment in shares in or loans to active and trading UK-registered companies.
Ms Wang also signed a "services agreement" with a company called Maxwell Holdings Ltd ("Holdings"). According to this agreement, Holdings was to provide services, including advising on the Tier 1 regime requirements and ensuring that monies were used for authorised investments. To do this, Holdings was to have discretion over how to invest the monies loaned by MAM on behalf of Ms Wang and to act on her behalf under a power of attorney. Holdings also guaranteed repayment of the loan to MAM and agreed to make all interest payments under the loan to MAM at no expense to Ms Wang. In return for this, Ms Wang paid a fee of £200,000, refundable if she did not obtain Tier 1 (Investor) migrant status.
The £1 million was then invested on behalf of Ms Wang (as with all the participants in the scheme) in a company called Eclectic Capital Limited ("Eclectic") via a loan convertible to shares at Eclectic's discretion (which would pay a dividend lower than the interest rate on loan from MAM). The loan funds were transferred directly from MAM to Eclectic, which then invested said funds predominantly in Russian companies.
MAM, Holdings, and Eclectic were wholly owned and controlled by two Russian nationals, Dimitry Petrovich Kirpichenko and his wife, Nika Kirpichenko.
In 2017, Ms Wang applied for leave to remain in the UK as a Tier 1 (Investor) Migrant based on her participation in this scheme. The Secretary of State rejected Ms Wang's application on two grounds: (1) the loan from MAM did not result in her having £1 million "under [her] control" because she had no choice about where to invest the money; and (2) the investment in Eclectic was not a qualifying investment as it was an excluded type of company. This decision was upheld following an administrative review within the Home Office.
Ms Wang then applied for judicial review. The Upper Tribunal dismissed this, but that decision was overturned by the Court of Appeal, which upheld Ms Wang's appeal and set aside the Secretary of State's decision. The Secretary of State appealed to the Supreme Court.
The Supreme Court unanimously allowed the appeal and reinstated the Secretary of State's decision to refuse Ms Wang's application for leave to remain. Lord Briggs provided the sole judgment, with which the other panel members concurred.
Reasons for the Judgment
The principal question for the Supreme Court was whether the £1 million loaned to Ms Wang was "money under [her] control" within the context of the Immigration Rules.
The Supreme Court clarified that the Immigration Rules should be interpreted considering their context and purpose, according to the general principles of statutory interpretation -. In applying the rules, the court must adopt an unblinkered and realistic approach to analysing the facts. In a case like this, that includes considering the relevant scheme in question as a whole or "in the round" -;. This was the case even though the Tier 1 (Investor) Migrant regime was a points-based or "tick-box" system, which sacrifices discretion and perfect fairness for efficiency, transparency, and predictability -.
Following this approach, the Supreme Court concurred with the Secretary of State's interpretation of "under [her] control" as requiring that an applicant has a real choice about the use and disposition of the relevant money . The Court of Appeal erred in interpreting the requirement as only being that the money be available to Ms Wang personally rather than as a nominee. This was because the condition of the money to be "of [her] own" would already exclude nominees, thereby rendering "under [her] control" redundant and emasculating its natural and ordinary meaning -.
Upon examining the terms, commercial rationale, and practical operation of the Maxwell scheme in the round, the Supreme Court agreed with the Secretary of State (and the courts below) that Ms Wang had no real choice about using the loaned money. It was preordained by the scheme that the £1 million would be invested in Eclectic (or possibly some other company owned and controlled by Mr and Mrs Kirpichenko). Any choice lay with Mr and Mrs Kirpichenko and the companies they controlled, not Ms Wang -.
Therefore, the Secretary of State was correct in concluding that Ms Wang did not have the money "under [her] control" for the purposes of the Immigration Rules. The appeal is thus allowed, and the Secretary of State's decision to refuse leave to remain is reinstated ;.
It was not necessary for the Supreme Court to consider the Secretary of State's second reason for refusing leave to remain (i.e., that the investment in Eclectic was not a qualifying investment) -.
We are profoundly disappointed by the decision rendered by the Supreme Court, which will not only impact the 100+ families who utilised the scheme directly, but we believe it will also impact other similar schemes, such as the Dolfin Financial scheme. Given that the Dolfin scheme shares similar characteristics with the MAM scheme, we anticipate that the Home Office will rely upon this judgment and reject outstanding Dolfin applications because the applicants did not meet the requirements of the Immigration Rules, particularly the requirement that applicants have the loaned money under their control.
We foresee the Home Office issuing rejection letters regarding the Dolfin scheme in the coming months. We urge you to liaise with us to update us on your current situation so that, if you wish, we can prepare separate legal representations to seek leave for you to remain in the United Kingdom.