Wang & Anor, R (On the Application Of) v Secretary of State for the Home Department

The Court of Appeal allowed the appeal against the Upper Tribunal and the Secretary of States decision refusing further leave to remain under the Tier 1 (Investor) Migrant rules. The court held that the control requirement in Table 8B (applied via Rule 245ED(e) and Appendix A) is principally concerned with the applicant's personal availability of the relevant UK assets or loan entitlement ("control" as personal availability), not with every restriction as to the subsequent destination of funds. The court also held that paragraph 65(b) of Appendix A excludes only the four specifically listed types of investment vehicle and cannot be applied as a free-standing catch-all to exclude any vehicle that merely shares some undesirable features of those listed. Because the Secretary of State had conceded that Eclectic was not one of the listed entities, the exclusion in paragraph 65(b) could not lawfully be applied to the Eclectic investment.

This is an appeal from the Upper Tribunal's dismissal of judicial review challenging the Secretary of State's refusal (20 December 2017, upheld on administrative review 6 February 2018) of further leave to remain under the Tier 1 (Investor) Migrant rules. The applicants (Ms Wang and her dependent son) participated in a scheme (the Maxwell/Eclectic scheme) under which a UK regulated lender (MAM) advanced
million and the borrowers contractual documents resulted in the funds being invested into Eclectic Capital Limited.

The claim sought judicial review of the SSHDs decision on two principal grounds: (1) that the loan proceeds were not "wholly under [the applicant's] control" for the purposes of Table 8B/Rule 245ED, and (2) that the Eclectic investment was excluded by paragraph 65(b) of Appendix A as an open-ended investment company, investment trust company, investment syndicate company or pooled investment vehicle. The Upper Tribunal affirmed the SSHDs decision, concluding that the applicant lacked genuine choice as to the destination of the funds and that Eclectic shared the objectionable features of the paragraph 65(b) entities.

The Court of Appeal (Popplewell LJ, Nugee LJ and Underhill LJ) analysed (i) the proper meaning and purpose of the control requirement in Table 8B (Rule 245ED(e) and related Appendix A provisions), and (ii) the proper construction of paragraph 65(b). The court concluded that the control requirement aims to ensure the personal availability to the applicant of the UK assets or loan entitlement (so that the applicant, not a third party, is the person making the qualifying investment) and that some restrictions on the permitted use of loan proceeds are consistent with that purpose. Consequently a restriction which confines the use to a qualifying vehicle (even if the choice is effectively to one qualifying vehicle) does not necessarily negate control where the applicant has sole power to direct the use of the money. On paragraph 65(b) the court held that the paragraph excludes investment "by way of" the four specifically listed entities and is not to be read as a free-standing prohibition against vehicles that merely share some of the listed entities' characteristics; because the Secretary of State conceded Eclectic was not one of the listed entities the exclusion did not apply. The court therefore allowed the appeal, while noting that the Maxwell/Eclectic scheme was objectionable and that the difficulty arose from the drafting of the Rules.

Procedural history: appeal from the Upper Tribunal (Immigration and Asylum Chamber) UTJJ Rimington and Jackson [2019] UKUT 00393 (IAC).

Appeal allowed. The court held that (1) the control requirement in Table 8B/Rule 245ED(e) is aimed at personal availability of the UK assets or loan entitlement and does not automatically fail because the applicants use of proceeds is restricted to a single qualifying vehicle provided the applicant retains sole power to direct the funds; and (2) paragraph 65(b) excludes only the four specified types of investment vehicle, so that the SSHDs concession that Eclectic was not one of those entities meant the exclusion did not apply. The SSHD and Upper Tribunal erred in law in the constructions they applied.

Appeal from the Upper Tribunal (Immigration and Asylum Chamber) UTJJ Rimington and Jackson [2019] UKUT 00393 (IAC). Earlier, the SSHD refused the application on 20 December 2017 and upheld that decision on administrative review on 6 February 2018.