The investor immigration rules in force when Ms Wang applied allowed a qualifying investment to be financed with borrowed money. Having a loan in her name was insufficient. The Supreme Court examined who could actually decide where the £1 million went. That question determined her entitlement to points under the rules.
Ms Jie Wang sought leave to remain—permission to stay in the United Kingdom—as a Tier 1 (Investor) Migrant. Rule 245E described that route as being for high net worth individuals making a substantial financial investment in the UK. She was one of over 100 people who paid £200,000 to enter the Maxwell Scheme, which was designed to secure that status.
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How the scheme worked
A UK-regulated company agreed to lend Ms Wang £1 million for five years at 3% interest. The loan was made expressly to meet the Tier 1 investment requirements. The lender controlled drawdown and repayment. Ms Wang separately paid its Jersey parent £200,000 to participate in the arrangements.
The lender transferred the money directly to Eclectic Capital Ltd. Eclectic could convert Ms Wang’s loan into non-voting preference shares, and later did so. The same couple controlled the lender, its parent and Eclectic. The formal documents therefore needed to be read in light of how these companies conducted the scheme.
The points required
Rule 245ED required at least 75 points. The applicant also had to be at least 18, and the assets and investment for which points were claimed had to be wholly under the applicant’s control. Table 8B awarded points in three boxes, all of which had to be satisfied.
The first box gave 30 points either for at least £1 million of the applicant’s own money under his or her control in the UK, or for personal assets worth at least £2 million after liabilities plus at least £1 million “under his control and disposable in the UK” lent by a UK-regulated financial institution. A further 30 points required a qualifying UK investment, including at least £750,000 in specified bonds or in share or loan capital of active and trading UK-registered companies. Fifteen points depended on its timing. Paragraph 65 excluded investment through four kinds of collective vehicle, including pooled investment vehicles.
The refusal and the earlier decisions
On 22 December 2017 the Secretary of State refused leave to remain. She concluded that Ms Wang had no choice about the money going to Eclectic and therefore lacked the required control. She also treated Eclectic as an excluded investee, without saying which of the four excluded types it was. An administrative review upheld the refusal in February 2018.
The Court of Appeal agreed that, in reality, Ms Wang had no choice and that the Kirpichenkos retained control. It nevertheless held that she met the test. Its view was that control only had to show that the loan was personally available to her for investment in a qualifying UK company; forcing her to use one such company did not matter. On the second issue, the Secretary of State had conceded that she was not identifying Eclectic as one of the four named types, but was relying on shared features. The Court of Appeal held that the named types were exhaustive, so the concession was fatal, and quashed the refusal.
Reading the rules in their setting
Lord Briggs, with whom Lord Kitchin, Lord Burrows, Lady Rose and Sir Declan Morgan agreed, held that the Immigration Rules are construed contextually and purposively, according to the sensible natural and ordinary meaning of words stating the Secretary of State’s policy. A realistic, unblinkered view of the facts applies to them as it does to legislation. The points-based system’s concern for efficiency, transparency and predictability does not require each step of a pre-arranged scheme to be examined in isolation. Where the question is whether a particular scoring condition is met, the scheme may and should be assessed as a whole. That does not allow an applicant who has genuinely met every hard-edged condition to be refused because the scheme seems generally unsuitable.
What “control” meant
Control was not a synonym for ownership. Even the applicant’s own money and assets had separate control requirements. Control could exist where the applicant could direct the lender to pay the investee without the money passing through the applicant’s hands, but it required more than an absence of third-party security. It also concerned the position before investment, not continuing control after the money had been invested.
the natural and ordinary meaning of control is that it describes an applicant with real choice about the use and therefore the destination of the loan money.
Genuine choice need not mean an unlimited choice. A lender might restrict the range of investments or reserve a right of reasonable approval. The Court left open the case of an investor who first chooses a company independently and then borrows on terms requiring the money to be invested in that company.
Why Ms Wang failed
Viewed as a whole, the scheme gave Ms Wang no real choice. Its terms, commercial rationale and operation for over 100 subscribers fixed the destination of the loan. At its widest, the money could go only to Eclectic or another company owned and controlled by the Kirpichenkos and selected by them. A disputed clause in the services agreement did not alter that reality: if it gave Maxwell Holding the choice, it supported the refusal; if not, it failed to record what must have been agreed informally.
It was inconceivable that the owners would lend £1 million unsecured unless it reached a company they controlled. As the Upper Tribunal observed, it was equally inconceivable that someone in Ms Wang’s position would freely invest a five-year loan costing 3 per cent in a company able to convert it into preference shares paying only 2 per cent after six years. She therefore did not earn the 30 points in the first box and could not reach 75 points.
The Home Secretary also wanted to argue that Eclectic was a pooled investment vehicle excluded by the rules. That would have required permission to withdraw a concession made below. The Court decided neither point because the first condition alone disposed of the appeal.
Verdict: The Court unanimously allowed the Home Secretary’s appeal and restored the refusal of leave to remain. Ms Wang had no genuine choice of investment, so the loan did not earn the 30 points needed for the first part of the test.
