Khan v Meadows
| Jurisdiction | England & Wales |
| Judge | Lord Briggs,Lord Kitchin,Lord Burrows,Lady Rose,Sir Declan Morgan |
| Judgment Date | 20 June 2023 |
| Neutral Citation | [2021] UKSC 21 |
| Year | 2021 |
| Court | Supreme Court |
[2021] UKSC 21
Lord Briggs, Lord Kitchin, Lord Burrows, Lady Rose and Sir Declan Morgan
SUPREME COURT
Immigration — business persons and investors — Tier 1 (Investor) Migrants — points-based system — paragraph (b)(ii) of box 1 in Table 8B in Appendix A to the Immigration Rules — interpretation of “money under his control” — the “Maxwell Scheme”
The Claimant applied for leave to remain in the United Kingdom as a Tier 1 (Investor) Migrant under the points-based system (‘PBS’). She claimed to fulfil the financial requirement set out in paragraph (b) of box 1 in Table 8B in Appendix A to the Immigration Rules HC 395 (as amended). Subsection (ii) of paragraph (b) required an applicant to have ‘money under his control’ and disposable in the United Kingdom of not less than one million pounds which had been loaned to him by a United Kingdom regulated financial institution. The Claimant sought to satisfy that requirement by subscribing to a scheme (‘the Maxwell Scheme’) designed to ensure qualification for leave to remain as a Tier 1 (Investor) Migrant in return for a payment of £200,000. She was one of over 100 aspiring Tier 1 (Investor) Migrants to do so. The scheme involved the Claimant making agreements with three companies, the lender, service provider and investee respectively. The first was Maxwell Asset Management Ltd (‘MAM’), which qualified as a United Kingdom regulated financial institution. The second was Maxwell Holding Ltd, MAM's parent company. The third was Eclectic Capital Ltd (‘Eclectic’). They were all owned and controlled by the same two individuals.
The Secretary of State for the Home Department refused the Claimant's application. She concluded that, under the Maxwell Scheme, the Claimant did not have the requisite control over the loan money from MAM because she had no choice about its transmission on to Eclectic. The Upper Tribunal (‘UT’) upheld that decision on judicial review.* On appeal, the Court of Appeal† held that although in practice the Claimant had no choice as to the destination of the funds loaned, she nonetheless had the requisite degree of control of the money for the purposes of paragraph (b)(ii) of box 1 in Table 8B. The Court found first, that the purpose of the control requirement was to give assurance that the loan entitlement was personally available to the applicant for the making of an investment in a qualifying company; and secondly, that provided that restrictions upon the applicant's use of the loan money did not prevent its investment in a qualifying company, it did not matter if
they compelled the applicant to invest in only one such company. In the instant proceedings, the Secretary of State challenged the Court of Appeal's decision.Held, allowing the appeal:
(1) The interpretation of the Immigration Rules did not involve any significant departure from the general principles of statutory construction, apart possibly from a relaxation of strictness: Mahad v Entry Clearance Officer[2009] UKSC 16 considered. Lord Brown's encouragement in Mahad to apply sensibly rather than strictly the natural and ordinary meaning of the words was the consequence of keeping in mind the context and purpose of the Rules. Mahad was not inconsistent with Hurstwood Properties (A) Ltd and Others v Rossendale Borough Council[2019] UKSC 16, which required a purposive approach to construction and a realistic and unblinkered approach to the application of the relevant provisions to the facts. The PBS deliberately sacrificed discretion and occasionally perfect fairness in the pursuit of a migration regime which was efficient, transparent, predictable and capable of being operated reasonably quickly and reliably. Those aims did not displace the need to take an unblinkered and realistic view of the facts to which the PBS was applied when deciding whether the requirements for achieving the specified scores were met. Where those facts included the use of a pre-ordained multi-step scheme, it was legitimate to look at the scheme in the round to see whether the ‘tick-box’ conditions had in fact been satisfied (paras 29 – 35).
(2) In approaching the question of interpretation, it was necessary to clear some preliminaries. First, box 1 of Table 8B was not using ‘control’ as a synonym for ownership. For that purpose, the drafter used the phrase ‘of his own’ in paragraph (a), which was intended to distinguish owned money from money borrowed. Secondly, although paragraph b(ii) spoke of loaned money, the control test was capable of being satisfied in respect of money that an applicant was entitled to direct to be paid from the lender to the investee, without it passing through the applicant's hands. Thirdly, the requirement for control demanded more than just a demonstration that the money was unencumbered by third party security rights. Fourthly, the disjunctive use of money and investment in Table 8B meant that it was not a requirement that the applicant retained ongoing control over the loaned money after the investment had taken place. The applicant must have satisfied the control test prior to making the qualifying investment of it. In the context of Table 8B, the natural and ordinary meaning of control was that it described an applicant with real choice about the use and therefore the destination of the loan money. Real choice did not need to be unfettered. The control requirement would not fail merely because the lender offered a restricted choice of investments or required the applicant's choice to be submitted for approval, not to be unreasonably withheld. In such cases the applicant had a real choice as to the investment made (paras 36 – 39 and 41).
(3) Having concluded that the Claimant had no choice at any stage over the investment of the MAM loan, the Court of Appeal nonetheless concluded that she satisfied the control test because (i) the money had in fact been invested in a qualifying investee and (ii) the loan entitlement was available to her personally rather than just as a nominee for someone else. The Court of Appeal considered that the control test in paragraph (b)(ii) was only to protect the Tier 1 (Investor) Migrant regime from being invaded by nominees rather than beneficial owners of the invested funds. There were problems with that very limited analysis. First, it broke down when applied to the same question in paragraph (a) of box 1 of Table 8B, which imposed a control test in identical terms. Secondly, it treated control as a badge of beneficial ownership, whereas, throughout the Tier 1 (Investor) Migrant regime, ownership and control were treated as separate concepts and requirements. Thirdly, limiting the perceived purpose of the control requirement had the effect of emasculating the control requirement altogether in its ordinary and natural meaning (paras 42 – 45).
(4) The common purpose of all the control requirements in the Tier 1 (Investor) Migrant regime was to require applicants to be individuals who were in control of specified amounts of their assets, their investments, their own money and their borrowed money. They were to be persons who made their own decisions about their property and financial affairs. The interpretation of control as having its natural and ordinary meaning, and therefore requiring that applicants had a real choice about the use and disposition of the relevant money, assets and investments, sensibly fulfilled the purpose described. That was the interpretation of control adopted by the Secretary of State and by the UT, and they were correct to do so. Paragraph (b)(ii) of box 1 of Table 8B required the Claimant to show that she had a real choice as to the use and investment of the MAM loan once it became available to her. Looking at the Maxwell Scheme in the round, neither she nor any other participants had such a choice (paras 46 – 47, 52 and 55).
Alam, Anwar and Eghan v Secretary of State for the Home Department [2012] EWCA Civ 960; [2012] Imm AR 974
Collector of Stamp Revenue v Arrowtown Assets Ltd [2003] HKCFA 52
EK (Ivory Coast) v Secretary of State for the Home Department [2014] EWCA Civ 1517; [2015] Imm AR 367; [2015] INLR 287
Hurstwood Properties (A) Ltd and Others v Rossendale Borough Council and Another [2021] UKSC 16; [2022] AC 690; [2021] 2 WLR 1125; [2022] 2 All ER 113
Mahad (previously referred to as AM) (Ethiopia) and Others v Entry Clearance Officer; Muhumed (previously referred to as AM (No. 2)) (Somalia) v Entry Clearance Officer[2009] UKSC 16; [2010] 1 WLR 48; [2010] 2 All ER 535; [2010] Imm AR 203; [2010] INLR 268
Mudiyanselage v Secretary of State for the Home Department; Khan v Secretary of State for the Home Department; MA (Pakistan) v Secretary of State for the Home Department; Negbenebor v Secretary of State for the Home Department; Igwe and Others v Secretary of State for the Home Department; Kokab v Entry Clearance Officer[2018] EWCA Civ 65; [2018] 4 WLR 55; [2018] 4 All ER 35; [2018] Imm AR 846; [2018] INLR 748
Odelola v Secretary of State for the Home Department [2009] UKHL 25; [2009] 1 WLR 1230; [2009] 3 All ER 1061; [2010] Imm AR 59; [2009] INLR 401
Pokhriyal v Secretary of State for the Home Department; Hussain v Secretary of State for the Home Department[2013] EWCA Civ 1568; [2014] Imm AR 711; [2014] INLR 291
R (on the application of Wang and Another) v Secretary of State for the Home Department [2021] EWCA Civ 679; [2021] 4 WLR 70; [2021] Imm AR 1339 on appeal from R (on the application of JW and Others) v Secretary of State for the Home Department (Tier 1 Investor; control; investments)[2019] UKUT 393 (IAC); [2020] Imm AR 305
Immigration Rules HC 395 (as amended), paragraphs 245E & 245ED; paragraphs 54 to 65-SD of Appendix A
Tribunals, Courts and Enforcement Act 2007, section 15(5A)
Sir James Eadie KC and Mr T Cleaver instructed by the...
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