R Jie Wang and Another v Secretary of State for the Home Department

JurisdictionEngland & Wales
JudgeLord Justice Popplewell,Lord Justice Nugee,Lord Justice Underhill, VP
Judgment Date11 May 2021
Neutral Citation[2021] EWCA Civ 679
Date11 May 2021
Docket NumberCase No: C6/2019/2863
CourtCourt of Appeal (Civil Division)

[2021] EWCA Civ 679

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE UPPER TRIBUNAL

IMMIGRATION AND ASYLUM CHAMBER

UTJJ Rimington and Jackson

[2019] UKUT 00393 (IAC)

Royal Courts of Justice,

Strand, London, WC2A 2LL

Before:

Lord Justice Underhill

Vice-President of the Court of Appeal (Civil Division)

Lord Justice Popplewell

and

Lord Justice Nugee

Case No: C6/2019/2863

Between:
The Queen on the Application of Jie Wang and Another
Appellant
and
Secretary of State for the Home Department
Respondent

Rupert D'Cruz QC and Ramby de Mello (instructed by Jackson & Lyon LLP) for the Appellant

Zane Malik QC and Julie Anderson (instructed by the Treasury Solicitor) for the Respondent

Hearing date: 20 April 2021

Approved Judgment

Lord Justice Popplewell

Introduction

1

On 20 January 2014 the Appellant, Ms Wang, was granted entry clearance as a Tier 1 (Investor) Migrant and leave to remain until 6 April 2017, together with her son (“G”) whose entitlement as a minor was dependent upon her own. On 20 February 2017 Ms Wang and G made an application for further leave to remain as a Tier 1 (Investor) Migrant and dependant respectively. In order to fulfil the applicable conditions under the Immigration Rules, it was necessary for her to have borrowed £1 million from a UK financially regulated institution so as to have that sum under her control; and to have invested at least £750,000 of such sum in UK Government bonds or in share capital or loan capital in a qualifying active and trading UK registered company, as defined. Ms Wang's claim was based on her participation in a scheme sold to her and over 100 other applicants for Investor Migrant visas, whereby £1 million was borrowed from Maxwell Asset Management Limited (“MAM”) and invested in Eclectic Capital Limited (“Eclectic”) by way of a convertible loan. I shall refer to this as the Maxwell/Eclectic scheme.

2

Following requests from the Respondent (“the SSHD”) for further information and two interviews with Ms Wang, the SSHD refused the applications in a decision of 20 December 2017. Ms Wang and G made an application for administrative review, which was concluded on 6 February 2018 with the SSHD's determination that the previous refusal should be maintained.

3

The SSHD refused the application on the twin grounds that the loan from MAM did not result in her having the proceeds under her control, and that the investment in Eclectic was not a qualifying investment. Ms Wang and G brought judicial review proceedings in the Upper Tribunal, which heard their application together with that of another migrant who had participated in the Maxwell/Eclectic scheme, and in respect of whom similar issues arose. The Upper Tribunal dismissed the applications. Ms Wang now appeals to this court.

The Tier 1 (Investor) Migrant rules

4

The conditions governing the grant of entry clearance, leave to remain, and indefinite leave to remain for Tier 1 (Investor) Migrants are set out in the Immigration Rules at Rules 245E to 245EF and paragraphs 54 to 65-SD of Appendix A. The relevant version of the Immigration Rules is that in force at the time of the SSHD's decision in 2017. There are differences from the earlier version applicable between October 2013 and February 2014 when Ms Wang entered into the Maxwell/Eclectic Scheme and when entry clearance and the first leave to remain were granted to her, but they are not material to the issues which arise on the appeal, save in one respect to which I refer below.

5

As is common for many of the grounds for entry and settlement provided for in the Immigration Rules, the parts of the Rules dealing with Investor Migrants envisage the grant of temporary leave to remain in stages, followed ultimately and potentially by the grant of indefinite leave to remain. Rule 245E identifies the purpose of the Investor Migrant provisions, as a ground for entry and route to settlement, in these terms: “This route is for high net worth individuals making a substantial financial investment to the UK.”

6

To qualify for leave to remain prior to indefinite leave to remain (“LTR”), it is both necessary and sufficient for the applicant to meet the conditions set out in Rule 245ED. There are three relevant requirements. The first is that the applicant must have, or have last been granted, entry clearance, leave to enter or LTR as one of a number of categories of migrant, categories which include, but are not limited to, Investor Migrants. Ms Wang fulfilled this criterion, having been granted entry clearance and initial LTR as an Investor Migrant on 20 January 2014. Secondly, the applicant must have a minimum of 75 points under paragraphs 54 to 65-SD of Appendix A. Thirdly, under sub-paragraph (e) of Rule 245ED, “the assets and investment the applicant is claiming points for must be wholly under his control.”

7

Paragraph 54 of Appendix A repeats that the applicant must score 75 points for attributes. There are three tables identifying how to score points for the purposes of entry clearance or LTR, namely Tables 7, 8A and 8B. Only one applies to any given applicant, determined in accordance with the provisions of paragraphs 55 and 56 of Appendix A. By reason of paragraph 56(b), the relevant table in Ms Wang's case was Table 8B because she had been granted entry clearance and LTR as an Investor Migrant under the Immigration Rules in place before 6 November 2014.

8

So far as is relevant, Table 8B provides as follows (I have italicised the parts which are key to the present appeal):

Money and Investment

Points

The applicant:

(a) has money of his own under his control in the UK amounting to not less than £1 million, or

(b) (i) owns personal assets which, taking into account any liabilities to which they are subject, have a value of not less than £2 million, and

(ii) has money under his control and disposable in the UK amounting to not less than £1 million which has been loaned to him by a UK regulated financial institution.

30

The applicant has invested not less than £750,000 of his capital in the UK by way of UK Government bonds, share capital or loan capital in active and trading UK registered companies, subject to the restrictions set out in paragraph 65 below and has invested the remaining balance of £1,000,000 in the UK by the purchase of assets or by maintaining the money on deposit in a UK regulated financial institution.

30

The investment referred to above was made:

(1) within 3 months of the applicant's entry to the UK, if he was granted entry clearance as a Tier 1 (Investor) Migrant …

15

9

As is apparent, there are only 75 points available under the table, such that in order to qualify the applicant must fulfil the criteria in each of the three rows. It is unlike some other aspects of the Rules involving a points based system in which the total number of points required can be acquired by fulfilling a number of alternative criteria.

10

In Ms Wang's case the relevant part of row 1 is alternative (b), and the dispute relates to whether she fulfils paragraph (b)(ii).

11

Paragraph 61 of Appendix A provides that “money of his own” and “personal assets” include money or assets belonging to the applicant's spouse or partner in certain limited circumstances.

12

Paragraph 61A of Appendix A provides:

“In Tables 7 to 9B “money of his own under his control” and “money under his control” exclude money that has been secured against where another party would have a claim on the money if the loan repayments were not met” [except in limited circumstances set out in the remainder of the paragraph].

13

Paragraph 65 of Appendix A provides:

“Investment excludes investment by the applicant by way of:

(a) ….

(b) “Open-ended investment companies, investment trust companies, investment syndicate companies or pooled investment vehicles,

…”

14

Paragraph 65A of Appendix A provides

“‘Active and trading UK registered companies’ means companies which:

(a) have a registered office or head office in the UK;

(b) have a UK bank account showing current business transactions; and

(c) are subject to UK taxation.”

The Maxwell/Eclectic Scheme

15

The Maxwell/Eclectic Scheme was marketed to potential Investor Migrants, who all participated on the basis of standard documentation comprising three agreements, namely:

(1) a loan agreement between MAM and the migrant, under which MAM lent the migrant £1 million (or in one case £5 million);

(2) a services agreement between the migrant and Maxwell Holding Limited, MAM's parent company (“Maxwell Holding”); and

(3) a loan agreement between the migrant as lender and Eclectic as borrower, under which the migrant invested the £1 million in Eclectic by way of a five-year loan, convertible into equity at Eclectic's option.

16

MAM was incorporated in 2007 in accordance with the laws of England and Wales and is regulated by the Financial Conduct Authority. It qualifies as a “UK regulated financial institution'” for the purposes of paragraph (b)(ii) of Table 8B. Its sole director is Dimitri Petrovich Kirpichenko (“DK”), a Russian national. Documents filed by MAM at Companies House in 2017 indicate that although it had been set up in order to invest in the Russian Stock Exchange, it had not done so, but had made loans to individuals, at that time totalling some £112 million. MAM's annual report and financial statements in 2017 record the company as being a wholly owned subsidiary of Maxwell Holding, and the ultimate controlling party as being its sole director, DK. Its shares had not always been held 100% by Maxwell Holding, having at an earlier stage been held...

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