Nadeem Anjum applied for a Tier 1 (Entrepreneur) visa in early 2015. It was refused. The Entry Clearance Officer took the view, following an interview with Mr Anjum, that he was not a “genuine entrepreneur”.

Since rights of appeal against Points Based System applications were removed, judicial consideration of the terms of the relevant rules has been comparatively rare.

The last entrepreneur case reported in the Upper Tribunal, for instance, was over two and a half years ago: R (Zhang) v Secretary of State for the Home Department (IJR) [2015] UKUT 138.

The entry clearance decision

Among the reasons for the original refusal were that, when asked specific questions about his business plan, Mr Anjum flicked through the document to provide the answer. In answer to questions about projected income, he gave a figure which amounted to less than that contained in his plan.

These were neither the actions nor the responses, found the Entry Clearance Officer, of a genuine entrepreneur.

We have looked at the curious nature of the “genuine entrepreneur” test on Free Movement previously, and the subjectivity inherent in any such assessment – anathema to everything the Points Based System was supposed to represent.

The official further divined from the answers given at interview that part of the investment money was being spent on buying a business from a previous owner and, as such, flouted the relevant rules and guidance on the requirements of the investment.

Investment requirements

One of the main criteria of the entrepreneur route is that applicants must have available to them £200,000 for investment in the UK enterprise which they will be setting up, taking over or joining. However, certain spending will not constitute “investment” for the purposes of the rules, including:

• The applicant’s own remuneration
• Buying the business from a previous owner, where the money goes to that previous owner rather than into the business
• Investing in businesses other than those which the applicant is running as self-employed or as a director
• Any spending which is not directly for the purpose of establishing or running the applicant’s own business or businesses

The other requirements of the route are: a formal business plan, a requirement to create jobs for British or settled workers after setting up the enterprise, and a can-do attitude.

Issue of proceedings

As mentioned above, there is no right of appeal against a refusal of a Tier 1 (Entrepreneur) application. Mr Anjum therefore challenged the refusal by way of judicial review in the Upper Tribunal: R (on the application of Anjum) v Entry Clearance Officer, Islamabad (entrepreneur – business expansion – fairness generally) [2017] UKUT 406 (IAC).

The lawyers in the case, and Nicola Braganza in particular, get a shout-out for some slick legal work. The Secretary of State’s case appears to have wilted somewhat in the mind-focussing cauldron of formal proceedings, with the parties separated at the time of hearing by only the following issue:

The refusal of the Applicant’s Tier 1 application was being maintained on the sole ground that (a) he was planning to spend £50,000 of the requisite minimum fund of £200,000 in a certain way which (b) is not permitted by the Rules. We observe that the foundation of this refusal consists of two inter-related exercises in interpretation. First, the interpretation of certain questions and answers during the interview. Second, the manner in which the ECO and ECM had interpreted certain provisions of the Rules.

Both are then tackled in turn.

Judgment

Outgoing President McCloskey provided a withering assessment of the interview conducted by the Entry Clearance Officer, who appears to have asked a list of pre-arranged questions of minimalist design, with no follow-up or probing as one might expect.

If questions are asked in this manner, the court found, misunderstanding and confusion are bound to follow. The court declared that the manner of the questioning was procedurally unfair, and the result – a mistaken belief on the part of the decision-maker that Mr Anjum was to spend a portion of his investment money on a prohibited use – eminently foreseeable.

The court makes an important finding that, even if the Entry Clearance Officer was correct to find that Mr Anjum intended to use some of his earmarked ‘investment’ for purchase of a business,

where a Tier 1 applicant operates an existing business, the Rules do not prohibit the use of part of the minimum fund to purchase a second business for the purpose of developing and expanding the existing enterprise.

McCloskey J reminds us that even the provisions of the Points Based System rules (which he describes as ‘moderately dense’) are subject to ordinary rules of legal interpretation

[The relevant entrepreneur provision at paragraph 245D] must be evaluated in conjunction with all that precedes and follows it in this discrete compartment of the Rules. Inter alia, there is no prohibition against taking over an existing business. Indeed this is expressly permitted. One asks, rhetorically, how a takeover could realistically be effected in the real world of commerce in the absence of financial or other valuable consideration.

Indeed. The court quashed the decision, finding it to be procedurally unfair and legally unsafe. It will now be re-made by the original decision-maker, almost three years after the initial application was submitted.

Appeals

One hears complaints that the appellate system sometimes generates more heat than light, providing decisions and determinations which muddy the legal waters rather than providing clarity.

Here, we have a visa route over which there is almost no judicial oversight, and little more than the relevant Home Office guidance to underpin advice to clients about the application requirements.

As made clear in this decision, that guidance is drafted in such a way that reasonable differences of opinion are clearly possible looking at the same rules. And one imagines this is why proceedings went full term, the Secretary of State persisting in her defence, and refusing to withdraw the decision.

Of the 50% of entrepreneur visa applications which are rejected each year, one wonders how many interviews are conducted with the ineptitude seen here, in respect of applicants without pockets or resolve of sufficient depth to sustain a three-year legal challenge.

Of course, without that oversight, we will never know.