[2024] UKUT 00418 (IAC)

The principles for the interpretation of the Immigration Rules were referred to by Lord Briggs (with whom Lord Kitchin, Lord Burrows, Lady Rose and Sir Declan Morgan agreed) in R (Wang) v Secretary of State for the Home Department [2023] UKSC 21. He said:

“29.

It was common ground between counsel that the leading authority on the general principles to be applied in interpreting the Immigration Rules is Mahad v Entry Clearance Officer [2010] 1WLR 48 and, in particular, the following two passages in the judgment of Lord Brown of Eaton-under-Heywood JSC. The first is his citation at para 10 from Lord Hoffmann’s judgment in MO (Nigeria) v Secretary of State for the Home Department [2009] 1WLR 1230, para 4:

“Like any other question of construction, this [whether a rule change applies to all undetermined applications or only to subsequent applications] depends upon the language of the rule, construed against the relevant background. That involves a consideration of the immigration rules as a whole and the function which they serve in the administration of immigration policy.”

In R. (Sajjad) v Secretary of State for the Home Department [2019] EWCA Civ 720, the Court of Appeal confirmed that the phrase "director's loan" in the Immigration Rules Appendix A para.46-SD(a)(iii) had no specialist meaning. It simply meant a loan made by a director to their company, and it covered any transaction whereby a director paid money to or for the benefit of the company on the basis that it would one day be repaid. Males LJ said:

“45.

…The requirement that the loan be unsecured ensures that in the event of the company's insolvency, secured creditors will have priority over the debt payable to the director. The requirement for subordination ensures that other unsecured creditors will have such priority. In the absence of such a provision, the loan to the director would rank equally with debts to other unsecured creditors and, if the amount of the loan represents a substantial proportion of the company's debts, could mean that the director takes the greater part of whatever assets there are. Accordingly the requirement for subordination puts an applicant who chooses to invest in his company by making a loan in the same position, in the event of the company's insolvency, as one who makes an equity investment.”

Mr Symes also refers to the judgment of Jackson LJ, at [43] in Pokhriyal v Secretary of State for Home Department [2013] EWCA Civ 1568, in which he said that the Secretary of State could not rely upon extraneous material in order to persuade a court to construe the Rules more harshly or to resolve an ambiguity in the Government's favour.