DP (United States of America) v Secretary of State for the Home Department

This is a cautionary tale about the frequent changes of the law in the immigration field and the changes of Home Office policy guidance which are almost impossible for lawyers to keep up with, let alone ordinary people.

This appellant, Mr Peagler, was born on 13 August 1979 and is a national of the United States of America. On 20 November 2007 he was granted two years’ leave to enter the United Kingdom under the Highly Skilled Migrant Programme and he has set up a computer company. On 29 October 2009 Mr Peagler made an in-time application for further leave to remain as a Tier 1 (General) migrant. He says that with that application he sent a bank statement from Santander of a company of which he was the sole director and shareholder, namely Pervalidus Limited, showing that more than £8,000 was in that company’s account between 5 and 9 October 2009. By a decision dated 27 November 2009 the Secretary of State refused the application on the grounds that Mr Peagler had failed to establish that he had the necessary funds of £800 identified in paragraph 245CE and appendix C1 of the Immigration Rules for the period of at least three months before the date of the application as specified on page 19 in the Secretary of State’s then policy guidance of 1 October 2009.

Mr Peagler exercised his statutory right of appeal against the Home Office refusal and submitted his personal statements of account with National Westminster Bank. He represented himself before IJ Pooler who determined on 18 March 2010 that the only matter in dispute before him was the question of funds available to Mr Peagler and whether he could show that £800 had been available to him for a period of three months before the date of the application. He decided, secondly, that Mr Peagler had submitted the statements specified in the Secretary of State’s policy guidance but that those statements showed that his account fell below £800 both between 8 and 23 July and 16 July to 19 August 2009. He decided that Mr Peagler had no additional evidence of funds; although he had funds in the United States, which he was not going to use them in England; although, moreover, there were funds in a company account and he did have an overdraft facility. Those matters were not relied on and so he concluded that the requirements of the Rules and the Secretary of State’s guidance were not met and the Home Secretary’s refusal did not breach Mr Peagler’s rights under Article 8.

Mr Peagler then applied for permission to appeal to the Upper Tribunal. On 23 June 2010, before that application was dealt with, the Court of Appeal in SSHD v Pankina [2011] QB 376 held that the requirements in the guidance were unlawful because one should only have regard to the Immigration Rules and not the guidance which had not itself been part of the Immigration Rules laid before Parliament. In the light of that SIJ Freeman granted Mr Peagler permission to appeal because he thought it was arguable that the First-tier decision had depended on the validity of the policy guidance. That grant of appeal did not explain to Mr Peagler either what the law was after Pankina, which appears to be that the requirement under the Rules was that £800 had to be available to the applicant on the day of application only, nor did the grant of permission to appeal explain what then happened, which was that the Home Office became concerned about the strictness of the rule as construed Pankina and decided to operate a concession that any applicant who made an application before 23 July 2010, as Mr Peagler had done, merely had to show that he had the requisite funds – in this case £800 – on any one day during the month preceding the application. Mr Peagler was still representing himself and, had he known of that concession of the Home Office, he might well have come to the conclusion that the Santander account originally submitted to the Home Office it now had a compelling aspect to it, because it showed that that account had not merely £800 but about £8,000 on occasions during the previous 30 days.

That Home Office concession was in operation when the matter came before SIJ Batiste sitting in the Upper Tribunal. There had been a direction that the matter was to proceed without any further oral evidence in the light of any further written submissions that the parties wished to make. No one appeared before SIJ Batiste and he operated on the basis of the original written submissions and further submissions, but no reference was made, as far as one can make out, on the part of Mr Peagler to this new concession of the Home Office. SIJ Batiste referred to it and obviously knew about it and he concluded that the immigration judge had materially erred in law, but he rejected Mr Peagler’s appeal, which was put on the basis that he had the facility of an overdraft of £3,000 and that that should be taken into account for the purposes of deciding whether he had £800 available at whatever the appropriate time might be.

As I say, although SIJ Batiste referred to the new guidance from the Home Office - which I have rightly or wrongly called a concession – it was not at all clear that Mr Peagler was aware of that position. SIJ Batiste restricted himself to determining whether Mr Peagler had the funds required by the Immigration Rules by reference to his personal accounts at National Westminster Bank and he concluded that access to overdraft facilities did not equate to his having the funds for the purpose of the Immigration Rules. He also dealt with the Article 8 argument, saying that the refusal by the Secretary of State did not breach Article 8 of the Convention.

Mr Peagler then applied for permission to appeal against the determination of SIJ Batiste. The Upper Tribunal refused permission on the basis that the application was four months out of time. Then Mr Peagler was able to instruct counsel. He renewed his application to this court and Mr Simon Canter of counsel submitted detailed grounds which explained the delay in submitting his appeal to the satisfaction of the court. Served with those grounds of appeal was a new letter of 24 November 2010 addressed to Mr Peagler personally at an address in Lincoln purportedly from Santander Bank showing that he had over £8000 in an account with them between 5 and 7 October and £5000 between 8 and 10 October. After he had renewed his application for permission to appeal but before it was considered by a lord justice of this court, this court on 28 June 2011 in The Queen (Adeyemi-Doro) v Secretary of State for the Home Department [2011] EWCA Civ 849 ruled that having an overdraft facility did not count as having funds for the purpose of at least one of the tiers of the Immigration Rules. Obviously that was a very relevant decision but no one thought to draw the attention of the Court of Appeal office to that decision on the basis that no doubt Mr Peagler did not know about it, Mr Canter did not know about it and I suppose that is just one of those things.

When the matter came before Toulson LJ he, on 11 August 2011, on the papers granted Mr Peagler permission to appeal limited to two questions: (1) whether his overdraft facilities amounted to possession of funds within the meaning of the relevant Immigration Rules; and (2) whether he should be permitted to introduce fresh evidence relating to the Santander account and, if so, whether this evidence established that the refusal of his appeal was unlawful.

The Secretary of State then contacted Santander to verify the letter of 24 November 2010 and on 19 September 2011 Santander stated that the document which had been provided by Mr Peagler did not match with the official bank records. On 23 September Santander said further that the name and address on the statement - that of Mr Peagler in Lincoln - did not match what they held on record for their customer. If one compares the letter of 24 November 2010 with the document originally sent by Mr Peagler at the time when he sought to make a further application for leave to remain in late 2009, one sees that the figures and the account number are the same but that the account is actually in the name of Pervalidus Limited and not in the name of Mr Peagler at all. To put it as low as possible, the document of 24 November 2010 submitted to Toulson LJ thus had the potentiality for misleading because it appears to say that the account was Mr Peagler’s account when it was not.

When the Secretary of State received the information from Santander that the letter of 24 November did not match what they held on record for their customer, she refused to accept the letter as evidence of funds and in due course on 13 January 2012 served Mr Peagler with copies of redacted correspondence from Santander confirming the information that I have mentioned, namely that the name and address on the statement did not match, as already set out effectively in a respondent’s notice which the Secretary of State had served once permission to appeal had been granted.

What then happened was that the claimant produced a new letter from Santander on or about 26 January 2012 addressed to both the company, Pervalidus Ltd, and to Mr Peagler at a new address in Downham Market in Norfolk which confirmed that the account referred to in the letter was a genuine business account in the name of Pervalidus. That was also information which became available to the Secretary of State and on 17 February of this year the Secretary of State accepted both that the account was a genuine account which had £8,000 in it in October and “exceptionally” that Mr Peagler could rely on the monies in that account to satisfy the appendix C requirements so that she was prepared “exceptionally” to give Mr Peagler further leave to remain for three years. In that letter she suggested that the right response was for there to be no order as to costs.

So the story has a happy ending in the sense that Mr Peagler has now got leave for a further three years but he has not been prepared to accept dropping hands as to costs and he submits through Mr Gill QC that he ought to have his costs because there was no fault on his part that the relevant evidence was not before SIJ Batiste; that if he had known that that was relevant evidence to submit to the Upper Tribunal the Secretary of State would no doubt have accepted that as evidence then as she has done now and that none of the subsequent litigation would have been necessary. Mr Gill submits secondly that the Secretary of State took a long time to come to her conclusion between the grant of a permission to appeal by Toulson LJ in August 2011 and 17 February 2012 when she indicated that Mr Peagler would get leave to remain for another three years, and that she should have come to that conclusion much earlier and a substantial amount of costs would have been saved. Indeed, he has had to come here to this court in order to get the right decision and that therefore it must follow that Mr Peagler should have his costs.

Mr Payne on behalf of the Home Office submits firstly that as long ago as 9 November the Secretary of State invited Mr Peagler to abandon his appeal on the basis that the point he was seeking to make and for which he got leave – namely the overdraft point – was a bad point, but that the Secretary of State would take a fresh look at any further evidence he wished to submit in relation to the Santander account and would make a fresh decision which could then have a fresh appeal process and the matter would start all over again. Secondly, he submits that the Secretary of State has taken a very structured and indeed compassionate decision in allowing Mr Peagler leave to remain for a further three years because if the appeal had proceeded the Secretary of State would have been bound to have won the appeal because (1) the overdraft facility point had already been decided by this court, albeit in relation to a different tier but that would be a distinction without a difference, and (2) Mr Peagler would not have been able to get over the hurdles of Ladd v Marshall in respect of fresh evidence to get the Santander documentation before the Court of Appeal. The fact that she has exceptionally and by a compassionate decision granted Mr Peagler further leave should not be used as a stick with which to beat her in relation to costs. He also points out that the Secretary of State had said on 17 February that the right proposal was that there should be a dropping hands as to costs.

I have not found this an easy case to decide. As I said earlier, the speed with which the law, practice and policy change in this field is such that litigants must feel they are in an absolute whirlwind and indeed judges of this court often feel that they are in a whirlwind in which it is very difficult to pause for the reflection which should accompany sound judgment. On the other hand, Mr Peagler is in my judgment to be criticised because the letter of 24 November did, as I say, have the potentiality to mislead. To send that document forward on an ex parte application to a judge of this court which looks as if it is saying that Mr Peagler has these funds available to him personally is not the way that ex parte applications should proceed. There is therefore some force in Mr Payne’s submission that had the appeal proceeded and had the Secretary of State stuck to her strict legal rights she would in the end have won. It seems to me that it cannot be as simple as that however. The real world is that the Secretary of State has made this decision. It may be that it is compassionate; it may be that it is exceptional; but the reality is that she would have made that decision in any event and a lot of costs have been incurred as a result of the inevitable delay in what have turned out to be unnecessary investigations into the Santander account.

For my part I feel one has to look at this with a broad brush and it seems to me that there has been some fault on both sides. It seems to me that although the Secretary of State’s proposal of 17 February was not an unreasonable proposal, it did come very late in the day and I fear that, doing the best I can, I can only come to the conclusion that the right order is that neither party should have any costs and that that should be the position throughout this sad story and should apply as much to today as the previous costs.

The order of this court, if my Lady and my Lord agree, would be that there be no order as to costs.

I agree. Although I agree with Mr Payne that the Secretary of State should not be penalised in costs if acting under her residual discretion outside the Immigration Rules she grants leave to remain on compassionate or other grounds, I do not consider that no order as to costs should be interpreted as penalisation in that sense. It is, after all, what the Secretary of State herself proposed last week and it does not entail any concession on her part that the decision of the Upper Tribunal was wrong.

I agree with both judgments. I wanted to add some short observations. As regards today, my Lord has said that the order that there should be no order should extend to today and I agree. I wanted just to explore that a little further. It was on Thursday that the Treasury Solicitor by a fax suggested that this matter should be disposed of by an order by consent for withdrawal and that the matter of costs should then be dealt with on written submissions as the parties were unable to agree. However, by then of course the case had already been allocated to this constitution. The papers were with the court. So the position is that if the Secretary of State, as a practical matter, wishes to put forward that sort of proposal, and obviously there is very good reason to do it and in the normal way that matter could be dealt with by one Lord or Lady Justice on paper, then in general agreement has to be reached in advance of the date when it was proposed in this case, and (if the court is already seized of the matter) the submissions have unless otherwise directed to be available immediately.

In this case, it was proposed that the costs submissions should be filed in a period of three to four weeks. By then the court would have become much less familiar with the matter. In these circumstances the court decided that the right course was to proceed with an oral hearing on costs.

This case was complicated and did call for detailed submissions on costs but the point is that they should have been ready in time for this matter to be disposed of without bringing the full constitution into court.