New London College Ltd, R (on the application of) v Secretary of State for the Home Department

The appellant (“the college”) is a limited company which provides further education courses. It formerly held a Tier 4 General (Student) Sponsor Licence issued by the United Kingdom Border Agency (“UKBA”), which enabled it to issue a visa letter or a confirmation of acceptance of studies (“CAS”) to non-EEA students who wished to study in the United Kingdom. The licence was suspended by UKBA on 18 December 2009 and was then withdrawn on 5 July 2010 (though the withdrawal has not yet come into effect, by reason of orders made in the course of a series of applications for judicial review). In a judgment handed down on 7 April 2011, Wyn Williams J found that the suspension of the licence from 18 December 2009 to 25 March 2010 was unlawful but that the decisions to maintain the suspension thereafter and then to withdraw the licence were lawful. He also found that the decisions to suspend and withdraw the licence engaged Article 1 of the First Protocol (“A1P1”) to the European Convention on Human Rights and that the initial period of suspension was in breach of that article.

The college now appeals on three broad grounds against the order made by Wyn Williams J in so far as he dismissed the claim against the suspension and withdrawal decisions. In outline, the grounds are that: (1) the system of sponsor licensing pursuant to which the decisions were taken is unlawful because it is contained in policy guidance, not in the Immigration Rules, and it lacks the necessary legislative authority (the college relies primarily on Pankina v Secretary of State for the Home Department [2011] QB 376 and I will refer to this as “the Pankina issue”); (2) the lack of a right of appeal to an independent body is in breach of article 6 ECHR (“the article 6 issue”); and (3) the judge was wrong to find on the facts that the decisions were reasonable and proportionate (“the reasonableness issue”).

The Secretary of State cross-appeals against the judge’s finding that the suspension and revocation of such a licence engages A1P1 (“the A1P1 issue”).

The Immigration Act 1971 (“the 1971 Act”) provides by section 1(2) that persons not having the right of abode may live, work and settle in the United Kingdom by permission and subject to such regulation and control of their entry into, stay in and departure from the United Kingdom as is imposed by the Act. By section 1(4), the rules laid down by the Secretary of State as to the practice to be followed in the administration of the Act for regulating the entry into and stay in the United Kingdom of persons not having the right of abode shall include provision for admission (in such cases and subject to such restrictions as may be provided by the rules, and subject or not to conditions as to length of stay or otherwise) of persons coming for the purposes of study.

Section 3(1) provides that, except as otherwise provided by or under the 1971 Act, where a person is not a British citizen he shall not enter the United Kingdom unless given leave to do so in accordance with the provisions of, or made under, the Act; he may be given leave to enter (or, when already there, leave to remain) either for a limited or for an indefinite period; and if he is given limited leave to enter or remain, it may be given subject to conditions restricting his employment and studies in the United Kingdom.

Provision is made in section 3(2) for the laying before Parliament of the rules made by the Secretary of State (generally referred to as the Immigration Rules):

“The Secretary of State shall from time to time (and as soon as may be) lay before Parliament statements of the rules, or of any changes in the rules, laid down by him as to the practice to be followed in the administration of this Act for regulating the entry into and stay in the United Kingdom of persons required by this Act to have leave to enter, including any rules as to the period for which leave is to be given and the conditions to be attached to different circumstances ….

If a statement laid before either House of Parliament under this subsection is disapproved by a resolution of that House passed within the period of forty days beginning with the date of laying …, then the Secretary of State shall as soon as may be make such changes or further changes in the rules as appear to him to be required in the circumstances, so that the statement of those changes be laid before Parliament at latest by the end of the period of forty days beginning with the date of the resolution ….”

The significance of that provision for the status of the Immigration Rules, and the extent to which the rules may be qualified or supplemented by policies which have not been laid before Parliament, are at the heart of the decision in Pankina.

The requirements for leave to enter as a student were formerly contained in paragraph 57 of the Immigration Rules, which included the following:

“57.

The requirements to be met by a person seeking leave to enter the United Kingdom as a student are that he:

(i)

has been accepted for a course of study, or a period of research, which is to be provided by or undertaken at an organisation which is included in the Register of Education and Training Providers, and is at either:

(a)

a publicly funded institution of further or higher education which maintains satisfactory records of enrolment and attendance of students and supplies these to the [United Kingdom Border Agency] when requested; or

(b)

a bona fide private education institution; or

(c)

an independent fee paying school outside the maintained sector which maintains satisfactory records of enrolment and attendance of students and supplies these to the [United Kingdom Border Agency] when requested; and

(ii)

is able and intends to follow either:

(a)

a recognised full-time degree course or postgraduate studies at a publicly funded institution of further or higher education; or

(b)

a period of study and/or research in excess of 6 months at a publicly funded institution of higher education where this forms part of an overseas degree course; or

(c)

a weekday full-time course involving attendance at a single institution for a minimum of 15 hours organised daytime study per week of a single subject, or directly related subjects; or

(d)

a full-time course of study at an independent fee-paying school ….”

That gives a sufficient flavour of the matter. It is unnecessary to set out the further requirements contained in paragraph 57 itself or those in paragraph 60 concerning an extension of stay as a student.

A new Points Based System (or “PBS”), was introduced with effect from 31 March 2009. Its introduction is described as follows in the witness statement of Ms Roxanna Cram, a higher executive officer of UKBA:

“4.

… The new system was designed to consolidate the various routes of entry into the United Kingdom into five different tiers. Central to the new system were ‘sponsors’ who would play a part in ensuring that only genuine students and workers entered the United Kingdom ….

5.

Prior to the introduction of the PBS, extensive consultation took place, including with the education sector. That consultation took place against the background that for many years prior to the introduction of PBS, Entry Clearance Officers (ECOs) tested the suitability, credibility and intentions of an international student when applying to come to the UK. If the ECO was not satisfied about these matters, they had the power to refuse an application for leave to enter. The education sector had historically seen this as a fetter on their activities since genuine students were said to be refused entry clearance. This assessment was also seen as a duplication of that already done by the sponsoring educational institution.

6.

In light of the above responses, a key change brought about by the consultation was UKBA’s agreement to remove an ECO’s power to make refusals on ‘credibility and intention’ on the basis that the education provider was best placed to make judgments as to the genuineness, or otherwise, of a prospective student and their ability to follow a course of study. The agreement was that UKBA would not make ‘academic judgments’ under PBS because the sector gave assurances that they would sponsor only genuine students who they had assured themselves were fully intending to study. A further … key change was that sponsors (of both students and workers) took on responsibility to monitor the compliance of the students or workers whom they had sponsored with immigration rules while in the UK.

7.

Thus, once the educational provider has issued a visa letter/ confirmation of acceptance for studies (‘CAS’) to the migrant, UKBA’s opportunity for further checks and its grounds for refusal are based on an objective assessment of whether an applicant has a valid offer from a registered UK based sponsor for an approved course, and an ability to maintain and support oneself without recourse to public funds. …

8.

… Assessing a student’s intention and ability to follow a course of study is a fundamental aspect of maintaining immigration control. …

9.

The principal basis for an education provider to have a role in maintaining the integrity of immigration control is through the duties imposed via a licence to issue Confirmation of Acceptance for Studies (previously visa letters). The introduction of the concept of a licensed sponsor was a further key feature of PBS. Sponsorship makes those who benefit financially from non-EEA migrants coming to the UK for work or study (i.e. employers or educational establishments) legally responsible for the migrants that they bring to the UK. Sponsorship underpins nearly all of PBS …. Prospective sponsors of non-EEA migrants must first be licensed by UKBA.”

Under the Points Based System, applications for entry clearance or leave to remain as a student are assessed in accordance with the provisions of Part 6A of the Immigration Rules applying to a “Tier 4 (General) Student”. The requirements for entry clearance are contained in paragraph 245ZV, and those for leave to remain in paragraph 245ZX. In each case, one of the requirements is that the applicant must have a minimum of 30 points under paragraphs 113 to 120 of Appendix A.

Paragraph 113 of Appendix A states that an applicant for entry clearance or leave to remain as a Tier 4 (General) Student must score 30 points. Available points are shown in Table 16, which awards 30 points for a Confirmation of Acceptance for Studies (“CAS”). Paragraph 6 of the Immigration Rules defines a CAS as “an authorisation issued by a Sponsor to an applicant for entry clearance, leave to enter or remain as a Tier 4 Migrant in accordance with these Rules”. The notes to Appendix A, set out in paragraphs 116 to 120 of the appendix, contain qualifications as to the circumstances in which a CAS will be accepted. In particular:

“116.

A Confirmation of Acceptance for Studies will only be considered to be valid if:

…

(d)

it was issued by an institution with a Tier 4 (General) Student Sponsor Licence;

(e)

the institution must still hold such a licence at the time the application for entry clearance or leave to remain is determined ….

117.

A Confirmation of Acceptance for Studies reference number will only be considered to be valid if:

(a)

the number supplied links to a Confirmation of Acceptance for Studies Checking Service entry that names the applicant as the migrant and confirms that the Sponsor is sponsoring him in the Tier 4 category indicated by the migrant in his application for leave to remain (that is, as a Tier 4 (General) Student or a Tier 4 (Child) Student) ….

…

120.

Points will only be awarded for a Confirmation of Acceptance for Studies (even if all the above requirements are met) if the course in respect of which it is issued meets each of the following requirements:

…

(d)

The course must meet one of the following requirements:

i.

be a full time course of degree level study that leads to an approved qualification as defined in UKBA guidance;

ii.

be an overseas course of degree level study that is recognised as being equivalent to a UK Higher Education course and is being provided by an overseas Higher Education Institution;

iii.

be a full time course of study involving a minimum of 15 hours per week organised daytime study and, except in the case of a pre-sessional course, lead to an approved qualification, below bachelor degree level as defined in paragraph 120(a).

(e)

If the course contains a course-related work placement, any period that the applicant will be spending on that placement must not exceed half of the total length of the course spent in the United Kingdom except where it is a United Kingdom statutory requirement that the placement should exceed half the total length of the course.”

The CAS is not an actual certificate or paper document but is similar to a database record: sponsors complete a process within a sponsorship management system that results in the assignment of a unique CAS reference number. Prior to the introduction of the CAS, colleges issued “visa letters” to students to whom they had offered a place; and until October 2009, Table 16 referred to a visa letter rather than to a CAS. There then followed a transitional period during which 30 points could be awarded either for a visa letter or for a CAS. From February 2010, however, the table was amended to refer only to a CAS. The differences between a visa letter and a CAS are not material to the issues in the appeal, and for the sake of simplicity I will generally refer only to a CAS.

The Immigration Rules contain various provisions for the revocation or curtailment of an entry clearance or leave to remain in the event of a change of circumstances since it was issued or granted. They include specific provision in respect of the Points Based System. In particular, paragraph 323A provides as follows:

“323A. In addition to the grounds specified in paragraph 323, the leave to enter or remain of … a Tier 4 Migrant … may be curtailed, or its duration altered, if:

(a)

the migrant’s Sponsor ceases to have a sponsor licence (for whatever reason),

(b)

the migrant’s Sponsor transfers the business … at which the migrant is studying to another person, that person does not have a sponsor licence and that person:

(i)

fails to apply for a sponsor licence within 28 days of the transfer of the business,

(ii)

applies for a sponsor licence but is refused, or

(iii)

applies for a sponsor licence and is granted one, but not in a category that would allow it to issue a Certificate of Sponsorship to the migrant,

....”

The rules quoted above make various references to a “sponsor licence”. Paragraph 6 of the Immigration Rules defines “sponsor licence” as “a licence granted by the Secretary of State to a person who, by virtue of such a grant, is licensed as a Sponsor under Tiers 2, 4 or 5 of the Points Based System”; and “Sponsor” is defined as “the person or Government that the Certificate of Sponsorship Checking Service or Confirmation of Acceptance for Studies Checking Service records as being the sponsor for a migrant”. There is, however, no provision of the Immigration Rules which identifies or defines the circumstances in which a sponsor licence will or may be granted, suspended or withdrawn. The Secretary of State’s practice in relation to the grant, suspension and withdrawal of such a licence is set out in guidance issued by UKBA. The Immigration Rules contain no specific reference to such guidance. The only material reference to guidance concerning the Points Based System is in paragraph 245AA, which reads:

“245AA. Documentary evidence

(a)

Where Part 6A or Appendices A to C, or E of these Rules state that specified documents must be provided, that means documents specified by the Secretary of State in the Points Based System Policy Guidance as being specified documents for the route under which the applicant is applying. If the specified documents are not provided, the applicant will not meet the requirement for which the specified documents are required as evidence.

…

(c)

Where Part 6A or Appendices A to C, or E of these Rules refer to the United Kingdom Border Agency guidance, this means guidance published by the United Kingdom Border Agency for use by Sponsors or migrants to ensure compliance with these Rules. If the Sponsor or applicant does not satisfy the requirements set out in guidance and referred to in these Rules, the applicant will not meet the related requirement in these Rules.”

Sub-paragraph (c) was not included in paragraph 245AA as it existed on 18 December 2009, the date when the college’s licence was first suspended, but was added by the date in March 2010 when the decision was taken to maintain the suspension.

UKBA’s “Guidance for Sponsor Applications for Tier 4 of the Points Based System” was first published for use for applications made on or after 5 October 2009 and has been subject to numerous subsequent revisions. Relevant parts of the guidance as it existed at material times are set out in the judgment of Wyn Williams J at [24] to [35]. I propose to refer only to some key provisions.

Licensed sponsors are given an A-rating or a B-rating, as described in the passages cited by the judge at [26] and [27] of his judgment.

All versions of the guidance contained provisions relating to the suspension of licences, as described by the judge at [28] to [30]. Paragraph 328 of the October 2009 version of the guidance was in these terms:

“328.

If we have reason to believe that a sponsor is seriously breaching its duties and poses a major threat to immigration control (for example, assigning confirmations of acceptance for studies or issuing visa letters to students who do not qualify to come to the United Kingdom), we may suspend its licence while we make further inquiries ….”

The March 2010 version, at paragraph 329, watered down the test for determining whether or not to suspend a licence, by omitting the words “seriously” and “major”:

“329.

If we have reason to believe that a sponsor is breaching its duties and/or poses a threat to immigration control (for example, assigning Confirmation of Acceptance for Studies to students who do not fully intend to undertake, and complete their course), we may suspend its licence while we make further inquiries.”

Where a licence is suspended, the sponsor is not entitled to issue any new CAS, and UKBA will not consider applications for leave by students with a CAS already issued by the sponsor, during the period of suspension.

The guidance in force at the time when decisions were taken to withdraw the college’s licence was that contained in the April 2010 version and the July 2010 version. As explained at [31] of his judgment, Wyn Williams J assumed those versions to be materially the same. He referred to paragraphs 344, 346 and 350 of the April version, of which paragraph 350 is the most important:

“350.

We may withdraw a sponsor's licence if:

•

It fails to comply with any of its duties;

•

As a result of information available to our visiting officers, we are not satisfied the sponsor is using the processes or procedures necessary to comply fully with its duties;

…

•

We find that students that it has sponsored have not complied with the conditions of their permission to stay in the United Kingdom and the sponsor has not been following good practice guidance set out by us or a sector body;

….”

Withdrawal of a sponsor licence results, of course, in the loss of entitlement to issue any further CAS. As to what happens to existing students and those already in possession of a CAS, the April 2010 version provided as follows:

“379.

When we withdraw a sponsor’s licence, we will:

•

Immediately end (curtail) the permission to stay in the United Kingdom of any students who we believe were actively involved (complicit) in any dishonesty by the former sponsor (for example, if the student agreed that the sponsor would arrange a non-existent course for him/her so he/she could come to the United Kingdom); and

•

reduce the length of the permission to stay in the United Kingdom of any other students (those who are not actively involved) to 60 calendar days, to give them a chance to find a new sponsor. (If a student has less than 6 months of his/her leave remaining, we will not curtail his/her leave).

380.

In the first case above, the student will have to leave the United Kingdom or face enforced removal. In the second case above, he/she will also have to leave or face enforced removal if, at the end of the 60 calendar days, he/she has not found a new sponsor.

381.

We will take action against any student who remains in the United Kingdom after his/her permission to stay here has expired. This may result in students being detained and forcibly removed from the country. Any application he/she makes to come to the United Kingdom within the next 10 years may also be refused.

382.

When a sponsor has its licence withdrawn, any Confirmations of Acceptance for Studies it has assigned or visa letter it has issued will automatically become invalid. This means that any application for entry clearance or leave to remain made on the basis of such a Confirmation of Acceptance for Studies or visa letter will automatically be refused.

383.

Where a student has already been granted entry clearance when we withdraw his/her sponsor’s licence, the entry clearance will be cancelled under paragraph 30(A)(ii) of the Immigration Rules, if he/she has not yet travelled to the United Kingdom. If a student has travelled to the United Kingdom, he/she will be refused entry to the country under paragraph 321(ii) of the Immigration Rules.”

The only other aspect of the guidance that I need to mention concerns the position on transfer of the sponsor’s business. The guidance contains detailed provisions relating to merger or takeover, but the point of particular importance for the arguments relating to A1P1 is that the sponsor licence cannot itself be transferred. The new organisation must apply for a sponsor licence of its own if it does not already have one; if it already has one, it can apply for an increase in its allocation of CASs under that licence (see e.g. paragraphs 383 and 387 of the March 2010 version of the guidance). If the transferor no longer needs a licence, the licence formerly granted to it becomes dormant or has to be surrendered.

The factual background is summarised clearly and succinctly in the introduction to Wyn Williams J’s judgment, at [1] to [10], from which I gratefully take the following.

The college provides further education courses in a range of subject areas from two campuses in Hounslow, London. In July 2008 it applied to UKBA for a Tier 4 General (Student) Sponsor Licence in anticipation that such a licence would be required so as to enable it to enrol non-EEA overseas students upon the introduction of the Points Based System. At that time the college operated from one campus only, the address of which was 1 Martindale Road, Hounslow.

On 18 October 2008 UKBA granted the college the licence which it had sought. The college was awarded an A-rating. By 18 October 2008 it had or was about to acquire the second campus, namely premises at 75-81 Staines Road, Hounslow. Nonetheless the licence granted related only to 1 Martindale Road.

On 18 December 2009 UKBA suspended the licence. In a letter to the college it explained the reasons why it had taken that action. The college responded immediately; it asserted that the reasons for the suspension were not sustainable and it asked for the suspension to be lifted. Despite those representations the suspension was not lifted. Indeed, as of 12 March 2010, UKBA had not responded substantively to the college’s representations. Accordingly, on that date the college issued proceedings for judicial review; it sought an order quashing the suspension of its licence or alternatively an order requiring UKBA to reach a decision about whether or not the suspension should continue.

On 25 March 2010, before the issue of permission could be determined, UKBA wrote a letter to the college setting out a number of complaints and seeking information about various points. The letter ended as follows:

“You now have 28 days to make representations including submitting evidence in response to this letter. If you fail to make representations, or to adequately address these issues within this time, your licence will be revoked and you will no longer be able to sponsor migrants.”

On 31 March 2010 Holman J refused the college’s application for permission to apply for judicial review on the ground that the claim was premature and that UKBA was legitimately and justifiably pursuing the questions which it had raised in its letter of 25 March. No renewed application for permission was made.

Unbeknown to Holman J, on 26 March the college's solicitors had sent a detailed reply to UKBA’s letter of 25 March; in the eyes of the college, at least, the reply provided answers to the points raised by UKBA. By 30 April 2010 there had been no substantive response to the solicitors’ letter. Accordingly the college commenced a second judicial review. On 14 May 2010 Mr Ian Dove QC, sitting as a deputy High Court Judge, granted the college an interim injunction restraining UKBA from withdrawing the licence. As it happens, UKBA had already decided to withdraw the licence. By letter dated 14 May 2010 it communicated that decision to the college, but because of Mr. Dove’s order the decision was not put into effect. Nonetheless, the college’s licence remained suspended.

On 25 June 2010 Kenneth Parker J considered the issue of permission in the second set of proceedings. He had before him summary grounds of defence which had been filed on 7 June 2010. He refused permission. He also discharged the interim order of Mr. Dove. On 5 July 2010 the college renewed its application for permission.

On the same day, 5 July 2010, UKBA wrote to inform the college that it had decided to withdraw the licence. This was the operative withdrawal decision adjudicated on by Wyn Williams J.

On 5 August 2010 officers of UKBA met with officers of the college; it had been agreed that the decision of 5 July would be reviewed. A fresh decision was promised within 14 days. On 12 August 2010 officers of UKBA visited the college’s premises and undertook various investigations. On 19 August UKBA wrote to the college to indicate that it had decided to maintain its decision to withdraw the licence.

On 24 August 2010 the college issued a third claim for judicial review. The proceedings sought to challenge the decision of 5 July 2010. On 24 August 2010 Collins J made an order which had the effect of restraining the withdrawal of the licence but maintaining its suspension. On 12 October 2010 King J granted permission to bring both the second and third claims for judicial review. Those claims were then determined by the order of Wyn Williams J now under appeal.

The essence of the case advanced under this ground by Mr Manjit Gill QC on behalf of the college is that the system of sponsor licensing pursuant to which the suspension and withdrawal decisions were taken is unlawful, in that there is no power under the 1971 Act to create and operate such a system or, if there is such a power, the relevant requirements have to be included in rules laid before Parliament pursuant to section 3(2) of the 1971 Act and cannot lawfully be contained in policy guidance outside the rules. The submissions were put in a variety of different ways in Mr Gill’s skeleton argument but were given a narrower focus in his oral submissions. At the heart of the submissions is the reasoning of the Court of Appeal in Pankina, as considered in a number of subsequent decisions.

The applicants in Pankina had sought leave to remain and work in the United Kingdom. Under the relevant provisions of the Immigration Rules, they had to demonstrate that they had sufficient funds to maintain themselves; and in particular, by paragraph 2 of Appendix C, they were required to have £800 and to provide specified documents. By guidance not laid before Parliament, though issued while the statement of changes to the rules containing the relevant provisions was still before Parliament, the specified documents were bank and building society statements showing that the applicant had held at least £800 continuously for the three months immediately prior to the date of the application. The Court of Appeal held that the requirement in the guidance to have held £800 continuously for three months did not form part of the rules and was of no effect. The leading judgment was given by Sedley LJ, with whom the other members of the court agreed.

Sedley LJ said at [17] that “the time has come to recognise that, by a combination of legislative recognition and executive practice, the rules made by Home Secretaries for regulating immigration have ceased to be policy and have acquired a status akin to that of law”; and, at [21], that the fact that the rules were being elevated to a status akin to that of law and made the source of justiciable rights was a potent constitutional reason for Parliament’s insisting, by section 3(2) of the 1971 Act, that the Home Secretary’s rules of practice must be open to a negative resolution. Since the three-month test did not form part of the rules laid before Parliament, the question was whether it was of any legal effect. This led to the first question formulated for the court, at [23]: “(1) Can the immigration rules lawfully incorporate provisions set out in another document which (a) has not itself been laid before Parliament, (b) is not itself a rule of law but a departmental policy, and (c) is able to be altered after the rule has been laid before Parliament?”.

Referring to R v Secretary of State for Social Services, ex p. Camden London Borough Council [1987] 1 WLR 819, Sedley LJ accepted at [26] that a measure which has to be laid before Parliament is not vitiated if, rather than being self-contained, it derives part of its content from an extant and accessible outside source; and that the answer to question (1)(a), taken alone, was that the bare fact that a measure was not self-contained did not render it ineffective. As he said at [27], the objection was not to rules which relied on outside sources for evidence of compliance, but “to rules which purport to supplement themselves by further rules derived from an extraneous source, whether that source is the rule-maker him- or herself or a third party”. He continued:

“28.

The reason lies in questions (1)(b) and (c). A policy is precisely not a rule: it is required by law to be applied without rigidity, and to be used and adapted in the interests of fairness and good sense. To take the present case, the policy guidance standing alone would not only permit but require a decision-maker to consider whether, say, a week’s dip below the £800 balance during the three-month period mattered. This would in turn require attention to be given to the object of the policy, which is to gauge, by what is accepted on all sides to be a very imprecise rule of thumb, whether the applicant will be able to support him- or herself without recourse to public funds. If that object was sensibly met, the law might well require the policy to be applied with sufficient flexibility to admit the applicant, or would at least require consideration to be given to doing so. But if the requirement is a rule – and it is the Home Secretary’s case that by incorporation it becomes a rule – then there is no discretion and no judgment to be exercised.

29.

This in itself would in my opinion require the three-month criterion to form part of the rules laid before Parliament if it were to be effective. But the objection goes deeper. Albeit the first version of the policy guidance was brought into being within the 40 days allowed by section 3(2) for the parliamentary procedure, it has been open to change at any time. It is this, rather than the fact that it has in the event been changed, which, in answer to question (1)(c), is in my view critical. It means that a discrete element of the rules is placed beyond Parliament’s scrutiny and left to the unfettered judgment of the rule-maker.

…

33.

But the operation of the rules qua rules is one thing; what they contain as a matter of law is another. In my judgment the statutory recognition of rules which are to have the character and, on appeal, the force of law requires such rules to be certain. That does not shut out extraneous forms of evidence of compliance, so long as these are themselves specified, but it does in my judgment shut out criteria affecting individuals’ status and entitlements which – coming back now to the questions in paragraph 23 above – (a) have not themselves been tendered for parliamentary scrutiny, and (c) even if ascertainable at that point of time, may be changed without fresh scrutiny. As to (b), while the fact that the criterion absorbed into the rules comes from a policy document makes nonsense of the notion of policy, this is not critical: the vice would be the same if the reference in the rules were to a categorical criterion in some external but impermanent or undetermined source.

…

35.

… The answer has to be that ministers are to be expected to do what is required of them: Parliament will expect the Home Secretary to lay before it any rules by which he or she proposes to manage immigration; the courts will expect such rules, like any other source of law, to be those and only those which have Parliament’s approval; and appellate tribunals will expect to find in the rules the certainty which rules must have if they are to function as law ….”

This led to the conclusion, at [37], that the three-month criterion formed no part of the rules applicable to the cases under appeal and that the only relevant criterion was the requirement in Appendix C that applicants should have £800 at the time of the application.

In R (English UK) v Secretary of State for the Home Department [2010] EWHC 1726 (Admin), Foskett J stated at [59]-[60] that “[t]he ratio of the decision [in Pankina] appears to me to be that a provision that reflects a substantive criterion for eligibility for admission or leave to remain must be the subject of a process that involves a true Parliamentary scrutiny” (original emphasis) and that it followed that, if a change to current practice did not involve any alteration of a substantive criterion for admission or for leave to remain, there would be no objection to the change being effected in some form of extrinsic guidance.

In R (Joint Council for the Welfare of Immigrants) v Secretary of State for the Home Department [2010] EWHC 3524 (Admin), the Divisional Court applied the reasoning in Pankina in holding that interim limits placed by the Secretary of State on (i) the number of applicants for entry clearance who might be issued with visas under Tier 1 (General) of the Points Based System, and (ii) the number of certificates of sponsorship that might be issued under Tier 2 (General) of the system, were unlawful. Statements of changes to the relevant rules had been laid before Parliament in each case. In the first case, the changed rule referred to “a limit, details of which will be published by the Secretary of State on the UK Border Agency website”; in the second case, it referred to “limits [which] will be specified in the Points Based System guidance”.

The leading judgment was given by Sullivan LJ, with whom Burton J agreed. Sullivan LJ stated in his conclusions:

“37.

I accept Mr Swift’s submission [for the Secretary of State] that the defendant’s intention in laying HC 59 and HC 96 before Parliament was to change the Rules so as to give her the power, not merely to determine the limits for Tier 1 and Tier 2 and incorporate those limits into the Rules by cross-reference to UKBA website and PBS Guidance in existence at the time, but also to be able thereafter to alter them at will by making such alterations to the website and/or the Guidance as she saw fit.

38.

I also accept Mr Drabble’s submission [for the claimant], that that is precisely what Pankina says that the Secretary of State may not do. ….

39.

We are bound by Pankina, but, perhaps unsurprisingly, I would follow Pankina even if we were not so bound. The Secretary of State has to administer the 1971 Act. The Act recognises that the Secretary of State will be laying down rules as to the practice that she will follow in administering the Act, and requires those rules to include provision for certain matters (see section 1(4)). The Act also requires the Secretary of State to lay before Parliament any changes in the rules as to the practice to be followed (see section 3(2)). The purpose of laying the changes before Parliament is to give Parliament an opportunity within a period of 40 days, of expressing its disapproval of the changes.

40.

It would frustrate the statutory purpose if the Secretary of State was able to lay before Parliament a change in the rules, which said in effect, that the practice to be followed will be set out in guidance, or be published on a website, which the Secretary of State would be free to change from time to time at her discretion. Far from giving effect to the statutory purpose, such a rule would be a deliberate evasion of the statutory purpose: an attempt to place the exercise of ministerial discretion beyond the bounds of Parliamentary scrutiny as required by the 1971 Act.

…

43.

I readily accept that there is a spectrum and that in enacting section 3(2) Parliament did not intend that every alteration to the Secretary of State’s practice, however minor, should be subject to the scrutiny of Parliament. It is unnecessary to consider the precise point in the spectrum at which Parliamentary scrutiny is not required because the quantification on the limits on the number of applicants who may be admitted under Tier 1 and Tier 2 is, on any basis, at the top end of the spectrum. Alterations to the limits of those who may be permitted to enter under Tiers 1 and 2 … are precisely the kinds of substantive changes that should be laid before Parliament ….”

Pankina and Joint Council for the Welfare of Immigrants were followed by the Divisional Court in R (Alvi) v Secretary of State for the Home Department [2011] EWCA Civ 681. The case concerned points awarded for a certificate of sponsorship issued by a prospective employer. Paragraph 82 of Appendix A provided that no points would be awarded for sponsorship unless the proposed job appeared on a list of skilled occupations published on UKBA’s website. The court held that the governing principle set out in the list was a substantive matter and, on the reasoning in Pankina, was a requirement which had to be set out in the Immigration Rules if it was to be valid (see per Jackson LJ at [40]).

We were told that the decisions in Joint Council for the Welfare of Immigrants and Alvi are under appeal to the Supreme Court, where they have been listed for hearing in April 2012, and that the correctness of Pankina is a live issue in the appeals. There was, however, no request or suggestion that our decision on the present appeal should await the judgment of the Supreme Court in those cases.

Mr Gill submitted to us that the system of licensing of sponsors falls within the same vice as led to the findings of unlawfulness in Pankina and the two Divisional Court decisions, and that Foskett J in English UK had attributed too narrow a ratio to the decision in Pankina. Mr Gill contrasted the former paragraph 57 of the Immigration Rules with the position under the Points Based System. Paragraph 57 set out the requirements for leave to enter as a student and was the source of justiciable rights which could be the subject of appeal (see e.g. R v Immigration Appeal Tribunal, ex p. Idiaro [1991] Imm AR 546 for an applicant’s appeal on the basis that the college at which he was a student was a bona fide educational establishment). The rules now refer to a CAS issued by an institution with a sponsor’s licence, but all the detail concerning the requirements for that licence are contained in guidance, without any possibility for the student to raise on appeal the question whether those requirements are satisfied. Moreover that guidance is itself subject to change. Thus a system of regulation of colleges which was formerly exercised through the rules is now exercised through changeable guidance. That system of regulation imposes requirements which directly affect the status and entitlements of students and is in any event part of the practice followed in the administration of the 1971 Act for regulating the entry into and stay in the United Kingdom of persons required by the Act to have leave to enter or remain as students. It is therefore required to be included in the rules laid before Parliament pursuant to section 3(2).

For the Secretary of State, Mr Palmer emphasised that a sponsor licence simply confers on an educational institution the right to issue a CAS (and formerly a visa letter) which will be recognised by UKBA as evidencing (i) a student’s ability and intention to follow a course of study and (ii) the sponsor’s commitment to be responsible for the student while in the United Kingdom. The licence is relevant only to non-EEA nationals with no basis to be here apart from the wish to study at a particular college. Its purpose is to satisfy immigration officers that a person can be granted leave to enter as a student. It does not need any statutory foundation beyond the general powers conferred by sections 1 and 3 of the 1971 Act.

Mr Palmer summarised the history that led to the adoption of the Points Based System and referred to the passage from Ms Cram’s witness statement set out at [9] above. He pointed out that prior to the introduction of the system there was a requirement, under paragraph 57 of the Immigration Rules, for a college to be on the Register of Education and Training Providers, which was held by the Department of Education. The need for pre-approval was retained in the new system through the requirement that a college be licensed by UKBA as a sponsor. In neither case were the detailed criteria, whether for inclusion on the Register or for licensing as a sponsor, set out in the rules. But the new system did mark a fundamental shift, in that the Secretary of State was giving responsibility to the colleges to assess for themselves the suitability of applicants to study with them, subject to their monitoring of compliance with the relevant requirements and letting UKBA know of any problems (thus showing the need for them to have robust, reliable monitoring systems).

In Mr Palmer’s submission, the focus of sections 1 and 3 of the 1971 Act is on the control of entry into and stay in the United Kingdom by persons without the right of abode. The Immigration Rules set out the criteria to be applied in determining whether to grant such persons leave to enter or remain. The requirements for entry into and stay in the United Kingdom as a student are contained in paragraphs 245ZV and 245ZX of the rules and include in each case that the applicant must have a minimum of 30 points under paragraphs 113 to 120 of Appendix A. Those provisions do not include any cross-reference to policy guidance. They do require that a CAS be issued by an institution holding a relevant sponsor licence, but the question whether a sponsor has a licence is as much a matter of objective fact as whether, under the previous system, the institution was on the Register of Education and Training Providers. The substantive criteria relating to entry and stay as a student are complete and are neither supplemented nor qualified by guidance. This distinguishes the case from Pankina, the ratio of which was correctly identified by Foskett J in English UK. Pankina and the two Divisional Court cases were all concerned with substantive criteria for eligibility to enter or stay, which it was held should have been set out in the rules rather than in guidance that was subject to change without Parliamentary scrutiny. Whilst the criteria for the grant, suspension or withdrawal of a sponsor licence may have an indirect effect on a person’s entitlement to enter or remain as a student, in that the substantive criteria for eligibility to enter or remain include a requirement that the sponsor holds a sponsor licence, what was said in Pankina cannot have been intended to apply to such a situation. (Mr Palmer accepted that paragraph 245AA(c), set out at [14] above, may give rise to a problem under the reasoning in Pankina, but it is a general rule applicable to the whole of the Points Based System and, in his submission, has no bearing on the specific issues in this appeal concerning the suspension and withdrawal of sponsor licences.)

In my judgment, Mr Palmer’s analysis is compelling. First, the college’s contention that there is no power under the 1971 Act to create and operate the system of sponsor licensing seems to me to be plainly wrong. Sections 1 and 3 of the Act are amply wide enough to confer the necessary power on the Secretary of State. Mr Gill did not advance any tenable argument to the contrary. The real thrust of his submissions was that such a system must be set out in the Immigration Rules themselves, not in policy guidance, rather than that there is no power to establish the system at all.

As to that, I acknowledge that there is some attraction to Mr Gill’s contention that the system of sponsor licensing forms part of “the practice to be followed in the administration of [the 1971] Act for regulating the entry into and stay in the United Kingdom of persons required by [the] Act to have leave to enter” and must accordingly, pursuant to section 3(2), be set out in rules laid before Parliament. Moreover, aspects of Sedley LJ’s reasoning in Pankina might be taken to support a wide view of what must be set out in the rules as opposed to policy guidance. But in my view the ratio of Pankina was correctly identified by Foskett J in English UK as relating to the substantive criteria for entitlement to leave to enter or remain. The particular issue in the case was whether a substantive criterion laid down in the rules could be qualified by changeable policy guidance; and when Sedley LJ referred at [33] to “criteria affecting individuals’ status and entitlements”, he was referring to the content of the substantive criteria themselves, not to extraneous factors which might affect the ability of an applicant to fulfil those criteria. In this case the substantive criteria governing entitlement to leave to enter or remain as a Tier 4 (General) Student are laid down in the rules which, as Mr Palmer submitted, are not supplemented or qualified by guidance. The fact that the rules include a requirement that the sponsor holds a sponsor licence is unobjectionable, just as the former requirement that the institution be included in the Register of Education and Training Providers was in my view unobjectionable. Whether the sponsor holds a sponsor licence does of course have an indirect effect on an applicant’s entitlement, in that it affects his or her ability in practice to meet the criteria; and it follows that the criteria for the grant, suspension or withdrawal of a sponsor licence also have an indirect effect on an applicant’s entitlement. Such criteria, however, are materially different from the substantive criteria for entitlement and do not affect the content of the substantive criteria.

A further concern about Mr Gill’s submissions is that if they were well founded it is difficult to see how any part of the system of sponsor licensing could survive in its current form. The college’s aim is to have its sponsor licence restored, and for that reason Mr Gill focused understandably on the alleged unlawfulness of the criteria for suspension and withdrawal of the licence. But if there is no power to adopt such criteria at all, or if the criteria must be contained within the Immigration Rules in order to be lawful, then the same must apply to the criteria relating to the grant of a sponsor licence in the first place. Thus the college’s case entails that the whole system, not just that part of it relating to suspension and withdrawal, is unlawful, in which event the college cannot ever have had a valid licence at all. It follows too that if the system of sponsor licensing is unlawful, the operation of the entire Points Based System will be brought to an effective halt until the problem is remedied: there will remain a valid requirement in the Immigration Rules that the sponsor must hold a licence, but there will be no valid system for the grant, suspension or withdrawal of such a licence. Mr Gill was unable, in my view, to grapple satisfactorily with these various implications of his submissions for his client’s position or for the system as a whole.

For the reasons given above, I am not persuaded by Mr Gill’s case under the Pankina ground. My reasons differ to some extent from the reasons given by Wyn Williams J at [45]-[47] of his judgment. In particular, he found that “the rules themselves specifically authorise the licensing of sponsors” and that the guidance “constitutes no more than an explanation of how the powers conferred by the relevant rules will be exercised in practice”; whereas it seems to me that, whilst the rules assume the existence of the system of sponsor licensing, the power to operate that system derives from the general powers of the 1971 Act rather than from any specific authorisation in the rules themselves, and that the guidance has a function falling outside the rules rather than explaining how powers conferred by the rules will be exercised in practice. I agree with the judge, however, that the guidance “does not impact upon the rights of the student in any way which is inconsistent with that which is contemplated by paragraph 323A itself” (concerning the consequences of a sponsor ceasing to hold a sponsor licence); and, as I have indicated, I consider more generally that the guidance does not impact upon the substantive criteria of the rules governing entitlement to enter or remain as a student. Thus, despite some differences of analysis, I am in agreement with the judge’s rejection of this ground of challenge.

The college’s case under the article 6 ground is that the suspension and revocation of the college’s licence constituted a determination of its civil rights within article 6 and that the availability of judicial review does not meet the requirement in article 6 for a hearing by an independent and impartial tribunal with full jurisdiction since the court on judicial review is restricted to examining the lawfulness of the decision and cannot resolve the underlying factual dispute, making its own factual determination. Mr Gill submitted that a full appeal on the merits is required for compliance with article 6, in the same way as issues arising under the former paragraph 57 of the Immigration Rules could be raised by a student in the context of an appeal as of right to the tribunal. He also referred to the regime established by sections 15 to 26 of the Immigration, Asylum and Nationality Act 2006 under which a right of appeal to the county court is conferred on employers issued with a civil penalty for employing adults who do not have leave to remain in the United Kingdom or whose leave does not entitle them to work.

The case so advanced is premised in part on the judge’s finding that the suspension and withdrawal of the college’s licence engaged A1P1, but other matters are also put forward in support of the contention that the college’s civil rights were in issue and that article 6 was therefore engaged. The applicability of A1P1 is the subject of the Secretary of State’s cross-appeal which, for reasons given later in this judgment, should in my view succeed; and if A1P1 does not apply, I strongly doubt whether decisions relating to the grant, suspension or withdrawal of sponsor licences can be said to relate to a college’s civil rights or to engage article 6 at all. In saying that, I have taken into account two authorities to which we were helpfully referred by Mr Palmer: R (A) v Croydon London Borough Council [2009] UKSC 8, [2009] 1 WLR 2557, at [34]-[45] per Lady Hale and at [55]-[65] per Lord Hope, and R (MK (Iran)) v Secretary of State for the Home Department [2010] EWCA Civ 115, at [57]-[58] per Carnwath LJ. It is, however, unnecessary for me to reach any conclusion on the point. For the purposes of the appeal I am content to assume, without deciding, that the decisions under challenge engaged article 6.

Making a similar assumption, Wyn Williams J dismissed the college’s article 6 case in robust terms at the end of his judgment:

“151.

Finally, I deal very shortly with the suggestion that there has been a breach of Article 6 ECHR. In summary and assuming that Article 6 is engaged (which may not be a safe assumption) I am in no doubt that the availability of judicial review provides an adequate remedy for the determination of any issue relating to the Claimant's civil rights. Before reaching a decision the officers of UKBA were engaged in much more than a purely fact finding inquiry. Certainly, the officers had to grapple with factual issues; however, they were also and importantly drawing upon their own expertise (and that of UKBA as a whole) in respect of the operation of the sponsor scheme. They were also exercising broader judgments relating to both policy and expediency. In any event, had either party considered that the legality of the decisions made by Ms Cram in this case could not be tested on the basis of the documents and the written witness statements provided to this court an application could have been made for oral evidence to be adduced. Although such applications are unusual in judicial review, in an appropriate case such an application can be granted.”

In challenging that conclusion, Mr Gill submitted that the power of the court to hear oral evidence so as to resolve disputed issues of fact in proceedings for judicial review is not sufficient for compliance with article 6. The role of the court in such proceedings remains supervisory, restricted to determining whether a decision is vitiated by legal error. Mr Gill pointed to the limitations in judicial review that are evident from the way the judge directed himself at [94] of his judgment when considering the lawfulness of the decision to withdraw the college’s licence:

“In the instant case the decisions would be unlawful if they were unreasonable in the Wednesbury sense. I also accept that they would be unlawful if the decision maker failed to have regard to a material consideration when making the decision. So, too the decisions would be unlawful if the decision maker made an important error in her consideration of the relevant facts or the information provided to her. Finally, the decisions would be unlawful if they were disproportionate. As it seems to me, however, these are the parameters within which I must work. It is not open to me, for example, to reach contrary conclusions of fact to those reached by Ms Cram, Mr Knight and Mr McKenzie – unless their findings were irrational or unreasonable or mistaken in a clearly identified way. Further, it is not for me to substitute my own view as to an appropriate “sanction”; if I conclude that the decision to withdraw the Claimant's sponsor licence was proportionate and reasonable I cannot declare the decision to be unlawful simply because I would have reached a different conclusion from that reached by Ms Cram.”

Mr Gill submitted that what is needed for the purposes of article 6 is a right of recourse to a court capable of making its own independent assessment in relation to the fact-sensitive issues involved in decisions on suspension and withdrawal.

I am not persuaded by those submissions. It must be recalled that sponsor licences do no more than confer a right to issue a CAS which will be recognised by UKBA for immigration purposes. In this context the administrative decision-making process provided for in the guidance, coupled with the availability of judicial review on conventional grounds, is in my view adequate to ensure a fair determination within the meaning of article 6. I agree with the judge’s conclusion on this issue.

In order to explain the various matters raised under this ground it is necessary to say a little more about the history and about how matters were analysed by Wyn Williams J.

By letter dated 18 December 2009 UKBA’s Ms Cram notified the college that its sponsor licence was suspended with immediate effect. The reasons for that decision were that (i) in breach of the licence, the college had yet to gain accreditation from the British Accreditation Council (“BAC”) for its second set of premises despite the fact that it was already delivering classes to students there; (ii) the college had issued 1,255 visa letters, despite the fact that it had a capacity to offer places to 200 students within its accredited accommodation and it had requested an allocation of 100 CAS; and (iii) viewing of an attendance register for a class showed that students had attended only 2 out of 8 classes, and although warning letters were issued to poorly attending students no further action was taken, which was in breach of the college’s attendance procedure and a failure to comply with its sponsorship duties. The letter gave the college 28 days to make any representations, following which UKBA would decide what, if any, further action to take.

The judge’s examination of that decision is at [48]-[63] of his judgment. He held that the decision was unlawful for two reasons. First, UKBA acted unfairly in deciding to suspend the licence without first giving the college an opportunity to deal with the circumstances said to justify the suspension and to make representations. Secondly, the decision was not in accordance with the published guidance then in force, in that the decision-maker did not have information or evidence before her which reasonably justified the conclusion that the college was “seriously breaching” its duties as sponsor and posed a “major threat” to immigration control (see paragraph 328 of the October 2009 version of the guidance, quoted at [17] above).

The judge’s conclusion on that issue is not challenged by the Secretary of State.

The judge went on to examine the maintenance of the suspension from 18 December 2009. Having referred to various exchanges in correspondence, he summarised a letter dated 25 March 2010 from Ms Cram to the college in which a number of complaints were made about the college: (i) the letter asserted that 26% of the college’s student body had failed to meet the standards of attendance required by the accrediting body, BAC; (ii) it suggested that 14 attending students had been refused leave to remain, several without the right of appeal; (iii) it complained that 2,308 visa letters had been issued in the period examined by UKBA yet 826 of the persons to whom they were issued were refused entry clearance or leave to remain, which was alleged to be a high rate of refusal and indicative that the system in place for recruiting students had not been adequately assessed; and (iv) the letter identified as the biggest area of concern the fact that 299 visa letters had been issued by the college which had not been declared on the attendance spreadsheet(s) supplied by the college to UKBA in response to its request for information in February 2010. The letter concluded:

“The inaccuracy of your records, the high level of undeclared visa letters and the number of individuals who have entered the UK and failed to study indicates that the college poses a threat to immigration control. The above indicates a failure to meet your sponsor obligations and would normally lead to withdrawal of your licence under paragraph 324 of the Tier-4 sponsor guidance. I would now like to give you the opportunity to explain the above before we make a final decision.”

The judge commented on what was a puzzling reference to paragraph 324 of the guidance, and he referred to the college’s solicitors’ substantive responses to the letter. But he found that the letter of 25 March was sufficient to render the maintenance of the suspension lawful as from 26 March:

“Although, as I have found, the initial decision to suspend was unlawful it does not follow that the maintenance of the suspension was necessarily unlawful. The Claimant sent written representations to UKBA on 22 December 2009 and 4 January 2010 explaining why suspension was unjustified. UKBA sought information from the Claimant on 23 December 2010 and 5 February 2010. The Claimant responded promptly to each request. In my judgment, by 5 February 2010, at the latest, the procedural unfairness which had vitiated the decision to suspend taken on 18 December 2009 had been cured. That does not mean, of course, that the maintaining of the suspension was not unlawful because it was in breach of published policy, irrational or disproportionate. It seems to me, however, that it is difficult to argue that maintaining the suspension was unlawful once the guidance in relation to suspending a licence had changed (as it did on 3 March 2010) so as to relax the test to be applied for suspension. Be that as it may it becomes impossible to argue that it was unlawful in the light of the letter of 25 March 2010. On any view, in my judgment, that letter provided cogent reasons which justified the suspension. That was the view of Holman J who refused permission to apply for judicial review in the first proceedings on the basis that UKBA were justifiably pursuing legitimate inquiries. It is also worth recalling that there was no attempt to renew an application for permission to proceed with the first judicial review and it was those proceedings which were primarily concerned with the events which followed the decision to suspend on 18 December 2009. In my judgment, as from 26 March 2010, at the latest, the suspension of the Claimant's sponsor licence became lawful and has remained lawful since that date.”

The judge went on to consider in detail, at [77]-[90], the events leading to the decision to withdraw the college’s licence and the maintenance of that decision. He referred first to the reasons for the original withdrawal decision of 14 May 2010 because, although the grant of interim relief by the court meant that that decision was not itself acted upon, the same considerations were relied on in the later withdrawal decision of 5 July 2010. In broad outline, the reasons were (i) widespread poor attendance at the college, which was said to be clear evidence that the college’s systems for monitoring attendance and issuing warnings about non-attendance were not effective; (ii) evidence that the college was failing to monitor the immigration status of its students; (iii) 35% of all visa letters issued by the college were to persons who had subsequently been refused leave to enter or remain, which was said to demonstrate that the college’s recruitment processes were not identifying genuine students who met the requirements of the Points Based System; and (iv) checks showed that 299 visa letters had been issued by the college which had not been declared to UKBA on its attendance lists, indicating poor record-keeping and posing a threat to immigration control. Reliance was placed on paragraph 350 of the guidance, quoted at [19] above.

The decision letter of 5 July 2010, again from Ms Cram, considered the same matters, stating that representations made by letter of 8 June did not answer UKBA’s previous complaints, and also considered an issue concerning the inaccuracy of certain of the college’s records which had to some extent been admitted in the letter of 8 June.

There followed a meeting on 5 August 2010 between UKBA officials and representatives of the college to discuss the complaints, and a visit by UKBA officials to the college’s premises on 12 August 2010. The results of the investigations made on that occasion were set out in a written report.

The final relevant matter was a letter dated 19 August 2010 from UKBA to the college, which identified the previous areas of concern, summarised the recent representations made and additional evidence provided, and recorded that the visit of 12 August had established that the college was not complying with its duties in relation to student attendance, maintaining migrant contact details, student recruitment, monitoring immigration status of students and preventing illegal employment by students. The findings were summarised and the letter concluded by indicating that the decision to withdraw the college’s licence was to be maintained.

In examining the lawfulness of the decision of 5 July 2010 the judge observed at [95] that the comprehensive skeleton arguments had analysed the letter in minute detail, dealing individually with each reason said to justify the withdrawal of the licence. The judge observed that the letter must be read as a whole and that the reasons said to justify withdrawal of the licence must be considered together and in the round. That said, he went on to deal in turn and at some length with each of four main reasons addressed in the arguments: (a) attendance levels, (b) in-UK refusals, (c) overseas refusals, and (d) visa letters.

He considered the issue of attendance levels at [96]-[105]. The main contention for the college was that UKBA’s assertion that the attendance levels failed to meet the 80% required by BAC was a fundamental error of fact which had led to an error of law, in that an 80% attendance level, although a policy of the college, was not a BAC requirement. The judge found, however, that the main thrust of the criticism against the college was that it did not effectively enforce its own policy, and that the available evidence supported that view. He concluded:

“I have reached the conclusion that Ms Cram was entitled to conclude as she did upon the issue of student attendance. I appreciate that it was no part of the guidance published by UKBA that in the event that a college failed to ensure that its students attended 80% of their classes there would be a breach of sponsorship duties on that account. However, that is not the point. It was the Claimant’s failure to follow the guidance (if guidance it was) of its accrediting body and, just as importantly, enforce its own policy which was of legitimate concern and placed it in breach of its duty as a sponsor.”

The issue relating to in-UK refusals was considered at [106]-[109]. UKBA asserted that students who had been refused leave to remain without a right of appeal were nonetheless attending the college. The letter of 25 March 2010 had identified four such students in particular. The letter of 5 July 2010 suggested that the onus was on the college to ensure that students had the right to study in the United Kingdom and that the college had not explained why it failed to do this adequately in the case of the four named students. It further asserted that the college had provided no evidence to show that it had rectified the situation or that the four students had either regularised their stay or left the United Kingdom. Thus there was said to be a continuing failure in the sponsor duty to monitor immigration status and prevent illegal study. The college’s response was that it kept full records of the expiry dates of students’ leave to remain, as well as copies of passports and acknowledgment letters issued by UKBA when applications for further leave to remain were made, and that it had done all it reasonably could to ensure that its students had the right to study in the United Kingdom. The judge concluded:

“…I am persuaded that Ms Cram was entitled to conclude, as she did, that the Claimant had failed to do all that it reasonably could to ensure that evidence was obtained or retained to demonstrate a student’s entitlement to study. I appreciate that as of 5 July 2010 the numbers of students concerned with this issue was very small. However, on any view, ensuring that a student is entitled to remain in the UK must be a very important aspect of a sponsor's duty. In my judgment, it cannot be said that Ms Cram was unreasonable in taking into account the fact that it had been demonstrated that 4 students were studying at the Claimant's college when they had no leave to remain in the UK.”

The issue relating to overseas refusals was considered at [110]-[117]. UKBA’s letter of 25 March 2010 recorded that the college had issued 2,308 visa letters to prospective students but that 826 students were refused entry clearance or leave to remain during the period 31 March 2009 to 5 February 2010. A high rate of refusal was said to indicate that the systems in place for recruiting students had not adequately assessed their ability and intention to follow their chosen courses. The college’s response was to suggest that a large volume of the refusals was because the visa letters issued could not be verified, and that a large number of the refusals had been made at one specific High Commission in India; the essential thrust of the representations was to the effect that the refusals were not related to the college’s own practices or procedures for recruiting students. The judge examined the evidence and found that, even if a significant proportion of the 826 students had been refused on the basis of “visa letter not verified”, a similar and significant number of students were refused for different reasons and that in those circumstances it was not irrational for UKBA to conclude that a number of students had been recruited who were not suitable for their chosen course of study – as at 5 July 2010, possibly as many as about 50% of the persons refused entry.

The issue relating to visa letters was considered at [118]-[124]. According to UKBA’s letter of 25 March 2010, investigations had revealed that 299 visa letters had been issued by the college to persons who did not appear on the attendance lists provided by the college to UKBA; and those letters might have resulted in a number of individuals obtaining entry clearance who did not appear to be attending the college and who were in the United Kingdom illegally. The college’s first response was that any inconsistency between the visa letters issued and the attendance lists was unintentional and in any event the true inconsistency was likely to be very small. The representations of 8 June 2010, however, involved a change of stance: it was acknowledged that no less than 345 students to whom visa letters had been issued were not included in the attendance lists provided to UKBA, but the omission was explained as an unintentional administrative error. UKBA’s decision letter of 5 July 2010 stressed the importance of record-keeping and said that it was unacceptable that the college only identified a significant error in its attendance data when it was pointed out by UKBA. The college’s case was that UKBA’s approach was irrational, given that the college always had the relevant records and the failure was simply a failure to transpose the information accurately onto a spreadsheet as requested by UKBA. The judge concluded:

“123.

In my judgment this is, classically, an issue which cannot be looked at in isolation. If the only complaint made by UKBA against the Claimant was that its staff had failed to transpose information properly and accurately from a data base to a spread sheet that would be one thing; the reality is that this failure has to be considered in the context that it was first denied that there was any material discrepancy between the information held by the Claimant and the information supplied to UKBA and also in the light of the other criticisms made against the Claimant. On that basis I accept that it was reasonable for Ms Cram to take this issue into account in reaching her decision.

124.

This last issue is part of a recurring complaint about the Claimant’s record keeping. In her letter of 5 July Ms Cram dedicated a complete section to that topic. It was obviously an important consideration as of 5 July 2010. Ms Cram explains why when she says in her letter that there is a clear and direct correlation between poor record keeping and immigration abuse.”

Accordingly, the judge found that UKBA was entitled to reach the conclusions it did on each of the issues analysed in the letter of 5 July 2010. In the light of those conclusions, he was not persuaded that the decision to withdraw the licence was unreasonable or disproportionate.

The judge went on to examine the decision of 19 August 2010 to maintain the withdrawal decision. This involved examination of the minutes of the meeting of 5 August 2010 and of the report into the investigation undertaken at the visit on 12 August 2010. It led to the conclusion at [141] that the decision to maintain the decision was also lawful.

In his submissions to us, Mr Gill challenged the judge’s conclusions in relation to each of the four issues examined in detail by the judge when considering the lawfulness of the withdrawal decision of 5 July 2010 (attendance levels, in-UK refusals, overseas refusals, and visa letters). He submitted that UKBA’s reasons in respect of the four issues were misconceived, based on inadequate inquiry and perverse, and also that the withdrawal of the licence was a disproportionate interference with the college’s rights under A1P1 and of the rights of the college and other persons under article 8 ECHR. His arguments as outlined at the hearing and elaborated in his written skeleton argument were essentially a re-run of the arguments considered by the judge. I do not propose to set them out here, nor Mr Palmer’s arguments in response. It seems to me that Wyn Williams J examined the issues with great care and I am not persuaded that he made any material error in his analysis. I am content to adopt his reasoning and conclusions without going over the whole ground again in this judgment.

I would simply add that, although the judge looked at the matter in terms of proportionality as well as rationality, I take the view that the proportionality analysis is not necessary. That is because, as already mentioned and for reasons given later in this judgment, I do not consider A1PI to have been engaged by the suspension or withdrawal of the licence; and because in my view the college has no arguable case that the suspension or withdrawal engaged the college’s rights under article 8 or any relevant article 8 rights of other persons.

Mr Gill advanced an additional, discrete argument in relation to the judge’s conclusion concerning the letter of 25 March 2010 and the lawfulness of the decision to maintain the suspension from that date. He said that the judge appeared to have been influenced by the fact that the test for suspension had been relaxed in the March 2010 guidance, by the removal of the words “seriously” and “major” when referring respectively to breaching the sponsor’s duties and posing a threat to immigration control (see [17] above). He submitted in particular that it was unfair to assess the college against that relaxed test and that the letter of 25 March raised four new concerns in relation to which the college should have been given time to make representations before those concerns were relied on as grounds for maintaining the suspension.

I see no force in those submissions. The change in the content of the guidance is not itself the subject of complaint and could not sensibly be so. The college’s position as at 25 March 2010 fell properly to be assessed on the basis of the guidance then in force and there was no unfairness in the judge taking that changed guidance into account. The letter of 25 March must also be considered in context: it was sent at a time when the college’s licence had already been suspended (albeit the judge found the original suspension to be unlawful) and in the light of further exchanges between the parties since the date of the suspension. In that context it was perfectly fair and reasonable for the letter to set out UKBA’s continuing concerns and to give an opportunity, as it did, for further representations to be made before any final decision on withdrawal was taken. The original procedural unfairness had been remedied, as the judge found, and the sending of the letter involved no further procedural unfairness.

Accordingly, I do not accept any part of the college’s case in relation to the reasonableness issue.

Article 1 of the First Protocol to the European Convention on Human Rights (to which, as already indicated, I will refer as “A1P1”) provides:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest ….”

Wyn Williams J concluded at [148]-[150] of his judgment that, although the point was not without difficulty, the suspension and withdrawal of the college’s sponsor licence was an interference with the college’s rights under A1P1, that the interference could not be justified in respect of the period during which the college was the victim of an unlawful suspension, but that the interference was otherwise justified.

By her cross-appeal the Secretary of State contends that the judge was wrong to find that the decisions in question engaged A1P1 at all.

It is well established that the concept of “possessions” in A1P1 has an autonomous Convention meaning, independent of classifications in domestic law. Unfortunately it is quite difficult to determine how that concept applies in a licensing context such as that with which we are concerned in this case.

In Tre Traktörer Aktiebolag v Sweden (1991) 13 EHRR 309 the European Court of Human Rights considered the application of A1P1 to the authorities’ withdrawal of a non-transferable liquor licence which conferred on the applicant company, TTA, an authorisation to sell alcoholic beverages in its restaurant, Le Cardinal. The court stated, at paragraph 53:

“The Government argued that a licence to serve alcoholic beverages could not be considered to be a ‘possession’ within the meaning of Article 1 of the Protocol. This provision was therefore, in their opinion, not applicable to the case.

Like the Commission, however, the Court takes the view that the economic interests connected with the running of Le Cardinal were ‘possessions’ for the purposes of Article 1 of the Protocol. Indeed, the Court has already found that the maintenance of the licence was one of the principal conditions for the carrying on of the applicant company’s business, and that its withdrawal has adverse effects on the goodwill and value of the restaurant.

Such withdrawal thus constitutes, in the circumstances of the case, an interference with TTA’s right to the ‘peaceful enjoyment of [its] possessions’.”

(A similar case was Bimer SA v Moldova (Application no. 15084/03, judgment of 10 July 2007), which concerned the loss of a licence to operate a duty free shop and bar; but since the parties agreed that the licence constituted a possession for the purposes of A1P1, and the court did not engage in any detailed analysis of its own, the case is not of any real assistance.)

The judgment in Tre Traktörer referred to adverse effects on goodwill. Denimark Limited v United Kingdom (2000) 30 EHRR CD 144 provides a useful statement by the Strasbourg court of the distinction that has been developed in the authorities between loss of goodwill and a mere loss of future income. In considering the extent to which the applicants’ “possessions” had been affected by a statutory prohibition on handguns, the court said this:

“The Court recalls its case-law that goodwill may be an element in the valuation of a professional practice, but that future income itself is only a ‘possession’ once it has been earned, or an enforceable claim to it exists …. The Court considers that the same must apply in the case of a business engaged in commerce. In the present case, the applicants refer to the value of their businesses based upon the means of earning an income from those businesses as ‘goodwill’. The Court considers that the applicants are complaining in substance of loss of future income in addition to loss of goodwill and a diminution in value of their assets. It concludes that the element of the complaint which is based upon the diminution in value of the business assessed by reference to future income, and which amounts in effect to a claim for loss of future income, falls outside the scope of Article 1 of Protocol No.1.”

Among subsequent domestic cases in which that distinction has been considered is R (Nicholds) v Security Industry Authority [2007] 1 WLR 2067, in which Mr Kenneth Parker QC (as he then was), sitting as a deputy High Court Judge, considered the application of A1P1 to a permission to act as a nightclub door supervisor under self-regulatory arrangements that preceded the licensing system introduced by the Private Security Industry Act 2001. He referred at [69] to the difficulty of determining whether such permissions were possessions within A1P1. At [71] he said that he had two firm fixed points upon which to tackle the question. First, the goodwill of a business, or part of a business, might constitute a possession; second, an expectation of future income was not a possession. As to “goodwill” , he said this:

“72.

It seems to me that ‘goodwill’ in this context is not being used in the technical accounting sense of the difference between the cost of an acquired entity and the aggregate of the fair values of that entity’s identifiable assets and liabilities ….. It appears that ‘goodwill’ is being used rather in the economic sense of the capitalised value of a business or part of a business as a going concern which, according to modern theory of corporate finance, is best understood as the expected free future cash flows of the business discounted to a present value at an appropriate after tax weighted average cost of funds ….

73.

The business has a capital value or goodwill only if the entity can be, and is, organised in a way that allows future cash flows to be capitalised …. [It] is clear on Strasbourg jurisprudence, now confirmed by high domestic authority, that article 1 of the First Protocol protects only ‘goodwill’, as a form of asset with monetary value, and does not protect an expected stream of future income which, for mainly organisational reasons, cannot be or is not capitalised. In other words, the Convention … protects assets which have a monetary value, not economic interests as such.”

He went on to consider the application of A1P1 to licences or permissions of various kinds:

“74.

How should a licence or permission be treated under article 1? It seems to me that certain licences or permissions are ‘assets’, that is, they have a monetary value and can be marketed for consideration, either through outright sale, ‘leasing’, or sub-licensing. … A more difficult case is a licence which has been acquired at a ‘market’ price but which may not be assigned or sub-licensed ….

75.

However, there are other licences or permissions that are neither marketable nor have been obtained at a ‘market’ price, that is, a price representing what is thought to be the value of net discounted future cash flows that the licence might generate. Such a licence in one sense has a value to the holder because, without it, he cannot carry on the licensable activities. However, such licences do not seem to me to be ‘assets’ having monetary value in the sense required for article 1. Such licences do not as such represent a distinct asset having a monetary value.

76.

Furthermore, to treat such licences as ‘possessions’ would, in my view, risk introducing unjustified distinctions into what is already a fairly complex area of law ….

77.

In the present application it is common ground that the permissions which the claimants enjoyed under the arrangements prevailing in their cases before the 2001 Act were not marketable and were not obtained at a ‘market price’, although the claimants may have paid fees, intended to cover the administrative costs of the grantor, to obtain them. They did not, therefore, represent any form of asset having a monetary value, although they were ‘valuable’ to the claimants because, without them, they could not work as door supervisors in the areas covered by the relevant arrangements. As I analyse the position, these permissions would not constitute possessions under article 1 of the Protocol.”

Having considered Tre Traktörer and certain other authorities, however, he thought it right, despite his reservations, to proceed for the purposes of his judgment on the footing that the relevant permissions did constitute possessions within A1P1. He went on to hold that if they did, the interference with them was nonetheless justified.

In R (Malik) v Waltham Forest NHS Primary Care Trust [2007] 1 WLR 2092 the Court of Appeal held that a doctor’s right to practise in the National Health Service flowing from his inclusion in a specified list was not a possession within A1P1 because, in summary, he was precluded by regulation from selling the goodwill in his practice and such goodwill therefore had no economic value. In the course of a lengthy exposition of the issue, Auld LJ referred at [29] to the distinction between goodwill and loss of future income. He observed at [40] that when considering a person’s claimed future monetary entitlement derived from an instrument such as a licence or permit, “a court should focus first on whether the entitlement has a present economic value to him in the sense of being marketable by him”; a licence itself is not a possession, and whether the economic interests that flow from it are a possession depends on the facts, “one of which may be the marketable goodwill that can flow from the exercise of a licensed trade”. At [42] he referred with apparent approval to the “powerful” analysis by Kenneth Parker J in Nicholds.

In the same case, Rix LJ referred at [58]-[59] to the decision in Denimark Limited v United Kingdom, observing that the court seemed to be saying that a substantive rather than a formal test was to be applied for the purpose of distinguishing between an existing possession (viz. goodwill consisting in clientele) and a mere expectation of future income: “[t]hus there will be no interference with possessions within article 1 of the First Protocol if the value of a business (including, presumably, its goodwill) declines only in so far as loss of future income is anticipated”. At [65]-[66] he said that the distinction might turn out to be difficult, possibly even unworkable, given that the present-day value of any business will inevitably reflect its future profit-earning capacity. One solution, suggested in Nicholds, might be to look only at marketability, but Rix LJ was not sure about that; and he said that the point did not have to be resolved because the doctor’s goodwill in the instant case had no economic value and could not therefore be regarded as an asset or a possession for the purposes of A1P1. Moses LJ agreed with both judgments, whilst adding some observations of his own, at [82]-[86], on the distinction between goodwill and a right to future income.

In R (Countryside Alliance) v Attorney General [2008] 1 AC 719, at [21], Lord Bingham of Cornhill also referred to the distinction between goodwill and a right to future income; and having mentioned authorities that included Tre Traktörer and R (Malik) v Waltham Forest NHS Primary Care Trust, he said:

“While I do not find the jurisprudence on this subject very clear, I consider that the Court of Appeal [in Malik] reached a correct conclusion in that case basing itself as it did on the very convincing analysis of Mr Kenneth Parker QC in R (Nicholds) v Security Industry Authority [2007] 1 WLR 2067, paras 70-76.”

Lord Bingham considered A1P1 to be clearly applicable to the complaints of certain of the claimants in the Countryside Alliance case itself, since the ban on hunting had restricted landowners’ use of their land, caused business owners to lose marketable goodwill, caused a loss in the value of shares, and so on; but the subject-matter was well removed from that of the present case.

Wyn Williams J said at [146] of the judgment now under appeal that it was difficult to see how the analysis of Kenneth Parker J in Nicholds fitted squarely with that in Tre Traktörer since the licence in Tre Traktörer was itself non-transferable. He continued:

“147.

It seems clear that a sponsor licence, looked at in isolation, cannot constitute possessions or an asset for the purposes of Article 1. Further, such a licence is non-transferable and it is not suggested that it has monetary or market value. However, a sponsor can engage in the business of providing educational services to non EE[A] migrants if it has a sponsor licence; if its licence is withdrawn it is bound to have a very significant effect upon its business. I find it difficult to see what relevant distinction there may be between withdrawing a non-transferable liquor licence and withdrawing a sponsor licence for the purposes of Article 1 First Protocol.”

That was the essential basis upon which he found that the suspension and withdrawal of the college’s sponsor licence engaged A1P1.

Mr Palmer submitted to us that the judge was right to find that a sponsor licence is not itself a possession within A1P1, but that he was wrong to draw the parallel he did between the withdrawal of the applicant’s liquor licence in Tre Traktörer and the withdrawal of the college’s sponsor licence in this case. In Tre Traktörer the withdrawal of the licence was found to have had an adverse effect on the goodwill of the applicant’s business. The distinction between goodwill and loss of future income is a difficult one to draw but it has to be drawn on the current state of the authorities, and the judge failed to draw it. His reasoning in effect proves too much: it would be applicable to all, or substantially all, cases in which the State licenses or permits economic activity of a particular kind. In this case the sponsor licence is not a permit to carry on the provision of education; it has a distinct, limited function under the Points Based System, as described above. It is not marketable and has no market value. If the ownership of the business changes, the new owner must apply for its own sponsor licence if it does not already have one. Further, the college does not have a commercial connection with its students comparable to the connection between the restaurant and its customers in Tre Traktörer. The economic reality is that the sponsor licence gives no more than an expectation of future income from non-EEA students requiring leave to enter or remain in order to study in the United Kingdom. Any reduction in numbers of students as a result of the suspension or withdrawal of the licence does not result in a loss of goodwill in the sense used in the cases.

For the college, Mr Gill submitted that a sponsor licence is itself a possession within A1P1: he referred to cases, such as Bimer SA v Moldova, where the Strasbourg court accepted without comment the parties’ agreement that a licence was a possession. But he submitted in any event that the suspension and withdrawal of the college’s licence gave rise or would give rise to an interference with the college’s possessions in various ways. The business could be sold at a significantly higher price with the benefit of a licence than without one, since a new owner would easily be able to get a licence of its own: in substance, if not in form, there would be a transfer of the licence. The property and other assets of the business could not be used effectively in the absence of an operational licence, as shown inter alia by the dramatic reduction in the number of current students (from 1,000 to 250) as a result of the suspension. There was also a dramatic effect on the college’s goodwill, consisting of the various contacts it had put in place, its contracts with students whose entry clearance applications could not be processed by reason of the suspension, and its relationship with existing students. Students wanted continuity, and the effect of suspension was to cause existing students to leave the college in view of the college’s anticipated inability to provide educational services to the end of their current courses. The ability of the college to continue existing contracts with employees and third parties was also affected. It was simply incorrect, submitted Mr Gill, that the college was complaining only about loss of future income.

In my judgment, Wyn Williams J was plainly correct to find that a sponsor licence is not itself a possession within A1P1. The analysis of Kenneth Parker J in Nicholds, which met with a strong measure of approval in Malik and Countryside Alliance, strongly supports that conclusion. A sponsor licence is not marketable or even transferable, nor is it obtained at a market price. I reject Mr Gill’s contention that on the sale of a business having the benefit of a licence there would in substance be a transfer of the licence. The new owner would have to satisfy UKBA that the conditions for grant of a licence were met under the new ownership.

The principal factor leading Wyn Williams J to find that the suspension and withdrawal of a sponsor licence nevertheless engaged A1PI was the apparent parallel with the withdrawal of the liquor licence in Tre Traktörer. There is obvious attraction in that line of reasoning, given the undoubted effect on the business in each case. The judge did not grapple, however, with the question whether the adverse effect in the present case amounts to an effect on goodwill, in the sense used in the authorities, or only to a loss of future income (albeit a loss with serious economic consequences for the business). I agree with Mr Palmer that he needed to do so. The distinction is far from clear but one has to decide which side of the line the case falls, since the relevant possession is the goodwill of the business, and the suspension or withdrawal of a licence will not amount to an interference with the right to peaceful enjoyment of possessions within A1P1 unless it has an adverse effect on that goodwill.

Kenneth Parker J in Nicholds was of the view that “goodwill” in this context means the capitalised value of the business as a going concern. Mr Gill did not seek to challenge the correctness of that view. Whilst there is evidence in this case of the economic disruption caused by the suspension of the college’s licence, and liable to be caused by the withdrawal of the licence, the evidence does not deal with the goodwill of the business in the sense identified in Nicholds. Thus there is no concrete evidential basis on which to found a conclusion that the goodwill of the business has been or would be adversely affected by suspension or withdrawal of the licence. Nor, as it seems to me, can such an effect be inferred from the information available to us.

It is important to bear in mind that the sponsor licence does not touch on the freedom of the college to provide courses of education to students. What it does is to confer the right to issue a CAS which will be recognised by UKBA and will contribute to a student’s ability to meet the substantive criteria for leave to enter or remain under the Immigration Rules. That certainly enables the sponsor to attract non-EEA nationals wishing to apply for leave to enter or remain as students, and the loss of that ability through suspension or withdrawal of the licence, with a consequential loss of income from that source, is clearly a serious matter. But it is far from clear that the expected income stream from such students can be capitalised as part of the value of the business, in particular because it depends on a licence that is non-transferable and has no market value in itself: in order to maintain the income stream, a purchaser of the business would have to obtain a licence of its own. (I accept that if the business is run in such a way that the current owner qualifies for a licence, it will facilitate the obtaining of a licence by the new owner; but on that basis it is the underlying state of the business that matters and the existing licence of itself has no substantive significance.)

The conclusion I reach is that the college has failed to establish that the suspension or withdrawal of its sponsor licence amounts to an interference with its right to the peaceful enjoyment of its possessions within A1P1 so as to require justification under that article. On this one issue, therefore, I respectfully differ from the view taken by Wyn Williams J.

For the reasons given I would dismiss the college’s appeal in its entirety but would allow the Secretary of State’s cross-appeal on the A1P1 issue.

I agree.

I also agree.