Leeds Unique Education Ltd (t/a Leeds Professional College) v Secretary of State for the Home Department

Leeds Unique Education Ltd (‘Leeds’) and AA Hamilton College Ltd (‘Hamilton’) own and operate colleges which cater mainly for overseas students. In March 2009 the Secretary of State for the Home Department (‘the SSHD’) changed the way in which overseas students from outside the EU would apply for entry clearance to come and study in the UK. Instead of Entry Clearance Officers considering whether applicants met the requirements under the Immigration Rules, approved colleges and other institutions would carry out their own procedures and, if satisfied, would issue prospective students with a visa letter. Approval or licensing was critical for businesses which, like the Claimants, wanted to attract such students. Both of them were approved or licensed to act as sponsors. Sponsors may be rated A or B. Both of the Claimants received the higher A rating.

However, on 18^th January 2010 the SSHD suspended the licence of Leeds. He notified the college of his decision on 25^th January 2010. An inspection took place on 3^rd February 2010. On 25^th February 2010 the SSHD wrote to Leeds setting out his concerns. Leeds made written representations to the SSHD on 11^th March 2010 but on 31^st March 2010 the SSHD revoked or withdrew Leeds’ sponsorship licence. On 19^th April 2010 Leeds issued its claim form seeking permission to apply for judicial review of the decision to revoke its licence. It also sought interim relief. On 20^th April 2010 Sales J. abbreviated time for service of the Acknowledgement of Service and ordered that the applications for permission and interim relief should be considered at an oral hearing. The Acknowledgement of Service with Summary Grounds of Defence were served on 4^th May 2010.

Hamilton’s licence was also suspended on 18^th January 2010. When the SSHD failed to provide further information as to why this decision had been taken, Hamilton issued an application for permission to apply for judicial review on 19^th February 2010. The SSHD filed and served an Acknowledgement of Service on 23^rd February 2010. An inspection visit took place on 24^th February 2010. On 4^th March 2010 a letter was written to Hamilton by the SSHD and a second letter by the Treasury Solicitor on the SSHD’s behalf. The two were not entirely consistent as became apparent when, on the following day, Black J. heard oral applications for permission and interim relief. She refused interim relief and ordered permission to be considered at a rolled up hearing (i.e. permission together with the substantive application for judicial review if permission was granted) on a date to be fixed. She ordered the SSHD to set out a definitive statement of his position, which he did in a letter of 15^th March 2010. Hamilton’s solicitors responded, but on 7^th April 2010 the SSHD announced that he was revoking Hamilton’s licence. Thereafter, Hamilton amended its claim form so as to seek to challenge the legality of both the decision to suspend and the later decision to revoke its licence. It applied again for interim relief. On 16^th April 2010 Saunders J. ordered that the application for interim relief should be considered at an oral hearing. Detailed Grounds of Resistance were filed and served on 4^th May 2010.

The application for permission and interim relief in Leeds and for interim relief in Hamilton were listed before me on 5^th May 2010. Although the factual background of each claim raised distinct issues, there were sufficient common features for it to be sensible to hear argument on both together. Neither Mr Cox (who represented both Leeds and Hamilton) nor Mr Karim (who acted for the SSHD in both cases) objected. Mr Karim accepted that I was not precluded from considering Hamilton’s application for interim relief because of the decision of Black J. to refuse it such a remedy. Since her decision, the SSHD had taken the more serious step of revoking Hamilton’s licence. The positions of the parties had, in any case, developed since she had heard the previous application. Mr Karim also, very sensibly, agreed that an application for interim relief would necessarily entail considering whether Hamilton had raised arguable grounds for its application for judicial review. It was therefore sensible for me to address the issue of permission in this case as well as in the Leeds matter. I was not prevented from doing so by the order of Black J. for a rolled up hearing.

Consequently, the hearing before me concerned in each case the two matters of whether permission to apply for judicial review should be granted and whether the Claimant in each case was entitled to interim relief.

A common theme to both cases was the SSHD’s concern that each college had issued visa letters to a number of people who either had failed to enrol after arriving in the UK or who had enrolled but who had then not attended a proportion of their lectures or tutorials. Before examining the detail of the complaints and responses in each case, it is convenient to say a little more about the sponsorship scheme. The details of this are contained in a publication from the UK Border Agency of the Home Office entitled ‘Guidance for Sponsor Applications for Tier 4 of the Points Based System’ (Tier 4 is the tier of the Points Based System for students). This has gone through various versions. The parties agreed that (for the most part at least) the relevant one to be used was that for applications made on or after 5^th October 2009. This substantial document runs to 64 single spaced pages in 386 paragraphs.

A section entitled ‘What are our organisation’s duties as a licensed sponsor?’ begins at paragraph 277. This says:

Duties that apply to sponsors in all tiers are then set out in paragraph 280. Detailed record keeping duties are prescribed in paragraph 280(a)-(c). Paragraph 280(d) is headed ‘Reporting Duties’. This says,

Paragraph 280(f) has the title ‘Complying with the Law’. Mr Karim referred to the following part of it,

Paragraph 280(g) then details obligations of co-operation with UKBA. No complaint of breach was made under that provision. Paragraphs 281-3 prescribed duties specific to sponsors under Tier 4 (as both Leeds and Hamilton had been). Paragraph 281 provides ‘A confirmation of acceptance for studies or visa letter may only be issued under Tier 4 if the sponsor is satisfied that the student intends and is able to follow the course of study concerned.’ As from 2^nd November 2009 an addendum to the Guidance added, ‘It is the sponsor’s responsibility to assess the student’s ability to follow a course of study. Sponsors must quote what evidence they have used to make this assessment in the student’s visa letter or confirmation of acceptance for studies. The way the sponsor makes this assessment is up to them, but examples might include: (1) checking the student’s English...(2) confirming any qualifications that the student already holds which make them suitable for the course the sponsor is offering...’

Some further details of reporting obligations are contained in paragraphs 284-5 where a student has not enrolled or where he has missed 10 expected contacts. Consistent with paragraph 280(d) those can only have become mandatory duties after February 2010. If sponsors do not comply with their duties, the Guidance specifies situations where a licence would be withdrawn (see paragraph 345), where it would normally be withdrawn (paragraph 346-8) and where a licence might be withdrawn (paragraph 349).

Mr Karim also referred me to other earlier sections of the Guidance. Paragraphs 1 and 2 say,

Mr Karim also took me to paragraph 10 which says ,

Mr Karim argued that paragraphs 1, 2 and 10 imposed duties which were independent of the more specific provisions later in the Guidance. In my judgment, though, it is strongly arguable, as Mr Cox contended, that their purpose is introductory and to inform the more specific provisions (such as the very detailed reporting obligations in paragraph 280). Paragraph 10, for instance, could only make sense if this were so. If Mr Karim were right, the Guidance would be internally contradictory. Paragraph 10 would, for instance, impose a duty to inform UKBA if a student did not turn up for their course as from the effective date of this version of the Guidance (5^th October 2009). But Paragraph 280(d) says in terms that the starred reporting ‘duties’ (including that to report non-enrolment) for the time being are not duties at all. Until February 2010 colleges are asked to make these reports voluntarily. Similarly, it seems to me to be strongly arguable that paragraphs 1 and 2 have to be seen in the context of the much more detailed provisions (including, critically, the deferral of certain reporting duties until February 2010) in paragraph 280. Likewise, I consider it strongly arguable that paragraph 277 does not impose duties that go beyond paragraph 280. By its terms, it sets out the objectives behind the duties rather than the duties themselves. Paragraph 280 sets out what the duties are and when (in certain cases) they will begin.

I turn to the SSHD’s reasons for revoking Leeds’ licence. The SSHD has not filed any evidence in this (or indeed in the Hamilton matter). That is no complaint. A Defendant is not obliged to file any evidence on which it wishes to rely until after permission is granted. He may, of course, choose to do so (especially when faced with an application for interim relief), but he does not have to do so. In these circumstances, it seems to me that I must look to the letter of 31^st March 2010 for the SSHD’s reasons. Mr Karim argued that I should also take account of the other reasons given by the SSHD in his letter of 25^th February 2010. The difficulty with that argument is that the Claimant responded to that letter on 11^th March 2010. If matters were raised on 25^th February, but not pursued in the face of the Claimant’s submissions it is, at the very least, strongly arguable that the Court should infer that on those matters the SSHD was satisfied by the Claimant’s response.

In the letter of 31^st March 2010, the SSHD did record the data which it had gathered from the Claimant’s records on 22nd December 2009 and on the visit of 3^rd February 2010. The March letter said that this information showed that of 198 migrants listed as attending on 22^nd December 2009 130 (or 65.7%) attended less than 80% of the time and 23.7% attended less than 60% of the time. Of the 290 migrants listed as attending on 3^rd February 2010, 46% appeared to be attending less than 80% and 23.1% less than 60% of the time. The SSHD accepted that reporting non-attendance was not mandatory prior to February 2010, but added ‘we expect a college to keep accurate records. We also expect a sponsor to take the responsibility for sponsoring migrants seriously. This requires them to closely monitor the students they sponsor and ensure that they follow the course they say they will undertake. Assessing a student’s intention to study is an important responsibility and an obligation of your sponsor licence.’ The high proportion of students who did not attend suggested that the college’s recruitment processes (including its use of agents) were lacking. The low attendance figures also suggested that the systems in place for monitoring student attendance did not work well. The SSHD added that while 80% attendance was not a requirement of UKBA, the college’s accrediting body did require that students maintained a minimum of 80% attendance. The decision was then framed in the following terms:

Leeds argues that the decision to revoke was flawed by the following independent errors of law:

It is convenient to take first the issue of Leeds’ accreditation. It was and has at all material times been accredited to the British Accreditation Council. This is one of the bodies approved by the SSHD – see paragraph 23 of the Guidance. In the letter of 25^th February 2010 the SSHD said ‘A requirement of British Accreditation Council accreditation is that students should be attending at least 80% of the time. This was confirmed by BAC on 9 February.’ The point was repeated in the letter of 31^st March 2010 where the SSHD said ‘your accrediting body requires that students maintain a minimum of 80% attendance.’ However, on the material produced to the Court it would seem to be clear that BAC only introduced a requirement that students attend for 80% of the time from 8^th March 2010 (and BAC may not have circulated this new requirement until a few days later). The Claim Form made the point that BAC did not introduce this requirement until March 2010. That is not controverted in the Summary Grounds of Defence or in Mr Karim’s skeleton argument.

As for the alleged duty to maintain an 80% attendance figure, the Defendant accepts that there was no formal requirement to this effect, but contends that it was implicit that good student attendance and appropriate actions for low attendance was part of the College’s duty as a sponsor. Mr Karim relies on the general comments in paragraphs 1,2, 10 and 277 of the Guidance (see paragraphs 8, 13 and 14 above). In my judgment, it is strongly arguable that the extent of a College’s duties in respect of a student’s non-attendance are set out in the detailed provisions of paragraph 280. It is strongly arguable that they would be otiose, and the postponed implementation of certain of the duties would make no sense, if the general provisions had the effect for which Mr Karim contends. In any case, as from February 2010, the benchmark which the Guidance adopts is not 80% attendance, but a student missing 10 expected contact points. Leeds’ letter of 11^th March 2010 observed that at a UKBA workshop on 15^th July 2009 it was emphasised that 10 consecutive missed contact points was to be the standard and the 80% system was no longer operative. No issue was taken with this report in the SSHD’s letter of 31^st March.

The SSHD was entitled to expect sponsors to carry out conscientiously their duties to assess whether prospective students and the ability and intention to carry out their studies in advance of issuing a visa letter of confirmation of acceptance for studies – see paragraph 281 quoted above. It is however, strongly arguable that the SSHD’s conclusion that the College had failed in this duty was flawed. The chain of reasoning appears to have been as follows: attendance rates were low; those students who had such low attendance rates were not properly carrying out their studies; those same students did not intend to (or would not have had the ability to) carry out their studies at the time they were assessed and granted visa letters; the College (or its agents) had been deficient in their duties because they had failed to identify these matters. However, it is arguable, as the College contends, that these steps do not follow logically from each other. So, for instance, students who attend few lectures may still do well in their examinations or other assessments. Intervening events after the issuing of a visa letter may have changed their ability or intentions. A reasonable and proportionate assessment system will not always be able to identify applicants who lack the intention or ability to complete their studies.

It is, of course, open to the SSHD additionally to require licensed sponsors to insist that their students maintain a particular level of contact with them. The Guidance shows that such requirements were to come into force, but they did not exist at the time of the data which the SSHD examined in the course of the inspection visit in early February 2010.

The Summary Grounds of Defence seek to rely on other matters which featured in the letter of 25^th February 2010 but which were not repeated in the decision letter of 31^st March 2010. As I have said, the difficulty for the SSHD is that between these two letters, the College had made very detailed representations in its letter of 11^th March 2010. At least on the evidence now before the Court, it is open to the Claimant to argue that these other matters were omitted because, as to them, the SSHD had been satisfied by the submissions which had been made and that those other matters were not taken into account by the SSHD when he made the decision on 31^st March, the decision which is under challenge in the Leeds proceedings.

The Summary Grounds of Defence did suggest a further ground of challenge to Mr Cox. Paragraph 13 of the Summary Grounds said,

The Guidance does identify circumstances in which a licence will be withdrawn (paragraph 345). Mr Karim does not suggest that those circumstances existed in the present case. Nor does he argue that the circumstances came in the next category (paragraph 346) where a licence would normally be withdrawn. The SSHD’s position is that the defaults of the college were of a kind which came within paragraph 349 where he may withdraw the licence. This carefully calibrated list of sanctions emphasises that in the final category of case withdrawal is discretionary. Yet the passage just quoted from the Summary Grounds implies that revocation will invariably follow. I agree with Mr Cox that this apparent departure from the published policy is a further ground for challenging the legality of the revocation decision.

I have found all of Leeds’s grounds to be at least reasonably arguable. Accordingly, I give Leeds permission to apply for judicial review. I also give permission for the Claim Form to be amended to plead the additional ground of challenge which I have summarised in the previous paragraph.

I turn to the question of interim relief in the Leeds case. I bear in mind that I have found there to be at least reasonably arguable errors of law in the SSHD’s decision to withdraw the Claimant’s licence and that, in some respects, the grounds for seeking judicial review are strongly arguable. In those circumstances, I must look at the balance of convenience: the disadvantage to the Claimant if no relief is granted; and the harm which the SSHD says would follow if it is granted.

Mr Ahmed Munir, the Director of the College has made a witness statement dated 16^th April 2010. He explains that where a College’s licence has been suspended (and necessarily where the licence has been withdrawn) it can no longer issue a confirmation of acceptance for studies (‘CAS’) to prospective students. The CAS is the current version of what was a visa letter. Since the College cannot issue CASs it cannot recruit new students. Moreover, its existing students may have leave to enter or remain in the UK for a shorter period than would be necessary for them to complete their courses of study. If the College was licensed it could issue a further CAS on the basis of which the student could apply for an extension to their leave. That is not possible if the College is no longer licensed. Thirdly, where a licence is withdrawn, the SSHD will curtail to 60 days the leave held by existing students unless the remaining leave is for less than 6 months. All of this means that the College cannot recruit new students; its existing students cannot obtain extensions to their leave; and (unless they have less than 6 months left) those existing students will have their present leave curtailed. Many students will understandably demand a return of their fees. Unsurprisingly, this all has had a devastating effect on the Claimant’s business. It has (as of the date of Mr Munir’s witness statement) had to refund £23,650 in fees. Because of its inability to recruit and the additional demands for refunds which it can expect, it projects further losses over the next few months of some £ ½ million. The College has already reduced its full time staff from 10 to 4 and shed all 8 of its part-time staff.

None of this evidence is challenged by the SSHD. However, he argues that the balance of convenience still favours the refusal of interim relief. He submits that it would be contrary to the public interest to allow the Claimant to continue to issue CAS to applicants who are not genuine students. He also argues that to continue to licence the Claimant would be a serious misrepresentation of its status. In addition, Mr Karim submits that, notwithstanding the loss of its licence, Leeds could still recruit students from inside the EU since they require neither a visa letter nor a CAS. Furthermore, it could submit a fresh application for sponsorship to the SSHD. If then satisfied of the Claimant’s fitness, the SSHD could issue a fresh licence with either an A or B rating.

In my judgment, Mr Cox gave persuasive responses to each of these arguments:

I do take into account that the SSHD remains the responsible regulator for sponsors. Even if the decision which has previously been taken is flawed and the licence is restored pending the hearing of the application for judicial review, he must be able to continue to exercise his powers of supervision in accordance with the current version of the Guidance for sponsors. Mr Cox agreed that this was in principle right. However, the grant of interim relief would not preclude the SSHD from so acting if the order was carefully framed. Mr Cox offered a form of wording which he thought would make this clear, but Mr Karim had not had an opportunity to fully consider it. Before this judgment is handed down, I will invite the parties to either agree an appropriate term or make submissions as to what would be necessary to achieve this objective. Subject to that, I consider that interim relief should be granted in this case.

I now turn to the Hamilton case. When issued the challenge was to the decision to suspend Hamilton’s licence. This took place on 18^th January 2010. In his letter, the SSHD quoted paragraph 281 (the obligation on a sponsor not to issue a CAS or visa letter unless it was satisfied that the student intended and was able to follow the course of study concerned). It then said, ‘The UK Border Agency has reason to be concerned about the activity of a number of international students to whom you have issued visa letters or confirmation of acceptance for studies. In view of the above information we believe AA Hamilton College London are failing in their duty to asses a student’s intentions effectively and are therefore posing a risk to immigration control.’ On 26^th January 2010 Hamilton sent a spreadsheet of student attendances. On 5^th February 2010 it asked for details of the SSHD’s allegations. Although a letter was apparently written in response on 11^th February 2010, it had not reached the College by the time proceedings were issued on 19^th February 2010. Summary grounds were filed and served on 23^rd February 2010.

While the suspension decision has now been overshadowed by the decision to withdraw the licence that was taken on 7^th April 2010, the Claimant does continue to seek leave to challenge the suspension. While suspended the College could no longer issue visa letters or CASs. This would have an obvious effect on the Claimant’s business. Hamilton argues that the decision was unfair, inadequately reasoned and/or perverse in view of the extremely limited information which it was given as to why its licence had been suspended. It is sufficient for me to say that in view of the paucity of information which the SSHD provided in the initial letter and the failure to expand on this in the month before proceedings commenced, I regard these grounds as reasonably arguable.

The decision to withdraw Hamilton’s licence was explained in the SSHD’s letter of 7^th April 2010. This noted that on the basis of data provided by the College on 4^th February 2010, 68% of its students attended less than 80% of the time. 207 students had been issued with visa letters by Hamilton and been granted entry clearance but had not enrolled for their course. Under the heading ‘response to representations’ the SSHD then dealt with the following matters:

The grounds of challenge to this decision are as follows:

The SSHD’s Detailed Grounds of Resistance responded as follows:

I am not persuaded by Mr Karim’s submissions. In my judgment, the Claimant has at the very least, clearly arguable grounds for seeking judicial review. It is necessary for me to respond to his submissions only briefly.

Accordingly, I grant permission to Hamilton to apply for judicial review of both the suspension and the revocation decisions.

Mr Zubair Ahmed is the Director of Hamilton. His witness statement of 14^th April 2010 provides evidence of the loss which it will suffer as long as it is suspended or its licence is withdrawn. The points which he makes are very similar to those made by Mr Munir for Leeds. At the time of his witness statement, Mr Ahmed said that more than 1200 students currently sponsored by Hamilton had more than 6 months of their leave remaining and so face curtailment of their leave to 60 days. All of these students could be expected to demand a full refund of their fees. If that happened, Hamilton would face demands of the order of £2.5 million.

In this case as well Mr Karim argues that interim relief should not be granted. I do not accept his submissions. Again, I can respond briefly to his points. He has accepted that I am not precluded from ordering interim relief despite the different decision of Black J. when the matter was before her. In my judgment the Claimant’s grounds for seeking judicial review are strong and not weak. There may be an explanation for the discrepancy between 2250 (the capacity which the Claimant says that it has) and 3226 (the number of visa letters which it has issued) and one was offered by Mr Cox after the hearing, but even if I were to consider the lower of those two figures it is plain that while its licence remains withdrawn the Claimant will suffer very significantly. For the reasons which I have given in Leeds, the order can be drawn in terms which will not prevent the SSHD from exercising his proper regulatory function should some fresh cause for this arise. The SSHD is, of course, entitled and obliged to take proper measures to prevent breaches of immigration control, but that is not a good reason for refusing interim relief where the Claimant has strong grounds for saying that the actions taken against it so far are not lawful. Finally, the pressures on the list in the Administrative Court are such that a hearing of the substantive application for judicial review in the immediate future is not likely.

For all of these reasons, I consider that the balance of convenience in this case as well does lead to the conclusion that I should in my discretion grant interim relief. Hamilton offers an undertaking that it will not issue new CASs other than to its existing students and who became enrolled before 18^th January 2010. I will not make the interim relief subject to a comparable undertaking in the Leeds case. I would not insist on an undertaking in this case. Of course, if Hamilton does still wish to give it, there can be no objection. Other than that, I envisage that the form of the order will be in the same terms as in Leeds, but I will again invite the parties to either agree an order or present written submissions as to what precisely it should say.