Capital Care Services UK Ltd, R (on the application of) v Secretary of State for the Home Department [2012] EWCA Civ 1151

Case No C1/2011/2616[2012] EWCA Civ 1151
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
ADMINISTRATIVE COURT
(MR JAMES DINGEMANS QC)
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Tuesday, 24 July 2012
Before
LORD JUSTICE LAWSLORD JUSTICE TOULSON--and--SIR ROBIN JACOB
Between
THE QUEEN ON THE APPLICATION OFAppellantCAPITAL CARE SERVICES UK LTDAppellantTHE SECRETARY OF STATE FOR THE HOME DEPARTMENTRespondent
(DAR Transcript ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Ms Faiza Rizvi, a director of the Appellant Company, appeared on its behalf. for The Respondent did not appear and was not represented.
Judgment
[1]This is an appeal with permission granted by Rimer LJ on 4 May 2012 against the refusal by Mr James Dingemans QC sitting as a Deputy High Court Judge on 30 September 2011 of permission to seek judicial review of the revocation by the Secretary of State on 11 July 2012 of the appellant's licence to operate as a sponsor under what is called Tier 2 of the points-based system.[2]Ms Rizvi, whom I understand to be a director of the appellant company, has appeared on their behalf today and addressed us in accordance with her latest skeleton argument with great clarity and courtesy.[3]A migrant worker who wishes to remain in the United Kingdom in order to work must have a sponsor. The relevant sponsorship scheme is administered by the Secretary of State through the United Kingdom Border Agency. In November 2008 the appellants applied to the Secretary of State for a Tier 2 sponsorship licence so that they might operate their business model. Officials paid a visit to the appellants on 23 January 2009. On 27 January 2009 the UKBA wrote to the appellants granting a licence. The letter stated:
"Your licence will be valid for 4 years, unless it is withdrawn by the Agency or surrendered before then. The licence will take effect from the day the licence is issued or the date on which it became possible to issue certificates of sponsorship under the tier, category or sub-category to which the licence relates, whichever is the later. You must notify the UK Border Agency if there are any changes in your circumstances."
Then in the next paragraph:
"You are reminded of the need, throughout the period of your licence, to fulfil the duties of a sponsor as set out in the guidance on the UK Border Agency website."
[4]It is common ground that the business model as proposed to be operated by the appellants was fully disclosed to the Secretary of State. It involved the supply of foreign medical staff to the National Health Service, as I shall explain more fully below. Audits were carried out on behalf of the Secretary of State on 26 April 2010 and 13 September 2010, and no concerns were expressed or issues then raised as regards the functioning of the appellant's business model or its compliance with the Secretary of State's requirements.[5]There was a further visit on 10 November 2011 when certain concerns were noted. On 15 February 2011 the UKBA wrote to the appellants expressing these concerns, suspending their licence with immediate effect and inviting representations within 28 days. The appellants’ then solicitors replied on 10 March 2011 making detailed representations. On 11 July 2011 the UKBA wrote again revoking the appellant's licence with immediate effect. This is the decision sought to be challenged.[6]Though it was accompanied by more detailed assertions in the correspondence, the essential complaint raised by UKBA and the reason for the revocation of the appellant's licence was that the appellants were acting as an employment agency supplying staff to the National Health Service and to the private health sector and this was contrary to the requirements of the sponsorship scheme.[7]The appellants have held three major contracts with the NHS for the provision of doctors, for the provision of nurses and associated professionals and for the provision of ancillary staff. The first and third of these framework agreements are included in the appellant's bundle placed before us. They are similar in form and substance. They provide that the NHS terms and conditions of contract should apply to the supply of temporary staff by the appellants. The NHS contract provides, amongst other things:
"1.1 The supplier shall be entirely responsible for the employment and conditions of service of his staff employed or engaged in the provision of the Services."
Then paragraph 1.3 of Schedule 2:
"In relation to the provision of the Services, the Supplier will employ or engage only such persons as are careful, skilled and experienced in the duties required of them and will ensure that every such person is properly and sufficiently trained and instructed (at the Supplier's expense) in accordance with clause 1.4 below and carries out the provision of the Services..."
And then various particulars are set out.[8]Paragraph 3 of the same schedule to the NHS contract includes this under the title “Job profiles”:
"3.1. Unless otherwise agreed in advance in writing with the Authority, a supplier shall ensure that all Agency Workers supplied in the provision of the Services, during the Contract Period, shall comply with the qualifications, registration requirements, experience and other standards as set out: 3.1.1. in the Supply Contract; and 3.1.2 by relevant Professional and Regulatory Body’s standards of competence, training and proficiency; and 3.1.3 by the relevant Job Profiles as referred to in Annex no.1A (Job Profiles) and any other Job Profiles as required by the Authority; 3.2 The job profiles referred to in Annex No 1A (Job Profiles) are not exhaustive and new requirements may be introduced by the Authority, NHS Employers or UCLH during the Contract Period provided they are reasonable; 3.3 New requirements shall be communicated in writing by the Authority or UCLH to the supplier and unless the circumstances are such as to necessitate notice of an immediate effect, the Authority shall give the Supplier at least one month's notice of any variation or addition to the job profiles."
And then at paragraph 5.1 of the same contract:
"The Supplier shall use reasonable endeavours to ensure that all agency workers supplied in the provision of the services are aware that at all times whilst during and assignment with an authority they: 5.1.1 must work as directed by the Authority and follow all reasonable requests, instructions, policies, procedures and rules of the Authority..."
[9]The requirements of the Tier 2 points-based scheme have been set out by the Secretary of State in guidance issued from time to time. The 9/08 guidance was in force when the appellants applied for a sponsorship licence; the 11/08 guidance when the licence was granted; the 12/10 guidance when the licence was suspended; and the 4/11 guidance when the licence was revoked. Each version of the guidance made it clear that it reflected "current policy, but may be subject to change at any time". Paragraphs 284 and 286 of the September 08 guidance stated:
"284. An agency can apply for a licence as a sponsor only if it will employ migrants who are not settled in the United Kingdom within its own organisation. We will not issue a licence if the agency only supplies staff to other employers. 286. We will only allow the sponsor to issue a certificate of sponsorship if it is clear that the sponsor has full responsibility for determining the duties, functions and outcomes or outputs of the post."
Paragraphs 280 and 284 of the 11/08 guidance:
"280. An employment agency or employment business can apply for a licence as a sponsor only if it will employ non-settled workers within its own organisation. 284. We will only allow the sponsor to assign a certificate of sponsorship if it is clear that they have full responsibility for deciding the duties, functions and outcomes or outputs of the job."
Paragraphs 380 to 382 of the 12/10 guidance:
"380. Where a migrant is working on a contract basis and has been supplied to the sponsor by another organisation, the sponsor must be the organisation which has full responsibility for determining the duties, functions and outcomes or outputs of the job the migrant is doing." 381. An example of this would be where Company A has a contract with Company Z to deliver a piece of work. A migrant who is sponsored by Company A, may be said to work for the duration of the contract with Company Z, but they remain employed by Company A throughout the period of the contract and Company A is fully responsible for deciding the migrant's duties, functions, outputs or outcomes. In this example, Company A remains the migrant's sponsor. 382. We only allow the sponsor to assign a certificate of sponsorship if it is clear that they have full responsibility for deciding the duties, functions and outcomes or inputs of the job. Where the sponsored migrant is carrying out work for a third party on behalf of the sponsor, the migrant must be contracted by the sponsor to provide a time-bound service or deliver a time-bound project on behalf of the sponsor. They may not be contracted as agency workers or to undertake a routine role for the third party which is not related to the delivery of a time-bound service by the sponsor."
The 4/11 guidance is to the same effect.[10]The plain intention of these policy measures is to ensure that the licensed sponsor maintains a very tight oversight of the sponsored work, involving full responsibility for the duties and functions which the worker is to perform, in order to secure as far as possible strict compliance with the Immigration Rules.[11]The appellant's licence was suspended and then revoked because the Secretary of State concluded that the arrangements they had in hand with sponsored medical staff did not fulfil these requirements. The appellants assert in successive skeleton arguments that they had "total responsibility for determining the duties and functioning of their Tier 2 migrant workers" and have produced material such as P60 tax forms.[12]However, the contract with the NHS to which I have referred demonstrates that much of the control over the sponsored doctors’ actual professional duties is in the hands of the NHS, and the appellant's contracts with individual doctors (which are in the bundle) are perfectly consistent with this. It seems to me that it is clear, notwithstanding the fact or possibility that the appellants had entered into relationships of contracts of employment with the migrant workers, that the arrangements made were not in accordance with the guidance as published from time to time. But it is no less clear as I have indicated that the appellant's business model was fully disclosed to the Secretary of State and was so disclosed when the licence application was made in November 2008.[13]Consistently with the guidelines, the Secretary of State should have refused the licence application and it is acknowledged that a mistake was made. In those circumstances, the appellants say that they enjoyed a legitimate expectation that their licence would enure for the four-year term of its initial grant. They claim to have invested very substantial sums on the faith of this expectation. They have spent money, it is said, on software, other infrastructure, management, security, marketing and publicity. In their second skeleton argument it is asserted they have suffered losses of £1.5m and £2.5m loss of future income. There is no evidence at all to support those sums or any claims of very large financial loss. There is one invoice for certain services in the sum of £8,000 and VAT. That is in the bundle. We have no idea however what value the appellants got out of the services so provided.[14]After enquiry by the court, it emerged that a witness statement was prepared by Ms Rizvi and placed before the court. We have (and it is not satisfactory though I mean no criticism) what appears to be a revised version of that document, containing in effect much of the text of the witness statement that was put before Mr Dingemans. In that statement there is an assertion that "a considerable amount of funds" was expended (paragraph 14). It is also said that the appellants "have heavily invested in their operations". But there is no further detail and there are no, as far as I can see, supporting documents save for the single invoice to which I have referred.[15]The appellants have referred, and Ms Rizvi mentioned it this morning, to the common law doctrines of estoppel by representation and estoppel by convention. She has referred in addition to the cases of Downderry Construction Limited v SSTLGR [2002] EWHC 02 Admin and Lever (Finance) Limited v Westminster LBC [1971] 1 QB 222. In my judgment, however, whatever the scope of application of those doctrines to the exercise of public functions by public authorities, they cannot confer any greater rights on the appellants than they might enjoy by force of the public law principles of legitimate expectation.[16]In that regard the case most closely in point is R v Department of Education and Employment ex parte Begbie [2000] 1 WLR 1115. There the appellant, a child acting by her mother as litigation friend, asserted a legitimate expectation derived from a letter from the Secretary of State and other statements to the effect that she would retain her assisted place at an independent school until her education was completed. In fact, the government's policy had been misrepresented in the correspondence and the mistake was corrected some five weeks after the principal letter had been sent. The expectation said to have been generated by the misrepresentation could not, so this court held, be fulfilled consistently with the relevant legislation: the Education (Schools) Act 1997. But the court also proceeded to consider whether, leaving aside the impact of the statute, the legitimate expectation claim was or might have been good. It was held that it was not. Peter Gibson LJ said this (paragraph 6):
“For my part I cannot accept that the mere fact that a clear and unequivocal statement such as that made in the Teed letter was made is enough to establish a legitimate expectation in accordance with that statement such that the expectation cannot be allowed to be defeated. All the circumstances must be considered. Where the court is satisfied that a mistake was made by the minister or other person making the statement, the court should be slow to fix the public authority permanently with the consequences of that mistake. That is not to say that a promise made by mistake will never have legal consequences. It may be that a mistaken statement will, even if subsequently sought to be corrected, give rise to a legitimate expectation, whether in the person to whom the statement is made or in others who learnt of it, for example where there has been detrimental reliance on the statement before it was corrected. The court must be alive to the possibility of such unfairness to the individual by the public authority in its conduct as to amount to an abuse of power. But that is not this case.”
I said:
“83. The present case does not lie in the macro-political field. It concerns a relatively small, certainly identifiable, number of persons. If there has been an abuse of power, I would grant appropriate relief unless an overriding public interest is shown, and none to my mind has been demonstrated. But the real question in the case is whether there has been an abuse of power at all. The government’s policy was misrepresented through incompetence. It is not in truth a case of change of policy at all. Mrs Begbie, who has conducted herself throughout with dignity, restraint, and a clarity of mind which contrasts with the letter to her from the Secretary of State of 11 March, did not alter her or her daughter’s position in reliance on the misrepresentation. The mistake was corrected five weeks or so after the ‘Teed’ letter. The issue is whether the correction amounted to an abuse of power; or whether the Secretary of State should be compelled to allocate public resources to the grant of assisted places inconsistently with his perfectly lawful policy. 84. If there had been reliance and detriment in consequence, I would have been prepared to hold that it would be abusive for the Secretary of State not to make the earlier representations good. But there has not...”
[17]There are plainly some points of distinction between this case and Begbie. Here the benefit in question, the grant of the sponsorship licence, was not merely promised but actually obtained and enjoyed for over two years before it was revoked. Plainly the appellants relied on the licence by operating their business model on the face of it, but the legitimate expectation case is to my mind weakened by the fact that the grant of the licence on 27 January 2009 itself made it plain that the licence might be withdrawn before expiry of the four-year period. And moreover, as I have indicated, successive versions of the guidance made it clear that the policy "may be subject to change at any time", though this of course is not a case of a change of policy but one where the policy in question was not initially applied as it should have been.[18]In my judgment any legitimate expectation to the effect that the appellant's licence would enure for the whole four year period was, on the facts of the case, weak. In addition to the matters to which I have already drawn attention, it is worth noting that while of course it was the Secretary of State's responsibility to apply his own policy correctly, the appellants were not without all responsibility in the matter. They knew or must be taken to have known what the policy was -- the guidance was drawn to their attention -- and plainly they knew the circumstances and conditions on and in which they supplied doctors to the NHS.[19]As regards detriment, which as I have shown was the subject of some discussion in the Begbie case, the fact is that no sufficient evidence was placed before the Deputy Judge to make good a substantial case of detriment. There is one invoice and generalised assertions. Ms Rizvi would wish to insist before us that there is much more than that, but it does not seem to me that it would be appropriate or proper to grant judicial review leave on the basis that hereafter evidence not so far produced might at length be placed before the court.[20]In those circumstances, I do not consider that the revocation of the appellant's licence upon the Secretary of State's belatedly appreciating the requirements of the scheme were not met by their business model was so unfair as to amount to an abuse of power.[21]I should add, since it has figured in Ms Rizvi’s submissions for the appellant, that the Deputy Judge below seems to have proceeded on the mistaken basis that the licence was renewed. That is not so. What was renewed was the number of sponsorship certificates, but I have to say that makes no difference to the conclusions which I have reached.[22]Lastly, there is in any event an overriding public interest here. The requirements of the policy are as I have said distinctly fashioned for the protection of immigration control in accordance with the Immigration Rules. The Secretary of State cannot in my judgment be required in the name of a legitimate expectation to weaken that protection by maintaining in being a licence to operate a business which does not meet those requirements.[23]For all these reasons for my part, I would refuse judicial review permission.[24]I agree.

Sir Robin Jacob:

[25]I also agree.

Order

Appeal dismissed

Cited in 3 later judgments