Warnborough College Ltd., R (on the application of) v Secretary of State for the Home Department [2013] EWHC 1510 (Admin)

[2013] EWHC 1510 (Admin)Case No CO/13631/2012
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 10 June 2013
Before
HIS HONOUR JUDGE ANTHONY THORNTON QCSitting as a deputy judge of the High Court
R (on the application of
Between
Warnborough College Ltd)ClaimantSecretary of State for the Home DepartmentDefendant
Mr Ian Macdonald QC (instructed by Quist Solicitors for ClaimantMr Sarabjit Singh (instructed by The Treasury Solicitor for DefendantHearing: 22 May 2013
JUDGMENT
[1]This judgment is concerned with Warnborough College Ltd’s (“WCL”) renewed oral application for permission to apply for judicial review. WCL seeks to challenge the decision of the Secretary of State for the Home Department (“SSHD”) dated 1 November 2012 to refuse to grant it a Sponsor Licence ("SL") as a Highly Trusted Sponsor ("HTS"). This licence enables WCL to grant international students Certificates of Acceptance (“CAS”) onto one of its courses so that the grantee can apply for a Tier 4 (General) visa issued by the SSHD under the Points Based System (“PBS”) which was first introduced into the Immigration Rules (“IRs”) in 2009. An international student cannot apply for a visa without having been issued with a CAS from a course-provider that sponsors that student and which confirms his or her admission onto the intended course of study. A sponsor course-provider can only issue a CAS if it has been granted a Sponsorship Licence (“SL) by the SSHD granting it HTS and permitting it to sponsor, in WCL’s case, Tier 4 student visa applications from international students wishing to study on one of the recognised courses offered by WCL. The effect of the revocation of its SL would have devastating consequences for WCL since it could not issue CASs and admit international students onto its courses without a SL. Furthermore, the Tier 4 visas of its existing students would be curtailed 60 days after the revocation of the SL.[2]WCL is a reputable private educational institution that was established in 1973 and is based in Canterbury, Kent. It offers accredited courses in the areas of Business Management, Marketing Management, Human Resource Management and Travel Tourism and Hospitality over 1 – 2 years in length at QCF Levels 4 – 7. It also offers NVQs in these areas. A significant proportion of its income has historically been derived from non-EEA students, many from the Indian sub-continent and on 1 November 2012 it had 134 full-time students all of whom were Tier 4 students. It has a potential enrolling capacity of 550 students and it currently employs 12 full time and 9 part-time members of staff. It is, therefore, wholly dependent on non-EEA international students and by 17 December 2012 when the claim form was issued, the number of its full-time Tier 4 enrolled students had fallen to 110.[3]WCL seeks a declaration that the decision dated 1 November 2012 is unlawful. WCL has also applied for and been granted interim relief given the intense hardship if not immediate closure on financial grounds that would result from this refusal decision. On 7 January 2013, Mr Ockelton, sitting as a deputy judge of the Administrative Court, made an order that the SSHD was not to revoke WCL’s SL until 14 days after the service of the acknowledgement of service. This injunction was discharged on 14 February 2013 by Mr Goudie QC sitting as a deputy judge when refusing permission. Factual background (1). Policy Guidance Document[4]The SSHD introduced the current refined and revised scheme for licensing CASs, which provided for the first time for HTS, on 1 October 2011. The HTS system was introduced by a policy guidance document (“PGD”) entitled Tier 4 of the Points Based System – Policy Guidance (“PGD”) Version 09/11 which replaced earlier versions of this policy. It has since been replaced by a number of revised versions. . The PGD formed part of the Guidance that the SSHD issued in relation to the operation of the PBS and the power to issue it was provided for in that part of the IRs relating to the PBS. This particular version of the licensing scheme provided that, from April 2012, all Tier 4 Sponsors would only be able to recruit new students subject to immigration control (in practice any non-EEA national) if they had attained HTS status which would only be granted to sponsors as part of their SL if they fulfilled the qualifying requirements provided for in the PGD.[5]The PGD also provided for the issue of CASs and for the duties of an HTS when accepting a student onto a course, when issuing that student with a CAS and sponsoring his or her visa application, when issuing a Certificate of Acceptance and in relation to all subsequent stages in that student’s progress through the course to its completion. The relevant provisions of the PGD may be summarised as follows:(1) An international student wishing to study as a Tier 4 student had first to apply for admission to a recognised course offered by an HTS and obtain a CAS signifying acceptance onto that course from the proposed institution of study. Each CAS was given a unique number and the sponsor paid the UKBA a fee when registering the CAS on the UKBA electronic Sponsorship Management System (“SMS”) on issue. A sponsor was only entitled to issue a CAS to a student who appeared to the sponsor to qualify for a visa and who had demonstrated appropriate ability and motivation to undertake and complete the proposed course of study.(2) The sponsor had to provide details on each CAS that it issued of the evidence that it had used in making the assessment of that student’s suitability for the course which the CAS had been issued for Paragraph 385 of the Policy . This assessment was, for the sponsor, its core involvement in the application process and it involved the exercise of academic judgment by the sponsor. The PGD explained that the sponsor was required to check other details in order to satisfy itself that the student would qualify for a visa. All those details would subsequently be rechecked by the visa reception centre before it issued the visa.(3) The student had then to apply for a Tier 4 visa from a visa reception centre. The application was usually submitted to a visa reception centre between three and six months after the grant of the CAS. In 2011, there were approximately 2,100 HTS who were issuing CASs in over 200 countries. It followed that a huge number of CASs were issued in 2011 for use in connection with a Tier 4 visa application and there were over 80 processing centres serving over 250 visa reception centres. 12 of these centres were located in India where the great majority of WCL’s CASs were issued.(4) The Tier 4 visa application form was lengthy and detailed and required answers covering the applicant’s personal details; proposed course of study, educational institution and CAS number; relevant academic qualifications obtained to date; the necessary proof by means of completed course or test certificates of their proficiency in English language use; their financial details including proof of the necessary funds that had to be provided up front and of their ability to pay the required course fees and to be self-sufficient during their stay in the UK; and any previous immigration history and convictions.(5) The visa would only be issued to those who score the necessary points for attributes under Appendix A, language skills under Appendix B and maintenance under Appendix C, had answered all questions on the lengthy application form satisfactorily and had provided all the required documents which, on examination by the trained checking staff, had been accepted as being authentic. The visa reception centre would then issue an acceptance or rejection document which was sent to the student but not to the SMS. A copy of this document was not sent to the sponsor who might, but not invariably would, be provided with a copy by the student. The rejection decision contained reasons why the application had been rejected.(6) Once the sponsor had been notified of the receipt of a visa, the student would be able to travel to the UK and enrol with the sponsor. The PGD contained detailed and prescriptive requirements imposed on each sponsor for the monitoring of the student’s enrolment, course attendance, academic development, course progression and pass or failure and details of each stage in the student’s progress through the course had to be submitted to the SMS.[6]WCL’s HTS application was rejected under one of the mandatory requirements in the PGD to the effect that its refusal rate had to be less than 20 per cent. A “refusal rate” was defined as:
“Of all the CAS that you have assigned which students have used to support an application for a visa or permission to stay, the total number of applications we refused must be less than 20%. … We will take into account all CASs that students have used and applications we refused during the 12-month period.”
In the Frequently Asked Questions document published by the UKBA about the HTS approval system, it stated:
“How are refusal rates calculated and how does this impact on an HTS application? • A high refusal rate is an indication of poor compliance and recruitment practices. However, when a sponsor applies for HTS status, we are aware that on some occasions an error may occur. • When calculating refusal rates, we will count all visa refusals for the previous 12 months. When calculating this figure, we will not include any refusals that have been overturned (on an administrative review). Paragraph 270 of the PGD. ” • A high refusal rate is an indication of poor compliance and recruitment practices. However, when a sponsor applies for HTS status, we are aware that on some occasions an error may occur. • When calculating refusal rates, we will count all visa refusals for the previous 12 months. When calculating this figure, we will not include any refusals that have been overturned (on an administrative review). Paragraph 270 of the PGD. ”
[7]The institution applying for an HTS licence also had to satisfy three further mandatory requirements, being its Enrolment Rate (at least 90%), its Course Completion Rate (at least 85%) and its Declaration of Academic Progression (100%).[8]If one or more of the mandatory requirements was not met, the HTS application would be refused and the licence revoked. This was because the applicant had failed to meet the minimum requirements.[9]If the institution satisfied the mandatory requirements, it then had to satisfy the core minimum requirements for the three mandatory requirements using the scoring system provided for in the accompanying table. If 70 points or more resulted, the application was granted. If the score was between 69 and the lowest possible score of 50, the result was a “near miss” and the applicant was placed on the A register and required to re-apply for an HTS licence. If the applicant again scored less than 70 points, the application would be refused.[10]WCL had applied for and been granted an A Licence when SLs were introduced in 2009 and, in anticipation of the introduction of the mandatory requirement to obtain an HTS SL, it applied for this licence on 1 October 2011, a few days before the deadline for that application. Remarkably, the SSHD only decided that application 13 months later on 1 November 2012. The UKBA refusal letter informed WCL that it was intending to take that step because:
“For a sponsor to be considered for HTS status they must first meet all the mandatory requirements as detailed in the sponsor guidance. We have been unable to approve your application for the following reason(s):- Our records indicate that your refusal rate is greater than 20%. The total number of leave applications made was 288 during the 12 months prior to the date your application was received, this being from 7 October 2010 until 6 October 2011. Of these, 76 were refused giving you a refusal rate of 26.39%. For your convenience we have indicated in Annex A the CAS numbers used during the assessment period outlined above. The refused applications have been highlighted in bold.”

We have been unable to approve your application for the following reason(s):-

[11]The CASs relating to these refusals would have been issued in the period between January 2010 and mid-2011 since each application would have been submitted by the student between 3 and 6 months after the award of the CAS and, once submitted, it could take up to 3 months to be processed and approved or refused The target set in April 2010 in Chennai, being one of the visa reception centres in India, was 90% of applications in not more than 3 weeks, 98% in 6 weeks and 100% in 12 weeks. It would seem however from the report from which these figures were taken that there were lengthy processing delays across the visa issuing sections in India in 2010. (Chief Inspector of the UKBA’s Report Inspection of entry clearance in Abu Dhabi and Islamabad, paragraph 6.81 and passim (January – June 2010)). . Thus, WCL’s checking process leading to the award of a CAS took place between 35 and 17 months prior to the UKBA refusal decision being taken and issued on 1 November 2012. WCL challenged the accuracy of these figures on the basis of its inspection of 30 of the 76 refusal decisions The refusal decisions are not sent to the Sponsor by the UKBA or the visa reception. It would seem that the decision cannot be downloaded from the SMS system. The decisions analysed by WCL were those which the student had provided to it. There has been no analysis of the other 46 refusal decisions so that it is likely that the refusal percentage, calculated as WCL had done, was very significantly lower than 19.44%. . 19 of the 30 refusals that were analysed were attributable to reasons which were unconnected with its sponsorship obligations. It contended that those refusals should have been left out of account and, if they were, the refusal rate would have been 19.44%. It also contended that there was evidence from the Chief Inspector’s reports relating to visa reception centres that a significant proportion of the visa application refusals in Indian sub-continent visa reception centres were refused in error and many of those erroneously refused applications were not then subjected to an administrative review. It followed that WCL’s refusal rate was, if properly calculated, significantly less than 20%.[12]UKBA’s response was that its analysis of the refusals that WCL contended should not count as refusals had arisen because the refusal decision showed that the correct maintenance requirement for the application had not been shown on the visa application form by the student. 4 of these cases were submitted for administrative reviews and the refusal decision was upheld. The remainder were not reviewed so that those refusal decisions also stood. It contended that the terms of the PGD were such that these refusals had to count as refusals when calculating the refusal rate irrespective of whether or not WCL could have identified the refusal ground when issuing the relevant CASs although it was also asserted that WCL could have identified these particular refusals had what were described as “robust” checking procedures been adopted. The PGD does not use this term. Instead, it provides further Guidance documents that provide guidance on the checking procedures that should be used which WCL contended had been in use in the relevant period. Unhelpfully, the UKBA has not identified the nature of the robust procedures that it contends could and should have been but were not used and it has not explained how those procedures, had they been used, could have identified these particular grounds of refusal.

WCL’s grounds

[13]WCL contends that the SSHD was not entitled to refuse its application for an HTS licence. In general terms, it points out that SSHD had refused its application because it had failed the 20% refusal rate test which was a test which was premised on WCL having responsibility for all refusals irrespective of the reason for those refusals. There was no discretion available to SSHD to enable it to take account of particular circumstances operating in a particular country or so as to distort the refusal rate for reasons outside the control of the applicant.[14]This general approach to the mandatory refusal rate is disputed by WCL on each of these grounds:(1) The applicable policy, insofar as it required WCL to undertake non-educational vetting or checking of a student’s eligibility for a visa was unlawful, because the PGD had not been approved by Parliament.(2) A mandatory refusal rate of 20% figure was unlawful as being unfair and arbitrary.(3) WCL’s procedures were robust and in its particular circumstances, the UKBA should have operated its exceptional circumstances review policy to reconsider its position holistically and accept its HTS application.(4) If the policy was interpreted correctly, the refusals to be used in calculating the refusal rate were confined to refusals for reasons which WCL could have identified had it conducted its CAS selection procedures “robustly”. It was therefore unlawful to apply a mandatory 20% refusal rate to all refusals save those set aside on an administrative review.(5) WCL’s refusal rate was well below 20% if the relevant refusals excluded refusals it could not have identified.(6) The UKBA applied an unpublished discretionary policy whereby it subjected a refusal decision to an overall “holistic” review as appropriate and then granted permission and/or treated the mandatory refusal rate of less than 20% as having been achieved. This arbitrary and ill-defined use of discretion should have been used to WCL’s advantage in this case.(7) The adoption of a mandatory maximum permitted refusal rate of less than 20% figure was arbitrary, unfair and irrational.(8) The 20% refusal rate policy contravened its protected right to enjoy its property provided for by Article 1 of Protocol 1 of the ECHR.[15]The SSHD answered these grounds in blunt and clear terms. It contends that the PGD provides for a mandatory refusal rate of less than 20%. That policy is lawful and should be uniformly applied to all HTS applications without exception. Moreover the lawful use of that mandatory policy has been upheld in one decision of the Court of Appeal and a three first instance decisions of the Administrative Court New London College v SSHD[2012] EWCA Civ. 51, CA; London College of Management Ltd v SSHD {2012] EWHC 1029 (Admin), Judge Alice Robinson; WestLondonVocationalTrainingCollege v SSHD [2013] EWHC 31 (Admin); WesternGovernorsGraduateSchool v SSHD [2013] EWCA 177, CA. . It follows that WCL’s various grounds have no prospects of success.

Grounds - General

[16]I will now summarise the reasons why I consider that WCL has good prospects of success in its challenge to the 1 November 2012 refusal decision and should, in consequence, be granted permission to apply for judicial review on all grounds being advanced.

Ground 1 – PGD unlawful - not approved by Parliament

[17]The contention that the PGD is unlawful since it has never been approved by Parliament and is not incorporated into the Immigration Rules does appear currently to be untenable given the decision in New London College encapsulated in the passage in paragraph 48 of the judgment of Richards LJ in that case.[18]Three qualifications should be made about this decision which show that it may not be the last word on this ground:(1) The Supreme Court appeal is being heard in the Supreme Court on 6 and 7 June 2013 The appeal has been conjoined for hearing with the appeal in WestLondonVocationalTrainingCollege. . There must therefore be some prospect that the appeals will succeed and that this ground will then be highly arguable. Presumably, it is hoped that the judgments in New London College will be handed down before or soon after the end of the Long Vacation 2013.(2) The Court of Appeal decision was in part supported by the court’s surprising contention that if the argument as to unlawfulness succeeded, the entire PGD and the underlying PBS for Tier 4 would be rendered inoperable until reformed. This appears to suggest that even if the policy is unlawful, it has to be saved on grounds of pragmatism. This is not a ground that the Supreme Court is likely to uphold.(3) The decision does not address an even more fundamental argument to the effect that the policy – or at least the mandatory features of the CAS approval process – is unlawful because it is imposing by the delegation onto educational bodies of visa granting functions which fall outside their objects as educational bodies, whether or not they are also charities. It is arguably not within the power of the SSHD under immigration legislation and the IRs to impose by way of policy guidance mandatory non-educational functions on an educational body. This would be outside the ambit of the powers of the SSHD since it is requiring educational bodies to undertake functions outside their educational objects, in breach of trust and charity law and education law. Thus, that part of the policy falls outside the remit of the exercise of policy guidance formulation of an SSHD exercising immigration powers and powers to control entry into the UK by non-EEA nationals. The requisite policy, that can only, on this argument, be achieved by primary legislation that adds to or amends the existing Education Acts, company law, charity law, tax law and articles of association of educational bodies.[19]Mr Macdonald QC, on behalf of WCL, indicated that he wished to reserve WCL’s position on this ground and to raise it at the substantive hearing if he got permission and the Supreme Court had allowed the two appeals.

Ground 2 - A mandatory 20% refusal rate is unlawful

[20]This argument was addressed in the London College of Management, West London Vocational Training College and Western Governors Graduate School cases. The argument was not accepted in these three cases as a matter of principle because the decisions were based on various assumptions which were not challenged in the evidence that appears to have been put forward in each of those cases. These decisions may be overruled by the Supreme Court.[21]Moreover, all the assumptions were, in the absence of evidence to the contrary, found to apply in the three cases which, in consequence, upheld the imposition of a mandatory 20% refusal rate rule. However, it seems that if these assumptions, or at least some of them had been shown by evidence not to have been applicable, the result in each of these cases might well have been different. It is therefore open to WCL to seek to show that these assumptions are inapplicable given the facts and circumstances of this case.

Grounds 3 - 8

[22]I will briefly identify these assumptions and provide brief reasons why it is arguable that each assumption is inapplicable to this case and, in so doing, identify why each of WCL’s grounds of challenge numbered 3 – 8 above have reasonable prospects of success.(1) There is a sound factual basis for the underlying assumption that a high visa refusal rate provides direct evidence that that institution’s CAS selection procedures were insufficiently “robust”. This assumption is arguably inapplicable because: (i) There is no statistical support for it other than the arguably flawed overall average refusal rate. (ii) UKBA were directly challenged in the PAP letter sent on behalf of WCL to explain why it is asserted that there is a rational connection between “mere figures of refusal and a failure to keep acceptably robust procedures for ensuring that only genuine students who intend to complete their studies are recruited.” The UKBA appear to have ignored that question in its reply since the answer that was given answered a totally different question, namely whether reporting “visa refusals” and failures to enrol were sponsor obligations. (iii) “Robust” is not a description of the selection procedures required by the PGD. It was introduced into the argument in London College of Management case, no doubt by way of forensic shorthand. It has no clear meaning in the context of particular necessary selection procedures and, in any case, the selection procedures that are to be used by a particular sponsor are those recommended in the relevant Guidance documents adjusted as necessary for any particular institution in relation to any particular part of the world for any particular course of study so that reasonable steps are taken to ensure that that student’s CAS application would, if resubmitted as a visa application, obtain the grant of a Tier 4 visa.(2) There is a sound factual basis for concluding that the appropriate threshold between acceptable and unacceptable selection procedures is a 20% refusal rate. This figure is made up of two elements: (i) an overall average refusal rate of 15% and a reasonable mark up on that figure of a 5% refusal rate to allow for those granted a CAS which they were not eligible where the factors giving rise to that ineligibility could not reasonably have been identified by the institution’s SAS-granting procedures See paragraphs 38 – 39 of Toulson LJ’s judgment in the West London Vocational Training College case. . This assumption is arguably inapplicable because: (i) There were 2,100 educational institutions licensed by the UKBA to sponsor students in 2011. These ranged in size and number of CASs awarded annually from the very small to numbers in excess of 1,000. The number of Tier 4 CASs awarded annually in 2011 was not recorded but it must have run into the hundreds of thousands. (ii) This extract from the UKBA Inspector’s Report of Tier 4 Applications is instructive as showing that there must have been a significant standard deviation from the overall average of 15% for the refusal rates generated by those of the overall number of 216 visa reception centres processing Tier 4 visa applications, being those centres whose Tier 4 visa refusal rates contributed to the overall refusal rate:
“New Delhi, India 3.31 At the time of the inspection April – July 2012. , the Visa Section in New Delhi, which is part of the South Asia region of International Operations & Visas, was receiving in excess of 30,000 applications for Tier 4 visas each year and was ranked 4th overall in terms of the volume of Tier 4 applications the Agency received in both 2010/11 and 2011/12. It also had a relatively high refusal rate, 53% in 2010/11 and 42% in 2011/12.” (iii) Moreover, the Inspector’s report for Entry clearance in Abu Dhabi and Islamabad January – May 2010. Islamabad was a spoke centre for Pakistan visa application centres found that for all visa categories in 2008/2009, the refusal rate was 57%. (iv) The Inspector’s reports show that many of the refusals arose from mistakes made by the staff checking the applications. There were a significant number of administrative reviews of which a significant number were successful but many of the mistakes were not subject to administrative review. The overall average refusal rate of 15% was therefore highly suspect as a figure since it failed to take account of the significant number of refusals around the world, and particularly in the Indian sub-continent, which had erroneously counted as refusals when they should have been acceptances. (v) Different standards were applied in different visa reception centres, the evidence suggesting that visa applications from students from the Indian sub-continent were scrutinised with undue and unwarranted severity. The inspector in his Abu Dhabi and Islamabad report stated this in his introduction: “Most significant among my findings however, was the different approach taken by UK Border Agency staff towards customers form Abu Dhabi, Bahrain and Dubai (members of the Gulf co-operation Council) and those from Pakistan. I found that staff were applying higher evidential requirements for entry to the UK to customers from Pakistan and this was not made clear to them. Exemptions under Section 19D of the Race Relations Act 1976 (as amended), allow discrimination in relation to particular nationalities for the purposes of carrying out immigration functions, if the appropriate authorisation is given. I am not aware of any such authorisation in this case. I believe that the UK Border Agency was not only failing to be open and transparent about their approach towards customers, but also may have been discriminating unlawfully in favour of Gulf Cooperation Council customers and against Pakistanis. I believe that UK Border Agency must take immediate action to ensure it is acting in compliance with its duties under the Race Relations Act 1976, and that, where it considers that different criteria are necessary, it ensures that it has the appropriate authorisation. This is a matter to which I shall be paying particular attention in future inspections.” (vi) The data relied on arose from what appears to have been an unlawful vetting procedure for visa applications which infringed the Race Relations Act. (vii) It appears to follow that there are significant objections to the 20% refusal rate figure being used. It appears to be crudely based on a raw figure representing a 15% refusal rate of everyone applying for Tier 4 visas anywhere in the world over a period of one year. However, this overall figure lumps together a wide range of differently sized educational institutions offering a wide range of courses, a wide range of different visa reception centres located in or catering for well over 200 countries with a wide range of refusal rates across the differently sized institutions, centres and countries and the use in those centres of a wide range of checking and assessment standards and, in many centres, wide differences in the accuracy of the quoted failure rates. Moreover, the incidents of the different reasons for rejection varied widely from reception centre to reception centre. (viii) In order to provide a fair acceptable refusal rate for any particular country, reception centre or institution, the raw data that yielded an overall 15% refusal rate would appear to require detailed statistical analysis so as to provide a formula arrived at that enabled a separate and fair applicable refusal rate to be obtained for each institution. This should take account of the number of CASs issued by that institution, the different parts of the world from which the applications were to come from, the differing standards of checking and refusal rates in each visa reception centre and the different make up of the overall number of refusals in each relevant reception centre. (ix) The 5% add on to allow for undetectable errors in the CAS application process is, on analysis, no more than a “guess in the wind exercise” with no statistical or factual basis for it. (x) The crude and unstatistical basis for arriving at a uniform 20% refusal rate figure would, therefore, appear to be both unfair and statistically valueless. Its use would appear to have been particularly unfair for institutions such as WCL which were relatively small and were recruiting from the Indian sub-continent for niche subjects of the kind offered by WCL. (3) The CAS application process was lawful so that it was reasonable to use data obtained from that process to arrive at an applicable refusal rate figure for use in HTS licence applications. This assumption appears to have been questionable for applications from the Indian sub-continent in 2011. The Inspector’s report suggests that the UKBA was operating its visa issuing procedures in that region at that time in breach of the Race Relations Act and no evidence has yet been produced in this case to show that the relevant procedures had been adjusted in 2011 to ensure that they did not infringe the Race Relations legislation. (4) The CAS and visa application processes involved a like-for-like comparison so that a correlation between the two refusal rates was factually and statistically meaningful. This assumption appears to have been questionable because: (i) The refusal rate was ascertained in October 2012 for the decision dated 1 November 2012 but the data related to the issue of CASs up to 24 months earlier and to visa refusal decisions taken up to 18 months earlier. (ii) WCL had no obligation to check financial data in 2011 as the holder of an A licence under previous versions of the PGD to that of September 2011. (iii) The data, including financial data, submitted with the CAS application was different to the corresponding data, including financial data, submitted with the visa application between 3 and 6 months later. (iv) The refusals were issued from different visa reception centres which had differing standards of verification, different mistake levels and different percentages of administrative reviews. (v) WCL has not been provided with the refusal decisions in 46 of the 76 refusals See paragraph 13 of the second witness statement of Brenden Tempest-Mogg. and has been unable to analyse the reasons for refusal in those 46, a significant number of which are likely to have been for financial data and information reasons which were outside the control or verification ability of WCL. (5) A rigid or “bright line” rule was necessary because the alternative would involve the need to examine thousands of cases which the UKBA had neither the resources, time nor manpower to undertake. This assumption appears to have been questionable because: (i) On a natural and reasonable construction of the PGD as a whole, UKBA would provide WCL with the refusal rate and CAS refusal numbers relied on and copies of such of those refusal decisions that WCL notified it that it did not have, WCL would analyse the refusal decisions and bring to UKBA’s attention those refusals that it was challenging with the reasons for challenge and UKBA would then reconsider whether those refusals should reasonably be included in the calculation of WCL’s refusal rate. (ii) This process formed a natural part of the process of ascertaining the true refusal rate and the review process that UKBA was in practice operating for those refusals that were being challenged by an institution whose application for a HTS had been refused on the basis of a refusal rate ascertained from the raw data. (6) The PGD was clear in its terms in requiring the adoption of a mandatory 20% refusal rate. This assumption appears to have been questionable because: (i) The PGD was not a legislative instrument but a policy which was intended to be construed in a sensible and pragmatic manner in the wide-ranging factual background of an international visa application system involving many applicants in a large number of visa application centres applying for a wide range of different courses on offer by a large number of different sponsors of varying sizes and types where the refusal rate did not involve a like-for-like comparison of identical information and factual answers. (ii) On a natural and reasonable construction of the PGD as a whole, the term “applications we refused” in paragraph 270 of the document meant “those applications we refused which were refused on grounds which could reasonably have been ascertained by WCL when considering the corresponding CAS application”
. In support of this construction, WCL relies on the availability of the review of a notified rejection which provided an holistic review of that rejection decision whenever a rejected applicant called for this on reasonable grounds. (iii) WCL relies on the entirety of the PGD for this construction including, but not confined to, paragraphs 35, 86 – 94, 269 – 286, 325 – 327 and 452 – 500. (iv) These provisions show that the function of a sponsor when awarding an CAS was two-fold: to make an academic judgment in relation to an applicant’s suitability for one of its courses and to undertake a first check of the accuracy of answers to factual questions, including questions about an applicant’s finances, which would be asked again in the subsequent visa application. The PGD advised an applicant in the PGD that the application vetting and award procedures for Tier 4 CASs were intended to ensure that a student is of an acceptable standard and so far as is possible ensure that the student met the requirements of a visa. In support of the sponsor’s exercise of academic judgment, the sponsor was required to state on the CAS the evidence that it had used to make its academic assessment but it was not required to make any record of the results of its factual checks which amounted to a preliminary sift of the visa applications that would later be submitted to, and checked by, the visa reception centre that the visa application was subsequently sent to. (v) It follows that the sponsor was not acting as a guarantor of the accuracy of the information set out in answers on the visa application. It had to exercise academic judgment in relation to its decision as to the student’s ability to undertake the course and a factual decision as to whether the other details in the application appeared to be accurate. These details were not necessarily, and usually were not, the same in all respects as the details checked by the visa vetting process. (7) Any unfairness was catered for by a limited discretion built into the policy that enabled the UKBA to relax the rigour of the 20% rule in very extreme cases. This assumption appears to have been questionable because: (i) It is clear that the system is designed for, and is intended to accommodate, a request by an institution to review any or all of the suggested failures.

Judge Robinson accepted that:

“That is not to say that there will not be occasions when an exception should be considered and made. Those should be decided on a case by case basis.”
Paragraph 39 of LondonCollege of Management. (ii) Similarly, Jackson LJ stated:
“I also accept that sometimes there will be an unforeseen change in the financial circumstances of a genuine candidate between the date when he or she secures a CAS and the date when he or she applies for entry clearance or leave to remain. All this is allowed for, however, by UKBA’s present system.”
Paragraph 62 of WesternGovernorsGraduateSchool. (iii) And Toulson LJ stated:
“Fettering of discretion It is alleged that the defendant unlawfully fettered her discretion. I am not persuaded of that on the evidence. According to Mr Shirley's statement, UKBA recognise that there may be instances when the circumstances of a case are so compelling that rigid application of a mandatory requirement may be disproportionate to the overall aim. In such cases UKBA would consider applying some form of discretion, but those instances would be limited to a small number of cases where the application of discretion can be clearly justified. Mr Shirley has given an example of one such case where the applicant did not strictly meet the terms of the policy but discretion was exercised in its favour because the numbers involved were very low.”
Paragraph 42 of West London Vocational TrainingCollege. (iv) Mr Macdonald QC also referred in his oral submissions to examples where the UKBA had adjusted a particular institution’s refusal rates (i) to take account of the widespread fraud from over 2,500 financial institutions in India in connection with students’ proof of funds that had led to extensive rejection rates from the Indian sub-continent and (ii) where a small institution would be differentially treated if its small number of CASs were subject to a 20% failure rate. (v) There are indications in the documents that the UKBA accepted that, in appropriate cases, it would review the refusal rate in what is referred to as “an holistic way” and that the basis of the review was what would be fair in the circumstances of the case. However, no clear ground rules were produced to indicate when such a review would take place. What is clear is that the grounds were broader than “in exceptional circumstances”. (8) Article 1 of Protocol 1 of the ECHR was not engaged in this type of case. This assumption appears to have been questionable because: (i) WCL contends that the value of its good will has been significantly diminished by the unlawful acts of the SSHD it contends have occurred. (ii) WCL also contends that the value of its business and a significant income from international students have similarly been lost. (9) The rejected applicants did not undertake a robust vetting system and could have identified the errors leading to each refused application relied on. This assumption appears to have been incorrect in the case of WCL because: (i) The grounds of rejection related to financial information which was different from that submitted with the visa application. WCL checked this information to the best of its ability and obtained sworn witness statements or affidavits from the applicants verifying the accuracy of the information provided. (ii) There was no obligation for WCL to check the financial information in 2011 when the refusal rate was ascertained.

Grounds 3 - 8

[23]All the assumptions which supported the findings in the cases relied on by the SSHD to show that the refusal rate of 20% provided a mandatory and fixed percentage which was not susceptible to revision in any of the respects contended for by WCL are, therefore challenged by WCL and it is clear that WCL’s grounds 3 – 8 which rely on those challenges have reasonable prospects of success.

Conclusion

[24]I grant WCL permission to challenge SSHD’s refusal decision of 1 November 2012 on all grounds contended for.[25]I must decide, when this judgment is handed down, what directions to make for the substantive hearing and for the interim relief that is currently only provided until the date of the handing down of the application for permission. HH Judge Anthony Thornton

Cited in 1 later judgment