Case No: CO/11351/2010
Neutral Citation Number: [2011] EWHC 642 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

The Court House
Oxford Row
Leeds LS1 3BG

Date: 18th March 2011 

Before :

His Honour Judge Behrens 
sitting as a Judge of the High Court in Leeds
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Between :
	The Queen on the application of
SAN MICHAEL COLLEGE LIMITED	
Claimant	
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	SECRETARY OF STATE FOR THE HOME DEPARTMENT	Defendant	

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Vijay Jagadesham (instructed by Davies Gore Lomax LLP of 63 Gt George Street, Leeds LS1 3BB) for the Claimant
Alan Evans (instructed by Treasury Solicitor of One Kemble Street, London WC2B 4TS) for the Defendant

Hearing dates: 01st March 2011
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Judgment
Judge Behrens : 
1. Introduction
1. The Claimant, San Michael College Ltd (“SMC”) operates a college in Birmingham that caters for overseas students. It has held a Tier 4 Sponsor Licence issued by the Defendant (“SSHD”) since 25 November 2008 acting through the United Kingdom Border Agency (“UKBA”). On 18th February 2010 UKBA suspended the licence. On 14th June 2010 the suspension was lifted and SMC was reinstated as a B rated sponsor. At the same time UKBA supplied an action plan for SMC to meet. On 20th July 2010 and 27th August 2010 officers of UKBA inspected SMC. On 17th August 2010 SMC supplied SSHD with information from its computers as to the number of visa letters it had issued. On 24th September 2010 UKBA suspended the licence again and on 15th October 2010 UKBA revoked the licence.
2. On 29th October 2010 SMC issued the judicial review claim form seeking to challenge the decisions of 24th September 2010 (suspending the licence) and the decision of 15th October 2010 (revoking it). 
3. On 16th November 2010 Judge Langan QC granted permission to apply for judicial review and also granted interim relief restoring SMC to the register pending the outcome of the application. 
4. It will, of course be necessary to look in detail at the allegations made by SMC and the responses of SSHD to those allegations. However the main complaint made by SMC is that the grounds relied on by SSHD relate to matters which arose before 14th June 2010 and the action plan sent to SMC on that date. SMC acknowledges that there were failings before 14th June 2010 but it contends that the failings have been addressed since 14th June 2010. It thus contends that it is unfair and irrational to suspend and subsequently revoke the licence based on past failures.
5. SSHD accepts that many (but not all) of the complaints relate to a period before 14th June 2010. However many of the relevant facts were not discovered until the inspections in July and August and the information supplied by SMC in August was analysed. In those circumstances SSHD contends that there was nothing unfair or irrational about the decisions made on 24th September 2010 and 15th October 2010.
2. The Scheme
6. There is a very helpful summary of the scheme in paragraphs 3 to 10 of the judgment of Neil Garnham QC in R (The London Reading College Ltd) v SSHD [2010] EWHC 2561 :
3. To understand the decision and the challenge it is necessary to know something of the background to the Sponsor’s Register.  The Register was devised by the UKBA as part of a “points based scheme” introduced by paragraph 113 of Appendix A to the Immigration Rules HC395 (as amended).  A non-EU applicant for entry clearance or leave to remain as a Tier 4 (General) Student requires “30 points” which may be obtained by holding a visa letter or a “Confirmation of Acceptance for Studies” document.  Pursuant to paragraph 116(d), that document is only valid if by “if it was issued by an institution with a Tier 4 (General) Student Sponsor License”.
4. That requirement was described by the Divisional Court in R on the application of Bhatti, Middlesex College and others v Croydon Magistrates’ Court and Secretary of State for the Home Department [2009] EWHC 3004 (Admin) at  [5] as follows:
“5….Following the introduction of a new points-based system by the United Kingdom Border UKBA (UKBA), those educational establishments, such as the College, wishing to be a Tier 4 sponsor were required, after 31st March 2009, to be included in the register of licensed sponsors maintained by the Sponsor Licensing Unit (SLU). SLU is part of UKBA, but it is operationally separate from the other parts of UKBA, including those parts of UKBA which are responsible for investigating alleged breaches of the Immigration Rules.”
5. The SLU has published Guidance for sponsor applicants.  The relevant version at the time of the decision was that issued in October 2009; the version relevant during the investigation which led up to the decision was that issued on 31 March 2009. Paragraph 8 of the latter edition describes the two fundamental principles of sponsorship namely:
“(i) those who benefit most directly from migration (that is, the employers, education providers or other bodies who are bringing in migrants) should play their part in ensuring that the system is not abused; 
(ii) we need to be sure that those applying to come to the United Kingdom to do a job or to study are eligible to do so and that a reputable employer or education provider genuinely wishes to take them on.”
6. Paragraph 9 describes “how the system works”.  It explains that: 
“To obtain a licence, a prospective employer must apply to us, supplying specified documents (listed in Appendix A) to show that it is eligible. We will carry out appropriate checks before deciding whether to grant the licence.”
7. To be licensed, an establishment must also have achieved an accreditation from an accreditation body.  This “key feature” of the licensing system was explained in Bhatti:
“12. A key feature of SLU's new licensing system is the need for any applicant applying to be included on its register as a Tier 4 sponsor to have accreditation from a specified independent body. The guidance for applicants makes it clear that such accreditation is a prerequisite for inclusion in SLU's register. In the present case the relevant accrediting body is the Accreditation Service for International colleges (ASIC).”
8. Once licensed under Tier 4;
“the sponsor will be able to issue visa letters to migrants who wish to come to the UK to study” (paragraph 10 of the Guidance).
9. It should be understood that establishing a college and achieving both accreditation and licensing is a substantial undertaking for an establishment.  Having achieved this status and opened for business teaching students, the college will inevitably have made substantial financial commitments.  The loss of a license would have the most serious professional and financial consequence for the college and its proprietors.  It would also have a serious impact upon both its students and its prospective students because, without a visa letter or a “Confirmation of Acceptance for Studies” document from a licensed college, the students’ immigration status is undermined.  It follows that a license is a very valuable thing.
10 During the currency of the license, the sponsor college is ascribed various duties in the Guidance.  Paragraph 427 identifies the four “objectives of these duties”, namely preventing abuse of assessment procedures, capturing early patterns of migrant behaviour that may cause concern, addressing weaknesses in process which can cause those patterns and monitoring compliance with immigration rules.  There are then set out various “generic duties” including record keeping duties and reporting duties.  It is plain from the Guidance that the scheme operates by imposing on the sponsor colleges serious and onerous duties in return for the grant of what for the college is a valuable license.
3. The Guidance
7. For the purpose of this case the relevant Guidance was that promulgated on 5th October 2009. In the course of the submissions a number of generalised points were made about the Guidance:
8. Paragraphs 277 to 287 of the Guidance set out the Sponsor’s duties. These include a duty to keep records (280a), a duty to report events within a specified time limit (280d), a duty not to issue a “Confirmation of Acceptance” (“CAS”) or a visa letter unless it is satisfied that the student both intends and is able to follow the course of study concerned (281).
9. A CAS is not an actual paper document but a virtual document similar to a database record (153). It acts as a confirmation from a licensed sponsor that it wishes to bring an overseas student to the UK to study and that to the best of its knowledge that person meets the rules for the assignment of the CAS. UKBA makes the final decision on who is allowed to travel or remain in the UK (161). The CAS scheme was introduced in February 2010. Before that the sponsor issued a visa letter.
10. Paragraphs 127 to 144 of the Guidance deal with Sponsor ratings. Sponsors may be A rated or B rated according to UKBA’s assessment of the sponsor’s ability to meet its duties. An A rated sponsor is one that has the necessary systems in place to meet its duties and with no evidence of abuse (129). If a sponsor has not fully complied with its duties but has not acted in a way serious enough for UKBA to withdraw its licence it will be awarded a B rating (135) . A B rated sponsor must comply with an action plan within a set time. The plan sets out the steps the sponsor needs to take to fully comply with its duties and obtain an A rating (139). If a B rated sponsor has not improved its performance it risks having its licence withdrawn (138).
11. Paragraphs 328 to 349 of the Guidance deal with the suspension and withdrawal of the licence. If UKBA have reason to believe that a sponsor is seriously breaching its duties and poses a major threat to immigration control (for example issuing visa letters to students who do not qualify to come to the UK) it may suspend the licence whilst it makes further enquiries (328). The Guidance divides the cases where the licence is withdrawn into three categories – those where the licence will be withdrawn (345), those where the licence will normally be withdrawn (346) and those where there is a discretion to withdraw the licence (349). It is common ground in this case that the decision to withdraw was made as a matter of discretion under paragraph 349. Paragraph 336 sets out the principles to be followed in deciding what action to take. In summary UKBA will take all the facts of the case into account. It will consider the seriousness of the sponsor’s actions and the harm done, whether the sponsor’s actions are part of a consistent or sustained record of non compliance or poor compliance or are a single event, any action the sponsor has taken to minimise the consequences of what it has done.
4. The facts.
Grant, Initial Suspension of and Reinstatement of Licence
12. On 25th November 2008 a Tier 4 Sponsor Licence was granted to SMC. In September 2009 SMC was downgraded and became a B rated sponsor. It was issued with an action plan. On 18th February 2010 its licence was suspended. It submitted representations to UKBA on 22nd February 2010 and 4th June 2010.
13. The representations were partially successful in that on 14th June 2010 UKBA reinstated SMC as a B Rated sponsor. The covering letter included:
“The B Rating will remain in place for 1 month, after which time we will expect you to demonstrate that the processes you now have in place work effectively and fully meet the PBS requirements. Should you fail to demonstrate that you have implemented the action plan within this time frame your licence will be revoked.
We expect your organisation to meet the requirements of the action plan in the areas of :
•	Migrant Tracking and Monitoring
•	Record Keeping”
14. The action plan set a Target date of 14th July 2010. Under Migrant Tracking and Monitoring there was a requirement of accurate attendance recording, reporting of non attendance and monitoring low attendance by staff. UKBA required evidence of manual and electronic records to reflect attending and non attending students and evidence of reporting of students after 10 consecutive absences and an improved system to show this.
15. Under Record Keeping the action required was the accurate record keeping of students; full details of attending students, non attending students, warning letters and withdrawal of sponsorship to be kept. UKBA were going to undertake an attendance monitoring roll call at the end of the action plan period. Records were required to match information provided to UKBA regarding non attendance and no shows.
16. Between 14th June 2010 and September 2010 the students were on vacation and there was no requirement for attendance at SMC.
Mark Taylor’s Involvement.
17. By 1st July 2010 Mr Umoh (the Principal and Company Secretary of SMC) employed the services of a specialist immigration consultant – Mark Taylor of Taylor Partnership Immigration Ltd. In a letter dated 1st July 2010 Mr Taylor set out both a short term and a long term strategy for SMC. The short term aim was to assist SMC in meeting the requirements of the action plan.
The visit dated 20th July 2010.
18. On 20th July 2010 Mr Taylor met with three UKBA inspectors at SMC. The visit lasted 4 hours and was led by Mr Broadhead on behalf of UKBA. There is some difference in the witness statements as to precisely what was agreed but it is common ground that Mr Broadhead agreed to return on 27th August 2010.
19. According to Mr Taylor they both agreed that SMC was not fully compliant at that stage but there was a significant change from the previous visit. Mr Broadhead says that Mr Taylor had said that procedures were in place; he had replied that Mr Umoh and his team had not implemented them. Mr Broadhead says he initially refused to postpone the visit but after consideration whilst writing the report he changed his mind. It was at that stage he agreed to the postponement.
The request and supply of information.
20. On 13th August 2010 UKBA requested from Mr Umoh details of all Visa Letters and CAS that had been issued to all Tier 4 students between 31 March 2009 and 31 July 2010. The letter also asked for details of the attendance percentage from the student’s date of enrolment to 31st July 2010.
21. On 17th August 2010 Mr Umoh sent UKBA a spreadsheet with the requested information.
Analysis of Information supplied by Mr Umoh
22. The information supplied by Mr Umoh was analysed by Mr Morris, an Administrative Officer of UKBA on 10th September 2010. UKBA has a number of other databases on its data analysis system. 
23. SMC had provided details of 326 named migrant students on their spreadsheet. The other records available to UKBA showed that SMC had failed to declare 526 Tier 4 students who applied for leave to enter or leave to remain for SMC. Of these 526 91 were issued a visa to attend SMC and 43 were still known to be in the UK. Mr Morris also noted that 222 students applying for leave to enter were refused entry clearance at post abroad. This led him to assert that SMC did not have a robust procedure in place to assess the intention and ability of prospective students
24. Mr Morris also carried out an attendance analysis based on the figures provided in the spreadsheet. After making the adjustments set out in his witness statements he concluded that 93 out of 182 (51%) of the students were attending for less than 80% of the time. He also performed a calculation of the non attendees. He concluded that 54 out of 236 (22.9%) were to be categorised as non attendees.
The visit on 27th August 2010
25. On 27th August 2010 there was a further visit to SMC by three officers of UKBA led by Mr Broadhead. Mr Broadhead prepared a detailed report following the visit. In the overview of the visit he noted that students were not monitored accurately, placements were not monitored accurately and that withdrawn students did not have evidence of eligibility of permission to study in their file.
26. He also noted that Mr Taylor had put in place procedures designed to improve the position. However under Monitoring, Maintaining Migrant Contact Details and Record  Keeping he noted continuing problems and gave ratings of “3” – the lowest rating possible. 
The letter of suspension
27. As already noted UKBA suspended SMC’s licence on 24th September 2010. The letter of suspension identified 3 issues arising out of visit of 27th August 2010 and 4 issues arising out of Mr Morris’s analysis of the information supplied by Mr Umoh on 17th August 2010. The three issues arising out of the August visit may be summarised:
1. Failure to notify UKBA timeously. Three examples were given. In each case there was a significant delay between the expiry of the visa (in the autumn of 2008) and the report (which occurred between February and July 2010)
2. Failure to track students on work placements. Two examples were given where there were no up to date contact details or inaccurate details of work placements
3. Inconsistent record keeping. One example was given where differing accounts were given in respect of one student.
28. The four matters arising out of Mr Morris’s analysis have been summarised above.
The letter of 27th September 2010
29. On 27th September 2010 Mr Taylor wrote a long a detailed letter in response to the suspension. In it he sought to argue that the conclusions in the letter of 24th September were erroneous, the “starting point” of the decision to suspend was erroneous and the findings of Mr Broadhead were arbitrary and erroneous.
30. In substance he submitted that the starting point of the decision to suspend the licence was the letter of 14th June 2010. The decision alluded to historic issues. If UKBA had wanted to revoke based on those issues it should have done so before 14th June 2010.
31. He sought to deal with the matters contained in the letter. In the case of two of the examples he suggested that SMC made repeated efforts to obtain information from the student; he made the point that tracking of students in the vacation is notoriously difficult. In any event SMC had the policies to comply; a margin of error should be allowed in respect of record keeping. He suggested that the non declaration of 526 students was attributable to overseas fraud and that SMC could not be responsible for the actions of others who operated without their knowledge. He referred to the analysis of the percentage of students not attending 80% of the time. He accepted that this was true historically but asserted that there were now robust new methods in place including a bio-metric system to collate details of entry/exit.
32. He repeated the allegation that UKBA had relied on historic material and set out the steps that SMC had taken since June 2010.
The revocation of 15th October 2010
33. As already noted the licence was revoked in a decision letter of 15th October 2010. In that letter UKBA summarised the history and the 7 allegations that had been made. It considered representations that were made by Mr Taylor but in broad terms rejected them. It adhered to the view that there were delays in reporting, tracking of work placement students and inconsistencies in record keeping. It did not accept that all of the 526 non declarations could be attributable to overseas fraud. It pointed out that the attendance figure was based on figures up to 31st July 2010 and was thus not historic. It did not accept that UKBA had used historic information. The suspension was based on recent analysis, failure to provide accurate figures in relation to visa letters issued and a failure adequately to implement the action plan despite introducing new procedures.
34. Three reasons were then given for the decision:
1. The failure to provide any adequate explanation or evidence relating to the actual numbers of visa letters issued
2. The fact that a large number of individuals entered the UK on the basis of the visa letters and did not attend the college, thereby contributing to the 22.9% non attendance rate at the college and UK immigration control problems relating to the number of students not meeting the conditions of their leave.
3. The college were given the opportunity to make improvements when they were B rated in June but despite implementing new processes still had issues with data accuracy, monitoring students on their work placements etc.
5. Submissions and Discussion
35. In his oral submissions to this court Mr Jagadesham divided his submissions into three categories:
1. The reliance on historic failures that pre-date the action plan. 
2. The failure by SSHD/UKBA to substantiate the serious allegation of deception in respect of the 526 undeclared visa letters. 
3. The reference to the 80% attendance rate when this rate never formed part of the action plan or the published Guidance.
5.1 Historic failures
36. At the heart of Mr Jagadesham’s submissions is the proposition that UKBA is not entitled to rely on any failures that occurred before 14th June 2010. On that date UKBA provided an action plan and it is that action plan that should be starting point for any decision to suspend or revoke the licence.
37. He pointed out that all of the analysis carried out by Mr Morris was based on data which pre-dated the action plan. Thus the 526 undeclared visa letters all relate to visa letters issued before February 2010; the 80% attendance also related to dates before June 2010.It has to be borne in mind that the college was on vacation between 14th June and the end of July with the result that the attendance figures could not relate to that period; similarly the 22.9% non attendance related to a pre action plan period. Furthermore the detailed criticisms in relation to the individual students referred to in the report of the 27th August 2010 also referred to matters predating the action plan.
38. Mr Evans rejected the core submission made by Mr Jagadesham. He made a number of points. First, the way in which SMC had operated in the recent past does not become irrelevant simply because an action plan is subsequently put in place; such plan does not preclude SSHD from considering information which, whilst relating to a period before the plan, had (as here) not been previously available to the Defendant. Secondly, the action plan had in any event indicated, under action point 1.3, that the Defendant would undertake “an attendance monitoring roll call at end of action plan period.” On 13th August 2010 the Defendant requested from the Claimant information from 31st March 2009 to 31st July 2010 in order to carry out that exercise and then derived conclusions from the information supplied by the Claimant on 17th August 2010. This exercise had not been carried out previously.
39. I prefer the submission of Mr Evans. In my view UKBA is entitled to look at all of the circumstances of the case in deciding whether to suspend and/or revoke a licence. The fact that it has re-instated a licence subject to an action plan does not to my mind preclude it from relying on historic events in a situation where it was unaware of them at the time the action plan was instituted. Suppose the inspection had revealed massive fraud that had taken place prior to June 14 2010. Can it really be suggested that UKBA would not have been able to take that into account?
40. It is also worth noting that Mr Evans was able to point to at least one example where inaccurate record keeping was still present – the case of Baig – despite the new systems in place. He also pointed out that UKBA had only inspected a sample of the files and that that sample had been selected by SMC or Mr Taylor.
41. In my view, however, the fact that the matters related to events that had taken place before 14th June 2010 did not preclude SSHD from taking them into account when the decisions were made.
5.2 Failure to substantiate the allegations in respect of the 526 undeclared visa letters.
42. Mr Jagadesham asserted that this was a serious allegation tantamount to an allegation of deception by SMC. He submitted that it was for SSHD to prove this allegation and the evidence of Mr Morris was insufficient. The mere fact that there were entries on other systems belonging to SSHD did not establish anything. He further relied on evidence of fraud in India already referred to and documents received from the British Embasssy in Beijing and Manilla
43. Mr Evans sought to answer this in a number of ways. First, he made it clear that this was not an allegation of fraud. The allegation was in respect of serious inadequacies in the record keeping by SMC. Second he made the point that there is no reason to believe that UKBA’s records are inaccurate. All of the records are disclosed and SMC has not been able to challenge them in any detail.
44. Third Mr Evans was able to demonstrate both from the evidence of Jill Crich and from the documents produced by SMC in relation to Manilla and China that a substantial number of visa letters were in fact undeclared.
45. Subsequent to the hearing before Judge Langan QC Jill Crich has carried out an analysis of 131 outstanding visa applications in New Delhi for students with visa letters issued by SMC. Of those 131 there were 66 who were on the spreadsheet supplied by SMC and 65 who were not. Only two of these were not identified by MIDA (Management Information and Data Analysis). In those circumstances there were at least 63 undeclared students for whom SMC had actually issued visa letters. 
46. On 29th September 2009 SMC sent to the FCO a list of 21 students from China for whom SMC had issued visa letters between 18th August and 28th August 2009. Mr Evans was able to demonstrate that 6 of these were on the undeclared list.
47. Similarly on 5th October 2009 SMC confirmed that it had issued visa letters to 13 students from Manilla. 8 of these 13 were on the undeclared list.
48. It is possible that a small number of the persons on the undeclared list had forged visa letters but the suggestion that any significant numbers were forged is to my mind fanciful. In my view UKBA was perfectly entitled to infer from Mr Morris’s analysis that there were a large number of undeclared students and that this demonstrated very serious failings in SMC’s record keeping.
5.3 The reference to 80% attendance.
49. It will be recalled that the action plan required evidence of the reporting of students after 10 consecutive absences. This obligation is different from the more detailed obligation in paragraph 280(d) of the Guide which requires the reporting within 10 working days if a student misses 10 expected contacts. The guide, however, makes it clear that the reporting duties are not compulsory for all students until February 2010. Mr Jagadesham referred me to a handout given to SMC at a Tier 4 Sponsor Event that took place in July 2009. He referred me to Questions 35 and 36 in the following terms:
35. In terms of reporting does the UK Border Agency still work to 80% attendance?
No. This is no longer a requirement. Instead, Sponsors are required to report if a migrant misses ten expected contacts. Equally if a sponsor judges that a student is no longer attending before they miss 10 expected contacts they should report this to UKBA.
36. Do students have to miss 10 CONSECUTIVE days or can those days be sporadic before sponsors are required to report the absence to the UKBA?
You must report to UKBA when the student misses 10 expected contacts consecutively. The frequency of this contact will depend upon the type of course and the level of study. However if you consider that a student is no longer participating in their study you do not have to wait until the student misses 10 expected contacts. You can report to the UKBA sooner than this but 10 is the maximum limit before reporting
50. This document together with the action plan seem to me to make it clear that UKBA’s reporting requirement related to 10 consecutive expected contacts.
51. Mr Evans took me to the British Council’s Accreditation Handbook. SMC is an accredited college. In the 2008 – 09 Accreditation Handbook and for many years previously it was a minimum requirement that visa students are required by the Institute to attend at least 80% of the classes. By inadvertence this requirement was omitted from the 2009 – 2010 Handbook but was re-instated in a somewhat fuller form on 20th May 2010 which also required systems to be in place to monitor students.
52. In those circumstances Mr Jagadesham criticises the letters of 24th September 2010 and 15th October 2010 for referring to the need for 80% attendance. It was not a requirement of the Guidelines and should not have been relied on by UKBA in their letters.
53. In my view it is important to observe the precise extent of the reliance by UKBA. The letter of 24th September 2010 relies on it as one of the matters thrown up by Mr Morris’s analysis in the following terms:
Assessing the intentions and credibility of a prospective students is a core sponsor obligation. Given the fact that 22.9% of your students are not attending, a further 51% are failing to attend for at least 80% of the time and that 222 students applying for your institution have been refused leave from entry clearance posts abroad we are not satisfied that you have robust procedures in place.
54. It will thus be seen that UKBA never alleged that it was a specific requirement that required reporting. However it was one of three matters which led them to believe that SMC did not have robust procedures in place to assess the intentions and credibility of their students. To my mind it was legitimate to take it into account on that basis.
55. The letter of 15th October 2010 makes very limited reference to the failure to attend for at least 80% of the time. It refers to it as an issue identified by the analysis. However the three reasons given for the decision do not include this factor at all.
6. Conclusion
56. It will thus be seen that none of Mr Jagadesham’s three criticisms of the decision to revoke the licence are well founded. As Mr Evans points out in his skeleton argument the decision letter is a well reasoned document. It plainly takes into account the matters that were raised in Mr Taylor’s long letter of 27th September. Despite these representations UKBA took the view that SMC’s failings which were apparent both as a result the visit and as a result of Mr Morris’s analysis of the information supplied by Mr Umoh demonstrated a serious risk to proper immigration control. 
57. As both parties recognised this was a discretionary decision. In the absence of an error of law it can only be reviewed if it is irrational or Wednesbury unreasonable. In my judgment it is neither. Whether or not I would have made the same decision is irrelevant. To my mind it was open to UKBA to form the view that the failings including the large  number of undeclared students were so serious as to justify the revocation of the licence.
58. In those circumstances this application for judicial review must be refused.