Scottish Court of Session Decisions

SECOND DIVISION, INNER HOUSE, COURT OF SESSION

[2016] CSIH 6

XA171/14

Lord Justice Clerk

Lord Bracadale

Lord Malcolm

 

OPINION OF THE COURT

delivered by LORD MALCOLM

in the APPEAL

under section 13(4)(b) of the Tribunals, Courts and Enforcement Act 2007

by

IRUM SHAH NAWAZ AND OTHERS

Appellants;

 

Act:  Caskie; Drummond Miller LLP

Alt:  McIlvride QC; Office of the Advocate General

28 January 2016

[1]        In an application dated 9 October 2012 the appellants (who are citizens of Pakistan), sought leave to remain in the United Kingdom.  The first appellant was the principal applicant.  She sought leave as a tier 1 (entrepreneur) migrant.  (Previously she enjoyed leave because of her status as a tier 4 student.)  The other applicants were her husband and three children who applied as her dependants.  To gain sufficient points under the applicable points-based system (PBS) in part 6A of the Immigration Rules, she had to show access to at least £200,000 for the purpose of investing in a business in the UK.  On 16 March 2013 the application was refused on the basis that she had not complied with this requirement and thus had not gained sufficient points.  The information supplied with the application showed that her husband held funds amounting to £202,000 in an account with Lloyds TSB, and that he promised to make it available to her.  However she had not provided the required letter from the bank confirming that the funds were available to her. 

[2]        Appeals against this decision were refused by the First-tier Tribunal and then the Upper Tribunal.  The matter comes before this court on the basis that the Upper Tribunal erred in law by disregarding the funds held by the husband.  After the date of the application, but before its refusal, the funds were used to purchase a garage and petrol station business in Cowdenbeath.  Counsel for the appellants submitted that there had been a failure to apply “a modicum of intelligence, common sense and humanity”;  reliance being placed upon, inter alia, R v Secretary of State for the Home Department, ex parte Forrester [2008] EWHC 2307 and Mahad v Entry Clearance Officer [2010] 1 WLR 48. 

[3]        For the respondent it was submitted that the Upper Tribunal correctly concluded that there was no error in law in the decision of the First‑tier Tribunal.  The fact that the funds were held by the principal applicant’s husband did not mean that she should be credited with the points necessary for qualification.  Purchase of the business could not retrospectively cure this failure.  In any event there was no finding in fact as to the purchase of the business.  Among other decisions, reference was made to Alam v Secretary of State for the Home Department [2012] EWCA Civ 960 and Patel and Others v Secretary of State for the Home Department [2014] AC 651. 

 

The decisions to date
The Secretary of State’s decision letter of 16 March 2013
[4]        The material supplied with the application included a letter to the principal applicant’s husband dated 9 October 2012 from Lloyds TSB confirming his bank account number and that, as at that date, there was a balance of £202,000.  On the same date the husband signed a witnessed third party declaration on the solicitors’ headed notepaper and addressed to the UK Borders Agency to the effect that, in relation to his wife’s application for entrepreneurial status in the United Kingdom, he gave his “full consent to the application to use (his) funds in the United Kingdom.”  After stating the details of his account and the balance of £202,000, he declared that his wife had his “full authority to access the sum of £200,000… upon request for use in the UK, for the purpose of investing in her business.” 

[5]        The Secretary of State was not satisfied that the applicant had provided the documents required to be awarded points for having access to £200,000.  The relevant Immigration Rules stated that there should be a letter from the financial institution holding the funds, in this case Lloyds TSB, to confirm the amount of money available to the applicant.  Among other things, the letter required to “confirm the amount of money provided to the applicant from any third party… that are held in that institution”:  para 41 – SD(a)(i)(9).  In the absence of such a letter from the bank, the Secretary of State was “unable to accept the funds from the third party that you are relying on.” 

 

The decision of the First-tier Tribunal dated 8 November 2013
[6]        The judge noted that the relevant part of the Immigration Rules required a letter from the bank stating, among other things, the applicant’s name, and the amount of money provided to the applicant from any third party along with their contact details.  Evidence was led that the appellant had purchased a business in the United Kingdom.  She could not remember when this was done, but thought it was in 2013.  She did this because she was sure that her application would be allowed.  She owned the business jointly with a partner, namely her sister-in-law.  In her application she stated that no others were involved in the enterprise.  This was explained on the basis that she may not have understood the technicalities of the matter.  As for the requisite letter from the bank, she had asked for it, but “the system would not allow it to be produced.”  Her solicitor accepted that the necessary document had not been produced. 

[7]        In reliance upon para 245AA of the rules and the decision of the Upper Tribunal in Rodriguez v Secretary of State for the Home Department [2013] UKUT 42, the submission was that the agency caseworker should have written requesting further information.  The third party declaration made it clear that money was available.  Her husband had the funds and he intended to work in the business.  Given an opportunity to do so, the applicant could have provided the appropriate documentation. 

[8]        The First-tier Tribunal judge noted that the requirements in the relevant Immigration Rules were clear.  The specified letter from the bank had not been provided, and, even at the time of the hearing before him, it remained unavailable.  The explanation about the system not allowing it “seemed unlikely.”  Para 245AA had no application where the specified document had not been submitted.  The evidential flexibility policy discussed in Rodriguez expired on 30 June 2011 and therefore did not apply to this application.  The check carried out as to the validity of an application referred to in Alam (cited earlier) was a preliminary check looking for obvious omissions, for example, no fee enclosed, no photographs supplied, or no signature at the end of a form. 

[9]        Given the purchase of the business, the judge had some sympathy for the appellant, though she would have known the risk involved.  The appeal was refused on the basis that the relevant rules were clear and the application had failed to comply with them.  There was no obligation on the respondent to request the missing information.  In her evidence the appellant said that she had read the relevant guidance so she would have known what was required.  The third party declaration did not fill the gap.  It was noted that there was no article 8 claim, and no evidence to suggest that it was engaged. 

 

The proceedings before the Upper Tribunal
[10]      When granting leave to appeal, an Upper Tribunal judge commented that the critical document was the bank’s letter of 9 October 2012.  The view was expressed that perhaps the case ought to have been considered under para 245AA(d)(iii)(1) of the rules:  “… missing information… verifiable from… other documents submitted with the application”, given that the owner of the bank account was the principal applicant’s husband, co-applicant and co-appellant.  The appellants’ hopes “should not be unduly raised”, but the view was taken that the grounds of appeal merited debate rather than summary refusal of permission. 

[11]      The same Upper Tribunal judge heard the appeal and issued his decision on 7 April 2014.  The case was said to turn on para 245AA, not on any evidential flexibility policy.  Permission to appeal had been granted on the basis that the decision maker should have applied para 245AA(d)(iii)(1), however the parties agreed that, as at the date of the decision, that provision had not been introduced.  Reference had been made to a letter from the bank of 21 October 2013 (post-dating the original refusal of leave) which showed that by then the account had become a joint account, with a balance of £8,200.  Counsel said that, at some unknown date, the account was transferred into joint names.  The bulk of the money in the account had been used to purchase the business.  The appellant had bought a genuine business.  Counsel claimed that the “substance” of the rules had been met, with the case failing only “on a procedural basis”.  As a result of timing issues, it had not been possible for the appellant to become a party to the account before the application was submitted.  The funds should be treated as an asset of the marriage to which both spouses were entitled.  The purchase of the business and the transfer of the account into joint names was “powerful evidence” that the appellant did have access to the necessary funds.  Furthermore, notwithstanding the statutory exclusion against consideration of post-decision evidence (section 85A of the Nationality, Immigration and Asylum Act 2002) this evidence became admissible by applying the discretion afforded by para 245AA in so far as it afforded a discretion concerning documents “in the wrong format” – a phrase which should be given a broad interpretation.  Had the appellant been contacted, the required document could have been supplied within seven working days.  The Upper Tribunal should exercise the 245AA discretion.  The Secretary of State should have exercised her discretion differently.  The decision of the First-tier Tribunal should be reversed. 

[12]      For the Secretary of State it was submitted that the problem was not a formatting issue, thus para 245AA was of no relevance.  There was nothing to prompt the decision-maker to exercise any discretion to seek further information. 

[13]      As with the First-tier Tribunal judge, the Upper Tribunal judge had sympathy for the appellant.  However, purchasing the business involved a risk, and, strictly, she ought to have known of the flaw in the application.  Had Rule 245AA(d)(iii)(1) been in place, there would have been force in the proposition that the missing information was verifiable from the documents submitted with the application.  The submission that the bank letter was “in the wrong format” stretched the wording of para 245AA too far.  The document itself was not deficient in any way.  The money not being in her hands, the appellant needed a letter from the bank which contained the necessary information.  There was nothing in para 245AA as it stood at the date of the decision which would prompt the decision-maker to consider requesting further documents.  Indeed it appeared that the document was not available. 

[14]      In order to comply, the underlying financial arrangements would have had to be changed.  The judge referred to the Court of Appeal’s decision in Alam at para 45, which is to the effect that there is no unfairness in the PBS requirement that all necessary documents must be produced with the application, even if “hard” cases will occur.  While under section 86(3)(b) of the 2002 Act the First-tier Tribunal and the Upper Tribunal can interfere if a discretion should have been exercised differently, a refusal to depart from the rules is not the exercise of a discretion for that purpose (section 86(6)). 

[15]      When determining that the First-tier Tribunal had not erred in any point of law, the Upper Tribunal judge commented that, “now that it had come fully to light”, it was a matter for the Secretary of State whether the fact that the holder of the funds was the appellant’s husband and co-applicant, with the same interest in the outcome, justified discretion outside the rules being exercised in her favour. 

 

The submissions before this court
Mr Caskie for the appellants
[16]      When the necessary funds are held by a spouse and dependant of the principal applicant, the Secretary of State cannot simply say no to the application.  Even before the introduction of para 245AA(d)(iii)(1), the Secretary of State had a common law duty to act in a fair, reasonable and rational manner.  At a minimum, the Secretary of State should have sought clarification.  Reference was made to the Upper Tribunal decision in Rodriguez (cited earlier).  It turned on the respondent’s evidential flexibility policy, which was applicable at the date of the determination in that case.  The policy provided that all applicants would be given an opportunity to provide missing evidence prior to any rejection.  The Upper Tribunal said that this was:  

“harmonious with the plainly detectable philosophy of progressive relaxation of the pre‑2009 rigidity which prevailed in the determination of PBS applications and which consequentially had reduced the number of refusals.” (para 12)

 

Reference was made to entrenched principles “designed to secure a fair, disciplined and properly informed decision-making process” (para 18).  The evidential flexibility policy promulgated by the respondent shifted the emphasis from mechanistic prescription “towards flexibility, discretion and, ultimately, greater fairness to applicants” (para 22).

[17]      Mr Caskie continued to the effect that it was clear on the documentation that the business had been bought using the funds in the bank account.  The case of Forrester (cited earlier) demonstrated that there is always a discretion, and scope for the exercise of “elementary common sense and humanity” (para 16).  He explained that there was no scope for a fresh application, the relevant rules having been changed shortly after the date of the present application, thereby preventing students, such as the appellant, from applying under the scheme for entrepreneurs. 

[18]      Mr Caskie accepted that, as a generality, the comments in para 45 of Alam were correct, but there had to be exceptions.  Here the intention was to invest and establish a business in the UK.  The appellant met all the other onerous requirements to obtain leave to operate a business in this country.  On the one point of concern, on any sensible view it would be apparent that the necessary funds were available – as has proved to be the case – albeit they were provided by her husband.  Reference was made to Mahad (cited earlier) at para 10, and to Mandalia v Secretary of State for the Home Department [2015] 1 WLR 4546 (UKSC).  The application for leave to remain should have been granted, failing which, at a minimum, further enquiry made of the principal applicant.  Had Immigration Rule 245AA(d)(iii)(1) been in force at the time, all would have been well.  As it is, the consequence for the appellant and her dependant co‑applicants will be drastic.  They will require to sell the business and give up the life which they have enjoyed for the last seven years in Scotland. 

 

Mr McIlvride QC for the respondent
[19]      Mr McIlvride submitted that there was no error of law in the decision of the Upper Tribunal.  Given that the appellant did not submit the necessary documents, there was no unfairness in refusing her application.  There was no duty to make enquiries.  No purpose would have been served by further investigations, it having been said that the bank could not provide the necessary letter.  The Court of Appeal in Alam addressed the issue raised in this appeal.  Section 85A of the 2002 Act prevented the First-tier and Upper Tribunals from having regard to new material.  The rules required the bank to confirm that the necessary funds would be available for the business.  Large numbers of such applications are made, many of them from abroad.  The Alam approach is based on pragmatism and good sense.  The problem would have been resolved had the husband given the funds to his wife. 

[20]      Counsel accepted that, even in the context of the PBS, there is a general public law duty of fairness, thus it might have been different had the Secretary of State been at fault in any way.  The recent decision of the Supreme Court in Mandalia was distinguishable.  It turned on the proper interpretation of instructions given to caseworkers concerning sequences of documents;  instructions which ceased to apply one month before the present application was made.  Rule 245AA superseded those instructions. 

 

Mr Caskie in reply
[21]      In a brief reply, Mr Caskie mentioned that an application fee of over £3,000 was paid.  There were 1,666 entrepreneurial applications in the UK in 2013.  This appeal concerned, in effect, a husband and wife application where, in point of fact, the business was bought before the application was determined.  The caseworker could have suggested that the funds be placed in an account in the wife’s name.  The tribunals below erred in overlooking the common sense view of what was required of a fair decision-maker in the particular circumstances of this case.  Reference was made to Mandalia at paras 2 and 32/3. 

 

The Immigration Rules
[22]      The documentation submitted along with the application included a declaration of the principal applicant’s husband, which gave consent “to the application to use my funds in the UK” and authority to his wife to access £200,000 of his funds upon request for use in the UK for the purpose of investing in her business.  In addition there was a letter from Lloyds TSB addressed to the husband confirming a balance of £202,000 in his account as at 9 October 2012, which was the date of the application.  However, as is accepted, the necessary letter from the bank in terms of para 41 -SD(a)(i)(9) was not provided.

[23]      Para 41 of appendix A to part 6A of the Immigration Rules begins by stating that an applicant will only be considered to have access to funds if the documents specified in para 41 – SD are provided to show (a) cash money to the amount required (here £200,000) and (b) that the applicant has permission to use the money to invest in a business in the UK.  In addition, (c) the money must be held in a UK regulated financial institution or be transferable to the UK, and (d) the money must remain available to the applicant until such time as it is spent in the establishment or running of the applicant’s business. 

[24]      So far as applicable to the present circumstances, money being “available” to an applicant is defined as meaning that the funds are available from the third party named in the application under the terms of the declaration referred to in para 41 – SD(b).  In this regard the declaration from the third party must state that he has made the money available for the applicant to invest in a business in the UK, plus, amongst other things, confirmation that the money will remain available until it is transferred to the applicant or the business. 

[25]      Pausing here, and so far as relevant for present purposes, the scheme is that (a) the third party has made the money available to the applicant, (b) the money is held by, for example, a UK bank, and (c) the third party provider has promised not to remove it before it is used for the declared purpose.  The purpose of the documentation specified in para 41 – SD is to show (a) access to £200,000 and (b) that the applicant has permission to use this money to invest in a UK business.  So far as applicable to the circumstances of the present case, the precise requirement was a letter from Lloyds TSB “to confirm the amount of money available to the applicant”:  para 41 – SD(a)(i).  That letter required to meet a number of requirements, including (9) confirmation of “the amount of money provided to the applicant from any third party that is held in (the bank)”. 

[26]      The problem with the material presented with the application is clear and obvious.  The requirement was that the third party had made the money available to the applicant for investment purposes and promised not to interfere before the investment occurred.  In addition the relevant financial institution had to confirm that it held the funds which the third party had made available to the applicant investor.  For the third party simply to promise that his funds would be made available was not enough.  The reasons for this are easy to understand.  By the time of the decision on the application, the funds had been used for the purchase of a business in Cowdenbeath.  For whatever reason, this was not brought to the attention of the UKBA.  Had it been intimated, this may or may not have prompted enquiries concerning the provider of the funds and the ownership of the business.  However the decision was taken on the basis of the incomplete documentation submitted with the application and in ignorance of the purchase of the business. 

[27]      The terms of Immigration Rule 245AA at the relevant time are of no assistance to the appellant.  They confirmed that the specified documents required to be provided with the application.  Documents submitted after the application would be considered only if they were (a) missing from a submitted sequence of documents;  (b) if a document was in the wrong format;  or (c) to substitute an original for a copy document.  No request would be made for a missing document.  A subsequent amendment allowed consideration of an application if missing information was verifiable from other documents submitted after the application, but, unlike the Upper Tribunal judge, the court has difficulty in understanding how this would have helped.  The fundamental problem was that the third party had not taken the steps necessary to provide reassurance, via the bank, that the money had been made available to the applicant and would remain available until the investment was made.  No amount of reference to other documentation submitted with the application would have filled this gap. 

[28]      The essence of the submission for the appellants is that, in the particular circumstances of this case, where the funds were held by the spouse of the applicant for entrepreneur status, and given that he was a dependant co‑applicant with an obvious interest in the success of her application, the caseworker should have concluded that the funds were in fact available to her, and granted leave.  Failing that, at a minimum, the applicant should have been alerted to the problem, thereby allowing her to take appropriate steps, most obviously having the funds put into an account in her own name.  It is said that any other approach contravenes the public law duty of fairness, and demonstrates a failure to exercise even a modicum of intelligence, common sense and humanity.  In short, it is claimed that the proper balance between the public interest in sound immigration control and fairness to the applicants has not been achieved. 

 

Discussion
[29]      At the relevant date, the discretion provided for by para 245AA was limited to the three circumstances mentioned above, none of which are applicable in the present case.  Nonetheless, and in our view correctly, counsel for the Secretary of State did not suggest that there was no place for the operation of the general public law duty of fairness, even when the points-based system was being applied.  The real question is – what does that general duty require?

[30]      The Immigration Rules are statements by a minister of the Crown as to how the Crown proposes to exercise its executive power to control immigration – MO (Nigeria) v The Home Secretary [2009] 1 WLR 1230, Lord Hoffmann at para 6.  Essentially they are statements of policy as to the exercise of administrative discretion.  As a general rule, however detailed and prescriptive a policy might be, the decision-maker must always be open to the facts and circumstances of the particular case.  However, in the field of immigration control the courts have recognised the practical implications of that general rule;  implications which have been addressed by the PBS itself.

 

The decision of the Court of Appeal in Alam
[31]      In Alam the Court of Appeal dealt with three appeals, all concerning the PBS.  In his judgment, with which the other judges agreed, Sullivan LJ observed that the PBS is “very detailed and highly prescriptive.  An important feature … is that it specifies the evidence that must be produced with the application in order to demonstrate that the criteria are met” (para 9).  Before May 2011 there was a wide discretion for the admission of new evidence when a decision was under appeal (section 85(4) of the 2002 Act).  This resulted in many appeals being allowed.  His Lordship explained that section 19 of the UK Borders Act 2007 was enacted “to address this problem”.  This was done by way of the introduction of the PBS and restrictions on new evidence being presented in the course of an appeal.  After a long delay, this system was brought into force on 23 May 2011. 

[32]      Mr Alam’s fourth ground of appeal was that the common law duty of fairness imposed an obligation on the Secretary of State to contact him when specified documents were missing from his application, and to give him an opportunity to rectify the omission.  Sullivan LJ commented that the detailed PBS was designed to secure predictability and consistency in a decision-making process which had to consider a very large number of applications.  As a result it was highly prescriptive (para 43).  Nonetheless the public requirement of fairness still had to be observed.  This might impose additional obligations on the Secretary of State as the decision‑maker under the PBS.  However, where the appellant was at fault in not supplying the specified documents with the application, there was “no unfairness” in refusing the application on the ground of a failure to demonstrate compliance with the rule under which leave was sought. 

“The price of securing consistency and predictability is a lack of flexibility.  That may result in ‘hard’ decisions in individual cases, but that is not a justification for imposing an obligation on the Secretary of State to conduct a preliminary check of all applications to see whether they are accompanied by all of the specified documents, to contact applicants where this is not the case, and to give them an opportunity to supply the missing documents.  Imposing such an obligation would not only have significant resource implications, it would also extend the time taken by the decision making process, contrary to the policy underlying the introduction of the PBS.” (para 45)

 

In due course Mr Alam’s case was considered by the UK Supreme Court, but the fourth ground of appeal was not maintained, thus the Justices did not require to consider this issue. 

 

The Court of Appeal’s decision in EK (Ivory Coast) v Secretary of State of the Home Department [2014] EWCA Civ 1517
[33]      A similar issue was considered in EK (Ivory Coast), again by the Court of Appeal.  The appellant applied for leave to remain in the UK as a tier 4 (general) student migrant.  As required, she submitted a letter of confirmation of acceptance for studies issued by St Stephen’s College.  While the application was pending, and as a result of an administrative error on the part of the college, St Stephen’s withdrew the letter.  Because of this the applicant failed to achieve the necessary number of points, and her application was refused.  The question was whether the Secretary of State should have delayed the decision until the applicant was told what had happened and been given an opportunity to correct any error on St Stephen’s part, or to find another college. 

[34]      The court was divided, with the lead majority judgment delivered by Sales LJ.  His Lordship recognised the unfairness to the applicant, however the Secretary of State was not responsible for it.  That lay with the acts and omissions of the college.  The public law duty to act fairly did not impose an obligation upon the Secretary of State to give the applicant notice of the withdrawal of the letter and an opportunity to rectify it.  Reference was made to the speech of Lord Mustill in R v Secretary of State for the Home Department, ex parte Doody [1994] 1 AC 531 at 560D – G.  Sales LJ noted that it is well established that the precise content of the duty to act fairly varies according to the particular decision-making context in which it falls to be applied.  Reference was made to a passage in the speech of Lord Bridge of Harwich in Lloyd v McMahon [1987] AC 625, 702/3: 

“… the so called rules of natural justice are not engraved on tablets of stone.  To use the phrase which better expresses the underlying concept, what the requirements of fairness demand when any body, domestic, administrative or judicial, has to make a decision which will affect the rights of individuals depends on the character of the decision-making body, the kind of decision it has to make and the statutory or other framework in which it operates.  In particular, it is well-established that when a statute has conferred on any body the power to make decisions affecting individuals, the courts will not only require the procedure prescribed by the statute to be followed, but will readily imply so much and no more to be introduced by way of additional procedural safeguards as will ensure the attainment of fairness.”

 

[35]      Sales LJ observed that the PBS was intended to simplify the procedure to allow high volumes of applications to be processed in a fair and reasonably expeditious manner according to clear objective criteria.  This was in the interests of all applicants.  Reference was made to the judgment of Sullivan LJ in Alam, especially at para 45.  The public duty of fairness should not be applied to the PBS “in such a manner as to undermine its intended mode of operation in a substantial way.”  It should not prejudice the public benefits of a clear and predictable scheme operating according to objective criteria (para 31).  The Secretary of State could not have identified the administrative error behind the withdrawal of the letter.  It might have been due to a failure on the part of the applicant to pay fees or to attend the college.  To expect the Secretary of State to investigate every withdrawal of such a letter and then delay the decision would be “a serious intrusion on the straightforward and relatively automatic operation of decision-making by the Secretary of State under the PBS” (para 32).  It would be different if the Secretary of State bore responsibility for the problem, for example by having withdrawn accreditation to a college to issue such letters.  In those circumstances the fair balance between, on the one hand, the public interest and the due operation of the PBS regime and, on the other hand, the individual interest of the appellant, would favour the latter. 

[36]      Briggs LJ agreed with Sales LJ.  Were it otherwise there would be “too great an inroad into the simplicity, predictability and relative speed of the PBS process”, particularly where the Secretary of State bore no responsibility for the mistake which caused the unfair outcome (para 59).  In a dissenting judgment, Floyd LJ considered that the decision was unlawful in the absence of the applicant having been given an opportunity to investigate the new circumstances and make representations.  He distinguished cases where there was a simple failure to supply the necessary documents, such as Rodriguez and Alam, from cases where there was a post‑application material change of circumstances of which the applicant was unaware, for example withdrawal of a college’s license.  In the latter category of cases, the applicant should be given an opportunity to deal with the changed circumstances, unless they were known to the applicant, were his/her fault, or were obviously irremediable.  His Lordship took the view that such a principle “strikes the right balance between the need for the PBS to work efficiently, and for it to work fairly.” 

 

The decision of the Court of Appeal in Rodriquez and others [2014] EWCA Civ 2
[37]      Earlier in this opinion reference was made to the appellant’s reliance upon the Upper Tribunal decision in Rodriguez.  That case and two other appeals (Mandalia and Patel) came before the Court of Appeal, with a decision issued in January 2014.  They all involved student migrant applications where a refusal was issued under the PBS because of a failure to provide evidence in the form of bank statements confirming possession of the necessary funds throughout a specified 28 day period.  In each appeal the applicant was able to demonstrate that, despite the defects in the submitted evidence, they did have the necessary funds over the relevant period.  The submission was that the Secretary of State’s evidential flexibility policy should have been applied thereby giving them the opportunity to remedy the deficiencies in their applications. 

[38]      Davis LJ gave the lead judgment in the Court of Appeal, with which Sir Stanley Burton and Pitchford LJ agreed.  The primary issue was whether the reasoning of the Upper Tribunal in Rodriguez was correct.  So far as Ms Rodriguez’s case was concerned, the defect concerned four days in the 28 day period when her bank balance fell below the required £1200, namely to £903.  Evidence led at the First-tier Tribunal as to a savings bank holding additional funds of £600 throughout the 28 days was regarded as inadmissible given the terms of section 85A of the 2002 Act.  That decision was not challenged.  However the appellant relied upon the contents of a letter dated 19 May 2011 from the UKBA to “joint education task force members” for the proposition that she should have been given an opportunity to remedy the problem.  The First-tier Tribunal judge rejected that proposition, and permission to appeal to the Upper Tribunal was granted.  As mentioned earlier in this opinion, that appeal was upheld.

[39]      In respect of the so called “evidential flexibility” policy, Davis LJ commented on the vagueness of the available information as to its implementation.  It was introduced in 2009 to address concerns as to undue harshness in the operation of the PBS.  From time to time the policy was changed, then, from 6 September 2012 it was incorporated into the Immigration Rules by way of para 245AA, which in itself has been the subject of subsequent amendment.  When originally introduced the policy allowed the correction of minor errors or omissions, the querying of details, and requests for further information, such as a missing wage slip or bank statement from a sequence of documents.  By June 2011 there was no limit upon the amount of information which could be requested from the applicant.  However, there had to be sufficient reason to believe that any evidence existed;  such requests should not be speculative, with any benefit of the doubt on this point being given to the applicant.  The Secretary of State’s letter of 19 May 2011 talked of, amongst other things, a validation stage being trialled where applicants would be given an opportunity to provide mandatory evidence missing from an application.  The Upper Tribunal in Rodriguez had placed particular weight upon this. 

[40]      Davis LJ noted that the Upper Tribunal decision in Rodriguez provoked debate.  Criticisms had been made of the presentation of the appeal by the Home Office presenting officer (Ms Rodriguez represented herself).  The lack of an informed debate in what was a test case was, in his Lordship’s view, “unfortunate”.  In a subsequent affidavit the officer had suggested that the letter of 19 May 2011 had no application to the Rodriguez case.  However this had not been brought to the attention of the Upper Tribunal, which held that it introduced a new practice whereby all applicants would be notified of the absence of mandatory evidence and given an opportunity to rectify the deficiencies.  The Upper Tribunal took the view that the Secretary of State had failed to have regard to this “dominant policy”, and that, in any event, the relevant caseworker had been unaware of the evidential flexibility policy.  As already noted, the Upper Tribunal observed that the emphasis had shifted from “mechanistic prescription towards flexibility, discretion and, ultimately, greater fairness to applicants.” (para 22) 

[41]      For the reasons given in paras 82/8, Davis LJ rejected the Upper Tribunal’s conclusions so far as based on the letter of 19 May 2011.  It did not create a new policy.  It referred to existing policy, as well as mooting some sort of trial.  The relevant policy was to be found in the evidential flexibility process instructions.  The learned judge did not agree with the Upper Tribunal’s conclusion that the policy had not been appreciated or had been ignored.  There was no evidence to that effect.  Indeed it was refuted by the terms of the decision letter itself.  Contrary to the apparent thinking of the Upper Tribunal, the policy did not require Ms Rodriguez to be given an opportunity to rectify the problem.  Requests were not to be speculative.  At the time there was no reason to believe that she had additional funds.  She had not met the terms of the Immigration Rules.  There was no reason to suspect a mistake or a gap in her application.  The policy did not apply in her favour, thus it could not be assumed that it was not considered.  Quite simply it did not avail Ms Rodriguez.  Davis LJ referred to Alam, including Sullivan LJ at para 45;  remarks which, even allowing for the process instructions, remained apposite in the three cases before him.

[42]      The Court of Appeal held that the Upper Tribunal erred in Rodriguez, and the First-tier Tribunal decision was restored.  Similar reasoning was applied in respect of the appeals by Mr Mandalia and Ms Patel.  The former was not a “missing sequence” case.  As to the very minor shortfall in Patel, a “near miss” approach was not available in the PBS (Moses LJ at para 12 of Secretary of State for the Home Department v Al Islam [2013] EWCA Civ 754).  In short, a rule is a rule.  The Upper Tribunal judge in Patel was correct to conclude that the evidential flexibility policy did not require further enquiries in every case where there was a failure to meet the requirements of the Immigration Rules.  In conclusion it was stressed that the Court of Appeal’s decision related only to the rules and guidance in operation at the time of the decisions in the three appeals. 

 

The decisions in Forrester, Mahad, and Alexander
[43]      Mr Caskie placed reliance on the decision in Forrester (cited earlier).  The claimant, a national of Jamaica, had arrived in the UK with leave to remain as a visitor until December 2002.  Subsequently she received leave to remain as a student until November 2007.  During that period she was joined by her daughter.  In addition she was given permission to marry someone who had been settled in the UK for 38 years.  In September 2007 her application to remain as a spouse was rejected for the sole reason that her cheque failed to clear.  In December 2007, and promptly after intimation of the refusal, the application was resubmitted along with a cheque which in due course cleared the bank.  That application was refused because it was submitted after her leave to remain in the UK had expired.  She and her daughter were required to leave the UK, otherwise an offence would be committed and they could be remanded. 

[44]      Sullivan J (as he then was) explained that the refusal was in accordance with the rules – however the Secretary of State was given a discretion which it was expected would “be exercised with a modicum of intelligence, common sense and humanity” (para 7).  The Secretary of State had observed that an application could be made from Jamaica, and there was no reason to suppose that thereafter entry clearance would be refused.  Thus, no doubt at considerable public and private expense, the applicant and her daughter were being required to travel to Jamaica, remain there for a period, and then return to the UK.  The decision was described as “manifestly disproportionate and unreasonable” (para 9).  It was one thing to say that one should have a fair and firm immigration policy, but “quite another to say that one should have an immigration policy which is utterly inflexible and rigid and pays not the slightest regard to the particular circumstances of the individual case…” (para 13).  The Secretary of State had maintained “a wholly perverse position” (para 16).  The decision was quashed and it was hoped that “a little common sense and humanity” would prevail (para 17).

[45]      Counsel also placed reliance upon the decision in Alexander v Immigration Appeal Tribunal [1982] 1 WLR 1076 (HL), which held that the Immigration Rules were not to be construed with the strictness appropriate for a statute, but sensibly, according to the natural meaning of the language used.  Mahad (cited earlier) was another decision to a similar effect.  When construing a rule, reference could be made to its primary purpose, which in that case was to ensure that prospective entrance to the UK could be maintained without recourse to public funds, and accordingly third party financial support could be taken into account. 

 

The decision of the UK Supreme Court in Mandalia v Secretary of State for the Home Department [2015] 1 WLR 4546
[46]      Both parties made reference to the decision of the UK Supreme Court in Mr Mandalia’s case, discussed earlier in the context of the Court of Appeal’s decision.  Lord Wilson gave the judgment, with which the other Justices agreed.  The rules required the application to be accompanied by a bank statement or statements showing that Mr Mandalia had held at least £5,400 for a consecutive period of 28 days ending no earlier than a month prior to the date of his application.  The submitted statements showed the requisite funds, but only for a 22 day period.  The question was whether the refusal was unlawful in the absence of a request for information regarding the six preceding days.  The Court of Appeal had answered this question in the negative.  The appeal against that decision relied upon the then extant processing instructions issued to caseworkers.  Lord Wilson noted that the PBS was extremely complex for applicants, but it had, to a substantial extent, relieved caseworkers of the need to consider whether to exercise discretions. 

“The sharp edges of the rules have cut out hard cases which have found their way to the courts and which have inevitably attracted at any rate the sympathy of the judges and sometimes – I speak for myself – nascent reservations about the suitability of the system which have not been easy to suppress.  But suppressed they must be.  For the management of this type of immigration, in principle highly valuable for the UK, is a profound social challenge, of which the complexities are beyond the understanding of the courts – and, by not exercising its right to disapprove part 6A of the rules, Parliament has endorsed the Secretary of State’s considered opinion that a points-based systems is the optimum mechanism for achieving management of it” (para 2).

 

[47]      The rules required Mr Mandalia to demonstrate that he had held at least £5,400 for a consecutive period of 28 days ending no earlier than 7 January 2012.  The submitted bank statement, number 64, covered the period from 29 December 2011 to 19 January 2012.  The opening entry was a credit balance brought forward of over £11,000.  The closing entry was a credit balance carried forward of over £12,000.  There were only eight modest debits, and two less modest credits.  Throughout the balance never fell below £11,000.  By letter Mr Mandalia was told that his application had been received and that if there was any problem as to the validity of the application, such as missing documentation or omissions in the form, he would be advised as to the action needed to rectify the problem.  No such advice was tendered.  On 21 April 2012 he was told that his application had been refused and that a decision had been made for his removal from the UK.  The ground of refusal was the failure to demonstrate that he held a minimum of £5,400 for the full 28 day period, and thus he failed to secure the requisite points. 

[48]      Before the First-tier Tribunal Mr Mandalia had produced bank statements to demonstrate that he was more than able to satisfy the 28 day requirement, however section 85A of the Act, which came into force in May 2011, prevented the tribunal from considering post-application material.  (There had been submissions in the Supreme Court as to the circumstances in which a fresh application could have been made, but Lord Wilson considered that any ability to do so was irrelevant to the issues in the case.)  The First-tier Tribunal’s decision was appealed, unsuccessfully, inter alia under reference to the document issued to caseworkers on 17 June 2011 entitled “PBS process instruction:  evidential flexibility” (“the process instructions”) which, amongst other things, commented that it might be appropriate to ask a tier 4 applicant to provide missing bank statements from a sequence.  The processing instructions applied to Mr Mandalia’s application, but they were withdrawn for all applications made after 6 September 2012 and replaced by Immigration Rule 245AA.  In turn this rule was amended in September and again in October, both of 2013.  Para 245AA gave caseworkers considerably less flexibility than the process instructions, but repeated the encouragement to contact the applicant in respect of a document or documents missing from a sequence of documents. 

[49]      Lord Wilson reviewed case law to the general effect that an applicant has a public law right to expect that an extant policy will be applied.  The case therefore turned on the proper interpretation of the process instructions.  The court had been favoured with submissions as to whether when Mr Mandalia submitted bank statement number 64, numbers 63 and 62, which demonstrated the necessary funds for the six day period, could be said to be “missing from a series.”  The Court of Appeal had decided that this was not a missing sequence case, and that, in any event, it would be mere speculation as to what earlier statements would have shown.  In R (GU) [2015] 1 All ER 363, Foskett J held that something cannot be missing from a sequence until the sequence itself exists.  At least the start and the end of the sequence must be in evidence – the missing part had to be from within those two limits.  Before the Supreme Court, “emboldened” by this decision and that of the Court of Appeal, the Secretary of State had submitted that the “two pillars” had to be before the caseworker before any question of the discretion concerning documents missing from a sequence would arise.  Lord Wilson considered this submission to be misplaced “even at the high level of pedantry on which it has been set” (para 33).  It should have been obvious to the caseworker that bank statement 64 formed the last in a series, and that the statement or statements covering the earlier six days were missing from the series.  However the caseworker did not need “to split such hairs” (para 34).  The applicable process instructions said that there were no limits on the extra information that could be requested, provided the request was not speculative.  Under the process instructions, a document missing from a series was but an example.  (It should be noted that this is not true for para 245AA.)  Furthermore the caseworker was instructed that the benefit of any doubt was to be given to the applicant.  His Lordship continued: 

“Conferred as he was, with that necessary degree of flexibility, how could the caseworker have followed the process instructions otherwise than by requesting Mr Mandalia to provide the statement or statements which covered the first six days?” (para 35) 

 

It was held that the refusal of the application was unlawful, and this without reference to the agency’s letter of 8 February 2012.  In addition the decision in R (Gu) was overruled. 

 

Decision
[50]      Drawing the various strands together, the following general propositions can be offered:

1.    If the appellants are to receive relief, it can only be based on the Secretary of State’s general duty to act fairly and rationally.  The policy in force at the time (the original rule 245AA) is of no relevance to the present circumstances. 

2.    As a general rule there is no unfairness in refusing an application under the PBS when the application is not accompanied by all the specified documentation:  Alam at para 45;  Rodriguez in the Court of Appeal;  and Mandalia at para 2.  The high watermark of the more flexible approach was the Upper Tribunal decision in Rodriguez, but it was overruled by the Court of Appeal.  In short, an applicant is expected to be appraised of the relevant requirements and to comply with them at the outset by lodging the appropriate supporting documents.  If he does not, then he is responsible for an adverse decision, even if the underlying facts demonstrate a mistake or unfortunate omission. 

3.    That general rule can be overcome when such is justified after a consideration of the particular circumstances of the case;  for example if the Secretary of State carries a degree of responsibility for the problem (EK (Ivory Coast)), or where the decision can be described as perverse, in defiance of common sense, or some equivalent epithet, as, for example, in Forrester and Mandalia. 

[51]      The concept of a general duty of fairness concerns not only the interests of those seeking leave, but also covers wider interests, including those of other applicants in an efficient and expeditious decision-making process.  Given the pressure which has been imposed for several years upon limited resources, the PBS was designed as a practical and pragmatic response, albeit “hard” cases will occur. 

[52]      In deciding whether there is merit in the current appeal, the court must look at all the circumstances.  In that regard it is relevant to note that the problem was not one of a missing document, at least not in the sense of a document which could have been produced, but was not.  The necessary letter from the bank could not have been submitted until the principal applicant’s husband had, in the context of her investment in the UK business, made the money available to his wife for that purpose, and the bank was in a position to confirm that state of affairs.  As it was, all the bank could vouch was the balance in the husband’s bank account as at 9 October 2012.  For understandable reasons the rules do not allow a positive decision simply because someone, who is in a position to do so, promises to make the monies available at the time of the proposed investment. 

[53]      The submission for the appellants is that the caseworker should have taken the view that, since the funds were held by the proposed entrepreneur’s husband, who was also a dependant co-applicant, in effect the monies were available to her.  It is contended that in these circumstances, the caseworker should have granted an exceptional leave outwith the rules, failing which, given her an opportunity to put the matter beyond doubt.  Mr Caskie placed more emphasis upon the fall-back alternative.  In my view this is understandable.  It is difficult to justify the imposition of an obligation on the Secretary of State to grant the application notwithstanding the breach of the rules.  The alternative is more arguable.  Had the caseworker exercised such a discretion, one would not expect him or her to be criticised.  However, it is an entirely different matter to conclude that failure to do so was unlawful in the sense of a breach of the general duty of fairness and rationality. 

[54]      All the general considerations emphasised in Alam and EK (Ivory Coast) apply to the present case.  We can identify no competing counter-balancing factor of sufficient materiality to outweigh them.  The necessary letter was missing.  There was nothing to suggest that the husband had placed the funds under the control of his wife.  He simply promised to allow her to use them for the purchase of the business.  In these circumstances we do not consider that common sense, humanity, or “a modicum of intelligence” required a different approach from that taken by the Secretary of State.  It ought to have been obvious to the applicants, who had the benefit of legal advice from solicitors experienced in this area of practice, that unless the financial arrangements between the spouses allowed the required letter from the bank to be written and submitted, it was more than likely that the application would be refused.  For whatever reason those financial arrangements were not put in place.  Even assuming that it was the principal applicant who purchased the business, it has never been explained why the necessary steps were not taken at the time of the application.  There is nothing to suggest that this was anything other than a deliberate decision.  If there has been an outcome which can be described as unfair, it is one for which the applicants bear responsibility. 

[55]      In these circumstances, the appeal against the decision of the Upper Tribunal falls to be refused.