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Cite as: [2013] EWHC 3915 (Admin)

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Neutral Citation Number: [2013] EWHC 3915 (Admin)
Case No: CO/13631/2012

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL
13/12/2013

B e f o r e :

THE HONOURABLE MR JUSTICE JEREMY BAKER
____________________

Between:
THE QUEEN
ON THE APPLICATION OF WARNBOROUGH COLLEGE LIMITED

Claimant
- and -


SECRETARY OF STATE FOR THE HOME DEPARTMENT
Defendant

____________________

Mr Ian Macdonald QC (instructed by Quist Solicitors) for the Claimant
Mr David Manknell (instructed by The Treasury Solicitor) for the Defendant
Hearing dates: 18th October 2013, 2nd December 2013

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Mr Justice Jeremy Baker :

  1. Warnborough College Limited t/a Warnborough College ("the claimant") is a private educational institution, established in 1973, which provides courses of one to two years duration to over 100 students in subjects ranging from business management to tourism. On 1.10.11 the claimant submitted an application to the UK Border Agency ("UKBA"), of which the Secretary of State for the Home Department ("the defendant") is responsible, to be appointed as a Highly Trusted Sponsor ("HTS") under the Tier 4 (General) points based system. On 1.11.12 the defendant refused the application. The claimant now seeks to challenge that decision by way of an application for judicial review, permission having been granted by the single judge on a renewed oral application on 18.6.13.
  2. On 31.3.09, as part of the strategy for controlling immigration into the UK, the defendant introduced the Tier 4 (General) points based system, which set out criteria for the provision of leave to enter or remain to foreign students from outside the European Economic Area ("EEA") and for sponsor licences to educational institutions within the UK. This system is contained in paragraphs 245ZT – 245ZY of the Immigration Rules and Tier 4 of the points based system – policy guidance. The latter has altered over the ensuing years, the applicable guidance at the date of the claimant's application being that introduced on the 5th of September 2011 ("version 09/11"). The evolution of this guidance over the intervening years has reflected the increasing concern by the defendant to seek to ensure that only those individuals who are genuinely intending and are able, both academically and financially, to study these courses in the UK are granted leave to enter or remain, and that only those institutions who are genuinely intending and are able to recruit such students to their courses are granted sponsor licenses.
  3. In order for an individual to obtain leave to enter or remain under this system, it is necessary for that individual firstly to obtain a confirmation of acceptance for studies ("CAS") from a licensed sponsor. The individual must then make an application to the defendant for leave and provide evidence that he has obtained the CAS and has sufficient funds to cover the course fees. In turn the defendant ascertains the validity of the application, including checks upon the funds of the individual and any relevant criminal or immigration history and, depending upon the outcome of these enquiries, either grants or refuses the application on a points based system.
  4. In order for an educational institution to become a Tier 4 licensed sponsor, it must make an application to the defendant to become an HTS. In order to become an HTS the institution must fulfil certain mandatory requirements provided in paragraphs 268 – 275 of version 09/11, one of which is that the number of students who have been refused leave to enter or remain by the defendant following the grant of a CAS by the institution, must not exceed 20% of the total number of individuals to whom it granted a CAS over the previous 12 months. The defendant will ascertain the validity of the application, including checks upon the fulfilment of these requirements and, depending upon the outcome, either grant or refuse the application on a points based system.
  5. In the present case the reason given by the defendant for the refusal of the claimant's application to become an HTS was that the relevant refusal rate exceeded the maximum, in that it was 26.39%. In its decision letter dated 1.11.12 the defendant identified the 76 individuals who were refused leave applications out of the total of 288 who had applied for leave with a CAS issued by the claimant.
  6. On 15.11.12 solicitors acting on behalf of the claimant wrote to the defendant requesting a review of her decision, asserting that the decision was unlawful, on the grounds of unfairness and irrationality, because 20 of the refusals by the defendant were made for reasons which were outside the control of the claimant, namely that in 19 of the cases the individual concerned had failed to demonstrate that he or she met the financial requirements of the Immigration Rules and version 09/11 of the Tier 4 guidance, and in 1 case the individual had previously employed deception in an entry clearance application by submitting false documents. It was pointed out that if these cases were removed from the calculation of the refusal rate then it would be 19.44% which was below the 20% threshold.
  7. The defendant replied to this letter on 28.11.12 stating that she had reviewed her decision and that there was no sufficient reason for not following the guidance. It was pointed out that of the 19 refusals, 16 of them had been refused because the correct maintenance requirement for the application was not shown at the time the application was made and that of these, 4 cases had been the subject of administrative review which had upheld the refusals, 2 cases were refused for additional reasons and in 1 case not only had the claimant issued two CAS, but the individual had otherwise breached the conditions of his leave by commencing his course of studies with the claimant prior to obtaining leave. In these circumstances the defendant maintained her original decision.
  8. The derivation of the defendant's powers to grant leave to enter or remain in the UK to those who do not have a right of abode is ss.1 (4) and 4 (1) of the Immigration Act 1971. Ss.1(4) and 3(2) provides for the defendant to lay down rules approved by Parliament to regulate the process. Although the Immigration Rules are laid before Parliament and come into force unless disapproved by a negative resolution of either House, no such procedure is carried out in relation to the Tier 4 policy guidance. The legality of this guidance was considered by the Supreme Court in R (New London College Limited) (Appellant) v Secretary of State for the Home Department (Respondent) R (on the application of West London Vocational Training College) (Appellant) v Secretary of State for the Home Department) [2013] UKSC 51, which upheld it. The majority considering that as the guidance was not determinative of an individual's leave to enter or remain in the UK, it was not required by s.3(2) of the 1971 Act to be laid before Parliament for its approval. Rather, as the guidance was concerned with regulating the authorisation of sponsors, the guidance was lawful as being within the Crown's general administrative powers to carry on the ordinary business of government. In this regard, Lord Sumption, with whom the majority agreed, stated at paragraph 29,
  9. "29. The Immigration Act does not prescribe the method of immigration control to be adopted. It leaves the Secretary of State to do that, subject to her laying before Parliament any rules that she prescribes as to the practice to be followed for regulating entry into and stay in the United Kingdom. Different methods of immigration control may call for more or less elaborate administrative infrastructure. It cannot have been Parliament's intention that the Secretary of State should be limited to those methods of immigration control which required no other administrative measures apart from the regulation of entry into or stay in the United Kingdom. If the Secretary of State is entitled (as she plainly is) to prescribe and lay before Parliament rules for the grant of leave to enter or remain in the United Kingdom which depend upon the migrant having a suitable sponsor, then she must be also be entitled to take administrative measures for identifying sponsors who are and remain suitable, even if these measures do not themselves fall within section 3(2) of the Act. This right is not of course unlimited. The Secretary of State cannot adopt measures for identifying suitable sponsors which are inconsistent with the Act or the Immigration Rules. Without specific statutory authority, she cannot adopt measures which are coercive; or which infringe the legal rights of others (including their rights under the Human Rights Convention); or which are irrational or unfair or otherwise conflict with the general constraints on administrative action imposed by public law. However, she has not transgressed any of these limitations by operating a system of approved Tier 4 sponsors. It is not coercive. There are substantial advantages for sponsors in participating, but they are not obliged to do so. The rules contained in the Tier 4 Guidance for determining whether applicants are suitable to be sponsoring institutions, are in reality conditions of participation, and sponsors seeking the advantages of a licence cannot complain if they are required to adhere to them."
  10. The Supreme Court also held that as the defendant retained ultimate authority for individual decisions, the guidance did not unlawfully delegate the defendant's powers to control leave to enter or remain in the UK, when it required the sponsoring educational institutions to fulfil some aspects of the task of ascertaining the validity of applications which had previously been carried out by immigration officers.
  11. The 09/11 version of the Tier 4 guidance at paragraph 19 states that.
  12. "Sponsorship is based on two basic principles. They are that:

    Moreover, at paragraph 31 it is pointed out that,

    "Highly trusted sponsor status (which we call HTS) is designed to ensure that all education providers are taking their obligations on immigration compliance seriously. It recognises sponsors who show a good history of compliance with their sponsor duties and whose students meet the standards of compliance with the terms of their visa or permission to stay in the UK (known as 'leave to remain')."
  13. In order to gain HTS the guidance provides at paragraph 270 that,
  14. "At the first stage we assess you against the mandatory requirements in table (iv). We base our assessment only on students sponsored under Tier 4 and whose application to come to, or stay in the UK was supported by a CAS assigned by you."

    Table (iv) provides, inter alia, that,

    "Your refusal rate must be less than 20%.
    This means that all the CAS 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 assess this using CAS data from the SMS for the 12-month period immediately before you apply. We will take into account all CASs that students have used and applications we refused this 12-month period."

    Paragraph 271 states that,

    "If you do not meet one or more of these requirements, we will refuse your HTS application and your licence will be revoked. This is because you will have failed to meet the minimum standards for sponsors who have been licensed for 12 months or longer."
  15. Over the last year or so there have been a number of challenges to the validity of the 09/11 version of the guidance, the New London College Limited case (supra) being one of them. The Administrative Court hearing of one of the two cases considered by the Supreme Court took place before Toulson LJ and Simon J. reported as R ( on the application of West London Vocational Training College Limited) v Secretary of State for the Home Department [2013] EWHC 31 (Admin). The court held that the as a matter of construction table (iv) did not allow for the discounting of refusals from the calculation of the refusal rate, where there was no breach of the sponsor's obligations under the policy guidance.
  16. Moreover, it held that the refusal rate calculation was not irrational on the basis that it imposed a mandatory requirement which an educational institution may be unable to satisfy through no want of diligence on its part. Toulson LJ stated that,
  17. " 35. After a period of public consultation, a policy decision was taken to try to improve immigration control by ensuring that sponsors carried out a high level of due diligence, in order to check that CAS holders would meet the requirements for entry clearance, or leave to remain, including the requirement of being able to maintain themselves. Mr Shirley's statement explains, at paragraph 55, the thinking behind the setting of a refusal rate as part of the criteria for the approval of sponsors:
    "…the strength, robustness and thoroughness of a sponsor's recruitment will largely dictate how many of its prospective students are refused by UKBA. The link between a rigorous recruitment policy and a low refusal rate is clear and logical. The fundamental expectation that a sponsor will undertake a rigorous recruitment process links to the core principles of sponsorship, in that those who benefit most from immigration should play a vital role in making the system work for everyone involved."
    36. The alternative would have been to increase the amount of checking done by UKBA staff. This would have had cost implications and would have been liable to delay the process for genuine applicants.
    37. Moreover, there would be serious practical problems if UKBA had to investigate in the case of every refusal whether the sponsor could be shown to have failed in its duties.
    38. It was recognised, however, that even with a high level of due diligence there might be refusals in situations which an educational provider could not have been able to anticipate, for example, where a person's financial circumstances had changed after the issue of a CAS but before attempting to enter the UK. Data showed that the average refusal rate across Tier 4 (General) in the year to May 2011 was 15.3%. Mr Shirley explained, in paragraphs 56 to 57, the reason for setting the refusal rate at 20%:
    "By setting the refusal rate at 20%, higher than the average refusal rate percentage, this allowed sponsors some further, reasonable, leeway which allowed for refused applications that a sponsor could not reasonably anticipate.
    By setting the refusal rate at 20% this was, therefore, a more than reasonable and generous allowance to set allowing for a margin of error in an application for leave to enter or remain made by the prospective student. UKBA recognises that there may be situations in which an educational provider may not be able to anticipate the refusal of an application for leave to enter or remain. However, anything more than 1 in 5 refusals indicates a complete failure of a sponsor's recruitment process, and demonstrates that for every 5 individuals who present to UKBA 1 does not meet the basic criteria for leave. This is therefore a threat to immigration control, and a sponsor with this level of refusal cannot be categorised as "highly trusted"."
    39. The claimant's evidence in response is that it is unrealistic and unfair to expect a sponsor to ensure that a student will meet the requirements of a visa. The sponsor has limited resources and means of enquiry. In practice, all that it can do is to rely on the student's confirmation of the veracity of financial and educational documents. Moreover circumstances may change after the sponsor has issued a CAS. A CAS is valid for 3 months and the student's bank statements at the date of intended entry may show a different picture from the bank statements provided to the sponsor. The defendant's reply is that it should not be assumed that the sponsor cannot check the veracity of information provided by the applicant, that in some cases careful scrutiny of the information should itself put the sponsor on inquiry, and that the 20% margin is designed to provide a fair margin for matters beyond a sponsor's ability to anticipate or monitor.
    40. I am not persuaded that there is a sustainable objection, on grounds of unfairness, to the use of a refusal rate as a basis for concluding that the sponsor's recruitment procedures are not sufficiently robust to merit classification as highly trusted. The reasons given by Mr Shirley for adopting it make sense. The points made by the claimant about possible reasons for refusal of entry (change of financial circumstances since the issue of the CAS, forgery of documents and so on) would apply equally to all sponsors. If a particular sponsor's refusal rate is significantly higher than average, it may not prove but it does tend to suggest that there has been a less rigorous approach to selection. The policy adopted by the defendant is a strong incentive to strict scrutiny…"
  18. The court also rejected the argument that adherence to the guidance amounted to a fetter on the defendant's discretion, as the defendant had stated that in exceptional circumstances, if adherence to the guidance was considered to be disproportionate to the overall aim of the policy, then she would consider exercising her discretion to grant HTS to an educational institution despite its inability to meet a particular criterion in the guidance.
  19. The argument that the refusal rate criterion in the guidance was irrational in that it did not necessarily indicate any deficiency in the educational institution's procedures had already been considered in the Administrative Court by Thirlwall J. in R (on the application of WGGS Limited trading as Western Governors Graduate School) v Secretary of State for the Home Department [2012] EWHC 2076 (Admin) and rejected. In doing so she stated that,
  20. "Mr MacDonald submitted in the skeleton and in oral submissions that the use of the refusal rate is irrational. To my mind, the opposite is the case. It is surely powerful evidence of [lack of] robustness of recruitment procedures if a significant number of those recruited do [not] gain entry clearance. In the absence of such an approach the Secretary of State would, as Mr MacDonald submits she should, be bound to examine the reasons for each refusal: a task which the partial delegation of immigration powers to colleges was designed to avoid. The claimant has undertaken the exercise at some length in these proceedings, for reasons I understand, but the length and detail of the exercise underlines why the use of the refusal rate cannot be said to be irrational. There can be no in principle objection to the use of a refusal rate as the basis upon which a decision can be made that recruitment procedures are not sufficiently robust."
  21. This decision was upheld in the Court of Appeal [2013] EWCA Civ 17. Jackson LJ considered the matter and stated that,
  22. "53. Mr Macdonald's second complaint is that the yardstick selected by UKBA was unduly harsh. Most of WGGS's students came from India, where a number of scams were in operation. Applicants were often producing false documentation. Also many banks in India were providing false letters about student loans. In addition they were inflating the bank accounts of applicants for a couple of days, so that those individuals appeared to be much wealthier than they really were.
    54. Mr Chhatlani argues in his witness statement that the colleges' recruitment procedures could not pick up scams of this nature. Mr Macdonald submitted that to allow for these factors colleges recruiting from India should be allowed a more generous margin than 20%. Alternatively, all refusals which could not sensibly be attributed to the college should be excluded from the assessment process. UKBA could then apply a much stricter and lower threshold than 20%.
    55. Miss McGahey for the Secretary of State submits that the issue in these proceedings is not whether the method of assessment adopted by UKBA is capable of improvement. It is always possible to suggest improvements to procedures of this nature. The issue is whether the method of assessment adopted by UKBA is lawful.
    56. Miss McGahey also points out there are some 2,100 institutions licensed by UKBA to sponsor students. UKBA must have a clear and workable system for assessing their performance. A minute analysis of the reasons for each refusal and whether the college can be blamed for that refusal is simply not practical. Overall approximately 15% of students with CASs are refused entry clearance or leave to enter. Therefore it is perfectly reasonable for UKBA to take a yardstick rate of 20% for determining which colleges no longer merit HTS status.
    57. Miss McGahey also places reliance on R (on the application of West London Vocational Training College Limited) v Secretary of State for the Home Department [2013] EWHC 31 (Admin). In that case the Divisional Court approved UKBA's adoption of a 20% refusal rate as the yardstick: see the judgment of Toulson LJ at paragraph 20.
    58. Miss McGahey also relies upon the decision of Her Honour Judge Alice Robinson sitting as a deputy High Court judge in The Queen on the application of London College of Management Limited v Secretary of State for the Home Department [2012] EWHC 1029 (Admin). In that case, however, the appellant conceded that the Secretary of State was entitled to adopt as a mandatory criterion that refusals must not exceed 20%. Mr Macdonald makes no similar concession in this case.
    59. In my view many of Mr Macdonald's criticisms of UKBA's method of assessing colleges amount to little more than suggestions for possible improvements. I have little doubt that UKBA's system could be improved or refined. There is a report from the National Audit Office dated 27th March 2012, which makes suggestions in this regard.
    60. Although UKBA's method of assessing refusals may be capable of improvement, I do not accept that it is unlawful. It would be quite impracticable for UKBA to examine the circumstances of each applicant who is refused entry clearance or leave to remain and then to determine whether the college was at fault through failing to foresee the problems.
    61. Take the example of a young Indian man who resolves to enter the UK by subterfuge and then to stay here in defiance of immigration controls. He obtains false documents from a dishonest bank official. He persuades that official to inflate his bank account artificially for a few days. He still needs to obtain a CAS from one of the sponsor colleges. So he applies to such a college. That college should interview the young man and carry out checks to see if he genuinely intends and genuinely is able to pursue a course of studies in the UK. If the college has suitably robust selection procedures, it will weed out many bogus applicants, simply because they are not suitable for admission as students. By definition the bogus applicants are not people who have the genuine intention and means to pursue a course of studies in the UK.
    62. I readily accept that even if a college operates proper and rigorous selection procedures, from time to time bogus applicants or unsuitable candidates will slip through the net. 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. A refusal rate of 20% makes proper allowance for those applicants who are unsuitable to come here as students, but cannot reasonably be weeded out by the colleges' admissions staff."
  23. The present application for judicial review commenced at a time when some of these cases had not been heard by the courts, such that the original grounds sought to raise many of the points which have now been authoritatively dealt with in these more recent decisions. However, the claimant seeks to rely upon evidence as to the operation of the defendant's entry clearance centres, particularly those handling applications from what the claimant describes as the "Indian market." In particular it seeks to rely upon extracts from the following publications:
  24. i) "An inspection of entry clearance in Abu Dhabi and Islamabad" carried out by the Independent Chief Inspector of the UK Border Agency between January – May 2010;

    ii) "An inspection of Tier 4 of the Points Based System (Students)" carried out by the Independent Chief Inspector of the UK Border Agency between April – July 2012;

    iii) "Immigration: The Points Based System – Student Route" carried out by the National Audit Office dated 27.3.12.

    Before setting out some of the extracts upon which reliance is placed by the claimant, it ought to be recorded that the claimant has sought to introduce evidence into this case in a somewhat relaxed manner. Although the first of these reports had been placed in evidence prior to the first hearing date, the second only appeared at that hearing and the third only appeared subsequent to the adjournment which I granted to allow these reports to be fully considered by the defendant and to allow her to provide any further evidence and submissions in respect of them. The defendant has provided such evidence in the form of a second witness statement from George Shirley together with further written submissions dated 12.11.13. Clearly when considering those matters which have been highlighted by the claimant, it has been necessary to have regard to the context in which they were written including both their full texts and the period of time to which they related.

  25. In the first of these reports the following is highlighted:
  26. From the Foreword

    "Most significant among my findings however, was the different approach taken by UK Border Agency staff towards customers from Abu Dhabi, Bahrain and Dubai (members of the Gulf Cooperation 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 this means that the UK Border Agency was not only failing to be open and transparent about their approach towards customers, but also may be discriminating unlawfully in favour of Gulf Cooperation Council customers and against Pakistanis. I believe the 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."

    From the Executive Summary

    "7. Our file sampling identified inconsistent decision making and this is becoming a common theme across all of our overseas inspections. Entry clearance staff frequently referred to the intense focus on the achievement of numerical targets, which they believe affected their ability to make correct decisions. We consider that their concerns, along with our file sampling results, strongly suggest there is a correlation between a strong focus on numerical benchmark targets and inconsistent and poor decision quality. The UK Border Agency needs to do much more to establish whether this is the case."
    […]
    10. We found an inconsistent approach was adopted by entry clearance staff over the weight that was attached to evidence, depending on the nationality of the customer. This effectively meant that customers from the three Gulf Cooperation Council countries appeared to be treated more favourably than customers from Pakistan. We also found that customers in Pakistan were subject to higher evidential requirements in support of their entry clearance applications, although this was not made clear to them at the time they made their applications. We were therefore concerned that the UK Border Agency may be discriminating unlawfully in favour of Gulf Cooperation Council customers and against Pakistanis."

    From the Background

    "4.19 The UK Border Agency told us that the average visa refusal rate in Abu Dhabi increased from 9% to 32% from 2007/2008 to 2008/2009. This followed the change13 in the proportion of nationalities dealt with by the visa section after the introduction of the Hub and Spoke model. However, the average refusal rate in Abu Dhabi across all visa categories over the same period for visa applications made in Pakistan rose from 39% (before work was transferred) to 57% (after work was transferred to Abu Dhabi).
    […]
    6.24 We were satisfied that documents were correctly assessed and points correctly awarded in 33 cases (73%). However, we found that documents had not been correctly assessed and points had not been correctly awarded in 12 cases (27% of the sample).
    […]
    6.25 We reported our concerns to the UK Border Agency in connection with these 12 cases. They accepted our findings in relation to 10 cases.
    […]
    6.32 We consider that in 8 of these 12 cases, the failure to assess documents and award points correctly led to poor quality decisions being made and this fact, coupled with long processing delays in some cases, constituted maladministration."
  27. In the second of these reports the following is highlighted:
  28. "3.31 At the time of the inspection, the Visa Section in New Delhi, which is part of the South Asia region of International Operations and 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."
  29. In the third of these reports the following is highlighted:
  30. "1.15 Detected forgeries give a partial picture of the level of abuse. In 2010, the Agency detected forged documents in 2.5 per cent of Tier 4 visa applications, accounting for 41 per cent of all forgeries detected overseas. Most forgeries were supporting evidence, such as college visa letters, bank statements and educational certificates. Before 2010, the Agency did not collect data on the number of forgeries detected by type of visa, so we cannot compare Tier 4 forgeries with earlier years. We found, however, some significant swings in forgeries detected at particular overseas posts in 2009 and 2010 (Figure 4), which are likely to be associated with Tier 4. For example, the Agency detected more than 6,000 forgeries at New Delhi in 2010, a 124 per cent rise on 2009; 70 per cent were discovered through the Agency's extra scrutiny of Tier 4 applications at that post (see paragraph 1.11). The Agency considers that the Points Based System allows it to detect more forgeries, as it requires applicants to submit educational certificates as an extra control to combat abuse.
    […]
    2.16 Where a sponsor is not meeting its sponsorship requirements, the Agency can suspend the sponsor licence pending revocation or reinstatement. Figure 9 shows the numbers of Tier 4 licences suspended, revoked and reinstated by month. The Agency suspended 80 sponsor licences in January 2010, in response to intelligence and compliance visits but reinstated 65 after further representations by sponsors and further visits. In May and June 2011 the Agency investigated colleges associated with a surge in applications before implementing new English language"
  31. In the light of this evidence the Claimant puts forward two main grounds, firstly that the maintenance of the 20% refusal rate threshold as a criterion for granting HTS to colleges is unlawful, as being irrational and/or unfair; secondly, that that although it is acknowledged that the defendant has a discretion to grant HTS to colleges whose refusal rate is beyond the threshold, it is submitted that this discretion is unlawfully fettered.
  32. In relation to the first of these grounds it is pointed out that the 20% threshold figure is said to derive from a 15.3% global refusal rate, to which has been added a margin of error of 4.7%. It is submitted that in view of the evidence that in New Delhi the refusal rates were significantly in excess of the global average, it would be unfair to use the 20% threshold either at all or at least in respect of those refusals which were dealt with by that entry clearance centre. Secondly it is pointed out that there is evidence that in some of the entry clearance centres the defendant has been inconsistent in her decision making. In particular there have been higher evidential requirements sought from those from Pakistan, as compared with those from some of the Gulf States. It is submitted that it would be unfair to use the colleges' refusal rate as a criterion either at all or in relation to those students from Pakistan, as the purpose of it is to encourage the colleges to maintain high standards of vigilance in relation to the issuing of CASs, whereas the evidence demonstrates that there has been inconsistency in decision making by the defendant. Thirdly, it is pointed out that there is evidence of particular difficulties in relation to the production of false documentation in New Delhi, which it is suggested could not readily be ascertained by a college. Once again having regard to the purpose of the refusal rate criterion, it is submitted that it would be unfair to use it as a reason for refusing a college's HTS either at all or in relation to those refusals involving students who were dealt with by this centre.
  33. At the adjourned hearing Mr MacDonald QC sought to rely upon a global refusal rate of 19% for the period 2010/11 contained in the schedule exhibited to George Shirley's second witness statement, as undermining the evidence that the worldwide refusal rate was 15.3%. However despite the fact that this evidence had been provided in a witness statement dated 11.11.13, the claimant had not previously sought to raise this matter with defendant. Moreover, Mr Manknell on behalf of the defendant stated that in contrast to the evidence which was available in relation to the calculation of the 15.3% figure, he was not aware as to the time parameters of the higher figure or the evidence upon which it had been calculated. Moreover he pointed out that according to the schedule the following year's refusal rate, which depending upon the dates over which this had been calculated, was 13%. Having already provided significant evidential flexibility to the claimant in the course of the hearings in this case, it did not appear that any further delay would be proportionate and this application has been considered on the evidence upon which it was brought and indeed is explained in paragraph 4 of Mr Shirley's second witness statement.
  34. In relation to the second ground it is submitted that in the light of the evidence from the defendant, the operation of her discretion to grant HTS to colleges who do not meet the 20% threshold in relation to its refusal rates is unlawful, because the discretion is limited only to circumstances which are deemed to be exceptional and/or compelling.
  35. In relation to the first ground the defendant points out that the claimant's submissions have already received the authoritative attention of the Court of Appeal in the Western Governors Graduate School case, who upheld the lawfulness of the 20% refusal rate as a criterion for the granting of HTS to institutions. Moreover she points out that the evidence which the claimant now seeks to rely upon was in the main that which was accepted and considered by the Court of Appeal in reaching its decision. It is submitted that to the extent that the claimant relies upon further evidence, the refusal rates in New Delhi is in reality a statistical reflection of that earlier evidence. The defendant repeats the submission which she made in that earlier case that it would be wholly disproportionate to have to undertake the type of detailed assessment which is contended for by the claimant. Instead the 20% threshold provides a logical and reasonable method of ensuring that only those colleges who faithfully and diligently fulfil their own responsibilities in relation to the granting of CASs are themselves granted HTS status. It is suggested that if there are problems with false applications in a particular area, such as India, then it is reasonable to expect institutions recruiting in that area to maintain suitably high standards of vigilance so as to be able fulfil that responsibility. Furthermore, the evidence in the first of these reports relates to a period prior to that which is under consideration in this case and the extent to which the claimant recruited students from Pakistan is unclear. In any event the evidence does not disclose a situation of sufficient concern to justify the abandonment of the 20% refusal rate threshold either completely or in relation to applicants from that country.
  36. In relation to the second ground it is submitted that a discretion based upon the requirement of exceptional and/or compelling reasons is lawful. It is pointed out that, unlike the Western Governors Graduate School case where the evidence was that the most of the college's students came from India, the evidence is that the claimant recruits some students from Pakistan. Moreover the "List of Refused Students and Their Country of Origin" provided by the claimant includes those from countries such as Armenia, Mongolia and China. Such that even if one discounted those from Nepal, which it is accepted were dealt with by the centre at New Delhi, this would not bring the claimant's refusal rate below the 20% threshold.
  37. It is apparent that the defendant's guidance in relation to the Tier 4 (General) points based system has received a significant amount of judicial consideration, and in particular the 20% refusal rate threshold as a criterion for the granting of HTS status to institutions. However in view of the arguments presented to me and in the light of the evidence which has been provided, further consideration is required. Albeit it is necessary to acknowledge that much of what the claimant had originally sought to argue has been authoritatively considered by both the Supreme Court and the Court of Appeal.
  38. The 20% refusal rate threshold has been considered to provide a lawful criterion for the granting of HTS status to colleges, as being both rational and fair, for the reasons set out in those earlier cases. Moreover it is clear that the factual context in which this view was reached by the Court of Appeal in the Western Governors Graduate School case was one that took into account the type of material to be found in the "Immigration: The Points Based System – Student Route" carried out by the National Audit Office, if not indeed the report itself, (a matter which was conceded by the claimant in the course of the adjourned hearing). Furthermore it is apparent that the institution involved in the Western Governors Graduate School case was one whose main source of students was India, and thus the potential significance of that evidence affected the majority of its students. Whereas in the present case, although I note that the claimant recruits students from, inter alia, Nepal whose applications are dealt with by the New Delhi entry clearance centre, there is no evidence before me as to the number of its students who come from India.
  39. Although it does not appear that either of the reports, "An inspection of Tier 4 of the Points Based System (Students)" or "An inspection of entry clearance in Abu Dhabi and Islamabad", was considered in the Western Governors Graduate School case, in my judgement this does not materially advance the claimant's position.
  40. In relation to the statistical evidence contained in the first of these two reports, not only is it almost inevitable, where there is a large number of entry clearance centres, that there will be a range of refusal rates, from which the average rate of 15.3% has been extracted, but I agree that this is likely to have been a readily anticipated product of the very problem that the Court of Appeal took into account, namely the provision of false documentation both by the applicants and their banks in India.
  41. As has been recognised the rationale behind the selection of the 20% refusal rate criterion is to seek to ensure that HTS status is only granted to those colleges who undertake their recruitment responsibilities faithfully and to a sufficiently high standard. I accept the submission made by the defendant that in order to fulfil that responsibility it is reasonable to expect colleges to modify the level of vigilance which is required to the situation current in the areas from which they recruit their students. Such that in those areas where there has been evidence of particularly high numbers of false applications, like those whose applications have been dealt with by the New Delhi entry clearance centre, it is reasonable to expect institutions recruiting from those areas to take particular care in vetting applicants before granting them CASs. In these circumstances if such colleges exceed the 20% refusal rate threshold, then it is a reasonable inference that they have failed to fulfil their responsibilities and thus are unworthy of being granted HTS status by the defendant.
  42. This is not to expect the institution to apply different evidential criteria to students who originate from those areas. A matter which could potentially provide grounds for a claim that an unlawful selection procedure had been used. But the defendant could reasonably expect that a suitably careful approach would be taken to applications from these areas, in order to seek to ensure that only genuine students were being granted CASs and that the institutions were thereby fulfilling their obligations to the defendant as potential HTSs.
  43. The fact that there are inconsistencies in decision making between the various centres, as is disclosed in the second of these two reports, is again in my judgement almost inevitable. If the degree of inconsistency was such that it destabilised reasonable reliance upon the decision making system being operated by the defendant, then that may found a ground for reconsidering the lawfulness of the 20% refusal rate threshold criterion or its application in a particular case. However, in my judgement when looked at in the context in which this report was written and its express limitations, it does not have this effect. In this regard it is apparent that this report is mainly based upon evidence gained as a result of an inspection at the Abu Dhabi centre. Furthermore the report makes it clear that a significant number of initial refusals were granted on appeal, which would not count towards the calculation of the refusal rate in the year in which they were allowed for the purposes of the 20% threshold. Moreover some of the matters which were raised were ones which, whilst highlighting possible improvements, did not necessarily undermine the integrity of the system which was in operation at that centre.
  44. In any event, the only evidence which is available as to the extent to which the situation in Abu Dhabi would have affected the claimant is the evidence from Dr Brenden Tempest-West that, "…the college recruits some of its students from Pakistan…." I envisage that if, as in the Western Governors Graduate School case, a significant number of its students came from a particular country, in this case Pakistan, this would have been placed in evidence in this case. Furthermore, it is of particular relevance that the origin of the evidence in the first report was the period between 2007 and 2009. In contrast to the period with which this case concerns, namely the period between 1.10.10 and 1.10 11. In these circumstances I do not consider that the relevance of this evidence to this latter period has been sufficiently established by the claimant.
  45. It would appear that there have been 193 countries from which student applicants under the Tier 4 (General) points based system have originated, and that these applications have been dealt with by 356 different centres. Moreover during the relevant period there were 460, 431 applicants who had applied to study at about 2100 institutions. In these circumstances it would in my judgement be impracticable to operate a system for the granting or continuing of HTS status to colleges in which the defendant was obliged to consider the individual merits of the college's grant of a CAS where the applicant had subsequently been refused entry to the UK under the Tier 4 (General) points based system criteria. Instead the defendant has devised a system which seeks to differentiate between those colleges who have been sufficiently careful and vigilant in the operation of their own recruitment process and thus have provided evidence that they are deserving of being granted HTS status by the defendant and those who have failed to do so.
  46. As has been recognised in the earlier cases there will be situations where, despite a sufficiently robust recruitment procedure operated by an institution, there may be some applicants whose lack of bona fides may not have been able to be detected or there has been an unforeseeable change of circumstances; hence the need for the margin of error. However over and above this the defendant has a discretion to reconsider and indeed grant HTS status to colleges whose refusal rate exceeds the 20% threshold. This is criticised by the claimant as being fettered in that it is used only in exceptional and/or compelling circumstances, and by implication it is one that should be used in this case to grant HTS status to the claimant. However, as the defendant has pointed out, even if one discounted those from Nepal, which were dealt with by the centre at New Delhi, there is no justifiable reason for the defendant to ignore those refusals which have been highlighted by the claimant where the applicants originated from countries such as Armenia, Mongolia and China etc. Furthermore as has already been observed the defendant was entitled to consider that the claimant would tailor the care with which it carried out its recruitment responsibilities to the circumstances which pertained in the areas from which it sought to recruit its students. Such that the defendant was entitled to consider that the claimant's failure to achieve a refusal rate which did not exceed the 20% threshold, reflected a failure on the part of the claimant to maintain sufficiently careful recruitment procedure and one which was not deserving of HTS status being awarded to it. On this basis the defendant cannot in my judgement be criticised either for her refusal not to apply the 20% threshold in this case or to treat the claimant's case as one in which she should exercise her discretion to grant HTS status not withstanding the claimant's having exceeded the threshold criterion.
  47. In these circumstances I consider that despite the further evidence provided by the claimant in this case, the maintenance of the 20% refusal rate threshold as a criterion for the granting of HTS status to institutions under the Tier 4 (General) points based system, is both rational and reasonable. Furthermore the evidence is insufficient to conclude that it was not operated appropriately by the defendant in this case or that the claimant's particular circumstances are such that, having exceeded the 20% refusal rate threshold, the defendant should nonetheless have exercised her discretion to grant HTS status to the claimant. In my judgement the defendant has acted lawfully when she refused to grant HTS status to the claimant in this case and accordingly I refuse the application for judicial review.


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