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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Manchester Trinity College Ltd, R (On the Application Of) v Secretary of State for the Home Department [2014] EWHC 4673 (Admin) (02 May 2014) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2014/4673.html Cite as: [2014] EWHC 4673 (Admin)

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

		Manchester Civil and Family Justice Centre 1 Bridge Street West Manchester Greater Manchester M60 9DJ
		2nd May 2014

1. HIS HONOUR JUDGE PLATTS: This is an application for judicial review of the decision taken by the defendant on 19th November 2013, to revoke the claimant's Tier 4 sponsor licence. Permission was granted by Mr Vincent Fraser QC on 31st January 2014, and interim relief has been granted to the claimant by orders of His Honour Judge Gore QC on 3rd December 2013 which were continued on 31st January 2014.
2. The claimant is a limited company which was formed in 2004 to provide education principally to overseas students. In January 2009 it was granted a Tier 4 sponsor licence which it held until the decision which is the subject of this review.
3. The background to the decision to revoke is as follows. On 6th November 2012 Mr Hyda purchased the whole of the share holding in the claimant company and became its sole director. His evidence is that he was told by one of the outgoing directors Mr Mirza, that he, that is Mirza, had informed the defendant of the transfer of shareholding using the sponsorship management system, ("SMS"), that is a computerised reporting system operated by the defendant. The defendant denies having received such notification (this is an issue which I will have to address in due course). However there is no dispute until this decision the claimant company continued operating under the ownership of Mr Hyda.
4. On 12th November 2012 the claimant company submitted a request under SMS for a Miss Ayse Ahmed to be named as the authorising officer, the key contact and the new level 1 user. These requests were accepted by the defendant on 22nd and 23rd November 2012.
5. Subsequently on 4th December 2012 there was a full compliance visit at the claimant's premises by officers of the defendant. The claimant claims that the defendant's officers were given full access to all of the claimant's files and indeed were shown a staff list which should Mr Hyda as a "director/owner". There is no evidence before me from the defendant touching upon this visit.
6. On 26th December the claimant made an application for renewal of its Tier 4 licence. This was granted by the defendant on 14th February 2013 and in the meantime the claimant had been granted highly trusted status on 28th January 2013.
7. Between 5th and 7th March 2013 the claimant college underwent an oversight inspection carried out by the independent schools inspectorate. The report on the college's performance is generally satisfactory. Paragraph 1.2 of that report, following the inspection reads:

"The current proprietor acquired the college in November 2012, this time he and the existing principle were joined by a group of senior managers new to the college. The extent of these changes has extended in a fuller inspection of the college."

8. It is accepted that a copy of that report was sent by the independence schools inspectorate to the defendant on 21st March 2013.
9. In May 2013 Mr Hyda was replaced as the key contact and authorising officer, again, using the SMS system. On 29th August 2013 the claimant was granted its requested Tier 4 CAS (Confirmation of Acceptance for Studies Allocation) of 210.
10. It was then on 19th November, without prior warning from the defendant that the Decision Letter to revoke was sent to the claimant company. No opportunity to make representations were given to the claimant either before or after the letter was sent. The letter is addressed to Mr Hyda and is headed "Removal from the register of licenced sponsors - Manchester Trinity College Ltd". It continues:

"I'm writing to inform you that the above sponsor licence as been revoked for the following mandatory reason. We have recently obtained a copy of your educational oversight inspection report which was undertaken between the 5th and 7th March 2013 by the independent schools inspectorate which states the following."

Then there is the quoted the paragraph concerning ownership which I have set out. Paragraph 2:

"After further investigation both Companies House and Company Check have revealed you were appointed as the director in November 2012, after all previous directors resigned which concedes with the above statement.

You have also required 100% of the college's shares confirming that you have taken over the college and all of its shares as a going concerned."

Paragraph 641 of the Tier 4 sponsor's guidance is then quoted. The letter continues:

"Our records show that the previous owners of the college have failed to notify us of this significant change to the business within 28 days. Instead you have been recently appointed as the authorising officer, key contact and level 1 user allowing you to be fully responsible for licence. As the sponsor licence is not transferable this is a breach of paragraph 643 and 644 of the Tier 4 sponsor guidance which state..."

Those are then set out and again I will refer to them in due course in this judgment. Then the relevant part of the letter concludes:

"As 100% of the shares have been transferred and no licence application has been submitted the sponsor licence is revoked with immediate effect. There is no right of appeal against this decision."

11. It seems clear then the basis for the defendant's decision was, first, that there had been a transfer of the shareholding to Mr Hyda in November 2012; second, that the defendant had not been notified of that transfer; third, that the claimant had not applied for a new licence as it was required to do; and, fourth, in the circumstances revocation was mandatory. The claim for judicial review and interim relief against that background was speedily issued on 26th November 2013.
12. I now turn to the legal background for the application which is uncontroversial. The Tier 4 sponsor system is part of the points based system introduced in 2009 to facilitate the control of immigration, particularly, with reference to non EEA students who wish to study in the United Kingdom. Under the system Tier 4 students who require leave to enter or remain in the UK must be sponsored by an institution which holds a Tier 4 student sponsor licence. These licences are granted by the defendant to education providers. Only those institution that are approved by the defendant as a sponsor may issue a confirmation of acceptance for studies which is a document which effectively allows a student to enter the UK for the purpose of studying. Consequently it can be seen the holding of a licence can be a benefit to the holder and the decision to grant, refuse, suspend or revoke the licence can have serious consequences for the not only for the institution concerned but also for its staff and its students.
13. The scheme has been the subject of consideration recently by the Supreme Court in R (on the application New London College Ltd v Secretary of State for the Home Department [2012] UKSC 51. Lord Sumption gave the speech of the court, said this at paragraph 1:

"The status of a licensed sponsor is central to the operation of the points-based system for international students. It is also of great economic importance to the institutions which possess it. It enables them to market themselves to international students on the basis that their acceptance of a student will in the ordinary course enable them to enter the United Kingdom for the duration of their studies. For institutions with a high proportion of non-EEA students, the status of licensed sponsor may be essential to enable them to operate as functioning businesses."

14. The defendant has from time to time issued policy guidance in relation to the granting and holding of such licences. As Lord Sumption said at paragraph 15 of his speech, this policy guidance has been amended with "bewildering frequency". The result of these amendments in so far as it relates to his case is that there was a different guidance applicable at the time Mr Hyda acquired the shares in the company from that applicable when the Secretary of State made her decision. As of 6th November 2011, when the shares were bought, the guidance in force was that effective from 9th July 2012. When the Secretary of State made her decision the relevant guidance was that effective from 1st October 2013. There are material differences in the two documents.
15. It is clear from the terms of the Decision Letter and indeed it is not disputed by the defendant that the decision was based upon the policy guidance effective as at the date of the decision, that is the October 2013 guidance. Paragraph 641, 643 and 644 are specifically quoted. It is also clear that the defendant considered the guidance provided for mandatory revocation in the circumstances.
16. So it is against that background that I have to consider the contents of the relevant policy guidance issued by the defendant from time to time and the way she has applied those guidances to the claimant's situation. In doing so I bear in mind and am assisted by the comments of Lord Sumption in the same case, at paragraph 29 when he said this:

"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."

17. The claimant raises five essential challenges to the decision which has been made. The first question is whether the defendant was entitled to rely upon the October 2013 guidance given that the events complained of took place in November 2012. Second, was there any duty in any event on the claimant or any other person to inform the defendant of the transfer of shares, and if so, was the defendant properly informed of the transfer? Third, whether in any event the defendant acted unfairly when revoking the licence, in particular (a) because she applied the wrong guidance and (b) by not giving any warning to the claimant of her intention to revoke or the opportunity to make representations. Fourth, whether in any event the decision to revoke the licence was unreasonable. Finally it is argued that the decision to revoke constituted a violation of various rights under the European Convention of Human Rights.
18. I deal with the first challenge first namely that it was unlawful for the defendant to place reliance upon the October 2013 guidelines. By applying the later guidance it is argued that the defendant was imposing obligations on the claimant and imposing penalties on the claimant which were not current at the time of the matters of complaint and therefore which the claimant could not have been aware at the time.
19. The relevant part of the October 2013 guidance is in paragraph 640 et seq under the heading "Takeovers, mergers and de-mergers". The equivalent in the July 2012 guidance is paragraph 603 et seq. The October 2013 guidance repeats the equivalent in the July 2012 guidance, but with important additions. In particular, in paragraph 641 the words "your sponsor licence is not transferable" are added. They did not appear in the July 2012 guidance. Further in the same paragraph the words in brackets "this includes whether or not controlling number of shares in your business or organisation are transferred to a new owner", did not appear in the July 2012 guidance. Further both paragraph 642 and 644 of the October 2013 guidance are new and did not form part of the July 2012 guidance.
20. For the sake of completeness, I now set out the relevant parts of the guidance relied upon by the Secretary of State, that is at paragraph 640 to 644. They read as follows:

"This section explains what you must do if you take over and existing organisation (b) as an existing sponsor you are taken over full or in part by another organisation and some of your students transfer to that organisation and (c) as an existing sponsor you carry a de-merger and some students transfer to a new organisation.

641. Your sponsor licence is not transferable. What happens to your sponsor licence will depend on whether you are (a) being taken over by completely by another organisation (this includes where the controlling number of shares in your business or organisation are transferred to a new owner) (b) taken over in part by another organiser (c) splitting out to form additional new organisations.

642. It is your duty to report a merger takeover or de-merger or change of ownership and if you fail to do so we will take action against you. Any action we take could also lead to students involved having their leave curtailed.

643 You must report a takeover or merger within 28 days by using SMS. If you do not we will take action against you. This may lead to us cancelling the permission to stay of any students involved.

644. If there is a change in ownership in your organisation or business, for example if it sold as a going concern or a share sale results in a majority number of shares being transferred a new owner, your sponsor licence will be revoked. The new owners of the business must then apply for a new sponsor licence unless they already have one. If they wish to continue teaching any migrants that you were sponsoring before the change of ownership."

21. I do not need to quote any further from that part of the guidance. There is no dispute if the October 2013 guidance applied, first the claimant would have been under a duty to notify the defendant of the transfer of ownership. Secondly on the transfer of ownership the Secretary of State would be entitled to revoke the licence and thirdly, that the new owner was obliged to apply for a new licence.
22. The claimant in this case does not argue that the defendant could not consider or take into account the October 2013 guidance. However, it is argued that in the circumstances of this case, she should also have regard to the guidance available at the time, which is all that the claim was available to the claimant at the time he purchased the shares. It is argued that under the guidance existing at the time of the transfer of shares there was no express duty to notify the defendant, there was no automatic revocation of licence, as now provided for in paragraph 644 and no requirement for an application for a new licence to be made. In the circumstances what the defendant is seeking to do, is to penalise past conduct by reference to current guidelines that was not available at the time.
23. The defendant argues that she was entitled, if not bound to rely on the guidance effective at the time of her decision. Reliance is placed on the first instance decision of Wyn Williams J in the New College London Case [2011] EWHC 856, when on the facts of that case at paragraph 76 he said:

"It is difficult to argue that maintaining the suspension was unlawful once the guidance in relation to suspending the licence had changed as it did on the 3rd March 2010 so as to relax the test to be applied for suspension."

24. However, it seems to me that the facts in that case were very different to the facts in this case. In that case there were continuing breaches of the relevant guideline, and further investigations were being made by the defendant. Further information became available on 25th March 2010, which in the view of the court "provided cogent reasons which justified the suspension". In the event it was held by the learned judge that the suspension of the licence became unlawful as from 26th March at the latest, so therefore ultimately the learned judge did not rely upon the new guidance as being the date upon which the suspension became lawful.
25. This case in my judgment is very different. The only criticism of the claimant relates to transfer of ownership. The transfer is a single event that took place and was completed in November 2012. If there was a duty to notify a defendant it had to be done within 28 days of that transfer. It seems to me only fair and just, that the obligations of the claimant in those circumstances should be judged by the guidance in force at the time. Further, it is only fair and just any action to be taken by the defendant consequent upon that transfer of ownership should also be dealt with applying the guidance that was available and in force at the time. This is particularly the case when the Secretary of State is seeking to impose a sanction for noncompliance. As a matter of principle it seems to me it cannot be right that a party can be penalised for failing to comply with an obligation, when it was not aware of the existence of that obligation or the likely sanction to be imposed.
26. I therefore conclude that in my judgment the defendant was wrong to rely on the October 2013 guidance on the facts of this case and in doing so she effectively applied that guidance retrospectively.
27. However the matter does not end there because the defendant goes on to argue that even had she applied the July 2012 guidance, which she did not, the obligations and the results would have been the same. I therefore move to consider this point, which effectively brings me also to the second challenge raised by the claimant.
28. The claimant's case is that under the July 2012 guidance in any event there was no duty to inform the Secretary of State of the transfer of the shareholding to Mr Hyda, or to apply for a new licence. So the claimant argues in so far as a defendant relies upon the July 2012 guidance, she has in any event acted unlawfully.
29. The defendant argues that the obligations in October 2013 guidance were no different from those contained in the July 2012 guidance and the latter one merely clarifying existing obligations. Therefore, it is submitted the claimant was obliged even in November 2012 to notify the Secretary of State of the transfer of shares to apply for a new licence and that in the absence of such notification or application she was entitled to revoke the licence in the way that she did.
30. This argument of course involves consideration of the terms of the July 2012 guidance. The starting point, it seems me, must be paragraph 524 of that guidance which under the heading "significant change in circumstances" reads as follows:

"You must tell us within 28 calender days if there are any significant changes in your circumstances for example (a) if you cease trading or become insolvent (b) substantial changes to the nature of your business or (c) [and this is the relevant part here] you are involved in a merger or you are taken over."

It seems to me this paragraph of itself when read alone would create a duty on the sponsor to notify the defendant by SMS if a sponsor was involved in a merger or taken over.

31. In this paragraph, as in many paragraphs of the guidance the obligation is placed on "you". The reference to "you" as explained in paragraph 6 of the guidance, a provision to which I will come in more detail later but on the face "you" represents the sponsor organisation or prospective sponsor organisation in this case the claimant.
32. That is the starting point. The parties agree that this provision cannot be read in isolation as a standalone provision. But they disagree as to the provisions with which it must be read. The claimant argues that it must be read with the provisions of paragraph 603 and the following provisions, which deals specifically with takeovers, mergers and de-mergers. The defendant argues that it must be read alongside paragraph 611 and the following provisions which deal also with complete takeovers and mergers.
33. Whatever is the case, and I will come to that in due course, in my judgment the phrase "take over" used in paragraph 524 must include the purchase of the majority shareholding in a limited company, whether by an individual company or other organisation. It seems to me the reason for that duty is clear, is clearly in the public interest when part of the system of immigration control is entrusted to private organisations or individuals that the same should know the owners of the organisation so as to be able to assess whether they are suitable.
34. I turn first to the arguments in relation to paragraph 603, which the claimant says 524 should be read in conjunction with. I set them out again in full for convenience:

"603 This section explains what you must do (a) if you take over an existing sponsor organisation (b) as an existing sponsor taken over in full or in part by another organisation and some of your students transfer to that organisation and (c) as an existing sponsor you carry a de-merger and some students transfer to a new organisation.

604. What happens to your sponsor licence will depend on whether you are (a) being taken completely by another organisation (b) being taken over in part by another organisation or (c) splitting the out form a different or new organisations.

605. You must report a takeover or merger within 28 days by using SMS. If you do not, we will take action against you. This may lead to us cancelling the permission to stay of any students involved.

606. Your level 1 user must be report it. If they are no longer available because you have been completely taken over or merged into another organisation we will accept the report from the authorising officer of the new sponsor organisation. Once you have reported the change we will ask for an check documents to support the change you are reporting and they may not always be documents we have listed in this guidance. We may contact your authorising officer for confirmation of takeover or merger at the later date if we fear it is necessary to do so.

607. On the 1st October 2011 we introduced specific features to the SMS to enable you to amend your organisation details including notifying us of takeovers and mergers."

35. It is of note that in those paragraphs there is no reference at all to revocation of the licence being a possible sanction for a noncompliance. So the issue as to whether the claimant was in breach of the July 2012 guidance, is really whether the obligation to report under that guidance applied to the circumstance where an individual as opposed to an organisation buys a controlling shareholding in the company that already has a sponsor licence.
36. The claimant's case is first that there was no obligation on Mr Hyda to report because the obligation is posed on "you", as I have said the word "you" is defined specifically in paragraph 6 of the guidance. That reads as follows:

"When we refer to 'we' or 'us' in this guidance we mean the UK Border Agency. When we refer to 'you' or 'your' this means the sponsor or prospective organisation. When we refer to 'a relevant person', we mean any owner Director, authorising officer, key contact level 1 user or anyone involved in your day-to-day running."

Therefore if there is any obligation at all, the obligation must be on the claimant company being the sponsor organisation and not on the individual. However, the claimant goes further and says in any event there was no obligation to report under these provisions because it was not being taken over by "another organisation" rather it was taken over by an individual Mr Hyda. The duties under these paragraphs expressly only relate to takeovers and mergers between organisations. Therefore do not apply to changes in shareholdings of individuals. It is argued the requirement to report a change in the identity of the majority shareholder was only introduced in October 2013 as a new feature and did not apply at the time of this transfer.

37. The defendant argues that the October 2013 guidance merely clarified but did not change the policy of the July 2012 guidance. It is argued there is no definition of "sponsor" in the guidance and the concept of sponsor in paragraph 6 and generally through the guidance is intended to be broad and to include "relevant persons" which are also defined in paragraph 6.
38. It is argued that in effect those defined as "relevant persons", are effectively a subgroup of sponsors. It is further argued that it was always intended that takeover provisions in guidance should apply to circumstances where a majority shareholding was transferred. The policy guidance therefore should be read as a whole and the clear intention was the Secretary of State should have knowledge of and be able to assess the suitability of the persons behind any sponsor perspective sponsor. There are provisions in the guidance for the suitability of an owner to be assessed particularly see for example paragraphs 86 and 87 and 93, to which I need not refer in detail. But it is pointed the clear intention is that the identity of the owner of an organisation should be notified to the Secretary of State.
39. Reliance is also placed upon the policy of the guidance as set out in paragraph 20A that "those who benefit most directly from migration" should "help prevent the system being abused". It is said that this clearly includes persons such as owners or majority shareholders in a sponsor company. This issue was recently considered by Her Honour Judge Coe QC sitting in this court, in R (on the application of Grenville College London and Birmingham College of Law and Management v Secretary of State [2014] EWCA 1865 (Admin). In that case the defendant sought to rely upon the paragraph 615B of the July 2013 guidance which provided for the mandatory revocation of its licence if "you stop trading or operating for any reason including if you sell your business". This provision was in fact repeated in the October 2013 guidance at paragraph 601 but did not appear in the July 2012 guidance. Interestingly the defendant did not seek to rely retrospectively of this provision in support of revocation in this case. However when considering the arguments which were advanced in that case Her Honour Judge Coe QC said this at paragraphs 87 to 89:

"86. The Defendant's letters to Birmingham dated 23rd May 2013 (BB p.81) and 1st July 2013 (BB p.83) do contain references to the provision (although referred to as paragraph 613 and 614). However, they also refer to the provisions of paragraphs 647, 662 and 668 about which I have heard no argument. By reference to those provisions (and others referred to by the Defendant) it appears arguable that the Defendant could have required the Claimant to apply for a new licence and there cannot be any certainty in the circumstances that the application would have been successful. The Defendant was not limited to consideration of the position under paragraph 615(b). She did not refer to that paragraph only and I find that the Claimant cannot rely on any misconstruction of that provision in isolation. Further the Defendant does have a residual discretion in any event outside of the guidance to respond to a sponsor's failure to comply with its duties. I agree therefore with the Defendant's submission that the same decisions could and probably would have been taken anyway.

87. I do agree that the wording of paragraph 615(b) in the version of the guidance in force at the time is unclear. Much of the wording in the guidance is poor. I agree it has been made much clearer in the later versions so that there cannot now be any doubt about the fact that sponsors in the position that these Claimants were are required to apply for a new licence. I am also sure that that was always the Defendant's policy and intention. I do not find that the new wording (see SB p.28 at paragraphs 607 (p.117) and 644 (p.124)) introduced new policy.

88. Although I agree therefore that the Claimants' argument about the use of language and the natural meaning of the words has considerable force I have concluded that the words must be construed in the context of the guidance as a whole and the purpose of the Tier 4 points-based scheme as a whole. To apply the construction relied on by the Claimants would produce a potentially absurd outcome whereby the sponsor business could in reality be sold by way of transfer of all its shares between private individuals but its licence would continue without the Defendant having any power to revoke it.

89. It seems to me therefore that 'you' must be construed as including 'any relevant person'. This appears to be the case in other provisions in the guidance. My view is reinforced by consideration of the first part of the provision (paragraph 615(a)) which provides for the immediate revocation of a licence if 'we find … you gave false information on your …application'. An education provider cannot complete an application form. Secondly, the sale of a business in this provision must be interpreted as including the sale of all the shares in a business."

40. It is rightly pointed out that I am not bound by that decision but of course deserves the greatest of respect. As can be seen in general terms I am in agreement with Her Honour Judge Coe that the guidance on its proper construction and in this case in paragraph 524 requires notification of a change of a shareholding, which is not the reason relied upon by Her Honour Judge Coe. However, with the greatest respect to her I am not convinced as she was in paragraph 89 of her judgment, that the argument that "you" includes relevant persons is well founded. I accept that the word "you" is used in guidance in circumstances where actions have to be performed by an individual including perhaps a relevant person. But in my judgment that does not mean the word "you" intended to go beyond the sponsor or prospective sponsor organisation. The reality is that a sponsor organisation performs it obligations by service or agents acting on its behalf. The responsibility is on the sponsor organisation not on the individual who carries out the particular task. Unless that is expressly provided for in the guidance, for example, provisions relating to obligations of key contact or authorised officers.
41. Further it seems to me it is quite clear looking at the guidance as a whole a distinction is made between the sponsor organisation on the one hand and relevant person on the other hand throughout. Again, I refer by way of example to paragraphs 86 and 87 and paragraph 93 of the July 2012 guidance. It seems to me to say the one includes the other or relevant persons are a sub group of sponsors does not sit happily with the ordinary natural meaning of the words of the guidance or the way they are used in the guidance.
42. I also have to say that in any event, it seems to me the real difficulty with relying on paragraph 6145B on the facts of this case is that the company has never stopped trading or operating so it is difficult to see how it would apply to these circumstances.
43. Whilst it is true there is no strict definition of "sponsor" in the guidance it does seem to me clear from the wording used that "sponsor" is intended to be the education provider to whom the licence is or might be granted. This it seems to me appears to be clear by paragraph 18 and 19 of the guidance. Paragraph 18 provides:

"Before someone can apply to come or stay in the UK to study under Tier 4 of the points based system they must have a sponsor. The sponsor is an education provider that offers courses of study within the UK and has a licence to sponsor migrants so they can take those courses.

19. A Tier 4 sponsor is an education provider that offers courses of study to full-time students. This education provider will be usually been airing nights - see paragraph 6."

Whilst there is nothing to suggest that an individual cannot be a sponsor, the overwhelming thrust of the guidance is that it expects the sponsor to be an organisation which, as part of that organisation has "relevant persons" who are individuals. The distinction between the sponsor and the relevant persons could not, in my judgment, be clearer than is set out in paragraph 6. Whilst it cannot be denied that owners and shareholders of a sponsor do stand to benefit, they do so through their companies. In my judgment, that is not a reason to impose duties beyond the sponsor on to the owner or other relevant persons unless the guidance specifically provides for it.

44. Having considered the competing arguments I prefer the claimant's argument that paragraph 603 onwards relate only to organisational changeovers. The words used in the guidance have to be given their ordinary and natural meaning. Indeed as the defendant points out the guidance was written for non lawyers. That is in my judgment all the more reasons for the wording to be taken at face value and given its ordinary natural meaning rather than to have to be the subject of speculative interpretation.
45. In this case the claimant company was not taken over by another organisation. In those circumstances I cannot see that there was duty to report the takeover under paragraph 605.
46. The defendant's argument is that paragraph 524 should be a read in conjunction with paragraph 611 and 612. Those paragraphs provide duties upon the old sponsor and then the new sponsor in the event of complete takeover and merger. Paragraph 611 provides:

"If you are being completely taken over or merged into another organisation and your sponsor migrants are transferring to a new organisation you must report the following."

Then obligations are set out. Paragraph 612, provides:

"If you have completely taken over or merged with another sponsor and their sponsor migrants are transferring to you you must do one of two things..."

The obligations are again set out.

47. In my judgment, these provisions clearly have no application to the facts of this case. Both only apply where 611, "your sponsored migrants are transferring to a new organisation" and under 612 and "sponsor migrants are transferring to you". In the facts of this case there was no transfer of students. The sponsor was and remained throughout the claimant company. The licence was issued to it; it was not issued to its owners or any individuals that form part of the company. Indeed, the licence was renewed for the company in 2013 after the transfer of ownership. In this case there was no transfer of students in fact and none was necessary. Therefore these provisions have no application. Similarly and for the same reasons paragraph 613 to 622 of the guidance cannot assist the defendant.
48. I accept the general point that there is no good reason why takeovers by individuals are not included in these provisions and very good reasons why they should be. But that does not in my judgment justify the interpretation contended for by the defendant. As Mr Gill QC submitted if there is a lacuna in the guidance then it is the defendant's problem. It the defendant's document setting out her guidance on how she grants and administers licences. It for her to therefore make out what those guidelines are. Given that individuals and organisations are expected to comply with it to achieve and maintain sponsor status it cannot be right they should read into guidance something that is not expressly stated or speculate as to what the Secretary of State's requirements are. In my judgment, the alteration of the guidance of 2013 was much more than clarification, it was an attempt to fill the lacuna in previous guidance.
49. In the circumstances, I am satisfied that neither paragraph 603 and onwards or 611 onwards have any application to this case. So, as I read the July 2012 guidance contrary to the submissions of both parties I am satisfied there was a duty imposed on the claimant by paragraph 524 to notify the defendant in the event of any takeover. As I said the phrase "takeover" must include the purchase of majority shareholding. That duty arose by virtue of paragraph 524 and was a duty imposed on the claimant company.
50. The next issue I have to decide then whether the transfer was reported in accordance with the guidance, and if not what sanction could the Secretary of State legitimately impose. The claimant's case is that transfer was reported. However the height of the evidence in that respect and in support of that proposition, is that Mr Hyda was told by Mr Mirza that it had been reported using the SMS system as the relevant guidance required. The defendant has no record of such a report having been received on its system and the evidence of Miss Cram is had it been so reported it would have been acted upon and investigated.
51. Despite the numerous question marks which Mr Hyda raises over the accuracy of the defendant's records, I am unable to conclude that notification of the transfer was given to defendant by the SMS. The best that the claimant can say is that Mr Hyda believed that notification had been given because he had been told so by Mr Mirza.
52. The claimant points out there were several opportunities after the transfer for the defendant to have become aware of it. First the unannounced inspection in December 2012 when the defendant prospectors had access to all the books and shown the statute sheet. Second when the applications for highly trusted status and renewal Tier 4 licence was made. It is pointed out that the defendant's case worker checklist on such renewals require such things as insolvency checks and company checks which if done properly would reveal the change in ownership. Third, the independent schools report specifically drew the defendant's intention to the fact of the transfer and there is no evidence before me as to why that was not acted upon for some 9 months after it was published and only after the guidance had changed.
53. Whilst I accept all of this is good evidence that the claimant and Mr Hyda in particular were never trying to conceal the change in the transfer of ownership, there are in my judgment two difficulties with the claimant's argument that this amounted to proper notification for the purpose of the guidance. First, quite simply the duty to notify, is a duty to notify by using SMS. As I have held there is no good evidence this was done. Second, I accept the defendant's argument that given the duty rests on the claimant to notify a change, that that notification will prompt appropriate enquiries by the defendant it was not then for the defendant to delve deeply into the ownership position each inspection or application to renew. The defendant was entitled to rely principally upon the sponsor fulfilling its obligation to notify.
54. The result of this is that there was a failure, in my judgment, by the claimant to comply with the guidance in that it failed to notify the defendant of the takeover by Mr Hyda by SMS within 28 days of it happening.
55. What was the available sanction for such failure at the time? At paragraph 570 of the guidance, made provision for mandatory and immediate revocation in certain circumstances. It is conceded by the defendant that none of these applied.
56. At paragraph 574D however provided as follows:

"We will consider revoking your licence for the following reasons... (d) if you fail to comply with any of your duties."

The Secretary of State therefore did have a discretion as to whether or not to revoke. She did not exercise that discretion but considered revocation to be mandatory relying as I have held on the wrong guidance. In that sense, and for the reasons I have given I conclude she also acted unlawfully.

57. I turn now to the third ground and that is the question of fairness. The claimant alleges the defendant acted unfairly in failing to give the claimant warning of her intention to revoke or give them an opportunity to respond.
58. This argument is pursued in any event whether revocation was mandatory or discretionary. I have been referred to the well-known authority of R v Secretary of State ex parte Doody [1994] 1 AC 531, in particular the speech of Lord Mustill at page 560, in relation to the duty to act fairly. He said this. He derived the following principles from the authorities:

"1. Where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances.

2. The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type.

3. The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to be taken into account in all its aspects.

4. An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative system within which the decision is taken.

5. Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result; or after it is taken, with a view to procuring its modification; or both.

6. Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer."

I also note at paragraph 30 of the guidance of July 2012, in which specifically states this:

"If we [the Secretary of State] decide to take action against you [the sponsor] we will give you an opportunity to explain your case to us. The penalty section is your responsibility of the sponsor has details of the process we will follow."

That is repeated in the October 2013 paragraph 26, but with one modification. It now states if we decide to take action against you we will usually give you an opportunity to explain your case to us.

59. There is no dispute in this case the defendant did not give the claimant any opportunity to explain its case. The context of this case is that the defendant was effectively seeking to impose a penalty for failure to comply with what she believed to be her guidance. This was a serious if not draconian step which carried with it significant potential detriment to the claimant who had held a Tier 4 sponsor licence for some 3 years. To revoke the licence has an immediate effect on the students, it puts in jeopardy the business and with it the interests of the staff and the owners. By virtue of paragraph 573, that is July 2012 guidance which is replicated in paragraph 621 of the October 2013 guidance, after a licence has been revoked a sponsor cannot re-apply for a licence for 6 months and by virtue of the provisions relating to highly trusted status it seems that such status could not be restored until another 12 months had elapsed from the obtaining of the new licence. These are serious effects on a sponsor.
60. Against that background, it is said that the breach alleged was not a serious one. I accept that submission in the sense that there was no demonstrated effect on the proper and effective control of immigration. Indeed no allegation of any such effect has been advanced by the defendant. Since the claimant had held the Tier 4 licence in 2009, there were and had been no concerns about the college's performance. There were and been no issues about the effectiveness of immigration control during that period either before or after the takeover. There was no evidence of any concerns about the character or suitability of Mr Hyda. Indeed he was accepted as a key contact and authorised officer in May 2013. There had been no attempt to conceal the transfer from the defendant. During the 12 months since the transfer the defendant had seen fit to grant highly trusted status and to renew the Tier 4 licence. It also seems to me if the claimant had been given the opportunity to make representations Mr Hyda's evidence is that he had been led to believe by Mr Mirza there has been due notification of the transfer.
61. In those circumstances, it seems to me that common fairness required at the very least the claimant should have some warning of the defendant's intention to proceed to revocation of this licence and the opportunity to make representations. In my judgment, owing to the specific circumstances of this case which I have outlined this failure amounts to a procedural irregularity which in my judgment itself sufficient for the decision to be set aside.
62. The fourth ground I deal with briefly. Was the decision unreasonable? I deal with it briefly in the light of my previous conclusion. In my judgment it clearly was for the reasons already given. First it was based on the wrong guidance. Second, the Secretary of State felt to exercise the discretion which I find she had. Third, even if the correct guidance had been applied there was in my judgment no clearly demonstrated breach. Fourthly the claimant had not been given a chance to put its case. Had the defendant taken into account all the factors in the case and exercised her discretion it seems to me highly likely she would, could or should have exercised it in the claimant's favour.
63. I turn now to final and fifth ground which was added by way of supplemental ground at the hearing before Mr Frazer in January 2014. In view of my earlier conclusions this ground can be dealt with briefly. First, it is argued that the decision interferes with the Article 8 rights of Mr Hyda himself, the staff and of the students, none of these individuals being parties to the action. There is no doubt the revocation of the licence has the potential to have a serious effect on the staff and students and on Mr Hyda in so far as it affects his business. However in my judgment there is insufficient evidence for me to conclude that effect is sufficient to amount to a breach of those individual's Article 8 rights. There is no evidence before me from any student or from any member of staff relating to the violation of their individual rights. The evidence from Mr Hyda relates only to the effect on the business and not on him personally. In those circumstances I do not accept that the claimant can succeed in challenging the decision on the grounds that it violates the Article 8 rights of those individuals. At best all that can be shown is they were potentially violated.
64. Finally the claimant relies on Article 1 of the first protocol to European Convention otherwise none A1P1. The application of this article to these circumstances was considered by the Court of Appeal in the New London College Case [2012] EWCA Civ 51, in particular, in the judgment of the court at paragraph 79 to 98. The Court of Appeal held that a Tier 4 sponsor licence is not itself a possession with an 1AP1. However, if it can be shown that there was an adverse effect on the goodwill of the company as opposed only to the loss of future income that was capable of amounting the A1P1. In that case Richards LJ said at paragraph 96:

"Whilst there is evidence in this case of the economic disruption caused by the suspension of the college's licence, and liable to be caused by the withdrawal of the licence, the evidence does not deal with the goodwill of the business in the sense identified in Nicholds. Thus there is no concrete evidential basis on which to found a conclusion that the goodwill of the business has been or would be adversely affected by suspension or withdrawal of the licence. Nor, as it seems to me, can such an effect be inferred from the information available to us."

65. I have to say I found myself in a similar position on the evidence in this case. This have been no less than six witness statements filed by Mr Hyda, the last signed only five days before the hearing. It is only in that last one he attempts to deal "goodwill and reputation losses" and even then only in the briefest of terms. There is no attempt in the evidence to show what the value of the business going concern is or how that has been or might be affected by revocation. The evidence in my judgment does not go sufficiently so far to suggest that there is anything other than the potential loss of future income or indeed opportunity to earn such income. So in those circumstances this ground will fail.
66. Mr Gill QC referred me to two decisions of the European Court namely Sporron v Sweden(?) 715175 and Rosenburg v Poland 517 to 8 of 99. As I understood his argument sought to argue that the property rights including an A1P1 went beyond merely the good will identified by the Court of Appeal in the New College case.
67. However, it seems to me I am bound by the decision of the Court of Appeal in New College, when the Court of Appeal held for the purposes of A1P1 the court needs to be satisfied I quote from paragraph 95:

"The suspension or withdrawal of a licence will not amount to interference with the right of peaceful enjoyment with possession with A1P1 unless it has an adverse effect on that good will."

68. So for the reasons I have given it seems to me this claim must succeed on the first four grounds but not on the fifth. Therefore, the decision of the Secretary of State of 19th November 2013 revoking the claimant's Tier 4 sponsor licence should be quashed.
69. MR GILL: My Lord, in those circumstances it must follow that the defendant will have to restore the claimant to the position the claimant was in so far as the register is concerned, the registers are concerned immediately before 9th November.
70. HIS HONOUR JUDGE PLATTS: That must right Mr Mandala?
71. MR MANDALA: My Lord, yes once the decision is revoked, it revokes (several inaudible words).
72. HIS HONOUR JUDGE PLATTS: Yes.
73. MR GILL: Since that will be clearly recorded now in this transcript, it may be we can just perhaps add a sentence into the order itself to that effect that:

(i) the decision of 19th November 2013 be quashed; and.

(ii) that the defendant is required to restore the claimant to the position the claimant was in on the sponsor's register on the defendant's sponsor register as at immediately before 19th November 2013.

74. The only other remaining matter is that we would ask for our costs. That must be costs throughout. There is an order ... there are two previous hearings in this in this matter. On the last occasion as to permission costs were reserved to this hearing. On the first occasion Judge Allan Gore said that we would get I think if I can go to that: "The costs of the application interim relief shall be the costs in the case so the claimant shall only be entitled to 50% of the costs for application interim relief." That was on 4th December 2012.
75. I think the reason why he did that was because on the morning of the hearing, not before, the morning of the hearing the defendant said: well we can achieve sort of a halfway house. We can put you in a suspended state internally and at least that will enable you to continue to operate for the time being.
76. That was what my learned friend was prepared to offer and that is what the judge in effect accepted. One can see that from paragraph 4(b) of the His Honour Judge Gore's order. That enabled us to continue without the judge having to make any greater order. Because I did not succeed in getting a full interim restoration back to the sponsor register. I suppose for that reason the judge ordered only 50%, but the fact is that now the position is, the judge having held the (inaudible) in the sense, in sense that putting it in a suspended state only internally but not on the register but external appearances enabled us to continue, it protected them, because it meant anybody who was a suspended new (inaudible) so it protect them also because the judge achieved halfway house time. The judge imposed that sort of order of 50%. But now it is clearly recognised in the light of this judgment and a full hearing that the decision was an unlawful one. We must be entitled to our costs throughout and even now that order must be revoked.
77. HIS HONOUR JUDGE PLATTS: Can I go behind the court's order?
78. MR GILL: Because it is an interim order and it is your dealing with the matter at the full hearing I would submit you can. This court always has power to revisit its previous interim orders. So far as the costs of the other hearing on the -- one other point, in relation to both the 4th December hearing and in relation to the 31st January hearing there is this point to be made. On 31st January before Mr Fraser QC my learned friend very fairly indicated that the Grenville College case had been granted permission to argue the point about construction of the previous guidance. He therefore accepted, as Mr Fraser QC recorded in his judgment, that permission had to be granted. That grant of permission in the Grenville College case was in September or October by Lang J I believe. We did not know about it but the other side must have done. So I appreciate that news does not always filter - I am not trying to be critical of anybody. People are busy in the Treasury Solicitor's office - the news does not always filter from one person in the Treasury Solicitor's office to another. When we came on 4th December, they should have known that in fact permission has already been granted on this point. We would have got permission on that day, whereas it was only on 31st January my learned friend then said: now we learned that permission has been granted and the full hearing in Grenville College is due to take place in early March.
79. HIS HONOUR JUDGE PLATTS: But there would still have been the issue of interim leave.
80. MR GILL: That is true, that is true. But, I say for those reasons. I am not seeking to criticise, I realise that wires can get crossed in this way. Somebody else in the Treasury Solicitor's was obviously dealing with Grenville College case rather than dealing this one. The defendant is the defendant in both cases and must have known, and for those reasons we say that we are entitled to our costs throughout.
81. MR MANDALIA: I do not take issue with the application for costs in principle. That should be subject to detailed assessment in the usual way. What I do take issue with is of course the power of this court to go behind the order of His Honour Judge Allan Gore QC that was made in December. His Honour Judge Allan Gore QC heard representations as to the appropriate order for costs at that stage. He makes a very clear order in terms as to costs. That is the costs of the application for interim relief shall be costs in the case save that the claimant should be entitled to recover 50% costs of the application of interim relief. That is what he had dealing with it at the time. He had the opportunity to consider the representations made on behalf of the both parties in that respect. It is not an order in my submission that the court should go behind plainly if the claimant was aggrieved with that decision in relation to the specific costs of that hearing then the appropriate course for it to appeal that decision. It did not do so.
82. HIS HONOUR JUDGE PLATTS: I think I am with the defendant on this point. It seems to me that His Honour Judge Gore had a discretion of costs on 4th December. One of the orders he could have made was to reserve costs, to see what the outcome of the case would be. He could have ordered and did in fact that cost be in the case, costs afford, where the ultimate successful party, favour ultimately the successful parity. He clearly wanted to show some concern about the conduct and I do not know why, but some concern about the conduct for the claimant and so limited the claimant's recovery to 50% in relation to that hearing.
83. I do not think it would be right or proper even if I had power to go behind that order on what I have been told. The order for costs will be the defendant pay the defendant's costs subject to detailed assessment on the standard basis if not agreed. Without prejudice to paragraph 5 of the order of the His Honour Judge Gore on 4th December 2013.
84. MR GILL: My Lord, I am grateful it is as my learned friend says just the application for interim relief as it stood at that stage. I think that will be satisfactory.
85. HIS HONOUR JUDGE PLATTS: It is not going to make a huge difference I do not think.
86. MR GILL: I think that probably covers all matters. I am most grateful to you for giving the judgment at such speed.
87. HIS HONOUR JUDGE PLATTS: It was necessary to be done quickly. It helps me as well. Thank very much both for your help.