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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 >> Akturk, R (on the application of) v Secretary of State for the Home Department [2017] EWHC 297 (Admin) (08 February 2017) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2017/297.html Cite as: [2017] EWHC 297 (Admin), [2017] WLR(D) 145, [2017] 4 WLR 62, [2017] 2 CMLR 37

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

		Royal Courts of Justice Strand London WC2A 2LL
		8 February 2017

MR JUSTICE HOLMAN:

The issues

1. The claimant is a Turkish national who was granted leave to remain in the United Kingdom for 6 months as a visitor. While here, he applied to the Secretary of State for the Home Department ("the SSHD") to vary his leave to remain in order to establish himself in business here as a window cleaner, relying upon the 1963 European Community Association Agreement with Turkey ("the ECAA") or, as it is often referred to, the Ankara Agreement. The application was refused in October 2015 by an official on behalf of the SSHD. Until April 2015, the claimant would have had a statutory right of appeal to an immigration tribunal from that refusal, but the right of appeal had been abolished with effect from April 2015. The SSHD substituted for the abolished right of appeal a process of administrative review. The claimant applied for administrative review, but that application was also refused by another official.
2. By his claim to this court for judicial review, the claimant raises the following claims and issues. They are analytically separate and discrete, although there is some overlap between them. Although this is not the order in which they were argued, I propose to deal with them in the following order:

(1) A claim for judicial review of both refusal decisions on the grounds that they are wrong on the facts of the case on conventional judicial review grounds (issue (1));

(2) A claim that the published "guidance" of the Home Office in cases such as this, which the officials applied in reaching their decisions, is unlawful because (i) its effects breach the ECAA, by which the United Kingdom is bound; and/or (ii) it amounts to introducing an immigration rule which has not been laid before Parliament. If that is correct, then it must also afford an additional ground for judicial review of the actual decisions in this case in that the officials avowedly applied the guidance which, on that hypothesis, is unlawful (issue (2));

(3) A claim that the abolition of the statutory right of a judicial appeal and its replacement by administrative review is incompatible with the ECAA. The claimant asserts that an appeal is a less restricted remedy than judicial review; that he had good prospects of success on an appeal; and that he should not have been forced to apply for judicial review (issue (3)).

3. When Green J granted on paper permission to apply for judicial review, he observed:

"The claim raises an issue which is common to a growing number of similar cases. It is sensible for one case (ie the present) to be determined and others to be stayed pending resolution of this case."

4. The observations were not further elaborated, but it has been assumed that the "issue" referred to is issue (3) above with regard to the abolition of the right of judicial appeal, although it may be that issue (2) with regard to the guidance is also common to other similar cases. Issue (1) and the challenge to the actual decisions in this case is essentially fact specific, although buttressed (if necessary) by issue (2) and the guidance point.

The facts in more detail

5. The claimant was born in November 1996. He is a citizen of Turkey and, as I understand it, was brought up there. In 2014 he was granted entry clearance to visit the UK between 31 October 2014 and 30 April 2015 (6 months) on condition of "no work or recourse to public funds". He actually entered the UK on 21 December 2014 when he was aged just 18. He is now aged 20.
6. On 28 April 2015, two days before his existing leave to remain expired, the claimant applied to the Home Office to vary his leave to remain so as to permit him to establish a business as a self-employed window cleaner. His application was expressly made in reliance upon the ECAA and was accompanied by the prescribed form ECAA2 for such applications. The application was supported by various documents, including a "business plan", which described in some detail the proposed business and its proposed viability. Essentially, the applicant proposed, if leave was granted, to work as a self-employed window cleaner in the Blackpool area in which he lives. The target market was both residential and small business premises, such as cafes, restaurants and shops. The target, although not exclusive, customers appear to have been the Turkish community whose language he speaks.
7. The business plan stated that the business would be solely owned and run by the applicant. The plan stated that he does not currently have a driving licence but "commits" to obtaining one by the end of the third year of training, and "aims to purchase a vehicle for our [sic] business." In the meantime, he would use taxis or public transport and some provision for the cost thereof was made in the "financial plan" section of the business plan.
8. By a letter dated 20 August 2015, the SSHD asked for further documents/information, namely:

"• Personal bank account statements in your name from a bank account in the UK (the statements should cover the previous 6 months showing that you have the funds to set up your business).

A letter from your sponsor [viz his father in Turkey] confirming that you do not have to repay the funds they [sic] have given you to establish in self-employed business."

9. The claimant's father had already sent him €4,000 with which to set up the business, and a note from the father was now supplied saying that he would not reclaim it. With regard to a UK bank account, the representatives then acting for the claimant (not his present solicitors) wrote on 1 September 2015:

" ... our client could not open a bank account in the United Kingdom as he had visitor visa. The sponsor transferred the funds by Western Union and our client keeps the money with himself. He keeps these funds with himself and he will open a bank account once he is granted relevant visa and will put in his bank account."

10. Further evidence of the transfer of money (actually £2,785 at the then exchange rate) via Western Union was enclosed.
11. The SSHD did not reply to that letter or ask any further or follow up questions or seek any further information. By a decision letter dated 27 October 2015, the SSHD refused the application and notified the claimant that he could apply for administrative review of the decision "if you think there has been a case working error." The claimant did apply for administrative review in the prescribed form.
12. By a further letter dated 23 November 2015, an official in the "admin review team 1" informed the claimant that his application for administrative review had been unsuccessful and that he should now leave the United Kingdom or he would be liable to be detained and removed. To all intents and purposes, the decision letter on administrative review merely repeated in abbreviated form what the first decision letter had said.

Issue (1) and judicial review of the actual decisions of 27 October and 23 November 2015

(i) The 1973 rules, HC510

13. On this part of the case, it is common ground that the effect of the "standstill" provisions of the ECAA or Ankara Agreement, to which I will refer more fully below, is that the claimant's application fell to be considered by reference to the 1973 "Statement of Immigration Rules for Control after Entry" HC510, and in particular paragraphs 4 and 21. Both decision letters purported to do so. There is no doubt that both paragraphs import a wide discretion in the Secretary of State. Paragraph 4 of HC510 includes the following:

" ... In deciding these matters account is to be taken of all the relevant facts: the fact that the applicant satisfies the formal requirements of these rules for stay, or further stay, in the proposed capacity is not conclusive in his favour ..."

14. Paragraph 21 of HC510 deals specifically with applications by "people admitted as visitors ... for consent to their establishing themselves here for the purpose of setting up in business", which was the capacity of this claimant and the application which he had made. The paragraph continues in part as follows:

"Any such application is to be considered on merits. Permission may depend on a number of factors, including evidence that the applicant will be devoting assets of his own to the business, proportional to his interest in it, that he will be able to bear his share of any liabilities the business may incur, and that his share of its profits will be sufficient to support him ... The applicant's part in the business must not amount to disguised employment, and it must be clear that he will not have to supplement his business activities by employment for which a work permit is required ...."

15. The case of R v Immigration Tribunal, ex parte Joseph [1997] Imm AR 70 concerned the scope and application of paragraphs 4 and 21. Robert Goff J, with whom the other members of the Divisional Court agreed, said:

"These rules, which are intended to provide guidance as to the practice to be followed, are not ... to be construed too rigidly ... the paragraph [21] is not ... specifying prerequisites for the grant of permission. It is specifying factors which must be taken into account, but failure to comply with any one of them will not necessarily be fatal to the application ... after considering all the relevant factors, the case has to be looked at in the round. That is because, as the paragraph provides, any application is to be 'considered on merits' ..."

16. Both Miss Nathalie Lieven QC, on behalf of the claimant, and Miss Deok Joo Rhee, on behalf of the Secretary of State, agreed that the thrust of Joseph has not been altered or qualified by subsequent cases. It was, therefore, the duty of the first decision-maker to consider the particular factors specified in paragraph 21 and all relevant factors, and to look at the case in the round. As a minimum, his decision had to be soundly based on the available evidence, including further evidence that might be requested from the applicant, rational and fair.

(ii) The 2015 guidance

17. The first decision-maker expressly referred to the Home Office "Business applications under the Turkish EC Association Agreement" guidance and purported to apply it. That guidance emanates from at least 2005, and I refer to the version published on 15 October 2015 just before the first decision in the present case. The guidance is published and is publicly available, but is addressed to Home Office staff deciding applications, such as the one in the present case, made under the ECAA to which the rules in force in 1973 apply.
18. Page 46 of the guidance refers to requests for further information and states that:

"You [viz the caseworker] must decide on a case by case basis whether it is appropriate to request further information from the applicant."

19. One such request was made in the present case by the letter of 20 August 2015 referred to above. Other requests could have been made but were not.
20. The guidance makes express reference at page 54 to "Evidence of proficiency in English." It states:

"Fluency in English is not a requirement of the 1973 business provisions but should be taken into account as part of the overall assessment of the evidence provided. In some circumstances common sense will tell you that it may be possible for the applicant to establish business with little or no English. In other circumstances, not being able to speak good English may present severe difficulties ... In cases where the applicant does not provide sufficient evidence of proficiency in English and this is relevant to the application, you must ask the applicant to provide further written evidence of their fluency ... In cases where proficiency in English is particularly relevant, you may consider interviewing the applicant ...."

21. As well as that specific reference on page 54 to interviewing the applicant in relation to proficiency in English, page 47 of the guidance provides more generally that:

"If you are unable to determine whether an application is genuine solely from the documents provided you must consider if it is necessary to interview the applicant in person. For example, you may have concerns about:

....

significant omissions in the documents required

....

....

the credibility of the application is in doubt"

(iii) The decision letter of 27 October 2015

22. Aside from formal parts, the Reasons enclosed with the decision letter extend to about two quite closely typed sides of A4. They begin:

"We have considered your application on behalf of the Secretary of State and your application has been refused. In making the decision to refuse your application, careful consideration has been given to the following:"

23. There follow three sub-headings, namely, "The Secretary of State is not satisfied that you genuinely wish to establish in business as proposed"; "The Secretary of State is not satisfied that you will be bringing into the country money of your own to establish in business"; and "The Secretary of State is not satisfied that you can bear your share of any liabilities that the business may incur." The first of those headings is an obvious one, for no application of this kind should succeed if the application is not based on a genuine wish and proposal. The second and third of the headings closely reflect the first two "factors" specifically mentioned in paragraph 21 of HC510. The Reasons conclude:

"As you have not been able to show that you hold a bank account with sufficient funds to establish in business and meet your everyday living expenses, I am not satisfied that you have any spare capital to meet any liabilities that your business may incur. Consequently, we cannot be satisfied that you have provided evidence of a genuine intention to start in business providing window cleaning services. Therefore, your application has been refused."

24. On behalf of the Secretary of State, Miss Rhee submitted that even if one, or even several, of the reasons or some of the reasoning in a decision letter is defective, the decision should still stand if it includes a good reason, which is itself decisive of the point in issue. For the purposes of this case, I accept the thrust of that submission. For example, on a points-based application, if the decision-maker correctly decides that certain compulsory points are not available, it may make no difference that he incorrectly decides that certain other points are not available.
25. In the present case, however, the decision-maker was required to exercise a broad overall discretion. As stated in Joseph, the factors mentioned in paragraph 21 are not prerequisites to the grant of permission and, after considering them, the case had to be looked at in the round. There is no indication in the decision letter that the decision-maker did in fact look at the case in the round; but that apart, the reasoning of the decision letter and the approach of the decision-maker was, in my view, so defective or unfair on a range of points that the overall conclusion that this was not a genuine or viable application simply cannot stand.
26. For the purposes of my decision, I identify and refer to the following, which, apart from the first point, are in no particular order of priority:

Point (i): Under the first heading as to genuineness the letter concludes:

"You have stated on your entry clearance application form that you wish to visit the United Kingdom to spend your holiday and the length of trip being 14 days. However you have stayed beyond the 14 days which you declared without providing any explanation of why your visit lasted more than 14 days. Furthermore less than two days [underlining in the original] before the expiry of your 6 months visit visa, you have submitted an application for self-employment under the ECAA scheme.

The timing of your application, the fact you declared your visit to the United Kingdom to last 14 days (which it did not) suggest your application is more of an attempt to secure leave rather than reflective of a genuine intention to establish in business. This seriously undermines the credibility of your application and the legitimacy of it."

27. The facts referred to in that passage may support, but do not necessarily support, the conclusion that "this seriously undermines the credibility of your application and the legitimacy of it." To say that the credibility is "seriously undermined" is close to saying that it is not credible. This was a wholly unjustifiable adverse finding to make against the applicant and his application in circumstances in which none of the points taken against him in that passage had been raised with him in correspondence, asking for his comments or explanations, and no attempt had been made to arrange an interview with him. Since the decision-maker was based in Liverpool and the claimant lives in Fleetwood, that would not have been difficult. As quoted above, page 47 of the Secretary of State's own guidance requires that if "the credibility of the application is in doubt", "you must consider if it is necessary to interview the applicant in person."
28. As to making the application within two days of the end of a leave period of a mere 6 months, the example given (non-exhaustively) on page 30 of the guidance where "conduct may suggest the application is an attempt to secure leave rather than a genuine intention to self-establish in business" is that "the applicant has been in the UK for years with no sign that they [sic] had any interest in setting up a business, but when facing enforcement action submits a poor business plan in order to frustrate removal." This applicant had not been in the UK "for years", but for just over four months between 21 December and 28 April, and he was not facing enforcement action. In my view, that unjustified conclusion alone would fatally undermine this decision. However, there are several other defects in it.
29. Point (ii): Under the second of the headings on page 2 of the Reasons, the decision-maker referred to their letter of 20 August 2015 requesting personal bank account statements from a UK bank account, and continued "We didn't receive however, any evidence of the personal bank statements we requested." That is correct, but the reasoning wholly omits the explanation, which had been expressly given in the reply of 1 September 2015, that the applicant could not open a UK bank account as he only had a visitor visa, but that he would do so once he is granted the requested visa when he would transfer the funds with Western Union into the bank account.
30. If the decision-maker did not accept that explanation, he could have explored it further by further correspondence or an interview; but he was not entitled simply to ignore or overlook it. Further, the absence of a bank account features again under the third heading in the Reasons, and is indeed the matter repeated and relied upon in the last paragraph of the decision letter, quoted above, for the closing proposition that "consequently, we cannot be satisfied ... of a genuine intention to start in business ... ".
31. Point (iii): Under the heading as to genuineness at the top of page 2 of the Reasons, the decision-maker wrote:

"You have not provided any qualifications or evidence that you have proficiency in the English language. Without English language skills, we cannot be satisfied your level of English is sufficient to allow you to run the business with a realistic chance of success. Failure to communicate in English will significantly limit your business prospects in the United Kingdom. Therefore it is unclear how you will communicate with customers, suppliers and deal with statutory bodies such as HM Revenue and Customs, or be able to comply with any regulations your business may be required to fulfil."

32. These were wholly unjustified conclusions on the available evidence. There was simply no evidence one way or another as to the applicant's fluency in English. There is simply an assumption that, being Turkish, he lacks sufficient English skills. This completely ignored the passage on page 54 of the guidance, quoted above, that:

"In cases where the applicant does not provide sufficient evidence of proficiency in English and this is relevant to the application, you must [my emphasis] ask the applicant to provide further written evidence of their fluency."

33. This applicant was never asked to provide any evidence as to his fluency. Further, the guidance at page 54 includes that "in cases where proficiency in English is particularly relevant you may consider interviewing the applicant". The decision-maker appeared to consider that "failure to communicate in English will significantly limit your business prospects in the UK", but there is no evidence that he considered interviewing the applicant, which would have been a simple way to form a judgment as to his fluency.
34. Further, the passage states that "it is unclear how you will communicate with customers, suppliers ... or be able to comply with any regulations your business may be required to fulfil." Miss Lieven says that, if he had been asked, the claimant would have been able to explain that he anticipated that most of his customers would be Turkish and Turkish speaking. The claimant had already described in his business plan that he would buy his very simple equipment at local supermarkets and online. There is no evidence as to what regulations a single self-employed window cleaner may have to comply with, but they are unlikely to be complex or incapable of translation into Turkish, if necessary.
35. Point (iv): A passage on the second page of the Reasons under the first heading as to genuineness reads:

"The letter you have provided is a basic list consisting of name, address, contact number and signed by each potential client. With the heading paragraph confirming they will be using your services once you are granted leave to establish your own business in the United Kingdom.

This does not detail what exactly the potential clients will be expecting from your service, for example, how times and days that you would be likely to be working for them or any window cleaning services you are likely to be providing them with.

Without the potential client letters dealing what they are likely to need undertaking and you providing and an in depth accurate quote, this letter of support is insufficient as evidence."

36. The "letter" referred to is a document which the claimant supplied with his application in which apparently eleven different people in relation to eleven different small businesses, such as cafes and shops, stated that they would use the applicant's window cleaning services. Nothing in the rule or the guidance requires such a document to be produced at all. The document does have the limitations described in the decision letter in the passage quoted above, but the conclusion that "this letter of support is insufficient as evidence" implies that there is more detailed evidence that was positively required and was lacking. If, indeed, the decision-maker required more detailed evidence as to "what exactly the potential clients will be expecting" and an "in depth accurate quote", he could have asked for it.
37. Point (v): On the first page of the Reasons under the genuineness heading the decision-maker wrote:

"Further into your business plan, on page 6, you have mention cost effectiveness. But no price list has been provided with the application or included as part of the business plan. It would be difficult to ascertain how profitable or how cost effective your business would be, especially when competing with rival competitors in your area ...."

38. This also was not correct in that on the next page, page 7, of the business plan, the applicant had clearly stated:

"Our pricing policy is simple and cost-effective when total costs of services considered; we will be charging £5.00 per window inclusive of material and equipment."

39. Point (vi): On the first page of the Reasons under the genuineness heading, the decision-maker referred to transport. He was clearly sceptical about the proposed reliance upon taxis or buses. Miss Lieven says that, if he had been asked about this by letter or in interview, the claimant would have explained that most of his anticipated customers are in a small area and he could have moved from site to site mainly on foot; but, in any event, the decision letter continues:

"Also on page 4 of the business plan, it details that you will not be looking until the third year of trading to get your own transport and commit to a full UK driving licence. Yet no reason has been given as to why these actions could not be attempted in the first year of trading."

40. This puts an unfair gloss or construction upon what the applicant actually said in his business plan, namely that he "commits" to obtaining a licence by the end of the third year and aims to purchase a vehicle. He thereby allowed himself a margin of three years before "committing" to passing the driving test and obtaining a full licence. It was not said that he would not attempt to do so earlier.
41. In my view, some of these matters individually, and certainly all of them cumulatively, render the decision of 27 October 2015 unfair, unsound, in parts factually wrong, and a defective application of paragraphs 4 and 21 of HC510 as illuminated by the court in Joseph. I stress at once that I make no determination that, and have no view at all as to whether, the business proposal is in truth genuine, and whether, for instance, the claimant has an adequate level of fluency in English. These are all matters to be reconsidered afresh by the Secretary of State in the reconsideration which I propose to order.
42. I have adverted several times above to the possibility of a face-to-face interview with the claimant, reflecting passages which I have quoted from the Secretary of State's own guidance document. When an applicant has a right of appeal to a judicial tribunal at which he can give evidence himself directly to the tribunal, the need for, and proportionality of, an interview at the earlier, administrative decision-making stage may be less; but if and in so far as appeal rights have been removed, the need for an administrative interview may have increased. Save where there is powerful documentary evidence of a lack of genuineness, it is a strong thing, and likely to be unfair; for any decision-maker to reach adverse conclusions as to integrity, credibility or legitimacy without, at some point in the process, the person concerned having the opportunity to answer questions and explain himself.
43. Miss Rhee referred in a very generalised way to "resource implications." No doubt there is a cost to interviews; but against that cost would have to be offset the costs wasted, as in this case, through erroneous decisions due to the lack of an interview, and perhaps the costs saved from the abolition of an appeal process.

(iv) The administrative review and the decision letter of 23 November 2015

44. The claimant applied in the prescribed form for administrative review of the first decision. In the form there is a choice of four boxes to select as to the reasons for applying for administrative review, and the claimant selected that the Home Office has "applied the Immigration Rules incorrectly". He could perhaps have selected some or all of the other boxes as well, but in my view the box that he did select was an appropriate "catch all" box in the circumstances of this case. The form contains blank pages in which to set out more detailed reasons for applying. It is right and fair to say, as Miss Rhee submits on behalf of the Secretary of State, that those reasons focus almost exclusively on the argument which is now issue (2), to the effect that the guidance which the first decision-maker applied is unlawful. The reasons relied upon in support of the administrative review do not include any of the factual reasons which now form part of the challenge to the first decision, which I have described and discussed above, save one. The Reasons did refer to the reference in the decision to "the timing of the applicant's application" and submitted that:

"There is no lawful basis for any challenge to the applicant's application based on these considerations ... the applicant has demonstrated no fraudulent intent or abuse of rights ... "

45. On behalf of the claimant, Miss Lieven points out the limited scope of, and grounds for, administrative review. It is a key part of her complaint and challenge under issue (3) below that administrative review is essentially limited to "a caseworking error". She argues that that limitation may have deflected the previous representative from developing the several other points of challenge now raised against the first decision letter. That may or may not be so, but in my view all the current grounds of challenge to the first decision letter, as discussed above, do in fact fall within "caseworking error" as described and defined in Appendix AR to the Immigration Rules and could perfectly well have been expressly raised in the application for administrative review. In fairness to the official who conducted the administrative review, it must therefore be stressed that only one point, namely "the timing" point, was expressly raised which could have formed the basis of administrative review. The challenge to the lawfulness of the guidance falls way outside "caseworking error" or the scope of administrative review.
46. The reviewing official began "we have carefully considered the points that you raise ... " In effect, only one point was raised. That said, the reasons enclosed with the decision letter of 23 November 2015 are in my view perfunctory. They amount to no more than a repetition in verbatim or summarised language of some of the points made in the first letter, including the unsafe point with regard to not having a UK bank account. As to the express ground of the application and the "timing" point, the language of the review letter is puzzling. It states:

"You also claim in reference to our response to the timing of your applications 'there is no lawful basis for any challenge to the application based on these considerations'. As stated in your [sic] original application:"

47. The letter then copies verbatim and in full the passage in the original decision letter cited above, namely "You have stated on your entry clearance ... and the legitimacy of it." The first curiosity is the reference to "As stated in your original application." The passage was not stated in the applicant's original application. It was stated in the Secretary of State's own reasons in response to the original application. The drafting of those words may have been no more than a slip, but they do not inspire confidence in the care or thoroughness of the reviewer. More profoundly, merely to repeat the passage under challenge is not to perform a review of the first decision-maker's decision and reasons. The reviewer had to consider the passage and the reasons, subject it to some scrutiny, and consider whether it is sound. If he had done so, he should have been driven to conclude that it is not for the reasons I have given above.

Outcome on issue (1) and the impact on issues (2) and (3)

48. In my view, the original decision of 27 October 2015 is seriously defective for the reasons that I have given. The review decision of 23 November 2015 is also defective for the reasons that I have given. There is no scope for, or possibility of, saying in this case that any defects in the first decision have been corrected or "cured" by the decision on review. Both decisions must, and will, be quashed, and the SSHD must reconsider afresh the application of the claimant first made on 28 April 2015. The claimant has thus succeeded on this judicial review on issue (1).
49. It may be that upon reconsideration the SSHD will grant his application. In that event, the issues raised under issues (2) and (3), relating respectively to the lawfulness of the guidance and the removal of the right of judicial appeal, will be of no, or at most academic, interest to this claimant. In those circumstances, I have hesitated long before deciding whether to consider issues (2) and (3), upon which anything I say may arguably be obiter. In my view, courts of first instance should avoid opining on points not required by the facts and circumstances of the instant case, the more so as issues (2) and (3) are major and not minor. But both counsel agree that issue (2) remains directly in point and engaged by this case. As the SSHD must now reconsider the application, both she and the claimant require to know whether the guidance is lawful.
50. Miss Rhee was much more circumspect as to whether if, contrary to her submissions, I allowed the judicial review on its merits under issue (1), I should still consider issue (3) and the appeal point. Indeed, that point would arguably be more appropriately considered in the case of an applicant who, unlike this claimant, has no grounds for judicial review of the original and review decisions, but may yet be able to demonstrate that he might have been successful on a judicial appeal upon which the judge can exercise afresh the underlying discretion. But Miss Lieven very strongly pressed me still to consider also issue (3). As she said, this case was, rightly or wrongly, identified by Green J as the lead case and the point has now been fully argued before me. In the end, with some misgivings, I have decided to address both issues (2) and (3).

The Ankara agreement and the "standstill" provisions

51. Issue (2) is based in part, and issue (3) is based in whole, upon the terms and effect of the ECAA. This was an agreement (together with its later protocols) signed at Ankara on 12 September 1963 between Turkey and the then member states of the European Economic Community, which later became the EU. It is common ground that when the United Kingdom became a member state of what is now the EU in 1973, the UK became similarly bound by that agreement and its subsequent protocols which have direct effect in the United Kingdom. Amongst other matters, the agreement as a whole makes provision for workers and for the right of establishment, services and transport.
52. Article 41 in Chapter II of the Additional Protocol provides that:

"1. The Contracting Parties shall refrain from introducing between themselves any new restrictions on the freedom of establishment and the freedom to provide services."

53. This is commonly known as the "standstill clause". It is because of that clause that in relation to business applications by Turkish nationals the Immigration Rules as in force in 1973, viz HC510, still apply, as has been seen. Article 41 is, however, subject to the qualification or condition provided in article 59 of the same protocol that:

"In the fields covered by this Protocol, Turkey shall not receive more favourable treatment than that which Member States grant to one another pursuant to the Treaty establishing the Community."

54. Thus, although article 41 provides a platform below which new restrictions must not be introduced, article 59 provides the ceiling that Turkey shall not receive more favourable treatment. On behalf of the claimant, Miss Lieven and Miss Emma Daykin submit that the effect of the guidance, and also the effect of the abolition of the statutory right of appeal, is unlawfully to introduce a new restriction in breach of article 41, which is not required or justified pursuant to article 59.

Issue (2). The lawfulness of the guidance

55. The guidance is very long, extending to 117 pages. In my view, frankly, it is so long as to risk bewildering and confusing rather than guiding. That, however, does not render it unlawful. Miss Lieven did not take me through it page by page, and I make no pretence to have read all or even most of it. For the purposes of her argument as to unlawfulness, Miss Lieven concentrated on page 33 of the current version which is headed "Evidence the funds or assets are the applicant's." I limit my consideration and decision as to lawfulness to that page only.
56. It appears to have been page 33 which led the decision-maker to conclude that the absence of a UK bank account meant that the Secretary of State could not be satisfied that the business plan is genuine. Part of page 33 (referred to in the decision letter as page 36) is quoted at the end of the second page of the decision letter. This leads Miss Lieven to submit that the guidance is being applied as if it were a rule, and that the effect is to add a requirement or prerequisite to possess a UK bank account, which is not a requirement of, nor even specifically mentioned in, paragraph 21 of HC510. Paragraph 21 refers only to "evidence that the applicant will be devoting assets of his own to the business." It does not refer to, nor even imply, the necessity of a UK bank account. Further, it will be recalled from Joseph that the factors which are specified in paragraph 21 are not themselves prerequisites.
57. So, Miss Lieven submits that the effect, if not the language, of page 33 is unlawfully to introduce a "new restriction" in breach of article 41. Miss Lieven further submits that it amounts to the introduction of a new immigration rule without it having been laid before Parliament as statute requires. In support of that submission, she relies upon passages in the judgments of the Supreme Court in Alvi v SSHD [2012] UKSC 33, [2012] 1 WLR 2208, in particular Lord Hope at paragraph 57, Lord Dyson at paragraphs 94 and 97, and Lord Wilson at paragraph 128.
58. At paragraph 94, to which Lord Hope cross-referred, Lord Dyson said:

" ... a rule is any requirement which a migrant must satisfy as a condition of being given ... leave to remain ... any requirement which, if not satisfied by the migrant, will lead to an application for leave ... to remain being refused is a rule within the meaning of section 3(2)."

59. At paragraph 97, to which Lord Wilson cross-referred, Lord Dyson said:

"The key requirement is that the Immigration Rules should include all those provisions which set out criteria which are or may be determinative of an application for leave to enter or remain."

60. At paragraphs 124 and 125, Lord Clarke said that he could see no distinction between the two formulations of the principle in paragraphs 94 and 97 and that it was a principled, clear and workable approach.
61. Miss Rhee strove to distinguish Alvi on the grounds that it was concerned with a points-based system, which, as Lord Walker said very clearly at paragraph 117, is aimed at eliminating any need or possibility of further evidence being produced in support of an application. While the context of Alvi is indeed distinguishable, it seems to me that the test of what is a rule in paragraphs 94 and 97 must be of more general application and should be applied also to the present case.
62. The question remains, however, whether the guidance itself does import a new restriction in breach of article 41 or a new rule in the Alvi sense, as Miss Lieven submits. Page 33 begins with the words:

"This page explains what type of documents should be submitted to show that a person ... is devoting funds or assets of their own to the business ...."

63. That proposition employs the word "should" not "must." The page continues by clearly stating (as is also stated in several other places in the guidance):

"While the 1973 Rules do not specify the types of documents to be submitted ... caseworkers should assess whether failure to provide relevant and/or requested documents undermines the credibility of the applicant's business proposal."

64. Pausing there, that sentence does in fact include the correct proposition and reminder that the 1973 Rules (viz paragraph 21) do not specify documents. It is, in my view, lawful and not introducing a new rule or restriction to say that caseworkers should "assess" whether failure to provide a relevant or requested document undermines the credibility of the proposal.
65. The page continues that the applicant should be able to provide sufficient evidence to show that the source of the funds is legitimate, the funds are under their own control, and there is no possibility that the money may be recalled or withdrawn from the business at short notice. Apart from the high test of "no possibility", Miss Lieven does not suggest that that passage is itself unlawful. The crunch is the next two sentences:

"[Applicants] should provide evidence of the available funding. This should include original bank statements for the last 6 months."

66. Miss Lieven submits that that introduces a requirement for a bank account, or at any rate is being treated by officials as introducing such a requirement, and thereby adds a new restriction or a new rule. I understand the submission, but I do not accept it. In the first place, the guidance does not state that there must be a bank account; and, on one reading of the two sentences, they may be saying no more than that if there is a bank account, statements should be produced which are original ones and that they should span the last 6 months. That is merely good practice as a matter of the reliability of evidence, since photocopy statements can easily be doctored by the use of Tippex, and selective production of a statement or statements for a very short period may easily mislead.
67. Further, the whole passage is subject to the opening sentence quoted above, that if documents are not produced, the caseworker should "assess" the effect. Page 33 of the guidance could arguably be better expressed, but I am not satisfied that it is unlawful either as being in breach of article 41, or by application of the domestic law under Alvi. It does not add a "criterion" nor a "requirement", which if not satisfied will lead to leave being refused, although, depending on the "assessment" of the caseworker, it may do so. I hold that page 33 of the guidance is not unlawful and that part of the claim will, accordingly, be dismissed. I stress that I say nothing as to the lawfulness of any other part or page of the guidance which I have not considered.

Issue (3). Is the abolition of the right of appeal incompatible with the ECAA?

68. I have already quoted article 41 of the Additional Protocol to the ECAA, which is directly relied upon and in point in this case. It is common ground in this case that a person in the position of this claimant enjoyed a statutory right of judicial appeal seamlessly in the period from 1973, when the UK acceded to the EEC, until 6 April 2015, when that right of appeal was abolished as a result of amendments to section 82 of the Nationality, Immigration and Asylum Act 2002 made by section 15 of the Immigration Act 2014. During that period, the appeal structure changed and there were other alterations to it, but the essential right of an appeal to an independent judicial body endured. It is not necessary to refer to the detailed statutory provisions.
69. Miss Lieven formulated the issue under issue (3) as:

"Whether or not domestic law, as it now is after the abolition of that appeal right and now affording only administrative review, gives to the claimant a remedy not disproportionately different from that of a EU citizen under the relevant Directive and the related domestic legislation."

70. Miss Lieven formulated the question in that way to reflect the language of the European Court of Justice ("ECJ") in Sahin (case C-242/06) [2010] 1 CMLR 8 at paragraph 71, and to respect the ceiling imposed by article 59 of the ECAA.
71. In my view, it is clear that the position of the claimant, or of someone in his position, since the abolition of the right of appeal and its replacement by administrative review, is markedly less favourable than it was before. The appeal was to an independent judicial body with a further avenue of appeal. Administrative review is performed by an official within the Home Office. On an appeal, oral evidence for and on behalf the applicant could be, and routinely was, heard. The tribunal could substitute its own discretion for that of the Secretary of State, whereas administrative review is limited to considering whether the original decision was incorrect.
72. The practical effect of these considerations is borne out by data produced in this case. In answer to a freedom of information request, the Secretary of State produced data with a letter dated 8 March 2016 and now at pages 98 to 106 of the bundle. That data has not been the subject of expert statistical analysis by a statistician, but analysis performed by the claimant's solicitor, Mr Aytac, and described in his witness statement of 18 October 2016, appears to indicate an average success rate on appeals by applicants such as this claimant of at least 40 per cent, or, on his figures, higher. By contrast, the success rate on administrative review in a period since April 2015 was apparently 2 out of 311 decisions or less than one per cent (the figure of 0.006 per cent in Mr Aytac's second statement is not arithmetically correct).
73. In a response by the Home Office to the Independent Chief Inspector's report into administrative review processes between September and December 2015, the Home Office described at page 2 (now at bundle page 171) that they had re-reviewed 273 previously decided cases and identified an additional 87 cases where the original decision should have been overturned but was not. That appears to indicate that in about 30 per cent of the re-reviewed cases the decision-maker on administrative review had failed to identify an error and overturn the decision when, on the Home Office's own account, he should have done so. Of course, the position of the Home Office is no doubt that, as a result of the Chief Inspector's report and that re-review, they have improved, or will improve, the system of administrative review so that the "success rate" on administrative review will itself increase.
74. The question is, however, whether this less favourable position amounts to introducing new restrictions within the meaning of article 41. There is no authority directly in point. On behalf of the Secretary of State, Miss Rhee accepted that article 41 can encompass both substantive and procedural conditions, but she submitted that it applies only to the procedure up to the point of first decision-making. At that point, a line is drawn (viz after the first decision but before administrative review) and article 41 is of no further application. She submitted that, therefore, the removal of the right of appeal does not amount to the introduction of a new restriction within the meaning of, and contrary to, article 41. Miss Rhee submits that there is no European authority for the proposition that appeal rights fall within article 41, and that the observations of Sullivan J in the only domestic case bearing on this topic, namely in Parmak v SSHD [2006] EWHC 244 (Admin), at paragraphs 26 and 27 are both obiter and wrong.
75. Miss Lieven does not accept this. She submits that to draw a line after the first decision, but before any administrative review or appeal, is to rob article 41 of its substance. Tum and Dari v SSHD (case C-16/05) [2008] 1 WLR 94 concerned the different issue of new restrictions upon conditions of, and procedure for, entry, but on a reference by the House of Lords the ECJ clearly stated at paragraph 69:

"69. Having regard to all the foregoing considerations, the answer to the question referred for a preliminary ruling must be that article 41(1) of the Additional Protocol is to be interpreted as prohibiting the introduction, as from the entry into force of that Protocol with regard to the member state concerned, of any new restrictions on the exercise of freedom of establishment, including those relating to the substantive and/or procedural conditions governing the first admission to the territory of that state, of Turkish nationals intending to establish themselves in business there on their own account."

76. In that passage, the court clearly referred to both substantive and/or procedural conditions.
77. The authority of the ECJ most strongly relied upon by Miss Lieven is Dorr and Unal (case C-136/03) [2005] 3 CNLR 11. That case concerned expulsion of workers to whom Decision 1/80, agreed between Turkey and the EEC in September 1980, applied, and it was not a standstill case. It is clearly distinguishable, as Miss Rhee says, but at paragraph 66 the court referred to the precise rights which Decision 1/80 grants to Turkish workers who fulfil its conditions, and continued at paragraph 67:

"67. In order for those individual rights to be effective, Turkish workers must be able to rely on them before national courts. To ensure the effectiveness of that judicial protection, it is essential to grant those workers the same procedural guarantees as those granted by Community law to nationals of Member States and, therefore, to permit those workers to take advantage of the guarantees laid down in articles 8 and 9 of Directive 64/221 ... such guarantees are inseparable from the rights to which they relate."

78. Dorr and Unal was considered by Sullivan J in Parmak. The claimant was a Turkish national who had unsuccessfully claimed asylum. While in detention pending removal, he applied to start a business as a contract cleaner relying upon the ECAA. His application was refused. The question in the judicial review was whether he was entitled to make an in-country appeal relying upon the standstill provisions. It was conceded, however, that in 1973 the claimant in that case, being here as a failed asylum seeker, would not have had an in-country right of appeal. Sullivan J said at paragraph 22:

"If he would not have been entitled to an in-country right of appeal under the immigration legislation then in force, there is no reason why he should be entitled to such a right in 2006."

79. The claim accordingly failed. At paragraph 21, Sullivan J accepted that Dorr and Unal was clearly distinguishable as that concerned workers to whom Decision 1/80 applies as opposed to those who wish to establish themselves in business. Sullivan J said that in the case of workers the procedural rights of appeal "piggyback" on the individual's substantive rights. Unquestionably, as Miss Rhee submits, what Sullivan J went on to say at paragraphs 26 and 27 was obiter; but it is still in my view highly persuasive, and I do not accept that it is wrong. Sullivan J said:

"26. Given the importance of procedural rules in the immigration field (as shown by Parliament's repeated amendments to the legislation over recent years) and the extent to which matters of procedure and matters of substance may well be inextricably interlinked in such cases, I would not be prepared to accept, in the absence of further and more detailed argument, that there is necessarily a clear-cut distinction to be drawn between procedural and substantive rules in this field.

27. As Dorr and Unal shows, substantive rights may well be ineffective or less effective if they are not backed up by appropriate procedural guarantees in relation to matters such as rights of appeal. It will be recalled that in paragraph 67 of its judgment the ECJ agreed with the point made by the Advocate General that such procedural guarantees 'are inseparable from the rights to which they relate.' There is nothing in Savas or in Tum and Dari to suggest that making procedural rights less favourable for an applicant who relies on the standstill agreement is acceptable in terms of Community law. Community law is concerned with practicality rather than procedural formality. Much, for example, may depend upon the extent to which it is necessary in practice for applicants to appeal in order to succeed in establishing their claims. For example, if there is a very high rate of initial refusals and, correspondingly, a high rate of success on appeal, then removing the right of appeal might well have the practical effect of worsening the position for applicants, even though the substantive rules, applied both at first instance and on appeal, remain unchanged."

80. The observations in the last sentence of that quotation are strongly reinforced by the evidence in the present case as to success rates, to which I have already referred.
81. The observations of the ECJ at paragraph 69 of Tum and Dari and paragraph 67 of Dorr and Unal seem to me to make clear that the standstill in article 41 applies no less to procedural rights and guarantees than to substantive ones, being "inseparable from the rights to which they relate." It is true that those authorities are distinguishable on their facts and in their context, but the reasoning of the court must apply no less to the standstill effect of article 41.
82. Further, the observations of Sullivan J in Parmak at paragraph 27, although obiter, powerfully describe and illustrate the practical importance of appeal rights. I can see no rational basis, nor any imperative, for drawing the line, as Miss Rhee does, immediately after the first decision, but before any review or appeal process.
83. In my view, the effect of article 41 is to require, subject to article 59, that the appeal or review procedure available to the claimant should not be less favourable now than it was in 1973. For the reasons already given, it is in my view markedly less favourable. The limitations and shortcomings of administrative review, relative to a judicial appeal, are very obvious and were indeed well illustrated by the history of this case. Although the claimant has ultimately succeeded by way of judicial review, judicial review is no substitute for an appeal. It is a more limited remedy in which there is the procedural hurdle of permission; oral evidence is rarely heard; and the court, unlike on an immigration appeal, can normally at best only quash the decision and order a reconsideration, as I have done. Unlike on an appeal, it would be a highly exceptional case in which the court on judicial review could substitute its own decision.
84. The remaining question is the impact of article 59 of the Additional Protocol. Citizens of the EU do not have to apply to establish a business here, but their right of entry and residence is not unqualified. Chapter VI of Directive 2004/38/EEC on the right of citizens of the Union and their family members to move and reside freely within the territory of member states imposes restrictions on grounds of public policy, public security or public health. Article 15 of Directive 2004/38 provides that:

"The procedures provided for by articles 30 and 31 shall apply by analogy to all decisions restricting free movement of Union citizens and their family members on grounds other than public policy, public security or public health."

85. Accordingly, article 31 applies to all decisions restricting the freedom of movement whether on the grounds of public policy, public security or public health or any other grounds. Article 31 provides as follows:

"Article 31

Procedural Safeguards

1. The persons concerned shall have access to judicial and, where appropriate, administrative redress procedures in the host Member State to appeal against or seek review of any decision taken against them on the grounds of public policy, public security or public health.

2.  ....

3. The redress procedures shall allow for an examination of the legality of the decision, as well as of the facts and circumstances on which the proposed measure is based. They shall ensure that the decision is not disproportionate ..."

86. Whilst article 31(1) refers to "judicial and, where appropriate, administrative redress procedures", the breadth and requirements of article 31(3) are such as to require a judicial process and are not satisfied by the more limited administrative review now in place. In practice, any citizen of the EU does have, and continues to have, a right of judicial appeal pursuant to paragraph 26 of the Immigration (European Economic Area) Regulations [2006], SI [2006] No.103 against any EEA decision as defined in paragraph 2 of those regulations. It follows that the restoration of a right of judicial appeal in the case of the claimant, for which Miss Lieven and Miss Daykin contend, would not lead to his receiving more favourable treatment than that which member states grant to one another pursuant to the Treaty establishing the Community, nor than that which the UK grants to EU nationals.
87. For these reasons, I hold that the absence, since its abolition, of a right of appeal for Turkish citizens seeking to exercise their freedom of establishment under the ECAA is incompatible with the ECAA in that it breaches the requirements of article 41(1) of the Additional Protocol to the ECAA; and that that incompatibility has not been avoided or removed by the introduction of administrative review in such cases.