The Court of Appeal on Substantive and Procedural Fairness

Pathan & Islam v Secretary of State for the Home Department [2018] EWCA Civ 2103 (02 October 2018)

Fairness in official decision-making is an important virtue in public law. Dismissing the judicial review claim involving Tier 2 (General) of the points-based system (PBS), the Court of Appeal held in this case that the complaint that the claimants had not been given time to seek alternative employment after the revocation of their sponsor’s licence was properly characterised as a substantive matter rather than an issue of procedural unfairness. The court held that UTJ Allen had been quite right to hold that questions of procedural fairness were to be determined by reference to the standard of rationality. Pathan, an Indian citizen, was granted leave to enter the UK as a Tier 4 (General) student from September 2009 until December 2012. His student leave was extended in December 2010 until April 2014. He then obtained leave as a Tier 2 (General) migrant in March 2013 until mid-October 2015 to work for Submania Limited. Pathan then made an in-time application to extend his leave under the Tier 2 (General) category. But while his application was pending the Home Office revoked Submania’s sponsorship licence and then subsequently refused his Tier 2 (General) application without any prior notice that his sponsor Submania’s licence had been revoked. Administrative review of the refusal was refused and so judicial review proceedings were therefore commenced. The Home Office defended the claim and it doubted Pathan’s credibility, saying that his proposed employment was not genuine.

His wife and child’s immigration status was a function of his own entitlements. Islam, a Bangladeshi, arrived in the UK in September 2009 with Tier 4 (General) leave until mid-2011. He extended his student leave for another year and then switched into the Tier 1 (Post-Study Work) category from August 2012 to August 2014. He was then refused further leave as a Tier 1 (Entrepreneur) migrant. He exercised his right of appeal and his appeal was dismissed in July 2015. Drifting into overstayer status he applied for further leave to remain as a Tier 2 (General) migrant to work for a restaurant. His employer assigned him a valid Certificate of Sponsorship (CoS) but its sponsorship licence was revoked in April 2016 without notice to Islam whose own actions played no part in the reasoning behind the revocation. Consequently, his Tier 2 (General) application was refused in June 2016. Thereafter, an administrative review of the decision failed and judicial review proceedings were instituted and were defended. When filing the detailed grounds of defence in both Pathan and Islam’s cases the respondent Home Office served “supplementary” decision letters which were expressed in similar terms.

The Upper Tribunal

Pathan and Islam claimed that they were entitled, as a matter of fairness, to be given notice of the revocation of the sponsor’s licence and they demanded a reasonable opportunity to reorganise their affairs. Upon hearing the two linked judicial review applications, UTJ Allen distinguished Patel [2011] UKUT 211 (IAC) and held that unlike the situation for Tier 4 applicants, a person whose sponsor’s Tier 2 licence was revoked for non-compliance with the Immigration Rules is not entitled to challenge a decision not to provide him/her with a period of 60 days in which to secure an alternative sponsor. The UT found merit in the point that it may be relatively easy for a Tier 4 student to find another sponsor.

In comparison, with even a 60-day grace period a Tier 2 (General) applicant would probably be unable to find another labour market gap existing which could not be filled by a resident worker. UTJ Allen expressed sympathy with the Home Office’s position that logistical problems would arise if a 60-day grace period were to be implemented for Tier 2 applicants.

The Appeal

Pathan and Islam contended that UTJ Allen (i) applied the wrong test and erred in law in assuming the issue was whether the Home Office decision was a rational one as opposed to whether the decision was procedurally fair, (ii) erred in law in holding that there was no obligation on the Home Office to provide notification as to the revocation of their respective sponsors’ licence so as to provide an opportunity to find an alternative sponsor before refusing leave to remain in the Tier 2 (General) category, and (iii) erred in law by attaching weight to potential “logistical problems” identified by Home Office officials and in failing to give any consideration to each appellants’ particular circumstances.

The Court of Appeal

Sir Andrew McFarlane, Coulson and Singh LJJ unanimously dismissed Pathan and Islam’s appeals. Giving the only judgment, Singh LJ shed further light on the difference between procedural fairness and substantive fairness. The court also addressed the position of Tier 4 (General) students and Tier 2 (General) workers under the points-based system (PBS).

(i) Procedural Fairness v Substantive Fairness

The Court of Appeal held that substantive fairness enables the court to ensure that a public authority acts lawfully and does not abuse its powers. However, the doctrine does not give the court a wide-ranging discretion to simply overturn the decision of a public authority where it considered it to be unfair.

Pathan and Islam argued that the result in Patel had been approved by the Court of Appeal’s decisions in EK (Ivory Coast) [2014] EWCA Civ 1517 and Raza [2016] EWCA Civ 36. The argument that the outcome in Patel was wrong was rejected in Raza but the court nevertheless found that Patel failed to assist Hammad Raza because he had overstayed. Singh LJ reminded us that only recently in Citizens UK [2018] EWCA Civ 1812 (discussed here), along with Asplin and Hickinbottom LJJ, he examined the duty of procedural fairness at common law in light of Osborn [2013] UKSC 61 which led to conclusion that the test for whether there has been procedural fairness or not is an objective question for the court to decide for itself. As Lord Reed explained in Osborn the function of the court is “not merely to review the reasonableness of the decision-maker’s judgment of what fairness required.”

Highlighting the distinction between procedural fairness and substantive fairness, in Talpada [2018] EWCA Civ 841 the court warned against generically raising “public law fairness” and Singh LJ said that practitioners must distinguish between procedural fairness and substantive fairness. Procedural fairness, or the duty to act fairly, is the new term for “natural justice” which is accompanied by the rule against bias and a need to hear the other side. In Kaur [2015] EWCA Civ 13, Lord Burnett took the view that the PBS is “prescriptive” because it is designed to achieve predictability, administrative simplicity and certainty. These virtues come at the expense of discretion and failure to earn points warrants refusal. To these principles, Singh LJ added that an alternative purpose of the PBS is to “achieve consistency of treatment as between different applicants”, something which is equally in the interests of applicants and the state.

The court also remained suspicious of Blake J’s approach in Patel where the UT had conflated “common law fairness” and “the principle of treating applicants equally”, the former expression in Singh LJ’s chosen terminology constituting “the rules of procedural fairness” or what earlier generations knew as “the rules of natural justice”.

In his Lordship’s view, the problem with the approach in Patel was that it ignored the controversial status of the principle of equal treatment which on proper analysis concerns the substance of decisions and not the procedure by which they are made. In other words, it is not concerned with procedural fairness at all. Singh LJ did not find it necessary to dwell on the outcome of Patel per se. Instead, the court noted that the issue in the instant appeals revolved around whether the reasoning in Patel should be extended to the Tier 2 context.

In recognition that only in the context of procedural fairness can the court itself decide the question for itself as an objective matter, both appellants invoked the doctrine of procedural fairness and distanced themselves from substantive fairness. They therefore attacked UTJ Allen’s decision by relying on the concept of rationality. Yet despite the calculated nature of the appellants’ arguments, Singh LJ rejected their submissions because their cases were analogous with the recent case of Talpada where the court roundly rejected the complaint that a used CoS should be accepted by the decision-maker. As in the instant appeals, the scenario in Talpada had no connection at all with procedural fairness and concerned a substantive requirement of the rules which needed to be adhered to in making a relevant application.

The thrust of Talpada is that public law is not normally concerned with the substance of public decisions and the role of the courts is limited to correcting errors of law committed by public authorities and ensuring that fair procedures have been complied with. Courts will rarely substitute their own view on what the substantive decision should actually be and, unless human rights and EU law are at stake, irrationality is usually the only basis on which the judiciary can concern itself with the substance of the decision.

The reserved approach to substantive fairness in Talpada sought to maintain the important dividing line between the court’s functions and those of the executive. The terms of infringing on the executive’s territory needed to be clear. Overall, the principle of legal certainty and the need to correct abuse of power were equally important aspects of the rule of law. However, the analysis in Talpada must now need be read in light of Gallaher Group v CMA [2018] UKSC 25 where the Supreme Court held that, while the principle of equal treatment could be regarded as an aspect of rational behaviour, it was not itself a freestanding ground for judicial review. Therefore, Singh LJ held that:

70. In all the circumstances it seems to me that the essential question then becomes whether there was in the present context such unfairness as to amount to irrationality. I am unable to accept the submission that there was.

Lord Carnwath said in Gallaher that substantive unfairness “is not a distinct legal criterion” and cannot be converted into one by emphasising an “abuse of power” because such terminology “adds nothing to the ordinary principles of judicial review, notably in the present context irrationality and legitimate expectation.” The other Justices agreed. Overall, the approach in Gallaher undermined the reasoning in Patel because the UT relied on the principle of equal treatment in the same context as the principle of procedural fairness. Overall, it could not be accepted in Pathan and Islam’s cases that there was such manifest unfairness as to amount to irrationality.

(ii) Tier 4 and Tier 2 of the PBS

The court also imparted guidance on Tier 4 and Tier 2 as two distinct areas of the PBS. The latter enabled foreign students to come to the UK for their studies. If the Home Office revoked an educational institution’s sponsorship licence, it was understandable why a period of grace should be allowed to enable affected students to seek to pursue their studies at another UK institution. No good public interest reason existed to refuse them that opportunity.

On the other hand, the Tier 2 regime for migrant workers functioned to match a worker’s application for leave to remain with a particular vacancy in the UK in circumstances where the local labour market did not offer a suitable worker for such employment. Singh LJ found that, as a matter of law, a court cannot possibly stigmatise as being irrational the executive’s decision. As his Lordship held:

71. … In those circumstances, it is pre-eminently a political judgment on the part of the Secretary of State whether people should be able to put forward an alternative sponsor if the particular sponsor has had its licence revoked. People may reasonably disagree on whether that would be a good thing or a bad thing.

The court also pointed out that guidance available to applicants gave them fair notice of the regime that would apply to them. Singh LJ found that the relevant guidance was unambiguous that migrants’ applications would be refused in the event of withdrawal of their sponsor’s licence. His view was that applicants were able to leave the UK, so as to avoid the potential consequences of overstaying, and apply for leave to enter from overseas through an alternative sponsor. It was therefore clear to his Lordship that:

75. It follows that, in my view, the UT Judge did not fall into error (as submitted by the Appellants) when he referred to the standard of review being rationality.

Overall, UTJ Allen did not err by referring to the logistical difficulties that the authorities would face, evidenced in the witness statements filed on behalf of the Home Office. In the court’s view, it was permissible for the UT to consider this evidence and to such difficulties.

Comment

The appellants tried their best to disguise their complaint about not being given notice of revocation of their respective employers’ sponsorship licence – an issue of substantive fairness – as procedural fairness. Yet they failed to swing Singh LJ onside and the court dismissed their claims.

At first blush, this judgment seems to have erased the footprint of substantive fairness in judicial review proceedings. On the other hand, it is equally clear from Singh LJ’s analysis that the Court of Appeal was quite careful to distinguish that irrationality is usually the only basis on which the court can concern itself with the substance of the decision unless human rights and EU law are at stake.

Judges and practitioners will know only too well that human rights and EU law are engaged in a plethora of cases. Thus, at the very least, it should nevertheless be possible for judicial review applicants to raise human rights and EU law and still mount arguments embedded in substantive fairness. Equally, judicial review applicants relying on human rights and EU law may also raise arguments relating to both substantive fairness and procedural fairness, albeit the latter concept will inevitably be more helpful to their cases as this judgment shows only too well. Finally, as seen in past analysis and as confirmed by the present ruling, the key decision in Citizens UK is very helpful to applicants seeking to challenge unlawful behaviour by the Home Office in a wide variety of situations.

About Asad Ali Khan, BA, MSc, MA, LL.B (Hons), LL.M

Senior Partner, Khan & Co, Barristers-at-Law
This entry was posted in Court of Appeal, Economy, Immigration Rules, Judicial Review, PBS, Post Study Work, Students, Tier 2, Tier 4 and tagged , , , , , , , . Bookmark the permalink.

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