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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 >> Grenville College London Ltd & Anor, R (On the Application Of) v The Secretary of State for the Home Department [2014] EWHC 1065 (Admin) (09 April 2014) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2014/1065.html Cite as: [2014] EWHC 1065 (Admin)

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		9 April 2014

HHJ Coe QC :

Introduction

1. Grenville College London ("Grenville") seeks to challenge by way of judicial review the Defendant's decisions: to reduce its Confirmation of Acceptance for Studies ("CAS") allocation to zero; to suspend its Highly Trusted Status ("HTS") licence; and to require it to apply for a new licence. Birmingham College of Law and Management ("Birmingham") seeks to challenge by way of judicial review the Defendant's decisions: to suspend its HTS licence; and to revoke its HTS licence. By order of the court dated 3rd September 2013 the matters were listed to be heard together.
2. I have four bundles of documents: a bundle from Birmingham ("BB"); a bundle from Grenville ("GB"); a supplementary bundle ("SB"); and an authorities bundle ("AB").

Procedural history

3. Grenville launched its application for judicial review on 28^th June 2013 and the Defendant's Acknowledgment of Service is dated 30th August 2013. Directions were made on 5th July 2013 and 17th July 2013 before permission was granted on 3rd September 2013 and the matter was listed to be heard with the Birmingham case.
4. Birmingham lodged its application for judicial review on 24th July 2013 when it was determined not to be immediate. Interim relief was refused on 1st August 2013 and directions given for urgency. Permission was refused on 15th August 2013 and then granted on 3rd September 2013 when the case was listed to be heard with the Grenville application. The Acknowledgement of service is dated 9th August 2013.

Background

5. Both Birmingham and Grenville colleges are educational providers who applied to be and were on the Register under Tier 4 of the Points Based System operated by the Defendant whereby the colleges could sponsor students to come to or stay in the UK to study full-time.
6. The Defendant issues policy guidance for the system. The guidance is updated from time to time and I am particularly concerned with the guidance issued on 1st July 2013 (SB p.238) and the guidance issued on 1st October 2013 (SB p.28).
7. The system for licensing educational institutions to sponsor students from outside the European Economic Area and the status of the Defendant's policy guidance was considered by the Supreme Court in the case of R (on the application of New London College Limited) v Secretary of State for the Home Department [2013] UKSC 51 (AB tab3). Lord Sumption said at paragraph 1 in that case: "The status of a licence 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 the student will in the ordinary course enable them to enter the United Kingdom for the duration of their studies".
8. The Tier 4 sponsor guidance issued by the Defendant sets out the conditions for the grant and retention of a sponsor licence and of HTS status. In the New London College case the Supreme Court held that the guidance did not have to be laid before Parliament under section 3 (2) of the Immigration Act 1971 (unlike the Immigration Rules). The sponsor guidance was described by Lord Sumption as "a large and detailed document issued on behalf of the Secretary of State, which may be amended at any time and has in fact been amended with bewildering frequency". It lays down mandatory requirements governing: the criteria for the award of a sponsor's licence; the obligations of those to whom a licence has been awarded; the criteria to be applied by the licence sponsor in issuing a CAS; and the procedure and criteria for suspending, downgrading or withdrawing a sponsor's licence. The Supreme Court considered that this did not involve unlawful delegation to control entry into or stay in the United Kingdom because leave to enter or remain continues to be the responsibility of the Defendant and immigration officers. The sponsor guidance is only concerned with the position of the sponsor and does not call for compliance by the migrant. Thus the guidance was described as setting out in reality "conditions of participation" so that sponsors seeking the advantages of a licence cannot complain if they are required to adhere to it.

Factual history

9. I am grateful to Counsel for the Defendant for the two documents he prepared setting out the factual history in relation to each College. I summarise it as follows:

(i) Grenville

10. Following its initial probationary B-rated licence (with a CAS allowance) Grenville was awarded an A-rated licence on 23rd September 2011 and HTS status on 2nd October 2012 (SB 1) which would have expired on 2nd October 2013.
11. Following unannounced visits by the Defendant on 8th and 9th May 2013 a decision was made on 10th May 2013 to reduce Grenville's CAS allocation to zero pending further investigation. This is the first decision challenged in these proceedings. Grenville challenged that decision by letter dated 15th May 2013 (GB 118) and the Defendant provided additional reasons for the decision on 29th May 2013 (GB 124). This is the second decision challenged. On 30th May the Defendant suspended Grenville's licence (GB 38) identifying concerns relating to: the process applied in checking the qualification of its students; its inability to produce a significant number of files relating to its students and/or all contact details; and the lack of an authorising officer and key contact. This is the third decision challenged.
12. The Defendant gave Grenville 28 days to respond to those concerns indicating that if they were not adequately addressed the licence would be revoked. The suspension did not prevent existing students from continuing their course of studies but Grenville could not assign a new CAS to any student.
13. Grenville responded to the concerns on 6th June 2013 and the Defendant said that it would provide a decision in relation to Grenville's licence by 26th June 2013. However having given the Defendant a deadline to make a decision about the licence by 24th June, on 28th June Grenville issued the claim for judicial review primarily directed at delay. On 5th July the Court ordered the Defendant to serve a decision by 10th July. By letter dated the 10th July the Defendant addressed Grenville's response and, importantly, additionally raised the issue as to whether or not there had been a change of director at the college and a new management team. Grenville were asked to confirm whether or not there had been a change of ownership and whether the new owners already held their own separate sponsor licence so that a decision could be made whether or not a new licence application was required. In that letter reference was made to the policy guidance setting out that changes of ownership must be communicated to the Defendant within 28 days and also referring to paragraph 657 thereof.
14. The court made further directions on 17^th July requiring the Defendant to conduct a further visit of Grenville's premises by 24th July and to issue a final decision by 31st July. There was a further compliance visit by the Defendant's officers on 22nd July when they were told that the business was being sold over time by the previous owners to two new owners who were now the current directors of Grenville. It was confirmed that a new director had been appointed on 18th April 2013 and that director had purchased the Grenville business from its previous owners on 7th May. The previous directors/owners had resigned on 18th April and 7th May. A second new director was appointed on 16th May who, it was intended, would own 45% of the business with the balance being owned by the first director (Mr Rana).
15. On 27th July Grenville confirmed that the change of ownership had been effected on 7th May but that before it had been able to comply with paragraph 657 of the sponsor guidance its licence had been withdrawn (on 30th May). On 23rd July the Defendant confirmed that had she been aware of the change of ownership at the time of the suspension, Grenville would have been given 28 days to obtain a new licence. Grenville made additional written submissions that it should be allowed to apply for a new licence whilst preserving its rights to challenge the interpretation of paragraph 657 of the guidance. On 31st July the Defendant informed Grenville that because of the change in ownership and management it was required to apply for a new licence by 20th August. This is the fourth decision challenged. On 20th August Grenville made the application. On 10th September the Defendant granted Grenville its new licence. That was an A-rated licence. Pursuant to the new licence Grenville's CAS allocation was 225.
16. By letter dated 13th September the Defendant confirmed that the suspension of Grenville's original licence should not have resulted in any applications by sponsored students being refused and that the original licence was "dormant" that is, remained in existence only so as to enable Grenville to report on the students who had been sponsored under that licence.
17. By its Claim Form Grenville sought judicial review of the "Defendant's decision to zero CAS and suspend the Claimants sponsor licence from the register of licensed sponsors". By the Claimants' joint skeleton argument Grenville also seek to challenge the Defendant's decision of 31st July 2013 to require it to apply for a new licence. At paragraph 7 of that document in relation to Grenville two issues are identified namely "whether the Secretary of State's decisions to reduce Grenville College's CAS allocation to zero and to suspend its HTS licence was procedurally unfair" and "whether the Secretary of State misconstrued paragraph 615(b) of the policy guidance in requiring Grenville College to make a new application for an A-rated licence and keeping its HTS licence dormant".
18. The Defendant properly took the point that the issue relating to the requirement to apply for a new licence and the interpretation of paragraph 615(b) of the policy guidance had not been pleaded. In circumstances where the Defendant was prepared and ready to argue the 615(b) point and where there was no prejudice I gave permission to the Claimant to amend the claim to add the wording at paragraph 7(d) of its skeleton argument to Grenville's claim.

(ii) Birmingham

19. Following an initial refusal Birmingham was granted an A-rated licence on 23rd February 2012. It was awarded HTS status on 8th May 2013 (valid until 8th May 2014). The Defendant exercised her discretion in this regard despite the fact that Birmingham had issued only one CAS in the 12 months preceding its application for HTS for an applicant who was then refused leave to enter. Ordinarily a refusal rate of 100% that would not entitle an organisation to HTS status.
20. On 9th May 2013 the Defendant refused Birmingham's requests: to transfer a large number of students from St Peter's College on to its sponsor licence; and to change its trading address from Birmingham to London. Also on that date the ownership of Birmingham changed as a result of an acquisition of all of its shares by Mr Saifuddin Chowdhury.
21. On 23^rd May 2013 the Defendant wrote to Birmingham suspending its HTS licence with immediate effect (BB 81). This is the first decision challenged in these proceedings. The reason given was that the Defendant had been informed by the previous owners of the college that the college had been sold in its entirety and moved premises. Also, the previous owner confirmed that he had no access to the e-mail account or the sponsor management system (SMS) on which there had been significant activity since the business was sold. The Defendant confirmed her view that this established that the e-mail address was being used by unauthorised personnel. Birmingham was told that a new licence application must be made providing a new secure e-mail address. Reference was made to paragraphs 647 and 662 of the policy guidance. There was also a reference to paragraph 613.
22. [I note that throughout the documentation there are references to paragraph numbers of the policy guidance some of which are not consistent. It seems that for the most part this relates to references to earlier or later versions of the guidance. For example this case is said to be primarily concerned with paragraph 615(b) in the version dated July 2013. The same paragraph is sometimes referred to as paragraph 614 which comes from an earlier version. I assume that the reference in this letter to 613 is to some other version but in fact refers to paragraph 615(b).]
23. The Defendant had also rejected Birmingham's requests to change the identity of: its Level I user on the SMS; the Authorising Officer; and the Key Contact in light of her concerns.
24. By letter dated 28th May Birmingham notified the Defendant of the change of ownership and served a change of circumstances form (BB 71). By letter dated the 30th May (SB 41) through their solicitors Birmingham challenged the suspension decision expressly relying on the fact that following a change in owners they would normally have 28 days to notify the Defendant. In response by letter dated the 1st July 2013 (BB 83) the Defendant revoked the licence pursuant to paragraph 614 of the guidance because the business had been sold and no application for a new licence had been made. This is the second decision challenged. The letter set out that as Birmingham was under new ownership the new owners could apply for a new licence immediately.
25. The bases of Birmingham's challenge to this decision were: that is was premature since the 28 days within which notification was required had not expired; on the grounds that the existing licence had not been transferred to a new company; and that the criteria in paragraph 614 were not met. By letter dated 16th July 2013 (BB 85) the Defendant identified further reasons for the revocation of the licence setting out that where notification was provided earlier than the 28 day deadline appropriate action would be taken by the Defendant from the date of that notification and no new application for a sponsor licence had been made. This is the third decision challenged.
26. In the joint skeleton argument Birmingham identifies the issues for me to decide as: "whether the Defendant's decision to suspend Birmingham's HTS licence was procedurally unfair"; and "whether the Defendant misconstrued paragraph 615(b) of the policy guidance in revoking Birmingham's HTS licence".
27. Birmingham applied for a new licence on 19th July and issued proceedings on 24th July.
28. On 8th November 2013 Birmingham was issued with an A-rated licence.

Recent developments

29. Since the proceedings were issued there have been further developments in respect of Grenville. By letter dated the 30th January 2014 (SB 22) Grenville's status was changed to that of a legacy sponsor in light of its failure to meet the requirements for educational oversight. As a legacy sponsor Grenville was not allowed to sponsor new students but could continue to sponsor those already studying until they finished their course.
30. By letter dated 19^th February 2014 (SB 26) Grenville's licence was suspended. The letter sets out that the premises had been visited on two occasions when the doors were found to be locked and padlocked with no lights on and no response to the college buzzer. The Defendant expressed real concern that there are currently two active licences in the name of Grenville (due to this litigation) which when combined provide for a total of 256 students who do not appear to be attending the college and in respect of whom no report has been made. At an inspection in January 2014 Grenville informed inspectors that there were only eight active students. Grenville has not yet responded to these decisions in relation to legacy status or suspension of its licence.

Are the claims academic?

31. It is the Defendant's case in respect of both Grenville and Birmingham that these claims are now academic. The Defendant argues that because they are academic that is an end of the matter and that the litigation is pointless. On this basis they say that I should reject the claims.
32. In support of her argument the Defendant contends that it should firstly be noted that neither Claimant claims damages. The applications are to quash the decisions to suspend and revoke the licences and to require applications for fresh licences. The Claimants seek reinstatement of the previous licences. The Defendant says that the argument in respect of the decisions to suspend licences was overtaken by the revocation decisions and/or requirement to apply for a new licence.
33. Essentially the Defendant argues that even if her interpretation of 615(b) is incorrect, in light of the new policy guidance the Claimants would have had to apply for new licences in any event following the introduction of that guidance at the very beginning of October 2013. In the circumstances (given the change of ownership in each case) the Claimants would have been given a new A-rated licence and not an HTS licence. Thus, their position would have been the same. By the skeleton argument and/or Grounds of Claim it is alleged that the Defendant's decisions will have caused damage to reputation and/or loss of business activity and income, damage to morale of staff and students and the risk of students' applications for entry clearance/leave to remain being refused. However, as the Defendant points out the Claimants have put forward no evidence of any such loss and do not claim damages.
34. In any event the Defendant says that the suspension decisions did not lead to the A-rating (rather than HTS status) and so the challenge to those decisions serves no purpose. The suspension decisions are no longer in force. In the absence of any impact of the decisions (in respect of suspension) and the lack of prejudice there is no legitimate objective in pursuing the claim.
35. Reference to the October 2013 guidance introduced with effect from 1st October 2013 provides at paragraphs 642 - 644 (SB p.124) that any merger, takeover, de-merger or change of ownership must be reported and that the sponsor licence will be revoked if there is a change in ownership of the organisation or business. Therefore the Defendant says that if the earlier decisions are quashed and the licences reinstated they would have to be applied for again in any event.
36. Additionally it is argued that there were other grounds upon which the suspension decisions and/or revocation decisions could have been taken and that whatever the guidance provisions, for the Secretary of State has an inherent residual discretion to revoke the licence for rational and reasonable reasons which in this case would be the significant change in circumstances.
37. Further in Grenville's case in light of its current suspension and earlier legacy status the Defendant argues that reinstatement of the earlier licences would produce no legitimate benefit.
38. In response the Claimants contend that the Defendant's argument is flawed. The Claimants say that prior to the introduction of the new Sponsor Guidance on 1st October 2013 they had existing licences issued during the currency of the earlier guidance. If, as they argue, that earlier guidance was misinterpreted by the Defendant when she made her suspension and revocation decisions and required applications for fresh licences then they should succeed in having those licences reinstated. They go on to argue that even if the new guidance introduced in October 2013 would otherwise have required them to apply for fresh licences on the basis of the change of ownership that new guidance cannot properly be applied to existing licences but only to new or renewal applications made on or after 1st October. Put shortly the Claimants say that the Defendant could not revoke the licence on the basis of a policy which was not in existence when the licence was issued. The Claimants say that both parties are bound by the terms of a contract (the guidance policy) which cannot be changed during the currency of the licence.
39. The Claimants argue that I should not speculate and that I should not take into account the current position with regard to Grenville. It may be that the suspension on the current licence will be lifted.
40. Further the Claimants say that even if I were to find that the revocation/renewal decisions were lawful then there would be significant consequences in costs if I upheld the unlawfulness of the suspension decisions. It is pointed out that King, J. who gave permission for these hearings was aware of the fact that the suspension decisions were overtaken by the revocation decisions but gave permission nonetheless in relation to both.
41. It is further argued that if I found that the revocation/renewal decisions were unlawful and those decisions were quashed the suspension decisions would remain in force and so the suspension decisions should be pursued.
42. In short the Claimants rely on an argument that if successful they ought to have their HTS status reinstated.
43. In oral argument the Defendant urges me to take account of what has happened in respect of Grenville since these claims were issued. There is no evidence that Grenville will challenge the legacy decision. There has been no challenge to date and the decision was made in January. There has been no contention that the decision (based on the lack of educational oversight) is unlawful or wrong.
44. It is argued that there is no suggestion by the Claimant that the original suspension decisions caused them to be A-rated or affected their ongoing status. There is no ongoing prejudice and no damage. In the absence of any remedy sought and in the absence of any benefit from any remedy the claims in respect of the suspension decisions, based as they are on procedural unfairness, are entirely academic. In light of subsequent events the suspension decisions do not give rise to causation of any loss or damage.
45. The Defendant referred me to the legacy status decision in respect of Grenville (SB 22). In response to the Claimant's argument that the HTS licence could be restored it is pointed out that in the absence of educational oversight the Defendant would not be able to do that. The Claimant's argument is that by reference to the guidance policy and in the exercise of her discretion the Defendant could cause Grenville to become an HTS legacy sponsor which would have benefits. The discretion referred to is alleged by the Claimant to be clear from the guidance (BB page 106).
46. Mr Payne referred me to the first instance decision in the New London College case (R (on the application of New London College Limited) v Secretary of State for the Home Department [2011] EWHC 856) (AB 1) (which the Claimant had taken me in respect of the procedural unfairness arguments). He pointed out that in that case the Claimant had claimed damages and none were claimed here. Nonetheless he went through the authority distinguishing the facts of that case and pointing out that any procedural unfairness would be immaterial if the substantive decision was reasonable and lawful and there is no challenge here to the substantive grounds on which the suspension decisions were based.
47. Mr Payne also pointed out that the reference at paragraph 76 of that decision is clearly to the application of new guidance (which came in on 3rd March 2010) which was held to apply to the existing licence (albeit under suspension). Mr Payne argues that any new policy guidance will take effect in respect of existing licences as well as new licences. On behalf of the Defendant he submitted that she would have to take a decision under the policy then in force in respect of any licence.
48. As far as Birmingham is concerned the Defendant says that because the decision to issue a new licence was made on 18th November 2013, six weeks after the new policy and which decision was made in accordance with the guidance the maintenance of the decision is lawful and there is no prejudice. The Defendant argues that the claims in respect of suspension are academic because they have had no causative effect. In respect of the revocation/reapplication it is submitted that the college has since acquired an A-rated licence enabling it to issue CAS. All students were issued with a CAS after the grant of the A-rated licence. Therefore if the HTS licence was reinstated that licence would be rendered dormant. An HTS licence would run in tandem with the A-rated licence until all of the courses were finished.
49. He also points out that if the Claimants' argument about the application of the guidance to existing licences is right and if the Claimants' analysis is right that there is no requirement to reapply following a change of ownership in the circumstances pertaining here then provided the notification of change ownership was made the Defendant would not be in a position to do anything even if the new owners were completely unsuitable.
50. In reply Mr Malik referred to the front cover page of the new policy dated October 2013 (SB 28) which he says supports his argument that the policy only applies to new institutions and the parties are bound by the terms of the licence in existence at the time. He says that his interpretation does not mean that the Defendant would not be able to take any action response respect of a change of ownership notifications because she would be able to make a note and the guidance does not mean that notification result in automatic revocation. He further argued that if this claim were successful even though there is no separate claim for damages such a claim could be pursued at a later date. By reference to SB p.22 in respect of Grenville he said that if the Claimant succeeded it would get back its HTS status and therefore have HTS legacy status which would be a clear advantage.
51. Having considered these arguments carefully I have reached the firm conclusion that these claims are in fact academic and there is no benefit to the Claimants in pursuing them. First of all I reject the Claimant's contention that it is appropriate or indeed of any actual benefit to a Claimant to pursue a claim for judicial review or to be allowed to continue a claim for judicial review simply to recover costs. In the absence of any claim for damages and in the absence of any evidence about any loss or damage I take the view that the claims in respect of the suspension decisions have no possible merit because they are of no possible benefit for either Claimant. I do not accept that there could be any subsequent claim for damages following on success in the judicial review claims which would not be an abuse of process. Again even if I am wrong about that does not seem to me that pursuing a claim for a declaration in judicial review and arguing that the same is not academic because there can be a subsequent claim for damages would be a proper use of the procedure.
52. In respect of the revocation/reapplication decisions I accept the Defendant's argument that these, too, are academic. There is nothing in the guidance to suggest that there is a binding contract between the parties based exclusively on the terms of the guidance for the duration of any particular licence. Indeed the New London College case suggests that the opposite is correct. Moreover it seems to me that for the life of a licence it would be wholly wrong for the Defendant to consider herself bound by the policy in force at the time that the licence was issued. The guidance may change and does change frequently in response to specific changes in policy and in response to changes in interpretation. Some of those changes may be favourable to the holders of the licences and some may be more favourable to the Defendant.
53. I note that despite their argument about the applicability of the guidance in force at the time of grant of the licence, the Claimants were happy to refer to the guidance which came into force on 1^st July 2013 in the course of the hearing although it would not have been the guidance in force when the licences were first granted.
54. There is no dispute between the parties that the new guidance which came into force on the 1st October 2013 would clearly require both Claimants in the circumstances of their change of ownership to notify the Defendant who would revoke their licences and require them to reapply. In the circumstances both of these Claimants would have had A-rated licences in any event. They have lost no benefit which can properly be identified. They would have to have waited a year for HTS status. There would have been no adverse effect to existing students. The Claimants contend there is a benefit to them but have not satisfactorily identified it in the circumstances of this case nor established how it would have arisen in fact.
55. In the circumstances I consider that the Claimant's claims are entirely academic and there is no benefit to be gained from pursuing them. In the circumstances I dismiss their claims for judicial review.

Addendum

56. Since writing this judgement I have received some further evidence via e-mail from the Defendant in respect of Grenville. It is important and so I have considered it. There is a copy of a notice apparently posted on the door to the college's premises saying that the college is closed from 12th February 2014 due to flooding. There is a Removal Notice from a bailiff firm in respect of goods to be removed and auctioned in respect of non-payment of rates to the London Borough of Croydon. There is a copy of a letter written by the Defendant to the Claimants' solicitors on 14th March 2014 enquiring as to whether or not the information that the college was repossessed is correct and if so why the Defendant and the court were not informed of that information during the hearing. The solicitor's response on 17th March indicates that they were not aware and had not been informed of any repossession of the premises but would be seeking instructions. There is a copy e-mail confirming that the lease to Grenville ended on 3rd March when the premises were repossessed by bailiffs acting on behalf of the landlord. The bailiffs changed the locks and put notices on the doors. Finally there is a letter from the Defendant to the Claimants' solicitors dated 18th of March 2014 pointing out that it is reasonable to assume that the Claimant's owners/directors present at Court during the hearing were aware at that time that the premises had been repossessed. The letter also points out that I specifically asked Counsel in the course of the hearing to take instructions from Grenville about the legacy sponsor issue and I adjourned briefly for that purpose. As I have set out above I was told that further applications will be made once the outcome of these proceedings were known in respect of the legacy status. In other words the fact of repossession which took place on 3rd March 2014 was not brought to my attention and it seems was not brought to the attention of solicitors or Counsel.
57. In the circumstances my decision in particular in respect of Grenville that the claims are academic is reinforced by the subsequent events and I should say that I find it completely unacceptable that the court would seem to have been misled in the course of a hearing. An explanation is required.

Further addendum

58. This judgement was, as is customary, sent out in draft form to Counsel for the parties in advance of being handed down. In response to the last two paragraphs (paragraphs 56 and 57 above) I have received a witness statement from Mr Zubair Ahmed Awan of Mayfair Solicitors instructed by Grenville. He tells me that his client from Grenville was not present in Court on 13^th March. When I adjourned so that instructions could be taken about the legacy sponsor issue he telephoned his client and was told that further applications/submissions would be made by Grenville once these proceedings were concluded. Neither he nor Mr Malik knew nor were they told anything about the repossession and closure of the college. Mr Awan has confirmed that had he known he would have brought it to the attention of Counsel and the Court. Thus he has confirmed my assumption at paragraph 56 hereof that his client had not informed him or Counsel of the situation. Grenville's legal representatives have explained their position fully. They were acting on express instructions.
59. In a late submission, Mr Payne on behalf of the Defendant argues that in circumstances where the question as to whether or not Grenville was still operating and intended to challenge the Defendant's later decisions was central to the issue of whether or not its claim was academic, Grenville's solicitors had a duty to obtain a detailed signed witness statement from their client in advance of the hearing. He says that the failure to do so led either to an unnecessary hearing of Grenville's challenge or to a hearing of Grenville's challenge on an inaccurate factual basis. I find that in light of the express instructions received by Mr Awan of the day of the hearing, there is no evidence that his client would have given him an accurate account of the situation had he asked earlier. In the circumstances there is no criticism to be made of Grenville's solicitors or Counsel.

The substantive claims

60. Having heard the case and having reached my conclusion above it seems to me nonetheless that it may be useful for me to reach conclusions about the merits of the substantive claims in case I am wrong in finding that they are academic.
61. Briefly the Claimants argue in respect of the suspension of the licences that it is settled law that in exercising any of the powers under the policy guidance or otherwise the Secretary of State must comply with the common law duty to act fairly. Paragraph 593 of the policy guidance empowers the Defendant: to revoke the licence; to suspend pending further investigation; or to reduce the number of allocated CAS. By reference to both the New London College case and the case of R v Secretary of State for the Home Office (ex parte Doody) [1994] 1 AC 531 the Claimants rely on the failure of the Defendant to give any notice before suspending the licences as establishing unfairness. They rely on the principle that fairness will very often require that a person who may be adversely affected by a decision should have an opportunity to make representations. Wyn Williams, J. in the New London College case identified the detriment or potential detriment to the Claimant of a decision being made to suspend the licence in terms of: publication of the decision; damage to reputation; financial detriment to the Claimant and its members of staff; and the inability to issue new CAS to prospective new students. The Claimants rely on these factors as establishing that the suspension decisions were procedurally unfair.
62. By reference to the letter (GB 38) of 30th May 2013 suspending Grenville's licence, the Defendant relies on the concerns there set out. She argues that the decision to suspend on the basis of those concerns was entirely consistent with the guidance relating as they did to key aspects of the sponsors' duties. As I set out above the concerns related to: the process Grenville applied in checking the qualifications of its students; Grenville's record-keeping in particular its inability to produce a significant number of files relating to students and/or contact details for a significant number of students; and the fact that Grenville lacked an Authorising Officer and Key Contact. The Defendant set out that the suspension was plainly justified pending an investigation into whether there was an adequate response to the concerns.
63. As far as Birmingham are concerned in respect of the decision of 23rd May on the basis of the information from the previous owners about: the sale of the college; the fact that it had moved premises; and that the previous owners had no access to the SMS, again the Defendant says that this was a lawful decision. On any view these factors amounted potentially to significant unreported changes which potentially went to the heart of the continuing suitability of Birmingham to be a sponsor.
64. The Defendant referred to the Compliance Report Form (GB p.187) which emphasised the significance of the failings which had been identified: there only appeared to be one member of the Home Office Key Personnel; the existing CAS allocation was far in excess of the premises' capacity; 183 CAS had been assigned by the college in the period of 25 days between 4th April 2013 and 29^th April 2013; the Key Contact, Mr Holmes expressed some shock about the number of CAS assigned; and there was anonymous information which appeared to indicate possible fraudulent activity.
65. Thus the Defendant's concerns were immediate and real. The recommendation was to suspend or revoke the licence and the decision taken was to reduce the CAS to zero. In other words the licence was not immediately suspended. Additional reasons were provided on 29th May. By that time the Claimant had had an opportunity (letter from Claimant's solicitors dated 15^th May (GB p.118)) to challenge the CAS allocation reduction and to deal with the concerns. In other words before the licence was suspended the Claimant was given an opportunity to make representations.
66. In relying on these real and significant concerns the Defendant also points out that the Claimants' challenge is procedural only, in other words, there is no challenge to the substantive basis for the decisions and the Claimants do not put forward any indication as to what information they could or would have produced even with prior notice which would have prevented the suspensions. In the case of Grenville the licence was suspended after representations were made on behalf of the Claimant. In Birmingham's case its licence was revoked having initially been suspended after Birmingham had challenged the suspension decision. The point of challenge put forward by Birmingham in respect of the suspension was that they would normally have 28 days to notify the Defendant of a change of ownership. The Defendant dealt with this by saying that they would act upon information as to change of ownership when such information was received. The 28 day period represented the requirement within which a licence holder should notify them not a period of time which the Defendant had to allow to elapse before taking action. It seems to me that that argument is unassailable.
67. By reference to the policy guidance the Defendant sets out that she can reduce a CAS allowance to zero where it is believed that a sponsor poses a threat to immigration control and/or is not complying with its duties; she can suspend the licence while further enquiries are being made if there is reason to believe that a sponsor is breaching its positive duties and/or represents a threat to immigration control which is serious enough that the licence may need to be revoked.
68. By reference to the New London College case the Defendant relies in respect of procedural fairness on submissions that: there is no universal requirement to provide prior notice in all cases of suspension; it is for the Claimants to show how fairness required them to be given prior notification on the particular facts; and the test is now different under policy guidance not in place when the decision in New London College was made in that suspension can now be imposed for checks to be carried out to see "whether any failure on the part of the sponsor is serious enough to potentially lead to revocation of" the licence. The previous test of "suspicion of serious breach of duties so as to pose a major threat to immigration control" was not in force at the time that these decisions were made. The concerns of the Defendant clearly satisfied the test in place at the time.
69. Right at the end of the hearing, the Claimants produced a further authority, Bank Mellat v Her Majesty's Treasury (No. 2) [2011] EWCA Civ 1. I was referred to paragraphs 28 to 32 where the principles of fairness identified in Doody are repeated and where the Court of Appeal concluded in very different circumstances that prior notice of a decision should have been given to a body against whom a draconian statutory power was to be exercised. However, it does not seem to me that this adds much to the previous statement of the principles and in any event in that case the Court's decision was materially based on a finding that had representations been sought the information which would have been forthcoming would have influenced the decision.
70. Having considered these arguments and the policy guidance I have reached the conclusion that there was no procedural unfairness in the decisions taken either to suspend the licences or to reduce the CAS to zero. The Defendant was acting in accordance with the guidance and in accordance with her powers and duties in the light of serious concerns. There were ample grounds for suspension. The Claimants have not shown that there was any need for prior notice to ensure fairness. In reality, each Claimant had an opportunity to make representations and the decisions were maintained. None of the representations made could or would have affected the outcome.
71. Thus even if the claims were not academic I would reject them in so far as they relate to the suspension/reduction of CAS allocation decisions.
72. Although identified as the primary issue in this case the interpretation of paragraph 615(b) of the guidance can be dealt with quite shortly.
73. By reference to paragraph 615(b) of the policy in force at the time (version 07/13 at BB p.87) the Claimants argue that the Defendant was wrong to revoke their licences because the situation pertaining at the time was not covered by the wording of that provision. The provision reads (BB p.174) "We will revoke your licence immediately for any of the following reasons: ... b. you stop trading or operating for any reason including if: (i) you sell your business (this includes circumstances where this happens as a result of you becoming insolvent); ..."
74. It is the Claimants' argument in respect of both Grenville and Birmingham that there was a transfer of shares which produced a transfer of ownership and that this is not covered by the guidance because Birmingham and Grenville did not stop operating or trading and there was no sale.
75. The Claimants rely upon the definition section at the beginning of the guidance where "you" and "your" are defined as the "sponsor or prospective sponsor organisation" whereas "a relevant person" is defined as "any owner, director, authorising officer, key contact, level 1 user or anyone involved in your day to day running". By reference to the policy guidance (and the New London College case) they point out the difference between the sponsor (the education provider) and any relevant person. Thus they say that the educational institution whether Grenville or Birmingham had not been sold. The applicant for the licence is the college, that is, the limited company not the directors or shareholders. A sponsor is the education provider and it is the sponsor who has the duties under the guidance. The wording of 615(b) refers to "you" and not "you or a relevant person". So, the Claimants argue, the construction of 615(b) by the Defendant is inconsistent with the natural meaning of the words used. They submit that I cannot ignore the use of language in the guidance. On this basis the Claimants argue that the decisions to revoke the licences and require applications for new licences should be quashed.
76. For the sake of completeness I should say that the Claimants additionally pointed to the Register of Sponsors licensed under Tier 4 of the points-based system which does not include the names of any shareholders but rather the names of the sponsoring organisations.
77. In considering the Claimants' arguments I find that it is important to look at their communications with the Defendant at the material time. I note that in its e-mail of 22^nd July 2013 (GB p.226) Grenville itself referred to paragraph 657 of the policy guidance and acknowledged that by reference to that paragraph they would have to apply for a new licence within 28 days. It does not seem to me therefore that at that time Grenville were in any doubt about the need to apply for a new licence. I also note that in their letter of 28^th May 2103 (BB p.71) Birmingham informed the Defendant that "... the ownership of the Company has also changed. We are also enclosing a copy of the confirmation of the share transfer from the Companies House". They clearly took the view that the share transfer involved a change of ownership and that notification of a change of ownership was something which had to be done separately from the Sponsor Change of Circumstances form which they had completed in respect of the other changes.
78. The Defendant argues that her construction and interpretation of the guidance is accurate and valid and that the reference to the sale of the business would clearly cover a sale of shares in particular where there was a complete sale of all shares and even if the guidance does not specifically spell that out (or did not at the time) it would be absurd to exclude a transfer of all of the shares in a business by way of sale from one individual to another (or others) from the definition of "sale". Of course as set out above Grenville acknowledged the need to apply for a new licence given the transfer and Birmingham indicated that there had been a change of ownership.
79. Further the Defendant argues that "you" is an inclusive term and cites various examples elsewhere in the guidance where "you" must be taken to include "you and any relevant person". These are in provisions where for example it is set out that a licence can be revoked or suspended if "you" have not been complying with "your" duties or have been dishonest in "your" dealings with the Defendant. There is a requirement that "you" act honestly in any dealings with the Defendant. There is a requirement that "you" must ask a student to leave the course in certain circumstances (see BB p.98).
80. The Defendant points out that the guidance is not a statute and it is written by non-lawyers for non-lawyers and that it should be interpreted with that in mind. The Defendant argues that in interpreting the guidance it is important to look at the purpose of the guidance and that the Claimants' construction would fly in the face of the purpose. The Defendant submits that it would be a startling proposition which would render paragraph 615(b) redundant if the Defendant could not revoke a licence following a change in ownership by way of a transfer of shares.
81. The Defendant contends that the purpose of requiring applications for new licences is to ensure that those controlling the educational establishment have been assessed by the Defendant. Whether control is exercised through a complex corporate organisation, or a simple organisation run by one or more individuals, the sponsorship system requires that those in control apply for and obtain a licence. The Defendant says her approach is consistent with policy and with the rest of the guidance. For example, at paragraphs 660, 664 and 665 of the guidance a new "organisation" has to apply for a licence if it does not already have one. Where it is not disputed that when an existing sponsor is taken over by another organisation there is an obligation to apply for a new licence there would be no justification for differentiating between the approach there and the approach to be adopted where takeovers are carried out by individuals.
82. The Defendant concedes that the wording of 615(b) lacks the clarity of the subsequent guidance issued in October 2013. This version is in SB p.28 and at 607 (SB p.117) there is the new version of 615. Paragraph 644 (SB p.124) makes the position with regard to a transfer of shares clear. The Defendant says that this is clarification and not a change of policy.
83. The Defendant additionally makes the point that no decision under paragraph 615(b) was ever taken in respect of Grenville. The requirement to apply for a new licence arose under paragraph 567 after notification of the change in owners. Thus the Defendant argues that even if I were to conclude that paragraph 615(b) did not apply to a change of ownership under paragraph 567 the guidance does not prescribe or limit the actions the Secretary of State could take in response to such notification. The Defendant maintains a general power entitling her to take a reasonable and proportionate response to being notified of a significant change in the circumstances of the sponsor. This approach could have been taken in respect of Birmingham. In the letter to Birmingham previously referred to (BB p.84) reference was made to paragraphs 616 and 668 of the guidance as well.
84. The Defendant therefore argues that even if I were to find against her on the construction/interpretation point the Claimants' claims should not succeed where she could and would have taken action pursuant to her residual discretion and/or other parts of the guidance so that the same decisions would in fact have been taken. The Defendant refers me to paragraphs 28 and 29 of the New London College case (AB Tab3 p.15).
85. In reaching my conclusion on this issue I should first identify the difference between the Claimants' positions. These claims have been run together and I allowed Grenville to amend its claim to rely on the paragraph 615(b) argument. However, the Defendant is right to say that no decision was made under that paragraph in relation to Grenville. The decisions of 30^th June 2013 (GB p.126) and 10^th July 2013 (GB p.170) make no reference to that provision and neither did the Claimant's responses including the solicitors' submissions in the application for interim relief (GB p.173). In the circumstances it does not seem to me that I could allow Grenville's claim on the basis of the Defendant's misconstruction of paragraph 615(b) in any event.
86. The Defendant's letters to Birmingham dated 23^rd May 2013 (BB p.81) and 1^st 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.
90. I therefore dismiss the Claimants' claims.