CO/68/2011 & CO/69/2011 
Neutral Citation Number: [2012] EWHC 640 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION 
THE ADMINISTRATIVE COURT 
Royal Courts of Justice 
Strand
London WC2A 2LL 

Friday, 24 February 2012
 
B e f o r e: 

HIS HONOUR JUDGE SYCAMORE
(Sitting as a Judge of the High Court)
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Between: 
THE QUEEN ON THE APPLICATION OF ARACHCHI AND PEIRIS 
Claimants

v 

ENTRY CLEARANCE OFFICER 
Defendant 
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Mr J Cliff (instructed by Messrs Capital Legal Solicitors, West Drayton UB7 7RQ) appeared on behalf of the Claimants
Mr D Marknell (instructed by Treasury Solicitors) appeared on behalf of the Defendant
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J U D G M E N T
1.	JUDGE SYCAMORE:  The claimants are Sri Lankan nationals.  On 20 July 2010 both made applications for entry clearance as Tier 1 General Migrants.  On 13 August 2010 both applications were refused by the Entry Clearance Officer ("ECO").  On 15 September 2010 each claimant applied for administrative review of the decision and on 6 October 2010 the Entry Clearance Manager maintained both decisions to refuse the applications. 
2.	The present applications for Judicial Review were issued on 6 January 2011 and both came before Mr C M J Ockleton, sitting as a Deputy High Court Judge on 25 March 2011.  He granted permission in both cases, observing as follows: 
"1.  It is clearly arguable following Pankina (which for some reason is not mentioned in the defendant's summary grounds) that it is not open to the defendant to require applicants to comply with requirements in guidance that are additional to those imposed by the rules, and that the provisions restricting proof of the availability of funds to documents of the sort listed in the guidance and to 'verifiable' documents, are such requirements.
2.  Although there is no right of appeal, and although the ECO may nevertheless refuse because having examined the documents he was not satisfied that the applicant had the funds, the point remains of importance.  This is because the terms of application for review do not enable a person whose (perhaps reliable) documents are 'unverified' to submit further documents on review.  He is required to make, and pay for, a new application.  It is therefore important that refusals are not made on procedural grounds outside the applicant's control.
3.  The point made at paragraph 30 of the summary grounds of defence is engaging, but again requires a new application.  Besides, the applicant may no longer have funds that he had when the first application was made, or may not be able to demonstrate that he has had them for the requisite period.  In any event, the matter is of sufficient general importance to proceed despite any concern that it is academic."
He then went on to direct that the two matters were to be listed together. 
3.	Following the grant of permission, the ECO made further decisions in both cases on 29 June 2011, again refusing the applications for entry at clearance.
4.	It was common ground at the hearing before me that those decisions superseded those of 13 August 2010.  Contrary to the assertion on the part of the claimants, those fresh refusals were made on a different basis to those on 13 August 2010 upheld on 6 October 2010 and I will explain why this is the case presently.
5.	The claimants did not pursue administrative review of those decisions.  So far as the original decisions of 13 August 2010 are concerned, these proceedings are now academic.  The most the claimants could have achieved, had they been successful in the challenge, would have been for an order that the decisions had been wrongly made and for them to be quashed and remade.  As I have observed, the ECO in effect rescinded the earlier decisions and made new ones which I will nevertheless consider in these Judicial Review proceedings.
6.	I will deal now with the law.  Paragraph 245(c) of the Immigration Rules states so far as relevant: 
"To qualify for leave to remain as a Tier 1 (General) Migrant, an applicant must meet the requirements listed below. If the applicant meets these requirements, leave to remain will be granted. If the applicant does not meet these requirements, the application will be refused."
Then the requirements:
"(a) The applicant must not fall for refusal under the general grounds for refusal ... 
... 
(e) The applicant must have 10 points under paragraphs 1 to 3 of appendix C." 
Appendix C, so far as relevant, states as follows: 
"1A. In all cases where an applicant is required to obtain points under Appendix C, the applicant must meet the requirements listed below:
 (a) The applicant must have the funds specified in the relevant part of Appendix C at the date of the application; 
...
 (b) If the applicant is applying as a Tier 1 Migrant, a Tier 2 Migrant or a Tier 5 (Temporary Worker) Migrant, the applicant must have had the funds referred to in (a) above for a consecutive 90‑day period of time ...
 (e) The applicant must provide the specified documents.
Tier 1 Migrants 
1. An applicant applying for entry clearance or leave to remain as a Tier 1 Migrant must score 10 points for funds ...
2. 10 points will only be awarded if an applicant:
 (a) applying for entry clearance, has the level of funds shown in the table below and provides the specified documents, or level of funds £2,800."
7.	Part 6A of the points based system, appendix 3 of the Immigration Rules provides at paragraph A: 
"Where Part 6A or Appendices A to C, or E of these Rules refer to the United Kingdom Border Agency guidance, this means guidance published by the United Kingdom Border Agency for use by Sponsors or migrants to ensure compliance with these Rules. If the Sponsor or applicant does not satisfy the requirements set out in guidance and referred to in these Rules, the applicant will not meet the related requirement in these Rules." 
8.	The specified documents are set out in the Tier 1 General Policy Guidance ("the guidance").  A copy of the guidance was attached to the ECO's acknowledgement of service in these proceedings and in so far as it is relevant it states as follows:
"Documents we require 
13.  The applicant must ensure he/she provides all of the necessary supporting documents at the time he/she sends us the application.  We will only accept the documents specified in this guidance.
... 
MAINTENANCE (FUNDS) 
Documents we require 
215.  Only the following specified documents will be accepted as evidence of this requirement: 
...  
 (iii) Letter from bank confirming funds and that they have been in the bank for a consecutive 90 day period, ending no more than one calendar month before the date of application."  
In relation to verification of documents, the guidance says as follows:
"Verification and other checks 
19.  We will ask for a variety of verifiable documents to enable us to consider the application.  
20.  We may want to check the supporting documents an applicant sends with his/her application.  Therefore, he/she must ensure that all the evidence comes from a source that can be clearly identified and that it can be independently confirmed as being genuine."
9.	I deal briefly with the background to the decisions that are challenged.  It is clear that applications for Tier 1 status are considered under what is described as a points based system.  The points are rewarded under various categories and if an applicant achieves the requisite number of points in the requisite categories, prima facie he will be awarded Tier 1 status.  His application will be refused if he fails to achieve the requisite points.
10.	Applicants for Tier 1 status are required to demonstrate that they have the equivalent of £2,800 available to them in order to maintain themselves in the UK.  If they can so demonstrate they are awarded ten points.  In each of the cases, subject to these proceedings, the claimant claimed ten points in respect of availability of maintenance funds.  In each case the claimant provided a letter from the same financial institution, Industrial Finance Limited ("IFL").  In Miss Arachchi's case the letter asserted that she held an account with them containing LKR 700,000, funds that had been deposited on 13 January 2010 and that the funds could be withdrawn at any time on request.  In the case of Mr Peiris, the letter from IFL indicated that he held an account with them containing LKR 800,000 and that those funds had been deposited on 1 July 2009 and that the funds could be drawn at any time on request.
11.	Whilst accepting that these letters appear to show compliance with the requirements, the ECO rejected the documents in the first decision letters of 13 August 2010 and I refer to the relevant paragraph from that decision letter headed "ECO comment".  The substance of the letter is identical in each case in terms of its content: 
"ECO Comment:  
Letter from Industrial Finance dated 30 June 2010 is enclosed.  Letter from the bank confirms that the funds can be withdrawn at any point of time.  Funds held as on 16/7/2010 is LKR 700,000.  Funds equivalent to £2,800 shown in the above account as per the requirements of published guidance.  However, as a result of checks made by this office, detailed in a document verification report, it has been established that we are unable to verify financial documents from Industrial Finance Limited.  I am not therefore able to allocate you the required 10 points for maintenance."
A letter, as indicated, in similar terms was sent to the claimant Peiris.
12.	The points claimed were not awarded and the claimants' applications were refused.  As I have previously observed, those decisions were upheld on administrative review.  Thus the earlier decisions were made on the basis that the ECO were "unable to verify financial documents from IFL."  
13.	As I observed in paragraph 3, Mr Ockleton observed that the reference to "verifiable documents" appears in the guidance but not in the rules themselves.  The new decisions conversely were not made on the basis that the IFL documents were unverifiable, as can be seen from the decision letters of 29 June 2011 which again in terms of the substance were identical in the case of each of the claimants and they read as follows: 
"As evidence of available funds to meet the maintenance requirements, you have submitted letters from Industrial Finance Limited dated 30 June 2010 and 25 October 2010 which claims that funds equivalent to £2,800 have been held as per the requirements of published guidance.  However, as a result of checks made by this office, it has been established that the financial documents issued by Industrial Finance Limited are unreliable.  I am not therefore satisfied by the evidence you have provided that you have the specified level of funds.  
In February 2010 Visa Services staff noted an increase in the number of financial documents issued by Industrial Finances Limited.  These documents were being used as evidence to support visa applications.  It was noted that applicants who were living in the North and East of Sri Lanka had apparently deposited funds with Industrial Finance Limited in Colombo.  This was considered unusual, given the availability of banking and financial services more local to the applicant's domicile. Industrial Finance Limited had four branches outside of Colombo in Galle, Anuradhapura, Negombo and Kurunegala.  These events gave rise to further enquiries with Industrial Finance Limited.  By 2 March 2011 UKBA verification officers had conducted 109 checks on Industrial Finance Limited documents.  Thirteen of these were confirmed as non‑genuine ie Industrial Finance Limited had not issued to the applicant's finance letters with the details provided.  However, on 2 March 2011 an email from a manager at Industrial Finance Limited was sent to the Visa Section in Colombo stating that a document that he had previously verified as false was in fact genuine.  On 8 March 2011, we were informed by Industrial Finance Limited that they had experienced computer problems and as a result wished to review verification results that had been issued previously.  UKBA Visa Services reviewed the verifications that had been undertaken with Industrial Finance Limited.  UKBA identified eight cases where Industrial Finance Limited had declared that bank documents were not genuine before providing a letter stating that the funds were available. This was ascribed to a computer glitch.  This explanation was not considered to be credible and raised further doubts that Industrial Finance Limited had satisfactory data management systems to accurately and reliably verify documents.  The verifications were themselves unreliable.  Similarly, despite correspondence and exchanges with UKBA Visa Services querying verification results, managers at Industrial Finance Limited were unable to confirm the number of incidents where verification results had been altered.  This adds additional weight to the concerns that Industrial Finance Limited retains inadequate information management procedures and that documents from Industrial Finance Limited cannot be considered reliable.  
Open source checks establish that Fitch Ratings (a financial ratings company) had downgraded Industrial Finance Limited's rating from CCC Lka to D Lka.  This was due to the concerns surrounding depositors not being able to withdraw their money from the bank.  On 3 August Fitch Ratings withdrew their rating of Industrial Finance Limited.  A newsletter referring to the withdrawal is attached to this notice.  
In assessing your application for entry clearance, I must decide whether you meet the requirements of the immigration rules and I must make a judgment as to whether you meet those requirements on the basis of the evidence disclosed by the application before me.  
Since our research has revealed that no real reliance can be placed on documents issued by Industrial Finance Limited, the letters dated 30 June 2010 and 25 October 2010 are not satisfactory as evidence that the funds were present in your account.  Consequently, I am not satisfied that you have the specified level of funds and I am not therefore able to allocate you the required 10 points for maintenance."
As I have observed, a letter in materially the same terms was sent to each of the claimants.
14.	As can be seen, the new decisions were made on a different basis, not that the IFL documents are unverifiable, but that they were unreliable.  In the circumstances the ECO exercised a judgment by which he concluded that there was not evidence that the requirements of the Immigration Rules had been met.  In exercising that judgment he took the view that he could not place any reliance on the documents in question as evidence that the funds were available.  The grounds for forming that belief are apparent from the decision letters and fall essentially into four categories.  First, the increase in the number of documents issued to support visa applications and location issues.  Second, the number of checks conducted on IFL documents and the number of those which were confirmed as non‑genuine.  Third, the lack of credibility which was attached to the explanation offered by IFL that a computer glitch was to blame and the doubts entertained by the ECO about the lack of satisfactory data management systems at IFL and the adequacy of information management procedures.  Fourth, the open source checks showing the downgrading of the rating of IFL.  
15.	Given that this was the background to the decision made by the ECO, in my judgment the Pankina issues raised by Mr Ockleton when granting permission no longer arise.  The decisions arose from the ECO's inability to place reliance on the IFL documents as evidence that the required funds were present, not that the documents themselves were unverifiable.  The new decision made no reference to any requirement for the document to be verified.  
16.	Against that background, unless it can be demonstrated that the approach adopted by the ECO was irrational, the decision is not susceptible to challenge.  In my judgment, it was clearly for the ECO to consider the evidence and to determine whether the claimants had satisfied the requirements of the rules.  He was entitled to and indeed obliged to exercise his judgment.  That judgment had to be exercised reasonably.  Against the background of the ECO's judgment that the document from the parties was unreliable, given the information set out in the decision letters and summarised in this judgment, it was reasonable for him to conclude that the requirements of the rules had not been met on the available evidence.  
17.	Accordingly, there being neither irrationality or unlawfulness in the decisions made by the ECO, these claims must fail and the applications for Judicial Review are dismissed. 
18.	MR MARKNELL:  Thank you, my Lord.  The defendant would ask for his costs in both of these cases. 
19.	JUDGE SYCAMORE:  Yes and you are asking for those to be assessed in the usual way?  You cannot really resist that application? 
20.	MR CLIFF:  No.