Landmark judgment in immigration ‘tax cases’ – Alexis Slatter represents appellant

News

On 16 April 2019, in the case of Balajigari v The Secretary of State for the Home Department [2019] EWCA Civ 673, the Court of Appeal gave an important judgment in the linked appeals, heard in January, concerning the controversial Home Office practice to refuse settlement to Highly Skilled Migrants (T1GM ILR decisions) in cases where there were discrepancies between earnings declared in a previous application for leave to remain and earnings originally declared to HMRC (even if subsequently amended), relying on non-mandatory general grounds of refusal.  A large number of migrants complained that the Home Office had been too ready to find dishonesty without adequate evidential basis or a fair procedure.  The Court intends for its decision to determine the various issues of principle raised in most of the pending legal challenges to TIGM ILR decisions based on earnings discrepancies. 

The judgment has been reported in The Guardian and Independent newspapers.  Alexis Slatter of the immigration team at Goldsmith Chambers represented one of the Appellants.

In addressing the domestic public law challenges to the decision-making process, the Court held that the two-stage analysis of para 322(5) of the immigration rules, advocated on behalf of the Appellants, was correct in principle: first, to ask whether it is “undesirable” to grant leave and if so, second, to consider whether there were factors outweighing the presumption that leave should be refused for that reason.  It was not in dispute and held to be correct, that an earnings discrepancy case could constitute sufficiently reprehensible conduct only if the discrepancy was the result of dishonesty. 

The Court was prepared to endorse the guidance given by the Upper Tribunal in the case of R (on the application of Khan) v Secretary of State for the Home Department (Dishonesty, tax return, paragraph 322(5)) [2018] UKUT 00384 (IAC), subject to an important qualification as to its “starting-point”: an earnings discrepancy may give rise to a suspicion of dishonesty but does not by itself justify a conclusion to that effect and there is no legal burden on an applicant to disprove dishonesty. 

The Court concluded that where the Secretary of State was minded to refuse ILR on the basis of alleged dishonesty, he was required, as a matter of procedural fairness: to indicate clearly to the applicant that he has that suspicion; to give the applicant an opportunity to respond, both as regards the conduct itself as well as any other reasons relied under the umbrella of “undesirability” and the exercise of the second-stage assessment under para 322(5). Then, to take that response into account before drawing the conclusion that there has been such conduct.   The Court did not accept that the availability of a procedure for administrative review following an initial refusal of ILR satisfied the requirements of common law procedural unfairness, principally because, fairness usually required an opportunity to make representations in advance of a decision; but also because the adminstrative review procedure did not permit new evidence to be adduced in response to the allegation of dishonesty.

The Appellants contended that the refusals of their settlement applications engaged Article 8 of sch 1 to the Human Rights Act 1998 and that this had consequences for the basis on which they could challenge the decision in law as well as how procedurally their rights could be vindicated.  The Court considered it right to consider these issues and in doing so, held that Article 8 ECHR is likely to be engaged in the typical case as the notice of liability to removal in consequence of the refusal of ILR (or the curtailment decision) constituted an interference which the Secretary of State needed to justify.  The Secretary of State’s argument that it was only a removal decision that engaged the migrant’s Article 8 rights was rejected as this was an administrative consequence and not the point of legal decision.

The principal substantive consequence of this finding by the Court was that in any legal challenge, the tribunal will be obliged to reach its own conclusion on whether the interference is justified, rather than conducting a rationality review, deciding for itself whether the discrepancy was the result of dishonest conduct by the applicant in supplying figures to either HMRC or the Home Office.  The Secretary of State’s decision that the earnings discrepancies were the result of dishonesty is reviewable as a matter of fact, whether in the context of a human rights appeal or judicial review proceedings. 


Related barristers: Alexis Slatter