25 April 2019

Home Office use of paragraph 322(5) over tax discrepancies in Tier 1 (General) cases is “legally flawed”

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The Court of Appeal in Balajigari v The Secretary of State for the Home Department [2019] EWCA Civ finds that the Home Office’s stance in Tier 1 (General) cases on the use of paragraph 322(5) of the Immigration Rules to refuse settlement to migrants over alleged tax discrepancies is “legally flawed”.

The Court of Appeal held in Balajigari supra [paragraph 55]: we have come to the conclusion that where the Secretary of State is minded to refuse ILR on the basis of paragraph 322 (5) on the basis of the applicant’s dishonesty, or other reprehensible conduct, he is 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… and then to take that response into account before drawing the conclusion that there has been such conduct.

As the Court of Appeal found in Balajigari, the Respondent further errs in that he concluded that 1. there was dishonesty on the part of the Applicant and 2. The dishonesty renders the presence of the Applicant in the UK undesirable, however he failed to consider whether there were other factors which outweigh the presumption in favour of removal, or give the Applicant the opportunity to raise any matters relevant to those questions. The Court of Appeal held at paragraph 222: First, as discussed in Part A of this judgment, the approach taken by the Secretary of State in deciding to refuse the applications for leave to remain in each of these cases on paragraph 322 (5) grounds – which we take to have been his general approach in all earnings discrepancy cases – was legally flawed (except, for particular reasons, in Albert). This is principally because he proceeded directly from finding that the discrepancies occurred to a decision that they were the result of dishonesty, without giving applicants an opportunity to proffer an innocent explanation. But nor does he address the further questions of whether the dishonesty in question renders the presence of the applicant in the UK undesirable or whether there are other factors which outweigh the presumption in favour of removal, or give applicants the opportunity to raise any matters relevant to those questions: such cases will no doubt be exceptional, but the step cannot simply be ignored. The availability of administrative review is not an answer, not least because the applicant is not normally allowed to produce evidence that was not produced before the original decision. That unlawfulness can be avoided for the future by the Secretary of State adopting a “minded to” procedure, which informs applicants of his concerns and gives them the opportunity to show cause why ILR should not be refused by offering an innocent explanation of the discrepancies (which will need to be particularised and documented so far as possible) and/or drawing attention to matters relevant to the “undesirability” or “discretion” issues. In Albert there was (at least arguably) a distinct unlawfulness, in that the Secretary of State failed to make an explicit finding of dishonesty.

  1. The Court of Appeal concluded that before refusing, the Home Office must:
    1. Let the applicant know that they are minded to refuse, and allow them a chance to submit more information as to why they should not be refused.
    2. With all of the evidence in front of them:
      1. Consider whether the applicant was dishonest
      2. Consider whether, even if dishonest, the applicant’s presence in the UK is undesirable
      3. Consider whether, even if dishonest and undesirable, the applicant should be granted leave for other reasons.

This is great news for all the applicants who either had their appeals or Judicial reviews pending. This may also mean (although not very clear) that those who were refused previously without a right of appeal may be able to have another bite at the cherry by making a human rights application, but it needs to be looked at on a case to case basis.

About the Author

Awais Javed
Awais has an extensive experience of advising high net-worth individuals on all types of immigration matters, ranging from investor and entrepreneur visa applications to appeals and judicial reviews in the Immigration Tribunal and the High Court.

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