Capital Care Services UK Ltd, R (on the application of) v Secretary of State for the Home Department

A mistaken grant by a public authority does not, without more, entitle its recipient to insist that it continue. Whether correction defeats a legitimate expectation depends on all the circumstances, including the terms of the grant, the recipient’s knowledge of the applicable policy, reliance and proven detriment, and whether the resulting unfairness amounts to an abuse of power.

An express power of withdrawal and a policy reservation that it may change weaken any expectation of a fixed term. In any event, a legitimate expectation cannot require the maintenance of an arrangement that conflicts with immigration-control requirements where an overriding public interest requires its revocation.

The appellant held a Tier 2 sponsorship licence under the points-based immigration system. Its disclosed business model supplied migrant medical staff to NHS and private-sector clients. The Secretary of State later suspended and revoked the licence because the appellant did not have full responsibility for the sponsored workers’ duties and functions, as required by the published guidance.

The Administrative Court refused permission to seek judicial review. The appellant appealed, contending that the original grant, made despite full disclosure, gave rise to a legitimate expectation that the four-year licence would continue. The central question was whether revocation following the correction of that mistake was so unfair as to constitute an abuse of power.

Appeal dismissed. Laws LJ, with whom Toulson LJ and Sir Robin Jacob agreed, held that the refusal of permission for judicial review was correct.

1. The Tier 2 guidance required the sponsor to retain full responsibility for deciding the sponsored worker’s duties, functions and outcomes. The NHS framework contracts showed that much control over the doctors’ actual professional duties rested with the NHS. The arrangement therefore did not comply with the guidance, even if the appellant employed the workers under contracts of employment.

2. The Secretary of State had made a mistake in granting the licence after the appellant fully disclosed its business model. Applying the approach in R v Department of Education and Employment, ex parte Begbie [2000] 1 WLR 1115, a clear representation made by mistake does not automatically create an expectation that must be fulfilled. The court must assess all the circumstances and ask whether correction is so unfair as to amount to an abuse of power.

3. Any expectation that the licence would last four years was weak. The grant itself said that it could be withdrawn before expiry, and the guidance stated that current policy could change. The appellant knew the policy and the way in which it supplied workers. It also failed to provide sufficient evidence of substantial detrimental reliance; general assertions and one invoice could not establish it. Leave could not properly be granted on the basis that further evidence might later be produced.

4. Accordingly, the revocation was not an abuse of power. There was also an overriding public interest in maintaining immigration control. Legitimate expectation could not require the Secretary of State to preserve a sponsorship licence for a business model that failed the scheme’s requirements. The Deputy Judge’s immaterial error in treating the licence as renewed did not affect that conclusion.

• Court of Appeal (Civil Division) — dismissed the appeal and upheld the refusal of permission to seek judicial review.
• High Court, Queen’s Bench Division, Administrative Court — Mr James Dingemans QC, sitting as a Deputy High Court Judge, refused permission to seek judicial review on 30 September 2011.