ZY (Turkey) v Secretary of State for the Home Department

Hearing dates : 7th December 2010

Lady Justice Black :

ZY ("the appellant"), a Turkish national in his mid-thirties, appeals against the determination of Senior Immigration Judge McGeachy who conducted a second stage reconsideration hearing in November 2009 as a result of which the appellant was refused leave to remain in the United Kingdom.

The appellant originally applied for leave to enter the United Kingdom under the Turkey-European Community Association Agreement (also called the Ankara Agreement and the ECAA) in March 2005. The Secretary of State refused that in July 2005. The appellant sought to change the Secretary of State's mind, submitting further information and adding a human rights application, but in January 2007 the Secretary of State finally refused both the ECAA application and the human rights application. The appellant appealed.

In June 2007, Immigration Judge Lingam ("the IJ") permitted the appellant's appeal to proceed in relation to the human rights decision only and allowed it. This would have entitled the appellant to stay in the United Kingdom. However, the Secretary of State applied for reconsideration which was ordered, on 11 July 2007, by Senior Immigration Judge Jarvis.

Senior Immigration Judge Freeman duly reconsidered Immigration Judge Lingam's decision and found it to contain a material error of law for reasons which he set out in a document dated 12 January 2009. The second stage reconsideration hearing before Senior Immigration Judge McGeachy with which we are concerned resulted from that decision of Senior Immigration Judge Freeman.

The objective of the appellant now is, of course, to have the IJ's decision restored so that he can remain in this country.

Background history

Before I deal with the main issues that arise in the appeal, it is necessary to give a little background history.

ZY was, in fact, already in the United Kingdom when he applied to the Secretary of State for leave in March 2005. He had come in clandestinely as an illegal entrant in January 2000. He applied unsuccessfully for asylum. By August 2004, he had exhausted his rights of appeal in that regard. Since then he has been on temporary release and it has been assumed by both sides that he is subject to the standard condition that he should not engage in business whilst here. However, in July 2004, he invested money in a kebab house, upon the basis of which business he made his first Ankara Agreement application to the Secretary of State in 2005. Subsequently, he developed a new food retail business which he runs in partnership with his brother and it was upon this business that he relied in making the Ankara Agreement application that culminated in the Secretary of State's refusal in January 2007.

The Ankara Agreement

As the Ankara Agreement is a thread that runs through this appeal, it may be convenient to set out the law in relation to it immediately.

Non-EU nationals who wish to establish themselves in business here must apply for leave to enter or to remain. The general provisions applicable to such an application in the period with which this case is concerned are contained in the Immigration Rules (HC395). Under those rules, an applicant has to demonstrate that he has access to a specified (sizeable) amount of capital to invest here; the appellant has never been in a position to demonstrate this. However, Turkish nationals are normally in a special position by virtue of Article 41(1) of the Ankara Agreement. Article 41(1), sometimes called "the standstill clause", prevents the UK from introducing "any new restrictions on the freedom of establishment and the freedom to provide services". In practice, where this applies, it means that Turkish nationals cannot be subjected to any more restrictive provisions than were in force on 1 January 1973, the date of the UK's adherence to the European Union. Accordingly, they need only satisfy the less onerous requirements of the Immigration Rules HC509 and HC510 which were then in force and which, for example, have no requirement as to a particular minimum capital sum.

Certain Turkish nationals do not have the benefit of Article 41(1). There is what was called "the fraud exception". This originally focused on whether the applicant has tried to seek an immigration advantage by fraud.

The mere fact that someone has made a claim for asylum which has not succeeded does not necessarily exclude him from Article 41(1) as R (on the application of Tum) v SSHD; R (on the application of Dari) v SSHD [2004] EWCA Civ 788 shows. The Court of Appeal was there concerned with two Turkish claimants, both of whom unsuccessfully claimed asylum here then stayed on and applied for leave to enter to establish themselves in business, relying on the standstill provision in Article 41(1). The Secretary of State argued that Article 41(1) could only benefit a person who has lawfully entered the United Kingdom and, having done so, seeks to establish himself here and to operate a business. His case was that as Tum and Dari were treated for legal purposes as not having entered the country, their applications were to be determined according to the current domestic law. The Court of Appeal rejected that argument, holding that, with the exception only of "a person who achieves entry to this country by the use of fraud", Article 41(1) applied whatever a person's status with regard to his right to enter or remain in this country. Lord Woolf made it clear that there was no suggestion that either of these claimants had acted in any way fraudulently and pointed out that claims for asylum can be bona fide claims, albeit that they are unsuccessful.

The Secretary of State petitioned the House of Lords for leave to appeal and the House of Lords referred the matter to the European Court of Justice for a preliminary ruling. R (Tum) v Home Secretary ( Case C-16/05) [2008] 1 WLR 94 is the decision, delivered in September 2007, of the European Court of Justice where the Secretary of State was no more successful than he had been in the Court of Appeal. The European Court of Justice agreed that Article 41(1) applied to first admission to a member state of Turkish nationals intending to establish themselves in business and that, in particular, failed asylum seekers were not deprived of the benefit of it merely by virtue of the fact that they had made unsuccessful asylum claims. The Court referred to the settled case law establishing that Community law cannot be relied on for abusive or fraudulent ends and that national courts can, in a particular case, deny a person the benefit of provisions of Community law on the basis of objective evidence of abuse or fraudulent conduct on his part, but said that the mere fact that someone has applied unsuccessfully for asylum cannot be regarded as constituting abuse or fraud and recorded that the claimants were not accused of any other fraudulent conduct.

R (LF) (Turkey) v SSHD [2007] EWCA Civ 1441 was determined the month after the decision of the European Court of Justice in the Tum case and in the light of it and illustrates that the exception is not confined simply to fraud but includes other forms of abuse of rights. The applicant was a Turkish national who was granted temporary admission to the United Kingdom whilst his asylum claim was being considered, subject to a requirement that he should not enter employment or engage in any business or profession. His asylum claim was refused and his appeal rights finally exhausted, at which point he should have made arrangements to return to Turkey. In fact, in breach of the terms of his temporary admission, he entered into business running a café-restaurant. He then applied for leave to enter the UK as a self-employed businessman, relying on Article 41(1). The Secretary of State refused to give him the benefit of the standstill provision because he had established his business by failing to depart from this country when required to do so and breaching the conditions of his temporary admission. The Court of Appeal endorsed that approach which it considered permissible because the application depended on the applicant's

[[bl]]"own wrongdoing" in establishing a business "in plain contravention of a then extant prohibition against his doing so".[[/bl]]

The precise extent of the application of the abuse of rights principle remains open; we are told that this court has made a reference to the Court of Justice of the EU in Oguz v SSHD [2010] EWCA Civ 311 concerning the position, vis-à-vis the Ankara Agreement, of a Turkish national with leave to remain here on condition that he does not engage in any business or profession who enters into self-employment in breach of the condition and then seeks leave to remain on the basis of the business he has established. However, the existence of the principle is not in doubt and the circumstances of the issue referred to Europe are not those of this case.

The focus of the appeal

The appeal has not, in fact, been concerned with the substance of Senior Immigration Judge McGeachy's decision, the...