Tribunal decisions

The decision

UPPER Tribunal
(Immigration and Asylum Chamber) Appeal Number: IA/37290/2014

THE Immigration ACTS

Heard at: Field House
Decision and Reasons Promulgated
On: 25 January 2017
On: 15 February 2017

Before
Deputy Upper Tribunal Judge Mailer

Between
Mr Sathya Murthy Chilumula
no anonymity direction made
Appellant
and

secretary of state for the home department
Respondent

Representation
For the Appellant: Mr Z Khan, counsel (instructed by Universal Solicitors)
For the Respondent: Mr L Tarlow, Senior Home Office Presenting Officer

DECISION AND REASONS
1. The appellant appeals with permission against the decision of First-tier Tribunal Judge C M Phillips, promulgated on 4 July 2016 dismissing his appeal against the respondent's decision to refuse his application for leave to remain in the UK under the Tier 1 (Entrepreneur) route and to remove him by way of directions under s.47 of the Immigration, Asylum and Nationality Act 2006. There was no respondent's representative at the hearing before Judge Phillips.
2. The appellant is a national of India, born on 12 October 1987. He originally appealed together with a second appellant for a Tier 1 (Entrepreneur) migrant visa. However, during the course of the appeal, the second appellant resigned as director in the company concerned and has left the UK. He was therefore deemed to have abandoned his appeal.
3. It was therefore only the appellant who remained as a director of the company.
4. First-tier Tribunal Judge Phillips noted that both their applications had been refused for the same reasons and were in identical terms.
5. In the reasons for refusal it is asserted that the respondent contacted the appellant on 3 September 2014 requesting submission of a contract with an expiry date and proof of trading in the form of a letter from a bank.
6. On the evidence subsequently submitted to the respondent, she was not satisfied that the appellant qualified for an award of points. Accordingly, no points were awarded under provision (d) in the first row of Table 4 of Appendix A of the Immigration Rules that were applicable.
7. The Judge noted that the appeal had a long history. They were originally heard and dismissed in March 2015. That was followed by a successful appeal before the Upper Tribunal in November 2015 as a result of which the decision was set aside.
8. At the hearing before the Upper Tribunal on that occasion, the respondent's representative accepted that the contract of service between the business and Rolabeth Ltd had been provided. That was a rolling contract with a 30 day notice period. It was conceded by the respondent that the rolling contract was capable of meeting the requirements of paragraph 41SD(e)(iv)(1)(d) and that the First-tier Judge had erred in failing to consider the contract and whether the evidence that it was a rolling contract was sufficient to meet the requirements under the Rules.
9. The Upper Tribunal noted on that occasion that a letter had been submitted with the application dated 11 September 2014 from Online Immigration UK confirming that the Rolabeth contract was a rolling contract without a specific end date terminable on 30 days' notice and the Judge failed to consider whether this evidence was capable of meeting the requirements under paragraph 41 SD which required the contract to show the duration of the agreement.
10. Judge Phillips stated at [25] that "?.the issue in the refusal decision was in fact whether or not the appellants' business was actively trading and the refusal on the basis that provision (d) of Table 4 was not met".
11. The Judge referred to the general service agreement dated 18 June 2015 between Rolabeth Ltd and Arvisat Technologies and Solutions Ltd. The terms were set out at [26] as follows:
"3. The term of this Agreement (the Terms) will begin on the date of this Agreement and will remain in force and effect until the completion of the Services, subject to earlier termination as provided in this Agreement. The Term of the Agreement may be extended by mutual written agreement of the Parties.
4. In the event that either Party wishes to terminate this Agreement, that Party will be required to provide thirty (30) days' notice to the other Party."
12. The Judge found at [27] that if the agreement is taken at its highest, there is no timescale specified or date given for the provision of the services to begin or end.
13. The Judge found with reference to Table 4 and the decision in Shebel (Entrepreneur: Proof of Contract) [2014] UKUT 00216 (IAC) that this agreement, whilst it may be construed as a rolling contract and whilst in line with the Shebel, this letter may be admitted as additional evidence. That letter was from an Immigration Advisor and not from Rolabeth. She found that neither provides sufficient detail to provide satisfactory evidence of continuous engagement in the business activity or continuous work or trading. To provide this additional evidence she found that the letter from Barclays Bank is not sufficient evidence because this does not state that the business is actively trading [29].
14. In the event, she found that the documents provided do not meet the requirements of the Immigration Rules for an award of points under (d) of Table 4 of Appendix A. If an applicant chooses to rely on one agreement as these applicants chose to do, then this must provide clear evidence of business activities/trading. She found on the balance of probabilities that this Service Agreement and letter do not [31].
15. She found that "? there is insufficient detail in the terms of the agreement that lacks any time scale for the work, to show a meeting of minds" [31].
16. In any event, the Judge was not persuaded that she had the power to keep this applicant's application alive for the first appellant by remitting the application to the respondent for reconsideration as to whether the requirements would have been met by the first appellant if his application had been considered alone. She found that the basis of the application had changed and that the terms of paragraph 245DE(h) and (l) cannot be read as including the situation that has arisen following the departure from the UK of the other team member.
17. On 5 December 2016, Upper Tribunal Judge Eshun found that it was arguable that the Judge failed to consider clause 10 of the contract which, it was said, provides a timescale at which the services would come to an end, namely one year after installation of the five specified services set out in Clause 1.
18. It was also arguable that the rolling contract may constitute services provided by a business engaged in genuine entrepreneurial business recognised by the current Immigration Rules. The appellant sought to rely in his grounds on paragraph 52 of Appendix A even though it is stated at [33] that he no longer relies on it.

The appeal
19. Mr Khan relied on the grounds of appeal.
20. The requirement to provide evidence of "trading" is set out at paragraph 41-SE (e)(iv) of Appendix A to the Rules. As at the date of the decision on 18 September 2014, that paragraph provided that:
(e) if the applicant is applying under the provisions in (d) in Table 4, he must also provide:
(iv) one or more of the following documents "showing trading" which must cover the continuous period commencing before 11 July 2014 up to no earlier than three months before the date of his application:
(1) one or more contracts for service. Each contract must show:
(a) the applicant's name and the name of the business;
(b) the services provided by the applicant's business;
(c) the name of the other party or parties involved in the contract and their contract details including their full address, postal code and, where available, landline phone number and any email address; and
(d) the duration of the contract; or
(2) one or more original letters from a UK Regulated financial institution with which the applicant has a business bank account, on the institution's headed paper, confirming the dates the business was trading during the period referred to at (iv) above.
21. Mr Khan submitted that the contract at F1-F6 of the bundle shows the name of the appellant, the name of his business, services provided by the business (clauses 1 and 2); the name and contact details of other parties to the contract at pages 3, clause 14, and finally the duration of the agreement at clauses 3 and 10.
22. The contract showed that it was entered into on 18 June 2014 and clause 10 made it clear that "after the installation of the services, support will be provided for a duration of one year."
23. He accordingly submitted that the appellant did submit a document "showing trading" for a continuous period commencing on 11 July 2014, namely 18 June 2014 but no earlier than three months before the date of application which in fact was 18 July 2014.
24. Accordingly the appellant provided a contract which met all the requirements of the Rules.
25. Nowhere in her decision did the Judge consider Clause 10 of the contract which provided a time scale at which the services will come to an end, namely a period of one year after the installation of the five specified services (clause 1), expressly prescribed within the contract.
26. He submitted that the Judge disregarded or failed to take into account this material provision of the agreement and it was wrong to conclude therefore that there was "no timescale specified or date given for the provision of the service to begin or end" or that the agreement "lacks any timescale for the work", to show a meeting of minds."
27. Further, there was and still is no requirement that an applicant must show "sufficient detail to provide satisfactory evidence of continuous engagement in the business activity or continuous work or trading." All the Rules require is the submission of just one or more of the two alternative types of documents set out at paragraph 41-(SD)(e)(iv)(1) or 41-SD(e)(iv)(2) "showing trading" commencing before 11 July 2014 up to and no earlier than three months before the date of the application.
28. Accordingly, the Judge was not entitled to dismiss the appeal for want of a document detailing continuous engagement in the business activity or continuous work or trading as such a requirement is not prescribed in the Rule. The Judge as not at liberty to impose her own requirements.
29. In any event, he submitted that the fact that the rolling contracts may constitute services provided by a business engaged in genuine entrepreneurial business is recognised by the current Immigration Rules which made provisions for a rolling contract and provides at paragraph 41-SD (C)(1)(d) that the contract must provide:
(d) the duration of the contract or, if it is a rolling contract with no defined end date, confirmation of when this arrangement began and a letter from the customer or the representative confirming that the contract has not been terminated.
30. The Rules accordingly recognise that such rolling contracts are capable of meeting the requirements contained within the specified evidence requirements and the relevant paragraphs of the Rules and "the meeting of minds" referred to in Shebel.
31. It is also contended that the Judge erred in concluding that the appellant fell foul of paragraph 52 of Appendix A. That paragraph does not impose any additional requirements to the specified evidential requirements or any other general requirement for the Tier 1 (Entrepreneur) category of the Rules. That paragraph merely provides that two applicants and no more than two applicants may claim points for the same investment and business activity.
32. That paragraph also sets out the circumstances in which two persons may claim for the same investment and business activity and specifically provides that both applicants must have an equal level of control over the funds, and/or the business in question.
33. He submitted that the appellant did provide such evidence, namely that he must have an equal level of control over the funds and/or business in question. The appellant is perfectly capable of pursuing and continuing his business (a limited company) despite his entrepreneurial team member having left the UK.
34. It is commonplace that the Tribunals have allowed appeals of one of the two entrepreneur team members and/or refused or dismissed an application or appeal of the other team member for one reason or the other. It is accordingly not correct that the appellant in the present case should be denied the fair hearing of his appeal and deprived of his leave simply because another person who initially arranged to pursue a business with him but has now changed his mind. The Rules cannot have been intended to operate in that manner, despite that a business such as a company, as in the present case, can be perfectly carried out by the remaining director of the business.
35. Mr Tarlow relied on the short Rule 24 response. He contended that the Judge directed herself appropriately. She was entitled to find that the terms of the agreement were lacking and that there was insufficient detail [31]. Moreover, there are additional reasons given at paragraph 27-30. The Judge made findings of fact that she was entitled to. In particular there was not enough detail in terms of the agreement to show a meeting of minds.
Assessment
36. I have had regard to the decision in Shebel, supra. The requirement to prove the existence of "contracts" in paragraph 41-SD of Appendix A to the Immigration Rules does not itself require the contracts in question to be contained in documents. There is, however, a need for such contracts to be evidenced in documentary form.
37. At [5] the Tribunal held that the intention behind the Rules is that the claimant should be able to show that he is genuinely trading. It is inconceivable that the entrepreneur route was to be confined to the types of trading in which contracts are made by single documents. Paragraph 41-SD properly specifies that there must be documentary evidence sufficient to show genuine contracts, and containing sufficient information to enable the secretary of state to check the matter with the other parties for the contracts if she chooses to do so.
38. The requirement of paragraph 41-SD (iv) is to provide one of the documents that are set out. There is no requirement to submit both contracts as well as bank documents.
39. It is evident from paragraph 41-SD(e)(iv)(e) that it is expressly stated that one or more of the documents set out must be provided. The first type of document is one or more contracts for service. The other type of document is one or more original letters from UK regulated financial institutions with which the applicant has a business account.
40. The appellant based his case on the contract contained at F1-F6 of the respondent's bundle.
41. Clause 10 provided that after the installation of the services, support will be provided for a duration of one year.
42. Accordingly, the documents submitted by the appellant showed trading for a continuous period. It was to commence before 11 July 2014 but no earlier than three months before the date of the application, which was 18 July 2014.
43. The agreement that was entered into between Rolabeth Ltd, described as the customer, and Arvisat Technologies and Solutions Ltd, as the service provider. The services provided are set out at paragraph 1. The terms of the agreement are set out at paragraphs 3 and 4. The agreement will begin on the date of the agreement and will remain in force and in effect until the completion of services subject to earlier termination.
44. It was also provided at clause 10 that the customer agrees to provide for the use of the service provider providing the services, the following extras, namely that after the installation of the services, support will be provided for a duration of one year.
45. I find that this was a material provision of the agreement and it was accordingly not correct that there was no timescale specified or date given for the provision of the service to begin or end. There was also no basis for finding that the agreement lacks any timescale for the work to show a meeting of minds.
46. I accordingly find that there was sufficient clear evidence of business activity or trading provided as set out in the service agreement.
47. I have also considered the conclusion that the appellant's appeal fell foul of paragraph 52 of Appendix A.
48. As submitted, that paragraph does not impose any additional requirements to the specified evidential requirements or any other general requirement for the Tier 1 (Entrepreneur) category under the Rules. It provides that two applicants and no more than two may claim points for the same investment and business activities.
49. In such an event, the applicants must have a full level of control over the funds and/or the business or businesses in question.
50. The appellant did provide evidence that he is the director of a business, namely Arvisat Technologies and Solutions Ltd, a limited company having a separate legal entity.
51. With regard to the requirement that he must have equal level of control over the funds and/or the business in question, he is capable of pursuing and continuing his business, a limited company, despite the fact that a team member has left the UK.
52. The appellant did apply for leave to remain as a Tier 1 Entrepreneur showing trading in this business. There is no contention by the respondent that the business is anything other than genuine. Nor is there any contention other than that it remains operative in trading. Nor has any issue been raised as to the appellant's continuing access to the funds or continuous control of the business in question as a legally registered director.
53. As submitted, the proposed business remains the same; the investment funds in question remain in the same amount; the business account with Barclays remains the sameand the contract which has been entered into by the business as a company (and not by the appellant or his team member in their personal capacity) remains valid and enforceable. The services provided by the business remain unchanged.
54. As submitted by Mr Khan, there are cases where the Home Office has granted leave to remain where there were two entrepreneur team members, but where after the application a team member has been dismissed for one reason or another. Moreover, the Tribunals have allowed appeals in respect of only one of the two original entrepreneur team members.
55. I find that the Tribunal was not precluded from allowing the remaining appellant's appeal .
56. I also note that although the contract does not contain a fixed end date as it can be terminated on 30 days' notice; it was recorded before the Upper Tribunal in the determination that it had been conceded by the respondent that such a contract could meet the specified evidence requirements.
57. I accordingly find that the decision of the First-tier Tribunal involved the making of an error on a point of law. I accordingly set it aside and re-make it.
Remaking the decision
58. I repeat and incorporate my findings herein.
59. From the foregoing I find that the contract does show trading from 18 June 2014, which is the start date of the agreement, for a continuous period which does not expire earlier than three months prior to the date of the application. The contract does not contain a fixed end date. However, as noted, it was conceded by the respondent that such a contract could meet the specified evidence requirements.
60. Clause 10 of the contract makes it clear that after the installation of services, support will be provided for a duration of one year.
61. There is thus a timescale specified or date given for the provision of services to begin or end. The Rules require that an applicant submit one or more of the two alternative types of documents prescribed under paragraph 41-SD, showing trading commencing before 11 July 2014 up to no earlier than three months before the date of application.
62. I also note that the current Rules recognise that rolling contracts are capable of meeting the requirements contained in the specified evidence requirements under paragraph 41-SD. Such rolling contracts may constitute services provided by a business engaged in genuine entrepreneurial business.
63. Having regard to the circumstances as a whole I find that the appellant is capable of pursuing and continuing the business, a limited company, alone. The proposed business remains the same. The contracts entered into by the company, remain the same. As the Director of the company the appellant has access to funds which he controls. The bank account remains unaltered as do the services provided.
Notice of Decision
The decision of the First-tier Tribunal involved the making of an error of law and the decision is set aside. I re-make the decision substituting for it a decision allowing the appellant's appeal under the Immigration Rules.
No anonymity direction is made.

Signed Date 13 February 2017
Deputy Upper Tribunal Judge Mailer