Tribunal refuses permission for appeal of subsidy control judgment on £140m loans made by combined authority

The tribunal dismissed the appellant's claim – which was brought under section 70(1) of the Subsidy Control Act 2022 and argued the loans amounted to unlawful subsidies – in July.

The appellant, Aubrey Weis, was specifically challenging a March 2024 committee decision made in March 2024 to approve two loans to companies in the Renaker Group.

One loan of £70.8m was made to Trinity Developments (Manchester), which is developing four high-rise residential tower blocks on two parcels of land known as "Trinity Islands" located by The River Irwell and Trinity Way.

The second loan of £69.2m was made to New Jackson (Contour) Investments, which is developing two high-rise residential tower blocks known as "Contour" in the Great Jackson Street area.

Weis argued that the loans would not have been granted by a commercial operator and that they had been concluded on non-market terms and had distorted the proper and fair operation of the relevant market in and around Manchester.

However, his claim was dismissed.

Weis applied for permission to appeal, submitting that the tribunal had erred in law by failing correctly to apply orthodox judicial review principles to the GMCA Committee's decision in March 2024.

He claimed that, instead of conducting a judicial review of the decision based on the information and advice that was before the combined authority in March 2024, the tribunal "fundamentally misdirected" itself by considering a report which was produced after the combined authority's decision and in relying upon its own analysis of the terms of the loans.

The appellant specifically claimed:

1. The tribunal had regard to and principally relied upon the interest rate setting paper (IRSP) produced by the Respondent after (i) the date of the Relevant Decision; and (ii) the Respondent received the appellant's substantive pre-action letter challenging the lawfulness of the Respondent's decision-making process and seeking disclosure of the contemporaneous decision-making records.
2. The tribunal conducted and relied upon its own analysis of whether the "terms [of the loans] are more favourable to [the recipients] than the terms that might reasonably have been expected to have been available on the market to the [recipients]" (i.e. whether or not the interest rates complied with the 'Commercial Market Operator principle' pursuant to s. 3(2) of the Act). The tribunal's task pursuant to the Act was not to consider or decide this issue for itself, but rather to apply orthodox judicial review principles to the decision, based on the information and advice that was before the decision-maker as at 22 March 2024.

He argued that this approach replicated the errors of law that were considered, and corrected, by the Court of Appeal in Kenyon v SSHCLG [2020] EWCA Civ 302 (see [28] to [30]) and R (007 Stratford Taxis Limited) v Stratford on Avon District Council [2011] EWCA Civ 160.

However, the tribunal dismissed the arguments, finding: "In our view, none of the Appellant's grounds of appeal discloses any error of law on which permission to appeal should be granted."

The tribunal said that in its previous judgment, it had utilised its expertise to understand the process and form an assessment of the terms of the 2024 Renaker Loans.

"Once the decision was made by the GMCA Committee that was not the end of the process as before the loans were entered into several critical steps such as due diligence and legal review had to be undertaken prior to the actual loan agreements being signed," the tribunal added.

The tribunal also noted its previous decision to dismiss the challenge "made clear that in determining whether the Respondent had granted an unlawful subsidy to Renaker the Tribunal would need to consider the whole process including the various stages leading up to that decision as well as the due diligence and final terms of the 2024 Renaker Loans".

On the "commercial market operator principle" point, the tribunal held the ground did not "advance any arguable case".

"Accordingly, we do not consider that there is a reasonable prospect of the appeal succeeding," the tribunal ultimately concluded, before dismissing the appeal.

Adam Carey