Weis v Greater Manchester Combined Authority

Factual and Procedural Background

On 22 November 2024 Company A advanced two loans (the "Loans") from the Greater Manchester Housing Investment Loan Fund ("GMHILF") to Company B (£60.7m) and Company C (£59.3m) to finance two residential developments. Company B and Company C were special purpose vehicles ultimately beneficially owned by Person A, who operated through a wider group (Group A) with prior borrowing from Company A. The Loans were funded pursuant to a Funding Agreement with Central Government. The Appellant, an investor with significant Manchester-area property interests, applied under the Subsidy Control Act 2022 ("2022 Act") to the Competition Appeal Tribunal ("CAT") seeking review on the ground that the Loans were unlawful subsidies. The CAT dismissed the application (Judgment dated 24 July 2025). The Appellant was granted permission to appeal to the Court of Appeal. The Court of Appeal heard the appeal and handed down judgment dismissing the appeal.

Legal Issues Presented

1. Whether the Loans constituted a "subsidy" under s.2(1) of the Subsidy Control Act 2022, in particular whether the Loans conferred an economic advantage under s.2(1)(b) having regard to the commercial market operator ("CMO") principle in s.3(2).
2. Whether the CAT, when determining an application under s.70(1) of the 2022 Act, is confined to a judicial review style review of the decision-making process (based only on materials before the decision-maker) or may determine for itself (de novo) whether the financial assistance was a subsidy.
3. Whether the CAT was entitled to have regard to materials which post-dated the decision complained of (notably the Interest Rate Setting Paper ("IRSP")).
4. Whether Company A was legally required to have regard to the Statutory Guidance (s.79 and the Guidance) and to apply the RR Communication when setting interest margins, and whether failures in that regard rendered the Decision unlawful.
5. How the RR Communication should be read as to the addition of 400 basis points for borrowers without a credit history and the proper application of that instrument to the Loans.

Arguments of the Parties

Appellant's Arguments

• The CAT was limited to a judicial review of Company A's Decision and should have confined itself to the materials before Company A on 22 March 2024; it should not have determined de novo whether the Loans were subsidies.
• Company A failed to consider or lawfully enquire into: alternative third‑party finance, market interest rates, charging higher rates, project viability, concentration risk, corporate structure and the borrowers' finances, and prior rates charged to the group.
• The CAT wrongly had regard to post-decision materials (notably the IRSP) that were not before Company A and so the Decision could not be validated by reliance on those materials.
• Company A failed to have regard to the Guidance under s.79(6) and its own Investment Strategy and Funding Agreement (including application of the RR Communication), rendering the Decision unlawful.
• The RR Communication requires at least a 400 basis point uplift for borrowers without a credit history and the IRSP's use of only 100 basis points was contrary to that instrument and irrational.

Respondent's Arguments

• Company A's decision-making process, as reflected in the Investment Strategy, Gateway Panel, Credit Committee, independent external advisers and the Part A/Part B reports, demonstrated commercial assessment comparable to a private lender.
• The CAT was entitled to determine for itself whether the Loans were subsidies under the 2022 Act; it could take account of the wider process and materials in reaching that conclusion.
• Even if Company A did not expressly record consideration of s.3(2), the overall process implied a decision that the Loans were on commercial terms and thus not subsidies.
• Any procedural shortcomings or failures to follow internal policy or Guidance could be addressed by ordinary judicial review in the Administrative Court but did not affect the CAT's jurisdiction under the 2022 Act to decide whether a subsidy existed.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court set out the statutory framework under the 2022 Act: a "subsidy" requires satisfaction of s.2(1)(a)‑(d); the CMO Principle is embodied in s.3(2); public authorities must consider the SC Principles (s.12) and have regard to Statutory Guidance (s.79(6)). The Court described Company A's Investment Strategy and approval process (Core Investment Team, Gateway Panel, Credit Committee, Part A and Part B reports) and the chronology: the GMCA decision approving the Loans occurred at a public meeting on 22 March 2024; the IRSP was prepared after that meeting, with its final version dated 25 November 2024.

Central to the appeal was construction of s.70(1) and s.70(5). The Court held that the CAT must first determine whether the decision under review is a "subsidy decision" (a decision to give a subsidy) and therefore it is for the CAT to determine whether the statutory criteria in s.2(1) are satisfied. The Court rejected the Appellant's submission that the CAT was confined to a judicial review (process-only) role and could not decide the preliminary question of whether a subsidy existed. The Court explained that the obligation in s.70(5) to apply judicial review principles relates to review of a subsidy decision once jurisdiction exists; it does not prevent the CAT determining whether a decision is a subsidy decision so as to give it jurisdiction.

The Court analysed the Appellant's reliance on authorities (including Barnet, South Yorkshire Transport, Stratford Taxis, Kenyon and British Gas Trading). It accepted that where the question involves policy judgments Parliament left decisions to elected decision-makers and such subsidy decisions are reviewable only on traditional public law grounds. But the prior question whether assistance is a subsidy is an objective question suitable for decision by the CAT: even if it admits a range of reasonable answers, the reviewing tribunal must decide whether the decision falls within that range or is irrational. The Court therefore concluded the CAT was entitled to determine de novo whether the Loans were subsidies and did not err in doing so.

The Court further addressed the subsidiary grounds: it accepted that Company A should have had regard to the Guidance where there was a real possibility of a subsidy, and that reliance on post-decision materials that did not form part of the decision-maker's thinking would be improper in a pure process review. However, because the CAT was entitled to decide the subsidy question, and it had found the Loans were not subsidies, any failure to follow Guidance or internal policy could not provide relief in the CAT proceedings (though it might found a separate judicial review application to the Administrative Court). On the RR Communication, the Court disagreed with the CAT's interpretation that the 400 basis points language was non-mandatory in the way the CAT read it; the Court read "at least 400 basis points (depending on the available collateral)" as indicating 400 bps was the floor, with collateral affecting the amount over 400 bps. The Court noted criticisms of Company A's reliance on the wider group's finances to justify only 100 bps uplift but concluded these criticisms had no present consequence given the CAT's jurisdictional role and ultimate conclusion that the Loans were not subsidies.

Holding and Implications

HOLDING: The appeal is dismissed; the Court upheld the CAT's conclusion that the Loans were not subsidies under the Subsidy Control Act 2022 and that the CAT was entitled to determine for itself whether financial assistance constituted a subsidy.

Implications: The direct effect is that the CAT's decision that the Loans were not subsidies stands and the Appellant obtains no relief in these proceedings. The Court confirmed that, for the purposes of s.70 of the 2022 Act, the CAT must determine whether the decision under review is a "subsidy decision" (i.e. whether the statutory criteria are met) before applying public law review principles to any subsidy decision; failures by a public authority to follow the Guidance or its own policies may give rise to separate judicial review proceedings but do not invalidate the CAT's power to decide the subsidy question. The Court noted an interpretive point on the RR Communication (that "at least 400 basis points" sets a floor) but found no present consequence for the outcome of this appeal.