A court has dismissed claims that public loans worth £140m for Manchester skyscraper developments were made on an ‘unlawful’ basis.

The case was heard in the Court of Appeal on June 9 and 10, and was the most recent episode in a long-running legal battle between the Greater Manchester Combined Authority (GMCA) and wealthy city centre landowner Aubrey Weis.

It focused on public money given to support two high-rise developments in Manchester city centre, known as Trinity Islands and New Jackson.

The money went into what is known as special purpose vehicles (SPVs) which are owned by Daren Whitaker, who operates under the brand name Renaker.

Renaker has been responsible for building some of central Manchester’s high-rise luxury towers.

Lawyers representing Mr Weis argued in court earlier in June that the skyscraper loans were issued ‘at unduly favourable [interest] rates’.

Written submissions to the court from Mr Weis’ lawyers said the loans came with a base interest rate of 5.65 per cent, with an extra one per cent margin. But they argued that the extra interest margin should have been higher, at four percent.

Weis Group lawyers also claimed in court that ‘no due diligence was ever conducted into Mr Whitaker’s liabilities or credit worthiness’, and that a paper on the interest rate proposal for the loans was written ‘after the decisionmaker had made the decision’ to approve the funds.

The GMCA hit back in the court case, saying there was a ‘whole due diligence process’ over the decision to loan the cash.

A ruling from the Court of Appeal today (June 29) went in favour of the GMCA, deciding there was ‘no error of law’ in the decision.

It followed a previous hearing at the Competition Appeal Tribunal (CAT) last year, which also ruled in the GMCA’s favour.

In the Court of Appeal judgment issued today (June 29), seen by the Local Democracy Reporting Service, Lord Justice Zacaroli, with agreement from Lord Justice Nugee and Lord Justice Miles, said: “The relevant question is whether the GMCA erred in law in deciding or believing that the loans did not constitute a subsidy.

“While that is an objective question which admits of a range of reasonable answers, the question whether it falls within that range is nevertheless one for the reviewing tribunal to answer.”

Commenting on the decision, a GMCA spokesperson said: “Today’s judgment from the Court of Appeal confirms the findings from last year’s Tribunal, which rejected the false claims that developers received favourable loans, and instead found that they were made on commercial terms.

“Despite repeated legal challenges and attempts in the media to undermine our processes and our reputation, the court has upheld the decision of the expert Tribunal that scrutinised all our documents and stood behind the robust measures we put in place.

“Our Housing Investment Loan Fund has lawfully helped rebuild confidence in Greater Manchester’s housing market, delivering 11,000 new homes, and generating income which has supported our work tackling the housing crisis.

“We welcome the additional clarity on legal guidance provided by the Court, which has today confirmed that our process was “designed to ensure that the GMCA acted on a commercial basis.”

Former Greater Manchester mayor Andy Burnham was chair of the GMCA committee which approved the loans in March 2024.

Mr Burnham was elected as Makerfield MP on June 19 and is widely expected to become the country’ s next Prime Minister.

The Court of Appeal judgement stated that the GMCA ‘ought to have had regard to the guidance’ for subsidy control when assessing whether the loans might be a subsidy.

It also found there were ‘well founded criticisms’ by the Weis Group when it claimed Daren Whitaker ‘had provided no guarantee and the GMCA had conducted no due diligence on his overall financial position’ when deciding on the loans.

A Weis Group spokesperson said: “While we are naturally disappointed that the Court of Appeal has dismissed our appeal, the judgment confirms the serious concerns we have raised about how Andy Burnham and the Greater Manchester Combined Authority have managed over £1bn of public money.

“These are questions Andy Burnham and the GMCA now need to answer. We are considering the judgment carefully with our legal team, including whether to seek permission to judicially appeal the wider process or appeal to the Supreme Court. All options remain open.”