“(1) It shall be the duty of each waste collection authority— (a) to arrange for the collection of household waste in its area except waste— (i) which is situated at a place which in the opinion of the authority is so isolated or inaccessible that the cost of collecting it would be unreasonably high, and (ii) as to which the authority is satisfied that adequate arrangements for its disposal have been or can reasonably be expected to be made by a person who controls the waste; (b) if requested by the occupier of premises in its area to collect any commercial waste from the premises, to arrange for the collection of the waste; … … (3) No charge shall be made for the collection of household waste except in cases prescribed in regulations made by the Secretary of State; and in any of those cases— (a) the duty to arrange for the collection of the waste shall not arise until a person who controls the waste requests the authority to collect it; and (b) the authority may recover a reasonable charge for the collection of the waste from the person who made the request. (4) A person at whose request waste other than household waste is collected under this section shall be liable to pay a reasonable charge for the collection and disposal of the waste to the authority which arranged for its collection; and it shall be the duty of that authority to recover the charge unless in the case of a charge in respect of commercial waste the authority considers it inappropriate to do so.”
“Article 107 (1) Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market. … Article 108 … (2) If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the internal market having regard to Article 107, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission. If the State concerned does not comply with this decision within the prescribed time, the Commission or any other interested State may, in derogation from the provisions of Articles 258 and 259, refer the matter to the Court of Justice of the European Union direct. On application by a Member State, the Council may, acting unanimously, decide that aid which that State is granting or intends to grant shall be considered to be compatible with the internal market, in derogation from the provisions of Article 107 or from the regulations provided for in Article 109, if such a decision is justified by exceptional circumstances. If, as regards the aid in question, the Commission has already initiated the procedure provided for in the first subparagraph of this paragraph, the fact that the State concerned has made its application to the Council shall have the effect of suspending that procedure until the Council has made its attitude known. If, however, the Council has not made its attitude known within three months of the said application being made, the Commission shall give its decision on the case. (3) The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the internal market having regard to Article 107, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision. …”
“2.113 Favouring certain undertakings or sectors. In order to constitute aid, a State measure must favour ‘certain undertakings or the production of certain goods’. This requirement is known as the selectivity condition. It is one of the defining features of State aid, and is distinct from the requirement to demonstrate and economic advantage. Where aid is granted to an individual undertaking, it can usually be presumed to be selective. But in the case of measures that apply more broadly to multiple undertakings, the selectivity condition serves to distinguish those schemes that are regarded as State aid from measures whose differential impact is not caught by Article 107(1), in particular general measures of tax or economic policy. 2. 114 Problem areas. Despite the number of cases which have addressed the selectivity condition, it remains the most difficult of the State aid conditions to apply in practice, and the assessment of selectivity has thus been described as ‘a difficult exercise with an uncertain outcome’. The basic problem is that not every measure that can be described as producing an advantage for one or more groups of undertakings over others is regarded as selective within the meaning of Article 107(1). Rather, the case-law of the Court has distinguished two particular situations where a measure with differential effects may nevertheless escape classification as aid on the basis of a selectivity analysis: the favoured undertakings may not be comparable, properly speaking, to the non-favoured group; and the different treatment may be justified by the nature and scheme of the relevant system. To address those issues a three stage analysis of selectivity has emerged for complex cases (particularly tax cases). First, the relevant reference system must be identified. Secondly, it must be established whether the measure is prima facie selective, in light of that reference system. The third question is whether the measure is justified by the nature of the scheme. … It should be emphasised, however, that it is not necessary to address all three stages in every case: in most cases, the prima facie selectivity of the measure will be obvious without having to look at a reference framework; and the ‘nature or scheme’ issue will only arise to the extent that this is advanced as a justification by the relevant Member State. 2-115 The relevant comparison. A measure is prima facie selective if it produces advantages exclusively for certain undertakings or certain sectors of activity. As noted above, this will normally be the case where aid is granted to a single undertaking.493 But in less obvious cases, where the measure might otherwise be characterised as a general measure, the Court applies a test of whether the measure favours some undertakings by comparison with others that are in a ‘comparable legal and factual situation’, in the light of the objective pursued by the measure in question. That in turn raises the question of how comparability is to be assessed. The Court’s answer is that the analysis should start by identifying the relevant reference framework, or in other words the point of reference for the comparison. …”
“Although some cases of measures of individual application may require a more complex assessment by reference to a relevant reference framework, such as individual tax rulings …”
“As can be seen from this, there are a number of elements to selectivity. In particular: a) it must be determined whether the measure favours certain undertakings (or sectors) over others; b) those undertakings must be in a ‘comparable factual and legal situation’; c) whilst a tax advantage can constitute State aid, it will not do so if it results from a general measure applicable without distinction to all economic operators; d) the starting point is to identify the ordinary or ‘normal’ tax system, and then determine whether the tax measure is a derogation from that system; e) the question whether undertakings are in a comparable factual and legal situation must be determined in the light of the objective pursued by the ordinary tax system; and f) even if a measure is a priori selective, there will be no State aid where the Member State shows that the differentiation in treatment flows from the ‘nature or general structure’ of the system.”
“ … Community law confers a right to reparation where three conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the injured parties.”
“He identified the following as potential factors: (1) the importance of the principle which has been breached; (2) the clarity and precision of the rule breached; (3) the degree of excusability of an error of law; (4) the existence of any relevant judgment on the point; (5) whether the infringer was acting intentionally or involuntarily or whether there was a deliberate intention to infringe as opposed to an inadvertent breach; (6) the behaviour of the infringer after it has become evident that an infringement has occurred; (7) the persons affected by the breach or whether there has been a complete failure to take account of the specific situation of a defined economic group; (8) the position taken by one of the Community institutions in the matter. He added (at page 554B-D) that the application of the ‘sufficiently serious’ test ‘comes eventually to be a matter of fact and circumstance’. ‘No single factor is necessarily decisive. But one factor by itself might, particularly where there was little or nothing to put in the scales on the other side, be sufficient to justify a conclusion of liability.’”
“1) The Council’s provision of household waste collection services (its ‘Household Waste Business’) is and has been funded largely or entirely through council tax revenue. 2) The Council’s Household Waste Business has been subsidising its provision of commercial waste collection services (its ‘Commercial Waste Business’), in particular by giving it access to assets and personnel at a cost less than the market price. As a result, its Commercial Waste Business has gained a commercial advantage over TDC and other private companies providing similar services, because it has been able to set its charges at lower levels by reason of not being required to bear the market costs of providing the commercial waste collection services. 3) The provision of this subsidy by the Council constitutes State aid (the Council being for these purposes an emanation of the State) and is prohibited by Article 107(1) of TFEU unless it is notified to the European Commission under Article 108(3) of TFEU and is declared by the European Commission to be compatible with the internal market: ‘The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision’ (Article 108(3)). 4) As the Council has not obtained a decision under Article 108(3) the State aid that it has provided to its Commercial Waste Business is unlawful in breach of that provision. 5) The prohibition in Article 107(1) and Article 108(3) is directly effective against local authorities, including the Council. 6) By reason of the Council's breach of the final sentence of Article 108(3), TDC has suffered and will continue to suffer loss and damage. 7) The principal relief sought in the prayer is: (a) declarations to the effect that the Council has unlawfully provided State aid to its Commercial Waste Business; (b) a ‘permanent mandatory injunction requiring the Defendant to set its price for commercial waste collection services so as to cover the costs of providing those services on a standalone basis’; (c) damages, which according to the claim form are expected to exceed£500,000 .”
“Further or in the alternative, in the event that the State liability conditions apply to the Claimant’s claim for damages by virtue of either English or EU law, it is averred that the Defendant’s breach of Article 108(3) TFEU is sufficiently serious for at least the following reasons: a. Article 108(3) TFEU supports an important rule of EU law, namely, the prohibition on State aid; b. Article 108(3) TFEU is a clear and precise rule of EU law; c. The Defendant’s breach of Article 108(3) TFEU has persisted long after (i)31 July 2017 , when the Claimant first alerted the Defendant to the presence of State aid by cross-subsidy in the conduct of its Commercial Waste Business, by letter from its Solicitors, Tilly Bailey & Irvine LLP, and (ii)24 October 2018 , when the Claimant drew the Defendant’s attention to the judgment of4 May 2018 of the French-Speaking Court of First Instance of Brussels in case 2017/1957/A, holding that arrangements similar to those obtaining between the Defendant’s Household and Commercial Waste Businesses amounted to State aid for the purposes of Article 107(1) TFEU; d. In light of (c) above, the Defendant’s breach of Article 108(3) TFEU has been deliberate since at least31 July 2017 ; alternatively, since at least24 October 2018 ; The Defendant has persisted in its breach of Article 108(3) in flagrant disregard for the detrimental economic impacts on the Claimant of the cross-subsidy of between the Defendant’s Household Waste Business and its Commercial Waste Business on Claimant. The Defendant has been aware of such impacts since21 December 2017 .”
“The best argument in favour of permitting the Council to rely on the selectivity criterion argument at this application is that, despite his protests, [counsel for TDC] addressed it substantively in his oral submissions. However, in the exercise my discretion I shall not allow the Council to rely on this ground in support of its application. Counsel in [counsel for TDC]’s position is on the horns of a dilemma, because he will be understandably reluctant to assume that the judge will rule out the applicant's argument in limine. The fact that he therefore adopts a belt-and-braces approach ought not to count definitively against his primary submission. In the present case, there is substantial litigation in the context of a long-running dispute between the parties. Wherever the merits might lie, the selectivity criterion argument involves a difficult and disputed question of law that goes to the fundamental basis of the claim. To give notice of the point almost six months after the application was filed and only two days before the hearing, with the result that it was first addressed by TDC in a very short supplemental skeleton argument on the day before the hearing, is a substantial unfairness to TDC. There is no good reason why the Council could not have raised the point much earlier and I shall not permit it to do so now.”
“Despite my ruling, the argument that I heard on the selectivity criterion is not redundant. I shall have cause to refer to it in the context of the primary basis on which [Counsel for the Council] put the Council’s application, that TDC has no real prospect of establishing a right to claim damages from the Council.”
“57. There is no direct evidence to indicate that the Council either deliberately flouted the State aid rules or acted without regard to those rules, not caring whether its conduct infringed them. [Counsel for TDC] submitted that such an inference could be drawn from either or both of two things: first, the Council's persistence in the conduct complained of after TDC had expressly alleged breach of the State aid rules in correspondence; second, the clarity and precision of the State aid rules. I do not consider that these matters justify the inference that the breach of the State aid rules (assuming there to have been a breach) was anything other than unintentional. … 58. The important question concerns the ostensible merit, not the fact, of the TDC’s complaint. In one sense, the State aid rules are clear and easy to state. However, their application in differing contexts and circumstances can be far from plain and obvious. That is one reason why there is much litigation about them. It is also a reason why Article 108 provides a mechanism by which it can be determined whether aid offends against Article 107(1). There is no case-law of the CJEU or of the courts of England and Wales that establishes that arrangements such as those made by the Council constitute unlawful State aid. No Community institution has taken a position on the matter (cf. factor (8) in Negassi), and the Commission has not even stated a preliminary opinion since the matter was referred to it. The clarity and precision of the basic principle therefore has limited force in the present case.”
“If the argument is plainly weak, or even obviously wrong, a breach of the State aid rules by the Council may well be more likely to be considered inexcusable, perhaps even wilful, and thus to be sufficiently serious. On the other hand, if the argument is plausible and might be advanced reasonably and in good faith, a breach might be less likely to be considered serious. As Negassi shows, this is not a consideration that need await the final determination of whether the Council’s actions were lawful.”
“The Council says that its factual and legal positions are not comparable to those of TDC and that any differential treatment is justified by the general nature and structure of the scheme in section 45 of EPA 1990, under which the Council operates. [Counsel for the Council] referred me to two decisions in this connection …”
“[Counsel for the Council] submitted that the fact that the Council and TDC are not in comparable legal and factual positions is shown by section 45 of EPA 1990 and by Warren J’s judgment …”
“66. [Counsel for TDC] submitted that Warren J’s decision was irrelevant to the present case, because it concerned the question whether, in providing commercial waste collection, the Council is engaged in activities as a public authority, not the question whether it acts as an undertaking for the purpose of the State aid rules. Certainly, the decision is not directly on point and does not decide the issues arising in these proceedings. However, its relevance lies in its analysis of the particular legal regime under which local authorities provide commercial waste collection services and the distinction between the positions of local authorities and commercial undertakings. 67. [Counsel for TDC] submits that the Council has admitted in its defence that its operations constitute it an ‘undertaking’, and by reference to comments in Bacon he says that aid that confers advantage solely on a single undertaking will necessarily meet the selectivity criterion. The point may be arguable, but I think that the contrary is also arguable and that [counsel for TDC]’s case is overstated. … The important point made by the Council is that it does not provide its commercial waste collection services on a commercial basis but under a specific regime for environmental protection, which is directed to the public benefit not to the economic advantage of local authorities, and that as such its factual and legal situation is not comparable to that of TDC. That point seems to me to be at the least strongly arguable. Indeed, I should be inclined to accept it, although I am not deciding the question. 68. For present purposes, what is important is that, even if the Council is wrong, the position it has taken it not so obviously lacking in merit that its conduct can be considered to amount to a wilful breach of the State aid rules or to be inexcusable.”
“The sixth factor in Negassi does not advance matters. The Council has persisted in its conduct, despite complaints by [TDC]. But it has never become ‘evident’ that its conduct is a breach of the State aid rules. I have mentioned that neither the Commission nor any other EU institution has taken a position on the matter; this is the eighth factor. The seventh factor does not seem to me to have significant weight in the circumstances. The Council knows of the effect complained of by TDC. Wilful flouting of the State aid rules would in those circumstances be the more serious. If, however, the Council believes that it is not acting unlawfully, there is no good reason why, simply to avoid commercial damage to TDC, it should increase its charges to its commercial customers.”
“70. Having considered the factors, I conclude that TDC’s case on the second State Liability Condition is at best merely arguable but that it carries no conviction and has no realistic, as opposed to merely fanciful, prospect of success. It ought not, therefore, to be permitted to proceed. 71. I have borne in mind [counsel for TDC]’s reminder that ‘the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case’ (principle (vi) in EasyAir). I am not persuaded that this presents a sufficient reason for refusing summary judgment in this case. First, a party that brings a claim is obliged to be able to set out the matters on which it relies to ground the claim and to verify those matters with a statement of truth. This requirement is not negated or diluted by the obvious fact that the balance of the evidence for and against the matters relied on in the claimant’s pleaded case may appear different at trial, after disclosure and exchange and examination of witness evidence, from the way it appeared at an early stage. It seems to me that TDC has not set out any plausible grounds for establishing State liability against the Council and is not in a position to do so. Related to this, secondly, I agree with [counsel for the Council] that TDC’s position is not properly to be viewed as a case of awaiting evidence that will establish the matters on which it currently relies but is in the nature of a fishing expedition, hoping that something will turn up that will enable it to advance a case on the second State Liability Condition that it cannot advance at present. Even on that basis, thirdly, I do not consider that reasonable grounds exist for supposing that anything of assistance to TDC would turn up.”
“13. I … think that Warren J was entirely right and that there is no real prospect of challenging the analysis he adopted which is that if local authorities are operating under section 45, then that is a special legal regime which is applicable to them in their capacity as public authorities exercising public duties and which is different from the legal regime which applies to private sector businesses such as the claimant even though, from the point of view of the consumer, the services provided may be indistinguishable. That is because, as Warren J sets out, the section 45 power is hedged around by a number of constraints. 14. The ones he identified were that, firstly, a local authority is obliged to make an arrangement in relation to any commercial waste from any premises within its area, an obligation which does not apply to those who are operating in the private sector; secondly, that there are constraints in the charges that can be made because section 45(4) imposes the limitation that the charge must be reasonable, which does not apply to private sector operators; and thirdly, that there are obligations in relation to disposal under section 48; see what he says as to the flexibility available to a private operator in this regard at [41] …. [Counsel for HMRC] also relied on one other matter, the environmental obligations, which Warren J deals with at [39] of his decision.”