Oslo municipality's claim for repayment after home purchase did not succeed

Oslo municipality's building enterprise Boligbygg Oslo KF entered into an agreement in 2016 to purchase flats and garage spaces in a block of flats in Oslo. After finding that the purchases were overpriced, the municipality demanded repayment of a significant amount as illegal state aid, see section 5 of the State Aid Act 1992. Like the previous instances, the Supreme Court found that the decision on repayment was invalid. The Court considered that the assessment of whether the co-contractor had received a financial advantage had to be based on the time when the public authority undertook to provide aid through an unconditional and legally binding commitment. The municipality's decision on repayment was based on the situation in 23 June 2016, when the offer to purchase the flats and garage spaces was accepted. As neither the board of Boligbygg nor the person in charge who signed had the authority to enter into the agreements, they were not binding until they had been approved by the city council. This could not have happened before the end of 2016, and property prices in the area had risen significantly in the intervening period. As the fact that the wrong time was used as a basis could have affected the content of the decision on repayment, the decision was invalid. In an obiter dictum, it was stated that illegal state aid acquired by an overcharge can be ordered to be repaid without this immediately having consequences for other mutual obligations under the agreement.

Read the whole judgment (Norwegian only)

Area of law: EØS-rett. Avtalerett. Lov om offentlig støtte 1992 § 5. Støtteprosessloven § 12.

Key paragraphs: 60, 68-71, 88

Justices: Matheson, Falkanger, Bergsjø, Høgetveit Berg, Sæther