Nama: Treasury must pay costs security

Nama will next week ask the Commercial Court to order insolvent developer Treasury Holdings to provide security for the costs of its forthcoming challenge to the agency’s decision to call in more than €1bn loans and appoint receivers over its properties here.

Cian Ferriter SC, for Nama, told Ms Justice Mary Finlay Geoghegan yesterday the agency is seeking security for costs from Treasury, but is not proceeding with seeking a fortified undertaking for damages from the company’s founders, John Ronan and Richard Barrett, should the case fail.

Security for costs is being sought in circumstances where the developer is insolvent with overall debt of €2.7bn. Nama acquired €1.7bn of its loans in 2010 and the loans called in by it amount to over €1bn.

Last month, Ms Justice Finlay Geoghegan granted leave to Treasury and 22 related companies to challenge the appointment of the receivers in judicial review proceedings.

The case was before the judge for mention yesterday to address a number of issues and she fixed Thursday next for the hearing of the security for costs application. She will also then address other matters relating to the substantive judicial review action, a date for which has yet to be fixed.

The judge added she will rule at a later date on Treasury’s application for costs against Nama of the judicial review leave application heard last month.

In opposing that costs application, Nama argued the appropriate order was for each side to pay their own costs on grounds including the court’s rejection of claims by Treasury that Nama acted in bad faith.

Under the Nama Act, the court has to measure the costs of the six-day leave application, expected to be very substantial.

In her judgment granting leave for judicial review, Ms Justice Finlay Geoghegan found Treasury had raised substantial issues for determination by the court, including whether Nama breached its duty to notify Treasury of its decision of December 8, 2011, to enforce the loans and to give it an opportunity to be heard prior to that decision being taken.

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