Judgment reserved in developer’s NAMA challenge

A EUROPEAN Commission letter to a Fine Gael senator about which loans may be acquired by NAMA had complicated matters, a High Court judge said yesterday.

Mr Justice Frank Clarke said the letter will now be considered by a three-judge divisional court of the High Court set up to hear a constitutional challenge to NAMA by property developer Paddy McKillen.

Judge Clarke said it was important in the public interest that any matters to be clarified with regard to the operation of NAMA should be fully explored at the full two-week hearing, which begins on October 5.

Mr McKillen asked the High Court on Thursday to allow him amend his pleadings so his legal team, led by barrister John Gleeson, can argue a major issue raised in the letter.

The letter was sent to Senator Eugene Regan last week by an official of the commission and stated that a loan could only be transferred to NAMA if the borrower was “impaired”.

The property developer, whose €80m loan from Bank of Ireland has already been acquired by NAMA, claims he is an unimpaired borrower and that this and other loans he owes other banks are operating normally and therefore outside the ambit of NAMA.

The state and NAMA resisted Mr McKillen’s application to amend his statement of claim, arguing that the application was late, that it lacked substance and merit and the court did not have jurisdiction to deal with it.

Judge Clarke, in a reserved judgment, yesterday decided all three matters should go forward to be fully explored by the three-judge divisional court of which he is a member with the president of the High Court, Mr Justice Kearns, and Mr Justice Peter Kelly. The judge told barrister Brian Kennedy, who appeared yesterday for the McKillen companies, that the issue of which loans could be acquired by NAMA had been somewhat complicated by the letter sent to Mr Regan.

“I am inclining to agree with submissions made by Mr Maurice Collins, counsel for the state and NAMA, when he argued that the decision of the European Commission is the legal instrument and therefore a letter written by an official, no matter how senior, cannot amend or change what is to be found in the decision,” Judge Clarke said.

However, it seemed to him that the better course of action was to allow all matters to be fully explored at the trial of Mr McKillen’s judicial review proceedings in which he challenged the constitutionality of NAMA.

Mr McKillen and his 15 companies are challenging NAMA on a number of legal issues, including that its taking over of his loans violated his property rights under the Constitution, claiming this affects his business reputation and his ability to raise funds internationally.

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