McKillen considers appeal after court dismisses NAMA challenge
Mr McKillen, whose property portfolio includes Dublin’s Jervis Shopping Centre and the Treasury Building, which ironically houses NAMA, has loans worth €2.1 billion transferring to the asset recovery agency, all of which he has claimed are performing (or not at risk of defaulting). The kernel of his legal challenge to the Commercial Court, last month, was €211m-€297m worth of those loans transferring from Bank of Ireland to NAMA.
The developer had argued that NAMA was ignoring certain considerations relating to him – including that the loans were performing and largely based outside of Ireland – and that the move represented a breach to his constitutional rights. The transfer of his loan portfolio to NAMA would, the Belfast-born businessman claimed, cause irreparable damage to his business empire.
For its part, NAMA had claimed that Mr McKillen’s loan portfolio provided “a systemic risk” to the state’s financial system and that the transfer was of national interest. Last month’s case also heard that Bank of Ireland had rated Mr McKillen’s loans at ‘nine’ on a scale of 1-13 (one being the best and 13 being the worst performing loans).
Yesterday’s judgment, delivered by the President of the High Court, Mr Justice Nicholas Kearns, noted the NAMA act “is a proportionate response to the very grave financial situation in which the state finds itself and which has particular relevance to financial institutions within the state.”
The judge said that the court was not satisfied that Mr McKillen made a substantial issue in relation to the constitutionality of the (NAMA) act. In all, the court ruled against Mr McKillen on all five grounds on which he based his case. It was also denied that the loan acquisition was unlawful because the decision to acquire these loans was technically taken before NAMA’s establishment.
The court also ruled that the European Commission’s approval of NAMA had not limited the agency to just taking charge of loans which were already impaired. Mr Justice Kearns also said that whether the Oireachtas’ policy decisions on solving the banking crisis were the best solutions, was not a concern for the court in its decision.
The developer’s representative, Michael Cush told yesterday’s hearing that they would be considering the judgment and would communicate on Friday if Mr McKillen would be seeking to appeal the decision to the Supreme Court.
NAMA welcomed yesterday’s decision. The agency’s chairman, Frank Daly, calling it “a very significant case” and saying the judgment “highlights the critical importance of the work of the agency for Ireland and the extraordinary circumstances which led to its establishment”.
