Judgment reserved on action to block NAMA move

THE Supreme Court has reserved judgment on the action by property investor Paddy McKillen aimed at preventing the National Assets Management Agency acquiring some €2.1 billion loans made to himself and his companies.

Mr McKillen has brought an appeal against a High Court decision clearing the way for NAMA to acquire loans of Mr McKillen and his companies with Bank of Ireland. The case has implications for the €2.1 billion loans held by the McKillen companies with the participating institutions in NAMA.

The agency has said it decided to acquire the €2.1 billion loan portfolio because it believed that extent of exposure to financial institutions participating in NAMA created a “systemic risk” to the institutions.

Yesterday, following closing arguments in Mr McKillen’s appeal against a decision of a three-judge High Court last month rejecting the challenge by him and 15 of his companies to the acquisition of the loans, the Chief Justice Mr John Murray said that the court was reserving its decision.

Mr Justice Murray thanked both legal teams for the way they had presented what were “the difficult issues in this case”.

The Chief Justice did not say when the seven-judge court would be in a position to hand down its verdict in this matter. However, judgment is not expected to be delivered before the law term opens on January 11.

The appeal was listed for three days, but concluded yesterday after a six-day hearing during which the court heard detailed and lengthy submissions from both sides.

A central issue in the appeal is Mr McKillen’s claim that NAMA’s decision of December 2009 to acquire the loans breached his right to fair procedure.

He claims that he was not afforded an opportunity to make representations on matters which affected his constitutional rights, including to property and to earn a livelihood.

Lawyers acting on Mr McKillen’s behalf also argued that prior to the decision to acquire the loans, NAMA had an obligation to engage in a qualitative assessment of the loans and to consider issues, including the geographical spread of his property portfolio and whether or not the loans were impaired.

If those arguments are rejected and the court finds the NAMA Act 2009 does not provide for a right to fair procedure, Mr McKillen claims the relevant provisions of the Act are unconstitutional.

However the state has argued that NAMA did not have to engage in a qualitative assessment before deciding to acquire the loans, nor was NAMA obliged to consider Mr McKillen’s particular circumstances or the circumstances of any individual borrower.

During the appeal, the AG Paul Gallagher SC said that, in establishing NAMA, the intention of the Oireachtas was to achieve an expeditious and efficient movement of eligible bank assets and no right to fair procedure applied in the circumstances.

If there was such a right, any interference with it was minimal and proportionate to the aims of the NAMA legislation, he added.