Courts won't roll over for the State


MY FAVOURITE CASE: Ross Maguire, senior counsel:The recent Paddy McKillen v Nama case proves that Irish courts have refused to yield to ‘intoxicating arguments’ which would give the State or its agencies untrammelled power

What is your favourite case?

In our society, the guardians of the people’s freedom are the courts. It is they who stand between the power of the State and the rights of individuals. Every day decisions are made which restrain the huge power of government and its agencies, often much to the annoyance of the authorities.

Every now and then a big case comes along where the courts are tested. It is here that we see their mettle. Dellway Investments Others v Nama Others (2011) was such a case.

What were the facts of the case?

The plaintiffs were borrowers from an Irish bank and they challenged a decision to transfer their loans from the bank to the National Asset Management Agency, an agency of the State.

The main shareholder of the plaintiff companies was Paddy McKillen and he made two primary arguments. First, he argued that at the time of the purported decision by Nama to transfer the loans to itself, it (Nama) did not exist. Quite simple really: how can a decision be made by an agency which, at the time of the decision, did not exist?

Second, he said he was entitled as a matter of fairness to be heard by Nama. Put simply, where a decision is made by the State that affects an individual, that individual has a right to make a representation to the State or its agency, and the State must listen. The State may of course reject the argument or the plea – that’s not the point. The point is that the citizen has a right to be heard.

What was the outcome of the case?

The High Court rejected Mr McKillen’s arguments. He then appealed to the Supreme Court which unanimously held that at the time of the purported decision made by Nama, the agency did not exist and the decision was therefore void. On that basis Mr McKillen had won his appeal.

Usually that would be that. The Supreme Court is a busy place and once you have won there is no need to go further. But in this instance the Court decided to determine the second argument – whether or not McKillen had a right to be heard.

The Attorney General, the chief legal officer of the State, had come to the Supreme Court and argued passionately that in circumstances where the State was taking a decision that would immediately affect Mr McKillen, he had no right to be heard; he had no right to fair procedure.

As in any legal case there were layers of argument, but when scrutinised it is clear that the basis of the Attorney General’s argument was that the denial of fairness was justified and proportionate by reason of the financial and banking crisis.

On its face, this may appear to be an attractive argument. The Irish banking system is, and was then, in a fragile condition and needed, we are told, to be helped. There is no doubt but that the State can properly make a decision to assist the banking sector and if Nama was a part of that, then so be it.

But what begins as an attractive argument, when taken to its conclusion, is the justification for tyranny. For the argument goes that, in circumstances of perceived urgency or crisis, the State can dispense with fair procedure; it can deny, absolutely, the right to be heard; it can set aside centuries worth of legal principal on the basis of what it decides is “emergency”. This is the self-same argument used by every well-meaning despotic regime since the beginning of time.

But we are fortunate in this country because of the vigilance of our Supreme Court. They emphatically rejected the argument. The Court reiterated in trenchant terms its insistence upon the participation in reaching decisions of those whom the decisions will affect. This has, the Court held, been raised to constitutional status – it is no longer a luxury, it is mandated, except in the most exceptional of circumstances.

Justice Hardiman held as follows: “But it is the business of the law to identify such circumstances: otherwise the cry of ‘emergency’ would be sufficient to set all rights aside at the whim of the Executive.

“The cry of ‘emergency’ is an intoxicating one, producing an exhilarating freedom from the need to consider the rights of others and productive of a desire to repeat it again and again.”

Our courts have been tested since the foundation of the State and again and again they have refused to yield to those “intoxicating arguments” which would give the State or its agencies untrammelled power.

Why is this your favourite case?

Justice Hardiman’s language is always particularly interesting and in this case what he was saying was that once the State uses the “intoxicating” cry of emergency once, it will do it again. The rights of citizens begin to get whittled down. It’s a bit like Animal Farm – it starts with little things, then the rot sets in.

For me the importance of this case is that in the current climate, one of economic crisis, it would be very easy for the courts to say “this really is a crisis, needs to move quickly”. What I like most about it is how the Supreme Court even in a crisis; that’s where it really is a stand-out case. It gives people confidence that the courts will not roll over.