Judge criticises Nama delays

A High Court judge has said delays by Nama in making decisions are frustrating the work of the Commercial Court and imposing unnecessary additional costs on the taxpayer.

He could not have a situation where the work of the Commercial Court is “sterilised” because Nama is considering matters over “an inordinate period”, Mr Justice Peter Kelly said.

A number of cases had been delayed due to Nama not making decisions, this was “of no benefit to anyone” and he was not prepared to tolerate it.

The judge, who manages the Commercial Court list, made the remarks after being told a Nama decision was still awaited on a proposal from the Minister for the Environment made some months ago in an effort to settle a €40 million claim by Durkan New Homes against the Minister as successor to a State agency, the Affordable Homes Partnership.

The case relates to alleged failure to honour a contract under which AHP agreed to swap Harcourt Terrace Garda station in Dublin for 215 affordable housing units in the greater Dublin area.

Nama was asked on May 30th last to make a decision on the Minister’s proposal, which had then been with Nama for a few weeks, but a decision was still outstanding, the judge was told.

Pending that decision, the sides were concerned necessary steps to proceed with the case would incur substantial costs related to discovery of documents.

When the judge asked if Nama had indicated when a decision would be made, Bill Shipsey SC, for Durkan New Homes, said they had been told last week it was being considered “higher up” in Nama.

James Doherty, for the Minister, said, if the proposal was acceptable to Nama, it was acceptable to the Durkan side and the Minister hoped there would be a decision soon as he did not want to spend money on litigation unnecessarily.

The judge said he was “sure the taxpayer feels the same” and noted the taxpayer is funding Nama.

When the judge suggested the Minister was in a better position than the court to get results from Nama, Mr Doherty said solicitors for both sides had already written to Nama stressing they needed an answer.

Ruling on procedural issues, Mr Justice Kelly noted he had previously provisionally adjourned the proceedings because of settlement talks. A proposal had been made but could not be given effect to because of Nama’s involvement and the court had expected Nama would have made its position clear by now but it had not.

As a result of that, motions for discovery were before the court which would add to the expense of the litigation for which the taxpayer was picking up the tab, he said. This was not a satisfactory situation and he was not prepared to tolerate it.

The judge said he would stay discovery issues for a week to allow the sides press Nama for a decision. The sides could also pass on the court’s comments to Nama with a view to ensuring some progress, he added.

The action by Durkan New Homes (DNH), arises from a contract of December 2007 between DNH and the Affordable Homes Partnership for purchase of the Harcourt Terrace station 3,540 sq meter site by December 2008 in exchange for 215 affordable housing units in the greater Dublin area.

DNH claims the units were provided but the station sale was not completed as required. It claims it was told in March 2009 the building of a new Garda station at Kevin Street had been delayed and the gardaí wanted to stay in Harcourt Terrace for another two years.

DNH served a completion notice in August 2010 requiring the sale be completed within 28 days.

When that notice expired in September 2010, it demanded payment of some €40 million due under the contract and later initiated the legal action.