A seven judge Supreme Court will give its judgment tomorrow on the action by property investor Paddy McKillen aimed at preventing the National Assets Management Agency (Nama) acquiring some €2.1 billion loans of his companies.
The court reserved judgment last December on Mr McKillen’s appeal against a decision of a three judge High Court rejecting the challenge by himself and 15 of his companies to the acquisition of their loans with Bank of Ireland.
The case has implications for some €2.1 billion loans held by the McKillen companies with the participating institutions in Nama which argued the McKillen loans acquisition was necessary because that extent of exposure to the financial institutions participating in Nama created a “systemic risk” to those institutions.
The appeal ran for six days and concluded on December 23rd last. Judgment will be given tomorrow morning.
A central issue in the appeal relates to the right to fair procedures and is whether the High Court was correct in finding, under the Nama Act 2009, Mr McKillen had no right to be heard prior to the decision by the agency to acquire the loans at issue.
The appeal again raised all five issues which had formed the basis of Mr McKillen’s case in the High Court.
The first issue, the fair procedures argument, is a claim the McKillen appellants were entitled to be heard before any decision was made by Nama to acquire the loans on the basis such acquisition interferes with their constitutionally protected rights, including to property and to earn a livelihood.
The second issue is whether Nama failed to take into account relevant considerations when deciding to acquire the loans.
The third issue is whether the Nama decision to acquire the loans was legally flawed on grounds it was taken prior to the agency coming into existence.
The fourth issue relates to interpretation of the European Commission decision permitting the State to grant aid under the Nama Act. Mr McKillen claims that decision imposed an obligation on the agency to only acquire loans from impaired borrowers. Mr McKillen contends he is not an impaired borrower.
The fifth issue - the Constitutional issue - raises two constitutional points. It is claimed, if Mr McKillen is correct that he is entitled to fair procedures but the State is correct in saying there is no implied entitlement to fair procedures in the Nama Act, then the relevant provisions of that Act are unconstitutional.
If there is no entitlement for Mr McKillen to be heard and if the Act permits loans to be acquired from impaired borrowers, it is further argued those provisions of the Act defining “eligible bank assets” — bank assets capable of transfer to Nama — are unconstitutional.
