Treasury challenge for court in July

THE CHALLENGE by troubled developer Treasury Holdings to the National Asset Management Agency’s decision calling in about €1 billion of Treasury’s loans will be heard at the Commercial Court next month. The legal costs of the case are expected to amount to more than €1 million.

Ms Justice Mary Finlay Geoghegan yesterday fixed July 3rd for the hearing of the judicial review challenge by Treasury against Nama.

KBC Bank, Irish Bank Resolution Corporation (formerly Anglo Irish Bank) and the two receivers appointed by Nama over various Treasury properties here are notice parties to the case.

Treasury, which the court previously heard is insolvent, last April agreed to provide a sum of €600,000 and charges over four properties in favour of Nama as security for the costs of the case, expected to amount to more than €1 million.

Security for costs was sought in circumstances where the developer is insolvent with overall debt of some €2.7 billion. Nama acquired some €1.7 billion of its loans in 2010 and the loans called in by it in December 2011 amount to more than €1 billion.

Ms Justice Finlay Geoghegan, in a ruling yesterday on liability for the costs of the six-day hearing of the developer’s application for permission to bring that judicial review, ordered that, if Treasury win the ultimate case, Nama and KBC (which is owed €75m by Treasury and opposed the leave application) must pay half of Treasury’s costs of the leave application.

She also directed Treasury must pay the “reasonable” costs incurred by the State in defending the application for leave and for an injunction. The State was entitled to costs of four days of the six-day hearing of the leave application because Treasury did not pursue the injunction claims or other claims of unconstitutionality of provisions of the Nama Act, she said.

Given the withdrawal of those claims, the State was last April struck out as a respondent in the case.

Last March, Ms Justice Finlay Geoghegan granted leave to Treasury and 22 related companies to challenge the appointment of the receivers in judicial review proceedings. She found Treasury had raised substantial issues for determination by the court, including whether Nama breached its duty to notify Treasury of its decision of December 8th, 2011, to enforce the loans and to give it an opportunity to be heard prior to that decision being taken.

A further substantial issue was whether Nama failed to regard as a relevant consideration the potential availability of an investor/purchase for the loans acquired by Nama from Treasury, she ruled.

Treasury had not made out a substantial case Nama had acted for an improper purpose or in bad faith, she found.