Byrne v National Asset Management Agency

• Jurisdiction: Ireland
• Judge: Mr. Justice Noonan
• Judgment Date: 11 September 2020
• Neutral Citation: [2020] IECA 305
• Date: 11 September 2020
• Court: Court of Appeal (Ireland)
• Docket Number: Record Number: 2018/262

BETWEEN/

VINCENT BYRNE

AND

VINCENT BYRNE JUNIOR

PLAINTIFFS/RESPONDENTS

-AND-

NATIONAL ASSET MANAGEMENT AGENCY

DEFENDANT/APPELLANT

[2020] IECA 305

Donnelly J.

Noonan J.

Binchy J.

Record Number: 2018/262

High Court Record Number: 2016/11419P

THE COURT OF APPEAL

Limitation – Statute barred – Strike out – Appellant seeking to strike out or dismiss the respondents’ claim – Whether the trial judge was wrong to hold that the claim was not statute barred

Facts: The respondents, Messrs Byrne, brought proceedings against the appellant, National Asset Management Agency (NAMA), in respect of NAMA’s dealings with certain bank assets, the subject of various charges and loans, seeking damages for alleged breach of constitutional right to fair procedures, alleged violation of their rights under the provisions of Protocol 1, Article 1 of the European Convention on Human Rights and Article 17 of the Charter of Fundamental Rights of the European Union, and alleged infringement of their rights under the Treaties of the European Union. NAMA appealed to the Court of Appeal from the judgment of the High Court (MacGrath J) delivered on the 23rd March, 2018 and the subsequent order of the court made on the 1st May, 2018. The High Court acceded to the application of NAMA to strike out or dismiss the Byrnes’ claim but in part only. NAMA appealed against the refusal of the trial judge to strike out the Byrnes’ claim in its entirety and the Byrnes cross-appealed against the striking out of parts of their claim. NAMA confined its appeal to two grounds, first that the trial judge was wrong to hold that the claim was not statute barred and secondly, in holding that the cause of action, if any, might have accrued later than the 17th December, 2010, being the date of acquisition. The Byrnes in their respondents’ notice sought to uphold the trial judge’s findings on the limitation issue and cross-appealed against the determination of the trial judge to strike out the relevant parts of their claim.

Held by Noonan J that, on any analysis, these proceedings were instituted after the expiration of the longest limitation period that could be applicable to this claim, being more than six years after the 17th December, 2010. He held that the proceedings were accordingly bound to fail.

Noonan J held that he would allow NAMA’s appeal and dismiss the Byrnes’ cross-appeal. He held that he would substitute for the order of the High Court an order striking out the Byrnes’ claim in its entirety.

Appeal allowed. Cross-appeal dismissed.

JUDGMENT of Mr. Justice Noonan delivered on the 11 ^th day of November, 2020

1 This appeal is brought from the judgment of the High Court (MacGrath J.) delivered on the 23 ^rd March, 2018 and the subsequent order of the court made on the 1 ^st May, 2018. The High Court acceded to the application of the appellant (“NAMA”) to strike out or dismiss the claim of the respondents (respectively “Mr. Byrne Snr. and Mr. Byrne Jnr.”) but in part only. NAMA appeals against the refusal of the trial judge to strike out the Byrnes' claim in its entirety and the Byrnes have cross-appealed against the striking out of parts of their claim. The Byrnes are father and son.

Background facts

2 In July 2006. Mr. Byrne Jnr. together with another party, Mark Carroll, entered into a loan agreement with Allied Irish Banks whereby AIB advanced the sums of €5.55M and €715,000 respectively for the purpose of funding the purchase and development of a property at Parnell Road in Dublin 12. While this is described as a “site”, it was in fact a fuel filling station. A charge over the property was provided by way of security for the loan together with additional security which comprised a charge over two apartments owned by Mr. Byrne Snr. and Mr. Byrne Jnr. known as 8 and 9 Doreen House, Blackhorse Avenue, Dublin together with a charge over a third apartment at No. 9 Doreen House owned by Mr. Byrne Jnr. Mr. Byrne Snr. also executed a guarantee for of the borrowing up to a maximum of €700,000. Unfortunately, the project got into difficulty and the development was not proceeded with. The loans fell into arrears. Ultimately, on the 17 ^th December, 2010, the loans were transferred to NAMA.

3 In a lengthy memorandum sent by Mr. Byrne Jnr. to NAMA which was received on the 19 ^th November, 2013, Mr. Byrne Jnr. deals with, inrer alia, the history of his dealings with AIB prior to the NAMA acquisition. He notes that in July, 2008, he and Mark Carroll met with AIB together with their solicitor to put proposals to the bank concerning the Parnell Road site, suggesting that the borrowing was at that stage in difficulty. On the first page of this memorandum. Mr. Byrne Jnr. says:

“In August 2010 Tony Cunningham of AIB informed me that the facility had been transferred to NAMA due to Mark Carroll's involvement with Elm Properties…”

On the fifth page of the same document, Mr. Byrne Jnr. says:

“NAMA have never disclosed to me when exactly the transfer of the facility took place, the first I heard of it was August 2010 through a phone call from Tony Cunningham of AIB …”

It therefore appears that Mr. Byrne Jnr. was well aware of the transfer or proposed transfer of the assets comprising the loan and the securities some four months before the formal transfer took place on the 17 ^th December, 2010.

4 As noted in the judgment of the trial judge, the Byrnes have sought to maintain that they were unaware of the decision that the assets had been acquired by NAMA until they received a letter from NAMA dated the 28 ^th April, 2011 in early May of that year. As will become apparent, that date assumes significance in the context of the limitation issues that arises in these proceedings.

5 Ultimately, letters of demand were served on the Byrnes on the 20 ^th December, 2013 and the 2 ^nd January, 2014. When these were not satisfied, NAMA appointed receivers over the apartments on the 13 ^th January, 2014 and over the Parnell Road premises on the 3 ^rd February, 2014. The Byrnes sought to prevent the receivers from selling the properties and instituted proceedings in 2014 seeking to restrain the sale. Those proceedings named only the receivers as defendants and when they came on for hearing in the High Court before White J., he afforded the Byrnes the opportunity to join NAMA and AIB as co-defendants, which they declined. The proceedings were dismissed on the 27 ^th February, 2014. As noted by MacGrath J., prior to the institution of those proceedings, no application for leave was made under s. 182 of the National Asset Management Agency Act, 2009, referred to further below.

6 Following the dismissal of the proceedings against the receivers, it would appear that proceedings were issued by “Vincent Byrne” on the 5 ^th June, 2005 in the High Court naming NAMA as defendant. Those proceedings were never served and it is unclear whether the plaintiff was Mr. Byrne Snr. or Mr. Byrne Jnr.

7 A second set of proceedings was issued by Mr. Byrne Snr. against NAMA on the 5 ^th August, 2015. A statement of claim was served on the 13 ^th November, 2015. In that statement of claim, Mr. Byrne Snr. pleaded that NAMA breached his rights under the Constitution and Article 1, Protocol 1 of the European Charter (sic) of Human Rights by, inter alia, the confiscation of his private property, depriving him of his livelihood and access to his pension and depriving him of his good name, dignity and respect. The reliefs claimed included a declaration that the sanction letter of loan and guarantee is void and that he is entitled to the return of his property, which appears to relate to the apartments, together with a claim for damages under various headings.

8 Mr. Byrne Snr. subsequently applied ex parte to the Master of the High Court to amend his summons by claiming additional reliefs including an order compelling NAMA to return possession of the apartments to him, compelling NAMA to reimburse him for the rent collected from these properties, presumably by the receivers, and an order prohibiting the sale of the Parnell Road site. Mr. Byrne Snr. issued a motion seeking interlocutory relief in these terms. When this motion was issued, the receivers were in the process of selling the apartments by way of auction due to take place on the 9 ^th December, 2015.

9 NAMA issued its own motion on the 3 ^rd December, 2015 seeking to have the proceedings by Mr. Byrne Snr. dismissed as being, inter alia, frivolous and vexatious on various grounds, including a breach of s. 182 of the 2009 Act. This motion came before the High Court (O'Connor J.) on the 4 ^th December, 2015 when Mr. Byrne Jnr. sought to address the court on his father's behalf. The court refused this application, instead permitting Mr. Byrne Jnr. to act as his father's McKenzie Friend. The High Court struck out Mr. Byrne Snr's motion and the related paragraphs of the amended summons. At a subsequent hearing on the 14 ^th December, 2015, O'Connor J. struck out the entirety of the proceedings. These orders were not appealed.

10 The current proceedings were issued on the 22 ^nd December, 2016. A statement of claim (described as a draft statement of claim) was served on the 15 ^th February, 2017. A perusal of this document discloses that the gravamen of the complaint therein concerns an alleged failure on NAMA's part to afford the Byrnes fair procedures during the decision making and acquisition process that led to their loans and associated securities being acquired by NAMA. They also complain that they did not receive clear and unequivocal reasons for the acquisition in breach of their legal rights. All of the allegations in the statement of claim appear to relate to the events that occurred prior to the acquisition of the loans by NAMA.

11 Although it is implicit in all of the claims pleaded in the statement of claim that the acquisition was invalid, this is clearly spelled out in para. 11:

“11...