Morrissey v The National Asset Management Agency

• Jurisdiction: Ireland
• Judge: Ms. Justice Ní
• Judgment Date: 02 July 2019
• Neutral Citation: [2019] IEHC 576
• Court: High Court
• Docket Number: [RECORD NO. 2014/2799P]
• Date: 02 July 2019

[2019] IEHC 576

THE HIGH COURT

Ní Raifeartaigh J.

[RECORD NO. 2014/2799P]

BETWEEN

CAROL MORRISSEY

AND

JOHN MORRISSEY

PLAINTIFFS

AND

THE NATIONAL ASSET MANAGEMENT AGENCY, CAPITA ASSET SERVICES (IRELAND) LIMITED, THE MINISTER FOR FINANCE, IRELAND

AND

THE ATTORNEY GENERAL

DEFENDANTS

Plenary proceedings – Damages – Unlawful decision – Plaintiffs seeking damages – Whether damages might follow from an unlawful decision

Facts: This case raised issues relating to the dealings of the first defendant, the National Asset Management Agency (NAMA), with the second plaintiff, Mr Morrissey, in connection with a portfolio of loans acquired by the first defendant, the National Asset Management Agency (NAMA). The loans were originally taken out from Irish Nationwide Building Society (INBS). Mr Morrissey obtained substantial loans in an amount of approximately €27 million from INBS between 2004 and 2006 in connection with his acquisition of seven investment properties. The loans were secured by mortgages over those properties. There were problems with the repayments from as early as 2006. The loans and related security were acquired by National Asset Loan Management Ltd (NALM) in 2010 pursuant to the National Asset Management Agency Act 2009 when the loans were in serious default. In 2014, NAMA decided to call in the loans and related security by demanding the outstanding sum of some €32 million and, following non-satisfaction, by appointment of receivers over the properties. The receivers had since sold the seven investment properties and the net sums received by the sales had been applied in reduction of the debt due. A sum of €3.75 million was also borrowed in 2005 to finance the purchase of a family home of both plaintiffs at Palmerston Road, Dublin 6 and the loan was secured upon the house. This loan was also substantially in default. NAMA had not yet taken a decision to enforce against this loan but Mr and Mrs Morrissey had requested the High Court to declare that NAMA did not have valid security over the family home. Mr Morrissey responded to NAMA’s decision to appoint receivers in January 2014 by issuing a plenary summons on the 27th February, 2014. An appearance was entered on behalf of NAMA and the second defendant, Capita Asset Services (Ireland) Ltd, on the 6th March, 2014. NAMA then issued a summary summons bearing Record No. 2014/1104S on the 17th April, 2014 and Mr Morrissey entered an appearance to those proceedings “under protest” on the 1st May, 2014. NAMA issued a notice of motion dated the 16th May, 2014 seeking liberty to enter final judgment in the sum of approximately €32 million with interest. The High Court subsequently gave directions that both sets of proceedings be dealt with together and fixed a timetable for pleadings, affidavits and discovery. It was agreed that the summary claim of NALM would be dealt with by way of counterclaim in the proceedings against NAMA. The plenary proceedings brought by the plaintiffs raised a multiplicity of legal issues.

Held by Ní Raifeartaigh J that, in circumstances where she had reached the conclusion that both the process leading up to NAMA’s decision and the decision itself were valid and lawful, the issue of whether damages might follow from an unlawful decision did not arise. She refused all the reliefs sought in respect of the family home at 36 Palmerston Road, Dublin 6 on the basis that the legal arguments were premised upon a factual situation which had not arisen. Given the decisions she had reached in relation to various factual and legal issues, she held that the constitutional issues pleaded by the plaintiffs did not arise for consideration in these proceedings.

Ní Raifeartaigh J held that she would refuse all reliefs sought by the plaintiffs in their plenary action, and grant the reliefs sought by the first and second defendants in their counterclaim.

Reliefs refused.

JUDGMENT of Ms. Justice Ní Raifeartaigh delivered on the 2nd day of July, 2019

Section 1: Preliminary Matters

Nature of the case

1 This case raises issues relating to NAMA's dealings with Mr. Morrissey in connection with a portfolio of loans acquired by NAMA. The loans were originally taken out from Irish Nationwide Building Society (‘INBS’). Mr. Morrissey obtained substantial loans in an amount of approximately €27 million from INBS between 2004 and 2006 in connection with his acquisition of seven investment properties. The loans were secured by mortgages over those properties. There were problems with the repayments from as early as 2006. The loans and related security were acquired by NALM in 2010 pursuant to the National Asset Management Agency Act in 2009 (‘the Act of 2009’) when the loans were in serious default. In 2014, NAMA decided to call in the loans and related security by demanding the outstanding sum of some €32 million and, following non-satisfaction, by appointment of receivers over the properties. The receivers have since sold the seven investment properties and the net sums received by the sales have been applied in reduction of the debt due.

2 A sum of €3.75 million was also borrowed in 2005 to finance the purchase of a family home of both plaintiffs at Palmerston Road, Dublin 6 and the loan was secured upon the house. This loan is also substantially in default. NAMA has not yet taken a decision to enforce against this loan but Mr. and Mrs. Morrissey have requested the Court in these proceedings to declare that NAMA does not have valid security over the family home for reasons that will become apparent in this judgment.

3 Mr. Morrissey responded to NAMA's decision to appoint receivers in January 2014 by issuing a plenary summons on the 27th February, 2014. An appearance was entered on behalf of NAMA and Capita on the 6th March, 2014. NAMA then issued a summary summons bearing Record No. 2014/1104S on the 17th April, 2014 and Mr. Morrissey entered an appearance to those proceedings ‘under protest’ on the 1st May, 2014. NAMA issued a notice of motion dated the 16th May, 2014 seeking liberty to enter final judgment in the sum of approximately €32 million with interest. The High Court subsequently gave directions that both sets of proceedings be dealt with together and fixed a timetable for pleadings, affidavits and discovery. It was agreed that the summary claim of NALM would be dealt with by way of counterclaim in the proceedings against NAMA.

The reliefs sought by the plaintiffs

4 The plenary proceedings brought by the plaintiffs raise a multiplicity of legal issues. The reliefs sought can be summarised and paraphrased as follows:-

i. Declarations that the acts of the defendants, their servants or agents in the purported exercise of their statutory and non-statutory functions in respect of the second plaintiff's properties, including the family home at 36 Palmerston Rd in Dublin 6, including the failure to act fairly and reasonably in respect of the valuation and disposition of the properties, including the appointment of a receiver, and in threatening further interferences with the plaintiff's constitutional rights, had breached certain constitutional rights of the plaintiffs. The constitutional rights identified included the right to inviolability of the dwelling, rights and duties as spouses, right to property, right to marital autonomy, equality, human dignity, access to the courts and the right to litigate;

ii. Damages for breach of constitutional rights, negligence, negligent misrepresentation, breach of statutory duty, breach of section 3 of the European Convention on Human Rights Act 2003, breach of statutory rights under the Guardianship of Infants Act 1964 and ‘causing loss by unlawful means’;

iii. An order restraining future breaches of the plaintiff's rights;

iv. Orders declaring that sections 17, 182, 192, 189, and 195 of the NAMA Act 2009 do not apply to the plaintiff's claims in respect of their claims of breach of constitutional rights. In the alternative, they seek orders that insofar as these sections of the Act restrict the plaintiff's access to the courts, they are invalid having regard to the Constitution;

v. An order that the actions of the defendants breached and threatened further interference with the rights of the second-named plaintiff under Article 41.2 of the Constitution;

vi. An order that the actions of the defendants breached and threatened further interference with the first-named plaintiff's right to earn a livelihood under Article 40.3 of the Constitution;

vii. An order that the above-mentioned sections of the Act of 2009 violate Articles 6, 8, 13 and 14 of the European Convention on Human Rights as well as Article 1 of the first protocol thereof;

viii. Finally, they seek, if necessary, the leave of the Court for bringing proceedings pursuant to section 182(2) of the Act of 2009.

The plaintiffs” case as set out in the Statement of Claim

5 The Statement of Claim is very lengthy, running to sixty-four pages. Here, I will set out only the broad parameters and repeated themes within it as it contains detailed factual assertions and a vast number of legal claims. Part 1 identified the parties and set out some general background. Part II claimed that the first named defendant had acted unlawfully with regard to Mr. Morrissey's Business Plan. Part III alleged that the first named defendant unlawfully delegated its authority. Part IV set out complaints concerning alleged unlawful demands as to a business plan letter and Part V dealt with an alleged ‘further unlawful demand’. Part VI dealt with a claim that NAMA had failed to adequately consider loan disposal or other asset management strategies. Part VII was entitled ‘NAMA and the Irish Property Market’ and Part VIII was entitled ‘NAMA's Lifespan and Debt Redemption Targets’. Part IX set out an alleged interference with the independence of NAMA by the Minister for Finance. Part X dealt with the first named defendant's ‘unlawful...