Treasury Holdings and Others v National Asset Management Agency and Others

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 31 July 2012
• Neutral Citation: [2012] IEHC 297
• Court: High Court
• Date: 31 July 2012

[2012] IEHC 297

THE HIGH COURT

[55 J.R./2012]

Treasury Holdings & Ors v National Asset Management Agency & National Asset Loan Management Ltd

JUDICIAL REVIEW

IN THE MATTER OF SECTION 193 OF THE NATIONAL ASSET MANAGEMENT AGENCY ACT 2009

BETWEEN

TREASURY HOLDINGS, SPENCER DOCK DEVELOPMENT COMPANY LIMITED, SDDC (No. 1) LIMITED, SDDC (No. 2) LIMITED, SDDC (No. 3) LIMITED, SDDC (No. 4) LIMITED, FAXGORE LIMITED, REAL ESTATE OPPORTUNITIES PLC., COOLRED LIMITED, TENDERBROOK LIMITED, WINTERTIDE LIMITED, TWYNHOLM LIMITED, RIGOL LIMITED, RUSHRID LIMITED, IREO IRISH REAL ESTATE OPPORTUNITIES FUND PUBLIC LIMITED COMPANY, CARRYLANE LIMITED, CALLSIDE DEVELOPMENTS LIMITED, RADTIP PROPERTIES LIMITED, SENCODE LIMITED, LORNABAY LIMITED, BALLYMUN SHOPPING CENTRE LIMITED, MONTEVETRO II LIMITED AND TREASURY HOLDINGS CHINA LIMITED

APPLICANTS

AND

THE NATIONAL ASSET MANAGEMENT AGENCY AND NATIONAL ASSET LOAN MANAGEMENT LIMITED

RESPONDENTS

AND

KBC BANK IRELAND PLC, IRISH BANK RESOLUTION CORPORATION LIMITED LUKE CHARLTON AND DAVID HUGHES

NOTICE PARTIES

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S182

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S193

RSC O.84

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S9

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S9(1)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S2

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S10

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11(1)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11(1)(A)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11(1)(B)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11(1)(D)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11(6)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S12(1)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S12(2)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S12(2)(A)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S12(2)(K)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S35(1)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S4

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S17

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 PART 6

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S87(3)(B)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S99(1)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S90(1)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S90(3)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S90(5)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S91

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S147(1)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S147(3)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S148

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 SCHED 1

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S149

BEIRNE v CMSR AN GARDA SIOCHANA 1993 ILRM 1

O'DONNELL v TIPPERARY (SOUTH RIDING) CO COUNCIL 2005 2 IR 483 2005 2 ILRM 168 2005/47/9846 2005 IESC 18

MERCURY ENERGY LTD v ELECTRICITY CORP OF NEW ZEALAND LTD 1994 1 WLR 521

R (BIRMINGHAM & SOLIHULL TAXI ASSOCIATION) v BIRMINGHAM INTERNATIONAL AIRPORT 2009 AER (D) 275 (JUL) 2009 EWHC 1913 (ADMIN)

R (MOLINARO) v KENSINGTON & CHELSEA ROYAL LONDON BOROUGH COUNCIL 2002 LGR 336 2001 AER (D) 420 (OCT) 2001 EWHC 896 (ADMIN)

HAMPSHIRE CO COUNCIL v SUPPORTWAYS 2006 LGR 836 2006 AER (D) 247 (JUL) 2006 EWCA CIV 1035

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S90

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S99

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S147

DELLWAY INVESTMENT LTD v NAMA 2011 4 IR 1 2011 IESC 14

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S84

EAST DONEGAL CO-OPERATIVE LIVESTOCK MART LTD & ORS v AG 1970 IR 317

FREDERICK INNS LTD, IN RE 1994 1 ILRM 387

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11(1)(D)(II)

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11(1)(D)(III)

MCCORMACK v GARDA SIOCHANA COMPLAINTS BOARD 1997 2 IR 489 1997 2 ILRM 321 1997 IEHC 200

ZOCKOLL GROUP LTD & ORS v TELECOM EIREANN 1998 3 IR 287 1998/10/3239

DEANE v VOLUNTARY HEALTH INSURANCE BOARD 1992 2 IR 319 1992/6/1609

O'KEEFFE v BORD PLEANALA 1993 1 IR 39 1992 1 ILRM 237

DORAN v THOMPSON LTD 1978 IR 223 1979 113 ILTR 93

SOULSBURY v SOULSBURY 2008 2 WLR 834 2007 3 FCR 811 2008 1 FLR 90 2007 AER (D) 132 (OCT) 2007 EWCA CIV 969

HYMAN v HYMAN 1929 AC 601

MACAULEY v MIN FOR POSTS & TELEGRAPHS 1966 IR 345

MURPHY v STEWART 1973 IR 97 1973 107 ILTR 117

CORRIGAN v IRISH LAND CMSN 1977 IR 317

Administrative law - Judicial review - Certiorari - Fair procedures - Duty of candour- Duty to act fairly - National Asset Management Agency Act 2009

Facts: The applicants sought judicial review of decisions taken by the first named respondent to decide to enforce and to proceed with enforcement against the applicant in respect of its functions under the National Asset Management Act 2009. The Court had to consider whether the decisions were in the area of public law and amenable to judicial review and whether NAMA had not exercised its powers in a fair and reasonable manner and had not given Treasury a right to be heard. The Court also consider whether standstill arrangements taken in 2012 precluded Treasury from challenging the validity of the decisions to enforce and whether they constituted a cure for any defect in procedures.

Held by Finlay Geoghegan J, that the decision to enforce taken by NAMA was in the realm of public law and amenable to judicial review. Treasury had the right to be heard and was not given the opportunity to be heard. NAMA was under a duty to act fairly and reasonably in taking the decision. NAMA had acted to its detriment in entering the standstill agreement and that Treasury had acquiesced on the ground rules set by NAMAS. Treasury was estopped form pursuing its claim. There would be an order dismissing the applicants' claims for orders of certiorari.

1 JUDGMENT of Ms. Justice Finlay Geoghegan delivered on the 31st day July of 2012

2 1. By order of the High Court of 27 ^th March, 2012, made pursuant to a judgment delivered by me on 22 ^nd March, 2012, leave was granted to the applicants pursuant to ss. 182 and 193 of the National Asset Management Agency Act 2009 ("the Act") and O. 84 of the Rules of the Superior Courts to apply by way of application for:

3 i "(i) An order of certiorari by way of an application for judicial review quashing the purported decision of the First Named Respondent, in performance of its functions under Section 11 of the National Asset Management Agency Act, 2009 (the "Act"), as evidenced in the letter of 9 January 2012 but actually made on 8 December 2011, 'to arrange for demands for repayment to be issued in respect of facilities in default and, failing repayment, to proceed to appoint receivers (including statutory receivers) as appropriate to various properties that comprise security for such facilities.'

4 …

5 (ii) If necessary or appropriate, an order of certiorari quashing the decision of the Respondents of 25 January 2012 to proceed with enforcement in respect of the Applicants' assets, including the appointment of receivers."

6 on the following grounds:

7 (i) The decisions are in the area of public law and are therefore amenable to judicial review;

8 (ii) The decision of 8 ^th December, 2011, was taken in breach of NAMA's duty to notify Treasury of the proposed decision and to give it an opportunity to be heard prior to the taking of the decision and in breach of Treasury's corresponding rights to receive notification and be heard;

9 (iii) NAMA, in exercising its discretionary power to take a decision to enforce and proceed with that decision is under a duty to exercise such power in a fair and reasonable manner; and

10 (iv) NAMA, in taking the decision on 8 ^th December, 2011, failed to exercise its discretionary powers in a fair and reasonable manner by reason of:

11 a) the failure to give notice of the proposed decision and to afford an opportunity to be heard; and/or

12 b) the Credit Committee considering the matter on 6 ^th December, 2011, when Treasury had been given until 7 ^th December, 2011, to respond to concerns relating to the creditors strategy; and/or

13 c) the failure to take into account relevant considerations on 8 ^th December, 2011, namely, the availability of investors/purchasers for the loans.

14 2. The applicants are all companies within the Treasury Holdings Group. They will be referred to in this judgment collectively as 'Treasury' or the 'Group'. In some contexts, this will not include the last named applicant which is not indebted to the respondents.

15 3. The first named respondent, the National Asset Management Agency, is established by s. 9 of the Act, and the second named respondent, National Asset Loan Management Ltd. is a NAMA group entity as provided for by the Act. They are referred to collectively as NAMA in this judgment. Nothing turns on the existence of two separate bodies corporate.

16 4. KBC Bank Ireland Ltd., the first named notice party, is the only notice party which participated in the hearing. It holds 25% of a syndicated facility in relation to the Spencer Dock Development which was amongst the Treasury facilities taken into NAMA. NAMA, as successor to Allied Irish Banks plc. ("AIB"), and Irish Bank Resolution Corporation Ltd. ("IBRC") holds 75% of the syndicated loan. IBRC is the agent and security trustee for the finance parties and secured beneficiaries under the syndicated loan agreement. Mr. Charleton and Mr. Hughes are the receivers purportedly appointed on 25 ^th January, 2012.

17 5. By further order of the High Court of 27 ^th March, 2012, the proceedings were admitted to the Commercial List.

18 6. Since the grant of leave, Treasury delivered an amended statement of grounds dated 27 ^th April, 2012. The grounds relied on are confined to those set out in the order granting leave. On 27 ^th April, 2012, an amended statement of opposition was delivered by NAMA. On 30 ^th April, 2012, an amended statement of opposition was delivered by KBC. The grounds...