Treasury Holdings & Ors -v- NAMA & Ors, [2012] IEHC 66 (2012)

Docket Number:2012 55 JR
Party Name:Treasury Holdings & Ors, NAMA & Ors
Judge:Finlay Geoghegan J.
 
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THE HIGH COURT

JUDICIAL REVIEW

IN THE MATTER OF SECTION 193 OF

THE NATIONAL ASSET MANAGEMENT AGENCY ACT, 20092012 55 JR

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 LIMITEDAPPLICANTSAND

THE NATIONAL ASSET MANAGEMENT AGENCY and

NATIONAL ASSET LOAN MANAGEMENT LIMITED

AND BY ORDER, IRELAND AND THE ATTORNEY GENERALRESPONDENTSAND

KBC BANK IRELAND PLC,

IRISH BANK RESOLUTION CORPORATION LIMITED

LUKE CHARLTON AND DAVID HUGHESNOTICE PARTIES

JUDGMENT of Ms. Justice Finlay Geoghegan delivered on the 22nd day of March, 2012

  1. The applicants seek leave pursuant to ss. 182 and 193 of the National Asset Management Agency Act 2009 (“the Act”) to issue judicial review proceedings seeking, primarily, an order of certiorari quashing a decision of the first named respondent, the National Asset Management Agency (“NAMA”), taken on 8th December, 2011, to enforce the securities held for multiple loans to the applicants, and if necessary, an order quashing a further decision of 25th January, 2012.

  2. The applicants are all companies within the Treasury Holdings Group. In this judgment, I propose referring to them collectively as “Treasury” or simply the “Group”. In some specified contexts, this will not include the last named applicant which is not indebted to NAMA.

  3. The first named respondent is established by s. 9 of the Act, and the second named respondent is a NAMA group entity as provided for by the Act. They are referred to collectively as NAMA in this judgment.

  4. By order of the High Court of 26th January, 2012, Ireland and the Attorney General were joined as respondents. Treasury, in the intended proceedings, seeks, inter alia, declarations that certain sections of the Act are invalid, having regard to the Constitution, and are incompatible with the State’s obligations under the European Convention of Human Rights. They also sought, in the initial motion, if necessary, an interlocutory injunction in aid of the constitutional reliefs in accordance with the decision of the Supreme Court in Pesca Valentia Ltd. v. Minister for Fisheries [1985] I.R. 193. At the hearing, Treasury withdrew all applications for interlocutory injunctive relief. Also, no application was made pursuant to ss. 182 and 193 of the Act for leave in relation to the constitutional reliefs. The State, in its written submissions, had contended that leave was not necessary under either section to pursue the constitutional claims. Accordingly, the State did not make oral submissions.

  5. On 26th January, 2012, on each of their respective applications, KBC Bank Ireland plc. (“KBC”), Irish Bank Resolution Corporation Ltd. (“IBRC”), Luke Charlton and David Hughes were joined as notice parties. Amongst the Treasury facilities taken into NAMA was a syndicated facility in relation to the Spencer Dock Development. NAMA, as successor to Allied Irish Banks plc. (“AIB”), and IBRC, holds 75% of the syndicated loan and KBC the remaining 25%. Mr. Charlton and Mr. Hughes are the receivers purportedly appointed on 25th January, 2012. IBRC is the agent and security trustee for the finance parties and secured beneficiaries under the syndicated loan agreement. At the outset of the oral hearing, counsel appeared for IBRC, Mr. Charlton and Mr. Hughes and indicated that they did not wish to participate in the oral hearing on the leave application.

    Application for Leave

  6. This application is only for leave to issue judicial review proceedings. There are limited issues which the Court should determine. They are, for the most part, dictated by ss. 182 and 193 of the Act. There appears to be only one area of dispute between the parties as to how the Court should approach the application. Section 182 (insofar as relevant) provides:

    “(1) Subject to subsection (2), a claim to which this Chapter applies gives rise only to a remedy in damages or other relief that does not in any way affect the bank asset, its acquisition, or the interest of NAMA or the NAMA group entity or (for the avoidance of doubt) any property the subject of any security that is part of such a bank asset.

    (2) A person may apply for an order that the person may apply for a remedy other than or in addition to that permitted by subsection (1) in relation to a claim to which this Chapter applies.

    (3) An application for an order mentioned in subsection (2) shall be made only by leave of the Court. An application for such leave may be made ex parte.

    (4) Leave shall not be granted to apply for an order under subsection (2) unless the Court is satisfied that the application raises a substantial issue for the Courts determination and–

    . . .

    (5) If the Court grants leave to apply for an order under subsection (2), the applicant shall serve on NAMA the order granting leave and the application.

    (6) The Court shall make an order under subsection (2) if and only if the Court is satisfied that if the applicant’s claim were established, damages would not be an adequate remedy.

    . . .”

  7. Section 193, insofar as relevant, provides:

    “(1) Leave shall not be granted for judicial review of a decision under this Act unless–

    (a) either–

    (i) the application for leave to seek judicial review is made to the Court within one month after the decision is notified to the person concerned, or . . .

    and

    (b) the Court is satisfied that the application raises a substantial issue for the Court’s determination.

    . . .”

  8. The orders of certiorari sought by Treasury are not permitted by subs. 182(1), and accordingly, under subs. 182(2), Treasury must apply that it may seek the relief. As the intended proceeding is an application by way of judicial review, O. 84 of the Rules of the Superior Courts obliges the applicants to obtain leave of the High Court. Section 193(1) applies to the intended judicial review application. Sections 182(4) and 193(1)(b) prohibit the Court from making an order granting leave to bring the intended judicial review application unless “the Court is satisfied that the application raises a substantial issue for the Court’s determination”. Hence, it is clear that the first issue to be addressed by the Court is whether Treasury’s intended application for orders of certiorari of the NAMA decisions of 8th December, 2011, and 25th January, 2012, raises a substantial issue for the Court’s determination.

  9. The parties are in agreement that the approach of the Court to the determination of what constitutes “a substantial issue” should be the approach of Carroll J. in McNamara v. An Bord Pleanála [1995] 2 ILRM 125, and as approved of by the Supreme Court in The Illegal Immigrants (Trafficking) Bill, 1999 [2000] 2 I.R. 360.

  10. In McNamara, Carroll J. considered the phrase “substantial grounds” and stated as follows at p. 130:

    “What I have to consider is whether any of the grounds advanced by the appellant are substantial grounds for contending that the board’s decision was invalid. In order for a ground to be substantial it must be reasonable, it must be arguable, it must be weighty. It must not be trivial or tenuous. However, I am not concerned with trying to ascertain what the eventual result would be. I believe I should go no further than satisfy myself that the grounds are ‘substantial’. A ground that does not stand any change of being sustained (for example, where the point has already been decided in another case) could not be said to be substantial. I draw a distinction between the grounds and the various arguments put forward in support of those grounds. I do not think I should evaluate each argument and say whether I consider it sound or not. If I consider a ground, as such, to be substantial, I do not also have to say that the applicant is confined in his arguments at the next stage to those which I believe may have some merit.”

  11. In McNamara, Carroll J. was considering an application for leave pursuant to s. 82 of the Local Government (Planning and Development) Act 1963, as amended by s. 19(3) of the Local Government (Planning and Development) Act 1992. Those provisions, which have been repeated in substance in the Local Government (Planning and Development) Act 2000 and in the Illegal Immigrants (Trafficking) Act 2000, are in different terms to those in s. 193 of the Act. Firstly, an application for leave must be on notice to relevant persons, and secondly, the prohibition on the High Court against granting leave is “unless the High Court is satisfied that there are substantial grounds for contending that the decision is invalid or ought to be quashed”.

  12. In Dellway Investment Ltd & Ors v. National Asset Management Agency & Ors [2010] IEHC 375, the Divisional Court decided that statutory language in s. 193 of the Act was similar to that contained in the Planning and Development Act 2000 and in the Illegal Immigrants (Trafficking Act) 2000 and that the applicants should therefore satisfy the test set out by Carroll J. in McNamara. The Court then went on to consider each ground advanced before deciding whether or not it constituted a substantial ground. In Daly & Ors v. NAMA & Ors (the High Court, Unreported, Peart J. 12th September, 2011), Peart J. followed this approach and considered whether each of the grounds advanced was a substantial ground for the purpose of deciding the leave application pursuant to ss. 182 and 193 of the Act.

  13. In this application, counsel for Treasury submits, in reliance, in particular, upon the difference in wording between s. 193 of the Act and the sections in the Planning...

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