Twenty-two companies in the Treasury Holdings Group have been granted leave to seek judicial review of National Asset Management Agency decisions to enforce loan securities and appoint receivers. The High Court’s ruling is a procedural decision that permits a challenge to proceed; it does not decide whether NAMA acted unlawfully or quash either decision.
Ms Justice Finlay Geoghegan said the companies had raised substantial issues for determination about NAMA’s decision of 8 December 2011 to demand repayment and, if the facilities were not repaid, appoint receivers. The court also granted leave to challenge NAMA’s decision on 25 January 2012 to proceed with enforcement already decided upon in December.
The judge said the companies had raised a substantial issue as to whether the decisions were in the area of public law and therefore open to judicial review. She also allowed the challenge to proceed on whether NAMA was required to notify Treasury of the proposed enforcement decision and give it an opportunity to be heard.
The companies argued that they could have addressed NAMA’s concerns about their creditor strategy, explained why receivership would not best protect the value of secured assets, and made representations about potential investors. The judge found a substantial issue as to whether those were matters NAMA could lawfully consider before deciding to enforce. She also found a substantial issue about whether NAMA acted fairly by having its Credit Committee consider an update and recommendation on 6 December, while Treasury had until 7 December to respond to concerns about its strategy.
A further permitted ground concerns whether NAMA considered the potential availability of investors or purchasers for the loans. The judgment noted that Treasury had told NAMA in November that it was in discussions with unidentified investors. The court did not determine whether the investors’ proposals were better than enforcement.
NAMA’s decision on 25 January followed a 14-day standstill during which it assessed proposals from Hines and Macquarie. NAMA told Treasury both proposals were unsatisfactory and said it would proceed with enforcement. The judge noted a dispute over whether Treasury’s standstill undertaking barred it from challenging the decisions. She found that issue required determination at a later stage.
Leave was refused on allegations of improper purpose and bad faith. The judge said no improper purpose had been specified and found no substantial issue supported by the evidence that NAMA had acted fraudulently or dishonestly. The court also held that damages would not be an adequate remedy if Treasury ultimately established its claim. NAMA may apply, on notice, for an undertaking as to damages. The parties were to be heard on further directions to expedite the proceedings.