The High Court has refused five companies’ request to add a claim comparing their treatment by Irish Bank Resolution Corporation (IBRC) with that of borrowers whose loans were transferred to the National Asset Management Agency (NAMA). It also ordered the companies to provide security for IBRC’s costs as their case proceeds.
In a judgment delivered on 24 May 2012, Mr Justice Brian J. McGovern allowed amendments concerning allegations that security documents had been altered and that loans involved unlawful financial assistance for the purchase of the plaintiffs’ shares. IBRC did not contest those amendments.
The judge refused a separate proposed amendment alleging unequal treatment and a breach of the companies’ constitutional property rights. The companies argued that their loans fell below the threshold for transfer to NAMA and that, had the loans been transferred, they would have received support rather than enforcement. These were the plaintiffs’ claims; the court did not determine the underlying dispute about the receivership.
The judge said the proposed claim rested on the incorrect assumption that a borrower’s liability to NAMA was reduced to the discounted price NAMA paid for a loan. He said the National Asset Management Agency Act 2009 left the borrower’s obligations unchanged. He also found there was no right to have a loan acquired by NAMA and that any challenge to the legislation would have to be brought against the State, naming Ireland and the Attorney General. The proposed claim against IBRC was bound to fail and was not needed to determine the real issues between the parties, so permission to add it was refused.
The underlying proceedings concern the companies’ challenge to the appointment of receivers over their assets and undertakings. The companies seek declarations that the appointments were invalid, damages for alleged breach of contract, and an account and inquiry. The judgment records allegations including that the receivers were appointed before demand and that there was misrepresentation in connection with the 2008 borrowing; those matters were not resolved by these motions.
On security for costs, the plaintiffs accepted that section 390 of the Companies Act 1963 applied unless special circumstances justified dispensing with security. The judge found they had not shown credible evidence linking their inability to pay costs to IBRC’s conduct. He also rejected their arguments that the case raised exceptional public importance or mirrored separate guarantee proceedings involving company director and shareholder John Moran. He ordered the plaintiffs to furnish security for costs. The judgment does not state the amount or a deadline.