The High Court has dismissed a judicial review brought by Treasury Holdings companies against National Asset Management Agency (NAMA) enforcement decisions, despite finding that NAMA had breached its duty to act fairly and Treasury’s right to be heard.
In a judgment delivered on 31 July 2012, Ms Justice Finlay Geoghegan ruled that NAMA’s 8 December 2011 decision to initiate enforcement against the Treasury group was a public-law decision subject to judicial review. The decision covered demands for repayment and, if they were not met, the appointment of receivers over properties securing the loans. A separate NAMA decision on 25 January 2012 to proceed with enforcement depended on the earlier decision, the judge found.
The judge concluded that Treasury had a right to be heard before NAMA decided to enforce, given the practical effects on the companies’ businesses and assets and the parties’ detailed engagement over a possible restructuring. NAMA had not told Treasury that enforcement was under consideration, she found. The court also found that the Credit Committee considered enforcement before Treasury’s deadline to respond to concerns about its creditor strategy, and that NAMA had not established that the Board considered information about potential investors before deciding to enforce.
Those failures meant NAMA acted in breach of its obligation to follow fair and reasonable procedures, the judgment said. The findings concern the decision-making process; the court did not decide whether NAMA’s commercial assessment of the creditor strategy or the investor proposals was correct.
The court nevertheless held that Treasury was estopped from pursuing its claim for orders quashing the decisions. On 11 January 2012, NAMA agreed to a 14-day standstill in reliance on Treasury’s undertaking that it would not object to receivers being appointed, or seek examinership, if discussions during the period were unsatisfactory to NAMA. Treasury later accepted NAMA’s proposed process for evaluating offers from Hines and Macquarie and took part without objecting, the judge found.
The judge said that even if Treasury had not been estopped, the court would have exercised its discretion against quashing the decisions. The final order dismissed the applicants’ claim for certiorari of the 8 December and 25 January decisions. The court therefore did not quash them.