The Supreme Court allowed an appeal by property developer Patrick McKillen and 15 companies and partnerships, declaring that the National Asset Management Agency (NAMA) had not made a decision to acquire eligible bank assets represented by their loans.
The Court found that an interim team’s December 2009 decision to acquire the loans had no legal effect because it was made before NAMA was established. It also found that NAMA’s Board had not subsequently made or adopted a valid decision. The Court’s declaration addressed the decision to acquire; the judgment said NAMA had not served the acquisition schedule required to formally acquire the assets.
The dispute arose from proposed transfers of the appellants’ credit facilities from Bank of Ireland and Anglo Irish Bank. The parties agreed that the loans were eligible bank assets under the relevant regulations. The judgment said NAMA had not taken the legal step under section 87 of the National Asset Management Agency Act 2009 that was necessary for acquisition to have practical or legal effect.
The appellants challenged an interim team decision made at meetings on 11 and 14 December 2009, before NAMA was established on 21 December. The team’s work had been carried out in preparation for NAMA’s creation. NAMA argued that its Board later adopted the decision through its actions, including considering borrower lists at a meeting on 23 December. The High Court had accepted that argument, finding that the December decision was adopted by NAMA after its establishment.
The Supreme Court disagreed. It said the Board minutes recorded that members considered a proposed acquisition timetable and borrower list, but did not record a decision. Evidence from NAMA’s chairman showed the Board believed the interim team had already made the decision, so the Board did not make a new one. The Court also found that a later affidavit from NAMA’s chief executive, who reviewed whether the original decision was correct, did not amount to a new decision to acquire.
The Court said the NAMA Act required NAMA itself, through its Board, to exercise the statutory discretion to decide whether acquisition was necessary or desirable. It rejected the argument that section 17 of the Interpretation Act 2005 gave the interim team authority to make the December decision.
The appeal had also raised fair procedures, other challenges to the proposed acquisition decision, constitutional issues and a European state aid issue. The Court said Fennelly J. would deliver a separate judgment on state aid, with which Murray C.J. agreed. It invited the parties to address whether the other issues remained justiciable after its ruling. The judgment does not set out their final determination.