The Supreme Court ruled that National Asset Management Agency (NAMA) must receive and consider submissions from Patrick McKillen and the companies and partnerships named as appellants before making a decision under section 84 of the National Asset Management Agency Act 2009 on whether to acquire their loans.
In a judgment delivered by Denham J. on 12 April 2011, the court allowed the appeal on the fair procedures issue and declared that NAMA should consider the appellants’ representations before making that decision. The court said the entitlement was specific to these appellants’ circumstances and did not establish a general right for all borrowers. It described the appropriate process as written representations, rather than an oral hearing.
The ruling concerned a question certified by the High Court: whether the appellants had a right to be heard before NAMA decided to acquire loans for which they were borrowers. The Supreme Court answered that question in the negative to the High Court’s conclusion: it said the High Court was wrong to find that no such right existed.
The court had previously held, in a separate judgment on 3 February 2011, that NAMA had not made a valid section 84 decision to acquire the loans in December 2010. The Supreme Court later received information that NAMA made a decision on 1 March 2011 to acquire them. That decision was not formally before the court in these proceedings. The court nevertheless held the fair procedures issue was not moot, given the later decision and the public importance of the question.
The appellants argued that acquisition could affect their property interests, income, contractual rights and McKillen’s reputation. The court accepted that a decision could affect those rights and trigger a right to be heard. It also noted that the Act limited litigation after NAMA served an acquisition schedule, making the opportunity to make representations before a section 84 decision significant.
NAMA and the other respondents argued that there was no relevant interference with constitutional rights and that a hearing would be unworkable or could be excluded in the circumstances. Denham J. rejected those submissions in relation to these appellants, finding that the statutory process did not create an urgency that justified excluding fair procedures and that written submissions were workable.
The judgment addressed fair procedures only. It did not determine the separate constitutional challenge to the 2009 Act. The court had already ruled against the appellants on the European state aid issue, while the relevant considerations issue was treated as moot because it related to the purported December 2010 decision that had been held invalid.