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Dellway Investments Ltd. and Others v. National Management Agency (NAMA) and Others, [2011] IESC 4 ; [2011] IESC 14; [2011] 4 IR 1 is a reported Irish Supreme Court case decision.

At the Supreme Court hearing, Patrick McKillen and 15 of his companies brought an appeal. They said, among other things, that the National Asset Management Agency Act of 2009 (NAMA Act of 2009) gave NAMA the power to buy loans from companies that weren't paying their bills, which was against the constitution. The Court said that the NAMA Act of 2009 was not unconstitutional, but it did agree with the appellant's claim that he or she had a right to be heard and make representations.

Background
Mr McKillen, a property investor, had an interest in a number of properties. Mr McKillen's property portfolio included properties not just in Ireland, but also in countries such as the United States, United Kingdom and France. Of the 62 properties contained within Mr McKillen's portfolio, 96% of those were leased to "blue chip tenants on long leases". In other words, leases lasting 25 years or longer. To further expand upon his property portfolio, Mr McKillen sought a financial loan from two Irish financial institutions. The loans Mr KcKillen sought amounted to approximately €2.1 billion.

More pertinent to the analysis of this case, was the status of credit facilities. The main argument of the appellant's case pertained to whether the secured loans constituted eligible bank assets to be retained by NAMA. A loan is considered impaired when it is unlikely the full value will be retained by the lender.

NAMA's decision to appoint a statutory receiver is a matter of public law.

Holding of the Supreme Court
The case involved judgments of which were delivered on two separate occasions. The first being on 3 February 2011 and the second on 12 April 2011.

In his judgment, Murray CJ referred to discretionary powers of NAMA as established in Section 84(1) of the NAMA Act 2009. Pursuant to this, Murray CJ held that NAMA does in fact have a discretionary power to acquire eligible bank assets. Furthermore, Murray CJ addressed the argument put forward by the plaintiff that Section 69 of the NAMA Act 2009: Designation of eligible bank assets.

Fennelly J also allowed the appellant's claim on the ground of fair procedures and the constitutionality of NAMA Act 2009. Fennelly J paid recognition to the appellant's argument of the possible unconstitutionality of the NAMA Act 2009 with respect to acquiring eligible bank assets. Fennelly J. came to the conclusion that the applicants have a right to be heard by NAMA before it makes any buying decision about their loans.. Thus, the learned judge allowed the appeal and held that Mr McKillen was permitted to make representations in respect of orders regarding the acquisition of eligible bank assets as defined in NAMA Act 2009.

Finnegan J concurred with Fennelly J. Mr Justice Finnegan held that the appellant had a right to be heard in response to a decision to acquire eligible bank assets under Section 84 NAMA Act 2009. Supportive of this, the supreme court judge also held that the powers and exemptions afforded to NAMA under the 2009 Act directly affected the appellant's property rights and interests.

The view expressed by Hardiman's J judgment was concurred by both Macken J and McKechnie J of the Supreme Court. A person "is entitled to be notified and heard before that power is exercised." Hardiman J refers to a basic right under constitutional law. Based upon the judgment, it appears that the legislation provided under the NAMA Act did not facilitate a personal right under Irish constitutional law. The issue of constitutional rights was further examined by Denham J, The Oireachtas is assumed to have intended for proceedings to be carried out in accordance with constitutional justice.

Evidently, the need for statutory legislation to conform to constitutional law was an underlying component to Mr McKillen's case. The majority court concluded that Mr McKillen has a right to be heard in respect of NAMA's decision to acquire eligible bank assets.

Suggested Categories

2011 in Case Law, procedure, fair trial, NAMA, Assets, Personal Rights, Constitution