IT WAS A matter of grave importance that the State operated Nama with clarity and in accordance with the approval of the European Commission, the High Court was told yesterday.
John Gleeson SC, for businessman Paddy McKillen – who is challenging Nama’s claimed right to acquire unimpaired loans – asked the court to allow him to argue at a two-week trial next month that the agency was breaching European Commission approval.
Mr Gleeson sought to amend Mr McKillen’s legal grounds for his constitutional challenge to Nama.
The legal team for 15 of Mr McKillen’s companies will argue that Nama is not authorised to acquire €80 million worth of loans which they claim are unimpaired and operating normally.
Mr Justice Frank Clarke will decide today if the companies can introduce, at next month’s trial, evidence of a letter sent from the European Commission last week to Senator Eugene Regan, in which the commission stated that a loan could only be transferred to Nama if the borrower was “impaired”. The existence of the letter was first reported in The Irish Times.
The amendment to the original statement of grounds for Mr McKillen’s constitutional challenge was strongly opposed by Maurice Collins SC, for Nama and the State.
Mr Collins told the court that not only was Mr McKillen’s application legally out of time, but it was without substance and merit.
He said the 2009 Nama Act provided that the Minister “shall designate” classes of bank assets as eligible assets and once so identified, they may be acquired by Nama.
“It is apparent that the scheme of the Act in relation to eligible assets could not be clearer,” he said. “The core provisions of the Act are clear and unambiguous. Particular loans are eligible for acquisition and there is no requirement that they be non performing.”
He said the word impairment was not to be found in any of the relevant provisions of the statute which had been approved by the European Commission.
An “impaired borrower” was not an expression to be found anywhere in the Act.
Mr Collins said a fundamental element of the scheme was the acquisition of eligible assets and the European Commission had clearly understood and approved of the Nama legislation.
He said Mr McKillen’s application for an amendment was made now some two-and-a-half months after his challenge had got under way and seven months after the decision of the commission to which it related.
“Is it seriously suggested that a letter written by the European Commission as a response to an inquiry is to be treated as a new fact in the proceedings?” Mr Collins asked.
Mr Gleeson told the court that the case he wished to make at the trial was that the decision to acquire assets from an unimpaired borrower fell outside the approved scheme as stated in the letter written to a public representative by a senior member of the European Commission.
Mr Justice Clarke said he would attempt to give his ruling on whether or not the pleadings could be amended by this afternoon.
