A EUROPEAN Commission letter sent to a Fine Gael Senator about which loans may be acquired by the National Assets Management Agency (Nama) had complicated matters in the Paddy McKillen case, a High Court judge said yesterday.

Mr Justice Frank Clarke said the letter will now be considered by a three-judge divisional court of the High Court set up to hear a constitutional challenge to Nama by the property developer.

Judge Clarke said it was important in the public interest that any matters to be clarified with regard to the operation of Nama should be fully explored at the full two-week hearing, which begins on October 5th.

Mr McKillen asked the High Court on Thursday to allow him amend his pleadings, so his legal team, led by barrister John Gleeson, could argue a major issue raised in the letter.

The letter was sent to Senator Eugene Regan last week by an official of the commission and stated that a loan could only be transferred to Nama if the borrower was “impaired”.

The property developer, whose €80 million loan from Bank of Ireland has already been acquired by Nama, claims that he is an unimpaired borrower, and that this loan – along with others he owes to other banks – is operating normally, and therefore outside the ambit of Nama.

The State and Nama strongly resisted Mr McKillen’s application to amend his statement of claim, arguing that the application was late, that it lacked substance and merit and that the court did not have jurisdiction to deal with it.

Judge Clarke, in a reserved judgment, yesterday decided that all three matters should go forward to be fully explored by the three-judge divisional court of which he is a member, along with the President of the High Court, Mr Justice Kearns, and Mr Justice Peter Kelly.