Developer David Daly and his children are out of time to challenge the National Assets Management Agency’s (Nama) move to call in their €457 million loans with Allied Irish Bank because they never disputed the agency’s acquisition of those loans almost a year ago, the High Court was told today.
Paul Sreenan SC, for Nama, said decisions by the Supreme Court in proceedings by property investor Paddy McKillen have made clear a legal challenge must be brought around the time of acquisition of loans and not, as in the Dalys’ case, almost a year later.
Mr Daly had not only not objected to the loans acquisition, he “practically embraced” it, counsel said. Because Mr Daly had acquiesced in acquisition, he could not now challenge the calling in of the loans. His acceptance of acquisition meant he was in a new statutory scheme, a Nama world with Nama powers, and had left behind his arrangements with AIB.
Over a period of a year, Nama had acquired the Daly assets, paid for them and dealt with both them and with the Dalys, counsel said. Mr Daly had very quickly become aware the agency approach was he should restructure, sell and bring down his debts and there either would be agreement on his own business plan to achieve that or Nama would do a plan for him.
In considering Mr Daly’s case, the court should also consider the public interest which would not be served by allowing a challenge to an assets acquisition made almost a year ago, counsel added.
The Dalys’ claim that their AIB loans could not be called in on demand also “flew in the face” of written loan agreements between them and the bank, Mr Sreenan also argued. The court should note they had not sworn in documents that they had ever raised an issue of a demand clause with AIB or had ever asked for loans that could not be demanded.
It might well by that the Dalys and AIB never thought there would have to be reliance on a contractual entitlement to demand repayment and that the economy would continue to boom and everything would continue to be “rosy”, but that did not alter the entitlement to call in the loans, counsel said.
He was making submissions for Nama in the continuing hearing before Mr Justice Michael Peart of the challenge by Mr Daly, his daughter Joanne and son Paul to NAMA’s decision last month to call in the loans and to appoint receivers over properties here and in the UK.
David Daly set up Manor Park Homebuilders with others and in 1995 was bought out of Manor Park after which he set up Albany Homes Ltd. He used Bank of Ireland as banker to Albany while AIB was his personal banker.
The Dalys claims, if Nama is let dispose of various assets, there is a distinct possibility they will be left with a shortfall, their income stream will be removed and the possibility of securing a foreign purchaser for the loans will be adversely affected.
The Dalys are seeking injunctions pending the outcome of a possible full action challenging Nama’s calling in of the AIB loans last month.
Under the Nama Act 2009, they must first secure leave from the court to bring an application for injunctions and must show substantial grounds before leave may be granted. If they secure leave, the court may then only grant the injunctions if satisfied damages would not be an adequate remedy for the Dalys.
The proceedings are against a Nama company, the receivers appointed, Nama itself, AIB and the State.
The case arose after the agency moved last month to appoint receivers over properties after giving the Dalys a 24-hour period to repay the loans.
In their main proceedings, the Dalys’ want declarations that various credit facilities entered into by them with AIB in July 2007 and February 2008, transferred to Nama last year, are not repayable on demand. They also claim certain provisions of the
Nama Act are invalid, unconstitutional and in breach of the State’s obligations under the European Convention on Human Rights.
The case resumes on Tuesday.
