The National Asset Management Agency (NAMA) (instructing William Fry) successfully opposed an application by Treasury Holdings (one of Ireland’s largest property developers) to quash its decision to appoint receivers over certain assets and entities within the group: Treasury Holdings & Ors v The National Asset Management Agency & Ors IEHC 297, (Unreported, High Court, Finlay Geoghegan J, 31 July 2012).
Treasury Holdings failed in its application to the High Court to quash two decisions made by NAMA on 8 December 2011 and 25 January 2012 to issue demands for repayment of certain loans and, if those demands were not satisfied, to enforce the relevant security and appoint receivers. Treasury argued that these decisions were subject to judicial review by the Court as NAMA is a public body exercising public law powers and it did not properly notify or give Treasury an opportunity to be heard prior to taking the decision to enforce. Treasury further argued that NAMA was under a duty to exercise such power in a fair and reasonable manner and that it failed to take into account relevant considerations of investor/purchaser proposals.
NAMA strongly disputed all of the public law arguments advanced by Treasury. It also argued that Treasury had waived any entitlement or right to seek relief as a result of a standstill agreement between Treasury and NAMA, whereby NAMA would not take any further steps in the enforcement process for 14 days and would consider proposals from certain interested parties to acquire its loans. NAMA committed to the agreement and engaged in a further evaluation of the proposals during the standstill period. Treasury gave an undertaking that it would not object to the appointment of the receivers or commence proceedings on the expiry of the standstill period should the proposals not be satisfactory to NAMA.
The Court found that Treasury had a right to be heard and that NAMA as a public body was under a duty to exercise such power in a fair and reasonable manner. However, the Court ultimately held that Treasury was prevented from having NAMA’s decisions to enforce quashed as it had sought and obtained the standstill agreement with NAMA. The Court also found that Treasury gave the express and clear undertaking that it would not object to the appointment of receivers or commence proceedings on the expiry of the standstill agreement. NAMA had relied on such representations from Treasury in engaging in the standstill agreement and had acted to its detriment by committing resources and incurring expenses in evaluating the further proposals submitted by Treasury.
Separately, KBC Bank Ireland plc has brought a petition in the High Court to wind up Treasury Holdings and related companies, which has been adjourned to 9 October 2012.
Contributed by Craig Sowman
