Supreme Court allows appeal on fair procedures regarding NAMA asset acquisition affecting borrower rights.

THE SUPREME COURT

Murray, C.J.

[396/2010]

Denham, J.

Hardiman, J.

Fennelly, J.

Macken, J.

Finnegan, J.

McKechnie, J.

BETWEEN/

DELLWAY INVESTMENTS LIMITED, METROSPA LIMITED,

BERKLEY PROPERTIES LTD., MAGINSTGRANTE LIMITED,

MAY PROPERTY HOLDINGS LIMITED, SCI 20 PLACE VENDOME,

DIRECTDIVIDE TRADING LIMITED, SUBMITQUEST LIMITED,

BELFAST OFFICE PROPERTIES LIMITED,

THE FORGE LIMITED PARTNERSHIP,

FINNSBROOK INVESTMENTS LIMITED,

CONNIS PROPERTY SERVICES LIMITED,

FORMCREST CONSTRUCTION LIMITED

CHESTERFIELD (THE PAVEMENTS) SUBSIDIARY LIMITED,

ABBEY DEVELOPMENTS LIMITED AND PATRICK MCKILLEN

APPLICANTS/APPELLANTS

-AND-

NATIONAL ASSET MANAGEMENT AGENCY

IRELAND AND THE ATTORNEY GENERAL

RESPONDENTS

Judgment of Macken, J. delivered on the 12th day of April, 2011

In this appeal the several appellants have sought to set aside the judgment of the High Court (Kearns, P., Kelly and Clarke, JJ)

delivered on the 1st November 2011, and by which it refused leave to the appellants to seek judicial review concerning the decision

by the first named Respondent (hereinafter “NAMA”) to take over certain “eligible assets” of two Irish Banks, represented by the loans

of the appellants, on the basis that substantial grounds had not been made out in respect of any of the issues, on the basis that the

provisions in issue do not materially alter the position of the appellants, and that none of the asserted rights were exposed to any

alteration of a type, nature or extent, such as to create an entitlement to fair procedures.. The sole exception found by the High

Court was based on its consideration of the position which would have arisen if that Court had held that there were constitutionally

protected rights, and there should therefore be implied into the legislation an obligation that appropriate procedures be complied with

– in this case, a right to be heard. In respect of that issue, on which it was held that the appellants had made out substantial

grounds sufficient to meet the statutory requirement in that regard, the High Court, having granted leave on that narrow issue,

nevertheless rejected the appellants’ case on the merits, and thereupon dismissed it. In that regard, the High Court, at the end of its

analysis on this issue, stated:

“The Court is satisfied that the issues which have been addressed in this section do raise a substantial issue which is

sufficient to meet the statutory test for the grant of leave. The Court, therefore, proposes to grant leave to seek judicial

review based on the grounds which have been analysed in this section. However, for the reasons which the Court has

sought to analyse, the Court has ultimately come to the view that the issues raised under this heading do not entitle Mr.

McKillen to succeed in relation to any of the reliefs which he seeks based on those grounds.”

When the appeal commenced before this Court, there were five separate issues identified by the appellants, which were:

(1) Their claim concerning their right to be heard;

(2) Their claim concerning the failure of NAMA to take particular or specific matters into consideration;

(3) Their claim that the decision of NAMA to acquire the eligible assets was a nullity;

(4) Their claim as to the constitutionality of the National Management Agency Act 2009 (“the Act of 2009”); and

(5) Their claim arising out of the decision of the European Commission on its receipt of details of the NAMA scheme;

As is noted in other judgments also delivered today, this Court has already held, by judgments delivered on the 3rd and 9th February,

2011 respectively, that the original decision made by NAMA to acquire the appellants’ loans, referred to at (3) above, was a nullity;

that the issue based on the alleged failure of NAMA to take into account six specific considerations when reaching its decision to

acquire the relevant eligible assets, referred to at (2) above, was moot, having regard to this Court’s judgment on the nullity of the

decision purportedly taken by NAMA; and that the High Court was correct in its interpretation of the European Commission’s approach

to the NAMA scheme to acquire eligible assets, referred to at (5) above. There remained extant in the appeal, therefore, two issues,

that is to say, the fair procedures issue and the constitutional issue. The Court, on the 9th February, 2011, having heard the parties

on the question as to whether these issues were also moot, determined to deliver judgment on these issues.

Any decision by NAMA to take over loans of a borrower on the books of a bank is made pursuant to the provisions National Asset

Management Agency Act, 2009 (“the Act of 2009”). The Act of 2009 is one of several pieces of legislation, including the Credit

Institutions (Financial Support) Act, 2008 and the Credit Institutions (Financial Support) Scheme, 2008 established pursuant to

statutory instrument, and others, which together were adopted with a view to addressing the financial crisis which developed in the

State in 2008 and since. The intention of the Act of 2009 was, inter alia, (a) to establish what NAMA described, in affidavits filed on

its behalf, as a “work out” vehicle for the disposal of certain assets the subject of the legislation; (b) to permit NAMA to acquire, hold

and/or dispose of “eligible assets” as defined in the Act, being some at least of the book debts of participating banks, represented in

the main by loans given to development borrowers; (c) to acquire as part of those eligible assts, the mortgagee/bank’s interest in the

underlying securities supporting the borrowings; and (d) to facilitate the possibility that the eventual use or realisation of the

securities would generate a profit sufficient, at least, to exceed the cost of the statutory scheme.

In the context of the issues which arise on this appeal, it is critical to understand what the scheme envisages. It is not the intention

of the scheme simply to acquire bad debts, whether all or some of them, of participating banks. What is intended, as is clear from the

affidavits filed on behalf of NAMA, is that specific identifiable and identified “eligible assets” of named parties are first subject to

scrutiny and analysis, and assessed by reference to the risks which they pose to the financial sector. NAMA also assesses the value

of the eligible assets constituting the underlying securities for borrowings appearing in the books of the bank. All this occurs before

NAMA decides whether or not, pursuant to Section 84 of the Act of 2009, to acquire any particular eligible assets. The specific

eligible assets, the subject of this appeal, are those of or relating to the appellants and as were the subject of a decision by NAMA to

acquire them.

I have had the benefit of reading the judgment of Hardiman, J., with which I agree. I propose in this judgment to confine myself, on

the fair procedures issue, to a few points which I wish to address separately, namely, (a) the extent to which the right to be heard is

recognised as a general principle of law, and to what that right attaches, (b) whether it can, in the context of the issues arising in

these proceedings, be set aside; (c) whether the appellants’ rights are, or risk being, interfered with, in a manner which, together

with other matters, supports, on the merits, their asserted right to be heard, prior to NAMA making a decision to acquire eligible

assets, and the consequences flowing therefrom.

In this appeal, as was also the case in the High Court, four separate constitutional rights of the appellants were invoked on their

behalf by senior counsel, Mr. Cush, as being those which support his contention that the appellants have a right to be heard before

NAMA makes its decision, because such a decision will interfere with them. These are, in short:

(a) The appellants’ interests in the underlying secured properties, or their value;

(b) The appellants’ interests in the income stream from those properties, and/or from which, it is said, inter alia, Mr.

McKillen earns his livelihood;

(c) a bundle of contractual and other rights existing between the appellants and their banks;

(d) Mr. McKillen’s reputation, which, it is alleged, is critical in the area of commercial property development.

Both the appellants and NAMA have argued their respective viewpoints on the right to be heard with some considerable force, and the

proper resolution of the issue is no easy task. There are, I believe, three stages to be looked at in relation to the particular fair

procedures under consideration, that is, “the right to be heard”. These are:

• the invocation of the right to be heard;

• the determination of that right; and

• the exercise of that right.

The last of these creates no difficulty in the event the right is express, or the parties agree to the claiming party being heard. In this

appeal, this Court is not concerned with whether or not, if the appellants are eventually heard, they succeed, or even, at this stage,

are likely to succeed, in persuading NAMA not to take over the relevant eligible assets. The eventual outcome of any such hearing, if

the appellants are successful in their appeal, is not for this Court. This court is only concerned (a) by the fact that NAMA has refused

the appellants any hearing, claiming they are not entitled to one; and (b) whether NAMA is correct in that regard, as the High Court

accepted, in rejecting the appellants on the merits.

Rather surprisingly, whereas several cases, both in this jurisdiction and elsewhere, deal with the application of rules or principles

relating to the exercise of a right to be heard, they refer scarcely at all to the rationale grounding the basic principles generating the

right. There is little detailed analysis found in any of the case law which assists in deciding the matter on a definitive basis. It may

well be that, in light of the long existence of the common law rule of natural justice, represented by the principle audi alteram partem

as a fundamental norm in administrative law, it has not been thought necessary to do so. It is, therefore, essential to start from first

principles, and see what the law requires on the issue of the right to be heard, when a party claims his rights are, or may be,

interfered with, before considering how the appropriate legal principles impact on the issues in this appeal. In the present appeal, the

importance of understanding to what the right refers, and when it applies, is critical, because the appellants claim that they have

certain constitutional rights, arising both from the ownership and the exercise of their property rights, as well as rights in their

reputation, which must be protected and which, in order to be so protected, require that they be heard before any decision is taken.

A bank, if a participating institution, has some right to be heard in some way, pursuant to the Act of 2009, in order to challenge

whether or not the claimed “eligible assets” are just that, and that issue may be referred to an expert for determination. The Act of

2009, is, however, entirely silent on the existence of any right in borrowers, mortgagors or guarantors to be heard before any decision

is taken by NAMA, and once “eligible assets” are acquired, the decision to acquire cannot, according to the Act of 2009, be

challenged. Section 103 of the Act provides:

“No cause of action lies or is maintainable against NAMA or any NAMA group entity by reason solely of the acquisition of a

bank’s assets by NAMA or a NAMA group entity.”

It seems to me that, when asserting a claim to fair procedures for the purposes of judicial review proceedings, an applicant must

establish that there are genuine interests disclosed, or rights invoked, and if prima facie these are established, an applicant will

ordinarily have overcome the first hurdle of being granted leave. The High Court did not accept in this case that the appellants had

established “substantial grounds” a specific statutory requirement governing the application in this case, under the Act of 2009,

based on the alleged interference with the constitutionally claimed rights as set out above, that statutory requirement representing a

heavier burden on an applicant than is normally required in law. It then falls to a Court, if leave were granted, in the ordinary course

of events, when assessing the eventual merits of the claim, to determine, according to the appropriate principles, whether there has

been the required interference in those rights. In the present appeal, therefore, an assessment must be made first of the claimed

rights underlying the invocation of the right to be heard, and then the question arises as to whether the High Court’s appreciation of

the manner in which they may be, or will be affected, was correct. As stated above, the appellants claim that the four rights, already

invoked by Mr. Cush, are all constitutionally protected rights which the decision of NAMA will, or may, on reasonable grounds, interfere

with.

A starting point for considering whether there is a general right to be heard where actions or steps are proposed which will, or may,

interfere with the rights of a party, might be thought to be the European Convention on the Protection of Human Rights and

Fundamental Freedoms (“the Convention”). While Article 6 of the Convention, together with other articles, including those granting a

right to private property, according to the case law of the European Court of Human Rights, recognises a right to have the

determination of, inter alia, civil rights or obligations heard or disposed of in public, I am not satisfied, on a review of the case law,

that any sufficiently clear assistance can be gleaned from the jurisprudence of that Court to assist definitively in determining whether

a clear right to be heard arises in all cases of parties claiming interference with rights, or if not, in what circumstances such a right

must be permitted, and what the applicable principles are for assessing the extent of the interference which must exist, in order to

establish the right.

The next possible source for the expression of such a right might be thought to be the Charter of Fundamental Rights (“the Charter”)

of the European Union, adopted as part of the adoption of the Lisbon Treaty, and having the same standing as the Treaty itself. A

consideration of the Charter discloses that the Member States of the Union have adopted, as an express fundamental right, the right

to an effective remedy, and a right to a hearing. Article 47 provides that:

“Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective

remedy before a tribunal in compliance with the conditions laid down in this Article.

Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal

previously established by law. Everyone shall have the possibility of being advised, defended and represented.”

That patently grants a right to be heard in respect of properly invoked rights. Its ambit is not, however, clearly spelt out. Although it

suggests a hearing must be “public”, there is no guidance on what precisely is meant by or is included in “rights” in the first paragraph

of Article 47. It is true that even before the adoption of the Charter by the Member States, but nevertheless after the Charter in an

earlier version, had formed some element in the overall architecture of the Treaty and Protocols of the Union, the European Court of

Justice had decided that a right to be heard, as part of the “right of defence”, constituted “a general principle of Community Law”. In

case C-349/07 Fazenda Publica v. Ministerio Publico, delivered on the 18th December 2008, the Court stated, in the context of a fine

affecting the complainant, imposed without the complainant being heard pursuant to the Customs Code:

“36. Observance of the rights of the defence is a general principle of Community law which applies where the authorities

are minded to adopt a measure which will adversely affect an individual.

37. In accordance with that principle, the addressees of decisions which significantly affect their interests must be placed

in a position in which they can effectively make known their views as regards the information on which the authorities

intend to base their decision. They must be given a sufficient period of time in which to do so …

38 The authorities of the Member States are subject to that obligation when they take decisions which come within the

scope of Community law, even though the Community legislation applicable does not expressly provide for such a

procedural requirement.” (emphasis added)

It is clear from that judgment that the purpose of the rule that the addressee of a decision, significantly affecting their interests,

must be placed in a position to submit observations before that decision is adopted, is to enable the competent authority effectively

to take into account all relevant information. In order to ensure that the person or undertaking concerned is in fact protected, the

purpose of that rule is, inter alia, to enable them to correct an error or submit such information relating to their personal

circumstances as will argue in favour of the adoption or non-adoption of the decision, or in favour of its having a specific content.

[para. 49]

Further, according to that case, respect for the rights of the defence implies that, in order that the person entitled to those rights

can be regarded as having been placed in a position in which he may effectively make known his views, the authorities must take

note, with all requisite attention, of the observations made by the person or undertaking concerned. [para. 50]

However, that case was decided on the principle of the right of defence, rather than by invoking an independent freestanding right to

be heard. I read it nevertheless as suggesting that, where a decision of the type made there is proposed, and which significantly

affects his interests, the addressee of the decision must be heard first. Nevertheless, I do not consider it to be applicable in the

present case. The decision at issue in that case breached another cardinal precept of natural justice, namely, that no person should

be condemned to any sanction, civil or criminal, without being afforded an opportunity of being heard. It does not assist in

determining whether the second cardinal principle, namely that of audi alteram partem, will also be accepted by the European Court

of Justice as a fundamental right or as a general principle of Community Law, and more importantly, in what circumstances a right to

be heard must be guaranteed. It is nevertheless helpful in that the purpose of the first rule is to enable parties to present information

evidence or argument as to why a decision should not be made, and therefore, has the same purpose as that arising on the exercise

of a right to be heard in the present case. I, therefore, consider the view expressed in that case as informative. I am also satisfied,

for the reasons explained above in relation to how and by reference to what the decision to acquire eligible assets, constitutes the

appellants addressees of the decision of NAMA, in the sense used in case C-349/07.

I also note that the Court has, during the course of 2010 and 2011 to date, since the adoption of the Charter, dealt with three cases

in which the provisions of Article 47 have been in issue. These are Case C-317/08 Alassini and others v. Telecom Italia, Case C-

407/08 P Gips v. Commission, and Case C-409/06 Winner v. Stadt Bergheim. In none of these cases, however, has the question

which arises before this Court been the subject of comment or decision, and I have concluded therefore that the case law of the

European Court of Justice on the right to be heard, as a particular element of the principle audi alteram partem, is not sufficiently

instructive in this particular appeal to be of assistance.

It is appropriate, before considering the next source to which I wish to refer, to say something in general about the right to be heard.

Procedural fairness has come to be regarded as the bedrock of administrative law. So fundamental to administrative law is the

principle audi alteram partem, that it may well that little is said as to its applicability in recent case law, save almost in passing. It

seems to me, however, that the particular value underlying a procedural fairness rule of this nature relates to the principle that the

individual affected by a decision should have the opportunity to present his case fully and fairly, and have a decision affecting his

rights, interests or even privileges made using a fair and impartial process. That of course will depend also on the appropriateness of

the process to any statutory, institutional and/or particular context in which the decisions are made. Clearly, that context must play

a particularly important role in the assessment of the fair procedure in issue, in this case the right to be heard. There are several

general criteria which could be propounded, I believe, for the purposes of assessing whether, in a given case, fair procedures require

that a person be heard before a decision is made, including, for example: (a) the nature of the decision; (b) the nature of the

statutory scheme; (c) the importance of the decision to the person invoking the right - in this case - to be heard; and (d) the choice

of procedure, if any, adopted by the decision-maker. There may be others, such as legitimate expectation, and so forth, but the

above are ones which resonate in the case law in this jurisdiction, to which I now turn.

For the purposes of this appeal I am satisfied that, with the plethora of case law concerning administrative law and the rules of

natural justice, including the right to be heard, the most important source of such a right, is clearly the Constitution, and/or the

common law, and the jurisprudence on such rights, as developed in the case law of this jurisdiction. On behalf of the appellants, Mr.

Cush did not invoke a free standing constitutional right to be heard. Rather, he submitted that the right to be heard flows from the

fact that several constitutionally protected rights are being interfered with and that being so, the interference with those rights

carries with it the right to be heard. I am in agreement with the analyses of Irish case law on the right to be heard, as an element in

the right to fair procedures or natural justice, found in other judgments delivered on this appeal today. I do not consider it necessary

therefore to embark on a separate treatment of all of that jurisprudence in this judgment, but will confine myself to addressing the

following cases. They are Haughey v. Moriarty [1999] 3 I.R. 1, and O’Callaghan v. Mahon [2005] IESC 9, as well as some of the cases

therein cited.

In O’Callaghan v. Mahon, Hardiman, J. invoked, in a different context certainly, the following extract from the judgment of Ó Dálaigh in

Re: Haughey [1971] I.R. 217

“In Re Haughey [1971] IR 217 at 264 O Dalaigh C.J. said in a lapidary passage:

“ … In proceedings before any tribunal where a party to the proceedings is on risk of having his good name, or his

personal property, or any of his personal rights jeopardised, the proceedings may be correctly classed as

proceedings which may affect his rights, and in compliance with the Constitution the State either by its enactments

or through the courts, must outlaw any procedures which will restrict or prevent the party concerned from

vindicating these rights.” (emphasis added)

Hardiman, J. also referred to Kiely v. Minister for Social Welfare [1977] I.R. 267 in which Henchy, J., stated, having referred to the

position arising under case law in the United Kingdom:

“With great respect, I cannot accept that those decision or those dicta correctly represent the law in this State. I do not

think it is open to judges here to adopt such a laissez-faire attitude to the vagaries of tribunals exercising quasi-judicial

functions. This Court has held, in cases such as In re Haughey [1971] I.R. 217 that Article 40. s.3, of the Constitution

implies a guarantee to the citizen of basic fairness of procedures. The rules of natural justice must be construed

accordingly.” (emphasis added)

It should be noted in passing that the phrase “affect his rights” is one used also by Keane, C.J., in Maguire v. Ardagh [2002] 1 IR 385

in which he stated:

“… No citizen whose name may be affected by the proceedings of a committee of this nature and who is required by legal

process to attend and give evidence before it can constitutionally denied in advance the right to cross-examine those

whose evidence might so affect his rights. (emphasis added)

In Haughey v. Moriarty [1999] 3 I.R. 1, an issue arose concerning a claimed breach of a constitutional right to privacy, the nature of

which is not important in the context of this appeal, save to say that it concerned a requirement to provide substantial material from

the banking and other financial accounts of the applicants. In this Court, in the judgment of Hamilton, C.J., with which all other

judges agreed, it was stated:

“Fair procedures require that before making such orders, particularly orders of the nature of the orders made in this case,

the person or persons likely to be affected should be given notice by the Tribunal of its intention to make such order, and

should have been afforded the opportunity prior to the making of such order, of making representations with regard

thereto….” (emphasis added)

It will be seen that in each of the above cited passages, the test appears to be whether or not a person’s rights are affected by the

proposed decision. Further, the test appears to be applied so as to ensure that, as between the party making the decision and the

person whose rights are affected by it, the fundamental principle to be assured is the application of “fairness of procedures”. Of

course the nature of the decision, its ambit, its effect and so forth will assist in determining whether there is a right to be heard, but

that does not alter, in my view, either the nature of the right and the ambit of the right. However, the fact that a decision is one

which is going to be taken in the exercise by a decision maker of a discretion even a very wide discretion, is not a ground, in itself,

for departing from the basic principle of audi alteram partem. Neither the breadth of the discretion, which in the present case is very

wide, nor the fact that it is described as the “sole” discretion of a decision maker, and thus may only be reviewed in very limited

circumstances, or as here not at all, can, in law, lead to the conclusion that if that decision is one affecting the interests of a party,

it does not attract the rules of natural justice. Indeed, it might be said that where the discretion afforded is very broad, as here, and

the limits on possible review may be very narrow indeed, this makes it all the more important that an affected party should have the

right to make submissions to the decision maker before a decision is made. If anything, the scale of the NAMA statutory discretion

and its statutory powers, and the fact that there is no appeal from its decision to acquire eligible assets referred to above,

emphasises the importance of scrupulous adherence to the rules of natural justice.

In light of the foregoing, as well as the more detailed analyses found in other judgments, I am satisfied that each of the claimed rights

of the appellants, as invoked by them, when properly considered, is a genuinely serious constitutional right which they are justified in

invoking for the purpose of asserting a right to be heard. First, they claim an interest in the underlying value of property owned by

them. It is said to have a huge value, on the evidence adduced. This is a property right which, if it is established that it will, or may

be, affected by a decision of NAMA to take over the loans, must entitle the appellants to the protection of the law. So too is a right

to the income stream therefrom, which is used, inter alia, as a means of the last appellant earning a living, an important personal and

property right. If the underlying property itself, or the value of it, free or otherwise, is also the subject of the claimed bundle of

rights, inter alia, any contractual or quasi contractual rights, existing between a mortgagee bank and the appellants, these too are

important rights being invoked. If they are established, and the decision of NAMA may threaten to interfere with them, or otherwise

affect them, then such a right is one in respect of which a person affected may again seek the protection of the law, and, in this

case, assert a right to be heard.

As to the High Court’s assessment and analysis of the merits of the right to be heard, Mr. Cush, for the appellants, apart from arguing

that the High Court was wrong in finding no real interference with the appellants’ rights had been established, also complains about

the absence of any decision at all by that court on some of the above issues. He points to:

(a) the failure of the High Court to consider at all, the first two issues raised, that is the underlying value of the property,

and the right to and loss of an income stream from that property;

(b) the failure of the High Court to assess the real interference with the banker/customer relationship, called the “bundle

of rights” existing in the appellants, based on the relationship between them, or to assess how the rights acquired by

NAMA would, in practice, affect the appellants’ rights;

Having regard to my conclusion that the property rights claimed entitled the appellants to invoke the principle of fair procedures to

the statutory level required, a matter not accepted by the High Court, the question which arises for this Court, in the absence of any

such decision by the High Court, is whether those claimed rights are, or are likely to be, “affected” by decision of NAMA, and the

extent to which the appellants’ rights are likely to be so affected. As to the question of the underlying property, it is difficult to

imagine, in the field of development, a greater interference with a property right than with one affecting the underlying value of a

property portfolio, not simply the residual or “free” value of the property, but its entire value. It is the essential raison d’etre of a

development company that its portfolio, and each element of a portfolio, must seek to retain its underlying value so as to permit

growth arising from increases in that value over a period of time due to natural market forces, or which, because of the nature of a

particular part of the portfolio, it enjoys the likelihood of an increase in its value. There will be other factors, but I confine myself to

these two. Of course, a property portfolio may lose value just as it may gain value. But the claimed effects arising from the decision

of NAMA to acquire the eligible assets, if established, must be classified as “sufficient” or, it might even be said, significant, and must

therefore satisfy the test, unless NAMA can establish it is otherwise, or there are good grounds for justifying the refusal to be heard.

That is not to say that the appellants will be successful at the end of the day in persuading NAMA not to take over the eligible assets

in question. As stated above, that is not the role of this Court. But nor can it be assumed either that the appellants will not succeed.

The eventual outcome – unless absolutely clear – must be a neutral factor in this Court’s analysis and assessment of the likely effects

of the decision. Similar considerations apply in relation to the claim that the decision of NAMA will affect the right to earn a living from

the expected income stream arising from the underlying properties. Assuming it is established, on reasonable facts, that it is likely to

be affected by the decision of NAMA, I am satisfied it attracts the right to be heard.

The appellants claim that as to the first of the above matters, apart from the overall value of the entire portfolio, there is also an

underlying “free” value amounting to many millions at any given time, including, it must be assumed, at the time of any decision. The

answer to this, on the part of NAMA, is that this depends, at the end of the day, on the current value of the properties. That is no

doubt true. However, while NAMA does say the effect of its decision will be minimal, it does not say that, if the appellants are found

to be correct, such claimed effects would not constitute a material interference with their rights. NAMA did not allege that there

could be and was no underlying value to the properties of a “free” nature, nor any income stream which might be available to the

companies or to Mr. McKillen as a means of earning a living. They questioned of course, whether there might genuinely be any income

at all, if the lenders had not benefited from the State assistance mentioned above. That being so, the eventual result of the exercise

of a right to be heard, which may be affected by the properties’ then value, cannot be the decisive factor, unless NAMA could

establish, in advance, that there was no reasonable basis in the appellants claim, in other words, that it was based on spurious or

worthless or unsustainable evidence. I cannot find any such claim on the part of NAMA. Indeed, while some of the evidence adduced

on behalf of the appellants is put in issue, properly so, by NAMA, this could not be said to place any of the appellants’ evidence into

the category of being worthless or spurious or unsustainable. Rather, it would be more correct to classify the evidence presented on

behalf of both parties as being valuable, strong, and carefully presented, but nevertheless conflicting. However, the High Court itself

did not find that, if it were established, the interference would not constitute, on the merits, a “significant” interference (the test

which was applied), such as to generate the right to be heard. The High Court found, on the contrary, that such significant claimed

interference had not been established by the appellants.

NAMA argues as follows, in brief: the Act of 2009 and the associated legislation, including certain regulations, which were adopted at

a time of severe crisis in the banking sector of the Irish economy, have had extremely serious impacts on all sectors of the economy,

on the Exchequer, and on the citizens of the State; what are being acquired are the “bad loans” on the books of the participating

banks, that is to say, eligible assets on their books, who would then have more “attractive” books, so as to allow for appropriate

recapitalisation of the banks; the Act of 2009 deliberately does not provide for any right in a borrower to be heard; that is a

proportionate response to the crisis; the pre-existing private law relationship between the appellants and their banks permitted and

envisaged the assignment of the very loans, mortgages and other securities in issue; it would be enormously onerous for NAMA and,

indeed, would undermine the entire scheme of the legislation, if borrowers were granted a right to be heard;, to permit such a right to

be exercised would also constitute an unduly delaying factor in the essential work of NAMA, a matter recognised by the Commission of

the European Union when it did not demur from the relatively short target period fixed for the acquisition of eligible assets; and by

reason of the critical nature of the events surrounding the near banking collapse, there was great urgency attaching to the timescale

for acquiring the eligible assets, which would be put at risk if a right to be heard were granted to borrowers. With regard to

interference, NAMA does not concede that, even if there is interference with property rights, even significant interference, as I

understand the argument, such would give rise to a right to be heard, NAMA adhering to the position that the legislation justifiably

intends there should be no such hearing, and that this restriction is proportionate. NAMA does nevertheless, allege that the actual

transfer will have no or only a minimal effect on the appellants’ rights.

I now return to the third right invoked on behalf of the appellants, which concerns their “bundle of relationships” with their

bankers/mortgagees, including contractual ones, being vested rights protected by the Constitution. Depending on the precise nature

of the various parts of a bundle of rights which are invoked, there may be some which are too amorphous to merit a sufficiently

defined “right” or even “interest” to permit reliance to be placed on them, or even that the decision, in respect of those could

genuinely “affect” a person in a manner which attracts a right to fair procedures, and thus the right to be heard. For example, NAMA’s

claim that the likelihood that banks would, in the context of these appellants, and regardless of their financial strength, continue with

existing arrangements with the appellants and therefore be in a position, for example, to roll over debts or mortgages, or even grant

new loans, where the relationship was, on the admission of the appellants, short term in nature, and indeed deliberately so, appears

reasonable to me, unless rather cogent evidence was adduced to the contrary. There is never the certainty, NAMA say, and there

could probably never be such a certainty, that short term arrangements of the type in existence between the appellants and its

bankers would never change. I do not consider that this court can come to a definitive view of such matters where such a view

cannot, at this stage, be established with certainty, and where there is credible evidence on behalf of the appellants, that even in

such circumstances, there are banks who would continue such support.

On the other hand, however, the transfer of the loans of the appellants, together with the underlying security attaching to them, or

any “related loans” as defined in the legislation, from the books of their banks to NAMA, does nevertheless, in my view, have the

potential for significant interference with existing rights of the appellants, such as to justify the appellants’ claim to be “affected”

within the meaning of the above case law, including their rights in the so called “free” value of the underlying property, in the income

stream, and with their existing contractual or quasi contractual rights (or part of the bundle of rights existing between the appellants

and their bankers). Mr. Cush argues that the High Court failed properly to analyse, in respect of these rights, how a decision of NAMA

would affect the appellants and their loans and securities in practice, but rather limited itself to statements of the legal position, and

resolved the issue on the latter basis. I consider there is merit in this argument. This requires, however, that the general position

relating to mortgages and securities arrangements between banks and borrowers be set out briefly, so as to ascertain how, in

general, borrowers could be could be affected, and quite materially, by a decision of NAMA, and to see whether and how the

appellants might be so affected.

Without citing chapter and verse of the overall NAMA legislation, save where necessary to do so, since a detailed analysis of this is

found in the judgment of Finnegan, J., delivered today, and with which I agree, the following, as practitioners will well know, and as

appear from the case law, the legislation and academic writings, is the position in general. Under the usual arrangements existing

between a borrower and a financial institution, as in the present case of a developer borrower, it is a certainty that the borrowings

will have been secured, inter alia, on underlying real property as well as on other interests, by means of a legal mortgage or charge. It

is envisaged by the provisions of the Act of 2009, by the regulations and the related legislation, that NAMA clearly will - and it has in

respect of other parties - when taking over the debts represented by loans on the books of the banks, take, as part of the eligible

assets, the benefit of the mortgagee/bank’s interests in the mortgages/ charges/guarantees or other securities underpinning the

original loans in question. That is part of the very rationale of the legislation and the scheme, as provided for. The consequences in so

doing have, in my view, an effect on at least the original contract or loan agreement made between the borrower and the banks, and

on the value of the underlying property, in particular, that part sometimes called the “free” element in the value of the property, and

not simply an indirect or coincidental effect. NAMA argues there is no change in the legal position of the appellants. While Mr. Cush

agrees that the appellants’ legal position remained in situ, he nevertheless contended that the High Court failed to analyse how

NAMA’s powers arising from the decision would affect the appellants in practice.

I confine myself to mentioning two or three specific examples where a borrower’s property interests and rights are, or there is

potential for them to be, affected materially. Speaking only in general terms for the moment, ordinarily a borrower – typically a

development company - enters into an agreement for finance with one or more banks. The terms upon which such borrowings are to

be made available will be incorporated into a letter of loan approval, which will inevitably list several conditions, including one requiring

the borrower to grant security for the loan(s). The securities are usually express, and may be very wide ranging. They certainly will

be in the case of substantial borrowings. In due course, in respect of each property agreed to be given as security, there will be

executed a charge/mortgage as well as guarantees. In the case of a development company, the underlying security will typically

consist of the development site itself and buildings to be constructed on the site, together with, in appropriate circumstances, a

charge over the rental income, so that rents coming from the properties in the development are deposited against the mortgage debt,

unless the development is being sold on, in which event, part of the security may relate also to a charge over the eventual sale

price(s), in particular, if constructed by a third party. There may be mortgages over related properties, and cross guarantees by

related companies and/or individuals.

Assuming everything goes well, in the case of a development being retained by a developer, the rents will usually meet the debt.

Some agreements between the parties may provide for the creation of a sinking fund into which part, or all, of the rents will be paid,

in order to discharge both the capital sum due at the end of a loan term, including the ongoing interest charges, or it may be that

both capital and interest will be paid over the entire, or part of the term of the loan, or that the interest element only will be paid.

There may be a deferral of payments for an initial period. The variations are numerous, and may be driven by what is tax efficient, or

how the market is operating at a given moment. The terms may even be driven by what will benefit, not only to a developer but also,

in the case of property being retained by a developer, what will suit some of the developer’s key tenants. While certain statutory

provisions exist for the purposes of protecting parties, including, in particular, individuals or consumers, it has to be borne in mind, of

course, that in the case of mortgages/charges between financial institutions and commercial undertakings, many of these statutory

protections will be excluded, by consent, the mortgagee usually insisting on this, and the developer normally consenting.

Eventually there may be a default. In a standard mortgage or charge there is always an express power of sale, and in any event such

a power is permitted by the provisions of applicable legislation which I do not have to cite in the context of this general exposé.

There is, however, no automatic entitlement in a bank/mortgagee to possession of the mortgaged premises, in the event of a default,

or even when a financial institution decides to call in loans and exercise its power of sale. Therefore, without more, a mortgagee/bank

seeking to sell, has no power to grant possession to a purchaser when closing a sale. In the event of default, frequently a bank will

enter into negotiations with a borrower to allow the borrower time to sell, the borrower generally (but not always) being in

possession. Occasionally, a borrower may consent to the mortgagee going into possession. However, a bank is not obliged to do so,

and equally a borrower has no right to insist on being permitted to sell. In the event of agreement between a bank and a mortgagor,

the bank does not have to go into possession, and the property will be sold by the borrower, with the mortgagee/bank’s agreement,

the bank debt being discharged, and the borrower being in a position to give a good title, including possession, to the purchaser. Even

when a mortgagor consents to possession vesting in the bank, this will not, in many cases, overcome the disadvantages for a bank,

inherent in doing so. If a mortgagee/bank goes into possession of commercial premises, which are leased to tenants, it may, and

usually will, become liable for such covenants in the leases as were also the liability or obligation of the borrower/mortgagor. The

mortgagee bank may also become liable for the security of the property which in the case of, say, a commercial shopping mall, may

be excruciatingly costly. Hence the desirability to deal, even with a defaulting borrower, in order to avoid such sample disadvantages,

even if the costs or liabilities for these are, by consent, to be charged against the borrower eventually, a poor consolation for a bank

with a non-paying borrower.

Critically, in the event of default, if a bank calls in a loan and wishes to sell, and does not enter into any arrangements of the types

above mentioned, it must seek an order for possession from the Court. On that application, again typically, a mortgagor will be

entitled to argue against an order for possession, or may present to the court – and this often occurs even in domestic situations – a

schedule or plan for its own sale of the premises. Provided the proposal is clear, certain and reasonable, a court may, and frequently

will, exercise its discretion to refuse possession, by acceding to the plan, which may extend over a period in excess of a year, or

more, provided, usually, that certain payments are made in the meantime to protect the mortgagee, and provided there is also

remaining some underlying equity or “free” element in the property for the mortgagor. In general, this application for possession will

have been preceded by negotiations, sometime lengthy, between the parties. A mortgagor may or will therefore have significant

protection from the Court in such a situation.

Nevertheless, a mortgagor’s original contract, represented by the letter of loan agreement, and/or the mortgage/charge, will envisage

that a power of sale may eventually be exercised, and commercial borrowers recognise fully that the law envisages an application to

court for possession being made, and that possession may be granted. Up to the point of sale, however, the mortgagor can always

exercise his equity of redemption. But that, in law, is simply the right to redeem the mortgage, by paying off the loan (usually by

refinancing). Sometimes this is referred to, loosely, as representing the balance of the underlying surplus value in the property, once

the loan is paid off, although this is not, strictly speaking, correct. The equity of redemption is simply a “last chance saloon” type

remedy in the hands of the mortgagor. Crucially, however, if it is exercised, it thereby allows the mortgagor to have ownership and

control of any remaining surplus equity, a vital matter, in particular for a development company. The power to sell with a court order

for possession may still occur, if the equity of redemption right is not exercised.

When a mortgagee/bank calls in a loan, and exercises its right of sale in such circumstances, however, there is another equitable

principle applicable, namely that the bank must look for and secure the very best price for the property. At the very least the bank

must be able to establish that it has taken all appropriate steps to secure the best possible price. This principle applies so as to

ensure that the position of the mortgagor (as well as that of subsequent mortgagees, if any) is appropriately protected. If it were

possible for the mortgagee to sell mortgaged property at any price, as can occur under the law in some jurisdictions, then the

mortgagor’s outstanding equity in the property could be seriously undermined. On the sale of mortgaged property, a mortgagee selling

is obliged, first, to discharge the expenses arising on the sale, then to discharge to the mortgagee the primary debt and any

outstanding interest on it, and then any debt due to a subsequent mortgagee, if any. The mortgagee must then return the entire of

the surplus to the mortgagor. There may or may not be a surplus, of course, but if there is, it must be returned; that surplus

represents the mortgagor’s remaining equity in the property, or “free” element. I can think of no circumstances in which a court would

permit a mortgagee to purchase, for its own benefit, property mortgaged to it, save perhaps in the case of a mortgage from one

family member to another. Such a purchase is ordinarily precluded by law. The reason, inter alia, for this is that a mortgagee cannot

enrich himself by purchasing the mortgaged property and then hold on to any surplus arising on a sale. That is not the contractual

arrangement entered into, which is to mortgage property to the extent to which it represents the borrowings made and the interest

charges thereon, and no more. A third principle applicable is that a mortgagee, exercising a power of sale, may not delay selling the

mortgaged property, subject always to the court, or the parties agreeing to this. This is so as to ensure that the mortgage debt does

not continue to increase, to the detriment of the mortgagor, or of subsequent mortgagees, by reason of an improperly delayed sale.

NAMA’s Position in Law

NAMA, according the statutory scheme under which it operates, initially acquires, not the underlying property itself, but rather the

bank debts represented by the various borrowings of development companies, together with the benefit of certain securities. The

scheme envisages NAMA paying for the removal of the eligible assets, being the bad debts on the books of the banks, represented by

the developers’ borrowings, and the banks’ interest in all the underlying security, in the hands of the mortgagee banks, that is, in the

mortgages or charges, in the rental streams, if any, in any guarantees, and in any other security given for the original borrowings. On

the ordinary law relating to such interest on transfer or assignment – and it has always been the case that such security could be

sold or assigned by a mortgagee – NAMA can only stand in the shoes of the assignor/bank. It has, of course, purchased the above

eligible assets for a figure, the nature of which I do not have to consider here, accepted by all parties as being a price far less than

the value appearing in the books of the banks, and certainly far less than the original borrowings. The mere purchase of the book

debts and the underlying security, or acquisition of the “eligible assets”, does not, however, and could not, in law, grant NAMA any

larger or newer rights in the underlying securities than existed in the mortgagee/banks. In consequence, it would have the same

power of sale and, as a mere assignee, the same entitlement to seek, from a Court, orders for possession, as the mortgagee/banks

had under a mortgage/charge. NAMA, qua assignee, would also have the same rights to appoint a receiver to the companies whose

mortgages/charges have been transferred or assigned, as existed in the banks, subject to any restrictions in relation to the same

found, for example, in the Companies Act, 1963, and as amended, and it would also step into the shoes of the banks in relation to any

guarantees, and have the same rights, if any, to appoint a receiver over the properties.

It would rarely, I believe, be in NAMA’s interest to seek orders for possession with the attendant liabilities I have referred to above,

and others, save in exceptional circumstances. Instead of merely having a power of sale, as an assignee from the banks, therefore, if

it wished to dispose of property charged, and have control both over its realisation, over any free element and over the timing of any

sale, it clearly needs something more than the right to seek a court order for possession, and the exercise of a mere power of sale.

One of these additional rights, it seems to me, is the vesting order provided for under Chapter 4, Part 9 of the Act. I use this order,

among the several new powers granted to NAMA and otherwise not available to a mortgagee, by way merely of example. There are

several other provisions of the Act of 2009 granting powers or exemptions not available to a mortgagee/bank, including those

concerning receivers of one or other type mentioned above, described in more detail in the judgment of Finnegan, J. The Act of 2009

envisages that NAMA, on a vesting order, will have a right of sale, clear of any requirement to seek possession. The vesting order

right comes into play once the borrower is in default for a specified period, and once NAMA is of the opinion that the sum secured by

a charge cannot be recovered by way of sale, and the borrower cannot redeem the charge within 3 months of the date of

application, which is, by any standard, a very short period of time indeed. While the mortgagor is on notice of that application, unless

the court is satisfied he can redeem the charge, then the Court “shall” make a vesting order, pursuant to the provisions of s.153 of

the Act, upon being satisfied with the accounts before it. There are ancillary provisions granting other benefits to NAMA: It does not

have to be registered as the owner of any of the property within the ambit of eligible assets, even those where an assignee or the

beneficiary of a court order would ordinarily be required to become registered; similarly there are provisions under which a written

document issued under the seal of NAMA is sufficient evidence of the conveyance or transfer of lands, and so forth.

The Appellants’ Position

The provisions of Part 9 of the Act of 2009, including s.153, cause an alteration both of the original contract between the bank and

the mortgagor, represented by the terms of the letter of loan, and were never envisaged or agreed between the parties. Part 9

constitutes a significant enlargement of the rights being granted to the assignee of the mortgagee/bank’s interest in the security,

also never envisaged in terms of the original mortgage or charge executed by the appellants, never agreed with the appellants, and

not previously provided in favour of a mortgagee by statute, or otherwise. Further, the legal effect of the vesting order, and its

consequences, in my view, also affects the appellants, or has the clear potential to do so, vis a vis, the original contract with a

mortgagee/bank, and certainly alters the existing arrangements between them. Once the vesting order is made, according to the

provisions of the Act of 2009, the equity of redemption is ended. That is, in my view, not legally offensive in itself. Its only

consequence, as a pure equity of redemption right, is that the mortgagor cannot himself insist on discharging the loan after the

vesting order is made. If he does not exercise that option to do so by refinancing or redeeming the loan, a borrower cannot complain

if the formal right to redeem is lost.

However, as mentioned above, under the law relating to a sale pursuant to a mortgage or charge, first, a mortgagee may only take

from the proceeds of sale what is due to it, and must return the balance to the mortgagor; secondly, there is an obligation on a

mortgagee to get the best possible price; and, thirdly, in the case of a sale by a mortgagee bank in possession, either by consent or

pursuant to Court Order, the sale may not be deferred so as to benefit the bank/mortgagee, to the detriment of a mortgagor. On the

other hand, once a vesting order is made under the Act, it would appear – and indeed is intended by the legislation to be so – that

NAMA is not obliged to sell at all, or within any specified period of time. NAMA, on the contrary, is entitled to hold onto the property

to await a possible or expected upturn in the market, even for a period of years, and, in consequence, retain the entire profits

accruing from any sale.

A consequence of the vesting order and the legislation is that NAMA can choose also to continue to hold the property as long as it

wishes, having purchased the eligible asset for a reduced price which is less than the original debt, selling the property later so as to

benefit from an improving market, at a substantial profit, and for its own benefit. No doubt there is some diminution of the impact of a

vesting order on a mortgagor, arising from the Court’s entitlement to fix a notional value for the property at the time of the making of

the vesting order, pursuant to s.153 of the Act. But that, in itself, does not alter the ability of NAMA to delay the sale of property,

even for several years, and thereby benefit exclusively from the profit generated by any upturn in the market. According to the High

Court, it found that the position of NAMA was no different to that which occurs in the case of any sale, when a purchaser can take

the benefit of any “uplift”. It seems to me that it is not the correct comparison to be made. The appropriate approach is to assess

whether the decision of NAMA will, or will likely, affect the appellants’ position. A comparison with a person who purchases property

on the open market from a willing seller is scarcely a true one.

During the course of argument before this Court, it was said on behalf of NAMA, that the obligation to secure the best price continues

to exist even after the vesting order. That may be so, but since there is no longer any obligation to the borrower, save in one respect

mentioned below, any obligation to get the best possible price, even if it exists, appears to be for the benefit of NAMA, and

deliberately not for the mortgagor. There may, therefore, be an independent obligation on NAMA to secure the best possible price to

fulfil its own objectives, but that is an entirely different issue. This seems clear, not only in consequence of the provisions of the Act

of 2009, but also what is clearly understood by NAMA itself and accepted by the High Court, that any increased price, including the

best possible price, is intended to redound exclusively to its benefit. So, even without holding the property for any prolonged period,

the “free” element may generate a profit in the immediate future, with, in consequence of a rising market in the medium or longer

term, larger profits, depending on how long the property is held for. This is clearly its intention in all cases it chooses, as is evident

from statements made by Mr. Frank Daly in his affidavit evidence. It is also what was clearly understood by the European

Commission’s comments on the scheme’s recovery aims.

The rationale behind the vesting order scheme appears to be:

(a) to vest the property without having to negotiate with the borrower or go through the process of securing possession

by means of a court order and thereby to bypass, for NAMA’s exclusive benefit, the disadvantages otherwise accruing to

it. This is an alteration in the position of the original mortgagee in its relationship with the borrower;

(b) to permit NAMA to hold the property for so long as it, in its discretion, decides, so as to maximize the eventual price it

will secure, and to facilitate the possibility of profit for it, another alteration in the position of the original mortgagee -

who could not hold the property at its whim - and its relationship with the borrower; and

(c) to ensure that at a certain time, either in the short or longer term, there is a sufficient amount of “free value”, or

increased value, in the property to allow NAMA recoup more than the amount it has cost them.

(d) to provide, within the legislation and the scheme, various acquisition powers and ancillary relief or exemptions so as to

enable NAMA easier access to the underlying securities, both physically and also legally, with a view to having very keen

control over the realisation of these in order to maximise their recovery value.

The intention found at the last paragraph appears to be supported by the statements of the European Commission’s view, set out in

the Commission’s assessment of the NAMA scheme. The Act of 2009, as I read it, is intended to ensure that NAMA should be able to

make a profit, to offset the cost to it of operating the scheme.

As mentioned, the High Court found that NAMA was entitled, although a mortgagee bank would not be, to take the benefit of the

“uplift”, simply stating that, as with any other person purchasing property, the purchaser was entitled to benefit from an improving

market. That, however, does not establish either that the stated rationale is acceptable in law, in the sense of being either

proportionate or justified, and clearly alters, or affects, the appellants’ rights, vis a vis, mortgagees. NAMA itself, as is clear from the

exchanges of emails presented during the course of the appeal, appears to take the view that once the vesting order is granted, any

“free” value in the underlying properties redounds to its benefit, and is under its exclusive control. That must mean the “free” value of

the property claimed by the appellants to constitute both part of their constitutionally protected right in the underlying property and

in the income stream accruing from it. In order to permit NAMA to benefit precisely from that “free” value, there is clearly an incentive

in NAMA to control that free value as soon as possible. The only way to do this is by means of a short default period, as provided for

in the Act of 2009, followed by a vesting order, with the immediate right to benefit from any uplift which would otherwise be returned

to the mortgagor, or continue to use the property to secure rental streams from it.

There appears also to be a disadvantage for any guarantor of underlying loans, and affects also the contractual position represented

by guarantees. In the case of a bank/mortgagee, in the ordinary course, a sale by it in excess of the debt would discharge the

primary debt and also would discharge the guarantor, unless the guarantee remained in place to meet other liabilities. In the

alternative, a lesser sum on a sale would reduce, not only the primary debt, but the guarantor’s liability, by the same amount. The

scheme, as provided for in the Act of 2009, appears to suggest that guarantors continue to be liable to NAMA under their original

guarantees, as assigned from the mortgagees/banks. In the case of a vesting order, they also continue to be liable, under their

guarantees, as they would have been originally, if a sale does not generate an amount sufficient to discharge the amounts due on the

primary debt. What then is the position if NAMA secures a vesting order and holds on to property and profits from a subsequent sale?

Assuming it benefits to a sum in excess of the original cost to it, as provided for under the Act, are the guarantors then relieved of

their obligations, or by what amount, if any, are the guarantees reduced? If it be the case that the guarantor remains liable to NAMA

for all of the original borrowing, or more than the above cost, this may or potentially affects the guarantors, possibly significantly, as

an additional interference in the interests of the guarantor of any mortgage.

A further possibility permitted to NAMA under the Act of 2009 and not permitted to a mortgagee bank, is that NAMA could secure a

vesting order and then either directly, or through the appointment of a receiver or agent, continue to gather in all the rents accruing

on a commercial property, while delaying the sale of the property until the market has improved. In such an event, there is no

evidence that these rentals, originally charged to a bank and paid in reduction of a primary debt and/or interest, so that the

borrowers and/or the guarantors benefit from an equivalent reduction, will continue to be applied in the same manner. Indeed, from

responses given during the appeal hearing, it seems not. Under s.151, and other provisions of the Act of 2009, a receiver (whether

before of after a vesting order) is not obliged to sell the property at any time, or at all.

The above rights are not ones NAMA would have had at the point where it acquires eligible assets, since it is clear it only acquires the

mortgagee’s interest in the securities in question. They are rights acquired only by virtue of the provisions in the Act of 2009,

surrounding the vesting order, and other provisions of the Act, such as those relating to statutory receivers, for example.

Conclusion

For the above reasons I consider that the effect on the rights underlying the property, and the rental stream, as well as on the

exercise of those rights, and the alteration of contractual, or quasi contractual, rights of the mortgagor, and/or the realignment of

the interests of a borrower with his mortgagee bank, as part of the bundle of rights invoked, are, or threaten to be, affected in a

material way by a decision to acquire eligible assets. I am satisfied that the decision does so in a manner which requires the

application of fair procedures, such as the right to be heard, and that no sufficient justification has been furnished to the contrary for

the automatic blanket prohibition invoked by NAMA. I am satisfied that the High Court, in finding that no sufficiently significant

interference in rights had been established by the appellants, erred in law.

As to the exercise of the right to be heard, which is the final matter I would wish to comment on, for a long number of years it has

been clearly established in the case law of this jurisdiction, that the nature of any such hearing, is a matter entirely dependent on the

circumstances of each particular case, in which the right is properly established. The gamut of the nature of the hearing is very wide

indeed, and may range from a hearing which adopts all the panoply of a court hearing on the one hand, to a hearing in which the

party exercising the right is limited to written submissions. There is, in law, no requirement that a person be physically present,

himself, or through legal representation. It is sufficient that he is “heard” by exercising the right to make all representations or

submissions to the decision maker which the right holder wishes to make, the ambit of which, provided it is relevant, remains under his

control. The right is a right to be heard, and is an active right, which differs in a material way from other rights or obligations which

may be enjoyed by a party or imposed on a decision maker. It falls to the decision maker to ensure that the mechanism for hearing

the party affected is sufficient to permit him to make appropriate representations.

In the above circumstances, I would allow the appeal and set aside the findings of the High Court on the issue of fair procedures,

specifically on the right to be heard.