Nama's failure to consult McKillen ahead of loan transfer to be raised again before Supreme Court, writes CAROL COULTER,Legal Affairs Editor

THE IMPORTANCE of the case taken by Paddy McKillen against Nama is indicated by the fact that the High Court heard it in a three-person divisional court, and a full seven-judge Supreme Court is hearing the appeal. The case for the State is, once again, being led by the Attorney General, Paul Gallagher SC.

In arguing in the High Court that his right to fair procedures was infringed, Mr McKillen claimed he should have been heard prior to a decision about his loans going to Nama. Failure to grant him this right interfered with his rights to his property, his right to earn a livelihood, his contractual entitlements and his reputation, he said.

The High Court judgment, which rejected his claims, did allow that he had adequate grounds to take a case on the question of whether his right to fair procedures were infringed. It is on this issue that his counsel, Michael Cush SC, is focusing.

The High Court found that the rights Mr McKillen claimed were infringed were not “legally enforceable rights” in the circumstances surrounding the establishment of Nama. The “mere possibility” of an infringement of such rights was not sufficient. The three judges pointed out that he could redeem his loans at any time, and his loans could also be assigned by his bank to another bank at any time.

Mr McKillen disagrees, arguing that by going into Nama he will be subjected to a much more disadvantageous regime than that which would apply if he remained as a bank borrower. The banks themselves did not want to dispose of his loans, as they were performing loans. If they were reassigning his loans to another bank he would be consulted, which did not apply if Nama took over his loans. Nama was empowered to dispose of his loans or his property without consulting him, thereby affecting his property rights, his right to earn a living and his “bundle of contractual rights” with his banks.

While acknowledging that they lost the argument that there was an actual or potential interference with Mr McKillen’s constitutional rights in the High Court, Mr Cush insisted the court was wrong in not addressing the underlying property right and the income it generated. The court did not address the impact of the Nama takeover on the property value.

He argued that Nama operated differently to the banks, and in a manner that adversely affected his client. This meant his rights were potentially infringed, and this in turn triggered an entitlement to fair procedures, including the right to be heard. That had not been afforded to him.

Even if he persuades the Supreme Court on this, he must also convince it that the interference with his rights was not justified by the extent of the financial crisis that led to the creation of Nama and the need for urgent measures to address it.