ANALYSIS:A range of measures offer the agency legal protection – but it may not prove to be robust to a constitutional challenge
ANY PARTY seeking to challenge Nama or its actions will face a wall of legal measures designed to ease the new body’s path into existence. But informed observers suggest the legislation as it stands is not bulletproof, particularly in the event of a constitutional challenge.
One section which may attract attention allows Nama to, on the face of it, limit a landowner’s rights over their property in certain circumstances. Under the provision, a landowner who has an asset falling under Nama and other assets which do not, cannot dispose of the unaffected assets without telling the agency if this would affect the value of the Nama land.
Other potentially controversial provisions on the constitutional front relate to Nama’s power to compulsorily purchase an asset, or to limit challenges to its work.
Fionán Breathnach, partner with Mason Hayes Curran said last night that the Bill could be open to being challenged on a constitutional basis.
“It seems at least possible that certain of the wide-ranging powers proposed to be granted to Nama may be open to constitutional challenge, including those relating to compulsory acquisition of privately owned assets, restrictions on dealings with lands not subject to Nama participating institutional borrowings and the manner in which the Bill imposes limitations on legal remedies.”
The Bill seeks to stand in the way of developers who might be considering an attempt to manoeuvre their assets out of Nama’s ambit before the agency takes to its feet.
Anybody who disposes of an asset so as to “defeat, delay or hinder” Nama’s acquisition of that asset or to impair its value may see that action declared “void” in court. The same applies where an asset is sold to have the effect of increasing the liabilities that attach to it.
The familiar path of injunctive relief, or taking an injunction against a Nama action, is also impeded, or as the draft legislation would have it, limited.
The Bill provides that where a party tries to take an injunction, the High Court will have “the public interest” at the forefront of its mind.
In considering what might be in the public interest, the High Court “will have regard to the purposes for which Nama has been established”. The court must also take account of the “desirability of certainty in relation to the acquisition by Nama of bank assets and the desirability of having bank assets moved back to the private economy in a timely and efficient manner.”
Going further, the Bill provides that an injunction will not be granted unless the High Court thinks refusing it would cause “an injustice”. There are also limitations on judicial reviews and on certain rights of appeal to the Supreme Court.
Now that the Bill has hatched, there will be a break to allow those affected to get used to its existence and make suggestions as to how it could become more effective. The legislation will be brought to the Oireachtas in September, before which stage the Minister says he hopes to “hear the views of all” on the draft provisions.
Another informed observer suggested this period of grace could be of unexpected significance in the event of a legal objection at a later date. This would arise where a challenger seeks to rely on something they could have raised at this stage but did not. The Minister could, perhaps, argue that the challenge should not be allowed because an opportunity to suggest an amendment to the Bill was offered but not used.
