S13 Dellway Investments & ors v NAMA & ors [2011] IESC 13 (12 April 2011)

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Cite as: [2011] IESC 13

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Judgment Title: Dellway Investments & ors v NAMA & ors

Neutral Citation: [2011] IESC 13

Supreme Court Record Number: 396/10

High Court Record Number: 2010 909 JR & 2010 222 COM

Date of Delivery: 12/04/2011

Court: Supreme Court

Composition of Court: Murray C.J., Denham J., Hardiman J., Fennelly J., Macken J., Finnegan J., McKechnie J.

Judgment by: Murray C.J.

Status of Judgment: Approved

Judgments by
Link to Judgment
Result
Murray C.J.
Other (see notes)


Outcome: Dismiss

Notes on Memo: Dismiss appeal on Constitutional issue.





THE SUPREME COURT

396/10

Murray C.J.
Denham J.
Hardiman J.
Fennelly J.
Macken J.
Finnegan J.
McKechnie J.



BETWEEN


DELLWAY INVESTMENTS LIMITED, METROSPA LIMITED, BERKLEY PROPERTIES LIMITED, MAGINOTGRANGE LIMITED, MAY PROPERTY HOLDINGS LIMITED, SCI 20 PLACE VENDOME, DIRECTDIVIDE TRADING LIMITED, SUBMITQUEST LIMITED, BELFAST OFFICE PROPERTIES LIMITED, THE FORGE LIMITED PARTNERSHIP, FINBROOK INVESTMENTS LIMITED, CONNIS PROPERTY SERVICES LIMITED, FORMCREST CONSTRUCTION LIMITED, CHESTERFIELD (THE PAVEMENTS) SUBSIDIARY LIMITED, ABEY DEVELOPMENTS LIMITED AND PATRICK McKILLEN
APPLICANTS / APPELLANTS
-v-

NATIONAL ASSET MANAGEMENT AGENCY, IRELAND

AND THE ATTORNEY GENERAL

RESPONDENTS
The Court, having delivered its judgment concerning two primary issues in this case on the 3rd day of February 2011, heard submissions from the parties concerning the mootness or otherwise of certain outstanding issues which had been raised by the appellants. One of these issues concerned a direct challenge to the compatibility of s. 69 of the National Asset Management Agency Act 2009 with the provisions of the Constitution having regard to the potential impact of the section and the regulations made thereunder on the property rights of the appellants.

Mootness
The Court is satisfied that, in the circumstances of the case, the appellants’ direct challenge to the constitutionality of s. 69 of the Act is not rendered moot by its earlier decision and is one which the appellants continue to have locus standi to maintain. It is not in issue that credit facilities which the appellants had obtained from banks who had opted to participate in NAMA are eligible bank assets within the meaning of the Act. Therefore, notwithstanding the decision of the Court that the purported decision of NAMA to acquire those assets was a nullity, those credit facilities nonetheless remain assets which may be acquired by NAMA in the exercise of its statutory powers and the appellants’ contractual interests and rights arising from the relevant credit facilities may be affected if acquired by NAMA. It is also a fact that at the hearing on the question of mootness the respondents, pointed out, as they were perfectly entitled to do, that they continued to have the right to consider and decide whether the eligible bank assets relating to the appellants’ loans should be acquired and do so in accordance with the provisions of the statute.

In those circumstances, given that the appellants have credit facilities with banks who are participating in NAMA and that those facilities as eligible bank assets are open to being acquired by NAMA in the exercise of its statutory discretion the Court is satisfied that the appellants currently face a real and immediate risk of being adversely affected by the operation of the Act and therefore continue to be entitled to maintain their direct challenge to the constitutionality of s. 69. The Court considers that the appellants, as concerns this issue, fall within the ambit of what was stated in Cahill v. Sutton [1980] I.R. 269 at 28 namely that a plaintiff should be able to assert that his interests “stand in real or imminent danger of being adversely affected, by the operation of the statute”.

The Constitutional Issue
The appellants have raised the issue concerning the compatibility with the Constitution of s. 69 of the National Asset Management Agency Act 2009, and the regulations made pursuant to that section on the grounds that the meaning given to eligible bank asset is so broad and the discretion of NAMA so untrammelled, as to represent an unjust and disproportionate attack on the appellants’ property rights contrary to the provisions of
Article 40.3.2 and/or Article 43 of the Constitution.

Thus the appellants rely on two elements related to the power of NAMA to acquire eligible assets, namely, the over broad, as they put it, definition of eligible bank asset combined with the vagueness or indeterminate nature of the criteria according to which NAMA may exercise its statutory power to acquire such an asset, as giving rise to the constitutional frailty. In their written and oral submissions to this Court the appellants have not contended that the over broad definition of eligible bank asset on its own gives rise to the constitutional frailty for which they contend, although that point appears to have been pursued in the High Court. As the appellants put it, it is the breadth of the “jurisdiction” of NAMA in exercising its statutory powers, combined with the untrammelled discretion of NAMA as to whether to exercise that statutory “jurisdiction” which renders s. 69 unconstitutional.

The Legislation
Section 4 of the Act provides that eligible bank asset has the meaning given by subsection (4) of s. 69. That subsection provides that “a bank asset that is in a class prescribed under subsection (1)” of s. 69 “is referred to in this Act as an eligible bank asset.”

Section 69(1) provides as follows:-

        “(1) The Minister may, after consultation with NAMA, the Governor and the Regulatory Authority, and considering the purposes of NAMA and the resources available to the Minister, prescribe, by regulation, classes of eligible bank asset.”
Section 69(2) describes the classes of bank assets which may be prescribed under s.s. (1) and provides as follows:-
        “(2) The classes of bank assets prescribed under subsection (1) may include—

        (a) credit facilities issued, created or otherwise provided by a participating institution—

            (i) for the purpose, whether direct or indirect and whether in whole or in part, of purchasing, exploiting or developing development land,

            (ii) where the security connected with the credit facility is or includes development land,

            (iii) where the security connected with the credit facility is or includes an interest in a company engaged in purchasing, exploiting or developing development land,

            (iv) where the credit facility is directly or indirectly guaranteed by a company referred to in subparagraph (iii),

            (v) directly or indirectly to a debtor who has provided security referred to in subparagraph (ii) or (iii), or

            (vi) directly or indirectly to a person who is an associated debtor of a debtor to whom a credit facility described in any of subparagraphs (i) to (iii) has been provided,

        (b) credit facilities and classes of credit facilities (other than credit facilities referred to in paragraph (a)) relating to debtors or associated debtors of participating institutions (or classes of debtors or associated debtors of participating institutions) where the total amount of indebtedness in respect of such facilities is such that, in the opinion of the Minister, acquisition by NAMA is necessary for the purposes of this Act,

        (c) other rights arising directly or indirectly in connection with a credit facility described in paragraph (a) or (b) including—

            (i) a contract to which the participating institution is a party or in which it has an interest,

            (ii) a benefit to which the participating institution is entitled, and

            (iii) any other asset in which the participating institution has an interest,

        (d) bank assets associated with bank assets specified in paragraphs (a) and (b), and

        (e) any other class of bank asset of a participating institution the acquisition of which the Minister is of opinion, after consultation with the Commission of the European Communities, is necessary for the purposes of this Act.

Subsection (3) of s. 69 provides as follows:-
        “(3) In forming an opinion for the purpose of subsection (2) (b), the Minister may take into account—

        (a) the total number of credit facilities or classes of credit facilities provided by the participating institution to those debtors and associated debtors or classes of debtors and associated debtors, and

        (b) the aggregate indebtedness of debtors and associated debtors or classes of debtors or associated debtors referred to in subsection (2) (b) owed to any other participating institution.


The Regulations
The Regulations referred to by the appellants are the National Asset Management Agency (Designation of Eligible Bank Assets) Regulations 2009 (S.I. No. 568/2009) made by the Minister pursuant to s. 69(1) of the Act. Specifically the appellants referred to Regulation 2 of those Regulations which provides as follows:
      “2. The following classes of bank assets are prescribed as classes of eligible bank assets for the purposes of the National Asset Management Agency Act 2009 (No. 34 of 2009):

        (a) credit facilities issued, created or otherwise provided by a participating institution—
            (i) to a debtor for the direct or indirect purpose, whether in whole or in part, of purchasing, exploiting or developing development land,

            (ii) to a debtor for any purpose, where the security connected with the credit facility is or includes development land,

            (iii) to a debtor for any purpose, where the security connected with the credit facility is or includes an interest in a body corporate or partnership engaged in purchasing, exploiting or developing development land,

            (iv) to a debtor for any purpose, where the credit facility is directly or indirectly guaranteed by a body corporate or partnership referred to in subparagraph (iii), or

            (v) directly or indirectly to a debtor who has provided security referred to in subparagraph (ii) or (iii), for any purpose;

        (b) credit facilities issued to, created for or otherwise provided to, directly or indirectly, a person who is or was at any time an associated debtor of a debtor referred to in paragraph (a), whether by a participating institution to which the debtor is indebted or by another participating institution;

        (c) credit facilities (other than credit facilities referred to in paragraph (a) and credit cards) issued to, created for or otherwise provided to, directly or indirectly, debtors referred to in paragraph (a) for any purpose;

        (d) any security relating to credit facilities referred to in paragraphs (a) to (c);

        (e) shares or other interests, or options in or over shares or other interests, in the debtors referred to in paragraph (a), in associated debtors referred to in paragraph (b) or in any other person, which the participating institution acquired in connection with credit facilities referred to in paragraphs (a) to (c);

        (f) other bank assets arising directly or indirectly in connection with credit facilities referred to in paragraphs (a) to (c) or security referred to in paragraph (d), including—

            (i) a contract to which the participating institution is a party or in which it has an interest,

            (ii) a benefit to which the participating institution is entitled, and

            (iii) any other asset in which the participating institution has an interest;

        (g) financial contracts, including financial contracts within the meaning of section 1 of the Netting of Financial Contracts Act 1995 , that relate in whole or in part to bank assets specified in paragraphs (a) to (f), but not including financial contracts between a participating institution and a credit institution or between a participating institution and a financial institution (within the meaning of the Central Bank Act 1997 ).”
As the appellants have pointed out Regulation 2 of the Regulations sets out the classes of eligible bank assets in a manner that broadly follows the scheme of s. 69(2) of the Act and contains seven main classes of eligible bank assets although the final six mostly refer back to the first class in some way.

Arguments of the Appellants
In his submissions counsel on behalf of the appellants pointed out that s. 4 of the Act provides that eligible bank assets has the meaning provided by s. 69(4), which in turn provides that a bank asset that is in the class prescribed under s. 69(1) is an eligible bank asset. Section 69(1) allows the Minister for Finance to prescribe, by regulations, classes of bank asset as classes of eligible bank asset. Then s. 69(2) provides a list of classes of bank asset that may be prescribed under s. 69(1). Counsel then referred to Regulation 2 of the above mentioned regulations which sets out the classes of eligible bank assets in a manner that broadly follows the list contained in s. 69(2) and pointed out that it refers to seven main classes of eligible bank assets although the final six mostly refer back to the first class in some particular way. Counsel further commented by stating that the first class, class (a) includes credit facilities connected in any way with development land. The other classes then seek to capture other credit facilities that are connected with those in class (a) either through the identity of the asset or the identity of the debtor. Counsel indicated that once a debtor has credit facilities which are connected to development land, all credit facilities granted to that debtor are eligible bank assets.

Counsel submitted that, accordingly, the meaning of ‘development land’ is a key element in the application of the provisions in question.

The appellants in their submissions went on to refer to the definition of ‘development land’ in s. 4 of the Act which is defined as meaning:

        “ land wherever situated (regardless of its zoning or its status under the Planning and Development Acts 2000 and 2007 or any other enactment or applicable law) –

        (a) in, on, over or under which works or structures were or are to be constructed, or

        (b) where it was intended to make a material change in the use of land,

        that was intended to be sold or otherwise exploited.”

Counsel also referred to the fact that s. 4 provides that “land” should have the same meaning as under the Land and Conveyancing Law Reform Act 2009, where that term is broadly defined.

Counsel submitted that all these provisions mean that land falls within the definition of development land for the purposes of the Act of 2009 if it was at any time intended to be sold or exploited and there was or was intended to be any material change of use (including a change of use to agriculture) or any of a litany of works, many of a minor character, which were or were intended to be carried out. On that basis most, if not all, land constitutes development land. It was further submitted that it follows from the foregoing that class (a) of eligible bank assets includes all credit facilities issued by a participating institution to a debtor in connection with the purchase, exploiting or development of most (if not all) land. The other classes then come into play, it was submitted to widen the net so as to include associated debtors and credit facilities. The notion of “development land” is a key element which triggers the involvement of NAMA under the Act and this is remarkably broad being far removed from any concept of “development land” as that term would be generally understood or even as that term might be understood by planners and lawyers in the context of the Planning and Development Acts.

The appellants then went on to submit that the breadth of the application of the Act by reason of the broad definition of eligible bank asset combined with the untrammelled discretion of NAMA as to whether or not it should exercise its powers in respect of any asset is what gives rise to the unconstitutionality of the provisions impugned.

This untrammelled discretion combined with the broad definition of eligible assets means that it is difficult for a person in the position of the appellants to know in advance on what basis NAMA would exercise its powers in respect of an eligible asset, or on what basis such a decision could be made.

The combination of these two factors, broadness of definition and vagueness of criteria, also had the consequence of making it impossible for a court to properly judicially review any decision of NAMA in particular as to whether, in acquiring an asset, it had acted intra vires or ultra vires.

Accordingly, it was submitted, that a decision by NAMA to acquire an eligible bank asset on the basis of such broad and general terms without any meaningful statutory guidance for NAMA itself or, in appropriate proceedings for a court, constitutes an unjust attack on the appellants’ property rights.

In the submissions on this issue a parallel was drawn with the arguments of the appellants relating to constitutional justice and the right to a fair hearing. It was submitted that an integral aspect of constitutional justice is that a potentially affected person knows the basis on which a decision could be made and that otherwise the right to make submissions is meaningless.

In effect the submission of the appellants was that in the absence of sufficiently discernible criteria for a decision to acquire an eligible asset the appellants were deprived of an opportunity to effectively invoke the judicial review jurisdiction of the courts since the courts would not be in a position to properly review such a decision made in the context of such broad and general criteria. These provisions in the foregoing circumstances constituted a disproportionate interference with the rights of the appellants.

Arguments of the Respondents
On behalf of the respondents it is first of all submitted that there is no principle of constitutional law which requires definitions in civil statutes to be declared unconstitutional solely on the grounds that such definitions are unduly broad. The legislature, it is submitted, is entitled to define the jurisdiction and powers of public bodies broadly and has frequently done so. Accordingly, the breadth of the definition of eligible bank asset does not give rise to any basis for declaring s. 69 unconstitutional. While the respondents take issue with the degree of broadness attributed to the definition of eligible bank asset by the appellants they submit that the definition of such assets in s. 69 is necessarily broad having regard to the purposes for which the Act of 2009 was enacted. This broad definition is required not merely to ensure beyond doubt that all development loans may be acquired where this is required for the purposes of the Act but it also has to be broad enough to address the range of assets related to development land which are capable of contributing to the systemic problem which prompted the enactment of the Act. It was submitted that the definition of eligible bank asset provided for in the Act was necessary to enable NAMA to achieve those purposes by focusing on the borrower exposure rather than individual loans.

Nonetheless, it was contended by the respondents, the definition, while necessarily broad, was defined and definite. It is not the case that NAMA can acquire any loans it sees fit to do. The category of eligible bank assets is limited and defined and anyone having recourse to the Act and to the regulations made under it will be in a position to identify with reasonable precision the assets which are subject to the acquisition.

It was further submitted that s. 4 conferred a discretion on NAMA, an administrative function, to decide whether, having regard to the purposes of the Act, it is necessary or desirable to acquire particular eligible bank assets. Section 84(4) provides further criteria to which NAMA may have regard in the exercise of that discretion. It follows that s. 84 cannot be described as conferring an “untrammelled” discretion since the statute clearly outlines the basis on which the discretion is to be exercised. Moreover the power conferred on NAMA is such that there must be an inherent degree of flexibility in order to enable NAMA to take into account individual circumstances.

It is also submitted that the appellants have not established any basis on which it can be suggested that were NAMA to exercise its discretion in a wholly irrational manner that it would not be open to appropriate judicial review.

The respondents also point out that the appellants have not referred to any judicial authority for the proposition that a provision of an Act must be treated as unconstitutional solely because the definition of a particular matter is too broad. The case-law otherwise relied upon by the appellants, it is submitted, does not support the propositions for which they contend concerning the constitutionality of the Act.

Insofar as the appellants have relied on the judgment of this Court in Re (Health Amendment) No. 2 Bill [2005] 1 I.R. 105 the judgment supports the position adopted by the respondents rather than the appellants. In that case this Court stated:-

      “As regards the criticism made of the discretionary power conferred on the Chief Executive Officer to waive or reduce a charge in the case of individual hardship, the Court considers that counsel for the Attorney General were correct in pointing out that that does not constitute the exercise of a delegated power to legislate but rather is the exercise of an administrative discretion to address the particular circumstances of an individual case. When public officials are charged with administering a statutory scheme it may be difficult, if not impossible, for the Oireachtas to prescribe in legislation for every special circumstance of individuals who find themselves on the margins of such a scheme. In this incidence the task of the administrator is to avoid undue hardship in individual cases in the general application of the scheme. That is simply an administrative function. A subsidiary argument of counsel assigned by the Court was that judicial review of the decision of the Chief Executive Officer in the exercise of such a discretion would not be an adequate remedy to a person who felt they had been wrongly refused a waiver or reduction of a charge. The Court does not accept this argument. The criterion (undue hardship) according to which the Chief Executive Officer should exercise his or her discretion is adequately set out in the Act and there is no reason to consider that an arbitrary decision or other unlawful misuse of his or her powers by a chief executive officer could not be subject to judicial review in the ordinary way.”
It was submitted that in that case the Supreme Court acknowledged that it would frequently be necessary for the Oireachtas to ensure that an administrative body in applying a particular scheme is given sufficient flexibility to be able to take into account individual circumstances.

The respondents finally submit that having regard to the provisions of s. 84 and the manner in which NAMA is required to exercise its discretion there are no grounds for concluding that a decision made by NAMA under that section would not be subject to appropriate judicial review in the ordinary way.

Decision
It is relevant to note at the outset that the appellants do not contend that the system of acquiring eligible bank assets established by the Act of 2009 is in itself incompatible with the Constitution (leaving aside the separate issue of fair procedures). Rather it is the breadth of the definition of eligible bank assets combined with the vagueness of the criteria according to which NAMA may acquire such assets that constitutes an unjust attack on the property rights of the appellants, principally since it would have no opportunity of knowing the basis on which NAMA might consider or decide to acquire assets pertaining to them and that the appellants would not be in a position to bring an effective challenge to a decision by NAMA to acquire the assets relating to the appellants since the vagueness of those criteria would not permit a court to decide whether NAMA had acted intra vires or ultra vires its powers.

In this appeal the appellants have not pursued the proposition that the broad definition of an eligible bank asset is on its own a ground for impugning the constitutionality of s. 69. Nonetheless it would be appropriate to make some comments on the breadth of the definition.

The purposes of the Act, as referred to in s. 2 and reflected in the preamble, include the necessity to address a serious threat to the stability of credit institutions and the need for the maintenance or stabilisation of the financial system in the State and to respond to a compelling need to remove uncertainty about the valuation and location of certain assets of credit institutions of systemic importance to the economy and to restore confidence in the banking sector. Given that the instability of the financial system and loss of confidence in the viability of the banking sector stemmed primarily from borrowings related directly or indirectly to development land and borrowers from the banks who had made very substantial investment on the basis of property values which had subsequently collapsed, it was inevitable that a broad definition of an eligible bank asset would be adopted so as to ensure that NAMA would be in a position, and be perceived to be in a position, to deal with all bank assets of systemic importance. Obviously, the Oireachtas could not determine which particular assets or which borrowings should be acquired. That was a task conferred by the statute on NAMA as an agency whose experts in the financial or banking sector exercise key responsibility. The policy decision of the Oireachtas, as reflected in the Act, (and as the Divisional Court pointed out it is not for the Courts to express approval or disapproval of a lawful policy choice), includes the restoration of confidence in the banking sector by providing a statutory mechanism by which bank assets of specified classes were eligible to be acquired by NAMA, not on any basis but only for the stated purposes of the Act. Public confidence, but particularly confidence in the finance or banking sector, may be profoundly influenced by perception and it seems to the Court entirely rational that the Oireachtas would provide for a broad definition of eligible bank asset to avoid any risk that any bank borrowings which posed a systemic risk to the economy and in particular the banking sector might be considered to fall outside the remit of the statutory provisions.

What is important for parties in the position of the appellants, as indeed they made clear in their submissions, is not the mere abstract point of the breadth of the definition of an eligible bank asset but the impact which the relevant provisions, taken together, might have on them. The Divisional Court of the High Court referred to the fact that it is not unusual for the Oireachtas to adopt legislation which contains broad enabling measures which allow compulsory acquisition for a range of purposes as specified in the statute concerned and put in place appropriate procedures for selecting the assets to be acquired. It went on to give a specific example, namely, compulsory purchase for road improvements or public works which may apply to land generally but where a decision to acquire any particular land, following a compulsory acquisition process, depends on a decision to build a road and the route which it should follow. It went on to state “In some cases it may be possible at the time of the enactment of legislation in question to identify with some high level of precision the precise assets to be acquired. There might, perhaps, be some leeway provided for in the legislation but the broad drift of what is to be acquired might be known. At the other end of the scale might well be the type of road schemes, to which reference has been made, where little more than a general understanding of the routes likely to be chosen may exist at the time of the enactment of general legislation dealing with, for example, motorways.”

In any event, it has to be borne in mind, that the Act, in giving a broad definition to an eligible bank asset, does not thereby require that the asset be acquired by NAMA. First of all the relevant bank must decide to opt to participate in the NAMA statutory scheme. Secondly, and more important, an eligible bank asset is not acquired by NAMA by reason of the fact alone of its so called eligibility but only if NAMA, in the exercise of its discretion, concludes that its acquisition is necessary or desirable for the purposes of the Act.

In the circumstances the Court considers that the Oireachtas was entitled, as a matter of policy, to include in the Act a very broad definition of eligible bank asset including a delegation to the relevant Minister of the power to make regulations prescribing classes of eligible bank asset. In the circumstances it is not necessary to examine whether the definition is precisely as broad as that for which the appellants contend.

Grounds for Acquisition
Section 84 of the Act confers on NAMA the power to acquire eligible assets but it also sets out the grounds upon which that power may be exercised. Specifically it provides, in subsection (1), that NAMA may acquire an eligible bank asset, of a participating institution, if it considers it necessary or desirable to do so having regard to the purposes of this Act. The agency, NAMA, itself was established in order to give effect to the purposes of the Act and it is quite clear from the terms of s.84 that an eligible asset can only be acquired in order to fulfil or achieve the purposes of the Act and not for any other purpose. The purposes of the Act are set out in s. 2 of the Act, some of which have been expressly referred to above. Although expressed in general terms the purposes for which such assets may be acquired are clearly stated. Section 84(4) also specifies an extensive list of explicit considerations which, without prejudice to the general power of NAMA in subsection (1), may be taken into account in deciding whether to acquire a particular eligible bank asset. It is true that the last of these refers to “any other matter that NAMA considers relevant” but any such consideration is governed by the requirement in subsection (1), that the asset is acquired for the purposes of the Act.

There is nothing unusual in the manner in which the purposes and policies in accordance with which NAMA must act are defined. In many respects the argument made on behalf of the appellants on this issue echo the kind of argument that would be made if the legislation was being challenged on the basis of Article 15 of the Constitution as being an impermissible delegation of legislative powers to NAMA, an argument which has not in fact been made by them.

The appellants in their written submission argue that powers granted to administrative bodies must be sufficiently precise to enable individuals to know in advance whether the power could be exercised and to enable the Courts to assess whether the administrative body has remained within the scope of the power assigned to it. In this respect the appellants pointed out that this principle was recognised by this Court in Re Health (Amendment) (No. 2) Bill 2004 [2005] 1 I.R. 105 in which the Court considered a challenge to the Act based, inter alia, on the breadth of a discretionary power, namely the power of a chief executive officer of a health board, to remit nursing home charges in cases of “undue hardship”. The appellants submitted that while the challenge in that case was rejected that the criterion of “undue hardship” was very different from the vague criteria on which NAMA decides whether to acquire an eligible asset. The Court does not consider that there is any fundamental difference in principle between the broad criterion of “undue hardship” given to a chief executive officer in that case and the criteria provided for NAMA in the Act under consideration. Indeed in the Health (Amendment) Bill case this Court rejected the submission that the broad or allegedly vague criteria of “undue discretion” was an obstacle to an effective remedy by way of judicial review in the event of an arbitrary exercise of that discretion and that its broad terms did not give rise to any reason to conclude otherwise.

In the light of the foregoing and in particular the requirement that NAMA can only acquire an eligible bank asset for the purposes of the Act as specified in s. 2 while taking into account the matters listed in s. 84(4), the Court does not accept that the powers of NAMA in this regard are ‘untrammelled’ or vague in the sense argued for by the appellants.

As Henchy J. stated in The State (Lynch) v. Cooney 1982 I.R. 337 (at 380) in relation to the exercise of a statutory discretion:

      “It is to be presumed that, when it conferred the power, Parliament intended the power to be exercised only in a manner that would be in conformity with the Constitution and within the limitations of the power as they are to be gathered from the statutory scheme or design.”
The Court is satisfied that the criteria by reference to which NAMA must exercise its discretion in making any decision to acquire specified eligible bank assets are sufficiently delineated in s. 84 to permit borrowers in the position of the appellants to effectively pursue before the courts any relief which they may claim to be entitled by way of judicial review.

Moreover, there is another aspect to the prejudicial impact which the appellants claim they will suffer as a consequence of the broad definition of an eligible bank asset and the allegedly vague criteria according to which NAMA should exercise its powers. This concerns the right of the appellants to be duly informed by NAMA of a proposal to acquire eligible assets relating to their borrowings, should that occur, and their right to make representations for the purpose of protecting their rights or interests, as found in the several judgments of the Court delivered today on the separate issue concerning fair procedures. Reference should be made to those judgments for their respective analysis and reasons for so concluding.

As noted above counsel for the appellants acknowledged in their submissions that there was a parallel between their arguments on this point and those relating to a constitutional right to fair procedures. Indeed at one point in the course of his oral submissions counsel for the appellants stated that much of his argument was based on the premise that he would be unsuccessful in relation to the fair procedures point.

In the light of the decision given by the Court, in its several judgments delivered today on the issue of fair procedures, the appellants, in the event of NAMA proceeding to acquire any eligible assets related to them, will be entitled to be afforded an opportunity to make appropriate representations to it as indicated above. NAMA will be bound to take account of those representations. Following such a process borrowers in a position such as the appellants will be entitled to seek relief by way of judicial review if it is considered that the decision of NAMA has not been made in accordance with the terms of s. 84, as interpreted by the judgments of the Court referred to, and there are no grounds for considering that the appellants would in any way be hindered or restricted in their ability to seek such relief from the Court in its capacity to pronounce on such an application.

In all these circumstances the provisions of s. 69 cannot be considered an unjust attack on the property rights of the appellants. Also in those circumstances the issue of breach of the principle of disproportionality does not arise.

Consequently the argument of the appellants that the alleged vagueness of the criteria according to which NAMA exercises its power to acquire an asset would deprive it of an opportunity to have an effective remedy by way of judicial review cannot be considered as having been substantiated.

For these reasons the appellants appeal on this constitutional ground is dismissed.



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