NAMA Constitutional

The High Court has just issued judgment in the case of Dellway Investment Ltd & Ors v. National Asset Management Agency, rejecting a constitutional challenge to NAMA. Detailed analysis of the judgment will follow after a more thorough reading of what looks like a well reasoned decision. For now, here is a brief extract:

The Court is of the view that the creation of NAMA, as permitted by the Act in the manner interpreted by the Court, is a reasonable and proportionate policy response to the problems which the Act seeks to address. It was, in the Court’s view, possible for the Oireachtas to conclude that impairing any rights which borrowers might have to any lesser extent, by either restricting NAMA’s acquisition powers to impaired loans or loans connected with impaired loans, or by delaying the NAMA acquisition process by putting in place an entitlement on the part of borrowers to be heard, or both, would not have achieved, to a sufficient extent, the ends of the Act. In those circumstances, the Court is satisfied that the Act meets the proportionality test. 

... the definition of possessions for the purposes of the ECHR is, if anything, narrower than the scope of property rights which may be afforded constitutional protection under the Irish Constitution. Two consequences seem to the Court to flow from that conclusion. First, it follows that the Court is of the view that there has been no interference with the rights of Mr. McKillen as guaranteed by the ECHR for those rights are, at a minimum, no more extensive than the rights guaranteed by the Irish Constitution which the Court has already determined have not been infringed. Second, the approach of the ECtHR lends reinforcement to the view which the Court has already expressed which is to the effect that property rights of a contractual or goodwill nature are required to be legally enforceable (or at least in the Irish context analogous to being legally enforceable) before those rights achieve the status of being constitutionally protected.

Conclusions
10.33 Given the Court’s view, as already expressed, that the Act does not interfere with any constitutionally protected rights of Mr. McKillen, it follows that, in any event, the Act is not inconsistent with the Constitution by reference to Mr. McKillen’s rights. Even if the Court’s analysis of the interference by the Act with Mr. McKillen’s rights is incorrect, it does not seem to the Court that any such interference could be placed at a very high level for all of the reasons which were addressed in the section of this judgment in relation to fair procedures. Even if the Court is wrong in its view that no constitutionally protected rights of Mr. McKillen are interfered with, then that analysis must, at a minimum, lead only to a conclusion that any interference with his rights is on the lower end of the scale.
10.34 For the reasons which the Court has already set out, the problem needing to be addressed is at the very highest end of the scale. In addressing the proportionality between those two matters (that is the scale of the problem and the minimal interference (if any) with Mr. McKillen’s rights), it does not seem to the Court that any such interference as might be said to derive from the absence of an impairment requirement and the absence of a right to be heard, can be said to infringe the principle of proportionality.

Bank of Ireland on Nationalisation and Nama

Reuters quotes BOI Governor Pat Molloy's response to a question from a shareholder at today's shareholder meeting: "On the matter of nationalisation, I can assure you, as far as the board is concerned, we are committed to remain independent."
It remains to be seen if this confidence is justified. It is quite likely that the taxpayer will have to contribute more money to keep it afloat. GMAC offers a lesson in this regard: it was bailed out with $12.5 billion from the US treasury in 2008 and May 2009, but came back for $3.8 billion more at the end of December 2009. A betting man might put money down on BOI needing more money from the Irish taxpayer.

Molloy did not issue any apology in his speech either. Here are excerpts:
We are acutely aware of the depth of public feeling about the banks at this time. We are working hard to learn the lessons from the past and to rebuild damaged relationships with all of our stakeholders. We know we have much to do to repair these relationships, but we are determined to do so.

Taoiseach on Financial Crisis Inquiry and NAMA

From an interview in the Independent:
"There's three investigations going on. We have in this country an independent system of investigation and prosecution. Now I understand the frustration people have on this but the Director of Corporate Enforcement is doing a job, the Garda Fraud Office are doing a job, the Financial Regulator is doing a job.

"I have to get on with my job. So I want them to complete those investigations as soon as possible so that we can draw whatever conclusions have to be drawn from them, and the DPP can do whatever he has to do . . . it can't happen quickly enough in terms of trying to persuade public opinion. My job, at the moment, is to get on with the business of Government and ask that those people who are doing their job try and conclude it as quickly as they can. I can't determine that."

On NAMA:
JC: "A lot of people are still confused about Nama. The bottom line, from the beginning, was that it would get credit flowing again. When will credit start to flow, that's what people want to know?"