“What was the legal bill picked up by NAMA in the Paddy McKillen case? How much did that case cost NAMA? I want the cost involved including the amounts paid to advisers and experts, the division of employee time, and the amount that NAMA contributed to Paddy McKillen’s costs. Who is responsible in the delegates’ view for NAMA losing the case? Who was responsible for taking the view that a decision had been made validly at NAMA on the transfer to NAMA of Mr. Paddy McKillen’s loans before the agency had even been incorporated? Has anyone at NAMA or any of its advisers faced penalties as a result of the losses incurred in the Mr. Paddy McKillen case which it has been speculated cost between €2 million and €4 million?” Deputy Pearse Doherty grilling NAMA in September 2011
Last weekend’s press in Ireland reported that Paddy McKillen still has about €300m of personal borrowings with Irish Bank Resolution Corporation, or “IBRC” plus about €550m of corporate borrowings, and the race is now on for Paddy to refinance his loans out of IBRC before NAMA gets its paws on them in the middle of 2013.
You will recall that Paddy fought tooth-and-nail to prevent his loans going into NAMA. He launched the first high profile case against the Agency in Ireland, challenging the NAMA Act and employed a range of experts including a Nobel prize-winning economist, Joseph Stiglitz. Paddy comprehensively lost his case at the High Court at the end of 2010 but obtained a fast-tracked appeal to the Supreme Court where technically he beat NAMA to a score-draw but as NAMA subsequently decided not to acquire Paddy’s loans, Paddy would probably claim a victory. And in any event, the Supreme Court awarded Paddy his costs, with NAMA footing the bill. That was in April 2011 and we are now two months shy of the second anniversary.
Back in 2011, the informed speculation amongst the media was that NAMA was facing a €7m legal bill. It came as a surprise in an Oireachtas hearing in September 2011, that the NAMA CEO was unable to provide the costs. Brendan McDonagh responded as follows:
“The Deputy asked about the Paddy McKillen case and the costs relating thereto. I remind members that the case in question involved five key issues. We won the case in the High Court but when it was appealed to the Supreme Court we did not. The first of these five key issues is the implied right to fair procedures. The Supreme Court clarified that there is such an implied right. The right in question is not expressly written into the Act but the Supreme Court clarified the position. The second key issue we raised was the timing of the decision, to which I will return. The third issue related to State aid and it was found that NAMA was not in breach of State aid. The fourth issue concerned the area of constitutionality and it was found the NAMA Act was constitutional. The fifth issue concerned whether there were relevant or appropriate considerations and the Supreme Court did not rule on that because it said it was a moot point. On the four points it ruled on, it ruled with NAMA and the Attorney General on some of them, as a number of issues involved constitutional points. NAMA’s side won on two of the four issues and Mr. McKillen’s side won on two of the issues.
The Deputy raised the issue of costs involved in that case. We are still waiting for the costs on McKillen’s side to be submitted to us and the matter will go to the Taxing Master in terms of seeking to reduce them. The costs on the NAMA side were not significant because we did a good deal of the work through the Attorney General’s office and the Chief State Solicitor’s office and, with the agreement of the Attorney General, we only used external counsel and legal firms where necessary.”
Yesterday in the Dail, the Sinn Fein finance spokesperson Pearse Doherty asked Minister for Finance Michael Noonan for an update, and remember we’re almost two years on from the Supreme Court decision. The response from Minister Noonan was that costs have not been agreed or taxed, and that therefore there is not a cost available.
In the UK, Paddy was ordered to pay some €25m of legal costs to the Barclay brothers and others last September 2012, and it is understood that Paddy has already paid a contribution to these costs, despite being given the right to appeal the relevant High Court judgment. At least Paddy knows that he has some costs forthcoming in Ireland, when the legal costs in the case two years ago are eventually finalized.
The full parliamentary question and response is here.
Deputy Pearse Doherty: the legal costs incurred by the National Asset Management Agency in its case in the High Court and Supreme Court in 2010 and 2011 against a person (details supplied) and which concluded at the Supreme Court in April 2011.
Minister for Finance, Deputy Michael Noonan: The case referred to was taken by the person against NAMA, Ireland and the Attorney General. I am advised by NAMA that, as costs in this case have not been agreed or taxed at this point, the information sought by the Deputy is not currently available.