High Court judge rules NAMA's demand for €32m loan repayment on Dublin properties was lawful
NAMA's demand for repayment of €32m outstanding in 2014 on loans obtained by a man for Dublin property investments was valid and lawful, a High Court judge has ruled.
A finding whether NAMA can enforce a further €3.5m loan secured on the family home of Carol and John Morrissey at Palmerston Road, Dublin 6, would be "pre-emptive" as NAMA has not so far sought to enforce that loan, Ms Justice Una Ní Raifeartaigh held.
While Mrs Morrissey disputes signing the necessary family home protection documents in 2005 when giving the house as security for that loan, the judge found, on the evidence, she signed them and received independent legal advice when doing so.
As she was adjourning making final orders for two weeks, Mr Morrissey said an appeal will be brought over the findings.
In dismissing the case by the couple, representing themselves, the judge noted NAMA claimed Mr Morrissey had in 2013 rejected a suggestion they relocate to a less valuable property on Lower Churchtown Road, insisting they were entitled to continue living on Palmerston Road.
A NAMA agent had said he explained to Mr Morrissey Palmerstown Road would be considered by NAMA to be a "trophy home" as it was valued in 2013 between €1.8-€2m while the Churchtown property was valued at €800,000.
The agent said he questioned how "optically" it would look to the taxpayer if NAMA was to allow Mr Morrissey and his family remain there whilst owing NAMA more than €25m in residual debt - the debt remaining after the investment properties were sold - and when more than €4.7m was outstanding on the loan secured on their home.
Ms Justice Ní Raifeartaigh today gave her reserved judgment on the couple's case claiming damages over alleged various unlawful acts by NAMA, including taking enforcement action over the loans and appointing receivers over properties.
Mr Morrissey got loans of some €27m from Irish Nationwide Building Society between 2004-2006 in connection with acquiring seven investment properties.
The loans were secured by mortgages over the properties, there were problems with repayments as early as 2006 and the loans were in serious default when acquired in 2010 by NAMA.
In 2014, NAMA called in the loans by demanding the then outstanding sum of some €32m. When that was not paid, it appointed receivers who sold the investment properties, reducing the debt to some €25m.
A loan of €3.75m borrowed in 2005 to buy the Palmerstown Road property, secured on the house, is also in default but NAMA has not so far decided to enforce against that loan, she said.
In their case against NAMA, Capita Assets Services (Ireland) Ltd and various State parties, the couple argued NAMA was not entitled to call in the loans and also sought a declaration NAMA does not have valid security over the family home.
The defendants disputed the claims and NAMA counterclaimed for final judgment. It argued it had attempted to work consensually with Mr Morrissey but experienced a difficult relationship with him because of how he sought to approach matters, including blaming INBS for the position he found himself in.
It said its decision to enforce in 2014 arose in circumstances where Mr Morrissey had been receiving some €200,000 annual rent from the investment properties but failed to provide that to NAMA and retained most of it for his own purposes, including to fund litigation against Irish Bank Resolution Corporation.
Ms Justice Ni Raifeartaigh rejected a wide range of claims by the couple, including NAMA had not meaningfully considered Mr Morrissey's alternative proposals for dealing with his loans and had acted outside its powers. She also dismissed claims of alleged interference with the independence of NAMA by the Minister for Finance.
She rejected claims that NAMA, in its handling of issues concerning the family home, breached the couple's rights.
Arguments that NAMA refused to allow Mrs Morrissey purchase the family home for €830,000 were not made out, she said. What NAMA refused was a "package offer" from an investor valuing the family home well below what NAMA was advised was its value.
While Mrs Morrissey clearly felt aggrieved her home was at risk because her husband is a NAMA debtor when she is not, the risk to the home was created by her deciding to sign certain documents at a certain time, the judge said.
Mrs Morrissey "has been fortunate compared to many others whose property interests in the family home were deeply affected by the banking crisis" as she continues to live in the family home when monthly repayments are a "fraction" of the €12,000 monthly sums agreed under the original loan agreement, she said.
