Nama stalls sale of 22 holiday homes in Clare10/04/2012 - 16:29:15
A High Court Judge has made orders preventing the proposed auction of a West of Ireland property containing 22 holiday homes after lawyers for Nama claimed the sale would result in a loss for the taxpayer.
Nama sought an injunction preventing the auction, due to go ahead on Wednesday (tomorrow), of a property at Ballyvaughan in Co Clare against Art to Fitness Ltd, of Monkstown Co Dublin which supplies gym equipment.
Art To Fitness, in July 2011, secured a judgment of €19,000, as well as a Well Charging Order and an order for sale against the registered owners of the holiday home development, Megcourt Developments Ltd, in Clare Circuit Court.
NAMA claimed that while the €19,000 had been paid, Art to Fitness's solicitors JP Foley and Company intended to sell the property in order to discharge their legal costs of €122,000.
Nama argued the defendant had no right to sell the property. While it was prepared to pay costs, it said the costs being claimed were "excessive".
Art to Fitness solicitors rejected Nama's claims, arguing they were entitled, on foot of the orders it obtained in the Circuit Court, to sell the property.
At the High Court today Nama company National Asset Loan Management Ltd sought an injunction, pending the final outcome of the case, preventing the defendant from selling the properties.
In his ruling Mr Justice George Birmingham granted an order preventing the auction from going ahead. The Judge said that he was doing this on the basis that an undertaking had been given by Nama that the defendant's solicitors legal costs would be paid after they had been taxed and ascertained.
Seeking the injunction Nama said that earlier this year it acquired the mortgage over the property from AIB and is owed €5.7m by Megcourt. Nama's charge over the property, took priority over the defendant's claim, its' lawyers submitted.
Should the sale proceed, Nama submitted the property would be "seriously undervalued," resulting "in a significant loss to the taxpayer." It also claimed that any sale would not help the defendant's solicitor recover his costs, because Nama's mortgage over the property exceeded "by a considerable margin the likely sale price."
Nama said the property failed to meet the reserve at a previous auction that occurred last January, when the highest bid tendered was €900,000.
In reply solicitor Mr Paul Foley said Nama's application was "disingenuous and not well grounded in fact or law." He did not accept Nama's contention he was not entitled to sell the property in order cover the legal costs incurred both before and after the Circuit Court judgment.
He also rejected Nama contention that it, and not AIB, is the proper holder of the charge over the holiday homes, or that his client's security over the site ranked behind that of Nama.
In relation to the costs he said that "a phenomenal amount of work," involving voluminous correspondence between solicitors " was undertaken by his office during the time it had been working on with the case.
He added that a bill of costs had been prepared on his firms behalf which Nama had objected to to. However Mr Foley said that Nama had "not advanced one single reason why it contends the costs are excessive." He also told the Court that the first indication he got that the legal costs was when in Nama's affidavit which was served on him late last week.
Following his ruling Mr Justice Birmingham adjourned the matter generally. He gave both parties permission to re-enter the matter should the need arise.