From Dublin County Council to Nama, Miley stays on top of the pile
RTE's Charlie Bird was at the door and Dublin County Council was on the verge of collapse. In an insolvency case that made the headlines for a week, solicitor Stephen Miley had been appointed as receiver to the Council over its non-payment of a compensation award to his clients. Some 27 years later, Mr Miley is still acting in high profile compensation cases and he has strong views on developments in the property market, insolvency and conveyancing.
Miley & Miley solicitors are 150 years in business and Stephen Miley is the fifth generation to run the practice. The firm employs 12 staff and it was Mr Miley's apprenticeship to his father that sparked his expertise in acting for property developers. One client handed down was Brennan and McGowan and it was a 15 year battle to secure planning permission for their Grange Developments 100 acre site at Mount Gorry, Swords that led to the County Council's imminent collapse.
In property law a landowner is entitled to compensation where they are refused appropriate planning permission on land zoned for development. However there are several reasons for which a local authority can refuse planning and avoid a compensation claim, typically a "lack of services." Stephen Miley challenged the Council's refusal and his clients were awarded compensation of approximately IR£1.9m. The Council refused to pay and with recently retired supreme court judge Niall Fennelly acting for his client, Mr Miley had himself appointed as receiver over the Council's assets.
That evening, the Acting County Manager, the late George Redmond and a large team called to Miley & Miley and after tense discussions a cheque was produced. Unfortunately it was for the wrong amount and the crisis continued until the next day when the compensation was paid and Stephen Miley consented to being removed as receiver.
These days, with private sector insolvency stalking the market, Stephen Miley rails against what he sees as injustices in the system. He sees an unfair balance of power between banks and borrowers and is disappointed that the insolvency era has not led to a Banking Act, to address the issues which have arisen. He says that we need individual accountability for bank executives and board members and transparency around how banking decisions are made. He also believes that we need a standard set of security documents for standard transactions and which are fairly balanced between the bank and the borrower.
He also advocates that we need an Ombudsman to adjudicate on the respective liabilities and responsibilities between bank and borrower when things go wrong." When a loan goes off the rails, there are two parties to that, and the bank must have some responsibility" he told me.
Mr Miley has strong views on Nama: "In 20 years time we will realise that Nama was the wrong way to go. We have a perfectly good suite of corporate insolvency legislation which should have been used. The market would probably have corrected itself through the liquidation process long before now, especially if sales were made sooner rather than later." Nama he believes is "hamstrung by political considerations, is administratively slow and its inability to re-sell to debtors has slowed down the whole recovery."
"Selling in over-large tranches which excluded most Irish developers and investors is not very patriotic and inviting in vulture funds looking for huge, quick profits, is not the smartest thing to have done."
The recession uncovered a lot of defective titles leading to professional indemnity claims and as a result, Stephen Miley sees a huge change in conveyancing. "The amount of time put into a conveyance has quadrupled in 40 years" he says. "There are less undertakings given in good faith between solicitors and we are following the UK route where all the investigations are now done before signing contracts."
One casualty of more "e-conveyancing" is a loss of collegiality in the legal profession as there is far less interaction between solicitors and Mr Miley doesn't find the new methods entirely efficient. "The electronic system for paying stamp duty actually takes longer than the days when you would send a clerk down to Dublin Castle with a cheque."