Thursday 20 June 2019

'Dodgy transaction bonus' condemned in €19m Nama case

Edmund Honohan, the Master of the High Court
Edmund Honohan, the Master of the High Court

Tim Healy

The Master of the High Court has struck out a €19m claim for judgment against a businessman, saying the bank official who "got the bonus for this dodgy transaction" would not end up being evicted from his home.

Edmund Honohan, who as Master deals with a range of administrative matters relating to cases on their way to trial, refused to allow a Nama company to proceed with its application for judgment against John Brennan arising out of various loans and overdrafts provided by AIB between February 2001 and December 2007 for commercial dealings.

Mr Brennan, of Confederation House, Waterford Business Park, Cork Road, Co Waterford, had sought more time from the Master to respond to the judgment application by Nama company National Asset Loan Management (NALM), which took over the AIB facilities in 2009. The facilities comprised loans for various sums totalling €18.6m along with another for 48m Japanese Yen, worth around €410,000 at the time the repayment demand was made. When the case came back before the Master yesterday, Mr Honohan said he was striking it out for a number of reasons including that it was not until 2017 that NALM made its demand for repayment of the facilities despite the fact that AIB had assigned them to Nama in 2009. The claim was therefore statute barred, he said.

He was also doing so because the claim was inadequately particularised and this had not been remedied since the proceedings had started. Mr Honohan said Nama had effectively taken on the role of funding an action to recover loans made by AIB in a way which offends public policy against the practice of "maintenance and champerty", whereby someone with no interest or connection in proceedings funds litigation.

The Supreme Court had ruled against this practice and it seemed to the Master there was no way a court could then deal with an application such as this.

Nama had been set up by statute to "warehouse debt and not to pursue guarantors", he said.

When Mr Honohan asked where was the evidence the "property debtor" defaulted on his debt, counsel for NALM pointed out this was not a property debt but one relating to commercial dealings.

Mr Honohan replied: "Where is the bank official who got the bonus for this dodgy transaction. Is he going to be evicted from his house?"

He also said Nama was a property management company and was not licensed or entitled to act like a bank which can decide when it will call in a loan.

He struck out NALM's claim and awarded costs to Mr Brennan.

Irish Independent

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