ANALYSIS:The High Court's comprehensive rejection of Paddy McKillen's challenge to his treatment by Nama makes further challenges unlikely, writes CAROL COULTER

OTHER BIG borrowers and their lawyers undoubtedly were watching carefully how the High Court would rule on Paddy McKillen’s argument that he had a right to be heard before his loans were taken over, and that the failure of the National Asset Management Agency (Nama) to so do infringed his constitutional rights.

Other issues – the matter of whether or not his loans were “impaired” and should have been examined in detail before being taken over; the date of the decision; and the view he imputed to the European Commission concerning “impaired” loans – do not necessarily apply to many of the other big borrowers whose loans are undoubtedly impaired. The fair procedures argument was therefore the one with most general application.

In seeking leave to take judicial review proceedings, applicants have to satisfy the court that they have adequate grounds for the exercise. If leave is refused, that is usually the end of the matter.

In this case, because of its urgency and the difficulty in separating the issues involved in seeking leave and in arguing the full case, the two stages were taken together.

However, McKillen and his companies only obtained leave on one ground – that Nama did not observe fair procedures when taking in his loans – and when this substantive issue was considered, he failed to persuade the court of its merits.

He failed to obtain leave for judicial review on the other four grounds.

In arguing that his right to fair procedures was infringed, McKillen claimed he should have been heard prior to a decision about his loans going to Nama. Failure to grant him this right interfered with his rights to his property, his right to earn a livelihood, his contractual entitlements and his reputation, he said.

The court acknowledged that the right to fair procedures is a basic constitutional right, and includes the right to be heard before any decision is made that might be detrimental to a person’s “legally enforceable right”.

It then went on to examine whether the rights he claimed were infringed were such “legally enforceable rights”, in the circumstances surrounding the establishment of Nama. The “mere possibility” of an infringement of such rights was not sufficient, according to the three judges of the High Court divisional court.

Referring to his rights to properties, they pointed out that he could redeem his loans at any time, just as he could if they were with an ordinary bank. In relation to his right to earn a living, they asked how this was interfered with by his loans “going into Nama”. He still owned the property portfolio and owed the same amount of money. As for his claimed right to a contractual relationship with the banks, his loans could have been assigned to other banks or institutions at any time without his agreement, they said.

Finally, the reputational damage he feared was not based on reality. While there may be a public perception that only “bad loans” went into Nama, that view was misinformed and could not form a basis for a claim of an infringement of his rights.

For all these reasons, no “legally protected right” was engaged in his loans being taken into Nama without him having an opportunity to be heard.

While the court considered he had a right to argue this issue, it concluded his arguments were without foundation.

His argument on the constitutionality of the Act was a “fall-back” position, argued on the assumption he failed on the other grounds. Given his failure to win the fair procedures argument, it was unlikely he could win his argument that the Act was unconstitutional. The court found that, even if any right was interfered with, this did not infringe the principle that such interference should be proportionate to the objective sought.

He did not even pass the required “leave” threshold with his other arguments: that Nama should have taken various matters into account, including the nature of his loans, before taking them over; that the decision to do so was taken before Nama was properly established; and that the European Commission decision on permitting Nama required it to take in only “impaired loans”.

It is hard to see how any other Nama borrowers could now seek the assistance of the courts in overturning a decision to take in their loans.