This juggernaut could not be halted or even slowed — then came McKillen
Since it was set up in late 2009, the all-powerful Irish toxic loans agency Nama has suffered few setbacks, either legally or financially.
Yes, it was given inaccurate information about loans by the banks and some expressed anger over salary levels for Nama executives, but to date the agency has been a juggernaut that nobody has been able to stop or even slow down.
When it was being formed in early 2009, there was ominous talk that powerful developers would crush it in the courts. There was talk of Nama being a bonanza for barristers and solicitors and speculation that it would be deemed unconstitutional.
However, none of these developments ever materialised — although lawyers have done quite well.
Even the sole legal challenge to its powers, from reclusive Belfast-born developer Paddy McKillen, was easily batted away when the High Court delivered a key judgment in November, saying that Nama was a “proportionate response to the very grave financial situation in which the State finds itself''.
But now, just as Nama seemed to be in the clear legally, Dublin’s Supreme Court has thrown a substantial obstacle in its path.
The court said the agency's decision to take over Mr McKillen's loans had no legal basis, as they were taken over before Nama had been legally established.
Despite the debilitating and dangerous banking crisis, the message is clear — the state agency must adhere to proper legal procedures. No shortcuts are allowed.
While Mr McKillen's victory is technical in nature and doesn't touch upon the wider constitutional issues relating to Nama, it is still a rare victory against the Irish State.
Last night, developers were exultant at the result and several of them were consulting their legal advisers about the implications.
Many of the developers believe that decisions to take over their loans were also taken before Nama had officially been established.
They could now argue that they suffered an economic loss because their loans were moved into Nama without proper legal procedures being followed.
However, most legal experts were sceptical yesterday about whether such cases would succeed.
That is the current situation in relation to developers who are still co-operating with Nama — but what about those who have been put into receivership by Nama since 2009? It is unclear whether these developers fall into the same time bracket as Mr McKillen. But if they do, then these developers may argue that Nama took on their loans invalidly and that, as a result, the receiverships which followed were also invalid.
Again, legal opinion last night was sceptical of the merits of this argument, but they admitted that the taking of cases on that basis could not be ruled out.
Either way, yesterday's judgment is a significant blow to Nama.
It is not every day that High Court judgments are overturned by the Supreme Court. Nor is it every day that state agencies have their procedures questioned by the finest legal minds in the country.
For example, the judgment notes that Nama's leadership felt no need to take minutes of their decision relating to the McKillen loans. Instead, a quick note on a spreadsheet was deemed sufficient.
While the judgment does not collapse Nama, it does add further uncertainty to the agency's operation and that slows down the process of cleaning up the banks.
It is worth remembering that the outgoing Irish government assured the public on several occasions that Nama was utterly bulletproof legally. Those comments now appear to have been born of complacency.
As early as next Wednesday, Nama lawyers will be back in court again to give fresh evidence about other issues, including the agency's constitutionality.
At the very least, the continuation of the McKillen case is a significant distraction to Nama's work. It is also likely to be a costly distraction at a time when the agency's original work schedule is coming under pressure.
Nama I is still being completed and there is talk of Nama II, in which loans below €20m are due to be transferred over.
The exact procedures for this have not been announced yet.
But based on yesterday's surprise judgment, one can expect Nama to be ultra-careful in handling the delicate affairs of Ireland's developers, both large and small.