Developer David Daly and his children have begun their legal challenge to the appointment of a receiver by the National Asset Management Agency over a number of his properties.

Mr Daly and his children are challenging the appointment which was made after NAMA took over loans of about €457m held by the Dalys with AIB.

Opening the case, the Dalys' Senior Counsel, Michael Cush said the Dalys had had a very good banking relationship with AIB over many years.

He said they had never missed a payment obligation and never breached any covenant of their loans.

He said in some respects the Dalys' case was very similar to the position of developer Paddy McKillen, who took a successful challenge to NAMA's attempt to acquire his loans.

He said the Dalys' property portfolio contained highly coveted trophy properties.

The rental income from them was twice what was required to meet payment obligations.

He said the Dalys had no opportunity to make representations to NAMA before the loans were acquired.

But he said they did not resist the application to acquire the loans as they believed they had nothing to fear from NAMA.

Some time later he said they appreciated that NAMA's business model was very different from their own.

He said the Dalys had employed an entirely lawful and legitimate business model over many years and they were entitled to protect themselves.

NAMA had entirely different, although quite legitimate, competing interests.

He said NAMA's view is that if you do not agree with them, they are entitled to take drastic action.

He said they misunderstood the hugely significant statutory powers they have been invested with.

Mr Cush also said Mr Daly had managed to get Deutsche Bank interested in purchasing the loans.

But he had now been shut out from negotiations between the bank and NAMA at NAMA's insistence.

He said the decision by NAMA to call in the loans and appoint receivers while negotiations with Deutsche Bank were ongoing was hugely detrimental to the prospect of a successful conclusion to those negotiations.