Department admits defeat in aquatic centre row

THE Department of Sport has finally admitted defeat in a seven-year legal battle to claim €10.5 million worth of VAT from the former operators of the National Aquatic Centre.

The department had gone to the Supreme Court, against the Attorney General’s advice, to try and force Dublin Waterworld Ltd (DWL) to pay the VAT.

In May it lost this case. And it has now decided not to refer the bill to a new arbitration hearing which was among the recommendations made by the Supreme Court.

In a letter to the Public Accounts Committee (PAC), the secretary general of the Department of Sport, Con Haugh, said no further claim would be made on the VAT issue.

He said the National Sports Campus Development Authority (NSCDA) had taken the decision after studying the judgment. The money was now considered to have been lost.

“Following consideration of the outcome of the Supreme Court judgment, the National Sports Campus Development Authority decided on the July 19, 2010, not to proceed with the provision in the judgment for a new arbitration hearing.

“This decision was taken after careful consideration of the implications of the judgment for the original arbitration process and following detailed consultation with NSCDA’s legal and tax advisers.

“The consequence of this decision is that the DWL’s legal advisors have been informed that the liability to pay the outstanding VAT invoice has been extinguished,” he said.

Before the initial 2005 High Court case, the Attorney General and the Comptroller and Auditor General (C&AG) both told the department if it pursued the legal challenge it was likely to lose.

In November 2004, the Attorney General’s advisory counsel, Christopher O’Toole, said the case of Campus Stadium Ireland’s (CSID), as the NSCDA was called then, failed the test used by Revenue to decide if VAT should be paid.

“It is regrettable that so much time and money has been expended by CSID on the issue and its highly paid advisors did not display the lateral thinking of the C&AG.

“Incurring further legal costs would be even more wasteful,” Mr O’Toole.

The C&AG’s office said the department should have withdrawn before incurring what is now expected to be multi-million euro costs for the legal challenge.

The Supreme Court ordered all of the legal process costs be paid by the state.

Mr Haugh told the PAC the reason it took the case was simply because of the VAT issue but because of wider grievances with DWL when it still held the lease to run the aquatic centre.

He said his department and the NSCDA were prepared to release all relevant documentation to the committee as part of pending investigation on the issue.

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