A private hospital group is suing the HSE for €6.6m over the alleged withholding of payments under a scheme to make their full capacity publicly available during the Covid-19 pandemic.
Oval Topco Ltd, along with its subsidiary companies Mater Private (Dublin), Mater Private Cork and Spireview Equipment Unlimited Co, which operates the Limerick Radiotherapy Centre, says the payments are entirely related to "cost only" operational matters incurred in making their services available.
The HSE is refusing to pay on the basis of what it says is a set-off against previous payments, which it claims included "disallowable costs" including interest costs arising from the group's financing agreements.
The hospital group’s lawyers have fundamentally disputed HSE assertions that the finance costs in question "are a mechanism for value extraction for Mater Private's shareholders or represent a distribution to shareholders".
The case was admitted to the fast track Commercial Court on Monday on consent, by Mr Justice David Barniville who strongly encouraged the parties to look at mediation.
It was a case "eminently suited" for mediation and there would be no loss of face between either side if they did so, he said.
In an affidavit, John Hurley, a director of all the plaintiff companies and CEO of the Mater Private group, said the March 20 agreement to make capacity available for the pandemic was on a full costs recovery "not for profit" basis.
Regrettably, he said the HSE took a "unilateral decision" to withhold reimbursement of €6.629m claiming the "disallowable costs" set-off.
As far as his side is aware, the total amount of Mater Private costs disputed by the HSE is €8.1m, he said.
Mr Hurley did not believe there is any proper basis for the HSE to seek to disallow these costs. It was not open to it to now seek to resile from its contractual commitments in an attempt to avoid reimbursing costs which have been properly incurred by Mater Private and are reimbursable, he said.
He also said the HSE had repudiated a contractually agreed dispute resolution procedure and refused to proceed on the basis of an independent expert accountant procedure.
Throughout the three-month period of the pandemic arrangement, he said the HSE was provided with monthly detailed costs statements.
It failed to make payment on June 19 last relating to €4.6m for June and a balancing payment of just over €2m for May, he said.