DWL ordered to hand over aquatic centre

Dublin Waterworld Ltd must hand over possession of the €62 million National Aquatic Centre on April 28th next to the State company which owns it, the High Court has directed.

Mr Justice Paul Gilligan yesterday deferred to April 25th his decision on any application by DWL for a stay on the possession order. He also adjourned to the same date the issue of liability for the costs of the legal proceedings brought against DWL, which are expected to be more than €2 million.

Costs were sought by Campus and Stadium Ireland Development Ltd, the State company which owns the centre, against DWL, a shelf company with no assets and registered offices at Ballyvard, Tralee. DWL contends it is entitled to costs of various aspects of the proceedings.

Following an application yesterday by Denis McDonald SC, for CSID, DWL undertook to continue operating the centre to April 28th. It also undertook not to remove any equipment from the centre and to retain membership and other relevant records.

The judge observed that "a smooth handover" would be in everybody's interest and, in that context, it was a matter of significant importance to know whether DWL intended to appeal.

Earlier, Hugh O'Neill SC, for DWL, seeking a stay on any possession order, said it was necessary, otherwise an appeal would be pointless as DWL would already have surrendered possession.

Mr Justice Gilligan was dealing with a number of matters arising from his decision last week that CSID was entitled to an order for possession of the National Aquatic Centre because of "wilful" breaches of the lease for operation of the centre by DWL and Limerick businessman Pat Mulcair, including failure to pay more than €11 million due in rent and VAT.

Because of those breaches and the breakdown of trust between DWL and CSID, the judge declared that the 30-year lease, granted to DWL by CSID in controversial circumstances only three years ago, was forfeit. He noted CSID had said it had "contingency plans" for the centre in the event of a possession order.

DWL secured the lease from CSID on April 30th, 2003. The judge found that, in a deal done "behind the back" of CSID earlier that same day, DWL breached the terms of the lease by assigning beneficial ownership to Mr Mulcair, who in turn entered into an agreement with Dublin Waterworld Management Ltd - a wholly owned subsidiary of DWL - whereby it would manage the centre on Mr Mulcair's behalf.

The judge noted the funding arrangements with Mr Mulcair, described as a "tax-driven deal", could be terminated if substantial capital allowances, worth some €2.8 million a year and capped at €34 million, were not secured by Mr Mulcair. This would have left DWL without a venture capital provider for the centre, he said.

In March 2005, CSID served a notice for forfeiture of the lease on grounds of multiple breaches and High Court proceedings were brought. CSID alleged more than €11 million was due in unpaid rent and VAT and that it had only learned the full details of Mr Mulcair's involvement in July 2005.

After CSID took legal proceedings, rent was paid up to date and other payments were also made.

DWL has also appealed an arbitrator's decision that some €10 million is due in VAT payments.