Pool lease blatantly breached, court told

The owners of the €62 million National Aquatic Centre have claimed before the High Court that, on the same day they assigned the lease to operate the centre to Dublin Waterworld Ltd in April 2003, that company breached the lease through assigning the operation of the centre to a trust set up in favour of well-known Limerick businessman Pat Mulcair.

It was only on Monday last that Campus Stadium Ireland Development Ltd (CSID) became aware of the trust and the involvement of Mr Mulcair, senior counsel Denis McDonald said at the opening of a hearing in which CSID is seeking possession of the premises for alleged "blatant" breaches of the lease.

Since the lease was assigned to Dublin Waterworld in April 2003, there had been "sustained", "consistent", "wilful", "egregious" and "irremediable" breaches of the lease, including failure to pay rent and rent insurance, failure to pay VAT, failure to present audited accounts within the time allotted under the lease, failure to set up a sinking fund for capital maintenance projects and failure to appoint an approved manager for various pools in the facility.

There was a "complete failure" by Dublin Waterworld to honour its financial obligations under the lease, counsel said.

Dublin Waterworld had also breached covenants that restrained it assigning the operation of the National Aquatic Centre to any other entity and restrained it holding the lease on trust for another party, he argued.

CSID had learned only on Monday last that, when it assigned the lease to Dublin Waterworld on April 30th, 2003, it had on that same day allowed and created a trust in favour of Mr Mulcair without the consent of CSID. Under that trust, Mr Mulcair purported to become the owner of the tenant's interest in the lease and was described as the operator of the business.

Mr Mulcair has an agreement with Dublin Waterworld Management Ltd (DWML), a subsidiary of Dublin Waterworld Ltd, under which it was allowed to operate the premises on Mr Mulcair's behalf, counsel added.

CSID had thought it was dealing with Dublin Waterworld as tenant, not the subsidiary firm or Mr Mulcair, he said.

The lease provided that CSID was to get 10 per cent of any profits made by Dublin Waterworld from the running of the centre. However, although 900,000 people were expected to visit the facility annually, the accounts of Dublin Waterworld showed it was not a trading company.

Mr McDonald said what had happened was that "an edifice" was put in place which seemed, on the face of it, to ensure that Dublin Waterworld would never itself make any profit or take any door receipts and would never be able to pay the 10 per cent share of the profits to CSID.

Had CSID seen the Dublin Waterworld accounts earlier than June last, those would have caused "alarm bells" to ring, counsel said. Although the accounts for the year to end December 2003 were signed off in October 2004, CSID was told during recent court proceedings they were not available.

He said John Moriarty, a director of Dublin Waterworld Ltd, had made a "manifestly false" statement on affidavit that the accounts were not ready.

Both sets of accounts clearly demonstrated Dublin Waterworld Ltd is not a trading company, counsel said.

Mr McDonald made the claims at the opening of an application by CSID for possession of the centre at Abbotstown, Co Dublin.

Dublin Waterworld is opposing applications for forfeiture and enforcement of a €10 million VAT award made against it on July 1st last.

The action continues today.