Aquatic centre firm 'told of tax deal'

The State company which owns the €62 million National Aquatic Centre was told, before awarding the lease for the centre to Dublin Waterworld Ltd on April 30th, 2003, that the proposed funding arrangements for the centre involved "a tax-driven deal", the High Court was told yesterday.

John Moriarty, a director of DWL, said he had told Paddy Teahon, the former executive chairman of Campus Stadium Ireland Development Ltd (CSID), in February 2003 about the funding structures he was proposing to put in place for the centre.

He had told Mr Teahon it was a "tax-based proposal".

Mr Moriarty said he had discussed funding arrangements for the centre with Mr Teahon on February 7th, 2002.

He had told Mr Teahon a structure would be put in place involving one company being put "on top of another" and that it was a "tax-driven deal".

"Mr Teahon told me I could essentially do what I wanted as long as we ran the centre well," Mr Moriarty said.

Mr Moriarty also said he had objected to the form of bank guarantee sought by CSID for the centre but had agreed, at Mr Teahon's request, to a "fudge" on this issue which, he said, involved the guarantee being renegotiated after the lease was signed by DWL.

He said Brendan Barrett, managing director of the building firm Rohcon, was present when this "fudge" was agreed but CSID had chosen not to call Mr Barrett to give evidence in its legal action against DWL.

After a controversy erupted shortly afterwards relating to the centre, Mr Teahon was no longer involved with CSID and CSID had insisted that the form of guarantee set out in the project agreement for the centre remained in place and that there would be no renegotiation, Mr Moriarty said.

He said the matters he had agreed with Mr Teahon were never put in writing but people in CSID, who it was unfair to name, were witnesses to the conversations that went on.

The cross-examination of Mr Moriarty continued yesterday in the continuing hearing of CSID's proceedings seeking forfeiture of the lease for the centre from Dublin Waterworld Ltd. CSID has alleged multiple breaches of the lease, including failure by DWL to pay rent and VAT.

The case continues today before Mr Justice Paul Gilligan.