Does the Government claim that NMH 299-year lease is effective ownership stack up?

‘Clinically appropriate’ treatment stipulation gives hospital more space, clinicians say

After weeks of confusion, claims and counterclaims, the Oireachtas Committee on Health met on Wednesday in a bid to establish the facts around the planned relocation of the National Maternity Hospital (NMH) from Holles Street in Dublin to the St Vincent’s campus. Here’s what we finally learned about the biggest issues at the heart of the controversy.

The Government says that a 299-year lease is effective ownership. Does this stack up?

St Vincent’s Healthcare Group does not want to sell the parcel of land on which the new hospital will be built because they say it will interrupt the effective running of their other hospitals on the site. The State wanted to buy the land but were told, in no uncertain terms: no. Instead, the land will be leased for 299 years to the Health Service Executive. The Government says this is effective ownership. The Opposition say it is not, adding that the State won’t own the building either.

Legal experts told the committee the arrangement amounts to effective ownership but just for that period.

Legal representative for the HSE John O'Donoghue said: "It is not the case that the State won't have an ownership in the land. On this issue of freehold versus leasehold there are two different types of ownership interest in Ireland: there is freehold, where you own the property into infinity; and there is leasehold, which is where you own a property for specific period of time."


Essentially, he is saying a leasehold interest is a form of ownership for however long two parties agree it should be so.

What about the hospital on the land, who owns that?

This cannot be called outright ownership but once again appears to be a case of effective ownership. It can’t be called outright ownership in perpetuity because when the 299-year lease ends, the land reverts to St Vincent’s and this includes any buildings on it.

Mr O’Donoghue, who is also a property lawyer, said the legal documents surrounding the deal “create a propriety interest in the land for the HSE for 299 years and the building constructed on that will be constructed by the HSE through its own interests. That lease contains a right for the State to build a hospital on that land, to maintain that hospital, to grant an operating licence to the operator of that hospital.”

Mr O’Donohoe noted 99 per cent of apartments are bought under long leasehold “and if you told those people they did not own those buildings, I think they would not accept that”.

The new building will be paid for by the State and also from the proceeds of the sale of Holles Street, should the move happen.

The State will pay for the building and technically own it and control it – but not forever, and not if it breaks certain terms.

What are these terms? Is this the €850,000 rent we keep hearing about?

A nominal rent of €10 per year will be charged as part of the leasehold agreement but this can be increased to €850,000 but only if six pretty standard terms are not met including that the State does not try to buy the freehold somewhere along the line (there are laws which could allow this, so that’s why it is being mentioned again). The site must also be used for its intended purpose as a maternity hospital and the State must not try to give the lease to anyone else. In reality, the rent will be €10 a year, and no more.

What about this phrase “clinically appropriate” being in the agreement for allowed procedures – why is it there?

This has been one of the biggest sources of confusion and debate over recent days and the Government only has itself to blame because different explanations have been offered by different people.

Ultimately, it boils down to two things: ring-fencing the services in the new NMH; and making sure the provision of future services are not limited.

Firstly, what we have learned for the first time is that because St Vincent’s will have some of its services displaced as part of the building works, some of these will be relocated on the premises of the new NMH.

The fear on the side of the NMH, political sources say, is that St Vincent’s might encroach on more of their turf and seek more rooms or use of other facilities. The NMH side say the term “clinically appropriate” means: this is our hospital, not yours. It is a maternity hospital, nothing else.

Secondly, clinicians told the committee the use of this term means that any procedure which becomes available in the future will not be curtailed because the documents were not too prescriptive. They say it gives them extra space, not less space.

What do the politicians say and what happens next?

Opposition politicians, and indeed Government politicians, say this is not good enough. They have raised concerns shared by critics about the subjectivity around the phrase, saying that clinicians could have different interpretations. They want Minister for Health Stephen Donnelly to submit an addendum to legal documents outlining procedures (such as terminations) that can take place but add a phrase saying that this would not be the limit of what can be provided, so as not to be too prescriptive. The Minister says he will think about it, and that he is not ruling anything out. But if the Government can find a way to do this, a major hurdle will have been cleared.

Anything else?

Yes. We also learned that in transferring their shareholding to the St Vincent’s Holding Company, the Religious Sisters of Charity were given an indemnity agreement. It is nothing to do with the State – it is between St Vincent’s and the Sisters. Donnelly said the indemnity is “for any liabilities that may arise in connection with the Sisters’ prior ownership of the shares and any past activities at the Vincent’s Hospital campus” and that there is a “waiver from St Vincent’s Healthcare Group of any claims in connection with the system’s operation, management supervision or ownership of the of the hospitals”.

Is this the end of the debate?

Far from it. Campaigners continue to push for the Religious Sisters of Charity to make public any correspondence with the Vatican about the transfer of their shareholdings. They want to know what the Vatican said about it, and if there were any terms attached.

The Government says it’s not their problem. Time will tell.