Court criticises Steward over time wasting tactics in €37 million pending VAT bill case

The Court of Appeal has ordered proceedings against Steward Health Care over a 2019 pending VAT bill of €37 million to continue without delay before the Administrative Review Tribunal while chastising the company for “wasting time” to avoid paying its dues.

Through an appeal aimed at lengthening court proceedings, Steward appealed a sentence given last year by the Magistrates court to pay up, arguing about the procedure used.

According to Steward, the Court was wrong in its decision as it argued the Court had no legal competence in this case. But the Court of Appeal, presided by Chief Justice Mark Chetcuti, quashed Steward’s argument and said that the first court was correct.

The Court also criticised Steward for using legal means to delay the final settlement of the pending bill and said that the case must now be subject to a final and quick verdict from the Administrative Review Tribunal, responsible for settling such matters.

The government awarded Vitals Global Healthcare a multi-billion-euro deal in 2015 to administer three state hospitals for 30 years against payment from the state.

Under the administration of disgraced former prime minister Joseph Muscat, both VGH and Steward accumulated millions in pending VAT payments, which between 2016 and 2019 reached €37 million.

The Commissioner for Inland Revenue failed to take legal action.

Following Muscat’s forced resignation in December 2019 and his replacement with Robert Abela, the latter attempted to strike a new deal with Steward, which had taken over the concession from VGH with the government’s permission, including a payback settlement regarding the unpaid taxes.

However, Abela was forced to withdraw his offer following legal advice that what he was contemplating was illegal.

It was only in 2021 that the Commissioner for Inland Revenue started formal procedures against Steward to settle a €37 million pending VAT bill.

Steward opposed this and started a series of legal challenges, further delaying the payment.

Defended by lawyer Joseph Camilleri of MAMO TVC, Steward admitted that when it bought the concession, it did not know it owed millions in outstanding VAT and did not check whether there were any unpaid dues.

The Court struck down Steward’s arguments and underlined that when the company took over the concession, it became liable for all contracts, bills, and debts.

In February 2023, the Court annulled the deal between the government and Steward, suggesting that it was made with “fraudulent intent.”

A magisterial inquiry investigating Muscat and other members of his cabinet over possible embezzlement and corruption of a criminal nature is still pending after four and a half years.

Magistrate Gabriella Vella is conducting the inquiry.