The student union at Memorial University in St. John's is stuck with a big bill after losing a 10-year court battle with the city over taxes at its student bar.

MUNSU lost the battle over the Breezeway Bar, and the student union said it's more than a little surprised that it is now stuck with the $360,000 tax bill.

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Travis Perry says he was surprised the student union lost its appeal. (CBC)

"I guess I was shocked that this is the decision that came down because since we've been working with our legal counsel we felt fairly strongly that the taxes, that these particular taxes levied against us, shouldn't have to be paid by the student's union," said Travis Perry, the director of finance for the student union.

Lawyers representing MUNSU argued that the student union should be exempt from property tax.

"There is value in having, I guess, a recreational facility within the institution that students can go to outside of the classroom to dialogue and discuss, and as such we felt under the current tax regulations that we should be exempt," Perry said.

One judge in the Newfoundland and Labrador Court of Appeal agreed, but two others upheld a lower court decision denying the application.

According to Perry, MUNSU will need to regroup and talk with city officials about their next steps.

"We have been paying taxes for most of our operations, and going forward there's still some clarification that we have to seek out from the city," Perry said.

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City Coun. Danny Breen says the court system handled the situation fairly. (CBC)

Coun. Danny Breen said the city is willing to work with the student union to work out loose ends.

"We're always fair and reasonable in terms of how to deal with this," said Breen, who got his start in politics as a vice-president on the student council at MUN in the early 1980s.

"Our staff will sit down with their (MUNSU's) representatives, and I'm sure that they'll come to an agreement that will be acceptable to everybody."

MUNSU is hoping to negotiate a multi-year repayment plan with city hall, and will be pressing for a reduction in the amount it owes.

The student union is hopeful it can pay the bill without compromising the services it offers to Memorial students.

A date for a meeting between the two parties has yet to be set.