Justin Hemmes Could Be Evicted from Coogee Pavilion

Could Merivale's seaside citadel lose its monarch?
Shannon Connellan
Published on May 11, 2015

The monarch of Merivale, Justin Hemmes, could be kicked out of his most successful venture in years. The Sydney Morning Herald's Kate McClymont reports Hemmes is facing possible eviction from the Coogee Pavilion by his landlord. According to documents lodged in the Supreme Court, Coogee Pavilion owner David Kingston, ex-managing director of investment bank Rothschild, has issued termination notices after late rent and "unauthorised works", namely the Coogee Pavilion Rooftop and the barbershop downstairs. And Hemmes is fighting back.

Let's head back to the beginning. According to the SMH, Hemmes sought to buy the Coogee Pavilion (formerly the Beach Palace) from Kingston last March. The pair agreed on $37 million and Kingston required Hemmes to pay the whole sum in two years. Hemmes deposited $5 million (treated as an option fee) and the rent (a cheeky $1.5 million per year) was considered interest on the remaining $32 million. Hemmes then poured $12 million into the refurbishment of the Coogee Pavilion and launched in July 2014.

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But all seems to have gone pear-shaped after Hemmes was allegedly two days late with rent in January 2015. After failing to pay rent on Saturday, January 3, Kingston issued Hemmes a termination notice on January 5, on which Hemmes paid the rent. So rent was paid, albeit late. Apparently this two-day delay would have set Kingston back $85.74, which seems teeny compared to the $1.5 million rental fee, but money's money. Fairfax reports that Hemmes lodged a caveat on the Coogee Pavilion the very next day, claiming he had an "equitable interest" in the property — and after pouring $12 million and the hefty Merivale brand into the joint, we can't blame him.

But Kingston's not just angry about late rent. Apparently the owner didn't know about "blatant and unauthorised works" happening at the Pavilion — the new and highly publicised Coogee Pavilion Rooftop, opened in December 2014. After claiming Hemmes hadn't clued him into the nature of the rooftop renovations, Kingston issued a second termination notice. Then Kingston claimed further breaches — he apparently didn't know Hemmes was operating a barbershop on the premises — and issued a third termination notice. Hemmes is biting back on this one, saying Kingston actually attended the opening of the downstairs section in July 2014 and the Rooftop in December. Someone check that security footage already.

Three notices in a month is serious stuff, so Hemmes is taking action in the Supreme Court. Fairfax reports Hemmes is seeking an injunction to prevent being kicked out of the Pavilion, and he's looking to reinstate the call option to buy the Pavilion from Kingston, who refuses to refund Hemmes' $5 million deposit. The case will be tackled in court later this month, and Coogee Pavilion will of course remain trading as usual.

What do you reckon? Would you return to the Coogee Pavilion if Justin Hemmes and Merivale were no longer the owners? Would it not matter? Let us know in the comments below; we'd love to know your two cents.

Via the Sydney Morning Herald.

Published on May 11, 2015 by Shannon Connellan
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