A huge fight is brewing between Merivale's Justin Hemmes and a former Rothschild MD over the Coogee Pavilion

The Coogee Pavilion rooftop bar.

Justin Hemmes and his Merivale hotel group are heading to the NSW Supreme Court to keep control of the Coogee Pavilion, with his landlord, David Kingston, a former Rothschild managing director, seeking to evict the bar tsar from the Eastern Suburbs pub.

Fairfax Media reports that Hemmes has spent around $12 million renovating the site, formerly called Beach Palace, having agreed to buy the property from Kingston for $37 million in March 2014. Merivale paid a $5 million deposit to buy the hotel in two years, as well as paying $1.5 million annually in rent as interest on the outstanding balance.

Supreme Court documents reveal that Hemmes was served with a termination notice for being two days late paying the rent at the start of the year. The rent was due on Saturday, January 3, and Merivale paid on the Monday, January 5. Fairfax has Hemmes claiming the late payment would have cost Kingston $85.74. Two weeks later, another termination notice was issued for “blatant and unauthorised works” on the rooftop bar, then a third in February for additional breaches, including a barbershop.

Hemmes has launched the Supreme Court action, which will be heard this month, seeking an injunction against the eviction and for the right to buy the hotel to be reinstated.

Merivale, which owns the landmark CBD hotels Establishment and ivy, in a portfolio of more than 50 restaurants and bars, including the recently acquired Newport Arms, has regularly created popular venues and some estimates suggest the value of the three-storey hotel may have doubled since it opened last July. Hemmes accuses Kingston of trying to engineer a “vast windfall” off the back of his labours.

Kingston accuses Hemmes of leaving him open to liability if anyone is injured on site and claims he did not know about the extent of the renovations. Hemmes counters that his landlord was at the opening of both the launched pub and its rooftop bar in December 2014.

A spokesperson for Merivale told Business Insider that “We are extremely disappointed that we have been forced to instigate Supreme Court proceedings to protect our considerable investment in the Coogee Pavilion.

“As these proceedings are now before the Court, it would not be appropriate for Merivale to provide any comment on the matter.

“However, we would like to take this opportunity to thank our guests and well-wishers on social media for their staunch support and astute understanding of the current situation.”

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