Bar baron Justin Hemmes faces eviction from Coogee Pavilion

Justin Hemmes' Midas touch with hotel revamps has hit a major snag with the pub baron facing eviction from the Coogee Pavilion with nothing to show for his hugely successful multimillion-dollar makeover of the faded beachside hotel.

According to documents lodged in the Supreme Court, Mr Hemmes has run foul of his landlord by being two days late with the rent and having some unauthorised building work on the rooftop bar.

The hotel, previously known as the Beach Palace, is still owned by David Kingston, former managing director of investment bank Rothschild. Using their respective corporate entities, Mr Kingston and Mr Hemmes entered into an agreement in March last year for Mr Hemmes to buy the hotel from Mr Kingston for $37 million.

But Mr Kingston wanted the sale to be completed in two years by way of a put and call option, with Mr Hemmes' $5 million deposit being treated as the option fee and the $1.5 million a year in rent being treated as the interest on the remaining $32 million.

Having secured the deal, Mr Hemmes, who also has Ivy, Establishment Hotel, The Beresford and others, spent $12 million on a major refurbishment of the three-storey establishment in Dolphin Street, which he renamed the Coogee Pavilion. Such has been the success of the makeover that industry sources estimate the hotel has possibly doubled in value.

However, Mr Hemmes may be left with nothing after being hit with a series of termination notices, firstly for the rent being two days late and then for what Mr Kingston has described as "blatant and unauthorised works".

Mr Hemmes has taken action in the Supreme Court seeking an injunction to prevent being evicted and to reinstate the call option.

He is accusing Mr Kingston of trying to capitalise on the "vast windfall" which has been achieved by Mr Hemmes' "skill, labour and expertise".

On Monday, January 5, 2015, Mr Kingston issued Mr Hemmes with a termination notice for paying the rent late. The rent was paid that day but Mr Kingston said the rent was due two days earlier, on Saturday, January 3.

Mr Hemmes claims Mr Kingston has engaged in "deceptive and misleading conduct" and that paying the rent on Monday rather than Saturday would have set Mr Kingston back $85.74.

Land title deeds obtained by Fairfax Media show that, the very next day, Mr Hemmes lodged a caveat on the title, registering an "equitable interest" in the hotel.

A fortnight later, Mr Kingston, issued another termination notice for unauthorised work on the rooftop bar. He followed this up with a third notice in February claiming further breaches, including operating a barbershop on the premises.

Mr Kingston claimed Mr Hemmes never informed him of the nature and extent of the renovations and that he thought he was doing only minor work. But Mr Hemmes stated Mr Kingston had come to both the opening of the downstairs bar in July 2014 and the rooftop bar in December, and expressed only admiration at the renovations. Mr Kingston denied saying to their mutual friend Bruce McWilliam at the hotel, in front of Mr Hemmes: "He's done a good job, hasn't he."

Mr Kingston is refusing to refund Mr Hemmes' $5 million option fee and, rather than a "vast windfall", he claims Mr Hemmes' unauthorised building works could leave him open to "civil and criminal liability" should anyone be injured.

The matter is set to return to court for mention later this month.