By Ian Neubauer

In a move that may mark the beginning of the end for bar baron Justin Hemmes, a court has ordered his family company pay the builder of his flagship ivy hotel more than $4.5 million.

The Supreme Court of NSW ruled on Friday (May 15) that Hemmes Hermitage Ltd owed builder Lucas Stuart $4.57 million over an argument relating to costs incurred for variations requested by the owner to ivy’s fourth floor during the construction period, News Ltd reported.

Hemmes said the ruling was based on a “legal technicality” and promised to countersue Stuart’s parent company, AJ Lucas, for $6 million over alleged “defects and delays” to the building.

Contacted today (May 18), AJ Lucas company secretary Nick Swan refused comment on the matter. “We have not released any kind of statement at all and neither do we intend to,” he said.

The courtroom development follows month of speculation that Hemmes overextended himself financially developing ivy – a palatial $150 million entertainment complex on George Street that opened to rave reviews early last year.

Ivy quickly made a name for itself as ‘the’ place to be among Sydney’s high flyers and beautiful people and continues to do brisk business in the event space due to the popularity of its Pool Club, the Lawn, the Den and other lavish venues-within-the-venue.

But cracks in the ice began to appear a few months after it opened, when another one of Hemmes’ pubs, the CBD, was taken off the market after being unsuccessfully listed for sale with realtor CBRE Ellis.

Rumours intensified when the economic bubble burst late last year, including unsubstantiated reports that Macquarie Bank had distributed a memo to staff that ivy and its sister property Est. were no longer to be used for client meetings and entertainment because of their premium-pricing policy.

Hemmes was finally forced to publicly rebuke the allegations in December after TheShout published comments by a spokesperson for Merivale – the holding company behind ivy, Est., the CBD, Lotus, Slip Inn, The Grand, Angel and Wynward – denying the company was in trouble. “We are not in receivership, I am not in jail and no, I’m not pregnant,” Hemmes said at the time.

Hemmes has combined vision, determination, excellence in service and cutting-edge design to create a pub empire that is the envy of hoteliers everywhere and turned himself into a celebrity in the process. He is also a highly amicable individual and revered by his staff, who affectionately know him as ‘Captain Jus’.

But his empire is appearing increasingly unstable.

The question of whether it will survive a year that has seen a number of high-profile pub barons go to the receivers – including most recently Stuart Laundy of the Laundy Family – will continue to fill headlines on this publication and others for the foreseeable future.

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The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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