Top club a ‘shell’ as legal threats fly
ONE of the Gold Coast's most famed nightspots has been stripped bare leaving 50-plus staff in limbo as an ugly row unfolds between the landlord and a longtime operator.
Surfers Paradise nightclub SinCity - popular with party-goers including Usain Bolt for a week during the Commonwealth Games - is to be at the centre of a bitter legal wrangle between the landlord and tenant, the Bulletin can reveal.
What is not in dispute is as of late last week, Melbourne landlord and accountant David Brandi's company Bada Bing Holdings has had the locks changed to keep out the nightclub's long-time operator Rockbah Bar Pty Ltd.
Since then, ugly claims and counter-claims from both sides have been flying.
The claims include that the landlord has failed to adhere to Prime Minister Scott Morrison's coronavirus business "hibernation" guidelines, that the tenant owes six figures in rent arrears and that the interior has been stripped so badly it amounts to vandalism.
Artesian Hospitality partner Matt Keegan - whose stable of venues includes an interest in Sin City - told the Bulletin last night the club's suppliers had recently taken their equipment out before the locks were changed, leaving a shell of a business and 50-60 staff and suppliers with uncertain futures post-coronavirus.
Mr Keegan contacted the Bulletin initially to say Rockbah had been locked out and blamed Bada Bing for failing to negotiate to ensure the tenancy continued during and after the coronavirus shutdown. Rockbah intended to sue for unquantified damages, he added.
Mr Keegan whose Artesian group includes The Bedrom, Havana and White Rhino claimed: "We have been negotiating with all our landlords. One landlord has been unwilling to engage - the landlord for SinCity (aka Rockbar Ltd)."
Mr Keegan said Rockbah received a breach of lease alert from Bada Bing which led to SinCity suppliers becoming "uncomfortable" and removing equipment including sound systems, furniture and more.
But when the Bulletin contacted Mr Brandi relaying Mr Keegan's claim Bada Bing was not negotiating as required, its lawyer Legacy Legal director Kevin Carey replied that Rockbah had failed to pay rent to Bada Bing since September and Rockbah had failed to contact "this office or the property agent at any time" prior to Mr Keegan contacting Bulletin to complain about the lockout.
Mr Carey's letter added: "A number of media articles indicate the apparent owners and operators of Artesian Group appear to have been in a position to outlay millions in the refurbishment of their other venues, at a time our client was being deprived of payments due to it under an agreed lease.
"We are instructed however that our client has received contact from Mr Keegan who has indicated that the lessee company is a '$2 Company, and our client would be left with a 'gutted tenancy'," Mr Carey's letter alleged. "Such matters raise grave concerns for our client who has since learned the venue has indeed been gutted and the rental arrears are in the hundreds of thousands. In fact, photos taken from the property agent show a venue that may have been subject to vandalism, removal of fixtures and fittings. Our investigations into who is responsible for the horrific condition of our client's property, is ongoing," Mr Carey's letter alleged.
Mr Carey added his client was mindful of the COVID-19 national cabinet's Code of Conduct in relation to commercial leases but "this matter clearly has nothing to do with COVID-19".
"The current dispute relates to prior breaches of a lease entered into years before any Covid-19 related closures, the failure of the Lessee to perform under the Lease...
"Any notion Rockbah has grounds to sue our client for breach of contract, is denied and fanciful. We are instructed to vigorously defend any such action in addition to our instructions to commence proceedings against those responsible for the damage done to our client's property."
Property agent Greg Bell, whose firm manages the SinCity lease on behalf of Bada Bing, said last night: "I have to support David Brandi's position. Since September, these guys haven't paid rent."
Mr Bell said his firm had requested Rockbah bring its rent up to date to the period prior to the coronavirus shutdown and "after that we will negotiate and sort something out".
"That place is now a shell. In my whole career, 43 years, I have never seen anything like it. (Bada Bing) is going to need to spend $500,000 to refit it to get another tenant.
"We served the appropriate notice and locked them out," Mr Bell said.
In response to the claims of vandalism and rent arrears, Mr Keegan said Rockbah had written to Bada Bing's lawyers Legacy Legal to say:
● A "breach" notice sent by Bada Bing on April 7 did not give Rockbah a "reasonable" amount of time to remedy the breach.
● Rockbah was not obliged to pay the "amount of alleged arrears" as it was inconsistent with another "agreement reached by our respective clients".
● The impact of coronavirus on SinCity should also be taken into account.
The Rockbah letter adds: "Our client considers 14 days from the date of the Notice to be an entirely inadequate period of time to remedy the alleged breaches in circumstances where the total outstanding rental arrears is alleged to be $268,250.18,
"We are instructed in early December 2019, an agreement had been reached for our client to pay rent in the amount of $10,000 per week for the tenancy, with any arrears prior to that date to be forgiven."
The letter claims the agreement for the new rental payment was agreed by Mr Keegan and the Bada Bing "agent" in early December and payments had been accepted for five months in that amount.
Mr Keegan said Rockbah intended to sue for breach of lease in the Supreme Court.
"Sin had 50-60 staff who now have no future, no job, some of whom we put into Jobkeeper in the hope of bringing them back when this is all over.
"We fully intended to open that business until we got this letter that made it clear they weren't willing to negotiate and their only motivation was to evict," Mr Keegan said.
Originally published as Top club a 'shell' as legal threats fly