25/11/2021 - 15:43

Starfish Bar pursued by Tsagalis for $1.6m

25/11/2021 - 15:43

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The owners of former Highgate restaurant Starfish Bar are on the grill for more than $1.6 million, three years after allegedly falling behind on rent and being forced to close.

Starfish Bar pursued by Tsagalis for $1.6m

The owners of former Highgate restaurant Starfish Bar are on the grill for more than $1.6 million, three years after allegedly falling behind on rent and being forced to close.

A writ lodged in the Supreme Court this week by Jim Tsagalis' KBMG outlines the five-year long battle over the lease it held with former Beaumonde Catering director Brian Leyden and hospitality figure Gordon Bain.

In the writ, KBMG claims the pair signed a 10-year lease in 2016 for use of 515 Beaufort Street, just months after they became directors of hospitality business Starfish Bar.

The parties allegedly agreed to a base rent of $16,666 per month, as well as a contribution for ongoing operating costs.

But according to the series of events outlined in the writ, Starfish Bar ran into financial trouble in January 2017, failing to pay rent or operating charges worth $11,494 until three months later.

The trend allegedly continued the following month, with KBMG claiming the pair failed to pay rent for February until late April.

The business continued to fall behind on rent before the landlord took action in July, notifying the directors that they were in breach of the lease and required to correct the breaches through the payment of more than $60,000 within seven days.

But KBMG claims it failed to make that payment until later that year, subsequently becoming liable to default interest on the August charges.

By May 2018, KBMG claims the tenants were in continuing breach of their obligations under the lease, prompting the landlord to terminate the agreement and take possession of the premises.

Further, the landlord called on the full amount of $63,591 of the bank guarantee.

On June 11, 2018, the landlord gave written notice requiring the tenant to restore the premises to its original state, remove property and repair any damage incurred during occupancy.

But KBMG claims the company failed to do so, prompting the landlord to carry out works to ready the premises for leasing to new tenants totalling $223,224.

The landlord allegedly wrote to the defendants demanding payment of $1.4 million, comprising costs incurred as a result of the lease, but the payment was not made.

Now, the landlord is taking the matter to court in the hope of retrieving the $1.4 million allegedly owed, the outstanding base rent, operating costs and outstanding sums up to the termination of lease on May 7, 2018.

The landlord also wants to be reimbursed for the $223,224 it spent repairing the premises and the costs incurred as a result of the alleged contract breach.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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