Hopetoun Tea Rooms co-owner ‘pressured’ on planned Block Arcade expansion works

The owners of a Melbourne culinary icon had been “railroaded” by their landlord over a doomed expansion of the business, a tribunal has heard.

It is alleged the actions of Block Arcade managing director Grant Cohen completely destroyed the Hopetoun Tea Rooms project. Picture: Alex Coppel

The owners of a Melbourne culinary icon had been “railroaded” by their landlord over a doomed expansion of the business, a tribunal has heard.

It was alleged the actions of Block Arcade managing director Grant Cohen had completely destroyed the project to add a basement restaurant to Hopetoun Tea Rooms.

Hopetoun co-owner Kelly Koutoumanos is suing the ­Collins St arcade for compensation and damages after building works were abandoned in 2016. Central to her claim is an ­allegedly unauthorised basement concrete pour that made the space unusable.

STORM IN TEACUP FOR HOPETOUN OWNERS

NEW FACE ON THE BLOCK AFTER RESTORATION

The Hopetoun Tea Rooms, established in the iconic Block Arcade in the 19th century, had planned to open another tea room in the basement. Picture: Alex Coppel

Ms Koutoumanos, who runs the popular venue with her husband Kon, is also ­accusing a Cohen family company of unconscionable conduct in relation to a $2 million loan given to Hopetoun for the expansion comprising a 200-seat restaurant and shop.

Barrister Luke Virgona, for Ms Koutoumanos, told the Victorian Civil and Administrative Tribunal on Monday that Mr Cohen had pressured the Koutoumanoses to use certain building and design contractors against their wishes.

Mr Virgona said Mr Cohen had set an unrealistic deadline with an overriding goal to “just push ahead, get this done as quickly as possible”.

But Michael Wise, QC, for Block Arcade, told the tribunal that the Koutoumanoses were not the “babes in the woods” that they were being portrayed as and being pushed along a certain path.

“The evidence does not bear that out,” he said.

Mr Wise said that Mr Koutoumanos had a background in the building industry, and Ms Koutoumanos’s request for better access to the basement had been met by Mr Cohen when he arranged for a tenant to move their shop.

Mr Wise said problems arose for the Koutoumanoses when they had to pay $600,000 to upgrade the existing tea rooms after a health inspection.

They then asked Mr Cohen for help, but the reality was “these folk had legal and financial obligations breathing down their necks”, and they were not organised properly to complete the project.

The hearing before VCAT senior member Rohan Walker is expected to take at least eight days and involve several expert witnesses.

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