MaxCap has initiated legal proceedings against Ilya Melnikoff, grand-nephew of developer Harry Triguboff, seeking $42.4 million over a stalled Byron Bay project, as The Australian reports. The move could force Melnikoff into personal liability and imperil his development group Luxcon.
Background: The Bohemian / Byron Plaza Vision
In late 2022, MaxCap provided a $32 million land facility to Luxcon to acquire the site at 90–96 Jonson Street, Byron Bay, intended for a mixed-use development known as “Bohemian” (or Byron Plaza).
Under the original plan, the site would host luxury apartments above a retail plaza, rooftop amenities, and supporting infrastructure.
That same transaction was heralded at the time by industry watchers and the developer as a marquee coastal precinct play, one that would redefine Byron’s town centre.
The Legal Clash
MaxCap alleges that Melnikoff breached his personal guarantee on the facility and is demanding repayment of the original loan plus $9.94 million in interest and fees. The case, filed in the Supreme Court of Victoria, seeks enforcement of the guarantee or any further relief deemed appropriate.
Melnikoff, meanwhile, has vowed to vigorously defend the claim and has accused MaxCap of making misleading and deceptive representations at the time of origination. He alleges that the lender rejected multiple commercially viable proposals designed to ensure full investor repayment and project completion, adding that the company’s conduct caused “substantial financial and reputational damages.”
His forthcoming counterclaim is expected to challenge MaxCap’s governance and investor reporting practices, suggesting potential systemic issues within parts of the non-bank lending sector.
Broader Market Implications
The dispute underscores growing tension between developers and private financiers as Australia’s once-buoyant residential and mixed-use development pipeline faces headwinds. For projects like Bohemian, tight capital markets and limited construction funding have exposed borrowers to high leverage and aggressive enforcement actions.
Should MaxCap prevail, Melnikoff could face bankruptcy, potentially destabilizing Luxcon’s national portfolio, which includes projects in Victoria, New South Wales, and Queensland.
The Byron Bay site has since been placed under receivership with FTI Consulting’s Joseph Hansell, who is exploring sale and leasing options. Despite its challenges, Luxcon maintains that the project remains “highly viable” and that its priority continues to be full investor repayment and completion of the development.
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