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[2003] VSC 251
mixed. The caveat over 6 Murray Street, Title Volume 10672 Folio 906, was ordered removed. The application to remove the caveat over 63 York Street, Volume 10672 Folio 907, was refused, so that caveat...
The Court did not decide whether the building works were actually complete. It found that the dispute was serious enough to be decided in the substantive proceedings. Although the caveats were the security the parties had agreed upon, the circumstances of the two properties differed. The caveat over the property being sold was removed because the sale was due to settle soon and the caveat over the other property was considered sufficient security. That second caveat remained. Costs were left for the judge hearing the main dispute.
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2,393 words · generated 01/10/2026
Mitrangas v Makalias and Ors [2003] VSC 251 was an interlocutory application in the Supreme Court of Victoria, heard by Cummins J in the Practice Court on 4 June 2003. The plaintiffs, Konstantinos and Kathy Mitrangas, were builders of two townhouses on land associated with the defendants, Theofanis and Urania Makalias. The dispute concerned caveats over two properties: 6 Murray Street, Prahran, Title Volume 10672 Folio 906, and 63 York Street, Prahran, Volume 10672 Folio 907. The plaintiffs asked the Court to remove both caveats under s 90(3) of the Transfer of Land Act 1958 (Vic) ([2]).
No linked legislation citations have been extracted yet.
The caveats were linked to clause 11.6 of the parties' contract. That clause provided for a charge over the property to secure costs the vendors might incur if the purchaser failed to complete construction of the two townhouses. It said that the charge would be in the form of a caveat, and that the vendor must remove the caveat or caveats when the townhouses were completed ([17]). The contract also restrained the purchaser from encumbering the property until the townhouses were complete ([17]).
The central factual dispute was whether the works had been completed. The contract did not define “completion” ([14]). The parties also disagreed about whether particular matters were defects arising after completion, within clause 11.3, or instead showed that the works remained incomplete under clause 11.6 ([22], [26]). That distinction mattered because the caveats were expressed to remain until completion.
The plaintiffs relied on several events as evidence of completion: certificates of occupancy for the two units issued on 20 November 2001, payment of $6,720 in late-completion damages on 6 December 2001, the provision or proffering of keys on 3 December 2001, and the defendants' possession of the units from January 2002 ([29]). The judge noted that the defendants' assumption of insurance risks was not, by itself, conclusive because it could have been a prudent step whether or not the premises were complete ([29]).
The defendants relied on a detailed report by BSS Design Group, dated 18 January 2002, which listed faults in the construction. The report described the building as being of average construction and stated that matters noted required attention ([32]). The plaintiffs said the report had been overtaken by events, but the competing evidence left completion in dispute.
The properties were in different practical positions. The Murray Street property was under contract for sale for $710,000, with settlement due on 30 June 2003. The judge considered that failure to remove its caveat by settlement would prevent the second plaintiff from completing the sale, with potential consequences under that sale contract ([54]). The York Street property was not described as being under a comparable imminent sale. The judge considered that, if the Murray Street sale proceeded, the York Street caveat would remain and, on the figures before the Court, would be sufficient to cover the defendants' interests concerning defects or non-completion ([54]).
The Court ordered removal of the caveat over Murray Street, but refused to remove the caveat over York Street. The caveat on York Street therefore remained. The caveators were to initiate proceedings within a month to establish their claim, and costs were reserved until the end of the substantive action ([57] and the ensuing costs discussion).
The Court treated the application as having two distinct aspects. First, it considered whether there was a serious question to be tried about completion. Second, it considered the balance of convenience.
On the first aspect, the judge concluded that there was a serious question whether the works were complete within clause 11.6 ([35]). The conclusion was based on the affidavit evidence and exhibits, including the competing material about occupancy, keys, possession and defects. The decision did not determine which party was right about the state of the construction. It recognised that the contract's use of “complete” and “completed” had practical consequences, while leaving the disputed meaning and facts for the substantive proceedings ([14], [17], [26], [35]).
On the balance of convenience, the defendants' contractual security carried substantial weight. Cummins J accepted that clause 11.6 reflected the parties' agreement about how the defendants would be protected if construction was not completed. He stated that the caveats were the protection contemplated by the parties and should receive “substantial priority” ([41]). This made the case different from one in which a caveat was merely an unagreed form of security.
The judge also addressed the argument that one property could provide security in place of the other. Referring to Wright v Bridge Wholesale Acceptance Corporation (Aust) Ltd, he accepted that having another security did not, by itself, warrant removal of a caveat from the first security ([50]). That proposition did not prevent a property-specific result. Instead, the judge considered the other security alongside the particular circumstances of each property.
The Murray Street sale was the decisive practical circumstance. If the caveat remained, the plaintiffs faced difficulty settling the sale by 30 June 2003. If the sale proceeded, its proceeds could be applied to discharge the St George Bank mortgage over Murray Street and York Street, and the York Street caveat would remain over that property. The judge considered that the remaining caveat was sufficient on the figures before him to cover the defendants' interests ([54]). The combination of an imminent settlement, the consequences of not being able to settle, and the continuing caveat over York Street tipped the balance in favour of removing the Murray Street caveat, but not the York Street caveat.
The Court separately addressed costs. The plaintiffs had obtained an alternative form of the relief they had sought, and they relied on earlier letters offering to remove the Murray Street caveat while leaving the York Street caveat in place. Cummins J did not determine costs on that application. He considered it prudent for the judge deciding the substantive matter to assess costs when all the material was available. The letters would remain available for that later consideration.
This judgment is an application of existing interlocutory principles to the particular evidence and properties before the Court. It does not purport to create a new general test. In assessing whether there was a serious question to be tried, Cummins J referred to Lewenberg & Pryles v Direct Acceptance Corporation Ltd and Smith v Callegari & Ors ([35]). The excerpt does not set out those authorities' full reasoning, so the case should not be treated as supplying a detailed restatement of their rules.
The decision also addresses how the balance of convenience applies when a caveat implements security agreed by contract. Clause 11.6 expressly contemplated caveats as the form of the charge securing the defendants' position ([17]). The Court gave that agreement substantial priority ([41]). But the priority was not absolute: it was weighed against the consequences of maintaining each caveat in the circumstances of the relevant title ([54]).
The judgment is careful about the significance of alternative security. It refers to Wright for the proposition that the mere existence of another security does not, without more, justify removal of the first caveat ([50]). The result here does not contradict that proposition. Rather, the Court concluded that the particular balance of convenience, including the imminent Murray Street settlement and the sufficiency of the York Street caveat on the figures, supported a different outcome for the two titles ([54]).
The judgment also notes a difference between the approach discussed in Porter v McDonald and the practice in Victoria and New South Wales. Cummins J referred to Gibson v Co-Ordinated Building Services Pty Ltd for the observation that the east-coast approach attends to the balance of convenience ([47]). The supplied text does not provide a comprehensive account of the competing approaches or their later development. It supports only the narrower point that the Court treated balance of convenience as relevant to this Victorian application.
Accordingly, the “before and after” account is limited. Before this decision, the authorities cited supplied the framework referred to by the judge. In this decision, that framework was applied to a serious completion dispute and two properties with different circumstances. The judgment does not establish that a second property will generally be sufficient security, or that an impending sale will always displace an agreed caveat. Its reasoning depends on the evidence and figures before the Court.
At [14], the judge identified the central issue as whether the works had been completed, and noted that the contract did not define “completion”. In plain English, the parties had agreed that completion would affect whether the caveat remained, but had not specified a definition that resolved their disagreement.
Clause 11.6, quoted at [17], says that the charge is security for costs the vendor might incur if the purchaser failed to complete construction. It also says the charge takes the form of a caveat, which is to be removed when the two townhouses are complete. In plain English, the caveat was not incidental: it was the contractual mechanism for protecting the defendants until the specified construction milestone.
At [29], the judge recorded the plaintiffs' completion indicators but cautioned that the defendants' insurance arrangements did not themselves establish completion. In plain English, conduct consistent with completion could be relevant, but it did not necessarily settle the question.
At [35], Cummins J stated that there was “a serious question to be tried” about completion within clause 11.6. In plain English, the evidence presented a genuine issue for the substantive case; the interlocutory hearing did not decide that the works were complete or incomplete.
At [41], the judge said the caveats were what the parties had contemplated and should be given “substantial priority”. In plain English, the contractual agreement mattered significantly when deciding whether to remove the caveats.
At [50], the judge accepted that another security does not automatically justify removing the first caveat. In plain English, the existence of the York Street property was not a stand-alone reason to remove the Murray Street caveat. The Court still had to assess the particular circumstances.
At [54], the judge concluded that the balance favoured removing the caveat from Folio 906 but retaining the caveat on Folio 907. In plain English, the same application produced different outcomes for the two titles because their practical positions differed.
The decision is most relevant to an interlocutory caveat application where the caveat is said to implement a contractual security arrangement and the contract ties removal to a disputed event, such as completion of works. It illustrates that a court may examine the underlying evidence of that event without finally resolving the substantive dispute at the caveat hearing ([14], [17], [35]).
It is also relevant where separate caveats affect separate properties and the practical consequences differ. In this case, one property was subject to a sale with an imminent settlement date, while another remained available as security. The Court assessed each property separately rather than treating the two caveats as an indivisible package ([54]).
The case may be useful where a party argues that another property or asset adequately protects the caveator. Its discussion of Wright makes clear that the existence of other security alone is not enough; the adequacy of that security and the wider balance of convenience must be considered ([50], [54]).
The judgment does not establish that any particular combination of sale pressure and alternative security will produce the same result. The outcome relied on the sale price, settlement date, mortgage arrangements and figures presented in the affidavits. It also arose in the context of a serious dispute about whether work was complete, with one side relying on completion indicators and the other on a defects report.
The supplied judgment contains no information about later cases considering Mitrangas v Makalias, and no later authorities are provided with the source material. It is therefore not possible, on this record, to say whether later courts followed, distinguished, limited or otherwise treated this decision.
The judgment itself discusses earlier authorities. It refers to Lewenberg & Pryles and Smith v Callegari when addressing the serious-question issue ([35]); to Bunning v Building Supplies Pty Ltd when considering the risk of an unfruitful judgment ([44]); to Porter v McDonald and Gibson when discussing different approaches to balance of convenience ([47]); and to Wright when considering alternative security ([50]). These are authorities considered by Cummins J, not evidence of how later courts treated Mitrangas.
For research purposes, the judgment can be described as an application of the caveat and balance-of-convenience principles identified in its cited authorities. Any account of its subsequent precedential status would require later judgments or a separate case-law search, neither of which forms part of the supplied source.
The most important unresolved issue was the meaning and application of “complete” in clause 11.6. The contract did not define that term ([14]). The judge found a serious question to be tried but did not decide whether defects identified by the defendants amounted to incomplete work or were defects arising after completion under clause 11.3 ([22], [26], [35]). That issue was left to the substantive proceedings.
The evidence also left open the extent and significance of the defects. The defendants relied on the BSS report, while the plaintiffs said it had been overtaken by events ([32]). The excerpt does not record a final factual finding about which items remained outstanding, their cost, or whether the plaintiffs had remedied them.
The judgment's assessment that the York Street caveat was sufficient depended on the figures before the Court and the anticipated application of sale proceeds to mortgage discharge ([54]). The excerpt does not state a detailed valuation or provide a general method for determining sufficiency. Whether the security remained adequate if the sale did not proceed, or if the figures changed, was not decided.
Finally, costs were left unresolved. The judge reserved them so that the judge dealing with the substantive matter could consider the complete material, including the plaintiffs' earlier offers ([57] and the costs discussion). The excerpt does not disclose the eventual costs decision or the outcome of the main action.
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[2003] VSC 251
"Charge: (a) The purchaser grants to the vendor a charge over the property which charge will constitute security in favour of the vendor for all costs that may be incurred by the vendor if it is required to complete the construction of the two townhouses on the remaining land arising from the failure by the purchaser to complete their construction for any reason whatsoever. The Charge will be in the form of a caveat over the property and the purchaser hereby authorises the vendor to lodge or cause to be lodged a caveat on its behalf over the property. The vendor must remove that caveat or caveats when the two townhouses on the remaining land are completed. (b) The purchaser must not encumber the property in any way whatsoever (except for the grant of the Charge pursuant to special condition 11.6(a)) until the two townhouses to be constructed on the remaining land are complete."
Notably the final word of Clause 11.6(a) is "completed" and of (b) is "complete."
"Vendor to make good. The purchaser must, at its own expense, make good all defects in the works arising from defect in materials or workmanship notified to the purchaser by the vendor within 18 months after the date the purchaser completes the construction of the townhouses on the remaining land, including but not limited to, works which are due to defective materials or faulty workmanship".
"I should say that I am not persuaded that I should, in an application such as this, order that the caveat removed simply because the caveator has another caveat ....which might amply support his security". I agree that the mere circumstance that there is another security does not, ipso facto, warrant the removal of the caveat from the first security.
MR PANNA: In those circumstances, Your Honour, the usual order is that the costs become part of the costs in the substantive proceeding, that's the Smith v. Calagary order for costs, the Wee Jasper and the other cases that follow it.
HIS HONOUR: Yes. Mr Kalyvas, do you submit otherwise than that?
MR KALYVAS: I do, Your Honour. If I could just say why our submission ought be that this is different in the two following senses in that the plaintiffs have been successful insofar as obtaining relief sought in their originating motion and summons, if one turns to paragraph 4 of the summons and paragraph 4 of the originating motion where the alternative is sought on behalf of the plaintiffs as an alternative paragraph 3 of the relief that the order be limited to the removal of the caveat which affects 6 Murray Street.
And secondly, Your Honour is familiar with the letters which were submitted to the first defendants on three occasions making an offer to remove the caveat over 6 Murray Street and to leave the caveat over 63 York Street. They are Exhibits KM23, KM24, letters of 4 April, 9 April and 22 April, and in those circumstances, Your Honour, we submit that in your discretion you ought exercise your discretion to award costs in favour of the plaintiffs.
I am not persuaded that I should make the order. I entirely understand what Mr Kalyvas has said: on the other hand the success of the plaintiffs is the alternative that they originally sought, and I think it would be prudent to let the Judge who makes the orders in the substantive matter deal with these issues when all the material is in.
The letters relied upon, and properly relied upon by Mr Kalyvas, will remain available to him to present to the Judge at the conclusion of all the proceedings and he may well be successful in his submission at that time in relation to today's proceedings. The Judge then will have all the material before her or him. Accordingly, I will reserve the costs from today to be determined at the conclusion of the main action as contemplated by Smith v. Callegari.
[1] [1981] VicRp 36; (1981) VR 344 at 347 per O'Bryan, J.
[2] (1988) V.Conv.R. 54 - 300 at 63858 - 859 per Phillips, J.
[5] [1993] VicRp 34; (1993) 1 V.R. 502 at 506.
Mitrangas
Makalias and Ors [2003] VSC 251
The caveat over 6 Murray Street, Title Volume 10672 Folio 906, was ordered removed. The application to remove the caveat over 63 York Street, Volume 10672 Folio 907, was refused, so that caveat remained. The caveators were to initiate proceedings within a month to establish their claim, and costs of the application were reserved for determination at the conclusion of the main action.