Hazelwood v Mercurio

Hazelwood, as the registered proprietor of a property, sought the removal of a caveat lodged by Mercurio, the caveator, under section 90(3) of the Transfer of Land Act 1958 (Vic). Mercurio sought to amend the grounds of the caveat, claiming an equitable interest in the property based on a purported agreement for sale with the vendor, Hazelwood. The dispute centred on whether Mercurio had a prima facie case for the maintenance of the caveat and whether Hazelwood was entitled to its removal. The Supreme Court of Victoria was tasked with resolving these issues.

The court had to determine if Mercurio had established a prima facie case for maintaining the caveat. This involved examining whether there was a binding agreement for the sale of the property and if Mercurio’s interest was sufficient to justify the caveat. The court also had to assess if the correspondence from Hazelwood’s agent could be considered a valid memorandum of agreement under section 126 of the Instruments Act 1958 (Vic). This required an interpretation of the legal authority of the agent and the requirements for a valid written agreement.

In its decision, the court found that Mercurio had not demonstrated a prima facie case for the maintenance of the caveat. The court held that the correspondence from Hazelwood’s agent did not constitute a valid agreement as it was not signed by Hazelwood, the vendor, nor was the agent lawfully authorised in writing to enter into such an agreement. The court distinguished the case from Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd, holding that the agent’s authority was not sufficiently documented to satisfy the statutory requirements. Consequently, the court ruled that Mercurio did not have a sufficient equitable interest to warrant the continuation of the caveat. However, the order for the removal of the caveat was stayed for seven days to allow Mercurio an opportunity to amend the grounds of the caveat.

The final orders included a stay of the removal of the caveat for seven days, during which Mercurio could amend the grounds of the caveat. This provided Mercurio with an opportunity to present a stronger case for maintaining the caveat. If Mercurio failed to amend the grounds within the stipulated period, the caveat would be removed, and Hazelwood would be entitled to the registration of title.