Can a special condition override the requirement to give 14 days' notice before a contract of sale of real estate is terminated?

In VS Property and Holding Pty Ltd v Zurzolo [2024] VSCA 199, the Victorian Court of Appeal had to determine the interpretation of a contract for the sale of real estate. The case involved a failure by the purchaser to settle on the original due date, and the entry by the parties into a deed which provided for an extension of the settlement date, with a specific term that failure to settle by the extended settlement date would result in the immediate termination of the contract. The purchaser failed to settle again on the extended due date, and the vendors argued that the contrct was termianted. The purchaser made an application for an order for specific performance of the contract, on the basis that the vendors had breached General Condition 27 by failing to provide a 14 day default notice to the purchaser. The trial judge dismissed the claim. The Court of Appeal had to determine specifically whether a 14-day notice was still required to terminate the contract and whether an order for specific performance could be made. The key points considered by the Court of Appeal were: - Clause 5 of the Settlement Deed: The parties agreed that if the purchaser (VS Property) failed to settle on the extended settlement date, the contract would be "immediately at an end" without the need for a 14-day notice. This clause was apparently intended to override the general condition (GC 27) of the contract, which required a 14-day default notice before exercising termination rights. - General Condition 27 (GC 27): This condition required that a 14-day notice be given to the defaulting party to remedy the default before any rights arising from the default could be exercised. The court held that Clause 5 of the Settlement Deed was not subject to GC27. The court found that Clause 5 provided for immediate termination upon default without the need for a 14-day notice, thus overriding GC27. The court reasoned that the specific terms of Clause 5 took precedence over the general terms of GC27. The court also dismissed the appeal which sought an order for specific performance of the contract. The court upheld that the contract was terminated automatically by the operation of Clause 5 upon the purchaser's failure to settle on the extended settlement date. In summary, the court concluded that a 14-day notice was not required to terminate the contract under the specific circumstances outlined in Clause 5 of the Settlement Deed, and an order for specific performance of the contract could not be made. As is often the case where purchasers fail to settle on the due date, and instead negotiate an extension to allow for a later settlement, the terms of the new arrangement need to be very clear. In this case, the purchaser negotiated an extension of time to complete the contract. In exchange, the vendors made it clear that there would be no further extensions and a failure to complete by the extended due date would result in the immediate termination of the contract. The Court of Appeal has confirmed that such an agreement can override the usual situation in Victoria where a defaulting party is allowed a 14 day period in which to remedy their default. WG Stark