Morton v Elgin-Stuczynski & Anor

(2008) 19 VR 294; [2008] VSCA 25

Victorian Court of Appeal

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Contract
2. › Construction
3. › Ambiguous terms
4. › Whether loan agreement required payment of compound or simple interest
5. › Reference to bank interest rate
6. › Whether reference to rate charged by bank incorporated method of calculation
7. › Surrounding circumstances admissible to resolve ambiguity
1. Contract
2. › Construction
3. › Distinction between interpretation and implication of terms
4. › Whether compound interest required implication of a term or was matter of interpretation
5. › No presumption in favour of simple or compound interest
6. › Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
1. Contract
2. › Construction
3. › Parol evidence rule
4. › Admissibility of extrinsic evidence of surrounding circumstances
5. › Ambiguous contractual language
6. › Evidence of relationship between parties

Quick Take

A reference in a private loan agreement to the rate of interest charged by a bank may, on proper construction in light of surrounding circumstances, require interest to be calculated on a compound basis consistently with banking practice, even where the lender is not a bank. There is no presumption in favour of either simple or compound interest; the question is purely one of contractual interpretation.