The Court held that under a private loan agreement providing for 2% monthly interest until the principal was 'paid off', interest was simple not compound, as there was no agreement for compounding. Applying Falk v Haugh (1935) 53 CLR 163, payments made without appropriation by the debtor are presumptively applied to interest before principal, but where the debtor clearly communicated at the time of payment an intention to appropriate to principal (via transaction descriptions and contemporaneous messages), and the creditor retained the funds without returning them within a reasonable time, the creditor was fixed with the debtor's appropriation. The promissory estoppel defence failed on the facts because the defendant did not adduce evidence establishing detrimental reliance — the refinancing merely substituted one debt for another and no evidence linked the representation to any change of position regarding property development plans.
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