Decorrado v Manoukian - [2009] VSC 451

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7536 of 2007

ALDO DECORRADO	Plaintiff
v
KHATCHICK MANOUKIAN & ANOR	Defendants

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	9–11, 16 JUNE and 9 DECEMBER 2009
DATE OF JUDGMENT:	23 DECEMBER 2009
CASE MAY BE CITED AS:	DECORRADO v MANOUKIAN
MEDIUM NEUTRAL CITATION:	[2009] VSC 451

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DEBTS – Construction of loan agreement – Loan agreement silent on whether simple or compound interest payable – Whether interest chargeable after termination of loan agreement.

COSTS – Calderbank letter – Order for costs to be paid by successful plaintiff on an indemnity basis - Recovery of small sum – Balance of costs awarded on Magistrates’ Court scale.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W. Stark	DKL Lawyers
For the Defendant	Mr G. Hardy	Law 554 (Gerard A. Conlan)

HIS HONOUR:

These reasons contain the revised reasons delivered ex tempore on 16 June 2009, together with reasons and determination of costs following the further hearing conducted on 9 December 2009.

In this case the plaintiff, Mr Decorrado, claims money outstanding on two loan agreements which he entered into with the first defendant, Mr Manoukian, and ancillary relief. Mr Manoukian was a licensed real estate agent. Mr Manoukian owned two properties. One was situated at 5 Peppermint Grove, Meadow Heights, and a second at 24 Piper Street, Fawkner in Victoria. A third property situated at 10 Bromwich Court in Mill Park at the relevant time was owned by Mr Manoukian’s former wife.

In mid-2005 Mr Manoukian was in urgent need of funds. Mr Cilmi was a person well known to Mr Manoukian. For a period of time Mr Manoukian conducted his business from Mr Cilmi's office. Mr Cilmi acted as a finance broker and conducted a business known as Northern Securities. He had an arrangement with Mr Decorrado, the plaintiff, to loan Mr Decorrado's money to approved persons on request from time to time. This was a relationship based on trust.

Mr Decorrado from time to time had a pool of money deposited with Mr Cilmi for this purpose. Customarily a high rate of interest would be charged on loans lent out by Mr Cilmi using Mr Decorrado's money. In this case the relevant loans were advanced on an interest rate of three per cent per month or 36 per cent per annum. In administering the loans Mr Cilmi and Mr Decorrado would customarily meet together, usually on a monthly basis, to discuss the position of the loans and make any adjustments between them as was determined to be necessary.

In June 2005 Mr Manoukian approached Mr Cilmi for a loan of $50,000. Mr Cilmi on behalf of Mr Decorrado agreed to make funds in the sum of $50,000 available to Mr Manoukian and make an advance on that basis. In order to formalise the loan that was proposed, Mr Cilmi engaged a Mr Sulfaro to draw up a loan agreement, which I will call…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Decorrado v Manoukian

Details

AGLC: Decorrado v Manoukian [2009] VSC 451
Case: [2009] VSC 451
Decision Date: 23 DECEMBER 2009

CaseChat Overview and Summary

In the case of Decorrado v Manoukian, the matter was heard in the County Court of Victoria. The dispute between the parties centred on the interpretation of a loan agreement, specifically whether interest was payable under the agreement and whether this interest was simple or compound. Additionally, the court had to determine if interest was chargeable after the termination of the loan agreement.

The primary legal issue was the construction of the loan agreement to ascertain the nature of the interest payable, as well as whether interest was chargeable post-termination. The court needed to determine if the silence in the agreement on the type of interest payable (simple or compound) could be clarified by extrinsic evidence. Furthermore, the court had to consider the effect of a Calderbank offer and its implications for the costs awarded.

The court found that the silence in the loan agreement regarding the type of interest payable did not permit the introduction of extrinsic evidence to clarify this matter. The court held that interest was payable only on a simple basis and not compound. Additionally, the court ruled that interest was not chargeable after the termination of the loan agreement. In terms of costs, the court considered the Calderbank offer and the small sum recovered, ultimately awarding the balance of costs on the Magistrates’ Court scale.

The court ordered that the defendant pay the plaintiff the sum of $17,763.72, representing interest on the loan from 16 July 2007 to 29 July 2019 at 6% per annum simple interest, together with costs on the Magistrates’ Court scale. The plaintiff was ordered to pay the defendant’s costs of the proceeding up to the date of the Calderbank letter.

Orders