Decorrado v Manoukian

In Decorrado v Manoukian, the parties were involved in a dispute concerning a loan agreement between the plaintiff, Decorrado, and the defendant, Manoukian. Decorrado sought to recover a sum of money from Manoukian, including interest on the loan amount. The matter was heard in the Supreme Court of Victoria. The primary legal issue the court needed to address was whether the loan agreement specified whether the interest payable was simple or compound. Additionally, the court had to determine whether interest was chargeable after the termination of the loan agreement.

The court analysed the terms of the loan agreement and considered whether the silence on the type of interest payable meant that simple or compound interest was applicable. The court held that the agreement did not explicitly state the type of interest, and therefore, the court was required to infer the intention of the parties. Given the context and nature of the loan, the court concluded that simple interest was the more likely intention of the parties. Furthermore, the court found that interest could not be charged after the termination of the loan agreement, as it would constitute an unauthorised charge.

Consequently, the court ruled in favour of Decorrado, awarding the principal sum and simple interest up to the date of termination of the loan agreement. However, the court also considered the costs incurred by both parties. Given the small sum involved and the recovery by Decorrado, the court ordered that the costs be paid by the successful party on an indemnity basis. The court further ordered that the balance of costs be awarded on the Magistrates' Court scale.