Facts: loan was for 6.25 million at a rate of interest of 10.25%Loan was to become repayable on 26th march 2000.Contract stipulated in the event that repayment was not made by that date, default interest would be payable. Default interest rate was 16.25%It quickly became clear due to the delays that the project would not be completed.
"What's going to happen in March" at the expiry of the loan
Phil - lender - "All we're concerned with is getting the houses finished" "I can assure you nothing will happen if things are proceeding properly" "we will continue to fund the project"
Lender sent borrower the loan statement - 31st may 2000
Sometime after the repayment of the debt had been due
That statement showed the interest rate to that date being 10.25% (not the default rate of interest)
"Look, we're not going to break your balls if you get the houses completed" etc.
Properly developer alleged that as a result of those 3 communications he had been led to believe that the lender would not charge the default rate of interest