Patel v Naik

The claim is for a total of £54,266.55 paid for a consideration that has wholly failed alternatively damages for a repudiatory breach of contract. In plainer terms the Claimant contends that the Defendant had fraudulently misappropriated monies totalling that amount paid to him for investment purposes.

Before me the Claimant was represented by counsel and solicitors. The Defendant conducted the case in person. Until 30 September 2004 he was represented by counsel and solicitors, including upon various applications in these proceedings. In conducting his case the Defendant was not lacking in understanding, fluency, or persistence. Nor did the trial process seem to cause him any undue inhibition. Of course, every effort was made to seek to ensure that he was able to present his case to best effect. I should add that I am grateful to Mr Living, counsel for the Claimant, for the restrained and measured way he conducted his case, in particular his cross-examination of the Defendant, taking fully into account the fact of the Defendant not being legally represented.

The Claimant is by present occupation a taxi driver. The Defendant now aged 52 appears to have had a long career in business in various jurisdictions, including Malta and Canada. He is very familiar with forming and operating companies, as well as opening and operating bank accounts in a various jurisdictions and foreign exchange transactions. He described himself as having been a nominee director of over a hundred companies and of having an office for a long period in Malta. The documentary evidence refers to the owning or having owned various properties or having addresses in the UK, Canada and Malta. These include his present address, 3 Cyclops Mews, Cyclops Wharf, West Ferry Road, London E14. In his affidavit dated 9 March 2004 he states that he has a beneficial interest in that property with his wife. In the same affidavit he states that he is the legal owner of three other properties in the UK (two in Cyclops Wharf) albeit he owns those three properties on trust for his brother.

The Claimant gave broadly consistent evidence throughout. Indeed I found him to be a convincing witness and his case was well supported by documentation. In contrast, the Defendant’s response to the claim has mutated through a number of versions up to and including his closing speech. I shall refer to these mutations and various inconsistencies further below. Indeed, I found the Defendant to be not merely unconvincing and evasive but to be serially dishonest. He blatantly demonstrated Sir Walter Scott’s observation, “Oh what a tangled web we weave, when ... we practise to deceive!” His various accounts challenged credulity let alone credibility. The inevitable astonishment aroused in the listener by his prevarications was caused as much by the intrinsic incredulity of those accounts as by the shameless persistence of the Defendant in resisting acceptance of the obvious truth. If the Defendant had any appreciation of the oath that he took to tell the truth, it rapidly deserted him. Where the Claimant’s and the Defendant’s evidence of events differ, I unhesitatingly prefer the evidence of the Claimant.

The initial claim, commenced on 6 August 2001, was very generally pleaded as for the return of £55,000 funds allegedly paid to him for the purchase of “a property”. The Defendant’s response, by a similarly very generally pleaded Defence dated 31 August 2001, was that he had not received any of the amounts so claimed.

The nature of the claim is set out in more detail in Amended Particulars of Claim dated 20 September 2002. In summary, it is for the return of monies paid to the Defendant in 1999 and 2000 to invest in property in Canada for and on behalf of the Claimant, but which were not so invested. £30,000 was transferred on 20 August 1999 by the Claimant at the Defendant’s direction to an account in the name of Belgravia Property Developments Ltd. (“Belgravia”) at Standard Chartered Bank (“SCB”) in Mayfair, London. Further amounts totalling £24,266.55 were paid in 2000 by the Claimant to the Defendant or at his direction for investment in syndicated property investments in Canada. Monies were paid partly in cash (£2,000), partly by bank transfer (C$20,000 or £8,766.55) and partly by 3 cheques, two made out to the Defendant for £6,500 and £3,500 respectively and the third also for £3,500 to a company, Plasto Ltd. (“Plasto”). The Defendant’s original defence was replaced by what I shall call his Amended Defence dated 20 June 2003 and I shall refer further to aspects of this below.

Each party has provided witness statements. The Clamant has provided four, the first dated 4 October 2001 (in support of an application for summary judgment), the second dated 3 November 2003 (in response to a strike out application by the Defendant), the third dated 28 January 2004 (in support of a freezing order against the Defendant) and a fourth dated 28 September 2004. The Defendant has provided two witness statements, the first dated 16 November 2001 (in response to the Clamant’s application for summary judgment and the Defendant’s counter-application to strike out or for summary judgment) and the second dated 28 September 2004. He also provided an affidavit of means dated 9 March 2004 in response to disclosure requirements in a freezing order made by Bell J. on 4 February 2004. There is another witness statement dated 19 August 2003 from Mr Gerber, the senior partner of Feltons Solicitors who were representing the Defendant at the time. This was provided in connection with the Defendant’s application to strike out elements of the Amended Particulars of Claim and/or for summary judgment or for an order that the Claimant provide replies to a request for further information. I should emphasise that nothing in this judgment should be taken as any criticism or slight on Mr Gerber, Feltons or counsel instructed to draft the Amended Defence. They acted on information provided to them by the Defendant and appear to have acted with the utmost propriety.

Both parties gave evidence on oath. The Claimant was cross-examined by the Defendant personally, aided by me. The Defendant gave evidence in chief by reference to his witness statements, again aided by me and was cross-examined by Mr Living for the Claimant. The Defendant made a closing speech. Mr Living did so also for by reference to written outline submissions.

Although the parties seem to have had some previous acquaintance with each other, relevant events start from the Defendant’s visit on 8 June 1999 to the flat of the Claimant and his wife, 67, Topmast Point, The Quarter Deck, London E14. The occasion for the visit was the Claimant’s wish to raise money in order to invest in property in India. A mutual friend, Mr Kanji, had suggested to the Claimant that the Defendant would be able to assist him in raising money on the security of his flat. The Claimant explained that he had had previous difficulty in raising mortgage finance, apparently because his was an ex-council flat situated above the seventh floor of a block.

The Defendant brought an application form for finance from Casley Finance Ltd. It was not in dispute that this form was completed by the Defendant and signed by the Claimant and his wife. The loan required is stated as £40,000. In the form the purpose of the loan is stated as a deposit on a new property, and the name and address of the applicants’ financial adviser/broker is stated as Mr Rajeev Naik of 3 Coborn Road, London E3. The parties were in dispute as to whether there was one or two visits by the Defendant to the Claimant’s flat. The Claimant maintained that there was only one visit. The Defendant asserted that there were two visits and it was on the second visit that answers were inserted in the form as to the purpose of the loan and the naming of the Defendant as the applicants financial adviser/broker. The Claimant asserted that the Defendant gave him his business card on his one visit whereas the Defendant asserted that it was on his second visit. I do not find it necessary to resolve such disputes.

On the business card, the Defendant’s name is inscribed in italics in the middle. Above there appears the heading “TURLING PROPERTY SERVICES (CANADA) INC” and a sub-heading “INTERNATIONAL PROPERTY SPECIALISTS”. Beneath the Claimant’s name appears an address, “Turling House, 47 Granby Street, Toronto ..., Canada” and a Canadian telephone and fax number. Beneath those details is inscribed “ALSO OFFICES IN UNITED KINGDOM.”

The Clamant gave evidence to the effect that the Defendant said that he was the owner of the company which I shall refer to as “Turling”. The Defendant disputed this. I prefer the Claimant’s evidence on that point. I also accept his evidence that the Defendant held himself out as a financial adviser or broker and property investment adviser.

The Claimant maintained that the Defendant dissuaded him from his original intention of investing in property in India and rather to invest in property in Canada. The Defendant maintained that he merely pointed out that investment in India was risky owing to exchange rate fluctuations and that he merely presented the Claimant with some listings or particulars of six or seven properties in Toronto and that the Claimant made his own decision to invest in Canadian property. I prefer the Claimant’s account. I am satisfied that the Defendant persuaded him to invest through him in property in Canada. The Claimant maintained, and I accept, that he was so induced by reason of the trust he had in the Defendant, having been introduced by a close friend and the impression he gained from the Defendant of his apparent experience and expertise as a financial and property adviser. This impression was derived from the Defendant holding himself out as such.

The loan application for £40,000 was successful and around that sum was remitted by the lender to the Claimant’s then solicitors, Edwards Duthie. They were then directed by the Claimant to transfer £30,000 to the account of a company, Belgravia, at SCB. The Claimant’s evidence has been consistently to the effect that he had no previous knowledge of that company or its account at SCB and that the Defendant told him to make the £30,000 to that account for the purpose of investing in property in Canada. The Defendant accepted in his closing speech that he told the Claimant to transfer the £30,000 to the Belgravia account at SCB. Previously he disputed this.

After this initial investment, the Claimant’s evidence is that he was induced by the Defendant to make further payments in investment property in Canada, this time in a managed portfolio or a syndicated property investment. The Defendant told him that only he and the Defendant would be in a syndicate with 40% and 60% shares respectively. Further the Defendant agreed to open a bank account in his name with the Royal Bank of Canada. I note that the Defendant did open a bank account in the Claimant’s name with the Royal Bank of Canada in New York (USA) but the address given on the account is Apt 611 40 Homewood Ave, Toronto (Canada). The Defendant accepted in evidence that that is his Canadian address. There is no evidence of the Defendant having paid any of the payments made by the Claimant into that account.

The further payments totalled £24,266.55, this money being borrowed by the Claimant from a number of sources. Monies were paid partly in cash, partly by cheques and partly by bank transfer.

As to the cash, the Claimant maintains that he paid a total of £2,000 in cash to Defendant between January and March 2000.

As to cheques, the Claimant maintains that in March 2000 he gave the Defendant four cheques signed by him but blank as to date, payee and amounts. He trusted the Claimant to fill in these details. Three of these cheques were sequentially numbered 100057, 100058 and 100059. The original and copies of these cheques were adduced in evidence. Cheque no. 100057 for £6,500 is dated 20 March 2000 and made out to the Defendant. Cheque no. 100058 for £3,500 is also dated 20 March 2000 but is to Plasto Ltd. Cheque no. 100059 for £3,500 is dated 10 July 2000 and made out to the Defendant. These cheques were met by the Claimant’s bank on 22 March 2000 in the case of the first two cheques and on 14 July 2000 in the case of the third, as apparent from the Claimant’s bank statements. The Claimant maintained in evidence that he cancelled the fourth cheque in about August 2000 following his concern over the Defendant having failed to explain satisfactorily what he had done with his money

As to the bank transfer, the Claimant maintained that he gave instructions to his bank, Barclays, to transfer $20,000 to Turling. There were included in the trial bundle a copy of the transfer instructions and of the corresponding bank statement which shows the transfer and the debit of the sterling equivalent of £8,788.55 on 6 April 2000.

The Claimant became increasingly concerned as to what the Defendant had done with his money and pressed him for explanations. The Defendant’s eventual response was to provide three acknowledgement letters, each with Turling’s name at the top and with the 47 Granby Street, Toronto, address at the bottom and the same telephone and fax number as on the Defendant’s business card.

The first [C73] is dated 1 August 2000and addressed to the Defendant at Apartment 5A, 47 Granby Street and signed by a Mr G. Ruwanpura on behalf of Turling. It states, “Dear Rajeev, We hereby acknowledge the receipt of Canadian Dollars 22150 ...collected by you on behalf of the company from Mr Kirit Patel towards his share of contribution of the managed portfolio.”

The second [C72] acknowledgment is dated 28 February 2001 and the third is dated 21 May 2001. Both state the Claimant’s income for the year ending 31^st December 2000 and the expectation for it to be the same for the following year. However, they contradict each other as to the amount of the income. The second acknowledgment states that the Claimant’s Agross share of the rental income of the rental income from the portfolio of properties managed is $48350@. The third acknowledgement states that the Claimant had Aa gross income of C$25000 from his share of the managed portfolio.@ The second is acknowledgment is signed on behalf of the Turling. The signature bears a close resemblance to the Defendant’s signature elsewhere, but he denied it was his when giving evidence. The third acknowledgment is signed on behalf of Turling by Mr Ruwanpura.

The second and third acknowledgments are curious in several respects. First, it is strange that the Claimant’s gross share or income from the same portfolio of properties should be differently stated and by so wide a margin. Secondly, even if the amount is taken as C$25,000 it is an oddly round figure and, more significantly, it is a very large return for the year ending 31 December 2000 on sums invested totalling some £54,267. Nor was that total invested throughout that year, in that the Claimant paid to the Defendant for investment ,10,000 on 22 March 2000, ,8,767 on 6 April 2000 and ,3,500 on 14 July 2000. Assuming the £54,267 had been invested for the whole of 2000, the C$25,000 return would represent a return of around £10,965 or over 20%, based on the ,1:C$2.28 conversion rate (taking into account bank charges) apparent from the transfer made through Barclays Bank by the Claimant on 6 April 2000. Adjusted for the fact that the Claimant’s payments made well after the start of 2000, the return is around 24%. If the return taken is the C$48,350 in the second acknowledgment, the apparent return calculated on the same bases is remarkable, namely 39% or, as adjusted, 46%.

The Claimant was not satisfied and commenced proceedings against the Defendant on 31 August 2001. As investigations were made it became increasingly apparent that the Defendant’s various contentions did not stand up to scrutiny.

The Claimant’s solicitors procured searches and inquiries to be made by a Canadian search agency on Turling Property Services Inc. and Turling Property Services (Canada) Inc. (i.e. ATurling@), the 47 Granby Street address and the telephone and fax numbers shown on the Claimant’s business card. Search reports were provided dated 20 March 2002 and 28 November 2003. According to the second report, a search of Ontario corporate records on Turling showed that the company was incorporated on 28 February 1989 in Ontario, that its Acharter [was] shown as being active and in good standing@ and that its address was 47 Granby Street, Toronto. According to the first report, both telephone and fax numbers were listed to Mr R. Naik at the same address. In November 2003 the number had been reassigned to local television station but there were still several telephone listings in Toronto for R. Naik, but none for a firm called Turling. No information is given in either report as to the directors or shareholders of Turling or any financial information. The explanation is given that private companies registered in Canada are exempt from filing accounts for public scrutiny. The second report goes on to record Turling’s solicitor as William Ash. According to the second report, when contacted by the search agency, he confirmed that he was Turling’s lawyer. He stated that Turling’s Aprincipal@ was out of Canada at the time and would not be returning for another month. He declined to give further information. This reports were not challenged by the Defendant and he confirmed in evidence that he knew Mr Ash.

In his first witness statement, the Defendant describes himself as having been employed by Turling as a property manager until he ceased working for the company when he moved and settled in the UK in January 2001. He states that he was not involved with the company management or investment side. Nevertheless (somewhat inconsistently with being only a property manager) he visited the UK one week every month to Aliaise.. with investors in property syndicates@ (as explained), as well as to visit his family. He records his understanding that the investors were provided with a statement as to the performance of their investment of the like provided to the Claimant. He states that he does not Aimmediately recall which properties the Claimant invested in. This information will of course be available when necessary documents are obtained in Canada.@

The Defence so far as it relates to Turling is much to the same effect. Turling is described as having an office at Turling House, 47 Granby Street, Toronto and being Aactive in the UK@.

In his second witness statement, the Defendant adds that he worked for Turling from 1998 to 2002. He was provided with an apartment at 47 Granby Street to work out of. A telephone line was set up in the apartment in his own name. The company also used the same number and he was reimbursed for its rental costs. He continues, AAs Turling was a small firm my employment status was informal. As a result I never had an employment contract with Turling. @

The Claimant’s solicitors also procured a search to be carried out on a UK company with an almost identical name to Belgravia, but this had no association with the Defendant. As later established on behalf of the Claimant, the company called Belgravia associated with the Defendant is or was an overseas company. Copies of Belgravia’s bank account statements were procured from SCB pursuant to a disclosure order dated 3 December 2003 made upon the Claimant’s application under the Bankers’ Books Evidence Act. The statements received pertain to entries in 1999 and 2000 and on three accounts, each with a eleven figure number and opened on 25 January 1999. The last two numbers of each bank accounts are 01, 02 and 03 respectively. An entry on the 01 account for 20 August 1999 shows ,30,000 as having been received in the account on 20 August 1999 from the Claimant’s solicitors. Most statements show Belgravia’s address as Ac/o Mr K.R. Naik, 3 Cyclops Mews, Westferry Road, London E14.@ Other statements show Belgravia’s address as Ac/o Mr R.V..Naik 191 Merchant Street, Valetta, Malta@. I observe that the Defendant is R.V. Naik and his wife is K.R. Naik. An entry on the 03 account for 8 November 1999 shows ,906.35 as having been received from Mr R. Naik.

In his first witness statement (paragraph 19), the Defendant denies any knowledge of a company called Belgravia and denies directing the Clamant to make a payment of ,30,000 or any other sum to that company. The denial is continued in the Amended Defence dated 20 June 2003 (paragraphs 11 and 14). Mr Gerber in his witness statement dated 19 August 2003 states (clearly recording the Defendant’s instructions) that the Defendant was not responsible for Belgravia (paragraph 4). The Defendant plainly had such knowledge and some responsibility for its bank statements, as is apparent from Belgravia’s bank statements obtained following the disclosure order obtained some six months later. There is a partial retraction of the previous denials in his second witness statement (paragraph 22) with the following explanation, AAlthough I had received bank statements for [Belgravia] at my then offices in Malta and subsequent to my resignation in Feb/Mar 1999 as nominee director at the owners insistence at 3 Cyclops Mews London. I believe that this position was brought [sic] by the bank by virtue of my position as nominee director for several companies. In my previous statement, I had stated I had no knowledge of [Belgravia]. I was referring to lack of knowledge of dealings of [Belgravia]@. However, he continued to dispute giving an instruction to the Claimant to make the transfer to Belgravia (paragraph 22).

The Claimant’s solicitors also procured a search to be carried out on Plasto. The search report provided in January 2004 records the company as having been incorporated in the UK but it was struck off the register on 16 October 2001 and dissolved on 23 October 2001. Its registered address was 3 Coborn Road, Bow, London E3, the Defendant’s present UK address. The Defendant was a shareholder and a director, as was his brother Mr Sanjeev Naik. The Defendant’s address was recorded in the Companies Register as one at Hans Crescent, London SW1.

In the Defendant’s first witness statement dated 16 November 2001, no mention is made of Plasto as such. However, the Defendant denies receipt of cheque number 100058 in fact made out to Plasto (paragraph 15) . In the Amended Defence dated 20 June 2003, it is pleaded (paragraphs 20 and 24) that the Defendant had no knowledge or connection with Plasto. Mr Gerber in his witness statement dated 19 August 2003 states that he had been instructed by the Defendant that he had no knowledge of Plasto (paragraph 17.1) The Defendant plainly had such knowledge as is apparent from the search report obtained seven months later. Also in the Amended Defence (paragraph 24) it is denied that the Defendant gave no direction that a cheque for ,3,500 be drawn in favour of Plasto. It is plain that he did so. The handwriting on the cheque is his and he was a director and shareholder of Plasto at the time.

The Defendant’s position by the time of trial can broadly be summarised as follows. The claim should be directed against Turling and he was not liable as a mere employee. The Claimant’s agreements were with Turling not him. His position as to the various payments was as follows:

The Defendant’s prevarications continued at trial with additional elaborations.

As to the transfer to Belgravia, the two cheque payments to him and the transfer of C$20,000, he broadly maintained his previous position.

As to the cheque payment to Plasto, he Aremembered@ that his brother had told him that the money paid to Plasto had been forwarded to Turling. He accepted, moreover, that the handwriting on the cheque was very similar to his but added that it could be his brother’s. I interpose that a consent order was made on 25 February 2004 for a hand writing expert to be jointly instructed. The intent was for the expert to compare a sample of the Defendant’s handwriting with the writing on the Plasto cheque and other documents. The Defendant was requested to provide a sample but he only provided samples of signatures. The samples look very different from what the Defendant accepts to be his usual signature on other documents. He maintained that he suffered from an arthritic condition which entailed that from time to time he was unable to write as he normally would.

As to the cash payments, he related that Mrs Patel, the Claimant’s wife, had given him a bundle of cash in a supermarket plastic bag when he was about to return to Canada. He did not check or count the money, but gave it upon arrival to, as far as he recalls, Mr Ruwanpura. When the latter or another Turling employee handed in the money at a branch of Thomas Cook some of the notes were found to be counterfeit. He was called to Thomas Cook to explain the origin of the money, but there was no further enquiry or recourse to him. The police were apparently not alerted. He maintained that his earlier failure to mention that he had received such money from Mrs Patel was consistent with his denial of receipt of the money from Mr Patel.

He gave further accounts about the operations of Turling and his attempts to discover what had happened to the Defendant’s monies. He explained that when he was employed at Turling its head office and accounts department was at an address in Yonge Street, North York, Toronto. As its operations expanded, it moved its property management operations to 47 Granby Street which consisted essentially of a single room Ahome office@ although later works were done to combine it with like home office in the same block. He worked from there together with Mr Ruwanpura and three others. Although initially employed as a finance manager, his role developed into one of a property manager. Asked whether he had a contract of payment or received payslips, his refrain was that Turling was a small company and did not provide them. Nor was he able to explain satisfactorily why the Claimant as an investor was not provided with any information as to the properties or syndicates in which his monies had been purportedly invested or print-outs of his investment returns. He sought to maintain that the second and third acknowledgments amounted to the requisite information. He affected relative ignorance about the operations of the company and minimised his appreciation of its operations and his own role. As to his dealings with the Claimant he characterised his role as no more than a courier or an Ahonest postman@ for Turling. He asserted that while he delivered the previously noted third acknowledgment to the Claimant in an envelope, he did not open it at the time and was unaware of its contents.

He maintained that when he visited 47 Granby Street in January 2002 there was no sign of the presence of Turling or its employees. Similarly there was no sign of them at the Yonge Street premises. He said that he did not have any information whereby he could contact former employees including Mr Ruwanpura. I observe that he did not even seek to look im up in a telephone directory. Nor could Turling’s lawyer, Mr Ash (with whom he had been acquainted) assist. In short, the Defendant’s evidence was to the effect that Turling was a corporate Marie Celeste.

In closing, Mr Living submitted that in considering the claim I should address following questions. First, what was agreed? Secondly, what monies were paid and to whom? Thirdly, was the Defendant liable to account for payments to Belgravia, Plasto and Turling? Fourthly, have the monies been invested? Fifthly, if it is found the monies have not been invested as per the agreement, is the Defendant liable to account to the Claimant for, and repay, those monies? Sixthly, does the source of the Claimant’s funds have any bearing on the issue? I accept that those questions provide an appropriate framework for analysis.

As to the first question, I conclude that there were one or more agreements between the Claimant and the Defendant whereby the Defendant agreed to invest monies paid to him or at his direction (i.e. to Belgravia, Plasto and Turling) in property or property syndicates in Canada. What induced the Claimant to pay such monies was his confidence and trust in the Defendant personally based on their mutual friendship with Mr Kanji and the Defendant’s self-professed experience of the Canadian property market. While the business card provided by him had Turling’s name on it, as well as that of the Defendant, that fact did not convey to the Claimant that the Defendant was acting as mere agent for the Defendant. The Claimant had no intention of contract with Turling which he had never previously heard of.

As to the second question, I conclude that the monies claimed were paid to the Defendant personally as to ,2,000 by cash and as to ,10,000 by two cheques for ,6,500 and ,3,500 and as to the remainder at his direction to Belgravia as to ,30,000, to Plasto ,3,500 and as to C$20,000 (,8,788.55 equivalent) to Turling.

As to the third question, the Defendant is liable to account for the payments to Belgravia, Plasto and Turling.

As to the fourth question, I conclude that the monies have not been invested as agreed between the parties. The overwhelming inference from the evidence is that the Defendant has misappropriated the monies to his own use.

As to the fifth question the Defendant is liable to account to the Claimant for, and to repay, those monies. The better analysis is the primary restitutionary basis of the pleaded claim, the consideration for the monies paid pursuant to the agreements between the Claimant and the Defendant having wholly failed. The monies would alternatively be recoverable as damages for repudiatory breaches of the agreement.

As to the sixth question, the source of the funds paid by the Claimant to the Defendant is immaterial. This question arose only because of the Defendant’s misconception that if I were to have accepted his account (which I do not) that cash had been given to him by the Claimant’s wife as opposed to the Claimant, that would have provided him with a defence to the claim for in respect of the cash payments. It is a misconception because in such event the Claimant’s wife would plainly have given the cash to the Defendant as the Claimant’s agent. I should add that the claim for ,2,000 cash is evidentially the weakest element of the claim. The cash withdrawal slips and credit card counterfoils produced in support of the claim do not establish that the sums indicated thereby were paid to the Defendant. However, I accept what the Claimant asserts, namely that he gave cash amounts totalling ,2,000 to the Defendant.

This judgment does not merit extension in order to chase the tails of tangential dissemblance which punctuated the Defendant’s oral evidence throughout. Suffice to conclude, as I do, that his evidence and defence were rotten from tangents to the core.

There will be judgment for the Claimant for the claimed amounts totalling ,54,266.55 plus interest. I invite further submissions as to the detailed calculation of interest and costs.