Break Fast Investments Pty Ltd v Perikles Giannopoulos

Judgment 1I delivered judgment in these proceedings on 9 December 2011 ("my earlier judgment") and held that the claim brought by Break Fast Investments Pty Limited ("Break Fast") against Mr Giannopoulos in unjust enrichment should succeed to the extent of any retained enrichment which Break Fast could establish on the evidence. 2I noted, in paragraph 84 of that judgment, that Break Fast had made no substantive submissions as to how certain matters were to be taken into account in determining the extent to which Mr Giannopoulos was enriched focussing instead on a claim to recover the entirety of the monies which it had paid. I had also noted that there was some force in Mr Giannopoulos' submission that, in the absence of such submissions, the claim for unjust enrichment should fail. However, I expressed the view that: "I do not consider that it would be proper to simply dismiss Break Fast's claim under this head for that reason. The preferable course, in my view, is to allow the parties the opportunity to make short additional written submissions as to the extent of any enrichment of Mr Giannopoulos, having regard to the findings which I have reached above. I propose to allow the parties the opportunity to do so." 3The process of further submissions has exposed additional issues which now require resolution. Break Fast made written submissions on 27 January 2012; the Defendants replied by written submissions on 10 February 2012; and the matter was listed before me for oral submissions on 15 February 2012. In the course of those oral submissions, an issue arose as to the potential relevance of Mr Giannopoulos' personal liability in respect of loans made by Citigroup Pty Limited ("Citigroup") in respect of the unit in Clarence Street Sydney ("Unit 1201") to which I had referred in my earlier judgment. I directed Break Fast to deliver a summary document identifying any further articulation of the basis of the unjust enrichment for which it contended and allowed the Defendants the opportunity to deliver a responsive document. Break Fast responded to that invitation by lodging further written submissions and a schedule of relevant material in evidence in the proceedings. Mr Giannopoulos has in turn responded to those submissions. 4I have been conscious that the course of permitting further submissions as to this issue has allowed Break Fast several opportunities to formulate, or reformulate, the matters which it contends amount to unjust enrichment of Mr Giannopoulos. Although that course did not involve reopening the case after a final judgment resolving all issues, the principles applicable to the exercise of the Court's discretion in that regard provide some assistance. It is well-established that, except in exceptional circumstances, a party should not be permitted, after a case had been decided against it, to raise a new argument which it failed to put during the hearing when it had an opportunity to do so: Metwally v University of Wollongong (No 2) [1985] HCA 28; (1985) 60 ALR 68 at [71]. At the same time, there are circumstances in which allowing reopening is appropriate to allow a matter to be addressed by a trial judge which would otherwise be open on appeal, and the Court's discretion whether to permit that course must be exercised in the interests of justice: Twenty-First Australia Inc v Shade & Anor [1998] NSWSC 325; Wentworth v Wentworth [1999] NSWSC 638 at [8]; Wentworth v Rogers [2002] NSWSC 921 at [5]; MK and JA Roche Pty Ltd v Metro Edgley Pty Ltd [2004] NSWSC 780; Kernaghan v Corrections Corporation of Australia Staff Superannuation Pty Ltd (No 2) [2007] FCA 1040 at [13]. 5The relevance of those principles is heightened because I had observed in my earlier judgment that Break Fast cannot have contributed more to the monies paid down on the Homebush mortgage than the amount of the reduction in the principal on Unit 1201 and pointed to the other contributions to the monies applied to that mortgage. The argument put by Break Fast in further submissions has the capacity to outflank that observation by focussing on a different measure of Mr Giannopoulos' enrichment, namely the discharge of his personal liability to Citigroup and for strata levies in respect of Unit 1201. 6On balance, I considered that the course of permitting further submissions was appropriate having regard to the risk that a determination of the nature and quantum of Mr Giannopoulos' enrichment on the basis of incomplete legal submissions would not have led to a just resolution of the proceedings. The relevant principles 7In my earlier judgment, I reviewed the case law relating to the question whether a claim in unjust enrichment allowed Break Fast to recover the amount of the monies initially paid to Mr Giannopoulos, or only the extent of any benefit which he had retained from the receipt of those monies. I should return to that issue, because it was the subject of further submissions before me and is critical to the relief that should be permitted. 8The relevant principles are summarised in Mason & Carter's Restitution Law in Australia at 124 [305], in a passage approved by Allsop P (with whom Campbell JA and Handley AJA agreed) in Heperu Pty Ltd v Belle [2009] NSWCA 252; (2009) 76 NSWLR 230 at 260 [127], as follows: "A personal cause of action, deriving from the count of money had and received, is available to the owner of money ... that can be traced to someone who did not take the money as or from a bona fide purchaser for value without notice of defect of title ... The independent restitutionary claim is one means whereby the plaintiff's property right is vindicated. Merely because the defendant has paid over the money to a third party provides no defence to the personal claim, but defences including change of position are available." 9The learned authors also express the view, which was the subject of further comment in Heperu v Belle to which I will refer below, that: "The common law personal remedy does not require proof that the defendant 'retains' the plaintiff's money. As with receipt by mistake or in consequence of improper pressure, the enrichment component stems from the receipt, although later dealings such as change of position may mean that it is no longer just to award restitution. The defendant from the outset lacked title vis-à-vis the plaintiff to retain the monies received. We therefore disagree with the recent obiter remarks to the contrary of the Queensland Court of Appeal. The recipient who pays away in circumstances that do not attract the defence of change of position or any other defence is liable." 10I addressed the nature and quantum of the unjust enrichment in this case in paragraphs [74]ff of my earlier judgment. I there referred to the decision of the High Court of Australia in Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; (1988) 164 CLR 662 at 672-673, where the High Court observed that: "The fact that specific money or property received can no longer be identified in the hands of the recipient or traced into other specific property which he holds does not of itself constitute an answer in a category of case in which the law imposes a prima facie liability to make restitution. Before that prima facie liability will be displaced, there must be circumstances (eg payment was made for good consideration such as the discharge of an existing debt) or, arguably, that there has been some adverse change of position by the recipient in good faith in reliance on the payment." Break Fast relies on that observation to contend that the amount of Mr Giannopoulos' enrichment was the amount he received, as distinct from the amount retained by him. However, in that case, Westpac had conceded prima facie liability to repay the amount it received, subject to whether a defence was established by subsequent events. The observations of the Court in that case were therefore directed, not to the question of the quantum of the enrichment, but to whether the fact that monies received had subsequently been paid out would establish a defence to a claim for unjust enrichment. 11In Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, like the present case, the relevant funds were received by a third party. Lord Templeman emphasised the importance of the retention of received funds, noting that: "Repayment by the club to the victim, limited to the net amount of stolen money which the club retains, will not inflict a net loss on the club as a result of the transactions between the club and the thief" (at 563). Lord Goff reached the same result by an application of the change of position defence (at 578-582); in Heperu v Belle, Allsop P summarised his Lordship's reasoning as that "there was a prima facie obligation to repay all received monies, less a deduction based on a defence of change of position". Mr Giannopoulos seeks to distinguish Lipkin Gorman in his further submissions on the basis that Lord Templeman was addressing a pool of ascertained funds and no such pool exists in this case. I do not understand such a distinction to be established; in Lipkin Gorman, the relevant funds were received and presumably applied by the gambling club in the ordinary course of its business and, here, as I will note below, the funds received by Mr Giannopoulos from Break Fast were paid to discharge Mr Giannopoulos' liability for principal, interest and fees to Citigroup and his liability for strata levies on Unit 1201. 12I also referred in my earlier judgment to the decisions in Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2002] QCA 158; [2003] 2 Qd R 661 at 670, Ford by his Tutor Watkinson v Perpetual Trustees Victoria Ltd [2009] NSWCA 186; (2009) 75 NSWLR 42 and Heperu v Belle. In Heperu v Belle, Allsop P (with whom Campbell JA and Handley AJA agreed) referred to the view expressed by Mason, Carter & Tolhurst that the common law remedy does not require proof that the defendant "retains" the plaintiff's money and expressed the view that retention of the fund was the gravamen of an unjust enrichment claim in Banque Belge pour l'Etranger v Hambrouck [1921] 1 KB 321 (at law), Lipkin Gorman and Port of Brisbane Corporation v ANZ Securities Ltd (No 2). Allsop P had there noted that the common law right focussed upon "the measure of the value surviving in the hands of an innocent voluntary recipient when notice of the claim is received, rather than the measure of value received"; observed that "[t]his can be recognised as conformable with the underlying conception that it is the inequitable retention of money or benefit that lies at the root of unjust enrichment"; and noted that there is every reason for coherence between the operation of the common law and equity in this respect and that this approach conforms with the approach to recovery in Lipkin Gorman. Allsop P summarised the position as that: "The remedy, both at law and in equity should focus upon the value properly attributable to the earlier receipts derived from misappropriations and still retained by the volunteer at the relevant time" (at [157]). 13I expressed the view in my earlier judgment that I was bound to follow the Court of Appeal's decisions in Ford v Perpetual Trustees Victoria Ltd and Heperu v Belle and determine the claim by reference to the enrichment retained by Mr Giannopoulos at the relevant time, namely October 2009 when notice of Break Fast's claim was given to him (at [80]). That approach was adopted by Slattery J in Heperu Pty Ltd v Belle [2011] NSWSC 1151 at [51], [53], when the matter was remitted to his Honour, where his Honour noted that: "In my view the appropriate measure of Ms Belle's obligation to restore funds derived from her husband's misappropriations to the extent as a volunteer she retains those funds, is to identify what benefits are in her hands when she receives notice of Heperu's claim... As Allsop P pointed out in Heperu Pty Limited v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252 at [158] "retention of the fund is the gravamen of such a claim, consistently with the reasoning in Banque Belge L'Etrager v Hanbrook [1921] 1 KB 321 and Black v S Freedman & Company [1910] ACA 58; 12 CLR 105 and see also Ford v Perpetual Trustees Victoria Limited [2009] NSWCA 186." 14Break Fast correctly points out that this case is different from Heperu v Belle in one respect, namely that Mr Giannopoulos received the funds paid by Break Fast into the Citibank Offset Savings Account referrable to Unit 1201, whereas the Court of Appeal had found that Ms Belle could not be treated as having received the funds paid into the Perpetual or Westpac accounts in that case, but only the benefit of payments from those accounts toward mortgages of properties which she owned. I do not understand the observations of the Court of Appeal as to the applicable legal principles to be limited to that factual situation. However, the distinction to which Break Fast refers will be relevant to the application of those principles in the particular facts as noted below. 15I should add that, at least in the case of a person who receives the relevant monies, the difference between the approach expressed in Mason, Carter & Tolhurst (to which I have referred in paragraph 9 above) on the one hand and the approach articulated by Allsop P in Heperu v Belle (to which I have referred in paragraph 13 above) which was followed by Slattery J when the matter was remitted to him on the other, may not affect the outcome of a particular case. The same result may be reached by focussing on the retained benefit or looking first to the amount of the monies received and then separately to the change of position defence. That is, of course, what occurred in Lipkin Gorman where Lord Templeman and Lord Goff had reached the same result by those two different approaches. 16In its submissions as to relief, Break Fast also draws attention to the summary of the principles of unjust enrichment by Einstein J in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2011] NSWSC 267 at [20]ff. His Honour's decision provides a helpful and succinct summary of those principles and rightly draws attention to the importance of the factual basis of any unjust enrichment claim. However, the facts of the case before his Honour did not raise the difficulties which arise in this case, since there appears to have been no suggestion in that case that the defendants had not retained whatever benefits they had received. The application of the monies received by Mr Giannopoulos 17I had made several findings of fact in my earlier judgment that are relevant to the application of the monies received by Mr Giannopoulos and the quantum of any unjust enrichment of Mr Giannopoulos. Mr Giannopoulos received the amount of $317,000 from Break Fast in payments which were not properly authorised, which were paid into Mr Giannopoulos' Citibank Offset Savings Account over the period 26 May 2006-26 October 2009. That money was applied, inter alia, to payments of principal and interest on a loan made by Citigroup over Unit 1201. Mr Giannopoulos was placed on notice of Break Fast's claim to repayment of that amount in October 2009. I also found that the amount of the reduction in principal on Unit 1201 between May 2008 and November 2009 was no more than $20,206 and that amount reflected not only monies received from Break Fast but also third party deposits as well as monies contributed by Mr Giannopoulos. (Both parties seek to recalculate that amount in their further submissions before me, but it is not necessary for me to address this question given the findings which I have reached below). On settlement of the sale of Unit 1201 on 30 July 2010, Mr Giannopoulos paid "surplus" proceeds of $282,670.45 into the loan account for another property, the Homebush property. 18Break Fast's further submissions contained a detailed reconciliation of subsequent payments by Break Fast into that account, deposits by Mr Giannopoulos into that account and expenditures by way of principal and interest on the loan, account fees payable to Citigroup and strata fees paid from that account, derived from the monthly statements for that account which are in evidence (Ex D8 tab 50ff). For a significant period from 1 January 2009 on, the only payments into that account (with the exception of one deposit made by Mr Giannopoulos which was withdrawn the next day and therefore did not become available to fund repayments on Unit 1201) were made by Break Fast. Break Fast contended that, where Mr Giannopoulos' funds and its funds were mixed in that account in the earlier period, the Court should assume that Mr Giannopoulos withdrew his own funds first in accordance with the approach in Re Hallett's Estate; Knatchbull v Hallett (1880) 13 Ch D 696. Mr Giannopoulos submitted that the funds should be applied in the order in which they were received and paid. Mr Giannopoulos also denied that a particular cheque related to strata fees, but did not draw attention to any evidence which supported that submission. Mr Giannopoulos conceded in his further submissions that he was enriched by the amount by which the principal on the Citigroup loan on Unit 1201 was reduced, which he contended at the principal hearing to be $20,206.17 and now contends to be $19,740.07. 19I consider that I should adopt the approach for which Break Fast contends which finds support in the obiter observation of Atkin LJ in Banque Belge pour l'Etranger v Hambrouck [1921] 1 KB 321 at 335 that, even if money passes through a mixed account, the common law could apply the principles stated in In Re Hallet's Estate; see also D Murr, "Recovering lost assets: Tracing at Common Law and in Equity" (2006) 27 Australian Bar Review 174. On this basis, the amount of $317,000 paid by Break Fast was applied to payment of strata levies on Unit 1201, account fees charged by Citigroup, and reduction in principal and payment of interest on the loan in respect of Unit 1201. Break Fast's submission by reference to the reduction of Mr Giannopoulos' liability in respect of the Citigroup loan, account fees and strata levies 20In its further submissions, Break Fast draws attention to the fact that Mr Giannopoulos was the borrower in respect of a home loan and mortgage provided by Citigroup in respect of Unit 1201 at the date of the initial receipt of monies from Break Fast on 29 May 2006. Break Fast contends that Mr Giannopoulos was liable for interest and fees owing under the loan facility and for repayment of the principal. Break Fast also contends that Mr Giannopoulos was liable to make strata levy payments in respect of Unit 1201. 21The evidence before me as to the terms of the loan agreement between Mr Giannopoulos and Citigroup was incomplete in some respects. Mr Giannopoulos was party to a Citigroup Standard Loan Facility Agreement approved 7 July 2004 in respect of Unit 1201 (Giannopoulos affidavit 3 October 2011, Ex PG40) which provided for an advance of $1,045,000 at an interest rate of 6.60% and for monthly repayments, payable over a loan term of 360 months, with each monthly repayment being $6,664 principal and interest. That loan facility referred to further terms contained in Citigroup's Standard Loan Facility Agreement - Terms and Conditions which were not in evidence. 22Mr Giannopoulos had also given a mortgage dated 26 July 2004 in respect of Unit 1201 which was stamped for duty on the basis that the amount secured was $1,045,000 (DTB 160-162). The Memorandum of Common Provisions filed in the Land Titles Office on 13 May 1996 (Ex P14) required Mr Giannopoulos to pay all amounts for which he was liable as owner of Unit 1201, including strata scheme levies and provided that the mortgagor indemnified Citigroup against any loss or costs which it suffered or incurred if he defaulted under the mortgage. Clause 18.2 of the Common Provisions required Mr Giannopoulos to pay interest calculated on daily balances on any part of the amount owing which arose solely under the mortgage at an interest rate 3% above Citigroup's overdraft interest rate on that day. That provision expressly did not extend to amounts owing under an agreement covered by the mortgage. In my view, and notwithstanding that the provisions of the loan agreement which are likely to be contained in the terms and conditions are not in evidence, the terms of the Citigroup Standard Loan Facility Agreement and the mortgage (particularly the references to the repayment amount and to monthly repayments) are sufficient to permit me to infer that Mr Giannopoulos was under an obligation to repay the loan amount. Mr Giannopoulos has not contended that he was not under such an obligation. 23Break Fast also contends that the application of the monies which it paid to Mr Giannopoulos to discharge strata levies in respect of Unit 1201 discharged a personal liability of Mr Giannopoulos in respect of those levies. That submission finds support in ss 76 and 78 of the Strata Schemes Management Act (NSW) 1996 which provides for the owners corporation in respect of a strata scheme to levy contributions on the owner of lots in the strata scheme and s 80 which provides that the owners corporation may recover an unpaid contribution, interest and recovery expenses as a debt; see, for example, Owners - Strata Plan No 36131 v Dimitriou [2009] NSWCA 27; (2009) 74 NSWLR 370. 24Break Fast contends that the discharge of Mr Giannopoulos' personal liability for the payment of strata levies, principal and interest on the loan is itself a retained benefit for Mr Giannopoulos since, had the monies not been received from Break Fast, he would have been personally liable for those monies. This approach, is, in my view, consistent with the reasoning adopted by Lord Templeman in Lipkin Gorman, which was approved by Allsop P in Heperu at [147]-[153]. The same result would be reached by the alternative reasoning of Lord Goff in Lipkin Gorman, to the extent that he held the gambling club liable for the "net benefit" it had obtained. The force of that proposition is emphasised by an example given by Break Fast in its further submissions, of an innocent volunteer who received $50,000 into his bank account from a thief, authorised the Bank to debit that sum to repay an outstanding unsecured loan and immediately afterwards received notice of a claim by the owner of the monies to that amount. Break Fast contends that: "The better analysis and consonant with common sense and justice, must be that on the date of notice of the claim the volunteer still has a 'retained benefit' equivalent to the $50,000 because he has retained the benefit of the discharge of his prior liability to the Bank. To require repayment does not inflict a net loss on him, a fortiori, if the $50,000 went to a mortgagee for outstanding interest and principal, thereby reducing the mortgagee's interest in the property of the defendant." 25On the other hand, Mr Giannopoulos' further submissions emphasise that, as I had noted in my earlier judgment, remaining unjustly enriched is an element of the cause of action for unjust enrichment and the inquiry is directed to the injustice of the retention of any money or benefit. Mr Giannopoulos also contends that the submission now put by Break Fast depends on facts which were also present in Heperu v Belle, where Ms Belle was personally liable on several of the loans in issue. Mr Giannopoulos notes that submissions were put before Slattery J in Heperu v Belle that the claimant should recover either the full amount of the payments made from the Westpac account to the mortgagees of the relevant properties or alternatively the amount of interest and principal payments made when the Westpac account had sufficient of the misappropriated funds to allow the making of those payments, and that those submissions reflected the fact that Ms Belle was discharged of her contractual obligations under the relevant loans. Mr Giannopoulos points out that Slattery J did not adopt those submissions, because the Court of Appeal in Heperu v Belle had observed that it was not self-evident that the interest payments increased the value of Ms Belle's equity. His Honour referred to the decisions to which I have also referred above and noted that: "In my view it is consistent with these authorities that the monies that Ms Belle paid in interest to maintain the equity of redemption in the Coffs Harbour and Potts Point properties are not properly part of the fund that she retains against which Heperu may have an order for restoration. That means that the actual mortgage payments made when there were misappropriated funds in the Westpac account totalling $118,932.10, which mortgage payments included interest and principal, are not the correct measure of the misappropriated funds Ms Belle retained when she received notice of the Heperu's claim. Rather, it is the figure of $86,970.01, which is the reduction in principal indebtedness on the mortgages, excluding any reduction in indebtedness attributable to non misappropriated funds." 26Mr Giannopoulos contends that the reasoning of the Court of Appeal and of Slattery J in Heperu v Belle is applicable on the facts of this case and that the benefit obtained by Ms Belle was not different in substance to the benefit obtained by Mr Giannopoulos. However, as I have noted above, this case is at least distinguishable from Heperu v Belle to the extent that Mr Giannopoulos received the relevant monies and the claim against him is in the nature of a common law claim for monies had and received, whereas Ms Belle had not herself received the impugned payments in Heperu v Belle. 27In my view, the approach for which Break Fast contends is consistent with the case law to which I referred in my earlier decision and above and not inconsistent with Heperu v Belle as Mr Giannopoulos contends. By way of summary, the reasoning of Lord Templeman in Lipkin Gorman and of the Court of Appeal in Ford v Perpetual Trustees Victoria Limited and Heperu v Belle emphasises the relevance of the question whether a benefit has been retained, so that there is, in truth, an unjust enrichment of the recipient (in the case of Lipkin) or volunteer (in the case of Heperu v Belle). In the case of a volunteer who had not received the relevant monies, the application of this reasoning led to the conclusion in Heperu v Belle that the benefit was only retained to the extent of the reduction in principal on the relevant loans. By contrast, Mr Giannopoulos received the relevant monies; they were applied to his use (rather than dissipated) in extinguishing his liabilities as to principal, interest, account fees and strata levies on Unit 1201; and the application of the monies in this manner does not, in my view, have the effect that Mr Giannopoulos did not retain their benefit or that their receipt was not unjust to the full extent of the monies received. The position is distinguishable in this respect from that which arose in Heperu v Belle where Ms Belle had not in fact received the stolen money. Other matters raised by Mr Giannopoulos 28Mr Giannopoulos also contends that, if Break Fast were to recover the full sum of $317,000 it would in substance be recovering sums received by Mr Giannopoulos before he had notice of its claims. However, a party faced with a claim for unjust enrichment will often be in that situation, and the gambling club in Lipkin Gorman was in that situation when it was obliged to repay the net benefit which it had received before it had notice of the relevant claim. Mr Giannopoulos also submits that he might not have received any benefit from the relevant payments if, for example, the value of the underlying equity in the property had diminished. However, Mr Giannopoulos would have been personally liable to Citigroup on the loan even if the value of the underlying equity in the property had diminished, and that personal liability was reduced when the monies were received from Break Fast. 29Mr Giannopoulos also contends that, had the monies not been paid by Break Fast and not been applied to the Citigroup loan, the mortgage would have been discharged through a forced sale. However, that submission is inconsistent with the findings which I had reached in paragraph 62 of my earlier judgment, that Mr Giannopoulos had not established that he would have sold that unit at an earlier date had he been aware of Break Fast's position that it was entitled to the relevant monies. As I there noted, Mr Giannopoulos was occupying that unit without paying rent on it and did not in fact sell it when Break Fast put him on notice of its claim in October 2009, but instead assumed personal responsibility for paying the mortgage. The explanation which he gave for the later sale of Unit 1201 in his oral evidence was not by reference to Break Fast's claim but to the purchase of the Homebush property and his family and personal circumstances. 30Mr Giannopoulos also contends that, had the monies not been paid by Break Fast and not been applied to the Citigroup loan, it is inconceivable that Citigroup would have done nothing and simply let the debt accumulate, and that liabilities of $317,000 on the part of Mr Giannopoulos would therefore not have arisen. Mr Giannopoulos contends that the mortgage would have been discharged through a forced sale. I am unable to accept that submission. The question that I have to determine is the extent to which Mr Giannopoulos was unjustly enriched by reference to the events which occurred, where those liabilities arose and were discharged by the payments made by Break Fast. There is in any event no evidence before me as to the steps which Citigroup would or would not have taken in that situation. Mr Giannopoulos similarly argues that there is no reason to think that the owners corporation would not have agitated claims against Mr Giannopoulos had strata levies not been paid over the relevant period and allowed the strata liability to grow. I also cannot accept that submission, both because the question of unjust enrichment is to be determined by reference to the events which occurred and because there is no evidence as to what the owners corporation would have done in that situation or as to how diligent or otherwise it was in pursuing outstanding strata levies. Conclusion as to unjust enrichment 31In these circumstances, I consider that Break Fast has established that Mr Giannopoulos has received and retained a benefit in the amount of $317,000, by the reduction in his personal liability for principal, interest and account fees under the Citigroup loan and for strata levies on Unit 1201. Break Fast's alternative approach by reference to the sale proceeds of Unit 1201 32Break Fast submitted, in the alternative, that, if Mr Giannopoulos had not received the payments made by Break Fast, the amount owing to Citigroup as principal and outstanding interest would have exceeded the amount of the sale proceeds of Unit 1201, so he would have received nothing on a sale of Unit 1201. On that basis, Break Fast contended that the value surviving in Mr Giannopoulos' hands was the amount of $282,670.45 which he was able to receive on the sale of the property by reason of the receipt of the payments made by Break Fast. 33I do not accept that alternative submission. The first difficulty with that submission is that it focuses on the outcome of the sale of Unit 1201 on 30 July 2010 rather than on the position when Mr Giannopoulos received notice of Break Fast's claim in October 2009. The submission therefore takes no account of the effect of the appreciation or depreciation of Unit 1201 in the period between October 2009 and July 2010 on the proceeds of sale of that property on the latter date. The second difficulty with that submission is that it did not seek to establish the extent to which the value surviving in Mr Giannopoulos' hands (even if properly calculated in this way) is attributable to the payments made by Break Fast, as distinct from the other contributions to which I referred in paragraph [83] of my earlier judgment. Break Fast's claim for interest 34Break Fast points out that s 100 of the Civil Procedure Act 2005 (NSW) provides that, in proceedings for the recovery of money, the Court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the Court thinks fit on the whole or any part of the money and for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect. Break Fast contends that it should be awarded interest at Court rates, from the date of receipt or alternatively interest at the Citigroup mortgage rate, which would otherwise have been payable by Mr Giannopoulos. 35I consider that it is appropriate to adopt a similar course to that adopted by Slattery J in Heperu v Belle [2011] NSWSC 1151 at [55], by allowing interest at the rates prescribed for interest up to judgment under Civil Procedure Act s 100, payable on each amount received by Mr Giannopoulos from the date on which it was received. This approach does not create unfairness so far as Mr Giannopoulos is concerned, since his payment of the amounts in reduction of strata levies and the Citigroup loan avoided the need to pay interest in respect of those liabilities. Costs 36The question of costs as between Break Fast and the Defendants will need to be dealt with after the remaining issues as to relief have been determined by this judgment, since I have been informed that there are matters on which the Defendants may wish to rely on that point which could only be relied on after I have delivered this judgment. 37However, I can deal at this point with an application for costs which is made by Citigroup which has a mortgage over a property at Homebush which was the subject of claims made in the proceedings. Break Fast sought an order in the proceedings that it be subrogated to Citigroup's rights as mortgagee in respect of that property and therefore joined Citigroup as Third Defendant in the proceedings. Citigroup, sensibly, reached an understanding with Break Fast shortly after the claim was brought against it which allowed it to be excused from attending the hearing. 38Citigroup contends that it should recover its costs on an indemnity basis and points to the general law entitlement of a mortgagee to indemnity from the mortgagor in respect of costs that it reasonably and properly incurs in defending its rights as mortgagee. Citigroup's primary position is that Mr Giannopoulos and Ms Faraone should pay those costs, notwithstanding that they had not joined it as party to the proceedings and did not bring any claim against it. Citigroup submits that it is a matter for Break Fast on the one hand and Mr Giannopoulos and Ms Faraone on the other to make submissions as to any question of indemnity between them. In the alternative, Citigroup seeks an order that Break Fast pay its costs on an indemnity basis. 39There is an initial question whether I should determine Citigroup's claim to costs based on the general law rights of a mortgagee, which is a matter relating to the relationship between Citigroup as lender and the defendants as borrowers and not a matter previously in issue in these proceedings. I consider that it is consistent with the overriding purpose identified in s 56 of the Civil Procedure Act for me to determine that issue and the submissions made by the parties have been sufficient to allow me to do so. The need to determine that issue arises from s 98(2) of the Civil Procedure Act, which might otherwise prevent Citigroup recovering costs from the defendants in the exercise of its general law entitlement as mortgagee and without an order of the Court permitting it to do so. 40I do not consider that the Court should order Mr Giannopoulos or Ms Faraone to pay Citigroup's costs under s 98 of the Civil Procedure Act, where Mr Giannopoulos and Ms Faraone did not join Citigroup to the proceedings and successfully defended the particular claim brought by Break Fast which had led to Citigroup's joinder in the proceedings. I also do not consider that the Court should make an order on the basis of any general law entitlement of Citigroup as mortgagee. I proceed on the basis that the Court may have regard to any contract between the parties and, by extension, any relevant general law rights of the parties in exercising its discretion as to costs under s 98 of the Civil Procedure Act: Abigroup Ltd v Sandtara Pty Ltd [2002] NSWCA 45 at [9]. 41In my view, Citigroup's role in the proceedings was not of the character that gave rise to a right of indemnity against Mr Giannopoulos and Ms Faraone at general law, in the absence of any provision of the mortgage establishing such a right. In Parker-Tweedale v Dunbar Bank plc (No 2) [1991] Ch 26 at 33-34, Nourse LJ (with whom Woolf LJ and Purchas LJ agreed) held that a mortgagee was not entitled to be reimbursed out of the mortgaged property for the costs of defending proceedings which impugned the mortgagee's exercise of its rights under the mortgage, as distinct from the title to the estate; that reasoning was subsequently approved in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 at 185, and Parker-Tweedale was applied (albeit on a different point) in Ringrow Pty Ltd v BP Australia Pty Ltd [2006] FCA 1446. 42In my view, Break Fast's claim to be subrogated to Citigroup's rights under the mortgage impugned the mortgagee's exercise of its rights under the mortgage, to the extent that it had any potential impact on Citigroup's rights, rather than the title to the estate. Accordingly, I do not consider the general law right of indemnity was established so as to support an order for costs in favour of Citigroup against Mr Giannopoulos or Ms Faraone under Civil Procedure Act s 98 which would not otherwise have been made. 43With one limitation, I consider that Break Fast should be ordered to pay Citigroup's costs in accordance with the usual rule reflected in Uniform Civil Procedure Rules 2005 (NSW) r 42.1, having joined Citigroup in the proceedings and failed to obtain relief against it. I do not consider that Citigroup has established a basis for costs on an indemnity basis. I also exclude the costs of and incidental to the argument before me on 15 February 2012 from that order. Citigroup was unsuccessful in establishing the right of indemnity which it claimed against Mr Giannopoulos and Ms Faraone on that date so they should not be ordered to pay its costs of that argument. I also do not consider that such an order can be made against Break Fast, which had, by an email from its solicitors dated 14 February 2012, offered to pay Citigroup's costs in respect of its joinder to the proceedings on an ordinary basis, and pointed out that acceptance of that offer would have avoided the need for Citigroup to appear on that date. The result that Citigroup has achieved is no more favourable than that which Break Fast had conceded prior to the argument before me. 44I direct the parties to bring in short minutes to give effect to this judgment within 14 days. I will hear Break Fast and Mr Giannopoulos and Ms Faraone as to costs.