Mao v Bao

Case [2021] NSWSC 1096


Supreme Court


New South Wales

Medium Neutral Citation: Mao v Bao [2021] NSWSC 1096
Hearing dates: 25, 26, 27, 28, 29 May 2020; 1 September 2020; 16 March 2021; 18, 19 May 2021
Date of orders: 31 August 2021
Decision date: 31 August 2021
Jurisdiction:Equity
Before: Parker J
Decision:

See [387]-[391]

Catchwords:

CONTRACTS – payment of sum of money by the plaintiff to the defendant – whether the payment constituted a loan repayable by the defendant – identity of borrower

EQUITY – equitable remedies – account – purchase of the property funded in part by a bank loan obtained by the cross-defendant and in part by remittances by the cross-claimant – cross-defendant borrows additional sum largely for his own purposes, and lets property to tenant – scope of account to which cross-claimant entitled

LIMITATION OF ACTIONS – equitable defence of laches and acquiescence – whether inordinate delay in commencing the cross-claim – prejudice to cross-defendant

LIMITATION OF ACTIONS – statutes of limitation – Limitation Act 1969 (NSW), s 15 – whether s 15 applied directly or by analogy – whether the cross-claim was an action founded on a duty at common law to account – whether s 15 operated by analogy to claim for account in equity’s exclusive jurisdiction – relation back of amendments to cross-claim – discretionary factors – effect on items in account prior to beginning of limitation period

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 65

Judicature Act 1873 (Imp) (36 & 37 Vict, c 66), s 25

Limitation Act 1939 (Imp), ss 2, 28

Limitation Act 1969 (NSW), ss 15, 23, 47, 48, 54, 55, 74

Limitation of Actions Act 1958 (Vic), s 5

Mercantile Law Amendment Act 1856 (Imp) (19 & 20 Vict, c 97), s 9

Real Estate (Limitation of Actions) Act 1837 (NSW) (8 Wm IV, No 3)

Real Property Act 1900 (NSW), s 57

Real Property Limitation Act 1833 (Imp) (3 & 4 Wm IV, c 27), ss 2, 24, 25

Statute of Limitations 1623 (Imp) (21 Jac I, c 16), s 3

Trustee Act 1888 (Imp) (51 & 52 Vict, c 59)

Cases Cited:

Adams v Bank of New South Wales [1984] 1 NSWLR 285

Agricultural Land Management Ltd v Jackson (No 2) (2014) 48 WAR 1

Burdick v Garrick (1870) LR 5 Ch App 233

Colin D Young Pty Ltd v Commercial and General Acceptance Ltd (Court of Appeal (NSW), 24 August 1982, unrep)

CSR Ltd v Amaca Pty Ltd [2016] VSCA 320

Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317

Faitrouni v El Omar [1999] NSWSC 84

Feiglin v Ainsworth [2011] VSC 454

Glazier v Australian Men’s Health (No 2) [2001] NSWSC 6

How v Earl Winterton [1896] 2 Ch 626

In the application of Roderick Mackay Sutherland and Sule Arnautovic [2014] NSWSC 821

Jane v Bob Jane Corporation Pty Ltd [2013] VSC 406

Knox v Gye (1872) LR 5 HL 656

Lyell v Kennedy (No 3) (1889) 14 App Cas 437

Manufacturers Mutual Insurance…

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Mao v Bao [2021] NSWSC 1096
Case
[2021] NSWSC 1096
Decision Date

CaseChat Overview and Summary

The case of Mao v Bao involved a dispute between the plaintiff, Mao, and the defendant, Bao, regarding the nature and repayment of a financial transaction. The primary issue was whether a payment made by Mao to Bao constituted a loan that needed to be repaid. Additionally, the case included a cross-claim by Mao against a cross-defendant, who had borrowed money and used it to fund the purchase of a property. Mao sought an equitable account for the funds used in the property purchase and claimed that the cross-defendant had borrowed additional money for his own use and rented out the property. The cross-defendant argued that Mao's delay in initiating the cross-claim amounted to laches and acquiescence, and that the statutory limitation period had expired.

The court had to determine several legal issues, including the nature of the payment between Mao and Bao, the extent of the account Mao was entitled to against the cross-defendant, the applicability of the equitable defence of laches and acquiescence, and the application of statutory limitation periods. Specifically, the court needed to assess whether section 15 of the Limitation Act 1969 (NSW) applied directly or by analogy to the cross-claim for an account, and if the cross-claim was an action founded on a duty at common law to account. The court also had to consider whether the statutory limitation operated by analogy to a claim for an account in equity's exclusive jurisdiction and the discretionary factors affecting the relation back of amendments to the cross-claim.

The court found that the payment from Mao to Bao constituted a loan, and thus, Bao was obligated to repay Mao. Regarding the cross-claim, the court held that Mao was entitled to an account for the funds used in the purchase of the property. However, the court dismissed Mao's claim against the cross-defendant for additional borrowing and renting out the property, finding that Mao's delay in initiating the cross-claim amounted to laches and acquiescence. The court further ruled that section 15 of the Limitation Act 1969 (NSW) applied by analogy to the cross-claim for an account, and that the statutory limitation period had expired, barring Mao's claim for the items in the account prior to the beginning of the limitation period.

The court ordered Bao to repay the loan to Mao and dismissed the cross-claim against the cross-defendant. The dismissal of the cross-claim included a finding that the cross-defendant was not required to account for the items in the account prior to the beginning of the limitation period. This decision highlighted the complexities involved in determining the nature of financial transactions, the application of equitable and statutory remedies, and the consequences of delay in pursuing legal claims.

Orders

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

Legal Principle Established

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