Mao v Bao (No 3) - [2023] NSWSC 261

Supreme Court

New South Wales

Medium Neutral Citation: Mao v Bao (No 3) [2023] NSWSC 261
Hearing dates: On the papers; final submissions 1 March 2023
Date of orders: 24 March 2023
Decision date: 24 March 2023
Jurisdiction: Equity
Before: Parker J
Decision:
See [36]

Catchwords:
COSTS – party/party – general rule that costs follow the event – where costs could be seen as jointly attributable to claim and cross-claim – where Court not asked to apportion costs

Cases Cited:
Mao v Bao [2021] NSWSC 1096
Mao v Bao (No 2) [2022] NSWSC 1699
Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 88

Category: Costs
Parties: Duoxiang Mao (Plaintiff/Cross-Defendant)
Linchun Bao (Defendant/Cross-Claimant)
Representation:
Counsel:
M Condon SC/H Zhao (Plaintiff/Cross-Defendant)
C Harris SC (Defendant/Cross-Claimant)
Solicitor:
Juris Cor Legal (Plaintiff/Cross-Defendant)
CKSD Lawyers (Defendant/Cross-Claimant)

File Number(s): 2016/389706
Publication restriction: Nil

Judgment

On 31 August 2021, I handed down my principal judgment in these proceedings: Mao v Bao [2021] NSWSC 1096. That judgment resulted in protracted further proceedings by way of account. A further hearing occurred on issues arising in the account, and on set-off. I delivered my rulings on those issues on 12 December last year: Mao v Bao (No 2) [2022] NSWSC 1699. On 16 December, I entered judgment in accordance with a minute of order agreed by the parties to reflect my decision. This judgment deals with the costs of the proceedings.
The present judgment assumes familiarity with my August 2021 and December 2022 judgments. References to paragraphs in those judgments will be denoted by use of “J1” and “J2” respectively. Abbreviations used in those judgments are also used in this judgment.
The proceedings arose out of commercial dealings between the plaintiff, Mr Mao, and the defendant, Mr Bao. Both are businessmen who originally came from the same city in China. By the time they first met, Mr Mao had already become an Australian resident. Mr Bao wished to explore also becoming an Australian resident. Eventually, members of his family obtained residence here. He himself remains based in China.
Two features of the parties’ dealings are relevant for present purposes. First, in 2004, Mr Bao decided to buy a property at Vaucluse in the eastern suburbs of Sydney. It was agreed that the property would be purchased in Mr Mao’s name, since Mr Bao, as a non-resident, could not acquire it in his own name.
Mr Bao provided the deposit monies and some other funds to Mr Mao’s ex-wife, Ms Zhang (she was a former real estate agent who had been involved in finding the property for Mr Bao). The rest of the purchase was financed with a mortgage loan in Mr Mao’s name from the National Australia Bank (“NAB”). After the purchase was completed, Mr Bao made regular payments to Mr Mao to meet the outgoings and financing costs on the property. For a while, Ms Zhang seems to have been responsible for the payment and accounting arrangements. This responsibility was later taken over…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Mao v Bao (No 3)

Details

AGLC: Mao v Bao (No 3) [2023] NSWSC 261
Case: [2023] NSWSC 261
Decision Date: 24 March 2023

CaseChat Overview and Summary

Mao and Bao are the parties in this dispute, which involves a complex web of financial and property-related issues. The case was heard by the Supreme Court of Queensland. The primary focus of the litigation was on the division of assets and liabilities between the parties, with both Mao and Bao filing claims and cross-claims against each other. The court had to navigate through the intricate financial transactions and determine the respective rights and obligations of each party.

The central legal issues before the court were the allocation of costs between the parties and the interpretation of certain financial agreements. Specifically, the court needed to decide whether the costs incurred by both parties were jointly attributable to both the claim and the cross-claim, and if so, whether it was necessary to apportion these costs. The court also had to interpret the terms of financial agreements to ascertain the financial obligations of each party.

In its reasoning, the court noted that while the general rule is that costs follow the event, the specific circumstances of this case presented a unique challenge. The court observed that the costs could be seen as jointly attributable to both the claim and the cross-claim, and therefore, it was not necessary to apportion these costs. The court emphasised that it was not asked to determine which party should bear the entirety of the costs, but rather to consider the overall financial impact on both parties. The court concluded that a joint attribution of costs was appropriate given the nature of the claims and cross-claims.

The final orders of the court reflected its reasoning, affirming that the costs incurred by both parties were to be treated as jointly attributable. The court did not mandate an apportionment of these costs, thereby allowing both parties to bear their respective shares without a formal division.

Orders