Mao v Bao (No 2) [2022] NSWSC 1699

Mao v Bao (No 2) [2022] NSWSC 1699

Mr Mao's liability to Mr Bao concerning the Vaucluse mortgage was limited to $2,050,084 as at 5 May 2014. The April 2011 loan was properly construed as a loan in Chinese Yuan, and interest for the first month accrued only for 20 days from the date of advance. Once the Vaucluse property was sold, Mr Bao's obligations concerning the property ended and Mr Mao had an immediate fiduciary obligation to account for or apply Mr Bao's share of the proceeds; that obligation impeached Mr Mao's claim to continue charging the much higher contractual interest on the loan while retaining Mr Bao's money. The requirements of equitable set-off were therefore met, and the set-off and currency conversion...

Jurisdiction
Australia
Judgment Date
12 December 2022
Procedural Posture
Equity Proceedings Involving a Loan Claim and a Cross Claim Concerning Accounting for a Mortgaged Property / Ruling on Remaining Issues of Quantification After Principal Judgment
Outcome
Proceedings adjourned for the parties to bring in proposed orders giving effect to the reasons and dealing with costs.
Legal Topics
['equitable Set Off' 'loan Agreement' 'money of Account' 'mortgage Accounting' 'fiduciary Accounting' 'pre Judgment Interest']
['equity' 'contract'] ['equitable Set Off' 'loan Agreement' 'money of Account' 'mortgage Accounting' 'fiduciary Accounting' 'pre Judgment Interest']

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Procedural Posture

Equity Proceedings Involving a Loan Claim and a Cross Claim Concerning Accounting for a Mortgaged Property / Ruling on Remaining Issues of Quantification After Principal Judgment

Legal Issues

  1. 1 ["Whether Mr Mao's liability concerning the Vaucluse mortgage was limited to the calculated benefit of $2,050,084 or extended to the larger amount claimed by Mr Bao for alleged loss of the property." 'Whether the money of account under the April 2011 loan was Chinese Yuan or Australian Dollars.' 'Whether interest for April 2011 accrued for a full month or only from the date of advance.' "Whether the set-off and currency conversion between the parties' liabilities should occur as at the date of judgment or as at 5 May 2014."]

Ratio Decidendi

Mr Mao's liability to Mr Bao concerning the Vaucluse mortgage was limited to $2,050,084 as at 5 May 2014. The April 2011 loan was properly construed as a loan in Chinese Yuan, and interest for the first month accrued only for 20 days from the date of advance. Once the Vaucluse property was sold, Mr Bao's obligations concerning the property ended and Mr Mao had an immediate fiduciary obligation to account for or apply Mr Bao's share of the proceeds; that obligation impeached Mr Mao's claim to continue charging the much higher contractual interest on the loan while retaining Mr Bao's money. The requirements of equitable set-off were therefore met, and the set-off and currency conversion...

Court Disposition

Proceedings adjourned for the parties to bring in proposed orders giving effect to the reasons and dealing with costs.

Orders

  • ['Adjourn the proceedings to 9:30 am on 16 December 2022 or such other time as may be arranged with my Associate.' 'Direct that the parties confer on the form of orders to be made to give effect to this judgment and to deal with costs, and, no later than 24 hours before the adjourned hearing, submit proposed orders...