FUNG v ANZ NATIONAL BANK LIMITED HC AK CIV-2011-404-007996

FUNG v ANZ NATIONAL BANK LIMITED HC AK CIV-2011-404-007996 [8 June 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-404-007996[2012] NZHC 1278BETWEEN RONNY CHEE HENG FUNGAppellantAND ANZ NATIONAL BANK LIMITEDRespondentHearing: 15 May 2012(Subsequent submissions received on 25 May 2012)Appearances: R C H Fung (Self-represented Appellant) in PersonH X Lee for the RespondentJudgment: 8 June 2012JUDGMENT OF DUFFY JThis judgment was delivered by Justice Duffyon 8 June 2012 at 4.00 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors: Shieff Angland P O Box 2180 Shortland Street Auckland 1140 (DX CP19036) for the RespondentCopy To: R C H Fung (Self-represented Appellant) P O Box 51578 Pakuranga Auckland 2140[1] The appellant, Ronny Chee Heng Fung, appeals against a decision of the District Court striking out his defence and counterclaim in proceedings that the respondent, the ANZ National Bank Limited (ANZ), has brought against him in debt. The appeal is opposed.Background[2] In November 2007, Mr Fung purchased an undeveloped section in Papakura (the property). On 5 December 2007, he entered into a loan agreement (the agreement) with the ANZ, and on 20 December 2007, in accordance with the agreement, the ANZ advanced him the sum of $204,000, secured by way of mortgage against the property. In January 2009, Mr Fung defaulted on the repayment that was then due under the agreement. In June 2009, the ANZ served a default notice, pursuant to s 119 of the Property Law Act 2007 (the Act). The notice expired on 24 July 2009 and the default continued. On 23 November 2009, theproperty was sold by public auction, pursuant to the ANZ's power of sale, for the sum of $155,000. $139,696.44 was applied to clear Mr Fung's indebtedness to theANZ under the loan agreement. This left a shortfall of $94,946.78. On 15 October 2010, the ANZ commenced the proceedings to recover $99,915.66, including the amount of the shortfall and interest to date.[3] Mr Fung accepts that he borrowed the principal sum, that he defaulted on his repayments, and that the amount of shortfall calculated is correct. However, his defence and counterclaim are that the ANZ caused him loss by changing its lending criteria from 80 per cent to 65 per cent of the secured asset and that the ANZ, via its agent, Mr Tony Goh (a mortgage broker), misled him into believing that the ANZ would grant him a construction loan.[4] Mr Fung never applied for a construction loan, as he could not satisfy theANZ's more onerous lending criteria. He contends that Mr Goh told him it would be pointless to do so, given the change in lending criteria.District Court judgment[5] In the District Court, Mr Fung made substantially the same argument on substantially the same facts as he had done previously in Westpac New Zealand Ltd v Fung DC Manukau CIV-2010-092-596, 28 March 2011. The District Court focused on that decision, which decided that Mr Goh was not an agent of the bank and at no time did he act as an agent, either expressly, ostensibly or impliedly. This was because a firm like Mortgage Management Limited (MML), where Mr Goh worked, makes applications to a great variety of lending institutions when seeking money on behalf of their clients, and only gets commission when they close the deal with a particular bank.[6] On appeal (Fung v Westpac New Zealand Ltd HC Auckland CIV-2011-404- 2498, 7 September 2011), Fogarty J held that even on the most favourable version of the facts, he still would not have found that Mr Goh acted as an agent for the bank because:The broker's fundamental role is to apply for loans on behalf of a borrowerto the bank, as lender, for approval of a loan. The broker is principally working for the borrower.He was also not convinced that the bank's policy change could give Mr Fung any defence.[7] Because the District Court Judge found that Mr Fung was arguing exactly the same points in exactly the same manner of pleading and those pleadings had already been rejected in the District Court and the High Court, the Judge applied those previous decisions to his consideration of whether to strike out the defence and counterclaim.[8] As to the separate issue of whether the ANZ sold the property at an undervalue, the Judge found there was no evidence to support such an allegation.[9] Mr Fung also argued that the ANZ's change of lending policy amounted tomisleading and deceptive conduct in terms of the Fair Trading Act 1986. The Judgedistinguished this case from Hieber v Barfoot & Thompson Ltd (1997) ANZ ConvR 162 (HC), saying that the change in the banking landscape was unknown and unpredicted at the time the appellant was seeking his loan advance, so could not amount to misleading and deceptive conduct.[10] Ultimately, the Judge saw this as a classic case where there was no prospect of a successful defence, or of Mr Fung succeeding in his counterclaim. Therefore, the notice of defence and counterclaim were struck out.Grounds of appeal[11] Mr Fung's grounds of appeal are not clearly set out. From his "Detail Points on Appeal", I discern these grounds:(a) That the transaction was invalid because Mr Goh was acting as ANZ'sagent in obtaining the mortgage, who made a misrepresentation inducing him into the mortgage transaction;(b) That the Judge was wrong to apply the Westpac case to determine the present case because there are material differences in the facts and because subsequent documents have emerged that the appellant argues changes the position;(c) That Fogarty J's judgment in Westpac was incorrect;(d) That the bank changing its lending policy from 80 per cent to 65 per cent towards the general public without telling the appellant is silence amounting to misleading and deceptive conduct in terms of the Fair Trading Act 1986; and(e) That the ANZ owed the appellant a duty of care and breached it negligently.Mr Fung's submissions[12] To support the ground that Mr Goh was acting as ANZ's agent, Mr Fung citesfour indicators:(a) Mr Fung claims that there is a contract between the ANZ and Allied Kiwi Mortgage and Insurance Solutions (Allied Kiwi), an organisation that provides support services for New Zealand financial advisors. According to him, Allied Kiwi also signed an agreementwith MML. So he submits that "very clearly" MML is ANZ's agent;(b) Mr Fung asserts that the ANZ pays Mr Goh's commission, which canbe recalled within 18 months, which Mr Fung says shows an agency relationship;(c) Mr Goh was able to use its own applications forms, which were accepted by the banks; and(d) Mr Fung claims that the ANZ is concealing documented evidence of communications between the ANZ and Mr Goh.[13] Mr Fung argues that because the above indicators were not properly put before the Court in the Westpac case, the present case is distinguishable.[14] Mr Fung also made a number of arguments about Fogarty J's decision, whichto me seemed to be no more than an attempt to re-litigate that case. I am not boundby Fogarty J's findings; but it would be completely wrong for me to embark on anexercise that amounted to a review of those findings. Therefore, I will not do so.[15] Mr Fung argues that banks should not be allowed to have a lending criteria of 80 per cent when the economic times are good, and then lower the lending criteria to 60 per cent when the times are bad. He further submits that he should not take 100 per cent of the responsibility of the situation caused by the global financial crisisbecause the bank is part of the industry and should assume some liability for this crisis.[16] Mr Fung submits that the ANZ's silence in not notifying him of any changesin the lending criteria is misleading and deceptive conduct in terms of s 9 of the Fair Trading Act.[17] Mr Fung also appears to suggest that the ANZ owed a duty of care not to sell the property at an undervalue, but this is not obvious from the current pleadings.The ANZ's submissions[18] The ANZ submits that Mr Goh is not its agent, for several reasons:(a) Affidavit evidence from Mr Justin Cole that states clearly that Mr Goh is not an employee or a representative of the ANZ;(b) This precise issue was considered by Fogarty J, including the commission point, and rejected;(c) The ANZ was one of many lenders whose services Mr Goh was willing and able to facilitate for Mr Fung;(d) In terms of documentation, the fact that it was MML application forms rather than the ANZ's application forms that were used shows that the ANZ did not have control over Mr Goh's actions;(e) The reservation of the right to call back commission confirms that the ANZ had little or no direct exposure to the mortgagor, MML, at the beginning of the lending and wanted to manage its risk; and(f) There is no sworn evidence to support any of these allegations.[19] As for the change in lending criteria, the ANZ submits that it is nonsensical to suggest that it had no right to change its lending criteria with regard to the widergeneral public. If Mr Fung had wanted advanced notice of changes, it was incumbent on him to request such terms in his contract.[20] The ANZ submits that there are no material differences between these proceedings and the Westpac proceedings. It contends that Mr Fung's argument thatthere is new evidence showing a relationship between the ANZ/Allied Kiwi/MML is a misconceived view of the brokerage relationship. Therefore, the findings in theWestpac proceedings continue to apply here.[21] The ANZ also states that the Contractual Mistakes Act 1977 has no application to this case, and that the appellant did not give any explanation as to why this defence was not raised earlier.[22] Finally, the ANZ submits that the repetitive assertions of the appellant'smeritless contentions and his repeated use of increasingly costly court processes be brought to an end with the dismissal of this appeal.Approach to strike out[23] The District Court may order that the whole or any part of a pleading be struck out under r 2.50(1) of the District Court Rules 2009 if it:(a) discloses no reasonable cause of action, defence, or case appropriate to the nature of the pleading; or(b) is likely to cause prejudice, embarrassment, or delay in the proceeding; or(c) is otherwise an abuse of the process of the court.[24] This is substantially the same as the High Court's strike-out powers, provided in r 15.1 of the High Court Rules 2008:15.1 Dismissing or staying all or part of proceeding(1) The court may strike out all or part of a pleading if it—(a) discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or(b) is likely to cause prejudice or delay; or(c) is frivolous or vexatious; or(d) is otherwise an abuse of the process of the court.(2) If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.(3) Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.(4) This rule does not affect the court's inherent jurisdiction.[25] The approach that should be taken to strike-out applications was most recently formulated by the Supreme Court in Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725. It states that even though pleadings may be obscureand "barely developed", it may still be inappropriate to strike out, citing at [31]:Richmond P referred with approval to the view of Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [(1964) 112 CLR 125] that the jurisdiction summarily to terminate an action where it is soclearly untenable that it cannot succeed is to be "sparingly employed" and isnot suitable for use [at [8]]:except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion.[26] So, according to the Supreme Court at [33]:It is inappropriate to strike out a claim summarily unless the court can becertain that it cannot succeed. The case must be "so certainly or clearly bad"that it should be precluded from going forward. Particular care is required in areas where the law is confused or developing.[27] Also, all hypothetical facts must be treated as capable of proof at trial (at [114]). So, ultimately, this Court can only strike out if, assuming that all the facts pleaded by Mr Fung are true, his defence and counterclaim are still so bad that they have no chance of success at a full trial.Agency[28] The key issue is whether on the facts pleaded, Mr Goh in the present case could be deemed an agent of the ANZ.[29] Provincial Finance Ltd v Trowbridge (2002) 10 TCLR 405 (HC) involved a mortgage broker who was aware of a daughter exerting undue influence on her parents in order to obtain a guarantee. However, because there was no evidence that the broker was the agent or employee of the finance company, the undue influence could not be sheeted home to the finance company. Indeed, the Court stated at [65]that "[t]o suggest he was Provincial's agent misunderstands the role of a broker".[30] In Fung v Westpac New Zealand Ltd HC Auckland CIV-2011-404-2498, 7 September 2011, Fogarty J stated that brokers would be approved by a bank before the bank would deal with them. He goes on at [10] to say that:But the law is quite clear that in this situation the broker's fundamental roleis to apply on behalf of the borrower to the bank as lender for approval of a loan. The broker is principally working for the borrower. What is also clear on the facts is that there was no application to the bank for a construction loan, and the bank has absolutely no written record that it ever made a promise to advance a construction loan.[31] In George v TEA Custodians (Bluestone) Ltd HC Auckland CIV-2009-004- 890, 18 June 2009, relied upon in the previous proceedings, the plaintiff borrowers alleged that their mortgage broker was instructed by the finance company to falsely represent the purpose of the loan, so that the finance company would grant them a loan they otherwise would not be able to afford. Woodhouse J accepted that the mortgage broker was always acting on behalf of the plaintiffs and that any misconduct could only be sheeted home to the finance company if there were inappropriate dealings between the company's employee and the broker (at [40]):Mr Dilks [the mortgage broker] was the plaintiffs' agent. That is clearlyborne out by the evidence. There is no evidence that would make Bluestoneliable for Mr Dilks' conduct, as an agent of Bluestone. The only basis upon which Bluestone might have a responsibility for misstating the purpose of the loan would be if there was evidence of some form of improper dealingbetween Mr Dilks and Bluestone's employee, Mr Harrison, before Mr Dilks submitted the application.[32] As there was no evidence of such misconduct, the mortgage broker'smisconduct could not be attributed to the finance company.[33] In Dollars and Sense Finance Ltd v Nathan [2008] NZSC 20, [2008] 2 NZLR 557, a son (Rodney Nathan) was given documents by a representative (Mr Thomas) of the finance company (D & S) so that he could obtain his parents' signatures to execute a mortgage for his own benefit. The issue was whether Rodney could be regarded as an agent of D & S through express/implied authorisation by Mr Thomas.This issue arose because instead of actually obtaining his mother's signature, Rodney forged it. His mother argued that Rodney did so as an agent of D & S, so the equitable fraud could be attributed to the company, with the result that the mortgage could not be enforced upon her.[34] The Supreme Court framed the question as follows at [8]:Did D & S, to adapt the words of Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd [(1931) 46 CLR 41], entrust to Rodney the function of representing it in its transaction with the parents so that the service to be performed by Rodney consisted of standing in the place of D & S (or of its solicitor) and assuming to act in its right and not in an independent capacity?[35] As in the present case, the mother did not have any direct contact with D & S, so D & S could not be said to have represented an authority for the son to act inrelation to her as D & S's agent. The only issue was whether there was actual authority. In determining the issue, the Court focused on the specific facts of the case, because (at [25]):It will in a particular case be very much a question of factual assessment and judgment whether the borrower has indeed acted as an agent for the lender to obtain signature or has merely acted as the conduit for the delivery of the documents.[36] In deciding that there was actual authority, the Court at [26] focused on the fact that Mr Thomas never contacted the parents himself, leaving it to Rodney to make all the necessary disclosure to the parents, including obtaining their signatures on the acknowledgement of the disclosure. As Mr Thomas had accepted without objection that it would be Rodney who organised signature, at the very least, thisamounted to ratification by Mr Thomas of Rodney's authority to arrange executionof the documents, if not actual authority. Thus, D & S implicitly authorised Rodney to represent it in dealings with his parents concerning their signature of the documents.Analysis[37] It is clear that absent exceptional circumstances, a broker is not normally thefinance company's agent. This is logical. It would be odd for the mortgage broker to be able to apply to various banks on behalf of his client and to be treated as anagent for every single bank, since the interest he should be protecting is the client's interest in getting a loan, rather than the bank's.[38] The appellant's main argument seems to be based on the fact that the banksare affiliated with Allied Kiwi, which is in turn affiliated with MML, which has hired Mr Goh. It would appear, at least from the website that Mr Fung has cited as evidence of this connection, that many major banks are affiliated with Allied Kiwi. It seems unreal to suggest that merely because of this affiliation, Mr Goh is working as an agent for all the banks. Indeed, as banks are all in competition, it would be placing Mr Goh in an inevitable conflict of interest situation if he were always held to be an agent of the financial institution advancing the loan. The more convincing explanation is that banks will only exclusively deal with mortgage brokers affiliated with Allied Kiwi because they saw these brokers as reliable, or they saw some other advantage in doing so, and not because they have given the brokers authority to act on their own behalf.[39] The question then becomes whether in these specific circumstances, more has been done to make this particular broker an agent of the ANZ. Even assuming all the facts pleaded were true, there is not enough to show an express authority like that inDollars and Sense Finance Ltd at the point at which Mr Goh represented that a construction loan would be easy to obtain.[40] First, there is no record that the ANZ had any dealings with Mr Goh beyond accepting the application. Secondly, Mr Fung in his two proceedings seems to be suggesting that Mr Goh had told him that a construction loan would be forthcoming from banks generally. But that state of affairs is not consistent with Mr Goh acting as the ANZ's agent. Instead, it is more consistent with Mr Goh acting as anindependent broker who would try to arrange a loan for Mr Fung from any bank.[41] Finally, Mr Fung contends that because the ANZ pays commission to the mortgage broker when the loan is taken out, and has the ability to recall the commission within a certain period if the customer takes the loan elsewhere, themortgage broker is in fact under the ANZ's control during the claw-back period. According to Mr Fung, the mortgage broker is therefore the bank's agent. The ANZsubmits that rather than affirming an agency relationship, the claw-back period is necessary because the bank does not have any direct exposure to the mortgagor, so it needs to manage its risk accordingly.[42] I accept the ANZ's submission. Commission from the bank is simply howmortgage brokers get paid for their services, so that in itself cannot be an indicator of agency. Given the principle earlier established that the mortgage broker is normally treated as the mortgagor's agent absent special circumstances, Mr Fung's argumentamounts to suggesting that before Mr Goh finalised the loan with the bank, he wasMr Fung's agent, but once he finalised the loan and received the commission withthe associated claw-back period, he automatically became the ANZ's agent. I reject that argument. It is inconsistent with commercial reality. Even if I were to accept it, it shows me that the relevant conduct complained about happened when Mr Goh wasstill Mr Fung's agent. I fail to see how this argument avails Mr Fung.[43] Overall, Mr Fung's argument appears to be based on the moral unfairness thatNew Zealand banks have all reduced their lending criteria, which in turn has made it more difficult for Mr Fung to borrow money. At the very best, Mr Fung is inferring from a comment Mr Goh made to him about banks in general that the ANZ wouldgive a construction loan easily. This does not approach the level of agency inDollars and Sense Finance Ltd where the financial institution at least knew about and was acquiescing to conduct about a specific transaction.[44] The claim that Mr Goh is an agent of the ANZ is so weak that it cannot possibly succeed as a defence.[45] Mr Fung also argued that it would be premature to strike his defence and counterclaim out now as once discovery is ordered against the ANZ, that will reveal evidence to prove the necessary agent/principal relationship between Mr Goh and the ANZ. However, such a request for discovery is no more than a request to embark on a fishing exercise in order to see if the ANZ has some evidence in its possession thatwould support Mr Fung's claim. It would be wrong to delay striking out a spuriousand meritless defence and counterclaim so as to give Mr Fung the opportunity to find the hoped for evidence by using discovery. Unless Mr Fung has available to him evidence that will support his defence and counterclaim, which he does not, he has no proper basis for his present pleading.Misrepresentation[46] Even assuming that Mr Goh were an agent for the ANZ, the next issue would be whether there was in fact a misrepresentation that entitles Mr Fung to counterclaim against the ANZ.[47] A misrepresentation is not defined in s 6 of the Contractual Remedies Act 1979. It is usually understood to be a statement of past or present fact, rather than one that relates to a future state of affairs. As stated in Ware v Johnson [1984] 2 NZLR 518:I have no doubt that to be a representation, to be actionable under s 6 of the Contractual Remedies Act 1979 must be a statement of present or past fact and that neither a representation as to a future state of affairs nor a mere expression of opinion not coupled with a false assertion, express or implied, that the opinion is a belief honestly held, is actionable.[48] Although Ware v Johnson has been overruled on an incorrect interpretation ofthe meaning of "inducement" in misrepresentation in Savill v NZI Finance [1990] 3 NZLR 135 (CA), it is still valid for the principles that a statement about the future can only be a misrepresentation if it implies false circumstances existing in the present, and that a mere expression of opinion is not a misrepresentation. This is qualified in Smith v Land and House Property Corporation (1884) 28 Ch D 7 (CA), which states that:[I]f the facts are not equally known to both sides, then a statement of opinion by the one who knows the facts best involves very often a statement of a material fact, for he impliedly states that he knows facts which justify his opinion.[49] On the facts pleaded, Mr Fung's main complaint is that Mr Goh had told himthat a construction loan would be easy to obtain. Even if Mr Goh were the agent of the ANZ such that his statement could be attributed to the ANZ, this is an expression of a future possibility, which does not fit under the definition of "misrepresentation".All it implies is that under the circumstances known to Mr Goh at the time, such a future loan would be likely, which may well have been true at the time Mr Goh made the statement. Further, if it is an opinion, all it implies is that Mr Goh has a factualbasis for saying that. At the time, the banks' lending criteria were all still at 80 per cent. So, there is no evidence to show that Mr Goh/the ANZ did not at the time hold the opinion honestly with a factual basis, because at the time the global financial crisis had not happened yet, and on the basis of the lending criteria at the time, it would have been easy for the appellant to get a construction loan.[50] So, even if the appellant were to succeed on the agency argument, there could be no misrepresentation upon which he could rely to counterclaim successfully. This ground of appeal has no merit.Mistake[51] The Contractual Mistakes Act 1977 allows relief for mistake in certain situations. In Compcorp Ltd v Force Entertainment Ltd (2003) 7 NZBLC 103,996,the Court stated that "[c]ontracting in the expectation of a course of events does not give rise to a vitiating mistake if matters do not turn out as expected".[52] That is exactly the scenario here. As there is no qualifying mistake, the Contractual Mistakes Act does not apply to give the appellant any relief. As an argument in favour of the appeal, it has no merit.Misleading and deceptive conduct[53] Section 9 of the Fair Trading Act states that: "No person shall, in trade,engage in conduct that is misleading or deceptive or is likely to mislead or deceive".[54] According to s 45(3), the misleading and deceptive state of mind may be attributed to the principal if this state of mind is held by the agent:Where, in a proceeding under this Part of this Act in respect of any conduct engaged in by a person other than a body corporate, being conduct in relation to which a provision of this Act applies, it is necessary to establish the state of mind of the person, it is sufficient to show that a servant or agent of the person, acting within the scope of that person's actual or apparent authority, had that state of mind.[55] At one point, Mr Fung seems to suggest that the banks by not disclosingsome documents sought to "mislead and deceive" the District Court, whichapparently constituted misleading and deceptive conduct under the Fair Trading Act. That is clearly not the case.[56] So the remaining allegation is that the ANZ engaged in misleading and deceptive conduct by changing its credit criteria without notifying Mr Fung. This raises the issue of whether silence could constitute misleading and deceptive conduct.[57] The New Zealand courts have recognised that silence may sometimes constitute misleading and deceptive conduct. For example, in the case cited by the appellant, Hieber v Barfoot and Thompson Ltd (1996) 5 NZBLC 104,179 (HC), thestatement that a house had "magnificent sea views" but omitting to say that the viewwould be obstructed was misleading under s 9. In Unilever NZ Ltd v Cerebos Greggs Ltd (1994) 6 TCLR 187 (CA) at 192, the Court of Appeal stated thatsilence must "affirmatively convey" a false meaning to contravene s 9. As a result,the case law on silence as misleading has all been where there have been misleading"half-truths" like in Hieber. It is important to note that according to Sinclair v Webb & McCormack Ltd (1989) 2 NZBLC 99,159 (HC), promises or statements of future intent cannot contravene s 9.[58] On any reading of the alleged facts, the silence alleged here cannot be treated as misleading and deceptive conduct. Even if the statement were made on behalf of the ANZ that a construction loan would be easy to get, as a business person, Mr Fung should be aware that as the economy changes, banks will change their lending policies and interest rates; that is an integral element of commercial reality. Mr Fung cannot reasonably expect such a comment to hold true forever. So, if it wasnot part of the bank's contract with Mr Fung to do so, then it was his responsibility to ask for disclosure. By not disclosing the changes in lending criteria, the bank did not do anything that it was not entitled to do in order to mislead the appellant. In any event, because the statement was a representation of future intent, it does not meet the requirements of s 9. It follows that this ground of appeal has no merit, even if the agency relationship were established.Dishonest assistance[59] In the course of his submissions, Mr Fung raised an argument based on the equitable claim of dishonest assistance. He referred me to what appeared to be a computer download of a yet to be published article by Professor Alastair Hudson on"Liability For Dishonest Assistance In A Breach Of Fiduciary Duty". However,Mr Fung was unable to develop an argument that fitted with the recognised principles of that cause of action. He could not establish that either the ANZ or Mr Goh owed him a fiduciary duty. He could not identify which of the ANZ or Mr Goh could be said to have acted as the dishonest assistant. It follows that any reliance on this cause of action is hopeless. I do not propose to consider it any further.Equitable estoppel[60] Mr Fung has not raised this ground of appeal. Because he was appearing without legal representation, I have considered it for completeness' sake.[61] On these facts, where the promise has not materialised into a contract, what Mr Fung is essentially arguing is that it would be unfair for the bank to have made a representation that he relied upon to cause his detriment, which are the classic indicators of an estoppel argument.[62] In New Zealand, the traditional categories of estoppel have now been unified into a general doctrine of equitable estoppel. According to the Court of Appeal inGold Star Insurance Co Ltd v Gaunt [1998] 3 NZLR 80 at 86, this requires:(i) The creation or encouragement of a belief or expectation;(ii) A reliance by the other party; and(iii) Detriment as a result of that advice.[63] The surrounding circumstances must be such that it would make it unconscionable for the promisor to enforce its strict legal rights.[64] As noted in Commonwealth of Australia v Verwayen (1990) 170 CLR 394 (HCA) at 445, the reliance by the representee must be reasonable, which is to be assessed objectively. So, according to Legione v Hateley (1983) 152 CLR 406 (HCA), if the representee knew or should have known that the person making the representation was not authorised to do so, there can be no estoppel.[65] Even if Mr Goh's representation can be said to have created or encouraged anexpectation that the bank will give a construction loan easily, I question whether reliance on this representation was reasonable in the circumstances. Mr Fung was in business as a property developer. It would be unreal for him to claim that he did not know banks would change lending criteria based on economic changes; this seems to be standard policy and is not peculiar to the banks in New Zealand. All Mr Fung could reasonably have relied on was that if the economic climate remained as it was when the statement was made, then a loan would be forthcoming. To treat a passing comment from an agent (whose status as an agent is questionable at best) as binding,without entering into any more formal arrangements to put that plan into action, is contrary to business practice.[66] With no reasonable reliance, it is difficult to see where the unconscionable behaviour of the bank could possibly lie. It follows that this argument could not assist Mr Fung.Mortgagee's duty of care in exercising power of sale[67] Under the Property Law Act 2007, s 176(1) states that a mortgagee that exercises its power of sale owes a duty of reasonable care to the mortgagor to obtain the best price reasonably obtainable. Mr Fung alleges that the ANZ did not do so, but does not provide much support for that on appeal.[68] In Agio Trustees Co Ltd v Harts Contributory Mortgages Nominee Co Ltd(2001) 4 NZConvC 193,480 (HC), the Court considered at [76] that sale at an undervalue did not necessarily mean that the mortgagee had breached is duty of care at [76]:The valuation evidence before me was that, when property is sold by way of mortgagee sale (or, to use the term preferred by the valuers, in a "forced sale situation"), there is a substantial discount from the market value that the property would achieve in a sale undertaken by an owner not under financial pressure to sell. That is a reality that cannot be ignored.[69] Mr Fung's only complaint is that the property could have been sold at ahigher value, based on market value. He has not alleged any other breach of duty. The market value of the property was $200,000 and the estimated value under forced sale conditions was $170,000. It eventually sold for $155,000, only $15,000 less than expected. Given the warning in Agio Trustees, it is difficult to say that this very slight undervalue is in itself a breach of duty. This ground of appeal also fails.Conclusion[70] I am satisfied that Mr Fung's defence and counterclaim are so hopeless andso without any prospect of success that the District Court was right to strike them out. It is hard to see how the District Court could have done otherwise.[71] After the hearing, Mr Fung filed further written submissions. The ANZ did not want to address them. Ordinarily, once the hearing is finished, parties cannot continue their arguments by filing further submissions without first obtaining leave of the Court. As Mr Fung is self-represented, I have extended some leniency to him in this regard. Having looked at the additional material, I consider that there is nothing in it that would cause me to depart from the view I have reached on the submissions he advanced at the hearing.[72] It follows that the appeal is dismissed.[73] Leave is granted to apply for costs, should that be necessary.Result[74] The appeal is dismissed.[75] Leave is granted to apply for costs.Duffy J