WILD v HONEY [2019] NZHC 499

WILD v HONEY [2019] NZHC 499 [20 March 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-2921[2019] NZHC 499BETWEEN WILD AND MACKIE LAWINDEPENDENT TRUSTEE LIMITED astrustees of The Wild Family TrustPlaintiffsAND MARTIN RUSSELL HONEYFirst DefendantPURE REALTY LIMITEDSecond DefendantHearing: 5 November 2018Appearances: Ms J C Dickson and Ms E Keall for the PlaintiffsMr J Dymock and Ms L Pearce for the DefendantsJudgment: 20 March 2019JUDGMENT OF ASSOCIATE JUDGE SMITHThis judgment was delivered by me on 20 March 2019 at 11.00am,pursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors / Counsel:Simpson Grierson, AucklandWooton Kearney, Auckland[1] This is a dispute between the vendors of a property and the real estate agentswho acted for them in the sale. Briefly, the vendors (the plaintiffs) say that they actedon the advice of the real estate agents in agreeing to sell the property for $1.85 million,notwithstanding their own belief that the property was worth at least $2.2 million. Theday after settlement, the purchaser on-sold the property for $2.55 million. Theplaintiffs allege that the defendants breached certain duties owed to them in relationto the transaction. They seek damages of $700,000 and certain other relief. Thedefendants deny liability.[2] On 30 April 2018 the plaintiffs served interrogatories on the defendants,requiring them to answer on oath approximately 70 questions. The defendants'answers to 18 of those interrogatories did not satisfy the plaintiffs. By amendedapplication dated 18 July 2018 they applied for orders directing the first defendant(Mr Honey), in his personal capacity and as a director of the second defendant (PureRealty), to attend for oral examination in relation to the defendants' responses tocertain of the interrogatories. In the alternative, the plaintiffs asked for orders directingthe defendants to provide sworn answers to the disputed interrogatories.[3] In the course of the hearing, agreement was reached that the defendants wouldprovide a further affidavit answering some of the disputed interrogatories. In the end,the Court is required to determine (i) whether Mr Honey should be required to attendfor oral examination; and (ii) if not, whether the defendants should be ordered toanswer the remaining 10 disputed interrogatories.[4] I now give judgment on those two issues.The parties[5] The plaintiffs are the trustees of the Wild Family Trust. From 11 March 2016until 29 July 2016 they were the registered proprietors of the property at 102 SymondsStreet, Royal Oak, Auckland (the property).[6] Pure Realty is a licensed real estate agent and a member of the Ray WhiteGroup, with offices at Royal Oak and One Tree Hill. Mr Honey is a director of, andshareholder in, Pure Realty.Background[7] On 5 March 2016 the first plaintiff (Ms Wild), acting on behalf of the plaintiffs,discussed with Mr Honey listing the property for sale through Pure Realty. Ms Wildhad seen another property at 18 Park Avenue, Grafton, Auckland (the Graftonproperty) that she was interested in buying.[8] Ms Wild said that she told Mr Honey that the property was her only substantialasset, and that she needed to get the best possible price for it. She wanted the propertysold by auction, and she said she relied on Mr Honey's expertise to achieve the bestpossible price for the property and protect her interests in selling it.[9] On 9 March 2016 Ms Wild entered into a conditional agreement to purchasethe Grafton property for $1.8 million, with settlement on 9 June 2016. There were twospecial terms of the sale:(a) The purchase was conditional upon the purchaser entering into anagreement to sell the property for $2 million, such agreement tobecome unconditional no later than 14 April 2016;(b) There was a cash-out clause, which may have resulted in an earlierunconditional sale after the vendor had given three working days'notice.[10] The plaintiffs say that further discussions took place between Ms Wild andMr Honey with regard to the marketing and sale of the property, in the course of whichMs Wild told Ms Honey the terms of the agreement to purchase the Grafton property.They say that Mr Honey told Ms Wild that he had appraised the value of the propertyat $1.7 million, and that it would be unnecessary for her to obtain appraisals from otherreal estate agents.[11] Ms Wild was not happy with the appraisal at $1.7 million. She told Mr Honeythat she thought the property was worth $2 million.[12] An early auction date was arranged for the sale of the property (22 March2016), and the plaintiffs formally appointed Pure Realty as sole agent on 9 March2016.[13] On or about 11 or 12 March 2016, Mr Honey presented Ms Wild with a writtenoffer to purchase the property at $1.7 million. Ms Wild believed that the namedpurchaser was a woman she came to know as "Louisa", who she later identified asMs Li Yi Tang. Louisa had visited the property with Mr Honey even before theproperty had been listed for sale, and she inspected it again some time before 16 March2016, this time in company with a person believed to be Mr Ron Hoy Fong of the firm"Ronovationz". Ms Wild rejected the offer, as it was well below a price the plaintiffswere prepared to accept. They say that Ms Wild told Mr Honey the she wished toproceed with the auction sale.[14] On 13 March 2016 the agent involved in the purchase of the Grafton propertytold Ms Wild that there were two unconditional offers for the purchase of the Graftonproperty, and that she had until the following Thursday (17 March 2016) to gounconditional. Ms Wild told Mr Honey that, as she had until 9 June to settle, shewould talk to the bank about bridging finance. She told Mr Honey she did not wantto "undersell the property", Mr Honey replied: "Ok good plan".[15] On 14 March 2016, the cash-out clause in the agreement for sale and purchaseof the Grafton was formally activated. The same day, Ms Wild told Mr Honey thatshe had applied for bridging finance to buy the Grafton property. The plaintiffs say,and the defendants deny, that Ms Wild told Mr Honey that the plaintiffs had alreadyarranged an overdraft to cover the deposit on the purchase of the Grafton property and,with the deposit and bridging finance in hand, there was no urgency in the sale of theproperty. They contend that Ms Wild again told Mr Honey that she wanted to havethe property properly marketed and sold by auction so as to get the best possible pricefor it.[16] On 14 March 2016 an email was sent to all people who had expressed aninterest in purchasing the property, advising that the plaintiffs' circumstances hadchanged, and that all offers would need to be presented by 5.00pm on 16 March 2016.An open home was held at the property on 15 March 2016, and Mr Honey toldMs Wild after the open home that there was only one interested person in the$1.7 million plus price bracket. That person was expected to make an offer in the nextday or so.[17] The plaintiffs say that Mr Honey told Ms Wild that there was no point inhaving the auction, and that it should be cancelled. Ms Wild reluctantly accepted thatadvice.[18] Bridging finance was approved for the plaintiff's purchase of the Graftonproperty on 16 March 2016, and Mr Honey was advised of that fact the same day.[19] On 17 March 2016 Mr Honey presented Ms Wild with another offer for thepurchase of the property. The purchaser was named as Yan Rong Ren. The plaintiffssay that Mr Honey led Ms Wild to believe that Yan Rong Ren was the same person asLouisa (who was the only person Ms Wild understood had expressed interest inpurchasing the property). The defendants deny that Mr Honey told Ms Wild that YanRong Ren was Louisa.[20] The offer from Yan Rong Ren was for $1.85 million, with settlement on 9 June2016. Under a special clause in the offer, if the purchaser did not want to settle on9 June, settlement could be extended to 29 July 2016 on payment of an extra $10,000.[21] The plaintiffs say that Ms Wild told Mr Honey that the purchase price wasbelow what she believed the minimum value of the property was (at least $2 million),and that she did not want to accept the offer. They contend that Ms Wild toldMr Honey that, with bridging finance for the Grafton property now arranged, therewas more time to obtain a higher sale price by selling the property at auction. Theyalso contend that Ms Wild expressed concern to Mr Honey that the property was beingsold to a speculator (which she was opposed to).[22] The plaintiffs' case is that Mr Honey told Ms Wild that the property had beenmarketed well, and that there was no other interest in the property. For his part,Mr Honey accepts that he told Ms Wild that there were no other offers, and that he hadbeen able to talk the purchaser up from $1.7 million to the $1.85 million offered.[23] The plaintiffs allege that Mr Honey made various other statements to Ms Wildat this time, including statements that the purchaser would not go ahead with thepurchase of the property unless the extended time for settlement was agreed to, andthat the purchaser (Louisa) was not a speculator. They allege that Mr Honey said thatthe purchaser intended to retain the home, except for the attached flat, and buildanother dwelling on the back section. The defendants deny that Mr Honey made eitherof those statements.[24] The plaintiffs say that Ms Wild accepted Mr Honey's advice and relied on hisjudgment. On 17 March 2016 they entered into the agreement presented by Mr Honey,without amendment or counter-offer, believing they were entering into an agreementwith Louisa.[25] The deposit was then paid, and Pure Realty deducted its commission. Thesolicitors for the purchaser of the property later advised that their client "Lu and RenFamily Trust", wished to extend the settlement date to 29 July, and pay the extra$10,000.[26] On 27 May 2016, the purchaser's solicitors gave notice that Yan Rong Rennominated Yan Mei Li to purchase the property.[27] The plaintiffs allege that, unbeknown to them at the time, the nominatedpurchaser Yan Mei Li was a friend or business associate of an employee or licensee ofPure Realty, namely Min Yu Fang (known as "Mandy"). They further allege thatLouisa and Mandy were related, or close friends, residing at the same address inNormans Hill Road, Onehunga.[28] The defendants accept that on 31 May 2016 Mandy was employed by PureRealty as an independent contractor. Otherwise, the plaintiffs' allegations, includingas to the alleged relationship between Louisa and Mandy, are denied.[29] The plaintiffs say that in late June 2016, the property was inspected by Louisaor the nominated purchaser, Yan Mei Li, accompanied by a person believed to beMr Eric Wu, a licensee employed by or contracted to Pure Realty.[30] The settlement of the sale of the property duly took place on 29 July 2016, andit was transferred into the name of Yan Mei Li. The day after settlement, the propertywas immediately listed with Pure Realty for sale. The defendants say that the listingagreement noted Mr Eric Wu and Mrs Joey Du as the licensees.[31] It is common ground that on 28 August 2016 the property was sold at auctionfor $2.55 million through the agency of Pure Realty. The property was subsequentlytransferred into the name of Xinda Construction & Installation Engineering Ltd(Xinda).[32] The plaintiffs contend that, as at 17 March 2016, the fair market value of theproperty was $2.2 million including GST (if any). They acknowledge that there wasa general increase in the market between March 2016 and August 2016, and say that,as at 28 August 2016, a fair value for the property would have been $2.4 million –$2.5 million.[33] The plaintiffs plead a number of causes of action against the defendants. First,they sue under the Fair Trading Act 1986 (FTA), contending that the defendants wereguilty of misleading and deceptive conduct in trade, contrary to s 9 of that Act.Secondly, they plead breach of contract, relying on an alleged implied term of theagency agreement that Mr Honey and Pure Realty would exercise all reasonable careand skill when advising them on the sale of the property and in acting as real estatelicensees in the sale of the property. They contend that Mr Honey and Pure Realtybreached the implied term in the same respects that are alleged to have been breachesof the FTA.[34] There are two other causes of action pleaded against Mr Honey and PureRealty. The first is in the tort of negligence, and the other alleges breach of fiduciaryduties.[35] The plaintiffs plead numerous particulars in support of their causes of action,including particulars relating to alleged misleading advice about the value of theproperty, resulting in the plaintiffs accepting the offer from Yan Rong Ren at$1.85 million. They also allege that Mr Honey and Pure Realty failed to tell Ms Wildthat there was a prospective purchaser, Lola Tupou, who was very interested in theproperty, and would have been prepared to pay a deposit of $130,000 (depending onthe sale of her own property becoming unconditional by 28 April 2016).[36] The plaintiffs further allege that Mr Honey and Pure Realty failed to fullydisclose to them that they had acted for Louisa on a previous sale or sales of theproperty, and/or that Louisa had had a previous involvement with them. They say thatthe defendants failed to disclose to them the relationship between Louisa and/orMandy and/or Yan Mei Li and/or the defendants, including the fact that Mandy wasemployed by, or a licensee of, Pure Realty.[37] The plaintiffs contend that the defendants failed to disclose to them thepurchasers' intentions with regard to the property, including those of Yan Mei Li,particularly as Ms Wild had made it clear to Mr Honey that she did not want theproperty sold to a speculator and on-sold at a profit. They say that Pure Realty andMr Honey were guilty of misleading or deceptive conduct in failing to warn Ms Wildabout speculators in the market, such as Ronovationz and/or Ron Hoy Fong and others,who targeted vulnerable vendors and bought properties at an undervalue (then sellingat a substantial gain after carrying out a "cosmetic do-up").[38] On the breach of fiduciary obligations cause of action, the plaintiffs allege thatMs Wild was a vulnerable purchaser, being a single mother selling her home. Theysay the defendants knew or should have known that the plaintiffs reposed trust andconfidence in them. For those reasons, Mr Honey and Pure Realty are said to haveowed duties to the plaintiffs to act with the utmost good faith, and with undividedloyalty to them.[39] The defendants are also said to have owed various other fiduciary obligations,including an obligation to keep the plaintiffs fully and properly informed of allmaterial matters relating to the sale of the property.[40] The plaintiffs say that, in breach of those obligations, the defendants failed toprotect the interests of the plaintiffs, and instead aided and promoted the interests ofYan Rong Ren, Louisa, and Yan Mei Li, to help them acquire the property at belowmarket value. They further contend that the defendants failed to disclose a potentialconflict of interest in promoting the sale of the property to Yan Rong Ren throughLouisa and subsequently to Yan Mei Li. The potential conflict is said to have arisenout of the defendants' previous dealings with those parties or entities associated withthem.[41] Put broadly, the plaintiffs say that the defendants or either of them directly orindirectly facilitated or assisted Yan Mei Li making a profit on the resale of theproperty. They refer to the defendants' prior connections with Louisa, to her visit tothe property before it was listed for sale, and to the advice given to Ms Wild thatLouisa was the only person interested in the property. Mr Honey is alleged to havepressed the plaintiffs to accept the offer from Yan Rong Ren (believed to be Louisa),and the property was eventually on-sold through Eric Wu, acting as licensee for YanMei Li, who was herself a business associate of one of Pure Realty's licensees(Mandy).[42] The defendants deny all of the allegations of breach of the FTA, breach ofcontract, and negligence. In respect of the cause of action for breach of fiduciaryobligations, they admit that they owed a fiduciary duty of loyalty, consistent with theirgeneral duties to act in the best interests of their client, to act in good faith, and to notmislead, provide false information, or withhold information that should by law orfairness be provided to a client. All of the alleged breaches of fiduciary obligationsare denied.PLAINTIFFS' APPLICATION FOR AN ORDER THAT MR HONEY BEREQUIRED TO ATTEND FOR ORAL EXAMINATION ON CERTAIN OFTHE INTERROGATORIES[43] The plaintiffs rely on r 8.42. That rule provides:8.42 Insufficient answerIf a party fails to answer an interrogatory sufficiently, a Judge may, inaddition to acting under rule 7.48,—(a) if the party has made an insufficient answer, order the party tomake a further answer verified by affidavit in accordance withrule 8.38; or(b) order the party, or any of the persons mentioned in rule8.41(1)(b) to (d), as the case requires, to attend to be orallyexamined.Submissions for the plaintiffs[44] Ms Dickson submitted that the circumstances justify an order forcross-examination of Mr Honey under r 8.42(b). She submitted that the defendants'answers to straightforward interrogatories were insufficient, and in the case ofinterrogatories 3 to 6, evasive. Cross-examination will help to ensure Mr Honeyunderstands the questions being asked, and accordingly provides complete answers tothem. She asked for an order that Mr Honey be ordered to attend for oral examinationon the answers to interrogatories 3, 4, 5, 6, 15(a) to 15(b) and 19(a).Submissions for the defendants[45] Mr Dymock referred to Stephenson v Jones, where Koś J noted that, althoughthere is provision for ordering oral examination ahead of trial in an appropriate case,it is a rare practice.1 Mr Dymock noted only one case in which such an order had beenmade, and it involved a litigant in person who was not answering the questions.2 Hesubmitted that an order under r 8.42(b) is not warranted in this case. The defendantshave not ignored the notice, or failed to take the matter seriously. They have answeredmost of the interrogatories, and have raised genuine objections to a select number ofthem.Discussion and conclusions[46] I accept Mr Dymock's submissions on this issue. An order under r 8.42(b) israrely ordered, and I am not satisfied that this is case where such an order would bejustified.1 Stephenson v Jones [2015] NZHC 1455 at [59].2 Hawkins v Ayers (1995) 9 PRNZ 138 (HC).[47] The defendants have responded to approximately 70 interrogatories, and in theend the disputed interrogatories number only 10 or 11. The defendants' contentionsrelating to the meaning of the expression "dealings" (affecting interrogatories 3 to 6)was not in my view beyond reasonable argument, and the present case is distant froma case such as Hawkins v Ayers, where a litigant in person was simply not answeringthe questions.[48] In Hawkins v Ayers, the Master said that Mr Ayers had been given everyopportunity to put his house in order and to seek out the information that is required,but he elected not to give the Court any further answers, or satisfy the Court that hewould or could seek further information. It appears that the Court in Hawkins v Ayerswas dealing with an uncooperative litigant in person, rather than a litigant representedby competent counsel running a point that was not beyond reasonable argument.[49] In this case, there is no reason to believe that the defendants, to the extent theyhave been ordered to do so, will not file full and complete answers to the disputedinterrogatories they have been ordered to answer. The application for an order underr 8.42(b) is accordingly dismissed.PLAINTIFFS' APPLICATION FOR AN ORDER THAT THE DEFENDANTSANSWER INTERROGATORIESThe relevant rules[50] Rules 8.38 and 8.39 of the High Court Rules 2016 provide:8.38 Order to answer(1) A Judge may, at any stage of any proceeding, order any party to fileand serve on any other party (whether the interrogating party or not)a statement prepared in accordance with rule 8.39 in answer tointerrogatories specified or referred to in the order.(2) The interrogatories must relate to matters in question in theproceeding.(3) The order may require the statement to be verified by affidavit.(4) The Judge must not make an order under subclause (1) unless satisfiedthat the order is necessary at the time when it is made.8.39 Contents of statement(1) A statement in answer to interrogatories must, unless a Judgeotherwise orders, comply with this rule.(2) A statement in answer to interrogatories must deal with eachinterrogatory specifically, either—(a) by answering the substance of the interrogatory withoutevasion; or(b) by objecting to answer the interrogatory on 1 or more of thegrounds mentioned in rule 8.40(1) and briefly stating the factson which the objection is based.(3) The statement must set out above or opposite to each answer orobjection the interrogatory to which it relates.[51] A party served with interrogatories has a limited entitlement to object toproviding answers. Rule 8.40 of the High Court Rules materially provides:8.40 Objection to answer(1) A party may object to answer an interrogatory on the followinggrounds only:(a) that the interrogatory does not relate to a matter in questionbetween the parties involved in the interrogatories:(b) that the interrogatory is vexatious or oppressive:(c) that the information sought is privileged:(d) that the sole object of the interrogatory is to ascertain thenames of witnesses.(2) It is not a sufficient objection that the answer to an interrogatory willdetermine a substantial issue in the proceeding.(4) If the Judge determines that the objection is not sufficient, theapplication is not entitled to object to answer the interrogatory.Interrogatories 3 to 6The interrogatories and the defendants' answersQuestion3 As at March 2016, had the defendants previously had dealings withYan Rong Ren, the person named as the purchaser of the property inthe agreement for sale and purchase of the property dated 17 March2016?AnswerIt is not clear what the plaintiffs mean by "dealings", but on the assumptionthat they mean having entered into an agency agreement, then the answer isno.Question4 If the answer to the previous interrogatory is yes, what were thedealings that the defendants had had with Yan Rong Ren?AnswerN/AQuestion5 As at March 2016, had the defendants previously had dealings withLi Yi Tang, otherwise known as Louisa, in connection with the saleand purchase of property or any other dealings whatsoever with her?AnswerIt is not clear what the plaintiffs means by "dealings", but on the assumptionthat they mean having entered into an agency agreement, then the answer isyes.Question6 If the answer to the previous interrogatory is yes, what were thedealings that the defendants had with Louisa, and on what date ordates were such dealings?AnswerAgency agreements were entered into in respect of the following properties:25 Brookfield Avenue, Onehunga – October 2006.25A Brookfield Avenue, Onehunga – May 2007.The plaintiffs' submissions on interrogatories 3 to 6[52] Mr Honey has admitted that he knew Louisa prior to the first sale of theproperty, and that he knew that Mandy worked for Pure Realty. He has alsoacknowledged (in answer to an interrogatory) that he was aware that Mandy andLouisa knew each other. In those circumstances a key issue in the proceeding will bewhether the defendants made full disclosure to the plaintiffs of the defendants'previous relationships with Louisa and the purchasers of the property.[53] Ms Dickson submitted that these interrogatories are each relevant to that keyissue. The interrogatories are plainly stated, clear, and unambiguous. The defendantshave interpreted "dealings" as the entering into of agency agreements, but that limitedanswer is insufficient and evasive. By limiting their answer to whether or not Louisaor Yan Rong Ren had entered into an agency agreement with the defendants, thedefendants have essentially reformulated the question before answering it, somethingthey are not entitled to do. The result is that the response provides little or noinformation about the extent of the relationship between the defendants andLouisa/Yan Rong Ren.[54] Ms Dickson further submitted that these interrogatories are not oppressive orvexatious. The work required to answer them will be proportionate to the value of thefacts sought. If Pure Realty considers that it may have had dealings with Louisa andYan Rong Ren through any of its agents (past or present), then its obligation was tomake reasonable enquiries of the agents it considers may have had those dealings.There is no indication in the evidence that Pure Realty has made those enquiries, evenof current agents and staff.The defendants' submissions on interrogatories 3 to 6[55] Mr Dymock submitted that these interrogatories are deficient in a number ofrespects. First, the interrogatories are ambiguous, as it is not clear what is meant by"dealings". Alternatively, the interrogatories have been properly answered. Further inthe alternative, the interrogatories are oppressive and unduly burdensome.[56] As for the word "dealings", it is not clear whether it means anyone thedefendants interacted with, or only the people they contracted with.[57] In support of the submission that the interrogatories have been properlyanswered, Mr Dymock submitted that a real estate agent's business dealing is with avendor, and the defendants have answered the questions in relation to "dealings" basedupon listing arrangements. They have therefore provided a substantial answer to theseinterrogatories.[58] On the oppressive/unduly burdensome point, Mr Dymock said that Pure Realtyhas been actively trading for nearly 15 years, and Mr Honey has been working in thearea for over 20 years. Mr Honey is unable to recall all the people he has dealt withover the past year, let alone everyone over the past 20 years. Pure Realty sells a largenumber of properties throughout Onehunga, Hillsborough, One Tree Hill, and RoyalOak each year, and each listing generally includes two to four open homes. Inaddition, many people will contact Pure Realty via text, email and telephone.Properties are commonly sold at auction, which many more people will attend. Alltold, Pure Realty will come across thousands of people every year in the course oftheir business, and many of their interactions with these people will be fleeting andunmemorable. The plaintiffs have not provided any limitations in terms of time, placeor circumstances on these interrogatories.[59] The plaintiffs' expectation appears to be for the defendants to review everyopen home register, email, text message and auction attendance sheet that has beencreated. In the case of Pure Realty, that would represent at least seven years of records;for Mr Honey, it would be over 20 years of interactions to be recalled. The defendantsdo not have the administrative capacity to undertake a task of that magnitude withoutsignificant disturbance to their business.Discussion and conclusions on interrogatories 3 to 6[60] The issue is over the meaning of "dealings".[61] Dealing first with interrogatories 3 and 4, I accept Ms Dickson's submissionthat the word, used in its present context, cannot be limited to situations where YanRong Ren entered into an agency agreement with Pure Realty or Mr Honey underwhich they agreed to act as his agent in the sale or purchase of real property. In myview the word "dealings" must include any property or commercial agreements thedefendants or either of them may have entered into with Yan Rong Ren (so that, forexample, a joint venture between Pure Realty and Yan Rong Ren for the developmentof a property, or other business dealing entered into for joint benefit, would be caughtby interrogatories 3 and 4).[62] I think that asking the defendants to answer on the basis that "dealings"includes every interaction that may have occurred between Yan Rong Ren and PureRealty or Mr Honey, falling short of an actual agreement, would be oppressive.[63] I direct that, within 20 working days of the date of this judgment, thedefendants are to provide answers, verified by affidavit, to interrogatories 3 and 4 onthe basis that the expression "dealings" is to be construed as including any commercialor property agreements entered into by Yan Rong Ren with the defendants or either ofthem.[64] The same considerations arise in respect of interrogatories 5 and 6 (although itis even more clear from interrogatory 5 that the plaintiffs' intention was to capturedealings going wider than mere listing agreements). The result must be the same —the defendants were not entitled to limit their answers to those interrogatories as theyhave. I direct that, within 20 working days of the date of this judgment, the defendantsare to provide answers, verified by affidavit, to interrogatories 5 and 6, on the basisthat the expression "dealings" is to be construed as including any commercial orproperty agreements entered into by Li Yi Tang (otherwise known as Louisa) with thedefendants or either of them.Interrogatory 9(b)The interrogatory and the defendants' answerQuestion9 Document PRL.00068 of the defendants' discoverable documentsincludes an email sent by Lola Tupou to the first defendant dated14 March 2016 at 16:21:a) Was the information in this email conveyed to the plaintiffs oreither of them?b) If the answer is yes, please say how and when it was conveyedto the plaintiffs?Answera) Ms Tupou's initial interest in the property was relayed to Ms Wild.b) Verbally.[65] In the course of the hearing Mr Dymock advised that Mr Honey has providedhis answer to interrogatory 9(b) as to the "how" part of the question, but he omitted tosay when the answer was conveyed to the plaintiffs. Mr Dymock advised at thehearing that the answer to the "when" aspect of interrogatory was provided by letterto the plaintiffs solicitors dated 4 July 2018. At the hearing, I directed that the answeron the "when" part of the question should be provided by sworn affidavit. I made adirection accordingly.Interrogatory 10[66] Mr Dymock noted that interrogatory 10(a) has been sufficiently answered, andthat is not disputed by the plaintiffs. Interrogatory 10(b) was the subject of agreementat the hearing, recorded in my Minute dated 5 November 2018. No further order ordirection is necessary in respect of interrogatory 10.Interrogatory 13(b)[67] At the hearing, Ms Dickson advised that the defendants have now provided acomplete answer to interrogatory 13(b) (in Mr Honey's affidavit sworn in oppositionon 1 August 2018). Accordingly, no orders are required on interrogatory 13(b).Interrogatories 15(a) and (b)The interrogatories and the defendants' answersQuestion15 Document PRL.00145 of the defendants' discoverable documents is adocument dated 5 July 2016 whereby Yan Mei Li appoints Louisa herPower of Attorney:a) On what date was the said Power of Attorney provided to thedefendants?b) Who provided the Power of Attorney to the defendants?Answera) This information is not in the defendants' possession, but it ispresumed that it was provided on or around 30 July 2016.b) This information is not in the defendants' possession, but it ispresumed that it was Yan Mei Li.Submissions for the plaintiffs on interrogatories 15(a) and (b)[68] The defendants say that the information is not in their possession. They thenstate what they presume the answer to be. Ms Dickson submitted that those answersare insufficient.[69] Parties answering interrogatories have a responsibility to make enquiries ofpast and present employees and agents, although the answering party may be excusedwhere the employee left the answering party's employment many years ago, or theformer employee's whereabouts are no longer known. In this case, there is no evidencethat the defendants have attempted to make relevant enquiries of former agents oremployees. Ms Dickson noted that the document in question is a 2016 document, andwould not call for extensive enquiries to be made of former employees. She submittedthat the answers to these interrogatories are evasive, and the objection to providingmore complete answers is without foundation.Submissions for the defendants on interrogatories 15(a) and (b)[70] Mr Dymock accepted that a party answering interrogatories is required to makeenquiries of former employees or agents. In this case, Mr Honey has set out in hisaffidavit in opposition the enquiries he made in order to answer the interrogatories.He made enquiries with all employees and agents of Pure Realty who might reasonablybe expected to have knowledge relevant to the interrogatories.[71] The power of attorney relates to the on-sale conducted by Mr Wu and Mrs Du.Mr Honey has reviewed the power of attorney document and talked to current staff.Based on those investigations he has given substantial and specific answers, and thoseanswers were sufficient. While they were qualified, Mr Honey would also have placeda similar qualification on any information he received from a third party.[72] Mr Dymock noted that the plaintiffs' concerns appear to relate to whetherenquiries were made of Eric Wu and Joey Du. They both left Pure Realty in the earlypart of 2017, and are now working for another agency. Neither of them was anemployee — they were independent contractors. Mr Dymock submitted that anindependent contractor is in a different position from a former employee. Pure Realtydid not control how Mr Wu and Mrs Du performed their services, and there was noduty of loyalty such as an employee has to his or her employer. Mr Dymock submittedthat in those circumstances the defendants' duty to make further enquiry did not extendto Mr Wu and Mrs Du.[73] In the alternative, the defendants object to answering these interrogatories onthe basis that their sole purpose is to seek the names of witnesses.3Discussion and conclusions on interrogatories 15(a) and (b)[74] The power of attorney document under which Yan Mei Li appointed Louisa asher attorney was dated 5 July 2016, and the agency agreement under which Yan MeiLi appointed Pure Realty (Eric Wu and Joey Du as licensees) to sell the property showsthat the agency commenced with effect from 30 July 2016. The agency agreementwas signed by Louisa "as POA for Yan Mei Li", and it is to be inferred that she did sousing the 5 July 2016 power of attorney she held.[75] Mr Honey explained in his affidavit in opposition that Ms Lyn Beere, PureRealty's branch manager who signed the agreement, is no longer with the company,and he has not made enquiries of Eric Wu or Joey Du, Pure Realty's contractedlicensees who acted on the on-sale of the property.[76] The probability must be that Pure Realty received a copy of the power ofattorney at some time between 5 July 2016 and 30 July 2016 when it was used byLouisa, and the issue raised by the plaintiffs appears to be whether the defendantsknew about the relationship between Louisa and Yan Mei Li, the existence of which3 High Court Rules, r 8.40, and Knapp v Harvey [1911] 2 KB 725 (CA) at 735. However, if theby-product of an otherwise admissible interrogatory will result in the disclosure of a name then itmay be allowed: BNZ v Gardner (1990) 2 PRNZ 278 (HC) at 284.was confirmed by the 5 July 2016 power of attorney, before the plaintiffs settled thesale of the property on 29 July 2016.[77] Even if they were not employees of Pure Realty, it seems to me that Mr Wuand Ms Du acted as its agents in carrying out the marketing work on the on-sale of theproperty, and that Mr Honey's enquiries should have extended to making reasonableenquiries of them for relevant information necessary to answer the interrogatories.They were obviously persons to whom enquiry needed to be made, and it is notunreasonable to have expected the defendants to have done so.4 I direct that, in theaffidavits the defendants are to provide within 20 working days, they are to provide afurther answer to interrogatory 15(a) after obtaining such further information on it asthey may be able to obtain from Mr Wu and Ms Du.[78] Turning to interrogatory 15(b), this does seem to me to be an interrogatorydirected to obtaining the name of a witness,5 and the relevance of the question is notclear. I decline to make any order in respect of this interrogatory.Interrogatory 19(a)The interrogatory and the defendants' answer on interrogatory 19(a)Question19 Document PRL.00178 is a Transaction Report for the sale of theproperty to Xiao Yi Peng on 28 August 2016 at a sale price of$2,550,000. At paragraph 20 the source of the listing is referred to asa "past client":a) Who was the client referred to?4 A party's duty in answering interrogatories extends to making enquiries of those who have actedas its agent — see Stansfield Properties Ltd v National Westminster Bank PLC [1983] 1 WLR 568ChD, at 571:If the answers do not at least state in general terms that the person swearing to themhas made diligent enquiries of all officers, servants and agents of the company whomight reasonably be expected to have some knowledge relevant to the questions, theparty administering the interrogatories may justifiably question whether the companyhas discharged its obligations in answering the questions. In particular, if any personis an obvious source of knowledge, he must be questioned. If he is not, the companyshould say why.5 Rule 8.40(1)(d).AnswerThis information is not in the defendants' possession, but the defendantspresume that the past client was Yan Mei Li.Submissions for the plaintiffs on interrogatory 19(a)[79] Ms Dickson submitted that the defendants have again apparently made noenquiries with former employees or agents that were involved in the matters to whichthe interrogatory relates. The document dates back only to August 2016, so theenquiries would not have been burdensome. She submitted that the defendants'answer, in which they say that they do not have the information in their possession,but presume that the past client was Yan Mei Li, is evasive and insufficient.Submissions for the defendants on interrogatory 19(a)[80] Mr Dymock submitted that the defendants have taken steps to answer thequestions, and based on their investigations have given substantial and specificanswers. He repeated his submissions to the effect that the object of the presentapplication is to require the defendants to obtain further information from Mr Wu andMrs Du, contractors whose relationships with Pure Realty ceased in the early part of2017.Discussion and conclusions on interrogatory 19(a)[81] My answer on interrogatory 15(a) provides the answer on this interrogatory.Mr Wu and Ms Du were obvious parties from whom the defendants could and shouldhave made enquiries, they having acted as agents for Pure Realty in bringing about theon-sale of the property. It would not have been burdensome or unreasonable for thedefendants to have made those enquiries.[82] I direct that, in the affidavit the defendants are to provide within 20 workingdays, they are to provide a further answer to interrogatory 19(a) after obtaining suchfurther information on it as they may be able to obtain from Mr Wu and Ms Du.Interrogatories 20 and 21The interrogatories and the defendants' answersQuestion20 Did the defendants know in March 2016 whether Louisa visited theproperty with a person believed to be Ron Hoy Fong of Ronovationzprior to 16 March 2016?AnswerThe defendants object to answering this interrogatory on the basis that it isoppressive and vexatious as it is a fishing interrogatory that proceeds uponspeculation and disputed assumptions of fact.Question21 If the answer to the previous interrogatory is yes:a) What date did Louisa visit and inspect the property with RonHoy Fong?b) Who knew of the said visit?c) On what date did they become aware of such visit?Answera) The defendants object to answering this interrogatory for the samereasons explained above.b) The defendants object to answering this interrogatory for the samereasons explained above.c) The defendants object to answering this interrogatory for the samereasons explained above.Submissions for the plaintiff on interrogatories 20 and 21[83] Ms Dickson submitted that the rule against "fishing" interrogatories applies assoon as it appears that the questions are asked in order to enable the party to see if theycan find a case, either of complaint or defence, of which at present the party knowsnothing, and which will be a different case from that which the party now makes.6 Shesubmitted that these interrogatories are directly relevant to the pleadings in thestatement of claim that the defendants have breached fiduciary duties owed to theplaintiffs, and that the defendants have breached s 9 of the FTA. The specific pleading6 Re Securitibank Ltd (No 31) 1 PRNZ 514 at 519.relied upon in the plaintiffs' breach of fiduciary obligations cause of action is that thedefendants failed:(h) to warn Ms Wild about investors and speculators in the marketsuch as Ronovationz and/or Ron Hoy Fong and others who boughtproperties at an undervalue and after carrying out a cosmetic do-up,resold at a substantial capital gain. Rather, the defendants worked inconcert with such investors and speculators to achieve outcomesfavourable to them at the expense of vendors such as the plaintiffs.[84] The FTA pleading (at paragraph 46(i) of the statement of claim) alleges breachof the FTA by the defendants in respect of the same alleged failure to warn.[85] Ms Dickson also relied on Ms Wild's evidence (in a reply affidavit) of linksbetween the property and Mr Wu on the one hand, and Ronovationz/Ron Hoy Fongon the other. Ms Wild referred in her evidence to a potential witness informing herthat a person believed to be Mr Fong visited the property prior to 16 March 2016.[86] On those bases, Ms Dickson submitted that these interrogatories are not fishinginterrogatories.[87] Ms Dickson acknowledged that Mr Honey stated in answer to interrogatory 22(not in issue on this application) that he did not know Mr Ron Hoy Fong. However,she submitted that that answer did not absolve the defendants from their duty to answerinterrogatories 20 and 21.Submissions for the defendants on interrogatories 20 and 21[88] Mr Dymock submitted that these are fishing interrogatories.[89] He noted that Mr Fong is a "property coach" based in Mt Roskill, who madeheadlines in 2017 by suggesting that his students target "divorcees, dummies anddeceased estates", to obtain a bargain. Those comments attracted negative attentionin the New Zealand Herald about the time the present claim was filed.[90] Mr Dymock submitted that fishing interrogatories are inadmissible, as they donot seek information on matters in question between the parties, but attempt todiscover a cause of action or defence other than that pleaded. In this case, theallegation is no more than that an unnamed, unknown person told Ms Wild that aChinese man (who might have been Mr Fong) visited the property on an unknowndate. No further details have been provided.[91] Ms Wild did say in her affidavit that she has a photograph showing Mr Fongand Mr Honey together. The photograph was taken at a public auction, and uploadedonto Pure Realty's Facebook page. But the person "identified" as Mr Honey is in factone of his business partners, and it is not possible to tell who the other person is (apartfrom the fact that he appears to be of Chinese ethnicity).[92] For those reasons, Mr Dymock submitted that these interrogatories are entirelyspeculative. Furthermore, interrogatory 20 is framed in terms of an unknown thirdparty's belief, which is something that the defendants are unable to answer.[93] In the alternative, and if the Court concludes that the interrogatories are notfishing interrogatories, the defendants say that the interrogatories have been properlyanswered. A party is entitled to refer to the whole of the affidavit in answer to showthat the answers are sufficient, and in this case the defendants statement in answer tointerrogatory 24 (that they do not know Mr Fong, and do not know whether he or oneof his employees was provided with marketing or listing material) sufficiently supportstheir "don't know" answer to interrogatory 20.Discussion and conclusions on interrogatories 20 and 21[94] I do not consider interrogatory 20 is speculative, or in the "fishing" category.The plaintiffs have alleged that the defendants were working in concert with investorsand speculators such as Ronovationz and/or Mr Ron Hoy Fong to achieve outcomesfavourable to them at the expense of people like the plaintiffs, and if to the knowledgeof the defendants Mr Ron Hoy Fong attended the property on 16 March 2016 incompany with Louisa (known to be associated with the person later nominated aspurchaser of the property, and apparently actively involved (as attorney) in the on-saleof the property), the question does appear to be relevant to part of the plaintiffs' case.I note further the express pleading in the statement of claim (para 9) that on 16 March2016 Louisa did visit the property with a person believed to be Mr Ron Hoy Fong.[95] I am not here concerned with the merits of the plaintiffs' case on this "failureto warn" issue, but merely whether there is a sufficient basis in the pleadings to justifythe interrogatory. Answering this interrogatory, which is fairly narrowly confined, willnot in my view be onerous or oppressive for the defendants, and I accept Ms Dickson'ssubmission that it is not a sufficient answer for the defendants to say that Mr Honeydoes not know Ron Hoy Fong or Ronovationz. The question is not whether Mr Honeyknew them, but whether he was aware in March 2016 of the site visit allegedly madeby Louisa and Ron Hoy Fong on that day. There will need to be enquiries made ofstaff and any other agents who may have been involved at the time, but the questiondoes seem to admit of a fairly simple yes or no answer.[96] Interrogatory 21(a) also does no more than require reasonable enquiries ofthose who may have been involved at the time, and the defendants will presumablyeither state the date or approximate date if they can, or say that, despite their enquiries,they are unable to do so (if that is the position).[97] However, I think the questions posed by Interrogatories 21(b) and (c) are fartoo broad, to the point of being oppressive.[98] I direct that, in the affidavit the defendants are to provide within 20 workingdays, they are to provide further answers to interrogatories 20 and 21(a), after havingmade enquiries of Pure Realty staff and agents who might reasonably be expected tohave any knowledge of the subject matter of those interrogatories. I decline to orderthe defendants to answer interrogatories 21(b) and (c).Result[99] I make the following orders:(1) The application for an order that Mr Honey attend for oral examinationis dismissed.(2) The defendants are ordered to file and serve, within 20 working daysafter the date of delivery of this judgment, further answers (verified byaffidavit) to the following interrogatories served by the plaintiffs:(2.1) interrogatories 3–6 inclusive, on the basis that the expression"dealings" in those interrogatories is to be construed asincluding any commercial or property agreements entered intoby the defendants or either of them with (a) Yan Rong Ren(interrogatories 3 and 4), or (b) Li Yi Tang (otherwise known asLouisa) (interrogatories 5 and 6);(2.2) interrogatory 15(a), after obtaining such further information onit as they may be able to obtain from Mr Eric Wu and Ms JoeyDu;(2.3) interrogatory 19(a) , after obtaining such further information onit as they may be able to obtain from Mr Eric Wu and Ms JoeyDu;(2.4) interrogatories 20 and 21(a), after having made enquiries ofPure Realty staff and agents who might reasonably be expectedto have any knowledge of the subject matter of thoseinterrogatories.(3) Subject to order (2) above, the plaintiffs' application for orders directingthe defendants to answer interrogatories is refused.(4) The plaintiffs have been successful on most of the interrogatories thatwere argued, and others were resolved after the plaintiffs' applicationwas filed. Against that, the plaintiffs' application for an order thatMr Honey attend for examination was not successful. In thosecircumstances, I think the justice of the case will be met by awardingthe plaintiffs costs on a 2B basis, reduced by 50 per cent, withdisbursements as fixed by the Registrar. I make orders accordingly.Associate Judge Smith