King v Edwards Valuations Limited
[2025] NZHC 1943
•15 July 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-1251
[2025] NZHC 1943
UNDER the Fair Trading Act 1986, the Contract and Commercial Act 2017 and the tort of negligence IN THE MATTER
of claims for negligent misstatement, breach of contract and breach of s 9 of the Fair Tracing Act 1986
BETWEEN
ANNA IRENE IVY KING
Plaintiff
AND
EDWARDS VALUATIONS LIMITED
First Defendant
KIM McKENZIE STONE
Second Defendant
Hearing: 7 July 2025 Appearances:
K B Arthur for Plaintiff
J C Dymock and S O Alomar for Defendants
Judgment:
15 July 2025
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 15 July 2025 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
KING v EDWARDS VALUATIONS LIMITED [2025] NZHC 1943 [15 July 2025]
[1] The plaintiff is suing the defendants in respect of a valuation report prepared by the first defendant of 28 April 2023 for a property in Auckland (the property). The second defendant is the director of the first defendant.
[2] The plaintiff alleges the valuation report substantially overvalued the property, and that in reliance upon it she settled her relationship property affairs with her husband. There are causes of action against the defendants in negligence, breach of contract and under the Fair Trading Act 1986.
[3] From my reading of the pleadings the defendants say the valuation report was not prepared for the plaintiff but solely for her husband, they did not contract with her for preparation of the report, owed her no duty of care and made no misleading or deceptive representations in respect to it, that the report was not prepared in breach of contract or negligently, that it was not relied upon by the plaintiff, and she suffered no loss.
[4] There are applications before me by both the plaintiff and the defendants arising from discovery. Each party opposes the other’s application but the issues between them are now much reduced and can be dealt with briefly.
Background
[5] The property in issue comprised in part a vacant area, referred to as Lot 1, and another part with a residential dwelling, referred to as Lot 2. The plaintiff and her husband intended to subdivide the property into these two lots.
[6]The first defendant had valued Lot 1 in July 2022 at $1.35 million.
[7] In April 2023, the first defendant was instructed to provide a valuation of Lots 1 and 2 as if the subdivision was complete. The initial approach to the first defendant was made by the plaintiff’s husband. The plaintiff says the approach was on behalf of them both but the defendants disagree.
[8] On 8 May 2023, the first defendant issued its valuation report. The valuation for Lot 1 was $1.35 million and Lot 2 was $3 million, on the basis that the subdivision
was complete. In fact, the subdivision was not completed until September 2023, but there is no dispute that the valuation was to be prepared on the basis that occurred.
[9] In August 2023, the plaintiff and her husband entered into a separation agreement. The plaintiff says title to the property was transferred to her at the value of the first defendant’s 2023 valuation (for Lots 1 and 2) and that the defendants overvalued the property as a result of which she suffered loss. She says the market value of the property at the date of the valuation was $3,630,000. Her claim is for 50 per cent of the amount of the overvaluation, which is said to be $360,000.
The applications
[10] The parties were ordered to provide standard discovery under r 8.7 of the High Court Rules 2016 (the Rules) on 31 October 2024. They have filed affidavits of documents. In both instances the affidavits do not adequately describe the steps that have been taken to search for relevant documents.1 It appears that had they done so some of the issues that arose could have been avoided without the need for formal applications.
[11] The plaintiff’s application sought particular discovery of five categories of documents, but as a result of correspondence between counsel there remains only one category that needs to be dealt with.
[12] The plaintiff seeks an order that the defendants file an affidavit of documents listing all documents pertaining to the defendants’ 2022 valuation of Lot 1 and making those documents available for inspection.
[13] As far as the defendants’ application is concerned, during the hearing Ms Arthur confirmed the plaintiff accepts that the 2023 valuation was to be undertaken on the basis “as if the subdivision of Lot 1 and Lot 2 was complete”. She referred to correspondence between counsel where this had been made clear and to an offer to amend the plaintiff’s pleading if that was required to clarify the point.
1 High Court Rules 2016, r 8.15(2) and sch 9.
[14] On the basis of Ms Arthur’s advice, Mr Dymock confirmed that the defendants did not pursue the orders in paragraphs [1.1(b)], [1.1(c)] and [1.3] of the notice of application. The defendants continue to seek orders that:
(a)The plaintiff file and serve an affidavit in relation to the following category:
(i)All documents passing between the plaintiff and her husband in relation to the valuation prepared by the defendants in 2023, including but not limited to all emails and text messages including in relation to the invoice and any reimbursement (the valuation documents).
(b)That the documents listed in part 2 of the plaintiff’s affidavit sworn 31 October 2024 be sufficiently described to enable the defendants to assess the claims for privilege.
(c)That the plaintiff make available for inspection:
the discovery documents; and
(ii)an unredacted copy of the separation agreement between her and her husband.
Particular discovery — relevant principles
Rule 8.19 of the High Court Rules provides:
8.19Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered
1 or more documents or a group of documents that should have been discovered, the Judge may order that party—
(a)to file an affidavit stating—
(i)whether the documents are or have been in the party’s control; and
(ii)if they have been but are no longer in the party’s control, the party’s best knowledge and belief as to when the documents ceased to be in the party’s control and who now has control of them; and
(b)to serve the affidavit on the other party or parties; and
(c)if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
[16] The Courts generally adopt the four-stage approach outlined in Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd in considering applications under r 8.19:2
(a)Are the documents sought relevant, and if so how important will they be?
(b)Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?
(c)Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the High Court Rules?
(d)Weighing and balancing these matters, in the Courts discretion applying r 8.19, is an order appropriate?
The plaintiff’s application
Documents pertaining to the defendants’ 2022 valuation of Lot 1
[17] The plaintiff considers documents pertaining to the 2022 valuation are relevant to issues arising in this proceeding because, Ms Arthur submits, it is clear that in arriving at the 2023 valuation of Lot 1 the defendants considered information from the 2022 valuation of that Lot.
[18]The submission is based on two matters. First, that Lot 1 was valued at
$1.35 million in both the 2022 and 2023 valuations. Second, in email correspondence the second defendant advised the plaintiff that in preparing the 2023 valuation he had “considered” other historical information and referred to three comparator sales, two of which had been referred to in the 2022 report.
2 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].
[19] The plaintiff has the 2022 valuation which sets out the basis upon which it was undertaken and the sales and other evidence relied upon. To my mind, the documents pertaining to that valuation are not of actual or direct relevance to any issue arising in this proceeding. It certainly will not assist the Court to embark on an enquiry in relation to how the 2022 valuation was arrived at beyond what is in the report itself.
[20] There is also no statement in the email correspondence the plaintiff relies upon that the second defendant did rely upon the 2022 valuation when preparing the 2023 valuation. The submission that he did so is speculation and, as the second defendant says in his affidavit, the reports are plainly based on different market evidence. The most that could be said is that when preparing the 2023 valuation the defendants considered comparator sales that were also referred to in the 2022 report, but the second defendant has been advised what they were and further discovery is unnecessary.
[21]The plaintiff’s application for disclosure of these documents is refused.
The defendants’ application
Documents passing between the plaintiff and her husband in relation to the valuation
[22] The defendants say the plaintiff has failed to disclose correspondence between her and her husband about the valuation. This is because:
(a)the plaintiff corresponded with her husband by email;
(b)the defendants have discovered correspondence that the plaintiff was party to, which she failed to disclose in her affidavit of documents;
(c)the plaintiff paid the invoice for the 2023 valuation but there is no discovery by her about that;
(d)there was an email sent in error to the defendants where the plaintiff’s husband enquired “what happens now” in relation to the 2023 valuation, but there is no response to that email disclosed; and
(e)there was likely to be correspondence between the plaintiff and her husband given the unusual instruction to the defendants as to the basis upon which the 2023 valuation was to be prepared.
[23] Ms Arthur says the submission that there is further undiscovered correspondence is baseless and the plaintiff has repeatedly stated that there are no further documents to discover. Ms Arthur submits that the defendants make bare assertions such documents exist because parties going through a separation will communicate electronically, whereas the plaintiff has confirmed that for the most part she discussed matters with her husband directly rather than communicating in written form, and there is no basis to infer she is not telling the truth about that.
[24] I am satisfied that documents of the kind sought are relevant to the matters in issue, particularly in relation to the issue of the plaintiff’s reliance upon the 2023 valuation.
[25] I am also satisfied there is reason to be believe further documents may exist that have not been discovered. While the plaintiff says that since filing her affidavit of documents she has “checked again and confirm[ed] that I have no more documents between me and [Mr King] about the 2023 valuation”, she has not in her affidavit of documents nor in her affidavits in relation to these applications stated with sufficient clarity what searches were undertaken.
[26] I am also satisfied that if such documents exist they will be few in number and easily located by a search of the plaintiff’s computer, and that it would be proportionate to require a further search to be undertaken. I will make directions for such a search to be undertaken and a further affidavit filed by the plaintiff as to the results.
Description of part 2 documents
[27] The defendants submit that part 2 of the plaintiff’s affidavit does not sufficiently describe the lawyers acting and their roles so that the defendants can analyse the claim to privilege. It appears to be suggested that some of the lawyers may not have been acting for the plaintiff but for her husband and so privilege would not attach.
[28] The plaintiff submits that her affidavit complies with the List and Exchange Protocol in sch 9, pt 2, r 9 of the Rules. In correspondence between counsel it has been explained which of the people identified in pt 2 of the plaintiff’s affidavit are lawyers, and that some of those referred to are not lawyers but third parties with whom the plaintiff’s lawyers have corresponded in circumstances where privilege applies.
[29] I consider the plaintiff’s position has been adequately explained. There being no other reason to suggest any basis to challenge privilege, this aspect of the defendants’ application is dismissed.
The separation agreement
[30] The plaintiff has disclosed the separation agreement between her and her husband in a redacted form. Ms Arthur argues that the separation agreement is confidential. The plaintiff proposes inspection of it be limited to the defendants’ lawyers, and for it to be subject to further restriction that its content is not shared with the defendants or any other party.
[31] The defendants say that proposal is unreasonable and that they cannot review and interpret the separation agreement without seeing it in its entirety. They say it is also unsatisfactory that they are not allowed to discuss it with counsel. They argue the agreement does not contain any commercially sensitive material, there are no trade secrets or know-how, and the protections provided by r 8.30 are sufficient.
[32]Rule 8.25 applies here and provides:
8.25 Challenge to privilege or confidentiality claim
(1)If a party challenges a claim to privilege or confidentiality made in an affidavit of documents, the party may apply to the court for an order setting aside or modifying the claim.
(2)In considering the application, a Judge may require the document under review to be produced to the Judge and may inspect it for the purpose of deciding the validity of the claim.
(3)The Judge may—
(a)set aside the claim to privilege or confidentiality; or
(b)modify the claim to privilege or confidentiality; or
(c)dismiss the application; or
(d)make any other order with respect to the document under review that the Judge thinks just.
[33] I adopt the approach of Radich J in Beverley v DC One H1 Ltd, that there is a three-stage enquiry to assessing claims to confidentiality in the discovery process as follows:3
(a)determining whether the information in question is confidential;
(b)determining whether there is a risk of prejudice from disclosure of the documents; and
(c)determining whether the prejudice is overborne by the prejudice to the other party in preparing their case.
[34] The separation agreement is an important document in this litigation and is acknowledged by the plaintiff to be relevant to a host of issues which arise. I accept it contains private information and a provision that it is to remain confidential to the plaintiff and her husband. However, nothing suggests it contains sensitive information of such a nature that there is any risk of prejudice to the plaintiff arising from disclosure to the defendants.
[35] Further, the interest of the plaintiff in safeguarding her private information must be balanced against the interests of the defendants in being able to prepare and present their case. Where, as is the case here, a document may form a substantial part of the case for or against the plaintiff, the defendants should have access to it. It would be unfair, in my view, if the defendants were unable to give instructions to their lawyers or receive advice from them as to how their case should be conducted because they do not have knowledge of the terms upon which the plaintiff and her husband separated their property affairs. I note that insofar as the plaintiff is genuinely concerned about disclosure of her private information, she has the protection of r 8.30(4).
3 Beverley v DC One H1 Ltd [2024] NZHC 3363 at [135].
[36] There was a further argument advanced for the plaintiff that the redacted parts of the separation agreement were irrelevant to the matters in issue. Having considered the redacted agreement and the headings of the redacted portions of it, which are almost entirely concerned with property matters, I do not accept that submission can be correct.
[37] Here, the balance clearly weighs in favour of ordering disclosure of the unredacted separation agreement. The plaintiff’s claim to confidentiality is set aside.
Result
[38]The plaintiff’s application is dismissed.
[39]The defendants’ application is allowed in part.
[40]The plaintiff shall file and serve a further affidavit of documents within
15 working days of the date of this judgment specifying:
(a)whether the documents described in [1.1(a)] of the defendants’ application for particular discovery are or have been in the plaintiff’s control;
(b)if they have been but are no longer in the plaintiff’s control, the plaintiff’s best knowledge and belief as to when the documents ceased to be in her control and who now has control of them; and
(c)the searches undertaken by the defendants to locate relevant documents, including (but without limitation), if any keyword searches were used, a list of the keywords, and any other search parameters used to identify relevant emails.
[41] The plaintiff’s claim to confidentiality in respect to the separation agreement between her and her husband is set aside.
[42] The plaintiff is to make available for inspection any documents discovered under [40] above along with the separation agreement within 15 working days of the date of this judgment.
[43] My initial view is that costs on both parties’ applications ought to be reserved. While it may appear from this judgment the defendants have achieved success, I note that the plaintiff responsibly withdrew aspects of her application because they were addressed in the defendants’ affidavit. If, despite my indication, either party seeks costs they may file a memorandum within 10 working days with five working days for any response, and costs will be determined on the papers. If no memoranda are filed, costs shall be reserved.
[44] The Registry is to set the case down for a telephone case management conference with an Associate Judge on the first available date so the case can be set down for trial. Counsel shall confer and file a preferably joint memorandum at least three working days prior to the telephone conference with proposed directions.
O G Paulsen Associate Judge
Solicitors:
Pidgeon Judd, Auckland Wotton Kearney, Auckland
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