Waiuku Free Range Eggs & Livestock Limited v Van Velthuizen

[2025] NZHC 1610

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-807

[2025] NZHC 1610

BETWEEN

WAIUKU FREE RANGE EGGS & LIVESTOCK LIMITED
Plaintiff

AND

KEES AND ASTRID VAN VELTHUIZEN

Defendants

Hearing:

22 May 2025

Appearances:

M R Taylor for Plaintiff

S Maloney for Defendants

Judgment:

17 June 2025

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 17 June 2025 at 4.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

……………………………..

WAIUKU FREE RANGE EGGS & LIVESTOCK LIMITED v VAN VELTHUIZEN [2025] NZHC 1610 [17 June 2025]

[1]    The defendants, Kees and Astrid van Velthuizen  (Kees and  Astrid), own     a poultry farm dedicated, as I understand it, to egg production.

[2]    Waiuku Free Range Eggs & Livestock Limited (Waiuku) carries on business processing and distributing eggs for small businesses in Auckland and Waikato.

[3]    In April 2023, the parties entered into an Egg Supply Agreement (the contract) under which Waiuku agreed to take 100 per cent of Kees and Astrid’s daily egg production,  with a minimum  daily  supply of 14,000 eggs.   The contract was for    a five-year term but included a right to either party to terminate on 12 months’ notice in writing. Kees and Astrid were Waiuku’s only supplier.

[4]    In addition to the mutual 12 month right of termination, Kees and Astrid had a contractual right to terminate for breach by Waiuku, however, the right was constrained. Kees and Astrid could only terminate the contract for breach if they issued a notice specifying the breach and gave Waiuku at least 90 days to rectify the breach.

[5]The contract contained an entire agreement clause.

[6]    A dispute has arisen between the parties as to the balance due by Waiuku to Kees and Astrid. In April 2024, that dispute led Kees and Astrid to, without prior notice, cease to supply eggs to Waiuku. Waiuku applied for an injunction which was resolved by agreement. As no 90-day notice was issued by Kees and Astrid in relation to the claimed arrears, their refusal to supply would appear to have been a breach of the contract.

[7]    Waiuku accepts that something is owed to Kees and Astrid, perhaps in the region of $60,000. Kees and Astrid say in their counterclaim, the amount owed is

$223,936.17.

[8]    Accordingly, the dispute essentially involves how to arrive at an accurate amount of money owed by Waiuku to Kees and Astrid. The difficulty is that the records

kept by both parties, or rather the lack of records, make that less than a straightforward exercise.

[9]    Each party is critical of the other’s record keeping. Kees and Astrid plead it was an implied term of the contract that the plaintiff: “… would operate an accounting system that was capable of administering its processes”. I note the counterclaim does not plead a breach of this implied term. The role of the claimed implied term may be to support a submission that any uncertainty at the end of the day, as to the balance owing between the parties, should be resolved against Waiuku, but I speculate.

[10]   The contract provided that Waiuku would count, wash and grade all eggs picked up and make available to Kees and Astrid, on a weekly basis, the appropriate grade sheet.

[11]   The original wording of the contract provided that buyer created invoices would be supplied to Kees and Astrid by Waiuku, but that has been changed in handwriting to the invoices being supplied by Kees and Astrid, albeit the amendment has not been initialled. Waiuku pleads that from 1 March 2023 to 1 April 2024, it paid “around $1,883,503 (including GST) for eggs supplied”. While that pleading is denied, it gives some idea of the scale of trading over approximately a one-year period.

[12]   Mr Allan Eaton, director of Waiuku, in his affidavit in support of the application for an injunction, said:

16.When we initially commenced our arrangements, Mr and Mrs Van Velthuizen would supply us with a docket or email to record the number of eggs supplied. Under the Egg Supply Agreement, we are required to count, wash and grade the eggs and make a grade sheet available to Mr and Mrs Van Velthuizen.

17.Initially, we paid within a day of pick up. However, due to the fact that we had to pick up, produce purchase orders, count and grade the eggs (which included dismissing all eggs that were cracked or unsaleable), all of which took quite  some  time,  we  agreed  with Mr and Mrs Van Velthuizen to payment being made 7 days after picking up. We have generally proceeded on the basis that the payment terms are 7 days.

18.Initially, once the count and grading were done, we would amend the original purchase order to reflect the actual number of eggs/trays graded and email that to Mr and Mrs Van Velthuizen and ask for a tax

invoice. This led to issues and resulted in text messages to me from Mr Van Velthuizen asserting that we had undercounted. So, to save arguments we then paid based on the figures/numbers contained in the original purchase order which would always work out as an over payment by us as Mr & Mrs Van Velthuizen chose to ignore the trading numbers we produced.

19.The price for the eggs recorded in the Egg Supply Agreement is $6 per dozen plus GST. However, since we have been in business this price has been amended by agreement to $10.60 plus GST per tray of 30 eggs, and $5.00 plus GST per tray of 30 pullet eggs (these are undersized eggs).

20.The   invoicing   arrangement   has   been   confused    at    times.  Mr and Mrs Van Velthuizen wished to produce their own invoices, but this worked with only varied success. Mr Van Velthuizen struggled to keep a close record of his own transactions and against our better judgment we were constantly asked to take over his purchase orders and invoicing.

21.On other occasions Van Velthuizen has said that the invoicing and accounting records are too difficult for him to keep and in frustration he has simply given up. We have then taken over.

22.Recently, Mr and Mrs Van Velthuizen again wished to introduce their own form of invoicing and asked us to complete order forms. We have been operating under this arrangement for a few months, but it is still very messy. They do not seem to have appropriate systems in place to record the number of eggs being supplied or the payments we have made to them. For example, there have been occasions when Mr and Mrs Van Velthuizen have verbally requested payment of invoices that we had already been paid.

[13]   Kees and Astrid’s counterclaim is based on “dockets” (not invoices) they issued from 2 March 2023 through to 1 April 2024, with those amounts ranging from

$1,094.34 up to $11,640.23, with the majority being for a few thousand dollars. The amounts claimed are both short paid dockets and dockets against which no payment was made.

Kees and Astrid issue interrogatories

[14]   With reference to the 40 dockets that make up Kees and Astrid’s counterclaim, they asked the following questions of Waiuku:

7In respect of each of the dates referred to in that paragraph: (emphasis added)

(a)Identify how many eggs the plaintiff collected from the defendant.

(b)Identify what record(s) the  plaintiff  produced  to  record  the number of eggs collected.

(c)Identify the cost the plaintiff was to pay the defendant for each collection of eggs.

(d)Identify the dates of payments (if any) in respect of the eggs collected on those dates.

(e)Identify how many eggs the plaintiff delivered to its customers.

8In respect of each of the dockets referred to in that paragraph, identify:

(a)Did the defendant or the plaintiff prepare the document?

(b)If it was the plaintiff, then identify the person who prepared the document.

(c)Identify whether the numbering is the defendant or the plaintiff.

(d)What did the document identify as the number of eggs that had been collected?

(e)What did the document identify as the price the plaintiff had to pay the defendant for those eggs?

9Between the date range shown above:

(a)Identify what records the plaintiff kept to identify the number of eggs it collected.

(b)Identify what document it used to identify the payment due in respect of each collection.

(c)Identify the payments made by the plaintiff to the defendant.

[15]   Mr Eaton’s answer to interrogatory 7(a), 7(b) and 9(a) was it was not Waiuku’s responsibility under the contract to identify the number of eggs collected from Kees and Astrid, and that the production of egg collection records was the obligation of Kees and Astrid. Mr Eaton also said that without discovery from Kees and Astrid, he could not provide an answer.

[16]Mr Eaton answered interrogatory 7(c).

[17]   In response to interrogatory 7(e), Mr Eaton provided the following answer: “Waiuku sold all eggs collected from the plaintiff to our customers”.

[18]   In response to interrogatory 8(a), Mr Eaton said that all dockets were produced by the defendants which rendered interrogatory 8(b) not applicable.

[19]   In response to interrogatory 8(c), Mr Eaton said that the numbering was that of the defendants.

[20]   In response to interrogatory 9(b), Mr Eaton said that Waiuku used dockets and/or invoices produced by the defendants to identify payments required in relation to each collection.

[21]   In response to interrogatory 9(c), Mr Eaton provided an answer by reference to the documents in Waiuku’s discovery.

[22]   Kees and Astrid considered the answers were unsatisfactory, evasive “and don’t answer anything.”

[23]   Kees and Astrid apply for an order that Waiuku answer the interrogatories, which is opposed. In the meantime, with Kees and Astrid having provided discovery, Mr Eaton provided supplementary answers which Kees and Astrid consider do not address their concerns with the original answers.

Principles applying to interrogatories

[24]   In Tourplan Pacific Ltd v Australian Tours Management Pty Ltd, the Court said: “… It is correct that it is not permissible to ask for what amounts to evidence of facts in dispute.1 (footnote omitted)

[25]In BNZ v Gardner, Master Hansen observed:2

In my view, merely because interrogatories seek to obtain an admission of fact which could be proved by a witness at trial, one can no longer say, in the context of the New Zealand rule, that the interrogatory is unnecessary. Depending on the circumstances it may well be that an interrogatory will limit the scope of a witness’s evidence, thus saving time and expense. It may go even further and make it unnecessary for certain witnesses to be called. It seems to me that within the context of the New Zealand rules there must be

1      Tourplan Pacific Ltd v Australian Tours Management Pty Ltd [2017] NZHC 2210 at [44].

2      BNZ v Gardner (1980) 2 PRNZ 278 (HC) at 281.

added to the four objects of interrogatories, listed by Lockhart J in W A  Pines Ltd v Bannerman … the aim and object of the rules generally and especially relating to interrogatories mentioned by Barker J at p 4 of Sunde, i.e.

(1)The aim of the rules is to arrive at the truth.

(2)The rules are designed to assist the parties in coming to a recognition of the proper issues.

(3)Through that recognition to a settlement of disputes.

[26]   Quite clearly, some answers that might ordinarily be referred to as evidence at trial will fall within the appropriate scope of an interrogatory. The question is one of degree. Evidence is that which tends to provide a fact, or that which may demonstrate a fact’s existence. In Westpac Banking Corp v Hart, Tipping J held that interrogatories should not require answers on the basis of a disputed assumption of fact.3 Such answers would amount to evidence of disputed facts rather than primary facts.

[27]   Questions aimed at “part of the facts” in issue which a party needs to prove are permissible, provided the question is not aimed at learning “mere evidence of the facts in dispute”.4 However, the distinction between the two is not always easy to make.5

[28]Accordingly, interrogatories:

(a)must be relevant;

(b)must not assume disputed facts; and

(c)may include questions that may indirectly prove the key facts relied on.6 They must relate to material facts rather than evidence,7 although the distinction may not involve a bright line.

3      Westpac Banking Corp v Hart (1987) 1 PRNZ 719 (HC) at 726—728.

4      Evans v Harris (1991) 6 PRNZ 329 (HC) at 333.

5      Leishman v Levie [2018] NZHC 2122; [2018] NZAR 1276 at [44].

6      Commerce Commission v Air New Zealand Ltd (No 6) [2012] NZHC 2113 at [18].

7      Commerce Commission v Air New Zealand Ltd (No 6), above n 6 at [17].

[29]   It is a legitimate purpose of interrogatories to obtain admissions of facts which support the case of the interrogatory party or damage the case of the party being interrogated:8

“Necessary” does not mean as is suggested in some of the submissions … that the questions relate to facts crucial to the interrogating party proving its case. The threshold is not that high. Rather, necessary questions can include questions that may indirectly prove the key facts relied on. They may establish or form a step in establishing the allegations made.

(footnotes omitted)

[30]   That the interrogatory may overlap with what the responding party would include in their brief of evidence or cross-examination does not of itself invalidate the interrogatory. As set out above in the passage from Tourplan, some answers might ordinarily be matters that would be included in evidence at trial but may still fall within the appropriate scope of an interrogatory.9 The question is one of degree. As the Court in Commerce Commission v Air New Zealand Ltd (No 6) stated:10

The Court’s determination of whether the interrogatory questions are sufficiently germane to the material facts must in the end turn on an analysis of the relevant issues, and the importance of the questions and their degree or connection to the core facts that must be proven.

[31]   There is no bright line between permissible and impermissible questions that may cover material the responding party would include in their brief of evidence. Open questions that call for lengthy explanations or need to cover significant background to give context to an answer tend not to be permitted.11 Focused closed questions have been permitted. As I set out in Body Corporate 389593 v Vero Insurance New Zealand Ltd.12

(a)The answers must be specific and substantial. They must also be complete in themselves.

(b)The answer must not be perfunctory or evasive.

(c)The interrogatories themselves must not be oppressive.

8      Commerce Commission v Air New Zealand Ltd (No 6), above n 6 at [18].

9      Tourplan Pacific Ltd v Australian Tours Management Pty Ltd, above n 1.

10     Commerce Commission v Air New Zealand Ltd (No 6), above n 6, at [20].

11     For example, Sealey’s International Ltd v Zhang [2017] NZHC 1789 at [52] where a question to the defendants that they “specify the steps they took in the product development” was ruled out.

12     Body Corporate 389593 v Vero Insurance New Zealand Ltd [2019] NZHC 2807 at [20].

(d)To require a party to answer an interrogatory question about the accuracy of a written statement prepared by others is oppressive.

(footnotes omitted)

[32]   The learned authors of McGechan on Procedure record that a specific interrogatory requires a specific answer.13 An answer which generally refers to certain books, affidavits or documents does not conform to the requirements of the rules. But a qualification or explanation may be added to an answer if it would otherwise be misleading, but nonetheless the answer must still be specific and substantial. If it is not possible to answer an interrogatory with complete precision, a proper attempt should nevertheless be made to provide the answer as accurately as possible.14

[33]   An answering party must seek the information he or she is required to give. If enquiries have been made from others, the answer should state that enquiries have been made and what belief he or she holds as a result.15

[34]   In support of the application, Mr Maloney, counsel for Kees and Astrid, points to the passages from Mr Eaton’s affidavit reproduced above at [12], saying they show Waiuku was involved in counting, grading and invoicing eggs. Mr Maloney submits these passages mean Waiuku must have records in connection with those steps from which it could answer the questions.

[35]Mr Maloney, in his submissions, said that Kees and Astrid:

… issued interrogatories which in the round required the plaintiff to detail – within its knowledge – the daily number of eggs collected, invoiced, and the payments made.

(emphasis added)

[36]   There is a tension between the need for questions to be specific and defined and the obligation for answers not to be evasive. Mr Maloney’s reference to the interrogatories seeking answers in “the round” indicates the questions were not as focused as they might have been. However, I accept that Mr Eaton’s answer in his first affidavit in reply to  interrogatories 7(a), 7(b) and  9(a), which  asked Waiuku  to

13     Jessica Gorman and others McGechan on Procedure (online ed Thomson Reuters) at [HR8.39.01].

14     Henwood v Radio New Zealand (1993) 7 PRNZ 160 (HC).

15     Jessica Gorman and others, above n 13, at [HR8.39.04].

identify how many eggs were collected and the records the plaintiff produced, was evasive. Mr Eaton’s answer that it was not the responsibility of Waiuku under the contract to keep those records, does not answer the question. Irrespective of what  the contract provided Mr Eaton has to identify the records Waiuku in fact created. Given the extracts from Mr Eaton’s evidence above, if Waiuku does not have any such records, Mr Eaton should explain how that is the case.

[37]   Mr Taylor submits that Mr Eaton’s answers addressed the questions as framed. For example, questions 7(a) to 7(c) which relate to the dockets listed in the defendants’ counterclaim ask: “In respect of each of the dates referred to .”, rather than in respect of each docket. No date  is  given  for two  of the dockets,  a point  highlighted  by Mr Eaton’s response: “no date is referenced in the notice”. He does not otherwise address the question. Mr Taylor says Mr Eaton cannot address a question related to the date of a docket when no date is given. At a technical level, I accept that submission but the intent of the question was clear, being “in the round”.

[38]   Question 9(a) asked Waiuku to identify the records it “kept” to identify the number of eggs it collected. Whether “kept” is read as “retained” or “produced/created” changes the question substantially. Mr Eaton read it as “retained”.

[39]   Insofar as question 7(b) asked Waiuku what records it “… produced to record the number of eggs collected”, there was room to read question 9(a) as having          a different focus, albeit question 9(a) covers the full date range of the dockets in the counterclaim, not just the dockets listed.

[40]   It appears there are gaps, if not deficiencies, in the records kept by both parties. The essence of Kees and Astrid’s counterclaim is that they say they supplied more eggs than they have been paid for. They were the only supplier of eggs to Waiuku. Discussions at the hearing arrived at the point where Kees and Astrid agreed they supplied to Waiuku all the eggs it has paid for, and they say further said they supplied the eggs in their counterclaim. That total can be compared to the number of eggs actually on-sold by Waiuku — “eggs in, eggs out”. If Waiuku has on-sold what it says it has paid for (plus the approximate $60,000 it accepts it does owe) then that will go some way to answer the counterclaim. However, if Waiuku has on-sold substantially

more eggs than it accepts it is liable for, then that will support the counterclaim. Given the difference between the parties on this issue is approximately $160,000, a pragmatic resolution to the counterclaim is called for.

Orders

[41]   I make the following orders. In relation to questions 7(b) and 9(a), Waiuku is to identify what records it created to keep track of its purchases from Kees and Astrid. It would be surprising if, with Waiuku receiving thousands of eggs per delivery, stocktaking records, inward goods records or purchase records were not kept. If such records were not kept, Mr Eaton is to provide some explanation as to why that was the case, that is, how Waiuku did keep track of its purchases and complete the steps identified by Mr Eaton set out at [12] above, without any records being created.

[42]   As to the responses to question 7(d), Mr Eaton’s answer in respect of some questions of; “I don’t know the date/s as it is not apparent [from] the documents reviewed” is evasive. For example, Mr Eaton accepts he received dockets 1757 and 1764 dated 28 September 2023 and 30 September 2023, so he must know when they were paid. If Mr Eaton accepts the accounts were paid then he must, from his banking, accounting or tax records, be able to say when they were paid. If Waiuku’s position is that the accounts were not paid, then Mr Eaton should say so. Or, if a part payment was made, he should give details.

[43]   In relation to docket 1775 on 7 October 2023, Mr Eaton accept this docket was prepared by Waiuku. As it was prepared by Waiuku, again, the answer set out in respect of question 7(d) above is evasive.

[44] In respect of docket 1770, which is not dated and while I accepted at [37] above that the question proposed was in respect of dates, it would have been apparent to  Mr Eaton that the question related to the eggs supplied in the docket.  Mr Eaton is   to answer question 7(a) to 7(e) in respect of docket 1770. The same direction applies in respect of undated docket 8611665.

[45]   In respect of all 7(e) questions, Mr Eaton is to identify from his actual sales records, that is his invoicing, the eggs actually sold. As I have said, the answer provided that Waiuku sold all eggs collected from Kees and Astrid, is evasive.

[46] In respect of a significant number of interrogatories, Mr Eaton has answered; “I don’t know as it is not apparent [from] the documents reviewed”. Firstly, answers are not limited from what Mr Eaton can obtain from reviewing documents. I accept that the detail required in the answers is most likely only able to be provided from documents, but where that answer is in many respects premised on the evasive response provided to questions 7(a) and 7(b) outlined at [15] above, I find that Mr Eaton is to again address those questions in which he gave the above answers, on the basis that questions 7(a) and 7(b) are to be answered from the records in fact kept by Waiuku in respect of each shipment Waiuku uplifted.

[47]   Similarly, when it comes to the question of whether the amounts in each dockets were paid, it is not sufficient for Mr Eaton to say he does not know as it is not apparent from the documents reviewed. Again, Mr Eaton needs to say whether it is his position that a docket was paid, part paid or not paid.

[48]   Given Kees and Astrid were Waiuku’s sole supplier of eggs, Mr Eaton’s answers in respect of the dockets from 20 March 2024 to 1 April 2024 are evasive (save for docket number 8611692 and 017213). I say that because Waiuku must have been supplying its customers with eggs between those dates and those eggs can only have come from Kees and Astrid. Mr Eaton therefore must be able to provide answers or explain why not.

[49]   In respect of questions 8(a) to 8(e), while I can understand the response to docket 0074149, as Mr Eaton says no eggs were collected in respect of that claim by Astrid and Kee, I cannot reconcile Mr Eaton’s answer in respect of docket 0611190 dated 15 February 2023 when he says he cannot locate that docket number, when in respect of the questions about that docket under question 7, he provides a number of answers.

[50]   Similarly, in respect of docket 0074172 dated 17 February 2023, Mr Eaton provided answers under question 7, but says he cannot locate the docket number. Just how those answers are to be reconciled should be addressed by Mr Eaton. That also applies to dockets 0611187 and 0611188 dated 13 and 14 December 2023 respectively.

[51]   I accept counsel for Waiuku acknowledged that if the dockets could in fact be located, then answers should be provided. If the numbered docket for 22 March 2024 for $4,549.54 can be located, then Mr Eaton is required to provide answers to questions 8(a) to 8(e) in respect of that docket. Similarly in respect of docket 8611695 dated 30 March 2024.

[52]   Mr Eaton is to provide comprehensive answers to the interrogatories as directed within 15 working days. If that timeframe proves impossible to meet, then an application for an extension may be made.

[53]   There is leave reserved to Kees and Astrid to renew their application should they consider Waiuku’s response continues to be unsatisfactory. I reserve that leave until Waiuku properly answers questions 7(a), 7(b), 7(e) and 9(a) from its own records, as whether Waiuku’s answers to the remaining questions are adequate cannot be assessed.

Costs

[54]   It is apparent that Kees and Astrid have been the successful party.  While, as  I have said, some of their questions may not have been as precise as they could have been, I am satisfied that Waiuku’s answers did not meet the principles I have outlined. Waiuku is to pay costs to Kees and Astrid on a 2B basis for the application, together with disbursements as fixed by the Registrar.

Associate Judge Lester

Solicitors:

Maria Taylor, Auckland (for Plaintiff) Ewart & Ewart, Auckland (for Defendants) Copy to counsel:

Ms M Taylor and Mr M Taylor, Barristers, Auckland (for Plaintiff) E St John, Barrister, Auckland (for Defendants)