IN THE HIGH COURT OF NEW ZEALAND
CHRISTCHURCH REGISTRY

AP 5/02

RESERVED JUDGMENT OF HON. JUSTICE JOHN HANSEN

[1] The appellant appeals the reserved decision of Judge Erber delivered on the 15th day of March 2002.

[2] Mr and Mrs Trowbridge are an elderly couple. Mrs Trowbridge's daughter, and Mr Trowbridge's step-daughter, is a Mrs Carol Pomeroy. For many years she operated a business in Christchurch called "Not Just Bears". She experienced pressing financial difficulties, and approached a mortgage broker, a Mr Broadway, for assistance.

[3] A credit check at Baynet showed some concerns. Notwithstanding these, the appellant was prepared to advance $20,000-00, provided it was guaranteed by the respondents, supported by a first mortgage over their only asset, a property at 1 Bateman Avenue, Christchurch.

[4] It apparent that Mrs Pomeroy was not entirely frank, and the true nature of her financial affairs was not revealed. She said she needed the money urgently to pay IRD., and assured the Trowbridges that it would be a short loan that could be paid from Christmas trading.

[5] On lst August 2000 the mortgage broker, Mr Broadway, and Mrs Pomeroy went to the Trowbridges' house. Mrs Trowbridge, the Judge found, was extremely frail and sitting in bed. There was a thirty minute meeting, during which Mrs Pomeroy was very upset and crying throughout. The Judge found she was giving her parents an impression of desperation. She told her parents that she was in arrears with the IRD and the need for money was temporary, but urgent, and would be repaid a short time after Christmas. She assured them she would not let them down, but that she did not want her husband to know about the difficulty, because it might precipitate a break up of the marriage and the loss of the business.

[6] She did not tell Mr Broadway, or her parents, the full extent of the financial difficulties confronting the business, which were clearly terminal.

[7] At first Mr Trowbridge refused to help and was against mortgaging the home, and he had warned his own daughters of similar difficulties. However, he became concerned that his wife was much affected by Mrs Pomeroy's tears, condition, pleas and desperation, and he agreed because he felt his wife condition would become worse if he did not accede.

[8] The Judge found that the respondents were influenced by the repeated assertions that the loan was to tide her over a temporary problem, and would be paid out of Christmas takings. There was evidence that Mr Trowbridge had once loaned her $ 1000-00, which had been repaid.

[9] The Judge found that had they known of her actual indebtedness, they would not have agreed to the proposal. They were persuaded to agree by her distress, by the asserted temporary nature of the financial problem, and by the assurance it would be taken care of from Christmas takings. As well, despite their reluctance, the fact she was their daughter, and was obviously in desperate straits induced them to agree.

[10] The Judge found Mrs Pomeroy was as deceitful to her parents as she had been with Mr Broadway.

[11] Once agreement was obtained, Mr Broadway went to Provincial. It received the proposal, and obtained a Baynet report. That showed the deteriorating credit position of Mrs Pomeroy, and showed ten judgments against her in 1998, four in 1999, and two in April of 2000, the last being 17 April 2000. It did not show the former landlord's judgment, which had been obtained on the 18th April 2000, and which, in fact, founded a bankruptcy petition.

[12] Mr Edilson of Provincial said:

We (Provincial) harboured some doubt as to the ability of Carol Pomeroy to repay the loan ...

[13] He was eventually persuaded to sanction this, because it was not a large loan, and he believed that sufficient cash flow would be generated by the business to pay the instalments required. Nevertheless, he required the guarantee and mortgage. He wanted them separately advised, and given a copy of the adverse Baynet report, which he required the Trowbridges to initial it:

so that they would be alerted to the information that we had concerning their daughter.

[14] Inevitably, the business failed, but before Provincial could exercise its rights the Trowbridges brought proceedings claiming that in the circumstances the agreement of the Trowbridges to execute the guarantee and mortgage were obtained by a misrepresentation, and/or actual or presumed undue influence, and/or as a result of the unconscionable conduct of Carol Pomeroy. They further alleged that the mortgage broker, Mr Broadway, was an agent of Provincial. A further cause of action alleged a breach of the Fair Trading Act, in the following terms:

19. That in the circumstances the defendant was under a duty to ascertain the true financial position of the said Carol Pomeroy and to disclose to the plaintiff and the plaintiffs' advisers the following material:

19.1 That Carol Pomeroy was indebted to the Inland Revenue Department for arrears of GST, PAYE and penalties, in excess of $40,000 and that the Inland Revenue Department was close to bankrupting her.

19.2 That she was in arrears with rent due to her current landlord in excess of $16,000 and the landlord was threatening to close her business down.

19.3 That her previous landlord was pursuing her for arrears of rental in excess of $12,000, and had obtained a judgment for $14,088 on 18 April 2000, which judgment was not disclosed in the Baycorp credit report.

19.4 That her total unsecured debt was well in excess of $100,000 and that she was unable to service these debts.

19.5 That a number of creditors had ceased supplying stock or alternatively required payment by cash in advance.

19.6 That the Bank of New Zealand had obtained a judgment for in excess of $30,000 relating to credit card debts.

20. That in the circumstances the omission of the defendant to disclose this information is misleading and deceptive within the meaning of Section 9 of the Fair Trading Act.

[15] The Judge recorded the plaintiffs' case, as put by Mr Brodie, as being a misrepresentation by silence or material omission. The argument was that Provincial, having decided the Trowbridges should be alerted to the information in the Baynet report, and requiring them to initial each page, and in failing to advise their solicitors that in Provincial's experience the reports could not be relied on as accurately up to date, failed in their duty to the respondents. As the Judge recorded:

Shortly put, Mr Brodie's submission was that if a lending institution decides to give information to a borrower or guarantor it must be sure that the information is accurate and complete and that there exists no special circumstance which might affect the judgment of the borrower/guarantor.

[16] Provincial argued that in a contract of guarantee there is no requirement of full disclosure on the part of the lender, and that Provincial discharged its duty by making available to the Trowbridges all the information it actually possessed and knew about. He said the Baynet report was not a representation by Provincial, but was a representation by Baynet itself. He further said the defendant further submitted it was a duty of the solicitor and not Provincial to ascertain the accuracy of the Baynet information.

[17] Following a review of the law, as the Judge saw it, the Judge concluded the evidence clearly indicated an innocent misrepresentation by omission or silence, which was found to be "conduct that is misleading or deceptive, or is likely to mislead or deceive" in breach of the Fair Trading Act. There was also found to be a misrepresentation which induced the Trowbridges to enter into the contract.

[18] He found there was no dispute that Provincial was "in trade", and the loan agreement and mortgage were procured by misleading and deceptive conduct on the part of the defendant and held the contract to be void ab initio. He also held that the threshold for cancellation under the Contractual Remedies Act had been reached.

[19] The Judge found it unnecessary to reach any conclusion in relation to the allegations of undue influence, but that there had been undue influence on the part of Mrs Pomeroy. He found the decision to give the Baynet report to the Trowbridges was probably brought about by the broker's account to Mr Edilson of Provincial of the scene that occurred at the house.

[20] It is hard to see, however, how this can in any way be sheeted home to the appellant. The broker was not its agent, and nor can it be answerable for the actions of Mrs Pomeroy.

[21] Ms Boniface acted for Mr & Mrs Trowbridge. She is a solicitor of some 9 years experience, who impressed the Judge. She received the documentation only shortly before the Trowbridges arrived, giving her little, if any, time to make independent inquiries. She understood the matter to be urgent, and shortly after she received the documents Mr Broadway, the Trowbridges, Mrs Pomeroy, and it seems Mrs Round were driven to her office. Mrs Trowbridge was not able to climb the stairs to the office, so Ms Boniface sat in the car next to her with Mr Trowbridge in the front. Mr Broadway introduced the Trowbridges to Ms Boniface and left the car. He was absent for virtually the whole of the meeting.

[22] It is not clear exactly how the Trowbridges had Ms Boniface acting for them. It may have been on Mr Broadway's recommendation, but there is nothing in the pleadings or the evidence to suggest she was instructed by Provincial and was acting for both parties. There is also no evidence, despite the pleadings, that Mr Broadway was employed, or was the agent of Provincial. Although the Judge noted that Ms Boniface had little time to make independent inquiries, there appears to be no evidence that she thought this was necessary. She explained the guarantee to the Trowbridges, that they could loose their house, and she expressed concern at the picture disclosed by the Baynet report, saying:

I then went through the Baynet credit check which had been supplied to me and expressed concern at the number of Court judgments entered against Mrs Pomeroy and the number of payment defaults.

[23] The Judge notes that there was no evidence that she knew, or had been told, by the Provincial, or Mr Broadway, that the Baynet report might be unreliable because it was not up to date.

[24] Ultimately, the Trowbridges signed the documentation, and Ms Boniface, clearly to protect her own position, had them sign an acknowledgement that they had been advised not to sign the guarantee, but decided to sign the document despite the advice.

THE APPELLANT'S SUBMISSIONS

[25] Mr Riach, on behalf of the appellant, submitted that the credit search report from Baynet was not a representation by, or on behalf, of the of the appellant in terms of s.6 of the Contractual Remedies Act 1979. Secondly, he argued it was not a misrepresentation in terms of that Act. Thirdly, it did not form misleading or deceptive conduct, or conduct that was likely to mislead or deceive in terms of s.9 of the Fair Trading Act 1986. Fourthly, it was not a misrepresentation serious enough to justify cancellation of the contract. Finally, in fact, it did not induce the respondents to enter into the guarantee, or the mortgage contracts.

[26] He also submitted that the respondents were not entitled to have the contract set aside or voided on grounds of undue influence because if undue influence was present, the appellant took all necessary and appropriate steps to protect the respondents from the effect of such influence.

[27] At paragraph 52 of the judgment, the Judge held that in providing the respondents with the Baynet report, the appellant was representing:

(a) That is considered the contents of the report material to a consideration of its own position and might well be material to the Trowbridge's consideration of their position.

(b) That in assessing Mr (sic) Pomeroy's credit worthiness and indebtedness the Trowbridges could rely on the report.

(c) That the report gave an up to date picture of her credit worthiness and indebtedness.

[28] Mr Riach disputed the second and third representations found by the Judge. It was the appellant's position that the mere provision of report obtained from Baynet was not a representation that the Trowbridges could rely on the report, nor a representation that it gave an up to date picture of her credit worthiness and indebtedness. However, it is to be noted that it was more than a provision of the report, the appellant required it to be signed by the Trowbridges acknowledging they had seen and considered it.

[29] Mr Riach submitted that all the appellant was doing was passing on such information it had concerning Mrs Pomeroy's credit worthiness so as to ensure the Trowbridges were in possession of the same information as the appellant. This was no more than a representation of what was on the Baynet data base regarding Mrs Pomeroy. He pointed to the definition of "representation" in paragraph 11 of Spencer Bower Turner & Hanley "Actionable Misrepresentation" (2000) that it is "a statement made by, or on behalf of, a person to, or with the intention that it shall come to the notice of, another person which relates, by way of affirmation, denial, description or otherwise to a matter of fact." Again, referring to the same text at paragraph 32 he submitted that if the representor does no more than express his opinion or state as information received such information as he has, he makes no representation except to the extent stated. He accepted that a statement as to the credit, character or reputation of another relates to a matter of fact, but submitted in this case there was no such statement by the appellant except to the extent that it had received information from Baynet, as set out in the report. It is to be noted the report was not accompanied by any statement to the effect it believed the report to be comprehensive or accurate, or indeed any opinion as to whether the subject person was credit worthy. There was no direct representation that the Trowbridges could rely on the report in assessing Mrs Pomeroy's credit worthiness. Furthermore, it was submitted that this could not be implied as it was no more or less than information received by the appellant and passed onto the Trowbridges, from which they could elect to make further enquiries or not.

[30] The learned District Court Judge in his decision records that it came as a surprise to Ms Boniface that she could not rely on a Baynet report having all the judgments on it. For an experienced solicitor, that is hard to accept.

[31] The Baynet report was clearly endorsed as follows:

The information contained in this report does not represent the opinion of Baynet CRA Limited as to the credit worthiness or otherwise of the subject(s). Alleged debts and/or judgments may be disputed or have subsequently been settled or set aside. Under the provisions of the Privacy Act 1993, the subject has the right to obtain a copy of this report. The subject can obtain assistance regarding the content of this report of (09)3565851.

[32] This makes it clear that the source of the report is making plain that it does not represent their opinion as to the credit worthiness, or otherwise, of the subject. It seems to me the report should have put an experienced solicitor on notice, but Ms Boniface appears to have simply accepted it at face value, and not taken any steps to make independent checks herself. Ms Boniface, in evidence, said she explained in general terms the document to the Trowbridges, but it appears that she could not recall advising the Trowbridges that it would not show their daughter's whole financial position. It seems that she was prepared to accept that it did, for reasons that are not entirely clear.

[33] Mr Riach said that an experienced solicitor for the respondents should have appreciated that the report was not, and could never be, a completely comprehensive and accurate list of the subject's indebtedness.

[34] Mr Riach submitted that the appellant was entitled to rely on the independent solicitor to give proper and effective independent legal advice. He further submitted that the appellant was going further than it needed to by providing the report. Indeed, Mr Brodie accepted that if the report had not been provided, the Trowbridges would not have been able to take action against Provincial. It seems that the position contended for by Mr Brodie is that by going further than that required and alerting the Trowbridges to the Baynet information which cast a bad light on Mrs Pomeroy's position, Provincial lose their rights to enforce the agreement.

[35] The Judge effectively held there was misrepresentation by silence, in that the appellant did not specifically warn the respondents, or Ms Boniface, as to the possible inaccuracy of the Baynet report. One would have thought the disclaimer, on the face of the document itself, made that clear.

[36] The Judge went on to hold that the failure to give this advice by Provincial distorted the positive representation of reliability made when it forwarded the Baynet report to Ms Boniface. How the Baynet report could be said to represent a "positive representation of reliability" given what it revealed is unclear to me.

[37] Mr Riach submitted this was an error by the Judge, in that there was no representation of reliability given by the appellant when the report was supplied. He submitted the appellant could reasonably have expected an experienced independent solicitor to advise the respondents of the nature and dangers associated with the document, and, in particular; that it did not comprise a comprehensive or up to date report as to the indebtedness of Mrs Pomeroy. I agree.

[38] Furthermore, Mr Riach submitted that it was not the report that induced the respondents to enter into the agreement. At paragraph of the judgment, the Judge found:

I have no doubt whatever that had the Trowbridges known of her actual indebtedness, and in particular that the former landlord had a judgment which he/they proposed to enforce with bankruptcy proceedings, they would not have agreed. They were persuaded to agree by her distress, by the asserted temporary nature of the financial problem and by the assurance that it would be taken care of by the Christmas takings. Even so, they were reluctant but the factors which I have mentioned and, of course, the fact that she was their daughter and was obviously in desperate straits, induced them to agree. So, it will be seen, that Mrs Pomeroy in disclosing her financial position to her parents was as deceitful as she had been with Mr Broadway.

[39] As Mr Riach properly pointed out, these matters all occurred prior to the report being supplied by the appellant. The operative inducements that led to the respondents entering into the contract are those set out in paragraph 17 above. The report itself was another reason for not entering into it, but they had already made their decision.

[40] Furthermore, there is evidence that supports this submission. Mrs Trowbridge did not give any evidence that she was affected by the information disclosed in the credit report. At paragraph of 17 of Mr Trowbridge's affidavit he said:

17. My wife and I did not really have a proper opportunity to spread the papers out in front of us and read them carefully and they would not have meant very much to us in any event. We stayed in the back throughout. Eventually after speaking to the lawyer, the papers were signed. By the time the papers were signed, Mr Broadway was back in the car again. He may have been in the car throughout.

20. I did not know that my stepdaughter was in a terrible debt situation. I initialled the Baycorp credit report which was shown to me. I did not really understand what that document was about at the time. I now understand that Carol as (sic) adjudicated bankrupt in December, with debts of over $200,000. I was not told of debts anything like $200,000 when I signed this document. I was shown the Baycorp Credit Report and although I did not total up the figures, I was not left at all with an impression of a business with $200,000 debt and being under severe financial pressure. I was under the impression that Carol was in a temporary jam because of her tax problem, but she was trading successfully and that her debts would be cleared by Christmas tithe." (Emphasis added).

[41] Even more importantly, in cross examination Mr Trowbridge was asked:

Q. You didn't take it (the Baycorp Report) in.

A. No. Because I was, I had already committed myself anyway.

[42] It seems to me there is strength in the submission that it was not the report that induced the entry into the contract. The Trowbridges were clearly determined and committed by the time they got to the solicitor, and in light of the document they signed for her, they were going to proceed come what may. The Baynet report was clearly not understood by the respondents, nor did it influence them in any way.

RESPONDENTS' SUBMISSIONS

[43] Mr Brodie said there was no practical difference in the approach under the Contractual Remedies Act or the Fair Trading Act.

[44] He concentrated on the Baynet report, and submitted it showed entries under four relevant headings. The first described payment defaults, one in 1999 for $1867, and another in 1998 for $11,193 that had been paid. Next there is one collection agency default for $244 in August 2000. Next there was a list of collection records spread over five years. There are only four entries for the year 2000, the largest of which is $7,000. There were only three collections in 1999, the largest being $900. The final was a list of Court judgments spread over a total of three years. There are two in 2000, one for $1,500 and one for $375. There had only been four for the previous year. He said there was a clear statement from Mrs Pomeroy that she required the $20,000 to tidy up an IRD debt, and she assured her parents it would be paid from pre Christmas trading, and that her business was good.

[45] He submitted it was clear that Mr Broadway was the agent of Provincial for the purpose of making at least some of the financial disclosures. I have already dealt with this question, and I have not been satisfied that the evidence establishes Mr Broadway as the agent of Provincial.

[46] Mr Brodie submitted it is necessary to make an objective assessment of the evidence, and the words are to be considered in a way that the representee would reasonably understand them. What the representor professes to have meant or intended when making them is wholly immaterial. The words are to be given their natural customary and ordinary meaning, that which would be conveyed to a normal person. The difficulty with that submission is, of course, that ignores the evidence that Mrs Trowbridge gave no evidence relating to the report, and that Mr Trowbridge said that he did not really take it in, because he was already committed to the transaction.

[47] Mr Brodie submitted, correctly, that non-disclosure of information, or the maintaining of silence, may amount to a misrepresentation, or misleading or deceptive conduct in some circumstances. Furthermore, he referred to the numerous cases mentioned in Halsbury 4th Ed. Paras 121 - 139, where half truths have led to a finding of a misrepresentation. He referred to the decisions of Lee v. Jones (1864) 17 CBNS 482 and Willis v. Willis (1850) 17 Sim 218, and dealt with the circumstances of those cases at some length.

[48] Mr Brodie submitted that if a creditor gives a guarantor an explanation, it must be sufficiently accurate and complete so as not to be misleading. (Cornish v. Midland Bank plc [1985] 3 All ER 513).

[49] He referred to the following passage from Burrows Finn & Todd Law of Contract page 312:

In most of the cases of this kind the representor knows of the existence of the fact which he or she fails to disclose and deliberately conceals it - in other words most half truths involve fraud. There has been some suggestion that this is a necessary ingredient in cases of this kind. It is submitted, however, that s6, Contractual Remedies Act does not require any such element. Under it misrepresentation, 'whether innocent or fraudulent', gives a right to damages, and it would seem that if the representor's statement is in fact misleading it is irrelevant whether or not the representor know of the undisclosed facts. What matters is only that the statement is an accurate statement of the position, and that it induces (and was intended to induce) the plaintiff to contract.

[50] Also the following from Dawson & McLaughlin, Contractual Remedies Act 1979 page 12:

The philosophy behind Section 6(1) of the Contractual Remedies Act is that where a person has made a representation which induces another to contract with him he should be responsible for the accuracy of the representation, irrespective of fault.

Page 22 para 6

The Courts have insisted that if a statement is made on a particular matter the representor is obliged to make a full and frank disclosure.

[51] In dealing with the Fair Trading Act, he said the Courts in New Zealand made it clear that liability may attach, even though the defendant had no intention to mislead or deceive, but has acted honestly and reasonably throughout.

[52] He said against the background of these authorities the Judge found that there was a misrepresentation because in handing over the report, the appellant remained silent instead of qualifying the document by pointing out that in it's experience such reports were unreliable.

[53] Mr Brodie continued that the qualification on the report needs to be viewed with care. All it says is, apart from saying it does not represent the opinion of Baynet, is that alleged debts may be disputed, judgments can be disputed, debts may have been settled, or set aside, as could judgments. It does not warn the list of judgments may not be complete and up to date. Mr Brodie accepted that it was common ground that Court judgments were a matter of public record. He said a reasonable person would anticipate some short delay before the formal entry of judgment and its appearance on the credit record, but a reasonable person would not expect the complete omission of a substantial judgment four months earlier. He further submitted that in this case the Baynet report operated as an inducement. He said if the Trowbridges had known the true state they would not have proceeded with the guarantee. He said that makes it clear that the failure to spell out the true position must have acted as an inducement.

[54] There was a further submission that the true financial position was material, and, therefore, it induced entry into the contract. Mr Brodie relied on Savill v. NZI Finance Limited [1990] 3 NZLR 135, for this proposition.

[55] Finally, Mr Brodie submitted there was clearly undue influence, and this could be sheeted home to the appellants.

DISCUSSION

[56] In my view, Mr Riach's submission that the appellant merely acted as a conduit for the Baynet report is not correct. It was obviously of more moment to them than simply the supply of information. They wanted it to be signed by the Trowbridges as an acknowledgement that they were aware of the precarious nature of Mrs Pomeroy's financial situation. However, I do not consider that it misrepresented the position.

[57] It was a clearly from Baynet, and there was nothing to suggest it was necessarily the view of the appellant. The appellant merely passed on a bad credit report on Mrs Pomeroy, which was carefully qualified as not expressing the view of Baynet as to the credit worthiness of the subject. They were ensuring that the Trowbridges were as informed as they were of the financial position. Furthermore, it seems to me strange to suggest that the Trowbridges would be liable if the report had not been passed on, but where a lender takes pains to ensure the guarantors are as fully informed as them there is no liability. It does not seem to me the duty of the lender to say they would not totally rely on the Baynet report. The possible inaccuracy of the report is inherent in the qualification. It made plain to the world it did not verify credit worthiness. The possible unreliability is clear. It is not a representation by silence. The case relied on by Mr Brodie requiring an explanation from the lender, if it is requested by the guarantor, has no application. The guarantors did not seek an explanation. Without going further than necessary, it seems to me that an experienced solicitor would have been warned by the Baynet report as to the perilous state of Mrs Pomeroy's finances, and would have made further enquiries, despite the seeming urgency. It is clear that Court judgments are a matter of public record, and it would not have been a difficult task to make enquiries of the Christchurch Court. No doubt the disclaimer was obtained from the respondents to protect the solicitor, where the Trowbridges were determined to proceed and execute the documents.

[58] There is the further difficulty confronting the Trowbridges. Even if there was a misrepresentation, the evidence falls well short of establishing that they were induced to enter into the guarantee by the Baynet report. That is clear, despite Mr Brodie's extensive and persuasive submissions. I repeat the passage of cross examination referred to earlier:

You didn't take it (the Baycorp Report) in ... No. Because I was, I had already committed myself anyway.

[59] Mrs Trowbridge gave no evidence relating to the affect of the report.

[60] In my view, that evidence makes it plain that the Trowbridges were not induced to enter the contract because of the Baynet report and the alleged silence in relation to the appellant's view of the reliability, or otherwise, of the report. There simply is no inducement.

[61] I accept that the true financial position was material, but, in my view, the report made it plain that the report did not represent Baynet's opinion of creditworthiness. In any event, accepting it as material that on its own does not establish inducement, as suggested by Mr Brodie. Inducement must be established as well.

[62] This question and answer is equally fatal to the Fair Trading Act cause of action. In considering whether or not the appellant's actions were in breach of s.9, there are a series of questions to be answered. These have been developed by the Court of Appeal in AMP Finance New Zealand Limited v. Heaven (1997) 8 TCLR 144, and subsequently adopted by the Court in Lane Group Limited v. D.L & L. Patterson Ltd [2000] 1 NZLR 129. The three questions are:

(a) Whether the conduct impugned is capable of being misleading.

(b) Whether the plaintiffs were in fact misled.

(c) Whether it was reasonable for them to be misled.

[63] Conceding for present purposes that the conduct was capable of misleading, the second question must be confronted, and the simple answer in the light of Mr Trowbridge's evidence in cross examination is that they were not misled. Mr Trowbridge said he did not take the report in, and it was obvious from his answer that regardless of the report he had already committed himself to the guarantee. That, in my view, is fatal to the Fair Trading Act cause of action.

UNDUE INFLUENCE

[64] The Judge dealt with this briefly. He found that there was actual undue influence on the part of Mrs Pomeroy. That is a finding that was almost inevitable. He continued that Mr Broadway saw what went on, although he interpreted it somewhat differently. He found that probably the decision to give the Baynet report to the Trowbridges was in some part brought about by Mr Broadway's account to Mr Edilson of the scene in the bedroom.

[65] The difficulty with the undue influence argument is how are the actions of Mrs Pomeroy to be sheeted home to the appellant. There is simply no evidence to establish that they should be responsible for the actions of Mrs Pomeroy, who was the daughter of Mrs Trowbridge and the step daughter of Mr Trowbridge. Furthermore, there is no finding, and on the evidence nor could there be, that Mr Broadway, who apparently observed some of Mrs Pomeroy's behaviour, was the agent, or employee of the appellant. To suggest he was Provincial's agent misunderstands the role of a broker. Undoubtedly, there was undue influence by Mrs Pomeroy, but this cannot be sheeted home to the appellant.

[66] It follows that the appeal must be allowed, and there will be judgment for the appellant in terms of the prayer in the counter claim.

[67] A short hearing as to costs and interest is to be set down in the week of the 4th June 2002.