Stephen Pervan had been fishing in the area for 20 years and knew it well, he said.
The group noticed that the dinghy was taking on water as they returned to Tokaanu about midnight.
"The boat came to a stop and before they knew it, it was totally swamped," Mr Saunders said.
Not long after, the boat sank, and the men - who were not wearing lifejackets - clung to a chillybin to keep themselves afloat.
Some time between 4.30am and 5am, after four hours in the water, the men decided that one of them should swim to shore.
Shamie Pervan, who was fitter and a stronger swimmer than his brother and father, decided to leave to try to seek help, Mr Saunders said.
He was found on the shore about 9am by a passing boatie, who raised the alarm.
He was said to be very cold and suffering from mild hypothermia, but did not go to hospital.
Police and coastguard searchers found the bodies of Stephen and Ben Pervan a short time later.
"Obviously he [Shamie] is pretty upset at what has happened," Mr Saunders said. "It was quite an ordeal for him and he was in the water for quite a long time."
Mr Saunders said it was unclear whether the men had drowned or died of hypothermia. An autopsy would be performed today.