Wright Asset Management Limited v Marchi - [2022] NZHC 3180

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,

11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
https://

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-237

[2022] NZHC 3180

BETWEEN WRIGHT ASSET MANAGEMENT LIMITED
Applicant

AND

PATRIZIA MARCHI

Respondent

Hearing: 26 October 2022

Appearances:

Lady D A T Chambers KC for Applicant

A C M Fisher KC and J D Ryan for Respondent

Judgment:

30 November 2022

JUDGMENT OF MANDER J

[1] Mr Gary Wright and the respondent, Ms Patrizia Marchi, were in a de facto relationship. After several periods of separation and reconciliation, their relationship finally ended in 2021. In the early part of that year, they engaged in negotiations to agree a s 21A Property (Relationships) Act 1976 (the Act) agreement for the purpose of settling financial and property relationship issues between them. To that end, a property that had previously been the subject of a notice of claim lodged by Ms Marchi was sold by the applicant, Wright Asset Management Ltd (WAM), in its capacity as the trustee of the Verona Trust (the Trust), a trust settled by Mr Wright that owned the property.

WRIGHT ASSET MANAGEMENT LIMITED v MARCHI [2022] NZHC 3180 [30 November 2022]

[2] In order to facilitate that sale, WAM’s solicitors gave an undertaking to Ms Marchi’s solicitors to hold the sale proceeds in their trust account until such time as Ms Marchi agreed to them being disbursed or a court order is made. After WAM provided that undertaking, negotiations between Mr Wright and Ms Marchi broke down. The funds remain in the solicitors’ trust account. Ms Marchi has declined to release the undertaking. As a result, WAM has sought orders releasing its solicitors from their undertaking and authorising payment of the funds. Ms Marchi opposes that application.

The parties’ respective positions

[3] Apart from the preceding broad outline, there is little common ground between Mr Wright and Ms Marchi regarding the background to their relationship property dispute. The status of assets claimed to be at stake and the extent to which Ms Marchi was involved in and contributed to Mr Wright’s business are in issue. Each of them have filed affidavits in support of their respective positions.

[4] WAM maintains the undertaking’s sole purpose was to facilitate the now defunct relationship property agreement in respect of which the funds generated from the sale of the property were intended to be applied. It says this was superseded by Ms Marchi’s refusal to sign the agreement. The solicitors should therefore be released from their undertaking because the basis upon which it was given, namely to enable settlement of the written agreement, has fallen away.

[5] Ms Marchi, on the other hand, contends the undertaking was intended to protect her interests in the proceeds of a liquidated asset over which she may have a valid claim…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NZHC 3180
Decision Date: 30 November 2022

CaseChat Overview and Summary

Wright Asset Management Limited (WAM), the trustee of the Verona Trust, applied to the High Court for an order releasing its solicitors from an undertaking to hold funds generated from the sale of a property until either Patrizia Marchi (Ms Marchi) agreed to their disbursement or a court order was made. Ms Marchi opposed the application, arguing the sale proceeds should remain in the solicitors' trust account pending the resolution of a wider relationship property dispute between herself and Mr Gary Wright, the sole shareholder and director of WAM and the trustee of the Verona Trust. The Court found the purpose of the solicitors' undertaking was to hold the sale proceeds until Ms Marchi's claims to a share in the property, and potentially other assets of the Trust, were resolved. Ms Marchi's claims remain extant and are yet to be finally determined. WAM's application for the solicitors to be released from their undertaking was declined. Ms Marchi, having successfully opposed WAM's application, is entitled to costs on a 2B basis.

Orders