Love, loss and IBM feature in $1.4 million court case

A reseller, a solicitor, a failing marriage and IBM Credit feature in dispute

IBM has notched up what could well be an IT industry first — it’s become entangled in a marital dispute.

A Wellington High Court case involving an alleged breach of fiduciary duty by a solicitor in relation to a $1.4 million credit guarantee from IBM Credit has been resolved in favour of the solicitor.

The guarantee was signed in 1997 by a husband and wife to secure a credit facility for Ultra Net Pacific, a company established to sell computers door-to-door. The couple owned Rawleigh Marketing, which had purchased the business of door-to-door specialists W T Rawleigh. The husband was the great-great nephew of the founders.

The wife, Beverley Rawleigh, alleged she signed the guarantee under duress at a time when the marriage was failing. Her claim against the lawyer was on the grounds that she claimed he was aware her husband was forcing her to sign the guarantee. She had no financial interest in Ultra Net.

According to the judgment, the solicitor, Derek Tait, said that at no time during the appointment did he see any indication of disharmony or disagreement between Mr and Mrs Rawleigh. He said that there was no indication that Mr Rawleigh was pressuring Mrs Rawleigh to sign the guarantee or that he had forced her to attend his office.

Ultra Net defaulted on the credit facility and IBM duly obtained a judgement against Mrs Rawleigh on the guarantee. Bankruptcy proceedings following that judgement have been stayed until further order of the court.

Judge Mallon says a transaction involving a wife guaranteeing her husband’s business debts involves a risk that undue influence may be operating.

IBM had recommended that both parties obtain

independent legal advice but the judge said there was no requirement that they take that advice independently from each other.

IBM had discharged its requirement to take reasonable steps and Judge Mallon found that Mrs Rawleigh’s claim had failed.

“I therefore conclude that the guarantee was enforceable by IBM. This is not a basis on which Mrs Rawleigh’s claim would have failed,” Judge Mallon said in his judgment.

“In the end, while Mrs Rawleigh has suffered considerably by the events which occurred, her losses are not attributable to Mr Tait.”