Perth man Stefan Pahia Schmidt, 25, has not denied pushing Mr Marshall, the 29-year-old cousin of slain Feilding farmer Scott Guy, through the hotel window but said it was accidental.
He has pleaded not guilty to murder.
His trial at the West Australian Supreme Court began on Monday when the jury was shown a security video of Mr Marshall plunging to his death.
Prosecutor Amanda Forrester said a "fit of rage" and the "barest exchange of words" prompted Schmidt to push Mr Marshall out of the window.
But defence lawyer Tom Percy says Schmidt accepts he pushed Mr Marshall, but claims he did not intend any harm.
Yesterday Mark Sylva, 30, who was working as a security guard on the night Mr Marshall died, told the court how Schmidt arrived at the hotel with two men and two women, the West Australian newspaper reported.
He noticed an altercation between Schmidt and one of his friends later in the night and noted that following the fights Schmidt appeared to be in an "upset state".
"He still seemed upset and I wasn't sure what he was capable of," Mr Sylva said.
"I kept my eyes on him for the majority of the time."
He watched Schmidt walk to a table where two of his female friends were talking to Mr Marshall, before grabbing him by the shoulder and swinging him around.
He then forcefully shoved him towards the window.
Mr Sylva said he there had been a "split second" where Mr Marshall could have been pulled to safety, but he fell two storeys, sustaining fatal injuries.
The trial is set down for two weeks.
Mr Marshall's father, Alan Marshall, last year told the New Zealand Herald of his shock over his son's death, especially so soon after Mr Guy's death.
"It's a little hard to believe ... they were close and all grew up together, the cousins, and had a good childhood together," Mr Marshall said.
