Menzies v Corrigan [2025] NZEmpC 186 - employment advocate and employment lawyer conduct

Catherine Stewart Barrister Costs - Menzies v Corrigan [2025] NZEmpC 186

Mr Menzies was argued out of the ordinary limited-liability protection of his company in relation to personal grievance remedies owed by Prime Focus Security Limited, which was already in liquidation. So far as I am aware, this was an unprecedented use of the compliance jurisdiction against a director for those grievance remedies.

We challenged it in the Employment Court. The central point was simple: Mr Menzies was not the employer, the company was a separate legal person, and the Authority had ordered him personally to take steps to put a liquidated company in funds so it could pay grievance remedies.

The challenge was not discontinued because it was hopeless

The stay judgment is important: Menzies v Corrigan [2025] NZEmpC 22.

Judge Beck held at [18] that Mr Menzies' challenge had been brought for good reasons and was being pursued in good faith. At [21]-[22] the Court accepted there were important public-interest issues about the interaction between s 137(2), separate corporate personality and employee recovery rights. At [23] the Court said the factual and legal issues were complex, were not straightforward, and required close review.

The problem was the price of the stay. At [27]-[29], the Court required Mr Menzies within 21 days to:

• pay $33,103.91 into the Employment Court registry;
• pay $4,571.55 directly to Mr Corrigan; and
• accept that the stay would lapse if those conditions were not met.

That was an immediate cash requirement of $37,675.46. Mr Menzies did not have that money available to park in the Court while also funding the challenge. Continuing had become commercially pointless, so it was discontinued.

That is materially different from saying the challenge was hopeless. The Court had already recorded the opposite on the matters above: good reasons, good faith, public importance and complex legal and factual issues.

The imprisonment / sanctions timeline

There were repeated written references from Catherine Stewart Barrister's team to imprisonment, a fine and sequestration of Mr Menzies' property. This is the paper trail.

By December 2024 this was therefore not just a generic warning that imprisonment existed somewhere in the Act. The other side's email, memorandum and pleading were expressly putting imprisonment, a $40,000 fine and sequestration into the existing Employment Court challenge.

My procedural objection was also straightforward. I did not agree that those sanctions could simply be turned into issues for determination by putting them into a joint memorandum or a Statement of Defence to Mr Menzies' de novo challenge. My position was that enforcement sanctions had their own statutory route and, where separate originating proceedings were required in the Employment Court, the proper originating document was a Form 2 Statement of Claim. I refused to agree to the sanctions wording proposed for the joint memorandum.

I remain strongly critical of the way that was handled. It is difficult to reconcile criticism of my procedural conduct with the fact that the other side was trying to put imprisonment, a $40,000 fine and sequestration into a challenge in a way that was thoroughly procedurally wrong.

What followed

Mr Menzies discontinued the challenge after the stay conditions made continuing practically unviable. That did not resolve the underlying disagreement about the compliance jurisdiction, the accounting material, the dealings with the liquidator, or the procedure being used against him.

Fresh evidence later emerged concerning material that had been subject to non-publication and further proceedings followed. Those later issues are dealt with separately in the 2026 Menzies article.

Menzies v Corrigan [2026] NZEmpC 151 - later proceedings

My submissions on the personal costs application

These are my written submissions dated 15 May 2025 opposing the application for costs against me personally. They set out my position on the facts, the procedure and the principles governing costs against a representative.

In summary, I argued:

• I was not a party and had not been joined. No proper application had first been made to join me to the proceeding. My submission was that the Court's ordinary costs power under cl 19 of sch 3 applies to parties, so the threshold for joinder had to be properly addressed before personal costs could be ordered against a representative.
• Joinder for representative costs is exceptional. I relied on authorities including Harley v McDonald, Practitioner Y v Foulkes, Aarts v Barnardos New Zealand and Noble v Ballooning Canterbury.com Ltd. My submission was that there had to be an extraordinary feature of the litigation elevating my conduct beyond that of an effective, even passionate, representative acting for a client.
• The threshold was not simply that an application had failed. I argued that the authorities required a serious dereliction of duty to the Court. A mistake, oversight or error of judgment was not enough.
• The non-party discovery application was filed on Mr Menzies' instructions and for an identified evidential purpose. It was directed at documents relevant to serious allegations being made against him, including allegations of a sham liquidation, transferring or siphoning company money, stealing company money, and assertions about his absence from the original Authority investigation.
• Ordinary disclosure had already been attempted. A Notice Requiring Disclosure had been sent to Mr Corrigan and his representatives. My submission was that the documents were not produced and no proper objection to disclosure was served.
• There were practical reasons for seeking the documents from the former lawyers' office. Prime Focus Security Limited had been removed from the register, the former liquidator no longer held office and had lost her liquidator's licence, and attempts to obtain the material from her had not succeeded. The contemporaneous correspondence gave us reason to believe the relevant documents were held by Catherine Stewart Barrister's office.
• The application was narrowed. After service was initially rejected, it was amended so that the office, rather than individual counsel personally, was the non-party from whom discovery was sought.
• The application was withdrawn when the substantive proceeding was discontinued. Once Mr Menzies decided not to continue the challenge after the stay conditions made it practically unviable, there was no purpose in continuing the discovery application.
• I disputed that the documents sought were privileged. The material principally concerned communications with the liquidator and Authority investigation notices. My submission was that possession of those documents by a barrister's office did not of itself make them privileged legal advice.
• I disputed that my conduct caused the sort of unnecessary costs required for a personal costs order. My position was that the discovery application was brought in good faith, for a proper evidential purpose and on client instructions. I denied that there was egregious conduct capable of justifying indemnity costs against me personally.
• I also disputed the claim for costs on costs. The substantive response to the discovery application was a Notice of Opposition. I argued there was no proper basis for a substantial further personal costs claim, particularly where costs were said to have begun accruing before the application had even been served.
• Collateral criticism of my communications did not establish liability for the discovery application. My submission was that statements made elsewhere, political or media commentary, and previous criticism of my language did not establish the necessary connection between the discovery application and an exceptional personal costs order.
• The wider challenge itself was not a frivolous exercise. In Menzies v Corrigan [2025] NZEmpC 22, the Court had already recorded that the challenge was brought for good reasons and in good faith, raised important public-interest issues, and involved complex factual and legal questions. The discovery application arose in that litigation and was directed at factual allegations that remained disputed.

My position was therefore straightforward: I was representing my client, acting on his instructions and seeking documents we considered relevant to serious allegations being made against him. Even if the Court ultimately considered the discovery application legally wrong, I did not accept that an unsuccessful or arguable interlocutory step became the extraordinary misconduct required to join a representative personally and order costs against him.

Open my submissions PDF