Menzies v Corrigan [2026] NZEmpC 151 - late challenge refused, substantive issues remain unresolved

The Employment Court refused Levi Menzies leave to bring a late challenge against the Employment Relations Authority determination in Corrigan v Prime Focus Security Limited (in liquidation). The application was substantially out of time and an earlier challenge had already been discontinued. That is the procedural history; it does not determine the merits of the underlying accounting, liquidation, disclosure and company-law disputes.

That is nevertheless different from deciding the underlying factual and legal controversies. In my view, important questions remain about the interaction between employment compliance powers and company liquidation, the accounting material relied on, the document pathway, and the practical means of recovery from a company already in liquidation.

The history matters

The original personal grievance was brought against Prime Focus Security Limited. By the time the matter developed further, the company was in liquidation. The Authority made awards against the company and the later litigation shifted towards whether compliance powers could require Mr Menzies, as a director, to take steps that would put the company in funds.

In July 2024 the Authority made a compliance order requiring Mr Menzies to take steps to put the company in funds. That raised an important and unusual question about the reach of the Employment Relations Act where the underlying debtor is a company in liquidation and ordinary principles of separate legal personality, creditor priority and control by the liquidator are also engaged.

My concern has consistently been that those regimes cannot simply be treated as though they operate independently of each other. A company debt does not automatically become a director's personal debt, and money introduced into a company in liquidation is ordinarily subject to the liquidation process and statutory creditor priorities.

The liquidation and accounting evidence

The compliance case relied in part on material concerning alleged excessive drawings and later financial records said to support a narrative that company funds had been removed to avoid Mr Corrigan's claim. Mr Menzies disputed that account and denied siphoning money from the company.

My position was that the figures required careful accounting analysis before serious conclusions were drawn from them. The underlying material was contested, and the reliability and completeness of the liquidation evidence therefore mattered.

Further concerns arose from the liquidation history. One of the liquidators, Kelera Nayacakalou, was later struck off following unrelated disciplinary findings. That does not establish that the liquidation itself was invalid or that every document supplied was wrong. It does, however, reinforce why contested material from the liquidation required careful scrutiny rather than assumption.

Why non-party discovery was sought from Catherine Stewart Barrister

The non-party discovery application arose from the pathway by which documents ordered from the liquidator reached the Authority. On 22 March 2024 the Authority directed the liquidator to provide financial statements, interim financial material, the statement of affairs referred to in the first liquidator's report, material supporting the phrase "excessive drawings", and relevant bank transactions and balances.

On 25 March 2024 Daniel Church advised the Authority that he had received documents from the liquidator over the weekend and asked that they be passed to the Member. Because material directed from the liquidator had passed through the office acting for Mr Corrigan, the provenance and completeness of that material became a legitimate evidential issue.

The questions were straightforward:

• What exactly had been supplied by the liquidator?
• Had everything ordered by the Authority been provided?
• Were there covering emails, explanations, or other communications relevant to understanding the material?
• Did the parties and the Authority receive the complete document trail?

That is why Mr Menzies instructed me to seek non-party discovery. The purpose was to establish the provenance and completeness of evidence being used in support of serious allegations against him. The application had been filed and served before the first challenge was discontinued.

A more detailed account of the accounting and disclosure issues is available here: Poor accounting in the ERA: Menzies v Corrigan and the liquidator disclosure problem.

The first challenge became practically impossible

Mr Menzies initially challenged the Authority determination within time. The proceeding raised issues including separate legal personality and the scope of the Authority's compliance powers.

The stay was conditional on payment of more than $33,000 into Court together with a further costs award to Mr Corrigan. Mr Menzies did not have the money required to satisfy those conditions. The practical consequence was that continuation of the challenge became extremely difficult and it was discontinued in April 2025.

The first challenge also produced a personal costs order against me, which I continue to regard as wrong. The discovery application was brought on Mr Menzies' instructions in a case the Court had already said was brought for good reasons and in good faith and raised important, complex issues. At the same time, Mr Corrigan's representatives were seeking dismissal of the proceeding, imprisonment for up to three months, a fine of up to $40,000 and sequestration of Mr Menzies' property. I do not accept that pursuing an arguable discovery step in that litigation justified making me personally liable for costs. The full chronology, sanctions sought and my submissions are here.

Further information emerged later. A judicial review was filed and subsequently put on hold. The later application attempted to return to the statutory challenge route, but by then it was approximately nine to ten months late following discontinuance of the first challenge.

Judge Holden refused the extension. I do not treat that procedural result as validating the underlying accounting allegations, disclosure process, liquidation narrative or the approach taken to personal liability. Those issues were not finally determined by refusing permission to restart the challenge out of time.

A separate procedural dispute about compliance sanctions

During the earlier Employment Court proceeding there was also a dispute about how any further compliance sanctions could properly be pursued. My position was that the existing de novo challenge concerned the Authority's compliance determination. If separate enforcement relief or sanctions were sought in the Employment Court, they required the proper originating process rather than being added to a statement of defence in the challenge.

I raised that issue with the Registry. The Registrar subsequently advised that the compliance determination stood on its own, that a separate statement of claim was required to seek a compliance order from the Court, and that a compliance order was not within the scope of remedies available in the existing de novo challenge.

That procedural point matters independently of the later controversy about correspondence between representatives. Where potentially serious sanctions are contemplated, correct process is not a technicality; it is part of ensuring that a person knows the case they must meet and that the Court is being asked to exercise the correct jurisdiction by the correct route.

Why I remain critical of the opposing case handling

I remain critical of aspects of the way the opposing representatives conducted the proceeding. That is not a general personal attack. It is based on identifiable procedural steps and their consequences.

The compliance issue is an example. My objection was that separate enforcement relief could not simply be pursued through the existing de novo challenge. The Registrar's response materially supported that objection by advising that a separate statement of claim was required and that a compliance order was outside the remedies available in the existing challenge. In my opinion, attempting to pursue that relief through the existing challenge was a material procedural error and an example of procedurally incompetent case handling.

I also consider aspects of the opposing approach unnecessarily combative. I do not accept a version of the history in which criticism of my communications is treated as the whole story while procedural errors and aggressive litigation choices by others disappear from view. The better approach is to identify each disputed step, explain why it mattered, and let the record speak for itself.

The broader public-record context, including my view that some wording could have been expressed differently without conceding the wider characterisations made about my conduct, is addressed separately here: The public record on Joyce, Menzies, LawNews and RNZ.

The practical recovery problem remained

None of this requires denying Mr Corrigan's original grievance or the awards made against the company. The practical problem was what happened next. An award against a company in liquidation is not the same thing as cash recovery, and attempts to obtain payment through the director personally generated further litigation, costs and procedural complexity.

In my view, that practical recovery problem should have been confronted directly and early. The more the dispute moved into satellite questions of compliance, personal liability and collateral procedure, the further it moved from the basic question of how a judgment creditor could lawfully recover against a company in liquidation.

What the 2026 judgment does and does not mean

The 2026 judgment means Mr Menzies was not permitted to restart his challenge substantially out of time. It demonstrates the obvious risk in discontinuing a proceeding when further evidence may later emerge and reflects the Court's interest in finality and prompt resolution.

It does not, in itself, establish that:

• the account of excessive drawings was accurate;
• the financial material proved deliberate asset stripping;
• the disclosure process was complete;
• the liquidation was a sham;
• the phoenix-business narrative was correct;
• the original compliance order was necessarily the only proper application of section 137 in the circumstances; or
• the interaction between employment compliance powers and company liquidation law has been finally resolved.

Judge Holden's discussion recognised that the use of section 137 in this setting engages the statutory framework governing liquidation, director liability and recovery of company debts. In my view, that confirms that the underlying issue was a real legal question even though the late application failed procedurally.

Tristam Price's assessment

Tristam Price described the result as a failure on paper but said that, in his view, it would have been wrong not to try. That was his assessment of the significance of the later material and the unresolved issues. I agree that there was a proper basis to attempt to put those matters before the Court. The delay and earlier discontinuance created an obvious procedural obstacle, but that does not diminish the importance of the issues the later application was attempting to raise.

Read Tristam Price's account: Leighton Associates - Media release: Menzies matter, Part 1 of 2.

Conclusion

The latest application failed because it was late. That is an important procedural result and should be stated plainly. It should not, however, be confused with a merits determination of every issue that sat beneath the litigation.

The substantive questions remain more interesting: how section 137 should operate where the debtor is a company in liquidation; what the accounting material actually established; whether the disclosure trail was complete; and how any lawful recovery strategy should interact with company and insolvency law.

My criticism of the history of this matter goes beyond the refusal to extend time. Significant legal and evidential issues became entangled in years of procedural and collateral dispute before they could be squarely tested. In my view, some of that complexity arose from poor procedural choices by the opposing side. The lesson is to identify the real legal problem early, test the evidence properly, use the correct originating procedure, and keep the litigation directed at the issue that can actually resolve the dispute.

Related reading

• The public record on Joyce, Menzies, LawNews and RNZ - the wider public and procedural context.
• Poor accounting in the ERA: Menzies v Corrigan and the liquidator disclosure problem - the detailed accounting and disclosure issues.
• Menzies v Corrigan [2025] NZEmpC 22 - stay judgment - the Court 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.

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Further reading: Leighton Associates - Menzies matter, Part 1 of 2.