Piercing the corporate veil in Central Auckland
On 26 July 2024, a liquidator was struck off by the NZICA Disciplinary Tribunal. By coincidence, that was the day security guard Levi Menzies became the first ever director to be argued out of his limited liability protection in relation to grievance remedies against his in liquidation company Prime Focus Security (PFS).
The Employment Relations Authority had relied heavily on the liquidator’s financial statements (unaware she was about to be struck off) and made a determination, later discredited, that Menzies had siphoned funds from his company and closed it down to avoid potential liability to Nathan Corrigan, a security guard who had worked for PFS for about six months.
PFS was incorporated in May 2020. On 22 July 2026 the Employment Court found:
[2] Mr Menzies was the sole director of Prime Focus Security. He says that he incorporated the company in May 2020 because he wanted to grow his business and was aware that it is safer to operate as a company than to be a sole trader because of limited liability. He says he made mistakes and Prime Focus Security ended up failing.
[3] Mr Corrigan, who is a former employee of Prime Focus Security, filed a personal grievance claim against Prime Focus Security in the Authority in June 2022.
[4] In September 2022, by special resolution as shareholder, and on the advice of his then employment advocate, Mr Menzies put Prime Focus Security into liquidation, finding a liquidator by searching the internet.
At the top of a Google search ranking for “liquidator nz” was a company called Liquidation Management Ltd, which was what the Court was referring to. A few months earlier a reputable Chartered Accountant had previously prepared the FY22 accounts, reporting a loss of ($61,449) following a FY21 loss of ($12,835). The balance sheet looked even worse due to the way PAYE arrears are penalised – the negative equity figure was by then around $74,000, so that means the company was on borrowed time – just another failed startup, youth and inexperience being the main reason.
Cooking the books
Unfortunately the liquidator, or more likely a known associate we can’t name because of a non-publication order, deliberately understated the FY22 loss by $56,700. The financial reports for the first 5-6 months of FY23, ie: 1 April 2022 until the liquidation date of 7 September 2022, were wild. They showed that Menzies had taken “excessive drawings” and the amount was either $194,588 or $128,627 if adjusting for purportedly introduced funds. How it was possible for Menzies to obtain credit and transfer even the lesser amount of $128,627 to his personal account, when PFS was way behind in its PAYE and GST payment obligations, was not explained.
A challenge to the Employment Court was filed within the 28 days allowed, but Menzies and his then advocate faced an enthusiastic three-strong legal team hell-bent on piercing the corporate veil; they even threatened to seek a short term of imprisonment if he didn’t pay up (by then it was nearly $38,000 including costs).
An application to stay the awards was unsuccessful, and Menzies succumbed to exhaustion and discontinued the challenge in April 2025.
A few weeks later, Menzies found out the liquidator who had been struck off was a front for a convicted fraudster who Menzies had actually spoken to a few times in relation to the liquidation. The recent judgment of the Employment Court said:
Mr Menzies says … that the liquidators of Prime Focus Security submitted evidence that was “demonstrably fake”, which Mr Menzies believes was an attempt to validate a predatory statement about “excessive drawings”. [His advocate] submits that there is a public interest in publicly identifying the persons who put that tainted evidence before the Authority.
We can now reveal that there was an attempt to get that non-publication order covering an unlicensed “shadow liquidator” lifted in 2025. Excerpts from the NZICA Disciplinary Tribunal’s decision appear below:
The (former) liquidators’ conduct, and generally poor accounting skills in the Authority caused both Levi Menzies and Nathan Corrigan to incur costs of roughly $15,000 each – through a combination of serious wrongdoing and the Dunning-Kruger effect (chasing money that never existed). There are two lessons to be learned from this dumpster fire:
If a party discontinues a challenge/appeal, there’s probably no going back – as we see from the Court declining leave to extend time for a second challenge (by 9-10 months).
If a company fails, any grievance raised against the company (as opposed to a claim for wage arrears and/or holiday pay) should die with the company to avoid further costs from being incurred.
Judge Holden noted:
Mr Corrigan has incurred in excess of $23,400 in costs in respect of his claims against Prime Focus Security and Mr Menzies and has received nothing for that.
A total of five lawyers worked on Corrigan’s claim. There is nothing to be admired about the result and perhaps unsurprisingly, none of them work together any more.
Tristam Price, Editor (and advocate for Levi Menzies from May 2025)
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