Liquidation claim didn't add up, and the bill landed on him personally
Authority member Robert Davies personally penalised a Mount Bricklayers director on 17 June 2026, after liquidation claims were contradicted by company records.
The case followed an applicant's personal grievance that was resolved by mediation in May 2025. The grievance arose after he was suspended from work without pay following what he described as a "minor work mistake".
The applicant and Mount Bricklayers Limited (MBL) signed a Record of Settlement following mediation. Clause 2 required MBL to pay $25,000 in compensation across two instalments, the second of $16,000 due "...no later than 5pm 21 June 2025." Clause 3 provided that if either instalment went unpaid, the balance would fall due in full "...within 7 days of the date of the missed payment." Clause 4 obligated MBL to contribute $8,000 plus GST toward the applicant's legal costs, payable "...within 3 days of the date these terms of settlement are signed by a Mediator and receipt of a GST invoice...".
MBL's sole director responded to the applicant's later statement of problem by telling the Authority the company had "gone into liquidation" and that he personally was broke. In a subsequent email, he accused the applicant's representatives of invoice fraud and offered to repay the outstanding debt at $5 a week.
A search of the Companies Register carried out during the Authority's investigation found MBL remained registered, with the director still listed as its sole officer, and no record of any liquidation.
The Authority found MBL breached clause 4 by paying only $4,600 of the required $9,200 cost contribution, and breached clause 2 by paying the final $16,000 instalment two days late. It found no breach of clause 3, since the balance was ultimately paid within seven days of the missed date.
Robert Davies recorded that the director had told the applicant's lawyers he sold his boat and used staff holiday pay to help meet MBL's obligations, and that he "denied all allegations in this case".
Relying on the Authority's earlier decision in Pelabon v Zumo Retail Nelson Limited, Davies found a director did not need the corporate veil pierced to be held responsible for a company's non-compliance, since the relevant question was who controlled whether the company carried out what it had been ordered to do. He found the director had complete control over MBL's compliance with the settlement.
MBL was ordered to pay the outstanding $4,600 plus GST within 28 days, with the director personally liable to make that payment if the company failed to do so. The director was also ordered to pay a $2,000 penalty, split between the applicant and the Crown, along with interest on the unpaid sum from 24 May 2025. Davies noted some allegations against the director were not tested by evidence and did not factor into the penalty. MBL and the director were held jointly and severally liable for a costs award of $4,500 plus GST and the Authority's filing fee.
