Economy downturn leads to long list of court cases

The downturn in the economy is being reflected in a marked upswing in court debt proceedings.

Yesterday's bankruptcy and liquidation session in the High Court in Christchurch was the longest civil list in 12 years, Associate Judge Tony Christiansen told the court.

About 70 matters were dealt with during the court session.

Inland Revenue was the applicant in about 20 of the cases.

Christchurch lawyer Hamish Evans, who has been practising in Christchurch for 18 years, said the list was similar to the fallout after the 1987 sharemarket crash.

"There was a huge amount of insolvency work that carried on into 1992 and 1993," he said.

"This time around, it seems to be much more immediate.

"People are hitting the wall much faster."

Liquidations yesterday included real estate company Hillary and Marshall Ltd and retirement village Abbotsleigh Retirement Home Ltd.

Keiran Horne, of Crichton Horne and Associates Ltd, which specialises in insolvency and business rescue services, said liquidations and bankruptcies in the quarter to March were down on the same period last year.

"However, anecdotally, we're getting quite a few more queries." she said.

"Things do seem to be hotting up a bit."

"We are speaking to a lot more directors looking for advice.

"To me, the barometer is the construction industry. They come first and then the hospitality industry."

She had no doubt worse was to come.

"As soon as there's talk of recession or tightening, businesses close to the wire will put their hands up, but there is a certain lag effect as well," she said. "We're getting towards the end of that lag time."

The director of a company that went into liquidation yesterday said he was devastated and was having trouble getting out of bed.

The man, who did not want to be named, said the economy had come to a standstill and media publicity had stopped people paying their bills and buying things.

An Inland Revenue spokesman said the department was not yet seeing a marked increase in actions against debtors.

"It's business as usual," he said.

- © Fairfax NZ News