The borrower sought relief under the Contracts Review Act and while some minor relief was granted the bank was nevertheless successful in obtaining a writ. The borrower then appealed to the Court of Appeal and lost. The borrower then sought a stay of the writ of possession while she sought special leave to appeal to the High Court. The Court of Appeal refused to grant a stay because it did not see any substance in the special leave application and the borrower was, in the meantime, unable to pay interest on the conceded amount of the debt.
The Court of Appeal concluded by encouraging the borrower to redraft her application for special leave and try again. It is submitted that this advice was inappropriate. Courts should restrict themselves to dealing with the issues before them, not advise litigants to continue hopeless proceedings. This is contrary to the spirit of s.56 of the Civil Procedure Act, being to ‘facilitate the just, quick and cheap resolution of the real issues in the proceedings’. It is also, from a lender’s perspective, an indication that the court favours borrowers. Confidence in the impartiality of the courts and the law’s respect for property rights, is crucial if lenders are to be induced to lend.
This has been explained in great detail by Hernando De Sotto in his seminal work, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, recommended reading for judges and legislators. In the Democratic Socialist Republic of Sri Lanka it is illegal to evict people from their homes. As a result it is impossible to raise capital and GDP per capita is only $4,589. Thus compassion for borrowers who cannot repay their mortgages is actually misguided because condemns entire country to a lower standard of living.