Nova Scotia has adopted and applied LeBlanc v. Doucet and has allowed the recovery of interest as a disbursement

National Bank Financial v. Potter, 2014 NSSC 264

This was a costs decision from the joint trial of related litigation involving multiple parties and actions. The successful Plaintiffs claimed disbursements of approximately $312,566.00, including $80,405.00 for interest on litigation loans. The Defendant, citing Leblanc v. Doucet, argued that interest on a litigation loan is recoverable only where, as a matter of fact, the loan was necessary to continue the litigation and the Plaintiff did not have the means to pursue the action. The Defendant argued that the Plaintiff in this case provided no such evidence and that there was no evidence of the causal connection between the loans and the litigation expense.

However, the Court disagreed and noted that there was evidence, provided by way of affidavit, setting out the loan agreement and interest. The Plaintiff borrowed three sums: $25,000.00 at 2.4% monthly interest; $15,000.00 at 2.4% monthly interest; and, $49,000 at an unidentified rate of interest for a total of $80,405.82 in interest. The Court also noted that there was evidence that the Plaintiff could not pay an order for security for costs, that he had lost his source of income when his company went out of business, and that a related action commenced by the Plaintiff’s former company was dismissed by reason of the impecuniosity of the Plaintiff. 20 The Court concluded “I am satisfied, on a balance of probabilities that it was necessary for [the Plaintiff] to take out loans at high rates of interest in order to continue the litigation. The Court approves the interest claim of $80,405.82”21