Executive Summary: Key Legal and Evidentiary Issues

• Liability-only civil trial ended with the plaintiff’s monetary claim dismissed, making the defendants the successful parties.
• Determination of the “amount involved” under Tariff A turned on whether the court should use the agreed $125,000 damages figure despite only liability being tried.
• The court assessed whether the defendants’ graduated formal offers to settle, structured as dismissal plus discounted costs, qualified under Rule 10 and justified a 50% uplift in tariff costs.
• Prior authorities on severed liability and damages were applied to balance efficiency in trial management against the principle that costs must substantially contribute to the successful party’s legal fees.
• The plaintiff’s unsupported assertion of financial hardship raised the question of when, and on what evidentiary basis, impecuniosity may reduce a standard costs award.
• Ultimately, Tariff A Scale 2, a 50% Rule 10.09 increase, and reasonable disbursements produced a total award of $23,875 in favour of the defendants.

Background and underlying dispute

The litigation in Linders v. Ordinelli arose from a civil action commenced by the plaintiff, John Francis Linders, against the defendants, John and Penny Ordinelli, in the Supreme Court of Nova Scotia. The plaintiff pursued a monetary claim, and through negotiation the parties fixed the potential damages exposure at $125,000 if liability were established. Rather than trying both liability and damages, the parties and the court agreed to proceed by way of a liability-only trial. That procedural choice substantially reduced the scope and duration of the hearing, because no evidence on quantum was required and the focus remained on whether the defendants were legally responsible for the alleged loss. The liability-only trial was heard over two days in October 2025. In a decision released on January 21, 2026 (2026 NSSC 27), the court found in favour of the defendants, dismissing the plaintiff’s claim on liability. As a result, no damages were payable to the plaintiff under the agreed $125,000 figure. The defendants, having successfully defended the action, became presumptively entitled to their party-and-party costs in accordance with the Nova Scotia Civil Procedure Rules and the applicable tariff.

From liability decision to costs dispute

Once liability was resolved against the plaintiff, the remaining controversy shifted to costs. The parties could not agree on the appropriate quantum or structure of a costs award. The defendants filed an affidavit from their counsel, Hannah Helm, documenting legal fees of $91,235.50, exclusive of disbursements and HST, together with disbursements totaling $1,378.10. They did not, however, seek reimbursement of the full amount of those disbursements; they limited their claim to $750 inclusive of HST. The plaintiff did not directly challenge the necessity of the disbursements but maintained that they should be taxed. More significantly, he maintained that the global costs figure proposed by the defendants was excessive in light of a two-day liability-only trial. These competing positions led to the separate costs judgment, 2026 NSSC 158, in which Associate Chief Justice Jamieson was asked to apply Rule 77 (Costs) and the Tariffs under the Costs and Fees Act to fix an award that would “do justice between the parties.”

Competing approaches to the tariff amount

A central question in the costs decision concerned the “amount involved” for Tariff A purposes. The defendants argued that the appropriate figure was the $125,000 quantum of damages that had been agreed between the parties before trial. Using that amount, Tariff A Scale 2 yielded a base figure of $12,250, to which an additional $2,000 per day of trial was added, resulting in a starting point of $16,250 in costs before any uplift. The plaintiff, while accepting that Tariff A and Scale 2 applied, urged a very different approach. He contended that because only liability was tried, the amount involved should be set at less than $25,000, the lowest band under Tariff A. On his calculation, the Tariff would then provide $4,000 as the base amount plus $4,000 for the two trial days, for a total of $8,000 plus disbursements. In support of this lower figure, the plaintiff relied on case law addressing situations where liability and damages had been severed. Those authorities cautioned that using the full damages risk as the amount involved in a liability-only trial could discourage efficient trial management and severance. They also stressed that the complexity and importance of the issues, rather than the raw damages figure, should weigh heavily in determining the amount involved.

Use of agreed damages to define the amount involved

The court accepted the general principles from the severance authorities but distinguished them on the facts. Here, unlike a situation where only liability is tried and damages remain unresolved, the parties had actually agreed on the quantum of damages, fixing the plaintiff’s potential recovery at $125,000. Rule 77 contemplates that the “amount involved” may be an amount agreed upon by the parties, and the judge viewed the pre-trial agreement on quantum as a critical feature. In the court’s analysis, the agreed figure represented “the totality of the risk” each side faced if it lost on liability, and that risk allocation “cut both ways.” Both the plaintiff and the defendants proceeded to a liability-only trial knowing that, in the event of defeat, the other side could reasonably seek costs calculated on the basis of $125,000 as the amount involved. The court further drew support from decisions such as Driscoll v. Crombie Developments Ltd. and Morash v. Burke, where courts in liability-only trials had used agreed damages figures as the amount involved for tariff purposes. Coupled with the principle that party-and-party costs should represent a substantial contribution to a successful party’s reasonable legal fees, the court considered that using a figure less than one-fifth of $125,000 would dramatically understate that contribution, especially in light of more than $91,000 in defence fees. Accordingly, the judge declined to reduce the amount involved and fixed it at the agreed $125,000, yielding the Tariff A Scale 2 base amount of $12,250 plus $4,000 for the two trial days, or $16,250 before consideration of any multipliers.

Formal offers to settle and the Rule 10 uplift

Another key issue was whether the defendants were entitled to an increase in tariff costs under Rule 10.09 based on their formal offers to settle. There was a history of offers by both sides. The defendants made formal offers in June 2022 and on July 15, 2024. The July 15, 2024 offer was structured as a graduated proposal: in each defined time window leading up to trial, the plaintiff could settle by dismissing his claim in exchange for paying the defendants their costs subject to a specified percentage discount, starting at 10% and shrinking to 2% as trial approached. In parallel, the plaintiff made his own settlement proposals, including a global offer of $131,526.43 and, later, an offer to settle for $60,000 plus costs, disbursements and prejudgment interest. The plaintiff attacked the defendants’ offers on two fronts. First, he contended that their offers did not qualify as “formal offers” under Rule 10.05 because his lawsuit was a monetary claim, while the defendants’ proposals focused on dismissal and cost reductions rather than a payment of a concrete sum to the plaintiff. In his view, offers that primarily addressed costs were outside the monetary offer framework and should not trigger Rule 10 consequences. Second, he argued in the alternative that, if the July 15, 2024 document was a valid formal offer, the relevant timing under Rule 10.09 should be tied only to the final phase of the sliding discount (the 2% period immediately before trial), which would yield only a 25% uplift. The court rejected both arguments. It held that a defendant’s offer of dismissal combined with a waived or discounted costs claim does have a monetary component, because it reduces the plaintiff’s potential exposure to costs and is precisely the kind of settlement device Rule 10 is designed to encourage. The judge reasoned that importing a rigid requirement that defendants must add at least a nominal damages payment to qualify for Rule 10 protection finds no support in the rule’s text and would be artificial. On timing, the court treated the July 15, 2024 communication as a single continuous formal offer that remained outstanding until trial, with only the percentage of cost discount changing over time. There is nothing in the Rules, the court noted, that prohibits such a graduated structure. Since the offer was “made” on July 15, 2024, after the matter had been set down for trial but before the finish date, Rule 10.09(2)(c) applied, and the appropriate uplift was 50%, not 25%.

Financial hardship and impecuniosity as a costs factor

The plaintiff also asked the court to reduce the costs award on the basis of his alleged financial circumstances, arguing that an award above $8,000 would create significant hardship for him as a retired person living on a fixed income. The defendants, in response, pointed to Rule 77.04, which allows litigants who cannot afford to pay costs, and for whom the risk of a costs award is a serious impediment to bringing or defending a claim, to seek an order that they pay no costs. That rule is intended to promote access to justice and requires a motion to be made at an early stage, supported by substantial evidence of the applicant’s financial condition. The court agreed with prior authorities that Rule 77.04 is not intended to provide a post-trial escape from ordinary costs exposure for an unsuccessful party. At the same time, the judge recognized that courts have, in some cases, factored hardship or impecuniosity into the broader “justice between the parties” analysis under Rule 77.02 when quantifying costs. Whether such considerations are engaged depends on the particular circumstances and, crucially, on the evidence tendered. In this case, the plaintiff did not file any affidavit or documentary proof regarding his income, assets, liabilities or overall financial position. The only material before the court on hardship consisted of submissions by counsel. Without a meaningful evidentiary record, the judge was not prepared to give weight to hardship as a reason to depart from the tariff-based and Rule 10–enhanced costs otherwise warranted.

Disbursements and the final outcome

The last component of the costs analysis dealt with disbursements. Under Rule 77.10, a party-and-party costs award generally includes necessary and reasonable disbursements related to the subject of the award. Evidence showed that the defendants had actually incurred $1,378.10 in disbursements, yet they chose to claim only $750 inclusive of HST. The court reviewed the disbursement entries and concluded that the claimed amount was both necessary and reasonable in the circumstances, and therefore fully recoverable. Bringing together all elements of the analysis, the court fixed the amount involved at the agreed $125,000, applied Tariff A Scale 2 to arrive at $12,250, added $4,000 for the two trial days for a base of $16,250, and then increased that amount by 50% under Rule 10.09 due to the defendants’ favourable judgment following their July 15, 2024 formal offer to settle. This produced total tariff costs of $23,125. Adding the $750 in allowed disbursements, the court ordered that the defendants receive $23,875 from the plaintiff. In the overall case, therefore, the defendants emerged as the successful parties: the plaintiff’s substantive claim on liability failed, no damages were awarded to him, and the defendants secured a combined costs and disbursements award of $23,875 in their favour.