The appellant solicitor appealed an order requiring him to personally pay $10,000 in costs under Rule 57.07 of the Rules of Civil Procedure.
The motions judge had awarded costs against the solicitor largely due to allegations of unprofessional conduct and conducting the litigation in an unreasonable manner.
The Divisional Court allowed the appeal, finding that the motions judge failed to apply the 'extreme caution' principle and did not establish how the solicitor's conduct caused costs to be incurred unnecessarily.
The court emphasized that Rule 57.07 is compensatory, not punitive, and should not be used to sanction professional misconduct that does not result in wasted costs.