Taliano J.

Following the dismissal of the appellants' appeal, the successful respondents sought costs of $31,804.58.

The appellants submitted that costs should be fixed at $20,000.

The Divisional Court agreed with the appellants, fixing costs at $20,000 inclusive, noting that this amount was fair, reasonable, and proportionate to the amount at issue.

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.

The applicants, real estate brokers, applied for judicial review of decisions by the Real Estate Council of Ontario (RECO) Discipline and Membership Appeals Committees, which found they acted unprofessionally in purchasing property from a client without proper disclosure or advising her to seek independent legal advice.

The Divisional Court determined the appropriate standard of review was reasonableness.

The Court found the Committees' conclusions that the applicants breached the Code of Ethics and were not entitled to costs were reasonable.

The application for judicial review was dismissed.