Solicitor Mini-Exam A - Questions
Business Law
1. Devin is the principal of a small business that has been placed into bankruptcy. He had guaranteed the company’s debts and is now being pursued personally by a creditor. Devin learns that a stay of proceedings has taken effect and asks whether the stay also protects him as guarantor. He believes the stay covers all related parties.
Does the automatic stay under the BIA protect Devin from enforcement as a guarantor?
A) Yes, the stay applies to all persons related to the bankrupt, including directors and guarantors.
B) No, the stay applies only to directors and officers but not shareholders or guarantors.
C) No, the stay applies only to the bankrupt and its property and does not protect guarantors from personal claims.
D) Yes, but only if the creditor agrees to suspend its claim during the bankruptcy process.
2. Rachel is a new shareholder in a private OBCA corporation. She notices that the corporation's articles authorize an unlimited number of common shares and a maximum of 1,000 preferred shares. She asks whether the corporation may later increase the number of preferred shares to raise capital. The directors are unsure whether a board resolution will be sufficient.
What must the corporation do to validly increase the authorized number of preferred shares?
A) Amend the corporate by-laws by board resolution and file the changes with the corporate records.
B) File a notice of change under the Corporations Information Act to update the share structure.
C) File articles of amendment to modify the authorized capital, with shareholder approval.
D) Approve the increase by board resolution and report it at the next annual general meeting.
3. Ben is a director of a corporation that issues 10,000 common shares to one shareholder for $5 per share and later issues another 10,000 shares to a second shareholder for $0.50 per share. Both shareholders hold the same class of shares. Ben is unsure whether the PUC for the class and the PUC for each share are the same.
How is the stated capital or PUC allocated in this situation under corporate law?
A) The PUC of the class equals the total amount received for all issued shares, and each share’s PUC is calculated by dividing that total by the number of shares issued.
B) Each share is assigned its own PUC corresponding to the amount paid by the specific shareholder on subscription.
C) The PUC is determined based on the adjusted cost base (ACB) of each shareholder’s investment in the corporation.
D) PUC allocation is governed by the CBCA, not the OBCA, and therefore is not applicable in this scenario.
4. Derek is a shareholder of an OBCA corporation who opposes a proposed amalgamation with another company. He believes the transaction will reduce the value of his shares and that he should have a right to dissent. The corporation insists that only voting shareholders are entitled to dissent rights. Derek holds a class of non-voting preferred shares and is unsure whether he can exercise dissent rights under the OBCA.
Is Derek entitled to exercise dissent rights in relation to the proposed amalgamation?
A) Only shareholders with voting rights attached to their shares are entitled to dissent from an amalgamation under the OBCA.
B) Shareholders holding non-voting shares may dissent if the amalgamation affects their rights under the articles.
C) A shareholder may only dissent where they hold a significant percentage of the outstanding voting shares.
D) Dissent rights are limited to shareholders of public OBCA corporations and do not apply in private company contexts.
5. Leo is planning to export an OBCA corporation to the British Columbia Business Corporations Act. He prepares the necessary special resolution and confirms tax filings are up to date. However, the OBCA Director refuses to approve the application due to missing documentation. Leo learns that certain filings and consents are required before authorization can be granted.
What must Leo obtain to successfully continue the corporation into another jurisdiction under the OBCA?
A) He must obtain consent letters from the Ministry of Finance and, where applicable, the Ontario Securities Commission.
B) He must obtain a certificate of revival from the foreign jurisdiction before submitting the continuance application in Ontario.
C) He must first secure approval of the amalgamation agreement by all shareholder classes, voting separately.
D) He must file a management proxy circular outlining the terms of the continuance with all shareholders before the vote.
6. Dina, a probationary employee, was dismissed two months into her job without warning. She was told she was not a “good fit” for the role. Dina claims she was wrongfully dismissed because she received no performance evaluation or notice. Her contract clearly included a three-month probationary period but was silent on performance standards.
Is Dina entitled to notice or damages despite being dismissed during a valid probationary period?
A) She is entitled to full common law notice unless the contract explicitly limits her rights.
B) The employer was required to implement a formal performance improvement plan before termination.
C) She may be dismissed without notice if the employer acts in good faith and assesses her suitability fairly.
D) She is automatically entitled to ESA termination notice, even if terminated before the three-month mark.
7. Sophia leases kitchen equipment to a restaurant under a five-year lease that includes an option to purchase at the end. She does not register a financing statement. A secured creditor later registers a PPSA security interest over all of the restaurant’s equipment. Sophia now wants to enforce her lease rights but is told the PPSA may apply.
How does the PPSA affect Sophia’s unregistered lease with an option to purchase?
A) A true lease is not subject to PPSA rules, even if it exceeds one year or includes a purchase option.
B) A lease that operates as a financing arrangement must only be registered after the first year has elapsed.
C) A lease over one year may be treated as a security interest under the PPSA and must be registered to maintain priority.
D) A lease that includes a purchase option is automatically exempt from PPSA registration requirements.
8. Rachel, CEO of a fintech company, distributes securities under the accredited investor exemption. Her counsel explains that she must file a report of exempt distribution with the OSC. Rachel wonders whether this requirement applies to all exemptions and what form is used. She also wants to know if she can avoid filing in the future by changing the exemption type.
What are the reporting obligations associated with the accredited investor and other prospectus exemptions?
A) No report is required for any exempt distribution, regardless of the exemption relied upon.
B) Form 45-106F1 must be filed within 10 days of most exempt distributions, except where the private issuer exemption applies.
C) A report must be filed only if the distribution involves more than ten accredited investors in Ontario.
D) Accredited investor distributions are exempt from reporting obligations unless they exceed a prescribed aggregate dollar threshold.
9. Leila operates a CCPC that generates both ABI and passive income. In 2023, her accountant advised that the company should pay out non-eligible dividends before declaring any eligible dividends. This puzzled Leila, as she thought eligible dividends were more tax-efficient. The accountant explained that a refund from the eligible RDTOH (ERDTOH) account can only be accessed after the NERDTOH is fully depleted. As the company has accumulated refundable tax from both business and investment sources, Leila wants to structure dividend payments to maximize tax recovery. She now seeks clarification on the ordering rule for accessing corporate tax refunds.
How must dividend payments be ordered to trigger maximum corporate tax refunds from RDTOH accounts?
A) Dividends must be paid in a blended order that reflects the proportion of ABI and investment income earned.
B) Eligible dividends are used first to access the ERDTOH account, followed by non-eligible dividends for NERDTOH.
C) Refunds are distributed proportionately from ERDTOH and NERDTOH, regardless of the type of dividend paid.
D) Refunds must first be drawn from the NERDTOH account before the ERDTOH can be accessed.
10. Caleb is a limited partner in a film production limited partnership. He regularly attends production meetings and gives strong opinions on casting and creative direction. One day, he signs a contract with a screenwriter on behalf of the partnership. When the partnership defaults, the screenwriter seeks payment from Caleb personally. Caleb insists he is protected by his limited partner status.
What is the most accurate assessment of Caleb’s liability?
A) Caleb has unlimited liability because he transacted with third parties.
B) Caleb retains limited liability as long as he did not profit from the transaction.
C) Caleb loses limited liability if he participates in the control of the business.
D) Caleb cannot be held liable unless the general partner consents.
11. Noah, a financial advisor, is helping his client Clara decide whether to incorporate her rapidly growing consulting business. Clara currently operates as a sole proprietor and earns over $300,000 annually. She is concerned about personal liability and wants to defer as much tax as possible by leaving income in the business. Noah suggests incorporating as a Canadian-controlled private corporation (CCPC) to take advantage of the small business deduction (SBD). Clara wonders whether this option is still beneficial even if she doesn’t plan to pay herself a salary or dividends right away. She is also curious whether the SBD will provide significant savings on her current income level.
What is the primary tax advantage of incorporating the business as a CCPC?
A) The ability to carry forward losses indefinitely against the shareholder’s other income.
B) Access to the small business deduction, resulting in significantly lower corporate tax rates.
C) Automatic eligibility for lifetime capital gains exemption.
D) Exemption from filing corporate tax returns for the first two years.
12. Ethan acquires securities under an accredited investor exemption and wants to resell them six months later. The issuer is not a reporting issuer. His broker informs him that the resale may be restricted and suggests reviewing NI 45-102. Ethan is confused about why resale rules apply when he already bought under a valid exemption.
Is Ethan permitted to freely resell the securities he acquired under the accredited investor exemption?
A) Securities acquired under an exemption are subject to resale restrictions unless the issuer becomes a reporting issuer and other conditions are met.
B) Securities of non-reporting issuers may be resold without restriction after a three-month holding period.
C) The accredited investor exemption allows unrestricted resale regardless of the issuer’s status.
D) Resale limitations under NI 45-102 apply only to securities issued by mutual funds and do not affect Ethan’s situation.
13. Arman incorporates a corporation under the CBCA with a single director and issues shares to three initial shareholders. They wish to pass a resolution approving the corporation’s general by-law but are unable to hold a formal meeting in time. Arman suggests doing everything in writing, provided all shareholders consent. One of the shareholders is travelling and cannot be reached for two weeks. The others want to proceed without delay and ask if a majority can sign a resolution instead.
Can the shareholders of a CBCA corporation pass a written ordinary resolution without unanimous consent?
A) A written resolution must be signed by at least two-thirds of the shareholders to be valid.
B) All shareholders must sign a written resolution, regardless of the nature of the matter.
C) A written ordinary resolution may be signed by a majority of shareholders if notice is sent to all non-signing shareholders within the required time.
D) Resolutions of shareholders must be signed by the board of directors on their behalf if unanimity cannot be achieved.
14. Lucas is a tax accountant who promotes an aggressive donation tax shelter scheme. He advertises substantial tax savings, and many clients rely on his advice. CRA audits several participants and disallows their deductions, assessing penalties under s. 163.2 of the ITA against Lucas personally. Lucas argues that he was not the taxpayer and should not be penalized. He also claims he had no intention of misleading anyone.
Can the CRA impose third-party civil penalties on Lucas under s. 163.2 of the ITA?
A) No, because Lucas did not file a return and is not considered a taxpayer under the Act.
B) Yes, if Lucas engaged in conduct amounting to culpable promotion of a false tax statement.
C) No, unless the CRA successfully prosecutes Lucas for tax fraud in criminal court.
D) No, because liability for penalties falls solely on the taxpayers who relied on the scheme.
15. Tina, a successful bakery owner, is exploring options to expand her business across Ontario. Rather than opening more locations herself, she is considering franchising her business model to interested investors. She drafts a detailed operations manual, prepares a licensing package, and begins discussions with prospective franchisees. However, she is unaware of her obligations under franchise disclosure legislation in Ontario. One potential franchisee, after receiving verbal promises of high profits, signs an agreement without receiving any formal documents. Months later, the franchisee suffers losses and threatens legal action, claiming Tina failed to meet legal disclosure requirements. Tina is unsure whether she has any statutory obligations before entering into franchise relationships.
What disclosure obligations must Tina comply with before finalizing franchise agreements in Ontario?
A) She is required to provide a disclosure document that complies with the Arthur Wishart Act at least 14 days before execution.
B) She is exempt from disclosure obligations if the prospective franchisee has a proven track record in operating similar businesses.
C) She must register her franchise model and template agreement with the Ontario Business Registry before soliciting franchisees.
D) She is obligated to supervise the franchisee’s business operations to ensure adherence to the operations manual and brand standards.
16. Briana and Thomas operate a boutique design studio through a general partnership. Without Briana’s knowledge, Thomas signs a large supply contract with a vendor outside their typical scope of work. The vendor believes Thomas had authority to act on behalf of the firm. When payment disputes arise, Briana refuses responsibility, claiming she never approved the purchase. The vendor insists the firm is bound by Thomas’s agreement.
Which of the following best reflects the firm's obligations?
A) The contract is void without Briana’s consent.
B) Thomas is solely liable for exceeding his authority.
C) The firm is bound if Thomas acted within the apparent scope of business.
D) The partnership is not liable because the contract involved an unusual product.
Case 1
Westgrain Solutions Inc. is a federally incorporated agri-tech company with subsidiaries in Ontario and Saskatchewan. The company has grown rapidly through a combination of equity offerings and joint ventures. However, a recent data breach involving employee health records has triggered a privacy complaint under PIPEDA. Simultaneously, Westgrain is exploring a restructuring to isolate its seed genetics business into a new corporation and wind down a debt-laden processing division. The CFO proposes using an asset transfer plan under s. 192 of the CBCA to reorganize assets. One director has objected, citing a potential loss of voting power and inadequate disclosure. Meanwhile, Westgrain’s lawyers are preparing a consent agreement to be filed with the Office of the Privacy Commissioner, but the firm is unsure if that will bar future litigation. At the same time, one of Westgrain’s business units is considering converting from a sole proprietorship to a limited partnership to attract outside investment while retaining operational control.
Questions 17 to 20 refer to Case 1
17. What business law concern arises from the director’s objection to the proposed s. 192 asset reorganization?
A) The director may apply to court under a derivative action if shareholder interests are misrepresented.
B) The director may apply for relief under the oppression remedy if the reorganization is unfairly prejudicial.
C) The director is entitled to mandatory dissent rights if any shares are to be redeemed during the transaction.
D) The director may block the transaction entirely unless unanimous board approval is obtained under the CBCA.
18. What legal issue is raised by Westgrain’s proposed consent agreement with the Privacy Commissioner?
A) Entering into a consent agreement will trigger a formal audit of all business records under s. 18.
B) A consent agreement does not bar affected individuals from bringing claims in Federal Court.
C) The consent agreement supersedes any earlier informal resolution and bars future sanctions.
D) The agreement must be approved by the Minister of Innovation, Science and Economic Development.
19. What is the legal effect of converting Westgrain’s unincorporated division to a limited partnership?
A) The business will lose the ability to flow losses to its founding individual partner.
B) The conversion requires registration federally and approval from the CRA.
C) The general partner will retain management control, while limited partners gain limited liability.
D) The limited partnership must be dissolved and reformed each year to comply with investor liability caps.
20. What restructuring option is available to Westgrain’s processing division if it is insolvent but wishes to avoid immediate bankruptcy?
A) It must file for bankruptcy and assign all assets to a licensed trustee under the BIA.
B) It may apply for interim relief under the CCAA without shareholder approval.
C) It can dissolve voluntarily under the OBCA and use court-supervised liquidation procedures.
D) It may pursue a proposal under the BIA to restructure its debt and avoid bankruptcy.
Estate Planning
1. The estate trustee of Harold’s estate obtains a certificate of appointment and proceeds with distribution. Eight months later, a previous unrevoked will surfaces. The original certificate was granted based on a 2018 will, but the new one is dated 2022. The new beneficiaries file an application to revoke the certificate.
What rule governs the revocation of the original certificate of appointment in light of the later will?
A) A new application must be made under Rule 75.01 to determine the validity of competing testamentary documents.
B) Rule 75.04 allows for revocation of a certificate if a later valid will is discovered or the original certificate was issued in error.
C) Revocation is not permitted unless the applicants can prove that the original trustee committed fraud.
D) Once distribution begins, revocation may only proceed with the written approval of the Attorney General or the Public Guardian and Trustee.
2. Michael is the sole estate trustee of his late wife’s estate and is also the surviving spouse. He is aware that making an election under the FLA would be financially advantageous but is uncertain about his duties as trustee. He asks his lawyer whether he has any obligation to inform himself about his own FLA rights or to disclose those rights to beneficiaries.
How should Michael discharge his fiduciary duties in light of his dual role as surviving spouse and estate trustee?
A) He must resign as estate trustee and allow the court to appoint an independent administrator to avoid breaching his fiduciary obligations.
B) He is barred from electing under the FLA because doing so would create an impermissible self-dealing scenario.
C) While a conflict exists, he may proceed cautiously but must seek legal advice and inform the beneficiaries of the election and its potential effect on the estate.
D) His fiduciary duty to the beneficiaries requires him to forgo any personal claims against the estate, including an equalization payment under the FLA.
3. Adam lived in a committed relationship with Vincent for over four years, raising Vincent’s young daughter as his own. When Vincent passed away intestate, Adam applied to become the estate trustee. Although some relatives of Vincent contested Adam’s appointment, Adam cited his right based on his common-law relationship.
What is Adam’s legal entitlement to apply for appointment as estate trustee under Ontario’s Estates Act?
A) Adam has no legal status to apply for appointment because he was neither married to Vincent nor related by blood or adoption.
B) Adam shares equal presumptive priority with married spouses when applying to be appointed estate trustee of an intestate estate.
C) Adam may apply only after obtaining formal renunciations or written consents from all living next-of-kin of the deceased.
D) Adam is automatically entitled to appointment as estate trustee unless an adult beneficiary files a notice of objection or competing application.
4. Graham dies intestate, leaving behind two adult children and a common-law partner, Joan, with whom he had cohabited for 18 years. Joan applies for a certificate of appointment without a will, asserting her role as spouse. One of the children contests the application, arguing that only married spouses may apply under the Estates Act.
Can Joan be appointed estate trustee without a will despite not being legally married to Graham?
A) No, because common-law partners are excluded from applying for a certificate of appointment under the Estates Act.
B) No, because courts must favour children or other blood relatives over unmarried
cohabitants in intestacy situations.
C) Yes, if no person with a prior statutory right applies, the court may appoint a common-law partner it considers appropriate.
D) No, because the Succession Law Reform Act limits eligibility for appointment to married spouses only.
5. Marta is reviewing a new client’s draft will and notices a clause directing the estate trustee to accumulate income in a discretionary trust for 25 years. The trust is to benefit the testator’s grandchildren, who are currently minors. Marta recalls that accumulation of income is subject to statutory restrictions. She is unsure whether the clause complies with Ontario’s Accumulations Act.
What is the maximum period during which accumulation of income is permitted under Ontario law?
A) Indefinitely, so long as the trust is discretionary.
B) 21 years from the testator’s date of death.
C) Until the youngest beneficiary reaches age 25.
D) So long as the trust remains part of a testamentary spousal trust.
6. Catherine learned that her father’s will had been probated despite serious concerns regarding her father's testamentary capacity at the time it was executed. A certificate of appointment of estate trustee had already been issued to her stepmother. Catherine wished to challenge the will’s validity but was concerned about the procedural route now that probate had been granted.
What step must Catherine take first to initiate a proper challenge to the probated will?
A) File a fresh notice of objection in Form 75.1 along with supporting medical evidence regarding testamentary incapacity.
B) Bring a motion for an order under Rule 75.05(1) requiring the return of the certificate of appointment to the court.
C) File a statement of claim and serve it on the estate trustee and all residual beneficiaries within 30 days of discovering the issue.
D) Commence an application under the Declarations of Death Act and include a request for probate revocation in the prayer for relief.
7. Rosa administers an estate that includes a rental property. The deceased was the sole landlord, and no successor was named. A tenant withholds rent, citing the absence of proof that Rosa has authority to act. Rosa has not yet received a certificate of appointment and wonders if she can take enforcement steps under the tenancy.
What is Rosa’s authority to act as landlord before probate is granted?
A) She must apply to the Superior Court for a specific order authorizing her to collect rent from the tenant.
B) She cannot assert any rights as landlord until probate has been granted by the court.
C) As a named estate trustee in the will, Rosa has immediate and enforceable legal authority to manage the lease.
D) Although Rosa has authority under the will, a certificate of appointment is likely required to compel tenant compliance or take enforcement action.
8. Liam prepares a detailed estate plan that leaves RRSP proceeds to his sister, a high-income earner, while directing all taxes to be paid from the residue of the estate. Upon his death, the estate is insufficient to cover the tax triggered by the RRSP, and his sister receives the full amount. The CRA issues a tax bill to the estate, which is unpaid. CRA then issues an assessment to the sister.
On what legal basis can the CRA assess the sister for tax relating to the RRSP proceeds?
A) Recipients of RRSP proceeds are jointly and severally liable with the estate for any tax attributable to the inclusion of the RRSP in the deceased’s income.
B) CRA may not assess named beneficiaries of registered accounts, even if the estate is unable to pay.
C) A beneficiary is only liable for unpaid taxes if they also acted as the executor or estate trustee.
D) Only spousal RRSP beneficiaries may be held responsible for unpaid taxes on rollover accounts.
9. Julie prepares a power of attorney for personal care that includes a provision authorizing her attorney to use force to have her assessed for capacity if needed. The lawyer explains that the SDA permits this, but only if a specific safeguard is satisfied. Julie agrees and completes the extra steps.
What safeguard is required to validate the use-of-force provision under the Substitute Decisions Act?
A) The attorney must obtain a written capacity opinion from a qualified physician before acting.
B) The grantor must sign a prescribed acknowledgment within 30 days of executing the power of attorney, confirming her understanding of the clause.
C) The authority to use force is only valid if the grantor is over the age of 70 at the time of execution.
D) A witness affidavit must be submitted to the Public Guardian and Trustee confirming voluntariness.
10. Sophie is preparing a summary disposition application for guardianship of property for her brother. She obtains two capacity assessments from assessors conducted fourteen months before issuing the notice of application. She proceeds to file the application without updating the assessments. The registrar refuses to submit the application to a judge.
Which statutory requirement did Sophie fail to meet?
A) She failed to file a guardianship plan with the Public Guardian and Trustee outlining how her brother’s property would be managed.
B) She failed to have both capacity assessments completed within twelve months before issuing the notice of application.
C) She failed to identify herself as the individual who would also serve as attorney for personal care in the required forms.
D) She failed to serve notice of the application on the spouse or partner of the incapable person as required for summary proceedings.
11. Nathan is assisting clients drafting wills where one parent names a family friend to be the child's guardian and the other parent names a different friend. The couple intends these appointments to take effect only if they die simultaneously. Nathan fails to point out a risk regarding conflicting appointments.
What legal risk did Nathan fail to identify in the parents’ conflicting guardianship designations?
A) Only the first friend who applies to the court will receive automatic decision-making powers over the child’s care.
B) The court may treat the two appointments as merged and jointly binding unless challenged by a family member.
C) If each parent names a different guardian and both die at the same time, neither appointment is effective unless they name the same person.
D) The guardianship decision will default to the person named by the parent who signed their will most recently.
12. Isabelle, a minor beneficiary under her late grandfather’s will, is represented by the OCL. The estate trustee seeks to sell farmland and reinvest the proceeds. All adult beneficiaries consent, but Isabelle’s guardian refuses. The trustee proposes to proceed under r. 14.05(3).
How should the trustee obtain court approval to proceed with the sale?
A) By submitting a Form 75.1 with evidence of OCL consent, as required for transactions involving minor beneficiaries.
B) By applying under the Trustee Act and demonstrating to the court that the sale is in the best interest of all beneficiaries, including Isabelle.
C) By bringing a motion under the Children’s Law Reform Act, with evidence of appraisal and representation by a litigation guardian appointed for Isabelle.
D) By showing that all adult beneficiaries reside in Ontario and have approved the sale, satisfying the criteria for summary approval under estate law.
13. A client wishes to distribute her estate equally among her five grandchildren but is concerned that one of them, age 14, is immature and at risk of squandering the funds. She instructs the lawyer to draft a trust holding that grandchild’s share until age 30, with income paid at the trustee’s discretion. The lawyer cautions about the Saunders v. Vautier rule and asks whether the client wants to avoid early access if all grandchildren survive.
What drafting approach would most effectively prevent the early termination of the trust under the rule in Saunders v. Vautier?
A) Include a gift-over in the event the grandchild dies before age 30, converting the interest into a contingent one.
B) Require the written consent of the trustee before any capital may be distributed prior to age 30.
C) Register the trust under the Family Law Act to ensure its enforceability as a protective measure.
D) State that the trust may be revoked at the discretion of the estate trustee before the grandchild reaches age 30.
14. Paul owns a $750,000 RRSP and names his disabled adult son as beneficiary. His son is financially dependent on him due to a mental disability. Upon Paul’s death, his estate applies to transfer the RRSP proceeds to a registered plan for the son without immediate tax. CRA questions the legitimacy of the rollover and demands additional documentation.
What tax treatment applies to the RRSP proceeds under these circumstances?
A) A tax-deferred rollover is available if the son is financially dependent due to infirmity, and the RRSP funds are used to purchase a qualifying annuity or RRSP in the son’s name.
B) A rollover is only permitted where the child is under the age of 18 at the time of the contributor’s death.
C) CRA must issue a discretionary written ruling before a rollover involving a disabled adult child can take effect.
D) The entire RRSP must be taxed on the terminal return unless the funds are directed to a surviving spouse or common-law partner.
15. Amelia names her friend as guardian of her minor child in her will. She assumes that the appointment is permanent and final. However, after her death, the friend fails to take legal steps to confirm the guardianship, resulting in the child being placed temporarily in foster care.
What procedural step was required to make the testamentary guardianship effective beyond the temporary period?
A) File a guardianship bond with the Superior Court of Justice before taking custody of the child.
B) Notify the Office of the Children's Lawyer within 30 days of the testator’s death.
C) Apply to the court within 90 days to confirm the appointment as permanent decision-maker.
D) Register the testamentary appointment with the court registrar in the child’s jurisdiction of residence.
16. When James died, he left a will naming his wife, Natalie, as both a beneficiary and the sole executor. Natalie decided to file an equalization claim instead of accepting the benefits under the will. The court later needed to determine whether she could continue acting as executor.
What is the legal effect of Natalie’s election to claim equalization on her appointment as executor?
A) She remains executor but must refrain from benefiting herself.
B) She remains executor only if she obtains consent from the court.
C) She is deemed to have predeceased the testator and cannot act as executor.
D) She may remain executor because the election only affects beneficiaries, not executors.
Case 2
Margaret Tse died unexpectedly at age 62, leaving a notarized will that appointed her adult son Nathan as estate trustee and left the residue of her estate to her common law partner, Charles. Margaret and Charles had lived together for 15 years in a jointly owned home but never married. She also had two minor grandchildren, whom she partially supported, and had named her sister Agnes in the will as their guardian and manager of their inheritance. The will included no trust provisions and was silent on any specific role for the Office of the Children’s Lawyer. The estate includes $420,000 in RRSPs, a $300,000 life insurance policy designating Charles as beneficiary, and a $1.5 million principal residence owned as joint tenants. Charles now claims he is entitled to an equalization payment under the Family Law Act and wants to elect against the will. Meanwhile, Agnes is seeking clarification on whether she must apply to be guardian of the children's property before accessing the inheritance Margaret intended for them. Nathan is unsure how to manage tax obligations on the RRSP and wants to know whether probate fees apply to jointly held assets.
Questions 17 to 20 refer to Case 2
17. Can Charles elect under the Family Law Act and seek an equalization payment from Margaret’s estate?
A) Yes, because common law spouses have the same election rights under the Family Law Act as married spouses.
B) No, because the FLA equalization regime applies only to married spouses, not common law partners.
C) Yes, but only if Charles can show that the will failed to provide him with adequate support.
D) No, because the jointly held home already satisfied Charles’s legal entitlement under the will.
18. What must Agnes do to manage the inheritance left to Margaret’s grandchildren under the will?
A) She must apply to be appointed as guardian of property for the minors within 90 days of the will taking effect.
B) She must apply to the court for guardianship of property, and notice must be given to the Children’s Lawyer.
C) She may act under the will if she is named as both trustee and guardian, with no further application required.
D) She can receive funds directly under s. 51 of the CLRA if the value of each child’s gift is less than $50,000.
19. Will the jointly held home between Margaret and Charles be subject to estate administration tax (probate fees)?
A) No, because jointly held property passes outside the estate and does not form part of the probate value.
B) Yes, if the executor includes it in the value of assets submitted for probate purposes.
C) Yes, because it is a matrimonial home and Charles must elect under the Family Law Act.
D) No, unless the joint tenancy is severed before death or challenged in court.
20. What are Nathan’s responsibilities regarding the RRSPs included in Margaret’s estate?
A) The RRSPs are taxed only if Charles does not use them to purchase an annuity within 60 days.
B) The RRSPs are tax-deferred if they pass to a minor child or sibling under a Henson trust.
C) Nathan must ensure that the full value of the RRSPs is reported as income on Margaret’s terminal return unless a qualified rollover applies.
D) Nathan is not responsible for reporting RRSPs if they pass to a designated beneficiary outside the estate.
Real Estate
1. Dario is a subcontractor on a commercial office project that substantially completed construction in June 2023. He last performed work on August 15, 2023, but received no further payments from the general contractor. On October 5, 2023, Dario registers a claim for lien and serves the owner. The owner claims the lien is expired because the certificate of substantial performance was published on July 25, 2023, and no further work was required after that. Dario insists his work was remedial and extended the limitation period.
How should the validity of Dario’s lien be assessed under the Construction Act?
A) The lien remains valid because it was preserved within 60 days from the final date on which he performed any work, regardless of certificate publication.
B) The lien is enforceable because the nature of the work performed after substantial performance was for the benefit of the owner and not merely minor in scope.
C) The lien deadline must be calculated from the actual last day on site, even if the work was remedial or corrective in nature.
D) The lien expired because it was not preserved within 60 days of the published certificate of substantial performance.
2. Omar holds a second mortgage on a downtown condo unit. He is notified that the first mortgagee has issued a notice of sale. To protect his interest, Omar tenders payment of the arrears owing under the first mortgage after the 35-day notice period has expired but before the scheduled closing. The first mortgagee rejects the payment, citing expiry of the notice period and commitment to a buyer. Omar applies for relief under s. 22 of the Mortgages Act, arguing his right to redeem remains intact.
When does Omar’s right to redeem the first mortgage expire under the Mortgages Act?
A) The right to redeem expires automatically after the 35-day notice period ends, regardless of sale status.
B) Redemption is permitted until the mortgagee enters into a binding agreement to sell the property.
C) The statutory right to redeem continues until closing unless the mortgagee registers a transfer.
D) The right to redeem ends once the mortgagee accepts a valid agreement of purchase and sale for the mortgaged property.
3. Danielle is advising a developer who owns Lots 4 and 5 on a registered plan of subdivision. The developer wants to build a semi-detached dwelling on the east half of Lot 4 and the west half of Lot 5 and sell each half separately. Danielle reviews s. 50(5) and confirms that the sale of part lots on an RPS is restricted unless permitted by by-law or consent. No exempting by-law applies.
What is the proper legal step to enable the developer to sell the divided parts of Lots 4 and 5 separately?
A) Sell both part lots together under a single transfer to avoid contravening subdivision restrictions in the Planning Act.
B) Obtain a part-lot control exemption by-law under s. 50(7) from the municipality to authorize the intended conveyances.
C) Register a caution against title to preserve the developer’s ability to convey once the structure is completed.
D) Submit a revised plan of subdivision to the municipal land registrar to formalize the new lot boundaries for legal sale.
4. Rohan owns Parcel A and Parcel B, which are both parts of a lot on a deregistered plan. He plans to sell Parcel A and retain Parcel B. Neither parcel is within an RPS, and no Planning Act consent has been obtained. Rohan insists that since the parcels were separately assessed for municipal taxes and are fenced off, he can deal with them separately. His lawyer must assess whether the intended transaction is valid.
How should Rohan’s lawyer assess the transaction under the Planning Act?
A) Tax status and fencing are relevant to land division analysis and may support separate dealing if the parcels were independently used for a prolonged period.
B) Registered and deregistered plans are treated the same under s. 50(5), so the transaction is valid without further consent.
C) The parcels fall under s. 50(3), which prohibits the sale of one part while retaining abutting land unless an exception or consent applies.
D) Because the parcels appear separately on historical assessment rolls, they are deemed legally divided under the Planning Act.
5. Grace is purchasing a new condominium unit and receives an addendum with a tentative occupancy date. The vendor provides timely notices of delays, but the outside occupancy date arrives and the unit is still not ready. Grace wishes to cancel the agreement. The vendor offers a $2,000 upgrade credit to keep her in the deal.
What are Grace’s legal rights now that the outside occupancy date has passed without delivery of the unit?
A) Grace must accept the vendor’s compensation offer if the delay notices were properly delivered under the Tarion Addendum.
B) Grace has no legal remedy since the vendor complied with all notice requirements and the agreement remains in force.
C) Grace may terminate the agreement and claim delayed occupancy compensation of up to $7,500 as provided under the warranty.
D) Grace is required to submit a formal complaint to Tarion before she can cancel the purchase agreement or seek compensation.
6. Mark, an estate trustee, sold real property to pay debts of the deceased under the authority of s. 17(1) of the Estates Administration Act. All debts were disclosed and paid out of the sale proceeds. However, the title search reveals no registered charge or lien against the land. The purchaser’s lawyer is unsure whether the land remains subject to debts and whether title will be conveyed free of encumbrances.
How should the purchaser’s lawyer assess whether title is conveyed free of estate-related debts?
A) The purchaser may be subject to unregistered claims unless a release is obtained from all creditors or beneficiaries.
B) The purchaser takes title free of debts where the sale is made to satisfy estate liabilities under the Estates Administration Act.
C) The estate trustee must obtain a clearance certificate from the Ministry of Finance and register it on title before closing.
D) A court order confirming discharge of debts must be sought by the estate trustee to ensure clear title to the purchaser.
7. Grace is the original mortgagor of a rural estate. She sells the property to Thomas, who assumes the mortgage. When Thomas defaults, the lender initiates power of sale and serves notice only to Thomas. Grace later receives a claim for a deficiency judgment after the sale closes. She argues that the lender failed to preserve its claim by not serving her with the notice of sale. The lender contends that she was no longer the owner and service on Thomas was sufficient.
How should Grace’s liability be determined in light of the lender’s failure to serve her with notice?
A) Grace is released from all liability because she no longer held registered title to the mortgaged property when the default occurred.
B) The lender was required to serve Grace with notice in order to enforce her personal covenant to pay under the mortgage.
C) Grace remains liable for the deficiency because a covenant to pay follows the debt, not the title, even when assumed by a third party.
D) The lender may pursue Grace for recovery only if Thomas assigns his contractual obligations back to her in writing.
8. Arjun and Mala, spouses, list their jointly owned matrimonial home for sale. Arjun is away on business, so Mala signs the agreement of purchase and sale on behalf of both. The buyers assume she has authority and proceed with title search. Days before closing, Arjun refuses to sign closing documents. The buyers file an application for specific performance and argue that Mala’s signature bound both sellers.
What is the legal effect of Mala’s signature on the enforceability of the agreement?
A) The contract is binding because Mala signed with apparent authority and the buyers reasonably relied on her representation.
B) The buyers may proceed with closing if Mala agrees to indemnify the vendor’s lawyer and the title insurer accepts the risk.
C) The agreement is unenforceable because both joint owners must sign for a valid sale of jointly held property.
D) The buyers are entitled to register a lien under the Vendors and Purchasers Act until Arjun’s refusal is resolved.
9. Christine’s client is purchasing a condo unit and declines title insurance after Christine explains the risks and alternatives. Christine provides a title opinion and completes all required searches. Six months after closing, the unit’s balcony is found to be in violation of a bylaw not disclosed in the zoning report. The buyer is assessed $12,000 by the condominium corporation for remedial work. Christine confirms the issue was unforeseeable and not covered by her opinion.
How should Christine’s liability be assessed in light of the client’s decision to decline title insurance?
A) The lawyer is liable for the zoning violation because her opinion failed to ensure compliance with all municipal bylaws.
B) The client has no recourse unless the zoning report itself was negligently prepared by the third-party provider.
C) The lawyer breached her duty by not requiring the client to purchase title insurance for post-closing protection.
D) The client may sue for recovery only if the assessment was retroactively applied in violation of condominium legislation.
10. Jason’s survey shows that the detached garage is 0.3 metres from the side lot line. Zoning requires a 0.6-metre setback. Jason calls the municipality and learns that no variance has been granted. The seller argues that the garage has existed since before the by-law and should be considered legal. Jason’s client wants to add a second storey in future and asks whether the garage can be expanded.
What should Jason advise his client?
A) Existing structures that predate current zoning are generally considered legal, and owners may expand them freely without obtaining further municipal approval or zoning relief.
B) The seller’s use creates a vested right that binds the municipality.
C) Because the encroachment is minor, it is considered de minimis and can be disregarded for zoning purposes, allowing for alterations or expansion without requiring further variances.
D) Legal non-conforming use applies only to continued existing structures, and expansion may require a new variance.
11. A solicitor’s title search reveals that a property previously belonged to a corporation that was involuntarily dissolved during its period of ownership. The corporation sold the property one year after dissolution. No court order confirming reinstatement was ever registered. The client is a purchaser seeking mortgage financing, and the lender requires confirmation that title is clear. The lawyer is asked whether any statutory issues need to be addressed.
What step must the solicitor take to assess the validity of the corporate transfer?
A) Accept the transfer without further inquiry because the Land Titles system guarantees title once registration is complete.
B) Review the Escheats Act and conduct a corporate search to determine whether the corporation legally existed at the time of the transfer.
C) Verify the seller’s identity by reviewing their address on the original transfer and confirming it with the local land registry office.
D) Register a caution on title and advise the lender to delay closing until potential claims are barred by the Real Property Limitations Act.
12. Lina is assisting her supervising lawyer with a transfer of a residential property between two unrelated parties. Both are represented by their own lawyers. Lina prepares the Transfer in Teraview and selects the appropriate capacity fields for the buyer and seller. She also completes the required Planning Act statement and selects the correct “lawyer acting for” designation. Before signing, she asks whether she, as a clerk, can release the document once her lawyer signs for completeness. Her supervising lawyer confirms that this is allowed, but only under certain conditions.
Under the Teraview registration process, when may a law clerk release an instrument for registration?
A) The release must be performed by a licensed lawyer, regardless of who completed the data entry or law statements.
B) A law clerk may release documents provided the supervising lawyer gives written instructions for each transaction.
C) A law clerk may release the instrument only if the lawyer has already signed for completeness and no additional law statement is required.
D) Registration by a non-lawyer is never permitted unless the Director of Titles grants prior written authorization under a statutory exemption.
13. Priya is acting for the estate trustee of a deceased who left a non-trust will. The will contains no express or implied power of sale. The estate trustee wishes to sell the property to a third-party purchaser for value. The estate has sufficient cash to pay all debts without selling the land, and the purpose of the sale is to divide the proceeds among the beneficiaries. Some beneficiaries are minors.
What must Priya advise regarding the sale?
A) The estate trustee may proceed without consents because the sale is within three years.
B) The estate trustee requires court authorization or the consent of the Public Guardian and Trustee.
C) Title must be transferred to the beneficiaries first, who may then sell the land.
D) The statutory power of sale does not apply to non-trust wills.
14. David is assisting with a commercial transaction involving an older building in an industrial area. As part of his due diligence, he orders a building compliance report and receives notice that there is an outstanding work order for fire code violations issued by the municipality. The vendor’s lawyer refuses to rectify the order before closing, insisting that the purchaser agreed to accept the property “as is.” The agreement of purchase and sale does not specifically reference the work order.
What is the most appropriate action for David to take before closing?
A) Proceed with the transaction and advise the purchaser to bring a civil claim for damages after closing if remediation proves costly.
B) Accept the vendor’s position that disclosure alone is sufficient and proceed on the basis that the issue was known.
C) Requisition compliance with the work order or seek a price reduction, and advise the purchaser on available legal remedies before closing.
D) Contact the fire department to request a municipal inspection prior to closing to clarify any potential enforcement action.
15. Daniel purchases a condo unit and receives a status certificate showing no arrears of common expenses. However, on closing day, the condominium corporation advises that the seller failed to pay the previous two months’ common expenses and a lien is being registered. The seller’s lawyer insists the status certificate is conclusive and refuses to make any payment. Daniel is now concerned about the lien affecting his title.
How does the status certificate affect Daniel’s liability for the seller’s unpaid common expenses?
A) The lien is unenforceable because it was not properly disclosed in the status certificate and is therefore void as against the purchaser.
B) The condominium corporation is bound by the status certificate, and Daniel cannot be held liable for arrears not disclosed therein.
C) Daniel must complete the transaction and pursue a post-closing claim against the seller for the unpaid amounts.
D) Daniel may terminate the agreement under the doctrine of misrepresentation because the seller failed to disclose outstanding arrears.
16. Rina is acting for a corporate vendor selling a large warehouse. The purchaser is taking title in trust for an undisclosed beneficiary. The agreement is silent on assignment. Days before closing, the purchaser asks Rina to revise title documents to show the beneficiary company as the registered owner. Rina refuses, citing potential tax implications and lack of contractual clarity.
How should the lawyer assess the purchaser’s request to register title in the name of the beneficiary?
A) Rina must comply if she receives written direction from the purchaser confirming the trust arrangement and beneficiary’s identity.
B) The vendor must consent to any change in title registration where the agreement is silent on title direction or assignment.
C) The purchaser is permitted to substitute the registered owner so long as contractual obligations remain enforceable against the original buyer.
D) Rina should revise the documents but obtain an indemnity from the purchaser to protect the vendor from adverse tax consequences.
Case 3
Hannah and Karim are first-time buyers looking to purchase a newly built cottage property near Haliburton. The builder uses a custom “new home” agreement that differs from the OREA standard form, and includes a clause stating that possession may be delayed due to seasonal access issues. The agreement also makes no mention of any survey, but includes a warranty stating the building complies with zoning by-laws and is located entirely within lot boundaries. Upon receiving the draft deed and other closing documents, their lawyer notices there is no survey on file. A site visit reveals that the septic tank may be partly located on Crown land and a shed straddles the neighbour’s fence. The builder insists the lot dimensions conform to the registered plan and refuses to delay closing. The lender is unaware of these encroachments and has instructed that the mortgage funds will be released only upon confirmation of clear title. Hannah and Karim want to know their rights and whether they can walk away from the deal.
Questions 17 to 20 refer to Case 3
17. How should Hannah and Karim’s lawyer address the absence of a survey in light of the registered plan and the mortgage conditions?
A) Advise the clients that proceeding without a survey is acceptable if the plan of subdivision is available.
B) Proceed with closing, relying on the builder’s warranty in the agreement.
C) Recommend title insurance as a complete substitute for a survey.
D) Advise the clients in writing of the risks, recommend obtaining a survey, and seek lender instructions before closing.
18. What legal remedy is most appropriate if the shed is encroaching onto the neighbouring property?
A) Obtain an encroachment agreement from the neighbour prior to closing.
B) Ignore the issue if the neighbour has not objected.
C) Proceed with closing and litigate the encroachment post-closing.
D) Assume the shed has possessory title if it has been there for over ten years.
19. Is the builder’s warranty regarding lot compliance a sufficient substitute for zoning and location verification?
A) Yes, builder warranties are enforceable and binding on future owners.
B) No, the lawyer must still independently verify setbacks and encroachments.
C) Yes, provided the builder has municipal approval for construction.
D) No, but only if the warranty is silent on utility easements.
20. What is the most likely consequence if the septic tank is found to be encroaching onto Crown land?
A) The encroachment can be ignored as Crown land is public.
B) The clients can acquire the land under the shed through negotiation.
C) A severance application and registered easement would be required.
D) The encroachment may result in a title defect that justifies termination.
Professional Responsibility
1. Melissa runs a wills and estates practice. She regularly prints client documents at home but stores signed originals in a filing cabinet at her office. When a client disputes a previous instruction, Melissa is unable to locate the signed power of attorney. Her assistant admits they weren’t aware of the firm's file retention protocol. Melissa has no written file management policy.
What professional obligation did Melissa most clearly fail to meet in this situation?
A) She failed to label the original power of attorney document as “revoked” when the client changed instructions.
B) She failed to create a duplicate copy of the power of attorney and store it off-site in a secure location.
C) She failed to establish and communicate a reliable file management and retention system to ensure preservation of client documents.
D) She failed to register the power of attorney with the Superior Court of Justice in accordance with estate practice requirements.
2. An estate solicitor handles a trust reorganization for a long-time client. He bills $8,000 but does not provide a breakdown of time or stages. The client requests details, and the lawyer replies that his rate is “industry standard” and the matter took “a fair bit of work.” No retainer letter or fee estimate was provided.
What professional obligation did the solicitor fail to meet in this situation?
A) The solicitor failed to register the restructured trust with the Canada Revenue Agency as part of required tax compliance.
B) The solicitor failed to provide a timely written estimate or clear confirmation of fees as required under the rules of professional conduct.
C) The solicitor failed to deduct and remit HST on fees collected from the client during the trust’s administration.
D) The solicitor failed to communicate the trust’s updated terms to beneficiaries entitled to notice under the original trust deed.
3. During negotiations for a business purchase, Jordan receives a voicemail from opposing counsel confirming an extension of the closing date. Jordan proceeds on that basis. Later, the opposing lawyer claims no formal extension was agreed upon because nothing was confirmed in writing.
What professional duty did the opposing lawyer most likely fail to discharge in handling the extension communication?
A) The duty to confirm all undertakings and practice-related commitments in writing, particularly those affecting critical transaction dates.
B) The duty to notify the court of any changes to agreed timelines or procedural milestones in commercial matters.
C) The duty to disclose material, non-privileged communications to third parties who may be impacted by the transaction’s terms.
D) The duty to file an updated Form 7A with the appropriate Business Registry when a closing date is amended.
4. Marina is retained to prepare a will and power of attorney for a client with early-stage Alzheimer’s disease. The client is articulate but forgetful and often repeats questions. Marina is unsure about capacity but proceeds after a brief meeting and does not document her impressions. When the will is challenged, Marina has no records supporting her conclusion that the client was capable.
What key responsibility did Marina fail to uphold when managing the retainer for a client with cognitive impairment?
A) She failed to notify the client’s family in writing about the confirmed Alzheimer’s diagnosis.
B) She failed to advise the client in writing about limitation periods affecting potential will challenges.
C) She failed to assess and document the client’s testamentary capacity with sufficient detail to support her decision to proceed.
D) She failed to register the executed will with the Office of the Public Guardian and Trustee before closing the file.
5. Denise is retained in a residential transaction and offers the client title insurance without mentioning that her law society-affiliated insurer provides the product. She receives a referral fee from the insurer but does not disclose this to the client. The transaction closes, but the client later complains after discovering that other policies were available.
What professional breach arises from Denise’s handling of the title insurance recommendation?
A) Denise failed to obtain and review a zoning certificate to confirm lawful residential use.
B) Denise failed to disclose her financial interest in the title insurance provider she recommended.
C) Denise failed to register the lender’s mortgage in priority sequence before closing funds were disbursed.
D) Denise failed to account for the lender’s excess advance and return the unused balance after closing.
6. A real estate lawyer receives a letter from the Law Society requesting information regarding an unusually high volume of transactions involving first-time homebuyers who defaulted within six months. The lawyer refuses to disclose client names, citing confidentiality, and questions the Law Society’s authority. The transactions raise concerns about mortgage fraud.
How should the Law Society respond?
A) Refer the lawyer to a spot audit to review books and records.
B) Dismiss the issue unless a bank files a fraud complaint.
C) File a civil claim to compel disclosure.
D) Forward the file to the CRA for tax investigation.
7. Natasha prepares a will for a client who subsequently terminates the relationship midway through revisions. The client instructs her to send the draft documents to a new lawyer. Natasha complies but includes her notes and margin comments about the client’s indecisiveness and family dynamics.
What confidentiality obligation did Natasha breach in forwarding the client file to successor counsel?
A) She failed to obtain judicial approval before releasing the file contents to another legal representative.
B) She failed to exclude personal commentary and confidential impressions that were not necessary for continuation of the file.
C) She failed to withhold delivery of all legal documents until payment of her final invoice was received.
D) She failed to file a formal notice of termination with the governing law society before transferring privileged information.
8. Teresa operates a sole estate law practice. She deposits all fee payments into her general account and all retainers into trust. However, she accepts credit card payments for both. Her POS terminal deposits all payments into the general account by default. She later manually transfers the retainer portion to trust.
What professional conduct rule has Teresa violated by handling payments this way?
A) She failed to report her professional income in accordance with Canada Revenue Agency requirements.
B) She used her law firm’s business credit card terminal to make improper personal withdrawals.
C) She failed to deposit client trust funds directly into the trust account, instead relying on general-to-trust transfers.
D) She failed to provide mandatory written disclosure of third-party referral fees related to credit card processing.
9. A lawyer discovers they made an error in a real estate file by failing to advise the client about a restrictive covenant registered on title. The lawyer believes it unlikely that the client will suffer loss and decides not to notify LAWPRO. Two years later, the client is sued by a neighbour, and the lawyer’s omission comes to light.
What professional obligation did the lawyer most clearly fail to meet after discovering the error?
A) The obligation to file a land transfer tax refund form with the Ministry of Finance before the statutory deadline.
B) The obligation to return any unused portion of the retainer once the real estate transaction had closed.
C) The obligation to notify the liability insurer promptly of a known error that could reasonably lead to a claim.
D) The obligation to report the client’s non-compliance with title restrictions to the Land Titles Office for regulatory enforcement.
10. Lisa is acting for a purchaser in a rural real estate transaction involving a well and septic system. She is aware that no recent testing reports are available, but assumes that the client will conduct inspections directly. She proceeds with closing without raising the issue. Months later, the buyer discovers the well water is contaminated and the septic system is non-compliant with municipal regulations.
What is the most relevant competence issue in this situation?
A) Lisa failed to comply with lender mortgage disclosure requirements.
B) Lisa failed to confirm whether the agreement required a survey.
C) Lisa failed to investigate facts necessary to advise the client on risk.
D) Lisa failed to record a lien on title for future system repairs.
11. Jason is acting for a landlord before the Landlord and Tenant Board. His client presents a recording of a tenant’s phone call that may be relevant but was obtained without the tenant’s consent. Jason is unsure about admissibility but decides not to disclose its existence at all.
What is Jason’s professional obligation regarding the undisclosed recording?
A) Jason is required to submit the recording only if the opposing party obtains a summons or production order compelling its disclosure.
B) Jason must inform both opposing counsel and the tribunal of the recording if it is material to the proceeding, regardless of admissibility concerns.
C) Jason may redact the contents and submit the recording anonymously to protect client confidentiality and avoid disclosure issues.
D) Jason may disregard the recording entirely if its contents involve communications potentially subject to solicitor-client or litigation privilege.
12. An estate lawyer advertises her services in a local magazine as “Ontario’s #1 Probate Specialist – Certified by the Law Society.” A former client complains that the lawyer was slow to respond and charged excessive fees for basic administration tasks. The Law Society opens an investigation into her marketing.
What is the most serious concern arising from the lawyer’s advertisement?
A) The lawyer may be disciplined for charging disbursements that exceed permitted fee guidelines in uncontested estate matters.
B) The lawyer’s use of unverifiable claims and references to Law Society certification may be misleading and create unrealistic client expectations.
C) The lawyer is in breach of Law Society rules, which restrict certification claims exclusively to tax and corporate counsel designations.
D) The lawyer’s conduct violates the requirement that all probate services be provided solely by licensed paralegals under Ontario’s Estates Act.
13. Samuel is a business lawyer acting for a private investor lending funds to a start-up. The borrower defaults within two months, and the investor sues. During discovery, it becomes clear that Samuel did not obtain a credit report or request financial statements, nor did he advise the investor on the risks of unsecured lending.
Which fiduciary duty did Samuel fail to uphold in advising the client on the lending transaction?
A) The obligation to report the terms of the private loan to the appropriate financial regulatory authority.
B) The obligation to avoid acting in a dual capacity for both lender and borrower in a commercial financing arrangement.
C) The obligation to provide candid and complete legal advice on material risks affecting the client’s position.
D) The obligation to evaluate compliance with foreign direct investment disclosure rules under applicable federal legislation.
14. Daryl operates a sole real estate practice and often receives referrals from mortgage brokers. To streamline intake, he uses a customized online form hosted by a third-party provider. However, he does not verify whether the platform stores data in Canada or review its privacy policy. One day, a client’s personal information is accessed by an overseas hacker and used in a fraudulent mortgage application. The client files a complaint.
What practice management obligation did Daryl fail to fulfill?
A) He failed to register the third-party software with the Law Society.
B) He failed to verify the licensing status of the referring broker.
C) He failed to ensure reasonable technological safeguards for client confidentiality.
D) He failed to encrypt PDF files before emailing them to clients.
15. Lara is retained to draft an impact benefit agreement between a mining company and a First Nation. The company instructs her to finalize the agreement quickly and omit references to free, prior, and informed consent under UNDRIP, arguing that it’s “aspirational, not binding.” Lara is unsure how to respond.
What is Lara’s ethical duty in responding to the company’s instructions regarding UNDRIP and consent principles?
A) To advise the client that FPIC under UNDRIP reflects international and Canadian reconciliation standards and should not be disregarded in negotiations.
B) To follow client instructions as UNDRIP is not directly enforceable in Canadian courts and carries no binding legal effect.
C) To submit a report on the proposed terms to the United Nations Office of the High Commissioner for Human Rights for independent assessment.
D) To escalate the matter to Crown-Indigenous Relations and Northern Affairs for regulatory intervention under the IBA framework.
16. Carla agrees to act for a group of four siblings purchasing a vacation property together. One client insists on communicating only by text and refuses to join group calls. Carla updates the others by email but rarely includes this sibling. When a dispute arises, the excluded sibling alleges she was left out of key decisions and was unaware of key changes to the agreement.
What step should Carla have taken to prevent this?
A) Established a preferred communication protocol at the outset of the retainer.
B) Appointed one sibling as primary contact for all communication.
C) Referred the client to a mediator before proceeding.
D) Submitted the draft agreement to the Ministry of Consumer Services.
17. Harsha is retained to incorporate a family business and prepare a shareholders’ agreement. Although she has never drafted such an agreement before, she accepts the retainer and uses a template from a previous employment law file. She does not discuss key matters such as voting rights, dispute resolution, or restrictions on share transfers. Six months later, a dispute arises, and the shareholders are surprised to learn that the agreement offers no protection for minority interests.
What was Harsha’s most significant breach of her competence obligations?
A) Failing to meet with all shareholders before finalizing the draft.
B) Failing to refer the file to litigation counsel.
C) Using a form document without tailoring it to the new business.
D) Charging a fixed fee for an unfamiliar area of law.
18. Ravi acts for a private company that recently terminated a supply contract. The terminated supplier approaches Ravi to draft a shareholder agreement for an unrelated new business. Ravi is confident he can keep the files separate but does not disclose the previous retainer or seek consent.
What professional obligation must Ravi consider before accepting the new retainer?
A) Confidentiality obligations do not apply to former clients in the context of terminated commercial contracts.
B) Ravi must assess whether his duties to the former client create a substantial risk of material impairment in representing the new client.
C) Ravi is permitted to act for the new client provided he completes a joint declaration of neutrality and files it with the Law Society.
D) Ravi is only required to disclose the prior retainer if the two clients are engaged in litigation against one another.
19. Marcus is drafting a complex shareholder agreement for a real estate joint venture. One partner, recently immigrated to Canada, hesitates to sign, noting that in his culture, family members must review such agreements. Marcus expresses impatience, saying “This is how we do business here,” and pressures him to execute. The client signs reluctantly.
What professionalism concern is most clearly raised by Marcus’s conduct during the execution of the agreement?
A) Marcus failed to verify the client’s corporate residency status before finalizing the shareholder agreement.
B) Marcus neglected to outline the material risks contained in the agreement prior to obtaining client instructions.
C) Marcus demonstrated a lack of cultural competence and failed to respect the client’s decision-making norms.
D) Marcus provided the client with an inaccurate or incomplete summary of title and ownership interests related to the joint venture.
20. A client meets with Daniel, a lawyer, to discuss transferring property to avoid a potential creditor judgment. Daniel advises that such a transaction could be void as a fraudulent conveyance and declines to act. Months later, Daniel learns that the same client has retained another lawyer and completed the transfer. When CRA investigators contact Daniel about the earlier consultation, he considers confirming the timeline.
What should Daniel do?
A) Confirm the facts with investigators since he was not retained to complete the deal.
B) Decline to disclose any client information and assert confidentiality.
C) Provide the CRA with a summary of his advice.
D) Cooperate only if the new lawyer provides authorization.