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Results:
Exam Type: Solicitor Mini Exam
Overall Score: 0 out of 80
Overall Percentage: 00.0%
Duration: 00:07:23
Section Breakdown:
0% (0/30)Business Law
0% (0/20)Estates Planning
0% (0/30)Real Estate
Overall Score : 0 / 80
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Business Law:
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Estates Planning:
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Real Estate:
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Question 1 of 80
1. Question
Category: Business Law1. Christine is a senior lawyer employed by the Canadian government. She has been concerned by recent statements from United States politicians that Canada may soon become the “51st state” of the United States unless certain actions are taken by Canada, such as improving border security. To assist the Canadian government with avoiding this scenario, she is looking into hiring Kenyon, a lawyer who specializes in public sector crisis management and currently works for ABC LLP. If hired, Kenyon’s plan would be to resign from ABC LLP and work on a full-time basis for the Canadian government. To comply with the Rules of Professional Conduct, what, if anything, must the Canadian government do prior to hiring Kenyon?
Correct
Solution: The correct answer is (a). The Rules of Professional Conduct provide certain rules regarding conflicts from transfer between law firms. Note that as per Commentary [1] of Rule 3.4-19, a “law firm” includes lawyers practicing in a government. Rule 3.4-19 states that Rules 3.4-20 to 3.4-22 [Law Firm and Lawyer Disqualification Rules] do not apply to a lawyer employed by the federal, provincial or a territorial government who, after transferring from one department, ministry or agency to another, continues to be employed by that government. In other words, the law firm and lawyer disqualification rules do not apply to purely internal transfers within governments. This is not an internal transfer as Kenyon would be transferring from working in private practice at ABC LLP to working for the federal government. Therefore, the Canadian government, as a “law firm”, would have to check for conflicts before hiring him. (b) and (c) are not required by the Rules, and (d) is incorrect since, as mentioned above, the Rules do apply to this type of transfer.
Incorrect
Solution: The correct answer is (a). The Rules of Professional Conduct provide certain rules regarding conflicts from transfer between law firms. Note that as per Commentary [1] of Rule 3.4-19, a “law firm” includes lawyers practicing in a government. Rule 3.4-19 states that Rules 3.4-20 to 3.4-22 [Law Firm and Lawyer Disqualification Rules] do not apply to a lawyer employed by the federal, provincial or a territorial government who, after transferring from one department, ministry or agency to another, continues to be employed by that government. In other words, the law firm and lawyer disqualification rules do not apply to purely internal transfers within governments. This is not an internal transfer as Kenyon would be transferring from working in private practice at ABC LLP to working for the federal government. Therefore, the Canadian government, as a “law firm”, would have to check for conflicts before hiring him. (b) and (c) are not required by the Rules, and (d) is incorrect since, as mentioned above, the Rules do apply to this type of transfer.
Unattempted
Solution: The correct answer is (a). The Rules of Professional Conduct provide certain rules regarding conflicts from transfer between law firms. Note that as per Commentary [1] of Rule 3.4-19, a “law firm” includes lawyers practicing in a government. Rule 3.4-19 states that Rules 3.4-20 to 3.4-22 [Law Firm and Lawyer Disqualification Rules] do not apply to a lawyer employed by the federal, provincial or a territorial government who, after transferring from one department, ministry or agency to another, continues to be employed by that government. In other words, the law firm and lawyer disqualification rules do not apply to purely internal transfers within governments. This is not an internal transfer as Kenyon would be transferring from working in private practice at ABC LLP to working for the federal government. Therefore, the Canadian government, as a “law firm”, would have to check for conflicts before hiring him. (b) and (c) are not required by the Rules, and (d) is incorrect since, as mentioned above, the Rules do apply to this type of transfer.
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Question 2 of 80
2. Question
Category: Business Law2. XXZ Corporation is incorporated under the Ontario Business Corporations Act (OBCA). Its articles include both voting and non-voting shares. The corporation is considering various corporate actions. In which of the following situations would the non-voting shareholders have the right to vote?
Correct
Solution: The correct answer is (c). Under the OBCA, non-voting shareholders are granted voting rights in specific circumstances, such as during an amalgamation. This ensures that all shareholders, regardless of their voting status, have a say in significant corporate restructuring decisions that could affect their interests. Option (a) is incorrect because the declaration of dividends does not confer voting rights to non-voting shareholders; such decisions are typically made by the board of directors without shareholder approval. Option (b) is incorrect because corporate charitable donations do not trigger voting rights for non-voting shareholders. Option (d) is incorrect because there are exceptions, such as in the case of an amalgamation, where non-voting shareholders are entitled to vote.
Incorrect
Solution: The correct answer is (c). Under the OBCA, non-voting shareholders are granted voting rights in specific circumstances, such as during an amalgamation. This ensures that all shareholders, regardless of their voting status, have a say in significant corporate restructuring decisions that could affect their interests. Option (a) is incorrect because the declaration of dividends does not confer voting rights to non-voting shareholders; such decisions are typically made by the board of directors without shareholder approval. Option (b) is incorrect because corporate charitable donations do not trigger voting rights for non-voting shareholders. Option (d) is incorrect because there are exceptions, such as in the case of an amalgamation, where non-voting shareholders are entitled to vote.
Unattempted
Solution: The correct answer is (c). Under the OBCA, non-voting shareholders are granted voting rights in specific circumstances, such as during an amalgamation. This ensures that all shareholders, regardless of their voting status, have a say in significant corporate restructuring decisions that could affect their interests. Option (a) is incorrect because the declaration of dividends does not confer voting rights to non-voting shareholders; such decisions are typically made by the board of directors without shareholder approval. Option (b) is incorrect because corporate charitable donations do not trigger voting rights for non-voting shareholders. Option (d) is incorrect because there are exceptions, such as in the case of an amalgamation, where non-voting shareholders are entitled to vote.
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Question 3 of 80
3. Question
Category: Business Law3. Grant, a doctor, works at XYZ Medical Office, which is based in Aurora, Ontario. A few years ago, he purchased a rare piece of avant-garde artwork from an art store for $2 million. The art store sells its artwork on behalf of local artists, and in return for agreeing to sell their artwork, gets 50% of the profits from its sales. As part of the purchase agreement for the artwork, Grant put $500,000 down, and agreed to pay the remainder of the purchase price in $100,000 installments over the next 15 years. After making his first payment, Grant stopped making any further payments. The art store, together with the artist who produced the artwork (the “litigants”), were still owed $1.4 million and proceeded to obtain a judgment from the court that required Grant to pay the remainder of his debt. The litigants did not obtain any security from Grant at the time of sale. Therefore, the litigants sought to recover the outstanding debt from Grant through a garnishment and served a notice of garnishment on XYZ Medical Office. Provided that XYZ Medical Office intends to fully comply with the garnishment order, how must it proceed?
Correct
Solution: The correct answer is (d). The litigants here are unsecured creditors, and have chosen to recover their outstanding amounts by obtaining a garnishment order. According to the Creditors’ Relief Act, 2010, along with Schedule 4 of the Act, once XYZ Medical Office received the garnishment order, which it intended to fully comply with, it must pay all amounts owed to Grant, up to the maximum amount of the judgment, to the sheriff. (a) is incorrect – this defeats the purpose of the garnishment order. (b) is incorrect – this is only needed if XYZ Medical Office wishes to either contest the garnishment or pays less than the amount stipulated in the notice of garnishment; the fact pattern explicitly says it intends to fully comply with the order, so there is no need for this. Finally, (c) is incorrect because the garnished amounts must be paid to the sheriff, who will then distribute the funds to the creditors.
Incorrect
Solution: The correct answer is (d). The litigants here are unsecured creditors, and have chosen to recover their outstanding amounts by obtaining a garnishment order. According to the Creditors’ Relief Act, 2010, along with Schedule 4 of the Act, once XYZ Medical Office received the garnishment order, which it intended to fully comply with, it must pay all amounts owed to Grant, up to the maximum amount of the judgment, to the sheriff. (a) is incorrect – this defeats the purpose of the garnishment order. (b) is incorrect – this is only needed if XYZ Medical Office wishes to either contest the garnishment or pays less than the amount stipulated in the notice of garnishment; the fact pattern explicitly says it intends to fully comply with the order, so there is no need for this. Finally, (c) is incorrect because the garnished amounts must be paid to the sheriff, who will then distribute the funds to the creditors.
Unattempted
Solution: The correct answer is (d). The litigants here are unsecured creditors, and have chosen to recover their outstanding amounts by obtaining a garnishment order. According to the Creditors’ Relief Act, 2010, along with Schedule 4 of the Act, once XYZ Medical Office received the garnishment order, which it intended to fully comply with, it must pay all amounts owed to Grant, up to the maximum amount of the judgment, to the sheriff. (a) is incorrect – this defeats the purpose of the garnishment order. (b) is incorrect – this is only needed if XYZ Medical Office wishes to either contest the garnishment or pays less than the amount stipulated in the notice of garnishment; the fact pattern explicitly says it intends to fully comply with the order, so there is no need for this. Finally, (c) is incorrect because the garnished amounts must be paid to the sheriff, who will then distribute the funds to the creditors.
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Question 4 of 80
4. Question
Category: Business Law4. Meera has been practicing as a corporate lawyer for 15 years and is a certified specialist in corporate and commercial law. If she wishes to maintain her certified specialist designation in 2025, how many total continuing professional development (CPD) hours must she complete?
Correct
Solution: The correct answer is (c). As of January 1, 2025, certified specialists are required to complete 10 hours of CPD in their area of specialty, in addition to the 12 hours of CPD that all licensees must complete annually. Therefore, Meera must complete a total of 10 + 12 = 22 hours of CPD in 2025 to maintain her certified specialist designation.
Incorrect
Solution: The correct answer is (c). As of January 1, 2025, certified specialists are required to complete 10 hours of CPD in their area of specialty, in addition to the 12 hours of CPD that all licensees must complete annually. Therefore, Meera must complete a total of 10 + 12 = 22 hours of CPD in 2025 to maintain her certified specialist designation.
Unattempted
Solution: The correct answer is (c). As of January 1, 2025, certified specialists are required to complete 10 hours of CPD in their area of specialty, in addition to the 12 hours of CPD that all licensees must complete annually. Therefore, Meera must complete a total of 10 + 12 = 22 hours of CPD in 2025 to maintain her certified specialist designation.
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Question 5 of 80
5. Question
Category: Business Law5. Ranesha operates a sole practice as a corporate lawyer. By what date must she conduct a monthly trust comparison for trust funds she held on behalf of her clients as of the end of April 2025?
Correct
Solution: The correct answer is (c). A monthly trust comparison must be conducted by the 25th of every month for trust funds held at the end of the previous month.
Incorrect
Solution: The correct answer is (c). A monthly trust comparison must be conducted by the 25th of every month for trust funds held at the end of the previous month.
Unattempted
Solution: The correct answer is (c). A monthly trust comparison must be conducted by the 25th of every month for trust funds held at the end of the previous month.
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Question 6 of 80
6. Question
Category: Business Law6. ABC Corporation was incorporated in 2019 under Ontario’s Business Corporations Act (OBCA) as a private corporation. Due to administrative reasons, it was dissolved on April 2, 2025. Ari, counsel to ABC Corporation, now seeks to revive the corporation. In addition to filing the articles of revival, what must accompany the revival application?
Correct
Solution: The correct answer is (b). According to section 241 of the OBCA, the articles of revival must be accompanied by a consent letter (i.e., approval) from the Ontario Ministry of Finance. Option (a) is incorrect because private companies are not subject to the Ontario Securities Commission’s consent requirements, and such consent is generally only relevant if there is a failure to file financial statements, which is not indicated here. Option (c) is incorrect because no judicial consent is required from a judge of the Ontario Court of Justice under the OBCA for revival. Option (d) is incorrect because there is no statutory requirement to provide a shareholders’ consent letter as part of the revival application.
Incorrect
Solution: The correct answer is (b). According to section 241 of the OBCA, the articles of revival must be accompanied by a consent letter (i.e., approval) from the Ontario Ministry of Finance. Option (a) is incorrect because private companies are not subject to the Ontario Securities Commission’s consent requirements, and such consent is generally only relevant if there is a failure to file financial statements, which is not indicated here. Option (c) is incorrect because no judicial consent is required from a judge of the Ontario Court of Justice under the OBCA for revival. Option (d) is incorrect because there is no statutory requirement to provide a shareholders’ consent letter as part of the revival application.
Unattempted
Solution: The correct answer is (b). According to section 241 of the OBCA, the articles of revival must be accompanied by a consent letter (i.e., approval) from the Ontario Ministry of Finance. Option (a) is incorrect because private companies are not subject to the Ontario Securities Commission’s consent requirements, and such consent is generally only relevant if there is a failure to file financial statements, which is not indicated here. Option (c) is incorrect because no judicial consent is required from a judge of the Ontario Court of Justice under the OBCA for revival. Option (d) is incorrect because there is no statutory requirement to provide a shareholders’ consent letter as part of the revival application.
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Question 7 of 80
7. Question
Category: Business Law7. ABC Law is a general partnership that was founded in 2017. This year, it sought to change its business structure from a general partnership to a limited liability partnership. What must the firm do upon making this change?
Correct
Solution: The correct answer is (b). Section 2(1) of By-Law 7 states that law firms that change from a GP to LLP must disclose the nature of the limited liability of the partners to all clients of the firm when the change occurs. (a) is incorrect because it is not necessary to inform past or prospective clients. (c) and (d) have no basis in the By-Law.
Incorrect
Solution: The correct answer is (b). Section 2(1) of By-Law 7 states that law firms that change from a GP to LLP must disclose the nature of the limited liability of the partners to all clients of the firm when the change occurs. (a) is incorrect because it is not necessary to inform past or prospective clients. (c) and (d) have no basis in the By-Law.
Unattempted
Solution: The correct answer is (b). Section 2(1) of By-Law 7 states that law firms that change from a GP to LLP must disclose the nature of the limited liability of the partners to all clients of the firm when the change occurs. (a) is incorrect because it is not necessary to inform past or prospective clients. (c) and (d) have no basis in the By-Law.
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Question 8 of 80
8. Question
Category: Business Law8. Gillian is a shareholder and manager of XYZ Corporation. She was loaned $10,000 by XYZ Corporation on February 9, 2018. Gillian ultimately paid back the loan on March 1, 2025. XYZ Corporation’s taxation year ends on March 31. Which of the following is true of how the loan must be treated by Gillian?
Correct
Solution: The correct answer is (b). According to section 15(2)-(2.6) of the Income Tax Act, loans to shareholders must be included in the shareholder’s income in the year they received the loan, unless otherwise excluded from the scope of section 15(2). According to section 20(1)(j), the owner-manager will be entitled to a deduction in computing income in the year which the loan is ultimately repaid. Therefore, since the shareholder loan was made in 2018, Gillian must include it in her income in 2018; further, since she repaid the loan in 2025, she is entitled to a deduction in computing income when completing her 2025 tax return.
Incorrect
Solution: The correct answer is (b). According to section 15(2)-(2.6) of the Income Tax Act, loans to shareholders must be included in the shareholder’s income in the year they received the loan, unless otherwise excluded from the scope of section 15(2). According to section 20(1)(j), the owner-manager will be entitled to a deduction in computing income in the year which the loan is ultimately repaid. Therefore, since the shareholder loan was made in 2018, Gillian must include it in her income in 2018; further, since she repaid the loan in 2025, she is entitled to a deduction in computing income when completing her 2025 tax return.
Unattempted
Solution: The correct answer is (b). According to section 15(2)-(2.6) of the Income Tax Act, loans to shareholders must be included in the shareholder’s income in the year they received the loan, unless otherwise excluded from the scope of section 15(2). According to section 20(1)(j), the owner-manager will be entitled to a deduction in computing income in the year which the loan is ultimately repaid. Therefore, since the shareholder loan was made in 2018, Gillian must include it in her income in 2018; further, since she repaid the loan in 2025, she is entitled to a deduction in computing income when completing her 2025 tax return.
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Question 9 of 80
9. Question
Category: Business Law9. Søren recently established ABC Corporation, a corporation governed under Ontario’s Business Corporations Act (OBCA). ABC Corporation provides a discreet online service for purchasing toilet paper to avoid the embarrassment of carrying it in person. Several months after its launch, ABC Corporation was voluntarily wound up due to limited sales. Under what circumstances may ABC Corporation continue to carry on its business after its shareholders pass a resolution to authorize its winding up?
Correct
Solution: The correct answer is (c). Section 198 of the OBCA requires that once a corporation is voluntarily wound up, it must cease carrying on its business except insofar as continuing the undertaking is beneficial to the winding-up process. Options (a), (b), and (d) do not capture this limited statutory exception.
Incorrect
Solution: The correct answer is (c). Section 198 of the OBCA requires that once a corporation is voluntarily wound up, it must cease carrying on its business except insofar as continuing the undertaking is beneficial to the winding-up process. Options (a), (b), and (d) do not capture this limited statutory exception.
Unattempted
Solution: The correct answer is (c). Section 198 of the OBCA requires that once a corporation is voluntarily wound up, it must cease carrying on its business except insofar as continuing the undertaking is beneficial to the winding-up process. Options (a), (b), and (d) do not capture this limited statutory exception.
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Question 10 of 80
10. Question
Category: Business Law10. ABC Ltd. is a marijuana company based in Leamington, Ontario. It recently acquired the shares of XYZ Ltd., a company that specializes in developing cannabidiol (CBD) products, and is based out of Tobermory, Ontario. As part of the share purchase agreement, one provision noted the following: “The purchase price shall be $500,000. In addition, in the year following the acquisition, if the revenues of the target company (XYZ Ltd.) exceed $25,000, then ABC Ltd. shall be required to pay an additional $25,000.” This provision is an example of which of the following?
Correct
Solution: This provision is an example of an earn-out provision. These are used in a share-purchase agreement whereby part of the purchase price will be paid post-closing, contingent upon the performance of the target company. Here, it is contingent on meeting a certain revenue threshold. Therefore, (b) is the correct answer.
Incorrect
Solution: This provision is an example of an earn-out provision. These are used in a share-purchase agreement whereby part of the purchase price will be paid post-closing, contingent upon the performance of the target company. Here, it is contingent on meeting a certain revenue threshold. Therefore, (b) is the correct answer.
Unattempted
Solution: This provision is an example of an earn-out provision. These are used in a share-purchase agreement whereby part of the purchase price will be paid post-closing, contingent upon the performance of the target company. Here, it is contingent on meeting a certain revenue threshold. Therefore, (b) is the correct answer.
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Question 11 of 80
11. Question
Category: Business Law11. Mordechai is a corporate lawyer specializing in corporate and commercial law. One of his existing clients, XYZ Corporation, is being sued by its former CEO in small claims for $15,000 for unjust dismissal. XYZ Corporation asks whether Mordechai can help defend the claim. Mordechai has no litigation experience and estimates that it would cost the client at least $12,500 for him to acquire the necessary competence to handle the case. Alternatively, he considers assigning the file to his summer student, Pierre, who could manage the case for approximately $5,000 given his lower hourly rate. What is the most appropriate course of action for Mordechai?
Correct
Solution: The correct answer is (d). Under Rule 3.1-2 and Commentary [6] of the Rules of Professional Conduct, a lawyer must provide legal services to the standard of a competent lawyer and recognize when a task exceeds their current competence; if acquiring the necessary competence would result in undue delay, risk, or expense to the client, the lawyer should decline to act. Here, the estimated cost of at least $12,500 for Mordechai to become competent is nearly as high as the $15,000 claim, rendering it largely impractical for him to proceed. Option (a) fails to resolve the issue of excessive expense relative to the claim. Assigning the entire matter to his summer student [option (b)] is not acceptable because a lawyer must assume complete professional responsibility for all work performed (see By-law 7.1, s. 2.1(3)). Option (c) is not satisfactory because, per Commentary [6](b), collaborating with an experienced litigator would require explicit instructions from XYZ Corporation and still might not justify the costs involved. Overall, declining the act would be the best option in this case.
Incorrect
Solution: The correct answer is (d). Under Rule 3.1-2 and Commentary [6] of the Rules of Professional Conduct, a lawyer must provide legal services to the standard of a competent lawyer and recognize when a task exceeds their current competence; if acquiring the necessary competence would result in undue delay, risk, or expense to the client, the lawyer should decline to act. Here, the estimated cost of at least $12,500 for Mordechai to become competent is nearly as high as the $15,000 claim, rendering it largely impractical for him to proceed. Option (a) fails to resolve the issue of excessive expense relative to the claim. Assigning the entire matter to his summer student [option (b)] is not acceptable because a lawyer must assume complete professional responsibility for all work performed (see By-law 7.1, s. 2.1(3)). Option (c) is not satisfactory because, per Commentary [6](b), collaborating with an experienced litigator would require explicit instructions from XYZ Corporation and still might not justify the costs involved. Overall, declining the act would be the best option in this case.
Unattempted
Solution: The correct answer is (d). Under Rule 3.1-2 and Commentary [6] of the Rules of Professional Conduct, a lawyer must provide legal services to the standard of a competent lawyer and recognize when a task exceeds their current competence; if acquiring the necessary competence would result in undue delay, risk, or expense to the client, the lawyer should decline to act. Here, the estimated cost of at least $12,500 for Mordechai to become competent is nearly as high as the $15,000 claim, rendering it largely impractical for him to proceed. Option (a) fails to resolve the issue of excessive expense relative to the claim. Assigning the entire matter to his summer student [option (b)] is not acceptable because a lawyer must assume complete professional responsibility for all work performed (see By-law 7.1, s. 2.1(3)). Option (c) is not satisfactory because, per Commentary [6](b), collaborating with an experienced litigator would require explicit instructions from XYZ Corporation and still might not justify the costs involved. Overall, declining the act would be the best option in this case.
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Question 12 of 80
12. Question
Category: Business Law12. Which of the following corporations derive income from a “specified investment business”, as defined by the Income Tax Act?
Correct
Solution: According to section 125(7) of the Income Tax Act, a “specified investment business” carried on by a corporation in a given tax year means a business which principally derives income from property. However, there are many exclusions:
- a business carried on by the corporation where it employs more than five-full time employees throughout the year;
- a business carried on by a credit union; and
- a business that is leasing property (except if it is real property – then it will still fall within the definition).
Therefore, the correct answer is (a). It is a corporation that only has four employees (less than the exception in (i)), and primarily earns income by leasing real property (and hence is an exception (iii)). (b) is incorrect because credit unions are excluded from the definition (see (ii)). (c) is incorrect because businesses that have more than five full-time employees are excluded from the definition (see (i)). (d) is incorrect because it is excluded from the definition (see (iii)).
Incorrect
Solution: According to section 125(7) of the Income Tax Act, a “specified investment business” carried on by a corporation in a given tax year means a business which principally derives income from property. However, there are many exclusions:
- a business carried on by the corporation where it employs more than five-full time employees throughout the year;
- a business carried on by a credit union; and
- a business that is leasing property (except if it is real property – then it will still fall within the definition).
Therefore, the correct answer is (a). It is a corporation that only has four employees (less than the exception in (i)), and primarily earns income by leasing real property (and hence is an exception (iii)). (b) is incorrect because credit unions are excluded from the definition (see (ii)). (c) is incorrect because businesses that have more than five full-time employees are excluded from the definition (see (i)). (d) is incorrect because it is excluded from the definition (see (iii)).
Unattempted
Solution: According to section 125(7) of the Income Tax Act, a “specified investment business” carried on by a corporation in a given tax year means a business which principally derives income from property. However, there are many exclusions:
- a business carried on by the corporation where it employs more than five-full time employees throughout the year;
- a business carried on by a credit union; and
- a business that is leasing property (except if it is real property – then it will still fall within the definition).
Therefore, the correct answer is (a). It is a corporation that only has four employees (less than the exception in (i)), and primarily earns income by leasing real property (and hence is an exception (iii)). (b) is incorrect because credit unions are excluded from the definition (see (ii)). (c) is incorrect because businesses that have more than five full-time employees are excluded from the definition (see (i)). (d) is incorrect because it is excluded from the definition (see (iii)).
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Question 13 of 80
13. Question
Category: Business Law13. ABC Corporation is undergoing restructuring under the CCAA. The court has made an initial order and appointed a monitor to oversee the company’s operations and report on its financial and business affairs. Several weeks later, one of ABC Corporation’s creditors, Silvio, alleges that he suffered losses after relying on a report prepared by the monitor. He wants to sue the monitor for damages. Could Silvio successfully hold the monitor liable?
Correct
Solution: The correct answer is (c). A monitor appointed under the CCAA is protected from liability for losses suffered by someone relying on their report only if the monitor acted in good faith and exercised reasonable care in preparing it. If the monitor failed to meet those standards, then liability could arise. Option (c) best captures this. Option (a) is incorrect because the CCAA does not grant monitors blanket immunity; the protection depends on how the report was prepared. Option (b) is incorrect because creditors do not assume all legal risk; the monitor has a duty to act in good faith and with reasonable care. Option (d) is incorrect because not every mistake leads to liability – only those where the monitor failed to act in good faith or with reasonable care.
Incorrect
Solution: The correct answer is (c). A monitor appointed under the CCAA is protected from liability for losses suffered by someone relying on their report only if the monitor acted in good faith and exercised reasonable care in preparing it. If the monitor failed to meet those standards, then liability could arise. Option (c) best captures this. Option (a) is incorrect because the CCAA does not grant monitors blanket immunity; the protection depends on how the report was prepared. Option (b) is incorrect because creditors do not assume all legal risk; the monitor has a duty to act in good faith and with reasonable care. Option (d) is incorrect because not every mistake leads to liability – only those where the monitor failed to act in good faith or with reasonable care.
Unattempted
Solution: The correct answer is (c). A monitor appointed under the CCAA is protected from liability for losses suffered by someone relying on their report only if the monitor acted in good faith and exercised reasonable care in preparing it. If the monitor failed to meet those standards, then liability could arise. Option (c) best captures this. Option (a) is incorrect because the CCAA does not grant monitors blanket immunity; the protection depends on how the report was prepared. Option (b) is incorrect because creditors do not assume all legal risk; the monitor has a duty to act in good faith and with reasonable care. Option (d) is incorrect because not every mistake leads to liability – only those where the monitor failed to act in good faith or with reasonable care.
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Question 14 of 80
14. Question
Category: Business Law14. Nsombe, a lawyer, recently established ABC Law Firm. In order to comply with her professional obligations, Nsombe’s marketing materials must state which of the following?
Correct
Solution: The correct answer is (b). According to Rule 4.2-1.1 of the Rules of Professional Conduct, a lawyer marketing legal services shall specifically identify in all marketing materials that they are licensed as a lawyer. (a) is incorrect – while advertising of fees is permitted pursuant to Rule 4.2-2, it is not required. (c) is incorrect – Rule 4.2-1.2 explicitly prohibits the marketing of second opinions. (d) is incorrect as it has no basis in the Rules.
Incorrect
Solution: The correct answer is (b). According to Rule 4.2-1.1 of the Rules of Professional Conduct, a lawyer marketing legal services shall specifically identify in all marketing materials that they are licensed as a lawyer. (a) is incorrect – while advertising of fees is permitted pursuant to Rule 4.2-2, it is not required. (c) is incorrect – Rule 4.2-1.2 explicitly prohibits the marketing of second opinions. (d) is incorrect as it has no basis in the Rules.
Unattempted
Solution: The correct answer is (b). According to Rule 4.2-1.1 of the Rules of Professional Conduct, a lawyer marketing legal services shall specifically identify in all marketing materials that they are licensed as a lawyer. (a) is incorrect – while advertising of fees is permitted pursuant to Rule 4.2-2, it is not required. (c) is incorrect – Rule 4.2-1.2 explicitly prohibits the marketing of second opinions. (d) is incorrect as it has no basis in the Rules.
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Question 15 of 80
15. Question
Category: Business Law15. ABC Corporation is authorized to issue, and has issued, 1,000,000 common shares. The company now seeks to issue 25,000 warrants, each convertible into one common share, to an investor. What action must ABC Corporation take, if any, to proceed with issuing these warrants?
Correct
Solution: The correct answer is (b). According to Section 27(3) of the Ontario Business Corporations Act (OBCA), if a corporation grants conversion privileges, options, or rights (including warrants) to acquire shares and its articles limit the number of authorized shares, the corporation must reserve sufficient authorized shares to meet the exercise of such privileges or rights. In this scenario, ABC Corporation has already issued all 1,000,000 of its authorized common shares. To issue 25,000 warrants convertible into common shares, the company must amend its articles to increase the authorized number of common shares to at least 1,025,000, ensuring that there are enough authorized shares available for potential conversion. Therefore, option (b) is the appropriate course of action. (c) is incorrect because, as mentioned, all of the authorized shares have already been issued. (d) is incorrect since it has no basis in the OBCA.
Incorrect
Solution: The correct answer is (b). According to Section 27(3) of the Ontario Business Corporations Act (OBCA), if a corporation grants conversion privileges, options, or rights (including warrants) to acquire shares and its articles limit the number of authorized shares, the corporation must reserve sufficient authorized shares to meet the exercise of such privileges or rights. In this scenario, ABC Corporation has already issued all 1,000,000 of its authorized common shares. To issue 25,000 warrants convertible into common shares, the company must amend its articles to increase the authorized number of common shares to at least 1,025,000, ensuring that there are enough authorized shares available for potential conversion. Therefore, option (b) is the appropriate course of action. (c) is incorrect because, as mentioned, all of the authorized shares have already been issued. (d) is incorrect since it has no basis in the OBCA.
Unattempted
Solution: The correct answer is (b). According to Section 27(3) of the Ontario Business Corporations Act (OBCA), if a corporation grants conversion privileges, options, or rights (including warrants) to acquire shares and its articles limit the number of authorized shares, the corporation must reserve sufficient authorized shares to meet the exercise of such privileges or rights. In this scenario, ABC Corporation has already issued all 1,000,000 of its authorized common shares. To issue 25,000 warrants convertible into common shares, the company must amend its articles to increase the authorized number of common shares to at least 1,025,000, ensuring that there are enough authorized shares available for potential conversion. Therefore, option (b) is the appropriate course of action. (c) is incorrect because, as mentioned, all of the authorized shares have already been issued. (d) is incorrect since it has no basis in the OBCA.
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Question 16 of 80
16. Question
Category: Business Law16. Alastair recently visited a local passport office to replace his damaged passport. Upon arrival, he received a numbered ticket indicating his place in line and waited over five hours before being attended to. Noticing that several individuals were denied entry due to the office reaching its daily capacity, Alastair conceived a business idea: he would arrive early at the passport office each day to obtain a queue number and then sell it to individuals urgently needing passport services. He plans to incorporate this business. What is the best name for Alastair to use for his business?
Correct
Solution: The best answer is (d). Both the Ontario Business Corporations Act and Canada Business Corporations Act have rules regarding selecting names for a corporation. These rules include prohibiting names that would be likely to deceive and prohibiting corporate names with certain words, including “Association”. Option (a) is therefore incorrect because it has the word “Association”, which is prohibited. Options (b) and (c) are also incorrect because they would be likely to deceive a person into thinking the business does something else (i.e., provide passport services). Option (c) also contains the word “Canadian” – this is generally not a good word to use when naming a Corporation as it is overused. The best answer is (d) because it should not deceive a person, it does not contain any prohibited words, and it does not otherwise contravene the corporate naming rules prescribed by the applicable statutes.
Incorrect
Solution: The best answer is (d). Both the Ontario Business Corporations Act and Canada Business Corporations Act have rules regarding selecting names for a corporation. These rules include prohibiting names that would be likely to deceive and prohibiting corporate names with certain words, including “Association”. Option (a) is therefore incorrect because it has the word “Association”, which is prohibited. Options (b) and (c) are also incorrect because they would be likely to deceive a person into thinking the business does something else (i.e., provide passport services). Option (c) also contains the word “Canadian” – this is generally not a good word to use when naming a Corporation as it is overused. The best answer is (d) because it should not deceive a person, it does not contain any prohibited words, and it does not otherwise contravene the corporate naming rules prescribed by the applicable statutes.
Unattempted
Solution: The best answer is (d). Both the Ontario Business Corporations Act and Canada Business Corporations Act have rules regarding selecting names for a corporation. These rules include prohibiting names that would be likely to deceive and prohibiting corporate names with certain words, including “Association”. Option (a) is therefore incorrect because it has the word “Association”, which is prohibited. Options (b) and (c) are also incorrect because they would be likely to deceive a person into thinking the business does something else (i.e., provide passport services). Option (c) also contains the word “Canadian” – this is generally not a good word to use when naming a Corporation as it is overused. The best answer is (d) because it should not deceive a person, it does not contain any prohibited words, and it does not otherwise contravene the corporate naming rules prescribed by the applicable statutes.
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Question 17 of 80
17. Question
Category: Business Law17. A lawyer helps a client incorporate under the Canada Business Corporations Act. The lawyer initially informs the client that the cost for services, including legal fees, would be $800. During the retainer, the lawyer realizes that he failed to include the costs of his legal assistant in the initial fee estimate, which would add another $500 to the client’s bill. How should the lawyer proceed?
Correct
Solution: According to R. 3.6-1 of the Rules of Professional Conduct, a lawyer must disclose to clients the charges for fees and disbursements in a timely fashion, including any changes to fees and disbursements. Therefore, the lawyer in this case must inform the client of the changes to the fees, and seek client instructions on how to proceed. (a) is the correct answer.
Incorrect
Solution: According to R. 3.6-1 of the Rules of Professional Conduct, a lawyer must disclose to clients the charges for fees and disbursements in a timely fashion, including any changes to fees and disbursements. Therefore, the lawyer in this case must inform the client of the changes to the fees, and seek client instructions on how to proceed. (a) is the correct answer.
Unattempted
Solution: According to R. 3.6-1 of the Rules of Professional Conduct, a lawyer must disclose to clients the charges for fees and disbursements in a timely fashion, including any changes to fees and disbursements. Therefore, the lawyer in this case must inform the client of the changes to the fees, and seek client instructions on how to proceed. (a) is the correct answer.
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Question 18 of 80
18. Question
Category: Business Law18. Which of the following statutory claims rank ahead of the statutory wage priority claims granted under sections 81.3-81.4 of the Bankruptcy and Insolvency Act?
Correct
Solution: The statutory wage priority claims under ss. 81.3-81.4 have priority over unsecured claims and all secured claims (i.e. those under the PPSA). They are only subordinate to unpaid suppliers under s. 81.1 of the BIA, and in a bankruptcy, claims of the CRA for unremitted source deductions. It is unclear how CRA claims for unremitted source deductions in a receivership rank relative to the statutory wage priority claims, which is why (a) is not the best answer. The correct answer is (b).
Incorrect
Solution: The statutory wage priority claims under ss. 81.3-81.4 have priority over unsecured claims and all secured claims (i.e. those under the PPSA). They are only subordinate to unpaid suppliers under s. 81.1 of the BIA, and in a bankruptcy, claims of the CRA for unremitted source deductions. It is unclear how CRA claims for unremitted source deductions in a receivership rank relative to the statutory wage priority claims, which is why (a) is not the best answer. The correct answer is (b).
Unattempted
Solution: The statutory wage priority claims under ss. 81.3-81.4 have priority over unsecured claims and all secured claims (i.e. those under the PPSA). They are only subordinate to unpaid suppliers under s. 81.1 of the BIA, and in a bankruptcy, claims of the CRA for unremitted source deductions. It is unclear how CRA claims for unremitted source deductions in a receivership rank relative to the statutory wage priority claims, which is why (a) is not the best answer. The correct answer is (b).
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Question 19 of 80
19. Question
Category: Business Law19. Pierre is from Ottawa, Ontario, and is in the process of selling goods to Aron, who is from Melbourne, Australia. If both Pierre and Aron seek to exclude the application of the Contracts for the International Sale of Goods (“CISG”) Act in their sales contract, what should their contract expressly state?
Correct
Solution: Article 6 of the CISG states that if parties want to contract out of CISG, they must expressly state this in their contract. Therefore, (a) is the correct answer. (b) – (d) are wrong; just because the law of a jurisdiction is chosen (i.e. Ontario) it does not mean that they have contracted out of the CISG.
Incorrect
Solution: Article 6 of the CISG states that if parties want to contract out of CISG, they must expressly state this in their contract. Therefore, (a) is the correct answer. (b) – (d) are wrong; just because the law of a jurisdiction is chosen (i.e. Ontario) it does not mean that they have contracted out of the CISG.
Unattempted
Solution: Article 6 of the CISG states that if parties want to contract out of CISG, they must expressly state this in their contract. Therefore, (a) is the correct answer. (b) – (d) are wrong; just because the law of a jurisdiction is chosen (i.e. Ontario) it does not mean that they have contracted out of the CISG.
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Question 20 of 80
20. Question
Category: Business Law20. Gustav, a lawyer, was asked by his client, Nina, to provide her with legal services in connection with the purchase of a business. Nina provided Gustav with a $25,000 upfront retainer. One month into the retainer, Nina decided she was no longer interested in purchasing the business. Since Gustav only provided $5,000 worth of legal services, she asked for $20,000 back as she wished to terminate the retainer. Gustav refused to return these funds, noting that it was not his fault she no longer wished to purchase the business. He offered to provide her with a credit for $20,000 for future legal services. Is Gustav acting in accordance with his professional obligations?
Correct
Solution: The correct answer is (d). According to Rule 3.6-10 of the Rules of Professional Conduct, a lawyer shall not appropriate any funds of the client held in trust or otherwise under the lawyer’s control for or on account for fees except as permitted by the by-laws under the Law Society Act. Commentary [2] further provides that refusing to reimburse any portion of advance fees for work that has not been carried out when the contract of professional services with the client has terminated is a breach of the obligation to act with integrity. Note that option (c) is incorrect because lawyers are permitted to ask for upfront retainers.
Incorrect
Solution: The correct answer is (d). According to Rule 3.6-10 of the Rules of Professional Conduct, a lawyer shall not appropriate any funds of the client held in trust or otherwise under the lawyer’s control for or on account for fees except as permitted by the by-laws under the Law Society Act. Commentary [2] further provides that refusing to reimburse any portion of advance fees for work that has not been carried out when the contract of professional services with the client has terminated is a breach of the obligation to act with integrity. Note that option (c) is incorrect because lawyers are permitted to ask for upfront retainers.
Unattempted
Solution: The correct answer is (d). According to Rule 3.6-10 of the Rules of Professional Conduct, a lawyer shall not appropriate any funds of the client held in trust or otherwise under the lawyer’s control for or on account for fees except as permitted by the by-laws under the Law Society Act. Commentary [2] further provides that refusing to reimburse any portion of advance fees for work that has not been carried out when the contract of professional services with the client has terminated is a breach of the obligation to act with integrity. Note that option (c) is incorrect because lawyers are permitted to ask for upfront retainers.
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Question 21 of 80
21. Question
Category: Business Law21. According to the Securities Act, who may purchase securities in accordance with the Private Issuer Exemption?
Correct
Solution: The correct answer is (c). According to section 2.4 of NI 45-106, the private issuer exemption is available to a person who purchases a security as a principal and is a specified type of purchaser. This includes a control person of the issuer (see section 2.4(2)(c)); a person who is not the public (see section 2.4(2)(l)); and an accredited investor (see section 2.4(2)(i)). An accredited investor, according to section 1.1 of NI 45-106, includes an individual who, along with their spouse, has pre-tax income of at least $300,000 in the past two calendar years, and reasonably expects to make more in the upcoming year.
Therefore, the correct answer is (c), as it falls under section 2.4(2)(c). Note that option (a) is incorrect because while a close personal friend of a director may purchase securities pursuant to the private issuer exemption, an acquaintance is not qualified to do so. Option (b) is incorrect because it is the opposite of what is stated in section 2.4(2)(l) (a person who is not the public). Finally, option (d) is incorrect because $190,000 falls well short of the $300,000 pre-tax income requirement for spouses.Incorrect
Solution: The correct answer is (c). According to section 2.4 of NI 45-106, the private issuer exemption is available to a person who purchases a security as a principal and is a specified type of purchaser. This includes a control person of the issuer (see section 2.4(2)(c)); a person who is not the public (see section 2.4(2)(l)); and an accredited investor (see section 2.4(2)(i)). An accredited investor, according to section 1.1 of NI 45-106, includes an individual who, along with their spouse, has pre-tax income of at least $300,000 in the past two calendar years, and reasonably expects to make more in the upcoming year.
Therefore, the correct answer is (c), as it falls under section 2.4(2)(c). Note that option (a) is incorrect because while a close personal friend of a director may purchase securities pursuant to the private issuer exemption, an acquaintance is not qualified to do so. Option (b) is incorrect because it is the opposite of what is stated in section 2.4(2)(l) (a person who is not the public). Finally, option (d) is incorrect because $190,000 falls well short of the $300,000 pre-tax income requirement for spouses.Unattempted
Solution: The correct answer is (c). According to section 2.4 of NI 45-106, the private issuer exemption is available to a person who purchases a security as a principal and is a specified type of purchaser. This includes a control person of the issuer (see section 2.4(2)(c)); a person who is not the public (see section 2.4(2)(l)); and an accredited investor (see section 2.4(2)(i)). An accredited investor, according to section 1.1 of NI 45-106, includes an individual who, along with their spouse, has pre-tax income of at least $300,000 in the past two calendar years, and reasonably expects to make more in the upcoming year.
Therefore, the correct answer is (c), as it falls under section 2.4(2)(c). Note that option (a) is incorrect because while a close personal friend of a director may purchase securities pursuant to the private issuer exemption, an acquaintance is not qualified to do so. Option (b) is incorrect because it is the opposite of what is stated in section 2.4(2)(l) (a person who is not the public). Finally, option (d) is incorrect because $190,000 falls well short of the $300,000 pre-tax income requirement for spouses. -
Question 22 of 80
22. Question
Category: Business Law22. On March 1, 2024, ABC Dental Corporation terminated Radek, its long-time dental hygienist, without notice. On March 8, 2024, Radek began to search for a job. On August 10, 2024, he rejected an offer from a local restaurant for a position as a chef. On August 15, 2024, he rejected an offer from a local dentistry practice for a position as a dental hygienist since the job paid $1,000 less than his previous position at ABC Dental Corporation. Which of the following is true?
Correct
Solution: Case law has held that an employee has a duty to mitigate their damages – i.e., seek comparable employment, whether they were terminated constructively or wrongfully dismissed. However, employees are permitted to have a buffer period where they are not expected to look for a job immediately after being terminated, as it is normal for them to need some time to recover from the news. The best answer is therefore (c). Radek was offered comparable employment on August 15, 2024, about five and a half months after he was terminated. Rejecting the position merely because of $1,000 is likely not reasonable. (a) is incorrect because, as noted, Radek is entitled to a “buffer” or “recovery period”. At that point, he had only been terminated for one week, so it is incorrect to say he “likely” had a duty to mitigate at that point by searching for a job earlier. (b) is incorrect as no one is expected to accept a completely different job – which a chef certainly is when compared to a dental hygienist. (d) is incorrect because Radek surely has a duty to mitigate.
Incorrect
Solution: Case law has held that an employee has a duty to mitigate their damages – i.e., seek comparable employment, whether they were terminated constructively or wrongfully dismissed. However, employees are permitted to have a buffer period where they are not expected to look for a job immediately after being terminated, as it is normal for them to need some time to recover from the news. The best answer is therefore (c). Radek was offered comparable employment on August 15, 2024, about five and a half months after he was terminated. Rejecting the position merely because of $1,000 is likely not reasonable. (a) is incorrect because, as noted, Radek is entitled to a “buffer” or “recovery period”. At that point, he had only been terminated for one week, so it is incorrect to say he “likely” had a duty to mitigate at that point by searching for a job earlier. (b) is incorrect as no one is expected to accept a completely different job – which a chef certainly is when compared to a dental hygienist. (d) is incorrect because Radek surely has a duty to mitigate.
Unattempted
Solution: Case law has held that an employee has a duty to mitigate their damages – i.e., seek comparable employment, whether they were terminated constructively or wrongfully dismissed. However, employees are permitted to have a buffer period where they are not expected to look for a job immediately after being terminated, as it is normal for them to need some time to recover from the news. The best answer is therefore (c). Radek was offered comparable employment on August 15, 2024, about five and a half months after he was terminated. Rejecting the position merely because of $1,000 is likely not reasonable. (a) is incorrect because, as noted, Radek is entitled to a “buffer” or “recovery period”. At that point, he had only been terminated for one week, so it is incorrect to say he “likely” had a duty to mitigate at that point by searching for a job earlier. (b) is incorrect as no one is expected to accept a completely different job – which a chef certainly is when compared to a dental hygienist. (d) is incorrect because Radek surely has a duty to mitigate.
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Question 23 of 80
23. Question
Category: Business Law23. XYZ Law, a law firm in Ontario, receives a request from one of its clients to access the personal information the firm holds about that client. What fee may XYZ Law charge, if any, to the client to process this request?
Correct
Solution: The correct answer is (a). According to the Personal Information Protection and Electronic Documents Act (PIPEDA), Schedule 1, Principle 9, clause 4.9.4, organizations must respond to an individual’s request for access to their personal information within a reasonable time and at minimal or no cost to the individual. This implies that any fee charged should be nominal. Charging fees based on hourly rates (option b) or a specific amount like $1,750 (option c) would likely exceed what is considered minimal and is not permissible under PIPEDA. Option (d) is incorrect because PIPEDA does allow charging a minimal fee.
Incorrect
Solution: The correct answer is (a). According to the Personal Information Protection and Electronic Documents Act (PIPEDA), Schedule 1, Principle 9, clause 4.9.4, organizations must respond to an individual’s request for access to their personal information within a reasonable time and at minimal or no cost to the individual. This implies that any fee charged should be nominal. Charging fees based on hourly rates (option b) or a specific amount like $1,750 (option c) would likely exceed what is considered minimal and is not permissible under PIPEDA. Option (d) is incorrect because PIPEDA does allow charging a minimal fee.
Unattempted
Solution: The correct answer is (a). According to the Personal Information Protection and Electronic Documents Act (PIPEDA), Schedule 1, Principle 9, clause 4.9.4, organizations must respond to an individual’s request for access to their personal information within a reasonable time and at minimal or no cost to the individual. This implies that any fee charged should be nominal. Charging fees based on hourly rates (option b) or a specific amount like $1,750 (option c) would likely exceed what is considered minimal and is not permissible under PIPEDA. Option (d) is incorrect because PIPEDA does allow charging a minimal fee.
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Question 24 of 80
24. Question
Category: Business Law24. For the general anti-avoidance rule to apply, the Minister of National Revenue must establish which of the following?
Correct
Solution: In order for the General Anti-Avoidance Rule to apply, three requirements must be present: presence of a tax benefit, the transaction is an avoidance transaction, and the transaction is abusive (i.e. contrary to the ITA). Only the last factor – that the transaction is contrary to the ITA must be established by the Minister of National Revenue (MNR), while the taxpayer must establish the first two. The correct answer is therefore (d).
Incorrect
Solution: In order for the General Anti-Avoidance Rule to apply, three requirements must be present: presence of a tax benefit, the transaction is an avoidance transaction, and the transaction is abusive (i.e. contrary to the ITA). Only the last factor – that the transaction is contrary to the ITA must be established by the Minister of National Revenue (MNR), while the taxpayer must establish the first two. The correct answer is therefore (d).
Unattempted
Solution: In order for the General Anti-Avoidance Rule to apply, three requirements must be present: presence of a tax benefit, the transaction is an avoidance transaction, and the transaction is abusive (i.e. contrary to the ITA). Only the last factor – that the transaction is contrary to the ITA must be established by the Minister of National Revenue (MNR), while the taxpayer must establish the first two. The correct answer is therefore (d).
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Question 25 of 80
25. Question
Category: Business Law25. The final report of the Truth and Reconciliation Commission provides a call to action directly aimed at the legal community to do which of the following?
Correct
Solution: The correct answer is (a). Call to Action 27 of the final report of the TRC notes the following: “We call upon the Federation of Law Societies of Canada to ensure that lawyers receive appropriate cultural competency training, which includes the history and legacy of residential schools…”
Answers (b) – (d) have no basis in the final report of the TRC.
Incorrect
Solution: The correct answer is (a). Call to Action 27 of the final report of the TRC notes the following: “We call upon the Federation of Law Societies of Canada to ensure that lawyers receive appropriate cultural competency training, which includes the history and legacy of residential schools…”
Answers (b) – (d) have no basis in the final report of the TRC.
Unattempted
Solution: The correct answer is (a). Call to Action 27 of the final report of the TRC notes the following: “We call upon the Federation of Law Societies of Canada to ensure that lawyers receive appropriate cultural competency training, which includes the history and legacy of residential schools…”
Answers (b) – (d) have no basis in the final report of the TRC.
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Question 26 of 80
26. Question
Category: Business Law26. To determine whether a status Indian (as defined under the Indian Act) will be taxed on employment income, the presence of “connecting factors” is relevant. The connecting factors test comes from which of the following sources of law?
Correct
Solution: The “connecting factors” test was established by Williams v Canada; the correct answer is therefore (d).
Incorrect
Solution: The “connecting factors” test was established by Williams v Canada; the correct answer is therefore (d).
Unattempted
Solution: The “connecting factors” test was established by Williams v Canada; the correct answer is therefore (d).
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Question 27 of 80
27. Question
Category: Business Law27. Donovan is in the process of forming a partnership and seeks a lawyer’s assistance with drafting the partnership agreement. He discovers that a local solo practitioner, Hira, specializes in corporate law. On Hira’s website, one ad states that he charges a “fixed $2,000 to draft a partnership agreement!” Donovan ultimately retained Hira. At the end of the retainer, he was charged $2,000 in legal fees, plus $500 in disbursements. Pleased with Hira’s work, Donovan referred his friend, Mickey, who also required assistance with drafting a partnership agreement, to Hira. Donovan was surprised to find that Mickey was only charged $1,500 in total by Hira, when the work completed for Mickey was virtually the same as the work that Hira completed for him. Which of the following is true?
Correct
Solution: The correct answer is (c). Hira breached the Rules of Professional Conduct through his misleading advertising. According to rule 4.2-2 of the Rules, a lawyer may advertise fees charged for legal services if, among other things, (i) the advertising states whether other amounts such as disbursements would be charged in addition to the fee; and (ii) the lawyer strictly adheres to the advertised fee in every applicable case. Here, Hira advertised his fee as simply a “fixed $2,000”, when, in reality for Donovan, it cost him $2,500 due to disbursements. Furthermore, Hira must be consistent with his fees, and by charging different amounts to Donovan and Mickey, he was acting contrary to this rule. Note that (d) is incorrect because simply advertising “A fixed $2,000 to draft a partnership agreement!” is not an emotional appeal.
Incorrect
Solution: The correct answer is (c). Hira breached the Rules of Professional Conduct through his misleading advertising. According to rule 4.2-2 of the Rules, a lawyer may advertise fees charged for legal services if, among other things, (i) the advertising states whether other amounts such as disbursements would be charged in addition to the fee; and (ii) the lawyer strictly adheres to the advertised fee in every applicable case. Here, Hira advertised his fee as simply a “fixed $2,000”, when, in reality for Donovan, it cost him $2,500 due to disbursements. Furthermore, Hira must be consistent with his fees, and by charging different amounts to Donovan and Mickey, he was acting contrary to this rule. Note that (d) is incorrect because simply advertising “A fixed $2,000 to draft a partnership agreement!” is not an emotional appeal.
Unattempted
Solution: The correct answer is (c). Hira breached the Rules of Professional Conduct through his misleading advertising. According to rule 4.2-2 of the Rules, a lawyer may advertise fees charged for legal services if, among other things, (i) the advertising states whether other amounts such as disbursements would be charged in addition to the fee; and (ii) the lawyer strictly adheres to the advertised fee in every applicable case. Here, Hira advertised his fee as simply a “fixed $2,000”, when, in reality for Donovan, it cost him $2,500 due to disbursements. Furthermore, Hira must be consistent with his fees, and by charging different amounts to Donovan and Mickey, he was acting contrary to this rule. Note that (d) is incorrect because simply advertising “A fixed $2,000 to draft a partnership agreement!” is not an emotional appeal.
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Question 28 of 80
28. Question
Category: Business Law28. Case Set: Rohan, an entrepreneur, recently traveled abroad and became captivated by the sport of pillow fighting. Inspired, he decides to establish a professional pillow fighting league in Canada and seeks legal counsel from Aaliyah, a lawyer licensed to practice law in Ontario, to assist with setting up the business.
Rohan tells Aaliyah that he plans to co-own the pillow fighting company with several Canadian individuals and wants to ensure that his personal liability is limited. He also notes that he does not expect to secure sufficient insurance to cover potential business-related liabilities. Which business structure would best suit Rohan’s needs?
Correct
Solution: The correct answer is (c). A corporation is a separate legal entity that limits each shareholder’s liability to the amount of their investment. This makes it the most appropriate structure for Rohan, especially given his concern about being unable to secure sufficient insurance coverage. In contrast, a sole proprietorship, joint venture, or general partnership would expose him to unlimited personal liability and therefore do not meet his stated needs.
Incorrect
Solution: The correct answer is (c). A corporation is a separate legal entity that limits each shareholder’s liability to the amount of their investment. This makes it the most appropriate structure for Rohan, especially given his concern about being unable to secure sufficient insurance coverage. In contrast, a sole proprietorship, joint venture, or general partnership would expose him to unlimited personal liability and therefore do not meet his stated needs.
Unattempted
Solution: The correct answer is (c). A corporation is a separate legal entity that limits each shareholder’s liability to the amount of their investment. This makes it the most appropriate structure for Rohan, especially given his concern about being unable to secure sufficient insurance coverage. In contrast, a sole proprietorship, joint venture, or general partnership would expose him to unlimited personal liability and therefore do not meet his stated needs.
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Question 29 of 80
29. Question
Category: Business Law29. Case Set: Rohan, an entrepreneur, recently traveled abroad and became captivated by the sport of pillow fighting. Inspired, he decides to establish a professional pillow fighting league in Canada and seeks legal counsel from Aaliyah, a lawyer licensed to practice law in Ontario, to assist with setting up the business.
After incorporating under Ontario’s Business Corporations Act (OBCA), Rohan plans to file an initial return. What information must be included in this initial return?
Correct
Solution: The correct answer is (c). Under the Corporations Information Act, a newly incorporated corporation must file an initial return within 60 days of incorporation. This return must include the corporation’s name, registered office address, and the names and addresses of all directors and officers as of the date of filing.
Option (a) is incorrect because the required information must reflect the date of filing, not the date of incorporation. Option (b) is incorrect as shareholder details are not required in the initial return. Option (d) is also incorrect because there is no requirement to file a business plan as part of the initial return.Incorrect
Solution: The correct answer is (c). Under the Corporations Information Act, a newly incorporated corporation must file an initial return within 60 days of incorporation. This return must include the corporation’s name, registered office address, and the names and addresses of all directors and officers as of the date of filing.
Option (a) is incorrect because the required information must reflect the date of filing, not the date of incorporation. Option (b) is incorrect as shareholder details are not required in the initial return. Option (d) is also incorrect because there is no requirement to file a business plan as part of the initial return.Unattempted
Solution: The correct answer is (c). Under the Corporations Information Act, a newly incorporated corporation must file an initial return within 60 days of incorporation. This return must include the corporation’s name, registered office address, and the names and addresses of all directors and officers as of the date of filing.
Option (a) is incorrect because the required information must reflect the date of filing, not the date of incorporation. Option (b) is incorrect as shareholder details are not required in the initial return. Option (d) is also incorrect because there is no requirement to file a business plan as part of the initial return. -
Question 30 of 80
30. Question
Category: Business Law30. Case Set: Rohan, an entrepreneur, recently traveled abroad and became captivated by the sport of pillow fighting. Inspired, he decides to establish a professional pillow fighting league in Canada and seeks legal counsel from Aaliyah, a lawyer licensed to practice law in Ontario, to assist with setting up the business.
The company also plans to sell specialized pillows to its followers. Given his interest in expanding sales to the United States, Rohan is concerned about recent tariffs imposed by the U.S. on certain Canadian goods. He asks Aaliyah whether she can review U.S. executive orders and laws and advise him on how to navigate any legal and tax implications. How should Aaliyah proceed?
Correct
Solution: The correct answer is (b). Under the Rules of Professional Conduct, a “lawyer” is defined as a person licensed by the Law Society of Ontario to practice law in Ontario. According to the fact stem, Aaliyah is licensed to practice law in Ontario and there is no indication she has the appropriate credentials to give advice on the legal and tax implications of U.S. executive orders, which are based on U.S. law. As such, the most appropriate course of action is to refer Rohan to a U.S. attorney who specializes in international trade law.
Option (a) is incorrect because it would involve giving legal advice on foreign law, which is beyond Aaliyah’s permitted scope of practice. Option (c) might offer general background information but does not replace competent legal advice from a U.S.-licensed lawyer. Option (d) is overly restrictive; while Aaliyah cannot provide U.S. legal advice, there is no prohibition against discussing U.S. laws in general terms, especially to help coordinate with appropriate counsel.Incorrect
Solution: The correct answer is (b). Under the Rules of Professional Conduct, a “lawyer” is defined as a person licensed by the Law Society of Ontario to practice law in Ontario. According to the fact stem, Aaliyah is licensed to practice law in Ontario and there is no indication she has the appropriate credentials to give advice on the legal and tax implications of U.S. executive orders, which are based on U.S. law. As such, the most appropriate course of action is to refer Rohan to a U.S. attorney who specializes in international trade law.
Option (a) is incorrect because it would involve giving legal advice on foreign law, which is beyond Aaliyah’s permitted scope of practice. Option (c) might offer general background information but does not replace competent legal advice from a U.S.-licensed lawyer. Option (d) is overly restrictive; while Aaliyah cannot provide U.S. legal advice, there is no prohibition against discussing U.S. laws in general terms, especially to help coordinate with appropriate counsel.Unattempted
Solution: The correct answer is (b). Under the Rules of Professional Conduct, a “lawyer” is defined as a person licensed by the Law Society of Ontario to practice law in Ontario. According to the fact stem, Aaliyah is licensed to practice law in Ontario and there is no indication she has the appropriate credentials to give advice on the legal and tax implications of U.S. executive orders, which are based on U.S. law. As such, the most appropriate course of action is to refer Rohan to a U.S. attorney who specializes in international trade law.
Option (a) is incorrect because it would involve giving legal advice on foreign law, which is beyond Aaliyah’s permitted scope of practice. Option (c) might offer general background information but does not replace competent legal advice from a U.S.-licensed lawyer. Option (d) is overly restrictive; while Aaliyah cannot provide U.S. legal advice, there is no prohibition against discussing U.S. laws in general terms, especially to help coordinate with appropriate counsel. -
Question 31 of 80
31. Question
Category: Estates Planning31. Daniel, a wills and estates lawyer, is approached by a new client, Robert, who is 89 years old and shows signs of cognitive decline. Robert wants Daniel to prepare a new will under a limited scope retainer and insists the work be done quickly. What must Daniel do before accepting the retainer?
Correct
Solution: The correct answer is (c). Under Commentary [5.2] to Rule 3.2-1A.1 of the Rules of Professional Conduct, when a client has diminished capacity, a lawyer must carefully assess whether it is possible to competently provide limited scope services in the circumstances. This is especially important in estate matters where legal capacity is central. Option (a) is incorrect because communication alone is not enough where capacity is in doubt. Option (b) is incorrect because family consent does not replace a lawyer’s independent assessment. (d) is incorrect because Robert agreeing to a full estate plan review is not necessary.
Incorrect
Solution: The correct answer is (c). Under Commentary [5.2] to Rule 3.2-1A.1 of the Rules of Professional Conduct, when a client has diminished capacity, a lawyer must carefully assess whether it is possible to competently provide limited scope services in the circumstances. This is especially important in estate matters where legal capacity is central. Option (a) is incorrect because communication alone is not enough where capacity is in doubt. Option (b) is incorrect because family consent does not replace a lawyer’s independent assessment. (d) is incorrect because Robert agreeing to a full estate plan review is not necessary.
Unattempted
Solution: The correct answer is (c). Under Commentary [5.2] to Rule 3.2-1A.1 of the Rules of Professional Conduct, when a client has diminished capacity, a lawyer must carefully assess whether it is possible to competently provide limited scope services in the circumstances. This is especially important in estate matters where legal capacity is central. Option (a) is incorrect because communication alone is not enough where capacity is in doubt. Option (b) is incorrect because family consent does not replace a lawyer’s independent assessment. (d) is incorrect because Robert agreeing to a full estate plan review is not necessary.
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Question 32 of 80
32. Question
Category: Estates Planning32. Tamika was recently called to the Ontario bar. Soon after, she started a solo practice as a wills, estates, and trusts lawyer. Excited about having a new lawyer in the family, Tamika’s father approached her for assistance with setting up an inter vivos spousal trust. How should Tamika proceed?
Correct
Solution: The correct answer is (b). Given the personal relationship that is involved here, the conflict of interest rules in 3.4-1 and 3.4-2 of the Rules of Professional Conduct are relevant here. A conflict clearly exists, but she would still be permitted to act in accordance with r. 3.4-2 if she receives her father’s fully informed and voluntary consent. (a) is incorrect because, as mentioned previously, she should not act without his fully informed and voluntary consent. (c) may be true, as she was recently called to the bar. A lawyer who is not competent to take on a matter must follow the steps outlined in section 3.1-2 and its commentary, which may include obtaining the clients’ consent to act. However, note here that we would simply be making an assumption Tamika is incompetent merely because she was recently called. She may indeed be competent or capable to take on the matter (i.e. perhaps she worked on such trusts extensively during her articling/LPP term). Therefore, this is a weaker answer than (b) – since with (b) we know, and need not assume, that a clear conflict exists here with her father. (d) is ideal (though not required); advising her father of the clear conflict should be the priority here.
Incorrect
Solution: The correct answer is (b). Given the personal relationship that is involved here, the conflict of interest rules in 3.4-1 and 3.4-2 of the Rules of Professional Conduct are relevant here. A conflict clearly exists, but she would still be permitted to act in accordance with r. 3.4-2 if she receives her father’s fully informed and voluntary consent. (a) is incorrect because, as mentioned previously, she should not act without his fully informed and voluntary consent. (c) may be true, as she was recently called to the bar. A lawyer who is not competent to take on a matter must follow the steps outlined in section 3.1-2 and its commentary, which may include obtaining the clients’ consent to act. However, note here that we would simply be making an assumption Tamika is incompetent merely because she was recently called. She may indeed be competent or capable to take on the matter (i.e. perhaps she worked on such trusts extensively during her articling/LPP term). Therefore, this is a weaker answer than (b) – since with (b) we know, and need not assume, that a clear conflict exists here with her father. (d) is ideal (though not required); advising her father of the clear conflict should be the priority here.
Unattempted
Solution: The correct answer is (b). Given the personal relationship that is involved here, the conflict of interest rules in 3.4-1 and 3.4-2 of the Rules of Professional Conduct are relevant here. A conflict clearly exists, but she would still be permitted to act in accordance with r. 3.4-2 if she receives her father’s fully informed and voluntary consent. (a) is incorrect because, as mentioned previously, she should not act without his fully informed and voluntary consent. (c) may be true, as she was recently called to the bar. A lawyer who is not competent to take on a matter must follow the steps outlined in section 3.1-2 and its commentary, which may include obtaining the clients’ consent to act. However, note here that we would simply be making an assumption Tamika is incompetent merely because she was recently called. She may indeed be competent or capable to take on the matter (i.e. perhaps she worked on such trusts extensively during her articling/LPP term). Therefore, this is a weaker answer than (b) – since with (b) we know, and need not assume, that a clear conflict exists here with her father. (d) is ideal (though not required); advising her father of the clear conflict should be the priority here.
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Question 33 of 80
33. Question
Category: Estates Planning33. Maria applies to the court under the Declaration of Death Act, 2002 for a declaration that her uncle is deceased. He disappeared five years ago after going for a late-night walk and has not been heard from since. In her application, Maria asks the court to declare a date of death other than the date of disappearance and the date of the application. Under what circumstance may the court grant this request?
Correct
Solution: The correct answer is (c). Under section 2(9) of the Declaration of Death Act, 2002, a court may declare a date of death other than the date of disappearance or the date of application if it is just to do so in the circumstances and if it would not cause inconvenience or hardship to any interested persons. Option (a) is incorrect because the absence of dependents or objections does not automatically justify the use of an alternate date. Option (b), though detailed, is too narrow as section 2(9) does not require forensic or circumstantial evidence but focuses on fairness and the absence of prejudice. Option (d) is incorrect because simplifying estate administration is not, on its own, a sufficient legal basis for selecting a different date of death.
Incorrect
Solution: The correct answer is (c). Under section 2(9) of the Declaration of Death Act, 2002, a court may declare a date of death other than the date of disappearance or the date of application if it is just to do so in the circumstances and if it would not cause inconvenience or hardship to any interested persons. Option (a) is incorrect because the absence of dependents or objections does not automatically justify the use of an alternate date. Option (b), though detailed, is too narrow as section 2(9) does not require forensic or circumstantial evidence but focuses on fairness and the absence of prejudice. Option (d) is incorrect because simplifying estate administration is not, on its own, a sufficient legal basis for selecting a different date of death.
Unattempted
Solution: The correct answer is (c). Under section 2(9) of the Declaration of Death Act, 2002, a court may declare a date of death other than the date of disappearance or the date of application if it is just to do so in the circumstances and if it would not cause inconvenience or hardship to any interested persons. Option (a) is incorrect because the absence of dependents or objections does not automatically justify the use of an alternate date. Option (b), though detailed, is too narrow as section 2(9) does not require forensic or circumstantial evidence but focuses on fairness and the absence of prejudice. Option (d) is incorrect because simplifying estate administration is not, on its own, a sufficient legal basis for selecting a different date of death.
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Question 34 of 80
34. Question
Category: Estates Planning34. Arlene and Bolando retained Zhang, a lawyer, to help them draft a joint will. Months after the will was drafted, Bolando approached Zhang and asked whether she could help him change the contents of the will. In which of the following circumstances may Zhang assist Bolando?
Correct
Solution: The correct answer is (b). According to rule 3.4-5 of the Rules of Professional Conduct and the commentary, after helping a couple devise a joint will, a lawyer may not alter the will on the sole direction of any one of them unless: (a) they separated; (b) the other person/spouse died; or (c) the other person/spouse was informed of this subsequent communication and consents to the lawyer acting on the new instructions. Therefore, pursuant to (b) above, if Zhang finds that Arlene passed away, she would be permitted to act for Bolando. (a) is incorrect, given the exceptions noted above. (c) is incorrect as a “major argument” on its own is not sufficient. Finally, (d) is also incorrect because it only matters if Arlene consents. Given that Bolando is the one who wants the will altered, it should be no surprise that he would consent.
Incorrect
Solution: The correct answer is (b). According to rule 3.4-5 of the Rules of Professional Conduct and the commentary, after helping a couple devise a joint will, a lawyer may not alter the will on the sole direction of any one of them unless: (a) they separated; (b) the other person/spouse died; or (c) the other person/spouse was informed of this subsequent communication and consents to the lawyer acting on the new instructions. Therefore, pursuant to (b) above, if Zhang finds that Arlene passed away, she would be permitted to act for Bolando. (a) is incorrect, given the exceptions noted above. (c) is incorrect as a “major argument” on its own is not sufficient. Finally, (d) is also incorrect because it only matters if Arlene consents. Given that Bolando is the one who wants the will altered, it should be no surprise that he would consent.
Unattempted
Solution: The correct answer is (b). According to rule 3.4-5 of the Rules of Professional Conduct and the commentary, after helping a couple devise a joint will, a lawyer may not alter the will on the sole direction of any one of them unless: (a) they separated; (b) the other person/spouse died; or (c) the other person/spouse was informed of this subsequent communication and consents to the lawyer acting on the new instructions. Therefore, pursuant to (b) above, if Zhang finds that Arlene passed away, she would be permitted to act for Bolando. (a) is incorrect, given the exceptions noted above. (c) is incorrect as a “major argument” on its own is not sufficient. Finally, (d) is also incorrect because it only matters if Arlene consents. Given that Bolando is the one who wants the will altered, it should be no surprise that he would consent.
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Question 35 of 80
35. Question
Category: Estates Planning35. Tamar prepares a will that includes a bequest of her vintage car to her friend Farida. Farida also signs the will as a witness. What is the general effect of this bequest?
Correct
Solution: The correct answer is (a). Section 12(1) of the Succession Law Reform Act (SLRA) provides that a bequest to a person who witnesses the will is presumed void. However, under section 12(3), the court may uphold the bequest if it is satisfied that neither the witness nor their spouse exercised improper or undue influence over the testator. Option (b) is incorrect because it understates the presumption of voidness. Additionally, the SLRA does not condition the voidness of a bequest on the nature of the benefit being “personal.” Option (c) is incorrect because the validity of the entire will is not affected. Only the specific bequest may be void. Option (d) is also incorrect, as meeting general witnessing requirements does not override the special rule regarding gifts to witnesses.
Incorrect
Solution: The correct answer is (a). Section 12(1) of the Succession Law Reform Act (SLRA) provides that a bequest to a person who witnesses the will is presumed void. However, under section 12(3), the court may uphold the bequest if it is satisfied that neither the witness nor their spouse exercised improper or undue influence over the testator. Option (b) is incorrect because it understates the presumption of voidness. Additionally, the SLRA does not condition the voidness of a bequest on the nature of the benefit being “personal.” Option (c) is incorrect because the validity of the entire will is not affected. Only the specific bequest may be void. Option (d) is also incorrect, as meeting general witnessing requirements does not override the special rule regarding gifts to witnesses.
Unattempted
Solution: The correct answer is (a). Section 12(1) of the Succession Law Reform Act (SLRA) provides that a bequest to a person who witnesses the will is presumed void. However, under section 12(3), the court may uphold the bequest if it is satisfied that neither the witness nor their spouse exercised improper or undue influence over the testator. Option (b) is incorrect because it understates the presumption of voidness. Additionally, the SLRA does not condition the voidness of a bequest on the nature of the benefit being “personal.” Option (c) is incorrect because the validity of the entire will is not affected. Only the specific bequest may be void. Option (d) is also incorrect, as meeting general witnessing requirements does not override the special rule regarding gifts to witnesses.
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Question 36 of 80
36. Question
Category: Estates Planning36. Riley and Marissa got married in 2017. They both fell under the definition of an “Indian” as defined by the Indian Act. Riley recently passed away. While Riley died with a will, it was discovered that his will was unenforceable. At the date of death, the net value of his estate was $675,000. Riley and Marissa had three children: Markus, Kaniehtiio, and Saira. At the time of his death, Riley’s one surviving parent was his mother, Tianna. If Marissa does not elect to claim her equalization payment, which of the following is true?
Correct
Solution: The correct answer is (b). Because Riley’s will is unenforceable, the intestacy rules in section 48 of the Indian Act apply. Where the estate exceeds $75,000 and there is a surviving spouse and more than one child, the spouse receives a preferential share of $75,000, plus one-third of the residue. The remaining two-thirds is then split equally among the children.
Here, Riley’s estate is $675,000. Marissa receives her $75,000 preferential share, leaving $600,000. She then receives one-third of the remainder ($200,000), and the remaining $400,000 is divided equally among Markus, Kaniehtiio, and Saira – each receiving approximately $133,333. Marissa will receive a total of $275,000 ($75,000 + $200,000) which is why (a) is incorrect. (c) is also incorrect since Tianna receives nothing, as under section 48(5) of the Indian Act, parents only inherit when there is no surviving spouse or issue (i.e., children).Incorrect
Solution: The correct answer is (b). Because Riley’s will is unenforceable, the intestacy rules in section 48 of the Indian Act apply. Where the estate exceeds $75,000 and there is a surviving spouse and more than one child, the spouse receives a preferential share of $75,000, plus one-third of the residue. The remaining two-thirds is then split equally among the children.
Here, Riley’s estate is $675,000. Marissa receives her $75,000 preferential share, leaving $600,000. She then receives one-third of the remainder ($200,000), and the remaining $400,000 is divided equally among Markus, Kaniehtiio, and Saira – each receiving approximately $133,333. Marissa will receive a total of $275,000 ($75,000 + $200,000) which is why (a) is incorrect. (c) is also incorrect since Tianna receives nothing, as under section 48(5) of the Indian Act, parents only inherit when there is no surviving spouse or issue (i.e., children).Unattempted
Solution: The correct answer is (b). Because Riley’s will is unenforceable, the intestacy rules in section 48 of the Indian Act apply. Where the estate exceeds $75,000 and there is a surviving spouse and more than one child, the spouse receives a preferential share of $75,000, plus one-third of the residue. The remaining two-thirds is then split equally among the children.
Here, Riley’s estate is $675,000. Marissa receives her $75,000 preferential share, leaving $600,000. She then receives one-third of the remainder ($200,000), and the remaining $400,000 is divided equally among Markus, Kaniehtiio, and Saira – each receiving approximately $133,333. Marissa will receive a total of $275,000 ($75,000 + $200,000) which is why (a) is incorrect. (c) is also incorrect since Tianna receives nothing, as under section 48(5) of the Indian Act, parents only inherit when there is no surviving spouse or issue (i.e., children). -
Question 37 of 80
37. Question
Category: Estates Planning37. Rhonda, a lawyer, is representing Stromile in an estate litigation matter. Rhonda has not yet been paid her interim legal fees. What is the best way for Rhonda to proceed?
Correct
Solution: The best answer is (b). According to rule 3.7-3 of the Rules of Professional Conduct, a lawyer may withdraw from representation when a client does not pay. However, the lawyer must first demand payment, and inform the client of the consequences of failing to do so. The correct answer is therefore (b). (a) and (d) are incorrect, because no withdrawal is permitted without demanding payment from the client in the first place. (c) is inappropriate as it does not provide Stromile with the consequences of failing to do so and is in any case, not suggested by the Rules of Professional Conduct.
Incorrect
Solution: The best answer is (b). According to rule 3.7-3 of the Rules of Professional Conduct, a lawyer may withdraw from representation when a client does not pay. However, the lawyer must first demand payment, and inform the client of the consequences of failing to do so. The correct answer is therefore (b). (a) and (d) are incorrect, because no withdrawal is permitted without demanding payment from the client in the first place. (c) is inappropriate as it does not provide Stromile with the consequences of failing to do so and is in any case, not suggested by the Rules of Professional Conduct.
Unattempted
Solution: The best answer is (b). According to rule 3.7-3 of the Rules of Professional Conduct, a lawyer may withdraw from representation when a client does not pay. However, the lawyer must first demand payment, and inform the client of the consequences of failing to do so. The correct answer is therefore (b). (a) and (d) are incorrect, because no withdrawal is permitted without demanding payment from the client in the first place. (c) is inappropriate as it does not provide Stromile with the consequences of failing to do so and is in any case, not suggested by the Rules of Professional Conduct.
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Question 38 of 80
38. Question
Category: Estates Planning38. Jussi, a 65-year-old, meets with Sherry, an Ontario-based lawyer, to draft the contents of his will. Over the course of the meeting, Jussi tells Sherry that he has three children, Ari, Brenda and Callum, and wishes to name his oldest child, 22-year-old Brenda, as estate trustee. He also tells Sherry that 50% of his assets are located in Finland. After receiving this information, what should Sherry advise Jussi of?
Correct
Solution: The best answer is (c). Given that Sherry is part of the Ontario bar, she is only able to provide legal advice on Canadian law. Furthermore, given that Jussi has assets in Finland, this will mean he will likely need to consult with a lawyer from Finland to help draft his will. (a) is incorrect – there is no law that stipulates someone that is 22 years-old is unable to be a trustee due to their age. (b) is incorrect, as similarly, no law states that a parent must name all of their children as estate trustees (although in some cases it may be wise to do so). Finally, (d) is wrong and overly far-reaching. It is certainly a stretch to claim that he is unable to grant any assets located outside of Canada in his will; besides, he is only qualified to advise on the assets that Jussi is able to grant that are within Canada.
Incorrect
Solution: The best answer is (c). Given that Sherry is part of the Ontario bar, she is only able to provide legal advice on Canadian law. Furthermore, given that Jussi has assets in Finland, this will mean he will likely need to consult with a lawyer from Finland to help draft his will. (a) is incorrect – there is no law that stipulates someone that is 22 years-old is unable to be a trustee due to their age. (b) is incorrect, as similarly, no law states that a parent must name all of their children as estate trustees (although in some cases it may be wise to do so). Finally, (d) is wrong and overly far-reaching. It is certainly a stretch to claim that he is unable to grant any assets located outside of Canada in his will; besides, he is only qualified to advise on the assets that Jussi is able to grant that are within Canada.
Unattempted
Solution: The best answer is (c). Given that Sherry is part of the Ontario bar, she is only able to provide legal advice on Canadian law. Furthermore, given that Jussi has assets in Finland, this will mean he will likely need to consult with a lawyer from Finland to help draft his will. (a) is incorrect – there is no law that stipulates someone that is 22 years-old is unable to be a trustee due to their age. (b) is incorrect, as similarly, no law states that a parent must name all of their children as estate trustees (although in some cases it may be wise to do so). Finally, (d) is wrong and overly far-reaching. It is certainly a stretch to claim that he is unable to grant any assets located outside of Canada in his will; besides, he is only qualified to advise on the assets that Jussi is able to grant that are within Canada.
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Question 39 of 80
39. Question
Category: Estates Planning39. Margaret and her husband David are both 64 years old and want to simplify their estate plan and reduce probate fees. Margaret hears about something called a “joint partner trust” and consults her lawyer to learn more. The lawyer explains that this type of trust can be created during Margaret’s lifetime and can hold assets that would otherwise be part of her estate. Which of the following is true about a joint partner trust?
Correct
Solution: The correct answer is (b). A joint partner trust allows only the settlor and their spouse to receive income and capital from the trust while they are alive. Option (a) is incorrect because the settlor must be at least 65 years old to create this type of trust. Option (c) is incorrect since one benefit of a joint partner trust is that it avoids probate. Option (d) is incorrect because children cannot receive income or capital from the trust during the settlor and spouse’s lifetimes.
Incorrect
Solution: The correct answer is (b). A joint partner trust allows only the settlor and their spouse to receive income and capital from the trust while they are alive. Option (a) is incorrect because the settlor must be at least 65 years old to create this type of trust. Option (c) is incorrect since one benefit of a joint partner trust is that it avoids probate. Option (d) is incorrect because children cannot receive income or capital from the trust during the settlor and spouse’s lifetimes.
Unattempted
Solution: The correct answer is (b). A joint partner trust allows only the settlor and their spouse to receive income and capital from the trust while they are alive. Option (a) is incorrect because the settlor must be at least 65 years old to create this type of trust. Option (c) is incorrect since one benefit of a joint partner trust is that it avoids probate. Option (d) is incorrect because children cannot receive income or capital from the trust during the settlor and spouse’s lifetimes.
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Question 40 of 80
40. Question
Category: Estates Planning40. Which of the following claims to an estate have priority over an equalization claim?
Correct
Solution: According to section 6(12) of the Family Law Act, an equalization claim has priority over the following: gifts made in the deceased spouse’s will, unless made for valuable consideration, in which case the gift will have priority. Therefore, (d) is correct. Section 6(12) continues by noting that the equalization claim will take priority over a person’s right to a share of the estate under Part II of the SLRA, and an order made against the estate under Part V of the SLRA (except an order in favour of a child of the deceased spouse) will rank behind a gift made under the will for valuable consideration. Therefore, an equalization claim will have priority over (a) and (b). (c) is also incorrect as it is not clear that claims of unsecured creditors would have priority over an equalization claim.
Incorrect
Solution: According to section 6(12) of the Family Law Act, an equalization claim has priority over the following: gifts made in the deceased spouse’s will, unless made for valuable consideration, in which case the gift will have priority. Therefore, (d) is correct. Section 6(12) continues by noting that the equalization claim will take priority over a person’s right to a share of the estate under Part II of the SLRA, and an order made against the estate under Part V of the SLRA (except an order in favour of a child of the deceased spouse) will rank behind a gift made under the will for valuable consideration. Therefore, an equalization claim will have priority over (a) and (b). (c) is also incorrect as it is not clear that claims of unsecured creditors would have priority over an equalization claim.
Unattempted
Solution: According to section 6(12) of the Family Law Act, an equalization claim has priority over the following: gifts made in the deceased spouse’s will, unless made for valuable consideration, in which case the gift will have priority. Therefore, (d) is correct. Section 6(12) continues by noting that the equalization claim will take priority over a person’s right to a share of the estate under Part II of the SLRA, and an order made against the estate under Part V of the SLRA (except an order in favour of a child of the deceased spouse) will rank behind a gift made under the will for valuable consideration. Therefore, an equalization claim will have priority over (a) and (b). (c) is also incorrect as it is not clear that claims of unsecured creditors would have priority over an equalization claim.
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Question 41 of 80
41. Question
Category: Estates Planning41. According to the Rules of Professional Conduct, a “licensee” includes which of the following individuals?
Correct
Solution: The correct answer is (c). According to section 1.1 of the Rules of Professional Conduct, a “licensee” includes a lawyer or paralegal. Note the fact that the lawyer was a judge of the Superior Court of Justice three years ago does not change the answer – they are still a licensee. Rules 7.7-1.3 and 7.7-1.4 do apply, but these merely say that lawyers who were judges of the Superior Court of Justice (among other courts) must not appear as counsel or advocates before the Superior Court of Justice or before any administrative board or tribunal over which the Superior Court of Justice exercised an appellate or judicial review jurisdiction for a period of three years from the date of their resignation, retirement or removal without the approval of the Hearing Division of the Law Society Tribunal. This does not change the fact that the lawyer remains a licensee.
Incorrect
Solution: The correct answer is (c). According to section 1.1 of the Rules of Professional Conduct, a “licensee” includes a lawyer or paralegal. Note the fact that the lawyer was a judge of the Superior Court of Justice three years ago does not change the answer – they are still a licensee. Rules 7.7-1.3 and 7.7-1.4 do apply, but these merely say that lawyers who were judges of the Superior Court of Justice (among other courts) must not appear as counsel or advocates before the Superior Court of Justice or before any administrative board or tribunal over which the Superior Court of Justice exercised an appellate or judicial review jurisdiction for a period of three years from the date of their resignation, retirement or removal without the approval of the Hearing Division of the Law Society Tribunal. This does not change the fact that the lawyer remains a licensee.
Unattempted
Solution: The correct answer is (c). According to section 1.1 of the Rules of Professional Conduct, a “licensee” includes a lawyer or paralegal. Note the fact that the lawyer was a judge of the Superior Court of Justice three years ago does not change the answer – they are still a licensee. Rules 7.7-1.3 and 7.7-1.4 do apply, but these merely say that lawyers who were judges of the Superior Court of Justice (among other courts) must not appear as counsel or advocates before the Superior Court of Justice or before any administrative board or tribunal over which the Superior Court of Justice exercised an appellate or judicial review jurisdiction for a period of three years from the date of their resignation, retirement or removal without the approval of the Hearing Division of the Law Society Tribunal. This does not change the fact that the lawyer remains a licensee.
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Question 42 of 80
42. Question
Category: Estates Planning42. Andrew and Bei, both of whom are licensed lawyers, operate a multi-discipline practice in Ontario called XYZ LLP. They work alongside Chandana, who is a chartered professional accountant. Andrew has a practice in real estate and wills and estates law, while Bei practices in criminal law. Recently, both Bei and Chandana asked Andrew to help each of them prepare a will, and in return for doing so, each agreed to provide Andrew with a testamentary gift. According to the Rules of Professional Conduct, can Andrew prepare their wills?
Correct
Solution: The correct answer is (a). Rule 3.4-39 of the Rules of Professional Conduct states that unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer must not prepare or cause to be prepared an instrument giving the lawyer or an associate a gift or benefit from the client, including a testamentary gift. Therefore, Andrew may accept the gift in exchange for preparing the wills, since both Bei and Chandana are “partners or associates”. Note that an “associate” includes a non-licensee employee of a multi-discipline practice providing services that support or supplement the practice of law. (b) is incorrect – since Chandana is a partner and/or associate of Andrew’s (the question stem does not make it clear which, but it does not matter), Andrew is also able to prepare her will in exchange for a testamentary gift. (c) is incorrect for the above reasons; (d) is incorrect because Andrew can prepare their wills without them having to be “family members”.
Incorrect
Solution: The correct answer is (a). Rule 3.4-39 of the Rules of Professional Conduct states that unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer must not prepare or cause to be prepared an instrument giving the lawyer or an associate a gift or benefit from the client, including a testamentary gift. Therefore, Andrew may accept the gift in exchange for preparing the wills, since both Bei and Chandana are “partners or associates”. Note that an “associate” includes a non-licensee employee of a multi-discipline practice providing services that support or supplement the practice of law. (b) is incorrect – since Chandana is a partner and/or associate of Andrew’s (the question stem does not make it clear which, but it does not matter), Andrew is also able to prepare her will in exchange for a testamentary gift. (c) is incorrect for the above reasons; (d) is incorrect because Andrew can prepare their wills without them having to be “family members”.
Unattempted
Solution: The correct answer is (a). Rule 3.4-39 of the Rules of Professional Conduct states that unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer must not prepare or cause to be prepared an instrument giving the lawyer or an associate a gift or benefit from the client, including a testamentary gift. Therefore, Andrew may accept the gift in exchange for preparing the wills, since both Bei and Chandana are “partners or associates”. Note that an “associate” includes a non-licensee employee of a multi-discipline practice providing services that support or supplement the practice of law. (b) is incorrect – since Chandana is a partner and/or associate of Andrew’s (the question stem does not make it clear which, but it does not matter), Andrew is also able to prepare her will in exchange for a testamentary gift. (c) is incorrect for the above reasons; (d) is incorrect because Andrew can prepare their wills without them having to be “family members”.
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Question 43 of 80
43. Question
Category: Estates Planning43. Shaun passed away earlier this year. He was survived by his former spouse, Asana; his common-law spouse, Bonnie, with whom he had lived with for two years prior to his death and had no children with; his granddaughters, Caitlyn and Daisy; his older cousin, Ed; and his foster child, Zachary. If it can be proven that Shaun had a legal obligation to provide support to these individuals prior to his death, which individuals would be able to make a dependant support claim?
Correct
Solution: The correct answer is (C). According to section 57 of the Succession Law Reform Act, a dependant must include a spouse, parent, child or sibling of the deceased. A “spouse” includes a former spouse and a common-law spouse with whom the deceased was co-habiting continuously for a period of at least three years or whom the deceased was in a relationship of some permanence if they are the natural or adoptive parents of a child. This means that while Asana, as his former spouse, would be a dependant, Bonnie would not be, given they lived together for less than three years and did not have children. Furthermore, a “child” includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of their family, other than a foster child. This means Caitlyn and Daisy, as his grandchildren, would be included, though Zachary, as his foster child, would not be. Finally, his older cousin, Ed, would not be eligible as a dependant. Overall, this means that Asana, Caitlyn and Daisy are eligible to make a dependant support claim, provided that it is shown that Shaun provided support or was under a legal obligation to provide support to them prior to his death.
Incorrect
Solution: The correct answer is (C). According to section 57 of the Succession Law Reform Act, a dependant must include a spouse, parent, child or sibling of the deceased. A “spouse” includes a former spouse and a common-law spouse with whom the deceased was co-habiting continuously for a period of at least three years or whom the deceased was in a relationship of some permanence if they are the natural or adoptive parents of a child. This means that while Asana, as his former spouse, would be a dependant, Bonnie would not be, given they lived together for less than three years and did not have children. Furthermore, a “child” includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of their family, other than a foster child. This means Caitlyn and Daisy, as his grandchildren, would be included, though Zachary, as his foster child, would not be. Finally, his older cousin, Ed, would not be eligible as a dependant. Overall, this means that Asana, Caitlyn and Daisy are eligible to make a dependant support claim, provided that it is shown that Shaun provided support or was under a legal obligation to provide support to them prior to his death.
Unattempted
Solution: The correct answer is (C). According to section 57 of the Succession Law Reform Act, a dependant must include a spouse, parent, child or sibling of the deceased. A “spouse” includes a former spouse and a common-law spouse with whom the deceased was co-habiting continuously for a period of at least three years or whom the deceased was in a relationship of some permanence if they are the natural or adoptive parents of a child. This means that while Asana, as his former spouse, would be a dependant, Bonnie would not be, given they lived together for less than three years and did not have children. Furthermore, a “child” includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of their family, other than a foster child. This means Caitlyn and Daisy, as his grandchildren, would be included, though Zachary, as his foster child, would not be. Finally, his older cousin, Ed, would not be eligible as a dependant. Overall, this means that Asana, Caitlyn and Daisy are eligible to make a dependant support claim, provided that it is shown that Shaun provided support or was under a legal obligation to provide support to them prior to his death.
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Question 44 of 80
44. Question
Category: Estates Planning44. Rinaldo, a lawyer, has been approached by a married couple, Naomi and Martin, to help them prepare a will. The couple is aligned on the contents of the will. How should Rinaldo proceed?
Correct
Solution: The correct answer is (b). As Rinaldo has been approached by more than one client, the joint retainer rules in the Rules of Professional Conduct (3.4-5 and commentary) apply. According to r. 3.4-5, Rinaldo must advise each of them that any information received from one cannot be held in confidence from the other (r. 3.4-5 (b)). (a) is incorrect because given the couple has agreed upon what will be in the will, there is no reason for him to decline acting at this stage (see r.3.4-5 commentary [2]). (c) is incorrect because if either one of them wished to revoke the will, then he has an obligation to hold this information in strict confidence (see rule 3.4-5, commentary [2](b)). Finally, as with (a), (d) is incorrect. They are aligned on the contents of the will and hence there is no reason for him to only act for one of them at this stage.
Incorrect
Solution: The correct answer is (b). As Rinaldo has been approached by more than one client, the joint retainer rules in the Rules of Professional Conduct (3.4-5 and commentary) apply. According to r. 3.4-5, Rinaldo must advise each of them that any information received from one cannot be held in confidence from the other (r. 3.4-5 (b)). (a) is incorrect because given the couple has agreed upon what will be in the will, there is no reason for him to decline acting at this stage (see r.3.4-5 commentary [2]). (c) is incorrect because if either one of them wished to revoke the will, then he has an obligation to hold this information in strict confidence (see rule 3.4-5, commentary [2](b)). Finally, as with (a), (d) is incorrect. They are aligned on the contents of the will and hence there is no reason for him to only act for one of them at this stage.
Unattempted
Solution: The correct answer is (b). As Rinaldo has been approached by more than one client, the joint retainer rules in the Rules of Professional Conduct (3.4-5 and commentary) apply. According to r. 3.4-5, Rinaldo must advise each of them that any information received from one cannot be held in confidence from the other (r. 3.4-5 (b)). (a) is incorrect because given the couple has agreed upon what will be in the will, there is no reason for him to decline acting at this stage (see r.3.4-5 commentary [2]). (c) is incorrect because if either one of them wished to revoke the will, then he has an obligation to hold this information in strict confidence (see rule 3.4-5, commentary [2](b)). Finally, as with (a), (d) is incorrect. They are aligned on the contents of the will and hence there is no reason for him to only act for one of them at this stage.
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Question 45 of 80
45. Question
Category: Estates Planning45. Janessa, a lawyer, has been retained to help an estate trustee, Viola, administer the estate of a friend who recently passed away. The friend’s estate included the following assets: a $360,000 home in Brantford, Ontario; $500,000 in life insurance proceeds payable to a beneficiary; a $90,000 art collection located in Ontario; and a $615,000 cottage in Lunenburg, Nova Scotia. How much estate administration tax must be paid?
Correct
Solution: The correct answer is (c). Estate administration tax is calculated by applying a 1.5% tax on the value of estate assets located in Ontario. It does not apply to life insurance proceeds payable to a named beneficiary or to out-of-province assets. Here, the taxable assets are the $360,000 Brantford home and the $90,000 art collection, totaling $450,000. The first $50,000 is exempt, leaving $400,000 subject to tax. 1.5% of $400,000 = $6,000.
Incorrect
Solution: The correct answer is (c). Estate administration tax is calculated by applying a 1.5% tax on the value of estate assets located in Ontario. It does not apply to life insurance proceeds payable to a named beneficiary or to out-of-province assets. Here, the taxable assets are the $360,000 Brantford home and the $90,000 art collection, totaling $450,000. The first $50,000 is exempt, leaving $400,000 subject to tax. 1.5% of $400,000 = $6,000.
Unattempted
Solution: The correct answer is (c). Estate administration tax is calculated by applying a 1.5% tax on the value of estate assets located in Ontario. It does not apply to life insurance proceeds payable to a named beneficiary or to out-of-province assets. Here, the taxable assets are the $360,000 Brantford home and the $90,000 art collection, totaling $450,000. The first $50,000 is exempt, leaving $400,000 subject to tax. 1.5% of $400,000 = $6,000.
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Question 46 of 80
46. Question
Category: Estates Planning46. Jonny would like to prove the existence of his late friend’s destroyed will by commencing an application. Unfortunately, Jonny is unable to receive the full consent of all the individuals who have a financial interest in his late friend’s estate. Jonny therefore applies to the court for directions respecting procedure for proving the destroyed will. Jonny must serve a notice of application on all individuals who have a financial interest in the estate at least how many days before the hearing?
Correct
Solution: The correct answer is (b). According to Rule 75.06(2) of the Rules of Civil Procedure, an application for directions shall be served on all persons appearing to have a financial interest in the estate at least 10 days before the hearing of the application.
Incorrect
Solution: The correct answer is (b). According to Rule 75.06(2) of the Rules of Civil Procedure, an application for directions shall be served on all persons appearing to have a financial interest in the estate at least 10 days before the hearing of the application.
Unattempted
Solution: The correct answer is (b). According to Rule 75.06(2) of the Rules of Civil Procedure, an application for directions shall be served on all persons appearing to have a financial interest in the estate at least 10 days before the hearing of the application.
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Question 47 of 80
47. Question
Category: Estates Planning47. Jayson attends to his lawyer’s office. As part of an ongoing dispute with the estate of his deceased spouse, he provides his lawyer with stocks registered in his name, a power of attorney, and a rare strip of chinchilla fur. He also promptly provides a $5000.00 money retainer. Which item should be included in his lawyer’s valuable property record?
Correct
Solution: (d) is the correct answer. Furs held by the lawyer should be included in the valuable property record. (a) and (b) are incorrect since items that cannot be sold or negotiated should not be included in the valuable property record. (c) is incorrect since money should not be included in the valuable property record. See the Law Society of Ontario’s Bookkeeping Guide for Lawyers for more information.
Incorrect
Solution: (d) is the correct answer. Furs held by the lawyer should be included in the valuable property record. (a) and (b) are incorrect since items that cannot be sold or negotiated should not be included in the valuable property record. (c) is incorrect since money should not be included in the valuable property record. See the Law Society of Ontario’s Bookkeeping Guide for Lawyers for more information.
Unattempted
Solution: (d) is the correct answer. Furs held by the lawyer should be included in the valuable property record. (a) and (b) are incorrect since items that cannot be sold or negotiated should not be included in the valuable property record. (c) is incorrect since money should not be included in the valuable property record. See the Law Society of Ontario’s Bookkeeping Guide for Lawyers for more information.
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Question 48 of 80
48. Question
Category: Estates Planning48. Case Set: Mauve is seeking assistance with various estate planning matters. She meets with a lawyer, Regis, for an initial consultation.
Regis is hesitant about representing Mauve. Which of the following provides the most appropriate reason for Regis to decline representing Mauve?
Correct
Solution: The best answer is (d). According to Rule 4.1-1 of the Rules of Professional Conduct, commentary [4], a lawyer may decline representation in certain scenarios, but this discretion should be exercised prudently. In particular, the commentary explicitly says a lawyer should not decline representation merely because a person’s cause is unpopular, or because of the lawyer’s private opinion. Answer choice (a) is implying that Regis seeks to decline representing Mauve because his cause is unpopular. (b) is also not a good answer; as noted in commentary [4], a lawyer’s private opinion about a client should not get in the way of representing them. (c) is unlikely to be a good reason to reject representation – Mauve’s request is not too onerous and can probably be worked around (i.e. scheduling important meetings, court dates and so forth on days that are not Monday).
Answer choice (d) is the best answer because a lawyer should only accept a retainer when they have the capacity to act for a client. This is a concept not necessarily stressed in r. 4.1-1, but throughout the Rules (i.e. Chapter 3- competency). Furthermore, consistent with rule 4.1-1, Regis is willing to refer Mauve to another lawyer so that Mauve can still obtain legal assistance.
Incorrect
Solution: The best answer is (d). According to Rule 4.1-1 of the Rules of Professional Conduct, commentary [4], a lawyer may decline representation in certain scenarios, but this discretion should be exercised prudently. In particular, the commentary explicitly says a lawyer should not decline representation merely because a person’s cause is unpopular, or because of the lawyer’s private opinion. Answer choice (a) is implying that Regis seeks to decline representing Mauve because his cause is unpopular. (b) is also not a good answer; as noted in commentary [4], a lawyer’s private opinion about a client should not get in the way of representing them. (c) is unlikely to be a good reason to reject representation – Mauve’s request is not too onerous and can probably be worked around (i.e. scheduling important meetings, court dates and so forth on days that are not Monday).
Answer choice (d) is the best answer because a lawyer should only accept a retainer when they have the capacity to act for a client. This is a concept not necessarily stressed in r. 4.1-1, but throughout the Rules (i.e. Chapter 3- competency). Furthermore, consistent with rule 4.1-1, Regis is willing to refer Mauve to another lawyer so that Mauve can still obtain legal assistance.
Unattempted
Solution: The best answer is (d). According to Rule 4.1-1 of the Rules of Professional Conduct, commentary [4], a lawyer may decline representation in certain scenarios, but this discretion should be exercised prudently. In particular, the commentary explicitly says a lawyer should not decline representation merely because a person’s cause is unpopular, or because of the lawyer’s private opinion. Answer choice (a) is implying that Regis seeks to decline representing Mauve because his cause is unpopular. (b) is also not a good answer; as noted in commentary [4], a lawyer’s private opinion about a client should not get in the way of representing them. (c) is unlikely to be a good reason to reject representation – Mauve’s request is not too onerous and can probably be worked around (i.e. scheduling important meetings, court dates and so forth on days that are not Monday).
Answer choice (d) is the best answer because a lawyer should only accept a retainer when they have the capacity to act for a client. This is a concept not necessarily stressed in r. 4.1-1, but throughout the Rules (i.e. Chapter 3- competency). Furthermore, consistent with rule 4.1-1, Regis is willing to refer Mauve to another lawyer so that Mauve can still obtain legal assistance.
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Question 49 of 80
49. Question
Category: Estates Planning49. Case Set: Mauve is seeking assistance with various estate planning matters. She meets with a lawyer, Regis, for an initial consultation.
Mauve ultimately retains Regis, who first helps her prepare a continuing power of attorney for property. What action is the power of attorney not permitted to perform?
Correct
Solution: According to section 7(2) of the Substitute Decisions Act, a continuing power of attorney may authorize the attorney to do anything that the grantor could do if capable, except make a will. Therefore, the correct answer is (a).
Incorrect
Solution: According to section 7(2) of the Substitute Decisions Act, a continuing power of attorney may authorize the attorney to do anything that the grantor could do if capable, except make a will. Therefore, the correct answer is (a).
Unattempted
Solution: According to section 7(2) of the Substitute Decisions Act, a continuing power of attorney may authorize the attorney to do anything that the grantor could do if capable, except make a will. Therefore, the correct answer is (a).
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Question 50 of 80
50. Question
Category: Estates Planning50. Case Set: Mauve is seeking assistance with various estate planning matters. She meets with a lawyer, Regis, for an initial consultation.
Mauve also asks Regis for assistance with creating a will. She tells Regis that she is currently engaged to her partner, and wonders what will happen to the will if they decide to get married. How should Regis respond?
Correct
Solution: The correct answer is (b). Previously, a will was revoked by marriage. As of January 1, 2022, this was no longer the case (see the Succession Law Reform Act, section 15(a) which now says “Repealed”). Therefore, Regis should advise that marriage does not affect the validity of the will, which is (b).
Incorrect
Solution: The correct answer is (b). Previously, a will was revoked by marriage. As of January 1, 2022, this was no longer the case (see the Succession Law Reform Act, section 15(a) which now says “Repealed”). Therefore, Regis should advise that marriage does not affect the validity of the will, which is (b).
Unattempted
Solution: The correct answer is (b). Previously, a will was revoked by marriage. As of January 1, 2022, this was no longer the case (see the Succession Law Reform Act, section 15(a) which now says “Repealed”). Therefore, Regis should advise that marriage does not affect the validity of the will, which is (b).
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Question 51 of 80
51. Question
Category: Real Estate51. Jamie, a lawyer, frequently acts on commercial real estate transactions. He charges a flat fee of $5,000 to act on these transactions and wants to advertise this flat rate. Which of the following is true about what Jamie can advertise?
Correct
Solution: The correct answer is (d). Because Jamie is advertising a fee for commercial real estate transactions, Rule 4.2-2 of the Rules of Professional Conduct applies, not Rule 4.2-2.1 (which only governs residential real estate advertising). Under Rule 4.2-2, Jamie may advertise fees for legal services provided the ad (i) reasonably describes the services included, (ii) states whether additional charges like disbursements or taxes will apply, and (iii) the lawyer strictly adheres to the advertised fee in every applicable instance. Options (a), (b), and (c) inaccurately impose requirements that are specific to residential real estate advertising under Rule 4.2-2.1 and do not apply to Jamie’s situation.
Incorrect
Solution: The correct answer is (d). Because Jamie is advertising a fee for commercial real estate transactions, Rule 4.2-2 of the Rules of Professional Conduct applies, not Rule 4.2-2.1 (which only governs residential real estate advertising). Under Rule 4.2-2, Jamie may advertise fees for legal services provided the ad (i) reasonably describes the services included, (ii) states whether additional charges like disbursements or taxes will apply, and (iii) the lawyer strictly adheres to the advertised fee in every applicable instance. Options (a), (b), and (c) inaccurately impose requirements that are specific to residential real estate advertising under Rule 4.2-2.1 and do not apply to Jamie’s situation.
Unattempted
Solution: The correct answer is (d). Because Jamie is advertising a fee for commercial real estate transactions, Rule 4.2-2 of the Rules of Professional Conduct applies, not Rule 4.2-2.1 (which only governs residential real estate advertising). Under Rule 4.2-2, Jamie may advertise fees for legal services provided the ad (i) reasonably describes the services included, (ii) states whether additional charges like disbursements or taxes will apply, and (iii) the lawyer strictly adheres to the advertised fee in every applicable instance. Options (a), (b), and (c) inaccurately impose requirements that are specific to residential real estate advertising under Rule 4.2-2.1 and do not apply to Jamie’s situation.
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Question 52 of 80
52. Question
Category: Real Estate52. On January 15, 2025, Freja began negotiations to purchase a parcel of land in Milton, Ontario. She ultimately registered the instrument relating to the land in her name on January 27, 2025. On February 4, 2025, the land registrar certified the registration. Freja plans on beginning construction of a home on her land on February 5, 2025. When will the instrument in her land be deemed to have been registered in her name?
Correct
Solution: The correct answer is (b). According to section 78(3) of the Land Titles Act, registration of an instrument is complete when the instrument and its entry in the proper register are certified in the prescribed manner by the land registrar, deputy or assistant deputy land registrar, and the time of receipt of the instrument shall be deemed to be the time of its registration. Since Freja registered the instrument in the land with the land registrar on January 27, 2025, that will be deemed the date of registration.
Incorrect
Solution: The correct answer is (b). According to section 78(3) of the Land Titles Act, registration of an instrument is complete when the instrument and its entry in the proper register are certified in the prescribed manner by the land registrar, deputy or assistant deputy land registrar, and the time of receipt of the instrument shall be deemed to be the time of its registration. Since Freja registered the instrument in the land with the land registrar on January 27, 2025, that will be deemed the date of registration.
Unattempted
Solution: The correct answer is (b). According to section 78(3) of the Land Titles Act, registration of an instrument is complete when the instrument and its entry in the proper register are certified in the prescribed manner by the land registrar, deputy or assistant deputy land registrar, and the time of receipt of the instrument shall be deemed to be the time of its registration. Since Freja registered the instrument in the land with the land registrar on January 27, 2025, that will be deemed the date of registration.
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Question 53 of 80
53. Question
Category: Real Estate53. Rupert, a real estate lawyer in Ontario, notices that his long-time assistant has suddenly begun referring numerous residential real estate transactions to his law firm. The assistant also offers to manage nearly every stage of these transactions, including drafting documents, corresponding with clients, and coordinating closings, stating that it would “lighten Rupert’s workload.” Rupert also observes that many of the clients in these transactions appear to be friends or family members of the assistant. What is the most appropriate next step Rupert should take in this situation?
Correct
Solution: The best answer is (d). The Law Society of Ontario identifies several red flags for real estate fraud, including employees referring transactions, offering to handle all aspects of a file, and bringing in clients who are friends or relatives. Rupert is required to remain in control of his files and should independently assess whether these patterns raise concerns about potential fraud. Blind reliance on staff, even with final sign-off, is not sufficient to meet professional standards. Options (a) and (b) are inappropriate because they allow for the unauthorized practice of law by a non-licensee, and option (c) is premature without further investigation.
Incorrect
Solution: The best answer is (d). The Law Society of Ontario identifies several red flags for real estate fraud, including employees referring transactions, offering to handle all aspects of a file, and bringing in clients who are friends or relatives. Rupert is required to remain in control of his files and should independently assess whether these patterns raise concerns about potential fraud. Blind reliance on staff, even with final sign-off, is not sufficient to meet professional standards. Options (a) and (b) are inappropriate because they allow for the unauthorized practice of law by a non-licensee, and option (c) is premature without further investigation.
Unattempted
Solution: The best answer is (d). The Law Society of Ontario identifies several red flags for real estate fraud, including employees referring transactions, offering to handle all aspects of a file, and bringing in clients who are friends or relatives. Rupert is required to remain in control of his files and should independently assess whether these patterns raise concerns about potential fraud. Blind reliance on staff, even with final sign-off, is not sufficient to meet professional standards. Options (a) and (b) are inappropriate because they allow for the unauthorized practice of law by a non-licensee, and option (c) is premature without further investigation.
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Question 54 of 80
54. Question
Category: Real Estate54. Which of the following off-title searches is always required for commercial transactions?
Correct
Solution: The correct answer is (b). Waste disposal searches are always required for commercial transactions.
Incorrect
Solution: The correct answer is (b). Corporate existence searches are always required for commercial transactions.
Unattempted
Solution: The correct answer is (b). Corporate existence searches are always required for commercial transactions.
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Question 55 of 80
55. Question
Category: Real Estate55. A lawyer seeks to represent both a borrower and lender on the same transaction, relying on the fact that the lender is a lending client. Which of the following is an example of a lending client?
Correct
Solution: According to rule 3.2-14 of the Rules of Professional Conduct, provided there is compliance with rules 3.4-15 to 3.4-19 of the Rules, a lawyer may act for or otherwise represent both the lender and borrower in a mortgage transaction if the lender is a lending client. Rule 3.4-13(d) provides that a Community Futures Development Corporation is one example of a lending client; therefore, (b) is the correct answer. (a) is incorrect because for a finance company to be categorized as a lending client, it must, among other things, actually be listed on a Designated Stock Exchange (rule 3.4-13 (b)(ii)). (c) is incorrect because according to Commentary [1] of rule 3.4-13, a mortgage investment company is not considered a finance company unless it satisfies the criteria in Rule 3.4-13. As we have no additional details to ascertain whether such criteria have been satisfied, it is not the best answer. Finally, (d) is incorrect as it is not listed under rule 3.4-13.
Incorrect
Solution: According to rule 3.2-14 of the Rules of Professional Conduct, provided there is compliance with rules 3.4-15 to 3.4-19 of the Rules, a lawyer may act for or otherwise represent both the lender and borrower in a mortgage transaction if the lender is a lending client. Rule 3.4-13(d) provides that a Community Futures Development Corporation is one example of a lending client; therefore, (b) is the correct answer. (a) is incorrect because for a finance company to be categorized as a lending client, it must, among other things, actually be listed on a Designated Stock Exchange (rule 3.4-13 (b)(ii)). (c) is incorrect because according to Commentary [1] of rule 3.4-13, a mortgage investment company is not considered a finance company unless it satisfies the criteria in Rule 3.4-13. As we have no additional details to ascertain whether such criteria have been satisfied, it is not the best answer. Finally, (d) is incorrect as it is not listed under rule 3.4-13.
Unattempted
Solution: According to rule 3.2-14 of the Rules of Professional Conduct, provided there is compliance with rules 3.4-15 to 3.4-19 of the Rules, a lawyer may act for or otherwise represent both the lender and borrower in a mortgage transaction if the lender is a lending client. Rule 3.4-13(d) provides that a Community Futures Development Corporation is one example of a lending client; therefore, (b) is the correct answer. (a) is incorrect because for a finance company to be categorized as a lending client, it must, among other things, actually be listed on a Designated Stock Exchange (rule 3.4-13 (b)(ii)). (c) is incorrect because according to Commentary [1] of rule 3.4-13, a mortgage investment company is not considered a finance company unless it satisfies the criteria in Rule 3.4-13. As we have no additional details to ascertain whether such criteria have been satisfied, it is not the best answer. Finally, (d) is incorrect as it is not listed under rule 3.4-13.
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Question 56 of 80
56. Question
Category: Real Estate56. Mei, a tenant in Ontario, moved into a rental unit in July 2022. Her tenancy agreement was not in the standard lease form required under the Residential Tenancies Act, 2006. In April 2025, Mei made a written request to her landlord for a standard form of lease. The landlord did not respond within 21 days, so Mei withheld her next rent payment of $4,800. Forty days after the rent was withheld, the landlord provided the standard lease form and asked Mei to repay the withheld rent. How should Mei proceed?
Correct
Solution: The correct answer is (c). Under section 12.1 of the Residential Tenancies Act, 2006, if a landlord fails to provide the standard lease within 21 days of a tenant’s written request, the tenant may withhold one month’s rent. If the landlord then fails to deliver the standard lease within 30 days after the first withheld rent payment, the tenant is not required to repay it. Since the landlord provided the lease 40 days after Mei withheld rent (10 days beyond the 30-day limit), Mei is not required to repay the $4,800.
Incorrect
Solution: The correct answer is (c). Under section 12.1 of the Residential Tenancies Act, 2006, if a landlord fails to provide the standard lease within 21 days of a tenant’s written request, the tenant may withhold one month’s rent. If the landlord then fails to deliver the standard lease within 30 days after the first withheld rent payment, the tenant is not required to repay it. Since the landlord provided the lease 40 days after Mei withheld rent (10 days beyond the 30-day limit), Mei is not required to repay the $4,800.
Unattempted
Solution: The correct answer is (c). Under section 12.1 of the Residential Tenancies Act, 2006, if a landlord fails to provide the standard lease within 21 days of a tenant’s written request, the tenant may withhold one month’s rent. If the landlord then fails to deliver the standard lease within 30 days after the first withheld rent payment, the tenant is not required to repay it. Since the landlord provided the lease 40 days after Mei withheld rent (10 days beyond the 30-day limit), Mei is not required to repay the $4,800.
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Question 57 of 80
57. Question
Category: Real Estate57. Shaquille has been leasing a commercial property in Niagara Falls, Ontario since 2017 (the “original lease”). Under the terms of the original lease, Shaquille is to pay $5,000 per month. Recently, he started leasing another property in Niagara Falls which provided a more competitive rate at $4,000 per month. Accordingly, he would like to sublet his original lease. The original lease agreement has the following sublet provision: “Subletting: The tenant may sublet the property only with the landlord’s consent.” Which of the following is true about Shaquille’s ability to sublet?
Correct
Solution: The correct answer is (c). According to section 23(1) of the Commercial Tenancies Act, where consent is required and the lease does not stipulate in what situations a landlord may withhold it, the lease is deemed to provide that consent shall not be unreasonably withheld by the landlord.
Incorrect
Solution: The correct answer is (c). According to section 23(1) of the Commercial Tenancies Act, where consent is required and the lease does not stipulate in what situations a landlord may withhold it, the lease is deemed to provide that consent shall not be unreasonably withheld by the landlord.
Unattempted
Solution: The correct answer is (c). According to section 23(1) of the Commercial Tenancies Act, where consent is required and the lease does not stipulate in what situations a landlord may withhold it, the lease is deemed to provide that consent shall not be unreasonably withheld by the landlord.
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Question 58 of 80
58. Question
Category: Real Estate58. Anissa, a lawyer, is set to provide an undertaking on behalf of her client. Which of the following is true about this undertaking?
Correct
Solution: The correct answer is (d). According to rule 7.2-11 of the Rules of Professional Conduct, a lawyer shall not give an undertaking that cannot be fulfilled. Therefore, before proceeding with the undertaking on behalf of her client, she should ensure that the terms of the undertaking can be fulfilled. (a) is incorrect; if Anissa clearly indicates that it is on behalf of the client and without personal liability, she will not be expected to honour it personally. The question stem does not specify what is actually stated in the undertaking itself, so this leaves open the possibility that she may not be expected to honour the undertaking personally, making (a) incorrect. (b) is incorrect, as the undertaking shall be in writing (r. 7.2-11, commentary [1]). (c) is incorrect as merely indicating the undertaking is on behalf of the client will not relieve her of personal liability; she must say more than that, i.e. that it is “without personal liability” as well (see 7.2-11, commentary [1]).
Incorrect
Solution: The correct answer is (d). According to rule 7.2-11 of the Rules of Professional Conduct, a lawyer shall not give an undertaking that cannot be fulfilled. Therefore, before proceeding with the undertaking on behalf of her client, she should ensure that the terms of the undertaking can be fulfilled. (a) is incorrect; if Anissa clearly indicates that it is on behalf of the client and without personal liability, she will not be expected to honour it personally. The question stem does not specify what is actually stated in the undertaking itself, so this leaves open the possibility that she may not be expected to honour the undertaking personally, making (a) incorrect. (b) is incorrect, as the undertaking shall be in writing (r. 7.2-11, commentary [1]). (c) is incorrect as merely indicating the undertaking is on behalf of the client will not relieve her of personal liability; she must say more than that, i.e. that it is “without personal liability” as well (see 7.2-11, commentary [1]).
Unattempted
Solution: The correct answer is (d). According to rule 7.2-11 of the Rules of Professional Conduct, a lawyer shall not give an undertaking that cannot be fulfilled. Therefore, before proceeding with the undertaking on behalf of her client, she should ensure that the terms of the undertaking can be fulfilled. (a) is incorrect; if Anissa clearly indicates that it is on behalf of the client and without personal liability, she will not be expected to honour it personally. The question stem does not specify what is actually stated in the undertaking itself, so this leaves open the possibility that she may not be expected to honour the undertaking personally, making (a) incorrect. (b) is incorrect, as the undertaking shall be in writing (r. 7.2-11, commentary [1]). (c) is incorrect as merely indicating the undertaking is on behalf of the client will not relieve her of personal liability; she must say more than that, i.e. that it is “without personal liability” as well (see 7.2-11, commentary [1]).
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Question 59 of 80
59. Question
Category: Real Estate59. Katia purchased and obtained possession of her new home in January 2019. The certificate of completion and possession was dated May 2019. In early 2025, she planned to sell her home. In preparation for the sale, she hired an inspector, who uncovered a variety of defects with the home. Which defects will still be covered by the TARION warranty?
Correct
Solution: The correct answer is (d). The TARION warranty still provides coverage up to seven years after the date indicated in the certificate of completion and possession (“CCP”) for major structural defects, including severe cracks in the basement walls (see Reg. 892, Section 16). (a) is incorrect since water penetration through the basement is only covered for up to two years after the date specified in the CCP; the same applies to (c). (b) is incorrect as damage resulting from Acts of God, including hurricanes, are explicitly excluded from TARION coverage.
Incorrect
Solution: The correct answer is (d). The TARION warranty still provides coverage up to seven years after the date indicated in the certificate of completion and possession (“CCP”) for major structural defects, including severe cracks in the basement walls (see Reg. 892, Section 16). (a) is incorrect since water penetration through the basement is only covered for up to two years after the date specified in the CCP; the same applies to (c). (b) is incorrect as damage resulting from Acts of God, including hurricanes, are explicitly excluded from TARION coverage.
Unattempted
Solution: The correct answer is (d). The TARION warranty still provides coverage up to seven years after the date indicated in the certificate of completion and possession (“CCP”) for major structural defects, including severe cracks in the basement walls (see Reg. 892, Section 16). (a) is incorrect since water penetration through the basement is only covered for up to two years after the date specified in the CCP; the same applies to (c). (b) is incorrect as damage resulting from Acts of God, including hurricanes, are explicitly excluded from TARION coverage.
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Question 60 of 80
60. Question
Category: Real Estate60. Eszter, a lawyer, acted for a client who was purchasing a home in Toronto. The original purchase price was $750,000, and based on that amount, Eszter calculated the land transfer tax to be $22,950, factoring in that her client was ineligible for any rebates. She requested the client to provide funds covering the purchase price and the land transfer tax. However, shortly before closing, the purchase price increased to $770,000 due to a delayed closing. Eszter calculated the revised land transfer tax to be $23,750. Given the time pressures, Eszter did not ask the client for additional funds; instead, she completed the closing by withdrawing the extra amount from her mixed trust account. Which of the following best describes the most concerning aspect of Eszter’s behaviour?
Correct
Solution: Correct answer: (a). Eszter’s most serious professional failing was her use of other clients’ funds from her mixed trust account to cover the increased purchase price and land transfer tax, rather than seeking additional funds from her own client. This violates the Rules of Professional Conduct, which require that a lawyer only use trust monies for the purposes for which they were received. Option (b) is incorrect because Eszter’s land transfer tax calculation of $23,750 on a Toronto property at $770,000 was accurate.
Here’s how that amount is calculated:
Ontario Land Transfer Tax (LTT):
0.5% on the first $55,000 = $275
1.0% on the next $195,000 (i.e., up to $250,000) = $1,950
1.5% on the next $150,000 (i.e., up to $400,000) = $2,250
2.0% on the remaining $370,000 (i.e., amount above $400,000) = $7,400
Total Ontario LTT = $11,875
Toronto Municipal Land Transfer Tax (same calculation): also $11,875.
Combined Total = $11,875 + $11,875 = $23,750Option (c) is incorrect because Eszter acted for the buyer, and the vendor’s consent to the price change is not the buyer’s lawyer’s responsibility. Option (d) is also wrong – while she should not have used other clients’ trust funds, she could have proceeded if she obtained the necessary funds from her client.
Note: This fact pattern is based on a real-life case heard by the Law Society Tribunal Hearing Division in 2025.
Incorrect
Solution: Correct answer: (a). Eszter’s most serious professional failing was her use of other clients’ funds from her mixed trust account to cover the increased purchase price and land transfer tax, rather than seeking additional funds from her own client. This violates the Rules of Professional Conduct, which require that a lawyer only use trust monies for the purposes for which they were received. Option (b) is incorrect because Eszter’s land transfer tax calculation of $23,750 on a Toronto property at $770,000 was accurate.
Here’s how that amount is calculated:
Ontario Land Transfer Tax (LTT):
0.5% on the first $55,000 = $275
1.0% on the next $195,000 (i.e., up to $250,000) = $1,950
1.5% on the next $150,000 (i.e., up to $400,000) = $2,250
2.0% on the remaining $370,000 (i.e., amount above $400,000) = $7,400
Total Ontario LTT = $11,875
Toronto Municipal Land Transfer Tax (same calculation): also $11,875.
Combined Total = $11,875 + $11,875 = $23,750Option (c) is incorrect because Eszter acted for the buyer, and the vendor’s consent to the price change is not the buyer’s lawyer’s responsibility. Option (d) is also wrong – while she should not have used other clients’ trust funds, she could have proceeded if she obtained the necessary funds from her client.
Note: This fact pattern is based on a real-life case heard by the Law Society Tribunal Hearing Division in 2025.
Unattempted
Solution: Correct answer: (a). Eszter’s most serious professional failing was her use of other clients’ funds from her mixed trust account to cover the increased purchase price and land transfer tax, rather than seeking additional funds from her own client. This violates the Rules of Professional Conduct, which require that a lawyer only use trust monies for the purposes for which they were received. Option (b) is incorrect because Eszter’s land transfer tax calculation of $23,750 on a Toronto property at $770,000 was accurate.
Here’s how that amount is calculated:
Ontario Land Transfer Tax (LTT):
0.5% on the first $55,000 = $275
1.0% on the next $195,000 (i.e., up to $250,000) = $1,950
1.5% on the next $150,000 (i.e., up to $400,000) = $2,250
2.0% on the remaining $370,000 (i.e., amount above $400,000) = $7,400
Total Ontario LTT = $11,875
Toronto Municipal Land Transfer Tax (same calculation): also $11,875.
Combined Total = $11,875 + $11,875 = $23,750Option (c) is incorrect because Eszter acted for the buyer, and the vendor’s consent to the price change is not the buyer’s lawyer’s responsibility. Option (d) is also wrong – while she should not have used other clients’ trust funds, she could have proceeded if she obtained the necessary funds from her client.
Note: This fact pattern is based on a real-life case heard by the Law Society Tribunal Hearing Division in 2025.
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Question 61 of 80
61. Question
Category: Real Estate61. According to the Construction Act, most of the mandated holdback may be released after the expiry of lien rights provided there is substantial performance of the project. Substantial performance means which of the following?
Correct
Solution: The correct answer is (b). According to section 2 of the Construction Act, Substantial performance is when a project is ready to be used and the remaining work will cost no more than 3% of the first $1,000,000 of the contract price, 2% of the next $1,000,000 of the contract price and 1% of the balance.
Incorrect
Solution: The correct answer is (b). According to section 2 of the Construction Act, Substantial performance is when a project is ready to be used and the remaining work will cost no more than 3% of the first $1,000,000 of the contract price, 2% of the next $1,000,000 of the contract price and 1% of the balance.
Unattempted
Solution: The correct answer is (b). According to section 2 of the Construction Act, Substantial performance is when a project is ready to be used and the remaining work will cost no more than 3% of the first $1,000,000 of the contract price, 2% of the next $1,000,000 of the contract price and 1% of the balance.
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Question 62 of 80
62. Question
Category: Real Estate62. Goran has obtained a loan from ABC Bank to help fund the purchase of a new home. The terms of the charge do not exclude any of the implied covenants set out in the Land Registration Reform Act. The charge will be deemed to include which of the following covenants?
Correct
Solution: The correct answer is (a). Under section 7(1)(1.)(ii) of the Land Registration Reform Act, one of the implied covenants is that the chargor (Goran) has the right to grant the charge. Option (b) is incorrect because the Act provides that on default of interest, the principal may become due at the option of the chargee. There is no provision for increasing the interest rate (section 7(1)(1.)(ix)). Option (c) is wrong because the chargee must provide notice before taking possession (section 7(1)(1.)(v)). Option (d) is incorrect because there is no specific 10-day vacate requirement under the Act, although the chargor may be required to assist in executing assurances (section 7(1)(1.)(vii)).
Incorrect
Solution: The correct answer is (a). Under section 7(1)(1.)(ii) of the Land Registration Reform Act, one of the implied covenants is that the chargor (Goran) has the right to grant the charge. Option (b) is incorrect because the Act provides that on default of interest, the principal may become due at the option of the chargee. There is no provision for increasing the interest rate (section 7(1)(1.)(ix)). Option (c) is wrong because the chargee must provide notice before taking possession (section 7(1)(1.)(v)). Option (d) is incorrect because there is no specific 10-day vacate requirement under the Act, although the chargor may be required to assist in executing assurances (section 7(1)(1.)(vii)).
Unattempted
Solution: The correct answer is (a). Under section 7(1)(1.)(ii) of the Land Registration Reform Act, one of the implied covenants is that the chargor (Goran) has the right to grant the charge. Option (b) is incorrect because the Act provides that on default of interest, the principal may become due at the option of the chargee. There is no provision for increasing the interest rate (section 7(1)(1.)(ix)). Option (c) is wrong because the chargee must provide notice before taking possession (section 7(1)(1.)(v)). Option (d) is incorrect because there is no specific 10-day vacate requirement under the Act, although the chargor may be required to assist in executing assurances (section 7(1)(1.)(vii)).
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Question 63 of 80
63. Question
Category: Real Estate63. Alicia is a lawyer who is in the process of assisting her client to complete a purchase of a strip mall located in Hamilton, Ontario. Her client would like to obtain title insurance. This insurance policy would likely cover which of the following matters?
Correct
Solution: Title insurance usually covers numerous types of losses, including any title defects. The correct answer is therefore (d). It will not cover matters related to zoning issues, expropriation rights, and aboriginal rights, among other things.
Incorrect
Solution: Title insurance usually covers numerous types of losses, including any title defects. The correct answer is therefore (d). It will not cover matters related to zoning issues, expropriation rights, and aboriginal rights, among other things.
Unattempted
Solution: Title insurance usually covers numerous types of losses, including any title defects. The correct answer is therefore (d). It will not cover matters related to zoning issues, expropriation rights, and aboriginal rights, among other things.
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Question 64 of 80
64. Question
Category: Real Estate64. Nina’s grandmother died in Ontario. Her will created a trust and named Nina as the beneficiary of her grandmother’s estate, which is valued at $45,000. Nina would like to have the grandmother’s real property transferred into her name. Which of the following is true?
Correct
Solution: The correct answer is (b). Because the will created a trust, legal title to the deceased’s real property vests in the estate trustee, not the beneficiary. However, since the estate is valued at under $50,000, the estate trustee can apply for a transmission application without a certificate of appointment, regardless of whether it’s the first dealing (see s. 14(2) of the Electronic Registration, O. Reg. 19/99, made under the Land Registration Reform Act). Option (a) is incorrect because the “first dealing” exemption applies more generally to estates of any value, but it is not required when the estate value is under $50,000. Options (c) and (d) are incorrect because Nina, as a beneficiary under a trust will, cannot apply for the transmission herself.
Incorrect
Solution: The correct answer is (b). Because the will created a trust, legal title to the deceased’s real property vests in the estate trustee, not the beneficiary. However, since the estate is valued at under $50,000, the estate trustee can apply for a transmission application without a certificate of appointment, regardless of whether it’s the first dealing (see s. 14(2) of the Electronic Registration, O. Reg. 19/99, made under the Land Registration Reform Act). Option (a) is incorrect because the “first dealing” exemption applies more generally to estates of any value, but it is not required when the estate value is under $50,000. Options (c) and (d) are incorrect because Nina, as a beneficiary under a trust will, cannot apply for the transmission herself.
Unattempted
Solution: The correct answer is (b). Because the will created a trust, legal title to the deceased’s real property vests in the estate trustee, not the beneficiary. However, since the estate is valued at under $50,000, the estate trustee can apply for a transmission application without a certificate of appointment, regardless of whether it’s the first dealing (see s. 14(2) of the Electronic Registration, O. Reg. 19/99, made under the Land Registration Reform Act). Option (a) is incorrect because the “first dealing” exemption applies more generally to estates of any value, but it is not required when the estate value is under $50,000. Options (c) and (d) are incorrect because Nina, as a beneficiary under a trust will, cannot apply for the transmission herself.
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Question 65 of 80
65. Question
Category: Real Estate65. ABC Bank seizes a home under a power of sale. The mortgagor had owed ABC Bank $750,000. ABC Bank is planning on listing the home for sale in the near future. Which of the following is true?
Correct
Solution: The correct answer is (b). The purchase agreement should be clear that ABC Bank is selling the home pursuant to a mortgage registered in its favour. (a) is incorrect because the listing should indicate that the home is being sold pursuant to a power of sale; (c) is incorrect because given that the home is being sold for $50,000 less than the amount of the mortgage, ABC Bank should give the mortgagor the option of redeeming the mortgage prior to closing. (d) is incorrect because ABC Bank is not discharging its mortgage prior to the closing date; it is instead enforcing it.
Incorrect
Solution: The correct answer is (b). The purchase agreement should be clear that ABC Bank is selling the home pursuant to a mortgage registered in its favour. (a) is incorrect because the listing should indicate that the home is being sold pursuant to a power of sale; (c) is incorrect because given that the home is being sold for $50,000 less than the amount of the mortgage, ABC Bank should give the mortgagor the option of redeeming the mortgage prior to closing. (d) is incorrect because ABC Bank is not discharging its mortgage prior to the closing date; it is instead enforcing it.
Unattempted
Solution: The correct answer is (b). The purchase agreement should be clear that ABC Bank is selling the home pursuant to a mortgage registered in its favour. (a) is incorrect because the listing should indicate that the home is being sold pursuant to a power of sale; (c) is incorrect because given that the home is being sold for $50,000 less than the amount of the mortgage, ABC Bank should give the mortgagor the option of redeeming the mortgage prior to closing. (d) is incorrect because ABC Bank is not discharging its mortgage prior to the closing date; it is instead enforcing it.
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Question 66 of 80
66. Question
Category: Real Estate66. A condominium corporation was recently established. In accordance with the Condominium Act, 1998, it needs to determine how much money to allocate to its reserve fund. How should the condominium corporation make this determination?
Correct
Solution: The correct answer is (b). According to section 94(1) of the Condominium Act, 1998, the corporation shall order a reserve fund study to determine how much money to allocate to its reserve fund.
Incorrect
Solution: The correct answer is (b). According to section 94(1) of the Condominium Act, 1998, the corporation shall order a reserve fund study to determine how much money to allocate to its reserve fund.
Unattempted
Solution: The correct answer is (b). According to section 94(1) of the Condominium Act, 1998, the corporation shall order a reserve fund study to determine how much money to allocate to its reserve fund.
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Question 67 of 80
67. Question
Category: Real Estate67. The Township of Athens is a municipality located in Ontario. The Township owns 26 highways in total. In 2008, it passed a by-law that acknowledged its responsibility for maintaining all of its highways, with the exception of one called “Brane Street”. Recently, a woman was driving on Brane Street when her car suddenly got stuck in a pothole, causing her to suffer serious injuries. Which of the following is true?
Correct
Solution: According to section 31 of the Municipal Act, 2001, until a municipality has assumed responsibility for the maintenance of its highways (i.e. by passing a by-law), it will not be rendered liable for the failure to maintain its highways. Since the Township did not assume responsibility for maintaining Brane Street, it had no obligation to maintain it. Therefore, (d) is correct. Note that (b) is incorrect because it is overly broad; while the Township did not need to maintain Brane Street, it is incorrect to broadly say it does not have an obligation to ensure all of its highways are clear of any potholes, because in fact other than Brane Street, it does have an obligation to do so.
Incorrect
Solution: According to section 31 of the Municipal Act, 2001, until a municipality has assumed responsibility for the maintenance of its highways (i.e. by passing a by-law), it will not be rendered liable for the failure to maintain its highways. Since the Township did not assume responsibility for maintaining Brane Street, it had no obligation to maintain it. Therefore, (d) is correct. Note that (b) is incorrect because it is overly broad; while the Township did not need to maintain Brane Street, it is incorrect to broadly say it does not have an obligation to ensure all of its highways are clear of any potholes, because in fact other than Brane Street, it does have an obligation to do so.
Unattempted
Solution: According to section 31 of the Municipal Act, 2001, until a municipality has assumed responsibility for the maintenance of its highways (i.e. by passing a by-law), it will not be rendered liable for the failure to maintain its highways. Since the Township did not assume responsibility for maintaining Brane Street, it had no obligation to maintain it. Therefore, (d) is correct. Note that (b) is incorrect because it is overly broad; while the Township did not need to maintain Brane Street, it is incorrect to broadly say it does not have an obligation to ensure all of its highways are clear of any potholes, because in fact other than Brane Street, it does have an obligation to do so.
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Question 68 of 80
68. Question
Category: Real Estate68. Samantha is purchasing a home in Ontario. She has already paid a $25,000 deposit, and closing is approaching. Her lawyer provides her with a statement of adjustments prior to closing. What is the purpose of this document?
Correct
Solution: The correct answer is (c). The statement of adjustments is a standard document used in Ontario real estate transactions to calculate the final amount the purchaser must pay on closing. It summarizes financial adjustments to the purchase price, such as the deposit already paid, unpaid property taxes, and prepaid utilities. Option (a) is incorrect because the legal description of the property appears in the Agreement of Purchase and Sale and transfer documents, not the statement of adjustments. Option (b) is incorrect because market value fluctuations do not impact the agreed purchase price in a firm deal. Option (d) is incorrect because mortgage terms are provided separately by the lender and are not included in the statement of adjustments.
Incorrect
Solution: The correct answer is (c). The statement of adjustments is a standard document used in Ontario real estate transactions to calculate the final amount the purchaser must pay on closing. It summarizes financial adjustments to the purchase price, such as the deposit already paid, unpaid property taxes, and prepaid utilities. Option (a) is incorrect because the legal description of the property appears in the Agreement of Purchase and Sale and transfer documents, not the statement of adjustments. Option (b) is incorrect because market value fluctuations do not impact the agreed purchase price in a firm deal. Option (d) is incorrect because mortgage terms are provided separately by the lender and are not included in the statement of adjustments.
Unattempted
Solution: The correct answer is (c). The statement of adjustments is a standard document used in Ontario real estate transactions to calculate the final amount the purchaser must pay on closing. It summarizes financial adjustments to the purchase price, such as the deposit already paid, unpaid property taxes, and prepaid utilities. Option (a) is incorrect because the legal description of the property appears in the Agreement of Purchase and Sale and transfer documents, not the statement of adjustments. Option (b) is incorrect because market value fluctuations do not impact the agreed purchase price in a firm deal. Option (d) is incorrect because mortgage terms are provided separately by the lender and are not included in the statement of adjustments.
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Question 69 of 80
69. Question
Category: Real Estate69. José retains a lawyer, John, for assistance with the purchase of a home. John has acted for José on several matters in years past. How should John identify José?
Correct
Solution: (d) is the correct answer. All John needs to do is confirm that the original identifying information José provided in the first transaction is still accurate or current. (a) is incorrect. This is more work than John needs to do and may inconvenience his client. (b) is incorrect; John should confirm José’s identifying information remains accurate. (c) is incorrect; a full name alone is insufficient to confirm that José’s identifying information is current.
Incorrect
Solution: (d) is the correct answer. All John needs to do is confirm that the original identifying information José provided in the first transaction is still accurate or current. (a) is incorrect. This is more work than John needs to do and may inconvenience his client. (b) is incorrect; John should confirm José’s identifying information remains accurate. (c) is incorrect; a full name alone is insufficient to confirm that José’s identifying information is current.
Unattempted
Solution: (d) is the correct answer. All John needs to do is confirm that the original identifying information José provided in the first transaction is still accurate or current. (a) is incorrect. This is more work than John needs to do and may inconvenience his client. (b) is incorrect; John should confirm José’s identifying information remains accurate. (c) is incorrect; a full name alone is insufficient to confirm that José’s identifying information is current.
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Question 70 of 80
70. Question
Category: Real Estate70. A person looking to sell their home should typically disclose what information about their property?
Correct
Solution: A seller must disclose latent physical defects where the defect renders the property unfit for habitation, or is dangerous (or potentially dangerous) to live in; or if the repair of the defect will be so costly that it would drastically reduce the value of the property. Furthermore, in terms of the history of a property, no disclosure is required unless it renders the property unfit for habitation or dangerous. The correct answer choice is (c). The gas can be potentially dangerous, and therefore must be disclosed.
Both (a) and (b) need not be disclosed unless they render habitation dangerous; there is no suggestion that is the case here. Similarly, in (d) – there is no indication that would render the property unfit for habitation or dangerous.
Incorrect
Solution: A seller must disclose latent physical defects where the defect renders the property unfit for habitation, or is dangerous (or potentially dangerous) to live in; or if the repair of the defect will be so costly that it would drastically reduce the value of the property. Furthermore, in terms of the history of a property, no disclosure is required unless it renders the property unfit for habitation or dangerous. The correct answer choice is (c). The gas can be potentially dangerous, and therefore must be disclosed.
Both (a) and (b) need not be disclosed unless they render habitation dangerous; there is no suggestion that is the case here. Similarly, in (d) – there is no indication that would render the property unfit for habitation or dangerous.
Unattempted
Solution: A seller must disclose latent physical defects where the defect renders the property unfit for habitation, or is dangerous (or potentially dangerous) to live in; or if the repair of the defect will be so costly that it would drastically reduce the value of the property. Furthermore, in terms of the history of a property, no disclosure is required unless it renders the property unfit for habitation or dangerous. The correct answer choice is (c). The gas can be potentially dangerous, and therefore must be disclosed.
Both (a) and (b) need not be disclosed unless they render habitation dangerous; there is no suggestion that is the case here. Similarly, in (d) – there is no indication that would render the property unfit for habitation or dangerous.
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Question 71 of 80
71. Question
Category: Real Estate71. Bogdan Babić is a second-year law student in Ontario who recently interviewed for a summer position at ABC LLP. During the interview, the firm’s human resources coordinator, Tom, opened the meeting by asking, “Are you single?” Surprised, Bogdan asked Tom to clarify. Tom replied, “I was just wondering if you’re married to Marta Babić. She’s one of our associates, and you share the same last name.” ABC LLP has an anti-nepotism policy that prevents hiring individuals who are married to current employees. Which of the following is the most accurate statement?
Correct
Solution: The correct answer is (a). Commentary [2] to Rule 6.3.1-3 of the Rules of Professional Conduct discourages inquiries about marital status in interviews. However, where an employer has an anti-nepotism policy, it may be permissible to ask a narrowly framed question about a possible relationship with an existing employee. Tom’s initial question (“Are you single?”) was overly broad and inappropriate, but asking whether Bogdan is married to Marta in light of the policy could be permissible. Option (b) is incorrect because the Rules do not prohibit nepotism; they caution against discriminatory hiring practices. Option (c) is incorrect because Tom is not a licensee, and the Rules only apply to licensees. Option (d) is wrong because private employers, including ABC LLP, are not required to hire employees, even when their interviews are inappropriate.
Incorrect
Solution: The correct answer is (a). Commentary [2] to Rule 6.3.1-3 of the Rules of Professional Conduct discourages inquiries about marital status in interviews. However, where an employer has an anti-nepotism policy, it may be permissible to ask a narrowly framed question about a possible relationship with an existing employee. Tom’s initial question (“Are you single?”) was overly broad and inappropriate, but asking whether Bogdan is married to Marta in light of the policy could be permissible. Option (b) is incorrect because the Rules do not prohibit nepotism; they caution against discriminatory hiring practices. Option (c) is incorrect because Tom is not a licensee, and the Rules only apply to licensees. Option (d) is wrong because private employers, including ABC LLP, are not required to hire employees, even when their interviews are inappropriate.
Unattempted
Solution: The correct answer is (a). Commentary [2] to Rule 6.3.1-3 of the Rules of Professional Conduct discourages inquiries about marital status in interviews. However, where an employer has an anti-nepotism policy, it may be permissible to ask a narrowly framed question about a possible relationship with an existing employee. Tom’s initial question (“Are you single?”) was overly broad and inappropriate, but asking whether Bogdan is married to Marta in light of the policy could be permissible. Option (b) is incorrect because the Rules do not prohibit nepotism; they caution against discriminatory hiring practices. Option (c) is incorrect because Tom is not a licensee, and the Rules only apply to licensees. Option (d) is wrong because private employers, including ABC LLP, are not required to hire employees, even when their interviews are inappropriate.
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Question 72 of 80
72. Question
Category: Real Estate72. Clayton, a lawyer, meets with a prospective client, Diego, who tells Clayton that he was referred to him by his friend. Diego had purchased a home, and sought Clayton’s help with closing, which was set for the next day. Clayton agreed to act for Diego. After the meeting, Clayton reviewed correspondence from Diego’s bank and noticed that the mortgage documents referred to “Pedro”, instead of Diego. Diego clarified that this was due to a recent change in his name. Clayton has never heard of nor dealt with this bank before. What is the best way for Clayton to proceed?
Correct
Solution: The best answer is (d). There are many red flags in this fact stem that Clayton must be aware of. First, his client was seeking to close a deal on very short notice. Second, his name does not line up with what is in the mortgage documents. Furthermore, Clayton has never heard of nor dealt with the bank before. All these red flags must make Clayton wary of this transaction. One key action Clayton can take here is to investigate the bank to determine if they are legitimate. (a) is incorrect because this would be a breach of confidentiality. Clayton should not even disclose the fact that he has been retained by Diego to anyone, including his friend, as that is confidential. Furthermore, as per the Rules of Professional Conduct, this is not a proper verification technique. (b) is incorrect; it is unclear why Diego’s residency would be of major concern in this situation. (c) is incorrect as, once again, it is unclear why whether Diego has purchased a home in the past is of concern here.
Incorrect
Solution: The best answer is (d). There are many red flags in this fact stem that Clayton must be aware of. First, his client was seeking to close a deal on very short notice. Second, his name does not line up with what is in the mortgage documents. Furthermore, Clayton has never heard of nor dealt with the bank before. All these red flags must make Clayton wary of this transaction. One key action Clayton can take here is to investigate the bank to determine if they are legitimate. (a) is incorrect because this would be a breach of confidentiality. Clayton should not even disclose the fact that he has been retained by Diego to anyone, including his friend, as that is confidential. Furthermore, as per the Rules of Professional Conduct, this is not a proper verification technique. (b) is incorrect; it is unclear why Diego’s residency would be of major concern in this situation. (c) is incorrect as, once again, it is unclear why whether Diego has purchased a home in the past is of concern here.
Unattempted
Solution: The best answer is (d). There are many red flags in this fact stem that Clayton must be aware of. First, his client was seeking to close a deal on very short notice. Second, his name does not line up with what is in the mortgage documents. Furthermore, Clayton has never heard of nor dealt with the bank before. All these red flags must make Clayton wary of this transaction. One key action Clayton can take here is to investigate the bank to determine if they are legitimate. (a) is incorrect because this would be a breach of confidentiality. Clayton should not even disclose the fact that he has been retained by Diego to anyone, including his friend, as that is confidential. Furthermore, as per the Rules of Professional Conduct, this is not a proper verification technique. (b) is incorrect; it is unclear why Diego’s residency would be of major concern in this situation. (c) is incorrect as, once again, it is unclear why whether Diego has purchased a home in the past is of concern here.
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Question 73 of 80
73. Question
Category: Real Estate73. Monica lives on a large rural property in Binbrook, Ontario. The property contains her primary residence along with a guest house immediately next to it. In 2025, Monica defaulted on her mortgage to XYZ Bank. While XYZ Bank had a mortgage against both her primary residence and the guest home, it only sought to enforce the mortgage against her primary residence. According to the Planning Act, what must XYZ Bank seek prior to commencing this action?
Correct
Solution: The correct answer is (a). Subsection 50(18) of the Planning Act requires mortgagees that are seeking to enforce only part of a mortgage to seek approval from the government.
Incorrect
Solution: The correct answer is (a). Subsection 50(18) of the Planning Act requires mortgagees that are seeking to enforce only part of a mortgage to seek approval from the government.
Unattempted
Solution: The correct answer is (a). Subsection 50(18) of the Planning Act requires mortgagees that are seeking to enforce only part of a mortgage to seek approval from the government.
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Question 74 of 80
74. Question
Category: Real Estate74. When may conveyancing requisitions be submitted by?
Correct
Solution: Conveyancing requisitions may be submitted up to the completion of the transaction. The correct answer is therefore (d).
Incorrect
Solution: Conveyancing requisitions may be submitted up to the completion of the transaction. The correct answer is therefore (d).
Unattempted
Solution: Conveyancing requisitions may be submitted up to the completion of the transaction. The correct answer is therefore (d).
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Question 75 of 80
75. Question
Category: Real Estate75. Benedikt is a real estate lawyer. He has advised his good friend, Maureen, on several real estate matters since 2015. Recently, Maureen purchased a new condominium unit and sought Benedikt’s assistance with the transaction. Maureen applies to the court for a determination that the declarant failed to disclose a material change to the disclosure statement. The court ruled in her favour. Once Bill 106 – Protecting Condominium Owners Act, 2015 is proclaimed into force, what remedy must the court provide?
Correct
Solution: The correct answer is (a). According to section 74(12) of the Condominium Act, 1998, once Bill 106 comes into force, if the court is satisfied that the declarant has failed to disclose a material change, contrary to section 74(1), then the court must order the following: (i) that the declarant pay damages to the person for their losses as a result of non-compliance; and (ii) that the declarant pay the person’s costs. Therefore, the correct answer is (a). Note that (b) and (c) are wrong because while a court may order either, they are not required to. (d) is also incorrect and has no basis in the Act.
Incorrect
Solution: The correct answer is (a). According to section 74(12) of the Condominium Act, 1998, once Bill 106 comes into force, if the court is satisfied that the declarant has failed to disclose a material change, contrary to section 74(1), then the court must order the following: (i) that the declarant pay damages to the person for their losses as a result of non-compliance; and (ii) that the declarant pay the person’s costs. Therefore, the correct answer is (a). Note that (b) and (c) are wrong because while a court may order either, they are not required to. (d) is also incorrect and has no basis in the Act.
Unattempted
Solution: The correct answer is (a). According to section 74(12) of the Condominium Act, 1998, once Bill 106 comes into force, if the court is satisfied that the declarant has failed to disclose a material change, contrary to section 74(1), then the court must order the following: (i) that the declarant pay damages to the person for their losses as a result of non-compliance; and (ii) that the declarant pay the person’s costs. Therefore, the correct answer is (a). Note that (b) and (c) are wrong because while a court may order either, they are not required to. (d) is also incorrect and has no basis in the Act.
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Question 76 of 80
76. Question
Category: Real Estate76. Nicky reaches out to a lawyer, Amy, for assistance with the purchase of a cottage property, which she planned to purchase jointly with her sister, Grace. Both Nicky and Grace met with Amy to discuss the transaction. While discussing how they would pay for the property during the initial consultation, Nicky insisted that Grace pays for her share of the cottage in cash, even though Grace did not have the financial ability to do so. The two also had a lively debate about which chattels to purchase from the existing cottage owner. What should Amy do to abide by her professional responsibility obligations?
Correct
Solution: The best answer is (d). Given that Amy here is dealing with two prospective clients on this particular transaction, she must abide by the joint retainer rules. While acting in a joint retainer requires the lawyer to obtain the clients’ informed consent, in this case, as noted in section 3.4-7 [1], she should avoid acting for both since it is likely that a contentious issue will arise that cannot be resolved, or their interests, rights and obligations will diverge. Given that Amy witnessed the sisters arguing over key issues during the initial consultation, she should avoid representing both to abide by the rule. Therefore, (d) is the best answer.
Incorrect
Solution: The best answer is (d). Given that Amy here is dealing with two prospective clients on this particular transaction, she must abide by the joint retainer rules. While acting in a joint retainer requires the lawyer to obtain the clients’ informed consent, in this case, as noted in section 3.4-7 [1], she should avoid acting for both since it is likely that a contentious issue will arise that cannot be resolved, or their interests, rights and obligations will diverge. Given that Amy witnessed the sisters arguing over key issues during the initial consultation, she should avoid representing both to abide by the rule. Therefore, (d) is the best answer.
Unattempted
Solution: The best answer is (d). Given that Amy here is dealing with two prospective clients on this particular transaction, she must abide by the joint retainer rules. While acting in a joint retainer requires the lawyer to obtain the clients’ informed consent, in this case, as noted in section 3.4-7 [1], she should avoid acting for both since it is likely that a contentious issue will arise that cannot be resolved, or their interests, rights and obligations will diverge. Given that Amy witnessed the sisters arguing over key issues during the initial consultation, she should avoid representing both to abide by the rule. Therefore, (d) is the best answer.
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Question 77 of 80
77. Question
Category: Real Estate77. Case Set: Anne is a lawyer based in the small rural town of Grand Bend. She is representing both the borrower, Marissa, and the lender, XYZ Bank, in a transaction involving the purchase of vacant land in Grand Bend. Marissa intends to use the vacant land to build a home.
What must Anne do before entering into the transaction with Marissa and XYZ Bank?
Correct
Solution: When acting in a joint retainer between a borrower and lender, according to r.3.4-12 – 3.4-16, the lawyer does not need to advise the lender (XYZ Bank in this case) of the nature of the joint retainer, the fact that conflicts may arise as a result of the joint retainer, or recommend that the bank receive independent legal advice. They are sophisticated, and it is assumed they know the risks involved. However, the lawyer must still advise the borrower (Marissa in this case) of the standard issues in a joint retainer, i.e., how conflicts may develop, that they should receive independent legal advice, etc. Therefore, the correct answer choice is (c).
Incorrect
Solution: When acting in a joint retainer between a borrower and lender, according to r.3.4-12 – 3.4-16, the lawyer does not need to advise the lender (XYZ Bank in this case) of the nature of the joint retainer, the fact that conflicts may arise as a result of the joint retainer, or recommend that the bank receive independent legal advice. They are sophisticated, and it is assumed they know the risks involved. However, the lawyer must still advise the borrower (Marissa in this case) of the standard issues in a joint retainer, i.e., how conflicts may develop, that they should receive independent legal advice, etc. Therefore, the correct answer choice is (c).
Unattempted
Solution: When acting in a joint retainer between a borrower and lender, according to r.3.4-12 – 3.4-16, the lawyer does not need to advise the lender (XYZ Bank in this case) of the nature of the joint retainer, the fact that conflicts may arise as a result of the joint retainer, or recommend that the bank receive independent legal advice. They are sophisticated, and it is assumed they know the risks involved. However, the lawyer must still advise the borrower (Marissa in this case) of the standard issues in a joint retainer, i.e., how conflicts may develop, that they should receive independent legal advice, etc. Therefore, the correct answer choice is (c).
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Question 78 of 80
78. Question
Category: Real Estate78. Case Set: Anne is a lawyer based in the small rural town of Grand Bend. She is representing both the borrower, Marissa, and the lender, XYZ Bank, in a transaction involving the purchase of vacant land in Grand Bend. Marissa intends to use the vacant land to build a home.
Marissa is planning on purchasing the land for $500,000. Upon signing the agreement, Marissa is to pay $250,000 to the vendor, with the remainder to be held in trust and paid six months later. With respect to handling the money, what are Anne’s obligations?
Correct
Solution: As part of a lawyer’s fiduciary duties, the lawyer should discuss with the client whether they would like to open a separate-interest bearing trust account whenever they have to hold funds for an extended period of time. As the funds here are to be held for 6 months, this should qualify as an “extended period of time” and Anne should therefore discuss this option with Marissa. The correct answer is (b).
The reason (a) is incorrect is because a separate interest bearing account may be necessary if the client requests it; therefore, it is wrong to say that Anne is obligated to open a mixed trust account. (c) is incorrect because money that does not belong to the lawyer, as with the $250,000 here, should never be deposited into the general account. There is no reason that (d) is correct.
Incorrect
Solution: As part of a lawyer’s fiduciary duties, the lawyer should discuss with the client whether they would like to open a separate-interest bearing trust account whenever they have to hold funds for an extended period of time. As the funds here are to be held for 6 months, this should qualify as an “extended period of time” and Anne should therefore discuss this option with Marissa. The correct answer is (b).
The reason (a) is incorrect is because a separate interest bearing account may be necessary if the client requests it; therefore, it is wrong to say that Anne is obligated to open a mixed trust account. (c) is incorrect because money that does not belong to the lawyer, as with the $250,000 here, should never be deposited into the general account. There is no reason that (d) is correct.
Unattempted
Solution: As part of a lawyer’s fiduciary duties, the lawyer should discuss with the client whether they would like to open a separate-interest bearing trust account whenever they have to hold funds for an extended period of time. As the funds here are to be held for 6 months, this should qualify as an “extended period of time” and Anne should therefore discuss this option with Marissa. The correct answer is (b).
The reason (a) is incorrect is because a separate interest bearing account may be necessary if the client requests it; therefore, it is wrong to say that Anne is obligated to open a mixed trust account. (c) is incorrect because money that does not belong to the lawyer, as with the $250,000 here, should never be deposited into the general account. There is no reason that (d) is correct.
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Question 79 of 80
79. Question
Category: Real Estate79. Case Set: Anne is a lawyer based in the small rural town of Grand Bend. She is representing both the borrower, Marissa, and the lender, XYZ Bank, in a transaction involving the purchase of vacant land in Grand Bend. Marissa intends to use the vacant land to build a home.
Anne is doing her due diligence on the property and notices that the owner currently owns an abutting parcel of vacant land, “Parcel B”. The owner notifies Anne that in 1985, the municipality of Lambton Shores, where Grand Bend is situated, gave the owner consent to sell Parcel B. How should Anne proceed?
Correct
Solution: The government consent exception under section 50(3)(f) of the Planning Act may allow an owner to subdivide a parcel of concession land. In this case, the municipality provided consent to the current owner to sell Parcel B, not the land in question, and hence there appears to be no exception in this case for the owner to sell, and Marissa to buy, the land in question. Therefore, if the transaction proceeds, it will likely be null and void – (a) is the correct answer.
Incorrect
Solution: The government consent exception under section 50(3)(f) of the Planning Act may allow an owner to subdivide a parcel of concession land. In this case, the municipality provided consent to the current owner to sell Parcel B, not the land in question, and hence there appears to be no exception in this case for the owner to sell, and Marissa to buy, the land in question. Therefore, if the transaction proceeds, it will likely be null and void – (a) is the correct answer.
Unattempted
Solution: The government consent exception under section 50(3)(f) of the Planning Act may allow an owner to subdivide a parcel of concession land. In this case, the municipality provided consent to the current owner to sell Parcel B, not the land in question, and hence there appears to be no exception in this case for the owner to sell, and Marissa to buy, the land in question. Therefore, if the transaction proceeds, it will likely be null and void – (a) is the correct answer.
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Question 80 of 80
80. Question
Category: Real Estate80. Case Set: Anne is a lawyer based in the small rural town of Grand Bend. She is representing both the borrower, Marissa, and the lender, XYZ Bank, in a transaction involving the purchase of vacant land in Grand Bend. Marissa intends to use the vacant land to build a home.
After a busy week of work, Anne found herself overworked. On top of this file, she had ten ongoing files, including six that dealt with real estate matters and four with corporate matters. Accordingly, she decided to hire a new lawyer, Naya, who would be strictly responsible for working on corporate matters. What should Anne do when Naya joins the firm?
Correct
Solution: The best answer is (a). Every time a new lawyer joins a firm, the firm should conduct a conflict check. (b) and (c) are unnecessary – the LSO does not require firms to report to it anytime a new lawyer joins a firm, and law firms are not expected to train lawyers on the Rules, though professional development sessions on the Rules are likely encouraged by the LSO; (d) is unnecessary – there may be good reasons for Naya to be privy to at least some of her real estate files (i.e. if they start having corporate aspects).
Incorrect
Solution: The best answer is (a). Every time a new lawyer joins a firm, the firm should conduct a conflict check. (b) and (c) are unnecessary – the LSO does not require firms to report to it anytime a new lawyer joins a firm, and law firms are not expected to train lawyers on the Rules, though professional development sessions on the Rules are likely encouraged by the LSO; (d) is unnecessary – there may be good reasons for Naya to be privy to at least some of her real estate files (i.e. if they start having corporate aspects).
Unattempted
Solution: The best answer is (a). Every time a new lawyer joins a firm, the firm should conduct a conflict check. (b) and (c) are unnecessary – the LSO does not require firms to report to it anytime a new lawyer joins a firm, and law firms are not expected to train lawyers on the Rules, though professional development sessions on the Rules are likely encouraged by the LSO; (d) is unnecessary – there may be good reasons for Naya to be privy to at least some of her real estate files (i.e. if they start having corporate aspects).