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Thank you for completing the Solicitor Mini Exam. Here is your result:
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:
0/0
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Estates Planning:
0/0
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Real Estate:
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Question 1 of 80
1. Question
Category: Business Law1. ABC Corporation, which is governed by Ontario’s Business Corporations Act, has two directors, Vanishri and Jade. Vanishri founded the corporation in 2016, and has been director ever since its inception. Jade has been director since 2021. How many of ABC Corporation’s directors must be a resident of Canada?
Correct
Solution: The correct answer is (a). ABC Corporation is governed by the OBCA. In July 2021, the OBCA was amended to remove director residency requirements (you will see section 118(3) of the OBCA now says “Repealed”). Therefore, corporations governed under the OBCA are no longer required to maintain a minimum number of directors who are Canadian residents.
Incorrect
Solution: The correct answer is (a). ABC Corporation is governed by the OBCA. In July 2021, the OBCA was amended to remove director residency requirements (you will see section 118(3) of the OBCA now says “Repealed”). Therefore, corporations governed under the OBCA are no longer required to maintain a minimum number of directors who are Canadian residents.
Unattempted
Solution: The correct answer is (a). ABC Corporation is governed by the OBCA. In July 2021, the OBCA was amended to remove director residency requirements (you will see section 118(3) of the OBCA now says “Repealed”). Therefore, corporations governed under the OBCA are no longer required to maintain a minimum number of directors who are Canadian residents.
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Question 2 of 80
2. Question
Category: Business Law2. Roberto has been operating a sole proprietorship under the name “Mugs Nation” for over five years. What problem may Roberto face given that he is operating a sole proprietorship?
Correct
Solution: The best answer is (c). All obligations of a sole proprietorship will be Roberto’s responsibility. (a) is inaccurate; (b) is incorrect – sole proprietor’s can still limit their personal liability through insurance or contractually; finally, (d) is incorrect – the fees are not hefty (about $60-80).
Incorrect
Solution: The best answer is (c). All obligations of a sole proprietorship will be Roberto’s responsibility. (a) is inaccurate; (b) is incorrect – sole proprietor’s can still limit their personal liability through insurance or contractually; finally, (d) is incorrect – the fees are not hefty (about $60-80).
Unattempted
Solution: The best answer is (c). All obligations of a sole proprietorship will be Roberto’s responsibility. (a) is inaccurate; (b) is incorrect – sole proprietor’s can still limit their personal liability through insurance or contractually; finally, (d) is incorrect – the fees are not hefty (about $60-80).
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Question 3 of 80
3. Question
Category: Business Law3. ABC Union represents employees at XYZ Ltd., one of the biggest manufacturing firms in Ontario. The Ontario Labour Relations Board (OLRB) has ordered a representation vote. Who is primarily responsible for overseeing this vote?
Correct
Solution: While the OLRB actually conducts the vote, the vote itself is overseen by the returning officer. Therefore, (d) is correct.
Incorrect
Solution: While the OLRB actually conducts the vote, the vote itself is overseen by the returning officer. Therefore, (d) is correct.
Unattempted
Solution: While the OLRB actually conducts the vote, the vote itself is overseen by the returning officer. Therefore, (d) is correct.
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Question 4 of 80
4. Question
Category: Business Law4. When may a lawyer provide a personal guarantee for a debt?
Correct
Solution: The best answer is (a). Rules 3.4-34 and 3.4-35 of the Rules of Professional Conduct highlight the situations where a lawyer may appropriately guarantee a debt. One is where the lender is a financial institution providing funds to the lawyer’s daughter. (b) is incorrect as that is not highlighted in the rules; (c) is incorrect because the rule states that all participants in the venture need to provide a personal guarantee (in other words, the rule is saying because it’s unavoidable, in that all participants need to guarantee it, it is fine; but if it only requires one person to provide a guarantee, as in this option choice, then the lawyer cannot provide a personal guarantee); (d) is incorrect and is not stated in the rule.
Incorrect
Solution: The best answer is (a). Rules 3.4-34 and 3.4-35 of the Rules of Professional Conduct highlight the situations where a lawyer may appropriately guarantee a debt. One is where the lender is a financial institution providing funds to the lawyer’s daughter. (b) is incorrect as that is not highlighted in the rules; (c) is incorrect because the rule states that all participants in the venture need to provide a personal guarantee (in other words, the rule is saying because it’s unavoidable, in that all participants need to guarantee it, it is fine; but if it only requires one person to provide a guarantee, as in this option choice, then the lawyer cannot provide a personal guarantee); (d) is incorrect and is not stated in the rule.
Unattempted
Solution: The best answer is (a). Rules 3.4-34 and 3.4-35 of the Rules of Professional Conduct highlight the situations where a lawyer may appropriately guarantee a debt. One is where the lender is a financial institution providing funds to the lawyer’s daughter. (b) is incorrect as that is not highlighted in the rules; (c) is incorrect because the rule states that all participants in the venture need to provide a personal guarantee (in other words, the rule is saying because it’s unavoidable, in that all participants need to guarantee it, it is fine; but if it only requires one person to provide a guarantee, as in this option choice, then the lawyer cannot provide a personal guarantee); (d) is incorrect and is not stated in the rule.
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Question 5 of 80
5. Question
Category: Business Law5. ABC Bank has a security interest in the inventory of XYZ Ltd., a now-bankrupt car manufacturer of auto parts. After providing XYZ Ltd. with a demand for payment, ABC Bank failed to secure any funds. ABC Bank’s lawyer, Sorella, would like to enforce the security interest as quickly as possible. What is the best way for Sorella to proceed?
Correct
Solution: Section 244(1) of the BIA only applies to an insolvent person. Since XYZ Ltd is a bankrupt, it is excluded from the definition of an insolvent person. Therefore, no notice is required, and given that Sorella would like to enforce the interest as soon as possible, (a) is the best answer. Note that the fact ABC Bank already provided a demand for payment was beyond what it needed to do – because, once again, no notice was required.
Incorrect
Solution: Section 244(1) of the BIA only applies to an insolvent person. Since XYZ Ltd is a bankrupt, it is excluded from the definition of an insolvent person. Therefore, no notice is required, and given that Sorella would like to enforce the interest as soon as possible, (a) is the best answer. Note that the fact ABC Bank already provided a demand for payment was beyond what it needed to do – because, once again, no notice was required.
Unattempted
Solution: Section 244(1) of the BIA only applies to an insolvent person. Since XYZ Ltd is a bankrupt, it is excluded from the definition of an insolvent person. Therefore, no notice is required, and given that Sorella would like to enforce the interest as soon as possible, (a) is the best answer. Note that the fact ABC Bank already provided a demand for payment was beyond what it needed to do – because, once again, no notice was required.
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Question 6 of 80
6. Question
Category: Business Law6. Sujen attends law school at an Ontario university. While interviewing for a position at ABC LLP, one of his interviewers noted that his English was “on point and flawless”. Sujen was born and raised in Canada, and was caught off guard by the comment. He reported the incident to ABC LLP’s human resources manager, Latifah. What is the best way for Latifah to proceed?
Correct
Solution: By complimenting Sujen on his English, the interviewer was displaying a microaggression, regardless of the intent of the interviewer. One way to prevent microaggressions is through practicing microaffirmations – which are simple behaviours that can build a more inclusive legal practice. Therefore, the best answer choice is (c). (a) is incorrect; it does not matter what the intent of the comment was. (b) also will not solve the problem (although if it was a firm-wide problem, this could be a necessary action, but there is no indication of that here). Finally, (d), again, does not solve the problem. Hiring Sujen will do little to prevent such comments from being made in the future.
Incorrect
Solution: By complimenting Sujen on his English, the interviewer was displaying a microaggression, regardless of the intent of the interviewer. One way to prevent microaggressions is through practicing microaffirmations – which are simple behaviours that can build a more inclusive legal practice. Therefore, the best answer choice is (c). (a) is incorrect; it does not matter what the intent of the comment was. (b) also will not solve the problem (although if it was a firm-wide problem, this could be a necessary action, but there is no indication of that here). Finally, (d), again, does not solve the problem. Hiring Sujen will do little to prevent such comments from being made in the future.
Unattempted
Solution: By complimenting Sujen on his English, the interviewer was displaying a microaggression, regardless of the intent of the interviewer. One way to prevent microaggressions is through practicing microaffirmations – which are simple behaviours that can build a more inclusive legal practice. Therefore, the best answer choice is (c). (a) is incorrect; it does not matter what the intent of the comment was. (b) also will not solve the problem (although if it was a firm-wide problem, this could be a necessary action, but there is no indication of that here). Finally, (d), again, does not solve the problem. Hiring Sujen will do little to prevent such comments from being made in the future.
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Question 7 of 80
7. Question
Category: Business Law7. What is one of the factors used in deciding the “medical admissibility” of a foreign applicant applying for resident status in Canada?
Correct
Solution: (a) is the correct answer. A key consideration is whether the applicant or their dependent will cause excessive demand to health or social services. None of (b), (c) or (d) are included in the factors to consider for the “medical admissibility” of a foreign applicant for resident status in Canada.
Incorrect
Solution: (a) is the correct answer. A key consideration is whether the applicant or their dependent will cause excessive demand to health or social services. None of (b), (c) or (d) are included in the factors to consider for the “medical admissibility” of a foreign applicant for resident status in Canada.
Unattempted
Solution: (a) is the correct answer. A key consideration is whether the applicant or their dependent will cause excessive demand to health or social services. None of (b), (c) or (d) are included in the factors to consider for the “medical admissibility” of a foreign applicant for resident status in Canada.
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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, 2015. Gillian ultimately paid back the loan on March 1, 2022. 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 year which the loan is ultimately repaid. Therefore, since the shareholder loan was made in 2015 – Gillian must include it in her income in 2015; further, since she repaid the loan in 2022, she is entitled to a deduction in computing income when completing her 2022 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 year which the loan is ultimately repaid. Therefore, since the shareholder loan was made in 2015 – Gillian must include it in her income in 2015; further, since she repaid the loan in 2022, she is entitled to a deduction in computing income when completing her 2022 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 year which the loan is ultimately repaid. Therefore, since the shareholder loan was made in 2015 – Gillian must include it in her income in 2015; further, since she repaid the loan in 2022, she is entitled to a deduction in computing income when completing her 2022 tax return.
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Question 9 of 80
9. Question
Category: Business Law9. On January 3, 2022, Faisal declared bankruptcy. Shortly after, a trustee was appointed to manage Faisal’s affairs, and inspectors were elected by the creditors. How may the inspectors make decisions?
Correct
Solution: According to section 116(3), the powers of the inspectors may be exercised by a majority of them. Therefore, a majority vote is required – (c) is the correct answer.
Incorrect
Solution: According to section 116(3), the powers of the inspectors may be exercised by a majority of them. Therefore, a majority vote is required – (c) is the correct answer.
Unattempted
Solution: According to section 116(3), the powers of the inspectors may be exercised by a majority of them. Therefore, a majority vote is required – (c) is the correct answer.
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Question 10 of 80
10. Question
Category: Business Law10. ABC Ltd. is a marijuana company based in Leamington, Ontario. In December 2021, it 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. Imani is a lawyer that specializes in corporate law. In her eight years of practice, she has never litigated any matter. While at a gathering during the 2021 holiday season, she met a person named Robert. He asked if she could help him with a matter, which involved commencing a constitutional challenge against the Ontario government’s recent coronavirus containment measures. What is the best way for Imani to respond?
Correct
Solution: The best answer is (d). Given that Imani specializes in corporate law, it would be out of her realm of expertise to assist Robert with a constitutional challenge. Rule 3.1-2 and commentary [6] of the Rules of Professional Conduct states that a lawyer must recognize a task which they lack competence and if consulted about such task, they should either decline to act or obtain the client’s consent to retain someone who is competent to act or obtain the client’s consent to become knowledgeable. Given this, (d) is the most suitable answer. (a) and (c) are hence both inappropriate responses for Imani. (b) is also inappropriate, especially given the fact that Imani is at a gathering and in a public setting. Legal matters should be discussed privately.
Incorrect
Solution: The best answer is (d). Given that Imani specializes in corporate law, it would be out of her realm of expertise to assist Robert with a constitutional challenge. Rule 3.1-2 and commentary [6] of the Rules of Professional Conduct states that a lawyer must recognize a task which they lack competence and if consulted about such task, they should either decline to act or obtain the client’s consent to retain someone who is competent to act or obtain the client’s consent to become knowledgeable. Given this, (d) is the most suitable answer. (a) and (c) are hence both inappropriate responses for Imani. (b) is also inappropriate, especially given the fact that Imani is at a gathering and in a public setting. Legal matters should be discussed privately.
Unattempted
Solution: The best answer is (d). Given that Imani specializes in corporate law, it would be out of her realm of expertise to assist Robert with a constitutional challenge. Rule 3.1-2 and commentary [6] of the Rules of Professional Conduct states that a lawyer must recognize a task which they lack competence and if consulted about such task, they should either decline to act or obtain the client’s consent to retain someone who is competent to act or obtain the client’s consent to become knowledgeable. Given this, (d) is the most suitable answer. (a) and (c) are hence both inappropriate responses for Imani. (b) is also inappropriate, especially given the fact that Imani is at a gathering and in a public setting. Legal matters should be discussed privately.
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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. Who may be a limited partner in a limited partnership?
Correct
Solution: The correct answer is (c). According to section 2(2) of the Limited Partnerships Act, any “person” can be a limited partner; a “person”, according to section 1, includes an individual, sole proprietor and corporation. Therefore, (c) is the correct answer.
Incorrect
Solution: The correct answer is (c). According to section 2(2) of the Limited Partnerships Act, any “person” can be a limited partner; a “person”, according to section 1, includes an individual, sole proprietor and corporation. Therefore, (c) is the correct answer.
Unattempted
Solution: The correct answer is (c). According to section 2(2) of the Limited Partnerships Act, any “person” can be a limited partner; a “person”, according to section 1, includes an individual, sole proprietor and corporation. Therefore, (c) is the correct answer.
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Question 14 of 80
14. Question
Category: Business Law14. Which of the following is an example of a microaggression?
Correct
Solution: The correct answer is (d). A microaggression is an everyday slight or insult that communicates a hostile or negative message to a person based solely on their group membership. (d) is correct because it fails to account for LGBTQ+ categories. (a) is incorrect because, as long as it was done in a respectful way, this is a microaffirmation, not microaggression. (b) is not a microaggression but rather a positive communication that a lawyer should engage in. Based on the facts, (c) is not a microaggression but likely indicative of a lawyer wishing to provide adequate service to a client whose English skills are limited.
Incorrect
Solution: The correct answer is (d). A microaggression is an everyday slight or insult that communicates a hostile or negative message to a person based solely on their group membership. (d) is correct because it fails to account for LGBTQ+ categories. (a) is incorrect because, as long as it was done in a respectful way, this is a microaffirmation, not microaggression. (b) is not a microaggression but rather a positive communication that a lawyer should engage in. Based on the facts, (c) is not a microaggression but likely indicative of a lawyer wishing to provide adequate service to a client whose English skills are limited.
Unattempted
Solution: The correct answer is (d). A microaggression is an everyday slight or insult that communicates a hostile or negative message to a person based solely on their group membership. (d) is correct because it fails to account for LGBTQ+ categories. (a) is incorrect because, as long as it was done in a respectful way, this is a microaffirmation, not microaggression. (b) is not a microaggression but rather a positive communication that a lawyer should engage in. Based on the facts, (c) is not a microaggression but likely indicative of a lawyer wishing to provide adequate service to a client whose English skills are limited.
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Question 15 of 80
15. Question
Category: Business Law15. Who must be party to a unanimous shareholder agreement for it to be effective?
Correct
Solution: (d) is the correct answer. All shareholders must be party to a unanimous shareholder agreement (“USA”). (a) is incorrect; a corporation may be party to a USA, but it is not required. (b) is incorrect; a USA can in fact be used to restrict the powers of directors; (c) is incorrect; the federal government need not be party to a USA.
Incorrect
Solution: (d) is the correct answer. All shareholders must be party to a unanimous shareholder agreement (“USA”). (a) is incorrect; a corporation may be party to a USA, but it is not required. (b) is incorrect; a USA can in fact be used to restrict the powers of directors; (c) is incorrect; the federal government need not be party to a USA.
Unattempted
Solution: (d) is the correct answer. All shareholders must be party to a unanimous shareholder agreement (“USA”). (a) is incorrect; a corporation may be party to a USA, but it is not required. (b) is incorrect; a USA can in fact be used to restrict the powers of directors; (c) is incorrect; the federal government need not be party to a USA.
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Question 16 of 80
16. Question
Category: Business Law16. Jackson is creating a new corporation to run his musical instrument business. The corporation will be called “Jackson Music”. What is problematic about this corporate name?
Correct
Solution: (b) is the correct answer. Both the OBCA and CBCA require at least one of these phrases to be used in a corporate name. (a) is incorrect; a corporation is legally separate from its owner or owners, but this has nothing to do with naming the corporation. (c) is incorrect; a corporate name can contain more than two words. (d) is incorrect; the word “instrument” does not need to be included. In other words, a corporate name does not need to wholly describe the business of the corporation.
Incorrect
Solution: (b) is the correct answer. Both the OBCA and CBCA require at least one of these phrases to be used in a corporate name. (a) is incorrect; a corporation is legally separate from its owner or owners, but this has nothing to do with naming the corporation. (c) is incorrect; a corporate name can contain more than two words. (d) is incorrect; the word “instrument” does not need to be included. In other words, a corporate name does not need to wholly describe the business of the corporation.
Unattempted
Solution: (b) is the correct answer. Both the OBCA and CBCA require at least one of these phrases to be used in a corporate name. (a) is incorrect; a corporation is legally separate from its owner or owners, but this has nothing to do with naming the corporation. (c) is incorrect; a corporate name can contain more than two words. (d) is incorrect; the word “instrument” does not need to be included. In other words, a corporate name does not need to wholly describe the business of the corporation.
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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. A lawyer must complete and submit a report to the Law Society of Ontario each year by which day?
Correct
Solution: The correct answer is (b) – March 31. According to By-Law 8, lawyers must submit a report to the Law Society of Ontario by March 31 of every year.
Incorrect
Solution: The correct answer is (b) – March 31. According to By-Law 8, lawyers must submit a report to the Law Society of Ontario by March 31 of every year.
Unattempted
Solution: The correct answer is (b) – March 31. According to By-Law 8, lawyers must submit a report to the Law Society of Ontario by March 31 of every year.
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Question 21 of 80
21. Question
Category: Business Law21. XYZ Corporation has prepared a preliminary prospectus, which has been approved by its board of directors. How will it file the prospectus with the applicable securities regulatory authorities in Canada?
Correct
Solution: The correct answer is (c). A prospectus in Canada must be file with the applicable securities regulatory authorities by using SEDAR.
Incorrect
Solution: There are three exemptions to the stringent disclosure requirements for a franchisor. These exemptions apply where: the agreement is for one year or less; the amount the franchisee must pay to operate the franchise is less than $5,000 annually; or the agreement is a fractional franchise. The correct answer choice is therefore (c); agreements over one year are not covered by the exemption.
Unattempted
Solution: There are three exemptions to the stringent disclosure requirements for a franchisor. These exemptions apply where: the agreement is for one year or less; the amount the franchisee must pay to operate the franchise is less than $5,000 annually; or the agreement is a fractional franchise. The correct answer choice is therefore (c); agreements over one year are not covered by the exemption.
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Question 22 of 80
22. Question
Category: Business Law22. On March 1, 2021, ABC Dental Corporation terminated Radek, its long time dental hygienist, without notice. On March 8, 2021, Radek began to search for a job. On August 10, 2021, he rejected an offer from a local restaurant for a position as a chef. On August 15, 2021, 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, 2021, 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, 2021, 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, 2021, 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. The Personal Information Protection and Electronic Documents Act (“PIPEDA”) will most likely apply to which of the following scenarios?
Correct
Solution: For PIPEDA to apply, an organization must engage in “commercial activity.” A bank collecting personal information to assess whether individuals are eligible for a loan certainly falls within the definition of commercial activity, which is defined as any particular transaction or conduct that is of a commercial character. Therefore, (d) is the correct answer. The activities of not-for-profits are generally excluded from PIPEDA’s application (except in limited circumstances), which is why (a) is incorrect. The collection of personal information to distribute newsletters (c) and for literary purposes (d) is also generally outside of PIPEDA’s purview.
Incorrect
Solution: For PIPEDA to apply, an organization must engage in “commercial activity.” A bank collecting personal information to assess whether individuals are eligible for a loan certainly falls within the definition of commercial activity, which is defined as any particular transaction or conduct that is of a commercial character. Therefore, (d) is the correct answer. The activities of not-for-profits are generally excluded from PIPEDA’s application (except in limited circumstances), which is why (a) is incorrect. The collection of personal information to distribute newsletters (c) and for literary purposes (d) is also generally outside of PIPEDA’s purview.
Unattempted
Solution: For PIPEDA to apply, an organization must engage in “commercial activity.” A bank collecting personal information to assess whether individuals are eligible for a loan certainly falls within the definition of commercial activity, which is defined as any particular transaction or conduct that is of a commercial character. Therefore, (d) is the correct answer. The activities of not-for-profits are generally excluded from PIPEDA’s application (except in limited circumstances), which is why (a) is incorrect. The collection of personal information to distribute newsletters (c) and for literary purposes (d) is also generally outside of PIPEDA’s purview.
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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. Kaiko is a lawyer in his second-year of legal practice. He would like to begin using a computerized time docketing system and is deciding between different applications. What is one of the key features that Kaiko should ensure the time docketing application can provide?
Correct
Solution: (d) is the correct answer. A time docketing system should explain services to be performed. (a) and (b) are incorrect given that Kaiko seeks a computerized time docketing system. These are features of a manual time docketing system. (c) is incorrect. Lawyers should use centralized reminder systems, but this is a consideration separate from that of time docketing.
Incorrect
Solution: (d) is the correct answer. A time docketing system should explain services to be performed. (a) and (b) are incorrect given that Kaiko seeks a computerized time docketing system. These are features of a manual time docketing system. (c) is incorrect. Lawyers should use centralized reminder systems, but this is a consideration separate from that of time docketing.
Unattempted
Solution: (d) is the correct answer. A time docketing system should explain services to be performed. (a) and (b) are incorrect given that Kaiko seeks a computerized time docketing system. These are features of a manual time docketing system. (c) is incorrect. Lawyers should use centralized reminder systems, but this is a consideration separate from that of time docketing.
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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: Fred and Jenna have decided to create XYZ Corporation, a corporation governed by the Ontario Business Corporations Act. The corporation plans to sell high-end footwear. Fred and Jenna will be the directors of XYZ Corporation, but both are undecided on how to structure the share capital for XYZ Corporation. For now, Fred and Jenna each own 50% of the shares of XYZ Corporation. They have hired a lawyer, Abbas, for assistance.
Fred and Jenna have worked with ABC Bank to secure a loan. Fred and Jenna want to ensure that the loan agreement with ABC Bank takes priority over any prior commitment letters previously agreed to between the parties. In order to accomplish this, what provision should Abbas suggest they include in the final loan agreement?
Correct
Solution: The correct answer is (a). An “entire agreement” provision can be used to give the loan agreement priority over any previous commitments/agreements between XYZ Corporation and ABC Bank. (b) is incorrect; this provision can be used to address representations and warranties and is beyond the scope of the question. (c) is incorrect; this provision is vague and certainly not common in debt financing. (d) is incorrect; an indemnification provision for each stated covenant would not address previously agreed to agreements/commitment letters.
Incorrect
Solution: The correct answer is (a). An “entire agreement” provision can be used to give the loan agreement priority over any previous commitments/agreements between XYZ Corporation and ABC Bank. (b) is incorrect; this provision can be used to address representations and warranties and is beyond the scope of the question. (c) is incorrect; this provision is vague and certainly not common in debt financing. (d) is incorrect; an indemnification provision for each stated covenant would not address previously agreed to agreements/commitment letters.
Unattempted
Solution: The correct answer is (a). An “entire agreement” provision can be used to give the loan agreement priority over any previous commitments/agreements between XYZ Corporation and ABC Bank. (b) is incorrect; this provision can be used to address representations and warranties and is beyond the scope of the question. (c) is incorrect; this provision is vague and certainly not common in debt financing. (d) is incorrect; an indemnification provision for each stated covenant would not address previously agreed to agreements/commitment letters.
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Question 29 of 80
29. Question
Category: Business Law29. Case Set: Fred and Jenna have decided to create XYZ Corporation, a corporation governed by the Ontario Business Corporations Act. The corporation plans to sell high-end footwear. Fred and Jenna will be the directors of XYZ Corporation, but both are undecided on how to structure the share capital for XYZ Corporation. For now, Fred and Jenna each own 50% of the shares of XYZ Corporation. They have hired a lawyer, Abbas, for assistance.
Which of the following is true of XYZ Corporation?
Correct
Solution: (a) is the correct answer. A corporation has a separate legal identity from its owners. (b) and (d) are incorrect; both resident and non-resident corporations can be taxed. (c) is incorrect; a corporation is the most common form of business organization.
Incorrect
Solution: (a) is the correct answer. A corporation has a separate legal identity from its owners. (b) and (d) are incorrect; both resident and non-resident corporations can be taxed. (c) is incorrect; a corporation is the most common form of business organization.
Unattempted
Solution: (a) is the correct answer. A corporation has a separate legal identity from its owners. (b) and (d) are incorrect; both resident and non-resident corporations can be taxed. (c) is incorrect; a corporation is the most common form of business organization.
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Question 30 of 80
30. Question
Category: Business Law30.Case Set: Fred and Jenna have decided to create XYZ Corporation, a corporation governed by the Ontario Business Corporations Act. The corporation plans to sell high-end footwear. Fred and Jenna will be the directors of XYZ Corporation, but both are undecided on how to structure the share capital for XYZ Corporation. For now, Fred and Jenna each own 50% of the shares of XYZ Corporation. They have hired a lawyer, Abbas, for assistance.
When should XYZ Corporation hold its first annual meeting of shareholders?
Correct
Solution: (a) is the correct answer. Directors must call the first annual meeting of shareholders not later than 18 months from the date of incorporation. (b) is incorrect – see the explanation for (a). (c) is incorrect; Fred and Jenna are the shareholders of the corporation, thereby warranting the need for an annual meeting of the shareholders. There is no need for the existence of shareholders who are not also directors where the timing of annual meetings is concerned. The existence of an OBCA corporation and its shareholders effectively creates such requirements under the OBCA. (d) is incorrect. See the explanation for (a) and (c).
Incorrect
Solution: (a) is the correct answer. Directors must call the first annual meeting of shareholders not later than 18 months from the date of incorporation. (b) is incorrect – see the explanation for (a). (c) is incorrect; Fred and Jenna are the shareholders of the corporation, thereby warranting the need for an annual meeting of the shareholders. There is no need for the existence of shareholders who are not also directors where the timing of annual meetings is concerned. The existence of an OBCA corporation and its shareholders effectively creates such requirements under the OBCA. (d) is incorrect. See the explanation for (a) and (c).
Unattempted
Solution: (a) is the correct answer. Directors must call the first annual meeting of shareholders not later than 18 months from the date of incorporation. (b) is incorrect – see the explanation for (a). (c) is incorrect; Fred and Jenna are the shareholders of the corporation, thereby warranting the need for an annual meeting of the shareholders. There is no need for the existence of shareholders who are not also directors where the timing of annual meetings is concerned. The existence of an OBCA corporation and its shareholders effectively creates such requirements under the OBCA. (d) is incorrect. See the explanation for (a) and (c).
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Question 31 of 80
31. Question
Category: Estates Planning31. Kristof and Marissa entered into a marriage in 2012. They both fell under the definition of an Indian, as defined by the Indian Act. Kristof died in 2020. While Kristof died with a will, it was discovered that his will was unenforceable. At the date of death, the net value of his estate was $165,000. Kristof and Marissa had two children, Juul and Kate. If Marissa does not elect to claim her equalization payment, which of the following is true?
Correct
Solution: The correct answer is (c). Firstly, note that the intestate rules apply here, since his will is unenforceable.
Section 48(2) of the Indian Act states that where the value of the estate of an intestate exceeds $75,000, the surviving spouse gets a $75,000 preferential share. With respect to the remainder of the estate, where the intestate has left more than one child, one-third goes to the surviving spouse, with the rest to the children on a per stripes (equal) basis.
Applied to the facts here, Kristof’s estate exceeds $75,000. Therefore, Marissa gets a preferential share of $75,000, plus one third of the remaining estate (given they had two children). There is $90,000 remaining ($165,000 total value – $75,000 preferential share). One-third of $90,000 is $30,000. Therefore, Marissa gets a total of $75,000 + $30,000 = $105,000. The children, Juul and Kate, are each entitled to the remainder of the estate ($60,000) on a per stripes basis (see section 48(4) of the Indian Act,. $60,000 /2 = $30,000. Therefore, the correct answer is (c) – Juul, as a child, is entitled to $30,000.
Incorrect
Solution: The correct answer is (c). Firstly, note that the intestate rules apply here, since his will is unenforceable.
Section 48(2) of the Indian Act states that where the value of the estate of an intestate exceeds $75,000, the surviving spouse gets a $75,000 preferential share. With respect to the remainder of the estate, where the intestate has left more than one child, one-third goes to the surviving spouse, with the rest to the children on a per stripes (equal) basis.
Applied to the facts here, Kristof’s estate exceeds $75,000. Therefore, Marissa gets a preferential share of $75,000, plus one third of the remaining estate (given they had two children). There is $90,000 remaining ($165,000 total value – $75,000 preferential share). One-third of $90,000 is $30,000. Therefore, Marissa gets a total of $75,000 + $30,000 = $105,000. The children, Juul and Kate, are each entitled to the remainder of the estate ($60,000) on a per stripes basis (see section 48(4) of the Indian Act,. $60,000 /2 = $30,000. Therefore, the correct answer is (c) – Juul, as a child, is entitled to $30,000.
Unattempted
Solution: The correct answer is (c). Firstly, note that the intestate rules apply here, since his will is unenforceable.
Section 48(2) of the Indian Act states that where the value of the estate of an intestate exceeds $75,000, the surviving spouse gets a $75,000 preferential share. With respect to the remainder of the estate, where the intestate has left more than one child, one-third goes to the surviving spouse, with the rest to the children on a per stripes (equal) basis.
Applied to the facts here, Kristof’s estate exceeds $75,000. Therefore, Marissa gets a preferential share of $75,000, plus one third of the remaining estate (given they had two children). There is $90,000 remaining ($165,000 total value – $75,000 preferential share). One-third of $90,000 is $30,000. Therefore, Marissa gets a total of $75,000 + $30,000 = $105,000. The children, Juul and Kate, are each entitled to the remainder of the estate ($60,000) on a per stripes basis (see section 48(4) of the Indian Act,. $60,000 /2 = $30,000. Therefore, the correct answer is (c) – Juul, as a child, is entitled to $30,000.
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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 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.
Note, for a similar real-world case, please see Law Society of Ontario v Zaldin, 2019 ONLSTH 2. Among other things, the lawyer before the Law Society Tribunal – Hearing Division, had acted in a conflict by representing his family members, without obtaining their consent. In paragraph 12, the adjudicator noted “While in many circumstances a client can provide informed consent to a lawyer acting while in a conflict, there was no such consent 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 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.
Note, for a similar real-world case, please see Law Society of Ontario v Zaldin, 2019 ONLSTH 2. Among other things, the lawyer before the Law Society Tribunal – Hearing Division, had acted in a conflict by representing his family members, without obtaining their consent. In paragraph 12, the adjudicator noted “While in many circumstances a client can provide informed consent to a lawyer acting while in a conflict, there was no such consent 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 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.
Note, for a similar real-world case, please see Law Society of Ontario v Zaldin, 2019 ONLSTH 2. Among other things, the lawyer before the Law Society Tribunal – Hearing Division, had acted in a conflict by representing his family members, without obtaining their consent. In paragraph 12, the adjudicator noted “While in many circumstances a client can provide informed consent to a lawyer acting while in a conflict, there was no such consent here.”
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Question 33 of 80
33. Question
Category: Estates Planning33. Raphael is interested in purchasing a car that is owned by his late friend’s estate, of which he is the estate trustee. The two children of his deceased friend, who are adults and of full capacity, were named as the beneficiaries of his entire estate. Raphael approaches an estates lawyer, Marina, for her advice on whether he can purchase the car. How should Marina advise Raphael?
Correct
Solution: The correct answer is (b). Raphael may purchase the car if both beneficiaries consent, and their consent is accompanied by an affidavit of execution. (a) is incorrect; despite what the will says, the beneficiaries may sell the assets to the trustee; for (c), while it is true that a conflict does exist, it may be overcome with the informed consent of the beneficiaries; and finally, (d) is incorrect; no court approval is needed for the transaction to occur given that the beneficiaries were of age and full capacity.
Incorrect
Solution: The correct answer is (b). Raphael may purchase the car if both beneficiaries consent, and their consent is accompanied by an affidavit of execution. (a) is incorrect; despite what the will says, the beneficiaries may sell the assets to the trustee; for (c), while it is true that a conflict does exist, it may be overcome with the informed consent of the beneficiaries; and finally, (d) is incorrect; no court approval is needed for the transaction to occur given that the beneficiaries were of age and full capacity.
Unattempted
Solution: The correct answer is (b). Raphael may purchase the car if both beneficiaries consent, and their consent is accompanied by an affidavit of execution. (a) is incorrect; despite what the will says, the beneficiaries may sell the assets to the trustee; for (c), while it is true that a conflict does exist, it may be overcome with the informed consent of the beneficiaries; and finally, (d) is incorrect; no court approval is needed for the transaction to occur given that the beneficiaries were of age and full capacity.
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Question 34 of 80
34. Question
Category: Estates Planning34. Arlene and Bolando retained Zhang, a lawyer, in January 2022 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 since 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 since 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 since 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. Brianne is seeking to create a power of attorney for personal care. She may appoint a power attorney that provides her health care for a fee if the power of attorney is which of the following?
Correct
Solution: According to section 46(3) of the Substitute Decisions Act, unless the individual is the spouse, partner, or relative of the grantor (Brianne), one may not act as a power of attorney for personal care if the individual provides healthcare to the individual (Brianne) for compensation. Therefore, since an uncle is a “relative” of the grantor, they would be permitted to be the power of attorney in this case. The best answer is therefore (b).
Incorrect
Solution: According to section 46(3) of the Substitute Decisions Act, unless the individual is the spouse, partner, or relative of the grantor (Brianne), one may not act as a power of attorney for personal care if the individual provides healthcare to the individual (Brianne) for compensation. Therefore, since an uncle is a “relative” of the grantor, they would be permitted to be the power of attorney in this case. The best answer is therefore (b).
Unattempted
Solution: According to section 46(3) of the Substitute Decisions Act, unless the individual is the spouse, partner, or relative of the grantor (Brianne), one may not act as a power of attorney for personal care if the individual provides healthcare to the individual (Brianne) for compensation. Therefore, since an uncle is a “relative” of the grantor, they would be permitted to be the power of attorney in this case. The best answer is therefore (b).
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Question 36 of 80
36. Question
Category: Estates Planning36. Ahanu is an Indian, as defined under the Indian Act. He has been found to be a “mentally incompetent Indian” and unable to handle his own affairs in relation to his property. In this context, what is unique about the meaning of Indian?
Correct
Solution: According to section 4.1 of the Indian Act, a reference to an “Indian” in any of the following provisions shall be deemed to include a reference to any person whose name is entered in a Band List: the definitions band, Indian moneys and mentally incompetent Indian in section 2, …and sections 51-52. Ss. 51-52 discuss the rules pertaining to the definition of “mentally incompetent Indian”, and therefore, Indian is extended to any member of a band. (b) is the correct answer.
Incorrect
Solution: According to section 4.1 of the Indian Act, a reference to an “Indian” in any of the following provisions shall be deemed to include a reference to any person whose name is entered in a Band List: the definitions band, Indian moneys and mentally incompetent Indian in section 2, …and sections 51-52. Ss. 51-52 discuss the rules pertaining to the definition of “mentally incompetent Indian”, and therefore, Indian is extended to any member of a band. (b) is the correct answer.
Unattempted
Solution: According to section 4.1 of the Indian Act, a reference to an “Indian” in any of the following provisions shall be deemed to include a reference to any person whose name is entered in a Band List: the definitions band, Indian moneys and mentally incompetent Indian in section 2, …and sections 51-52. Ss. 51-52 discuss the rules pertaining to the definition of “mentally incompetent Indian”, and therefore, Indian is extended to any member of a band. (b) is the correct answer.
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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. What obligation does a lawyer have when their client has diminished capacity?
Correct
Solution: (c) is correct; in this situation, a lawyer should try to maintain a normal relationship as much as possible. (a) is incorrect; a lawyer cannot unilaterally take such action. (b) is incorrect; a lawyer cannot abandon the interests of their client on such grounds. (d) is incorrect; a language interpreter does not solve the issue of diminished capacity here.
Incorrect
Solution: (c) is correct; in this situation, a lawyer should try to maintain a normal relationship as much as possible. (a) is incorrect; a lawyer cannot unilaterally take such action. (b) is incorrect; a lawyer cannot abandon the interests of their client on such grounds. (d) is incorrect; a language interpreter does not solve the issue of diminished capacity here.
Unattempted
Solution: (c) is correct; in this situation, a lawyer should try to maintain a normal relationship as much as possible. (a) is incorrect; a lawyer cannot unilaterally take such action. (b) is incorrect; a lawyer cannot abandon the interests of their client on such grounds. (d) is incorrect; a language interpreter does not solve the issue of diminished capacity here.
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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, and a “lawyer” is defined to include a candidate enrolled in the Law Society’s Licensing Process for lawyers. The other options are not licensees.
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, and a “lawyer” is defined to include a candidate enrolled in the Law Society’s Licensing Process for lawyers. The other options are not licensees.
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, and a “lawyer” is defined to include a candidate enrolled in the Law Society’s Licensing Process for lawyers. The other options are not licensees.
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Question 42 of 80
42. Question
Category: Estates Planning42. A client retains a lawyer to prepare a will. In the will, the lawyer would receive a prestigious painting upon the client’s death. The lawyer may prepare the will if the client is which of the following?
Correct
Solution: According to r.3.4-38 and 3.4-39 of the Rules of Professional Conduct, unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer is not permitted to prepare (or cause to be prepared) a testamentary instrument that grants the lawyer a gift or benefit. Therefore, the correct answer choice is (b).
Incorrect
Solution: According to r.3.4-38 and 3.4-39 of the Rules of Professional Conduct, unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer is not permitted to prepare (or cause to be prepared) a testamentary instrument that grants the lawyer a gift or benefit. Therefore, the correct answer choice is (b).
Unattempted
Solution: According to r.3.4-38 and 3.4-39 of the Rules of Professional Conduct, unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer is not permitted to prepare (or cause to be prepared) a testamentary instrument that grants the lawyer a gift or benefit. Therefore, the correct answer choice is (b).
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Question 43 of 80
43. Question
Category: Estates Planning43. An estate trustee must personally carry out which of the following tasks in managing the estate of a deceased?
Correct
Solution: An estate trustee is prohibited from delegating out matters involving the exercise of discretion, such as when deciding whether to realize an original estate asset and the price it should be sold at.
Mere administrative tasks may be delegated to an agent, as long as they simply implement a decision already made by the estate trustee. Furthermore, there is an exception to the non-delegation principle when it comes to the investment management of estate assets (see the Trustee Act), meaning that an estate trustee may retain an agent as investment manager.
Therefore, the correct answer choice is (a). This is a matter of discretion and must be personally carried out by the estate trustee. (b) is one of the exceptions noted in the Trustee Act. (c) and (d) are mere administrative tasks that do not necessarily have to be conducted by the estate trustee
Incorrect
Solution: An estate trustee is prohibited from delegating out matters involving the exercise of discretion, such as when deciding whether to realize an original estate asset and the price it should be sold at.
Mere administrative tasks may be delegated to an agent, as long as they simply implement a decision already made by the estate trustee. Furthermore, there is an exception to the non-delegation principle when it comes to the investment management of estate assets (see the Trustee Act), meaning that an estate trustee may retain an agent as investment manager.
Therefore, the correct answer choice is (a). This is a matter of discretion and must be personally carried out by the estate trustee. (b) is one of the exceptions noted in the Trustee Act. (c) and (d) are mere administrative tasks that do not necessarily have to be conducted by the estate trustee
Unattempted
Solution: An estate trustee is prohibited from delegating out matters involving the exercise of discretion, such as when deciding whether to realize an original estate asset and the price it should be sold at.
Mere administrative tasks may be delegated to an agent, as long as they simply implement a decision already made by the estate trustee. Furthermore, there is an exception to the non-delegation principle when it comes to the investment management of estate assets (see the Trustee Act), meaning that an estate trustee may retain an agent as investment manager.
Therefore, the correct answer choice is (a). This is a matter of discretion and must be personally carried out by the estate trustee. (b) is one of the exceptions noted in the Trustee Act. (c) and (d) are mere administrative tasks that do not necessarily have to be conducted by the estate trustee
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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 are 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 have 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 have 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 have 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 $900,000 home in Brantford, Ontario; $500,000 in life insurance proceeds payable to a beneficiary; and a $800,000 home in Vancouver, British Columbia. How much estate administration tax must be paid?
Correct
Solution: The correct answer is (a) – after December 31, 2019, the tax is calculated by applying a 1.5% tax on the estate’s value in excess of $50,000. Further, some items are excluded from the calculation of estate administration tax, including life insurance proceeds payable to a designated beneficiary and any property outside of Ontario. Therefore, the only asset that the tax would apply to would be her friend’s $900,000 home in Brantford, Ontario. The first $50,000 is exempt, which leaves the value of the estate at $900,000 – $50,000 = $850,000. 1.5% of $850,000 is $12,750.
Incorrect
Solution: The correct answer is (a) – after December 31, 2019, the tax is calculated by applying a 1.5% tax on the estate’s value in excess of $50,000. Further, some items are excluded from the calculation of estate administration tax, including life insurance proceeds payable to a designated beneficiary and any property outside of Ontario. Therefore, the only asset that the tax would apply to would be her friend’s $900,000 home in Brantford, Ontario. The first $50,000 is exempt, which leaves the value of the estate at $900,000 – $50,000 = $850,000. 1.5% of $850,000 is $12,750.
Unattempted
Solution: The correct answer is (a) – after December 31, 2019, the tax is calculated by applying a 1.5% tax on the estate’s value in excess of $50,000. Further, some items are excluded from the calculation of estate administration tax, including life insurance proceeds payable to a designated beneficiary and any property outside of Ontario. Therefore, the only asset that the tax would apply to would be her friend’s $900,000 home in Brantford, Ontario. The first $50,000 is exempt, which leaves the value of the estate at $900,000 – $50,000 = $850,000. 1.5% of $850,000 is $12,750.
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Question 46 of 80
46. Question
Category: Estates Planning46. How long after a trust’s year-end is a T3 return due?
Correct
Solution: (d) 90 days is the correct answer. See section 150 of the Income Tax Act.
Incorrect
Solution: (d) 90 days is the correct answer. See section 150 of the Income Tax Act.
Unattempted
Solution: (d) 90 days is the correct answer. See section 150 of the Income Tax Act.
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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: https://lso.ca/lawyers/practice-supports-and-resources/topics/managing-money/bookkeeping.
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: https://lso.ca/lawyers/practice-supports-and-resources/topics/managing-money/bookkeeping.
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: https://lso.ca/lawyers/practice-supports-and-resources/topics/managing-money/bookkeeping.
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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 is 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 is 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 is 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. Darlene is publishing a book on real estate transactions. In it, she intends to discuss her clients’ successful transactions. All of the transactions are public knowledge. Does Darlene need to obtain her clients’ consent to publish the book?
Correct
Solution: (c) is the correct answer. See r.3.3-1 commentary [11.1] of the Rules of Professional Conduct. The duty of confidentiality applies here and is not impacted by whether information is public. (a) is incorrect; see the explanation for answer choice (c). (b) is incorrect; the duty of confidentiality applies to lawyers engaged in real estate transactions. (d) is incorrect; the duty of confidentiality is perpetual; as such, the status of the lawyer-client relationship is irrelevant.
Incorrect
Solution: (c) is the correct answer. See r.3.3-1 commentary [11.1] of the Rules of Professional Conduct. The duty of confidentiality applies here and is not impacted by whether information is public. (a) is incorrect; see the explanation for answer choice (c). (b) is incorrect; the duty of confidentiality applies to lawyers engaged in real estate transactions. (d) is incorrect; the duty of confidentiality is perpetual; as such, the status of the lawyer-client relationship is irrelevant.
Unattempted
Solution: (c) is the correct answer. See r.3.3-1 commentary [11.1] of the Rules of Professional Conduct. The duty of confidentiality applies here and is not impacted by whether information is public. (a) is incorrect; see the explanation for answer choice (c). (b) is incorrect; the duty of confidentiality applies to lawyers engaged in real estate transactions. (d) is incorrect; the duty of confidentiality is perpetual; as such, the status of the lawyer-client relationship is irrelevant.
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Question 52 of 80
52. Question
Category: Real Estate52. Which of the following is true of the land titles system?
Correct
Solution: The correct answer is (c). In the land titles system, regardless of notice, priority of registration prevails. (a) is incorrect because the definition of “instrument” is the same in both. (b) is incorrect because each separately owned piece of land is called a “parcel”. (d) is incorrect because physical paper registration may still be used.
Incorrect
Solution: The correct answer is (c). In the land titles system, regardless of notice, priority of registration prevails. (a) is incorrect because the definition of “instrument” is the same in both. (b) is incorrect because each separately owned piece of land is called a “parcel”. (d) is incorrect because physical paper registration may still be used.
Unattempted
Solution: The correct answer is (c). In the land titles system, regardless of notice, priority of registration prevails. (a) is incorrect because the definition of “instrument” is the same in both. (b) is incorrect because each separately owned piece of land is called a “parcel”. (d) is incorrect because physical paper registration may still be used.
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Question 53 of 80
53. Question
Category: Real Estate53. Melna submitted a $750,000 offer to purchase a home in northern Ontario. To make the offer more competitive, she made the offer unconditional. Shortly after, the seller accepted the offer. Closing for the home was held on April 30, 2022. Prior to closing, she and her lawyer began conducting customary checks of the property, which included hiring a surveyor and conducting a pre-closing inspection, in order to get a sense of whether any repairs were needed prior to moving in. Through this process, they discovered the fence was significantly damaged and wondered if her new neighbour, Clifford, who shares the fence with her, would be willing to split the cost of rebuilding it. Unfortunately, Clifford was not willing to spend any money on the fence. Melna asked her lawyer to take any measures that were possible that would require Clifford to split the cost of the fence. What is the best way for her lawyer to proceed?
Correct
Solution: The best answer is (b). The Line Fences Act can help resolve fencing disputes; however, the Act does not apply if the relevant municipality has already passed a by-law to resolve such disputes. Therefore, the first step would be to inquire into whether the relevant municipality has done just that. Note that (c) and (d) are both not strong answers since the facts state that her offer was made on an unconditional basis. This means she has no entitlement to revoke her purchase (in c), or to require the seller to fix the fence first (d).
Incorrect
Solution: The best answer is (b). The Line Fences Act can help resolve fencing disputes; however, the Act does not apply if the relevant municipality has already passed a by-law to resolve such disputes. Therefore, the first step would be to inquire into whether the relevant municipality has done just that. Note that (c) and (d) are both not strong answers since the facts state that her offer was made on an unconditional basis. This means she has no entitlement to revoke her purchase (in c), or to require the seller to fix the fence first (d).
Unattempted
Solution: The best answer is (b). The Line Fences Act can help resolve fencing disputes; however, the Act does not apply if the relevant municipality has already passed a by-law to resolve such disputes. Therefore, the first step would be to inquire into whether the relevant municipality has done just that. Note that (c) and (d) are both not strong answers since the facts state that her offer was made on an unconditional basis. This means she has no entitlement to revoke her purchase (in c), or to require the seller to fix the fence first (d).
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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). Waste disposal searches are always required for commercial transactions.
Unattempted
Solution: The correct answer is (b). Waste disposal 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, which was amended on April 22, 2021, 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, which was amended on April 22, 2021, 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, which was amended on April 22, 2021, 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. A lawyer is proceeding with an above-guideline rent increase application on behalf of a client. Who must approve the application?
Correct
Solution: According to section 126 of the Residential Tenancies Act, all above-guideline rent increase applications must be approved by the Landlord and Tenant Board. The correct answer is therefore (a).
Incorrect
Solution: According to section 126 of the Residential Tenancies Act, all above-guideline rent increase applications must be approved by the Landlord and Tenant Board. The correct answer is therefore (a).
Unattempted
Solution: According to section 126 of the Residential Tenancies Act, all above-guideline rent increase applications must be approved by the Landlord and Tenant Board. The correct answer is therefore (a).
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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, and the lease is to expire in 2023. In early 2022, 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 client can fulfill its terms. (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; (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 client can fulfill its terms. (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; (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 client can fulfill its terms. (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; (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 2016. The certificate of completion and possession was dated May 2016. In early 2021, 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; same goes for (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; same goes for (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; same goes for (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. What task can a real estate lawyer delegate to a non-lawyer, provided that the non-lawyer performs them under the lawyer’s supervision?
Correct
Solution: (a) is the correct answer. A non-lawyer can advise a client about title insurance or other insurance products, provided it is done under a lawyer’s supervision. See r.6.1-1 and commentary and rr.6.1-5-6.1-6.2 of the Rules of Professional Conduct, as well as By-Law 7.1. For the rest of the options: a non-lawyer cannot do any of these tasks. Please consult the above rules and By-Law 7.1 for more information.
Incorrect
Solution: (a) is the correct answer. A non-lawyer can advise a client about title insurance or other insurance products, provided it is done under a lawyer’s supervision. See r.6.1-1 and commentary and rr.6.1-5-6.1-6.2 of the Rules of Professional Conduct, as well as By-Law 7.1. For the rest of the options: a non-lawyer cannot do any of these tasks. Please consult the above rules and By-Law 7.1 for more information.
Unattempted
Solution: (a) is the correct answer. A non-lawyer can advise a client about title insurance or other insurance products, provided it is done under a lawyer’s supervision. See r.6.1-1 and commentary and rr.6.1-5-6.1-6.2 of the Rules of Professional Conduct, as well as By-Law 7.1. For the rest of the options: a non-lawyer cannot do any of these tasks. Please consult the above rules and By-Law 7.1 for more information.
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Question 61 of 80
61. Question
Category: Real Estate61. The Construction Act is designed to protect which of the following individuals?
Correct
Solution: (c) is the correct answer. The Construction Act is designed to protect those supplying goods and services. (a), (b) and (d) are incorrect. Protections are afforded to these groups through employment laws.
Incorrect
Solution: (c) is the correct answer. The Construction Act is designed to protect those supplying goods and services. (a), (b) and (d) are incorrect. Protections are afforded to these groups through employment laws.
Unattempted
Solution: (c) is the correct answer. The Construction Act is designed to protect those supplying goods and services. (a), (b) and (d) are incorrect. Protections are afforded to these groups through employment laws.
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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). Section 7 of the Land Registration Reform Act provides for the implied covenants, which includes that the charger (Goran) or his successors will insure the buildings on the land as specified in the charge (see section 7(1)(1.)(iv.)). (b) is incorrect; section 7(1)(1.)(ix.) states that upon default of interest payments, the principal shall, at the option of the chargee, become payable. (c) is incorrect; section 7(1)(1.)(v.) provides that upon default, the chargee must first provide notice before taking possession. Finally, (d) is also incorrect as it is not an implied covenant found anywhere in section 7, although 7(1)(1.)(vii.) states that the chargor on default will execute such assurances of the land and do such other acts that are required by the chargee.
Incorrect
Solution: The correct answer is (a). Section 7 of the Land Registration Reform Act provides for the implied covenants, which includes that the charger (Goran) or his successors will insure the buildings on the land as specified in the charge (see section 7(1)(1.)(iv.)). (b) is incorrect; section 7(1)(1.)(ix.) states that upon default of interest payments, the principal shall, at the option of the chargee, become payable. (c) is incorrect; section 7(1)(1.)(v.) provides that upon default, the chargee must first provide notice before taking possession. Finally, (d) is also incorrect as it is not an implied covenant found anywhere in section 7, although 7(1)(1.)(vii.) states that the chargor on default will execute such assurances of the land and do such other acts that are required by the chargee.
Unattempted
Solution: The correct answer is (a). Section 7 of the Land Registration Reform Act provides for the implied covenants, which includes that the charger (Goran) or his successors will insure the buildings on the land as specified in the charge (see section 7(1)(1.)(iv.)). (b) is incorrect; section 7(1)(1.)(ix.) states that upon default of interest payments, the principal shall, at the option of the chargee, become payable. (c) is incorrect; section 7(1)(1.)(v.) provides that upon default, the chargee must first provide notice before taking possession. Finally, (d) is also incorrect as it is not an implied covenant found anywhere in section 7, although 7(1)(1.)(vii.) states that the chargor on default will execute such assurances of the land and do such other acts that are required by the chargee.
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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 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 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 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 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. In order to obtain possession of their rental unit, how much notice must a landlord give to a residential tenant who has committed drug-related illegal acts?
Correct
Solution: According to Sections 61 and 63 of the Residential Tenancies Act, to retain possession of the unit, a landlord must give 10 days of notice to a tenant who has committed drug-related illegal acts. The correct answer choice is therefore (b).
Incorrect
Solution: According to Sections 61 and 63 of the Residential Tenancies Act, to retain possession of the unit, a landlord must give 10 days of notice to a tenant who has committed drug-related illegal acts. The correct answer choice is therefore (b).
Unattempted
Solution: According to Sections 61 and 63 of the Residential Tenancies Act, to retain possession of the unit, a landlord must give 10 days of notice to a tenant who has committed drug-related illegal acts. The correct answer choice is therefore (b).
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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 of maintaining all of its highways, with the exception of one called “Brane Street”. In late 2021, 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. Moritz is in the process of purchasing an apartment unit in Prince Edward County, Ontario. After negotiations, Moritz will also be purchasing various furniture and an exercise machine from the vendor. To ensure the furniture and exercise machine is properly conveyed to Moritz, what document should his lawyer ask the vendor to deliver upon closing?
Correct
Solution: The correct answer is (b). While a bill of sale is no longer required, Moritz’ lawyer should still ask the vendor to deliver one to provide evidence of the chattels that are to be delivered.
Incorrect
Solution: The correct answer is (b). While a bill of sale is no longer required, Moritz’ lawyer should still ask the vendor to deliver one to provide evidence of the chattels that are to be delivered.
Unattempted
Solution: The correct answer is (b). While a bill of sale is no longer required, Moritz’ lawyer should still ask the vendor to deliver one to provide evidence of the chattels that are to be delivered.
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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 enrolled at an Ontario university. In November 2021, he was excited about interviewing with numerous law firms, although anxious about how he would perform in a virtual interview format. During his first interview with ABC LLP, he was interviewed by Tom, a human resources coordinator. Tom began the interview by asking Bogdan if he was single. Taken aback by the question, Bogdan asked for Tom to repeat the question to verify that he heard him correctly. Tom then clarified “I was just wondering, are you married to Marta Babić, one of our associate lawyers? You both have the same last name.” ABC LLP has an anti-nepotism policy, whereby it does not hire individuals who are married or closely related to existing employees. Which of the following is true?
Correct
Solution: The best answer is (c). Tom’s initial question to Bogdan about whether he was single was inappropriate. As noted in section 6.3.1-3 commentary [2] of the Rules of Professional Conduct, an employer should not be asking about an applicant’s martial status. The only exception to this is if the employer has an anti-nepotism policy, as in this case, whereby an employer may choose to not hire individuals if they have a personal relationship to existing employees. (a) is incorrect because Tom can ask “personal questions” in some scenarios, i.e., given that it has an anti-nepotism policy, Tom was permitted to ask whether Bogdan was related to Marta (though his initial, broader question about Bogdan’s relationship status may have been inappropriate). Furthermore, the fact that it was done in a virtual-interview format is irrelevant. (b) is also incorrect as there is no evidence that Tom is a licensee; the fact pattern states that he is a “human resources coordinator”. The Rules only apply to licensees. Finally, (d) is incorrect as firms are allowed to have such a policy (see commentary [2] noted above).
Incorrect
Solution: The best answer is (c). Tom’s initial question to Bogdan about whether he was single was inappropriate. As noted in section 6.3.1-3 commentary [2] of the Rules of Professional Conduct, an employer should not be asking about an applicant’s martial status. The only exception to this is if the employer has an anti-nepotism policy, as in this case, whereby an employer may choose to not hire individuals if they have a personal relationship to existing employees. (a) is incorrect because Tom can ask “personal questions” in some scenarios, i.e., given that it has an anti-nepotism policy, Tom was permitted to ask whether Bogdan was related to Marta (though his initial, broader question about Bogdan’s relationship status may have been inappropriate). Furthermore, the fact that it was done in a virtual-interview format is irrelevant. (b) is also incorrect as there is no evidence that Tom is a licensee; the fact pattern states that he is a “human resources coordinator”. The Rules only apply to licensees. Finally, (d) is incorrect as firms are allowed to have such a policy (see commentary [2] noted above).
Unattempted
Solution: The best answer is (c). Tom’s initial question to Bogdan about whether he was single was inappropriate. As noted in section 6.3.1-3 commentary [2] of the Rules of Professional Conduct, an employer should not be asking about an applicant’s martial status. The only exception to this is if the employer has an anti-nepotism policy, as in this case, whereby an employer may choose to not hire individuals if they have a personal relationship to existing employees. (a) is incorrect because Tom can ask “personal questions” in some scenarios, i.e., given that it has an anti-nepotism policy, Tom was permitted to ask whether Bogdan was related to Marta (though his initial, broader question about Bogdan’s relationship status may have been inappropriate). Furthermore, the fact that it was done in a virtual-interview format is irrelevant. (b) is also incorrect as there is no evidence that Tom is a licensee; the fact pattern states that he is a “human resources coordinator”. The Rules only apply to licensees. Finally, (d) is incorrect as firms are allowed to have such a policy (see commentary [2] noted above).
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Question 72 of 80
72. Question
Category: Real Estate72. Clayton, a lawyer, meets with a prospective client, Diego, on Thursday, December 30, 2021. Diego tells Clayton that he was referred to Clayton 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 client is seeking to close the deal right before a holiday (New Years Day) and at the end of the month, which is often a time fraudsters operate. Third, 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 client is seeking to close the deal right before a holiday (New Years Day) and at the end of the month, which is often a time fraudsters operate. Third, 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 client is seeking to close the deal right before a holiday (New Years Day) and at the end of the month, which is often a time fraudsters operate. Third, 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 2019, 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. In early 2022, 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 his 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 borrower (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 borrower (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 borrower (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 is 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 is 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 is 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).