Solution: The correct answer is (b). According to rule 3.3-1 of the Rules of Professional Conduct, a lawyer at all times shall hold in strict confidence all information concerning the business and affairs of the client acquired, unless otherwise exempted by the rule. In this case, Chiumbo entered information obtained from his client, Burna, into the ChatGPT prompt, which, as per its privacy policy, may now be used by ChatGPT and shared with others. There are no exceptions to the duty of confidentiality that can assist Chiumbo here. Therefore, he has breached his duty of confidentiality. (a) and (c) are incorrect as this is not a conflict of interest issue, but a confidentiality issue.

Solution: According to section 241 of the OBCA, articles of revival should be accompanied by a consent from the Ontario Ministry of Finance. (b) is therefore correct. Note that (a) is incorrect for a couple reasons. First, ABC Corporation has always been a private company, so it is highly unlikely to be subject to the Securities Act, which mainly prescribes rules aimed at public companies. Second, a consent from the commissioner of the OSC is only needed if it specifically failed to file financial statements, and we have no proof that happened here. Therefore, you would need to make an assumption that happened, which makes this a much weaker answer when compared to (b) – which must always accompany the articles of revival. (c) and (d) are incorrect as they are not based on the rules provided in the OBCA.

Solution:  The correct answer is (d). The litigants here are unsecured creditors, and have chosen to recover their outstanding amounts by obtaining a garnishment order. According to the Creditors’ Relief Act, 2010, along with Schedule 4 of the Act, once XYZ Medical Office received the garnishment order, which it intended to fully comply with, it must pay all amounts owed to Grant, up to the maximum amount of the judgment, to the sheriff. (a) is incorrect – this defeats the purpose of the garnishment order. (b) is incorrect – this is only needed if XYZ Medical Office wishes to either contest the garnishment or pays less than the amount stipulated in the notice of garnishment; the fact pattern explicitly says it intends to fully comply with the order, so there is no need for this. Finally, (c) is incorrect because the garnished amounts must be paid to the sheriff, who will then distribute the funds to the creditors.

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.

Solution: The correct answer is (c). A monthly trust comparison must be conducted by the 25^th of every month for trust funds held at the end of the previous month.

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.

Solution: The correct answer is (b). Section 2(1) of By-Law 7 states that law firms that change from a GP to LLP must disclose the nature of the limited liability of the partners to all clients of the firm when the change occurs. (a) is incorrect because it is not necessary to inform past or prospective clients. (c) and (d) have no basis in the By-Law.

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.

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.

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.

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.

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:

1. a business carried on by the corporation where it employs more than five-full time employees throughout the year;
2. a business carried on by a credit union; and
3. 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)).

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.

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.

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.

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.

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.

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).

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.

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.

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.

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, 2022, 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

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.

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).

Solution: The correct answer is (a). Call to Action 27 of the final report of the TRC notes the following: “We call upon the Federation of Law Societies of Canada to ensure that lawyers receive appropriate cultural competency training, which includes the history and legacy of residential schools…”

Answers (b) – (d) have no basis in the final report of the TRC.

Solution: The “connecting factors” test was established by Williams v Canada; the correct answer is therefore (d).

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.

Solution: In using a letter of credit, ABC Corporation will rely not on the buyer’s character or creditworthiness but rather its own bank, which will ultimately confirm the L/C. Therefore, the correct answer choice is (c).

Solution: The FRANK system searches everything filed with the court following April 2008, and any court files before April 2008 that were transferred from the Sustain system to the FRANK System. Results from the FRANK system will not disclose a history of court proceedings, insolvency proceedings that are not commenced with the court, private receiverships and finally, any notices of intention to make a reorganization proposal pursuant to the Bankruptcy and Insolvency Act.
Therefore, the correct answer choice is (a). This is because insolvency proceedings commenced with the court after April 2008 will certainly be covered by FRANK.

Solution: The correct answer choice is (c). A reporting letter, also referred to as a termination or disengagement letter, should be prepared by Chen to complete the matter. Note that (a) is incorrect as the fact pattern states Chen has finished advising ABC Corporation; (b) is incorrect since this is to be prepared when a lawyer is to confirm that they do not wish to advise a client; and (d) is not stipulated anywhere in the Rules of Professional Conduct.

Solution: According to section 53(1) of the Substitute Decisions Act, a power of attorney for personal care is terminated when the grantor (Jonah) executes a new power of attorney for personal care, unless the grantor provides that there shall be multiple powers of attorney for personal care. Therefore, depending on the circumstances (i.e., if Jonah has said that there shall be multiple attorneys for his personal care), all three may be attorneys. This is why (b) is correct. (a) is incorrect; it cannot be said that this is true with certainty as it would require the assumption that Jonah did not provide that there shall be multiple powers of attorney for personal care, which is not based off any of the facts in the question stem. (c) is incorrect as it then ignores the new power of attorney; and finally, (d) is incorrect. There is not necessarily a conflict; both can exist if Jonah provides such, or if he didn’t, then the old one would be terminated in favour of the new one.

Solution:  The correct answer is (b). Given the personal relationship that is involved here, the conflict of interest rules in 3.4-1 and 3.4-2 of the Rules of Professional Conduct are relevant here. A conflict clearly exists, but she would still be permitted to act in accordance with r. 3.4-2 if  she receives her father’s fully informed and voluntary consent. (a) is incorrect because, as mentioned previously, she should not act without his fully informed and voluntary consent. (c) may be true, as she was recently called to the bar. A lawyer who is not competent to take on a matter must follow the steps outlined in section 3.1-2 and its commentary, which may include obtaining the clients’ consent to act. However, note here that we would simply be making an assumption Tamika is incompetent merely because she was recently called. She may indeed be competent or capable to take on the matter (i.e. perhaps she worked on such trusts extensively during her articling/LPP term). Therefore, this is a weaker answer than (b) – since with (b) we know, and need not assume, that a clear conflict exists here with her father.  (d) is ideal (though not required); advising her father of the clear conflict should be the priority here.

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; therefore, it would be misleading for Marina to advise Raphael that he is only able to purchase the vehicle if the court approves of the purchase.

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.

Solution: The best answer is (a). Given Rocco is a former member of the Canadian Armed Forces, inquiring with Director Canadian Forces Pension Services is something the trustee will likely have to do to determine if there are any pensions that are payable. (b) is incorrect as a valuation should be conducted before selling the business; (c) is incorrect as it should say “for the appointment of an estate trustee with a will.” (d) is inappropriate at this time; Rocco just died and the pre-taking of fees by an estate trustee is generally prohibited.

Solution: The correct answer is (d). 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 one child, one-half goes to the surviving spouse, and one-half goes to the one child.
Applied to the facts here, Riley’s estate exceeds $75,000. Therefore, Marissa gets a preferential share of $75,000, plus one half of the remaining estate (given they had one child), being $100,000 ($275,000 – $75,000 = $200,000; $200,000 / 2 = $100,000). Markus is also entitled to $100,000. Therefore, Marissa gets a total of $75,000 + $100,000 = $175,000 and Markus is entitled to $100,000 overall. Riley’s mother, Tianna, does not get any of the proceeds. According to section 48(5) of the Indian Act, the parents of the deceased only get the proceeds of the estate where the deceased left no surviving spouse or issue (i.e., children). However, this is not the case, as Riley is survived by Marissa and his child, Markus. Therefore, the correct answer is (d) – Tianna is not entitled to any proceeds of the estate.

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.

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.

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.

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.

Solution: The correct answer is (c). According to section 1.1 of the Rules of Professional Conduct, a “licensee” includes a lawyer or paralegal. Note the fact that the lawyer was a judge of the Superior Court of Justice three years ago does not change the answer – they are still a licensee. Rules 7.7-1.3 and 7.7-1.4 do apply, but these merely say that lawyers who were judges of the Superior Court of Justice (among other courts) must not appear as counsel or advocates before the Superior Court of Justice or before any administrative board or tribunal over which the Superior Court of Justice exercised an appellate or judicial review jurisdiction for a period of three years from the date of their resignation, retirement or removal without the approval of the Hearing Division of the Law Society Tribunal. This does not change the fact that the lawyer remains a licensee.

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).

Solution: The correct answer is (C). According to section 57 of the Succession Law Reform Act, a dependant must include a spouse, parent, child or sibling of the deceased. A “spouse” includes a former spouse and a common-law spouse with whom the deceased was co-habiting continuously for a period of at least three years or whom the deceased was in a relationship of some permanence if they are the natural or adoptive parents of a child. This means that while Asana, as his former spouse, would be a dependant, Bonnie would not be, given they lived together for less than three years and did not have children. Furthermore, a “child” includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of their family, other than a foster child. This means Caitlyn and Daisy, as his grandchildren, would be included, though Zachary, as his foster child, would not be. Finally, his older cousin, Ed, would not be eligible as a dependant. Overall, this means that Asana, Caitlyn and Daisy are eligible to make a dependant support claim, provided that it is shown that Shaun provided support or was under a legal obligation to provide support to them prior to his death.

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.

Solution: The correct answer is (b) – 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 assets that the tax would apply to would be her friend’s $700,000 home in Brantford, Ontario, along with the $50,000 vehicle (for a total of $750,000 in assets). The first $50,000 is exempt, which leaves the value of the estate at $750,000 – $50,000 = $700,000. 1.5% of $700,000 is $10,500.

Solution: According to rule 75.1.05(2) of the Rules of Civil Procedure, the correct answer is (c) – 30 days.

Solution: (d) is the correct answer. Furs held by the lawyer should be included in the valuable property record. (a) and (b) are incorrect since items that cannot be sold or negotiated should not be included in the valuable property record. (c) is incorrect since money should not be included in the valuable property record. See the Law Society of Ontario’s Bookkeeping Guide for Lawyers for more information.

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.

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).

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).

Solution:  The correct answer is (c). According to rule 3.4-15 of the Rules of Professional Conduct, when a lawyer acts for both the borrower and lender, as in this case, they must disclose to the borrower and lender, in writing, before the release of funds, all material information that is relevant to the transaction. Commentary [1] of rule 3.4-15 adds that the duty to disclose arises even if the lender or borrower do not ask for the specific information. (c) is correct because it best summarizes the above, as important has a similar meaning to material. (a) is incorrect because it does not need to be expressly sought out by ABC Bank. (b) and (d) are incorrect because it is too broad in saying “any information”; it should only be any material (or important) information.

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.

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).

Solution: The correct answer is (b). Waste disposal searches are always required for commercial transactions.

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.

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).  

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.

Solution: The correct answer is (d).  According to rule 7.2-11 of the Rules of Professional Conduct, a lawyer shall not give an undertaking that cannot be fulfilled. Therefore, before proceeding with the undertaking on behalf of her client, she should ensure that the terms of the undertaking can be fulfilled. (a) is incorrect; if Anissa clearly indicates that it is on behalf of the client and without personal liability, she will not be expected to honour it personally. The question stem does not specify what is actually stated in the undertaking itself, so this leaves open the possibility that she may not be expected to honour the undertaking personally, making (a) incorrect; (b) is incorrect, as the undertaking shall be in writing (r. 7.2-11, commentary [1]). (c) is incorrect as merely indicating the undertaking is on behalf of the client will not relieve her of personal liability; she must say more than that, i.e. that it is “without personal liability” as well (see 7.2-11, commentary [1]).

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.

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.

Solution: The correct answer is (b). According to section 2 of the Construction Act, Substantial performance is when a project is ready to be used and the remaining work will cost no more than 3% of the first $1,000,000 of the contract price, 2% of the next $1,000,000 of the contract price and 1% of the balance.

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.

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.

Solution: The correct answer is (c). The Criminal Code is engaged when the interest rate is found to be criminal (i.e. in excess of 60% per annum, see s. 347 of the Code) .

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.

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.

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.

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.

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.

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.

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).

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.

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.

Solution: Conveyancing requisitions may be submitted up to the completion of the transaction. The correct answer is therefore (d).

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.

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.

Solution: When acting in a joint retainer between a borrower and lender, according to r.3.4-12 – 3.4-16, the lawyer does not need to advise the lender (XYZ Bank in this case) of the nature of the joint retainer, the fact that conflicts may arise as a result of the joint retainer, or recommend that the bank receive independent legal advice. They are sophisticated, and it is assumed they know the risks involved. However, the lawyer must still advise the borrower (Marissa in this case) of the standard issues in a joint retainer, i.e., how conflicts may develop, that they should receive independent legal advice, etc. Therefore, the correct answer choice is (c).

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.

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.

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).