Solicitor Mini-Exam C - Questions

Business Law 

1. Maya is the director of a company undergoing a restructuring under the BIA. As part of the restructuring, the company has proposed to its creditors a compromise that includes partial repayment of outstanding debts and forgiveness of interest. The proposal is accepted by the required majority of creditors and is submitted to the court for approval. However, Maya is concerned because the proposal does not provide for payment of outstanding source deductions owed to the Canada Revenue Agency. The trustee warns that this omission could result in the court refusing to sanction the proposal.

How should the court respond to a restructuring proposal that excludes full payment of source deductions?

A) The court is required to reject the proposal unless it includes payment in full of amounts deemed held in trust under the Income Tax Act, including source deductions.

B) The court is permitted to approve the proposal if a majority of unsecured creditors vote in favour and no objections are raised.

C) CRA is entitled to assert a deemed trust over unpaid deductions but may still participate in the proposal process.

D) The court is allowed to delay its decision pending evidence that source deductions will be paid through a parallel arrangement.

2. Evelyn, a monitor in a complex CCAA proceeding, receives a draft plan of arrangement that proposes to release several third-party lenders, advisors, and former directors from all claims relating to the restructuring. A number of creditors object to the inclusion of these releases, arguing they are overbroad and not essential to the plan. Evelyn advises the court that the releases are part of the consideration provided by stakeholders who are contributing DIP financing and new capital. The court must now determine whether the releases are appropriate and lawful.

How should the court assess the permissibility of third-party releases included in a proposed CCAA plan of arrangement?

A) Third-party releases must be reasonably connected to the restructuring, necessary for its success, and supported by affected stakeholders.

B) Releases may only be granted if the parties being released are secured creditors contributing financially to the plan.

C) The CCAA allows releases only for directors, unless creditors unanimously consent to broader relief.

D) Third-party releases are valid only where the claims arise from post-filing actions taken in good faith to support restructuring.

3. Sienna is purchasing shares in a private manufacturing corporation that owns a warehouse, equipment, and intellectual property. To secure payment of a vendor take-back loan, the vendor demands a pledge of the shares and an instrument of transfer endorsed in blank. Sienna’s lawyer mentions this may be insufficient if not perfected correctly. The vendor also wants backup security over corporate assets.

What is the best way to perfect a security interest in shares in this context?

A) Registering the share purchase agreement with Corporations Canada to create a public record of the security interest.

B) Taking possession of the share certificates along with a signed instrument of transfer to perfect the pledge under the PPSA and Securities Transfer Act.

C) Registering a Uniform Commercial Code financing statement in the U.S. jurisdiction where the vendor resides.

D) Filing the share pledge and transfer documents with the Ontario Securities Commission for regulatory compliance.

4. Priya is incorporating a small OBCA corporation with her business partner. They plan to raise funds privately and want to avoid the prospectus and registration requirements under securities law. Their lawyer explains that they may qualify as a private issuer under National Instrument 45-106. However, to maintain this status, their articles must include certain provisions. Priya wants to ensure the corporate structure complies with this exemption.

What provision must be included in the corporation’s articles to qualify as a private issuer?

A) A restriction on directors from issuing shares without unanimous approval.

B) A restriction on the transfer of shares requiring board or shareholder approval.

C) A minimum share capital contribution of $10,000.

D) A clause limiting the corporation’s operations to Ontario.

5. Francois is finalizing the asset purchase of a commercial real estate company in Ontario. The seller’s lawyer warns him that the transaction may attract both HST and land transfer tax (LTT) unless a joint election is filed. Francois is unfamiliar with the mechanics of such an election. His counsel explains the eligibility criteria and filing procedure under section 167 of the Excise Tax Act.

Which of the following best describes a key requirement to elect under section 167 to avoid HST?

What condition must be met to elect under section 167 and avoid HST on the asset sale?

A) The vendor must be a public corporation whose shares are actively traded on a Canadian stock exchange.

B) The election is only available where the transfer involves shares rather than a direct sale of business assets.

C) The vendor must have claimed input tax credits for the transferred assets during the prior fiscal year.

D) The purchaser must be registered for HST, and the assets transferred must constitute all or substantially all of the property necessary to carry on the business.

6. Ryan is a minority shareholder in a corporation with a USA in place that restricts director powers. The USA gives shareholders decision-making authority over the corporation’s borrowing and compensation policies. After the corporation fails to pay employee wages, CRA assesses Ryan personally under director liability provisions. Ryan argues he was only a shareholder, not a director, and therefore cannot be liable.

How should Ryan’s personal liability be assessed under the OBCA in light of the USA?

A) Shareholders are not subject to director-level liabilities even if they are granted decision-making powers by a USA.

B)  Ryan can only be held liable for unpaid wages if he signed a personal guarantee covering employee entitlements.

C)  Ryan may be deemed to have director liability to the extent the USA gives him equivalent powers.

D) Only majority shareholders are exposed to statutory director liabilities under a USA restricting board authority.

7. Anna is a shareholder in an OBCA corporation and discovers that another shareholder has pledged their shares as security for a personal loan without notifying anyone. The shareholder agreement contains a clause prohibiting share transfers or encumbrances without board approval. Anna raises the issue at the next shareholder meeting, concerned that the action violates the agreement and affects control of the company.

What is the legal effect of pledging shares in breach of a shareholder agreement?

A) Shareholders are entitled to pledge their shares unless such restrictions appear in the articles or bylaws.

B) Encumbering shares does not require board consent unless the pledge is disclosed and registered with the corporate records.

C) Pledging shares without approval violates the shareholder agreement and may be void or unenforceable.

D) Only directors have standing to challenge improper pledges made by individual shareholders.

8. Isaiah receives notice that his financial services provider experienced a cybersecurity breach affecting thousands of clients. The company confirms that customer contact information and bank account numbers were involved. Isaiah asks if the company is required to notify the Privacy Commissioner and clients under PIPEDA. The firm’s in-house counsel refers to the 2018 amendments on breach notification and begins assessing the risk of harm.

What legal obligation applies to organizations under PIPEDA when personal data has been compromised?

A) Notification is not required unless there is evidence of criminal activity such as fraud or intentional hacking.

B) If the breach creates a real risk of significant harm, the organization must notify the Commissioner and affected individuals.

C) Notification is only required when the information at issue could lead to identity theft or financial loss.

D) Organizations must maintain internal records of all data breaches but have no duty to report unless compelled by regulators.

9. Samantha incorporated her consulting practice and provides services through her corporation to a single client. She works onsite at the client’s office, uses their equipment, and follows their schedule. She has no employees and performs all the work herself. CRA conducts a review and concludes that Samantha’s corporation may be earning personal services business (PSB) income. The corporation had been claiming the SBD and deducting business expenses as if it earned ABI. Samantha is concerned about the potential tax consequences of the reclassification.

What is the tax treatment of PSB income in Samantha’s circumstances?

A) She will still be eligible for the small business deduction because the corporation is properly registered.

B) PSB income qualifies for the lifetime capital gains exemption if Samantha later sells the corporation.

C) PSB income is taxed at a higher corporate rate and disallows many standard deductions.

D) The PSB rules apply only where the client reports income on a T4 and do not apply to T4A contractors.

10.  Fatima is finalizing a legal opinion confirming that a CBCA corporation is a validly existing corporation in good standing. She obtains a certificate of compliance from Corporations Canada and includes the incorporation date and current filing status. The lender asks whether she can opine that the corporation is in “good standing.” Fatima is unsure whether this phrase is appropriate under Canadian corporate law and reviews relevant practice guidelines.

What is the proper way to express a corporation’s legal status in a Canadian legal opinion?

A) “Good standing” is standard terminology in federal corporate opinions and reflects full compliance with all statutory obligations.

B) The opinion should state that the corporation is “duly organized and existing” under the CBCA, as this encompasses both legal formation and active status.

C) The opinion should confirm that the corporation “has not been dissolved” based on the certificate of compliance issued by Corporations Canada.

D) “Good standing” and “active” are equivalent under federal corporate law and may be used interchangeably in formal opinions.

11. Nina is the executor of an estate where the deceased failed to file tax returns for the last three years of life. CRA contacts her and insists that she must now file the outstanding returns. Nina believes she is not liable because the estate had no assets to distribute and she never received any compensation for acting as executor. She seeks legal advice on whether she has an obligation to file.

What obligation does Nina have as legal representative of the deceased under the Income Tax Act?

A) Nina has no filing obligation unless she received property or compensation from the estate.

B) Legal representatives are required to file outstanding tax returns for deceased individuals.

C) CRA must seek court authorization before holding an executor liable for prior-year returns.

D) A tax return is required only if the deceased owed income tax in the year of death.

12. A First Nation owns 100% of a corporation that provides essential services to its members. The CRA audits the corporation and finds it has significant taxable income. The First Nation argues that the corporation should be exempt under the Indian Act. The CRA responds that corporations are not “Indians” for purposes of the Act. The band seeks a tax ruling based on section 149(1)(d.5) of the ITA.

How should the corporation’s tax-exempt status be properly assessed?

A) All corporations owned by Indigenous communities are automatically exempt under the Indian Act.

B) Corporations are not exempt under the Indian Act but may qualify for exemption under the ITA if they meet the s. 149(1)(d.5) test.

C) A corporation is exempt only if it operates from reserve lands and serves only on-reserve clients.

D) The existence of election bylaws granting the band municipal authority determines whether the corporation is tax-exempt.

13. Vanessa, a band member, applies for a mortgage to build a home on-reserve. The bank refuses her application, citing concerns about enforcement of security on reserve lands. Vanessa offers to assign her Certificate of Possession as collateral. The band proposes to act as guarantor and take temporary ownership of the land until the loan is repaid. The bank reconsiders but seeks legal assurance.

How can lenders lawfully secure residential loans on reserve lands under the Indian Act?

A) Although banks may not register mortgages directly, they often rely on band guarantees and interim land transfers to comply with Indian Act restrictions.

B)  Since the Crown holds legal title to reserve land, banks typically require co-signature from a federal officer before lending to Indigenous borrowers.

C) A band member can freely mortgage their Certificate of Possession as long as the land is not being leased to non-members.

D) The Indian Act allows mortgage registration on reserve land if the borrower provides written consent and the band council approves the use of land.

14. Gina is a director of an OBCA corporation who is sued in her personal capacity after the corporation defaults on a contract. She argues that she acted solely as a director and that the claim should be brought against the corporation, not her personally. The plaintiff insists that Gina personally guaranteed the contract, although there is no written guarantee. Gina asks whether the corporation may indemnify her for legal costs associated with defending the claim.

When is Gina entitled to indemnification by the corporation under the OBCA?

A) Gina cannot be indemnified unless she wins the case outright and the judgment confirms she acted properly.

B) Indemnification is automatic under the OBCA for directors involved in any legal proceeding.

C) Gina may be indemnified if she acted in good faith and in the best interests of the corporation.

D) Indemnification is only available to employees and officers, not directors of an OBCA corporation.

15.  Leo is a sole proprietor operating a plumbing business from his home on a reserve. To reduce his tax liability, he ensures that all administrative and operational functions of his business are conducted on-reserve. He delivers services both on and off-reserve and keeps all records, inventory, and equipment on-reserve. CRA audits him and challenges the tax exemption on the basis that some customers are located off-reserve.

How should Leo’s claim for tax exemption be evaluated under the Indian Act?

A) Business income is exempt only if the entirety of the customer base and service delivery occurs on-reserve.

B) Business owners must be formally registered with the band council to qualify for income tax exemption.

C) Income may be exempt if sufficient connecting factors tie the business to the reserve.

D) Service-based businesses are excluded from the exemption unless the work is conducted exclusively on-reserve land.

16. Marcus operates a small business and obtains financing from a private lender who takes a security interest in his equipment. The lender properly registers under the PPSA. Later, Marcus sells some of the equipment in the ordinary course of business to a third-party buyer. The buyer is unaware of the lender’s interest and pays fair market value. Marcus defaults on the loan, and the lender demands return of the equipment from the buyer.

What is the legal effect of the sale on the buyer’s interest in the equipment?

A) The buyer must return the equipment because it was transferred subject to a valid, perfected security interest.

B) The buyer takes the equipment free of the security interest because it was sold in the ordinary course of business.

C) The buyer is liable only if the security interest was registered under a federal registry covering movable assets.

D) The lender may recover the equipment only if the buyer paid less than fair market value at the time of sale.

Case 1

Fatima and Jacob operated a small landscaping business as an unregistered general partnership for four years. They recently decided to incorporate as "Green Earth Landscaping Inc." under the Ontario Business Corporations Act (OBCA), with Fatima as the sole director and both partners holding equal shares. Without seeking legal advice, they failed to dissolve the original partnership formally. A few months later, the corporation entered into a loan agreement with Riverside Bank, pledging its assets as security. Fatima signed the agreement without a directors' resolution or shareholder approval. The lender requested a legal opinion before advancing the funds, and counsel conducted corporate profile and PPSA searches but overlooked partnership name searches. A dispute then arose when a former supplier obtained a judgment against the old partnership and filed a writ of execution. The bank now questions whether the security interest is valid and enforceable.

Questions 17 to 20 refer to Case 1 

17. How does the failure to dissolve the original general partnership affect liability?

A) The supplier may pursue the partnership’s assets and both Fatima and Jacob personally.

B) The supplier’s judgment is void because the business is now a corporation.

C) Only the corporation is liable for debts if it continued the business without formal notice.

D) Fatima is solely liable since she is the corporation’s only director.

18. What is the effect of Fatima signing the loan agreement without a directors' resolution?

A) The agreement may be enforceable if she had ostensible authority to bind the corporation.

B) The loan is invalid due to lack of corporate approval under the OBCA.

C) The agreement is void unless ratified by both shareholders.

D) Only Jacob can enforce the agreement against the corporation.

19. What was the consequence of omitting a partnership name search before providing the legal opinion?

A) Only active registrations under the new corporation’s name are legally relevant.

B) The search was unnecessary because the partnership had ceased operations.

C) The opinion is unaffected if PPSA and corporate searches were clear.

D)  The omission risks overlooking outstanding claims enforceable against former partners.

20. Is Riverside Bank’s security interest enforceable based on the legal opinion and searches conducted?

A)  It is enforceable only if the corporation’s shares were pledged as collateral.

B) It is unenforceable because the opinion failed to confirm share capital structure.

C) It is likely enforceable, but subject to defects arising from omitted searches or internal authority issues.

D) It is automatically unenforceable due to the ongoing supplier litigation.

Estate Planning 

1. Elaine is drafting wills for a couple with two young children. The couple intends to appoint different individuals to be estate trustee and to assume decision-making responsibility for the children. Elaine advises them that coordination between these roles will be crucial if both parents die. The couple asks whether they should also prepare a letter of wishes. Elaine explains that while such letters are not legally binding, they are often helpful in guiding decision-making by both the trustee and the person with responsibility for the children.

What is the legal role of a letter of wishes in the estate planning process for parents of minor children?

A) A letter of wishes is not binding but may guide appointed guardians and estate trustees on how the parents would have approached specific matters affecting the children.

B) A letter of wishes must be formally filed with the court and approved before it can influence estate administration.

C) Letters of wishes legally override will provisions if signed contemporaneously with the testamentary documents.

D) The Children’s Law Reform Act bars estate trustees from relying on private, informal instructions such as a letter of wishes.

2. Lucas is the trustee of a trust established by will for the benefit of the testator’s grandchildren. The trust deed is silent on the timing of distributions. On the 21st anniversary of the trust’s creation, CRA assesses the trust for a large capital gain on deemed disposition. Lucas argues that the gain is premature and should only apply upon actual sale of the property.

How should the 21-year deemed disposition rule apply to Lucas’s trust?

A) Capital gains tax liability only arises when trust property is sold, not upon arbitrary anniversaries.

B) The CRA must obtain court approval before it can impose a deemed disposition on trust assets.

C) The trust is deemed to dispose of its capital property every 21 years, even if no sale occurs, unless a rollover or distribution applies.

D) Testamentary trusts are categorically excluded from the 21-year deemed disposition rule under current tax legislation.

3.  Neil dies intestate, survived by his common-law spouse of 16 years and a child from a previous relationship. The estate consists of a home, savings, and a pension plan. His spouse, Melissa, was financially dependent and is considering a claim for support. The child is already administering the estate and disputes Melissa’s entitlement.

How should Melissa proceed to assert her rights in Neil’s estate?

A) She may attempt to invalidate the intestacy and assert a claim to one-half of the estate as if she were a married spouse.

B) She may seek a preferential share of the estate on the basis of long-term cohabitation under the Succession Law Reform Act.

C) She may pursue a dependant support claim under s. 57 of the SLRA and also seek appointment as estate trustee under s. 29 of the Estates Act.

D) She may seek to set aside the intestacy distribution by arguing that the house was held by Neil in resulting trust for her benefit.

4. Julian is seeking appointment as guardian of property for his father under the summary disposition procedure. The family physician conducts a capacity assessment and completes the prescribed Form A. However, the assessment is dated seven months before the application is issued. The registrar declines to submit the matter to the judge.

Why was Julian’s application for guardianship of property deficient?

A) The capacity assessor omitted statutory references required to support a summary disposition under the Substitute Decisions Act.

B) The assessment was prepared by a physician who was not licensed to practice medicine in Ontario under the Health Professions Act.

C)  The application was not filed within 30 days of the assessor signing Form A, as required for summary proceedings under the rules.

D) The capacity assessment was completed more than six months before the application, rendering it invalid under the SDA.

5. After the expiry of the six-month period following her husband’s death, Farah discovers she would have received significantly more by making an equalization claim than under the will. She applies for an extension under s. 2(8) of the FLA, arguing she was unaware of the time limit. The estate trustee opposes the application, saying Farah had legal advice and failed to act diligently.

What factor will the court consider in deciding whether to grant Farah an extension under the FLA?

A) Whether the will includes a no-contest clause that would penalize Farah for electing under the FLA.

B) Whether Farah acted with reasonable diligence and whether the estate would be prejudiced by her delayed claim.

C) Whether the six-month limitation period in s. 2(8) of the FLA is considered mandatory or merely directory by the court.

D) Whether Farah can demonstrate that the estate trustee intentionally withheld information about her legal entitlements.

6. Joanne drafts a will that includes a large bequest of $100,000 “to my cousin Amanda.” Joanne dies in 2023, but Amanda had predeceased her in 2022, leaving a surviving husband and two children. Joanne’s will does not specify a gift-over clause or any intention regarding lapse. Amanda’s children now claim the legacy, while the estate trustee considers it lapsed.

How should the bequest to Amanda be treated under Ontario’s anti-lapse rule in the SLRA?

A) The bequest lapses and is added to the residue unless the will specifically names Amanda’s children as substitute beneficiaries.

B) The gift fails entirely because Amanda died before Joanne and was not alive to accept the bequest.

C) The children are entitled to the legacy based on the presumption of advancement recognized in Pecore v. Pecore.

D) The bequest passes to Amanda’s children under s. 31 of the SLRA, unless the will reveals an intention that the gift lapse.

7. Alistair and Dana, parents of two minor children, die in a boating accident. In their separate wills, they each name different individuals to assume decision-making responsibility for their children. Neither will includes a coordinated appointment, and the appointed persons are in conflict. Meanwhile, the maternal grandparents file a s. 21 application under the CLRA to be appointed as guardians. The court must now weigh the parents’ testamentary wishes against competing live applications.

How should the court approach the conflicting guardianship claims in this situation?

A) The court must consider the best interests of the children and may disregard testamentary appointments under s. 61(8) of the CLRA.

B) The court must give effect to the most recent testamentary appointment unless both appointees are found to be unfit.

C) The court may treat the testamentary appointments as persuasive but is not bound to follow them if better evidence supports another arrangement.

D) The court lacks discretion to override parental wishes unless the named guardians waive their entitlement.

8. Jessica is retained by a client to prepare a continuing power of attorney for property. The client wishes to restrict the authority of the attorney so that it only becomes effective upon medical confirmation of incapacity. Jessica drafts the condition but fails to specify how incapacity is to be determined. Later, when the client becomes unavailable, the attorney is unable to activate their authority because the financial institution refuses to recognize the condition.

What drafting mistake did Jessica most clearly make?

A) She failed to notarize the continuing power of attorney.

B) She failed to establish a clear and specific mechanism to determine incapacity.

C) She failed to appoint multiple attorneys acting jointly.

D) She failed to register the power of attorney with the court.

9. Olivia cohabits with Martin for five years. He is divorced with two adult children and owns substantial real estate. He dies suddenly without a will. Olivia receives no property under intestacy. She asserts a claim for quantum meruit, citing her unpaid labour maintaining Martin’s properties and assisting with his rental business.

What must Olivia establish to succeed in her quantum meruit claim?

A) That she and Martin had a mutual intention to share income from the rental properties during their cohabitation.

B) That her efforts supported Martin’s property interests in a way that justifies a constructive trust over specific real estate assets.

C) That her services were measurable and performed with a reasonable expectation of compensation at the time they were rendered.

D) That an enforceable contract or written agreement for payment existed prior to Martin’s death, outlining the terms of her compensation.

10. George was named as estate trustee under his late father's will. After locating the will, George immediately began liquidating some of the estate’s assets without first contacting the lawyer who had drafted the will. During this process, George realized that some decisions, like selling the family cottage, involved discretion not specifically delegated to an agent. George later asked the estate lawyer whether he could delegate decision-making authority to his financial advisor.

What limitations apply to George’s ability to delegate estate trustee responsibilities under Ontario law?

A) He may delegate full authority over all estate administration decisions to a financial advisor of his choosing.

B) He must personally handle discretionary decisions and may delegate only routine administrative functions.

C) He is obligated to appoint a licensed investment professional to handle all estate asset transactions.

D) He may delegate his powers only if the beneficiaries unanimously agree in writing to the arrangement.

11. Selina, acting under a valid power of attorney for personal care, refuses consent for her mother’s admission to a psychiatric facility. The attending physician believes the admission is urgently needed to treat a severe mental disorder. The hospital reviews the power of attorney and finds that it lacks the required provision under the SDA to use force. The facility now seeks direction about how to proceed.

What is the legal effect of the power of attorney lacking express authority to consent to the use of force?

A) The hospital must seek a second opinion from another qualified physician before proceeding.

B) The attorney cannot authorize involuntary psychiatric admission using force without express authority in the document.

C) The power of attorney is rendered invalid and ceases to have legal effect under the SDA.

D) The hospital must apply to the Consent and Capacity Board for advance authorization of the use of force.

12. A will leaves a minor’s inheritance to the child’s parent “to be used for her benefit,” with no further provisions. The amount is $100,000, and no guardianship order is in place. The Office of the Children’s Lawyer becomes involved and questions the estate trustee’s decision to pay funds directly to the parent. The estate trustee insists that the will permits it and that the parent is trustworthy. However, there is concern about whether the trustee may be liable for breach of trust.

What is the safest course of action to minimize the estate trustee’s liability?

A) Apply for the parent to be appointed as a special trustee for the minor, giving rise to fiduciary duties and limiting the trustee’s risk.

B) Pay the funds into court under the Rules of Civil Procedure and require the parent to bring an application under s. 47 of the CLRA for release.

C) Retain the funds indefinitely in a high-interest trust account until the minor reaches the age of majority or a court order is obtained.

D) Distribute only what is deemed immediately necessary for the child’s shelter, food, and clothing, and hold the rest until further instruction is received.

13. Monique assists a client in preparing a power of attorney for personal care. The client insists that their best friend, a nurse at their long-term care home, serve as attorney. Monique proceeds without checking the legal eligibility of the attorney. After the client’s incapacity, the appointment is challenged and found invalid.

Why was the appointment of the best friend as attorney for personal care legally invalid?

A) The attorney was ineligible because they were not a Canadian citizen at the time of execution.

B) The attorney was disqualified because they had not yet reached the age of majority in Ontario.

C) The attorney was a compensated caregiver and not a spouse or relative, making them legally ineligible.

D) The attorney was ordinarily resident outside of Ontario and therefore could not act under the appointment.

14. Leo, a widower, owned a family cottage and a downtown condominium, both of which had appreciated significantly in value. Upon his death, both properties were transferred to his only son under the terms of his will. Leo had lived primarily at the condominium but spent summers at the cottage. His executor now faces the decision of which property should be designated as the principal residence for tax purposes. The executor noted that the cottage had appreciated much more than the condo. 

How should the executor apply the principal residence exemption in this scenario?

A) Designate both properties as principal residences, since Leo used each personally during the years of ownership.

B) Designate the property with the highest accrued capital gain to minimize the tax burden on the estate.

C) Designate the condominium, as Leo lived there most of the year and it best fits the definition of a primary residence.

D) Designate the property preferred by the beneficiary, since the exemption can follow the recipient's intentions after death.

15.  Samantha established a trust during her lifetime to provide for her adult daughter who struggles with managing finances. The trust document explicitly stated that Samantha would retain the right to direct how the trust income and capital were distributed. Samantha also appointed herself as the sole trustee. Several years later, Samantha passed away, and CRA reviewed the trust for compliance. 

What is the tax consequence of Samantha retaining control over the trust’s income and capital during her lifetime?

A) The trust would be disregarded as a separate taxpayer and its income fully included in Samantha’s personal return.

B) Section 75(2) attribution rules would apply, causing income and gains to be taxed in Samantha’s hands.

C) The trust would trigger a deemed disposition of its property at inception, immediately realizing capital gains.

D) The trust would be ineligible for the flat top rate and taxed at lower individual marginal rates.

16. Oliver passed away in Toronto in early November, leaving behind a substantial investment portfolio consisting of shares he purchased decades ago for a nominal cost. The shares had appreciated significantly in value by the date of his death. His will directed that the portfolio be distributed equally between his two adult children. Oliver’s executor, Emily, was concerned about how to report the value of the shares and whether any tax was immediately triggered by the inheritance. Emily also realized that there were limited liquid assets in the estate to pay any immediate taxes. She wondered whether the shares themselves could be transferred without any deemed sale for tax purposes. 

How are the capital gains on Oliver’s appreciated shares treated for tax purposes upon his death?

A) The shares pass to the beneficiaries without tax consequences, and the children inherit Oliver’s original adjusted cost base.

B) The estate does not report capital gains because Canada does not impose estate tax or succession duties at death.

C) The children will pay tax on the accrued gains only when they decide to sell the shares in the future.

D) The shares are deemed disposed of at fair market value immediately before death, and the estate must report the capital gain on Oliver’s final return.

Case 2

Isabelle lived with her common-law partner, Malcolm, for 22 years in a jointly owned Toronto home. Malcolm died in March 2025 with no will. At the time of his death, his estate included a fully taxable RRIF, several mutual funds, and a cottage he inherited from his parents. Malcolm’s two adult children from a prior relationship began administering the estate without probate and immediately listed the Toronto home for sale. Isabelle had contributed to the mortgage and renovations over many years but held no title interest. She filed a claim under the Succession Law Reform Act (SLRA) for dependant support and a constructive trust, and requested an interim preservation order. She also challenged the children’s actions as intermeddling and raised concerns about unreported income from Malcolm’s rental property. Malcolm’s accountant had not yet filed the T1 terminal return. Before his death, Malcolm had created a bare trust for the cottage, naming his son as trustee and beneficial owner “only upon my passing.”

Questions 17 to 20 refer to Case 2

17. What legal remedy should Isabelle pursue to secure her interest in the jointly occupied Toronto home?

A) A claim for constructive trust based on unjust enrichment and contribution to property value.

B) A statutory equalization claim under the Family Law Act as a surviving spouse.

C) A motion for vesting order to transfer title based on occupancy rights.

D) An application under the Estates Act to revoke the children’s right to administer the estate.

18. What is the tax consequence of Malcolm’s death in respect of the RRIF and mutual funds?

A) The full fair market value of the RRIF and funds is included in Malcolm’s terminal return unless rolled over.

B) No tax arises until the children liquidate the assets.

C) The RRIF is exempt from tax if Malcolm named his children as beneficiaries.

D) Only gains accrued after death are included in the estate’s income.

19. What is the legal effect of the “bare trust” created for the cottage?

A) The trust has no effect unless Malcolm executed a separate transfer deed before death.

B) The cottage automatically passes outside the estate as a trust asset.

C) The son becomes absolute owner only if Malcolm registered the trust.

D) The trust is invalid unless witnessed by two independent parties.

20. What procedural tool best protects Isabelle’s claims during pending litigation?

A) An interim preservation order to prevent dissipation of estate assets.

B) A cease-and-desist letter demanding immediate accounting.

C) An ex parte application for temporary title registration.

D) A certificate of pending litigation against all estate property.

Real Estate 

1. Anil is acting for a purchaser acquiring a commercial plaza. During his search of the parcel register, he notes several prior charges and discharges listed in the electronic history. He observes that some instruments have been “ruled off” while others remain active. The seller claims that all past charges have been discharged, but Anil sees no registration to confirm discharge for the most recent mortgage. Anil contacts the lender, who confirms the charge is still outstanding. The seller insists it will be paid off just before closing.

What should Anil do to ensure the purchaser receives clear title?

A) He may proceed with closing based solely on the seller’s assurance that the mortgage will be paid off in due course.

B) He should require either a registrable discharge or an irrevocable undertaking to discharge the mortgage before or on closing.

C) He may register a caution to protect the purchaser’s interest and close once it is in place.

D) He must obtain a vesting order from the court confirming that title can be transferred without the registered charge.

2. Noah represents a buyer and discovers an execution against “John K. Morrison,” while the seller is named “John Kenneth Morrison.” The amount is significant, and the buyer’s lender refuses to advance funds until the matter is resolved. The seller claims he is not the debtor and says the writ is against a different person. Noah’s requisition deadline is the following day. The seller refuses to provide a statutory declaration and says that the writ will expire soon anyway. Noah must advise on the proper response.

How should Noah address the title concern arising from the execution against a name similar to the seller’s?

A) The name discrepancy alone is sufficient to dismiss the writ as irrelevant to the transaction.

B) The buyer should proceed to close and rely on the lender’s title insurance policy to cover any risk from the writ.

C) A court order removing the writ is necessary to proceed, even if it causes closing delays and adds cost.

D) The buyer’s solicitor should requisition a statutory declaration confirming the seller is not the named debtor.

3. Andre reviews the title and finds a charge registered in 1993 in favour of a private individual, with no discharge ever registered. The seller claims the loan was repaid decades ago and shows a photocopy of a receipt. The agreement of purchase and sale includes the standard clause permitting undertakings for institutional discharges only. Andre’s requisition deadline is two days away. The seller refuses to apply to court or obtain further documentation, insisting that the buyer must accept the receipt. Andre’s client is worried about closing with an outstanding mortgage.

What is Andre’s best course of action regarding the undischarged charge?

A) Accept the receipt as adequate proof of payment and advise the client that no further steps are required.

B) Advise the seller to provide a personal undertaking to discharge the mortgage after closing.

C) Requisition a formal discharge or insist on deletion of the charge from title prior to closing.

D) Rely on title insurance to remove the charge automatically as part of standard coverage.

4. David agrees to purchase a commercial building, with a deposit of $150,000 held in trust. Before closing, David refuses to proceed after discovering that the vendor misrepresented gross rental income figures. The vendor refuses to return the deposit, insisting that any misrepresentation was inadvertent and that the exclusion clause in the agreement bars any claim. David sues for rescission and return of the deposit.

How does the vendor’s misrepresentation affect the enforceability of the exclusion clause in the agreement?

A) The exclusion clause is effective as long as the misrepresentation was not deliberate or fraudulent.

B) A material misrepresentation may render the agreement voidable even if it includes an exclusion clause.

C) Rescission is unavailable once the agreement has been signed and a deposit has been paid.

D) The purchaser must complete the transaction and pursue a post-closing claim for damages.

5. Rami is acting for a tenant negotiating a lease in a building with a prior registered mortgage. The lease is subordinate to the mortgage and does not require the mortgagee to recognize the lease. The client plans to spend $250,000 in leasehold improvements and is concerned about losing the space if the landlord defaults.

What should Rami advise?

A) Registering the lease on title is sufficient to ensure continued occupancy despite the existing mortgage.

B) The tenant should request a non-disturbance agreement from the mortgagee to safeguard against eviction.

C) Purchasing title insurance will prevent the tenant from being evicted due to the landlord’s mortgage default.

D) Subordinating the lease again will give the tenant stronger rights against the lender in case of enforcement proceedings.

6. Jared is reviewing the agreement of purchase and sale for a client buying a cottage on a seasonal road. The road is not maintained in winter, and the seller has never sought municipal maintenance. The buyer plans to occupy the cottage year-round and assumes snow removal will be available. Jared conducts inquiries and confirms the road is not assumed by the municipality and has no upgrade plan. The client insists on closing anyway.

What should Jared include in writing to confirm proper disclosure and protect against future liability?

A) That the road may be upgraded to a municipally assumed highway after closing depending on local development trends.

B) That statutory rights of access under the Road Access Act will ensure year-round passage regardless of maintenance.

C) That the buyer understands the road is unmaintained during winter and accepts the risks of limited access and services.

D) That once the municipality imposes local improvement charges, the road will qualify for full winter access and plowing.

7. Priya is acting for a buyer of a new condominium unit. The vendor has appended the standard Tarion/HCRA addendum with a tentative occupancy date. The addendum also includes a Schedule B listing various closing adjustments, but a $15,000 “developer levy” is disclosed only in the fine print of the agreement and not in Schedule B. The buyer closes and is shocked by the unexpected adjustment.

What is the enforceability of the $15,000 developer levy disclosed outside of Schedule B?

A) The buyer is required to pay the levy because it appears elsewhere in the agreement, even if not itemized in the addendum.

B) The buyer may challenge the charge because undeclared adjustments in Schedule B are unenforceable under the regulation.

C) The developer may ask Tarion to approve enforcement of the adjustment after closing.

D) The levy is enforceable as long as similar charges are commonly applied in comparable new-build transactions.

8. Noel is acting for a buyer who signed a builder’s agreement with a clause requiring all deposits to be paid directly to the vendor. The home is subject to the ONHWPA, and the total deposit is $90,000. Noel’s review reveals that the agreement makes no provision for trust protection over amounts exceeding the Tarion deposit protection limit.

What should Noel do to protect the excess deposit funds above the Tarion coverage limit?

A) Proceed to closing and advise the client to pursue litigation later if the funds are lost due to vendor default.

B) Require that any amount exceeding the Tarion protection limit be paid into trust with the vendor’s lawyer.

C) Accept the deposit clause as is because it reflects common builder practice in Ontario real estate transactions.

D) Report the builder to the Law Society of Ontario for failing to comply with deposit protection requirements.

9. Lawyer X is approached by a new client, A, who asks him to act on the purchase of a property in Toronto for $350,000. Three weeks later, A resells the property to B for $550,000 on the same day A is scheduled to close with the original owner. A and B claim to be brothers and ask X to act for both of them, insisting that related parties are exempt from the conflict rules. They provide unusually large retainers and a forged appraisal valuing the property at $575,000. SPQR Bank retains X to act on the mortgage to B for $525,000. X does not disclose to the bank that he is also acting for both A and B, nor that two transactions are closing simultaneously.

What professional misconduct has Lawyer X committed?

A) Failing to challenge the inflated appraisal and unusual direction regarding title.

B) Acting without reviewing the chain of title between the original seller and B.

C) Acting jointly for clients with conflicting interests without disclosure, consent, or independent legal advice.

D) Failing to document the separate transactions in accordance with standard real estate conveyancing practice.

10. Sophia’s client is purchasing a cottage serviced by a drilled well. The seller provides a recent potability test but no flow test. The buyer plans to install a dishwasher and laundry unit and asks whether the well can support this usage. Sophia advises adding a condition precedent for a flow rate test, but the buyer waives it to expedite the deal. After closing, the well cannot support more than two gallons per minute and requires expensive upgrades.

Who bears legal responsibility for the post-closing flow rate issue?

A) The buyer may claim damages due to the listing’s reference to “fully serviced” water infrastructure.

B) The buyer accepted the risk by choosing to waive the condition precedent relating to flow rate.

C) The seller may be liable under environmental legislation governing groundwater sources.

D) The lawyer was required to obtain a recovery rate certificate from the Ministry of the Environment.

11. Lucas is assisting a client purchasing a rural property that is not serviced by municipal water. During discussions, the client mentions that the property uses a private well. Lucas sends a water potability sample to the local health unit and also requests a well record from the Ministry. The sample comes back showing elevated nitrate levels. The client wants to know whether this can be raised as a defect to terminate the deal. The agreement of purchase and sale is silent on water quality.

How should Lucas advise the client regarding the elevated nitrate results and the status of the agreement?

A) The solicitor should disclose the findings and explain that, absent a contractual condition, the issue may not justify terminating the deal.

B) The purchaser is entitled to rescind the agreement due to the presence of water contamination.

C) The buyer may postpone closing until a compliant well is installed or the issue is remedied.

D) The seller is obligated to bear the cost of adding appropriate water filtration to ensure compliance.

12. Lina is acting for a buyer of a semi-detached property. The survey shows the party wall encroaches 0.15 metres over the lot line. The seller argues this is standard construction and should not delay the deal. Lina reviews the title and finds no existing party wall agreement or easement. Her client is fine proceeding but wants protection from future disputes.

What is the best way for Lina to protect the buyer before closing?

A) Advise terminating the transaction based on the unregistered encroachment.

B) Recommend obtaining a party wall agreement or mutual acknowledgment and registering it on title.

C) Rely on the title insurance policy, which will automatically cover minor encroachments of this nature.

D) Close the transaction based on industry norms for semi-detached construction.

13. Dana rents a condominium unit that was first occupied for residential purposes in December 2018. Her landlord raises the rent in 2024 by 5%, citing an exemption from the rent guideline. Dana files an LTB application, arguing the increase exceeds the maximum allowed by law. The landlord claims the unit is exempt under the post–November 15, 2018 construction rule. Dana insists that the exemption doesn’t apply because the building was completed earlier.

Is the landlord legally permitted to raise the rent above the guideline in this case?

A) Yes, if the unit was first occupied after November 15, 2018, the exemption under the RTA applies.

B) Yes, the exemption applies to newly built units, including condominiums, regardless of tenant objections.

C) No, rent guideline rules apply to all condominium units regardless of occupancy or completion date.

D) No, the exemption applies only if the entire building was completed after November 15, 2018.

14. Carlos is a landlord seeking to terminate a tenancy because his daughter will be moving into the unit. The unit is one of four in the building. He provides the tenant with 60 days’ notice and files an application with the LTB. Carlos also sends a cheque for one month’s rent to the tenant as compensation. The tenant disputes the notice, stating Carlos has filed a similar application in the past two years. Carlos fails to mention this in his affidavit.

What impact does Carlos’s omission of prior termination applications have on his current LTB claim?

A) The LTB must approve the termination if Carlos can show a sincere intention for his daughter to occupy the unit.

B) The LTB may refuse the termination because Carlos failed to disclose previous applications as required under the RTA.

C) The LTB cannot consider the application because the tenant rejected the compensation cheque provided by Carlos.

D) The omission in the affidavit does not matter because the landlord’s good faith is the only legal requirement for termination.

15. A retail tenant occupying 4,000 sq. ft. of space in a mall is negotiating renewal rights. The draft lease provides an option to “extend” the lease for a further five years at market rent. The tenant asks whether this creates a new lease or continues the existing one. The distinction affects liability for repair costs and inducements.

How does the legal meaning of “extension” affect the tenant’s ongoing obligations?

A) It results in a new lease being formed, relieving the tenant of continuing liabilities under the previous term.

B) It merely allows the tenant to remain in possession, but terminates the lease's original terms unless expressly carried over.

C) It continues the original lease, maintaining the same terms and obligations without interruption.

D) It provides for renewal benefits such as inducements and improvements to automatically reapply under the new term.

16. Lucia is a tenant in a care home operated by a nonprofit. She receives notice that her monthly fees will increase by 4% to cover the cost of new meals and care services. The rental portion of her fees remains unchanged. Lucia believes the increase is illegal and wishes to dispute it. She contacts the LTB seeking an order freezing the fees.

Is the landlord’s 4% fee increase subject to the RTA’s rent guideline?

A) Yes, because the guideline cap applies to all amounts paid by care home tenants, regardless of whether they are for rent or services.

B) No, because the guideline only applies to rent, and care service fees can be increased without restriction.

C) No, unless the landlord can justify the increase based on necessary capital improvements for the care home.

D) Yes, unless the tenant has provided express written consent to the fee increase at the time of renewal.

Case 3

Katrina retained a lawyer to assist with the sale of her late father’s cottage in Muskoka. The property, registered under the Registry system, had been in the family since 1975. After her father’s death, Katrina was named estate trustee with a certificate of appointment. The lawyer began a 40-year title search and found an unregistered right-of-way agreement affecting lake access. He also discovered that Katrina’s father had taken out a private mortgage in 1992 that had never been discharged, even though full repayment occurred in 2005. Meanwhile, the buyer’s lender required a clean title and refused to proceed unless both the right-of-way and mortgage were cleared. A Planning Act search of adjoining properties revealed a 1982 severance of a shared lot with no apparent compliance certificate. Katrina is eager to close quickly but unaware of the potential complications in removing the old mortgage or dealing with the access easement.

Questions 17 to 20 refer to Case 3

17. What is the legal consequence of the unregistered right-of-way discovered during the title search?

A) It does not constitute notice unless it has been brought to the lawyer’s attention and acknowledged.

B) It automatically binds all future owners due to its location near the waterfront.

C) It may bind the property if the lawyer becomes aware of it during the title review.

D) It is enforceable only if it was included in the original deed of the root of title.

18. What is the best way for dealing with the undischarged 1992 mortgage?

A) The lawyer should obtain a discharge statement from the original mortgagee or file a court application if the party is unavailable.

B) The mortgage can be ignored if Katrina provides a sworn affidavit stating that it was repaid.

C) The mortgage will automatically be discharged if it is over 20 years old.

D) The mortgage can be assigned to the buyer as a precautionary measure.

19. How does the Planning Act affect the identified 1982 severance?

A) If there was no compliance or validation, the severance may render the chain of title defective.

B) Because the severance occurred over 40 years ago, it is presumed valid.

C) Only municipal approval is required to cure the Planning Act violation.

D) A severance prior to 1985 does not require review under the Planning Act.

20. Which closing document is crucial in ensuring compliance during an estate cottage sale like Katrina’s?

A) A direction regarding funds signed by all heirs of the deceased.

B) A seller’s indemnity stating no personal knowledge of title defects.

C) A municipal zoning certificate to verify permitted uses.

D)  A statutory declaration confirming no unregistered claims or encroachments.

Professional Responsibility 

1. Leo is an estate lawyer acting for an elderly client with declining capacity. Without a capacity assessment, Leo drafts and witnesses a new will disinheriting two family members. He files it as the client’s last will and testament. When the family challenges the will, they file a complaint with the Law Society alleging professional misconduct.

What is the Law Society likely to investigate?

A) Whether Leo charged a fixed fee for the new will.

B) Whether Leo failed to refer the client for a formal capacity assessment.

C) Whether Leo provided gifts to the testator.

D) Whether Leo failed to report the prior will to the family.

2. A junior lawyer joins a new firm that represents a company in a commercial litigation matter. At her previous firm, she acted for the opposing party on a related matter and has confidential information that could harm her former client. The firm wants to keep her isolated from the litigation file.

What must the new firm do?

A) Immediately withdraw from acting for its current client.

B)  File a conflict motion with the Superior Court to determine whether the new lawyer’s prior involvement creates an irremediable conflict that requires disqualification of the firm.

C) Obtain consent from the former client or implement timely confidentiality screens.

D) Issue a general waiver signed by both parties.

3. Julia receives trust funds from a corporate client in advance of finalizing a lease transaction. The funds are earmarked for lease registration fees, but she applies part of the amount to pay an old invoice for unrelated corporate services. The lease file closes successfully and no client harm results.

What rule has Julia violated?

A) She failed to file a requisition for commercial rent tax.

B) She improperly blended client disbursement funds with the firm’s operating revenue, breaching financial segregation obligations.

C) She misappropriated earmarked trust funds by using them for a separate matter.

D) She neglected to document leasehold improvements in accordance with post-closing reporting best practices for real estate matters.

4. Leonard, a business lawyer, retains an independent bookkeeper to manage his financial records. He assumes that trust reconciliations are being handled monthly. When audited, he discovers that no monthly trust comparisons have been completed for nearly six months.

What is Leonard required to do to address the failure to complete monthly trust reconciliations?

A) He must immediately complete all overdue monthly trust comparisons and review them personally.

B) He must register his bookkeeper with the Law Society to formalize the delegation of financial tasks.

C) He must file a late reconciliation notice with CRA to avoid tax-related penalties.

D) He must replace the bookkeeper with a licensee authorized to manage client trust accounts.

5. Monica is acting for a purchaser in a condominium transaction. She discovers the seller has not provided a valid status certificate, but because the transaction is closing shortly, she proceeds without requesting one. She fails to alert the purchaser to potential issues with special assessments or budget increases. Three weeks after closing, the client receives a $12,000 assessment notice.

What obligation did Monica most clearly neglect?

A) She failed to file a formal requisition to extend the closing date.

B) She failed to notify the condo board of the buyer’s change of address.

C) She failed to collect sufficient certified funds from the lender to cover closing adjustments.

D) She failed to communicate key risks and developments to the client.

6. A commercial lawyer acts for an Indigenous entrepreneur establishing a partnership with a settler-owned food export company. The agreement omits any reference to the Indigenous partner’s jurisdictional rights or cultural branding. The client later expresses regret that their community values were not reflected in the deal.

What did the lawyer fail to do?

A) Engage with the federal Crown to explore whether trade or export licences might be needed for Indigenous-led commercial activity.

B) Arrange for the agreement to be translated into the client’s Indigenous language to ensure accessibility and comprehension.

C) Include terms acknowledging and respecting Indigenous identity and jurisdictional elements of the client’s role.

D) Recommend a non-competition clause to protect the client’s market position and limit post-partnership risks.

7. Leo represents a client in a condominium purchase and closes the transaction successfully. He never sends a closing letter or reports on the final trust reconciliation. Two months later, the client calls to ask if there’s anything else she needs to do. Leo responds verbally but provides no documentation. The client later complains about the lack of clarity.

What step should Leo have taken at the end of the retainer?

A) Sent a formal disengagement letter confirming the matter was completed.

B) Registered the title under the old Act to preserve legacy rights available only under transitional registration regimes.

C) Provided a satisfaction survey to close the file and ensure internal quality control procedures were followed.

D) Forwarded the file to LAWPRO in case a potential insurance claim arose from the client’s concerns post-closing.

8. During a conveyancing transaction, a real estate lawyer discovers that the funds used for the down payment were gifted by a third party, who expects a future beneficial interest in the property. The lawyer does not document this interest or raise it in the title report. A dispute later arises, and the client alleges the lawyer failed to advise on the implications.

What duty did the lawyer fail to fulfill?

A) The duty to request and review the donor’s banking records to verify the source of the down payment and confirm its legitimacy.

B) The duty to clarify the parties' intentions and advise the client of the legal effect of non-registration.

C) The duty to prepare and submit a Form T2 with the Land Titles Office in order to properly record the transfer of beneficial interests.

D) The duty to file a valid inter vivos trust deed to formally recognize the third party’s anticipated equitable claim in the property.

9. Gabriella is retained to represent a property management company. She receives instructions from the company’s regional manager and negotiates several leases. Months later, head office claims that the regional manager had no authority to instruct legal counsel on leasing matters. Gabriella had never requested written authorization or confirmation from head office.

What procedural safeguard should Gabriella have implemented?

A) Obtaining a certificate of status for the corporation.

B) Requesting a land transfer tax affidavit.

C) Sending lease summaries to all tenants before closing.

D) Recording a written acknowledgment of who was authorized to instruct her.

10. During a will-drafting meeting, Tina’s client says she would like to leave half her estate to “my daughter, who now identifies as my son.” Tina assumes this is a misstatement and proceeds to draft the will using the client’s old family information, identifying the child as "daughter." She does not seek clarification or make any reference to the child’s preferred name or pronouns in the will.

Which professional obligation did Tina neglect when preparing the will?

A) She failed to obtain the client’s medical background, which may affect testamentary instructions.

B) She failed to exercise cultural and identity competence in tailoring the will to reflect the client’s intentions.

C) She failed to consult with a financial expert to confirm the estate’s actual value.

D) She failed to comply with regulatory obligations regarding client verification and source of funds.

11. Ravi is an estate solicitor who uses a client intake form for all will clients. A new client completes the form in English but includes several unusual provisions in handwritten Mandarin script. Ravi does not read Mandarin and does not have the contents translated before proceeding. He includes all clauses in the final will. Months later, the executor discovers one clause unintentionally disinherits a key beneficiary.

Which professional obligation did Ravi fail to meet in this situation?

A) He should have notarized the handwritten clause to confirm its legal effect before incorporating it.

B) He should have obtained a translation of the clause and confirmed its contents with the client before drafting the will.

C) He should have referred the client to an estate litigation lawyer to verify the enforceability of the clause.

D) He should have submitted the will to the Office of the Public Guardian to ensure all clauses were properly interpreted.

12. Jack, a business lawyer, was representing a client in a dispute regarding a shareholder agreement. During a pre-hearing conference, Jack realized that opposing counsel had made a factual mistake about the existence of a certain clause. Jack decided not to correct the error because it could benefit his client’s position.

What advocacy obligation did Jack breach?

A) Duty to zealously advocate by any means necessary.

B)  Duty to waive the client’s rights without client consent.

C) Duty not to knowingly mislead or deceive the tribunal.

D) Duty to present only favourable facts to the tribunal.

13. Monica is counsel for a condominium developer in a transaction involving numerous pre-construction unit sales. Due to clerical errors in her office, the same deposit account was referenced for multiple purchasers, and several deposits were incorrectly allocated. One buyer alleges that their deposit was misapplied, and files a complaint. The Law Society initiates an investigation.

What aspect of Monica’s conduct is likely the focus of the Law Society’s investigation?

A) Whether Monica failed to advise the developer of Tarion warranty obligations for new home construction.

B) Whether Monica’s trust account management complied with By-Law 9 and met the Law Society’s recordkeeping standards.

C) Whether the condominium developer engaged in misleading sales practices contrary to consumer protection legislation.

D) Whether Monica’s purchase and sale agreements failed to include essential clauses required under the Condominium Act.

14. While preparing a commercial lease for a client, Helena allows her assistant to review draft clauses and send preliminary documents to the opposing lawyer. The assistant mistakenly includes an outdated draft that weakens the client's position. Helena had not reviewed the assistant’s draft prior to sending. The client later disputes the lease terms.

What did Helena fail to do?

A) File a solicitor’s affidavit of review.

B) Ensure her assistant was licensed as a paralegal.

C) Directly supervise delegated work to ensure its appropriateness.

D) Advise the client to obtain title insurance on the leased premises.

15. An estate solicitor learns that a junior staff member has recorded confidential client calls without informing the clients. The lawyer reviews the recordings to verify accuracy and then deletes them. She does not inform the clients or the Law Society.

What is the relevant ethical issue?

A) Recording conversations with clients without notice violates professional courtesy and consent standards.

B) Deleting call logs without first obtaining permission from the Law Society may contravene record-keeping and professional accountability obligations.

C) All staff-initiated recordings of client communications must be certified by a notary public to ensure admissibility and reliability.

D) The staff member must be formally registered as a law clerk with the Law Society in order to participate in client-facing communications.

16. Mark represents a testator's son in a will challenge. He also represented the testator several years prior when the will was drafted. During cross-examination, Mark is asked whether the will reflects the testator’s known wishes. He begins to answer but does not inform the panel that he previously drafted the document.

Why was it improper for Mark to answer questions about the will?

A) Mark failed to object to an improper question.

B) Mark improperly acted as both advocate and witness in the same matter.

C) Mark failed to confirm the testator’s mental capacity.

D) Mark failed to include a legal opinion in his submissions.

17. Samantha is preparing an estate freeze for a business client. When reviewing the trust documentation, she realizes that some provisions disadvantage the client’s eldest daughter, who uses a mobility device and requires future care. The client explains that the daughter “doesn’t really need the same share.” Samantha proceeds without further inquiry.

What professional duty did Samantha overlook when proceeding with the freeze as instructed?

A) The rule requiring the use of plain language in trust drafting.

B) The duty to address potential discrimination and facilitate inclusive service.

C) The obligation to register all freeze instruments under the PPSA.

D) The duty to clearly explain marital equalization rights to intended beneficiaries.

18. Elliot has been retained to advise on the transfer of a family cottage through an inter vivos trust. Midway through, he accepts a government position and intends to cease private practice. He emails his client to say he’s “transitioning out of practice” but does not return the file or suggest alternate counsel.

What step must Elliot take under the withdrawal rules?

A) Refer the file to the Land Transfer Tax Office to ensure registration issues are properly handled.

B) Invoice the client for services rendered before taking any further steps related to the transition.

C) Notify the client in writing, return all entitled documents, and assist with the orderly transfer of the file.

D) Submit a resignation letter to the Law Society within 10 days of officially ending his practice.

19. Trina acts for a couple in preparing mirror wills. Her assistant later joins another firm and, without Trina’s knowledge, takes scanned drafts of several client documents, including those of Trina’s clients. The documents are found on a shared drive at the new firm. Trina is alerted after one of the clients discovers their private information has been exposed.

How should Trina respond to the assistant’s unauthorized disclosure of client documents?

A) She may argue that no professional breach occurred because the assistant was no longer under her supervision at the time of the disclosure.

B) She can close the file after encrypting the documents, since the breach was unintentional and occurred after the drafts were complete.

C) She must immediately commence legal proceedings against the new firm to seek injunctive relief and damages.

D) She is required to take steps to contain the breach and notify the affected clients.

20.  A law clerk in a business law firm consistently refers to a client by the wrong pronouns despite multiple corrections. The lawyer supervising the file does not intervene, explaining privately to the clerk that “we’re not changing how we talk just for one client.” The client expresses discomfort and ultimately moves the file to another firm.

What professionalism obligation did the supervising lawyer most clearly breach?

A) The firm was required to amend its business registration to reflect the client’s identity before proceeding.

B) The lawyer failed to ensure that the client was treated with dignity, respect, and free from discriminatory conduct.

C) The clerk should have been advised to address the client using honorifics or formal legal titles only.

D) The lawyer was obligated to notify the Law Society immediately upon the client transferring their file.