Solicitor Sample Practice Questions
Business Law
John serves as a director of a private corporation but decides to resign due to internal financial issues within the company. After submitting his resignation letter, he discovers that the corporation owes unpaid taxes to the CRA from before his resignation.
What are John’s obligations regarding these tax liabilities?
A) John may remain personally liable for corporate tax debts that arose during his directorship.
B) John is only liable if the CRA establishes that his resignation was not made in good faith.
C) John cannot be held liable for unpaid taxes unless he was directly involved in the corporation’s financial decisions.
D) John is automatically shielded from liability for prior tax debts once his resignation takes legal effect.
Estate Planning
Emma, a single mother, names her brother, Jack, as the guardian of her minor daughter, Lily, in her will. Emma's will also specifies that Jack should manage Lily's inheritance until she reaches the age of 21. After Emma's unexpected death, Jack steps in as Lily's guardian.
Under the Children’s Law Reform Act (CLRA), what must Jack do to legally manage Lily’s inheritance?
A) Jack becomes the guardian of Lily’s property by virtue of being named in the will and taking on custody.
B) Jack must seek court authorization to act as property guardian, even though the will names him as such.
C) Jack is entitled to administer the property under the will without court involvement, unless contested.
D) Jack must notify the Office of the Children’s Lawyer and follow their recommendations before managing assets.
Real Estate
Mark is purchasing a residential property, and during the title search, his lawyer discovers a restrictive covenant registered against the property, prohibiting any construction that exceeds two stories. Mark plans to build a three-story home on the property.
What should Mark’s lawyer advise him to do?
A) Proceed with the transaction and apply to the court post-closing for a declaration that the covenant is unenforceable.
B) Negotiate with the vendor for a price reduction to offset the risk posed by the covenant.
C) Explain that the covenant is binding and may prevent construction unless it is lawfully removed or varied.
D) Rely on municipal approval processes, which override private land use restrictions like covenants.
Professional Responsibility
Emily, a real estate lawyer, is meeting with her client, Michael, to discuss the sale of a commercial property. Michael brings his business partner and his real estate agent to the meeting, asking them to stay and assist in decision-making.
How should Emily handle this situation?
A) Advise Michael that including third parties may affect solicitor-client privilege and proceed only with informed consent.
B) Proceed with the meeting, relying on Michael’s implicit waiver of confidentiality by inviting them.
C) Permit the business partner’s presence as a stakeholder, but exclude the agent to preserve privilege.
D) Decline to continue the meeting unless all non-clients are excluded to protect against future liability.
ANSWERS
Business Law
John serves as a director of a private corporation but decides to resign due to internal financial issues within the company. After submitting his resignation letter, he discovers that the corporation owes unpaid taxes to the CRA from before his resignation.
What are John’s obligations regarding these tax liabilities?
A) John may remain personally liable for corporate tax debts that arose during his directorship.
B) John is only liable if the CRA establishes that his resignation was not made in good faith.
C) John cannot be held liable for unpaid taxes unless he was directly involved in the corporation’s financial decisions.
D) John is automatically shielded from liability for prior tax debts once his resignation takes legal effect.
Correct Answer: A
Explanation: Under CBCA s. 227.1 and OBCA s. 121(1), directors can be held personally liable for certain corporate tax liabilities, such as unremitted source deductions or HST, if the debts arose during their tenure. Resignation does not retroactively remove this liability; it only prevents future exposure. The CRA must act within two years of the director’s resignation to enforce the liability.
Estate Planning
Emma, a single mother, names her brother, Jack, as the guardian of her minor daughter, Lily, in her will. Emma's will also specifies that Jack should manage Lily's inheritance until she reaches the age of 21. After Emma's unexpected death, Jack steps in as Lily's guardian.
Under the Children’s Law Reform Act (CLRA), what must Jack do to legally manage Lily’s inheritance?
A) Jack becomes the guardian of Lily’s property by virtue of being named in the will and taking on custody.
B) Jack must seek court authorization to act as property guardian, even though the will names him as such.
C) Jack is entitled to administer the property under the will without court involvement, unless contested.
D) Jack must notify the Office of the Children’s Lawyer and follow their recommendations before managing assets.
Correct Answer: B
Explanation: Under section 47 of the Children’s Law Reform Act, being named as a guardian of property in a will does not in itself confer legal authority. The named individual must still apply to the court to be formally appointed. Unless the will provides a trust structure with a trustee holding explicit authority, Jack cannot legally manage the inheritance without a court order.
Real Estate
Mark is purchasing a residential property, and during the title search, his lawyer discovers a restrictive covenant registered against the property, prohibiting any construction that exceeds two stories. Mark plans to build a three-story home on the property.
What should Mark’s lawyer advise him to do?
A) Proceed with the transaction and apply to the court post-closing for a declaration that the covenant is unenforceable.
B) Negotiate with the vendor for a price reduction to offset the risk posed by the covenant.
C) Explain that the covenant is binding and may prevent construction unless it is lawfully removed or varied.
D) Rely on municipal approval processes, which override private land use restrictions like covenants.
Correct Answer: C
Explanation: Restrictive covenants are enforceable private land use restrictions that run with the land. Even if municipal zoning permits a three-story home, a registered covenant limiting construction to two stories is binding unless successfully challenged or varied under the Land Titles Act or through mutual agreement. The lawyer must inform Mark of this limitation and the risks of proceeding without addressing it.
Professional Responsibility
Emily, a real estate lawyer, is meeting with her client, Michael, to discuss the sale of a commercial property. Michael brings his business partner and his real estate agent to the meeting, asking them to stay and assist in decision-making.
How should Emily handle this situation?
A) Advise Michael that including third parties may affect solicitor-client privilege and proceed only with informed consent.
B) Proceed with the meeting, relying on Michael’s implicit waiver of confidentiality by inviting them.
C) Permit the business partner’s presence as a stakeholder, but exclude the agent to preserve privilege.
D) Decline to continue the meeting unless all non-clients are excluded to protect against future liability.
Correct Answer: A
Explanation: Rule 3.3-1 requires lawyers to maintain confidentiality and warn clients that the presence of third parties may undermine solicitor-client privilege. Emily should ensure Michael understands the implications and consents before proceeding. Privilege may be lost if a court later finds the communication was not confidential due to the presence of others.