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Facilitator's Guide - Real Estate Case Study (The Joint Venture)

Opening Paragraph

At 1 p.m. on Wednesday March 21, 2018, Sarah Greene hung up the phone after speaking to Peter Kovacs, the principal of her client, Renaissance Building Corporation (“Renaissance”).  Pursuant to a joint venture agreement that Sarah drafted, two of her client’s properties were being transferred that day to a nominee that would hold registered title for Renaissance and two other companies, Northern Investments Inc. (“Northern”) and Jarvis Development Inc. (“Jarvis”).  Peter had just instructed Sarah not to disclose the existence of an execution she discovered had been filed against Renaissance the previous day.  He assured her that he would use the purchase funds to pay the execution amount within a couple of weeks and insisted that she not disclose this to Northern or Jarvis.  Uncertain about how to proceed, Sarah told Peter that she would call him back within the hour with her response.
  1. This case is intended for a study group discussion session on professional responsibility in Real Estate Law.
  2. Participants will be expected to put themselves in the position of the lawyer, Sarah Greene in the case and to identify and analyze the legal, professional and personal challenges she faces.
  3. Participants will also be expected to develop alternatives and an action plan for resolving the issues in accordance with the lawyer’s professional obligations under the Rules of Professional Conduct.
Rules of Professional Conduct
  • Definitions, , r. 1.1-1 “client”, “conflict of interest”, “independent legal advice”, “independent legal representation”
  • Honesty and Candour, r. 3.2-2
  • Confidential Information, r. 3.3-1
  • Duty to Avoid Conflicts of Interest, r. 3.4-1 and Commentary
  • When Client is an Organization, r. 3.2-3
  • Dishonesty, Fraud, etc. when Client is an Organization, r. 3.2-8
  • Joint Retainers, rr. 3.4-5 to 3.4-9
  • Unrepresented Persons, r. 7.2-9
  • Mandatory Withdrawal, r. 3.7-7

Suggested Discussion Questions
Assume you are the lawyer in this case and answer the following questions with reference to the relevant Rules of Professional Conduct:
  1. Do you have a conflict of interest in this situation?  If so, what is the nature of the conflict?
  2. Do you have a joint retainer with Renaissance, Northern and Jarvis?  If so, what are your obligations?
  3. Are Northern and Jarvis unrepresented parties?  If so, what are your professional responsibilities to them?
  4. Would you rely on Jane Leung, as in-house counsel for Northern, to make decisions regarding the joint venture on behalf of the company?  Why or why not?
  5. Would you rely on David Abbott’s instructions as the principal of Jarvis?  Why or why not?
  6. Should you have included a clause in the joint venture agreement which contained an acknowledgement that Northern and Jarvis had
                                a) been advised to obtain independent legal advice (ILA)
                                b) obtained ILA, or
                                c) waived the opportunity to obtain ILA? 
  1. What is the difference between ILA and ILR (independent legal representation)?
  2. How would you handle Peter’s request not to disclose the existence of the execution to Jane or David?
  3. Do you have an obligation to advise both Northern and Jarvis of the execution?
  4. What, if anything, should you do if Peter continues to insist that you not disclose this information?
Terms or Concepts Explained