Capacity: No one test to rule them all

Law360 Canada (June 17, 2025, 2:21 PM EDT) --

Esther Mendelsohn

Ontario’s Rules of Professional Conduct require lawyers to turn their minds to their clients’ capacity throughout the retainer. However, determining capacity is often much more complex than it initially appears. There is no single, universal test because “legal capacity is … time, situation and decision specific” (Law Society of Ontario’s Guide to navigating client capacity concerns). Lawyers must therefore remain mindful of the specific legal services they are being asked to provide and whether their clients are capable of providing informed instructions. A brief description of various capacities to consider follows.

Instructing counsel

The test to instruct counsel is set out in Bilek v. Constitution Insurance, [1990] O.J. No. 3117. In Bilek, the court noted that the test to appoint a litigation guardian, on the basis that the plaintiff lacked capacity to instruct counsel, was “whether the [individual] properly understands the nature and effect of what he is, and may be, called upon to participate in and decide upon.” Subsequent jurisprudence has established the following relevant factors to determine capacity to instruct: knowledge and understanding of the minimum choices or decisions required and to make them; appreciation of the consequences and effects of those choices or decisions; appreciation of the nature of the proceedings; the person’s inability to choose and keep counsel; the person’s inability to represent him or herself; the person’s inability to distinguish between relevant and irrelevant issues; and, the person’s mistaken beliefs regarding the law or court procedures (Costantino v. Costantino, 2016 ONSC 7279, at paras. 57 and 65).

Appointing a litigation guardian

If a party is deemed to be under a disability (which includes persons who lack the capacity to manage their own property or personal care), they must be represented by a litigation guardian when commencing, continuing or defending proceedings, other than an application to appoint a guardian for the property or person of that individual (Substitute Decisions Act (SDA), ss. 1.03(1), 7.01(1), 7.01(2)). The court may even order a plaintiff to be examined in order to determine whether he or she is a party under a disability (626381 Ontario Ltd. v. Kagan, Shastri, Barristers & Solicitors, et al., 2013 ONSC 4114).

Capacity to manage property and personal care

The capacity to manage one’s own property requires that the individual understand the relevant information and be able to appreciate the reasonably foreseeable consequences of a decision or lack thereof (SDA, s. 6). In order to be considered capable of personal care, an individual must be able to understand the relevant information regarding his or her own health care, nutrition, shelter, clothing, hygiene or safety, and be able to appreciate the reasonably foreseeable consequences of a decision or lack thereof (SDA, s. 45). In Plummer v. Plummer, 2015 ONSC 4857, the court underscored the fact that the tests for managing property and personal care are distinct in fashioning an order for production based on the various permutations that could result from a capacity assessment for both management of property and personal care.

Capacity to grant continuing powers of attorney for property

The test for capacity to grant and revoke continuing powers of attorney for property (CPOAP) is that the person must have knowledge and understanding of: the extent and value of one’s property, one’s obligations to dependants, the effect of granting/revoking the CPOAP, the obligation of an attorney to provide an accounting, and the ability of the person to grant/revoke the CPOAP, and the potential consequences of granting/revoking same (SDA, s. 8(1) and 8(2)). A CPOAP may be valid even if the grantor is incapable of managing their property at the time of execution, so long as the grantor is capable of giving the CPOAP (SDA, s. 9(1)). Where an attorney under a CPOAP knows that the grantor lacked the capacity to grant a CPOAP, the CPOAP is void ab initio, as are all of the actions of the attorney under the void CPOAP (Hill Estate v. Chevron Standard Ltd., [1992] M.J. No. 580).

Capacity to consent to sex

In Salzman v. Salzman, 2011 ONSC 3555, the court essentially applied the test for capacity for personal care in determining whether a cognitively impaired nonagenarian woman should be able to continue her sexual relationship with a man 30 years her junior who had been convicted of sexual interference with a child.

Capacity to marry/divorce

The Marriage Act prohibits the issuance of a marriage licence where there are reasonable grounds to believe that one of the parties lacks mental capacity (s. 7). While the Court of Appeal found that marriage is about much more than finances (Halpern v. Canada (Attorney General), [2003] O.J. No. 2268, at para. 5), the test for capacity to enter into marriage may now be linked to the ability to manage one’s property (Hunt v. Worrod, 2017 ONSC 7397, at para. 104).

There are many more types of capacity that lawyers must be familiar with, whether they are drafting wills or representing a client facing liability for negligence. To learn more, join us for Wagner Sidlofsky’s Lunch and Learn seminar on this topic, featuring Wagner Sidlofsky LLP’s David Wagner, Adam Wygodny and Esther Mendelsohn on June 24, 2025, starting at 12 p.m. This seminar is an opportunity for new and experienced lawyers — whether solicitors, litigators, or both — to refresh and deepen their knowledge of this important legal issue. For more information and to register, please access the following link.

Esther Mendelsohn is a lawyer at Wagner Sidlofsky LLP, practising in the estate and commercial litigation groups.

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