There is no single legal definition of “capacity.” The SDA, which addresses various capacity decisions and their corresponding criteria, simply defines “capable” as “mentally capable,” and provides that “capacity” has a corresponding meaning.

Similarly, there is no general approach to apply in determining or establishing “capacity,” “incapacity,” “mental capacity” or “competency.” Each particular task or decision undertaken has its own corresponding capacity characteristics and determining criteria.

Generally, all persons are deemed capable of making decisions at law. That presumption stands unless and until the presumption of capacity is legally rebutted.^[1]

Capacity is defined or determined upon factors of mixed law and fact and by applying the evidence available to the standard or factors for determining requisite decisional capacity.^[2] It is important to understand there is no capacity “test” per se (“test” is often colloquially referenced as an acceptable descriptive, but it is not technically correct), rather there is a standard to be applied, or factors to be considered in the assessment of requisite decisional capacity to make a certain decision at a particular time.

Capacity is an area of enquiry where medicine and law collide. Legal professionals often deal with clients who have medical and cognitive challenges, and medical practitioners are asked to apply legal standards in their clinical practices, or are asked to review evidence retrospectively to determine whether at a particular time an individual had the requisite capacity to complete a specific task or make a specific decision.

The assessment of capacity is a less-than-perfect science, both from a legal and a medical point of view. Capacity determinations are complicated. In addition to professional and expert evidence, lay evidence can be relevant to assessing capacity in many situations. Equally complicating is the fact that the standard of assessment varies, and this too can become a difficult obstacle to overcome in determining capacity and in resolving disputes involving the quality and integrity of assessment reports. And, to add further to the complexity, in contentious settings, often seen in an estate litigation practice, capacity is frequently evaluated retrospectively, when a conflict arises relating to a long-past decision of a person, alive or deceased. The evidentiary weight given to such assessments varies. In some cases where medical records exist, a retrospective analysis over time can provide comprehensive and compelling evidence of decisional capacity.

Capacity is decision, time and situation specific. This means that a person may be capable with respect to some decisions, at different times, and under differing circumstances. It is incorrect to describe an individual as globally “incapable” or similarly “capable,” and there is no standard or factors prescribed to determine general capacity. Rather, capacity is determined on a case-by-case basis in relation to a specific task or decision at a moment in time.

Capacity is Decision Specific

Capacity is decision specific in that, for example, as determined by legislation, the capacity to grant a power of attorney for property differs from the capacity to grant a power of attorney for personal care, which in turn differs from the capacity to manage one’s property or personal care. Testamentary capacity, the capacity to enter into a contract, to give a gift, to marry, separate or divorce, all involve different considerations as determined at common law. As a result, an individual may be capable of making personal care decisions, but not capable of managing property, or capable of granting a power of attorney document, but not capable of making a Will. The possibilities are limitless since each decision has its own specific capacity standard or factors to consider in its determination.

Capacity is Time Specific 

Capacity is time specific in that legal capacity can fluctuate over time. The legal standard builds in allowances for “good” and “bad” days where capacity can and does fluctuate. As an example, an otherwise capable person may lack capacity when under the influence of alcohol. And even in situations where an individual suffers from a non-reversible, unremitting, and/or progressive disorder, that person may not be decisionally incapable, and may have requisite capacity to make certain decisions at differing times. Much depends on the unique circumstances of the individual and the medical diagnosis.  Courts have consistently accepted the principle that capacity to grant a power of attorney or to make a Will can vary over time.^[3]

The factor of time specificity as it relates to determining capacity means that any expert assessment or examination of capacity must clearly state the time of the assessment. If an expert assessment is not contemporaneous with the giving of instructions, the making of the decision or the undertaking of the task, then it may impact the probative value of the expert evidence proffered. A drafting solicitor who applies the legal standard for determining requisite capacity at the time that instructions are received may have the preferred evidence.^[4]

Capacity is Situation Specific

Lastly, capacity is situation specific in that under different circumstances, an individual may have differing capacity. For example, a situation of stress or difficulty may diminish a person’s capacity. In certain cases, for example, an individual in one’s own home may have capacity that may not be displayed in a lawyer’s or doctor’s office.

Although each task has its own specific capacity standard or factors to consider, it is fair to say that in general, capacity to make a decision is demonstrated by a person’s ability to understand all the information that is relevant to the decision to be made, and then that person’s ability to understand the possible implications of the decision in question.

The 2003 Supreme Court of Canada decision of Starson v Swayze^[5] is helpful in elucidating capacity considerations. Although the decision dealt solely with the issue of capacity to consent to treatment under the Health Care Consent Act, 1996, there are similar themes in all capacity determinations.

Writing for the majority, Major J. made several points about capacity. First, he held that the presence of a mental disorder must not be equated with incapacity, and that the presumption of legal capacity can only be rebutted by clear evidence.^[6]

Major J. emphasized that the ability to understand and process information is key to capacity. The ability to understand the relevant information requires the “cognitive ability to process, retain and understand the relevant information.”^[7] Then, a person must “be able to apply the relevant information to his or her circumstances, and to be able to weigh the foreseeable risks and benefits of a decision or lack thereof.”^[8]

A capable person requires the “ability to appreciate the consequences of a decision,” and not necessarily “actual appreciation of those consequences.”^[9] A person should not be deemed incapable for failing to understand the relevant information and/or appreciate the implications of a decision, if he or she possesses the ability to comprehend the information and consequences of a decision.

Major J. also recognized that the subject of the capacity assessment need not agree with the assessor on all points, and that mental capacity is not equated with correctness or reasonableness.^[10] A capable person is entitled to be unwise in his or her decision-making. In the oft-cited decision of Re Koch, Quinn J. wrote as follows:

It is mental capacity and not wisdom that is the subject of the SDA and the HCCA. The right knowingly to be foolish is not unimportant; the right to voluntarily assume risks is to be respected. …^[11]

THE SUBSTITUTE DECISIONS ACT AND CAPACITY

The SDA incorporates tools to protect the autonomy of individuals who find themselves subject to its provisions. The statutory provisions are in recognition of the significance attributable to the potential loss of an individual’s autonomy as a result of proceedings under the SDA.

As part of the protections afforded individuals under the SDA, the legislation sets out presumptions of capacity. The SDA presumes that individuals who are eighteen years of age or older are capable of entering into a contract.^[12]

Individuals who are 16 years of age or older are presumed capable of giving or refusing consent in respect of their own personal care.^[13]

Another example of these protections is the requirement that individuals undergoing capacity assessments be given “rights” advice, that is, fulsome information on their legal rights to refuse an assessment or challenge the outcome of an assessment.^[14]

The SDA requires that an individual whose capacity is at issue in a proceeding be served with notice of the proceedings. The individual, regardless of capacity, has the right to take part in the proceedings and have access to a lawyer, and, as noted below, if such person does not already have counsel, section 3 of the SDA provides for the appointment of counsel.

Subsection 3(1) (b) provides for a further presumption of capacity. It sets out that a person who is represented by a lawyer appointed pursuant to section 3 of the SDA is “deemed to have capacity to retain and instruct counsel.”

The purpose of the SDA is dual: to protect vulnerable individuals while at the same time respecting their autonomy.

CAPACITY CONSIDERATIONS: GUARDIANSHIP OF PROPERTY

When an individual is found to be incapable of managing property, a guardian of property may be appointed for that individual, if that individual does not already have an appointed attorney under a Power of Attorney. A guardian of property is either a court-appointed or statutory guardian who manages the financial affairs of a person who is declared mentally incapable of doing so.

CAPACITY TO MANAGE PROPERTY

The standard for determining the requisite decisional capacity to manage property is found at section 6 of the SDA. Capacity to manage property is defined as:

The ability to understand the information that is relevant in making a decision in the management of one’s property; and

The ability to appreciate the reasonably foreseeable consequences of a decision or lack of a decision.

Although the factors in assessing capacity to manage property are straightforward, a finding of incapacity to manage property is not easily made. This assessment is not one that is conducted informally.

Under the SDA there is a class of designated “capacity assessors” who may be requested to assess an individual’s legal capacity with respect to managing property by conducting capacity assessments.

Restrictions respecting capacity assessments have been legislated in recognition of the serious ramifications of a finding of incapacity on a person’s autonomy and ability to make future decisions. As Justice Quinn stated in Re Koch:

The mechanisms of the SDA and the HCCA are, as I stated at the outset, formidable. They can result in the loss of liberty, including the loss of one’s freedom to live where and how one chooses.

….

Any procedure by which a person’s legal status can be altered (which is the inevitable result on a finding of mental incapacity) must be cloaked with appropriate safeguards and capable of withstanding rigorous review.^[15]

In the same case, Justice Quinn charged assessors with the responsibility of exercising extreme diligence in their assessments and reports: they are obliged to “maintain meticulous files,” to inform the subject of his or her right to refuse to be interviewed, to carefully explain the “significance and effect” of a finding of incapacity to the person being assessed, to inform the subject that he or she may have a lawyer or friend in the interview, to carefully probe answers provided by the subject and to seek verification of answers, all the while taking caution not to be influenced by a party “harbouring improper motives.”^[16]

Justice Quinn emphasized also that for someone to be found incapable, the incapacity must be such that it is sufficiently serious to override the primacy of that person’s right to make his or her own choices.

The nature and degree of the alleged incapacity must be demonstrated to be sufficient to warrant depriving the appellant of her right to live as she chooses. Notwithstanding the presence of some degree of impairment, the question to be asked is whether the appellant has retained sufficient capacity to satisfy the statutes.^[17]

The purpose of capacity provisions under the SDA were addressed in Re Phelan:

The Substitute Decisions Act is a very important legislative policy. It recognizes that persons may become temporarily or permanently incapable of managing their personal or financial affairs. It anticipates that family members or others will identify when an individual has lost such capacity. It includes significant evidentiary protections to ensure that declarations of incapacity are made after notice is given to all those affected or potentially affected by the declaration and after proof on a balance of probabilities has been advanced by professionals who attest to the incapacity. It requires that a plan of management be submitted to explain the expectations. It specifies ongoing accountability to the court for the implementation of the plan and the costs of so doing.^[18]

Only qualified assessors can assess capacity in respect of property and personal care, and the factors considered in determining capacity in these respects is often said to be higher than that for granting or revoking power of attorney documents for property or personal care. That said, our court has also found there to be no higher or lower thresholds; rather, the factors to be applied and considered in determining decisional capacity are simply different.

Capacity and Court Applications for Guardianship

In a court application for guardianship, the evidence presented must be sufficient to satisfy the court that it can make a finding that the person is incapable of managing property. There can be no court appointed guardian of property (as opposed to a statutory guardian, discussed below) without a finding of incapacity by the court first.

The SDA does not stipulate what type of evidence is required with respect to capacity, but it should be third party independent evidence, if at all possible.^[19] This type of evidence would include either a report or letter or affidavit from a physician or psychologist. Or it could be a capacity assessment requested for the purposes of an application pursuant to s.22 or s.72 of the SDA, (distinct from an assessment under s.16, discussed below). It is quite rare for a court to make a finding of incapacity without independent evidence. However, if it is not possible to obtain third-party independent evidence of incapacity to manage property, compelling anecdotal evidence should be included, as this anecdotal evidence may be enough to convince a court to order that the alleged incapable person submit to a capacity assessment pursuant to s.79 of the SDA.

An order for a court-ordered capacity assessment under s.79 of the SDA must include specific information such as the name of the proposed assessor and the place of the assessment. If a capacity assessor has been asked to provide evidence for a court application for property guardianship, he or she is providing an opinion, one that the court may accept or not. Capacity assessors sometimes make statements in their assessments for court purposes that they “find X incapable.”^[20] This is likely incorrect, since it is the court that makes that finding, based on the evidence presented. Similarly, applicants’ lawyers often draft affidavits setting out that “Dr. Y has found X to be incapable of managing property.” This, too, is arguably incorrect.^[21]

The court is prohibited from finding a person incapable of managing property and appointing a guardian if there is an alternative course of action that does not require the court to make a finding of incapacity and is less restrictive of the person’s decision-making rights than the court appointment of a guardian.^[22] Other options, such as the appointing of an attorney under a continuing power of attorney for property should be canvassed, if the individual has the requisite capacity to make such an appointment.

Statutory Guardian Of Property

Sections 15 and 16 of the SDA provide for the OPGT to become the statutory guardian of property for an allegedly incapable person. Such appointments do not involve court applications. Instead, there are two ways for someone to be deemed incapable and a statutory guardian appointed. The first circumstance, or means, is if a person is admitted to a psychiatric facility, at which point the Mental Health Act (the “MHA”)^[23] requires that a physician assess the person’s capacity to manage property.^[24] Following that initial assessment, an attending physician is authorized by the MHA to assess the patient further, at later times, to determine whether the patient is capable of managing property.^[25] If the assessing physician finds the patient to be incapable of managing property, the physician is required to issue a formal certificate of incapacity and deliver a copy of the certificate to the OPGT.

The second means to a finding of incapacity to manage property is via an assessment by an authorized capacity assessor.^[26] Unless the assessment is ordered by a court (discussed above), a person has the right to refuse to have his or her capacity to manage property assessed by an assessor.^[27] A person can only request that another person’s capacity be assessed in limited circumstances: the assessment must be requested in the prescribed form; the person requesting the assessment must indicate that he or she has reasonable grounds to believe that the other person is not capable of managing property; and the person requesting the assessment must indicate that the requesting person has made reasonable inquiries and found that there is no power of attorney for property that authorizes an attorney to manage the other person’s property or any other relatives who would seek to act as guardian of property.^[28] If the OPGT is appointed as statutory guardian, certain persons may apply to the OPGT to replace it as guardian through an administrative process.^[29]

Any individual can apply to the Consent and Capacity Board for a review of their capacity.

An application will be brought under the MHA if a person was found incapable by a doctor while in a psychiatric facility and under the SDA if found incapable by a capacity assessor.

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^[1]            Palahnuk v Palahnuk Estate, [2006] OJ No 5304 (SC); Brillinger v Brillinger-Cain, [2007] OJ No. 2451 (SC); Knox v Burton (2004), 6 ETR (3d) 285 (Ont SC).

^[2]             Starson v Swayze, [2003] 1 SCR 722.

^[3]             Palahnuk Estate, Brillinger v Brillinger-Cain, Knox v Burton, all supra note 3.

^[4]             Palahnuk Estate, supra note 3 at para 71.

^[5]             Supra note 4.

^[6]             Ibid at para. 77.

^[7]             Ibid at para 78.

^[8]             Ibid at para 78.

^[9]             Ibid at paras 80-81 [emphasis in original].

^[10]           Ibid at para 79.

^[11]           Re Koch, 1997 CanLII 12138 (Ont SC) at para 89.

^[12]           See section 2(1) of the SDA, supra note 1.

^[13]           Ibid, s 2(2).

^[14]           Ibid, s 78(2)(b).

^[15]          Supra note 13 at para 89 [emphasis in original]. In this case, Mrs. Koch, the allegedly incapable person, had been assessed for her capacity to manage property under the SDA, as well as her capacity to consent to placement in a care facility under the HCCA.

^[16]           Ibid.

^[17]           Ibid at para 19.

^[18]           Re Phelan (1999), 29 ETR (2d) 82, [1999] OJ No. 2465 (SC).

^[19]          Law Society of Upper Canada, How to Have a Guardian of Property Appointed through Court Application, available  at: http://www.lsuc.on.ca/For-Lawyers/Manage-Your-Practice/Practice-Area/Trusts-and-Estates-Law/How-to-Have-a-Guardian-of-Property-Appointed-through-Court-Application/ Accessed on August 14, 2015.

^[20]           Ibid.

^[21]           Ibid.

^[22]           SDA, supra note 1, subsection 22(3).

^[23]           RSO 1990, c M.7.

^[24]           MHA, s 54(1).

^[25]           Ibid, s 54(2).

^[26]          “Assessor” is defined at subsection 1(1) of the SDA as “a member of a class of persons who are designated by the regulations as being qualified to do assessments of capacity.” The training of capacity assessors is managed and conducted by the Capacity Assessment Office. http://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/capacity.asp

^[27]           SDA, supra note 1, section 78 and subsection 79(1).

^[28]           Ibid s 16(2).

^[29]           Ibid s 17.

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This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.