Capacity assessments are an integral tool in estates and trusts litigation since a significant portion of contentious issues turn on requisite capacity of an individual to execute a Will or grant a Power of Attorney.

The court has the power to order that an individual whose capacity is in question submit to a capacity assessment. These assessments can be invasive, especially when the person under assessment has been compelled to undergo one. For this reason, the court is required to carefully consider the available evidence, the circumstances and the rights of the individual before ordering a capacity assessment to take place.

Criteria in Ontario

In Ontario, the governing legislation regarding incapable adults and substitute-decision making is the Substitute Decisions Act, 1992, R.S.O. (the “SDA”). The SDA provides the court with the power to compel another’s capacity to be assessed. Section 79(1) of the SDA provides that:

79 (1) If a person’s capacity is in issue in a proceeding under this Act and the court is satisfied that there are reasonable grounds to believe that the person is incapable, the court may, on motion or on its own initiative, order that the person be assessed by one or more assessors named in the order, for the purpose of giving an opinion as to the person’s capacity.

Moreover, section 105 of the Courts of Justice Act, 1990, R.S.O. states that where a physical or mental condition of a party to a proceeding is in question, the court may order that the parity is to undergo a physical or mental examination by one or more health practitioners.

Therefore, for the court to make an order for a capacity assessment: (a) a person’s capacity must be in issue; and (b) the court must be satisfied that there are reasonable grounds to believe that person is incapable. It is a matter of judicial discretion whether to order a capacity assessment.

When the court considers if a capacity assessment is required, they must weigh the individual’s fundamental rights of dignity and privacy and their legal rights against the court’s duty to protect the vulnerable.^[1] In Abrams, Justice Strathy (as he then was) listed the factors that should be considered by the court when exercising their discretion to order a capacity assessment:

1. The purpose of the SDA
2. The terms of section 79 of the SDA, namely:
   1. The person’s capacity must be in issue; and
   2. There are reasonable grounds to believe the person is incapable;
3. The nature and circumstances of the proceedings in which the issue is raised;
4. the nature and quality of the evidence before the court as to the person’s capacity and vulnerability to exploitation;
5. if there has been a previous assessment, the qualifications of the assessor, the comprehensiveness of the report and the conclusions reached;
6. whether there are flaws on the previous report, evidence of bias or lack of objectivity, a failure to consider relevant evidence, the consideration of irrelevant evidence and the application of the proper criteria;
7. whether the assessment will be necessary in order to decide the issues for the court;
8. whether any harm will be done if an assessment does not take place;
9. whether there is any urgency to the assessment; and
10. the wishes of the person sought to be examined, taking into account his or her capacity.^[2]

Capacity

There is no single legal definition of capacity and there is no general test for establishing the capacity to manage one’s personal care, property or competency. Instead, capacity is time-specific, decision-specific and situation-specific. Under the SDA, an individual is presumed capable of managing their personal care once they reach the age of sixteen and their property at the age of eighteen.^[3]

Section 6 of the SDA provides that a person is incapable of managing their property if they cannot not understand information that is relevant to making a decision in the management of their property and is unable to appreciate the reasonably foreseeable consequences of a decision or lack of a decision.

Conversely, section 45 of the SDA provides that a person is incapable of managing their personal care if they cannot understand information relevant to making a decision concerning their own health care, nutrition, shelter, clothing, hygiene or safety and to fully appreciate the reasonably foreseeably consequences of their decisions or lack thereof.

Application of section 79 and the Abrams factors

The decision in Zagorac v. Zagorac, 2021 4448 (ONSC) is helpful in demonstrating how the court considers whether to order a capacity assessment. In Zagorac, the dispute centered around the capacity of 68-year old Leposava Zagorac (“Ms. Zagorac”). The dispute was principally between Ms. Zagorac’s two adult children: Ivan and Nina.

In 2015, Mrs. Zagorac was diagnosed with dementia and later with Alzheimer’s disease. In 2019, Ivan noticed several discrepancies with Mrs. Zagorac’s finances, including unexplained withdrawals from accounts jointly held by her and Nina, unusual balances on her credit card and that a bathroom renovation at her home was substantially over budget.^[4]

Ivan sought an order that Mrs. Zagorac be assessed for her capacity to manage her property and personal care. His position was that she was incapable of managing her property, her personal care and that she was susceptible to undue influence from Nina.^[5]

The court considered evidence from eleven different individuals, including Ivan and Nina, who opined on Mrs. Zagorac’s capacity. Evidence was submitted from Mrs. Zagorac’s neighbours, old time friends in Croatia, family members and PSWs. In Ivan’s affidavit evidence, he raised Mrs. Zagorac’s dementia and Alzheimer’s diagnoses as well as the fact that she had scored 13/30 on a Mini-Mental Status Exam (“MMSE”) and could not complete a Montreal Cognitive Assessment (“MoCA”), among other things.^[6]

Nina, meanwhile, relied on two Assessment Reports conducted in 2018 and 2019 respectively to assert that Mrs. Zagorac could manage her property and personal care.^[7] Mrs. Zagorac herself swore an affidavit in which she asserted that she wished to live in her own house until she died and “I may be old and slow, but I am not stupid”. Mrs. Zagorac made no mention of the capacity assessments or any cognitive testing.^[8]

Justice Dietrich’s decision on whether to grant a capacity assessment included an analysis of the Abrams factors.

(i) Was Mrs. Zagorac’s capacity at issue and were there reasonable grounds to believe she is incapable?

First, was Mrs. Zagorac’s capacity in issue? Her Honour had little doubt that this was the case. Mrs. Zagorac had been diagnosed with both dementia and Alzheimer’s disease. She had undergone a MMSE and MoCA and several individuals attested to her forgetfulness, confusion and more importantly – inability to manage her property or personal care.^[9]

(ii) The nature and circumstances in which the issue of capacity is raised

Justice Dietrich found considerable anecdotal evidence that Mrs. Zagorac had been unable to manage her finances since at least 2017. Evidence demonstrated how she was prone to getting lost in her own neighbourhood, could not remember things from moment to moment or perform independent activities of daily living. Her Honour also highlighted the declining scores on her MMSE and MoCA tests and dementia / Alzheimer’s diagnoses.^[10]

(iii) The nature and quality of the evidence before the court as to the person’s capacity and vulnerability to exploitation

Her Honour found that the evidence before the court was largely unbiased and impartial. It included health records, cognitive tests and sworn statements from Mrs. Zagorac’s friends and neighbours.^[11]

Importantly, Justice Dietrich noted that no assessments of Mrs. Zagorac’s capacity to manage her property or personal care have been carried out. While in 2018 there was an Assessment Report, the assessor Ms. Boiago came to no conclusion on Mrs. Zagorac’s ability to manage her finances and conceded in her cross-examination that she made no reference to the test set out in the SDA for assessing capacity to manage property.^[12]

(iv) Qualifications of Ms. Boiago and Mr. McLean, the comprehensiveness of their reports, the conclusions reached and the weaknesses in their reports

Ms. Boiago, who conducted the 2018 Assessment Report, is a registered capacity assessor and her qualifications were not challenged.  In her cross-examination, Ms. Boiago stated that she was not retained to opine on Mrs. Zagorac’s capacity to manage her personal care or property but capacity to grant powers of attorney and a will. Nevertheless, Nina relied on her 2018 report to assert that Mrs. Zagorac had the capacity to manage her property.^[13]

Justice Dietrich found Ms. Boiago’s assessment to be flawed; it did not consider medical evidence, financial statements or Mrs. Zagorac’s cognitive tests.  Moreover, Ms. Boiago did not set out the requisite tests for the capacity to manage property or to grant powers of attorney in the SDA. Finally, Ms. Boiago was not aware of Mrs. Zagorac’s Alzheimer’s diagnosis, and she relied heavily on notes taken by Nina in her assessment.^[14]

Mr. McLean, who conducted the 2019 Assessment Report, stated that he relied heavily on the 2018 report so by extension his report was also flawed. He had no personal relationship with Mrs. Zagorac, did not review any material like financial or medical records to form his opinion and also did not set out the tests formulated in the SDA.^[15]

(v) Is the assessment required to decide the issues before the court?

The issue before the court was the unexplained expenditures that occurred during Nina’s care for Mrs. Zagorac. Nina relied on Mrs. Zagorac’s presumed capacity to excuse justify the expenses and that she reasonably appreciates the consequences of them. Her Honour found that a capacity assessment was required to determine the extent of Mrs. Zagorac’s capacity in this regard.^[16]

(vi) Would any harm be caused by not ordering the assessment?

Justice Dietrich found that harm would be caused by not ordering an assessment. Ivan and Nina were unable to agree on Mrs. Zagorac’s capacity to manage her property, the validity of her Powers of Attorney or the adequacy of the accounting provided by Nina. Moreover, a mediation on this matter was unsuccessful. As such, a capacity assessment would be useful to advance several issues and hopefully bring forth a resolution.^[17]

(vii) Is there any urgency to the assessment?

Her Honour found some urgency to the assessment. Nina appeared to be unwilling to accept Mrs. Zagorac’s Alzheimer’s diagnosis or that there may be limitations in her ability to appreciate decisions relating to her property. As such, a capacity assessment could assist to better inform the parties of Mrs. Zagorac’s actual capacity to manage her property and hopefully assist in the medium and long-term planning of her property management.^[18]

(viii) Wishes of Mrs. Zagorac, taking into account her capacity

Lastly, Justice Dietrich considered the wishes of Mrs. Zagorac herself. Her Honor considered her steadfast wish to be cared for by Nina, and her refusal to let Ivan manage her property. This is notwithstanding the potential that her position could be the product of undue influence by Nina.^[19]

While cognizant of Mrs. Zagorac’s privacy, autonomy and that a capacity assessment can substantially intrude on the security of an individual, Justice Dietrich stated that her “greater concern relates to her vulnerability”. Nina’s rapid spending of Mrs. Zagorac’s finances could mean that her modest estate would be depleted and that she could face difficulties living in her home if she required private care and could not afford it.^[20]

Conclusions

Justice Dietrich found reasonable grounds to believe that Mrs. Zagorac was incapable, stating that there is “compelling evidence from a number of credible witnesses of a direct connection between [her] behavior and the issue of capacity”^[21].  Furthermore, upon considering each factor identified in Abrams, Justice Dietrich found that a further and more comprehensive assessment of Mrs. Zagorac’s capacity was necessary in order for the court to obtain an objective, independent and expert assessment of her capacity.

As Zagorac highlights, the decision to order a capacity assessment is not one the court takes lightly. It is one that can heavily impede a person’s autonomy and rights to privacy and person. Because of this, jurisprudence in Ontario has developed to provide clear and thorough guidance to courts on how they are to exercise their discretion in the circumstances.

—

[1] Abrams v. Abrams, 2008 CanLII 67884 (ONSC) at para 50.

[2] Ibid, para 53.

[3] SDA, section 2

[4] Zagorac v. Zagorac, 2021 4448 (ONSC) (“Zagorac”) at para 5

[5] Zagorac at para 6

[6] Zagorac at para 40

[7] Zagorac at para 56

[8] Zagorac at para 58

[9] Zagorac at Para 85

[10] Zagorac at para 92.

[11] Zagorac at para 92.

[12] Zagorac at para 95.

[13] Zagorac at para 101.

[14] Zagorac at paras 102 to 107.

[15] Zagorac at para 108.

[16] Zagorac at para 112

[17] Zagorac at para 114

[18] Zagorac at para 114.

[19] Zagorac at para 119

[20] Zagorac at para 121

[21] Zagorac at para 122