In the decision of Dixon v. Maynard (“Dixon”),[1] the Honourable Justice Bryne considered the validity of a Contingency Fee Arrangement (CFA) and the decisional capacity of a client to instruct their counsel.
Background
Dixon concerned a client (the “Client”) and a property they jointly owned with their daughter (the “Property”). Unfortunately, a bitter dispute arose between them which resulted in litigation concerning ownership and the division of the proceeds of sale from the Property.[2]
On or about December 4, 2020, the Client entered a CFA with a solicitor (the “Solicitor”) for collection of her share of the Property following its sale. The CFA contemplated that the Client would pay the Solicitor 20% of anything he was able to recover, plus disbursements, resulting from the litigation. The Solicitor subsequently filed a Statement of Defence and Counterclaim.[3]
On March 20, 2021, the Court heard an interpleader motion and ordered that the Client’s share of the Property be paid into Court. On July 10, 2024, the Public Guardian Trustee (PGT) became Guardian of the Property for the Client. In January 2025, the litigation settled and the PGT received the sum of $484,000.00 on behalf of the Client.[4]
Legal Issues
In Dixon, the Solicitor sought payment of their fees pursuant to the CFA. As the Court considered the validity of the CFA, it also analysed the Client’s capacity to instruct counsel during the course of their retainer.
- The Contingency Fee Arrangement
The Court considered whether the CFA complied with the governing Solicitor’s Act.[5] Pursuant to the Act, a CFA must include the following to be effective in Ontario:
- A statement that the client and solicitor discussed other options other than a contingency fee arrangement, as per s. 2(3)(i);
- A statement that hourly rates vary, and she could speak to others to compare rates, as per s. 2(3)(ii);
- A simple calculation of how a contingency fee was calculated, as per s. 2(6);
- A statement advising the client that he or she can ask the Superior Court of Justice to review the solicitor’s bill, as per s. 2(8).
The Court noted that the CFA between the Solicitor and the Client did not include several of these factors. Given these deficiencies, Justice Bryne noted they were required to declare the CFA void.[6]
- Capacity to Instruct Counsel
The secondary issue thus became whether the Solicitor was entitled to payment of their legal costs, notwithstanding the void CFA. In this regard, the Court noted there was much evidence that the Client’s capacity was at issue well before they entered their retainer with the Solicitor.[7]
In Costantino v Costantino,[8] the Ontario Superior Court noted that to have capacity to instruct counsel, a person must:
- understand what they have asked the lawyer to do for them and why;
- be able to understand/process the information, advice, and options the lawyer presents; and
- appreciate the advantages/drawbacks/consequences associated with the options
In the subsequent decision of Bajwa v. Singh,[9] the Ontario Superior Court provided further clarity on the factors that should be considered in assessing the requisite decisional capacity to instruct counsel, including:
- The ability to understand and appreciate the nature of the proceeding and the ultimate issues in the proceeding, the financial risks and benefits of the lawsuit to the client, and the social risks and benefits of the proceeding;
- The ability to assess the comparative risk of available alternatives, and reasonable range of possible outcomes; and
- The ability to make a reasoned choice regarding the proceeding, the rationality and stability of the choices made.
Justice Bryne noted that the Solicitor’s dockets indicated that they should have been concerned about the Client’s capacity to instruct counsel when the CFA was entered into.[10]
Early in the retainer, the Client was served with a Statement of Claim alleging that the Client suffered from delusions and suffered from psychotic episodes. Moreover, than in 2019 she was involuntarily detained for assessment at a psychiatric facility. In the Client’s Statement of Defence, they disputed that they suffered from mental health issues.[11]
In the following months, the Solicitor sought the production of the Client’s medical records. In March 2021, the Solicitor wrote to the Regional Senior Justice concerning the Client’s need for a litigation guardian “because of her past mental health history, her lack of understanding of her financial affairs and the risk of financial abuse by others”.[12]
On March 12, 2021, the Solicitor arranged for the Client to undergo a capacity assessment to manage their property. The designated capacity assessor under the Substitute Decisions Act,[13] Ms. Shah, opined that the Client was not capable of managing her property. The Client’s medical records were examined which noted a diagnosis of early to moderate dementia which impacted her memory and added confusion. This assessment was not shared with any other party until May 2023.[14]
Despite the capacity assessment, the Solicitor continued to receive instructions from the Client, including to contest the interpleader motion in March 2021. As noted by Justice Bryne:
The difficulty arises on March 16, 2021, when [the Solicitor] learned that [the Client] had no capacity to manage her own affairs. While the assessment did not address capacity to instruct counsel, it has been recognized that the capacity to instruct counsel involves a higher level of understanding than when deciding personal financial matters.[15]
The Client was swearing affidavits to issues in the litigation concerning the Property within the same month she was found to lack capacity. Following the March capacity assessment, the Solicitor docketed a further 96 hours. It was only in May 2023 that the Court referred this matter to the PGT, upon which they were eventually appointed as the Client’s Guardian.[16]
In light of the evidence before the Court, Justice Bryne permitted the Solicitor to claim 15% of their outstanding dockets for a sum of $4,200.00.[17]
The Court heavily discounted the Solicitor’s time following the capacity assessment on the basis that the instructions they were receiving, and acting upon, may not have been in the Client’s best interests. It is ambiguous whether the Client understood the extent that her instructions were diminishing the value of the Property, and in particular given the high 20% margin that the Solicitor would claim pursuant to the CFA.[18]
Concluding Comments
As the adage goes, capacity is time, task and situation specific. Whereas there is no formal hierarch of capacity, the Court in Dixon highlighted that the capacity to instruct counsel requires a higher level of sophistication and understanding than the management of one’s property. One of the key responsibilities of any lawyer is to assess and be cognisant of their client’s capacity and understanding of the legal matter at issue.
The Law Society of Ontario has useful resources on this topic and an instructive guide to navigating client capacity concerns. Moreover, WEL Partners has a red flag checklist for decisional incapacity in the context of a legal retainer.
—
[1] Dixon v. Maynard, 2026 ONSC 879 (“Dixon”).
[2] Dixon at paras 3 – 6.
[3] Dixon at para 7.
[4] Dixon at paras 10 and 11.
[5] At the time the CFA was entered in December 2020, they were governed by Contingency Fee Agreements, O Reg 195/04 of the Solicitors Act, RSO 1990, c S.15.
[6] Dixon at paras 13 – 16.
[7] Dixon at para 18.
[8] Costantino v. Costantino, 2016 ONSC 7279 (CanLII) at para 47.
[9] Bajwa v. Singh, 2022 ONSC 3720 (CanLII) at para 14.
[10] Dixon at para 19.
[11] Dixon at para 19.
[12] Dixon at paras 20 – 22.
[13] Substitute Decisions Act, 1992, S.O. 1992, c. 30.
[14] Dixon at para 23.
[15] Dixon at para 21; citing Calvert (Litigation Guardian of) v. Calvert, (1997) 32 O.R. (3d) 281 (S.C.), at 294, affirmed (1998) 37 O.R. (3d) 221(C.A.); Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, at para. 87.
[16] Dixon at para 24.
[17] Dixon at para
[18] Dixon at para
Written by: Oliver O'Brien
Posted on: March 18, 2026
Categories: Commentary, WEL Newsletter
In the decision of Dixon v. Maynard (“Dixon”),[1] the Honourable Justice Bryne considered the validity of a Contingency Fee Arrangement (CFA) and the decisional capacity of a client to instruct their counsel.
Background
Dixon concerned a client (the “Client”) and a property they jointly owned with their daughter (the “Property”). Unfortunately, a bitter dispute arose between them which resulted in litigation concerning ownership and the division of the proceeds of sale from the Property.[2]
On or about December 4, 2020, the Client entered a CFA with a solicitor (the “Solicitor”) for collection of her share of the Property following its sale. The CFA contemplated that the Client would pay the Solicitor 20% of anything he was able to recover, plus disbursements, resulting from the litigation. The Solicitor subsequently filed a Statement of Defence and Counterclaim.[3]
On March 20, 2021, the Court heard an interpleader motion and ordered that the Client’s share of the Property be paid into Court. On July 10, 2024, the Public Guardian Trustee (PGT) became Guardian of the Property for the Client. In January 2025, the litigation settled and the PGT received the sum of $484,000.00 on behalf of the Client.[4]
Legal Issues
In Dixon, the Solicitor sought payment of their fees pursuant to the CFA. As the Court considered the validity of the CFA, it also analysed the Client’s capacity to instruct counsel during the course of their retainer.
The Court considered whether the CFA complied with the governing Solicitor’s Act.[5] Pursuant to the Act, a CFA must include the following to be effective in Ontario:
The Court noted that the CFA between the Solicitor and the Client did not include several of these factors. Given these deficiencies, Justice Bryne noted they were required to declare the CFA void.[6]
The secondary issue thus became whether the Solicitor was entitled to payment of their legal costs, notwithstanding the void CFA. In this regard, the Court noted there was much evidence that the Client’s capacity was at issue well before they entered their retainer with the Solicitor.[7]
In Costantino v Costantino,[8] the Ontario Superior Court noted that to have capacity to instruct counsel, a person must:
In the subsequent decision of Bajwa v. Singh,[9] the Ontario Superior Court provided further clarity on the factors that should be considered in assessing the requisite decisional capacity to instruct counsel, including:
Justice Bryne noted that the Solicitor’s dockets indicated that they should have been concerned about the Client’s capacity to instruct counsel when the CFA was entered into.[10]
Early in the retainer, the Client was served with a Statement of Claim alleging that the Client suffered from delusions and suffered from psychotic episodes. Moreover, than in 2019 she was involuntarily detained for assessment at a psychiatric facility. In the Client’s Statement of Defence, they disputed that they suffered from mental health issues.[11]
In the following months, the Solicitor sought the production of the Client’s medical records. In March 2021, the Solicitor wrote to the Regional Senior Justice concerning the Client’s need for a litigation guardian “because of her past mental health history, her lack of understanding of her financial affairs and the risk of financial abuse by others”.[12]
On March 12, 2021, the Solicitor arranged for the Client to undergo a capacity assessment to manage their property. The designated capacity assessor under the Substitute Decisions Act,[13] Ms. Shah, opined that the Client was not capable of managing her property. The Client’s medical records were examined which noted a diagnosis of early to moderate dementia which impacted her memory and added confusion. This assessment was not shared with any other party until May 2023.[14]
Despite the capacity assessment, the Solicitor continued to receive instructions from the Client, including to contest the interpleader motion in March 2021. As noted by Justice Bryne:
The difficulty arises on March 16, 2021, when [the Solicitor] learned that [the Client] had no capacity to manage her own affairs. While the assessment did not address capacity to instruct counsel, it has been recognized that the capacity to instruct counsel involves a higher level of understanding than when deciding personal financial matters.[15]
The Client was swearing affidavits to issues in the litigation concerning the Property within the same month she was found to lack capacity. Following the March capacity assessment, the Solicitor docketed a further 96 hours. It was only in May 2023 that the Court referred this matter to the PGT, upon which they were eventually appointed as the Client’s Guardian.[16]
In light of the evidence before the Court, Justice Bryne permitted the Solicitor to claim 15% of their outstanding dockets for a sum of $4,200.00.[17]
The Court heavily discounted the Solicitor’s time following the capacity assessment on the basis that the instructions they were receiving, and acting upon, may not have been in the Client’s best interests. It is ambiguous whether the Client understood the extent that her instructions were diminishing the value of the Property, and in particular given the high 20% margin that the Solicitor would claim pursuant to the CFA.[18]
Concluding Comments
As the adage goes, capacity is time, task and situation specific. Whereas there is no formal hierarch of capacity, the Court in Dixon highlighted that the capacity to instruct counsel requires a higher level of sophistication and understanding than the management of one’s property. One of the key responsibilities of any lawyer is to assess and be cognisant of their client’s capacity and understanding of the legal matter at issue.
The Law Society of Ontario has useful resources on this topic and an instructive guide to navigating client capacity concerns. Moreover, WEL Partners has a red flag checklist for decisional incapacity in the context of a legal retainer.
—
[1] Dixon v. Maynard, 2026 ONSC 879 (“Dixon”).
[2] Dixon at paras 3 – 6.
[3] Dixon at para 7.
[4] Dixon at paras 10 and 11.
[5] At the time the CFA was entered in December 2020, they were governed by Contingency Fee Agreements, O Reg 195/04 of the Solicitors Act, RSO 1990, c S.15.
[6] Dixon at paras 13 – 16.
[7] Dixon at para 18.
[8] Costantino v. Costantino, 2016 ONSC 7279 (CanLII) at para 47.
[9] Bajwa v. Singh, 2022 ONSC 3720 (CanLII) at para 14.
[10] Dixon at para 19.
[11] Dixon at para 19.
[12] Dixon at paras 20 – 22.
[13] Substitute Decisions Act, 1992, S.O. 1992, c. 30.
[14] Dixon at para 23.
[15] Dixon at para 21; citing Calvert (Litigation Guardian of) v. Calvert, (1997) 32 O.R. (3d) 281 (S.C.), at 294, affirmed (1998) 37 O.R. (3d) 221(C.A.); Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, at para. 87.
[16] Dixon at para 24.
[17] Dixon at para
[18] Dixon at para
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