The Defendant Stopped Making Sense in Court Filings, and the Case Had to Stop Too

The situation

By the time Rahel and Selam sat down in our office, they had already filed a statement of claim themselves, served it themselves, and spent close to a year exchanging increasingly strange written responses with the defendant, a man named Jae-won who owed them close to 600,000 dollars and who had, over the previous several months, started filing court documents that veered between coherent legal argument and passages that made no sense at all, some referencing events and people that had nothing to do with the case.

The debt itself had a straightforward origin. Jae-won, a longtime acquaintance of Rahel's family, had approached her and Selam three years earlier asking to borrow a substantial sum to cover a shortfall on a home renovation project, offering a second mortgage against his Carleton Place property as security along with a signed promissory note setting out repayment terms. Rahel, an optometrist, and Selam, an accountant, had the savings available and knew Jae-won well enough to trust the arrangement. The renovation was completed, but the repayments never properly started, and after eighteen months of partial payments and excuses, Rahel and Selam decided to enforce the note. By that point the amount outstanding, principal and the interest the note specified, had climbed past 550,000 dollars, a sum large enough that neither of them was willing to simply write it off as a favour to an old family friend gone wrong.

They filed the claim without a lawyer, reasoning that the promissory note and registered second mortgage made the case simple enough to handle themselves. For the first several months, Jae-won's responses, while unhelpful, read as those of someone contesting the debt in an ordinary, if disorganized, way. Gradually, though, his filings changed character: dates and figures that contradicted his own earlier documents, references to conversations that did not appear to have happened, and at one point a response that appeared to have been drafted, in part, by someone else entirely without explanation.

It was only once a case conference produced an exchange so incoherent that even the presiding official raised the question of whether Jae-won understood what was happening in his own defence that Rahel and Selam recognized they were out of their depth, and came to us, a year into a fight they had started confident they could manage alone.

Why this was harder than it looked

A loan enforcement claim backed by a signed promissory note and a registered second mortgage is, in the ordinary course, one of the more straightforward pieces of civil litigation, which was exactly why Rahel and Selam had felt confident handling it themselves. What made this file genuinely difficult had nothing to do with the underlying debt, which was well documented and not seriously in dispute on the paper, and everything to do with a problem the claim's simplicity had masked for months: whether Jae-won, by the time he was defending himself, had the mental capacity to understand the proceeding at all.

Ontario's civil procedure rules require that a party who lacks the capacity to instruct counsel or represent themselves in a lawsuit be represented by a litigation guardian, someone authorized to make decisions in the proceeding on that party's behalf. This is not a determination that can be assumed or skipped past, and a lawsuit generally cannot properly continue against a party whose capacity is genuinely in question until the capacity issue is addressed, whether that means confirming the party is in fact capable, or arranging for a litigation guardian to step in. Continuing to litigate against someone who cannot understand or respond to what is happening risks producing a result that could later be set aside entirely, which would have wasted the year Rahel and Selam had already spent.

The difficulty was that nobody, including the court staff at the case conference, was positioned to make that determination casually. Capacity in this context is not a diagnosis a judge or a litigant can simply declare from the bench; it typically requires medical evidence, and raising the question at all meant redirecting the entire file, for a period, away from the merits of the debt and toward a separate, slower process of establishing whether Jae-won had a family member, friend, or the Public Guardian and Trustee available and willing to act as his litigation guardian, and whether his declining capacity was longstanding or comparatively recent.

Compounding the difficulty, Jae-won had no immediate family member obviously positioned to take on the guardian role, and the year of self-represented, sometimes contradictory filings Rahel and Selam had already generated needed to be reviewed carefully to determine what, if anything, from that year could still be relied on once a proper guardian was in place and able to respond to the claim on Jae-won's behalf.

What we did

1. Reviewed the full year of filings Rahel and Selam had generated on their own, reading through every document exchanged with Jae-won since the claim was first served, identifying which procedural steps remained sound and which would need to be redone once a litigation guardian was appointed, to avoid either wasting the earlier work entirely or building further on a foundation that a guardian could later challenge as improperly obtained.
2. Raised the capacity question formally with the court rather than leaving it as an informal concern noted at a case conference, because a proceeding cannot safely continue on the assumption of incapacity without a proper process addressing it, and an unresolved doubt left hanging over the file would have undermined any result eventually reached, however favourable it looked on paper.
3. Identified potential candidates to act as Jae-won's litigation guardian, starting with a search for family members and close contacts who might be willing to take on the role and, when none came forward as willing or suitable, engaging with the Public Guardian and Trustee's office to explore whether that office would step into the role given the absence of any private alternative.
4. Coordinated the medical evidence needed to establish Jae-won's capacity status, working with the process the court required to document his condition through an appropriate assessment, since a bare assertion of incapacity, however apparent it seemed from the tone and content of his own filings, was not sufficient on its own to support the appointment being sought, and produced the documentation the court needed before it would treat the guardian question as properly before it.
5. Paused active steps on the merits of the debt claim while the guardian question was resolved, a deliberate decision to protect the eventual outcome from a later challenge on the basis that it had been obtained against a party who could not properly respond, even though it meant additional delay on a claim that had already taken a year longer than it should have.
6. Once a litigation guardian was appointed, rebuilt the claim's procedural footing by formally serving the guardian with the material needed to bring them properly up to speed on the file's full history, rather than assuming the guardian could simply pick up where Jae-won's own confused and sometimes contradictory filings had left off, since a guardian working from an incomplete record could later argue the case had proceeded on an unfair footing.
7. Negotiated directly with the litigation guardian once appointed, presenting the promissory note and registered mortgage as the core of a claim that remained factually strong despite the capacity delay, with the goal of reaching a resolution that recognized both the property's realistic market value and the guardian's independent obligation to protect Jae-won's remaining interests through the process, rather than pressing for terms the guardian would be duty-bound to resist.
8. Reviewed Jae-won's broader financial picture alongside the guardian, including his ongoing care costs and what other assets or obligations existed beyond the mortgaged property, since a settlement that ignored those realities risked being unenforceable in practice, or reversible later, even if it looked favourable to our clients on paper, and this review shaped the repayment terms both sides ultimately accepted.

The outcome

Once the litigation guardian was in place and had reviewed the file, the underlying debt was not seriously contested; the promissory note and registered second mortgage left little room for a genuine defence on the merits. What was negotiated instead was the manner and extent of repayment, balanced against the guardian's responsibility to ensure Jae-won retained enough from the eventual sale of his property to cover his ongoing care needs, which were themselves connected to the same decline in capacity that had stalled the case.

Rahel and Selam recovered a substantial majority of the roughly 600,000 dollars owed, paid out of the proceeds when Jae-won's property was sold under an arrangement the guardian negotiated with our office, but not the full amount, and not the additional costs and interest a court might have ordered had the case proceeded to judgment on a straightforward, uncontested debt. The guardian's mandate to protect Jae-won's interests, and the practical reality of what remained available once his care costs were accounted for, meant a full recovery was never realistically on the table once capacity became the central issue.

The year Rahel and Selam had spent representing themselves before the capacity problem surfaced added real delay and, in hindsight, several procedural steps that had to be revisited once a guardian was appointed. They were candid afterward that recognizing the capacity issue sooner, and bringing in help before a case conference forced the question, would likely have shortened the file by months and reduced the number of procedural steps that ultimately had to be revisited once a guardian was properly in place. The debt was substantially, though not fully, recovered, and the case closed with a lesson about how a claim's apparent simplicity can obscure a genuinely difficult procedural problem sitting underneath it, one that has nothing to do with whether the money is owed and everything to do with whether the person on the other side is able to answer for it.

What you can learn from this