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09/May/2018
Waiving Away your Right to Sue: The Enforceability of Waivers

With warmer weather finally on the horizon, Ontarians are enthusiastically heading outdoors to enjoy recreational activities such as rock-climbing, treetop rope courses, and skydiving simulators. Many of us will hardly reflect on the effect of signing a waiver before getting in line to enjoy these activities. A recent Ontario Court of Appeal decision has made it more difficult for victims injured while partaking in activities like these to obtain compensation. The Court of Appeal upheld the use of waivers by commercial occupiers, including ski resorts, to avoid or mitigate liability, and held that plaintiffs cannot rely on the Consumer Protection Act to override valid waivers under the Occupiers’ Liability Act.

This decision related to two appeals that involved similar issues with respect to the interaction and conflict of the Occupiers’ Liability Act, R.S.O. 1990, c. O.2 (“OLA”) and the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A (“CPA”). The plaintiff in the first action, David Schnarr, purchased a season ski pass to Blue Mountain Resorts, and executed a waiver that waived any and all claims against the ski area operator and others, and released them from liability for any damages that he may suffer. Mr. Schnarr then allegedly collided with a piece of debris while skiing on the premises. In the Rule 21 motion decision, Schnarr v. Blue Mountain Resorts Limited, 2017 ONSC 114, Tzimas J. held that there was no conflict between the OLA and the CPA. Tzimas J. held that Mr. Schnarr could advance two causes of action: one for negligence, which would be subject to the waiver, and one for breach of warranty, which would not be subject to the waiver as the waiver was void under sections 9(3) and (4) of the CPA. Blue Mountain appealed the decision.

The plaintiff in the second action, Elizabeth Woodhouse, purchased a lift ticket, equipment rental and a ski lesson at Snow Valley and executed a waiver. Ms. Woodhouse was then allegedly injured while using a tow rope on the premises. In the Rule 22 special case motion decision Woodhouse v Snow Valley, 2017 ONSC 222, McCarthy J. held that section 9 of the CPA voided the waiver, and that these sections superseded the provisions of the OLA. However, McCarthy J. held that a court could nonetheless hold that a consumer was bound by a void waiver pursuant to section 93(2) of the CPA. Ms. Woodhouse appealed the decision with respect the applicability of section 93(2) and Snow Valley cross-appealed with respect to the application of section 9.

The main legal issue on appeal was whether sections 7(1) and 9 of the CPA overrides or otherwise impacts section 3 of the OLA. Section 7(1) of the CPA expressly prohibits the use of waivers:

7(1)The substantive and procedural rights given under this Act apply despite any agreement or waiver to the contrary.

[…]

9(1) The supplier is deemed to warrant that the services supplied under a consumer agreement are of a reasonably acceptable quality.

[…]

(3) Any term or acknowledgement, whether part of the consumer agreement or not, that purports to negate or vary any implied condition or warranty under the Sale of Goods Act or any deemed condition or warranty under this Act is void.

(4) If a term or acknowledgement referenced in subsection (3) is a term of the agreement, it is severable from the agreement and shall not be evidence of circumstances showing an intent that the deemed or implied warranty or condition does not apply.

Conversely, sections 3 and 4 of the OLA permits the use of waivers:

3(1) An occupier of premises owes a duty to take such care as in all the circumstances of the case is reasonable to see that persons entering on the premises, and the property brought on the premises by those persons are reasonably safe while on the premises.

(2) The duty of care provided for in subsection (1) applies whether the danger is caused by the condition of the premises or by an activity carried on on the premises.

(3) The duty of care provided for in subsection (1) applies except in so far as the occupier of premises is free to and does restrict, modify or exclude the occupier’s duty.

4(1) The duty of care provided for in subsection 3(1) does not apply in respect of risks willingly assumed by the person who enters on the premises, but in that case the occupier owes a duty to the person to not create a danger with the deliberate intent of doing harm or damage to the person or his or her property and to not act with reckless disregard of the presence of the person or his or her property.

As Nordheimer J.A. stated, “what the OLA permits, the CPA prohibits” (para. 43). It was held that there was a clear conflict between the provisions.

Turning to the issue of how the conflict should be resolved, the Court of Appeal held that the OLA should take precedence for the following reasons:

  1. section 9(1) of the OLA sets out a “class of things” that may have a higher liability or standard of care, including innkeepers, common carriers and bailees. The Court held that while the list was not exhaustive, the items are of a different class than the consumer transactions considered under the CPA;
  2. the OLA was intended to be an exhaustive legislative scheme that replaced the common law with respect to occupiers’ liability, and the CPA should not be interpreted so as to infringe on that scheme;
  3. the OLA deals specifically with waivers of liability, whereas the CPA applies generally to all consumer transactions. The specific provisions of the OLA override the general provisions of the CPA; and
  4. it would be absurd to conclude “that the Legislature went through the exercise of amending the OLA for the purpose of clarifying the liability of occupiers, and to encourage them to open their property for use by members of the public, all to have it rendered of no force or effect because of the existence of the CPA” (para 68).

 

Ms. Woodhouse’s claim raised the specific issue of whether section 93(2) of the CPA could be used to hold a consumer to a waiver of liability, even if section 9(3) of the CPA voided the waiver.

The Court of Appeal dismissed the defendant’s argument that the court could hold a consumer to a waiver of liability, even if the waiver was void under section 9(3), stating:

The purpose behind s. 93(2) is to avoid situations where a consumer, who has received the benefit of a consumer agreement, attempts to retain those benefits without performing his or her side of the agreement because of a technical breach of the CPA. Section 93(2) is not intended to permit the court to hold a consumer to a consumer agreement that violates one of the basic tenets of the CPA, especially when the provision is void. (para 77)

The Court of Appeal held that Mr. Schnarr was bound by the Blue Mountain waiver and Ms. Woodhouse was bound by the release in her lift ticket and the Snow Valley waiver, regardless of whether their claims were in tort or for breach of warranty.

If you have been injured in a skiing accident or during any another recreational activity, the lawyers at Bogoroch & Associates LLP can help you understand your legal rights and the impact of any waivers you signed.

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