Decision has significant impact on waivers

The Court of Appeal has found that provisions in the Occupiers’ Liability Act trump the Consumer Protection Act when it comes to waivers.

In Schnarr v. Blue Mountain Resorts Limited, the Court of Appeal heard two cases together that involved injured skiers bringing lawsuits against ski resorts after having signed agreements waiving the facilities’ liability in the event they got hurt.

Lawyers say the decision has significant implications for waivers, in particular when it comes to the sports and recreation industry.

“Waivers are designed to explain the risk to the participant and insulate to some degree the facility from being sued because you can’t have a recreational facility being sued every time somebody gets injured,” says John Olah, one of the lawyers representing Blue Mountain Resorts. 

Olah, a senior litigation partner at Beard Winter LLP, says the decision means that waivers are valid and will serve as effective defences as long as the activity falls under the Occupiers’ Liability Act.

At issue in the appeal was whether a particular provision in the OLA prevails over provisions in the Consumer Protection Act.

The OLA, which came into force in 1980, allows occupiers to obtain waivers from people using their premises so they are not liable in the event they get injured. A provision of the act holds that the occupier’s duty of care does not apply in “respect of risks willingly assumed by the person who enters on the premises.”

On the other hand, the CPA, which was adopted in 2002 to modernize the province’s consumer law, guarantees a warranty of quality of services provided by a supplier to a consumer.

This says that warranty cannot be waived and that any term or acknowledgement that purports to do so is void.

In this case, the ski hills were both occupiers as well as suppliers of services under the CPA.

Motions judges found consumer protection law applied. The Court of Appeal came to the opposite conclusion, finding the right of the occupier to limit its liability trumps what is in the CPA.

While the plaintiffs argued that the relevant parts of the two pieces of legislation could be read together harmoniously, the Court of Appeal found that there was an unavoidable conflict between the two and that they were irreconcilable.

“The OLA permits an occupier to obtain a waiver of liability. The CPA precludes a supplier from obtaining a waiver of liability. In other words, what the OLA permits, the CPA prohibits,” Justice Ian Nordheimer wrote in the decision on behalf of a three-judge panel.

Nordheimer added that, under this conflict, the ski resorts would be held liable for “something that they thought they had lawfully protected themselves against” and that such a result would be “absurd.”

The Court of Appeal found that the OLA was intended to be an exhaustive scheme in relation to the liability of occupiers to people on their property and that its purpose would be undermined if the CPA “were allowed to reintroduce another novel contractual duty.”

The court concluded that the OLA was more specific in relation to waivers and should apply. This meant that the waivers bound the two plaintiffs.

“This is so regardless of whether their claims are in tort or for breach of warranty,” Nord‑heimer said.

Shantona Chaudhury, one of the lawyers representing both plaintiffs, says the Court of Appeal’s decision is troubling as it waters down the scope of consumer protection law.

“The general take on consumer protection law is it has to be interpreted very broadly and in favour of the consumer and the whole point of it is to protect consumers,” says Chaudhury, a partner at Pape Barristers PC. “What they’ve done in this decision is essentially made a big exception in consumer protection law for occupier’s liability.”

Chaudhury adds that the decision may well have application in other cases as well as it says something about how to interpret consumer protection law generally.

Edward Chadderton, one of the lawyers who represented Snow Valley Ski Resort, says the decision brings some certainty to the law in this area as there was some conflict between the two earlier underlying decisions.

“If they hadn’t been set aside, it would have led to some confusion in how to deal with [waivers] when raised as a defence,” says Chadderton, a partner with Carroll Heyd Chown LLP.

The case attracted the attention of a number of groups that chose to intervene in the appeal, including the Ontario Trial Lawyers Association and the Canadian Defence Lawyers.

Jim Tomlinson, who represented the Canadian Defence Lawyers as interveners, says the reason for so much interest was the underlying decision’s potential implication for waivers.

“The net effect would have been to render waivers somewhat hollow,” says Tomlinson, a partner with McCague Borlack LLP.

The lawyer representing the OTLA in its intervention did not respond to a request for comment.

Chaudhury says she does not know yet whether the plaintiffs intend to seek leave from the Supreme Court of Canada to appeal the decision.