Sign a Waiver and its All Downhill from there: Court of Appeal Entrenches the Legal Use of “Waivers of Liability” at Ski Resorts across Ontario
Apr 18, 2018
In Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 313, the Ontario Court of Appeal upheld the validity of “waivers of liability” at ski resorts across the province. Two appeals were heard together, arising from motions involving skiers who had signed waivers of liability as a condition to purchasing lift tickets, and then were injured on the slope. This decision will have a far-reaching impact as it preserves not just the right of ski resorts, but seemingly all other purveyors of sport and recreation, to limit their liability with respect to personal injury.
The crux of the decision was a contest between s. 3 of the Occupiers’ Liability Act (“OLA”), which permits waivers, and s. 9(3) of the Consumers Protection Act (“CPA”), which prohibits waivers. It was accepted by all parties that purchasing a lift ticket at a ski resort is a consumer transaction. However, the Court found that the CPA – at least as far as waivers are concerned - had no jurisdiction over consumer transactions where the supplier was also an occupier (i.e. a ski resort). The waivers under the OLA were found to be valid.
One of the injured skiers, Schnarr, claimed against Blue Mountain Ski Resort for negligence as well as breach of contract. The latter was framed as a breach of the deemed warranty under s. 9(1) of the CPA, which requires all consumer services to be of “reasonably acceptable quality”. The Motions Judge found that the negligence claim was barred by the waiver, but the breach of warranty claim could proceed because the waiver was void under ss. 9(3) and (4) of the CPA.
The other skier, Woodhouse, claimed for only negligence against Snow Valley Ski Resort. The Motions Judge found that the waiver was presumptively voided by s. 9(3) of the CPA, but could be saved under s. 93(2) of the CPA. This provision allows the Court to bind the parties to a consumer transaction even if the statute is violated, if it would be “equitable” to do so.
There were multiple appeals and cross-appeals but ultimately the issues coalesced into the following:
(1) Does s. 9 of the CPA (which prohibits waivers) conflict with s. 3 of the OLA (which permits waivers), or can the two provisions be read harmoniously?
(2) If the two provisions are in conflict, how should that conflict be resolved; and
(3) Does s. 93(2) of the CPA allow a court to hold a consumer bound to a voided waiver under s. 9(3) of the CPA?
The Court of Appeal found: (1) there was a direct conflict; (2) the conflict resolved in favour of the OLA; and (3) it would not be equitable for s. 93(2) to bind the parties to a properly voided waiver (i.e. not one bargained for at a ski resort).
The Background of the OLA and the CPA
The OLA was intended to be an “exhaustive scheme” that canonized all legal obligations incumbent on occupiers. It was the result of distilling a medley of disparate statutes and common law principles into one comprehensive statutory scheme. The notion that further burdens could be imposed on occupiers - from an entirely different statute (the CPA) - would undermine the purpose of the exhaustive scheme.
Furthermore, a primary purpose of the OLA – particularly the right to waive liability – was to promote the use of vast tracts of rural land for the enjoyment of recreational activity. Landowners would not voluntarily allow the public onto their land to engage in such activities unless waivers were permissible.
The CPA was intended to protect consumers from transactions that were not already regulated by specialized legal regimes. There was no evidence that the provincial legislature had turned its mind to regulating liability for personal injuries sustained by persons engaged in recreational activities on occupied premises when the CPA was passed. In fact, the parliamentary record showed that the primary concern at the time the bill was passed was to protect consumers from predatory and fraudulent financial transactions.
(1) Was there a Conflict or could the Provisions be Read Harmoniously?
The Court examined the statutes from all angles and concluded there was no way to interpret them harmoniously and avoid a conflict. The notion that there could be “perfect” harmony was a fiction. The two statutes were promulgated 20 years apart and administered by two different governmental ministries. It was clear that an irreconcilable conflict existed between the two statutes: what the OLA permits, the CPA prohibits.
The Court did not accept the argument (advanced by the injured skiers) that a conflict could be avoided by upholding the waiver with respect to the tort claim, but not the breach of warranty claim. For the ski resorts to organize their affairs and effectively waive liability in the realm of tort, but then be subject to identical exposure and damages for breach of a deemed warranty would have been a “distinction without a difference”. Accepting this argument would have led to a contradictory and “absurd” result.
(2) How should the Conflict be resolved?
The conflict was resolved on the basis of several classic doctrines of statutory interpretation. The deciding factor was a long-held principle that general provisions must yield to specific provisions. In this case, the CPA generally targets myriad consumer transactions, whereas the OLA specifically targets recreational activities on occupied premises.
The conflict was resolved in favour of upholding waivers under the OLA. It is important to note that s.9(3) of the CPA – which prohibit the use of waivers – was not found to be invalid. However, the reach of that provision does not extend to consumer transactions between occupiers and members of the public who enter onto property for recreational activities.
It is clear that the underlying purposes of each statute (discussed earlier in the analysis) played a major role in resolving this conflict. In rejecting the outcome of the motion decisions below, the Court of Appeal had strong remarks about how interpretation of the CPA could not be shoehorned to indirectly “amend” the statute. That was clearly the purview of the legislature.
(3) Can the equities save a properly voided waiver under the Consumer Protection Act?
The court also determined that s. 93(2) of the CPA cannot give effect to a waiver that is properly voided by s. 9(3) of the CPA. That is because the discretionary clause was intended to protect suppliers from consumers who retain the benefit of a transaction, while refusing to pay for it on the basis of a technical breach of the CPA. It was not intended to bind consumers to a transaction that violates a “basic tenet” of the CPA. While not expressly stated in the decision, the Court of Appeal was obviously concerned about giving suppliers of consumer services carte blanche to peddle low-quality products with impunity. The bargaining power imbalance inherent to most consumer transactions would likely be abused if a waiver might pass muster.
This was a well-reasoned decision that applied a technical analysis with a correct result. While many critics will say the decision favoured commercial interests over consumers, and harkened back to a time when consumers had little protection – they may have a point. But they should take aim at the provincial legislature, and not the Court of Appeal. The new reality is that waivers have legal effect, and should be read carefully and only signed when and if prepared to waive the risk inherent in the activity.
Nicholas Carmichael is the author of this blog and a member of the Commercial General Liability practice group. If you have a question about this blog or a similar file, please contact Nicholas.