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Articles and Publications

April 2018

"Waive" Goodbye to the Consumer Protection Act for those who are both Occupiers & Suppliers

James Tomlinson
James Tomlinson,
Partner

Garett Harper
Garett Harper,
Associate

David Olevson
David J. Olevson,
Associate Lawyer

 


Featured Case of James Tomlinson and Garett Harper

Written by David J. Olevson

 

In the recent decisions in Schnarr v Blue Mountain1 and Woodhouse v Snow Valley,2 the Court of Appeal for Ontario held that the Occupiers' Liability Act3 ("OLA") prevails over the general provisions of the Consumer Protection Act4 ("CPA").

This decision, where MB's James Tomlinson and Garett Harper successfully represented the intervener Canadian Defence Lawyers, reaffirms the jurisprudence surrounding waivers in Ontario and confirms that waivers are still an effective means of managing risk for occupiers who also meet the definition of "supplier" under the CPA.

The appeals dealt with the issue of whether ss. 7 and 9 of the CPA voided an otherwise valid waiver of liability under s. 3(3) of the OLA, particularly where the party seeking to rely on the waiver is both a “supplier” under the CPA and an “occupier” under the OLA. These appeals also raised the separate issue of the application of s. 93(2) of the CPA and whether it could be used to save a consumer agreement that offended sections of the CPA.

Section 3(3) of the OLA allows an “occupier” to modify the duty of care owed to entrants. This has the effect of shielding ski resort owners/operators from negligence claims brought by their patrons through a properly worded waiver of liability. On the other hand, ss. 7(1) and 9(3) of the CPA prevent “suppliers” from negating or varying a consumer's right to services of a reasonably acceptable quality and deem any term in a contract that purports to do so to be void.

In both actions, the plaintiffs brought the following novel argument before the Superior Court: Do ss. 7(1) and 9(3) of the CPA operate to void a properly executed broad and all-encompassing waiver of liability that would otherwise be enforceable under the OLA?

Background

In both Schnarr and Woodhouse, the plaintiffs were patrons who purchased ski tickets from the defendant ski resorts. The respective plaintiffs executed the ski resorts' waivers of liability as a condition of purchasing tickets. In both cases, the plaintiffs were injured on the ski resorts' premises. The plaintiffs sued.

In Schnarr, the parties brought a Rule 21 motion to determine if Blue Mountain's waiver offended the CPA and should be declared void. In her reasoning, the motions judge held that Blue Mountain's waiver, insofar as it purported to waive liability in contract, was void and severed from the consumer agreement.

In Woodhouse, the parties brought a Rule 22 motion to determine if the waiver was void. The motions judge determined that Snow Valley's waiver was void in respect of both tort and contract claims, but held that the court had the equitable power to enforce a void waiver in a consumer agreement pursuant to s. 93(2) of the CPA.

Blue Mountain and Ms. Woodhouse appealed their respective decisions and Snow Valley cross-appealed.

...these statutes were found to be in an unavoidable conflict.

Analysis

Sections 7 and 9 of the CPA Do Not Operate to Void a Valid Waiver Under Section 3(3) of the OLA

Due to the fact that the OLA permits an occupier to enforce a waiver of liability while the CPA precludes a supplier from enforcing a waiver of liability, these statutes were found to be in an unavoidable conflict. In essence, what the OLA permits, the CPA prohibits.

The Court of Appeal also found that there was nothing in the record before it to suggest that, in enacting the CPA, any consideration was given to the OLA or to the impact that any of the provisions in the CPA might have on the OLA. Furthermore, the Court of Appeal recognized that these two statutes were enacted by two different governments more than twenty years apart.

Accordingly, there could be no “reasonable conclusion other than that the two statutes conflict when one attempts to apply them to occupiers under the OLA who also happen to be suppliers under the CPA.”6 The effect of the CPA on occupiers, who are also suppliers, is that they cannot obtain effective waivers. Thus, the direct contradiction of these statutory provisions creates an absurd result – those who are both occupiers and suppliers will be held liable for something they believed they had lawfully protected themselves against.

The Remedy

In order to resolve this absurdity, the Court of Appeal embarked on a principled interpretation of the two statutes with a view to permitting both statutes to maintain their maximum application and effectiveness. After applying various principles of statutory interpretation, the Court of Appeal concluded that the CPA does not operate within the sphere of activities governed by the OLA. The Court of Appeal reaffirmed that this conclusion does not undercut the effectiveness of the CPA, nor does it offend public policy: “Rather, it allows for the commercial flexibility necessary to promote the goal of encouraging landowners to permit their premises to be used for recreational activities.”7

...the court may order that a consumer be bound to all or a portion of the consumer agreement...

The Application of Section 93(2) of the CPA

Although it was not necessary for the Court of Appeal to address this issue in light of the conclusion above, Nordheimer JA, writing for the Court, dealt with this issue for the sake of completeness. Pursuant to s. 93(2), the court may order that a consumer be bound to all or a portion of the consumer agreement, even if the agreement was not made in accordance with the CPA.

Justice Nordheimer held that 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. Stated otherwise, s. 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.

Conclusion

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. These proceedings were remitted back to the Superior Court of Justice with the Court of Appeal making clear to the plaintiffs that the waivers were not voided by ss. 7(1) and 9(3) of the CPA.


1 David Schnarr v Blue Mountain Resorts Limited, 2017 ONSC 114 [Schnarr].
2 Woodhouse v Snow Valley, 2017 ONSC 222 [Woodhouse].
3 Occupier's Liability Act, RSO 1990, c O2.
4 Consumer Protection Act, 2002, SO 2002, c 30.
5 Schnarr v Blue Mountain Resorts Limited, 2018 ONCA 313 at para 50.
6 Supra note 6 at para 69.


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