April 2016 Waivers Gain Additional "Armor" in the Defence of |
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By Garett Harper, Associate The Ontario courts have once again delved into the issue of the efficacy and enforceability of waivers in the defence of tort claims. In Jensen v. Fit City Health Centre Inc.1, the plaintiff, who was a member of the defendant’s gym, was injured while using a shoulder press machine caused by the defendant allegedly allowing the machine to exist in a defective condition. At trial, the jury found that the defendant was not negligent and, therefore, not liable for the plaintiff’s loss. Following the completion of the trial, the Court was tasked with making a determination on the validity of a waiver entered into between the plaintiff and the defendant that was contained within the gym’s membership agreement and associated membership renewal documentation. |
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The plaintiff’s position was that neither the membership agreement nor the renewal documentation containing the waiver language were in effect or enforceable on the date of loss. The plaintiff argued that the initial membership agreement had expired at the time that this incident occurred. She also argued that the renewal agreements (which only renewed payment obligations between the parties) superseded the membership agreement. She further argued that the defendant failed to draw her attention to relevant portions of the agreement. The plaintiff also argued that she did not read the membership agreement prior to executing it and, therefore, it was not valid. The defendant argued that the membership agreement was in effect at the date of loss and the terms contained within that agreement excluded the defendant’s liability for the loss and that the renewal agreement was meant to be read in conjunction with the membership agreement. The defendant stated that it was not necessary for it to have explained the terms and conditions of the membership agreement to the plaintiff, reasoning that execution of an agreement without reading it does not allow a party to avoid that agreement altogether. At trial, the jury found that the plaintiff had entered into the membership agreement and, therefore, it was deemed to be in force and effect on the date of loss for the purposes of the present decision.
The Court ruled that the plaintiff could not avoid the terms and conditions of the membership agreement on the basis that she did not read the agreement. The Court found that the plaintiff had familiarity with waiver provisions from her own fitness business. Furthermore, the Court found that the plaintiff had provided her initials to approximately 29 separate clauses on the agreement, calling into question her position that she did not read the agreement. The Court also agreed with the defendant that the renewal agreement did not supersede the membership agreement but, rather, the two agreements were to be read in conjunction with each other. However, given the validity of the membership agreement, the Court found that the waiver provision contained within the membership agreement continued to govern the relationship between the plaintiff and the defendant regardless of the language contained within the renewal agreement. The plaintiff also argued that the defendant did not satisfy its duty to draw the relevant waiver provisions contained within the Membership Agreement to her attention. This issue was not canvassed at trial. However, comments made in obiter from the Court, in reliance on the case of Gallant v. Fanshawe College of Applied Arts & Technology,2 illustrated that a defendant must make efforts to draw the existence of waiver provisions to a plaintiff’s attention in order to rely on those waiver provisions to exclude liability. The Court also reviewed the language of the waiver in order to determine whether the waiver was broad enough to exclude liability in this case. The membership agreement stated as follows:
In considering whether the language was sufficiently broad to exclude liability for the plaintiff’s claim, the Court concluded that it is well founded that a waiver will only be effective for claims based in negligence if negligence is specifically excluded in clear terms.3 However, utilizing the word "negligence" is not necessary to exclude claims based in negligence.4 All that is required is words or phrases which clearly indicate that all claims, including those of negligence, are covered and excluded.5 As such, the Court found that subclauses (a) and (c), when read together, were sufficiently broad to bar the plaintiff’s claim in negligence.
The plaintiff also argued that allowing the defendant to rely on waiver provisions violated the statutory duties contained within the Occupiers’ Liability Act ("OLA"). While some jurisprudence stated that clear language is required to exclude claims based on the failure of a statutory duty,6others held that a statutory duty (such as that found in the OLA) is, in essence, one based in negligence.7 Therefore, language excluding liability for claims for negligence would also act to exclude liability for statutory duties based in negligence. The Court in Jensen agreed with the latter view that language barring claims for negligence also barred claims for breach of statutory duties. As such, the Court found that the Membership Agreement was valid and enforceable on the date of loss, that the defendant took reasonable steps to bring the waiver provisions contained within the Membership Agreement to the plaintiff’s attention, and that the scope of the waiver provision was sufficiently broad to exclude liability for claims based in negligence. As such, the Court found that the agreement served to bar the plaintiff’s claim in this matter. Closing Remarks As additional cases that seek to challenge the validity and enforceability of waivers emerge, the Courts are providing further guidance on not only the language that the "optimal" waiver contains, but also other seemingly mundane issues such as formatting, layout, and even font size. The Court’s ruling in Jensen in particular provides considerable guidance on the optimal language that should be contained within waivers should parties intend for the waiver to also provide exclusions for liability for negligence or breach of a statutory duty as well as the obligations of parties to draw a signatory’s attention to exclusionary language. Preparing a waiver is a rather inexpensive investment which can have enormous benefits over time. Entities who rely on waivers in their day-to-day operations should revisit their waivers periodically in order to ensure that they are "properly" drafted and laid out to ensure their ongoing efficacy in what is a rapidly changing legal landscape. This is even more important given the Court’s acceptance that waivers can now act as a total defence to a plaintiff’s claim based in negligence. 1 2015 ONSC 6326
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