The Current Law on Liability Waivers in Ontario: Through the Lens of Schnarr v Blue Mountain Resorts Ltd.

The present state of the law as it relates to adult plaintiffs and the enforceability of liability waivers in Ontario, within the context of sports and recreational activities, was made clear in Schnarr v Blue Mountain Resorts Limited[1].

In Schnarr the Court of Appeal held that the Consumer Protection Act, 2002[2] does not preclude an occupier under the Occupier’s Liability Act[3], from relying on a waiver. The Court maintained that the latter remains true, regardless of whether the claim is founded in contract, or in tort. In other words, an occupier providing public access to a sport or recreational activity can rely on a valid waiver as a complete defence to a personal injury lawsuit.

A brief synopsis of the decision in Schnarr is provided below. It is worth mentioning that an application for leave to appeal was filed with the Supreme Court of Canada on May 28, 2018. Whether the matter will be heard, remains to be seen.

          a. Facts of the Case

Mr. Schnarr purchased a season ski pass from Blue Mountain’s website. As part of his online transaction, Mr. Schnarr executed a Release of Liability Agreement, Waiver of Claims, Assumption of Risk and Indemnity Agreement (the “Blue Mountain waiver”).[4]

While skiing, Mr. Schnarr allegedly collided with a piece of debris from a broken ski pole. He lost control, struck a tree, and sustained injuries.[5] The Blue Mountain waiver contained a number of provisions purporting to shield Blue Mountain from certain liabilities and preclude Mr. Schnarr from suing. Despite which, Mr. Schnarr commenced an action in negligence against Blue Mountain.[6]

During the litigation process, Mr. Schnarr amended his statement of claim. Under the heading “Applicable Statutes”, he claimed that the season ski pass was a consumer transaction. He also alleged that Blue Mountain had breached the “reasonably acceptable quality” standard under s. 9(1) of the CPA. The particulars of this alleged breach were identical to the alleged breaches of the standard of care in the tort of negligence as advanced in the original statement of claim. In addition, in his amended statement of claim, Mr. Schnarr also pleaded that he was relying on s. 7(1) of the CPA to vitiate the entirety of the Blue Mountain waiver. He did not plead any additional or different facts to support his allegation that Blue Mountain failed to provide a reasonably acceptable quality of service.[7]

          a. Relevant Legislation

The two applicable sections of the OLA that relate to Schnarr are ss. 3 and 4:

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.

The two applicable sections of the CPA that relate to Schnarr are ss.7 and 9:

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.

          b. Superior Court Decision

Although the trial was originally scheduled to start soon after the amendment of the Statement of Claim, Tzimas J. concluded that, due to the amendment, a novel issue of law was raised. Hence, the case should first proceed by way of a rule 21 motion (determination of an issue before trial).[8]

Justice Tzimas held that there was no conflict between the impugned sections of the CPA and OLA and that the relevant provisions could be read harmoniously under modern principles of statutory interpretation. She concluded that, by operation of ss. 7(1), 9(1), and 9(3) of the CPA, the defendant could not disclaim liability for any breach of the deemed warranty of providing services of a “reasonably acceptable quality”. She went on to determine that Mr. Schnarr would be allowed to advance two distinct causes of action: one for negligence and the second for breach of warranty. She found that the negligence claim would be subject to the Blue Mountain waiver but that the breach of warranty claim would not be subject to that waiver since the portions purporting to waive liability for breach of warranty would be void and severed under ss. 9(3) and (4) of the CPA.

          c. Court of Appeal Decision

Upon review of trial judge’s decision, Nordheimer J.A. noted that there is in fact, a clear, direct and unavoidable conflict between the OLA and the CPA. The OLA permits an occupier to obtain a waiver of liability. The CPA precludes a supplier from obtaining a waiver of liability. In effect, what the OLA permits, the CPA prohibits.[9]

The Court of Appeal further held that any distinction between suing in contract and suing in tort in an attempt to avoid the reality of the conflict between the statutes is artificial.[10] In reality, the OLA imposes a statutory duty of care that must be met regardless of whether the occupier has a relationship with an injured party founded in contract or in tort.[11]

By way of reference to the Principles of Statutory Interpretation, the Court of Appeal held that the CPA does not operate within the sphere of activities governed by the OLA and it does not undercut its effectiveness. Rather, the CPA allows for the commercial flexibility necessary to promote the goal of encouraging landowners to permit their premises to be used for recreational activities.

Accordingly, the Court of Appeal concluded that ss. 7 and 9 of the CPA do not operate to void otherwise valid waivers executed under s. 3(3) of the OLA. Therefore, it was held that the Mr. Schnarr was bound by the Blue Mountain waiver.

 

[1] Schnarr v Blue Mountain Resorts Limited 2018 ONCA 313 at para 5 [Schnarr].

[2] SO 2002 c 30, Sched A [CPA].

[3] RSO 1990 c0.2 [OLA].

[4] Schnarr, Supra note 1 at para 5.

[5] Ibid at para 6.

[6] Ibid at para 9.

[7] Ibid at para 10.

[8] Ibid at para 11.

[9] Ibid at para 43.

[10] Ibid at para 46.

[11] Ibid at para 47.