OLA Supersedes CPA in matter of Waivers - Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 313

April 10, 2018, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

OLA Supersedes CPA in matter of Waivers - Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 313

Date Of Decision: 20180328
Heard Before: Doherty, Brown and Nordheimer JJ.A.

COURT OF APPEAL FOR ONTARIO

On appeal from the orders of Justice E. Ria Tzimas of the Superior Court of Justice, dated January 6, 2017 with reasons reported at 2017 ONSC 114, and of Justice John R. McCarthy of the Superior Court of Justice, dated January 13, 2017 with reasons reported at 2017 ONSC 222.

Nordheimer J.A.:

These two appeals were heard together as they raise common issues. In both cases, the plaintiffs were patrons of the defendant ski resorts who purchased ski tickets. In both cases, those patrons executed the ski resorts’ waivers of liability as a condition of their tickets. And in both cases, the patrons were injured on the ski resorts’ premises. The patrons sued. Tzimas J

In the case of Mr. Schnarr, the parties agreed that there was a “consumer agreement” (as defined under the Consumer Protection Act (CPA)) between Mr. Schnarr and Blue Mountain Resorts. On that basis, Tzimas J held that Blue Mountain’s waiver under the Occupiers’ Liability (OLA) partially offended ss. 7(1) and 9(3) of the CPA. He put forth the argument that Blue Mountain’s waiver, insofar as it purported to waive liability in contract, was void and severed from the consumer agreement. In a similar vein, in the case of Ms. Woodhouse on a r. 22 motion, McCarthy J. held that Snow Valley’s waiver was void in respect of both tort and contract claims. However, he held that a court nevertheless had the equitable power to enforce a void waiver in a consumer agreement pursuant to s. 93(2) of the CPA. It is important to note that, aside from the agreed statement of facts submitted by the parties, none of the underlying facts have yet been proven in court.

Blue Mountain and Ms. Woodhouse appeal. Snow Valley cross-appeals. Foremost, these appeals raise the question of whether the CPA or the OLA governs the relationship between the parties. Specifically, the appeals present a case of first impression as to whether ss. 7 and 9 of the CPA vitiate or void an otherwise valid waiver of liability under s. 3 of the OLA, where the party seeking to rely on the waiver is both a “supplier” under the CPA and an “occupier” under the OLA.

The Court of Appeal took the view that when applied to the instant context, ss. 7 and 9 of the CPA fundamentally undermine the purpose of s. 3 of the OLA. The statutes are irreconcilable and conflict. As such the more specific provision in the OLA prevails over the general provisions in the CPA. Therefore, both Blue Mountain’s appeal and Snow Valley’s cross-appeal are allowed for the reasons that follow. On the separate issue of the application of s. 93(2) of the CPA, Ms. Woodhouse’s appeal is also allowed.

Mr. Schnarr purchased a 2010-2011 season ski pass from Blue Mountain's website on April 29, 2010. As part of his online transaction, Mr. Schnarr executed a Release of Liability Agreement, Waiver of Claims, Assumption of Risk and Indemnity Agreement.  On March 26, 2011, while skiing Mr. Schnarr allegedly collided with a piece of debris from a broken ski pole, struck a tree, and sustained injuries.  The Blue Mountain waiver contained a number of provisions purporting to shield Blue Mountain from certain liabilities and preclude Mr. Schnarr from suing. One heading, set out in bold type in a yellow box with a red border, specifically instructed the customer to “PLEASE READ CAREFULLY!” and cautioned Mr. Schnarr that by executing the document, he was giving up certain legal rights. The waiver specifically provided that in consideration for Blue Mountain accepting his application for a season pass, Mr. Schnarr agreed both to waive any and all claims against the ski area operator and others, and to release them from liability for any damages that he may suffer. On October 13, 2011, Mr. Schnarr commenced an action in negligence against Blue Mountain. Mr. Schnarr claimed general damages in the sum of $200,000 and special damages in the sum of $100,000.

On January 4, 2016, Mr. Schnarr amended his statement of claim. Under the heading “Applicable Statutes”, he claimed for the first time 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. Tzimas J. concluded that, due to the amendment of the statement of claim and the novel issue of law raised, the case should first proceed by way of a r. 21 motion. Justice Tzimas ordered a determination of a question of law under r. 21.01(1)(a) based on the pleadings before trial. Justice Tzimas did not receive any evidence other than the parties’ agreed statement of facts.

On January 6, 2017, Tzimas J. released her reasons on the r. 21 motion. 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.

Blue Mountain appeals from that decision.

On December 23, 2008, Ms. Woodhouse went skiing with her husband and grandson at Snow Valley. Ms. Woodhouse purchased a beginner ski package from Snow Valley, which included a lift ticket, equipment rental, and a lesson. The lift ticket itself contained a Release of Liability. Moreover, Ms. Woodhouse was also required to execute a Rental Agreement and Release of Liability on December 23, 2008 when she purchased the beginner ski package. That document contains a section entitled “Waiver of Claims”. After signing the Snow Valley waiver, Ms. Woodhouse and her family took a ski lesson on December 23, 2008. and her family used the ski facilities for several hours. While using a tow rope, Ms. Woodhouse allegedly sustained injuries. She commenced an action in negligence for the injuries that she suffered. The parties eventually agreed to bring a r. 22 special case motion that raised five questions of law, all relating to the applicability of the CPA to Ms. Woodhouse’s injuries allegedly sustained at Snow Valley.

On January 13, 2017, McCarthy J. released his reasons on the r. 22 special case motion. He held that the CPA applied to the instant case. Consequently, he concluded that the Snow Valley waiver was presumptively void and, therefore, Ms. Woodhouse was entitled to proceed with her claim. Importantly, McCarthy J. held that s. 9 of the CPA voided the Snow Valley waiver in respect of both tort and contract claims. Justice McCarthy found that the OLA’s provisions did not supersede the CPA’s. However, he also held that a court could nonetheless order that Ms. Woodhouse was bound by the Snow Valley waiver by virtue of s. 93(2) of the CPA. Ms. Woodhouse appeals from the McCarthy J.’s conclusion regarding the applicability of s. 93(2) of the CPA. Snow Valley cross-appeals from the conclusion that s. 9 of the CPA voids an otherwise valid waiver under s. 3 of the OLA.

ISSUES ON APPEAL

1. Does s. 9 of the CPA conflict with s. 3 of the OLA, or can the impugned provisions be read harmoniously?
2. If they conflict, how should each statute be interpreted and what effect should be given to the impugned provisions?
3. In any event, 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?

ANALYSIS

The Supreme Court has repeatedly reaffirmed the modern approach espoused in E. A. Driedger, Construction of Statutes, that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”.

The OLA came into force in 1980. It is evident from the provisions of the OLA that the legislation was intended to establish a single primary duty of care that an occupier would owe to persons entering upon their premises. Section 3 of the OLA also prescribes a default standard of care that requires an occupier to take such care as is reasonable in the circumstances to keep entrants and their property reasonably safe on the premises. The breach of that statutory standard of care would make the occupier liable for injuries sustained by those entrants. As Lewis N. Klar and Cameron Jeffries say in their text, Tort Law, 6th edition:

It seems irrefutable that the legislation was intended to be exclusive and comprehensive, in so far as the liability of occupiers is concerned.

This intention is made clear by s. 2 of the OLA which reads:

Subject to section 9, this Act applies in place of the rules of the common law that determine the care that the occupier of premises at common law is required to show for the purpose of determining the occupier’s liability in law in respect of dangers to persons entering on the premises or the property brought on the premises by those persons.  The two critical sections of the OLA, for the purpose of these appeals, 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.

3(1) 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(20) 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.

When considering the purpose of the OLA, it is of some importance to recognize that part of the rationale for including s. 4 in the statute was to encourage private landowners to voluntarily make their property available for recreational activities by limiting their liability. Moreover, although s. 3(1) of the OLA prescribes the primary duty and standard of care, the OLA also expressly preserves situations where a higher obligation or standard may apply because of specific legislation or the common law under s. 9(1):

Nothing in this Act relieves an occupier of premises in any particular case from any higher liability or any duty to show a higher standard of care that in that case is incumbent on the occupier by virtue of any enactment or rule of law imposing special liability or standards of care on particular classes of persons including, but without restricting the generality of the foregoing, the obligations of,

1. innkeepers, subject to the Innkeepers Act;
2. common carriers;
3. bailees.

Thus, while the Legislature left to itself the right to establish a higher liability or duty of care for occupiers in specific situations, it did not see fit to amend the OLA to include obligations under the CPA.

The CPA was enacted in 2002 to modernize consumer law in Ontario. Two sections of the CPA are of particular importance to these appeals. One is s. 7(1) which reads:

The substantive and procedural rights given under this Act apply despite any agreement or waiver to the contrary.

The other is s. 9 which reads in relevant parts:

The supplier is deemed to warrant that the services supplied under a consumer agreement are of a reasonably acceptable quality.

On a fair reading of the government’s consultation paper discussing the CPA, and the CPA itself, it is evident that the principal concern was with respect to financial transactions, and the potential for scams to operate to the detriment of consumers. There is nothing to suggest that changing the existing framework governing liability for personal injuries sustained by persons availing themselves of premises for recreational activities was in any way an objective of the CPA.

Mr. Schnarr and Ms. Woodhouse, and the intervener Ministry, point to the fact that the CPA exempts certain statutes under s. 2(2) and the OLA is not one of them. The thrust of this argument is based on expressio unius est exclusio alterius.

Justice Nordheimer argues that the principle that things are implicitly excluded when others are expressly enumerated is not an absolute rule. Key to this analysis is the fact that when one looks at the types of exemptions provided by the CPA it is clear that they are primarily directed at financial transactions and professional services. They are not directed at the type of activities covered by the OLA.

There is nothing in the background to the passage of the CPA, or in the provisions of the CPA itself, that would suggest that it was intended to regulate duties of care of the type stipulated by the OLA, or that it was intended to regulate liability arising from the use of premises that are subject to the OLA.

Justice Nordheimer then reviewed whether a conflict exists between the CPA and the OLA noting The Supreme Court set out the principles of statutory interpretation with respect to the analysis of conflicting statutes in Thibodeau v. Air Canada, 2014:

First, courts take a restrictive approach to what constitutes a conflict in this context. Second, courts find that there is a conflict only when the existence of the conflict, in the restrictive sense of the word, cannot be avoided by interpretation. Overlap on its own, does not constitute conflict in this context, so that even where the ambit of two provisions overlaps, there is a presumption that they both are meant to apply, provided that they can do so without producing absurd results. This presumption may be rebutted if one of the provisions was intended to cover the subject matter exhaustively. Third, only where a conflict is unavoidable should the court resort to statutory provisions and principles of interpretation concerned with which law takes precedence over the other.

Justice Norheimer also noted that courts have held that a conflict between two statutes arises where:

1. provisions are so inconsistent or “repugnant” to each other that they are “incapable of standing together”
2. the application of one provision must implicitly or explicitly preclude the application of another
3. two pieces of legislation are “directly contradictory or where their concurrent application would lead to unreasonable or absurd results”

In this case there is a clear and direct conflict between the OLA and the CPA – and it is an unavoidable one. 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.

Mr. Schnarr and Ms. Woodhouse try to avoid the reality of a conflict between the statutes by submitting that there is a distinction between the ability of a party to sue either in contract or in tort. On that point, with due respect to Tzimas J., suggesting that the waiver is valid with respect to the tortious negligence claims, but invalid with respect to the contractual warranty claims, is a distinction without a difference. In this regard, Mr. Schnarr and Ms. Woodhouse relied heavily on the decision in BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993]. Justice Nordheimer noted that with respect, that decision does not support their position because they mischaracterize the nature of the issue that was engaged in that case. In this case, however, we are not dealing solely with duties arising from tort or contract. Here we are dealing with a duty of care imposed by statute. It is the OLA’s statutorily imposed duty that all occupiers must meet, regardless of whether the occupier has a relationship with an injured party that is founded in contract or in tort. The decision in BG Checo does not assist Mr. Schnarr and Ms. Woodhouse in this regard. Indeed, it arguably assists Blue Mountain and Snow Valley because the decision recognizes that parties can contractually alter the rights that might otherwise be imposed upon them by the common law. As LaForest and McLachlin JJ. said, at p. 27:

The rule is not that one cannot sue concurrently in contract and tort where the contract limits or contradicts the tort duty. It is rather that the tort duty, a general duty imputed by the law in all the relevant circumstances, must yield to the parties’ superior right to arrange their rights and duties in a different way.

The OLA permits an occupier to “restrict, modify or exclude” the duty imposed by the statute regardless of whether a claim is founded in contract or in tort. The waivers in the instant appeals dealt with both Blue Mountain’s and Snow Valley’s contractual and tort obligations. The effort to avoid a conflict between the statutes on the basis that the OLA deals with tort liability and the CPA deals with contractual liability is not only artificial, it does not reflect the fact that the duty of care originates from the statute itself, nor does it take into account that the statute allows for the modification of the duty and liability arising therefrom. Moreover, adopting such a restricted interpretation of s. 3(3) of the OLA would go against the development trends in private law. As the majority noted in BG Checo, “the law should move towards the elimination of unjustified differences between the remedial rules applicable to the two actions [tort versus contract], thereby reducing the significance of the existence of the two different forms of action”.

Despite Mr. Schnarr’s and Ms. Woodhouse’s best efforts to advance the contrary proposition, there can 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. Simply put, under the OLA, an occupier can obtain a waiver of liability (within limits as defined by the common law)[6] from any person coming onto their premises. However, that same occupier, if they are also a supplier under the CPA, cannot obtain an equivalent waiver. This, despite the fact that the factual foundation for both tort and contract causes of action are the same. A plain reading of the amended statements of claim allows for no other conclusion.

As the instant appeals amply demonstrate, the result is a clear conflict. On the one hand, Blue Mountain and Snow Valley have lawful waivers that would exclude their liability for the injuries suffered by Mr. Schnarr and Ms. Woodhouse, respectively, and yet they are told that those waivers are of no effect by virtue of the CPA. Justice Nordheimer took the view that such a result is both a direct contradiction and an absurd result.

Justice Norheimer then went on to examine the question if the CPA and the OLA conflict, how should the conflict be resolved? He determined that principles of statutory interpretation urge an approach that allows both statutes to maintain their maximum application and effectiveness. The principles affecting the analysis with respect to which statute should take precedence include:

1. where a class of things is modified by general wording that expands the class, the general wording is usually restricted to things of the same type as the listed items (ejusdem generis);
2. when one or more things of a class are expressly mentioned, others of the same class are excluded (expressio unius est exclusio alterius);
3. the exhaustiveness doctrine;
4. he provisions of a general statute must yield to those of a special one (generalia specialibus non derogant); and
5. the absurdity doctrine.

Upon review of the cases and the principles listed above the Justice concluded that the OLA provides that the statute does not restrict the imposition of a higher liability or standard of care upon occupiers. It provides innkeepers, common carriers, and bailees as examples of where a higher liability or standard of care would apply even if those classes of persons are simultaneously occupiers. The CPA does not purport to apply a special liability or higher standard of care for actions that are incidental to the role of an occupier. Rather, the CPA seeks to regulate the entirely separate category of consumer transactions between a supplier and consumer. As such, reading the section pursuant to the principle of ejusdem generis, it is clear that the application of any special liabilities or higher standards imposed by the CPA were not meant to be preserved under s. 9(1) of the OLA.

The OLA was a statutory scheme that replaced the common law with respect to occupiers’ liability. Significantly, it replaced the different common law standards of care applicable to entrants on premises (including contractual entrants) with a single, unified statutory duty to take reasonable care to see that entrants and their property are reasonably safe on the occupiers’ premises. Furthermore, the OLA expressly allows for the restriction, modification, or exclusion of the statutory duty.

The Court took the view that the OLA was therefore intended to be an exhaustive scheme at least in relation to the liability of occupiers to entrants on their premises flowing from the maintenance or care of the premises. The very purpose of this legislative scheme would be undermined if the CPA were allowed to reintroduce another novel contractual duty that purports to subject occupiers to an obligation to warrant that their premises are of a “reasonably acceptable quality”. As such, the fact that s. 9 of the CPA undermines the very purpose of the OLA is a factor that militates towards holding that the OLA supersedes the CPA. In this factual situation, the OLA must be reasonably seen as dealing directly with the core issue, that is, the ability of occupiers of premises to obtain waivers of liability. In contrast, the CPA deals generally with all forms of consumer transactions. Buying a ski pass is but one of a myriad of consumer transactions to which the CPA could apply. The OLA, on the other hand, deals directly, and substantially, with activities on premises (as defined), including the operation of recreational activities on premises. Indeed part of the rationale for permitting occupiers to obtain waivers of liability was to promote the use of their properties by others for those very activities.

Adopting this approach does not invalidate the CPA or otherwise render it of no force or effect. Rather, this result simply recognizes that the OLA carves out consumer transactions that relate to activities covered by the OLA from the application of the CPA. Put another way, to the extent that an occupier engages with members of the public for the use of the occupier’s premises in return for payment, and thus creates a consumer agreement, the provisions of the CPA do not apply to that agreement. At the same time, insofar as parties who are occupiers engage with members of the public and create consumer transactions that do not relate to “persons entering on premises or the property brought on the premises by those persons” (OLA, s. 2), then the CPA would still apply to those consumer transactions.

The conclusion that the CPA does not operate within the sphere of activities governed by the OLA 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.

As such, Justice Nordheimer 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.

Ms. Woodhouse’s appeal raises a separate issue with respect to McCarthy J.’s conclusion that s. 93(2) of the CPA might be used as a mechanism to hold a consumer to a waiver of liability, even if s. 9(3) of the CPA voided the waiver. Justice Nordheimer  took the view the motion judge erred in so concluding. 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. Section 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. In that regard, it is important to observe, and give effect to, the exact wording of s. 9(3) of the CPA. It reads:

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.

Two points can be taken from that wording. One is that it applies to any term or acknowledgment whether it is part of the consumer agreement or not. Thus, s. 9(3) has a very broad reach. It is clear that it was intended to catch any attempt to negate or vary the deemed warranty provided by s. 9(1) of the CPA, even if the attempt is outside of the consumer agreement itself. The other is that s. 9(3) renders any such term or acknowledgement void. A term that is void is a term that is a nullity. It is different in kind from a term that is voidable. A term that is void has no legal force or effect and there is nothing to be saved by a curative provision: Price v. Turnbull’s Grove Inc., 2007 ONCA 408, 85 O.R. (3d) 641, at paras. 34-37. Adopting a purposive interpretation of the CPA, there is nothing that would suggest that the Legislature intended that, notwithstanding the direct language used in s. 9(3), courts would be able to hold a consumer to a waiver of the deemed warranty provided by s. 9(1) of the CPA. Indeed, it would be hard to conceive of a factual situation where it would be equitable to do so in light of the fundamental purpose of the CPA.

Justice Nordheimer concluded that s. 93(2) cannot be used to give effect to a waiver that is voided by s. 9(3) of the CPA.

CONCLUSION

The two appeals and the cross-appeal are all allowed. The orders below are set aside. Mr. Schnarr is bound by the Blue Mountain waiver and Ms. Woodhouse is bound by the release in her lift ticket and the Snow Valley waiver. This is so regardless of whether their claims are in tort or for breach of warranty. The proceedings are remitted back to the Superior Court of Justice to proceed in accordance with these reasons.

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