In Schnarr v Blue Mountain Resorts Limited,1 the Ontario Court of Appeal overturned two lower court decisions that threatened to significantly weaken the effectiveness of waivers of liability. The court determined that an occupier’s ability to restrict its liability to persons entering its property – a legislative change that was designed to encourage the development of recreational activities – overruled the restrictions on waivers in the Consumer Protection Act.
The companion cases of Schnarr v Blue Mountain Resorts Limited and Woodhouse v Snow Valley Resorts et al. arose in very similar circumstances. In both cases, the plaintiffs purchased ski passes from the defendant ski facility operators. As a condition of the purchase, the plaintiffs agreed to waive any and all claims against the defendants and release them from liability for any damages that might be suffered on the premises. Both plaintiffs ultimately suffered injuries on the slopes and commenced lawsuits against the defendants.
The legal problem in both Schnarr and Woodhouse arose from the fact the defendants were both “occupiers” under the Occupiers’ Liability Act (the OLA),2 and “suppliers” under the Consumer Protection Act, 2002 (the CPA).3 On one hand, the OLA permitted the defendants to limit their liability through the use of waivers. On the other hand, the CPA created an avenue for the waivers to be invalidated. The plaintiffs claimed that the purchase of a ski pass is a “consumer transaction” under the CPA, and the defendants failed to provide services of a reasonably acceptable quality.
The plaintiffs argued the waivers were not legally binding on the basis of sections 7(1) and 9(3) of the CPA, which provide consumers with a mechanism to void any terms that do not comply. In response, the defendants took the position that the waivers were valid and should be upheld to shield them from liability. As “occupiers” of the lands in question, the defendants argued they were entitled to rely on section 3 of the OLA, which permits them to restrict, modify or exclude the duty to see that persons entering their premises are reasonably safe.
On motions in each case, the court ruled the OLA and the CPA did not conflict, and the waivers were therefore void.4
The Ontario Court of Appeal
The Court of Appeal allowed both appeals, finding that the CPA and the OLA were irreconcilable in the context of occupiers who are also suppliers under the CPA. The court found that the relevant sections of the CPA fundamentally undermined one of the OLA’s purposes, which was to provide protection to occupiers who allowed persons to come onto their lands to engage in recreational activities. The OLA was intended to replace the common law by establishing a comprehensive regime for occupiers. In the absence of any evidence that the legislature ever turned its mind to the interplay of the two statutes, there was no basis to find that the CPA should supersede the OLA.
The court clarified that its decision does not invalidate the CPA. Rather, it simply carves out an exception for consumer transactions relating to activities already covered by the OLA (i.e., occupiers that are also “suppliers” under the CPA):
… 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.
Accordingly, the court determined that the CPA will not void otherwise valid waivers made under the OLA. The plaintiffs in both actions were bound by the waivers, whether their claims were based in tort or contract.
Schnarr is a clear message from the Ontario Court of Appeal that occupiers can continue to rely on waivers as a means to limit their liability. The decision will provide both insureds and insurers with greater certainty when assessing risks of a wide range of commercial and not-for-profit ventures, especially those in the sports and recreation space.
1 2018 ONCA 313.
2 R.S.O. 1990, c. O.2.
3 S.O. 2002, c. 30, Sched. A.
4 Schnarr v Blue Mountain Resorts Limited, 2017 ONSC 114; Woodhouse v Snow Valley Resorts et al., 2017 ONSC 222. The respective motions judges varied on the issue of whether the waivers were void with respect to both contract and negligence claims.