The Ontario Court of Appeal has recently released a decision which has the effect of limiting the application of Ontario’s Consumer Protection Act and reinforcing protections afforded to occupiers of land by the Occupiers’ Liability Act.

Schnarr v Blue Mountain Resorts Limited (“Schnarr”)[1] involved two cases heard together for the purposes of the appeal. The defendants were both ski resorts and the plaintiffs were both patrons of the resorts. In each case, the patron had signed releases of liability and/or waivers which purported to release the ski resorts from a wide variety of claims.[2] Both plaintiffs were injured on the ski hills, allegedly due to the ski resorts’ negligence. In the first case, the plaintiff allegedly collided with a piece of debris from a broken ski pole and sustained injuries.[3] In the other case, the plaintiff was injured while using a tow rope.[4]

The issue for the Court of Appeal related to an alleged conflict between the Consumer Protection Act and the Occupiers’ Liability Act. The conflict related to the extent to which a waiver could protect the ski resorts from liability.

Section 3 of the Occupiers’ Liability Act imposes a duty of care on “occupiers” 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.” However the statute also allows occupiers to modify the duty through, for instance, a liability waiver.[5] This protects occupiers who permit people to come onto their land for recreational activities.[6]

On the other hand, section 9 of the Consumer Protection Act deems into consumer agreements a term that a “supplier” of services warrants that the services supplied are of a “reasonably acceptable quality”. This deemed term cannot be waived,[7] and any other term in the consumer agreement which purports to modify this term is void. This is meant to protect consumers.

There was no disagreement that the ski resorts qualified as both “suppliers” of services and occupiers.

So, what happens when a person is both an “occupier” and a “supplier” of services? Is their liability waiver only effective for liability under the Occupiers’ Liability Act, leaving them exposed to liability if their services are not of a “reasonably acceptable quality”?

Appeal counsel for the plaintiffs argued that the two statutes did not conflict because each set of provisions engaged different areas of law: the un-waivable deemed warranty in the Consumer Protection Act permits a person to sue in contract, while the waivable duty of care in the Occupiers’ Liability Act impacted whether a person could sue in tort. Thus, the ski resorts’ waivers were effective for avoiding liability for negligence lawsuits, but could not protect the ski resorts if their services were not of a “reasonably acceptable quality”. The plaintiffs could therefore sue in contract.

The Court of Appeal rejected this distinction:

[The plaintiffs] 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…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.[8]

The Court then held that the two statutes’ liability regimes conflicted:

As the instant appeals amply demonstrate, the result is a clear conflict. On the one hand, [the ski resorts] have lawful waivers that would exclude their liability for the injuries suffered by [the plaintiffs], and yet they are told that those waivers are of no effect by virtue of the CPA. It is of no practical comfort to [the ski resorts] to be told that their waivers protect them from the negligence claims but not from the warranty claims. The result for the ski resorts is the same. They will be held liable for something that they thought they had lawfully protected themselves against. In my view, such a result is both a direct contradiction and an absurd result.[9]

Having found that the statutes conflicted in the circumstances, the Court of Appeal ruled that the liability regime in the Occupiers’ Liability Act prevailed over the Consumer Protection Act. Consequently, the ski resorts’ waivers protected them from claims stemming from both the Occupiers’ Liability Act and the Consumer Protection Act.[10]

The implications of this decision are broad in Ontario: the waivers used by a variety of businesses which are both suppliers of services and occupiers (for example: gyms, paintball arenas, ice rinks, nail salons etc.) may well afford those businesses protection even where the services supplied are not of a “reasonably acceptable quality” if the appropriate waivers are in place.