A recent decision of the Ontario Superior Court of Justice highlights how waivers of liability, which are often present in product liability cases, may be impacted by the statutory protections under consumer protection legislation. In Schnarr v. Blue Mountain Resorts Limited, the court determined a novel legal issue addressing the intersection of the Consumer Protection Act (Ontario) (the CPA) and the Occupiers’ Liability Act (Ontario) (the OLA) as to the protections afforded to consumers under the CPA and to suppliers under the OLA and how these Acts relate to waivers of liability for recreational activities.1
Background to the Case
Schnarr, who had purchased a season ski pass from Blue Mountain, had a collision on a trail run and sustained injuries. Schnarr initially commenced action against Blue Mountain as a tort claim for breach of the OLA and subsequently amended the action to plead breach of the deemed warranty under the CPA, specifically section 9(1) which provides that a supplier is deemed to warrant that the services it is providing are of a reasonably acceptable quality. Schnarr asked the court to conclude that section 7(1) of the CPA vitiated Blue Mountain’s waiver in its entirety. Section 7(1) prohibits the waiver of a consumer’s substantive and procedural rights under the CPA.
The parties agreed that Schnarr, Blue Mountain and the ski pass were subject to the following definitions under the CPA: “consumer,” “supplier,” and “consumer agreement.” When completing the agreement with Blue Mountain to purchase the ski pass, Schnarr agreed to a comprehensive waiver that expressly barred him from pursuing any legal action against Blue Mountain, including a waiver of negligence and breach of contract and breach of any statutory duty. A breach of contract would include a breach of the deemed warranty under section 9(1) of the CPA, which is a deemed term of a consumer agreement.
Waiver Partially Severed
The court underwent a thorough analysis of (1) the interplay between the OLA and the CPA, (2) a review of the modern principle of statutory interpretation, (3) a review of legislative intent and legislative history of the CPA and OLA, and (4) severance in the context of agreements.
The court determined that the Blue Mountain waiver’s reference to breach of contract and “any type of loss or damage” engaged the CPA protections and had the effect of “bleeding into CPA territory”. However, the court did not vitiate the entire waiver and instead read down the waiver as to sever the portion that excluded claims involving substantive and procedural rights under the CPA – the remainder of the waiver remained enforceable. The court found this remedy to be the least disruptive to both parties and to allow for an interpretation of the waiver that was considered to recognize the protections for occupiers under the OLA and for consumers under the CPA.
Key Take-Away Principles
The Schnarr case highlights that (1) occupiers who are also suppliers may be subject to the CPA; and (2) suppliers must carefully consider the wording used when drafting waivers – in this case, the “exceptionally broad” nature of the waiver triggered the application of the CPA. Following the release of the Schnarr decision, a similar finding was reached in another case, Woodhouse v. Snow Valley.2 An appeal of the Schnarr decision was recently filed and our Product Liability and Consumer Protection law teams will be watching the appeal with interest.
Suhuyini Abudulai is a partner in Cassels Brock’s Financial Services Group and the firm’s resident expert on all matters pertaining to the Consumer Protection Act. She is the author of the Annotated Ontario Consumer Protection Act, an invaluable resource for all things related to Consumer Protection law in Ontario.