Occupiers’ Liability Act Occupies the Field

On March 28, 2018, the Court of Appeal for Ontario released Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 313, an important case of first impression addressing the issue of enforceability of waivers in occupiers liability cases on commercial property.

The decision is very favourable to commercial occupiers that use waivers to mitigate risk, definitively ejecting the Consumer Protection Act from the arena of civil occupier liability law in Ontario.

In recent years, lower courts have been confronted with novel arguments relating to the applicability of the Consumer Protection Act (CPA) in the context of traditional occupiers’ liability cases governed by the Occupiers Liability Act (OLA). In this case, the argument was that the CPA voids such waivers of liability, even though such waivers are permitted under the OLA.

The case required the court to examine the conflicting provisions contained in the CPA and the OLA.

The conflict centres on sections 7(1) and 9 of the CPA and section 3 of the OLA.

Section 7(1) of the CPA provides:

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

Section 9 of the CPA provides:

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.

Finally, section 3 of the OLA provides:

Occupier’s duty

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.

Idem

(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.

 Idem

(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. R.S.O. 1990, c. O.2, s. 3.

As part of its statutory interpretation analysis, the court referenced the doctrine of “presumption of perfection” (sometimes referred to as “presumption of coherence”). The presumption is that statutes work together in harmony, and courts should avoid interpreting provisions in a manner that conflict, where possible. Despite the interpretive presumption against conflict, the court concluded that the two statutes clearly conflicted.

On the one hand, section 3 of the OLA permits a restriction of the occupiers’ duty, through a waiver of liability, while on the other hand, section 7(1) of the CPA expressly forbids waivers. Or, as Nordheimer J.A. laconically put it “what the OLA permits, the CPA prohibits”.

The court found that the OLA is an exhaustive scheme for dealing with occupier liability cases and plaintiffs cannot rely on the CPA to override valid waivers under the OLA. The court found that the CPA was never intended to affect the legal framework for analyzing occupier liability cases governed by the OLA.

This case will also preclude plaintiffs from arguing that commercial occupiers owe a higher standard of care under the CPA (section 9) than the standard of care under the OLA (section 3).

The only silver lining for plaintiffs seeking relief under the CPA was the court’s interpretation of section 93(2). The court overruled the lower court when it came to commercial interactions potentially giving rise to liability off-premises (i.e. where the OLA does not apply). The court held that judges have no equitable jurisdiction under section 93(2) of the CLA to enforce a waiver that is otherwise prohibited under section 7 of the CPA.