Canada: The Occupiers' Liability Act Takes A Bite Out Of The Consumer Protection Act, 2002

Last Updated: April 18 2018
Article by Alan Melamud

Operators of ski hills, and other land owners, can breathe a little easier. In Schnarr v. Blue Mountain Resorts Ltd.,1 the Court of Appeal confirmed the right to contract out of the duty of care set out in the Occupiers' Liability Act (the "OLA")2 will continue to apply, notwithstanding contradictory provisions in the Consumer Protection Act, 2002 (the "CPA")3. The Court considered two cases where the plaintiffs sought damages from the ski resorts Blue Mountain and Snow Valley, respectively, for injuries sustained while skiing. Both plaintiffs had signed waivers of liability, but relied on the CPA as voiding those waivers. The Court found in favour of the ski resorts, concluding that section 3(3) of the OLA, which permits an occupier to contract out of the duty of care, prevailed over sections 7 and 9 of the CPA, which preclude a business from contracting out of a the warranty of "reasonable acceptable quality" for services in consumer contracts.

The statutory provisions at issue were as follows:

OLA

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.

(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.

(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. 4

CPA

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

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.5

The parties agreed that the contracts between the plaintiffs and the ski resorts were "consumer agreements" under the CPA and that the ski resorts were "occupiers" under the OLA. The prima facie application of both statutes was therefore not at issue.

The Statutory Conflict

The Court recognized that the relevant provisions of the OLA and CPA were in direct conflict. Notwithstanding the presumption of perfection, which requires courts to presume that two statutes, even where they overlap, can be read harmoniously, the Court found here that the two were inconsistent and led to an absurd result. Put simply: "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." 6

The Court rejected the plaintiffs' position that the two could be read harmoniously by finding that the OLA applies to tort liability while the CPA, which governs "consumer contracts", applies only to contractual liability. The plaintiffs' argument ignored that the OLA provides an exclusive and exhaustive regime concerning the liability of occupiers and established a single primary duty of care. The ski resorts' duty was statutory. The Court found that the distinction between tort and contract was in any event artificial, and that applying it would render the ability under the OLA to limit occupier's liability illusory.

Resolving the Conflict

Pursuant to the principles of statutory interpretation, the Court set out to resolve the conflict while allowing both statutes to maintain their maximum application and effectiveness. The Court considered five principles:

  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 (expression unius est exclusion alterius);
  3. the exhaustiveness doctrine;
  4. the provisions of a general statute must yield to those of a special one (generalia specialibus non derogant); and
  5. the absurdity doctrine.

The Court found that the factors were either neutral or favoured the OLA, and therefore concluded that sections 7 and 9 of the CPA could not be applied to void a valid waiver under section 3(3) of the OLA.

Neutral Factors: Section 9 of the OLA and Section 2(2) of the CPA

The Court found section 9 of the OLA, which expressly permits the application of higher standards of care on occupiers under other statutes, and section 2(2) of the CPA, which excludes transactions under certain statutes from the ambit of the CPA but does not include the OLA, to both be neutral.

With respect to the former, the Court applied the ejusdem generis principle, holding that section 9 should be restricted to situations similar to the enumerated examples in the statute: innkeeprs, occupiers, and bailees. Accordingly, the expansion of liability and duty permitted under section 9 was directly connected to the role of occupier. The CPA, however, created a completely distinct liability arising out of a supplier-consumer relationship. Accordingly, the liability created by the CPA was not preserved on occupiers by section 9 of the OLA.

With respect to the latter, the Court refused to apply the expressio unius principle, which would presume that the exclusion of the OLA from the list of excluded transactions was intentional and so the CPA applied. The Court noted that there was no evidence the Legislature ever turned its mind to the interaction between the CPA and the OLA, and therefore found the absence of the OLA from section 2(2) of the CPA to be immaterial.

Factors Favouring the OLA

The Court found that all of the remaining principles for resolving statutory conflicts favoured the OLA. The Court principally relied on its conclusion that the OLA was intended to provide an exclusive and exhaustive regime that replaced the different common law standards applicable to occupiers with a single statutory duty of care,7 which the Act permitted occupiers to modify, amend, or exclude. The Court further noted that a principal purpose of the OLA was to encourage private landowners to permit recreational activities on their land by limiting their liability. Accordingly,

  1. the OLA was exhaustive concerning occupiers' liability, and its purpose would be undermined if occupiers were subject to the CPA warranty notwithstanding a valid exclusion of liability;
  2. the OLA was more specific than the CPA, which applied generally to all supplier-consumer transactions, and so carving OLA transactions from the CPA would not invalidate the CPA, while the reverse would eviscerate the OLA; and
  3. the application of the CPA would so undermine the OLA as to result in an absurdity, while the more minor carve out from the CPA would not undercut the effectiveness of the CPA or offend public policy.

Given this, the only way to do the least damage to the purpose of both statutes was to interpret the OLA as superseding the CPA. The ski resorts' waivers of liability therefore applied.

Can a Consumer Still Be Held to a Voided Waiver Pursuant to Section 93(2) of the CPA

While the Court was not strictly required to decide the issue given its conclusion that the OLA superseded the CPA, the Court went on to consider whether section 93(2) of the CPA could save a waiver voided under section 9(3) of the Act. One of the courts below had concluded that section 93(2) could be used in this manner, a decision from which one of the plaintiffs had appealed. Section 93(2) permits the court to enforce a consumer agreement that is not made in accordance with the Act if it would be equitable to do so.

The Court held that section 93(2) could not be applied to save a void provision under the Act:

In my 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.8

Unsurprisingly, given that a warranty of "reasonable acceptable quality" can have no connection to a consumer's obligations under an agreement, the Court held that it was difficult to conceive of a situation where it would be equitable to void a warranty required by the CPA.

Footnotes

1 2018 ONCA 313. [Schnarr]

2 R.S.O. 1990, c. O.2. [OLA]

3 S.O. 2002, c. 30, Sched. A. [CPA]

4 OLA, supra note 1, s. 3.

5 CPA, supra note 2, ss. 7(1), 9(1), and 9(3).

6 Schnarr, supra note 1 at para. 43.

7 See, OLA, supra note 2, s. 2.

8 Schnarr, supra note 1 at para. 77.

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