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Canon to the Right of Them, Canon to the Left of Them, Canon in Front of Them

The Ontario Court of Appeal’s recent decision in Schnarr v. Blue Mountain is significant for two reasons. First, it provides much needed clarification to the law of occupiers’ liability, and to waivers of liability in particular. Second,  it includes a detailed discussion of some of the principles of statutory interpretation. In this brief article, I discuss the Court of Appeal’s decision and, particularly, its application of the principles of statutory interpretation. I argue that the Court got it right, but that the appeal could have been decided solely on the basis of the “general/specific” canon.

Background

Schnarr was an appeal of two separate lower court decisions decided one week apart from each other. In each case, the plaintiff had executed a waiver of liability agreement at the defendant’s ski resort and had subsequently been injured on the resort premises. The plaintiffs sued separately and the Superior Court dealt with the preliminary issue in each case of whether the waiver of liability was operative and enforceable.

In the case of the first plaintiff, David Schnarr, Tzimas J. found that the waiver partially offended ss. 7(1) and 9(3) of the Consumer Protection Act (“CPA“) and was therefore void.  Those sections essentially state that a contractual provision that purports to negate or vary an implied condition under the CPA is void. Section 9(1) states that every supplier of services is deemed to warrant that its services are of an acceptable quality, and any agreement to negate that implied warranty is therefore void.

Similarly, in the case of the second plaintiff, Elizabeth Woodhouse, McCarthy J. held that the waiver was void in both contract and tort. However, he held that the Court could nevertheless enforce the waiver pursuant to s.93(2) of the CPA, which empowers a court to enforce an agreement that contravenes the CPA “if the court determines that it would be inequitable in the circumstances for the consumer not to be bound.”

At the Court of Appeal, the issue was whether the relevant provisions of the CPA were superseded by s.3(3) of the Occupiers’ Liability Act (“OLA“). Section 3 of the OLA provides that all occupiers must take care to ensure that persons and property remain reasonably safe while on their premises. However, s.3(3) permits an occupier  to exclude or modify this duty. In other words, as the Court noted, the OLA permits an occupier who supplies services to obtain a waiver of liability, while the CPA prohibits it. There was no doubt that the defendants were both occupiers pursuant to the OLA and suppliers of services pursuant to the CPA. The question for the Court, therefore, was which statute governed.

 

The Court of Appeal’s Decision

The Court of Appeal concluded that s.3(3) of the OLA governed and that the defendants’ waivers of liability were therefore valid. In coming to its decision, the Court considered five well-entrenched principles of statutory interpretation, otherwise known as “canons” of construction.  These included:

  1. ejusdem generis: 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.
  2. expressio unius est exclusio alterius: the expression of one thing is the exclusion of another.
  3. The exhaustiveness doctrine: whether a statute was intended to be an “exhaustive scheme.”
  4. generalia specialibus non derogant: A specific provision/statute overrides a general one.
  5. The absurdity doctrine.

With respect to the first canon, the Court examined s.9(1) of the OLA which provides that certain occupiers will be faced with a higher standard of care. That provision lists innkeepers, bailees and common carriers as a non-exhaustive list of those to whom a higher standard of care applies. The Court noted that s.9(1) must be confined to “situations that are similar to the enumerated examples.” While the Court did not set out what those similar situations would be, it was clear that the duties imposed by the CPA do not fall within s.9(1) as they do not relate to the incidental duties of an occupier.

The plaintiffs relied upon the “express mention” canon since the CPA and its regulations provide a list of statutes that are exempted from its application, and this list does not include the OLA. The plaintiffs therefore argued that this demonstrated a clear intention on the part of the legislature to bring occupiers under the ambit of the CPA.  The Court disagreed, noting that the express mention canon was rebuttable and had limited application; it should not be employed where doing so would disregard the “underlying objective of the statute.” As such, the Court held that the “express mention” canon was of no assistance.

With respect to the “exhaustiveness” doctrine, the Court held that the OLA was intended to be an exhaustive scheme in relation to the liability of occupiers to persons entering their premises flowing from the maintenance or care of the premises. Section 9 of the CPA undermines this purpose by purporting to impose an additional duty upon occupiers who offer services that the premises are of a “reasonably acceptable quality.”

The fourth principle – the specific overrules the general – was arguably the most relevant canon at issue; but, as the Court noted, determining which provision is the general and which is the specific is often a difficult task. Nevertheless, the Court concluded that the CPA‘s provisions were the more general and the OLA‘s the more specific. The CPA deals with “all forms of consumer transactions” and buying a ski pass is “but one of a myriad of consumer transactions to which the CPA could apply.” By contrast, the OLA deals directly and substantially with “activities” on premises, including recreational activities.  As such, to the extent an occupier enters into a transaction with a person entering its premises to supply services, the provisions of the CPA would not apply and the occupier would be entitled to rely upon a waiver of liability pursuant to s.3(3) of the OLA.

The Court also found that if the CPA governed it would lead to an absurd result. One of the basic purposes in enacting the OLA was to provide protection to occupiers who allow persons to come on to their premises for the purpose of recreational activities.  If the CPA supersedes the OLA, however, then this purpose would be defeated. The OLA was recently amended to provide greater protection to occupiers of recreational trails. The Court explained that it would make little sense to suppose that the Legislature went through the =exercise of amending the Act only to have these provisions rendered of no force or effect by the CPA.

 

The Correct Canon

I generally agree with the Court of Appeal’s decision. The panel led by Nordheimer J.A. undertook a detailed textual analysis and, in my view, reached the legally correct result. There can be little doubt that the impugned provisions of the OLA and CPA are in conflict. While certain occupiers will not offer services and while many service providers will not be occupiers, the defendants in these cases were both occupiers and service providers. The OLA permitted them to obtain waivers of liability, while the CPA prohibited it. It is trite that statutes should be read harmoniously wherever possible, but where there is a clear conflict, as here, one provision must trump the other.

* * *

I also agree with the Court that the first two canons (ejusdem generis and express mention) are of no real assistance here. In my opinion, the most applicable and relevant canon to this case was generalia specialibus non derogant. It alone could have (and perhaps should have) disposed of the matter. As the Court noted, the practical difficulty is often determining the relative generality and specificity of the statutes and/or provisions.

In assessing which statutory provision is more specific, the key consideration, in my view, is which provision has a greater percentage of its content covered by the area in which the two provisions overlap. This would benefit from an illustration. If we imagine that the two provisions at issue are overlapping circles with the overlapping portion shaded in, the question to be answered is which circle is smaller and has a greater percentage of its surface area shaded in. In some cases, the smaller circle will be contained entirely within the larger circle and so the overlap will cover 100% of the smaller circle.  For example, if Law A says that courts may review all administrative tribunal decisions on questions of fact and law, and Law B says that in the context of Tribunal X, a court may only review a decision on questions of law, Law B will clearly prevail as the more specific statute. Its content is contained entirely within Law A, whereas Law A contains a great deal of content completely outside the scope of Law B.

The interplay between the OLA and the CPA is more complicated, as neither can be said to be a subset of the other. However, applying the same principle, I believe it is clear that the OLA is the “smaller circle” as it were. First, the CPA is undoubtedly the broader statute overall. As the Court noted, it covers the entire field of consumer agreements, whereas the OLA only covers the liability of occupiers for personal injury or property damage. The CPA has 123 sections, many of which have numerous subsections, while the OLA contains only 11. The narrower scope of the OLA strongly suggests at the outset that s.3(3) of the OLA is the more specific provision.

Moreover, while the OLA does not expressly mention service providers, it is clear that the supply of services is far from incidental to the Act. Sections 1 and 3(2) expressly envisage that activities may be carried on at the premises. While this would not necessarily involve the supply of services, many premises containing activities will also involve a consumer agreement of some form.  And indeed, many if not most occupiers who obtain a waiver of liability will do so in the context of supplying services. This is admittedly an unscientific assertion on my part, but it is one that I believe is supported by common sense and human experience.

By contrast, the CPA does not explicitly or implicitly refer to occupiers, nor to transactions involving the use of a supplier’s property, nor to personal injuries generally. As the Court of Appeal said, buying a ski pass is one of any number of commercial transactions into which a consumer could enter. I would go a step further and say that the vast majority of consumer transactions will not relate to the use of a supplier’s real property. Put another way, it is more likely that an occupier who obtains a waiver of liability will be a supplier of services than it is that a supplier of services who obtains a waiver of liability will be an occupier.

* * *

As noted above, the Court of Appeal also relied on the exhaustiveness doctrine. The Court concluded that the OLA was intended to be an exhaustive scheme “at least in relation to the liability of occupiers to entrants on their premises flowing from the maintenance or care of the premises.” That is true so far as it goes. But could it not also be said that the CPA was intended to be an exhaustive scheme with respect to the law governing consumer protection (save and except for the statutes and circumstances it expressly excludes, which do not include the duty of occupiers under the OLA)? The Court highlighted the fact that the OLA replaced the various common law standards of care that had previously existed, but it also noted (at para. 31) that the CPA consolidated nine different consumer protection statutes. Both statutes, in other words, appear to deal comprehensively with their respective subject matter, and I question whether it makes sense to debate which is the more “exhaustive” of the two.

The Court’s final consideration was the rule against absurdity. In my respectful view, invoking this canon was misguided.  The Court relied heavily on statements made by the Minister of Tourism, Culture and Sport prior to amending the OLA in 2016 to the effect that the new provisions would offer greater protection to landowners who allow access to trails on their land. The Court concluded that it would make little sense for the legislature to amend the OLA with the express purpose of clarifying the liability of occupiers if it always intended for the CPA to trump. However, these amendments were to s.4 of the OLA, which deals, inter alia, with recreational activity where no fee is paid for the entry or activity,which suggests the absence of a consumer agreement. In other words, the CPA arguably has nothing to do with the subject of the amendments. What is more, that section contains highly specific provisions that would clearly prevail over the CPA‘s general scheme in the event of a conflict.

The absurdity doctrine should only be invoked  where no reasonable legislator would have intended the legal outcome. It is entirely conceivable that the Legislature wanted to protect owners of recreational trails who do not charge fees for the use of the trail, but did not want to afford the same kind of protection to occupiers who supply services at a profit. Indeed, the fact that the 2016 amendments were narrowly tailored could suggest that the Legislature recognized that the CPA did have a role to play with respect to occupiers who supply services at a profit.

This, as I have written elsewhere, is the problem we invariably encounter when we attempt to ascertain an extra-textual purpose to legislation (though I recognize the Court of Appeal was bound to undertake a purposive approach pursuant to the Supreme Court’s decision in Rizzo v. Rizzo Shoes). Even if we assume that the Minister’s comments reflect the intention of the government, and of a majority of the legislators, we still have no idea whether the Legislature also wanted to protect occupiers outside the narrow confines of recreational trails, and particularly those occupiers who enter into commercial agreements. No purpose is pursued absolutely and the best way to know the extent of the Legislature’s intent is to read the words it chose to enact into law.

 

Conclusion

The upshot of the decision in Schnarr is that waivers of liability will be valid if they relate to personal injury or property damage on a premises and are obtained by the occupier of that premises. While some might consider this to be an unfair policy outcome that unduly favours occupiers at the expense of consumers, this protection is expressly provided for in the OLA, and there can be little doubt that its specific provisions prevail over the general scheme of the CPA.

The Ontario Court of Appeal has settled the doctrine in an area that was previously hampered by uncertainty. For that reason alone, this decision should be welcomed. Lawyers will now be able to advise their clients with greater certainty, and this will help reduce litigation costs and ultimately promote greater access to justice for meritorious claims. And while I believe the Court’s application of the rules of statutory interpretation left something to be desired, this mild criticism does not detract from my view that the Court has provided a well-reasoned and thoughtful decision that has helped to reduce indeterminacy in the law.

 

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