NEWMARKET

COURT FILE NO.: CV-10-99569-SR

DATE: 20151013

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Candace Jensen
Plaintiff

– and –

Fit City Health Centre Inc.
Defendant

Joel P. McCoy, for the Plaintiff

Kevin C. Eng, for the Defendant

HEARD: May 21, 22, 25, 26, 27, 28, 29, June 1 and 2, 2015

WAIVER RULING FOLLOWING TRIAL BY JURY

MULLINS J.:

Introduction

[1] The plaintiff, Candace Jensen, became a member of the defendant club, Fit City Health Centre Inc. (Fit City), in August 2004. The plaintiff claimed to have been injured while using a shoulder press machine on June 3, 2008. She brought this action against the defendant alleging that the machine was in a defective condition, and that the defendant was negligent for failing to inspect or regularly maintain the machine and for failing to warn the plaintiff of the dangers present. The defendant responded by denying liability for the incident. The defendant relied upon two waivers: one in a Membership Agreement that the plaintiff allegedly entered into on August 23, 2004 (the “Membership Agreement” or “the Agreement”), and another in renewal material that the plaintiff allegedly entered into on September 22, 2004.

[2] A trial by jury took place between May 21 and June 2, 2015. On consent by counsel, the jury decided certain threshold issues relating to waivers contained in the Membership Agreement and the renewal documentation, while the ultimate validity of the waiver was to be decided by me as the trial judge. After deliberation, the jury found that the defendant was not negligent, and therefore not liable for the plaintiff’s loss. The jury found that the plaintiff signed and entered into the Membership Agreement and the later renewal documentation, and that the defendant had taken reasonable steps to bring the waiver provisions of both of these agreements to the attention of the plaintiff.

Positions of the Parties

[3] The plaintiff’s position is that neither the Membership Agreement nor the renewal documentation were in effect or enforceable on the date of the loss. While the jury found that Ms. Jensen had signed the Membership Agreement, its term was only for a period of twelve months. There was no evidence that the defendant made her aware of the renewal portion of that agreement.

[4] In any case, the plaintiff submits, the language and placement of this renewal provision suggest that the renewal was in relation to payment obligations, and not to the Agreement as a whole. The plaintiff suggests that the renewal documentation is the operative contractual document as it was the last document signed by the plaintiff. The plaintiff appears to deny that the Membership Agreement and renewal documentation may work in conjunction with one another.

[5] Finally, the plaintiff submits that, in any case, the Agreement is not valid, as the defendant failed to show that the Membership Agreement was properly validated, agreed to and enforceable.

[6] The defendant submits that the Agreement was in effect at the time of the plaintiff’s loss, and its terms exclude the defendant’s liability for that loss. The jury found that the plaintiff had signed and entered into the Membership Agreement. According to the “Membership Conditions” clause, the Agreement automatically renewed on a month-to-month basis, unless the signator provided Fit City with a written notice of cancellation at least sixty days prior to the renewal date. Since the plaintiff conceded that she did not provide notice of cancellation, the Agreement was therefore in effect on the date of the loss in June 2008.

[7] The jury also found that the plaintiff had the renewal documentation. According to the defendant, the terms of that documentation provided that it does not supersede, but rather, works in conjunction with, the Membership Agreement.

[8] The defendant submits that it is not necessary for it to have explained the terms and conditions of the Agreement to the plaintiff, since the law is that if a person signs a contract without reading it, they are still bound by its terms, unless there has been fraud, misrepresentation or a very onerous term. It was not alleged in this case that there was fraud, misrepresentation or onerous circumstances. Therefore, the Agreement is enforceable against the plaintiff in this action.

Analysis

Were the Membership Agreement and the renewal documentation in effect at the time of loss?

[9] The jury found that the plaintiff signed the Membership Agreement. The “Membership Conditions Clause” states in capital letters:

THIS AGREEMENT SHALL AUTOMATICALLY BE RENEWED FROM MONTH TO MONTH WITH MONTLY DUE OF 41.73, UNLESS I PROVIDE THE CLUB WITH A HAND DELIVERED WRITTEN NOTICE OF CANCELATION NOT LESS THAN SIXTY (60) DAYS PRIOR TO THE RENEWAL DATE. [Emphasis in original.]

[10] I agree with the defendant that by signing the Agreement, an individual is bound by the terms of the Agreement, regardless of whether or not the individual actually read the Agreement. In this reasoning, I have had regard to Aviscar Inc. v. Muthukumaru, 2009 CarswellOnt 4003 (S.C.), at para. 23, which the defendant cited for the following principle:

The law is that if a person signs a contract without reading it, that person is bound by the terms of the contract. That is the general rule. There are exceptions if the signing person can establish that there was fraud, misrepresentation, or there was a very onerous term that a reasonable person would not expect to be in the contract.

[11] The plaintiff has not alleged that there was fraud, misrepresentation or a very onerous term in the Agreement. She testified that she herself utilized waivers in her own fitness business. The renewal provision is in large capitalized letters, whereas most of the rest of the agreement is in lower-case letters. There is a place for the member to initial the clause, and I find that she has done so.

[12] I do not accept that the renewal clause is only in relation to payment requirements. It provides that the “agreement” shall automatically be renewed. “Agreement” means the entire agreement and not just the payment provision. It makes little commercial sense that the defendant would require the plaintiff to agree to twenty-nine separate clauses on initial registration, and that the parties would not expect to be renewing on these same terms, pursuant to an automatic month-to-month renewal. Since the plaintiff did not provide written notice of cancellation sixty days prior to the renewal date, I find that the Membership Agreement was in effect at the time of the loss in June of 2008.

What is the relationship between the Membership Agreement and the renewal documentation?

[13] I agree with the defendant that the renewal documentation does not supersede the Membership Agreement, but must be read in conjunction with that agreement. The opening clause of the renewal documentation reads as follows:

Terms and Conditions: I hereby acknowledge having purchased the following membership from FitCity Health Centres Inc. (the “Club”) and agree that the terms and conditions set out below and as set out in the Membership Agreement (the “Agreement”) form part of my agreement with the Club.

[14] This clearly contemplates that the renewal documentation must be read in conjunction with the Membership Agreement. It is not necessary that the plaintiff be made aware of the terms of the Membership Agreement at the time the renewal documentation was signed, because the Membership Agreement is valid on its own, without the renewal documentation, for the reasons stated above. As to whether the renewal documentation itself is valid and enforceable, it does appear that it was not signed by a representative of the defendant. However, this amounts to very little, as the waiver clause in the Membership Agreement prevails, for reasons I will discuss below.

[15] In conclusion, I find that the Membership Agreement was in effect at the time the injury occurred in June of 2008, and that the renewal documentation was to be read in conjunction with the Membership Agreement.

Was the defendant required to bring the legal effect of the waiver to the plaintiff’s attention?

[16] The defendant concedes that it was an “Occupier” pursuant to the Occupiers’ Liability Act, R.S.O. 1990, c. O.2 [the OLA]. Section 3(1) of the OLA provides that the defendant owed a duty of care to Ms. Jensen:

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.

3(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.

[17] Subsection 3(3) provides that an occupier may exclude this duty:

3(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.

[18] Under section 5(3) of the OLA, in order to exclude its duty, the occupier must take reasonable steps to bring this exclusion to the attention of the plaintiff:

5(3) Where an occupier is free to restrict, modify or exclude the occupier’s duty of care or the occupier’s liability for breach thereof, the occupier shall take reasonable steps to bring such restriction, modification or exclusion to the attention of the person to whom the duty is owed.

[19] As the defendant rightly points out, the questions as to whether the occupier took reasonable steps to bring the exclusions in the Membership Agreement and in the renewal documentation to the attention of the plaintiff were answered in the affirmative by the jury.

[20] The plaintiff’s position is that the defendant must not only bring the waiver to the attention of the plaintiff, but must fully explain the legal effect of the waiver provision. In Gallant v. Fanshawe College of Applied Arts & Technology, 2009 CarswellOnt 5734 (S.C.) [Gallant], at paras. 14, 40 and 43, despite that the jury was directed to find that the defendant had brought the waiver to the plaintiff’s attention, the trial judge ultimately found that the waiver was not valid, since the defendant did not ensure that each student understood the legal effect of the waiver. Counsel for the plaintiff in the case at bar submits that there is no evidence that the defendant explained the implication of the waivers to Ms. Jensen when she signed any of the documents. The plaintiff’s evidence was that, though she used them herself, insurance was still required. She was not seriously challenged as to her knowledge of the legal effect of waivers when cross-examined.

[21] The defendant’s position is that the plaintiff did not plead in reply or argue that the defendant was required to demonstrate the legal effect of the waiver provision, in addition to taking reasonable steps to bring the waiver to the attention of the plaintiff. The defendant says that the OLA only requires that the waiver provision be brought to the attention of the plaintiff. There is no additional requirement that the defendant must take the further step of explaining the legal effect of the waiver to the plaintiff.

[22] The question as to whether the defendant took reasonable steps to bring the waiver provision to the attention to the plaintiff was a question of fact decided by the jury on the consent of both the plaintiff and defendant. This followed, what I note was, careful and repeated consideration by counsel as to the questions to be put to the jury. Further, the plaintiff did not plead or argue that there was a requirement that the defendant explain the legal effect of the waiver provision to the plaintiff. This is consistent with the circumstance that the question was put to the jury as a question of fact, and not to me as a question of law.

[23] Having neither pleaded nor canvassed this argument at trial, the plaintiff cannot now ask me to make this determination and ignore the arguments at trial and the findings of the jury. The only remaining issue to decide is whether the waiver covered the negligence alleged.

Was the scope of the waiver broad enough to cover the negligence alleged by the plaintiff?

[24] The waiver provision in the Membership Agreement says:

The Member forever releases and discharges the Club and its respective directors, operators, employees, agents, instructors or any other individual who the Club is in law responsible, from:

(a) any damages arising from personal injuries sustained by the Member, in or about the premises. The Member assumes full responsibility for such injuries and damages, including without limitation any claim for personal injuries resulting from and arising out of either the negligence of the Club, its directors, officers, employees, agents and assigns or the negligence of any other person or guest using the facilities;

(b) any claim whatsoever arising by reason of the Member suffering disease, deterioration of health, illness or aggravation of a condition of ill health as a result of participation in programs or services offered by the Club, or as a result of the acceptance of any advice about the use of the facilities provided by the Club;

(c) any and all claims, demands, rights of action, or causes of action, present or future, whether the same be known or unknown, anticipated or unanticipated, resulting from the Member’s use of the facilities, equipment or services of the Club.

[25] The defendant’s position is that the plaintiff’s claim (which is essentially that the defendant is negligent for failing to inspect or maintain the shoulder press machine and for failing to warn the plaintiff of the danger presented) is covered by the clear language of the waiver provision. Subclause (a) releases the defendant from any liability for any injury as a result of the defendant’s own negligence. Subclause (c) releases the defendant from responsibility for any and all claims resulting from the plaintiff’s use of the defendant’s equipment. Both clauses are clear and unambiguous. The language clearly indicates that the defendant intended to release itself from liability for its own negligence in the circumstances of this case. The defendant submits there is no authority for the proposition that it is necessary to reference the OLA in order for the waiver to be valid.

[26] The plaintiff’s position is that the waiver was not broad enough to cover the plaintiff’s claim, and indeed, at trial, the plaintiff testified that she was not aware that the Membership Agreement was broad enough to cover the negligence of the defendant in failing to inspect its own equipment. The plaintiff claims that subclauses (a) and (c) should be read separately, and are lacking essential terms to capture the claim of the plaintiff, such that:

(a) Subclause (a) does not reference the defendant’s failure to inspect and maintain gym equipment;

(b) Subclause (c) is silent as to the defendant’s negligence, nor does it speak to any failure to inspect or maintain gym equipment;

(c) Neither subclause:

(i) Provides any context such as a description of the negligence covered by the provision;

(ii) Specifically excludes any duty owed under the Occupiers’ Liability Act;

(iii) States “whatsoever” or “howsoever” (as (b) does); or

(iv) Mentions liability.

[27] The plaintiff states that the three subclauses read as a whole are convoluted, vague and ambiguous. The subclauses do not use the same language and there is no joining language between the subclauses that indicates they should be read together. The plaintiff points out that any ambiguity in the waiver must be resolved against the drafter (See: Gallant, at paras. 26 and 27).

[28] The plaintiff further alleges that subclause (a) offends the OLA where it states “The Member assumes full responsibility for such injuries and damages… arising out of either the negligence of the Club … or the negligence of any other person or guest using the facilities”.

[29] According to section 5(1) of the OLA:

5(1) The duty of an occupier under this Act, or the occupier’s liability for breach thereof, shall not be restricted or excluded by any contract to which the person to whom the duty is owed is not a party, whether or not the occupier is bound by the contract to permit such person to enter or use the premises.

[30] The plaintiff states that by attempting to exclude the negligence of a third party, subclause (a) violates section 5(1) of the OLA.

[31] Since the defendant drafted the waiver, any ambiguity must be resolved against it, which would render the waiver ineffective and unenforceable (See: Gallant, at paras. 26 and 27). In order to cover the negligent conduct of the defendant, courts have held that the waiver must specifically state that it covers negligence. See, for example, the decision of Dyck v. Manitoba Snowmobile Assn. Inc. (1981), 1981 3433 (MB QB), 11 Man. R. (2d) 308 (Q.B.), at para. 42, aff’d 1982 3051 (MB CA), 15 Man. R. (2d) 404 (C.A.), aff'd 1985 27 (SCC), [1985] 1 S.C.R. 589.

[32] It is well established that a general release purporting to protect a defendant against claims for damages will be confined in its application to loss occurring through causes other than negligence, unless liability in respect of negligence is specifically excluded in clear terms.

[33] However, courts have also held in several cases that it is not necessary to use the word “negligence” if the waiver is otherwise clear that it covers a defendant’s negligence. In Clarke v. Action Driving School Ltd., 1996 CarswellBC 1004 (S.C.) [Clarke], at para. 10, although the waiver did not include any express reference to “negligence”, the court was satisfied that the use of the words “howsoever arising” in that context included liability for negligence:

The second issue is whether the terms of the waiver are broad enough to include the assumed negligence of the defendant. The key words of the waiver are

release ... from all responsibility of property damage, bodily injury, liability, cost and expenses and claims of every nature and kind howsoever arising from or in consequence of such students participation in any of the training courses conducted by the school. ...

The clause does not contain any express explicit reference to negligence. I am satisfied that the use of the words "howsoever arising" in the context here includes liability for negligence. Those and similar words have been given a very wide ambit including negligence in a number of cases, including Pyman Steamship Co. v. Hull & Barnsley Railway Co., [1915] 2 K.B. 729 (C.A.); Swiss Bank Corp. v. Brink's-Mat Ltd., [1986] 2 Lloyd's Rep. 79, 92-93; White v. Blackmore, [1972] 2 Q.B. 651, 671 (C.A.). [Emphasis added.]

[34] Nor is it necessary that the words “howsoever” and “whatsoever” arising be used, provided there are equivalent words or phrases to indicate that all claims, including claims of negligence, are covered. In Rauhanen v. Lee, 2003 ABQB 84, 2003 CarswellAlta 103, at para. 25, the court concluded that the words “in any manner arising” in that case were tantamount to the words “howsoever arising” as used in Clarke.

[35] In upholding the trial judge’s decision in Braun Estate v. Zenair Ltd., 1998 CarswellOnt 4479 (C.A.) [Braun Estate], at para. 3, the Ontario Court of Appeal also held that it was unnecessary that the precise term “negligence” be used in the circumstances of that case, since the only possible head of damage would lie in negligence:

[The Appellant] argues that the trial judge erred in finding the Waiver ineffective because it did not refer to negligence in terms. Insofar as the trial judge could be said to have done this, we agree with this submission. In the circumstances of this case the only possible head of damage for which the appellant could be liable under the contract lies in negligence. Hence it is unnecessary that the precise term appear in the Waiver Form.

[36] I agree that subclause (b) does not apply in this case. I conclude that subclauses (a) and (c), either read separately or read together, cover the negligence claimed by the plaintiff. Subclause (a) covers a very wide ambit of “any damages” arising from a “personal injury” on the premises of the defendant, and so covers damages related to an injury in using the shoulder press. The waiver specifically include claims for “personal injuries” arising from the “negligence” of Fit City, its directors, officers and employees. This very clearly and unambiguously covers the claim that was made against the defendants. It is unnecessary that the defendant here specifically refer to damages arising from a failure to inspect or maintain equipment or from a failure to adequately warn the plaintiff of the dangers. An individual reading this clause could come to no other conclusion than that he/she has waived the right to sue the defendant for a claim of negligence.

[37] Equally, subclause (c) also covers the type of negligence claimed by the plaintiff. This clause releases the defendant from liability for “any and all claims, demands, rights of action, or causes of action.” The clause goes on to specifically mention that it relates to claims as a result of the “Member’s use of the … equipment … of the Club.” I agree with the authorities of Clarke, which was upheld by the Supreme Court, and Braun Estate that it is not necessary to use the word negligence, provided the waiver is otherwise clear that it includes negligence. An individual reading this clause could come to no other conclusion than that she had waived her right to sue for “any and all claims” which here includes a claim for negligence. Therefore, I conclude that both clauses read separately unambiguously cover the type of negligence claimed by the plaintiff. I would further conclude that, read together, subclause (c) reinforces subclause (a) and serves as a further indication that the waiver covers all claims for personal injuries, including those sustained as a result of using the gym’s equipment. A reasonable person reading these clauses would realize that, by signing the agreement, he or she was waiving any right to sue the defendant in negligence.

[38] The plaintiff argues further that it was necessary for the defendant to explicitly refer to the duty under the OLA for the waiver to be valid regarding claims under that Act.

[39] In the case of Coueslan v. Canadian Mini-Warehouse Properties Ltd., 2000 BCPC 137, 2000 CarswellBC 3234, at para. 31, the B.C. Provincial Court applied the principles of contract law and the obligations under B.C.’s Occupiers’ Liability Act, R.S.B.C. 1996, c. 337 (the “B.C. Act”), and concluded that it was necessary in the circumstances of that case to set out in clear terms an exclusion of liability under the B.C. Act, as distinct from a limitation of liability for negligence:

The statutory duty of care contained in the Occupiers Liability Act is distinct from negligence at common law. The legislature has established a standard of care separate and apart from the standards referred to at common law: Rendall v. Ewert (1989), 1989 232 (BC CA), 38 B.C.L.R. (2d) 1 (B.C. C.A.). Thus in my view it was incumbent upon the Defendant to set out in clear terms an exclusion of liability under this Act as distinct from a limitation of liability for negligence. Although the language used by the Defendant is broad, excluding liability from any cause, there is no express reference to liability under the Occupiers Liability Act or other statutes. Given the statutory duty to warn of the exclusion of liability, and construing the language strictly against the Defendant, I find the existence of an exclusion of liability under the Occupiers Liability Act is not so plainly stated that it clearly bears that meaning on its face.

[40] There is conflicting authority to be found in Lafontaine (Guardian ad litem of) v. Prince George Auto Racing Assn., [1994] B.C.J. No. 176, 1994 CarswellBC 2387 (S.C.), at para. 50. The B.C. Supreme Court found that the failure to specifically mention the B.C. Act did not detract from the broad scope of the language in the waiver. Further, in Blomberg v. Blackcomb Skiing Enterprises Ltd., 64 B.C.L.R. (2d) 51 (S.C.), at para. 41, the court found that the waiver of claims of negligence includes claims under the B.C. Act, since a breach of the duty of care under that Act is negligence:

A breach of the duty of care imposed on the defendant by s. 3 is negligence. If the document specifically excludes negligence, which it does, then that must be an express agreement to exclude the duty of care. The plaintiff suggested that it would have been more appropriate to specifically mention that the negligence mentioned included the Occupiers Liability Act. That suggestion is a good one and perhaps its insertion into waivers of this kind would avoid future arguments on this point. However the absence of such words in this waiver are not fatal in my view.

[41] While I am not bound to follow either of these lines of authority, I find that the latter authorities are more persuasive. Like B.C.’s Occupiers Liability Act, Section 3 of Ontario’s OLA, which creates a duty to “take such care as […] is reasonable to see that person entering the premises […] are reasonably safe”, essentially founds a claim in negligence. By expressly excluding liability for negligence in subclause (a), the defendant expressly excludes the duty of care owed under the OLA. Further, the broad language of subclause (c), which excludes liability for “any and all claims, demands, rights of action, or causes of action”, may reasonably be seen to include claims for breaches of the statutory duty under the OLA. Therefore, it is not necessary to specifically mention the OLA in the waiver, provided that the waiver is specific and broad enough to cover claims made under the OLA, as I find it does here.

[42] Finally, I will briefly address the plaintiff’s argument that subclause (a) offends the OLA by providing a release for negligence for any other person or guest using the facilities. . This section does nothing to prohibit an occupier from using a waiver to provide a release for negligence to protect other individuals using the facilities who are not party to the agreement. In the case at bar, the plaintiff, Candace Jensen, the party to whom the duty is owed, is a party to the agreement. Therefore, I find that section 5(1) of the OLA has not been contravened.

[43] The words of the waiver in the renewal documentation are not quite as strong as in the Membership Agreement. The wording of the former is:

Waiver: I hereby release and hold nameless the Club, its agents, officers and employees and any affiliated companies from any liability with respect to injury of any nature to me or my property arising out of, or in connection with my exercise participation or the use of sun tanning equipment.

[44] In contrast to the waiver in the Membership Agreement, this waiver does not specifically refer to the “negligence” of Fit City, but rather refers to “any liability”. Given my ruling that the Membership Agreement was in effect at the material time, I need not rule on the adequacy of the renewal documentation on a stand-alone basis.

Conclusions

[45] Given all of the above, I conclude as follows:

(a) The Membership Agreement was a valid and enforceable agreement in effect on the date of the loss in June of 2008, as per the findings of the jury;

(b) The defendant took reasonable steps to bring the waiver provision in this agreement to the attention of the plaintiff, as per the findings of the jury; and

(c) The scope of the waiver provision was broad enough to cover both the negligence alleged by the plaintiff and any breach of duty owed under the Occupiers’ Liability Act.

[46] Therefore, the waiver in the Membership Agreement constitutes a valid release of liability and serves to bar the claim in negligence and the claim of a breach of the OLA alleged by the plaintiff.

Madam Justice A.M. Mullins

Released: October 13, 2015