Finlay v. Canada (Minister of Finance), 1986 CanLII 6 (SCC), [1986] 2 SCR 607
The Minister of Finance of Canada, the Minister of National Health and Welfare of Canada and the Attorney General of Canada Appellants
v.
Robert James Finlay Respondent
indexed as: finlay v. canada (minister of finance)
1985: February 22; 1986: December 18.
Present: Dickson C.J. and Beetz, McIntyre, Chouinard, Wilson, Le Dain and La Forest JJ.
on appeal from the federal court of appeal
Actions ‑‑ Standing ‑‑ Non‑constitutional challenge by private individual to the statutory authority for federal public expenditure ‑‑ Person in need within the meaning of the Canada Assistance Plan seeking a declaration that cost‑sharing payments by Canada to Manitoba pursuant to the Plan are illegal and an injunction to stop the payments because of provincial non‑compliance with the conditions and undertakings imposed by the Plan ‑‑ Plaintiff claiming to be prejudiced by the provincial non‑compliance ‑‑ Whether plaintiff has standing to seek the declaratory and injunctive relief ‑‑ Whether statement of claim discloses reasonable cause of action.
The respondent alleges that he is a resident of Manitoba and a person in need within the meaning of the Canada Assistance Plan ("the Plan") whose sole support is the social allowance he receives under the Manitoba Social Allowances Act; that for a period of forty‑six months an amount was deducted from his monthly social allowance in payment of a debt owing by him to the Crown for overpayment of allowance; and that prior to receiving social allowance he received municipal assistance, which by The Municipal Act of Manitoba is made a debt owing by the respondent to the municipality. The respondent contends that the continued payments by Canada to Manitoba of contributions under the Plan are illegal, as being contrary to the statutory authority conferred by s. 7(1) of the Plan, because they contribute to the cost of a provincial system of assistance to persons in need which is in breach, in several respects, of the conditions and undertakings to which such payments are made subject by s. 7(1). He contends that s. 20(3) of The Social Allowances Act, which authorizes the deduction from a social allowance payment of an amount to repay an overpayment of allowance, is contrary to the provincial undertaking to provide assistance to any person in need in an amount or manner that takes into account his basic requirements because such deduction has the effect of reducing the amount of a social allowance payment below the cost of basic requirements; that s. 444 of The Municipal Act, which makes the cost of any municipal assistance to a person in need a debt owing to the municipality, is in breach of the provincial undertaking to provide assistance to a person in need; and that the authority conferred on municipalities by s. 11(5)(b) of The Social Allowances Act to fix the amount of assistance required to meet the cost of basic requirements is contrary to the indication in the Plan that such authority shall be exercised by the provincial authority designated in the agreement made pursuant to the Plan.
The respondent sues for a declaration that the federal cost‑sharing payments are illegal and an injunction to stop them as long as the provincial system of assistance to persons in need fails to comply with the conditions and undertakings imposed by the Plan. On a motion to strike by the appellants under Federal Court Rule 419(1) the respondent's statement of claim was struck out in the Trial Division of the Federal Court on the grounds that the respondent lacked the requisite standing to bring his action and the statement of claim did not disclose a reasonable cause of action. A majority of the Federal Court of Appeal allowed an appeal from this order and restored the respondent's statement of claim. The appellants appeal from that judgment, and the issues in the appeal are whether the respondent should be recognized as having standing to bring his action, and if he has the requisite standing, whether the statement of claim discloses a reasonable cause of action.
Held: The appeal should be dismissed.
The respondent does not have a sufficiently direct, personal interest in the legality of the federal cost‑ sharing payments, as distinct from provincial compliance with the conditions and undertakings imposed by the Plan, to bring him within the general requirement for standing to sue, without the consent of the Attorney General, for a declaration or an injunction to challenge an exercise of statutory authority. He should, however, be recognized, as a matter of judicial discretion, as having public interest standing to bring his action. The approach to public interest standing reflected in the judgments of this Court in Thorson, McNeil and Borowski, in which there was a challenge to the constitutionality or operative effect of legislation, should be extended to a non‑constitutional challenge by an action for a declaration to the statutory authority for public expenditure or other administrative action. The respondent meets the criteria laid down for the discretionary recognition of public interest standing in Thorson, McNeil and Borowski. His action raises justiciable issues. The issues are serious ones, and the respondent has a genuine interest in them. If the respondent were denied standing there would be no other way in which the issues could be brought before a court. The respondent should be recognized as having standing to sue for the injunctive, as well as the declaratory, relief prayed for in his statement of claim. The alternative contention that the statement of claim does not disclose a reasonable cause of action should be rejected. It is not plain and obvious that the respondent cannot succeed with his contentions.
Cases Cited
Applied: Thorson v. Attorney General of Canada, [1975] 1 S.C.R. 138; Nova Scotia Board of Censors v. McNeil, [1976] 2 S.C.R. 265; Minister of Justice of Canada v. Borowski, [1981] 2 S.C.R. 575; referred to: MacIlreith v. Hart (1908), 39 S.C.R. 657; Inland Revenue Commissioners v. National Federation of Self‑Employed and Small Businesses Ltd., [1982] A.C. 617; Australian Conservation Foundation Inc. v. Commonwealth of Australia (1980), 28 A.L.R. 257; London County Council v. Attorney‑General, [1902] A.C. 165; Carota v. Jamieson, [1977] 1 F.C. 19; Gouriet v. Union of Post Office Workers, [1978] A.C. 435; Boyce v. Paddington Borough Council, [1903] 1 Ch. 109; London Passenger Transport Board v. Moscrop, [1942] A.C. 332; Cowan v. Canadian Brodcasting Corp., [1966] 2 O.R. 309; Rosenberg v. Grand River Conservation Authority (1976), 69 D.L.R. (3d) 384; Smith v. Attorney General of Ontario, [1924] S.C.R. 331; Flast v. Cohen, 392 U.S. 83 (1968); Linda R. S. v. Richard D., 410 U.S. 614 (1973); Joint Anti‑Fascist Refugee Committee v. McGrath, 341 U.S. 123 (1951); Re Lofstrom and Murphy (1971), 22 D.L.R. (3d) 120; LeBlanc v. City of Transcona, [1974] S.C.R. 1261; Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26 (1976); Operation Dismantle Inc. v. The Queen, [1985] 1 S.C.R. 441.
Statutes and Regulations Cited
Canada Assistance Plan, R.S.C. 1970, c. C‑1, ss. 2 "person in need", "provincial authority", 4, 6(2)(a), 7(1), 9(1)(g).
Federal Court Rules, C.R.C. 1978, c. 663, R. 419(1).
Municipal Act, S.M. 1970, c. 100, s. 444.
Social Allowances Act, R.S.M. 1970, c. S160, ss. 11(5)(b), 20(3) [en. 1980, c. 37, s. 10].
Authors Cited
Cromwell, Thomas A. Locus Standi: A Commentary on the Law of Standing in Canada. Toronto: Carswells, 1986.
Thio, S. M. Locus Standi and Judicial Review. Singapore: Singapore University Press, 1971.
Zamir, Itzhac. The Declaratory Judgment. London: Stevens & Sons Ltd., 1962.
APPEAL from a judgment of the Federal Court of Appeal, [1984] 1 F.C. 516, 146 D.L.R. (3d) 704, 48 N.R. 126, allowing respondent's appeal from a judgment of Nitikman D.J. of the Trial Division striking out respondent's statement of claim. Appeal dismissed.
T. B. Smith, Q.C., Harry Glinter and Susan D. Clark, for the appellants.
G. Patrick S. Riley and A. J. Roman, for the respondent.
The judgment of the Court was delivered by
Le Dain J.‑‑This appeal raises the question whether a private individual has standing to sue for a declaration that certain payments out of the Consolidated Revenue Fund of Canada are illegal on the ground that they are not made in accordance with the applicable statutory authority. More specifically, the question is whether a recipient of provincial assistance to persons in need, who claims to be prejudiced by certain provisions of the provincial legislation respecting such assistance, should be recognized as having standing to seek a declaration that payments by the federal government to the provincial government of contributions to the cost of such assistance, pursuant to the Canada Assistance Plan, R.S.C. 1970, c. C‑1 (hereinafter referred to as "the Plan"), are illegal, as being contrary to the authority conferred by the Plan, because the provincial legislative provisions complained of do not comply with the conditions and undertakings to which the federal cost‑sharing payments are made subject by the Plan. There is also the issue, raised alternatively, whether, if there is the requisite standing to sue, the statement of claim discloses a reasonable cause of action.
The appeal is by leave of this Court from the judgment of the Federal Court of Appeal (Thurlow C.J. and Lalande D.J.; Heald J. dissenting), on April 25, 1983, [1984] 1 F.C. 516, allowing an appeal from the order on November 17, 1982 of Nitikman D.J. in the Trial Division, who, on a motion to strike under Federal Court Rule 419(1), struck out the respondent's statement of claim on the grounds that the respondent lacked standing and the statement of claim did not disclose a reasonable cause of action.
I
The respondent's statement of claim contains the following allegations of fact. The respondent is a resident of Manitoba who by reason of illness and disability is unable to provide adequately for himself and is therefore a person in need within the meaning of the Plan. His sole source of support is the social allowance he receives under The Social Allowances Act, R.S.M. 1970, c. S160, of Manitoba. For a period of forty‑six months an amount equal to 5 per cent of the respondent's social allowance was deducted from his monthly allowance in payment of a debt owing by him to the Crown for overpayment of allowance. Prior to receiving social allowance the respondent received municipal assistance, which, by s. 444 of The Municipal Act, S.M. 1970, c. 100, of Manitoba, is made a debt owing by the respondent to the municipality.
The respondent contends that the continued payments by Canada to Manitoba of contributions under the Plan are illegal, as being contrary to the statutory authority conferred by s. 7(1) of the Plan, because they contribute to the cost of a provincial system of assistance to persons in need which is in breach, in several respects, of the conditions and undertakings to which such payments are made subject by s. 7(1). Section 7(1) reads as follows:
(1) Contributions or advances on account thereof shall be paid, upon the certificate of the Minister, out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed, but all such payments are subject to the conditions specified in this Part and in the regulations and to the observance of the agreements and undertakings contained in an agreement.
The respondent contends that s. 20(3) of The Social Allowances Act, which authorizes the deduction from a social allowance payment of an amount to repay an overpayment of allowance, is contrary to the provincial undertaking to provide assistance to any person in need in an amount or manner that takes into account his basic requirements because such deduction has the effect of reducing the amount of a social allowance payment below the cost of basic requirements. The provincial undertaking is required as a condition of contributions under the Plan by s. 6(2)(a) thereof and is contained in clause 2 of the agreement of March 20, 1967 (hereinafter referred to as "the Agreement") entered into by the Government of Canada and the Government of Manitoba pursuant to s. 4 of the Plan.
The respondent further contends that s. 444 of The Municipal Act, which makes the cost of any municipal assistance to a person in need a debt owing to the municipality, is in breach of the provincial undertaking, as required by the Plan, to "provide" such assistance to a person in need. In the respondent's submission, the word "provide" requires, in view of the federal contribution to the cost of such assistance, that the assistance be provided in the form of a gift rather than a loan.
Finally, the respondent contends that the authority conferred on municipalities by s. 11(5)(b) of The Social Allowances Act to fix the amount of assistance required to meet the cost of basic requirements is contrary to the intention indicated in the definition of "person in need" in s. 2 of the Plan that such authority shall be exercised by "the provincial authority", as defined by s. 2 of the Plan and designated by clause 1(b) of the Agreement, which states that the Minister of Welfare is the provincial Minister charged with the administration of the provincial law.
The respondent's action is brought against the Minister of Finance, as the Minister responsible for payments out of the Consolidated Revenue Fund, and against the Minister of National Health and Welfare, as the Minister responsible for certificates under s. 7 of the Plan, and concludes for the following relief: (a) a declaration that the certificates and the payments of contribution under the Plan are illegal so long as the provincial legislation respecting assistance to persons in need fails to comply, in the manner indicated above, with the conditions and undertakings to which such payments are made subject by the Plan; (b) an injunction to stop such certificates and payments; and (c) a declaration that the payments of contribution to Manitoba since March 20, 1967 constitute overpayment within the meaning of s. 9(1)(g) of the Plan.
The appellants' notice of motion under Federal Court Rule 419(1) for an order striking out the respondent's statement of claim sets out the following grounds: (a) the respondent "does not have the requisite standing in law to maintain his action"; and (b) in the alternative, if the respondent does have the requisite standing, the statement of claim "does not disclose any reasonable grounds for obtaining the relief sought".
The motions judge of the Federal Court, Trial Division, struck out the respondent's statement of claim on both of the above grounds, without giving reasons.
A majority of the Federal Court of Appeal, in reasons by Thurlow C.J. and Lalande D.J., allowed the appeal and restored the respondent's statement of claim on the grounds that the respondent should be granted standing, as a matter of judicial discretion, and that the statement of claim disclosed a reasonable cause of action. Heald J., dissenting, was of the view that the respondent lacked the requisite standing.
The Federal Court of Appeal also had before it at the same time appeals from two other orders of the Trial Division on applications by the respondent against the appellants: (a) an order dismissing an application by originating notice of motion under s. 18 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, for an injunction to restrain the appellants from continuing to make payments under the Plan to the province; and (b) an order dismissing an application for an interim injunction to the same effect in the action for a declaration and injunction. The judgments of the Federal Court of Appeal dismissing the appeals from both of these orders are not in issue in this appeal. In its judgment allowing the appeal from the order of the Trial Division striking out the respondent's statement of claim the Federal Court of Appeal did not refer, at least explicitly, to the respondent's standing and cause of action to obtain the injunctive relief prayed for in the statement of claim. It allowed the appeal and restored the statement of claim on the basis that the respondent had the requisite standing and a reasonable cause of action to seek the declaratory relief.
II
The issue of standing in this appeal, as I conceive it, may be approached by asking the following questions:
Does the respondent have a sufficient personal interest in the legality of the federal cost‑sharing payments to bring him within the general requirement for standing to challenge an exercise of statutory authority by an action for a declaration or an injunction?
If not, does the Court have a discretion to recognize public interest standing in the circumstances of the present case?
If the Court does have such a discretion should it be exercised in favour of the respondent?
These questions involve a consideration of the discretionary control over standing to assert a purely public right or interest by an action for a declaration or an injunction that has traditionally vested in the Attorney General and the extent to which that control has been displaced or qualified by the judgments of this Court in Thorson v. Attorney General of Canada, [1975] 1 S.C.R. 138, Nova Scotia Board of Censors v. McNeil, [1976] 2 S.C.R. 265, and Minister of Justice of Canada v. Borowski, [1981] 2 S.C.R. 575. More specifically, they involve a consideration of whether the approach to public interest standing reflected in those cases, in which there was a challenge to the constitutionality or operative effect of legislation, applies to a non‑constitutional challenge to the statutory authority for administrative action.
In the course of his submissions on the issue of standing counsel for the appellants also raised an issue of justiciability. He contended that the question of provincial compliance with the conditions of federal cost‑sharing was not an issue appropriate for determination by a court, but was rather one that should be left to government review and inter‑governmental resolution. The respondent contended that the particular questions of provincial non‑compliance raised by the statement of claim were questions of law appropriate for judicial determination. Justiciability was held by this Court in Thorson to be a central consideration in the exercise of the judicial discretion to recognize public interest standing in certain cases. I propose to consider it in that context.
Finally, before examining the question of standing, something should perhaps be said concerning the assumption underlying the judgments below and the argument in this Court that the issue of standing can be properly determined with final effect in this case as a preliminary matter on a motion to strike. This question, which involves the relationship between standing and the merits of a case, was briefly alluded to by Thurlow C.J., who noted that no objection had been taken to the determination of standing as a preliminary matter, based on the view expressed by Collier J. in Carota v. Jamieson, [1977] 1 F.C. 19, at p. 25. There, on a motion to strike under Federal Court Rule 419(1), Collier J. expressed the opinion that the question of standing should not be determined on a preliminary motion of that kind, but should be "the subject of full evidence, argument and deliberation at trial" or at least of "a formal hearing on a point of law, after all relevant facts for determination of that point have been established". The stage of the proceedings at which the issue of standing is best considered had earlier been the subject of comment by this Court in McNeil, supra, where, the question of standing to bring an action for a declaration of legislative invalidity having been raised and determined in the courts below as a preliminary matter, Laskin C.J. said at p. 267: "In granting leave, this Court indicated that where, as here, there is an arguable case for according standing, it is preferable to have all the issues in the case, whether going to procedural regularity or propriety or to the merits, decided at the same time. A thoroughgoing examination of the challenged statute could have a bearing in clarifying any disputed question on standing." A similar view was expressed by the House of Lords in Inland Revenue Commissioners v. National Federation of Self‑Employed and Small Businesses Ltd., [1982] A.C. 617. There the question arose in the context of an application for judicial review under R.S.C. Ord. 53, r. 3(5), which required that an applicant have "a sufficient interest in the matter to which the application relates". The members of the House of Lords were of the view that it was necessary to consider the merits of the application in order to determine the matter to which the application related. This question was also considered by the High Court of Australia in Australian Conservation Foundation Inc. v. Commonwealth of Australia (1980), 28 A.L.R. 257, where the opinion was expressed that it is a matter of judicial discretion, having regard to the particular circumstances of a case, whether to determine the question of standing with final effect as a preliminary matter or to reserve it for consideration on the merits. The Court held that for reasons of cost and convenience the judge had properly exercised that discretion in dealing with the question of standing as a preliminary matter and striking out the statement of claim. Assuming that the question whether an issue of standing to sue may be properly determined as a preliminary matter in a particular case is one which a court should consider, whether or not it has been raised by the parties, I agree with the view expressed in the Australian Conservation Foundation case. It depends on the nature of the issues raised and whether the court has sufficient material before it, in the way of allegations of fact, considerations of law, and argument, for a proper understanding at a preliminary stage of the nature of the interest asserted. In my opinion the present case is one in which the question of standing can be properly determined on a motion to strike. The nature of the respondent's interest in the substantive issues raised by his action is sufficiently clearly established by the allegations and contentions in the statement of claim and the statutory and contractual provisions relied on without the need of evidence or full argument on the merits.
III
I turn to the question whether the respondent has a sufficient personal interest in the legality of the federal cost‑sharing payments to bring him within the general requirement for standing to challenge an exercise of statutory authority by an action for a declaration or an injunction. The nature of the interest required by a private individual for standing to sue for declaratory or injunctive relief where, as in the present case, a question of public right or interest is raised, has been defined with reference to the role of the Attorney General as the guardian of public rights. Only the Attorney General has traditionally been regarded as having standing to assert a purely public right or interest by the institution of proceedings for declaratory or injunctive relief of his own motion or on the relation of another person. His exercise of discretion as to whether or not to give his consent to relator proceedings is not reviewable by the courts. See London County Council v. Attorney‑General, [1902] A.C. 165, and Gouriet v. Union of Post Office Workers, [1978] A.C. 435. In such a case a private individual may not sue for declaratory or injunctive relief without the consent of the Attorney General unless he can show what amounts to a sufficient private or personal interest in the subject matter of the proceedings. It is in this sense that I have referred to the discretionary control of the Attorney General over public interest standing. Thorson, McNeil and Borowski represent a departure from or exception to that general rule, but before considering their application in the present case it is necessary to consider whether the respondent has a sufficient interest in the legality of the federal cost‑sharing payments to bring him within the general rule.
The general rule was laid down in cases involving the private action for public nuisance but it has been applied in a variety of public law contexts where an issue of public right or interest has been raised. The statement of the rule that has been most often cited is that of Buckley J. in Boyce v. Paddington Borough Council, [1903] 1 Ch. 109, in which the issue was whether the plaintiff, a private individual, could bring an action, without the consent of the Attorney General, for an injunction to restrain a public authority from erecting an obstruction in an open space that interfered with the access of light to the windows of the plaintiff's property. The case involved the public right to the open space and the private right to access of light to private property. It was held that the plaintiff could sue without joining the Attorney General because, although the right to the open space was a public right, the plaintiff sought to restrain an interference with his private right to access of light to his property, and he also suffered special damage peculiar to himself from the interference with the public right. Buckley J. stated the rule as follows at p. 114:
A plaintiff can sue without joining the Attorney‑General in two cases: first, where the interference with the public right is such that some private right of his is at the same time interfered with (e.g., where an obstruction is so placed in a highway that the owner of the premises abutting upon the highway is specially affected by reason that the obstruction interferes with his private right to access from and to his premises to and from the highway); and, secondly, where no private right is interfered with, but the plaintiff, in respect of his public right, suffers special damage peculiar to himself from the interference with the public right.
- That statement has been treated as an authoritative expression of the rule and applied on several occasions to actions for a declaration as well as actions for an injunction, most notably by the House of Lords in London Passenger Transport Board v. Moscrop, [1942] A.C. 332, and Gouriet, supra. Examples of its application in Canada to cases involving issues of statutory authority are the judgments of the Ontario Court of Appeal in Cowan v. Canadian Brodcasting Corp., [1966] 2 O.R. 309, and Rosenberg v. Grand River Conservation Authority (1976), 69 D.L.R. (3d) 384. While the authority of the rule is well established the precise nature of the two exceptions stated by Buckley J.‑‑interference with a private right and special damage peculiar to oneself‑‑has been the subject of a variety of commentary and expression. The "private right" referred to by Buckley J. has been said to be "a right the invasion of which gives rise to an actionable wrong within the categories of private law, for example, a breach of contract or trust or the commission of a tort": S. M. Thio, Locus Standi and Judicial Review (1971), p. 161. It has also been observed that the exception for private rights applies not only to common law rights but to a right created by statute for the benefit of a plaintiff: I. Zamir, The Declaratory Judgment (1962), p. 269. The nature of the interest reflected by the words "special damage peculiar to himself" in the second exception in Boyce has been variously characterized in the cases. For a convenient reference to the conflicting meanings given to these words in the private action for public nuisance see T. A. Cromwell, Locus Standi: A Commentary on the Law of Standing in Canada (1986), pp. 24‑27. In Smith v. Attorney General of Ontario, [1924] S.C.R. 331, which was considered by this Court in Thorson, Duff J. referred to the general rule as follows at p. 337: "An individual, for example, has no status to maintain an action restraining a wrongful violation of a public right unless he is exceptionally prejudiced by the wrongful act." In Cowan, supra, in which the standing requirement laid down in Boyce was applied by the Ontario Court of Appeal to an action for declaratory and injunctive relief alleging that the Canadian Broadcasting Corporation had exceeded its statutory authority by operating a French language broadcasting station, Schroeder J.A. said at p. 311:
A plaintiff, in attempting to restrain, control or confine within proper limits, the act of a public or quasi‑public body which affects the public generally, is an outsider unless he has sustained special damage or can show that he has some "special interest, private interest, or sufficient interest". These are terms which are found in the law of nuisance but they have been introduced into cases which also involve an alleged lack of authority. Therefore, in an action where it is alleged that a public or quasi‑public body has exceeded or abused its authority in such a manner as to affect the public, whether a nuisance be involved or not, the right of the individual to bring the action will accrue as it accrues in cases of nuisance on proof that he is more particularly affected than other people.
In Australian Conservation Foundation, supra, in which the High Court of Australia applied the rule in Boyce to deny public interest standing to challenge the validity of administrative procedures respecting a requirement for an environmental impact statement, Gibbs J., at p. 268, made the following observations concerning the meaning to be given to the words "special damage peculiar to himself" in Boyce:
Although the general rule is clear, the formulation of the exceptions to it which Buckley J. made in Boyce v Paddington Borough Council is not altogether satisfactory. Indeed the words which he used are apt to be misleading. His reference to "special damage" cannot be limited to actual pecuniary loss, and the words "peculiar to himself" do not mean that the plaintiff, and no one else, must have suffered damage. However, the expression "special damage peculiar to himself", in my opinion should be regarded as equivalent in meaning to "have a special interest in the subject matter of the action".
In Borowski, supra, Laskin C.J., dissenting, referred to the general rule as follows at p. 578: "Unless the legislation itself provides for a challenge to its meaning or application or validity by any citizen or taxpayer, the prevailing policy is that a challenger must show some special interest in the operation of the legislation beyond the general interest that is common to all members of the relevant society."
The precise nature of the respondent's interest in the legality of the federal cost‑sharing payments is not easy to characterize in terms of the general rule. The respondent sues as a person in need within the meaning of the Plan who claims to have been prejudiced by the alleged provincial non‑compliance with the conditions and undertakings to which the federal cost‑sharing payments are made subject by the Plan. He alleges the prejudice caused by the deduction from his monthly social allowance payment of an amount to repay an overpayment of allowance, which he contends was caused by administrative error. Counsel for the appellants conceded that the deduction reduced the amount of the respondent's monthly social allowance payment below that required to meet the cost of basic requirements or necessities. The respondent alleges the further prejudice arising from the fact that he remains indebted for the municipal assistance which he received prior to qualifying for social allowance. Although the Plan was enacted for the benefit of persons in need it does not confer any rights on such persons; their entitlement to assistance arises under the provincial legislation. Nor can the federal cost‑sharing payments be said to affect such entitlement directly. The respondent contends, however, that the continued payment of the federal contributions, despite the alleged provincial non‑compliance with the conditions and undertakings imposed by the Plan, is in effect a cause of such non‑compliance and the resulting prejudice to the respondent. He argues that it is the federal failure to insist on provincial compliance with the conditions and undertakings imposed by the Plan that permits or encourages such continued non‑compliance by the province. What the respondent seeks by a declaration that the federal payments are illegal and an injunction to stop them is to compel the province to comply with the conditions and undertakings imposed by the Plan.
Counsel for the appellants contended that there was an insufficient "nexus" between the alleged provincial non‑compliance with the conditions and undertakings imposed by the Plan and the alleged illegality of the federal payments to satisfy the general requirement for standing to bring an action for a declaration. The term "nexus" was apparently borrowed from American cases on standing to which we were referred in the course of argument. As formulated in Flast v. Cohen, 392 U.S. 83 (1968), a case of taxpayer's standing to challenge the constitutionality of federal public expenditure, the nexus requirement has a two‑fold aspect of a special nature based on particular features of the American Constitution. The term "nexus" is used in a more general sense in other cases, such as Linda R. S. v. Richard D., 410 U.S. 614 (1973), to refer to the causative relationship that must exist between the injury or prejudice complained of and the action attacked. The action attacked must have been a cause of the injury or prejudice complained of, and the plaintiff must have a personal stake in the outcome of the litigation‑‑that is, stand to benefit in his personal interests from the relief sought. It is in this general sense that I understood counsel for the appellants to use the word "nexus". The American requirement of "nexus" or "directness", as it is sometimes referred to (cf. Joint Anti‑Fascist Refugee Committee v. McGrath, 341 U.S. 123 (1951), per Frankfurter J. at pp. 152‑53), stems from the special constitutional requirement of case or controversy for federal jurisdiction under Article III of the Constitution, and for this reason the American cases on standing must be treated with some caution. I am of the opinion, however, that a similar requirement of directness or causal relationship between the alleged prejudice or grievance and the challenged action is implicit in the notions of interference with private right and special damage. I note that Thio, op. cit., pp. 5‑6, refers to the general requirement for standing in administrative law as being that of a "direct, personal interest". In Australian Conservation Foundation, supra, Gibbs J., referring to the general rule, stated the requirement of a personal stake in the outcome of the litigation as follows at p. 270:
A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails.
- There is no doubt that the respondent has a direct, personal interest in the alleged provincial non‑compliance with the conditions and undertakings imposed by the Plan. A declaration that the federal cost‑sharing payments are illegal would necessarily involve a finding that the province had failed to comply with the conditions and undertakings imposed by the Plan, but this would not affect the validity of the provincial legislative provisions about which complaint is made. Cf. Re Lofstrom and Murphy (1971), 22 D.L.R. (3d) 120 (Sask. C.A.) See also LeBlanc v. City of Transcona, [1974] S.C.R. 1261, per Spence J. at p. 1268. It cannot be asserted for a certainty that the province would feel compelled by such a finding to change the offending legislative provisions. The effect on provincial action of a declaration that the federal payments are illegal and even an injunction to stop them is also necessarily a matter of speculation. For a somewhat analogous relationship between the prejudice suffered and the action attacked that was held to be too speculative for standing see Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26 (1976). Although I have experienced some difficulty on this question, I am on balance of the view that the relationship between the prejudice allegedly caused to the respondent by the provincial non‑compliance with the conditions and undertakings imposed by the Plan and the alleged illegality of the federal payments is too indirect, remote or speculative to be a sufficient causative relationship for standing under the general rule. The respondent must therefore in my opinion rely for standing on what is essentially a public interest in the legality of the federal cost‑sharing payments, albeit that of a particular class of the public defined by the Plan as persons in need. It is accordingly necessary to consider whether the respondent should be recognized as having standing, as a matter of judicial discretion, by application of the principle or approach reflected in the decisions of this Court in Thorson, McNeil and Borowski.
IV
Opinion has differed as to the scope and implications of what was held by this Court in Thorson, McNeil and Borowski. The two questions that are particularly relevant to the issue of standing in this appeal may be summarized as follows: (a) Does the approach to public interest standing in those cases apply to a non‑constitutional challenge to the statutory authority for administrative action; and (b) As a result of what was said in those cases about MacIlreith v. Hart (1908), 39 S.C.R. 657, in which this Court affirmed the standing of a municipal ratepayer to challenge the legality of municipal expenditure, does the principle of that case apply by analogy to a challenge to the legality of federal public expenditure?
In the Federal Court of Appeal, Thurlow C.J. appears to have relied particularly on MacIlreith v. Hart and generally on the approach reflected in Thorson, McNeil and Borowski for his conclusion that the respondent should be recognized as having standing, as a matter of judicial discretion. In one passage of his reasons, which I quote below, there is possibly a suggestion that he may have considered the respondent to have a sufficient personal interest in the legality of the federal payments for standing, but I read his reasons as a whole as basing standing in this case on what is essentially a public interest. In his analysis of the issue of reasonable cause of action, which he undertook first and which perhaps unavoidably overlapped with his discussion of standing, he referred to the present case as one falling directly within the class of MacIlreith v. Hart. He was referring there to the distinction noted by Laskin C.J. in his dissenting judgment in Borowski, which I also quote below, between an issue of the legality of federal or provincial public expenditure arising incidentally to an issue of the constitutionality of legislation and such an issue arising "per se". After saying at p. 525 that MacIlreith v. Hart varied from the present case "only in that it is a federal expenditure which is alleged to be illegal and in that the appellant does not assert standing as a taxpayer", Thurlow C.J. made the following statements at p. 526, which although made with reference to the issue of reasonable cause of action, suggest, I think, the nature of the interest which he considered sufficient for standing in this case: "Once it is accepted for the purposes of this appeal that the allegations of the statement of claim are true, and it is not inconceivable that they may be true, one may at once wonder how the citizenry can put a stop to such illegal action otherwise than by the declaration of a court of competent jurisdiction"; and "What is at stake is the right of the citizens of Canada to have the Consolidated Revenue Fund of Canada applied in accordance with the law." Referring explicitly to the issue of standing in the light of the judgments of this Court in Thorson, McNeil and Borowski, Thurlow C.J. expressed his conclusion in the following passages of his reasons for judgment at pp. 527‑28:
In such circumstances one may wonder why the law should prevent a person who is one of the class of intended beneficiaries of the Canada Assistance Plan and who alleges that he is not getting the standard of assistance it intends because Manitoba does not provide it, from bringing an action to have the issue of the legality of payments to Manitoba under the Act resolved. In seeking to maintain this action he is by no means a mere busybody and it seems to me that his interest in having the matter determined is at least as strong as that of the respondent in the Borowski case.
The issue here is not like any of these. It is not so striking as any of them. Even so, it seems to me to be one of sufficient importance that in the interest of the appellant, of the class of persons intended to have the benefit of the Plan and of the public in general the appellant should be allowed to raise it.
Heald J., dissenting, was of the view that the respondent did not have a sufficient personal interest in the legality of the federal cost‑sharing payments and that he did not fall within the public interest exception recognized by Thorson, McNeil and Borowski because, in his view, the principle affirmed in those cases applied to an issue of legislative validity and not to a non‑constitutional issue of administrative validity, as in the present case. As he put it at pp. 534‑35: "As I perceive the test above enunciated in the Thorson, McNeil and Borowski cases, supra, status is to be accorded only in actions where a declaration of invalidity is sought in respect of certain legislation. The case at bar is not such a case. The declaration herein sought, as stated supra, relates to the validity of administrative action...."
In Borowski, Martland J., delivering the judgment of the majority, summed up what Thorson and McNeil stood for as follows at p. 598:
I interpret these cases as deciding that to establish status as a plaintiff in a suit seeking a declaration that legislation is invalid, if there is a serious issue as to its invalidity, a person need only to show that he is affected by it directly or that he has a genuine interest as a citizen in the validity of the legislation and that there is no other reasonable and effective manner in which the issue may be brought before the Court.
I take that to be an indication that the Court was not purporting in Thorson, McNeil and Borowski to lay down a rule or principle respecting public interest standing that extended beyond a challenge to the constitutionality of legislation. In Thorson and McNeil the challenge was to the constitutionality of federal and provincial legislation respectively. In Borowski, the substantive question raised by the action for a declaration was whether the abortion provisions of the Criminal Code were rendered inoperative by conflict with the Canadian Bill of Rights. The majority and the minority were in agreement that no distinction should be drawn, for purposes of the issue of standing, "between a declaratory action to obtain a decision on validity under the British North America Act and a declaratory action to obtain a decision on operative effect in the face of the Canadian Bill of Rights". I take that to mean that a question of operative effect under the Canadian Bill of Rights was assimilated for purposes of public interest standing to a question of constitutionality in the strict sense. As Laskin C.J. observed in Borowski, the issue of the legality of public expenditure raised by the pleadings in those cases turned on the issue of the constitutionality or operative effect of the legislation.
That the Court in Thorson, McNeil and Borowski was not concerned to formulate a rule of public interest standing that would have application beyond the sphere of constitutionality is further indicated, I think, by the repeated insistence in Thorson on the importance in a federal state that there be some access to the courts to challenge the constitutionality of legislation. That, as I read the judgment of Laskin J. (as he then was), was the dominant consideration of policy in Thorson. It is reflected in several passages in his judgment which I shall not quote at length. It is sufficient to refer to his statements at p. 145 that a "telling consideration" for him was "whether a question of constitutionality should be immunized from judicial review by denying standing to anyone to challenge the impugned statute" and that "it would be strange and, indeed alarming, if there was no way in which a question of alleged excess of legislative power, a matter traditionally within the scope of the judicial process, could be made the subject of adjudication". To similar effect he said at p. 161: "On the other hand, where all members of the public are affected alike, as in the present case, and there is a justiciable issue respecting the validity of legislation, the Court must be able to say that as between allowing a taxpayer's action and denying any standing at all when the Attorney General refuses to act, it may choose to hear the case on the merits." The same consideration of policy is further reflected in his statement at p. 150 that the discretionary control of the Attorney General over public interest standing is not a principle appropriate for application in a federal state to a challenge to the constitutionality of legislation; in the doubt expressed by him at p. 146 as to whether, in view of the Attorney General's responsibility to defend the government's legislation, it is even appropriate that a request for the intervention of the Attorney General should be regarded as a condition precedent to the recognition of public interest standing to challenge the constitutionality of legislation; and in his reference at pp. 151‑52 to the well‑established principle that neither Parliament nor a provincial legislature can bar access to the courts to challenge the constitutionality of legislation by requiring the prior consent of some official or by imposing some other condition precedent.
At the same time Laskin J. drew support in Thorson for his conclusion that the Court must have a discretion to recognize public interest standing to bring an action for a declaration to challenge the constitutionality of legislation, where there is no other way in which the issue could be brought before a court, from what he appears to have regarded as the essential significance of MacIlreith v. Hart. The feature of that case to which he appears to have attached particular importance was not the view expressed by the judges in that case that a municipal ratepayer fell within the special damage exception in Boyce because an illegal expenditure could affect the amount of taxes that he would be liable to pay, but the implication that where the corporation refused to act, as in that case, there must be some way in which an ultra vires municipal expenditure could be challenged in the courts. This is reflected in the following statement at p. 157: "It is quite clear that obeisance to the special damage requirement was purely formal, and that at least equally important was the fact that ultra vires expenditures were involved which the municipal council was unwilling to reclaim". It is further reflected in the statement on p. 158, where, after observing that if the Attorney General refused to act in such a case and a ratepayer was not recognized as having standing that would end the matter, he said: "I am unable to appreciate how an argument of principle can be made that such a wrong, an illegality which is certainly justiciable, should go uncorrected at law, whatever may eventuate as political redress." To similar effect, in distinguishing Smith and MacIlreith v. Hart, he said at p. 158 that "in MacIlreith v. Hart, there was a public right involved which had no punitive aspects for any particular ratepayer or class of ratepayers, and it would beget wonder that, in such a case, there should be no judicial means of recovering or controlling an illegal expenditure of public money".
In certain passages of his reasons Laskin J. did suggest the possibility that the special interest of the municipal ratepayer recognized in MacIlreith v. Hart should be applied by analogy to the interest of a taxpayer to challenge the legality of federal or provincial public expenditure, but I do not read his judgment as finally being made to rest on that view. The emphasis in Thorson was on the public interest in constitutionality rather than on the particular interest of a taxpayer, as indicated in the following statement of Laskin J. in the conclusion of his judgment on p. 163: "It is not the alleged waste of public funds alone that will support standing but rather the right of the citizenry to constitutional behaviour by Parliament where the issue in such behaviour is justiciable as a legal question." While Thorson is referred to as a taxpayer's suit, what was really recognized was citizen's standing in certain circumstances to challenge the constitutionality of legislation. This was acknowledged by Martland J. in the passage which I have quoted above from Borowski, where he said that it is sufficient for a plaintiff to show, among other things, that he has "a genuine interest as a citizen in the validity of the legislation". The particular significance which Laskin J. attached to the exception to the general rule represented by MacIlreith v. Hart, which he regarded as a different exception from that of Thorson, was further indicated in his dissenting opinion in Borowski, where as Chief Justice he said at pp. 579‑80:
There are exceptions to the general rule and to the policy. One of the earliest recognized has been a municipal taxpayer action to restrain an allegedly illegal municipal expenditure: see MacIlreith v. Hart. An explanation of this exception is that it involved a public right to see that municipal expenditures were lawfully made, being expenditures which were limited by considerations that do not apply to a province or to Canada. No municipal taxpayer could raise a lis in the ordinary sense or court a penalty or other sanction in respect of an allegedly illegal municipal expenditure and, hence, unless a taxpayer action was permitted the illegality would go unchallenged and unchallengeable.
In the provincial and federal field, the issue of an illegal, or perhaps unconstitutional, expenditure would not likely arise per se but, in the main, only (as is alleged in this case) in connection with the operation of challenged legislation; the challenge to the expenditure would thus depend on the outcome of the challenge to the legislation.
Another exception (but a more limited one in view of the discretion associated with it) is shown in the judgment of this Court in Thorson v. Attorney General of Canada....
The foregoing indicates, in my view, that the judgments of this Court in Thorson, McNeil and Borowski cannot be regarded as providing clear and direct authority for the recognition of public interest standing, as a matter of judicial discretion, to bring a non‑constitutional challenge by an action for a declaration to the statutory authority for public expenditure or other administrative action. It is fair to say, however, that they do not clearly exclude such recognition. The issue, then, as I see it, is whether the principle reflected in Thorson, McNeil and Borowski should be extended by this Court to such cases. This question raises again the policy considerations underlying judicial attitudes to public interest standing, and in particular, whether the same value is to be assigned to the public interest in the maintenance of respect for the limits of administrative authority as was assigned by this Court in Thorson, McNeil and Borowski to the public interest in the maintenance of respect for the limits of legislative authority.
In my view an affirmative answer should be given to this question. The recognized standing of the Attorney General to assert a purely public interest in the limits of statutory authority by an action of his own motion or on the relation of another person is a recognition of the public interest in the maintenance of respect for such limits. For the reasons indicated in Thorson, I do not think that his refusal to act in such a case should bar a court from the recognition, as a matter of discretion in accordance with the criteria affirmed in Borowski, of public interest standing in a private individual to institute proceedings. The traditional judicial concerns about the expansion of public interest standing may be summarized as follows: the concern about the allocation of scarce judicial resources and the need to screen out the mere busybody; the concern that in the determination of issues the courts should have the benefit of the contending points of view of those most directly affected by them; and the concern about the proper role of the courts and their constitutional relationship to the other branches of government. These concerns are addressed by the criteria for the exercise of the judicial discretion to recognize public interest standing to bring an action for a declaration that were laid down in Thorson, McNeil and Borowski. I shall deal with each of them in relation to the question of the respondent's standing in the present case.
The concern about the proper role of the courts and their constitutional relationship to the other branches of government is addressed by the requirement of justiciability, which Laskin J. held in Thorson to be central to the exercise of the judicial discretion whether or not to recognize public interest standing. Of course, justiciability is always a matter of concern for the courts, but the implication of what was said by Laskin J. in Thorson is that it is a matter of particular concern in the recognition of public interest standing. As I indicated earlier in these reasons, counsel for the appellants raised the issue of justiciability with reference to judicial review of a question of provincial compliance with the conditions of federal cost‑sharing. The requirement of justiciability was considered by this Court in Operation Dismantle Inc. v. The Queen, [1985] 1 S.C.R. 441, where reference was made to both the institutional and constitutional aspects of justiciability. The question of justiciability in that case was considered in the context of a challenge, based on the Canadian Charter of Rights and Freedoms, to the constitutionality of a decision of the executive government of Canada in the realms of foreign policy and national defence. As I read the reasons of Wilson J., with whom Dickson J. (now C.J.) concurred on the question of justiciability, they affirm that where there is an issue which is appropriate for judicial determination the courts should not decline to determine it on the ground that because of its policy context or implications it is better left for review and determination by the legislative or executive branches of government. That was, of course, said in the context of the judicial duty to rule on issues of constitutionality under the Charter, but I take it to be equally applicable to a non‑constitutional issue of the limits of statutory authority. There will no doubt be cases in which the question of provincial compliance with the conditions of federal cost‑sharing will raise issues that are not appropriate for judicial determination, but the particular issues of provincial non‑compliance raised by the respondent's statement of claim are questions of law and as such clearly justiciable. The same is, of course, true of the issue of statutory authority under s. 7 of the Plan. I am, therefore, of the opinion that the recognition of public interest standing in this case should not be refused on the ground of justiciability.
The judicial concern about the allocation of scarce judicial resources and the need to screen out the mere busybody is addressed by the requirements affirmed in Borowski that there be a serious issue raised and that a citizen have a genuine interest in the issue. I think the respondent meets both of these requirements. The issues of law raised with respect to the alleged provincial non‑compliance with the conditions and undertakings to which the federal cost‑sharing payments are made subject by the Plan and with respect to the statutory authority for such payments are in my opinion far from frivolous. They merit the consideration of a court. The status of the respondent as a person in need within the contemplation of the Plan who complains of having been prejudiced by the alleged provincial non‑compliance shows that he is a person with a genuine interest in these issues and not a mere busybody.
The judicial concern that in the determination of an issue a court should have the benefit of the contending views of the persons most directly affected by the issue‑‑a consideration that was particularly emphasized by Laskin C.J. in Borowski‑‑is addressed by the requirement affirmed in Borowski that there be no other reasonable and effective manner in which the issue may be brought before a court. In Thorson, McNeil and Borowski that requirement was held to be satisfied by the nature of the legislation challenged and the fact that the Attorney General had refused to institute proceedings although requested to do so. In Borowski, the majority and the minority differed essentially, as I read their reasons, on the question whether there was anyone with a more direct interest than the plaintiff who would be likely to challenge the legislation. Here it is quite clear from the nature of the legislation in issue that there could be no one with a more direct interest than the plaintiff in a position to challenge the statutory authority to make the federal cost‑sharing payments. In so far as a prior request to the Attorney General to intervene might be considered to be necessary in certain cases to show that there is no other way in which the issue may be brought before a court, I do not think it should be regarded as necessary in a case such as this one, where it is clear from the position adopted by the Attorney General in the case that he would not have consented to the institution of proceedings. I am accordingly of the view that the respondent meets the requirement that there should be no other reasonable and effective manner in which the issue of statutory authority raised by the respondent's statement of claim may be brought before a court.
For all of these reasons I am of the opinion that the respondent should be recognized as having standing to bring his action for a declaration to challenge the legality of the federal cost‑sharing payments under s. 7 of the Plan.
As I indicated above, the Federal Court of Appeal did not, at least explicitly, address the question of standing to seek the injunctive relief prayed for by the respondent, as distinct from standing to seek the declaratory relief. The Court dismissed the appeals from the orders in the Trial Division refusing an injunction by way of originating notice of motion and an interim injunction in the action on the ground, as I read the reasons of Thurlow C.J., of lack of urgency and not lack of standing. In his reasons for judgment Thurlow C.J. referred throughout to standing to seek a declaration. After giving his reasons for dismissing the appeals from the orders refusing an injunction, he said at p. 522: "That leaves for consideration the questions whether the appellant has standing to bring the action and whether the statement of claim disclosed a reasonable cause of action for declaratory relief." In this Court counsel for the appellants did not contend that there was a significant distinction to be drawn, for purposes of the issue in the appeal, between standing for a declaration and standing for an injunction. Indeed, that question was simply not addressed in argument. The Federal Court of Appeal and counsel in this Court may well have proceeded on the assumption that there is no significant difference between these remedies, in so far as standing is concerned, as distinct from the conditions of entitlement to them in a particular case. If so, that is in my opinion a sound assumption. It is essential to distinguish, I think, between standing, or the right to seek particular relief, and the entitlement to such relief. The general rule respecting standing to seek a declaration or an injunction, to which I have referred above, has generally been regarded as essentially the same for the two forms of relief. Cf. Cromwell, op. cit., pp. 157‑58. I can see no sound reason why the exceptional recognition of public interest standing, as a matter of judicial discretion, which is being affirmed in these reasons should not apply to injunctive as well as declaratory relief. If the respondent is recognized as having standing to seek the declaratory relief then I cannot see why he should not be recognized as also having standing to seek the ancillary injunctive relief. Whether a plaintiff should be granted either declaratory relief or injunctive relief in a particular case is a matter of judicial discretion to be exercised according to criteria and considerations which are somewhat different for the two forms of relief. In the exercise of that discretion in the present case consideration would have to be given to the role of injunction as a public law remedy, including the question whether it will lie against Ministers of the Crown. Those are questions to be left to the trial court. The respondent should in my opinion be recognized as having standing to seek the injunctive relief prayed for in his statement of claim.
V
As I indicated at the outset of these reasons, the appellants contended, as an alternative ground in their motion to strike, that the statement of claim did not disclose a reasonable cause of action. I may say that as I understood the argument of counsel for the appellants in this Court he did not press this contention. The emphasis was on the question of standing and the related question of justiciability. The issues of standing and reasonable cause of action are obviously closely related, and as acknowledged by counsel for the appellants, tend in a case such as this to merge. Indeed, I question whether there is a true issue of reasonable cause of action distinguishable, as an alternative issue, from that of standing. With respect, I think that is perhaps reflected in the reasons of Thurlow C.J. on the question of reasonable cause of action in which there is reference to cases on standing in support of his conclusion. Clearly, if a plaintiff has the requisite standing an action will lie for a declaration that an administrative authority has acted without statutory authority. What I understand to be the reasonable cause of action issue, if the respondent is held to have standing, is whether it is plain and obvious that the respondent cannot succeed with his contentions in respect of the alleged provincial non‑compliance with the conditions and undertakings imposed by the Plan and the alleged illegality of the federal payments. I agree with Lalande D.J. in the Federal Court of Appeal that this is not the case, and I would accordingly reject the contention that the respondent's statement of claim does not disclose a reasonable cause of action.
I would dismiss the appeal with costs.
Appeal dismissed with costs.
Solicitor for the appellants: R. Tassé, Ottawa.
Solicitor for the respondent: G. Patrick S. Riley, Winnipeg.
