Hy and Zel's Inc. v. Ontario (Attorney General); Paul Magder Furs Ltd. v. Ontario (Attorney General), [1993] 3 S.C.R. 675

Hy and Zel's Inc., et al. Appellants

v.

The Attorney General for Ontario Respondent

and between

Paul Magder Furs Limited, et al. Appellants

v.

The Attorney General for Ontario Respondent

Indexed as: Hy and Zel's Inc. v. Ontario (Attorney General); Paul Magder Furs Ltd. v. Ontario (Attorney General)

File Nos.: 22556, 22559.

1993: February 25; 1993: October 21.

Present: Lamer C.J. and La Forest, L'Heureux‑Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.

on appeal from the court of appeal for ontario

Practice -- Standing -- Act defining holiday and restricting shopping on those defined holidays -- Corporate Charter challenge alleging infringement of freedom of religion following convictions for breach of Act -- Declaration sought that Act unconstitutional -- Application stayed pending decision in similar case but brought on following finding of constitutionality -- Constitutional questions querying whether freedom of religion infringed and, if so, whether infringement justified -- Whether corporations had standing to seek declaration of unconstitutionality -- Retail Business Holidays Act, R.S.O. 1980, c. 453, ss. 1(1)(a), 2(2), 8(1), (2).

The Retail Business Holidays Act restricts holiday shopping and defines "holiday". The Act has been defied by many retailers, notwithstanding a finding of constitutional validity, and each amendment subsequent to this finding has been seen as dealing a fatal blow to its constitutionality.

The Attorney General for Ontario applied under s. 8 of the Retail Business Holidays Act for an order requiring Paul Magder Furs Ltd. and two other retailers to close on the following Sunday (Christmas Eve), Christmas Day, and Boxing Day. In response, Paul Magder Furs Ltd., together with some 30 employees not named in the s. 8 application, brought a civil application in the High Court against the Attorney General (the "Magder application") requesting declarations that s. 2(2) of the Act was unconstitutional and that the employee applicants had a right to work on the holidays stated in the Act. The Magder application requested a hearing at the same time as the s. 8 application and relied on the material filed in the Attorney General's s. 8 application. An interim s. 8 order requiring Paul Magder Furs Ltd. to close on holidays as defined in the Act was granted given that firm's deliberate and persistent breaches of the Act. The Ontario Court of Appeal quashed an appeal of the interim order on jurisdictional grounds and at adjourned sine die an appeal from a finding of contempt which was made when the firm remained open in violation of the interim order. That court later ruled that the notice of appeal did not stay the imposition of fines under the contempt order and refused Paul Magder Furs Ltd.'s application to bring the s. 8 application back on for hearing because of its continuing contempt of court.

The Regional Municipality of Halton brought a s. 8 application against Hy & Zel's Inc. The Attorney General later intervened and took over the action. In response to the s. 8 application, the principals of Hy & Zel's Inc. brought a civil application requesting, among other things, a declaration that s. 2(2) of the Act was invalid. Hy and Zel's Inc. subsequently brought a new application against the Attorney General, with over 100 of its employees, seeking declarations that s. 2(2) of the Act was unconstitutional, that the Act was unconstitutional and that the employee applicants have a right to work on holidays. This application relied on material filed in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada, plus some additional affidavit evidence.

The applications of both firms were stayed until a judgment was rendered in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada. This case involved a similar s. 8 application and applications for declaratory relief. Both the Magder and the Hy & Zel applications were set for hearing following the Court of Appeal's finding the Act to be constitutional in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada. The constitutional questions here queried whether the Retail Business Holidays Act infringed religious freedom guaranteed by s. 2(a) of the Canadian Charter of Rights and Freedoms or equality rights guaranteed by s. 15, and if so, whether the infringements were justified under s. 1.

Held (L'Heureux‑Dubé and McLachlin JJ. dissenting): The appeals should be dismissed.

Per Lamer C.J. and La Forest, Sopinka, Gonthier, Cory, Iacobucci and Major JJ.: In order for the Court to exercise its discretion to grant standing in a civil case, where the party does not claim a breach of its own Charter rights but those of others, a serious issue must be raised as to the Act's validity, the appellants must be directly affected by the Act or have a genuine interest in its validity, and no other reasonable and effective way can exist for bringing the Act's validity before the court.

A serious issue was raised here. It was assumed for purposes of this appeal only that the numerous amendments enacted in the years since the Act was upheld in R. v. Edwards Books and Art Ltd. have sufficiently altered the Act that the Act's validity was no longer a foregone conclusion.

The Act had a direct effect on the appellants. While the Act affects all Ontarians by limiting shopping on defined holidays, only retailers and retail employees were subject to prosecution for its violation.

Other reasonable and effective ways to bring the issue before the court existed. Since both applications presented almost no original evidence in support of their claim, and relied on evidence filed in the Attorney General's s. 8 application (the Magder application) or in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (the Hy and Zel application), a more reasonable and effective matter of bringing this matter before the court may exist. The nature of the Act did not assist the appellants. The Act did not discourage challenges and so create a situation where no party directly affected could reasonably be expected to challenge the legislation. The party seeking to challenge the Act must show that there is no other reasonable and effective means of bringing the matter before the court.

Appellants did not have standing on the basis that their own religious rights have been violated. Even if it is assumed that corporations can have religious rights, there was no evidence or allegation that appellants' rights were violated. Charter decisions cannot be made in a factual vacuum. In the absence of facts specific to the appellants, both the Court's ability to ensure that it hears from those most directly affected and that Charter issues are decided in a proper factual context are compromised.

This was not a proper case for deciding the extent to which the test for standing in Smith v. Attorney General of Ontario survived the more liberal views relating to public interest standing. No evidence was presented as to how appellants suffered exceptional prejudice under the earlier test.

Per L'Heureux‑Dubé and McLachlin JJ. (dissenting): Given the procedural history of this appeal, the understanding of the appellants that this litigation was to proceed as a test case and, in particular, its effect on the large number of outstanding charges presently facing the appellants in the lower courts which raise the same constitutional issue, this is an appropriate case for this Court to exercise its discretion to grant the appellants standing. This conclusion is buttressed by a consideration of both the special and continuing effect of the Act on the appellants in this litigation, the goals of efficiency in the administration of justice and the costs to society and the parties involved of further litigation on the same issue as well as the general rationale underlying the rules of standing. Recognition of the practical and financial impediments to challenging this legislation that would face the appellant employees without the assistance of the corporate appellants militates in favour of granting standing to those appellants.

Standing and the entitlement to the relief sought must be differentiated. Standing is a threshold question involving the recognition of entitlement to come before the court and it must remain, both conceptually and factually, distinct from the court's rulings after hearing the appeal.

R. v. Big M Drug Mart Ltd. did not decide the question of standing here. Its ratio of this case is the positive right of a corporation to rely on the Charter rights of others in defence to a criminal charge. The Court did not consider whether corporations have rights under s. 2(a) because it would be irrelevant since no one could be convicted under an unconstitutional law. Neither R. v. Big M Drug Mart Ltd. nor Irwin Toy v. Quebec (Attorney General) suggests that the Court's rulings on the Charter rights of corporations affects their standing to challenge a perceived infringement of their constitutional right.

The "exceptional prejudice" rule articulated in Smith v. Attorney General of Ontario, required a plaintiff challenging a law of general application to establish that the legislation had a greater impact on the plaintiff than on the public at large and that the plaintiff had an interest affecting his or her personal, proprietary or pecuniary rights. The Attorney General, as a corollary, was assumed to act as the guardian of the public interest. The trilogy of Thorson v. Attorney General of Canada, Nova Scotia Board of Censors v. McNeil, and Minister of Justice of Canada v. Borowski greatly broadened access to the courts and removed the categorical barriers to standing. The courts increasingly look beneath the rules governing standing and consider whether the legislation would be immunized from attack and whether it could be attacked by private litigants removing the need for public interest standing.

The rules regarding public interest standing, which were advanced in the trilogy to liberalize access to the courts, do not govern litigants falling squarely within the rule in Smith. Litigants are still entitled to standing as long as they are able to establish that they are "exceptionally prejudiced" by the legislation's effect on their private rights. The general rule in Smith also applies to litigants seeking declarations under the Charter. Standing must also be available to parties facing criminal or quasi‑criminal procedures to challenge the constitutionality of the legislation. The appellants here fall squarely into the category of "public interest litigants" but they are better described as persons who experience "exceptional prejudice" under the Act.

A flexible approach allowing courts to respond to a spectrum of concerns affecting both the parties and the administration of justice should prevail over a strict, no‑exception approach. Citizens have an interest in the constitutionally sound behaviour on the part of the legislatures and where the constitutionality of legislation is at issue, the primary focus is on the law itself, and not on the position of the parties. In resolving standing, the Court should take a purposive and functional rather than categorical approach and resort the concerns, which underlie the restrictions on standing such as the multiplicity of suits and judicial economy, should be considered.

A challenge to the constitutionality of a law (assuming that it involves no remedy other than a finding of invalidity) must be governed by the same rules of standing and procedure, regardless of whether the challenge is based on federal or Charter grounds. Corporations, because they may not invoke Charter rights, face obstacles in bringing a Charter challenge that do not exist in division of power challenges. There is no reason in principle, however, to adhere rigidly to a rule which automatically bars challenges to legislation directly affecting a corporate plaintiff simply on the ground that the impugned aspect of the legislation does not directly affect it. As the constitutionality of the law may be raised in defence, the question should be whether the plaintiff has sufficient interest in the outcome of a constitutional challenge. The overriding concern is whether governments have respected the limits of their constitutional authority. Technical barriers to standing based on such grounds as the mode of proceeding chosen cannot be sustained on the level of principle.

The ability of other litigants to bring the issue before the courts should not operate as an automatic and inflexible bar to the court's discretion to grant standing. Consideration should be given in assessing the benefits of proceeding with the constitutional challenge and the prejudice to the appellants in refusing standing late in the proceedings, particularly where the party seeking standing is already before the courts.

The question of the application of s. 15 rights to corporations or to the legislation challenged in this case has not yet been addressed by the Court. As the appellants are the appropriate parties to raise a s. 15 argument in this context and leave was granted by this Court on the issue, no basis for denying standing existed.

The appellants can rely on the record of other parties raising identical legal issues in what are essentially identical circumstances. The nature of the evidence is not generally an issue that bears on the question of standing. Particularly in constitutional cases, background evidence of a general nature may be relevant to set the context of the issue quite apart from the position of the specific parties. More importantly, it would unquestionably be prejudicial to the appellants to have been permitted to rely on this record all along, only to be told at this stage that they will be denied standing for this reason.

The appellant retail employees should not be denied standing for want of evidence to establish standing. Deciding the appeal in a factual vacuum is not an issue at this stage. A court's concern at this stage of the proceedings is whether there is enough material to assess the "nature of the interest" which the plaintiff is asserting. This does not necessarily entail an examination of the evidence. The only effective way for the retail employees to bring an issue before the court, given the expense, may be to join the application with an application brought by others. The employees are affected by the Act's provisions even if they are unlikely to be charged under the Act and their rights under the Act as guaranteed by ss. 2(a) and 15 of the Charter remain an open question.

Cases Cited

By Major J.

Referred to: R. v. Edwards Books and Art Ltd., [1986] 2 S.C.R. 713; Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (1991), 2 O.R. (3d) 65 (C.A.), reversing (1990), 73 O.R. (2d) 289 (H.C.), leave to appeal granted sub nom. Oshawa Group Ltd. v. Attorney General of Ontario, [1991] 3 S.C.R. x.; Ontario (Attorney-General) v. Paul Magder Furs Ltd. (1989), 71 O.R. (2d) 513; Ontario (Attorney General) v. Paul Magder Furs Ltd. (1991), 6 O.R. (3d) 188, leave to appeal refused, [1992] 2 S.C.R. ix; Ontario (Attorney General) v. Paul Magder Furs Ltd. (1992), 10 O.R. (3d) 46; Ontario (Attorney General) v. Paul Magder Furs Ltd. (1991), 5 O.R. (3d) 560, with supplementary reasons delivered July 16, 1992; Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236; 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; Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607; MacKay v. Manitoba, [1989] 2 S.C.R. 357; Danson v. Ontario (Attorney General), [1990] 2 S.C.R. 1086; Smith v. Attorney General of Ontario, [1924] S.C.R. 331.

By L'Heureux‑Dubé J. (dissenting)

Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (1991), 2 O.R. (3d) 65, reversing (1990), 73 O.R. (2d) 289, (leave to appeal granted sub nom. Oshawa Group Ltd. v. Attorney General of Ontario, [1991] 3 S.C.R. x); MacKay v. Manitoba, [1989] 2 S.C.R. 357; Danson v. Ontario (Attorney General), [1990] 2 S.C.R. 1086; R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295; Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 S.C.R. 927; R. v. Wholesale Travel Group Inc., [1991] 3 S.C.R. 154; R. v. Edwards Books and Art Ltd., [1986] 2 S.C.R. 713; Smith v. Attorney General of Ontario, [1924] S.C.R. 331; 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; MacIlreith v. Hart (1908), 39 S.C.R. 657; Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236; Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607.

Statutes and Regulations Cited

Retail Business Holidays Act, R.S.O. 1980, c. 453, ss. 1(1)(a) [am. S.O. 1989, c. 3. s. 1], 2(1) [am. ibid., s. 2], (2), 7(1) [am. ibid., s. 7], (2) [am. ibid., s. 7].

Authors Cited

British Columbia. Law Reform Commission. Report on Civil Litigation in the Public Interest. LRC 46. Vancouver: 1980.

Cromwell, Thomas A. Locus Standi: A Commentary on the Law of Standing in Canada. Toronto: Carswell, 1986.

Hogg, Peter W. Constitutional Law of Canada, 3rd ed. Toronto: Carswell, 1992.

Ontario. Law Reform Commission. Report on the Law of Standing. Toronto: Ministry of the Attorney General, 1989.

Scott, Kenneth E. "Standing in the Supreme Court -‑ A Functional Analysis" (1973), 86 Harv. L. Rev. 645.

Strayer, Barry L. The Canadian Constitution and the Courts, 3rd ed. Toronto: Butterworths, 1988.

APPEAL (Hy and Zel's Inc. et al. v. Attorney General for Ontario, S.C.C., File No. 22556) from a judgment of the Ontario Court of Appeal dismissing an appeal from a judgment of Potts J. dismissing an application for declaratory relief. Appeal dismissed, L'Heureux-Dubé and McLachlin JJ. dissenting.

APPEAL (Paul Magder Furs Ltd. et al. v. Attorney General for Ontario, S.C.C., File No. 22559) from a judgment of the Ontario Court of Appeal dismissing an appeal from a judgment of Potts J. dismissing an application for declaratory relief. Appeal dismissed, L'Heureux-Dubé and McLachlin JJ. dissenting.

Timothy S. B. Danson and Julian N. Falconer, for the appellants.

Elizabeth C. Goldberg and Hart Schwartz, for the respondent.

The judgment of Lamer C.J. and La Forest, Sopinka, Gonthier, Cory, Iacobucci and Major JJ. was delivered by

Major J. --

I. Facts

The Retail Business Holidays Act, R.S.O. 1980, c. 453, (the "Act") restricts holiday shopping. Section 1(1)(a) of the Act defines "holiday" as

1. -- (1) . . .

(a) . . .

(i) New Year's Day,

(ii) Good Friday,

(iii) Victoria Day,

(iv) Canada Day,

(v) Labour Day,

(vi) Thanksgiving Day,

(vii) Christmas Day,

(viii) the 26th day of December,

(ix) Sunday, and

(x)any other public holiday declared by proclamation of the Lieutenant Governor to be a holiday for the purposes of this Act; . . .

Since the Act was first proclaimed in 1975, numerous retailers have defied its provisions despite this Court's ruling in R. v. Edwards Books and Art Ltd., [1986] 2 S.C.R. 713 (Edwards Books), that the Act was constitutionally valid. Each subsequent amendment has been viewed by retailers as a fatal blow to the Act's constitutionality.

Paul Magder Furs Ltd. has worn a wide path to the courthouse over the past ten years. The present trek began in late December 1989. The Attorney General for Ontario applied under s. 8 of the Act for an order requiring Paul Magder Furs Ltd. and two other retailers to close on the following Sunday (Christmas Eve), Christmas Day, and Boxing Day ("the s. 8 application"). Section 8 states:

8.^__(1) Upon the application of counsel for the Attorney General or of a municipality to the Supreme Court, the court may order that a retail business establishment close on a holiday to ensure compliance with this Act or a by-law or regulation under this Act.

(2) An order under subsection (1) is in addition to any other penalty that may be imposed and may be made whether or not proceedings have been commenced in the Provincial Offences Court for a contravention of section 2 or of a by-law or regulation under this Act.

In response, Paul Magder Furs Ltd., together with some 30 employees not named in the s. 8 application, brought a civil application in the Ontario High Court of Justice against the Attorney General and the Toronto police (the "Magder application") requesting the following relief:

a. an interim and final order enjoining the Toronto police from enforcing the Act against the applicants until the applicants had challenged the constitutional validity of the Act

b. an interim and final order enjoining Metropolitan Toronto from taking steps against the applicants pursuant to the Act

c. a declaration that s. 2(2) of the Act is unconstitutional

d. a declaration that the employee applicants have a right to work on the holidays stated in the Act

The Magder application requested hearing at the same time as the s. 8 application and relied on the material filed in the s. 8 application. Paragraphs (a) and (b) were later abandoned.

As the s. 8 application had been brought on only 24 hours notice, Farley J. granted the retailers' request for an adjournment. Farley J. also adjourned the Magder application. Both matters were stayed pending the High Court of Justice's hearing of Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada, a case involving a similar s. 8 application and retailers' applications for declaratory relief. However, based on the evidence of "deliberate and persistent breaches of the Act by Magder", that "penalties for prior convictions have had no effect as a deterrent" and of "an intention on the part of Magder to continue with the breaches", Farley J. granted an interim s. 8 order requiring Paul Magder Furs Ltd. to close on holidays as defined in the Act. See Ontario (Attorney-General) v. Paul Magder Furs Ltd. (1989), 71 O.R. (2d) 513 (H.C.), at pp. 520 and 524. Paul Magder Furs Ltd. appealed the interim order. The Ontario Court of Appeal quashed the appeal of the interim order on jurisdictional grounds on October 22, 1991.

Paul Magder Furs Ltd. remained open in violation of the interim order. On February 23, 1990, Chilcott J. found Paul Magder Furs Ltd. in contempt of court. Paul Magder Furs Ltd. appealed the finding of contempt. The Court of Appeal adjourned the appeal sine die until Paul Magder Furs Ltd. purged its contempt and undertook to abide by the order. See Ontario (Attorney General) v. Paul Magder Furs Ltd. (1991), 6 O.R. (3d) 188 (C.A.), leave to appeal refused [1992] 2 S.C.R. ix. The Court of Appeal later ruled that the notice of appeal did not stay the imposition of fines under the contempt order. See (1992), 10 O.R. (3d) 46 (C.A.).

In October, 1991, Paul Magder Furs Ltd. applied to bring the s. 8 application back on for hearing. Somers J. refused the application due to Paul Magder Furs Ltd.'s continuing contempt of the interim order. See Ontario (Attorney General) v. Paul Magder Furs Ltd. (1991), 5 O.R. (3d) 560 (Gen. Div.), supplementary reasons delivered July 16, 1992.

The litigation involving Hy & Zel's Inc. is similar but less complex. The Regional Municipality of Halton brought a s. 8 application against Hy & Zel's Inc. in early December 1989. The Attorney General later intervened and took over the action. In response to the s. 8 application, the principals of Hy & Zel's Inc. brought a civil application requesting, among other things, a declaration that s. 2(2) of the Act was invalid. Presumably these matters stand adjourned. Then on June 24, 1991, Hy and Zel's Inc. and over 100 of its employees brought a new application against the Attorney General (the "Hy & Zel's application"). The Hy & Zel's application sought the following relief:

a.a declaration that s. 2(2) of the Act is unconstitutional

b.a declaration that the Act is unconstitutional

c.a declaration that the employee applicants have a right to work on holidays

The Hy & Zel's application relied on material filed in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada, plus some additional affidavit evidence.

Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada, was heard by the High Court of Justice and the Court of Appeal. The Court of Appeal found the Act to be constitutional: (1991), 2 O.R. (3d) 65 (C.A.), reversing (1990), 73 O.R. (2d) 289 (H.C.), leave to appeal granted sub nom. Oshawa Group Ltd. v. Attorney General of Ontario, [1991] 3 S.C.R. x. The Magder application was set for hearing on June 26, 1991. The Hy & Zel's application requested hearing on the same day.

Potts J. dismissed both the Magder and the Hy & Zel's applications with the following endorsement:

I am advised that counsel for the applicants was also counsel for A & P and a number of its employees in an application which was ultimately heard and determined by the Ontario Court of Appeal in Peel v. Great Atlantic & Pacific Co. of Canada Ltd., 2 O.R. (3d) Part 2, pg. 65. Mr. Danson has advised that the Hy and Zel's Inc. employee application is indistinguishable from the A & P employee application (No. 920/90) dismissed by the Ontario Court of Appeal, supra. For the reasons given by that Court, this application is also dismissed, without costs.

The Court of Appeal allowed the appeals to be expedited and dismissed them on July 15, 1991, on the basis of Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada.

II. Issues

The constitutional questions set in this appeal are:

1.Does the Retail Business Holidays Act, R.S.O. 1980, c. 453, as am. by S.O. 1989, c. 3, infringe or deny the rights and freedoms guaranteed by ss. 2(a) and/or 15 of the Canadian Charter of Rights and Freedoms?

2.To the extent that the Retail Business Holidays Act, R.S.O. 1980, c. 453, as am. by S.O. 1989, c. 3, infringes or denies the rights and freedoms guaranteed by ss. 2(a) and/or 15 of the Canadian Charter of Rights and Freedoms, are the infringements or denials demonstrably justified in a free and democratic society within the meaning of s. 1 of the Canadian Charter of Rights and Freedoms?

III. Analysis

The appellants have brought civil applications for declaratory relief. A party's ability to attack a legislation's constitutional validity on Charter grounds is more difficult to establish in a civil suit than in a criminal prosecution. The appellants bear the burden to establish their standing to raise Charter issues.

This Court recently reviewed the discretion to grant standing in Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236. After outlining the development and rationale behind public interest standing, Cory J. warned against its abuse and against expanding its availability at pp. 252-53:

The increasing recognition of the importance of public rights in our society confirms the need to extend the right to standing from the private law tradition which limited party status to those who possessed a private interest. In addition some extension of standing beyond the traditional parties accords with the provisions of the Constitution Act, 1982. However, I would stress that the recognition of the need to grant public interest standing in some circumstances does not amount to a blanket approval to grant standing to all who wish to litigate an issue. It is essential that a balance be struck between ensuring access to the courts and preserving judicial resources. It would be disastrous if the courts were allowed to become hopelessly overburdened as a result of the unnecessary proliferation of marginal or redundant suits brought by a [sic] well-meaning organizations pursuing their own particular cases certain in the knowledge that their cause is all important. It would be detrimental, if not devastating, to our system of justice and unfair to private litigants.

The whole purpose of granting status is to prevent the immunization of legislation or public acts from any challenge. The granting of public interest standing is not required when, on a balance of probabilities, it can be shown that the measure will be subject to attack by a private litigant. The principles for granting public standing set forth by this Court need not and should not be expanded. The decision whether to grant status is a discretionary one with all that designation implies. Thus undeserving applications may be refused. Nonetheless, when exercising the discretion the applicable principles should be interpreted in a liberal and generous manner.

See also 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; and Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607.

Following this Court's earlier decisions, in order that the Court may exercise its discretion to grant standing in a civil case, where, as in the present case, the party does not claim a breach of its own rights under the Charter but those of others, (1) there must be a serious issue as to the Act's validity, (2) the appellants must be directly affected by the Act or have a genuine interest in its validity, and (3) there must be no other reasonable and effective way to bring the Act's validity before the court.

Serious Issue of Validity

The validity of holiday shopping legislation has been challenged on many occasions. In Edwards Books, the Act was held to violate s. 2(a) of the Charter but was a reasonable limit under s. 1. The present action challenges amendments intended to eliminate the s. 2(a) violation found. For the purposes of these reasons only, I am prepared to assume that the numerous amendments have sufficiently altered the Act in the seven years since Edwards Books so that the Act's validity is no longer a foregone conclusion.

Direct Affect or Genuine Interest

The appellants are either corporate retailers or retail employees. Section 2 of the Act targets both these groups making them liable to prosecution under s. 7.

2. -- (1) No person carrying on a retail business in a retail business establishment shall,

(a) sell or offer for sale goods or services therein by retail; or

(b) admit members of the public thereto,

on a holiday.

(2) No person employed by or acting on behalf of a person carrying on a retail business in a retail business establishment shall,

(a)sell or offer for sale any goods or services therein by retail; or

(b) admit members of the public thereto,

on a holiday.

7. -- (1) Every person who contravenes section 2 or a regulation under section 4 is guilty of an offence and on conviction is liable to a fine of not more than the greater of,

(a) $50,000; or

(b)the gross sales in the retail business establishment on the holiday on which the contravention occurred.

(3) Every person who coerces, requires or counsels another person to contravene section 2, a regulation under section 4 or a by-law under subsection 4 (1) is guilty of an offence and on conviction is liable to a fine of not more that the greater of,

(a) $50,000; or

(b)the gross sales in the retail business establishment on the holiday in respect of which the offence under this subsection occurred.

While the Act affects all Ontarians by limiting their ability to make retail purchases on holidays, only retailers and retail employees are subject to prosecution for its violation. The Act clearly has a direct effect on the appellants.

Other Means of Bringing the Issue before the Court

The third criteria, that there be no other reasonable and effective way to bring the issue before the court, lies at the heart of the discretion to grant public interest standing. If there are other means to bring the matter before the court, scarce judicial resources may be put to better use. Yet the same test prevents the immunization of legislation from review as would have occurred in the Thorson and Borowski situations.

Courts are often called upon to determine standing as a preliminary point. Indeed, this Court decided Thorson, Nova Scotia Board of Censors, Finlay, and Canadian Council of Churches as preliminary matters. As stated by Le Dain J. in Finlay, at p. 617, a court's ability to consider standing at the outset "depends on the nature of the issues raised and on 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." Since the appellants' case has proceeded without trial, the situation is akin to determining standing as a preliminary point.

The appellants allege the Act violates both freedom of religion and equality rights but have presented almost no original evidence in support of their claim. The Magder application relies on the evidence filed in the Attorney General's s. 8 application. The s. 8 application was stayed and never brought on for trial. In any event, the s. 8 application did not involve any retail employees and would not provide evidence to establish their standing. The Hy & Zel's application relies on the evidence filed in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada, with a few additional affidavits. The very fact that the appellants rely on the Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada evidence suggests there may be a more reasonable and effective matter of bringing this matter before the court.

The nature of the Act does not assist the appellants in establishing standing. In Borowski, standing was first raised on appeal to this Court. However, the nature of the legislation in Borowski was such that no party directly affected could reasonably be expected to challenge the legislation. This made up for whatever evidentiary problems there may have been in raising standing so late in the day. In contrast to Borowski, the present Act does not discourage challenge. Nevertheless, a party seeking to challenge the Act must show there is no other reasonable and effective means of bringing the matter before the court. The appellants have failed on this point. Accordingly, Paul Magder Furs Ltd. and Hy & Zel's Inc. do not satisfy the third criterion for public interest standing to challenge the Act on the basis of a violation of s. 2(a) of the Charter.

Nor do the appellants have standing on the basis that their own religious rights have been violated. Assuming that corporations can have religious rights, there is no evidence and it is not alleged that the appellants' rights have been violated. As this Court stated in MacKay v. Manitoba, [1989] 2 S.C.R. 357, at pp. 361-62:

Charter decisions should not and must not be made in a factual vacuum. To attempt to do so would trivialize the Charter and inevitably result in ill-considered opinions. The presentation of facts is not, as stated by the respondent, a mere technicality; rather, it is essential to a proper consideration of Charter issues. A respondent cannot, by simply consenting to dispense with the factual background, require or expect a court to deal with an issue such as this in a factual void. Charter decisions cannot be based upon the unsupported hypotheses of enthusiastic counsel.

More recently in Danson v. Ontario (Attorney General), [1990] 2 S.C.R. 1086, at p. 1093, this Court cautioned that "the failure of a diffuse challenge could prejudice subsequent challenges to the impugned rules by parties with specific and factually established complaints." This mirrors the Court's vigilance in ensuring that it hears the arguments of the parties most directly affected by a matter. In the absence of facts specific to the appellants, both the Court's ability to ensure that it hears from those most directly affected and that Charter issues are decided in a proper factual context are compromised.

My colleague Justice L'Heureux-Dubé is of the opinion that the appellants satisfy the test for standing set out in Smith v. Attorney General of Ontario, [1924] S.C.R. 331. In my opinion, this is not the proper case for deciding the extent to which Smith survives in view of the more liberal views relating to public interest standing. The appellants have not presented any evidence as to how they themselves have suffered exceptional prejudice under the Smith test.

In the absence of standing, the appeals are dismissed.

The reasons of L'Heureux-Dubé and McLachlin JJ. were delivered by

L'Heureux‑Dubé J. (dissenting) -- This case involves appeals by two corporate appellants, as well as a number of their retail employees, for a declaration as to the constitutionality of the Retail Business Holidays Act, R.S.O. 1980, c. 453 (the "Act"). More precisely, the Court is asked to answer the following constitutional questions:

1.Does the Retail Business Holidays Act, R.S.O. 1980, c. 453, as am. by S.O. 1989, c. 3, infringe or deny the rights and freedoms guaranteed by ss. 2(a) and/or 15 of the Canadian Charter of Rights and Freedoms?

2.To the extent that the Retail Business Holidays Act, R.S.O. 1980, c. 453, as am. by S.O. 1989, c. 3, infringes or denies the rights and freedoms guaranteed by ss. 2(a) and/or 15 of the Canadian Charter of Rights and Freedoms, are the infringements or denials demonstrably justified in a free and democratic society within the meaning of s. 1 of the Charter?

The appellants challenge those sections of the Act which require retail businesses to close on certain holidays.

The Act restricts retail shopping on certain holidays, including Sundays, which are designated in s. 1(1)(a). Section 2 of the Act provides that "[n]o person carrying on a retail business, . . . [or] employed by or acting on behalf of a person carrying on a retail business in a retail business establishment shall, (a) sell or offer for sale any goods or services therein by retail; or (b) admit members of the public thereto, on a holiday". Under s. 7, it is an offence punishable by fine to contravene the provisions of s. 2. Section 8 of the Act allows the Attorney General or a municipality to apply to a court for a closing order to ensure compliance with the terms of the Act. Before this Court, the appellants argued that the Act violates ss. 2(a) and 15 of the Canadian Charter of Rights and Freedoms and that neither violation is saved under s. 1.

Proceedings

The corporate appellants in this case, Hy and Zel's Inc. and Paul Magder Furs Ltd., have been the subject of numerous charges laid under s. 7 of the Act. In addition, the Attorney General commenced closing applications under s. 8 of the Act for failure to observe the holidays as required by the Act. In response, the corporate appellants, who were at this point joined by a number of their employees, brought cross‑applications for declarations that the Act was unconstitutional. These applications were adjourned pending the decision of the High Court of Justice on a similar s. 8 application in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada which involved the identical legal issues. At the trial in Peel, the Act was found to be unconstitutional ((1990), 73 O.R. (2d) 289); the decision was reversed by the Court of Appeal ((1991), 2 O.R. (3d) 65); leave to appeal to this Court granted (sub nom. Oshawa Group Ltd. v. Attorney General of Ontario, [1991] 3 S.C.R. x). Following the decision of the Court of Appeal in Peel, the applications of both Magder and Hy & Zel's were dismissed with a short endorsement, and the appeals to the Court of Appeal expedited so that they could be heard by this Court together with Oshawa Group.

In their written submissions, the appellants state that the cross‑applications for declarations were commenced for the purpose of ensuring that, if the Attorney General decided to withdraw the s. 8 closing applications, the time, money and effort involved in the defence of those applications would not be wasted. They also contend that, as their appeals were dismissed by the Court of Appeal for the same reasons as Peel, they should, in fairness, be entitled to argue that the Court of Appeal erred in their conclusions in their appeal before this Court. In addition, the appellants submit that the endorsements of the trial judges and the Court of Appeal in these appeals confirm that all counsel understood that these proceedings, as the trial judge held in Peel, were to be a test case to determine the constitutional validity of the Retail Business Holidays Act.

The respondent, for its part, disputes those allegations and states, in particular, that it has never conceded the standing of the appellants to rely on the Charter rights of others.

Analysis

As my colleague has set out the facts and procedural history of the case in the courts below, I shall dispense with repeating them here.

Justice Major, for the majority, would dismiss this appeal on the grounds that the corporate appellants lack standing to challenge the Act, and that the factual basis presented by the appellant retail employees is insufficient to establish either standing or that the Act infringes their rights in the present case. Accordingly, the majority declines to decide the merits of this appeal.

I must respectfully disagree both with their approach to the issue of standing and the result they have reached in this case. Given the procedural history of this appeal, the understanding of the appellants that this litigation was to proceed as a test case and, in particular, its effect on the large number of outstanding charges presently facing the appellants in the lower courts which raise the same constitutional issue, this is an appropriate case for this Court to exercise its discretion to grant the appellants standing. Moreover, this conclusion is, in my view, buttressed by a consideration of both the special and continuing effect of the Act on the appellants in this litigation, the goals of efficiency in the administration of justice and the costs to society and the parties involved of further litigation on the same issue as well as the general rationale underlying the rules of standing. Finally, recognition of the practical and financial impediments to challenging this legislation that would face the appellant employees without the assistance of the corporate appellants also militates in favour of granting standing to those appellants.

My colleague has concluded that the corporate appellants do not have standing to challenge the Act, as, in his view at p. 000, even "[a]ssuming that corporations can have religious rights, there is no evidence and it is not alleged that the appellants' rights have been violated." As for the appellant retail employees, relying on the Court's pronouncements in MacKay v. Manitoba, [1989] 2 S.C.R. 357, and Danson v. Ontario (Attorney General), [1990] 2 S.C.R. 1086, my colleague finds that standing should be denied in the present case on the basis of the sufficiency of the evidence. I shall deal with each of these issues in turn. In doing so, I find it necessary to consider both the Court's findings with respect to the religious rights of corporations and the principles and rationale that have traditionally undergirded the rules restricting standing.

It is crucial to differentiate, at the very outset, between standing and the entitlement to the relief sought. Simply stated, the question of standing involves the recognition of entitlement to come before the court to argue that a right has been violated or a legal obligation unfulfilled. According to Professor Scott, "it was a decision whether to decide" (K. E. Scott, "Standing in the Supreme Court ‑- A Functional Analysis" (1973), 86 Harv. L. Rev. 645, at p. 669). Standing is, therefore, a threshold question which should remain both conceptually and factually distinct from the question as to whether, upon hearing the plaintiff, the court will accede to the request or, in a case such as this, recognize entitlement to the claimed right. Rather, as Professor Hogg observes in Constitutional Law of Canada (3rd ed. 1992), at p. 1263, the question of standing essentially involves the determination as to whether a person has "sufficient stake in the outcome to invoke the judicial process" (emphasis added).

1. Religious Rights of Corporations

Although my colleague Major J. assumes rather than decides the issue of whether or not the corporate appellants do, in fact, have religious rights, in my opinion a corporation's entitlement to invoke s. 2(a) Charter rights does not appear to yet have been conclusively resolved. Because of the way in which case has proceeded, I think that it is important to discuss the matter briefly.

I reiterate here that it is important to distinguish between deciding that the appellants have or do not have standing to argue that their Charter rights have been infringed and deciding that those arguments should or should not succeed on their merits. The mere fact that certain individuals or groups are found incapable of relying on a Charter right may indeed dispose of the substance of a particular claim. However, while case law which runs counter to a litigant's Charter arguments may affect the decision to grant leave to appeal, it does not automatically dispose of the matter of standing. If this were not the case, persons directly affected by government action would be denied the forum in which to argue that a principle of Charter interpretation should be overturned or applied differently in a new context. Such a rule would run counter to the most basic tenets of constitutionalism. Quite apart from this, however, an examination of R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295, and subsequent rulings of this Court does not, in my opinion, compel the conclusion that the appellants have no standing to raise the matter of the infringement of their s. 2(a) Charter rights by the legislation challenged.

In R. v. Big M Drug Mart Ltd., the Court ruled that any defendant may rely on a constitutional defect in the law as a defence to a criminal charge. Dickson J. (as he then was) articulated the rationale as follows, supra, at p. 313:

Section 52 sets out the fundamental principle of constitutional law that the Constitution is supreme. The undoubted corollary to be drawn from this principle is that no one can be convicted of an offence under an unconstitutional law.

Some years later, in Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 S.C.R. 927, this Court held that a corporation may not avail itself of the protection of s. 7 of the Charter, on the ground that a corporation cannot possess rights which, by their nature, are reserved to natural persons. This decision currently provides the foundation for the view that a litigant may not, in a constitutional challenge, invoke Charter rights that he, she or it does not possess. However, subsequently, in R. v. Wholesale Travel Group Inc., [1991] 3 S.C.R. 154, the Court did allow the corporate defendant to raise the s. 7 rights of others in defence, despite what was said in Irwin Toy.

A number of observations about this jurisprudence are appropriate at this point. First, there is no suggestion either in Big M Drug Mart Ltd. or in Irwin Toy that the Court's ruling on the rights of the appellants affected their standing to argue before the Court an infringement of their constitutional rights. The decision is, rather, limited to a discussion of the applicability of the right guaranteed under s. 7 of the Charter to corporate litigants.

Second, the ratio decidendi of Big M Drug Mart Ltd. must be carefully scrutinized. The Court did not decide that a corporation cannot invoke the rights guaranteed under s. 2(a) of the Charter, nor did it find that a corporation was unable to rely on an infringement of a natural persons's religious rights in civil proceedings. Rather, the ratio of that case is the positive right of a corporation to rely on the Charter rights of others in defence to a criminal charge. The Court did not consider at all whether corporations may have rights under s. 2(a) of the Charter: it was held to be irrelevant, in view of the fact that no one could be convicted under an unconstitutional law, be it a corporation or an individual litigant.

In R. v. Edwards Books and Art Ltd., [1986] 2 S.C.R. 713, Dickson C.J., speaking for the majority, did say in obiter at p. 784 that he had "no hesitation in remarking that a business corporation cannot possess religious beliefs". Again, however, that issue was left open, since the case stood to be decided on the question of whether the provisions of the Retail Business Holidays Act of Ontario, as they then stood, contravened s. 2(a) of the Charter, and if so, were saved by s. 1. More importantly, Dickson C.J. expressly recognized that, if the legislation had not been justified under s. 1, as it was in that case, a number of other issues would have arisen, among which is the following, at p. 785:

A more difficult question is whether a corporate entity ought to be deemed in certain circumstances to possess the religious values of specified natural persons. If so, should the religion of the directors or shareholders or even employees be adopted as the appropriate test? What if there is a divergence of religious beliefs within the corporation?

Thus, in my opinion, a corporation's entitlement to invoke s. 2(a) Charter rights does not appear to yet have been conclusively resolved.

As to the specific issue of standing, in R. v. Big M Drug Mart Ltd., Dickson J. did make the following comments at p. 313:

Standing and jurisdiction to challenge the validity of a law pursuant to which one is being prosecuted is the same regardless of whether that challenge is with respect to ss. 91 and 92 of the Constitution Act, 1867 or with respect to the limits imposed on the legislatures by the Constitution Act, 1982.

Later, at p. 315, he continued:

In my view there can be no question that the respondent is entitled to challenge the validity of the Lord's Day Act on the basis that it violates the Charter guarantee of freedom of conscience and religion.

Although Dickson J. in that case indicated that an individual voluntarily seeking standing would be treated as a public interest litigant, he also remarked at p. 314:

The argument that the respondent, by reason of being a corporation, is incapable of holding religious belief and therefore incapable of claiming rights under s. 2(a) of the Charter, confuses the nature of this appeal. A law which itself infringes religious freedom is, by that reason alone, inconsistent with s. 2(a) of the Charter and it matters not whether the accused is a Christian, Jew, Muslim, Hindu, Buddhist, atheist, agnostic or whether an individual or a corporation. It is the nature of the law, not the status of the accused, that is in issue. [Emphasis added.]

Since, in my view, R. v. Big M Drug Mart Ltd., supra, does not decide the question of standing in the present case, it is necessary to consider the rule, principles and rationale concerning standing. The rule governing standing in such ordinary cases is set out in Smith v. Attorney General of Ontario, [1924] S.C.R. 331, to which I shall first turn. Then, I will discuss the judgments of this Court on public interest standing as they bear on litigants in the position of the appellants in this case. Finally, I shall consider the judgments in Irwin Toy, supra, and Wholesale Travel Group, supra, as regards the standing of corporate litigants under the Charter. In my view, it is clear, on examination of the principles and rationale of standing, that the appellants, as persons directly affected by the legislation which is challenged, must be entitled to seek a ruling as to the constitutionality of the Act.

2. Standing: Principles and Rationale

Courts have traditionally seen it necessary to impose restrictions on standing to control the proper use of the forum and its resources. Underlying these restrictions are a number of rationales which have been invoked, depending on the context, when the issue of standing has come before the courts. Three major concerns are typically identified: the proper allocation of judicial resources; the prevention of vexatious suits brought at the behest of mere "busybodies"; and the particular requirements of the adversary system. The first category includes such concerns as fears about a multiplicity of suits, otherwise known as the "floodgates" argument. Within the second category, courts have employed standing restrictions to ensure that issues are fully canvassed by promoting the use of the judicial process to decide live disputes between parties as opposed to hypothetical ones. Under the latter category are subsumed such matters as the "justiciability" of the issue before the courts, whether the full dimensions of the issue can be expected to be aired before the court and limits on the exercise of judicial power. (See generally: T. A. Cromwell, Locus Standi: A Commentary on the Law of Standing in Canada (1986), at p. 191; P. Hogg, Constitutional Law of Canada (3rd ed. 1992), at p. 1263; British Columbia Law Reform Commission, Report on Civil Litigation in the Public Interest (1980)).

Accordingly, until recent years in Canadian law, standing to challenge the validity of a law was narrowly construed. Under the "exceptional prejudice" rule articulated in Smith, supra, in order to challenge a law of general application, a plaintiff was required to establish that the effect of the legislation was greater or different than its effect on the public at large. Moreover, the plaintiff had to establish a judicially cognizable interest in the legislation which, at that time, meant an interest affecting the personal, proprietary or pecuniary rights of the plaintiff.

A corollary to this restrictive rule was the assumption that the Attorney General could be relied upon to act as the guardian of the public interest. The role of the Attorney General has its origins in the tort of public nuisance and developed in the United Kingdom where, due to the unitary nature of the state and the supremacy of Parliament, there was no prospect that a law might be declared unconstitutional in a court of law.

With the exception of specified classes of cases involving suits such as those brought by shareholders and municipal ratepayers, the general rule as set out in Smith remained the means by which entitlement to standing was assessed for the next fifty years. The effect of the enforcement of traditional standing rules, however, was effectively to immunize certain types of legislation from the scrutiny of the courts. Recognizing that the absence of a means to challenge the acts of the legislature offends the fundamental principles of constitutionality, the rules for public interest standing have been considerably relaxed in recent years. In the trilogy of decisions on standing, 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, this Court reviewed the rationale underlying standing and developed the test which now governs public interest standing. As one commentator observed, the effect of these cases is to "cast off the mechanical application of the public nuisance standing rule to constitutional cases" and to endorse a more functional approach to the question of standing (Cromwell, supra, at p. 90).

Laskin J., as he then was, pointed out in Thorson, supra, at p. 150 that the standing principles developed in tort law with respect to public nuisance could not be transferred wholesale to the litigation of constitutional issues. While it might be reasonably expected that the Attorney General would be sensitive to interferences with public rights, it is doubtful whether this would be so with respect to constitutional issues, given the Attorney General's obligation, as legal officer of the government, to enforce its legislation (see also Hogg, supra, at p. 1265).

In addition, cases involving challenges to the constitutionality of a law attract powerful countervailing arguments in favour of an expansive approach to standing. As Laskin J. put it in Thorson, supra, at p. 163, where an issue is justiciable, it is "the right of the citizenry to constitutional behaviour by Parliament" that supports the argument in favour of standing. Laskin J., in the same case, made a number of other observations which signal a departure from the strict approach to standing which characterized earlier decisions. First, standing is at the discretion of the courts. Second, standing relates to access to justice and concerns with the effectiveness of the judicial process. Finally, he observed that concerns about the multiplicity of suits may not be as great as previously feared.

On this last point, citing MacIlreith v. Hart (1908), 39 S.C.R. 657, where the Court recognized the right of a municipal ratepayer who could not establish exceptional prejudice to challenge the legality of municipal expenditures, Laskin J. noted, at p. 145, that this decision had "not spawned any inordinate number of ratepayers' actions". In his view, courts are entirely able to control declaratory actions through the exercise of discretion, directing stays and imposing costs. This suggests that concerns about the multiplicity of actions may in many cases be overstated and, in any event, are amenable to the control of the courts.

In Borowski, supra, the Court set out the rules for public interest standing in cases raising the constitutionality of legislation as follows at p. 598:

. . . 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.

Moreover, in Borowski, the nature of the interest that a litigant must demonstrate was expanded so that, as long as there is a serious question of validity and no other means to have it tested before the courts, it is no longer necessary to demonstrate that one's personal rights are affected in order to have standing to litigate the issue.

The effect of the trilogy has been to broaden access greatly to the courts to persons who would previously not have been granted standing and to remove the categorical barriers to standing. In addition, there is increasing recognition, most evident in Thorson, that courts should look beneath the rules governing standing and consider the rationale as it applies to the facts of a particular case.

The test for standing in cases which raise issues of public interest, crystallized in Borowski, was recently applied by this Court in Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236, in the context of an attempt to challenge legislation under the Charter. Cory J., speaking for the Court, elaborated on the diverse considerations which will affect the decision as to whether or not to grant standing. First, legislation should not be immunized from attack. Second, public interest standing is not required when, on the balance of probabilities, it can be shown that the measure will be subject to attack by a private litigant. Finally, as a consequence of the entrenchment of the Charter, the granting of standing remains discretionary, but discretion should be exercised in a liberal and generous manner. Standing was not granted in that case on the basis that there was another more effective means of addressing the issue.

At this point, the following question must be addressed, specifically: should the rules recently developed by this Court as regards public interest litigants govern those litigants who fall squarely within the rule in Smith? In other words, should the trilogy test bar the standing of those litigants who would otherwise benefit from the rule in Smith? The question arises because, in this case, while the appellants, of necessity, also fall into the category of "public interest litigants", in my opinion, they are better described as persons who experience "exceptional prejudice" under the Act. Thus, as I shall outline, the rules for public interest standing articulated in the trilogy may not be tailored to meet their particular interests in the present litigation.

The position of the appellants, in contrast to that of the public interest litigant, may be described as follows. The basic thrust of public interest standing is to provide an avenue of access to the courts to those who, because they have no cause of action under traditional rules, lack the means of bringing their concerns before the courts. The expanded rules of public interest were intended to accommodate such persons so that legislation would not be otherwise immunized from attack. However, what litigants such as the appellants seek is standing to argue the constitutionality of a law by which they are directly and particularly affected.

In my view, this general rule of standing set out in Smith remains applicable to litigants seeking declarations under the Charter as well as in the ordinary case. There is nothing in the trilogy to suggest otherwise. Thus, litigants are still entitled to standing as long as they are able to establish that they are "exceptionally prejudiced" by the legislation's effect on their private rights. Where such litigants, in addition, face criminal or quasi‑criminal procedures and would be allowed to raise the constitutionality of the legislation in defence, the arguments in favour of entitlement to standing seem unassailable. In the result, standing is available to such litigants commencing declaratory actions on the basis of the Charter.

A parallel conclusion as to the effect of the new test for public interest standing was reached by Le Dain J. for the Court in Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607. His reasons clearly disclose that the public interest standing test is an addition, not a replacement, to the general rule governing standing. In that case, Le Dain J. confronted the question of the appropriate test for standing in the context of an administrative challenge to the statutory authority of the provincial government regarding the setting of public welfare rates. He commenced his examination of standing with the following passage at p. 618:

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.

Le Dain then held at pp. 623‑24 that:

. . . 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. . . . 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 the Court in Thorson, McNeil and Borowski.

The following commentary by Cromwell, supra, at p. 69, endorses this approach to standing in constitutional cases and, in my view, is also helpful to assess the impact of the trilogy on the rule in Smith:

The constitutional cases in which standing difficulties have been encountered are those in which citizens seek a declaration but cannot allege that the impugned legislation affects any traditionally recognized "private rights", or that some general effect strikes at them differently than at other citizens.

As a consequence, he suggests at p. 82, that if, under pre‑existing doctrine, the plaintiff had the right to sue, standing should be granted:

. . . the result of Thorson and McNeil was to create a new, discretionary approach to standing that is available for those who do not come within the Smith test of "exceptional prejudice". For those that do, standing remains as of right. [Emphasis added.]

This view also appears to be shared by B. L. Strayer in The Canadian Constitution and the Courts (3rd ed. 1988), who concludes at pp. 187‑88 that the effect of the trilogy is to provide an avenue to those who cannot otherwise show that they have a special interest or fall within a category of persons with a recognized right to commence a public action such as a declaratory action.

It is evident that, strictly speaking, where litigants satisfy the criteria set out in the general rule for standing, it is unnecessary to resort to the test set out in the trilogy. However, for the following reasons, the test in the trilogy should not conflict but rather must be aligned with the general rule in Smith. Thus, even if the public interest standing test is applied to litigants who are exceptionally prejudiced, in my view, such litigants should also succeed under this test, applied flexibly and purposively with consideration to both the position of the litigants and the context of the case.

First, it must be recalled that the expansion of public interest standing developed by this Court in Thorson, supra, McNeil, supra, and Borowski, supra, was not designed to restrict access to the courts but to liberalize it. It would be anomalous, if not perverse, to find that a plaintiff who formerly would have succeeded in bringing a constitutional challenge simply by the ability to establish exceptional prejudice under the legislation is now barred due to rigid adherence to a formula designed to serve as a means of sorting out meritorious from less deserving claims to public interest standing.

Second, it is now firmly established, since the trilogy, that standing is a matter of discretion for the courts. Furthermore, as the rule regarding public interest litigants set out in Borowski, supra, and Canadian Council of Churches, supra, must a fortiori apply to litigants who suffer exceptional prejudice to their personal and proprietary rights under the Act, such discretion must be exercised in a generous and liberal manner. While guidelines remain useful and important, a strict, no‑exception approach should be eschewed. Rather, a flexible approach that allows courts to respond to a spectrum of concerns affecting both the parties and the administration of justice is to be preferred.

Third, as we recognize that citizens have an interest in the constitutionally sound behaviour on the part of the legislatures, where the constitutionality of legislation is at issue, the primary focus is on the law itself, not the position of the parties. In this regard, it is worth restating the words of Dickson J. in R. v. Big M Drug Mart Ltd., supra, at p. 314:

A law which itself infringes religious freedom is, by that reason alone, inconsistent with s. 2(a) of the Charter and it matters not whether the accused is a Christian, Jew, Muslim, Hindu, Buddhist, atheist, agnostic or whether an individual or a corporation. It is the nature of the law, not the status of the accused, that is in issue. [Emphasis added.]

Fourth, in resolving the question of standing, following Thorson, the Court should take a purposive and functional rather than categorical approach to standing and resort should be made to the concerns underlying restrictions on standing. If the usual concerns, such as a multiplicity of suits, are not present, or indeed if the circumstances of the case indicate, as they do here, that the interests of judicial economy would actually be best served by awarding standing, nothing is gained by denying standing because another avenue to test the constitutionality of the legislation potentially exists.

Fifth, while concerns about judicial economy were successfully raised as a bar to standing to argue a Charter issue in Canadian Council of Churches, the significance of that factor must be considered in the particular context of each case.

In Canadian Council of Churches, the issue was whether or not standing should be granted to an umbrella group, demonstrating genuine commitment and interest in the plight of refugees, to contest the constitutionality of proposed changes to the Immigration Act, 1976, S.C. 1976‑77, c. 52, as am. The Court denied standing. However, in so doing, the Court noted that literally thousands of refugee claims were filed every year, each of which potentially provided a means by which the constitutionality of the impugned provisions could be tested. Moreover, because of the ability of courts to grant intervener status, there were arguably an equal number of opportunities for the plaintiffs to bring their particular views before the courts. Hence, there was no question of either the immunization of the changes to the Act from judicial scrutiny or any real barrier to the appellants' ability to get their particular views on the issue before the courts.

In general terms, as this Court recognized in Thorson, concerns about judicial economy and the multiplicity of lawsuits are often overstated. In the usual case, there are enough practical disincentives to litigants by reason of costs and inconvenience to discourage those who have no real stake in the outcome of the litigation from engaging in frivolous lawsuits. Furthermore, as standing is discretionary, courts always retain a mechanism to refuse to entertain the arguments of those whose motive to litigate is clearly suspect. In view of these practical realities, care should be taken not to exaggerate the threat to the justice system by a more liberal approach to standing; indeed, as Laskin J. suggested in Thorson, this concern should rarely provide the basis upon which to deny standing to an otherwise worthy plaintiff.

I would also take note of provincial law reform commission reports in British Columbia and Ontario on alterations to the law of standing which suggest that the balance be weighted in favour of the litigant seeking standing (see: British Columbia Law Reform Commission, Report on Civil Litigation in the Public Interest; Ontario Law Reform Commission, Report on the Law of Standing (1989)). The basic recommendation of the Ontario Law Reform Commission is as follows, at p. 177:

. . . [e]very person should be entitled to commence and maintain a proceeding unless a party challenging such a right satisfies the court that there factors against proceeding that outweigh the factors in favour. . . .

The B.C. Law Reform Commission recommended that any person be entitled to commence a proceeding for a declaration of invalidity "whether or not the person has an interest in or is directly affected by the enactment" (at p. 75). As is evident, the tenor of these recommendations is increasingly to remove the formal barriers to access to the courts and place the emphasis on the need to demonstrate, in each case, that cogent reasons exist for barring access to the courts.

One final matter remains to be addressed: the impact of this Court's decisions in Irwin Toy and Wholesale Travel Group Inc. on the standing of corporate litigants bringing challenges under the Charter. As I discussed above, in Irwin Toy the Court ruled that a corporation may not invoke the rights guaranteed by s. 7 of the Charter. Because of this decision, corporations wishing to challenge the constitutionality of legislation under the Charter face procedural obstacles that do not exist with respect to challenges on questions of the division of powers.

However, at the level of principle, there is no reason to adhere rigidly to a rule which automatically bars challenges to legislation directly affecting a plaintiff simply on the ground that the impugned aspect of the legislation does not directly affect him, her or it. As the constitutionality of the law may be raised in defence, the question should be whether the plaintiff has sufficient interest in the outcome of a constitutional challenge. This Court recognized in Thorson, supra, that, in constitutional cases, the overriding concern is whether governments have respected the limits of their constitutional authority. In my view, there is equal force to this argument whether the question of constitutionality concerns the division of powers or infringement of rights under the Charter. Section 52 of the Constitution Act, 1982 provides that "[t]he Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect" (emphasis added).

This view is shared by authorities such as Professor Hogg in Constitutional Law of Canada, supra. In contrasting the results of Irwin Toy and Wholesale Travel, he makes the following observations at pp. 1273‑74:

The difference between Irwin Toy, where the Court held that a corporation could not invoke s. 7, and Wholesale Travel, where the Court held that a corporation could invoke s. 7, is that Irwin Toy Ltd. was a civil plaintiff seeking a declaration while Wholesale Travel Group Inc. was a defendant in a criminal proceeding. But why should this difference be important? The plaintiff corporation Irwin Toy was not relying on s. 24 of the Charter for its remedy. The corporation was simply seeking a declaration that the law was unconstitutional. It has always been regarded as axiomatic in Canadian constitutional law that an individual or corporation may seek a declaration of invalidity on federal grounds, despite the fact that no individual or corporation is directly implicated in the question whether a law should properly be enacted by one level of government rather than the other. Indeed, in Irwin Toy itself, the plaintiff corporation, in addition to Charter grounds, attacked the law on a federal ground (that the provincial law could not apply to advertising in the federal medium of television), and the Court without any preliminary discussion addressed that ground on the merits (rejecting it in the result).

It is difficult to see what principle allows a plaintiff to bring an action for a declaration of invalidity on federal grounds, but not on Charter grounds. Assuming that the plaintiff has a sufficient interest in the validity of the law . . . the plaintiff ought to be able to obtain a declaration that the law is unconstitutional on the basis of any part of the Constitution. . . . The principle of constitutionalism is surely offended by the erection of artificial barriers to constitutional challenges to the legislation. At the very least there should be no difference between federal and Charter grounds. Both grounds have the effect of withholding power from legislative bodies, and both grounds lead to invalidity under the supremacy clause. [Emphasis added.]

Furthermore, technical barriers to standing based on such grounds as the mode of proceeding chosen cannot be sustained on the level of principle. Thus, it is difficult to rationalize a rule that permits a plaintiff to challenge the constitutionality of a law regulating his daily affairs once he is charged with an offence but not before: the difference is only a matter of timing. As Duff J. for this Court recognized as long ago as Smith, supra, at p. 337:

Much may be said, no doubt, for the view that an individual in the position of the appellant ought, without subjecting himself to a prosecution for a criminal offence, to have some means of raising the question of the legality of official acts imposing constraint upon him in his daily conduct which, on grounds not unreasonable, he thinks are unauthorized and illegal.

In my view, the following approach outlined at p. 1274 by Professor Hogg is preferable:

The correct principle, it seems to me, is that a challenge to the constitutionality of a law (assuming that it involves no remedy other than a finding of invalidity) should be governed by the same rules of standing and procedure, regardless of whether the challenge is based on federal or Charter grounds. This would mean not only that the challenge could be made as a defence to a criminal charge (as in Big M Drug Mart), but in any other proceedings, civil or criminal, where the law is potentially relevant, including proceedings for a declaration of invalidity.

This approach has the virtue of consistency with the principles which apply to the resolution of other constitutional questions. In addition, there may well be instances in which the interests in the efficient administration of justice are better served by a prospective ruling on the constitutionality of legislation.

In summary, I would draw the conclusion that the rules of standing developed in Borowski should not be used to defeat the standing of a litigant who, by virtue of the exceptional prejudice and effect on his private rights, has always been entitled to challenge government actions. Rather, plaintiffs who are able to establish exceptional prejudice to private rights under legislation are entitled to standing as of right to litigate the constitutional validity of a law by which they are affected.

Application to the Case

As I have discussed above, this Court's trilogy on public interest standing was not intended to abrogate or restrict the general rule regarding entitlement to standing of those whose interests are directly and particularly affected by legislative action. There is no question that, because of the special effect of the Act on the interests of both the corporate retailers and the retail employees in this case, they fall within the class of persons who suffer "exceptional prejudice" under the legislation. Thus, the question of the appellants' standing to address the constitutional questions stated in this case may be resolved by resort to the traditional rules governing standing set out in Smith alone.

My colleague, however, denies the appellants standing under the test formulated in the Canadian Council of Churches. While he agrees that there is a serious question as to the validity of the Act and that the appellants are directly affected by the Act, he finds that the appellants have not demonstrated that there is no other reasonable and effective means of bringing the question to court. In particular, my colleague concludes that the appellants' reliance on the record of the Oshawa Group suggests that there may be a more reasonable and effective means of bringing the matter to court. He also concludes that they should be denied standing because they cannot rely on evidence of unrelated parties in separate proceedings. As to the retail employees, the majority would also deny them standing on the grounds of insufficient evidence to establish either standing or a Charter violation.

I disagree. In my view, the appellants should not only succeed under the test in Smith but should also succeed under the public interest standing test set out in Borowski and Canadian Council of Churches, properly applied to the circumstances of this case. Nor, in my view, is the insufficiency of the evidence a proper ground upon which to deny the retail employees standing in this case. I shall address each issue in turn.

As I noted above, courts now have discretion to award standing and, as a consequence of the trilogy, this Court has decided that a functional approach is to be preferred over the application of inflexible rules. This suggests that the ability of other litigants to bring the issue before the court should not be interpreted as an automatic and inflexible bar to the exercise of the court's discretion to grant standing. Particularly where, as in this case, the party seeking standing is already before the courts, great consideration should be given in assessing the benefits of proceeding with the constitutional challenge and the prejudice to the appellants in refusing standing at this late stage in the proceedings. The following factors lead, in my mind, to the conclusion that nothing is to be gained by refusing standing whereas the benefits of granting standing are evident indeed.

First, this is not an instance in which, but for their application for the declaration, the appellants would not be before the courts at all. Rather, they must confront the effect of the legislation. The only question is when and by what means.

None of the usual concerns which underlie the restrictions on public interest standing is present in this case. The parties most directly affected by the Act are before the court, there is a live controversy and, as the appellants face numerous outstanding charges in the lower courts, there is no question of burdening the system with another litigant who would otherwise be uninvolved. In fact, granting the appellants standing actually reinforces one of the objectives of the rules of standing, that is, prevention of a multiplicity of suits, as the numerous outstanding charges against the appellants under the Act which presently constitute a burden on the administration of justice could be disposed of by a ruling on the constitutional validity of the Act.

Moreover, it is important to recognize that the declaratory action was itself precipitated by the s. 8 closing application, under which, following this Court's decision in R. v. Big M Drug Mart Ltd., the appellants' right to address the constitutionality of the Act in defence would be incontestable. Those applications were adjourned pending the decisions in Peel; the appellants then brought the declaratory application back on and were subsequently granted leave by this Court in order to argue the constitutionality of the Act. In view of this procedural history, the appellants' appeal to this Court should not fail at this late stage for lack of standing merely because the declaratory action is before the Court at this time rather than the s. 8 application. The appellants were clearly under the impression that the s. 8 application and the cross‑application for a declaration would function as a test case to resolve the constitutionality of the outstanding charges under the Act. In my view, it would discredit the administration of justice to require the appellants to argue the merits of the case in still another proceeding which may yet end up at some later stage before this Court. Vast amounts of time, expense and effort have already been expended by the appellants in proceeding with this application; in my view, the Court should exercise its discretion to grant standing and dispose of the appeal on its merits, which, in any event, have been pleaded. While this Court is not bound by the trial judge's ruling that the case constituted a test case, in my opinion, when the Court is asked to rule on the question of standing at this point in the proceedings, the proceedings as a whole should be considered as well as the parties' expectations about what the litigation was intended to accomplish.

Furthermore, the appellants also made submissions concerning the infringement of s. 15 Charter rights under the Act. This Court has not yet addressed the question of the application of s. 15 rights to corporations or to the legislation challenged in this case. As the appellants are the appropriate parties to make this argument and leave was granted by this Court on this very issue, in my view, there is no basis upon which to deny them standing now.

As to the matter of the record, in my view, it is not necessarily inappropriate for the appellants to rely on the record of other parties raising identical legal issues in what are essentially identical circumstances. Furthermore, as I will discuss below, the nature of the evidence is not generally an issue that bears on the question of standing. Particularly in constitutional cases, background evidence of a general nature may be relevant to set the context of the issue quite apart from the position of the specific parties. In this case, all parties faced the same types of charges and closing orders under s. 8, and, for all practical purposes, the position and interests of the parties were indistinguishable. The cases were being prepared concurrently and litigated sequentially and it is not surprising that the process involved an exchange and consolidation of material of this general sort.

But, more importantly, it would unquestionably be prejudicial to the appellants to have been permitted to rely on this record all along, only to be told at this stage that they will be denied standing for this reason. If this was of concern to the Court, the appellants should have been denied leave. Whether the record is ultimately sufficient to establish their claims is an entirely separate matter about which I shall refrain from comment.

Turning to the appellant retail employees, my colleague would deny them standing on the basis that the evidence adduced in this case is insufficient to establish standing, let alone the claimed infringement under the Charter. In so doing, he relies on the earlier jurisprudence of this Court in Danson, supra, and MacKay, supra.

This Court's decisions MacKay and Danson, which dealt with the need to avoid deciding Charter issues in a factual vacuum, are not at all relevant to the question of standing. If anything, they lend support to the notion that standing is an issue separate and apart from the question of the sufficiency of the evidence and, furthermore, that an appellant's standing can be unassailable even when there is not a shred of evidence to support a Charter claim.

In MacKay, supra, despite the fact that, as Cory J. held at p. 363, "[i]n this case there is not one particle of evidence put before the Court", at no point did the Court suggest that the appellants lacked standing to bring a constitutional challenge on the basis of the Charter. Rather, the Court was prepared to assume the opposite, stating at p. 360:

The respondent did not question the status of the appellants to bring the action. As a result, this important issue was not considered by the Court and for the purposes of this appeal it is assumed that the appellants had the requisite status to bring the action.

Similarly, in Danson, supra, the appellant contended that he ought to be entitled to proceed with an application despite, in the words of Sopinka J., speaking for the Court at p. 1100, "the complete absence of adjudicative facts". Citing the decision of the Court in MacKay, the Court declined to rule on the question. Again, however, Sopinka J. expressly held that standing of the appellant to bring the Charter challenge was not an issue.

In any event, there is no question here of deciding this appeal in a factual vacuum. My colleague does not state that there is "no evidence"; rather, he finds that the appellants may not rely on the record of the Oshawa Group in its appeal to this Court.

As is noted in the reasons of the majority, this Court held in Finlay, supra, at p. 617, that standing depends on:

. . . 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.

Thus, a court's concern at this stage of the proceedings is whether there is enough material to assess the "nature of the interest" which the plaintiff is asserting. However, this does not necessarily entail an examination of the evidence. In fact, in that case, Le Dain J. expressly stated that the respondent's interest was sufficiently clearly established by the statement of claim and the statutory and contractual provisions; he found no need to consider the evidence.

In my view, no such inquiry is warranted in the circumstances of this case either and the appellant retail employees should not be denied standing because of a lack of evidence. Particularly when the Court has already granted leave, the sufficiency of the evidence is largely a matter that goes to the merits and success of the appeal.

The rights of retail employees under the Act as guaranteed by ss. 2(a) and 15 of the Charter remain an open question. Furthermore, there can be no question, and indeed the majority does not contest, that an application such as this one may well be the only effective means for the retail employees to bring the issue before the court.

In my view, it is important to recognize the practical difficulties and disincentives which face appellants in the position of the retail employees and to acknowledge that there may be no other reasonable and effective means of bringing their concerns before the court. Although most employees are unlikely to be charged under the Act, they are still affected by its provisions. However, such claimants may have little realistic possibility of bringing their concerns before the court except, as they have in this case, by joining the application of others who are able to bear the expense.

As this Court had occasion to observe in Edwards Books, supra, retail employees are a group that is largely unorganized and which comprises persons without significant political and economic power. As it is open to the court to exercise its discretion on standing, it is not inappropriate in my opinion, to examine the position of all of the parties involved as a whole and consider such factors as their respective ability to bring their concerns before the courts. In the present case, denial of standing to the corporate appellants will effectively also deny the retail employees the opportunity to assert their claims.

In view of these considerations, in my opinion, there is no principled or practical reason to refuse the appellants standing to seek declaratory relief. In the result, I find that all of the appellants in this case have standing to address the constitutional questions which were stated in this appeal and that this appeal should not be decided on the basis of standing alone.

Given the fact that the majority of this Court has concluded that the appeal should be dismissed, it would not be an efficient use of the Court's limited resources for me to discuss the merits of the case. Accordingly, I decline to address the merits of the issues at this time but would have granted standing to all the appellants. In this, I dissent from the majority.

Appeals dismissed, L'Heureux‑Dubé and McLachlin JJ. dissenting.

Solicitors for the appellants: Danson, Recht & Freedman, Toronto.

Solicitor for the respondent: The Attorney General for Ontario, Toronto.