Finlay v. Canada (Minister of Finance)

Finlay v. Canada (Minister of Finance)
Collection
Supreme Court Judgments
Date
1986-12-18
Report
[1986] 2 SCR 607
Case number
17775
Judges
Dickson, Robert George Brian; Beetz, Jean; McIntyre, William Rogers; Chouinard, Julien; Wilson, Bertha; Le Dain, Gerald Eric; La Forest, Gérard V.
On appeal from
Federal Court of Appeal
Subjects
Action
Notes
SCC Case Information: 17775
Decision Content
Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 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)
File No.: 17775.
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
1. 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.
2. 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
3. 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.
4. 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:
7. (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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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".
10. 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.
11. 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.
12. 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
13. The issue of standing in this appeal, as I conceive it, may be approached by asking the following questions:
1. 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?
2. If not, does the Court have a discretion to recognize public interest standing in the circumstances of the present case?
3. If the Court does have such a discretion should it be exercised in favour of the respondent?
14. 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.
15. 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.
16. 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
17. 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.
18. 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.
19. 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 Broadcasting 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."
20. 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.
21. 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.
22. 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
23. 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?
24. 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