The City of Windsor enacted a by-law which created the licensing scheme for adult entertainers in the City. The by-law required that those who fell within the definition of "dancer" must be licensed and pay the required license fee. Dancer was broadly defined as all people working in adult entertainment establishments in a state of partial or full nudity, whether they danced, waited tables, bartended, etc. A group of operators of adult entertainment establishments challenged the validity of the by-law in the Ontario Superior Court of Justice. The application judge struck down the impugned portions of the by-law as discriminatory against employees of adult entertainment parlours.
The City of Windsor appealed to the Ontario Court of Appeal. A majority of the Court of Appeal dismissed the appeal. It held that the combined effect of sections 150(1), 150(6)(a), 150(8)(d), 10(1) and 10(2) of the Municipal Act was to give power to the City of Windsor to license trades and occupations, define different classes of trades and occupations, and charge different license fees for different classes of trades and occupations. Windsor was entitled to discriminate between classes but not within classes. Accordingly, for Windsor to validly charge a different license fee for dancers, dancers had to constitute a different class of a trade or occupation. The majority did not accept that classifying a person as a "dancer" by reference to the state of the person's attire made the service that the person rendered a different trade or occupation. The words "trade" and "occupation" were to be taken to refer to the regular employment services performed, based on his or her skills and background, and not the manner in which the person was attired when carrying out his or her employment responsibilities. Therefore, to require employees of adult entertainment establishments who performed their employment duties nude or partially nude to pay a different license fee than those who did so fully clothed was discriminatory, which discrimination was not authorised by the Municipal Act.
The minority of the Court held that the City was entitled to treat persons who worked nude or partially nude in an adult entertainment parlour as composing a different class than those who worked fully clothed. Those employees who worked nude or partially nude, according to the minority, provided an additional service, that of "appealing to erotic or sexual appetites or inclinations." "Dancers" were those who performed this function in addition to the function of bartending, waiting tables, or dancing. It was permissible for the City to use these employees' state of undress as the criterion to identify them as members of the class of "dancers."
The City of Windsor applied to the Supreme Court of Canada for leave to appeal from the decision of the Ontario Court of Appeal. That Court dismissed the application without reasons. The dismissal gives effect to the reasons of the majority of the Court of Appeal, which upheld the application judge's striking down of sections of the City of Windsor's licensing by-law as discriminatory.