This is an appeal from a pleadings motion where the Crown (Ontario) sued Sanjay Madan and his family (appellants) for fraud.
The appellants counterclaimed, alleging contributory negligence by Ontario, misuse of a Mareva injunction, vicarious liability for Sanjay's intrusion upon seclusion, and direct/vicarious negligence by Ontario.
The motion judge struck these parts of the pleadings and refused leave to amend.
The Court of Appeal dismissed the appeal, affirming that a victim's negligence is not a defence to fraud, the "clean hands" doctrine does not apply to mere carelessness, and claims related to the Mareva injunction were unsupported.
The Court further held that Ontario could not be vicariously liable for Sanjay's intrusion upon seclusion as there was no nexus between his employment and the privacy violation, and that Crown liability in tort is vicarious, not direct, requiring proximity to identified Crown employees for negligence claims.