By Mondaq

In a 4-1 decision,¹ the Supreme Court of Canada recently held that a statutory exclusion for loss attributable to “wilful misconduct” of the insured does not require proof that the insured intended to cause the loss. Rather, the Court held that it is sufficient if the insured had a “duty to know” and acted recklessly in the face of that duty, even if the insured in fact subjectively believed that there was no risk of harm.

In a strong dissenting opinion, however, Wagner J. held that a finding at trial, that the insured had no intention of causing harm, was determinative. In Wagner J.'s view, “wilful misconduct” requires proof of intent, and so the majority misconstrued the concept of recklessness by finding that it did not.

Read more…