Wilful misconduct: what the law says for being bad on purpose

Accidents happen. On the other hand, wilful misconduct happens on purpose, and courts have very little patience for it. From punitive damages to voided insurance policies to workers’ compensation disputes, the word “wilful” carries more legal weight than most people realise.

What is the definition of wilful misconduct?

Wilful misconduct does not have one fixed definition in Canadian law. Its meaning shifts depending on the legal context, but the common thread running through every definition is that the person knew what they were doing was wrong and did it anyway.

Ontario courts have put it most plainly in Plester v. Polyone Canada Inc., 2011 ONSC 6068. Here, Justice Wein described the standard as conduct that is “intentional or deliberate,” where “the employee must purposefully engage in conduct that he or she knew to be serious misconduct.” In other words, it is “being bad on purpose.”

That is why wilful misconduct has a higher bar than ordinary negligence or even carelessness. In these cases, it must be shown that the conduct was:

• intentional: not accidental, inadvertent, or the product of honest error
• deliberate: the person chose to act, knowing the conduct was wrong
• not trivial: the behaviour is serious, and not just a minor lapse
• not condoned: the employer or relevant party did not knowingly tolerate it

While this concept that intent is the defining factor is specific to Ontario’s Employment Standards Act, 2000 (ESA), it applies across personal injury law, insurance, and occupational health and safety as well.

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How does wilful misconduct differ from gross negligence?

Wilful misconduct and gross negligence are both at the serious end of the misconduct spectrum. However, they are not the same thing.

The spectrum of fault

The Supreme Court of Canada addressed this as far back as 1942 in McCulloch v. Murray, [1942] S.C.R. 141. This case described gross negligence, wilful misconduct, and wanton misconduct as conduct involving “a very marked departure from the standards by which responsible and competent people […] habitually govern themselves.”

These three can be differentiated in this way:

• ordinary negligence: an inadvertent failure to meet a reasonable standard of care
• gross negligence: an aggravated, flagrant, or extreme departure from that standard; carelessness that goes well beyond a momentary lapse, but not necessarily intentional
• wilful misconduct: an intentional or deliberate act where the person knows their conduct is wrong

Why the distinction matters

Gross negligence appears frequently in commercial contracts and statutes as the threshold for liability where it would otherwise be excluded. These statutes include the BC Police Act, the Local Government Act, and the Good Samaritan Act.

Courts have noted that this standard is flexible, since the higher the duty of care owed in the circumstances, the lower the bar for what counts as grossly negligent conduct. The case of Doern v. Phillips Estate, [1995] 4 WWR 1, involved a police pursuit, where the officer was found grossly negligent for failing to follow a written pursuit policy, precisely because the standard of care during such a chase was so high.

Further distinction: knowledge of wrong conduct

Wilful misconduct goes further, since there’s an additional subjective mental element, where the actor must have known their conduct was wrong.

The Ontario Court of Appeal confirmed in Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310, that wilful misconduct involves “an assessment of subjective intent, almost akin to a special intent in criminal law.” Gross negligence, by contrast, can exist even without conscious wrongdoing.

The difference is consequential, both for litigants and their personal injury lawyers. Although gross negligence may trigger liability under a statute or a contract clause, wilful misconduct triggers a different and more severe set of legal consequences altogether.

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When does wilful misconduct void an insurance policy?

Insurance policies in Canada routinely include exclusion clauses that deny coverage when the insured’s conduct crosses from accidental into intentional territory. The legal principle behind this is called fortuity, where the insurance is designed to cover unforeseen, accidental losses, but not deliberate ones.

The intentional act exclusion

The Ontario Court of Appeal addressed this directly in Butterfield v. Intact Insurance Company, 2023 ONCA 246. Here, Brett Butterfield stabbed a store owner at a firearms store while suffering a psychotic episode caused by schizophrenia. As he was found not criminally responsible (NCR) for the attack, the store owner then sued him in negligence.

Notably, Butterfield’s condominium insurance policy included a standard exclusion for claims arising from “bodily injury caused by any intentional or criminal act.”

Looking at the Ontario Superior Court of Justice decision, the court applied a three-step test drawn from Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24:

• Determine the true nature of the claim, looking beyond the label chosen by the plaintiff
• Determine whether the negligence claim is derivative of an intentional tort
• Ask whether any non-derivative claims could trigger the insurer’s duty to defend

The Court of Appeal found that although Butterfield was NCR, he understood the physical nature and consequences of his actions and that he intended to stab the store owner, even if he could not appreciate the moral wrongness of doing so. For the court, that was enough to apply the exclusion and held that the insurer was not required to defend or indemnify Butterfield.

Effects of finding of NCR

A finding of NCR does not neutralise an insurance exclusion clause. What matters is not moral appreciation, but rather that the insured intended the physical act. A negligence claim that is inseparable from an intentional tort will not revive coverage simply because the plaintiff frames it in negligence.

The Ontario Court of Appeal reinforced this in Southside Muay Thai Academy Corp. v. Aviva Insurance Company of Canada, 2020 ONCA 385. In this case, a sexual abuse exclusion clause in a commercial liability policy was held to cover both the direct abuse claim and the parallel negligence claim for failure to supervise.

This means that when the subject matter of the action is excluded, a negligence claim does not change the outcome.

Can a workplace injury claim survive serious misconduct?

In Ontario, the answer is often yes, and the case of Interpaving Limited v. Workplace Safety and Insurance Appeals Tribunal, 2023 ONSC 5162, makes that clear.

Section 17 of the Workplace Safety and Insurance Act, 1997 (WSIA) works in two steps:

• First, was the injury solely caused by the worker’s serious and wilful misconduct?
• Second, did the injury result in death or serious impairment?

If yes, benefits are payable regardless of how the first question is answered.

On September 15, 2015, Jeremy Vaughan, a road crew foreman at Interpaving Limited, crashed a company vehicle while driving home drunk with two crew members. He pleaded guilty to impaired driving and became paraplegic.

The tribunal found his injury was solely attributable to his serious and wilful misconduct. However, because his paraplegia was a “serious impairment,” the tribunal also held his benefits were payable under the s. 17 exception. The Divisional Court upheld that finding.

The court confirmed that only conduct showing “malign intent or an intention to harm” would take a worker entirely outside the scheme. Drunk driving, however criminal, does not meet that threshold.

Wilful misconduct: the intent behind intent

The word “wilful” appears simple, but it does a lot of heavy lifting across Canadian personal injury law. It determines whether an insurance exclusion applies, whether a dismissed employee keeps their statutory entitlements, and whether a workers’ compensation claim survives a finding of serious misconduct. As common law made it plain, this kind of misconduct is not just an accident, and neither are its consequences.

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