The applicant insurer sought a declaration that the respondent insurer had a duty to defend the driver of a rental vehicle in a motor vehicle accident tort action.
The applicant had initially defended the driver based on a mistaken belief that he was covered under his mother's policy.
Upon discovering the error, the applicant asked the respondent, who insured the rental vehicle, to assume the defence.
The respondent refused, arguing the applicant was estopped.
The court found the driver was not insured by the applicant, there was no binding agreement to abandon the priority dispute, and promissory estoppel did not apply because the respondent suffered no detrimental reliance.
The respondent was declared the priority insurer with a duty to defend.