An insured motorcyclist died in an accident while in breach of his insurance policy due to alcohol consumption, but his insurer provided a defence for three years without knowledge of the breach.
The insurer ceased defending and denied coverage upon discovering the breach; a third-party claimant sought a declaration that the insurer was estopped from denying full coverage.
The majority held that promissory estoppel requires the promisor to have actual knowledge of the facts demonstrating the breach, as a promisor cannot intend to alter a legal relationship by promising to refrain from acting on information it does not have.
The court also rejected constructive knowledge arising from a breach of a duty to investigate as a basis for estoppel, holding that the insurer's duty to investigate fairly runs to the insured, not to third-party claimants.
The concurrence agreed the appeal should be dismissed but disagreed that actual knowledge is an absolute requirement, preferring an objective analysis of the promisor's intent.
