Executive Summary: Key Legal and Evidentiary Issues

• Scope of a “full and final” release and whether it could extend beyond the existing civil action to bar future challenges relating to the Canadian Dental Care Program (CDCP).
• Objective test for formation of a settlement agreement, and whether email acceptance created consensus on all essential terms when the offer referred only to “the Action.”
• Tension between enforcing settlements under Rule 49.09(a) and the court’s mandate under Rule 1.04 to secure determination of disputes on their merits.
• Significance of the timing and content of correspondence raising concerns about the breadth of the draft release immediately upon its receipt.
• Interaction between this Ontario civil action and a parallel Federal Court judicial review of Sun Life’s CDCP-related decisions.
• Whether, in the circumstances, enforcing the alleged settlement would be contrary to the interests of justice, even if a settlement were otherwise found to exist.

Background of the parties and delisting decision

Dr. Pierre Obeid is a dentist operating a practice known as Leamington Sedation Dentistry. In or around early 2020, Sun Life Assurance Company of Canada, acting as an insurer, delisted his practice over concerns of alleged widespread billing fraud. As a result, Sun Life stopped reimbursing claims for services provided by Dr. Obeid to patients covered under Sun Life insurance plans. This delisting had direct financial and professional consequences for Dr. Obeid and his professional corporation, prompting them to commence an action against Sun Life in the Ontario Superior Court of Justice in May 2020. The lawsuit challenged Sun Life’s conduct and sought relief in relation to its refusal to accept claims associated with the practice.

Development of the federal dental program and escalation of the dispute

While the civil action proceeded slowly, a new public program changed the stakes. In 2023, the federal government launched the Canadian Dental Care Program (CDCP) and appointed Sun Life to administer it. In July 2024, Sun Life wrote to the plaintiffs stating that, in light of its March 26, 2020 decision to stop accepting claims involving Leamington Sedation Dentistry, Dr. Obeid could not participate in the CDCP or provide services to CDCP clients. This communication extended the impact of the original delisting decision into the realm of a significant national public program. Counsel for the plaintiffs responded by raising the possibility of holding the existing Superior Court action in abeyance pending an appeal of Sun Life’s administrative decision regarding participation in the CDCP, and by noting that amendments to the Statement of Claim might be required to reflect those developments. The appeal of Sun Life’s administrative determination was later dismissed without written reasons, which further intensified the dispute.

The offer to settle and the contested release

In May 2025, following the dismissal of that appeal, Sun Life’s counsel made a formal Offer to Settle the Ontario action. The key terms were: (1) the plaintiffs would execute a full and final release in favour of Sun Life “in a form acceptable to defendant’s counsel” within ten days of acceptance; and (2) the parties would consent to an order dismissing the action without costs, to be taken out promptly after acceptance. The offer expressly referred to settling “the Action” identified as Dr. Pierre Obeid et al v. Sun Life Assurance Company of Canada. The offer was open until May 19, 2025. On May 16, 2025, plaintiffs’ counsel accepted the offer by email, clearly stating that Dr. Obeid accepted the offer to settle and asking Sun Life’s counsel to send the proposed form of release. In response, on May 20, Sun Life delivered its standard form full and final release. The language of this draft release was broad, and the judge later observed that its wording was wide enough to allow Sun Life to rely on it to defend against future efforts by the plaintiffs to challenge its position as administrator of the CDCP, not just the existing civil action. Upon review, plaintiffs’ counsel promptly raised concerns about the breadth of this release and ultimately refused to have the plaintiffs sign it.

Parallel Federal Court judicial review proceedings

Shortly after the settlement correspondence, on June 5, 2025, the plaintiffs commenced an application for judicial review in the Federal Court. That proceeding directly challenged Sun Life’s decisions as administrator of the CDCP, particularly its refusal to allow Dr. Obeid to participate in the program. Sun Life moved in Federal Court to strike or dismiss the judicial review as disclosing no claim in law, but that motion was dismissed, with reasons released in January 2026. As the Ontario motion judge noted, Sun Life’s position on this motion was that CDCP-related matters were “irrelevant” to the Rule 49.09(a) motion in the civil action. However, the judge confirmed on the record that this statement was not a concession that Sun Life would forego reliance on any full and final release from this action as a defence in the Federal Court judicial review. This clarification was important because it highlighted the potential for the proposed release in the Ontario action to have a far broader impact, possibly undermining the plaintiffs’ ability to pursue their public-law challenge to CDCP decisions in another court.

Legal framework: settlement enforcement and the objective test

Sun Life brought a motion under Rule 49.09(a) of the Rules of Civil Procedure seeking two primary outcomes: dismissal of the Ontario action based on the accepted offer to settle, and an order requiring the plaintiffs to execute, or deeming them to have executed, Sun Life’s proposed full and final release. The defence argued that: there had been a binding settlement; the plaintiffs never indicated at the time of settlement that they intended to pursue judicial review; and the Statement of Claim, issued before the CDCP existed, did not raise issues connected to that program. To frame the legal analysis, Sun Life relied on case law including Terranata Winston Churchill Inc. v. Teti Transport Ltd., which holds that where parties agree to execute a full and final release but do not specify its exact form, the parties are taken to have agreed to a “standard form” release, not one that is complex or unusual. In applying this principle, courts use an objective test and focus on what a reasonable person would understand from the language used, rather than the parties’ subjective intentions. Royal Bank of Canada v. Sunn was also cited for the proposition that the question is whether, in the eyes of a hypothetical honest and sensible businessperson, the parties appeared to have reached an agreement. The Ontario Court of Appeal’s decision in Sredot v. Sredot Farms Ltd. provided the structure for the analysis: first, determine whether a settlement has actually been concluded on all essential terms; second, if so, consider whether the settlement should be enforced. The underlying policy is to support certainty in settlements while ensuring fairness and justice in cases involving potentially far-reaching consequences.

Whether a binding settlement existed

The judge accepted that the subjective mindset of the parties, including the plaintiffs’ counsel, was not determinative. Instead, the court examined the key documents and exchanges. Objectively, there was an offer with clear terms, and an unconditional email acceptance within the deadline. On its face, this could suggest that a settlement had been concluded. However, the motion judge gave considerable weight to the way the offer was worded and to the immediate reaction of the plaintiffs once the actual draft release was supplied. Critically, the offer referred only to resolving “the Action” and contained no specific reference to the CDCP or to disputes arising from the administration of that federal program. At the time of the offer and acceptance, there was no amendment to the Statement of Claim bringing CDCP issues into the Ontario action, and no explicit language in the offer tying settlement to any future or broader disputes. Once the plaintiffs saw that the proposed release could be interpreted as extinguishing their ability to pursue CDCP-related relief, they quickly objected to the breadth of the language. The judge ultimately found that, in light of the limited wording of the offer and its focus on “the Action,” and given the lack of any reference to the CDCP or the Federal Court judicial review, there had not been agreement on all essential terms, particularly on the scope of the release. On that basis, the court concluded that no binding settlement had been reached that would justify dismissal of the action or compel the signing of the broad release.

Whether enforcement would be in the interests of justice

The judge went on to consider the second step outlined in Sredot, assuming for the sake of analysis that a concluded settlement might be arguable. In this alternative analysis, the court asked whether enforcing what Sun Life characterized as the settlement would be appropriate. The judge found that this was one of the rare cases where enforcement would not be in the interests of justice. The concern was that compelling the plaintiffs to sign Sun Life’s draft release—or deeming it signed—would risk foreclosing their ability to challenge CDCP-related decisions, including in the Federal Court judicial review that was already underway. The court emphasized Rule 1.04, which directs that the procedural rules be interpreted to secure the just determination of proceedings on their merits. Here, using Rule 49.09(a) to force a broadly worded release would run counter to that foundational principle. In effect, it would convert what had been framed as a settlement of the existing action into a tool that could potentially defeat separate public law proceedings, without clear agreement on that broader consequence.

Final disposition and cost consequences

In the result, the motion judge dismissed Sun Life’s motion. This meant that the Ontario action was not summarily dismissed on the basis of the alleged settlement, and the plaintiffs were not required—nor deemed—to execute the broad full and final release tendered by Sun Life. Following the ruling on the motion, the parties made submissions on costs. Plaintiffs’ counsel requested additional time to complete their costs outline, with an indication that they would attempt to reach agreement with the defence. The court was subsequently advised in writing that the parties had agreed to a lump-sum costs amount. The judge therefore fixed costs at $17,500, inclusive of fees, HST, and disbursements, payable by Sun Life to the plaintiffs forthwith. In this way, the successful party on the motion was the plaintiffs, who preserved both their existing civil claim in Ontario and their ability to pursue related CDCP issues in the Federal Court, while receiving a total monetary award of $17,500 in costs against the defendant for this motion.