Ruling notes dentist with insurer-delisted business promptly assailed broad draft release
Upon determining that the parties had not reached a settlement agreement, the Ontario Superior Court of Justice denied an insurance company’s motion to dismiss an action brought by a dentist whose business it had previously delisted.
In Obeid v. Sun Life Assurance Company of Canada, 2026 ONSC 856, the defendant insurer delisted the plaintiff’s dentistry business based on alleged billing fraud in or early 2020.
Thus, the insurer would cease reimbursing the dentist for services performed on individuals with insurance plans it had issued.
In May 2020, the dentist initiated this action. In 2023, the federal government established a National Dental Care Program (CDCP) and delegated its administration to the defendant insurer. In June 2024, the insurer served its statement of defence for the plaintiff dentist’s action.
In July 2024, the insurer notified the dentist that they could not participate in the CDCP or offer services to the CDCP’s clients, given its March 2020 decision to stop accepting claims involving their dentistry business.
On May 7, 2025, the insurer’s counsel advised the dentist’s counsel of the appeal’s dismissal, without reasons provided. On May 14, 2025, the insurer’s counsel made an offer to settle, under which the parties would consent to an order dismissing “this Action.”
On May 16, 2025, the dentist accepted the offer. In a May 20, 2025 email, the insurer forwarded a draft release with broad wording that could potentially defend against any of the dentist’s further actions to alter the insurer’s position as the CDCP’s administrator.
The dentist’s counsel requested clarification and refused to execute the current release. In June 2025, the dentist brought a judicial review application before the Federal Court.
Last Jan. 29, the Federal Court dismissed an initial motion to dismiss, which the insurer had based on the application’s lack of a claim in law.
The insurer again moved to dismiss the dentist’s application. The insurer sought to require the dentist to execute the full and final release it had drafted.
Court to hear action on merits
The Ontario Superior Court of Justice dismissed the insurer’s motion upon applying the two-step process in Sredot v. Sredot Farms Ltd., 2013 ONCA 84. First, the court had difficulty finding that the parties had agreed to the settlement.
The court acknowledged that the insurer aimed to end all its legal disputes with the dentist through its settlement offer. However, the court pointed out that the offer referenced only “this Action” and not the CDCP issue. The court noted that:
- The insurer confirmed that it still sought to rely on the draft release it had forwarded
- The dentist had an issue with the insurer’s recent refusal to prohibit them from participating in the CDCP, though they expressed willingness to forego the risk and expense of the current action
- The dentist promptly challenged the breadth of the proposed settlement
The court concluded that the parties had not reached a settlement.
Second, the court considered this a rare case in which enforcing the settlement would not serve the interests of justice, given the circumstances.
