Dunn v. Watts, 2026 ONSC 1228

CITATION: Dunn v. Watts. et al., 2026 ONSC 1228

COURT FILE NO.: FS-24-00041555-0000

DATE: 20260227

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

TANYA DUNN

Applicant

– and –

DAVID CORY WATTS, ET AL.

Respondents

Jeff Rechtshaffen, for the Applicant

Self-Represented Respondents

HEARD: February 10, 2026

hood J.

REASONS FOR DECISION

1This was a motion by Rechtshaffen, Breitman, the law firm for the applicant, Ms. Tanya Dunn, to remove itself as her solicitor of record. The law firm also seeks to have $46,637 from the $130,000 it is holding in its trust account paid to it for outstanding legal accounts with the balance of $83,363 being paid into court pursuant to Rule 43 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

2For the following reasons, the order removing the law firm of Rechtshaffen, Breitman as solicitors of record for the applicant Tanya Dunn is granted and the balance of the motion is dismissed. The $130,000 in the law firm’s trust account is to be paid into court to the credit of the within action.

3It is clear from the affidavit of Elizabeth Ustinova, a law clerk for the firm of Rachtshaffen, Breitman, that they can no longer continue to act for the applicant and that an order removing it as solicitor of record for Tanya Dunn is appropriate. They are unable to obtain instructions from Ms. Dunn and Ms. Dunn is no longer prepared to follow Mr. Rechtshaffen’s legal advice.

4From the material, the last known address for Ms. Dunn is 1205-919 Dufferin Street, Toronto, Ontario, M6H 4B3 and her last known email address and telephone number is tanyadunn9@gmail.com and (647) 466-7216. The order removing Rechtshaffen, Breitman as the solicitors for Ms. Tanya Dunn shall set out this address, email address and phone number and be served upon Ms. Dunn at this address and email and upon Mr. Watts in accordance with r. 4(15) of the Family Law Rules, O. Reg. 114/99.

5The balance of the motion is dismissed due to the fact that the $130,000 in funds being held by the law firm belong to the respondent, Mr. Watts, and not the law firm or the applicant. Mr. Watts is opposed to the funds being released in part or at all.

6Ms. Dunn commenced a family law proceeding against Mr. Watts. In November 2024 they entered into Minutes of Settlement whereby they agreed that Mr. Watts would make a payment of $130,000 to Ms. Dunn in full satisfaction of all claims, and that the parties would execute a formal Separation Agreement. On November 20, 2024 counsel for Mr. Watts delivered a draft separation agreement to Mr. Rechtshaffen who passed it on to Ms. Dunn. Mr. Watts executed the separation agreement. On November 26, 2024 Mr. Rechtshaffen confirmed that it was agreeable. It was, however, not yet signed by Ms. Dunn.

7In December 2024, Mr. Rechtshaffen wrote to Mr. Watts’s counsel demanding payment, stating that it was overdue. He undertook to hold the funds once received in trust pending execution of the separation agreement by Ms. Dunn.

8On December 18, 2024, Mr. Rechtshaffen’s firm emailed Mr. Watts’s counsel stating that Mr. Watts was in breach of the Minutes of Settlement due to non-payment and that they were contemplating their options. They also advised that they had yet to communicate with Ms. Dunn.

9In response, Mr. Watts’s counsel wrote to advise that Mr. Watts was prepared to transfer funds to Mr. Rechtshaffen’s trust account, pending execution of the separation agreement by Ms. Dunn. They however requested a formal undertaking that the full amount was to remain in trust until the agreement was signed, with no deductions for fees or any other expenses.

10On December 19, 2024, Mr. Rechtshaffen wrote to Mr. Watts’ counsel and gave an undertaking in writing that he would hold all settlement funds in trust, without any deduction, pending execution of the separation agreement by Ms. Dunn. In reliance upon that undertaking Mr. Watts then deposited the $130,000 with Mr. Rechtshaffen’s firm. To date Ms. Dunn has not executed the separation agreement.

11Whatever the issues may be between Mr. Rechtshaffen and Ms. Dunn they do not relieve Mr. Rechtshaffen from his undertaking. His motion to have $46,637 paid to his firm is in direct violation of his undertaking.

12Until the separation agreement is signed, Mr. Rechtshaffen is bound by his undertaking. His undertaking is two-fold – he is to hold the full amount of the funds until the agreement is signed and secondly, until that happens, he is not to deduct anything from the funds. He is seeking court approval to breach both aspects of his undertaking.

13The case of Mark & Marks LLP v. Galetta Renewable Energy, 2008 ONCA 291, 236 O.A.C. 62, relied upon by Mr. Rechtshaffen, is not applicable. It had to do with whether the application judge was able to order that funds, which were not part of the sought interpleader order, could be ordered to be paid into court at the same time as the agreed upon funds. That is not the issue before me.

14When a solicitor undertakes to do something, they must do it unless there is an express direction to them that they need no longer comply: see Valleyfield Construction Ltd. v. Argo Construction Ltd. et al (1978), 1978 1436 (ON HCJ), 20 O.R. (2d) 245 (H.C.). The sanctity of an undertaking is also set out in Rules 5.1-6 and 7.2-11 of the Rules of Professional Conduct.

15Here there is a clear undertaking. The applicant, Ms. Dunn, and by extension Mr. Rechtshaffen, have no entitlement to any of the settlement funds until the separation agreement is signed. Mr. Rechtshaffen is holding the funds in trust, not for Ms. Dunn but for Mr. Watts. They are Mr. Watts’s funds. Mr. Rechtshaffen’s claim to the funds as against Ms. Dunn is only possible once she has signed the separation agreement. At that point he could conceivably interplead the balance of $83,363 into court, but not before. No authority was provided to me by Mr. Rechtshaffen to support his position that he could ignore or was for some reason no longer bound by his undertaking to Mr. Watts.

16Mr. Watts, as one of his alternative remedies, in response to the motion, requests that the totality of $130,000 be paid into court pending execution of the separation agreement or further court order. He takes no position as to the removal of Rechtshaffen, Breitman as solicitors of record. He did not ask that the funds be returned to him. Nor did he ask for costs in having to respond to the motion. Given that Rechtshaffen, Breitman will no longer be involved in this matter, paying the $130,000 into court seems to be a reasonable solution.

17Order to go removing Rechtshaffen, Breitman as solicitors of record for Ms. Tanya Dunn as set out above and for an order that Rechtshaffen, Breitman pay $130,000 into court to the credit of this proceeding to the Accountant of the Superior Court of Justice.

18The moving party law firm also sought a declaration that the sum of $46,637, inclusive of legal fees, disbursements and HST be found to be due and owing to it from the applicant Mr. Dunn. In effect, the law firm is seeking an order that it is entitled to this amount without there being an assessment of fees and disbursements or an order or judgement being made that this amount is due and owing. While I recognize that Ms. Dunn was served with the motion material, I am concerned, based upon primarily the affidavit of Ms. Ustinova, as to whether Ms. Dunn realizes what is being asked for by her former law firm. I am not prepared to make such an order without there being a clear and unequivocal agreement by Ms. Dunn, which is not present. As well, the law firm is not without its remedies as against Ms. Dunn. This part of the motion is also denied.

Justice K. Hood

Released: February 27, 2026

CITATION: Dunn v. Watts, 2026 ONSC 1228

COURT FILE NO.: : FS-24-00041555-0000

DATE: 20260227

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

TANYA DUNN

Applicant

– and –

DAVID CORY WATTS, et al.

Respondents