Years of commissions allegedly vanished, and now the boss himself could be on the hook
A long-serving engineer who says his employer left years of commissions and bonuses unpaid has been cleared to chase the company's president personally for the money, even as the business sits in receivership.
The April 20, 2026, ruling by Associate Justice McGraw of the Ontario Superior Court of Justice let David Smith, a professional engineer, amend his claim against Rotalec Canada Inc. and its president and sole director, Farhat Buchh. Smith can now seek to pierce the corporate veil to hold Buchh personally liable, and raise a mental-suffering claim against him from $100,000 to $500,000.
A commission fight years in the making
Smith worked for Rotalec, a Brantford, Ont., maker of industrial automation and customized robotics, from January 2000 until February 2020. He alleges that from 2006 the company paid him a 10 per cent commission on gross profits in his territories, but that the money went unpaid or arrived haphazardly, with no accounting despite repeated requests. He claims unpaid commissions from 2015 through 2020.
His pay shifted repeatedly. Smith says he signed a contract in August 2016 with a $59,510.88 base, then was promoted in January 2017 to regional manager on a $70,000 base. He alleges the company removed his 10 per cent commission in 2018 and brought in a plan paying a $75,000 base, commissions under six programs, allowances, and a $15,000 performance bonus.
Smith alleges the changes added up to a constructive dismissal, citing unpaid bonuses and commissions, a new rule requiring three days a week in the office, and the loss of his car allowance. He says the company refused a pre-booked trip to Australia, warned that going would count as resigning, and tied his outstanding pay to a resignation. According to the pleading, a manager collected his laptop and phone before he was locked out and a staff-wide email announced his exit.
A dividend that looked odd
Rotalec later fell into receivership. According to the decision, Toronto-Dominion Bank obtained a court order in July 2024 putting it under a receiver, staying the action against it, and selling its assets and shares that September.
Smith says the receivership changed his understanding. He had reviewed the company's financial statements in 2023 without spotting anything amiss, but a later production showed a $1,900,000 dividend he found "odd" given Rotalec's history of not paying them. He obtained the interim receiver's first report in August 2024.
That report, as set out in his amended pleading, identified roughly $755,000 in missing inventory the president could not explain and a margin deficit that grew from about $60,000 to more than $2.2 million. Smith alleges Buchh stripped more than $6.5 million from the company for himself and his family, leaving it unable to pay him.
Cleared to proceed, not proven
Buchh opposed the amendments, though not the higher mental-suffering figure, and the receiver took no position. The court sided with Smith on whether the personal-liability claim could proceed. "I conclude that this link exists in the present case," Associate Justice McGraw wrote of the alleged conduct.
The judge found Smith had pleaded the elements needed to pierce the corporate veil, distinguishing earlier rulings where such claims failed. Because the commissions were tied to specific sales and territories, the court accepted a sufficient link between the alleged diversion of funds and the pay Smith says he never received.
The court decided none of the merits. The judge declined to rule on whether Smith acted in time, finding the question of his due diligence and discoverability "must be determined on a full record at trial or on a summary judgment motion." Buchh was given leave to file a fresh defence raising limitation arguments, and none of the allegations has been proven.
