Civil Case (Center) 38712-06-23 Coover Agencies Ltd. v. Pitkit-Printing Factories Ltd. - part 7

The transfer of the information amounts to a breach of Article 3 of the Unima Brokerage Agreement.

• There is a causal connection between the conduct of Shahar and Piron and the breach, since it was their actions that caused Unima to breach its obligation not to provide information, as aforesaid.

1. As I stated above, Shahar and Piron were aware of the Unima brokerage agreement, the terms included in it at the time of the breach, including the condition prohibiting the transfer of information to a third party. This applies even more strongly with respect to Firon, who himself drafted the brokerage agreement (see Matan's testimony at p.  73, paras.  25-26, Katz's testimony at p.  194, paras.  17-18, and Firon himself, at p.  454, paras.  2, 4, 6, 21).
2. As for the existence of sufficient justification, according to case law, sufficient justification can be based on self-interest such as necessity, protection of a proprietary right, contractual right or other public interest. The interest must be perceived by the court as preferable, or at least parallel in importance, to the interest in protecting the contractual relationship.  A desire to promote self-interest was not recognized as a sufficient justification for causing a breach of contract (see Civil Appeal 8191/16 Dyalit Ltd.    Avraham Harar (Nevo, June 17, 2019)).  Shahar claimed that he acted behind Unima's back because he was exposed to lawsuits from Pitkit, but this claim was made without any evidence.  The transfer of the information to Liberty is rooted in Shahar and Piron's financial interest in getting their hands on Pitkit, which they saw as an excellent business opportunity.  There is no justification in this interest for causing a breach of the brokerage agreement on Unima.
3. Therefore, there are elements of the tort of causing breach of contract in relation to Shahar and Firon. In this context, it should be noted that Shahar and Piron do not receive the protection given in case law to officers who acted on behalf of the company, since it was proven, as stated, that Shahar and Piron acted contrary to the interest of Unima, and that their decision to violate the Unima brokerage agreement stemmed from extraneous and personal motives (see Civil Case (Tel Aviv District) 41953-01-17 Eliyahu Knefler v.  Avi Nehemia (Nevo, February 8, 2026)).
4. Liberty, which benefited from the information transferred to it (the fruits of the tort), is liable for this tort in accordance with the provision of section 12 of the Torts Ordinance, as a party that participated in and approved the actions of the interested parties therein.
5. In these circumstances, and since the plaintiff suffered pecuniary damage as a result, the defendants should be considered liable to the plaintiff also by virtue of the tort of causing a breach of contract.

Interim Summary

152. In light of the above, I found that the defendants are liable to the plaintiff by virtue of the cause of enrichment and not by law and by virtue of the tort of causing a contract.
153. The plaintiff also based her claim on the tort of theft of a trade secret in accordance with the provisions of the Commercial Torts Law, claiming that the information about the business opportunity to purchase a patent is information that falls within the scope of a "trade secret". In light of the result I have reached above, I have not found it necessary to elaborate on this ground.  However, it should be noted that it is doubtful in my opinion whether this information is a "trade secret", as defined in section 5 of the Commercial Torts Law, if only because the plaintiff was not given exclusivity in the brokerage agreement between it and Pitkit.
154. Here's a discussion, sir, on the scope of the liability.

The rate of brokerage fees at which the defendants must be charged

155. The plaintiff petitioned to charge the defendants an amount of 4% of the amount of consideration paid by Liberty under the purchase agreement, plus VAT, i.e., in the sum of ILS 1, 800, 000 plus VAT. Alternatively, the plaintiff petitioned for a proper wage ruling.
156. As detailed above, in the Unima brokerage agreement, it was determined that the plaintiff must present Unima to Pitkit and assist it in conducting the negotiations.
157. As far as the Unima-Pitkit deal is concerned, the plaintiff fulfilled these functions. However, with regard to the Liberty-Pitkit transaction, there is no dispute that the plaintiff and/or anyone on its behalf were not involved in the negotiations, and in fact the plaintiff's entitlement to brokerage fees arose by virtue of the connection it created in the first transaction.  Therefore, the plaintiff's actions in the Liberty-Pitkit transaction were significantly limited than those performed by it in the Unima-Pitkit transaction.
158. In these circumstances, I found that the plaintiff's alternative petition should be granted, and she should be awarded proper wages.
159. The Supreme Court Other Municipality Applications 2144/91 Henry Moskowitz v. Esther Beer, as the executor of the estate of the late Tuvia Beer and a counter-appeal, IsrSC 48(3) 116, ruled that it can be determined in two ways:

"The first is through section 46 of the Contracts Law (General Part).  The discussion within the framework of section 46 requires the determination of the appropriate salary....  The method of calculating the proper salary for realtors is to calculate a certain percentage of the transaction.  The main criterion for calculating the proper salary is the market price...  The method of calculating the market price is done in the law of brokerage, as stated, "with an affinity to the price paid for the seller"...  The next question is - what is the rate of that percentage? In the circumstances of the case, one percent is a proper rate.  This conclusion stems from our view that it is customary - based on case law - to award a brokerage fee rate of one percent.  Our conclusion is also based on the evidence, which was before the trial court.  This evidence is the appellant's affidavits and Mr. Glazer's words in his cross-examination.  The realtors, who gave their testimony on behalf of the appellant, admitted that one percent is a reasonable and acceptable rate as a brokerage fee...