The second way to reach a solution of one percent as the rate of brokerage fees in large transactions lies in section 26 of the Contracts Law (General Part) - that is, "according to the accepted practice in contracts of the same type..."
These are the two possible ways. The second way seems to me to be the right way. It can be determined that the rate of one percent in large transactions is the accepted rate in the market."
- The Supreme Court in the matter of vertical integration noted the differences between real estate brokerage and business/commercial brokerage and ruled that "the activity of business brokers may indeed differ in nature and requirements from the activity of real estate brokers whose matter is regulated in the Real Estate Brokers Law... Therefore, there is a degree of justice in the appellant's argument that it is appropriate to draw appropriate distinctions between the various types of brokerage, and as a result, there may also be distinctions as to the conditions relating to the broker-client relationship in the business field."
- In Civil Appeal (Tel Aviv District) 2089/05 Aryeh Ben Mayor v. Elie Tahari Ltd (Nevo, September 7, 2010), the court discussed the determination of a proper salary for a business broker and ruled that in light of the differences between real estate brokerage and business brokerage, the salary of a commercial broker, as a rule, is higher than that of a real estate broker.
- In our case, the parties submitted expert opinions. While the expert on behalf of the plaintiff, Shalom Sofer, CPA, determined that the proper salary in transactions of the type of brokerage transaction in question should be about 4.8% of the amount of the consideration, the expert on behalf of Shahar and Liberty (defendants 4-5), Prof. Hadas Glander, determined that the proper salary in transactions of this type is only about 1.8%.
- The experts were questioned about their opinions, and difficulties arose in relation to the two opinions. In his interrogation, the expert admitted that he did not conduct an examination with respect to the scope of each and every transaction for which a comparison was valued (p. 31 of the transcript, paras. 27-28, p. 32, paras. 10-11), and that sometimes the data he used were only the amounts that were required and not the actual amounts (p. 49, paras. 13-14). The expert admitted in her interrogation that she did not know whether the commission appearing in the expert's opinion at the rate of 5% relates to the commission for brokerage only, or includes additional services (p. 379 of the transcript at paras. 14-15), because she did not examine how the recipient of the commission is defined (p. 380 of the transcript at paras. 16-17) and did not examine each and every transaction that appeared in the expert's report (p. 388 of the transcript at paras. 5-7).
- In these circumstances, I have come to the conclusion that the appropriate salary, in accordance with the salary set out in the brokerage agreement, should be determined at a rate of 2.25% of the amount of the sale consideration. This salary authentically reflects the salary due in this specific transaction in respect of that property, and balances all the considerations, as detailed above, especially when in the Pitkit brokerage agreement, the plaintiff was also not tasked with assisting in the negotiations. It should be noted that this result is consistent with the expert opinion on behalf of the plaintiff, who noted in his testimony that usually the brokerage fees paid by the seller are identical to the brokerage fees paid by the buyer (p. 60 of the transcript at paras. 3-6).
- The amount of the transaction from which the brokerage fees should be derived is ILS 45 million, which reflects the consideration received by the interested parties in Pitkit, in practice. The fact that part of it was paid through funds that were in the Pitkit fund is irrelevant to this matter, since it relates to the means of payment and not to the amount of the consideration itself.
Should the plaintiff be deprived of her entitlement to brokerage fees (to the extent she determines) due to a breach of her duty of good faith?
- The defendants claim that the plaintiff should be deprived of her entitlement to brokerage fees due to her breach of the duty of good faith, since, according to them, she did not disclose to Unima the existence of the brokerage agreement with Pitkit.
- This argument was contradicted by Matan, who testified that he had already learned from Haimi at the initial stage of a pit brokerage agreement (p. 76 of the transcript, paras. 20-21 and p. 77, paras. 4-5). This fact was confirmed by Firon in his interrogation at p. 460 of the transcript at paras. 3-10.
- Considering that Matan is the controlling shareholder of Unima, and the brokerage agreement was with Unima, the fact that Matan knew about the existence of a brokerage agreement is sufficient to reject the claim that the plaintiff did not disclose this fact.
- In addition, Katz testified that he informed Firon about a Pitkit brokerage agreement (p. 198 of the transcript at paras. 10-20) and claimed that Firon's claim that he did not know about this agreement is not true (p. 199 of the transcript at para. 25).
- Moreover, according to case law, the duty of disclosure applies to a brokerage agreement with the other party when the realtor has a hidden interest, for example, in a case where the realtor receives exceptional consideration from one of the parties (see: Civil Case (Central District) 15706-01-14 Amit Mizrahi v. Ehud Markovich (Nevo, March 16, 2016)). In this case, the plaintiff is not entitled to exceptional brokerage fees from either party. There is reason to assume that the fact that the rate of brokerage fees set in the Pitkit brokerage agreement is 2.25% and in the Yonima brokerage agreement at the rate of 4%, is rooted in Pitkit's bargaining power vis-à-vis the plaintiff, and does not indicate exceptional brokerage fees in the Yonima brokerage agreement. Moreover, as stated above, brokerage fees of 4% were not exceptional in relation to Unima's business, which, as noted, signed additional brokerage agreements at similar rates.
- Moreover, there is a flawed reason in the fact that this argument was raised by Piron, after he himself did not disclose to Unima the agreement, which according to him was made between him and Katz, to receive half of the brokerage fees.
- In light of the above, the argument that the plaintiff should be deprived of her entitlement to brokerage fees due to a breach of her duty of good faith is rejected.
The Offset Claim
- Firon argued that if it was decided to charge him any amount against the plaintiff, he was entitled to deduct from this sum his share of the brokerage fees that the plaintiff received from the interested parties in the note, as well as the brokerage fees that were awarded in this suit. This, he claims, is because he and Katz have agreed orally that in any joint business venture, if brokerage fees are received, it will be divided between them in equal parts.
- Katz vehemently denied the existence of this agreement (p. 247 of the transcript, para. 27, p. 260, paras. 10-12).
Therefore, there are two contradictory versions in this matter, without Firon bringing evidence to support his version, even though the burden of proof is on him to prove the claim of offset.
- In addition, Piron testified that the alleged agreement was entered into between him and Katz (p. 439 of the transcript S. 2), while the entitlement to brokerage fees in this lawsuit belongs to the plaintiff, who is a company with a separate legal personality. When Firon was asked about this in his interrogation, he claimed that he had assumed that Katz had acted legally on behalf of the plaintiff and that as far as he was concerned, the undertaking had been transferred to the plaintiff (pp. 439, paras. 14-15), without giving a satisfactory explanation of what this assumption was based on, especially when it was claimed by a lawyer.
- It should be added that Piron testified that if Liberty had paid the plaintiff, beyond the letter of the law, a brokerage fee of a certain amount, he would not have insisted on receiving half of the brokerage fees that were paid (p. 471 of the transcript at paras. 18-19).
- In these circumstances, and in light of the above, Firon did not prove the claim of offset in the framework of this proceeding. However, Firon reserves the right to clarify this claim in a separate lawsuit, in the competent court, without a judgment constituting an act of court in this matter.
The Result
- In light of all of the above, the claim against the defendants is partially accepted.
- The defendants will pay the plaintiff, jointly and severally, brokerage fees at the rate of 2.25% of the transaction amount (ILS 45 million), i.e., a total of ILS 1, 012, 500 plus VAT and plus linkage and interest differentials from 30 days from the date of signing the purchase agreement (regarding 0.5% of the consideration amount) and from 180 days from the date of signing the purchase agreement (regarding the balance) until the actual payment. The said amount will be paid within 30 days from today (the vacation days will be included in the number of days).
- The defendants will bear the defendant's expenses, jointly and severally, in the sum of ILS 200, 000.
- The defendants reserve the right to determine a division between them of the judgment amount and the expenses, according to the internal relations between them, and their claims in this regard are preserved.
- The guarantee deposited by the plaintiff to secure the expenses of defendants 4-6 in accordance with my decision of April 17, 2024, will be returned to the plaintiff through her counsel.
- The right to appeal to the Supreme Court, lawfully.
Given today, July 30, 2026, in the absence of the parties.