Court File and Parties

COURT FILE NO.: CV-20-647855

DATE: 20210614

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JOSEPH NOTSCH-KUPCHO, JASON NOTSCH-KUPCHO and ROYAL LEPAGE REAL ESTATE PROFESSIONALS

Plaintiffs

– and –

NY BRAND STUDIO INC.

Defendant

COUNSEL:

Brett D. Moldaver, for the Plaintiffs

Jamie Spotswood and Rachel Migicovsky, for the Defendant

HEARD: June 9, 2021

BEFORE: FL Myers J

REASONS FOR JUDGMENT

The Issue

[1] The defendant owes the plaintiff commission in relation to a real estate transaction. They disagree on the rate of commission due.

[2] There is a single question of fact in issue between the parties:

During a telephone call with the plaintiff Joe Notsch-Kupcho on May 14, 2020, did Frank Rocchetti, the President of the defendant, accept the plaintiffs’ written offer to reduce their commission from the agreed rate of 1.5% to an amended rate of 0.75%?

[3] If Mr. Rocchetti accepted the plaintiffs’ offer, then the amended rate of commission due to the plaintiffs by the defendant is 0.75%. If Mr. Rocchetti did not accept the offer, then the rate of commission payable by the defendant remains at the original, agreed rate of 1.5%.

[4] Two people know what was said during the telephone call on May 14, 2020. Unfortunately, I am not one of them. Mr. Rocchetti and Mr. Notsch-Kupcho tell diametrically opposed stories. I must make a finding of fact that determines which side has proven its case to win the lawsuit. Lacking the power of clairvoyance, I can only apply the law related to the assessment of credibility and reliability of witness evidence and, if necessary, default to the burden of proof.

[5] For the reasons that follow, I am satisfied that the theory of the case and evidence adduced by the plaintiffs is more believable than the theory of the case and evidence advanced by the defendant. In my view, the plaintiffs’ evidence accords more with both the written record and the business common sense and probabilities of the negotiation that was under way between the parties.

Summary Judgment

[6] The amount in issue is $127,500. Neither side wants to go to trial. Both want summary judgment. Both sides submitted that this is a proper case in which I can utilize the enhanced authority to make findings of fact under Rule 20.04 (2.1) of the Rule of Civil Procedure, RRO 1990 Reg 194.

[7] On the original return of the cross-motions, I ordered a mini-trial under Rule 20.04 (2.2). I had read the transcripts and had not seen many obvious indicia of witness credibility. No one had been impeached on significant points No one was especially vague or evasive. Neither counsel intervened inappropriately to protect his witness on important points. The documents remained the objective record. But the defendant asserts an oral communication with overriding significance. I needed to hear the two participants’ evidence of the conversation and context.

[8] In Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98, the Court of Appeal reiterated the approach to determining if there is a genuine issue requiring a trial as outlined by the SCC in Hryniak v Mauldin, 2014 SCC 7, as follows:

1. First, the motion judge should have determined if there was a genuine issue requiring a trial based only on the evidence before her, without using the enhanced fact-finding powers under r. 20.04(2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

2. Second, if there appeared to be a genuine issue requiring a trial, the motion judge should have determined if the need for a trial could be avoided by using the enhanced powers under r. 20.04(2.1) – which allowed her to weigh evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence – and under r. 20.04(2.2) to order that oral evidence be presented by one or more parties.

[9] How does a judge make the first determination? Hryniak directs the following inquiry:

[49] There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[10] I heard oral evidence because credibility findings were required and I was hoping to receive additional indicia of credibility or reliability of the protagonists’ evidence from further, live cross-examination.

[11] The enhanced powers set out in Rule 20.02 (2.1) expressly contemplate that there will be cases where a judge can and will make credibility findings on a summary judgment motion. The Rule provides:

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

[12] How does a judge make the determination of whether to utilize the enhanced fact-finding powers as required by the second issue set out in Royal Bank? At para. 66 of Hryniak, the Supreme Court of Canada described the inquiries to be made by a judge concerning the use of the enhanced powers under Rules 20.04 (2.1), (2.2), and 20.05:

If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole. [Emphasis added.]

[13] I draw first from the wording of the relevant questions in Hryniak, as explained in Royal Bank, that the availability of summary judgment does not turn on finding an overwhelmingly strong case on the merits or any finding on the merits. Rather, the determination of whether to proceed summarily turns on the process being fair and just. It must be a process that serves the identified goals of the civil justice system – reaching a fair and just result in a timely, affordable way with an amount of process proportional to the needs of the individual case.

[14] Having heard live evidence under Rule 20.04 (2.2), I need to decide if making findings under Rule 20.04 (2.1) will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole.

[15] As urged by the parties, I find that the mini-trial was an efficient, affordable, and proportional process that allows me to reach a fair and just outcome. I will have to make credibility findings to do so. But, I have heard all the evidence that the parties have to give. There is no further evidence to be adduced at trial. Each side has put its “best foot forward”.

[16] There was not a single impeachment of a witness based on the witness’s live testimony varying from his prior out-of-court testimony. The live examinations revealed nothing different from that which was already in the transcripts. In litigator’s lexicon, the witnesses were already “pinned” to their initial testimony. They knew that they could not move off what they had sworn to previously.

[17] I am satisfied that there are no concerns from the perspective of the “litigation as a whole”. The witnesses’ true voices were not obscured by the use of affidavits. Each was resolute and clear that he was giving his version of the facts in his own voice. There is no apparent gap in the evidence (although there is an issue of whether a judge ought to be telling counsel what evidence to call in any event). Costs and time are saved by proceeding this way. Hearing the witnesses a third time will not add anything but cost and delay. In fact, proceeding to a full blown trial is probably unaffordable given the modest amount in issue.

[18] In my view, there is no genuine issue requiring a trial. I can fairly find the facts and apply the law to those facts based on the evidence before me. Doing so is more efficient and affordable than a full trial process and will provide a fair and just resolution.

[19] It is important for this court to be able to resolve disputes where the amount in issue is modest but above the monetary limits of the jurisdiction of the Small Claims Court. Access to justice cannot be limited to the wealthy who have multi-million dollar civil cases. Courts and justice must be available to all. We should not have to force people to private arbitration to have access to affordable civil justice with summary proceedings proportional to the amounts in issue. Rather, provided that a summary process meets the requirements of fairness demanded in Hryniak, we must find ways for civil justice before the courts to remain available to Canadians.

The Need for Detailed Fact Finding

[20] With a summary process, it is important for the parties to understand that the decision-making has been principled. An abbreviated evidentiary process does not mean that the judge can apply abbreviated reasoning or pay any less heed to the importance of the decision to the parties and the law.

[21] In Royal Bank, the Court of Appeal emphasized the need for motion judges to analyze carefully all evidence relied upon by the responding party to show that there is a genuine issue requiring a trial. To that end, the Court of Appeal directed judges to pay particular care to explain any proposed rejection of unchallenged evidence utilizing the enhanced powers under Rule 20.04 (2.1).

The Facts Required to Resolve the Issue

[22] The Notsch-Kupcho brothers are employed by a real estate brokerage operating as Royal Lepage Real Estate Professionals. Joe is a broker. Jason is a registered sales representative.

[23] They have a history of some dealings with the defendant and others engaged with the defendant in the transaction that is the subject matter of this proceeding.

[24] In February, 2020, the plaintiffs brought to the defendant an opportunity to purchase a building at 1 Niagara Street, Toronto.

[25] By a written Buyer’s Representation Agreement dated March 10, 2020, the defendant retained Lepage to act as its agent for the purpose of buying the Niagara Street property. While the parties hoped that the vendor would pay the buyer’s agent from the gross sales proceeds in the ordinary course, the defendant agreed that it would ultimately be responsible to pay commission to Lepage of 1.5% of the purchase price plus HST.

[26] The defendant’s liability is not in issue. Only the amount of commission is contested.

[27] The plaintiffs submitted an offer to purchase the property on the defendant’s behalf on March 10, 2020. Discussions with the owner continued. The vendor signed back a counteroffer on March 11, 2020.

[28] On March 12, 2020 a receiver was appointed to take possession and control of the assets of the owner of the Niagara Street property. Thereafter, discussions ensued with the Receiver.

(i) The Defendant asks the Plaintiffs to Cut their Commission

[29] The defendant’s evidence is that its President Frank Rocchetti held the bulk of the discussions and carried the negotiations with the Receiver himself. Mr. Rocchetti’s evidence is that once the Receiver was appointed, the plaintiffs’ role was reduced to that of a scribe cutting and pasting clauses into a formal agreement format and submitting the offers to the owner’s agent on the defendant’s behalf.

[30] I do not need to resolve the precise scope of the plaintiffs’ involvement. The issue is not quantum meruit. The relevancy of this piece of the story is that it informs the defendant’s desire to cut the plaintiffs’ rate of commission. Mr. Rocchetti plainly expressed his view that the plaintiffs did not deserve commission at the initially agreed rate. He felt that they did not do much apart from making the initial introduction and holding some discussions before the Receiver’s appointment. Mr. Rocchetti was willing to pay the plaintiffs for the introduction but felt they were being overpaid for what they ultimately did on the deal.

[31] Negotiations with the Receiver continued into mid-May when the deal began to take shape.

[32] On May 13, 2020, Mr. Rocchetti met with the plaintiffs and asked them to reduce their commission. The deal was costing more than the defendant had initially hoped. In addition, the defendant and their associates had historically asked the plaintiffs to reduce their commission in other deals.

[33] The plaintiffs agreed to Mr. Rocchetti’s request that they should make a proposal to the defendant for a reduced commission.

(ii) The Plaintiffs’ Offer dated May 13, 2020

[34] By email dated May 13, 2020, Jason Notsch-Kupcho offered to decrease the plaintiffs’ commission to 0.75% plus HST to help make a deal.

[35] The email irked Mr. Rocchetti. He thought that some of the body of the email was disrespectful to the vendor’s agent who was a well-respected real estate brokerage with whom the defendant did other business. He also felt that the email was presumptuous. Jason Notsch-Kupcho repeated the plaintiffs’ view that the vendor ought to be responsible to pay the plaintiffs’ commission. Mr. Rocchetti had negotiated this issue with the Receiver already and he had

accepted that the Receiver was not willing to pay the buyer’s agent’s commission. Mr. Rocchetti resented the younger Notsch-Kupcho dictating terms of the deal to him. Mr. Rocchetti preferred to deal with older brother Joe Notsch-Kupcho who was the experienced broker.

[36] The plaintiffs wanted to settle the commissions issue and followed up with Mr. Rocchetti on the 13th. In an email that evening, Mr. Rocchetti indicated that he was going to speak to his partner Joseph Mimran the next day about the plaintiffs’ proposal.

[37] In the body of his email, Mr. Rocchetti made clear his annoyance with the content of Jason Notsch-Kupcho’s prior email. Mr. Rocchetti wrote:

Jason keep in mind I've been doing this a long time, very long time. Likely before you were born. So I trust my judgments and thankfully I'm lucky enough to be in a position to be making such a purchase.

[38] Jason Notsch-Kupcho called Mr. Rocchetti immediately. Mr. Rocchetti did not answer. Jason tried again a few minutes later and left a voicemail asking Mr. Rocchetti to call.

[39] Mr. Spotswood submits this shows how anxious the plaintiffs were to make a deal and this feeds the rest of the story. He suggested to Joe Notsch-Kupcho that he and his brother were trying to get the commission deal done then and there on the 13th. Joe Notsch-Kupcho disagreed. They knew Mr. Rocchetti was going to speak to Mr. Mimran about the issue the next day. He and Jason were concerned about the tone of Mr. Rocchetti’s criticisms. Jason wanted to discuss them (and to walk back some of his own criticisms no doubt).

[40] I accept Joe Notsch-Kupcho’s evidence. There was no point hectoring Mr. Rocchetti for a decision when he has already written that he wants to discuss the issue with his (senior) partner the next day. Moreover, I would expect Joe Notsch-Kupcho to have wanted his younger and less experienced brother to undo apparent harm caused to an important client relationship right away. Joe admitted in cross-examination that the percentage rate would likely have been raised to be discussed in the call had it occurred. But that was not the point of Jason’s efforts to reach Mr. Rocchetti on the evening of May 13, 2020.

(iii) Joe Mimran’s Note on May 14, 2020

[41] Mr. Rocchetti met with his partner Joe Mimran the next morning on May 14, 2020. Mr. Mimran is known to be an inveterate note-taker. He carries notebooks with him and, apparently, writes notes frequently. Yet, for this $17 million purchase, he has only a single note in all of his notebooks for the contemporaneous months. In a note taken on the morning of May 14, 2020, Mr Mimran set out some of the math of the deal and a sentence about environmental conditions in the deal. And he wrote:

Commission 0.75 - $ agreed.

[42] In his cross-examination prior to the hearing, Mr. Mimran explained that his lack of notes about this deal was because this was Mr. Rocchetti’s deal. Mr. Rocchetti had carriage of the negotiations and full discretion to make the deal. It appears then that Mr. Rocchetti wanted to keep Mr. Mimran informed and perhaps get his advice (or signoff) just before the final deal to buy the building deal was made.

[43] Mr. Mimran said that he understood from Mr. Rocchetti that a reduced commission deal had already been made with the plaintiffs. He had no other conversations with Mr. Rocchetti or the plaintiffs about the commission issue in May.

[44] The use of Mr. Mimran’s evidence or his note to prove or corroborate that a commission deal had been made is hearsay. It might be admissible for the fact that Mr. Rocchetti said that a deal had been made. But this too is probably inadmissible as a prior consistent and self-serving statement. At best, it can be used to show that Mr. Rocchetti and Mr. Mimran talked about the plaintiffs’ offer to reduce their commission and that Mr. Mimran thought that a deal had been struck at the reduced rate of 0.75%.

[45] However, it is common ground between the parties that Mr. Rocchetti had not accepted the plaintiffs’ offer when he spoke to Mr. Mimran in the morning of May 14, 2020. If Mr. Mimran thought a deal was done – whether because Mr. Rocchetti said so or he misunderstood – both sides agree that belief was incorrect. The most that can be said about this evidence then, is that as of the morning of May 14, 2020, Mr. Mimran was content with a deal at 0.75%.

[46] An aside to deal with a technical piece of hearsay evidence analysis. Neither side argued that Mr. Rocchetti actually believed that a deal had been struck before he responded to the plaintiffs. There could be a theory that when one asks an agent to propose a fee cut and the agent responds that he or she is willing to reduce the fee to X or Y percentage, little more is necessary. But that is distinctly not the theory of either side’s case. The defendant says that Mr. Rocchetti was required to and did expressly accept the plaintiffs’ offer later that day. Therefore, even if Mr. Mimran’s evidence and note could be admissible to show that Mr. Rocchetti said that a deal had been done, the truthfulness of the fact that the statement was made is not relevant to the issues pleaded before me.

[47] Mr. Mimran’s evidence and note do not tell me anything at all about how Mr. Rocchetti went about expressing the defendant’s willingness to accept the plaintiffs’ offer later that day or the next day.

[48] In any event, what Frank Rocchetti told Mr. Mimran on May 14, 2020 is not admissible for its truth through Mr. Mimran and is not relevant beyond the point discussed above – that Mr. Mimran was content with a reduced commission of 0.75%.

(iv) The Key Phone Call on May 14, 2020

[49] The Receiver made a counteroffer to sell the building on May 14, 2020. The negotiation was down to its last strokes. A call was scheduled for the next morning with the defendant’s lawyers so the defendant and its advisors could discuss the defendant’s responding and near final offer.

[50] Joe Notsch-Kupcho called Frank Rocchetti during the evening of May 14, 2020. They spoke for about 20 minutes. Neither one of them took notes. Neither of them confirmed the call in an email.

[51] Joe Notsch-Kupcho says they discussed the issues for the meeting with the lawyer to prepare for the final negotiation. He was resolute that they did not discuss the plaintiffs’ outstanding offer to reduce their commission.

[52] Mr. Rocchetti says they spoke about the latest offer on the building. He also says, he leveled several criticisms of Jason Notsch-Kupcho’s email of May 13, 2020, and he accepted the plaintiffs’ offer to reduce their commission. When questioned as to how he accepted the offer while criticizing the author and content of the email in which it was made, Mr. Rocchetti said that he accepted the offer first before voicing his criticisms of Jason Notsch-Kupcho.

(v) Mr. Rocchetti’s Responding Email dated May 15, 2020

[53] On May 15, 2020, the defendant reached terms of an agreement with the Receiver to buy the building. The defendant had to increase its final offer by $100,000 to make the deal.

[54] It was a busy and eventful day. Joe Notsch-Kupcho and Frank Rocchetti spoke at least six times during the day according to the telephone records. They both agree that they never spoke about the plaintiffs’ commission rate during any of those telephone calls.

[55] At 2:42 p.m., Mr. Rocchetti send the plaintiffs the accepted agreement of purchase and sale. The deal to buy the building was done.

[56] Nine minutes later, Frank Rocchetti sent the following email to the plaintiffs:

Hello Jason/Joe,

I had a discussion with Joe [Mimran] today and as you know we've have had to adjust the price again to try to get this deal done, so we are asking that in the spirit of the Partnership you guys consider a flat fee of $100,000 for this deal.

Completely understand you are entitled to more and have earned it. Hopefully going forward we can make it up to you in future deals that we completely control.

Let me know if you are agreeable.

[57] At a purchase price of $17 million, a 1.5% commission is $255,000 plus HST. At 0.75%, the commission is $127,500 plus HST. Mr. Rocchetti asked the plaintiffs to take a flat commission of $100,000.

[58] A few things are worthy of note about this email. This is the first email on the topic since the May 13, 2020 email in which Mr. Rocchetti said that he was going to speak to his partner the next day. This email begins with an indication that Mr. Rocchetti spoke to Mr. Mimran. So, on the written record, this appears to be the next communication between the parties.

[59] In this email, Mr. Rocchetti makes no mention at all of his telephone call the night before in which he say he accepted the plaintiffs’ May 13, 2020 offer to reduce their commission. Mightn’t one expect to see a confirmation of an oral agreement worth $127,500 in the ordinary course? If a deal had been accepted just 15 hours before and the defendant was asking for a further concession, would there not have been some recognition of this? Something like, “I know we agreed on 0.75% last night. We do appreciate your assistance. But we find ourselves needing to ask for a bit more…”?

[60] Two other issues arise with this email. First Mr. Rocchetti says that he spoke to Mr. Mimran “today” i.e. May 15. In fact, they spoke May 14, 2020. More on this below. Second, in the penultimate paragraph, Mr. Rocchetti tells the plaintiffs’ that he knows they are entitled to more and they have earned it. He offers to make up the difference in future deals. Yet before me, as mentioned above, he testified that he felt the plaintiffs were being overpaid, were not entitled to their agreed commission rate, and had not earned it.

[61] Joe Notsch-Kupcho reacted very badly to this email. He felt that it was dishonest of the defendant to defer responding to their generous offer to cut their commission by 50% by requesting even more. While the defendant did pay an extra $100,000 to seal the deal, that would generate only an additional $1,500 in commission. Moreover, even the final decrease requested of some $30,000, when divided among the defendant and its partners in the deal, were immaterial, if not trivial, amounts to each of them.

[62] Joe Notsch-Kupcho was also angered by the timing of the response. He viewed the defendant waiting until after the deal was made to come back to the plaintiffs on their offer as unethical. While I think his reaction somewhat overblown by the time of his testimony before me, it seems clear that the plaintiffs’ felt that they were not being treated respectfully and they lost faith in the defendant. They were not therefore willing to accept a promise of future work to make up commission losses.

(vi) The Plaintiffs Reject the Defendant’s $100,000 as a Counteroffer

[63] On May 20, 2020, Joe Notsch-Kupcho sent a lengthy email to Frank Rocchetti. It described the brothers’ approach throughout and expressed their disappointment with Mr. Rocchetti’s email of May 13, 2020. It concludes:

Reluctantly, you decided that you were going to pay the commission and from our discussion and my brothers' email we were willing to cut our fee by 50% according to the signed buyer representation agreement, to .75% plus HST which was very generous on our part. Following my brother's email and your initial response, my brother tried calling you but there was no response

and asked in an email for you to give him a call to discuss his email, but you did not give him a call to discuss. Following the final sign-back and discussion with the lawyer you decided to accept the sign-back and we signed the acceptance and sent it to CBRE.

Nine minutes after sending the acceptance of the APS to us, you sent the email below, which completely caught us off guard. I thought we were being extremely generous at .75% Plus HST from our original 1.5% Plus HST and you never brought your proposed commission until the deal was conditionally accepted. Following the email you came by my house since there were 4 minor initials missing on the accepted APS, At that time, my brother and I met you in the driveway, to discuss the email and commission, At that time, you advised us that did not want to talk about it and for us to think about it as it is only a proposal.

We do not accept your counter proposal of $100,000 flat fee plus HST, and our previous proposal of .75% is no longer on the table. We feel that our professional service is being de-valued and we are being extremely fair with the proposal we put forth but that was rejected by you with your counter-offer. My brother and I are willing to consider another proposal from you that takes into account the hard work we have put into this deal and compensates us fairly.

[64] If the plaintiffs’ offer of May 13, 2020 was not accepted by Mr. Rocchetti on the phone on May 14, 2020, then, under a technical contractual analysis, the May 13 offer remained an outstanding offer. Mr. Rocchetti’s response on May 15, 2020, asking to pay $100,000, was then a counteroffer.

[65] At common law, a party who makes a counteroffer is no longer entitled to accept the original offer. The counteroffer is deemed to reject the initial offer.

[66] Joe Notsch-Kupcho’s email of May 20, 2020, makes no sense if Mr. Rocchetti had already accepted the May 13, 2020 offer. If the offer had been accepted, then the contract to amend the Buyer’s Representation Agreement was already formed and binding (assuming an oral amendment is valid). If that is so, then the $100,000 request was not a counteroffer that would reject the initial offer. Rather, it was a request for a second reduction. The refusal of that request would leave intact the oral amendment of the commission rate to 0.75%.

[67] The defendant did not respond to the May 20, 2020 email. If Mr. Rocchetti had made an oral acceptance of the plaintiffs’ offer to reduce their commission, the May 20 email cried out for a simple response – “No Joe, we already did a deal at 0.75 when I accepted your offer on the phone on the 14th. My request to pay $100,000 was not a counteroffer. It was an additional request. The deal at 0.75% stands”. Bur he did not do that. He did not contest at all the plaintiffs’ assertion of the facts.

[68] The parties agree that they met briefly on the 15th as recounted in the May 20th email. They were both conciliatory and both came away thinking that the other was going to agree with their position.

[69] Mr. Rocchetti says that he thought that the plaintiffs had gone nuts. He could not fathom how they would not want to do future work with the defendant as a win-win. He says he did not respond due to his incredulousness and his optimism that he would be able to settle the issue with the Notsch-Kupchos.

[70] The parties gave evidence of two further calls at which they made efforts to settle. Each set out their position. On July 8, 2020, Joe Mimran told the plaintiffs that he thought the deal had already been done at 0.75%. Joe Notsch-Kupcho denied that. The July 8, 2020 call in particular was likely a without prejudice settlement effort in any event.

(vii) The evolution of Frank Rocchetti’s Evidence

[71] I do not make too much of it, but Frank Rocchetti’s story has moved and become more definitive and detailed over time.

[72] In the statement of defence, the defendant pleads that Mr. Rocchetti called Jason and Joe Notsch-Kupcho to accept the offer. No date is pleaded for this call. In fact, Joe Notsch-Kupcho called Mr. Rocchetti and Jason was not on the call. Before me, it was Mr. Rocchetti’s evidence that he only wanted to deal with Joe about the commission issue.

[73] The defendant also pleads and, as noted above, Mr. Mimran swears to another meeting between Mr. Rocchetti and Mr. Mimran in late May, 2020 about the commission issue. Both now agree that did not take place.

[74] Then, in para. 33 of his affidavit, Mr. Rocchetti swears:

33. I accepted Joe's Offer to accept 0.75% commission on May 14, 2020 (the "Commission Agreement"). From my review of my phone records, I see that I spoke to Joe at 7:59 pm for 21 minutes. I believe I accepted the Offer during that phone call. However, I also have an internet- connected phone in my office for which I am not able to obtain phone records for local numbers. It is possible that I telephoned Joe from that phone, at another point in the day, and accepted the Offer at that time. [Emphasis added.]

[75] When he swore his affidavit on February 1, 2021, Mr. Rocchetti did not have a clear recollection of which telephone call he had in which he accepted the offer. Before me, four months later, Mr. Rocchetti’s memory had improved to now resolutely recall and identify the conversation.

(viii) The Call between Rocchetti and Domenic Gurreri

[76] Dominic Gurreri was investing in part of the deal being negotiated by the defendant. He had no involvement in the negotiations. He had little contact with Mr. Rocchetti through the negotiation process.

[77] Both Mr. Rocchetti and Mr. Gurreri swear that after Mr. Rocchetti hung up from accepting the commission deal with Joe Notsch-Kupcho, Mr. Rocchetti called Mr. Gurreri and told him that he had made that deal.

[78] The phone records show a call between the two of them that evening.

[79] I have some trouble with this evidence. First there was no reason for Mr. Rocchetti to be calling Mr. Gurreri to report the acceptance of the commission deal. Mr. Gurreri had not been involved with the plaintiffs on this transaction.

[80] In his cross-examination, Mr. Gurreri tried to explain that the commission deal was very significant. Even in multi-million dollar deals, a very small issue can be the straw the breaks the camel’s back – so to speak.

[81] There is no suggestion by the defendant that the amount they paid the plaintiffs was material at all to their willingness or ability to get the deal done with the Receiver. The fact that Mr. Rocchetti chose to withhold his May 15 email until after the deal with the Receiver was done suggests the opposite. The lack of any written corroboration of the commission deal being done also suggests it was of little significance.

[82] Mr. Gurreri tried to make it sound like the commission point was a vital deal issue when on the evidence it was not so. To me, he was trying to give a reason for the otherwise random conversation to have occurred at all. I do not believe that it did occur. Moreover, I have concern here too with Mr. Rocchetti giving evidence of a prior consistent statement to try to bolster his credibility.

Analysis

[83] In his text, The Trial of an Action, (1981, Toronto Ont; Butterworths) at p. 77, John Sopinka wrote about the assessment of credibility through probabilities as follows:

Probability is the great touch-stone of all evidence. A witness whose testimony strays from the truth will often have built into it some inherent improbability.

[84] The British Columbia Court of Appeal in Faryna v. Chorny, 1951 CanLII 252 (BC CA), put it this way (at para. 10 of the decision):

… the real test of the truth of the story of a witness… must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions.

[85] In my view, the best evidence is the written record. It is seamless and inconsistent with the theory that Mr. Rocchetti accepted the plaintiffs’ offer to reduce their commission orally on May 14, 2020.

[86] As I see it, the deal that the Notsch-Kupchos brought to the defendant changed in early March when the Receiver was appointed. Mr. Rocchetti did much of the negotiation himself and felt the plaintiffs were being paid too much. I accept that Mr. Rocchetti had Mr. Mimran’s approval to accept 0.75%. But Mr. Rocchetti was miffed at Jason Notsch-Kupcho and decided to try to do better. With Mr. Mimran’s approval, he knew he could fall back to 0.75 in any event.

[87] Mr. Rocchetti withheld his response to the plaintiffs’ commission offer until after the building deal was done and then counteroffered at $100,000. He said he only met Joe Mimran that day when he actually met with him the day before to try to give cover to his late reply.

[88] Mr. Rocchetti’s statements to the plaintiffs in his email that he thought the plaintiffs were entitled to their full commission and that they had earned it were untrue.

[89] It is apparent then that Mr. Rocchetti was willing to say things to the plaintiffs that were not wholly correct for self-serving purposes.

[90] By withholding his response until the real estate deal was done, the plaintiffs were completely vulnerable. They had no services left to perform and could not do anything to protect themselves.

[91] If the plaintiffs offered to accept $127,500 and Mr. Rocchetti decided to ask for more, it does not make sense that he would accept a deal at $127,500 and then go back to ask to the plaintiffs to reduce the accepted deal a day later. Who would accept a further reduction after having come to a deal just the day before to take a 50% haircut? It makes even less sense that there is not a peep about the acceptance in the May 15 email asking for the reduction or in response to Joe Notsch-Kupcho’s May 20th email asserting that the $100,000 was a counteroffer.

[92] It was a counteroffer. The defendants expected the plaintiffs to accept a saw-off with the allure of future work. Frank Rocchetti told them so in June and did not take kindly to Joe Notsch-Kupcho saying that the plaintiffs were no longer interested in working with the defendant as a client whom they no longer trust.

[93] Mr. Rocchetti probably never expected that the Notsch-Kupchos would withdraw the 0.75% offer. Once a party indicates a willingness to take an amount or to pay an amount, that usually subsists. But, by waiting until the building deal was done before making his counteroffer, Mr. Rocchetti removed any upside reason for the brothers to accept a compromise.

[94] Moreover, what developer/investor would expect a broker to turn down future work? Mr. Rocchetti said that he thought the plaintiffs were nuts to reject the idea of working with them again. He was surprised and probably embarrassed given his lengthy experience that his $100,000 offer got turned around on him.

[95] In my view, as is usually the case, the paper record drives the probabilities. The fact that Mr. Rocchetti started his May 15th email reciting his meeting with Mr. Mimran shows he intended it to be the next communication after his May 13th email in which he said he would speak to his partner. The silence on the alleged oral acceptance on May 14, 2020 coupled with the lack of response to the May 20, 200 email from Joe Notsch-Kupcho are deafening.

[96] Mr. Mimran’s note is not a knockout blow as the defendant submitted. It purports to record a deal before Mr. Rocchetti says he made the deal. As noted above, it does not tell me what happened next.

[97] Mr. Rocchetti concedes that he was angry with the plaintiffs and felt they did not deserve their commission. He did not deal with them forthrightly however as the timing and the two errant statements in his May 15th email establish.

[98] Finally, Mr. Rocchetti’s incredulousness and optimism for settlement do not really explain how he could have left Joe Notsch-Kupcho’s May 20th memo stand without a response. The response was so simple and,, if true, it was a complete answer. Rather, to me, his incredulousness speaks to the defendant’s overblown sense of its own market power and its inability to appreciate that someone might not roll over and accept disrespectful treatment. I doubt that Mr. Rocchetti expected a real estate broker to “Just say ‘no’” to him and to Joe Mimran.

[99] The plaintiffs’ conduct is consistent with the documents and the lack of an oral acceptance of the offer to reduce commission. The defendant’s conduct is too. It is not consistent with Mr. Rocchetti’s evidence that he orally accepted the compromise offer.

[100] The defendant argues that Joe Notsch-Kupcho cannot be believed when he says that he did not discuss his commission on the call on the 14th. The plaintiffs wanted the commission deal done. However, he was consistent on both cross-examinations and he knew that the ball was in Mr. Rocchetti’s court to speak to Mr. Mimran.

[101] The defendant relies on the call with Mr. Gurreri as corroborative of Mr. Rocchetti’s evidence. I have already found that I do not believe that the conversation occurred as recounted by Mr. Gurreri and it is not admissible coming from Mr. Rocchetti.

[102] Mr. Spotswood argues that the plaintiff’s reaction to the May 15 counteroffer is artificial and overblown for this hearing. Based on that one email, Mr. Notsch-Kupcho changes from trusting and admiring the defendant and its people to distrusting them and refusing to work with them again. I do not believe that the defendant denies that Mr. Notsch-Kupcho told them that he would not work with them again. So, it is the emotive wording and not the existence of that decision that is in issue. While unusual perhaps, it does seem to me that the plaintiff had good reason to adopt the adage, “Fool me once, shame on you. Fool me twice, shame on me”. I accept that he became more forceful about his view in court. But unlike Mr. Rocchetti, he did not add additional facts or show improved memory with the passage of time.

Outcome

[103] For all the foregoing reasons, I prefer the evidence of Joe Notsch-Kupcho to that of Frank Rocchetti. Although the burden of proving an amendment to the Buyer Representation Agreement lies with the defendant, I find that the plaintiffs have proven on a balance of probability that during a telephone call with the plaintiff Joe Notsch-Kupcho on May 14, 2020, Frank Rocchetti did not accept the plaintiffs’ written offer to reduce their commission from the agreed rate of 1.5% to an amended rate of 0.75%.

[104] Accordingly, the plaintiff is entitled to judgment for $288,150 plus prejudgment and post-judgment interest. The counterclaim is dismissed.

[105] The plaintiffs may deliver cost submissions no later than June 21, 2021. The defendant may deliver cost submissions no later than June 18, 2021. In addition, the parties may deliver copies of any offers to settle on which they rely. Submissions shall be no longer than three pages. Both parties shall deliver Costs Outlines if they deliver submissions.

[106] All costs material is to be filed through the Civil Submissions Online portal and uploaded to Caselines although counsel will not have received confirmation of the acceptance of their filings from the registrar.

[107] No case law or statutory material is to be submitted. References to case law and statutory material, if any, shall be embedded in the parties’ submissions as hyperlinks.

FL Myers J

Released: June 14, 2021