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Attorney Park Jae-cheon, et al., Counsel for the defendant-appellant in charge of Korea

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manager ○○○

A. Of the instant lawsuit, the claim for the settlement of accounts for false construction cost amounting to KRW 34,287,938 shall be dismissed.

B. The defendant shall pay to the plaintiff 26,494,072 won with 5% interest per annum from September 16, 2009 to June 30, 2010, and 20% interest per annum from the next day to the day of full payment.

C. The plaintiff's remaining claims are dismissed.

2. 80% of the total litigation costs is borne by the Plaintiff, and 20% of the total litigation costs by the Defendant, respectively.

3. The above paragraph 1(b) may be provisionally executed.

A. Construction contracts between the original and the defendant

1) On April 17, 2008, the Plaintiff entered into a contract with the Defendant on a total sum of KRW 210,1200,000,000,000 from among the new construction works of the ○○○○ building located in the instant ○○○○○○-dong (hereinafter referred to as the “instant primary construction works”), which was contracted by the Defendant on April 17, 2008, to receive a subcontract for the said construction works, but agreed on July 21, 2008 to increase the price of KRW 35,00,000,000,000 for total construction cost (including value-added tax).

2) In addition, on September 25, 2008, the Plaintiff entered into a contract under which the Defendant was awarded a subcontract for 44 million won (value-added tax included) for the structural construction of the studio building located in the OO-dong (hereinafter “the instant 2 construction”) among the construction of the studio building located in the O-dong.

3) The Plaintiff completed the instant construction work (hereinafter referred to as “instant construction work”).

(b) agreements between the original and the Defendant regarding the issuance of certificates of completedness;

1) The Defendant issued to the Plaintiff a certificate of completed performance equivalent to KRW 664,64,00, which is the amount of totaling KRW 664,64,00, which is the amount of totaling KRW 664,00 with respect to the instant construction project. The Plaintiff used the certificate for contract acceptance, etc., and the Defendant agreed to include the amount in the cost of the tax invoice issued according to the aforementioned completed performance.

2) According to the above agreement, from April 30, 208 to December 31, 2008, the Plaintiff issued to the Defendant a tax invoice of KRW 664,664,00, a false tax invoice of KRW 664,660,00 in the aggregate of the construction costs increased by more than 300 million in the contract amount under the above contract amount in relation to the first construction project of this case. The Plaintiff prepared one copy of the total tax invoice of KRW 604,240,00, and the value-added tax amount of KRW 60,423,99, and submitted one copy of the total tax invoice of KRW 60,423,99 to the competent tax office. On February 10, 2009, the Defendant issued to the Plaintiff a copy of the construction work performance certificate of KRW 664,64,00 (including value-added tax) with the above contract amount of KRW 664,664,000 (including value-added tax).

C. The defendant's payment of construction price and value added tax

1) The Defendant’s account book of the payment of construction price (No. B. 1) against the Plaintiff stated that the sum of KRW 724,885,000 has been paid over 60 times from May 9, 2008 to February 27, 2009, and that the amount of KRW 25 million has been paid in relation to the payment of value-added tax on February 2, 2009.

2) On August 20, 2008, the Plaintiff drafted a receipt with the purport that he/she received KRW 20 million from the Defendant on September 12, 2008, KRW 60 million on September 12, 2008, KRW 30 million on December 17, 2008, and KRW 30 million on December 19, 2008.

D. Employment, industrial accident insurance premiums and corporate tax imposed on the Plaintiff

1) On March 31, 2009, the Plaintiff reported the industrial accident insurance premium amount of KRW 5,106,000, and KRW 16,161,600 on the premise that the total amount of wages on March 31, 2009 is KRW 44,400,000.

2) The corporate tax of the year 2008 imposed on the Plaintiff reaches KRW 4,090,410.

[Ground for Recognition: Facts without dispute; Gap evidence 1, 2, 3, and 4-1 to 7, 5, 10, 11;

14 Evidence of heading 14, Eul evidence of heading 1, 2-1 through 4, 3-1, 2, 4, 6, and 10 evidence of heading 14

1 and 2 - Each entry, the purport of the whole pleadings

2. The plaintiff's assertion

In the first instance trial, the Plaintiff had a significance to jointly pay the instant construction cost of KRW 664,64,00 among the Plaintiff and the Defendant. Since the Defendant’s unpaid amount of KRW 140,041,00, the Plaintiff sought payment of the said money. The Plaintiff asserted that the payment was made in the appellate trial, and thereafter, filed a claim for the alteration thereof as follows.

1) The Plaintiff: (a) provided a sub-contract for the instant 1 construction project to a wood tree; and (b) carried out the instant 2 construction project directly by the Plaintiff; (c) as the instant 2 construction project was suspended on the grounds of the enemy, the Defendant continued to increase the price of the instant 1 construction project; and (d) pursuant to the spread that the instant 1 construction project was carried out.

2) As to the instant construction project between the prime contractor and the Defendant, the tax invoice shall be written in the actual construction amount, and the value-added tax, insurance premium, etc. thereon shall be settled. Unlike the initial contract, the construction amount shall be paid for each stage of the construction project by way of settling actual expenses.

3) Of the details of KRW 724,885,00, which are written in the Defendant’s account book of payment of construction cost, the following items are irrelevant to the instant construction cost.

(1) ① Total sum of 140 million won, which the Plaintiff issued a receipt to the Defendant, is a processed transaction only with a receipt.

B Of the above details, KRW 179,000,000, total amount of KRW 179,000,000, which is irrelevant to the instant construction project, was paid to the Plaintiff via the Plaintiff or with the Plaintiff’s passbook to the other constructor.

③ Of the above details, 25 million won on February 2, 2009 was paid as value-added tax payment.

Ultimately, the remainder of KRW 380,881,00 (i.e., KRW 724,885,000), 140 million - KRW 179,004,000 - 25 million), other than those, was actually paid for the construction cost of this case.

4) The Defendant would have paid the Plaintiff the entire amount of the instant construction cost. However, it is necessary to settle the following value-added tax, insurance premium, corporate tax, and corporate tax, which are imposed on the Plaintiff, by stating the construction cost as KRW 664,64,000 in a tax invoice, by making it smaller than the actual construction cost.

(1) ① Value-added tax plus KRW 380,881,000 for actual construction cost and KRW 223,359,001 for processed construction cost plus KRW 604,240,000 for value-added tax of KRW 60,424,00 for value-added tax less KRW 25,000 for the Defendant paid to the Plaintiff on February 2, 2009.

1 ② Insurance premium is KRW 21,267,60,600, total amount of the insurance premium to be borne by the Plaintiff, as a result of the report on the total amount of the wage based on the construction cost (excluding value added tax) of the tax invoice 604,240,000 won, and KRW 5,106,000,000,000,000 won.

③ As above, corporate tax was increased by KRW 223,359,001 for processed construction cost, and corporate tax in 2008 borne by the Plaintiff reaches KRW 4,090,410 for corporate tax in 2008.

5) Therefore, the Defendant is obligated to pay the Plaintiff KRW 60,782,010 (=35,424,000 + KRW 21,267,60 + KRW 4,000 + KRW 21,267,60 + KRW 4,000 + KRW 4,090) on the wind that issues a tax invoice with construction cost at KRW 664,664,00 (including value-added tax) as a result of the agreement on the settlement of expenses to the Plaintiff.

3. Whether a lawsuit demanding the settlement of false construction price is legitimate;

A. Formation of a criminal act

Article 11-2 (1) 1 of the Tax Punishment Act (amended by Act No. 9919, Jan. 1, 2010; hereinafter the same) provides that a tax invoice issued by the Plaintiff to enter the construction price in an amount less than the actual construction price as above constitutes a false tax invoice. The act of the Plaintiff’s delivery of such a tax invoice to the Defendant constitutes a crime against Article 9 (1) of the Tax Punishment Act (see, e.g., Supreme Court Decision 83Do2050, May 14, 1985) by submitting a false tax invoice to obtain the refund of value-added tax, and the act of submitting a tax invoice to the Defendant by buyer stating the unrefilled construction price as above constitutes a crime against Article 11-2 (1) 2 of the Tax Punishment Act (see, e.g., Supreme Court Decision 2050, May 14, 1985).

B. Whether to allow a claim for settlement amount premised on a false tax invoice

The Plaintiff is seeking implementation by establishing an agreement under which the Defendant is responsible for the issuance and delivery of a false tax invoice that constitutes a criminal act as above. The Plaintiff voluntarily committed a tort and attempts to realize his/her right on the ground of such tort through a trial. As such, if permission is granted, the purpose of the judiciary, i.e., the realization of justice through a trial, is destroyed, and the court ultimately causes an increase in the public confidence in the judgment.

C. Whether the lawsuit on the above portion of the claim for the settlement of accounts is lawful

Therefore, the Plaintiff’s filing of a false tax invoice by unfixing the construction cost as above and claiming the implementation of the settlement agreement on that portion violates the social order as well as the principle of good faith, and the portion of the claim amounting to KRW 34,287,938 (=total of KRW 60,782,010 for the settlement amount claimed under the premise of false construction cost during the instant lawsuit - KRW 26,494,072 for the settlement amount cited below) is unlawful as there is no qualification for protection of rights or benefit of lawsuit (see Supreme Court Decision 76Da558, Jun. 7, 197).

4. Determination on the claim for the settlement of actual construction price

A. Facts of recognition

① According to a contract entered into between Won and the Defendant, the instant first construction cost is KRW 270,820,000,000,000 won, and the amount of the second construction cost is KRW 31482,00,000,000,000,000 won (including value-added tax) and the Defendant’s account book entered that the amount much than that would have been paid to the Plaintiff is as seen earlier.

② The Plaintiff itself determines that the Plaintiff received KRW 380,881,00 as the price for the instant construction work.

③ In addition, according to the evidence Nos. 12-1, 2, and 13, if the Plaintiff reported the actual expenses incurred in the process of performing the instant construction work to the Defendant, who is the contractor, at intervals of two to three days, the Defendant paid them. The Plaintiff confirmed the actual expenses incurred in performing the instant construction work and received an application for an additional claim for progress payment from the principal and the Defendant at any time during the instant construction work, and received an application for an additional claim for progress payment by January 9, 2009. The fact that the instant construction price received by the Plaintiff by January 9, 2009 is up to three hundred

B. Recognition of the method of settling the actual cost of construction between the plaintiff and the defendant

In full view of the above facts, it is determined that an agreement was reached between the prime and the Defendant on the payment of the construction cost by paying the actual cost incurred each stage of construction work, unlike the initial contract, according to the actual cost settlement method, and on the settlement of value-added tax, insurance premium, etc.

C. Scope of the settlement amount to be paid by the Defendant

The settlement amount that the Defendant shall pay to the Plaintiff is as follows:

(1) Value-added taxes

The amount of value-added tax to be paid by the Defendant to the Plaintiff is KRW 13,088,100 (=38,088,100) if the amount of value-added tax to be paid by the Defendant to the original on February 2, 2009 is KRW 38,88,100 (=38,088,100 - 25 million).

(2) Insurance premiums.

As seen earlier, as a result of reporting the total amount of wages of KRW 380,881,00 and KRW 223,359,001 in total of KRW 604,240,001 in total of KRW 604,240,00,000 in total, KRW 21,267,60 in total of employment insurance premium, and industrial accident insurance premium of KRW 16,161,60 in total, KRW 21,267,60 in total, and KRW 13,405,972 in total, among them, insurance premium of KRW 21,267,60 in total is determined as KRW 380,81,00 in total, KRW 604,240,00 in total, KRW 00 in total, KRW 604,240,01 in total, and KRW 604,601 in total.

(3) Corporate tax.

As seen earlier, it is recognized that the corporate tax in 2008 imposed on the Plaintiff amounting to KRW 4,090,410,000, but it is difficult to conclude that the above corporate tax was incurred due to the actual construction cost of KRW 380,881,000, and it is difficult to conclude that the above corporate tax was imposed on the Plaintiff (In so doing, the Plaintiff asserts that the above corporate tax was imposed on KRW 223,359,001) and that the above amount should be settled by the Defendant.

D. The cited part of the Plaintiff’s claim

Therefore, the Defendant is obligated to pay the Plaintiff annual damages calculated at the rate of 20% per annum under the Civil Act from September 16, 2009, which is the day following the delivery date of a copy of the complaint of this case, to September 30, 2010, which is the day when the Defendant rendered a decision of substantial trial, and from June 30, 2010, to June 30, 2010, to pay the Defendant annual damages, calculated at the rate of 5% per annum under the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings, which is stipulated in the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings, from the next day until the day of full payment.

5. Conclusion

A. Therefore, the part of the lawsuit claiming the settlement amount of the false construction price in the instant lawsuit shall be dismissed, and the claim for the settlement of the actual construction price shall be accepted within the extent of the recognition as above, and the remainder of the plaintiff's claim shall be dismissed as without merit.

B. The judgment of the court of first instance is partially unfair, and thus, it is so decided as per Disposition by the decision of the court of first instance.

Madics

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