Eastern Law Firm and four others (Law Firm East, Attorneys Lee Hy-young et al., Counsel for the plaintiff-appellant)

The Minister of Justice

May 15, 2020

Seoul Administrative Court Decision 2019Guhap51000 decided October 25, 2019

1. Revocation of the first instance judgment.

2. On October 8, 2017, the Defendant’s imposition of each of the administrative fines of KRW 3 million imposed on Plaintiff Eastern Law Firm and Plaintiff 5, respectively, against Plaintiffs 2, 3, and 4, shall be revoked in entirety.

3. All costs of the lawsuit are borne by the Defendant.

The decision is as follows (the plaintiff, in the first instance court, sought confirmation of invalidity of the imposition of each of the above administrative fines and revocation of the imposition of each of the above administrative fines in preliminary case, and this court withdraws the main claim).

1. Details of the disposition;

This part of the reasoning of the judgment of the court of first instance is as follows: (a) the pertinent part of the reasoning of the judgment of the court of first instance (from No. 2, No. 14 to No. 4, No. 8 of the judgment of the court of first instance) is the same as that of the relevant part of the reasoning of the judgment of the court of first instance; and (b) thus,

2. Whether the disciplinary action in this case is lawful

A. The plaintiffs' assertion

(i) procedural defects;

The Defendant violated Article 26 of the Administrative Procedures Act by failing to provide information on the procedure of dissatisfaction while taking the instant disciplinary action.

2) unconstitutionality and illegality of the instant guidelines

Article 4 of the Guideline provides that the Defendant shall take the instant disciplinary action with the main provision, but Article 4 of the Guideline is unconstitutional and unlawful as follows.

A) Article 4 of the instant guidelines violates the freedom of contract and the principle of private autonomy of the parties to a loan agreement, and imposes on a notary public an obligation to examine the content that exceeds the method of verifying the identity of a client and examining the authority of a commissioned agent under Articles 27, 30, and 31 of the Notary Public Act without any legal ground of delegation. In this regard, Article 4 of the instant guidelines is unconstitutional and illegal as it deviates from the limitation of delegated legislation.

B) The Notary Public Act and the Civil Execution Act allow creditors to commission a certificate of execution concerning a claim for monetary payment under a monetary loan contract in the manner of bilateral representation. However, Article 4 of the instant guidelines, which is not a law, merely an administrative rule or an official order, limits the freedom of appointment of a debtor’s commissioned agent by completely prohibiting it. Thus, this goes against the principle of statutory reservation.

C) “Recommendation and other similar involvement” under Article 4 subparag. 3 of the instant guidelines are ambiguous, and thus contravenes the principle of clarity.

(iii) the deviation and abuse of discretionary authority;

Considering the economic situation and circumstances of the Plaintiffs (in particular, Plaintiff Corporation) and the circumstances of the violation, the amount of each administrative fine prescribed by the instant disciplinary action is excessive, and thus, the instant disciplinary action constitutes a deviation or abuse of discretion.

B. Relevant statutes and regulations

It is as shown in the attached Form.

C. Determination

1) Determination on the assertion of procedural defect

The provision on notification procedures under Article 26 of the Administrative Procedures Act provides convenience for the other party to an administrative disposition to file an objection to the disposition, and thus, even if the disposition agency did not comply with the duty of disclosure under the above provision, the administrative disposition that is the object of the trial cannot be deemed unlawful (see Supreme Court Decision 2017Du6633, Feb. 8, 2018). Therefore, the plaintiffs' procedural defect assertion based on the premise that it is illegal in violation of Article 26 of the Administrative Procedures Act is without merit.

2) Determination as to the assertion of unconstitutionality or illegality under Article 4 of the instant guidelines

Article 4 of the Guideline is reasonable to deem it invalid for the following reasons.

A) According to Articles 27, 30, and 31 of the Notary Public Act, a notary public shall know the name and face of a person who entrusted the preparation of a deed (where the agent entrusts with the preparation of a deed), and shall confirm that the client (where the agent entrusts with the preparation of a deed, the agent) is in compliance with the certificate, etc. of resident registration certificate, etc., or by obtaining a certificate from two witnesses, etc., if the name or face is copied, the notary public shall confirm that the client (where the agent entrusts with the preparation of a deed at his/her request, the agent shall be required to submit a certificate proving his/her right of representation, and where a deed proving his/her right of representation is a deed signed by a private person not authenticated, a notary public shall require the agent to submit a certificate of personal seal impression or a certificate of signature prepared by the competent administrative agency besides the deed and to prove that the deed is authentic. According to this, if a notary public prepares a notarial deed at the request of an agent, he/she shall confirm the identity or identity of the agent by the method prescribed in Article 271.

However, as above, notary public law only imposes an obligation on a notary public to verify and examine the identity or identity of the commissioned agent and the existence of the power of attorney in accordance with the method prescribed by the above law, and further does not impose an obligation to verify whether the agent commissioned on behalf of the debtor is either the same person as the obligee or the obligee’s employee or loan solicitor, and whether the appointment of the commissioned agent was involved in the appointment of the obligee.

B) In addition, Article 4 of the Notary Public Act provides that "a notary public shall not refuse a commission without justifiable reasons. Where a notary public refuses a commission, the notary public shall inform the client or his/her agent of the grounds for refusal." Article 81 provides that "a notary public or an interested person may raise an objection to the chief public prosecutor of the district public prosecutor's office to which he/she belongs with respect to the handling of affairs of the notary public," so the notary public is obligated to take over the commission unless there are justifiable grounds for refusal, and the grounds for exception to this principle are permitted only when there are clear grounds for rejection in the notary public law or other

C) However, Article 56-3(2) of the Notary Public Act provides that “When a notary public entrusts the preparation of a notarial deed stating the purport of accepting a compulsory execution against a claim for delivery or return of real estate, etc., neither of the other parties shall act as an agent for the other party nor as an agent for either of the parties shall act as an agent for the other party.” This prohibition does not apply to the commission of the preparation of any other notarial deed (a certificate of execution concerning monetary loan contract, bill of note, etc.). Therefore, if a creditor entrusts the preparation of an execution deed concerning a monetary loan contract on behalf of the debtor or a certain agent entrusts the preparation of an execution deed on behalf of both parties, a notary public may not refuse the receipt of the client on account of such reasons. If such an agent entrusts the preparation of an execution deed concerning a monetary loan contract on behalf of the debtor, a notary public cannot refuse the receipt of the client, or if the agent does not meet the procedural requirements under Article 27(b) of the Notary Public Act and Article 31 of the Notary Public Act does not constitute grounds for

Nevertheless, Article 4 of the Guidelines of this case provides, “If a credit service provider, etc. (a credit service provider, etc., an employee of a credit service provider, etc., or a loan solicitor (a person who agrees to make and mediates the conclusion of the agreement) (a person who mediates or mediates the conclusion of the agreement) and an employee of a credit service provider, etc., or its employee or a loan solicitor participate in recommendation or any other similar involvement in the appointment of an agent of the other party, the agent (Article 3), and if a person who acts as an agent of a credit service provider, etc. for the preparation of an enforcement document with fees and fees as a proxy (Article 4) acts as an agent of the other party with respect to the expression of intent to accept the agreement and acceptance of execution, the agent must refuse to prepare the enforcement document, regardless of whether the power of representation exists.” In addition, Article 27(2) of the Notary Public Act provides that a proxy commission under the above provision imposes an obligation to refuse to comply with the above terms, and thus, it is inconsistent with the above provisions of the Notary Public Act.

Therefore, in order for the defendant to issue the same matter as Article 4 of the Guidelines of this case as an official order, there must be a clear ground for delegation in the law, and there is no ground for delegation in the Notary Public Law, and the defendant does not present any ground for delegation in other laws.

D) Meanwhile, according to Articles 78(1) and 79, etc. of the Notary Public Act, the defendant is a supervisory organ with respect to a notary public, and the defendant has the right to urge attention to, or properly handle, the inappropriate performance of duties of the notary public, or to warn matters not suitable for the status of the notary public, regardless of whether it is inside or outside the scope of such duties, and thus, the defendant has the right to issue an order to the notary public in relation to the performance of duties, and the guidelines of this case were enacted as part of such performance of duties. However, the defendant's right to supervise the above should be exercised to the extent that the notary public complies with the obligations and methods prescribed by the Notary Public Act and subordinate statutes, and should not be permitted unless it is based on other provisions of the Notary Public Act or other relevant Acts and subordinate statutes.

E) The defendant asserts that the necessity of Article 4 of the Guidelines is recognized to prevent the occurrence of various misconducts, such as notarial deeds, signing agent, and discount, in the course of collective commission of preparation of notarial deeds that consent to compulsory execution on the ground of a number of employees or slabs after lending money to multiple credit service providers, etc., and that there is a problem that the number of cases of preparation of notarial deeds by notary public is severe imbalances, and the debtor's expression of intent confirmation procedures are penalized. However, even though it is recognized as necessary as above, imposing duties inconsistent with the provisions of the Notary Public Act by administrative rules or official orders without the express delegation of law is unlawful and thus it is not permissible. Furthermore, under Article 4 of the Guidelines of this case, it is unreasonable to allow the debtor to refuse to prepare notarial deeds even if the debtor himself/herself has entrusted to the creditor or his/her related person with notarial deeds, and it is also difficult to consider that such act is an act of preparation of notarial deeds or an opportunity for delivery of notarial deeds within three days from the date of preparation of notarial deeds itself.

F) In addition, the defendant asserts that Article 6-2 (1) of the Credit Business Act requires that the other party to the transaction should write important matters in the case of concluding a loan agreement with the other party to the transaction, and that it is legitimate for the defendant to impose restrictions as stipulated in Article 4 of the guidelines of this case on the grounds that Article 385 (2) of the Civil Procedure Act provides that "the right to appoint an agent for the settlement prior to the filing of a lawsuit may not be delegated to the other party." However, the above provision of the Credit Business Act is only applicable to the credit service provider provided by the Credit Business Act, and it is not a provision regulating the act of requesting a notary public to prepare an execution document, and the above provision of the Credit Business Act is not a provision regulating the act of entrusting a notary public to prepare an execution document. (2) If a request for settlement prior to the filing of a lawsuit is not possible in the case of the failure of settlement, it has the same nature as the potential filing of a lawsuit, and if written in the protocol has the same effect as the final and conclusive judgment, it is difficult to accept the above provision of the other party to the request.

3) Sub-determination

Since Article 4 of the Guidelines is null and void, the grounds that the plaintiffs violated Article 4 subparagraph 3 of the Guidelines for the Preparation of Notarial Deed cannot be a legitimate ground for disciplinary action, and therefore, the disciplinary action of this case is unlawful without considering the remaining points.

3. Conclusion

Therefore, the plaintiffs' claims in this case are reasonable, and all of them should be accepted. Since the judgment of the court of first instance (the part concerning the main claim was invalidated by the withdrawal of the lawsuit in this court) is unfair with different conclusions, the plaintiffs' appeal is accepted, and the judgment of the court of first instance is revoked, and all of the disciplinary actions in this case are revoked, and it is so decided as per Disposition.

(attached Form omitted)

Judge Lee Jae-won (Presiding Judge)

(1) Not only credit service providers and loan brokerage companies under Article 2 of the Act on Registration of Credit Business, etc. and Protection of Finance Users (hereinafter “Credit Business Act”), but also financial institutions that engage in credit business with authorization and permission under the Acts and subordinate statutes stipulated in Article 2-2 of the Enforcement Decree of the Credit Business Act, including the Banking Act, and debt collectors, etc. under Article 2 of the Fair Debt Collection Practices Act (Article 2 of the Guidelines). The same applies to the same.

2) Although Article 124 of the Civil Act on the prohibition of self-contract or bilateral representation may apply to the commission of a certificate of execution of a monetary loan for consumption, even under the above Article 124, if the debtor's consent is obtained, the commission may not be refused on the ground of a violation of the above provision. Meanwhile, if a creditor who has been commissioned by proxy is "credit service provider" under the Credit Business Act, Article 6-2 (1) of the Credit Business Act may apply to the commission of a certificate of execution of a monetary loan for consumption. However, the above provision does not apply to the case where a credit financial institution, which is not "credit service provider" under the Credit Business Act, entrusts an obligor with the appointment of a commission agent for a debtor (the grounds for disciplinary action applied to the plaintiffs of this case are all the cases where a credit financial institution, which is not