The meaning of “the date when the obligee becomes aware of the cause of revocation” in the exercise of the obligee’s right of revocation, and, in case where the obligee exercises the obligee’s right of revocation against the legal act of the defaulted taxpayer with the claim preserved, whether the determination shall be made based on the tax official’s awareness in charge of the affairs related to the collection and preservation of the claim, in relation to the starting point of the exclusion period (affirmative in principle)

Article 406(2) of the Civil Act

[Plaintiff-Appellant] Plaintiff 2007Da63102 decided Mar. 26, 2009 (Gong2009Sang, 547)

Republic of Korea (Law Firm LLC, Attorneys Park Jae-ju et al., Counsel for the plaintiff-appellant)

Defendant 1 and two others (Law Firm LLC, Attorneys Ba-young et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2015Na2026670 decided November 19, 2015

All appeals are dismissed. The costs of appeal are assessed against the Defendants.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal Nos. 1 through 3

A. In the exercise of the obligee’s right of revocation, “the date when the obligee becomes aware of the cause for revocation” means the date when the obligor becomes aware of the fact that the obligee had committed a fraudulent act while being aware that it would prejudice the obligee. This is insufficient to simply recognize the fact that the obligor conducted a disposal of the property, and further, to know the existence of a specific fraudulent act and to know the fact that the obligor had an intent to deceive the obligor (see Supreme Court Decision 2007Da63102, Mar. 26, 2009).

However, when the State exercises its right of revocation against a legal act of a delinquent taxpayer by making a claim preserved for a claim against the State, the issue of whether the State becomes aware of the starting point of the limitation period, barring any special circumstance, shall be determined based on the tax official’s awareness in charge of the duty to collect and preserve tax claims, etc. If such tax official knows not only the delinquent taxpayer’s disposal of his/her property but also the existence of a specific fraudulent act and his/her intent to injure the delinquent taxpayer, it can be deemed that the State knew of the cause of revocation at that time

B. Based on the circumstances indicated in its reasoning, the lower court determined that each of the instant donations was a fraudulent act at each time the Plaintiff asserted by the Defendants, and that the Plaintiff cannot be deemed to have recognized the existence of a fraudulent act and the intent of deception solely on the ground that public officials in charge of other business knew only some of the elements of the fraudulent act in the course of performing their business. Accordingly, the lower court rejected the Defendants’ assertion that the Plaintiff had been filed one year after the date on which the Plaintiff became aware of the fraudulent act and the limitation period was exceeded.

C. Examining the aforementioned legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine on the limitation period for obligee’s right of revocation, by failing to exhaust all necessary deliberations, or by omitting judgment, thereby adversely affecting the conclusion of the judgment, contrary to what is alleged in the grounds of appeal.

2. As to the grounds of appeal Nos. 4 and 5

The lower court, based on its stated reasoning, determined that each of the instant donations constitutes a fraudulent act, and rejected the Defendants’ assertion that the Defendants constituted a bona fide beneficiary.

In light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine on the determination of piracy and the bona fide beneficiary in its revocation of fraudulent act, or by misapprehending the legal doctrine on the facts contrary to logical and empirical rules.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)