In a case where an obligor filed a lawsuit seeking confirmation of existence of an obligation against the obligee, but no performance lawsuit is filed by the obligee, whether statutory interest rate under Article 3 of the Act on Special Cases Concerning Encouragement, etc. of Legal Proceedings may be applied to the calculation of damages for delay even if the existence of an obligation is recognized as part of the existence of an obligation as a result of a fact-finding

Article 3 of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings (hereinafter “the Act”) provides for statutory interest rates that serve as the basis for calculating the amount of damages for non-performance of monetary obligations (Article 3(2) of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings (hereinafter “the Act”) in cases where an obligor who fails to perform his/her obligation without any justifiable reason, even after filing a lawsuit by a monetary obligee, gives disadvantages to the interest in arrears, thereby preventing the maintenance of the state of nonperformance and the delay of unnecessary litigation. In addition, Article 3 of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings provides for statutory interest rates that serve as the basis for calculating the amount of damages for non-performance of monetary obligations (Article 3(2) of the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings). Therefore, where an obligor has filed a lawsuit seeking confirmation of non-performance of monetary obligations against the obligee, and in the absence of a creditor’s performance lawsuit, even if the existence of the obligation is recognized as a result of fact-finding trial and the judgment is rendered.

Article 3 of the Act on Special Cases concerning Litigation Facilitation, etc.

Supreme Court Decision 2010Da50922 Decided September 30, 2010 (Gong2010Ha, 2009)

Plaintiff (Law Firm brightness, Attorney Song Jae-sub, Counsel for the plaintiff-appellant)

Defendant (Attorney Kim Jae-soo, Counsel for defendant-appellant)

Seoul High Court Decision 2017Na2068715 decided September 20, 2018

1. The judgment of the court of first instance is reversed, and the part against the defendant in the judgment below is modified as follows: (a) The liability for damages arising from removal works implemented in the Gwanak-gu Seoul Special Metropolitan City (hereinafter address omitted) from February 2, 2017 to February 4, 2017 against the defendant does not exceed the amount calculated at the rate of 11,083,010 won and 5% per annum from February 3, 2017 to the date of full payment. (b) The remaining claims of the plaintiff are dismissed. (3) The remaining claims of the plaintiff are dismissed. 70% of the total litigation expenses arising between the plaintiff and the defendant are assessed against the plaintiff, and the remainder are assessed against the defendant, respectively.

The grounds of appeal are examined.

1. Determination on the scope of damages

Based on its stated reasoning, the lower court determined that the amount of damages incurred by the Defendant in relation to the instant accident was KRW 15,209,70, and the amount of damages already paid by the Plaintiff to the Defendant was KRW 4,126,690, and on this premise, determined that the amount of damages to be compensated by the Plaintiff was KRW 11,083,010 and damages for delay.

Examining the reasoning of the lower judgment in light of the record, the lower court did not err in its judgment by failing to exhaust all necessary deliberations as alleged in the grounds of appeal and by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

2. Determination on the application of statutory interest rates under Article 3 of the Act on Special Cases concerning Expedition, etc. of Legal Proceedings (hereinafter “Litigation Promotion Act”).

A. Article 3 of the Litigation Promotion Act aims to maintain the state of nonperformance and prevent unnecessary delay of litigation by imposing disadvantages on a debtor who fails to perform his/her obligation without any justifiable reason even after filing a lawsuit by a monetary creditor (see Supreme Court Decision 2010Da50922, Sept. 30, 2010). In addition, Article 3 of the Litigation Promotion Act provides for statutory interest rate which serves as the basis for calculating the amount of damages due to nonperformance of a monetary obligation in the case where a judgment ordering performance of all or part of a monetary obligation is rendered” (Article 3(2) of the same Act also provides that “in addition, where a debtor files a lawsuit seeking confirmation of existence of a monetary obligation against a creditor, and there is no creditor’s performance lawsuit, even if the existence of a monetary obligation is recognized as a result of trial by fact-finding court and a judgment ordering performance of a monetary obligation is rendered, this does not apply to the case where a judgment is rendered in whole or in part, and thus, Article 3(2) of the Litigation Promotion Act does not apply to this case.

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) The Plaintiff sought confirmation against the Defendant that there was no liability for damages arising from the instant accident, and the first instance court accepted the Plaintiff’s claim in full.

2) On this ground, the Defendant appealed, but did not institute a performance lawsuit, such as a counterclaim claiming the performance of the obligation to compensate for damages until the lower court rendered the judgment.

3) The lower court accepted the Defendant’s appeal partially, and sentenced the Plaintiff’s damage liability KRW 11,083,010, which is the date of the instant accident, to the extent of September 20, 2018, which is the date of the lower judgment, 5% per annum as prescribed by the Civil Act from February 3, 2017 to September 20, 2018, which is the date of the lower judgment, and to the date of full payment from the following day to the date of full payment, that the Plaintiff’s damage liability does not exceed

C. However, in light of the legal principles as seen earlier, the instant lawsuit was filed by the Plaintiff seeking confirmation of the absence of the obligation to compensate for damages against the Defendant, and the Defendant brought a lawsuit seeking performance against the obligation to compensate for damages. Therefore, even if the Plaintiff’s obligation to compensate for damages is partially recognized and the judgment of confirmation is rendered, statutory interest rate under Article 3 of the Civil Procedure Promotion Act as to the damages for delay cannot be applied. Nevertheless, the lower court erred by misapprehending the legal principles as to the application of statutory interest rate under Article 3 of the Civil Procedure Promotion Act, which is the legal rate of 15% per annum, from the following day of the lower judgment to the date of full payment. The allegation contained in the grounds of appeal on

3. Conclusion

Therefore, the judgment of the court below shall be reversed, and since this part is sufficient for the court to directly judge, this part shall be self-printed in accordance with Article 437.

According to the facts duly established by the court below, the plaintiff's liability for damages arising from the accident in this case against the defendant does not exceed 1,083,010 won and damages for delay calculated at the rate of 5% per annum as stipulated by the Civil Act from February 3, 2017, which is the date of the accident in this case, to the date of complete payment, and the defendant has interest in confirmation. Therefore, the plaintiff's claim against the defendant is accepted within the scope of the above recognition, and the remaining claims are justified, without merit. The judgment of the court of first instance is unfair in conclusion, and it is so unfair as stated in paragraph (1). Thus, it is so decided as per Disposition by the assent of all participating Justices on the bench. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)