Whether the obligor’s assertion was accepted in the first instance trial by disputing the existence and scope of the obligor’s obligation, but is rejected in the appellate trial, whether the application of the interest rate on delay damages as stipulated in Article 3(2) of the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings is excluded until the appellate judgment is rendered (affirmative)

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

Supreme Court Decision 2013Da30356 Decided September 12, 2013

Plaintiff (Law Firm, Attorneys Park So-young et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Cheong, Attorneys Lee In-bok et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2015Na2055685 decided September 9, 2016

The part of the lower judgment against the Defendant ordering payment of 450,000,000 won per annum from August 23, 2014 to September 9, 2016 and 20% per annum from the next day to the day of full payment, shall be reversed, and the Plaintiff’s appeal corresponding to that part shall be dismissed. The remainder of the appeal by the Defendant is dismissed. One-third of the total costs of the lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

In light of the circumstances indicated in its reasoning, the lower court determined that the period of payment of the instant agreement has arrived at around October 2010, since the “the time of the completion of the instant implementation project,” which is the period of payment of the instant agreement, refers to the time when the Sipo Development Co., Ltd. obtained approval for temporary use of the instant apartment and began to move in by buyers.

In light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the interpretation of a disposal document, or by misapprehending the facts contrary to logical and empirical rules.

2. Regarding ground of appeal No. 2

The lower court rejected the Defendant’s assertion that the instant payment note constitutes an unfair juristic act stipulated in Article 104 of the Civil Act and thus null and void, on the grounds that there is no evidence to acknowledge that the Defendant’s climatic note of payment was prepared and that it was a juristic act that substantially lost fairness.

In light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine regarding unfair legal acts, or by misapprehending the legal doctrine regarding facts contrary to what is alleged in the grounds of appeal.

3. As to the third ground for appeal

Article 3(2) of the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings (hereinafter “Litigation Promotion Act”) provides that “Where it is deemed reasonable for an obligor to resist the existence or scope of the obligation, prior to the adjudication of a fact-finding court that declares that the obligor has the obligation to perform the obligation, the provisions of paragraph (1) shall not apply to the reasonable extent.” This refers to cases where the application of Article 3(1) of the Litigation Promotion Act, which provides for special cases concerning statutory interest rates, which serve as the basis for calculating the amount of damages arising from the nonperformance of the obligation, may be excluded. If an obligor’s assertion is accepted in the first instance trial, disputing the existence or scope of the obligation to perform, even if such assertion is rejected in the appellate trial, the argument may be deemed reasonable, and in such a case, the interest rate for delay damages as prescribed in Article 3(2) of the Litigation Promotion Act cannot be applied until the judgment of the appellate court is rendered (see, e.g., Supreme Court Decision 2013Da30356, Sept

In this case, the first instance court accepted the Plaintiff’s claim as to the primary claim and dismissed all the Plaintiff’s primary claim against the Defendant. The lower court followed the conclusion of the first instance court and accepted all the Plaintiff’s primary claim against the Defendant. As long as the Defendant’s claim was accepted in the first instance court, it shall be deemed that there exists a reasonable ground. As such, even if the Plaintiff’s primary claim against the Defendant is accepted in the first instance court, the lower court cannot apply the interest rate on delay damages as prescribed in Article 3(1) of the Litigation Promotion Act until the date the lower judgment is sentenced pursuant to Article 3(2) of the same Act. Nevertheless, the lower court erred by misapprehending the legal doctrine as to the application of the above provision, thereby adversely affecting the conclusion of the judgment.

4. Conclusion

Therefore, the part of the judgment of the court below against the defendant ordering payment of 450,000,000 won from August 23, 2014 after the day when the copy of the complaint of this case was served, to September 9, 2016, which is the day when the judgment of the court below was rendered, in excess of 5% per annum as stipulated in the Civil Act, and 20% per annum as stipulated in the Civil Procedure Act, from September 9, 2016, which is the day after the day when the judgment of the court below is delivered, and from the day after the day when the payment is fully made. Since this part is sufficient for the court to directly decide, the plaintiff's appeal corresponding to the above reversed part shall be dismissed, and the defendant's remaining appeal shall be dismissed, and 1/10 of the total costs of the lawsuit shall be borne by the plaintiff, and the remainder shall be borne by the defendant,

Justices Lee Ki-taik (Presiding Justice)