[1] The meaning of "date when the injured party becomes aware of the damage and the perpetrator" under Article 766(1) of the Civil Act, which is the starting point of starting the short-term extinctive prescription of a claim for damages due to a tort / The meaning of "the injured party becomes aware of the identity of the

[2] In a case where Gap et al., an employee of Gap bank Eul et al, and Gap bank, et al., sought employer liability against Byung and Byung company, which are employees of Byung securities company established by Gap bank for financial investment business in the Republic of Korea, the case holding that the court below erred by misapprehending the legal principles as to the starting point of the extinctive prescription period for damages claim due to tort, on the grounds that it cannot be deemed that there was a proximate causal relation between illegal harmful act and harmful act and the occurrence of damages at the time of the announcement of investigation by the Financial Services Commission, etc., prosecution's indictment, press report

[1] Articles 756 and 766(1) of the Civil Act / [2] Articles 756 and 766(1) of the Civil Act

[1] Supreme Court Decision 88Meu32500 Decided November 14, 1989 (Gong1990, 31) Supreme Court Decision 2006Da30440 Decided April 24, 2008 (Gong2008Sang, 770)

Plaintiff 1 and nine others (Law Firm LLC, Attorneys Kim Jong-woo et al., Counsel for the plaintiff-appellant)

Deut Bank Bank and one other (Attorneys Park Jong-sung et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2017Na2037841 decided May 10, 2018

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. “The date when the victim becomes aware of the damage and the perpetrator” under Article 766(1) of the Civil Act, which is the starting point of starting the short-term extinctive prescription of a claim for damages due to a tort, refers to the time when the victim actually and specifically recognizes the elements of the tort, such as the occurrence of the damage, the existence of the illegal harmful act, and the proximate causal relation between the harmful act and the occurrence of the damage. Whenever the victim actually and specifically recognizes the facts of the elements of the tort, it shall be reasonably recognized by taking into account various objective circumstances in individual cases and taking into account the circumstances in which the claim for damages is feasible and specific (see, e.g., Supreme Court Decision 2006Da30440, Apr. 24, 2008). In addition, the employer’s liability for damages refers to the time when a person in an employment relationship with the employer causes damage to a third party in connection with the performance of the employer’s business, and the victim’s awareness of the identity of the perpetrator in such case refers to the fact that the tort was committed between the employer and the victim (see Supreme Court Decision 28.

B. On the grounds indicated in its reasoning, the lower court, based on the facts indicated in its reasoning, determined that, on February 23, 2011 and May 31, 2011, the Defendants’ employees of the Defendants were aware of the existence of market price manipulation and the proximate causal relation between the pertinent market price manipulation and the damages, and that there was no hindrance in filing a lawsuit seeking compensation for damages on the ground of employer’s liability. The lower court accepted the Defendants’ defense that the Plaintiffs’ claim for compensation for damages was extinguished by the statute of limitations, on the ground that the instant lawsuit was received on January 26, 2016, which was three years after the said lawsuit was received on January 26, 2016.

C. However, according to the reasoning of the lower judgment and the record, the following circumstances are revealed.

1) On February 23, 2011, the Financial Services Commission and the Financial Supervisory Service announced the result of the investigation that “the employees of Defendant Doo Bank’s affiliate companies confirmed the fact of market price manipulation, and decided to prosecute and take disciplinary measures against the relevant persons.” On May 31, 201, some business suspension measures against Defendant Doo Securities became final and conclusive. Furthermore, on August 19, 2011, the prosecutor announced that the Defendants’ employees and Defendant Doo Securities were indicted under the suspicion of market manipulation under the Financial Investment Services and Capital Markets Act. Although the media reports and domestic financial institutions, insurance companies, and foreign investors’ claims for damages were followed, it is difficult to readily conclude that the Plaintiffs, not personal financial investment business entities, have been aware of all the matters known by the Financial Services Commission, the Financial Supervisory Service, or the prosecutor, etc., even if they were to relatively have a relatively extensive understanding and experience in the financial market.

2) As a result of the investigation by the Financial Supervisory Service, etc., the Defendants strongly denied and disputed the suspicion following the publication of prosecutions by the prosecutions and media reports, and the employees of the Hong Kong Branch of Defendant Doa Bank were convicted of the first instance court on January 25, 2016 only for the Non-Party and Defendant Do Do Do Securities, by escaping abroad.

3) In order to determine the illegality of the instant market price manipulation, there is a need for specialized knowledge of the COS200 and the fluctuation in the index, and there was a dispute over the existence of the illegal market price manipulation and the existence of the above criminal judgment. In light of the fact that there was 82 pages of the above criminal judgment, it cannot be readily concluded that an ordinary person recognized the existence of the illegal market price manipulation, and the proximate causal relation between the above market price manipulation and the damages prior to the

4) The Defendants were dissatisfied with the existence of civil liability for damages under the Civil Act, and the judgment of the court of first instance, which recognized the Defendants’ liability for employer, was rendered around November 26, 2015.

5) In the case of Defendant Dom Bank, it is more unreasonable to conclude that the Plaintiffs, who are not a specialized financial investment business entity, could have known the relationship between the employees of the Hong Kong Branch Office of Defendant Dom Bank and the Defendant Dom Bank prior to the pronouncement of the first instance judgment in the above civil case, because they were excluded from the subject of sanctions by the Financial Services Commission or the Governor of the Financial Supervisory Service and the prosecution.

D. Examining the aforementioned circumstances in light of the legal principles as seen earlier, it cannot be deemed that the Plaintiffs actually and specifically recognized the existence of illegal harmful acts in around February 23, 201 through August 19, 201, which were announced as a result of investigation by the Financial Services Commission, etc., prosecutions, press reports, etc., and that there was a proximate causal relationship between the harmful act and the occurrence of damages, or that there was a relation of use, etc.

In so doing, the court below erred by misapprehending the legal principles as to the starting point of the extinctive prescription of damage claim due to a tort, thereby affecting the conclusion of the judgment. The ground of appeal assigning this error

2. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jung-hwa (Presiding Justice)