[1] The method of interpreting the disposal document in a case where there is a difference of opinion between the parties on the interpretation of the contract and the interpretation of the intention of the party expressed on the disposal document

[2] The case holding that the court below erred by misapprehending the legal principle that Gap's local government's non-performance of unjust enrichment does not constitute unjust enrichment where Eul's local government's non-performance of the recovery of resources and the operation, maintenance, and management of the resources recovery facilities and incidental facilities were selected as a private business entity entrusted with the operation, management, etc. of Eul's joint contractors and the above facilities; Eul's joint contractors and joint contractors were concluded with the above facilities; Eul's company notified Eul of the non-execution of the non-payment expenses, such as labor cost and welfare expenses, and Eul's payment was notified in accordance with the above agreement; and Eul's company filed a lawsuit seeking nullification of the recovery notice after its payment

[1] In a case where there is a difference between the parties regarding the interpretation of a contract, and the interpretation of the parties’ intent expressed in a disposition document is at issue, the parties’ contents of the text, motive and background of the agreement, the objective to be achieved by the agreement, the parties’ genuine intent, etc. shall be reasonably interpreted in accordance with logical and empirical rules by comprehensively taking into account the contents of the text, the motive and background of the agreement, the parties’ genuine intent, etc.

[2] In a case where Gap local government selected a joint supply and demand organization composed of four companies, including Eul corporation, as a private business entity entrusted with the operation, maintenance, and management of the facility and incidental facilities, and entered into an agreement on the operation of the joint supply and demand organization and the above facility with Eul corporation, etc., as a result of the audit of the private entrustment affairs conducted, Eul corporation, etc. notified Eul of the non-execution of the non-execution amount, such as labor cost and welfare cost, and Eul corporation, etc. notified Eul corporation of its payment, the case holding that the above agreement constitutes a private contract entered into under the private law agreement with Eul corporation, etc. and the local government did not have a contractual right to recover the non-execution amount of the non-execution amount from the non-performance of the contract, on the ground that Eul corporation, etc. did not have an obligation to return the non-performance amount to Gap corporation, etc. as a result, on the ground that the non-performance of the contract cannot be seen as a non-performance of the contract, solely on the ground that labor cost and other expenses were not partially executed.

[1] Article 105 of the Civil Act, Article 202 of the Civil Procedure Act / [2] Articles 105 and 741 of the Civil Act, Article 202 of the Civil Procedure Act

[1] Supreme Court Decision 2004Da60065 Decided May 27, 2005 (Gong2005Ha, 1031) Supreme Court Decision 2012Da44471 Decided November 29, 2012 (Gong2013Sang, 38) Supreme Court en banc Decision 2009Da66549 Decided May 19, 2016 (Gong2016Sang, 769)

Posco Construction Co., Ltd. (Law Firm Sejong, Attorneys Kim Jae-min et al., Counsel for the plaintiff-appellant)

Yangsan-si (Government Law Firm Corporation, Attorneys Kim Jae-chul et al., Counsel for the plaintiff-appellant)

Busan High Court Decision 2017Nu24356 decided September 19, 2018

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

The grounds of appeal are examined.

1. According to the reasoning of the lower judgment and the record, the following facts are revealed.

A. On October 25, 2013, the Defendant published a tender for entrusted management services of the instant facilities in order to select a private business entity entrusted with the operation, maintenance, management, etc. of the resource recovery facilities and ancillary facilities (hereinafter “instant facilities”). As a result of the tender, a joint supply and demand organization (hereinafter collectively referred to as the “Plaintiff, etc.”) composed of four companies of the Environmental Management Company, BlubM, and KSM as its representative director was selected as a successful bidder. Accordingly, the Plaintiff, etc.’s joint supply and demand organization and the Defendant entered into an agreement on the entrusted management of the instant facilities (hereinafter “instant agreement”).

B. The main contents of the instant agreement are as follows.

(1) The expenses for entrusted operation shall be classified into expenses for settlement of accounts and expenses for settlement of accounts, and shall be paid monthly based on the annual total amount. The expenses for settlement shall be all the expenses for medicine and expendable materials, such as chemical drugs, expenses for inspection agency, maintenance and repair of facilities, fuel expenses, analysis and medical expenses, electricity expenses, water supply expenses, LNG charges, and other expenses incurred for projects implemented at the Defendant’s request, and the expenses for settlement of accounts shall be all the expenses, such as labor expenses and expenses, excluding the expenses for settlement of accounts (Article 9(1) and (2)).

(2) In cases where taxes and public charges are modified (Article 9(3)); where there is any change in the relevant laws and regulations or facilities (Article 9(3)); or where there is any other change in the said laws and regulations or facilities (Article 9(3)), the contract amount may be changed by mutual consultation (Article 9(3)).

(3) The settlement of entrusted operation expenses shall be made once a year, and the performance until the end of each fiscal year shall be settled by the end of January of the following year (Article XII).

(4) The Plaintiff et al. shall assign a certain number of persons with specific qualifications required under relevant laws and regulations to the site of the instant facility, and the number of operating personnel shall be 42, but may be adjusted to the extent that does not interfere with stable operation (Article 13(1) and (2)).

C. The Defendant requested a specialized service company to calculate the cost of annual entrusted operation, based on the result of the above calculation, entered into a technical service standard agreement with the Plaintiff et al. on the contract amount. Of these, the Defendant determined the appropriate size of the operating personnel of the instant facility and classified the operating personnel into the occupational category and the technical qualification class, and calculated the cost of labor by applying the market wage unit corresponding to the occupational category and the technical qualification class, and based on which the total amount of the cost of labor is determined.

D. As a result of the audit of the affairs entrusted to the private sector in 2016, the Defendant decided to recover KRW 912,00,000 not executed among the amounts paid as expenses for settlement of accounts, such as labor cost and welfare, based on the instant agreement (hereinafter “unexecution amount of this case”). On February 3, 2017, the Yangsan market notified the Plaintiff on February 3, 2017, that “the Plaintiff would take labor cost and welfare expenses to be executed for employees as additional profits of an enterprise.” As such, the Defendant notified the Plaintiff that the amount of non-execution of this case would be paid by April 3, 2017.”

E. The Plaintiff et al. shared liability according to the share ratio (5:2:1) set out in the basic agreement on the operation of joint supply and demand companies, and paid KRW 84,425,000 on July 31, 2017 by the Plaintiff, etc., the Environment Management Company paid KRW 182,40,000 on July 20, 2017, and BluuM Co., Ltd paid KRW 182,40,000 on July 31, 2017, with the intention to pay KRW 91,200,000 in installments, and paid KRW 84,425,000 on July 25, 2018.

2. On the following grounds, the lower court determined that the Defendant’s total sum of KRW 905,225,000 received money from the Plaintiff, etc. did not constitute unjust enrichment without any legal ground.

A. If the Plaintiff et al. allows the Plaintiff et al. to retain the unexecution amount of the instant non-execution amount as it is, efforts will be made to increase profits by increasing the unexecution amount of the non-settlement cost under the name of cost reduction. Ultimately, this would result in preventing excessive competition and achieving the initial intent to operate the instant facilities in an efficient and stable manner by calculating the reasonable non-settlement cost.

B. The cost of settlement cannot be deemed to be a fixed amount that cannot be changed at any time, or that even if the amount of non-execution is generated, it shall not be deemed to be a fixed amount that is reverted to the Plaintiff, etc.

C. Personnel expenses, etc. constitute an operating cost agreed to be paid on the premise that an adequate number of persons meeting the specific conditions of the resource recovery facility works. If part of the expenses has not been executed in compliance with the intended purpose, it shall be deemed that the Defendant is obligated to return the expenses for operation under Article 7(2) of the instant Convention by falling under

3. However, the lower court’s determination is difficult to accept for the following reasons.

A. The instant agreement is a service agreement that provides that the Defendant, a local government, entrusts the operation of the instant facility to the Plaintiff, etc. and pays expenses incurred in the entrusted operation thereof to the Plaintiff, etc., which is a private person, and constitutes a private contract under the private law concluded by the parties on an equal footing (see, e.g., Supreme Court Decision 2015Da205796, Jan. 25, 2017). Therefore, the interpretation of the instant agreement is governed by the general legal doctrine

In a case where there exists any difference in the interpretation of a contract between the parties, and the interpretation of the intent of the parties expressed in the disposition document is at issue, the parties shall reasonably interpret it in accordance with logical and empirical rules by comprehensively taking into account the contents of the text, the motive and background of the agreement, the purpose to be achieved by the agreement, the parties’ genuine intent, etc. In such cases, if the objective meaning of the text is clear, the existence and content of declaration of intent shall be recognized in accordance with the text, barring any special circumstance (see Supreme Court en banc Decision 2009Da66549, May 19

The existence of the obligation to settle the expenses for entrusted operation under the instant agreement constitutes a civil legal relationship, and thus, the lawsuit disputing the instant lawsuit constitutes a civil lawsuit. However, even if the lower court proceeds in the instant lawsuit, the trial procedure of an administrative case does not directly differ from the civil litigation procedure, except that the special rule prescribed by the Administrative Litigation Act can be applied in light of the characteristics of the administrative litigation, barring any special circumstance, barring special circumstance, it cannot be deemed unlawful (see, e.g., Supreme Court Decision 2014Du11328, Feb. 13, 2018).

B. According to the instant agreement, the expenses for entrusted operation of the instant facilities are classified into the expenses for settlement and the expenses for settlement of accounts. The expenses for settlement of accounts, including personnel expenses, are not settled, and only the items for settlement expenses are to be settled once a year (Article 12). Therefore, even if the Plaintiff, etc., who is the trustee, did not partially perform the expenses for settlement of accounts among the expenses for entrusted operation, it cannot be deemed that the contractual right is acknowledged to the Defendant, the truster, as the truster, to recover the amount

C. As to the judgment of the court below, the operating expenses of the item of the non-settlement expense may be changed depending on the case, and the amount of the non-execution may be recovered by the defendant. However, in principle, the procedure for the change of the contract amount under Article 9(3) of the Convention ought to be followed. Here, the term “mutual consultation” for the change of the contract amount refers to both parties

D. If a part of personnel expenses, etc. has not been executed because the Plaintiff et al. failed to perform the fiduciary duty under the instant agreement, the Defendant may take measures for nonperformance of such duty. However, the instant agreement provides that the Plaintiff et al., the trustee, etc., may adjust the number of persons to the extent that does not interfere with the stable operation of the instant facility, not necessarily have to hire all the persons who have served as the basis for calculating personnel expenses in the course of the entrusted operation of the instant facility (Article 13(2)). Therefore, the mere fact that labor expenses, etc. have not been partially executed cannot be deemed to have failed to perform the duty

E. Since the Plaintiff, etc. has no contractual obligation to return the amount of non-execution of the instant case to the Defendant, it cannot be deemed that the Plaintiff, etc. continues to hold the amount of non-execution of the instant case and can be reverted to their profits, and thus, constitutes “use for other than the purpose of operating expenses” under Article 7(2) of

4. Nevertheless, the lower court determined that the amount that the Defendant received from the Plaintiff, etc. for the recovery of the amount of non-execution of the instant case did not constitute unjust enrichment. In so doing, the lower court erred by misapprehending the legal doctrine on the interpretation of the disposition document, thereby adversely affecting the conclusion of the judgment

5. The plaintiff's appeal is with merit, and the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices

Justices Lee Dong-won (Presiding Justice)