The method of calculating the amount of lost income of a victim who had a certain amount of income at the time of tort, and where the victim has reported to the tax authority, whether the reported amount of income should be deemed the amount of income at the time of accident (affirmative in principle)

The amount of lost income of a victim who has earned a certain amount of income at the time of an accident shall be determined based on objective and reasonable data and calculated based on the amount of income actually earned by the victim at the time of the accident. In such cases, the amount of reported income shall be deemed the amount of income as at the time of the accident: Provided, That in cases where the reported income is determined to be substantially low in light of the victim’s occupation, age, experience, etc., the amount of reported income cannot be deemed the amount of income at the time of the accident. However, in such cases, in order to recognize a lost income based on the victim’s income above the daily wage, the victim’s actual income was actually earned at the time of the accident or was able to obtain such amount of income should be recognized. Therefore, even if such circumstance is not recognized, the actual income should not be deemed to be recognized based on the amount of income claimed by the victim. This is likewise applicable to cases where the presumption income of the employee engaged in the same type of work with the same experience as the victim is recognized based on the employee’s estimated income engaged in the same type of work.

Articles 393, 750, and 763 of the Civil Act

Supreme Court Decision 98Da62114 Decided March 24, 2000, Supreme Court Decision 2007Da52607 Decided December 14, 2007

Plaintiff (Attorney Cho Young-chul, Counsel for the plaintiff-appellant)

Korean Federation of Passenger Transport Business (Attorney Shin Hun-chul, Counsel for defendant-appellant)

Seoul Central District Court Decision 2014Na41338 Decided March 17, 2015

Of the lower judgment, the part against the Defendant regarding the payment of the amount of KRW 59,829,187 and the amount of KRW 5% per annum from January 28, 2013 to July 16, 2014, and KRW 20% per annum from the next day to the date of full payment, shall be reversed, and the case shall be remanded to the Panel Division of the Seoul Central District Court.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. On the grounds delineated below, the lower court calculated the Plaintiff’s daily income by applying KRW 3,024,583 per month, which is the statistical income of not less than 10 years, among male statistics workers, of cooking 44. Pursuant to the occupational category of a report on the fact-finding survey of the Plaintiff’s daily income by employment type (China, cattle),

(1) The Plaintiff, at least in the name of the Nonparty, who is the Plaintiff’s spouse, worked in the main room of the Chinese branch from May 26, 2001 to the date of the instant accident, where the Plaintiff registered the business of an intermediate restaurant (hereinafter “instant restaurant”).

(2) In light of the fact that the amount of reported income by the Plaintiff and the Nonparty to the tax authority is less than the monthly income from the urban daily wage or the minimum cost of living from the 5-person household in 2012, and thus, the Plaintiff’s reported income amount cannot be deemed as the Plaintiff’s actual income at the time of the Plaintiff’s accident.

(3) The fact that the Plaintiff reported sales amounting to KRW 12,00,000 in the year 201 and KRW 14,750,00 in the year 2012 is recognized, but it is difficult to objectively recognize necessary expenses, capital facilities, etc., and there is no other evidence to acknowledge it. Therefore, it is difficult to calculate the sales amount at the time of the Plaintiff’s accident based on the above sales amount.

(4) The restaurant of this case was operated in the main place of the plaintiff, and the non-party was in the form of visiting customers, and the plaintiff was damaged by the accident of this case, and it can be recognized that the restaurant of this case was closed down. According to the above recognition facts, the plaintiff's revenue mainly depends on the plaintiff's labor and did not reach the capital profit in the company.

B. However, the above determination by the lower court is difficult to accept.

(1) The amount of actual income of a victim who had a certain amount of income at the time of tort shall be calculated based on objective and reasonable data after determining the amount of income actually earned by the victim at the time of the accident. In this case, when the victim reported to a tax authority, the reported amount of income shall be deemed the amount of income at the time of the accident (see Supreme Court Decision 98Da62114, Mar. 24, 2000). However, where the reported amount of income is deemed considerably low in light of the victim’s occupation, age, career, etc., only the reported amount of income cannot be deemed the amount of income at the time of the victim’s accident (see Supreme Court Decision 2007Da52607, Dec. 14, 2007). However, in such a case, in order to recognize the daily income of the victim based on the daily income above the daily wage, it should be acknowledged that the victim actually earned such income or was able to obtain such income. Accordingly, it should not be acknowledged that the victim’s actual income is an individual employee’s labor income.

(2) The reasoning of the lower judgment and the record reveal the following: (a) on May 26, 2001, the Plaintiff registered the business of a middle food restaurant under the name of the Nonparty, his spouse; and (b) from that time, the Plaintiff required food in the kitchen from January 28, 201, the date of the instant accident to January 28, 201, and the Nonparty operated the instant restaurant in the form of eating food to customers; (c) upon filing a global income tax report on the said restaurant under the name of the Nonparty, the Plaintiff reported the amount of income to KRW 2,038,136 (average 169,844) in the year 201,243,846 (average 186,987 won per month); and (d) upon filing a value-added tax report, the Plaintiff reported the sales amount to KRW 12,00,000 in the year 201 and reported the sales amount to KRW 14,500 in the year 200.

Examining these facts in accordance with the aforementioned legal principles, since the amount of income reported by the Plaintiff to the tax authorities is deemed to be considerably low in light of the Plaintiff’s career and family relations, it cannot be deemed that the reported amount of income is the Plaintiff’s income. However, in order to recognize the lost income based on the worker’s estimated statistics income with the same career as the Plaintiff, the Plaintiff’s income mainly depends on the Plaintiff’s labor, and thus, constitutes a case where the company’s capital income was low. Moreover, it should be acknowledged that the Plaintiff had obtained income similar to that at the time of the instant accident, or that such income was able to obtain such income. However, there is no evidence to acknowledge such circumstances in the records of the instant case, and instead, the restaurant operated by the Plaintiff on a very small scale without the Plaintiff’s employees other than the Plaintiff’s husband and wife, and the Plaintiff appears to have received multiple hospitalization treatments from alcohol diseases before the instant accident. Thus, there is sufficient possibility that the Plaintiff’s income earned by the instant restaurant was more likely than the estimated statistics recognized by the lower court.

Therefore, the lower court should have urged the Plaintiff to prove the reasonable probability circumstances that the Plaintiff claimed at the time of the instant accident, or that he could have obtained such income, on the basis of the above estimated statistics income, only when such circumstances are proved.

(3) Nevertheless, without taking such measures, the lower court calculated the Plaintiff’s lost income by applying estimated statistical income based on the presumption of actual status survey report by employment type for the reasons stated in its holding. In so doing, the lower court erred by misapprehending the legal doctrine on calculation of lost income, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion

2. Regarding ground of appeal No. 2

For reasons indicated in its reasoning, the lower court rejected the Defendant’s assertion that the Plaintiff’s maximum working age should not be determined until he/she reaches 60 years of age due to the Plaintiff’s king ( alcohol addiction).

Examining the record in accordance with the relevant legal doctrine, the lower court’s determination is justifiable. In so doing, it did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the maximum working age.

3. Conclusion

Therefore, the part of the judgment of the court below against the defendant should be reversed, but the part against the defendant regarding the payment of 59,829,187 won, which is the scope of the appeal, and 5% per annum from January 28, 2013 to July 16, 2014, and 20% per annum from the next day to the day of full payment, shall be reversed and 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 on the bench.

Justices Lee Sang-hoon (Presiding Justice)