In case where there is a ground for imposing fines for negligence under Article 635 (1) 8 of the Commercial Act, whether the court of the Minister of Justice may render a judgment on fines for negligence ex officio before imposing fines for negligence (negative)

Articles 635(1)8, and 637-2 of the Commercial Act

Offenders

Seoul Western District Court Order 2010Ra239 dated March 18, 2013

The order of the court below is reversed, and the case is remanded to the Seoul Western District Court Panel Division.

The grounds of reappeal are examined.

Article 635(1)8 of the Commercial Act provides that "where the number of directors or auditors who are prescribed by the Act or the articles of incorporation is replaced by one another, such appointment procedures shall be imposed on a person in the position to convene a general meeting to be convened for such appointment, and Article 637-2 of the Commercial Act provides that a fine for negligence under the above provision shall be imposed and collected by the Minister of Justice (paragraph (1)), and where a person who is dissatisfied with the disposition of the fine for negligence raises an objection, the Minister of Justice shall notify the competent court thereof, and the competent court shall, upon receipt of the notification thereof (paragraphs (2) and (3)), have the authority to impose the fine for negligence under the Non-Contentious Case Litigation Procedure Act (Article 635(1)8 of the Commercial Act). According to each of the above provisions, since the authority to impose the fine for negligence is originally against the Minister of Justice, even if the Minister of Justice becomes aware of any of the causes prescribed by Article 635(1)8 of the Commercial Act before the disposition of the fine for negligence is made ex officio.

According to the reasoning of the order of the court below and the records, the commercial registration office, etc. of the Seoul Central District Court found that the re-appellant neglected to register the retirement of director and auditor and notified the Seoul Western District Court of the fact that there is a ground for imposing an administrative fine under Article 635 (1) 1 of the Commercial Act. The above court rendered a decision to impose an administrative fine of 4 million won by applying Article 635 (1) 1 of the Commercial Act on the ground that the re-appellant neglected to register the retirement of director and auditor on March 13, 2009. The court of first instance confirmed that the re-appellant neglected to appoint director and auditor on the basis of the notification of the registrar and the first instance court confirmed that the re-appellant neglected to appoint the director and auditor, applying Article 635 (1) 8 of the Commercial Act on the ground that the court below dismissed the immediate appeal on this ground.

In light of the above facts in light of the legal principles as seen earlier, the first instance court was aware of the fact that the re-appellant was negligent in appointing directors and auditors based on the notification of the registrar, and rendered a judgment of fine for negligence by applying Article 635(1)8 of the Commercial Act ex officio before the Minister of Justice takes a disposition of fine for negligence. Thus, the judgment of fine for negligence is unlawful.

Nevertheless, by applying Article 635 (1) 8 of the Commercial Act, the lower court maintained the first instance court’s decision, which is sentenced to a fine for negligence, as it is. In so doing, the lower court erred by misapprehending the legal doctrine on the authority and procedure for imposing a fine for negligence, thereby affecting the conclusion

Therefore, the order 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 on the bench.

Justices Kim Yong-deok (Presiding Justice)