SPS Co., Ltd. (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Defendant 1 (Law Firm Cho & Kim, Attorneys Cho Jae-chul et al., Counsel for the defendant-appellant)

Defendant 2

May 30, 2018 (Defendant 2), August 29, 2018 (Defendant 1)

Suwon District Court Decision 2015Gahap23137 decided December 21, 2017

1. The plaintiff and defendant 1's appeal are all dismissed.

2. The costs of appeal between the Plaintiff and Defendant 1 are borne by both the Plaintiff and Defendant 1, and the costs of appeal between the Plaintiff and Defendant 2 are borne by the Plaintiff.

1. Purport of claim

A. As to Defendant 1’s KRW 4,584,91,272 and KRW 1,00,00,000 among them, 5% per annum from January 1, 2014 to the delivery date of a copy of the complaint of this case; 2,964,91,272% per annum from the next day to the date of full payment; 5% per annum from the date of delivery of a copy of the complaint of this case; 15% per annum from the date of full payment to April 18, 2014 to the date of full payment; 15% per annum from the date of full payment; 51,027,158% per annum from the next day to the date of full payment; 25% per annum from the date of full payment to the date of full payment; 3% per annum from the date of full payment; 15% per annum from the date of full payment to 25% per annum; 25% per annum from March 21, 2014 to the date of claim of this case;

B. Defendant 2 shall pay to the Plaintiff 160,325,00 won with 5% interest per annum from January 1, 2014 to the service date of a duplicate of the complaint of this case, and 15% interest per annum from the next day to the day of complete payment.

[Plaintiff filed a claim for restitution of unjust enrichment with a preliminary claim. Both claims are compatible by nature, and thus, it is deemed that the Plaintiff is entitled to choose the order and scope of the trial.]

2. Purport of appeal

A. The plaintiff

The judgment of the first instance court shall be modified and the judgment as stated in the purport of the claim shall be sought.

B. Defendant 1

The part against the defendant in the judgment of the first instance is revoked, and the plaintiff's claim corresponding to the revocation is dismissed.

1. Quotation of the first instance judgment

The reasons for this court’s judgment are as follows, even in full view of the respective descriptions of evidence Nos. 19 through 21 and the testimony of Non-Party 2 of the concerned party witness, the following parts are identical to the reasons for the first instance judgment, and thus, they are cited pursuant to the main sentence of Article 420 of the Civil Procedure Act, inasmuch as the part used by Eul and the subsequent decision on the issue of the party’s trial are stated in

○ The third 12-party 12-party 12-party 1 of the judgment of the first instance is called “director and internal director.”

○ The 3rd 16th 16th e.g., “special performance” in the judgment of the first instance is the nominal monetary amount (hereinafter “special performance amount”) such as “performance grade”, “special performance grade”, and “Speci”.

○ The 9th half of the first instance judgment “157,33,33 won” is considered as “157,233,333 won.”

○ 16th day below the 16th day of the first instance judgment, and the following 4th day and 17th day of each 3th day of the first instance judgment shall be deemed to be “date of the first instance judgment”.

○○, the 16th to 10th 8th 10 of the judgment of the first instance, “(the Plaintiff’s preliminary claim against the Defendant is not judged separately, since the Defendant’s obligation to return unjust enrichment is recognized, the Plaintiff’s preliminary claim against the Plaintiff is not determined separately)” (The Plaintiff’s claim for damages arising from a tort for which the special performance rate is not unjust enrichment, in its nature, is related to a claim for restitution of unjust enrichment and selective claim, and the portion corresponding to withholding income tax and employment insurance premium, such as income tax, which is not recognized as unjust enrichment, is also subject to the same legal doctrine, and no difference exists in both claims amount. Therefore, even if part of the Plaintiff’s claim for restitution of unjust enrichment is

2. Additional determination

A. Whether the special bonus received by Defendant 1 constitutes remuneration for directors under the Commercial Act

1) Defendant 1’s assertion

Since the money received by Defendant 1 is money of a future-oriented nature that is intended to strengthen performance-oriented management and give future motivations, it cannot be viewed as remuneration for performance of duties.

2) Determination

The remuneration for directors under Article 388 of the Commercial Act includes all the remuneration that is paid as compensation for the performance of duties of directors, regardless of their titles. As seen earlier, the special performance bonus that Defendant 1 received is calculated and paid based on operating income as compensation for performance, and constitutes remuneration for the performance of duties by Defendant 1. There is no evidence suggesting that there is a ground for payment of the said money to the director solely with the approval of the executive officer or the representative director of the company, as claimed by Defendant 1. Even if the special performance bonus was additionally stated for the purpose of giving future motive, such as the strengthening of performance-oriented management, etc., when paying the special performance bonus, it is difficult to view that the nature of the remuneration that is paid for the purpose of compensation for the performance of the past is different. Rather, the payment of the special performance bonus is incidental to the future-oriented nature of granting the motive for the future, and if it is deemed that the special performance bonus can be paid without a resolution of the general meeting of shareholders, the allegation that Defendant 1 would not be subject to excessive restriction on the payment of remuneration for the director.

B. Whether a resolution of the general meeting of shareholders on the payment of special bonus can be seen as having been adopted

1) Defendant 1’s assertion

Inasmuch as Nonparty 1, who was in the position of exercising substantial management rights as a major shareholder of the Plaintiff, approved and approved the payment of special performance rating, and Nonparty 1 also received special performance rating, it is natural that the resolution was made if the special performance rating was presented as an agenda item at the general meeting of shareholders. Therefore, the payment of special performance rating to Defendant 1 is valid as the resolution passed at the general meeting of shareholders.

2) Determination

If a director’s remuneration is not provided for in the articles of incorporation, it shall be determined by the resolution of the general meeting of shareholders (Article 388 of the Commercial Act); and since the above provision is a mandatory provision, there is no evidence to acknowledge that there was a resolution of the general meeting of shareholders on the amount, time, method of payment, etc. of the director’s remuneration or retirement allowance in the articles of incorporation (see, e.g., Supreme Court Decision 2004Da25123, Dec. 10, 2004). In addition, even if the representative director of the company made an agreement on remuneration for directors, even if the representative director of the company has 2,00 shares out of 3,00 shares of the company, it cannot be said that the agreement remains effective against the company unless the resolution of the general meeting of shareholders is adopted (see Supreme Court Decision 79Da1599, Nov. 27, 1979).

As seen earlier, there was no resolution of the general meeting of shareholders as to the payment of each special performance-based bonus. Meanwhile, Nonparty 1 held more than 50% of the Plaintiff Company’s shares as an internal director at the time of payment of each special performance-based bonus, and participated in the approval and settlement of the payment of performance-based bonus, and was also paid a special performance-based bonus. However, it cannot be interpreted that the decision on the payment of remuneration for the director without a resolution of the general meeting of shareholders is valid merely because it is anticipated that the internal director who is a major shareholder of the company would have approved and decided the payment of remuneration for the director, or that the resolution would have been made if the general meeting of shareholders was held. Such interpretation results in de facto excluding the application of the Commercial Act to the general meeting of shareholders if the major shareholder owns a majority of the company’s shares. Accordingly, even if Nonparty 1 and Nonparty 1’s family hold more than 80% of the Plaintiff Company’s shares, it cannot be deemed that there was a resolution of the general meeting of shareholders. Accordingly, Defendant 1’s above assertion is rejected.

(c) Whether remuneration payment within the limit of remuneration ceiling of directors determined by a general meeting of shareholders is valid;

1) Defendant 1’s assertion

Inasmuch as the amount within the limit of the amount determined by the general meeting of shareholders among the special bonus paid to Defendant 1 is valid, unjust enrichment cannot be established.

2) Determination

The Plaintiff’s regular general meeting of shareholders only set the limit of remuneration for directors, but did not decide on the amount, method and timing for payment of special performance pay. As seen earlier, the decision on the payment of special performance pay becomes null and void without a resolution of the general meeting of shareholders cannot be deemed as a valid performance payment of the part solely on the ground that part of the special performance payment, which was paid without a legal source, is within the limit of director’s remuneration determined by the general meeting of shareholders. Therefore, the payment of special performance pay constitutes unjust enrichment made without any legal ground, and Defendant 1’s assertion that differs from this premise is without merit.

D. Whether Defendant 1 is a bona fide beneficiary

1) Defendant 1’s assertion

Since Nonparty 1, a major shareholder, approved the payment of special bonus, Defendant 1 did not know that the payment of bonus constitutes unjust enrichment without any legal ground. Accordingly, Defendant 1 is liable to return the profit received as a bona fide beneficiary only to the extent that there are existing benefits.

2) Determination

When the beneficiary of unjust enrichment becomes aware that there is no legal cause after receiving the benefit, he/she is liable for return of the benefit as a malicious beneficiary from that time (Article 749(1) of the Civil Act), and the person liable for return is aware that his/her ownership of the benefit has no legal cause.

Defendant 1 has worked for a long time in the Plaintiff Company as a director, and has been engaged in the work related to the representative director. In light of the Commercial Act and the Plaintiff Company’s articles of incorporation, the circumstances in which the resolution of the general meeting of shareholders is required for the payment of special performance-based incentives are naturally known. Defendant 1’s “the performance-based bonus fluctuation” stated in Defendant 1’s labor contract is merely KRW 119,952,768 (the entry of evidence No. 3-1), while the amount paid as special performance-based bonuses in 2013 and 2014 exceeds the scope of the performance-based bonus ordinarily entitled to 3.9 billion won and 60 million won. In fact, Defendant 1 appears to have not been paid a large amount of special performance-based bonus as in the instant case for which the Plaintiff Company works as a director (the entry of evidence No. 46). Nevertheless, considering the fact that Defendant 1 received a large amount of special performance-based bonus without confirming the payment provision or procedure, Defendant 1 is not accepted as the beneficiary’s legal interest.

E. Whether a claim for return of special performance-based pay violates the good faith principle

1) Defendant 1’s assertion

The plaintiff's claim for return to defendant 1 on the ground that there was no resolution of the general meeting of shareholders since the non-party 1, who is a major shareholder and a real manager, paid the special performance amount with approval of the general meeting of shareholders

2) Determination

If a person who violates the mandatory law denies his/her assertion on the invalidity of an agreement in violation of the compulsory law on the ground that it is an exercise of the right in violation of the principle of good faith, this would result in realizing the outcome to be excluded by the mandatory law, and the legislative intent of the agreement is entirely entirely neglected, barring any special circumstance, such assertion cannot be deemed as contrary to the principle of good faith. Meanwhile, in order to deny the exercise of the right on the ground that it is in violation of the principle of good faith, there should be justifiable grounds for the other party’s belief or objectively deeming that the other party was in good faith, and the exercise of the right against the other party’s faith should reach the extent that it is not acceptable in light of the concept of justice (see Supreme Court Decision 2007Da17482, Mar. 10, 201).

As seen earlier, the Plaintiff’s special performance-based payment to Defendant 1 is null and void in violation of Article 388 of the Commercial Act, which is a mandatory provision. Even if the Plaintiff was aware of the invalidity of the payment of the special performance-based payment, such circumstance alone would result in practically permitting the return of the paid remuneration without a resolution of a general meeting of shareholders as prohibited by the Commercial Act if it was impossible to claim the return of the payment in violation of the compulsory provision. There is no circumstance to deem that Defendant 1’s claim for the return of the special performance-based payment of the special performance-based payment would be unreasonable to the extent that it is unreasonable in light of the concept of justice in light of the concept of justice. Accordingly, Defendant 1’s allegation is without merit.

3. Conclusion

Therefore, the judgment of the first instance is legitimate, and all appeals by the plaintiff and defendant 1 are dismissed.

Judges Lee Jin-man (Presiding Judge)