[1] Whether an executor of an aggregate building bears a warranty against defects under Article 9 of the former Act on the Ownership and Management of Aggregate Buildings (negative in principle)

[2] Where a contract for construction works constitutes a commercial activity, the extinctive prescription period of the contractor's liability for warranty (=5 years)

[3] In a case where the extinctive prescription of damage claim in lieu of defect repairs under a contract between the apartment construction company Gap and the apartment construction company Eul, a selling company Eul, is at issue, the case affirming the judgment below holding that the above claim suffered a five-year commercial extinctive prescription

[1] Article 9 of the former Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 6925, Jul. 18, 2003; hereinafter “former Act”) only provides for the warranty liability of the buyer of an aggregate building. Thus, barring special circumstances, such as where the buyer of an aggregate building participates in the sale contract and takes the responsibility of transfer of ownership due to the sale of a divided building, it shall not be deemed that the contractor of an aggregate building bears the warranty liability under Article 9 of the former Act, unless there are special circumstances, such as that the seller is the one party to the sales contract who bears

[2] Where a contract for construction works falls under commercial activities, the contractor's liability for warranty based on such contract shall be deemed to take five years extinctive prescription in principle pursuant to the main sentence of Article 64 of the Commercial Act.

[3] In a case where the extinctive prescription of damage claim in lieu of defect repairs under a construction contract between the apartment construction company Gap and the apartment construction company Eul, the apartment construction company Eul and the seller company Eul, the case affirming the judgment below that Eul suffered a five-year commercial prescription period for the above claim held by the company Gap

[1] Article 9 of the former Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 6925 of July 18, 2003) / [2] Article 64 of the Commercial Act / [3] Article 64 of the Commercial Act

[1] Supreme Court Decision 2008Da12507 Decided January 30, 2009

The council of occupants' representatives (Attorneys Park Hong-chul et al., Counsel for the plaintiff-appellant)

Korea Housing Guarantee Co., Ltd and one other (Law Firm Future, Attorney Park Jong-woo, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2004Na58309 decided February 18, 2009

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 9 of the former Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 6925 of Jul. 18, 2003; hereinafter "former Act") only provides for the liability for warranty against the buyer of an aggregate building. Thus, barring any special circumstance such as that the constructor of an aggregate building shall be construed as one party to the sales contract, which bears the responsibility for the transfer of ownership due to the sale of a sectioned building by participating in the sales contract and is interpreted as one party to the sales contract (see Supreme Court Decision 2008Da12507, Jan. 30, 2009).

The court below acknowledged the fact that only the non-party light construction company (hereinafter referred to as "non-party light construction company") sold the apartment of this case on the grounds of the evidence and significant circumstances adopted by the court below, and that the non-party light construction company (hereinafter referred to as "non-party light construction company") was not a construction company in charge of the construction of the apartment of this case, and determined that the defendant construction company did not bear the warranty liability pursuant to Article 9 of the former Multi-Family Building Act because it was merely a contractor of the apartment of this case and is not a business entity who sold this apartment of this case. In light of the above legal principles and records, the above fact-finding and decision of the court below are justified, and there is no error in the misapprehension of legal principles as otherwise alleged in the

2. Regarding ground of appeal No. 2

Where a contract for construction works falls under commercial activities, the contractor's liability for warranty based on such contract shall, in principle, take five years extinctive prescription in accordance with the main sentence of Article 64 of the Commercial Act.

The lower court determined that the damage claim in lieu of the defect repair under the instant contract between the non-party company and the Defendant Construction Company, the contractor responsible for the construction of the apartment in this case, was the commercial claim and the five-year commercial prescription period. In light of the aforementioned legal principles and the records, the lower court’s determination on this part is justifiable, and from different opinions, the allegation in the grounds of appeal that the defect liability of the Defendant Construction Company under the instant contract ought to be deemed to take ten-year civil prescription is not acceptable.

3. As to the third ground for appeal

The issue of whether to accept the application for examination of evidence is a matter belonging to the reasonable discretion of the court, and the value judgment on the result of examination of evidence regarding the adopted method is also a matter belonging to the discretionary authority of the fact-finding court, unless it is contrary to logical and empirical rules. The court below dismissed the plaintiff's request for fact-finding on the appraiser, while the court below rejected the appraisal result of the court of first instance without any particular reason and calculated the amount of the warranty bond based on only the appraisal result of the court below, such circumstance alone does not lead to an error of the court below's measure or judgment,

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Ahn Dai-hee (Presiding Justice)