[1] Requirements for a rehabilitation claim under Article 118 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act

[2] Where the contractor of a construction contract completed the performance of the contract by completing and delivering the construction before the commencement of the rehabilitation procedure, and the damage incurred by the defect of the object completed after the commencement of the rehabilitation procedure for the contractor is practically caused, whether the contractor’s right to claim compensation for the defect repair of the contractor constitutes a rehabilitation claim (affirmative in principle) and whether the contractor’s right to claim compensation for damages arising from the contractor’s non-performance of the contractor’s obligation under the contract constitutes a rehabilitation claim (affirmative in principle)

[1] Article 118 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act / [2] Articles 390 and 667 (2) of the Civil Act, Article 118 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act

[1] [2] Supreme Court Decision 2011Da109388 Decided April 23, 2015 (Gong2015Sang, 719) / [1] Supreme Court Decision 2011Da8435 Decided November 29, 2012 (Gong2013Sang, 21) Supreme Court Decision 2012Da114851 Decided May 16, 201 (Gong2014Sang, 1193) / [2] Supreme Court Decision 2001Da24174, 24181 decided October 9, 201 (Gong201Ha, 2431)

Korea Land and Housing Corporation (Attorney Song-tae et al., Counsel for the plaintiff-appellant)

Esweak Construction Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Kim Man-man et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2013Na2010961 decided July 17, 2014

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined.

1. Rehabilitation claims under Article 118 subparag. 1 of the Debtor Rehabilitation and Bankruptcy Act refer to any property claim arising from the cause of the occurrence of claims, such as expression of intent, before the commencement of rehabilitation procedures. As long as the cause of the occurrence of claims is based on the cause prior to the commencement of rehabilitation procedures, it is not specific or even if the cause of the occurrence of claims arrives after the commencement of rehabilitation procedures (see, e.g., Supreme Court Decision 2012Da114851, May 16, 2014). The main cause of the claim is sufficient if the major cause of the claim is preserved before the commencement of rehabilitation procedures (see, e.g., Supreme Court Decision 201Da84335, Nov. 29, 2012).

In the case of a contract for construction work, unless there are special circumstances, no longer cancel the contract for construction work, and if a contractor cannot cancel the contract for construction work due to the completion and delivery of a building before the commencement of rehabilitation procedures, the contractor shall be deemed to have completed the contract for construction work before the commencement of rehabilitation procedures (see Supreme Court Decision 2001Da24174, 24181, Oct. 9, 2001). In such a case, it is reasonable to deem that the primary cause of damages claim in lieu of the defect repair occurred before the commencement of rehabilitation procedures, unless there are special circumstances, unless the contractor is obligated to compensate the contractor for the damages due to the failure of the contractor to perform his/her obligation under the contract due to the failure of the contractor to perform the obligation under the above warranty contract, the damage claim in lieu of the defect repair shall be deemed a rehabilitation claim. Furthermore, even if the contractor is obligated to compensate for the damages due to the extension of the contractor's body or property, barring special circumstances, it also constitutes a rehabilitation claim before the commencement of rehabilitation procedures.

2. The reasoning of the lower judgment and the evidence duly admitted by the lower court reveal the following facts.

A. On March 5, 2001, the Defendant (hereinafter “Defendant”) entered into a construction contract with the Korea National Housing Corporation (the Plaintiff succeeded to the rights and obligations of the Korea National Housing Corporation on October 1, 2009; hereinafter “the Plaintiff”) regarding the instant apartment construction, machinery, civil engineering, electricity, telecommunications, and landscape architecture (hereinafter “instant contract”). After completion of construction works on the instant apartment construction, etc., the Plaintiff obtained approval for the use of the instant apartment from the competent administrative agency on December 5, 2001, and thereafter sold the instant apartment.

B. As a result of the occurrence of defects caused by the non-construction, erroneous construction, defective construction, etc. on the instant apartment, the council of occupants’ representatives of the instant apartment filed a lawsuit against the Plaintiff on September 10, 2009 against the Plaintiff seeking damages in lieu of defect repairs (hereinafter “instant prior lawsuit”). The Seoul High Court (Seoul High Court 2011Na25116) rendered a decision to recommend reconciliation in the instant prior lawsuit, and the said decision to recommend reconciliation became final and conclusive on November 29, 2011 on the grounds that the parties did not raise any objection thereto.

C. On November 30, 2011, the Plaintiff paid damages, etc. in lieu of defect repairs to the council of occupants’ representatives of the instant apartment, in accordance with the decision on the recommendation for settlement, and paid service fees, stamp fees, and attorney fees in the instant lawsuit. On March 30, 2012, the Plaintiff paid litigation costs to the council of occupants’ representatives of the instant apartment in accordance with the decision on the amount of litigation costs determined.

D. Meanwhile, on December 12, 2008, the Defendant received a decision to commence rehabilitation procedures as Seoul Central District Court 2008 Mahap82, and obtained a decision to commence rehabilitation procedures on December 22, 2009. Moreover, on October 4, 2013, the rehabilitation procedures against the Defendant were completed, and the Defendant taken over the instant lawsuit against the Nonparty against the Nonparty by the Defendant.

3. We examine the above facts in light of the legal principles as seen earlier.

If the Plaintiff had already completed the construction work on the apartment of this case before the commencement of the rehabilitation procedure and obtained approval for the use of the apartment of this case, the Defendant should be deemed to have completed the implementation of the contract of this case before the commencement of the rehabilitation procedure

Therefore, even if the defect of the apartment of this case occurred in reality after the commencement of rehabilitation procedures for the defendant, the claim for damages in lieu of the defect repair of the apartment of this case, which the plaintiff had, before the commencement of rehabilitation procedures for the defendant, shall be deemed to fall under the rehabilitation claim as it has a major cause. Furthermore, even if the defendant is obligated to compensate the plaintiff for the above damage caused by the plaintiff's failure to perform his/her duty under the contract of this case as a result of the plaintiff's occurrence of property damage, such as the payment of litigation costs, after the commencement of rehabilitation procedures for the defendant, the claim for damages due to the

However, in the course of the rehabilitation procedure against the defendant, the plaintiff reported the right to claim damages in lieu of the aforementioned defect repair and the right to claim damages due to non-performance as rehabilitation claims, or there is no evidence that each of the above rights to claim damages was entered as rehabilitation claims in the list of rehabilitation creditors, etc. submitted by the defendant's administrator. Therefore, if the rehabilitation plan was decided to grant authorization in the rehabilitation procedure against the defendant, there is sufficient room to deem that the defendant exempted his/her liability under Article 251 of the Debtor Rehabilitation Act as to the right to claim damages in lieu of the

Nevertheless, solely on the grounds stated in its reasoning, the lower court determined that the Defendant is liable for damages to the Plaintiff on the premise that the liability period for damages in lieu of the repair of defects that cannot be determined at the time of occurrence of defects among the defects that are ten years of defect and the claim for damages arising from the nonperformance of the contract of this case does not constitute rehabilitation claims. In so doing, the lower court erred by misapprehending the legal doctrine on rehabilitation claims, etc. under the Debtor Rehabilitation Act, thereby adversely affecting the conclusion of the judgment. The allegation contained

4. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part against the defendant among the judgment below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating

Justices Kim Chang-suk (Presiding Justice)