2020 Gohap61294 Demanding revocation of registration of elevator maintenance business

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May 27, 2021

June 15, 2021

1. The Defendant’s revocation of registration of an elevator maintenance business against the Plaintiff on March 31, 2020 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The plaintiff is a corporation whose business purpose is manufacturing, selling, and maintaining elevators, etc., and an elevator maintenance business operator who has registered each elevator maintenance business for the main office and six business places in Seoul Special Metropolitan City pursuant to Article 39 of the Elevator Safety Management Act (hereinafter referred to as the "elevator Act").

B. The Ministry of the Interior and Safety, from October 21, 2019 to December 6, 2019, conducted a government joint fact-finding survey on the actual condition of subcontracting elevator maintenance business (hereinafter “instant survey”). On December 10, 2019, four elevator large companies, including the Plaintiff, including the Plaintiff, received an elevator maintenance business throughout the country since 2013, concluded a nominal joint supply and demand agreement to avoid the violation of the subcontract restriction regulations stipulated in the Elevator Act, and issued a survey on the fact that the subcontractors actually participated in the elevator maintenance business by sharing the elevator maintenance business in a lump sum.

C. Upon receipt of the notice of the result of the instant investigation from the Ministry of Public Administration and Security, the Defendant issued a prior notice on January 20, 2020 on the disposition of revocation of registration of elevator maintenance business, and held a hearing on February 3, 2020. On March 31, 2020, the Defendant issued a disposition to revoke the Plaintiff’s registration of elevator maintenance business as of May 1, 2020 pursuant to Article 44(1)5 of the Elevator Act and Article 67(1) [Attachment Table 12] of the Enforcement Rule of the Elevator Act (hereinafter “instant disposition disposition”) on the ground that the Plaintiff violated Article 42 of the Elevator Act and confirmed the fact that the Plaintiff has subcontracted it for at least six months to a joint supplier (hereinafter “instant disposition”).

D. Meanwhile, the Ministry of the Interior and Safety, after the instant investigation and announcement, filed a criminal charge against the Plaintiff, etc. on the charge of violating Article 42 of the Elevator Act, and the prosecutor of the Seoul Western District Prosecutors' Office rendered a disposition against the Plaintiff on the ground that the relationship between the Plaintiff and the subcontractor does not constitute a subcontract with other maintenance business operators prohibited by the Elevator Act.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, 9 (including branch numbers for those with additional numbers; hereinafter the same shall apply), Eul evidence Nos. 1 and 5, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant disposition should be revoked on the grounds that it is unlawful for the following reasons.

1) The instant disposition is a serious procedural defect in violation of Article 23(1) of the Administrative Procedures Act, as the grounds for the disposition in question are not entirely specified.

2) The mere fact that the customer pays the cost of maintenance to the representative of the joint contractor cannot be viewed as subcontracting the relationship with the subcontractor. The Plaintiff did not perform the status and role of the original contractor, such as work instruction and performance management, or performed elevator maintenance work by concluding a separate subcontract with the subcontractor. Since it was only performed the elevator maintenance work by constituting a joint contractor with the subcontractor, there is no reason for disposal since it did not constitute a subcontract violating Article 42 of the Elevator Act, and there is no reason for disposal.

3) The instant disposition standard is merely an internal administrative agency’s internal business handling standards, and the Elevator Act provides that the suspension of business, termination of subcontract, imposition of penalty surcharges, etc. may be ordered in addition to revocation of registration in violation of the prohibition of subcontracting regulations. Thus, the instant disposition revoking the Plaintiff’s registration of elevator maintenance business constitutes a case where the Plaintiff’s disposition is not necessarily considered, or where it is deemed that the Plaintiff did not properly consider individual and specific discretionary factors.

B. Determination

1) As to the assertion of violation of Article 23(1) of the Administrative Procedures Act

A) The following facts are acknowledged in full view of the aforementioned evidence and the evidence stated in the evidence Nos. 2 through 5 and the purport of the entire pleadings.

(1) The National Assembly Environmental Labor Relations Commission requested a thorough investigation and strict disposition to the relevant ministries through the inspection of state administration ( October 11, 2019) and pending issues ( November 7, 2019) with regard to a fall accident, etc. of a collaborative company, which occurred on March 27, 2019, and the Ministry of Public Administration and Security announced the results of the instant investigation on December 10, 2019 with local governments and the Korea Elevator Safety Corporation.

(2) The main part of the instant advance notice sent by the Defendant to the Plaintiff on January 20, 2020 is as follows.

A person shall be appointed.

(3) During the period from January 31, 2020 to February 5, 2020, the Defendant held a hearing under Article 77(2) of the Elevator Act on four major elevator companies including the Plaintiff. The Defendant’s competent authorities stated the following opinions in the hearing procedures with respect to the Plaintiff on February 3, 2020.

- The background in which the hearing was held on December 10, 2019, and the government joint elevator elevator operator's status in the second half of 2019, following the announcement of the results of illegal subcontracting in large companies of the Ministry of the Interior and Safety, in the second half of 2019.

On the basis of various evidentiary materials collected by the inspection.On February 2013 through November 2019, we were found to have violated the provisions of Article 42 of the Elevator Maintenance Business Act, Article 34 of the Enforcement Decree of the same Act, such as restrictions on subcontracting of the elevator maintenance business and the ratio of subcontracting of the maintenance business under Article 44 (1) 5 of the Elevator Act and Article 67 of the Enforcement Decree of the same Act, such as restrictions on subcontracting of the elevator maintenance business under Article 44 of the same Act and restrictions on subcontracting of the elevator maintenance business under Article 67 of the Enforcement Decree of the same Act, if we were to examine the current status of the supply and demand of joint contracts from February 2013 to November 2019.

(4) As a result of holding a hearing with respect to the plaintiff, the hearing records prepared by the presiding official of the hearing include the statement of the plaintiff's written opinion on February 3, 2020 as follows:

① Whether the customer pays the cost of maintenance and repair to each member of the joint contractor, and whether the payment is made in a lump sum to the representative of the joint contractor is not a standard to distinguish between the joint contract and the subcontract, ② us has not performed the status and role of the original contractor, such as ‘business instruction' and ‘performance management'.

(5) The Defendant’s report on the result of the hearing held by an illegal subcontractor for elevator maintenance, prepared on February 20, 2020 after completing the hearing procedures for four major elevator companies, including the Plaintiff, is indicated as follows:

1. Outline on the terms and conditions of holding hearings for illegal subcontractors. Details of violation: Impossibility of the standard of joint contract (fields) due to the violation of the Act on February 13, 2013 or the Act or the Act on the Law and the Regulation of Contracts (in excess of 50%) ; Prohibition of the standard of joint contract (fields) due to the violation of the Act on the Maintenance and Management of Contracts (in excess of 50%) ; 25-40% due to the self-sale of the goods to the subcontractor; 3. The role of the status of the prime contractor, not the joint contract, such as the payment of the price-on-

(Entry of the same contents in the above hearing protocol) The public opinion of e.g., the public opinion of e.g., the public opinion of e.g., the establishment of a joint supply and demand relationship, not a subcontract relationship, is prepared and submitted in accordance with the administrative guidance of the Ministry of Public Administration and Security and the public interest of e.g., safety of the e.

(6) On December 11, 2019, the Ministry of the Interior and Safety accused the Plaintiff and the representative director of the Plaintiff against the charge of violating Article 42 of the Elevator Act, and the specific charges stated in the accusation charge are as follows.

Pursuant to Article 42 of the ○ Elevator Act, the maintenance business operator may not subcontract the maintenance business of an elevator that he/she has entered into a contract to another maintenance business operator, etc. Nevertheless, the defendant's work violated the above prohibition provisions in a way that constitutes a joint supply and demand organization only through appearance, even though a subcontract is prohibited under the above Act.In detail, the defendant's work is ordered by organizing a joint supply and demand organization in appearance with the subcontractor, and all or most of the actual elevator maintenance business prescribed by the relevant Acts and subordinate statutes, such as the self-inspection, repair of an elevator, emergency exit, and replacement of parts, have the subcontractor perform the whole or most of the maintenance business of an elevator. In light of the operational status and actual operational status of

(7) The notice of disposition of this case contains the following descriptions as to the contents and reasons for the disposition.

A person shall be appointed.

B) Article 23(1) of the Administrative Procedures Act provides that “In rendering a disposition, an administrative agency shall present the basis and reasons for the disposition to the parties, except in any of the following cases.” This purport is to exclude arbitrary decisions of the administrative agency and allow the parties to properly cope with it in the administrative remedy procedure. Therefore, in a case where it is sufficiently known that a disposition was made by the parties at the time of the disposition, in full view of the content stated in the written disposition, relevant statutes, and the overall process, etc. up to the relevant disposition, and where it is deemed that there was no particular obstacle to the parties’ appeal and moving to the administrative remedy procedure, the disposition cannot be deemed as a procedural defect that should be revoked even if the basis and reasons for the disposition are not specified in the written disposition (see, e.g., Supreme Court Decision 2018Du41907, Dec. 13, 2019).

In light of the above legal principles, the following circumstances acknowledged by the overall purport of the above facts and arguments, namely, ① the Minister of Public Administration and Security, on December 10, 2019, ordered the elevator maintenance business from 2013 to four major companies of an elevator, announced the results of the instant investigation that they violated the provisions of Article 42 of the Elevator Act by entering into a nominal supply and demand agreement with a collaborative company and allocating the actual elevator maintenance business in a lump sum. ② The plaintiff was not only the target company of the instant investigation but also the object company of the investigation, but also the details and background of the investigation, and the result of the investigation. ③ The instant disposition was based on the results of the investigation on the actual status of four major companies of an elevator, and was not based on the results of the instant investigation, and was not based on the consultation with the plaintiff 1 in the execution process of the instant elevator maintenance and repair contract, and was not based on the order of the plaintiff 2 to cooperate in the execution of the instant elevator maintenance and repair contract (Article 42 and 45 (1) of the Elevator Act)7).

C) Therefore, it cannot be deemed that the disposition of this case was in violation of Article 23(1) of the Administrative Procedures Act, and this part of the Plaintiff’s assertion is without merit.

2) As to the non-existence of grounds for disposition

A) The following facts are acknowledged according to the purport of Gap evidence Nos. 6, 7, and Eul evidence Nos. 6, 7, and 7 as a whole and the purport of the whole pleadings.

(1) In organizing a joint supply and demand organization with a subcontractor, the Plaintiff prepared a "Basic Agreement for the Organization of Joint Supply and Repair of Elevators" (hereinafter referred to as the "Basic Agreement"). The main contents of the Framework Agreement are as follows.

(1) The specific terms and conditions of a joint supply and demand organization shall be set out in detail by mutual agreement between the parties and in accordance with a joint supply and demand contract concluded with the customer. The parties within the joint supply and demand organization shall be jointly and severally liable to the customer for the specified affairs. The representative of the joint supply and demand organization shall, in principle, be designated by the customer,

2. The work performed by the parties shall be stipulated in a joint supply and demand contract. Each party shall perform their respective maintenance and management work in accordance with a joint supply and demand contract, and the plaintiff shall provide the parts for the plaintiff's products within two days (Articles 2 and 4) if requested by the subcontractor, the representative of the joint supply and demand

3. The customer may directly pay the maintenance and repair charges to the parties.

In the case of a customer's preference for payment, the parties concerned shall be subject to a contract for the distribution of the cost of maintenance and repair of the joint contractors, and accordingly the representative of the joint contractors shall process the transaction for the benefit of all the parties and the customer (Article 3).

4. The Parties recognize that they have the equal status in the joint supply and demand organization and that any content of this contract shall not be construed to form any non-independent relationship other than the relationship of subcontract, commercial agent or joint supply and demand organization under this contract (Article 8).

(2) The contract for the joint supply and demand of elevators submitted by the plaintiff and the defendant are parties to the contract, and the managing body of the elevator, which is the contracting party, designates one of the plaintiff and the subcontractor as the representative of the joint supply and demand company and selects the method of payment, such as maintenance and management fees, etc. If the contracting party selects the method of collective payment, it shall be paid to the representative of the joint supply and demand company, and the members of the joint supply and demand company if the method of payment is selected. Meanwhile, in the main text or general terms of the above joint supply and demand contract, the members of the joint supply and demand company provide that the joint supply and demand company shall perform the elevator maintenance and management work, and the contract amount attached to the contract stipulate the details of the work according to the classification of the members and the distribution ratio of the cost according to the classification of each member. The plaintiff mainly sets out technical support, call center operation, material supply and demand business, and the subcontractor share the amount of the plaintiff's share at least 30% through 47%, and 53% through 70% of the cost distribution ratio.

B) Administrative laws and regulations, which serve as the basis for an indivative administrative disposition, shall be strictly construed and applied, and shall not be excessively expanded or analogically interpreted in the direction unfavorable to the other party to the administrative disposition. In a case where a teleological interpretation is allowed taking into account the legislative intent and purpose of such administrative laws and regulations, such a teleological interpretation shall not go beyond the ordinary meaning of the language and text (see, e.g., Supreme Court Decision 2014Du47686, Nov. 24,

In light of the following circumstances, which are acknowledged as a whole by taking into account the facts acknowledged as above and the purport of the entire pleadings, the evidence submitted by the defendant alone cannot be deemed as a subcontract to another maintenance business operator prohibited by Article 42 of the Elevator Act. Thus, the plaintiff's allegation in this part is with merit.

(1) Article 42 of the Elevator Act provides that no maintenance business operator shall subcontract any elevator maintenance business under his/her contract to another maintenance business operator: Provided, That this shall not apply where he/she subcontracts any maintenance business below the ratio prescribed by Presidential Decree to another maintenance business operator, and the management entity (in cases where the maintenance business operator is a management entity, referring to an elevator owner or a person designated as an elevator manager pursuant to other Acts and subordinate statutes) gives written consent, and Article 34(1) of the Enforcement Decree of the Elevator Act provides that "ratio prescribed by Presidential Decree" under the proviso to Article 42 of the Elevator Act is delegated to him/her, if he/she subcontracts only the replacement of elevator parts during his/her maintenance business, he/she subcontracts only the replacement of elevator parts during his/her contract, and if he/she only turns out to a self-inspection business among the maintenance business, he/she shall be deemed as one half of the maintenance business.

Provisions on the restriction on subcontracting of an elevator maintenance business operator were first enacted on December 30, 1996 as Article 11-5 of the former Elevator Act which was amended by Act No. 5213 on December 30, 1996, and the above provisions stipulate that "repair business operator shall not subcontract the repair business of an elevator that he/she has entered into: Provided, That this shall not apply where there is a consent (in cases where repair business operator concurrently serves as a managing body, referring to the consent of the owner or the person designated as an elevator manager in accordance with the provisions of other Acts and subordinate statutes) from the managing body of an elevator," and Article 11-5 of the former Elevator Act was amended as of December 31, 2004, which was established as the requirement for subcontracting by Act No. 11343, Feb. 22, 2012, the maintenance business operator is prohibited from subcontracting the elevator maintenance business operator's entire elevator maintenance business at a rate lower than that prescribed by Presidential Decree."

(2) In full view of the language and text, structure, legislative history, etc. of the aforementioned relevant statutes, the purpose of restricting subcontracting of elevator maintenance business under the Elevator Act is to protect trust in the ordering person’s maintenance business operator, including managing body of an elevator, and to ensure the proper performance of contracted maintenance business. Even if the maintenance business operator who forms a joint supply and demand organization and takes the responsibility of maintaining an elevator in the manner of joint performance upon being entrusted with the elevator maintenance business, barring any special circumstance, it is difficult to view that the elevator management entity’s trust in the contractor or interferes with the proper performance of contracted elevator maintenance business.

In addition, Article 42 of the Elevator Act prohibits a maintenance business operator who has been awarded a contract from a managing body of an elevator from subcontracting his/her maintenance business to other maintenance business operator, etc. in excess of the ratio prescribed by Presidential Decree, in light of the legislative purport of the Elevator Act that limits the liability for maintenance by the joint performance method of members of a joint supply and demand organization, the relationship between internal liability for maintenance and management, and the subcontract for maintenance and management business in principle, even if the maintenance business operator agrees to perform his/her duties by sharing the roles among the members of a joint supply and demand organization responsible for the joint performance method, it shall not be deemed as

However, in principle, the issue of whether a joint contractor is a joint contractor shall be determined by the content and form of a contract, i.e., directly contracted or wholly subcontracted from the contractor. Thus, in exceptional cases where an elevator maintenance business operator agreed to subcontract all or part of his/her maintenance work from the managing body and then prepares a nominal joint supply contract and forms only the appearance of the joint supply and demand in order to avoid the restriction on subcontracting under Article 42 of the Elevator Act even though he/she has been awarded a contract with the managing body, it may be deemed that he/she actually entered into a subcontract with the subcontractor notwithstanding the form of the contract.

(3) As seen earlier, the Defendant, on the grounds of the instant disposition grounds that the relationship with the Plaintiff constitutes a substantial subcontract, cited that the Plaintiff performed its role as a principal contractor rather than a joint contract, such as taking out part of the price, paying the remainder to the subcontractor, ordering the subcontractor to conduct the business, or managing the performance.

In principle, each of the instant basic agreement and joint supply and demand agreements requires a customer to choose a package payment method, but the customer designates or the representative of a joint supply and demand organization designated through an agreement between the parties shall pay the other parties in accordance with the distribution rate established. Accordingly, the mere fact that the managing body of an elevator, the contracting party, selects a package payment method and pays the price to the Plaintiff, which is the representative of a joint supply and demand organization, distributes the payment to the Plaintiff is difficult to deem the relationship between the Plaintiff and the subcontractor as practically constituting subcontracting. In this regard, the Defendant argues that the Plaintiff did not comply with Article 11(2) of the Guidelines for the Joint Contract Operation of Elevators (Rules for the Management of Elevators 410) or Article 11(2) of the Operation of the Elevator Act (Ministry of Public Administration and Security No. 2019-24) and paid the price to the subcontractor, which constitutes a joint supply and demand organization under Article 72 of the Enforcement Decree of the Act on Contracts to Which the State Is a Party, and thus, it is difficult to view that the Plaintiff’s joint payment method is a contracting party under the Act.

Furthermore, there is no evidence that the Plaintiff, according to the division of roles under a joint supply contract, has served as a prime contractor, such as ordering the subcontractor to provide technical assistance, call center operation, and management of performance by receiving a report, etc., other than performing duties such as technical assistance, call center operation, and supply and demand of materials.

(4) Meanwhile, the Defendant, as a subcontractor, has a structure that makes it inevitable for the Plaintiff to pay the price according to the ratio of the share of the price determined by the Plaintiff. The Plaintiff’s designation as a joint contractor is not the choice of the contracting party but the Plaintiff’s demand or the terms and conditions have been stipulated, and thus, from the perspective of the subcontractor, the Plaintiff merely constitutes a joint contractor in the form of only a form of a joint contractor,

However, even in the case of a subcontract, it cannot be deemed that the parties unilaterally set the price to be paid to the other party, and even if it was difficult to accept the opinion of a collaborative body having equal negotiating power with the Plaintiff in consultation on the terms of the contract, the substance of the collaborative body cannot be deemed to constitute a subcontract on such grounds. In addition, the ratio of allocating the price of the collaborative body stipulated in an individual joint supply contract concluded by the Plaintiff is at least 53% through 70%, and the ratio of allocating the price to the other collaborative body is deemed to have been set according to the contents of the elevator maintenance business that the Plaintiff and the collaborative body agreed to share, and there is insufficient evidence to acknowledge that the Plaintiff unilaterally set the ratio of allocating the price with the collaborative body. In this regard, the parties to the basic agreement of this case understand and agree that the respective claims should be paid through the representative of the collaborative body after the non-performance of the contract was actually paid to the designated parties, and there is no reason to regard that the Plaintiff's share of the price exceeds the risk of paying the price to the other collaborative body (Article 3).

Furthermore, there is no evidence that the managing body of the elevator designated the representative of the joint contractors at the request of the plaintiff as the plaintiff or the plaintiff designated as the joint contractors.

C) Therefore, the instant disposition is not recognized as a ground for its disposition, and without having to examine the remaining arguments of the Plaintiff, the instant disposition should be revoked on the ground that it was unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition.