The meaning of name lending prohibited by Article 21 of the Framework Act on the Construction Industry and the criteria for determining whether to lend the name of construction business.

Article 21 and Article 96 subparag. 4 of the Framework Act on the Construction Industry

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Lee Jae-soo et al., Counsel for plaintiff-appellant)

Defendant 1 and four others

Prosecutor

Busan District Court Decision 2005No442 delivered on August 18, 2005

All appeals are dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Upon examining the reasoning of the judgment below in light of the records, the court below rejected the defendants' credibility of the evidence that is appropriate for the defendants' acts of altering private document of this case and fraud, and found the defendants not guilty of this part of the facts charged on the ground that there is no other evidence, and there is no error of law such as misconception of facts or misunderstanding of legal principles due to violation of the rules

2. Regarding ground of appeal No. 2

In light of the legislative purport of the Framework Act on the Construction Industry (hereinafter referred to as the “Act”) for the purpose of promoting the proper execution of construction works and the sound development of the construction industry, and the relevant provisions of the Act, which provide strict standards for the license and registration of construction business to achieve this objective, and are essential and core with which no person other than a licensed or registered constructor is able to engage in construction business, “an act of allowing another person to receive or execute construction works by using his/her name or trade name (hereinafter referred to as “title lending”)” prohibited under Article 21 of the Act shall be interpreted as “an act of allowing another person to receive or execute construction works by using his/her own name or trade name” (hereinafter referred to as “an act of allowing another person to use his/her name or trade name) with the knowledge that the other person would be qualified to receive or execute construction works, even if he/she executes construction works with another person (hereinafter referred to as “contractor”) in the name of a constructor, and if the constructor actually received or is actually involved in the construction work, it shall not be viewed as a name.

Furthermore, whether a constructor was actually involved in the supply and demand of construction works and construction works shall be objectively determined in light of the following: (a) details of the demand and supply of construction works and whether to receive the consideration; (b) details and methods of receiving the consideration; (c) details of the agreement between the constructor and the contractor related to the construction works; (d) extent and scope thereof; (e) methods of raising and managing construction funds and receipt of progress payment; (e) methods of receiving progress payment; and (g) ownership of liability and profit and loss arising from the construction; and (e) the relevant constructor, contractor, and other related persons have stated in the investigative agency or court and used the name lending or any other similar expression; and (e) the mere fact that a rice lending is not recognized (see Supreme Court Decision 2002Do7425, May 13, 2003, etc.).

In light of the above legal principles and records, the court below acknowledged facts as stated in its holding, and held that Defendant 5 corporation actually participated in the supply and demand of the instant construction project and actually performed almost all the process on its own, and held Defendants not guilty of the violation of the Framework Act on the Construction Industry by lending the name of this case on the ground that there is no proof of the crime, and there is no error of law such as misconception of facts or misunderstanding of legal principles due to violation of

3. Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)