[1] Whether Article 20 of the Act on the Ownership and Management of Aggregate Buildings, which prohibits a separate disposal of a right to use site on the site of an aggregate building before the sectional ownership is established, applies (negative)

[2] Requirements for establishing sectional ownership for one building / In a case where the intention of sectional ownership is objectively indicated through the application for building permit or the contract for sale in lots before the physical completion of a sectional ownership, whether the existence of sectional ownership can be recognized (affirmative); and in such a case, the point at which sectional ownership is constituted (i.e., when the structure and form are completed as one building and the sectional ownership corresponding to the act of division is completed objectively

[3] In a case where there are co-owners, other than sectional owners, on the site of one building, whether another co-owner may seek a return of unjust enrichment based on his/her co-ownership right against the sectional owners who have used and benefit from the entire site (affirmative in principle)

[4] Whether the owner of a section of exclusive ownership without a right to use site shall return unjust enrichment equivalent to the rent that belongs to the ratio of his/her section of exclusive ownership to the entire section of exclusive ownership in the aggregate building (affirmative in principle)

[5] In a case where Company A, upon obtaining a building permit for an officetel, sold the land to each household of a sectioned building while entering into the construction work, and completed about 10th floor and only the aggregate construction work, set up a collateral on the land of an officetel to B, but upon the purchase of the land at the auction procedure to enforce the collateral security, Company B, upon the completion of an officetel, sold to the owner of the section of exclusive ownership corresponding to the size of the section of exclusive ownership, and sought a return of unjust enrichment against Company C, who is the owner of the section of exclusive ownership that purchased or leased the right to share, the case holding that Company B, who is a co-owner of the site, has a duty to return unjust enrichment equivalent to the ratio of the portion of exclusive ownership to the whole area of the aggregate building to Party B, who is a co-owner of the right to share ownership at the time of establishing the collateral security, and that Party C, etc., has a duty to return unjust enrichment equivalent to the ratio of

[1] The right to use a site, the separate disposition of which is prohibited pursuant to Article 20 of the Act on the Ownership and Management of Aggregate Buildings, is a right that a sectional owner has against the site of a building to own a section of exclusive ownership, and is premised on the establishment of sectional ownership. Therefore, the prohibition of separate disposition as to the site of an aggregate building shall not apply

[2] In order for sectional ownership to be established for one building, there must be a separate act of separating the parts of the building physically partitioned from an objective and physical aspect, and the section of the building should be independent in its structure and use, as well as the physically partitioned parts of the building as the object of sectional ownership. Here, the act of partitioning is a juristic act that intends to divide a specific part of the building into the object of sectional ownership without changing the physical form and quality of the building, and it is sufficient for the disposal authority to place special restrictions on the timing and method, and it is sufficient for an objective external expression of the intention of the disposal authority to divide the building objectively. Even before the physical completion of the partitioned building, if the intention of division is objectively indicated to divide the building newly constructed in the future through the application for building permission or the sale contract, the existence of the act of partitioning can be recognized. However, the structure and form of the partitioned building should be completed as one building and the section corresponding

[3] In a case where the sectional owners of one building own the site of the building according to the share of co-ownership at the time when the building was sold in lots, barring special circumstances, such as the existence of separate regulations, the sectional owners are legally entitled to use the entire site for the purpose of use, regardless of the share of co-ownership in the site, barring any special circumstances, and thus, they cannot seek a return of unjust enrichment among the sectional owners on the ground of a difference in the share of co-ownership in the site. However, in a case where there is a co-owner other than the sectional owners on the site, the site may be used, profit-making, and managed in accordance with the general legal principles as to co-ownership. Therefore, barring any special circumstance, the sectional owners may not be deemed to have the right to use

[4] Since the owner of a section for exclusive use without a right to use the site occupies the site of the section for exclusive use without any legal ground, he/she obtains unjust enrichment equivalent to the percentage of his/her section for exclusive use out of the site to the entire section for exclusive use in the entire section for exclusive use, and the owner of the site can be deemed to have suffered losses corresponding thereto. Therefore, barring special circumstances, the owner of the section for exclusive use without a right to use the site

A co-owner of a section for exclusive use that does not have the right to use a site has the obligation to return unjust enrichment to the owner of the share in the site as above. This obligation is an indivisible obligation, barring any special circumstance, and thus, is obligated to return unjust enrichment regarding the entire area

[5] The case holding that in a case where Company A, upon obtaining permission to construct an officetel, sold the instant land to Company B, which is a site for officetel to Company B while the construction was completed up to 10th floor, and Company B, upon purchasing the said land at the auction procedure to exercise the right to use the site, sold to the owner of the exclusive ownership, and sought a return of unjust enrichment against Company C, who is the owner of the exclusive ownership, who purchased or leased the right to own ownership, the case holding that: (a) it is difficult to view that an officetel’s structure and form, etc. were in a construction state to the extent that it is recognized as identical to that of the building permit at the time of establishment of the right to use the right to use the right to use the site; and (b) it is valid to acquire Company B’s ownership in an auction procedure to exercise the right to use the right to use the right to use the site, and thus, C, etc., without any legal cause, has to return only the portion of exclusive ownership to Company B’s entire area of the exclusive ownership regardless of his/her share.

[1] Article 2 subparag. 6 and Article 20 of the Act on the Ownership and Management of Aggregate Buildings / [2] Articles 1, 2 subparag. 1, and 3 of the Act on the Ownership and Management of Aggregate Buildings / [3] Articles 2 subparag. 6 of the Act on the Ownership and Management of Aggregate Buildings, Articles 263 and 741 of the Civil Act / [4] Article 2 subparag. 6 of the Act on the Ownership and Management of Aggregate Buildings, Articles 41, 413, and 741 of the Civil Act / [5] Articles 1, 2 subparag. 1, 3, and 6, and 20 of the Act on the Ownership and Management of Aggregate Buildings, Articles 263, 41, 413, and 741 of the Civil Act

[1] Supreme Court Decision 2010Da6017 Decided May 27, 2010 (Gong2010Ha, 1265) / [2] Supreme Court en banc Decision 2010Da71578 Decided January 17, 2013 (Gong2013Sang, 298), Supreme Court en banc Decision 2012Da109538 Decided June 24, 2015 / [3] Supreme Court Decision 2011Da58701 Decided March 14, 2013 (Gong2013Sang, 638) / [4] Supreme Court Decision 91Da40177 Decided June 23, 192 (Gong1992, 2242), Supreme Court Decision 201Da71278 Decided June 17, 2012

Plaintiff (Counterclaim Defendant) (Law Firm Hando, Attorneys Lee Han-cheon, Counsel for the plaintiff-Counterclaim Defendant)

Defendant 1 and one other

Defendant Counterclaim (Defendant’s Plaintiff’s Plaintiff’s Plaintiff-Appellant)

Daejeon High Court Decision 2015Na13414, 13421 decided April 8, 2016

All appeals are dismissed. The costs of appeal are assessed against the Defendants and the Defendant-Counterclaim Plaintiff.

The grounds of appeal are examined.

1. Basic factual basis

According to the reasoning of the lower judgment and the record, the following facts are revealed.

A. Since around 1989, the Daeyang General Construction Co., Ltd. (hereinafter “Moyang General Construction Co., Ltd.”) obtained a building permit on the Daejeon Seosung-gu ( Address omitted) 1,657 square meters (hereinafter “instant land”)’s 4th and 13th residential business facilities of the 13th floor above the ground (hereinafter “instant officetel”), and began construction work and sold it to each household as a sectioned building.

B. On April 1, 191, the Daeyang General Construction and the Plaintiff concluded a contract to establish a mortgage on the instant land, and made a comprehensive construction for the debtor, the maximum debt amount of 1.6 billion won, and the establishment registration of a mortgage on the instant land as the Plaintiff (hereinafter “mortgage”).

C. On April 20, 1992, the Plaintiff filed an application for an auction to enforce the instant right to collateral security. On April 21, 1995, at the auction procedure commenced accordingly, the Plaintiff purchased the instant land and paid the sales price in full, and thereafter registered the ownership transfer thereof on July 5, 1995.

D. At the time of the instant establishment of the right to collateral security, the instant officetel was completed only up to 10 floors, and completed around March 1997.

E. From April 1997 to June 2009, the Plaintiff sold to the owner of the instant officetel’s exclusive ownership right corresponding to the size of the instant land. At present, the Plaintiff owned or owned part of the instant officetel’s exclusive ownership right. The Defendants owned or owned part of the instant officetel’s exclusive ownership right, and did not purchase or lease the Plaintiff’s exclusive ownership right to the instant land.

2. As to the establishment of the right to claim restitution of unjust enrichment (ground of appeal Nos. 2, 3, and 4)

A. The right to use a site, the separate disposition of which is prohibited pursuant to Article 20 of the Act on the Ownership and Management of Aggregate Buildings (hereinafter “Act”) is a right that a sectional owner has against the site of a building to own a section of exclusive ownership, and is premised on the establishment of sectional ownership. Therefore, the prohibition of separate disposition as to the site of an aggregate building does not apply before sectional ownership is established (see Supreme Court Decision 2010Da6017, May 27, 2010, etc.).

In order to establish sectional ownership of one building, there exists one building in an objective and physical aspect, and there is a separate act to divide the physically partitioned part of the building into the object of sectional ownership, without changing the physical form and quality of the building. Here, the act of subdivision is a juristic act that intends to divide a specific part of the building into the object of sectional ownership without changing the physical form and quality of the building, and it is sufficient for the person holding the disposition authority to place restrictions on the timing and method, and it is sufficient if it is objectively indicated from the outside. Even before the physical completion of the sectional ownership, if the intention of division is objectively indicated to divide the building that is newly built in the future into the sectional building through the application for building permission or the sale contract, etc., even if the sectional ownership is physically completed, the existence of the act of subdivision can be recognized. However, the sectional ownership is established at the time when the structure and form of the sectional ownership should be completed as one building and the section corresponding to the act of subdivision should be completed objectively and physically (see, e.g., Supreme Court en banc Decision 2010Da328, Jun. 213, 2015

In cases where the sectional owners of one building co-ownership the site of the building at the time of the initial purchase of the building in lots, barring special circumstances, such as the existence of separate regulations, the sectional owners are legally entitled to use the entire site for the purpose of use irrespective of the share of co-ownership in the site, and thus, they cannot seek a return of unjust enrichment among the sectional owners on the ground of a difference in the share of co-ownership in the site. However, in cases where there are co-owners, other than sectional owners, regarding the site, the site may be used, profit-making, and managed in accordance with the general legal principles as to co-ownership. Thus, barring any special circumstance, the sectional owners may not be deemed to have the right to gratuitously use the site, and the other co-owners may claim a return of unjust enrichment based on their co-ownership right (see Supreme Court Decision 2011Da58701, Mar. 14, 2013, etc.

B. According to the above facts and legal principles, the following conclusion can be derived.

(1) It is difficult to deem that the instant officetel at the time of the establishment of the instant right to collateral security was in the construction of a building to the extent that the structure, form, etc. of the instant officetel was deemed identical to that of the building permit. Therefore, prior to the establishment of the instant right to collateral security, the instant officetel was not completed as a sectioned building corresponding to the objective and physical aspect, and the relevant structure, form, etc. was not completed as a separate building corresponding to the act of division. As such, since the instant officetel was not established as at the time of establishment of the instant right to collateral security as to the instant land, it is valid for the Plaintiff to acquire the instant land ownership in the auction procedure to enforce the instant

(2) The Defendants, without the right to use site, occupied the instant land without any legal ground while owning the instant officetel’s section of exclusive ownership. Therefore, the Defendants are not the sectional owners of the instant officetel, and are obliged to return unjust enrichment from the possession to the Plaintiff, who is the co-owner of the instant land.

C. The lower court determined that the Defendants had the duty to return unjust enrichment from the possession of the instant land to the Plaintiff, who is the co-owner of the instant land. The Defendants asserted that the instant mortgage constitutes an act contrary to Article 20(2) of the Aggregate Buildings Act and thus null and void, and the Plaintiff who purchased the instant land at the auction procedure based on the instant collateral security was not able to acquire the ownership of the instant land effectively. However, the lower court rejected the said assertion on the ground that the instant officetel was not constituted sectional ownership at the time of the establishment of the instant collateral security, and the Plaintiff

In so determining, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine regarding the establishment of sectional ownership, or omitting judgment.

3. As to the scope, etc. of return of unjust enrichment (ground of appeal Nos. 1 and 5)

A. Since the owner of a section for exclusive use without a right to use the site occupies the site of the section for exclusive use without any legal ground, he/she obtains unjust enrichment equivalent to the percentage of his/her section for exclusive use out of the site to the entire area of the aggregate building, and the owner of the site can be deemed to have suffered losses corresponding thereto. Therefore, barring any special circumstance, the owner of the section for exclusive use without a right to use the site has the duty to return the said unjust enrichment to the owner of the said portion (see, e.g., Supreme Court Decisions 91Da40177, Jun. 23, 1992; 2010Da7279, 72786, Jan. 27, 2011).

A co-owner of a portion of exclusive ownership without a right to use site has a duty to return unjust enrichment to the owner of the share in the site as above. This duty is an indivisible obligation, barring any special circumstance, and even if only a part of the share is jointly owned, he/she is obligated to return unjust enrichment with respect to the whole area of that portion of exclusive ownership (see Supreme Court Decision 200Da13948, Dec. 11,

B. The lower court, on the following grounds, accepted the Plaintiff’s claim against the Defendants seeking one-half of the rent for the entire area of the instant officetel △△△△△△△, which is (1) the Defendants obtained unjust enrichment equivalent to the rate of rent that one’s exclusive ownership occupies in the entire exclusive ownership of the aggregate building during the period of possession of the instant officetel, and the Plaintiff, the owner of the land share, who owns the same amount of damages. (2) The Defendants owned or owned part of the instant officetel △△△△△△△△△△△. Of them, Defendant 3 owns the instant officetel 1/2 shares.

According to the records of this case, Defendant 3’s share in the instant officetel △△△△△△△ is not 1/2 but 1/10. However, in light of the aforementioned legal principles, Defendant 3 is obligated to return unjust enrichment on the entire area of the instant office, irrespective of his/her own share ratio, to the Plaintiff. As such, Defendant 3 is obligated to return unjust enrichment on the entire area of the instant △△△△△△△△△△, and accordingly, he/she is obligated to return one-half of the Plaintiff’s share. Although the lower court erroneously recognized Defendant 3’s share, it is justifiable to accept 1/2 of the rent for the entire area of the instant △△△△△

4. Conclusion

The appeal by the Defendants and the Defendant-Counterclaim Plaintiff is dismissed in entirety as it is without merit. The costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Chang-suk (Presiding Justice)