2017 Gohap 561921 Compensation for damages, etc.

A Stock Company

B Stock Company

June 14, 2018

June 28, 2018

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The defendant shall pay to the plaintiff 1,00,000,000 won with 15% interest per annum from the day after the delivery of a copy of the complaint of this case to the day of complete payment.

1. Basic facts

A. The plaintiff is a corporation engaged in the services and consulting related to real estate development, and the defendant is a corporation engaged in real estate development services and sale in lots, which is a business agent of a regional housing association in the course of promoting the following projects (hereinafter referred to as "project in this case"):

(tentative) Project name: (tentative) Recruitment of members of the regional housing association and general sale;

Location: Doilwon in Namyang-si

Site area: 114,00 square meters (34,485.30 square meters)

Total floor area: 199,801.45 square meters (60,439.94 square meters)

Business scale: from 1st to 29th above ground, 14 units and ancillary facilities, neighborhood living facilities;

Recruitment Generation: 1,584 Generations

Commencement date of solicitation: scheduled December 9, 2016

B. On October 13, 2016, the Plaintiff entered into a membership recruitment service contract with the Defendant and (tentatively named) Regional Housing Association Promotion Committee (hereinafter referred to as the “Promotion Committee”) and the Plaintiff’s exclusive contract for the recruitment of union members and the provision of services to the general public (including the sale in lots) regarding the instant project (hereinafter referred to as the “instant service contract”). The main contents of the instant service contract are as follows.

Article 1 (Purpose of Contract)

Under the instant service contract, the Defendant and the Promotion Committee concluded the instant service contract with a view to clarifying mutual rights and duty relations with respect to the provision of exclusive orders to the Plaintiff regarding the recruitment of union members and the sale in general (including the sale in lots) in accordance with the project implementation of the instant project as a joint owner of the Plaintiff under the instant service contract.

Article 2 (Principles of Services)

① The Defendant and the promotion committee shall attract the Plaintiff to the Plaintiff, including all consultation and business regarding the instant project.

All powers shall be granted to such person.

(2) The plaintiff may organize and subcontract a specific business-specialized group for efficient business purposes as a service company in charge of solicitation, but shall be responsible for and manage the affairs and costs of the plaintiff.

(3) The outcome and responsibility of the business specialized group that the Plaintiff rendered services shall accrue to the Plaintiff without objection.

Article 3 (Term of Contract and Commencement of Business)

(1) The service contract period shall be from the commencement date of recruitment to the completion date of recruitment.

(2) The plaintiff shall, no later than 15 days prior to the commencement date of recruitment, move-in to the business office provided by the defendant and the promotion committee and shall commence prior business and public relations activities. The commencement date may be adjusted through mutual consultation.

Article 4 (Amount of Solicitation of Object)

(1) The amount of solicitation of cooperative members shall be recruited to not more than 7,400,000 won (including agency expenses) per one-lane, and the amount of the secondary collection and the amount of general sale shall be determined by mutual agreement between the defendant and the promotion committee and the plaintiff.

(2) The down payment shall be divided into the first and second down payment, and 10% of the intermediate payment and 20% of the remainder, respectively, and 60% of the intermediate payment shall be treated as interest late payment.

③ In principle, the terms and conditions of the deposit of cooperative members contributions and agency expenses shall be based on the contract to join the cooperative that the defendant and the promotion committee make and deliver to the plaintiff, but the defendant and the promotion committee and the plaintiff may adjust according to the recruitment conditions.

Article 6 (Fees for Recruitment Services and Payment thereof)

(1) The service fees for recruiting members of a plaintiff shall be KRW 6,000,000 per recruitment household (excluding value-added tax).

(2) The Defendant and the Promotion Committee shall pay the Plaintiff fees for recruitment of general partners under paragraph (1) where a party to a contract pays the first down payment to the trust account in full: Provided, That where a party to a contract prepares a subscription contract and the first down payment is to be paid in full by installments within one month, the Defendant and the Promotion Committee may pay the Plaintiff fees on the condition that he/she demands an additional letter of promise stating that “if the party to a contract fails to pay in full within one month, without any condition, he/she waives the subscription contract, and waives the already paid down payment or agency expenses without objection.”

(3) The defendant and the promotion committee shall pay fees based on the recruitment performance as of the 15th day of each month and 30th day of each month;

The plaintiff shall request the defendant and the promotion committee to issue tax invoices, etc. three days prior to the scheduled date of payment.

(4) The initial recruitment fees shall be paid on the basis of one complex when 20% of the recruitment of partners is achieved.

Article 7 (Responsibility and Obligations of Defendant and Promotion Committee)

1. Production of marketing publicity materials to promote the recruitment of cooperative members and sale of buildings in units, and sharing of expenses;

-all the products of customer companies, including leaflets, inserted distribution, various placards and contractor gifts, dopingcars, various events, sales promotions, printed promotions, newspapers, subway advertising, subway advertising (skin, banners, placards), Internet advertising, scambling distribution expenses, incidental installation operating expenses (department department, Mat, and real estate), provided that the defendant and the Promotion Committee may omit some of the advertisements in consultation with the plaintiff.

2. Lease and construction of the site for the housing publicity center for the recruitment of members, and provision of the office for solicitation business within the public relations center (including office fixtures): Provided, That where the office for solicitation business outside the public relations center is operated separately as necessary by the plaintiff, the expenses therefor shall be borne by the plaintiff;

3. Opening and operation of a website, if necessary;

8. All operation, including telephone and Internet home facilities, communication expenses, management expenses (including water supply, luminous heat, cleaning, heating and cooling), etc. of a housing public relations center (including public relations offices and business offices in the public relations center);

9. Personnel expenses incurred in operating public relations offices and public relations centers (cleaning services, security personnel, parking personnel, etc.);

Article 11 (Risk Bearing and Responsibility)

(1) After entering into a membership agreement with a cooperative member (the defendant and the committee of promoters' subscription agreement and the takeover of documents attached thereto), follow-up management and liability for the termination and cancellation thereof shall be the issue of the defendant and the committee of promoters: Provided, That where the defendant and the committee of promoters refund 100% of the contributions and the agency expenses due to the objective defects (in cases where the plaintiff consents or the defect becomes final and conclusive) in the course of performing the plaintiff's service in the course of solicitation, the plaintiff will waive (in cases where prior to the receipt of the fees) or substitute for another contractor without additional fees (in cases where he

② In the event that the instant service contract is terminated due to the Plaintiff’s nonperformance of obligation, etc., the Defendant and the Promotion Committee shall be liable only for the recruitment fees, the loan of business expenses, the obligation to deposit money, and other expenses incurred by the Plaintiff and future profits.

(3) Recruitment of partners due to the nonperformance of duties by the defendant and the promotion committee, civil petition or objection by landowners.

When business failure occurs, the risk burden shall be borne by the defendant and the promotion committee, and the plaintiff may terminate the service contract of this case according to his/her will.

(4) The plaintiff's service against a contractor is terminated by issuing a membership agreement and a contractor performs the first down payment out of the contributions, and the relationship between the defendant and the contractor and the contractor for joining the cooperative shall be the responsibility of the defendant and the promotion committee.

Article 13 (Matters under Special Agreement)

② The Plaintiff shall lend KRW 200,000 to the Defendant, and the representative E of the Defendant shall be responsible for the said money, and shall be repaid to the Plaintiff without objection within one month from the date of the deposit of the loan (* the conclusion of a separate monetary lending contract and notarial deed).

(3) The repayment of the loan as referred to in paragraph (2) shall be 200,000,000 won at the time of the conclusion of this contract.

(4) The date of commencement of solicitation under this contract is to be November 25, 2016, and the defendant, in accordance with its schedule, shall complete the plaintiff's business environment by completing open opening to the public relations center, the conclusion of a fund management trust contract, and an agreement related to expected construction.

C. Pursuant to Article 13(2) and (3) of the instant service contract, the Plaintiff and the Defendant transferred KRW 200,000,000 to the head of Tong in the name of the representative director E on October 13, 2016, when the instant service contract was concluded.

D. On April 20, 2017, the Defendant entered into a service contract that delegates the instant station to the AlleyF Co., Ltd. and the AlleyF Co., Ltd.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, 6, purport of the whole pleadings

2. The party's assertion

The Plaintiff, upon entering into the instant service contract with the Defendant, acquired the exclusive right to the instant service. However, the Defendant excluded the Plaintiff and excluded the Plaintiff, and the Plaintiff and the other company regarding the instant service.

By concluding a double contract, approximately KRW 1,00,000 lent from the Plaintiff on October 13, 2016, the Defendant violated Article 7(1) and Article 13(4) of the instant service contract, even though the Defendant had a duty to open a public relations center to maintain the Plaintiff’s business environment by performing duties, such as opening a public relations center so as not to cause any impediment to the schedule, but failed to open the public relations center until December 2016, which was the starting date of the recruitment of union members. In addition, even though the Defendant decided to pay the Plaintiff KRW 2,00,000 borrowed from the Plaintiff on October 13, 2016, it did not pay the Plaintiff all the said money for personal purposes by the Defendant’s representative director E, and thus, the Defendant violated Article 13(2) of the instant service contract.

On July 18, 2017, the Plaintiff served a preparatory document dated September 21, 2017, stating the Defendant’s declaration of intent to terminate the instant service contract on September 22, 2017, in the Seoul Central District Court Decision 2017Kahap81812, which filed against the Defendant and the Promotion Committee’s heir (tentative title). The instant service contract was terminated by the reply of January 25, 2018, stating that the Plaintiff would terminate the instant service contract on January 26, 2018, by reaching the Plaintiff on January 26, 2018.

However, in a comprehensive interpretation of Article 11(3) and (2) of the instant service contract, the Defendant is obligated to compensate the Plaintiff for damages equivalent to the total amount of recruitment fees, i.e., performance interest, in the event that the Plaintiff is unable to perform his/her duties because the instant service contract cannot be performed due to the Defendant’s fault attributable to the Defendant, or the instant service contract is terminated. If the Plaintiff performed duties under the instant service contract, the Plaintiff could obtain total recruitment fees of KRW 4,889,60,000 (=total recruitment fees of KRW 9,504,500,000 - total recruitment fees of KRW 4,614,40,000), and the number of union members is limited to KRW 50 per cent, 2,196,800,000 (= total recruitment fees of KRW 50 per cent).

- 2,059,200,000 won - Labor cost of 96,00,000 won for general employees - Other expenses of 400,000,000 won. The Plaintiff explicitly claims only KRW 1,000,000 out of the Plaintiff’s damages, and as such, the Defendant is liable to pay the Plaintiff KRW 1,00,000,000 and damages for delay.

B. Defendant

The instant service contract was terminated by the agreement between the Plaintiff and the Defendant on November 2016, and the Plaintiff did not hold the right to act on behalf of the mother. Therefore, there was no fact that the Plaintiff suffered damage equivalent to the performance interest.

3. Determination

A. The time when the instant service contract was terminated

1) In full view of the contents of the instant service contract as seen earlier, the instant service contract is a onerous delegation contract, the main purpose of which is to enable the Defendant to act on behalf of the Plaintiff and pay the Plaintiff fees in return for that contract. The delegation contract is based on personal trust between the delegating and the mandatary, and either party may terminate the objection at any time pursuant to Article 689(1) of the Civil Act, and the same applies to delegation that aims at both the trustee’s interest (the matter of separate question is that one of the parties is liable for damages due to termination). The Defendant may terminate the instant service contract at any time.

2) Whether the instant service contract was terminated on November 2016

The following facts and circumstances do not conflict between the parties, or may be acknowledged by comprehensively taking account of the overall purport of the pleadings in Gap evidence 8-1 and 2 and witness G testimony. However, the aforementioned facts and circumstances alone are as alleged by the defendant, as alleged by the defendant, around November 2016 or around December 2016.

It is difficult to see that the contract was terminated, and there is no other evidence to acknowledge it.

A) The Defendant’s representative E, on October 13, 2016, failed to repay KRW 200,000,000 borrowed from the Plaintiff within one month from that end.

B) On November 23, 2016, H found the Defendant’s office and discussed about E and E’s repayment plan of KRW 200,000,00,00, etc., and E communicates with the Plaintiff, namely, the following week. H is waiting for a match. The Plaintiff’s representative “I will come well. I will come well.”

C) On December 12, 2016, three of the Plaintiff’s representative H et al. urged the Defendant’s office to repay KRW 200,000,000 at the Defendant’s office. During this process, there was no talk that the instant service contract will be terminated or that the instant service business would not be any longer.

3) Whether the instant service contract was terminated on September 22, 2017 or January 26, 2018

A) Facts of recognition

In full view of the purport of the entire pleadings, the following facts can be acknowledged in the statement Nos. 7-1, 2, and 3 of the evidence No. 7-2.

(1) On July 18, 2017, the Plaintiff filed an application against the Defendant for provisional disposition prohibiting infringement on the exclusive recruitment authority by Seoul Central District Court Decision 2017Kahap80967 (hereinafter “provisional disposition procedure”). In the first provisional disposition procedure, the Defendant consistently asserted that the validity of the instant service contract does not continue from the time when the written response was submitted. On September 21, 2017, the Defendant stated in the preparatory document dated September 21, 2017 that “if the instant service contract continues to exist effectively, there is no intention to entrust the recruitment of union members to the creditor (the Plaintiff of this case),” and the Plaintiff also stated that the Defendant was September 21, 2017.

As the answer to the briefs on September 25, 2017, “A debtor (the defendant of this case) also asserted that the instant service contract was terminated pursuant to Article 689(1) of the Civil Act in accordance with the principle of the freedom of termination of delegation contract.” In light of such circumstances, the said court determined that the briefs on September 21, 2017, including the debtor (the defendant of this case)’s expression of intent to terminate the instant service contract, were terminated by being served on the creditor (the plaintiff of this case) on September 22, 2017.

(2) On December 21, 2017, the Plaintiff filed an application for provisional disposition against the Defendant and the (tentatively named)F Housing Association for prohibition of infringement on the exclusive recruitment authority (hereinafter referred to as “provisional disposition procedure”) with the Seoul Central District Court 2017Kahap81812. The response of January 25, 2018, issued to the Plaintiff on January 26, 2018, stating that the Plaintiff would terminate the instant service contract during the provisional disposition procedure.

B) Determination

According to the facts of recognition, it is reasonable to view that the instant service contract was terminated on September 22, 2017 by the Defendant’s expression of termination of the instant service contract at the end of Section 1 of Disposition A. The Plaintiff asserted that the instant service contract should be terminated on January 26, 2018 according to the Plaintiff’s expression of termination in the procedures of Disposition 2. However, the instant service contract between the Plaintiff and the Defendant was terminated on September 22, 2017, and (tentative name) there is no evidence to acknowledge that the F Housing Association succeeded to the status of the contracting party in the instant service contract by the Promotion Committee, and thus, cannot be deemed as alleged by the Plaintiff.

B. Establishment of damages liability and scope of damages

1) Article 689(1) of the Civil Act provides that "a delegation contract may be terminated at any time by either party," and Article 689(2) provides that "if one of the parties terminates a contract at a disadvantage of the other party without any inevitable reason, he/she shall compensate for damages incurred therefrom." The defendant is as seen earlier.

Since the instant service contract was terminated pursuant to Article 689(1) of the Civil Act on September 22, 2017 pursuant to Article 689(1) of the Civil Act, if the Defendant terminated the instant service contract at a disadvantage of the Plaintiff without any inevitable reason, the Defendant is liable to compensate for the damages incurred therefrom. The Defendant’s termination of the instant service contract at a disadvantage of the Plaintiff without any inevitable reason, and the Plaintiff’s assertion and proof that the damages incurred therefrom were incurred. Since the Plaintiff did not assert and prove any assertion and proof against the termination of the instant service contract, the Plaintiff’s damages may not be acknowledged due to the termination of the instant

2) Furthermore, even if examining the Plaintiff’s assertion seeking the payment of performance interest, Article 11(3) of the instant service contract provides that the risk burden shall be borne by the Defendant only when the Plaintiff’s failure to perform the Plaintiff’s duty to recruit members, and even when comprehensively interpreting Article 11(2) of the instant service contract, if the Plaintiff becomes unable to perform his/her duties due to the Defendant’s failure to perform his/her duties, the Defendant cannot be deemed liable to compensate the Plaintiff for the total amount of the recruitment fee, i.e., damage equivalent to the performance interest. Even if such interpretation can be interpreted, the Plaintiff did not submit any evidence to support the Plaintiff’s commencement of the performance of the instant service contract or the Plaintiff’s performance of duties in accordance with the instant service contract, and the materials submitted by the Plaintiff are only one case of success in the recruitment of all partners in other regions. Thus, it cannot be recognized that the Plaintiff could have obtained the performance interest claimed by

3) Ultimately, the Plaintiff’s claim is without merit.

4. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

Judges half-yearly by judges

Judges Gyeong-Gyeong-kon

Judges next to that of judges