2017 Gohap15815 Confirmation of invalidity by the Board of Directors

A

B Regional Housing Association

January 26, 2018

February 9, 2018

1. On June 2, 2017 and January 14, 2018, the Defendant confirms that a resolution made by the board of representatives on June 2, 2017 by expulsion from a member of the Plaintiff at an ordinary general meeting is null and void respectively.

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

The same shall apply to the order.

1. Basic facts

A. Status of the parties

1) The Defendant is a regional housing association established pursuant to the Housing Act in order to implement a project to build a collective housing (hereinafter referred to as the “project in this case”) in the Gu, Si, Si, and Gu.

2) The Plaintiff was a person who joined the Defendant’s membership on October 17, 2013, and was selected as the Defendant’s director upon the Defendant’s recommendation from the Defendant’s inaugural general meeting, held by the Defendant’s chairman D, on December 27, 2013.

B. Conclusion, etc. of service contracts by the defendant

1) Around 2013, prior to the opening of the above inaugural general meeting, Defendant Promotion Committee and E Co., Ltd. (hereinafter referred to as “E”) entered into a contract for services on behalf of the Defendant (hereinafter referred to as “instant contract for services”) under which E performs the business activities such as a contract for purchase of the instant project site, authorization and permission (including modification), establishment and operation of model hybrids, and support and management of the business activities to recruit members, etc., and is to receive service fees from the Defendant. Of the instant contract for services, the contents relating to the instant case are as follows.

Article 5 [Payment of Price] ① The project cost of the project shall be financed with the contributions of the association members, and for the service cost of the project, the additional tax shall be paid to E on the basis of the number of construction units with the approval of the project (the number of households to be changed at the time of approval of the change) (Provided, That the additional tax shall be appropriated for and paid separately from the project cost) as follows: The amount per house type (exclusive area) (25109,000,0074m 25109,000,000,008m 23110,000,000,000

2) On December 27, 2013, the Defendant held the above inaugural general meeting and resolved on the association members’ contributions, the cost of performing duties per household, etc., and subsequently selected E as an agent for performing the instant project, and ratified the instant service contract.

3) After March 2014, Defendant and E agreed to modify part of the terms of the instant service contract (hereinafter referred to as “the first amendment agreement”) and the modified contents are as follows.

Article 5 (Payment of Price) (1) Of the contract period for the change of business performance service, the number of 59 households—189 households; 74m2 510 households—33 households; 112m20 households; 333 households; 112m20 households; 40 households; 1850,000,00 won (additional); 27,793,760,000 won - 27,760,000 [14,6295 square meters; 1,90,000,000, based on the aggregate of the total floor area of the E-1,90,000 (14,6295 square meters); 1,90,000,000 won for business performance contract with E; 1,840,000,000 or more; 29,000 or more of E-14,000 or more of E-19,719.

4) Around January 2015, the E, the Defendant, and the F Co., Ltd., Ltd., the contractor of the instant project (hereinafter referred to as “F”), confirmed that the total amount of the service cost to be performed by E is KRW 5.5 billion, and that KRW 3.5 billion out of the service cost to be financed with the construction cost when the shortage of F’s construction cost occurs. To this end, a written agreement stating that it shall be reserved until the payment of the construction cost is completed. The remaining KRW 2 billion should be paid based on the existing service contract.

5) On March 24, 2015, E and the Defendant agreed to re-revision the instant service contract and the first amendment agreement (hereinafter referred to as “the second amendment agreement”). The main contents are as follows.

Article 5 (Payment of Price) of the Contract for Change of Business Performance Services (Payment of Price) shall be paid to E at the time of payment of the service cost as follows. ① If any ground for increase in the Defendant’s association members’ contributions occurs due to the increase in the project cost, etc. except for the portion of the tax arrears (land and building, registration tax, school site charges, etc.) to be paid by the business owner and the additional charges (settlement of the area) to be decided at the association inaugural general meeting, the amount shall be calculated by deducting the above amount from the remainder payment of the service cost under paragraph (1) if the Defendant’s ground for increase in the amount of the Defendant’s association members’ contributions occurs due to the reduction of the project cost, etc.

6) On the other hand, on August 9, 2013, the Defendant Promotion Committee entered into a contract with the 1.59 billion won design service charges for the instant project with respect to the construction work charges of KRW 1.59,8 million with respect to the said construction work charges. On December 2013, 2013, the Defendant Promotion Committee entered into a contract with G Co., Ltd. (hereinafter “H”) for giving the said design service amounting to KRW 1.399,8910,000,000, and thereafter paid KRW 864,943,750 to H as service charges.

C. Defendant’s resolution on expulsion of union members

1) During the instant project, the Defendant Mutual Aid Association members, including I and J, filed a complaint with D, etc., asserting that D would inflict damage on the Defendant by unfairly entering into a service contract relating to the instant project.

2) On May 4, 2015, D held a board of directors on May 4, 2015, and D passed a resolution to dismiss I from its members with the consent of all participating officers, including the Plaintiff, on the grounds that "I denied the defendant's board of directors system and demands the association president and the written consent on the replacement of executive officers, and posted an illegal banner stating false facts in the vicinity of the defendant's office." On May 8, 2015, the board of directors held on May 8, 2015 also passed a resolution to dismiss I from its members with the consent of all participating executive officers, including the Plaintiff, for the foregoing reasons.

3) The five persons notified of expulsion, such as I, filed a provisional injunction against the Defendant on the effect of the resolution of expulsion of each of the above board of directors (Seoul District Court Decision 2015Kahap10006, Daegu District Court Decision 2015 Kahap1006), and received the award for the same reason, on July 21, 2015, on the ground that there is procedural defect in which the defendant did not give an opportunity to properly explain to the first instance, and there is no substantive defect that does not exist any reason for expulsion as stipulated in Article 12(4) of the rules of the defendant. On November 13, 2015, the court was sentenced to the award for the same reason.

4) On July 7, 2015, 466 of Defendant Mutual Aid Association members, including I, obtained from the court a decision to permit the convening of an extraordinary general meeting (Seoul District Court Kimcheon Branch Office 2015 non-conforming 3), and held an extraordinary general meeting on August 16, 2015 and resolved to dismiss all existing executives, including the Plaintiff and D, and to appoint I as the head of the partnership, J, K, L, and N as directors.

5) Since then D, as in paragraph 6 of this Section, the Defendant’s members in collusion with the founders of O, P, and H, who were shareholders of E by the president of F, even though the Defendant’s Promotion Committee ordered the existing design service.

In order to reduce the contribution of the police officer, the first instance court convicted him on July 19, 2016 and sentenced him on the charge that he embezzled KRW 864,943,750 for the purpose of giving a contract to the police officer in the middle of December 2013 (Seoul District Court Kimcheon Branch 2015,90, etc.).

D. Resolution on expulsion of union members against the plaintiff

1) On June 2, 2017, I convened a meeting of the board of representatives of the defendant, passed a resolution to dismiss the plaintiff from the union members, and passed a resolution to convene an annual meeting of the defendant on January 14, 2018 during which the lawsuit is pending, and again remove the plaintiff from the union members.

2) In this case, the Plaintiff sought confirmation of invalidity of the resolution recommended by the board of representatives on June 2, 2017 by the Defendant, but the Defendant held a general meeting on January 14, 2018 and added the Defendant’s claim for confirmation of invalidity of the resolution recommended by the Plaintiff at the above general meeting.

E. Articles of incorporation

The contents of the Defendant’s bylaws relating to the instant case are as follows:

B. A member of a regional housing association may be expelled pursuant to a resolution of the board of representatives or a general meeting if he/she causes damage to the association due to failure to perform his/her duties as an executive officer or a member of the association, such as: Provided, That the member shall be given an opportunity to vindicate before expulsion, but if he/she fails to comply with such opportunity, he/she shall be deemed given an opportunity to vindicate.2.

[Reasons for Recognition] Unsatisfy, Gap evidence Nos. 1, 2, 4-7, Eul evidence Nos. 1-7, 9-24, 25, 32

Second, the purport of the whole pleading

2. The parties' assertion

A. The plaintiff's assertion

Since the Plaintiff was faithfully performing his duties after the Defendant was elected as a director and did not perform any act causing damage to the Defendant, a resolution by the board of representatives on June 2, 2017 and on January 14, 2018, expulsion of the Plaintiff who was dismissed at the general meeting of shareholders from the Plaintiff’s member does not constitute grounds for expulsion. On June 2, 2017, since the board of representatives was defective for those who are not qualified as a representative to attend the meeting, the above resolution on expulsion is null and void.

B. Defendant’s assertion

The Plaintiff, while in office as the Defendant’s director, agreed to the second amendment agreement to increase the service cost stipulated in the instant contract, and required the Defendant to additionally bear the service cost. ② He did not know that D contracts for double design service and neglected it with the knowledge that it embezzled the service cost, and ③ without good cause, caused enormous damage to the Defendant by consenting to the resolution of the board of directors ordering I et al. from the association members. Thus, there exists a reason stipulated in Article 12(4)2 of the Rules of the Defendant.

3. Determination

A. On January 14, 2018, as to the existence or absence of a resolution of expulsion at an ordinary general meeting

1) As to the increase in the service cost under the instant business service contract

Around January 2015, D and E, the president of the Defendant Union, drafted a written agreement to verify that the total amount of service costs of the instant service contract is 5.5 billion won, which was the amount increased by 9.43 billion won again on March 24, 2015, upon concluding the second amendment agreement on March 24, 2015.

As seen above.

However, in light of the following circumstances acknowledged based on the above basic facts and the evidence adopted, it is insufficient to recognize that the Defendant increased the total amount of service charges incurred by the Defendant due to the second amendment agreement, such as the above acknowledged facts, and there is no other evidence to acknowledge that there exists a ground for expulsion under Article 12(4) of the Rules of the Defendant.

A) E filed a lawsuit against the Defendant for the payment of the instant service contract and the second amendment agreement (Tgu District Court Kimcheon 2015Gahap15637). The Defendant recommended that the second amendment agreement, from the appellate court (Tgu High Court 2015Na24585) to which the Defendant additionally bears the service cost of approximately KRW 4 billion, such as the above, constitutes “a contract that will become a partner, without going through a general meeting resolution, in addition to the matters stipulated in the Housing Act’s budget.”

However, the above appellate court rejected the above assertion on the following grounds: (i) the service cost per household as stipulated in the second amendment agreement is identical to the service cost stipulated in the contract for the wife; and (ii) even under the first amendment agreement, the service cost to be borne by the Defendant union members for each household may not be deemed to be identical to the previous agreement; (iii) if the second amendment agreement provides for the settlement by subtracting the amount of the charge to be borne by the Defendant union members due to the increase in the project cost, etc., from the time of the payment of the remainder of the service cost; and (iii) based on the second amendment agreement, the amount shall be calculated by deducting the amount in question at the time of the payment of the remainder of the work performance cost; and (iv) the second amendment agreement does not constitute a contract that

B) In addition, the defendant's second amendment agreement in the above appellate court is for the interest of D in the interest of E.

The author argues that it is invalid because it constitutes an abuse of the right to vote.

However, the above appellate court decided to reduce approximately KRW 4 billion from the service cost in the first modified agreement, while the second modified agreement added a provision to deduct the pertinent amount from the service cost in the event a cause for the increase of the union members' charges arises instead of deleting the above reduction provision. The second modified agreement was made on the ground that it is difficult to determine the second modified agreement as disadvantageous to the first modified agreement, unless it is acknowledged that the total amount of the union members' charges to be increased due to the increase of the project cost was less than KRW 4 billion at the time of the first modified agreement, the second modified agreement cannot be deemed disadvantageous to the first modified agreement, and the court rejected the above assertion, and sentenced the judgment to pay the entire amount claimed by E.

C) As stated in paragraph (6) of the above basic facts, I et al. filed a complaint not only against D’s double contracting of design services, but also against the act of increasing service costs through the second amendment agreement. D was punished as to double contracting of design services as seen earlier, but it was subject to a disposition taken by the prosecutor in charge as to the second amendment agreement.

2) As to double contracts for design services

D The facts that D was punished for the embezzlement of Defendant’s funds in excess of KRW 800,000,000 as the contract for the double design service in H are as seen earlier.

However, while an executive officer of a union is obligated to actively perform his/her duties for the interests of the union, it can be expelled from the union member solely on the ground that he/she does not bear such an active duty, and that in the case of an executive officer under Article 12 of the defendant's rules, he/she does not abandon his/her duties or perform his/her duties, thereby causing damage to the defendant (Paragraph 5), but in the case of an ordinary member, he/she has caused substantial damage to the project promoted

In light of the fact that the Plaintiff’s act of expulsion (Article 12 (5) of the Rules of the Defendant) is classified as the grounds for expulsion (Article 12 (4) 2 of the Rules of the Defendant, even if the Plaintiff neglected to perform his/her duties during the period in which he/she was reappointed as a director and incurred damage to the Defendant, whether there was a reason for expulsion under Article 12 (5) of the Rules of the Defendant to the Plaintiff is separate theory (Article 12 (4) 2 of the Rules of the Defendant, and Article 12 (5) of the Rules of the Defendant cannot be applied if the expulsion is made at a regular general meeting, and Article 12 (5) of the Rules of the Defendant cannot be applied if the Plaintiff’s act of expulsion was caused by the Plaintiff’s active illegal and unfair act and the damage was caused to the progress of the business, the reason for expulsion of the Plaintiff’s member cannot be easily acknowledged. In addition to the above adopted evidence, the following circumstances acknowledged by the Plaintiff’s act of expulsion under Article 12 (4) 2 of the Rules are insufficient to find otherwise.

A) As to the above double contract, I et al. filed a complaint with D with the Plaintiff, and the prosecutor in charge did not prosecute the Plaintiff on the ground that it is difficult to recognize the Plaintiff’s participation.

B) Although the Plaintiff was selected and appointed as a director on the recommendation of D, the said second design service contract was concluded on December 2013, 2013, prior to the date on which the Plaintiff assumed office as a director ( December 27, 2013), which was before the date on which he was appointed as a director. In addition, the crime was planned to embezzled the cost of O, P, and Q Q services, which is the operator of E and H.

It is difficult to see that the Plaintiff was aware of the above crime, and even if the Plaintiff did not commit an illegal act as a director without knowing the crime, it is difficult to see that the Plaintiff was aware of the above crime, and that it constitutes “an illegal and unfair act that meets the requirements for expulsion of the Defendant’s members.”

3) As to expulsion, such as I

D Around May 4, 2015 and May 8, 2015, a board of directors was held to recommend I, K, etc., and the Plaintiff consented to the above resolution as a director. However, it is difficult to find that the mere fact that there was the above resolution of expulsion has resulted in enormous damage to the Defendant who promoted the “project” as stipulated in Article 12 (4) 2 of the above regulations, and there is no evidence to deem that the act of expulsion I, etc. constitutes a reason for expulsion stipulated in the above regulations.

4) Sub-determination

A resolution made by the Defendant at an ordinary general meeting on January 14, 2018, by which the Plaintiff was expelled from the Plaintiff at an ordinary general meeting of shareholders, is null and void due to the existence of substantive defects that do not exist in the grounds for expulsion prescribed in Article 12(4)2 of the Defendant’s Rules (the Defendant has a benefit to seek confirmation of invalidity, as the above resolution has been effective).

B. On June 2, 2017, as to the existence or absence of the board of representatives’ resolution on expulsion

An extraordinary general meeting held by the convening permission of the court may resolve on the agenda items of the meeting and related matters stated in the notice of permission and convocation of the court (see, e.g., Supreme Court Decision 92Da50799, Oct. 12, 1993).

The following facts are as follows: (i) Defendant Union members, including I, held an extraordinary general meeting on August 16, 2015 with the permission to convene the extraordinary general meeting from the court on July 7, 2015, and (ii) made a resolution to dismiss all existing executives, including the Plaintiff and D, as the president of the partnership; and (iii) thereafter, I convened the council of representatives on June 2, 2017 and made a resolution to dismiss the Plaintiff from the union members. However, in light of the overall purport of the statement and arguments in the evidence Nos. 5 and 3, the purpose of the court’s decision to convene the above general meeting is as follows; (iv) the purpose of the above general meeting is to stipulate only the above purpose as the agenda item; and (v) on August 16, 2015, 640 of Defendant Union members present at the extraordinary general meeting, who were newly recommended by the general meeting and its subordinate organization under the Rules No. 6 and its subordinate organization; and (v) the amendment to the existing general meeting.

2. The case of the modification of the business plan; 4. The case of the termination of the contract of service companies and the adjustment of construction costs following the modification of the business plan; 5. The case of the modification of the business plan and the case of the modification of the business plan, 6. The case of the modification of the business plan and the case of the adjustment of the members' contributions, 1. The association may have a board of representatives. 2. the total number of representatives, including the partnership head and the director, shall not exceed 20. 1. 3 1. The board of representatives shall constitute a majority of the incumbent representatives, and the resolution of the board of representatives shall constitute a majority of the incumbent representatives, and the resolution of the majority of the members shall be passed with the consent of the attendance representatives.

According to the above facts, at the special meeting on August 16, 2015, the court did not designate the plaintiff as an objective item, and the decision was made on the appointment of a representative who was not notified as an agenda for the special meeting. The above decision on the appointment of a representative was null and void because there was a defect in infringement of the voting rights of the union members who did not attend the above special meeting, and the decision made by the board of representatives on June 2, 2017, which was made by the council of representatives on June 2, 2017, was null and void due to such procedural defect, regardless of the existence or absence of any reason for expulsion against the plaintiff (the defendant has a interest to seek confirmation of invalidation, as the above decision on the appointment of a representative has a dispute over the validity of the resolution on the expulsion).

As to this, the Defendant asserted that the board of representatives was normally operated for a period of more than two years since the election of representatives at the extraordinary general meeting on August 16, 2015, and that there was no person who raised an objection against it among the union members, and thus, the above resolution of election of representatives was impliedly inferred. However, in order to recognize implied ratification, there should be circumstances to deem that the Defendant’s members sufficiently understand the legal status faced by the act in question and, even if so, recognize that the result of the act in question belongs to himself/herself on the basis of the truth (see, e.g., Supreme Court Decision 2009Da37831, Sept. 24, 2009). The Defendant’s members had sufficiently known that the resolution of election of representatives made at the extraordinary general meeting on August 16, 2015 was invalid due to procedural defect and did not raise any objection.

Since there is no evidence to see that this premise is without merit, the other defendant's above assertion is without merit.

In addition, the defendant asserts that, as a result of the resolution of selecting representatives at the extraordinary general meeting on August 16, 2015, the resolution of expulsion of plaintiffs was ratified at the ordinary meeting on January 14, 2018 at the representative meeting on June 2, 2017. According to the evidence No. 32, it is recognized that the defendant passed the "case of ratification of the election of representatives" at the ordinary meeting on January 14, 2018 and the "case of ratification of the resolution of the board of representatives" at the meeting on August 14, 2018. However, even if ratification is made on January 14, 2018, it can be deemed that a new act was conducted when the defendant knew that the act would be null and void without any validity (Article 139 of the Civil Act), it is merely that the defendant appoints new representatives from the above ordinary meeting at the meeting of representatives at the meeting of representatives at the same time, and it cannot be asserted that it would be valid retroactively from the 20th meeting on August 16, 2014.

4. Conclusion

The plaintiff's claim is justified, and all of them are accepted, and it is so decided as per Disposition.

Judges anti-competence

Judge Lee Jae-seok

Judges Kim Yong-American

1) = (exclusive use area: KRW 189 square meters + KRW 8 million + exclusive use area of KRW 413 square meters + KRW 110 percent of value-added tax (exclusive use area of KRW 8435 square meters + KRW 10 million) x value-added tax of KRW 110 percent.

2) If a member or an officer is indicted or indicted due to involvement in or in connection with interest coupons pertaining to the project, or is charged for embezzlement, breach of trust, etc., or if an officer or a representative of the association abandons his duties as a representative or causes damage to the association as a result of omission, he may, by a resolution of the board of representatives, order the expulsion of the member’s self

3) Although the Defendant may argue that Article 12(5) of the Defendant’s Covenant was enacted after the cause for expulsion of the Plaintiff alleged by the Defendant arose, it may be pointed out that whether it can be applied retroactively to past acts of deprivation of the status of the union members, as it is a rule that was enacted after the cause for expulsion of the Plaintiff, can be seen as an issue.