2019dahap211724 Action to nullify the resolution of the board of directors

RoO

Daegu

Attorney Kim Jong-il, Counsel for the plaintiff-appellant

A City Sports Association

Daegu

Representative Park;

Attorney Kim Jong-hee, Counsel for the plaintiff-appellant

September 11, 2020

November 13, 2020

1. The plaintiff (appointed)'s claim is dismissed.

2. The costs of lawsuit shall be borne by the plaintiff (appointed party).

The decision of the board of directors dated September 16, 2019, which was designated by the defendant as the management organization of the A Si B Association (hereinafter referred to as the "Association of this case") by the defendant, is invalid.

1. Basic facts

A. Status of the parties

1) The defendant is a branch of the Sports Association of 00, and the Association of this case is a member-type organization of the defendant.

2) On July 1, 2016, the Plaintiff (appointed; hereinafter referred to as “Plaintiff”) is a person elected as the president in the election of the president of the instant association, which was implemented on July 1, 2016. Of the Appointors listed in the separate sheet, the remaining Appointors except the Plaintiff (hereinafter referred to as “designatedors”) are those who were in the position of the vice-president or director of the instant association by September 16, 2019.

B. Designation of management organization of the instant Association

1) On the ground that the instant association falls under Article 8(1)1, 4, and 5 of the Defendant’s 10th Council held on September 16, 2019, the Defendant made a resolution that the instant association should be designated as a management organization (hereinafter “instant resolution”). Accordingly, on September 16, 2019, the Defendant designated the instant association as a management organization, and notified the instant association of the designation as a management organization.

2) The reasons for the designation of a management organization in the notification of the designation of the management organization are as follows:

Article 8 (1) 1 of the Defendant’s Code: serious violation of the provisions of this Ordinance, etc. - Within 15 days after holding a general meeting under Article 7 (2) of the present Code, and violation of the Defendant’s Code Article 8 (1) 4: Various disputes related to the organization of issues.

- The association functions of the board of directors solely with the functions of the board of directors without approval of the settlement of accounts in 2017 and 2018, for any other reason, continuous disputes between the executive branch of the Association in this case and the representatives of the Association in this case:

3) As a result of the designation of the management organization of the instant Association, pursuant to Article 4 of the Management Regulations of the Defendant’s management organization and Article 31 of the Defendant’s Membership Organizations Regulations, the Defendant’s management committee managed and operated the instant Association, and at the same time the Plaintiff and the designated parties lost their status as executive officers of the instant Association

[Reasons for Recognition] Unsatisfy, Gap evidence 4 (including branch numbers, hereinafter the same shall apply), Eul evidence 5, the purport of the whole pleadings

2. The plaintiff's assertion

For the following reasons, the instant resolution is null and void as it has a significant and apparent defect.

(a) Lack of justifiable grounds for designation of a management organization;

1) The part concerning the violation of the defendant's rules

The obligation under Article 7(2)1 of the Defendant’s Rules (the Defendant’s membership category organization’s obligation to report its business plan, budget plan, and annual business report and settlement of accounts for the previous year to the Defendant within 15 days after the end of the general meeting) shall be interpreted as the obligation that arises only when the general meeting of the member category organization proceeds normally and obtains the resolution of the general meeting on the settlement of accounts, etc. In the case of the instant association, since the head of the Gu/Si/Gun association, who is the representative, could not report the settlement of accounts to the Defendant due to the collusion with the general meeting’s interference

2) Various disputes related to the membership sports groups

Even if a member's organization falls under any of the subparagraphs of Article 8 (1) of the Rules of the defendant, the defendant may designate the member's sports organization as a management organization only when it is deemed difficult for the organization to normally organize and operate the member's sports organization. ① The plaintiff and the designated persons continuously dialogue with the chairperson of the Gu/Gun cooperative and the principals, who are representatives, and the conflict between the association and the representatives of the case is settled. ② The association of this case was supported by mutual aid from outside in 2018, and recorded the black person in 2018, and the four games organized by the association of this case was terminated without any particular problem, the normal organization and operation of the association of this case is not difficult. Therefore, it cannot be viewed that there is a dispute between the executive and the representative that can be the basis for designation as management organization of the association of this case.

3) The portion that normal business execution is impossible due to other reasons

① In light of the following: (a) the association’s failure to obtain the approval of the general meeting among the settlement of accounts of the instant association is limited to the settlement of accounts of the year 2018; (b) the association of the instant case is being well operated without any accounting problem; (c) the board of directors of the instant association has the authority to deliberate and resolve on important matters of the association, such as matters regarding the business plan and budget; and (d) there is no particular problem in its operation, the association of the instant case cannot be deemed to have operated normally solely on the ground that the instant association’s settlement of accounts in the year 2018 fails to obtain the approval of the general meeting. Accordingly, there is no abnormal project that may serve as the basis for designation

(b) Unfairity in the process of a decision to designate a management organization.

1) The chairman of the Defendant’s board of directors actively led the Defendant’s members of the board of directors to agree with the instant resolution, thereby having a direct and conclusive impact on the instant resolution.

2) Among the members of the Defendant’s board of directors in the process of the instant resolution, many of the members of the instant association did not know about the limitation or effect of their status to the executives and delegates of the instant association due to designation of the management organization of

(c) a decision that is substantially contrary to equity.

① In light of the following: (a) the instant resolution was made without properly grasping the aforementioned circumstances; (b) the Defendant’s board of directors may sufficiently cope with measures, such as expulsion and demotion (Article 9 of the Rules of the Republic of Korea); (c) cancellation of authorization to an executive officer (Article 33 of the Rules of the Republic of Korea); and (d) request for audit and disciplinary action (Article 47 of the Rules of the Republic of Korea), etc. (e) even though the instant resolution was made due to the interference with holding of intentional general meetings following the collusion by the heads of the Gu/Si/Gun associations; and (b) the instant resolution was made without appropriately grasping the aforementioned circumstances; and (b) the instant resolution was made with excessive measures, such as designation of a management organization.

3. Determination

(a) Facts of recognition;

1) The facts prior to discussion on designation of management organization with respect to the instant Association

A) The instant association convened an ordinary general meeting in January 31, 2018, but there was a different opinion as to whether representatives attend the ordinary general meeting, and as a result, some representatives (the president of the Gu/Si/Gun Association) retired from the ordinary general meeting before filing a report on gender of the general meeting.

B) The major civil petition received by the Defendant with respect to the operation of the instant Association during the first half of 2018 is as follows.

“Request for withdrawal of unfair disciplinary action against B Association and for suspension of abuse of authority on March 14, 2018” on February 28, 2018

On April 4, 2018, “The cases of investigation and request for disciplinary action against the abandonment of duties and abuse of authority by the president of the B Association” on April 13, 2018

C) On March 2018, the Defendant conducted an audit of the instant Association on the instant occasions, and through the audit above, various problems related to the accounting and operation of the instant Association, such as the “compliance with the convening rules of the board of directors, failure to confirm the procedures after preparing the meeting minutes of the board of directors and the general meeting, failure to establish various committees, failure to comply with the relevant regulations, 'compliance with the regulations on the implementation of official documents', 'conformity with and failure to prepare accounting documents', 'conformity with and failure to prepare accounting documents', 'uncompliance with the execution of the support fund for fostering athletes' and 'unfair accounting process', 'conformity with budget compilation and improper execution of business promotion expenses', etc.

D) On May 18, 2018, the president of the Seo-gu Association, one of the representatives of the instant Association, requested the instant Association to convene an extraordinary general meeting, which is a non-Confidence agenda item for the Plaintiff’s president, by receiving the document of “request for holding an extraordinary general meeting” from May 18, 2018. On the same day, the Nam-gu Association President, the president of the Association, the president of the Association, the president of the Association, the president of the Association, the president of the Association, the president of the Association, the president of the Association, the president of the Seongdong-gu Association, the president of the Suwon-gu Association, the president of the Association, and the president of the Jung-gu Association Kim

E) On June 29, 2018, 16 of the 17 incumbent representatives were present at the special meeting of the instant Association, which was held at the Defendant’s second floor conference room in Daegu, and the resolution of the non-Confidence proposal against the Plaintiff was passed on the 12th affirmative votes and the 4th opposing votes.

F) On July 4, 2018, the Plaintiff filed a lawsuit with the Daegu District Court seeking confirmation of invalidity of the resolution of the general assembly (2018Gahap205890), and the Daegu District Court confirmed that the resolution of the general assembly was invalid on December 10, 2018.

G) The instant Association convened an ordinary general meeting on January 31, 2019, but the ordinary general meeting was no longer organized among 17 incumbent representatives.

H) The instant Association re-convened an ordinary general meeting on February 20, 2019, but the ordinary general meeting was re-convened with four incumbent representatives attending the 17th general meeting.

2) Specific details of the designation of management organization

A) On February 22, 2019, the Defendant: (a) held a board of directors on February 22, 2019 to discuss whether to designate a management organization for the instant Association; (b) constituted an auxiliary device normalization promotion committee for ascertaining problems of the instant Association and normalization; and (c) decided to review whether to designate a management organization for one month after having it

B) From February 28, 2019, the business normalization promotion committee started with activities on February 28, 2019, prepared a recommendation for the normalization of the instant association (approval of non-Confidence of executives and settlement of accounts through holding a general meeting). The instant association held an extraordinary general meeting on March 2019 and elected a new auditor, but did not complete the non-Confidence of executives of the general meeting and the approval of settlement of accounts.

C) The Defendant, which was held from April 9, 2019 to April 15, 2019, had the 9th board of directors extend the activities of the 9th board of directors for three months to induce the association’s own normalization.

D) The Association of this case, upon the recommendation of the Normalization Promotion Committee, conducted its own audit from June 10, 2019 to June 12, 2019, and through the audit above, various problems related to the accounts of the Association of this case, including 'the Plaintiff's goods of a related person to the Association of this case, 'the property loss of the Association due to the execution of an erroneous subsidy', 'the expense of the Association of this case', 'the expense of the Association of this case, 'the execution exceeding the budget', 'the execution exceeding the budget', etc.

E) The Normalization Promotion Committee adopted an activity report on July 2, 2019, and recommended the Defendant’s board of directors to review the designation of the management organization for the instant Association. Accordingly, the Defendant’s board of directors resolved on September 16, 2019, and the Defendant designated the instant Association as the management organization on the same day.

3) Contents of the relevant provisions

A) The part relating to the instant case in the Defendant’s bylaws is as follows.

Article 1 (Base and Name) This Code shall prescribe the matters concerning the organization and operation of the defendant (hereinafter referred to as the "branch") who is a branch of the ○○ Sports Association pursuant to Articles 7(4) and 39 of the Articles of the ○○○ Sports Association's articles of association.The rights and obligations of the sports groups and the Gu/Si/Gun Sports Association pursuant to Article 7 (Rights and Duties of the Si/Gun Sports Association) are as follows: (2) Si/Gun sports associations and the Gu/Si/Gun Sports Association shall have the following obligations against this Association:

B) Of the provisions of the Defendant Member Lines, the parts relating to the instant case are as follows.

Article 1(1)(1) provides for the matters concerning the organization and operation of a category organization (hereinafter referred to as a “type organization”) for which membership is approved as a member pursuant to the provisions of Articles 5, 32 and 34 of the Rules of the defendant.(2) A category organization shall have the following obligations against the defendant. (3) A category organization shall report its business plan, budget, annual business report and settlement of accounts for the preceding year to the defendant within 15 days after the end of the general meeting of the organization. (6)(1) If the group of items is deemed unable to normally organize its organization, the organization may be designated as a group of items pursuant to Article 8 of the Rules of the defendant. (2) If the organization is designated as a management organization, the officer shall be immediately dismissed. (2) The general meeting of the category of the organization shall be composed of the following representatives. (1) The head of the old/Gun group under Article 7(1)(3) and the general meeting of the board of directors shall be established with respect to the organization and settlement of accounts of the following items:

C) The part relating to the instant case in the instant Association’s bylaws is as follows.

Article 9 (Organization and Functions of General Meeting) (1) The General Meeting of the Association shall be composed of the following representatives: 1. 2. the head of the Gu/GunB Association under Article 7(1); 3. the head of the school fostering the B; 4. the head of the institution fostering the B; 1. the head of the institution fostering the B; 3. The following matters shall be decided:

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 2, 3, 4, 5, 7, Eul evidence Nos. 3, 4, 5, 7, 14, and 15, and the purport of the whole pleadings

B. Whether there was a violation of the Defendant’s rules

1) According to the facts acknowledged earlier, the instant association is obligated to report to the Defendant within 15 days after obtaining the resolution of the general meeting on the settlement of accounts in accordance with Article 7(2)2 of the Defendant’s Rules and Articles 5(2)2 and 9(10)4 of the Rules of the Defendants’ Membership Organizations.

2) The Plaintiff asserts that the above duty to report takes place only when the general meeting passed a resolution on the settlement of accounts. However, the Plaintiff asserts that the above duty to report takes place only in the following circumstances, namely, ① Article 50(2) of the Rules of the Association provides that “within one month after the end of each fiscal year, the resolution of the general meeting on the settlement of accounts shall be made every fiscal year in accordance with the rules of the Association of this case; ② the Association of this case is under the Defendant’s supervision as the Defendant’s member-type organization, and the Defendant cannot exercise the supervisory authority on the settlement of accounts, so it is reasonable to deem that the Association of this case has the duty to report to the Defendant every fiscal year, and ③ the Plaintiff’s assertion that the above duty to report to the Defendant is not fulfilled if the obligation to report under Article 7(2)2 of the Rules of the Association takes place only in the event that the general meeting’s resolution on the settlement of accounts takes place, as alleged by the Plaintiff, can not be accepted.

3) The instant association failed to perform its duty to report to the Defendant on the instant settlement of accounts in 2017 and the settlement of accounts in 2018 without obtaining the approval of the general meeting (the Plaintiff asserted that the instant association did not obtain the approval of the general meeting is limited to the settlement of accounts in 2018; however, according to the written evidence Nos. 3 and 5, the instant association’s assertion that the instant association did not obtain the approval of the general meeting regarding the settlement of accounts in 2017 is inappropriate. This constitutes a ground for designation of the management organization under Article 8(1)1 of the Rules of the Defendant (a serious violation of the provisions of the Rules of the Defendant, etc.) and in this respect, the instant resolution constitutes a justifiable ground for the instant resolution. This part of the Plaintiff’s assertion is without merit.

1) Article 8(1) of the Rules of the defendant provides that "the defendant may designate an organization for membership categories as a management organization through a resolution of the board of directors if any of the following causes occurs." Article 6(1) of the Rules provides that "the defendant may designate an organization for membership categories as a management organization for the management organization for the designation of a management organization." In light of the above, Article 6(1) of the Rules provides that the defendant may designate an organization for membership categories as a management organization for the management organization for membership categories when the organization for membership categories is deemed difficult to organize and operate normally, the defendant's assertion that the organization for membership categories can be designated as a management organization for membership categories only when the organization for membership categories falls under any of the subparagraphs of Article

2) However, in the instant case, the following circumstances revealed in addition to the testimony and overall purport of argument by witnesses 00 and the facts acknowledged earlier, i.e., ① there was a conflict or dispute between the executive branch and the representative with respect to the operation of the instant association before 2018, ② The ordinary general meeting of the instant association convened on January 31, 2018 and the ordinary meeting of 2019, which was convened on February 20, 2019. The dispute between the executive branch and the representatives, seems to be not likely to perform the important functions of the general meeting, such as approval of settlement of accounts, due to the dispute between the instant association and the association’s management organization of the instant association, and the resolution of the instant association’s own resolution of the instant case cannot be seen to have been resolved for a certain period of time due to the lack of sufficient grounds to resolve the conflict between the Plaintiff and the association’s management organization of the instant case’s resolution and the non-Confidence association’s resolution on June 3, 2018.

D. The following circumstances are revealed as to whether there was any abnormal project that could serve as the basis for the designation of a management organization, namely, ① the general meeting of the Association was not held from the beginning of the year 2018, as seen earlier, and the operation of the Association was made only by the resolution of the board of directors. ② The general meeting of the Association of this case has exclusive decision-making authority on the business results and settlement of accounts as the highest decision-making body of the Association of this case, ② the general meeting of the Association of this case cannot be deemed to be operated normally if the general meeting is not held properly. ③ although the board of directors of the Association of this case has a decision-making authority on the business plan and budget, the board of directors of the Association of this case has the authority to make a decision on the "business plan and budget", but the "resolution and execution of the business plan" made by the board of directors is determined by the "resolution on the business results and settlement of accounts" (approval), and it is clear that the responsibility for the operation of the Association of this case is responsible for the operation of the Association of this case.

E. Whether the instant resolution process is unfair

In light of the following circumstances that can be seen by adding the aforementioned facts to the entries in the evidence Nos. 17 and 46 as well as the overall purport of the pleadings, i.e., ① the chairman of the Defendant’s board of directors does not seem to have induced the members of the board of directors among the 8th meetings held on February 22, 2019 to agree on the instant resolution, and only proposed the formation of the normalization Promotion Committee after hearing the respective arguments on whether or not the management organization was designated to the Association in a balanced manner, and the instant resolution was made seven months after the lapse of seven months from the date of the resolution. ② In the process of the instant resolution, there is no evidence to deem that many of the members of the Defendant’s board of directors were not well aware of the restrictions on the status or validity of the instant association’s officers and representatives due to the designation of the management organization of the Association. This part of the Plaintiff’s assertion is without merit.

F. Whether the contents of the instant decision are contrary to equity

In light of the following circumstances, which can be seen by adding the aforementioned facts to the entries in the evidence Nos. 6 and 17, the testimony and the entire purport of the OO as well as the following circumstances, i.e., (i) the operation of the Association was due to the deepening disputes and conflicts between the executive branch and the representatives; (ii) the Defendant did not designate the Association as the management body of the Association, and gave sufficient opportunity to resolve conflicts in itself to the Association; (iii) the instant Association failed to comply with the essential parts of the recommendations made by the CA; (iv) the Defendant obtained full management and operation authority for the Association as a result of the designation of the management organization in accordance with the resolution of this case, but the Defendant did not exercise such authority permanently; and (v) the Defendant may cancel the designation after the operation of the Association of this case was normal, the resolution of this case cannot be viewed as an inevitable violation of equity.

G. Sub-committee

The instant resolution cannot be deemed as having substantive and procedural defects. Therefore, the Plaintiff’s assertion that the instant resolution is null and void as a matter of course is without merit.

4. Conclusion

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

The presiding judge, judge, vice versa;

Judges Lee Jae-in

Judges Jeju-dok