Korea Land Trust Co., Ltd. (Law Firm Jeong, Attorney Lee Dong-hwan, Counsel for defendant-appellant)

Head of Busan District Tax Office

August 31, 2009

1. On October 7, 2008, the Defendant confirmed that a seizure disposition against the deposit claims listed in the separate sheet against the Plaintiff is null and void.

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

The primary purport of the claim is as shown in the text of the claim.

Preliminary claim: A disposition of seizure against the deposit claim stated in the attached Table against the plaintiff on October 7, 2008 by the defendant shall be revoked.

1. Details of the disposition;

A. On June 12, 2004, the Plaintiff entered into a land development trust agreement (hereinafter “instant trust agreement”) with C&S real estate development (hereinafter “SP real estate development (hereinafter “SP”) on which the Plaintiff was entrusted by the non-party company for the construction of a new building on the ground of the above land and the sale, lease, management, and operation of the land and the buildings as trust property, and return the profits therefrom to the non-party company (hereinafter “instant trust agreement”).

B. After completing the registration of ownership transfer under the name of the Plaintiff pursuant to the above trust contract, the Plaintiff newly constructed a building on the ground of the instant land and issued a tax invoice with Nonparty Company as a supplier while selling it in units.

C. According to the above tax invoice, the non-party company reported the value-added tax on January 2008 and February 2008 to the defendant, and the defendant did not pay the above value-added tax, and on October 7, 2008, upon which the non-party company was the delinquent taxpayer, the non-party company attached the deposit claim in the attached list in the name of the plaintiff, which is the account in which the sale price of the real estate held in the trust is deposited.

[Ground of Recognition] A without dispute, Gap evidence 1, Eul evidence 2-1 through 7, Eul evidence 1-3, Eul evidence 3-1 through 4, Eul evidence 4-1 through 4, Eul evidence 5-1 through 5-4, Eul evidence 6-1 through 3, Eul evidence 7, Eul evidence 8-1 through 4, Eul evidence 8-1 through 9, Eul evidence 10, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The disposition of this case where the defendant seized the deposit claims listed in the attached list, which are trust property, based on the non-party company's value-added tax claim against the non-party company, constitutes the seizure disposition of the third party's property, which is not the taxpayer's obligation

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Where a trustee supplies or becomes supplied with goods or services in the course of managing and disposing of trust property, the trustee himself/herself becomes a contracting party to the trust business, or the profits and expenses incurred from the management, disposal, etc. of the trust property shall ultimately vest in the truster and be based on the truster’s calculation as a result of performance. Therefore, in principle, a business operator and a person liable to pay value-added taxes in the course of performing trust business, such as management, disposal,

2) The issue is whether the Defendant can enforce compulsory execution against the deposit claims listed in the separate sheet, which are trust property, based on the value added tax claim against the non-party company.

Article 21(1) of the Trust Act provides that “The trust property shall not be subject to compulsory execution or auction against the trust property: Provided, That this shall not apply to the rights arising prior to the trust or the rights arising from the performance of the trust affairs.” Thus, the trust property shall be separately managed from the trustee’s proprietary property, and shall be subject to compulsory execution only in the case of an exception to the proviso of Article 21(1) of the Trust Act, as it is separate from the trustee’s proprietary property, and it shall be subject to compulsory execution only in the case of an exception to the proviso of Article 21(1) of the Trust Act. According to the provisions of Article 24(1) of the National Tax Collection Act, the subject of seizure is limited to the taxpayer’s property. If the truster transfers the ownership of real estate to the trustee and establishes a trust relationship under the Trust Act between the parties, the trust property shall belong to the trustee and the truster’s property even after the trust is still deemed to be the truster’s property.” The term “right arising prior to the trust affairs” in this context means the rights arising from the trust affairs.

3) Therefore, insofar as the instant value-added tax claim does not belong to the “right arising from the cause before the trust” under Article 21(1) of the Trust Act, insofar as the instant value-added tax claim does not belong to the “right arising from the trust business” before the trust is performed under the Trust Act, and the instant value-added tax claim cannot be deemed as the “right arising from the management of trust business” with the truster’s claim against the truster. As such, the instant attachment disposition that seizes trust property based on the value-added tax claim against the truster after

3. Conclusion

Therefore, the plaintiff's primary claim of this case is reasonable, and it is so decided as per Disposition with the assent of all participating Justices.

[Attachment Form 5]

Judges Shin Young-sik (Presiding Judge)