1. Hyundai Industrial Development Co., Ltd. and 2. Ilsung Construction Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Jeon-tae et al., Counsel for the defendant-appellant-appellee)

1. Seoul Special Metropolitan City (LLC, Attorneys Jeong Young-young, Counsel for the defendant-appellant);

2. Korea;

August 29, 2017

Seoul Central District Court Decision 2016Gahap534908 Decided December 1, 2016

1. The plaintiffs' appeal against the defendant Republic of Korea is dismissed.

2. Of the judgment of the first instance, the part against the defendant Seoul Special Metropolitan City is revoked, and the plaintiffs' claims against the defendant Seoul Special Metropolitan City are dismissed.

3. The total costs of litigation between the plaintiffs and the defendant Seoul Special Metropolitan City and the costs of appeal between the plaintiffs and the defendant Republic of Korea are all borne by the plaintiffs.

1. Purport of claim

The purport of the claim against the primary defendant: The defendant shall pay to the plaintiff Hyundai Industrial Development Co., Ltd. the amount of KRW 1,019,761,295, the amount of KRW 170,019,705, and each of them shall be 3.51% per annum from March 8, 2016 to the service date of the duplicate of the complaint in this case, and the amount of money calculated at the rate of KRW 15% per annum from the following to the day of full payment.

The purport of the claim against the conjunctive defendant: The defendant Republic of Korea pays to the plaintiff Hyundai Industrial Development Co., Ltd. 1,019,761,295 won, 170,019,705 won to the plaintiff Ilsung Construction Co., Ltd., and 3.51% per annum from March 8, 2016 to the service date of a copy of the complaint of this case, and 15% per annum from the next day to the day of full payment.

2. Purport of appeal

A. The plaintiffs

Of the judgment of the first instance, the part against the defendant's Republic of Korea shall be revoked. The defendant's Republic of Korea shall pay to the plaintiff Hyundai Industrial Development Co., Ltd. 1,019,761,295 won, 170,019,705 won to the plaintiff Ilsung Construction Co., Ltd., and 3.51% per annum from March 8, 2016 to the service date of a copy of the complaint of this case, and 15% per annum from the next day to the day of full payment.

B. Defendant Seoul Special Metropolitan City

Paragraph 2 of this Article.

1. Basic facts

The reasoning of this court concerning this part is as follows: "The contractor shall be informed of all necessary matters for this construction tender, such as the submission of tender document on April 4, 2008 to April 14, 2008 to April 12, 2008, the tender submission period: 00:00 to April 12, 2008 to April 14, 2008; the tender guide prepared by the procuring entity at the time of site site site preparation; and "I will comply with the tender" in Section 18 of Chapter 5, and "I will comply with the tender" in Section 18, the construction contract document prepared at the time of the conclusion of the construction project of this case between the contracting entity and the defendant in the Republic of Korea as to the construction project of this case, as stated in the main sentence of Section 1, the contract document, comprehensive and alternative tender contract, site description and general terms and conditions of the construction contract, general terms and conditions of the construction contract, general terms and conditions of integrity contract, general terms and conditions of integrity contract, additional terms and conditions of the contract."

2. Determination on the legitimacy of the appeal

The plaintiff's appeal is legitimate ex officio.

An appeal is intended to seek revocation or change of a judgment disadvantageous to himself/herself, and therefore an appeal against the judgment in favor of him/her cannot be permitted, and in principle, whether a judgment is disadvantageous to an appellant shall be determined at the time of filing an appeal based on the order of the judgment as the standard. Thus, an appeal against the judgment in favor of the entire winning case shall be unlawful as there is no benefit (see Supreme Court Decision 2007Da20235, Jul. 13, 2007, etc.).

On the other hand, the plaintiffs' claim is a primary defendant in Seoul Special Metropolitan City and a primary defendant in Korea. Since the plaintiffs' claim against the primary defendant in the first instance court accepted all the claims against the primary defendant in the plaintiffs' claim, even if the claim against the primary defendant in Korea was dismissed in accordance with the necessity of unity. In other words, even if the plaintiffs' claim against the primary defendant in the appellate court is changed to a dismissal judgment, the plaintiffs' claim against the primary defendant in the appellate court is subject to the appellate court's judgment, and therefore, it is not necessary to maintain the plaintiffs' appeal against the primary defendant. Accordingly, the plaintiffs' appeal against the defendant in Korea is unlawful as there is no benefit of appeal.

3. The parties' assertion

This Court's explanation is identical to the corresponding part of the judgment of the court of first instance (No. 6, No. 8, and No. 7, No. 15). Thus, this Court's explanation is citing it according to the main text of Article 420 of the Civil Procedure Act.

4. The subject of the obligation to pay the construction price of this case

The court's explanation on this part is identical to the corresponding part of the judgment of the court of first instance (from No. 7, No. 17, and No. 9, No. 3). Thus, it is citing it according to the main text of Article 420 of the Civil Procedure Act.

5. Determination on the plaintiffs' claims against Defendant Seoul Metropolitan Government

A. In this case, there is no dispute between the parties that the Defendants did not comply with Article 93 subparag. 1 of the government tender and contract execution standards under the purport that the Defendants should allow prior access to the tender by stating matters concerning the ex post facto settlement of health insurance premiums, etc. in the public tender notice, etc. of this case. It is a question whether the Defendant Seoul Metropolitan Government is legitimate to reduce the amount of the contract price of the construction contract of this case by ex post settlement of KRW 1,189,781,00, based on Article 26-2(3) of the Enforcement Decree of the Framework Act on the Construction Industry.

B. In light of the following facts and circumstances that can be acknowledged by comprehensively taking account of the following facts and circumstances, the evidence mentioned above, Gap evidence No. 23, Eul evidence No. 5, and Eul evidence No. 5, the construction of this case constitutes a corporation subject to ex post facto settlement of health insurance premiums pursuant to the Framework Act on the Construction Industry and the Enforcement Decree of the same Act. Accordingly, it is justifiable that defendant Seoul Metropolitan Government made ex post settlement. Accordingly, the plaintiffs' assertion against defendant Seoul Metropolitan Government is without merit.

1) The system of follow-up settlement of health insurance premiums, etc. means that the contractor does not definitely pay the statutory insurance premiums, such as health insurance premiums, to correct the previous practices that the contractor acquired even without paying the insurance premiums to a daily worker who actually works for the construction company when the government or the public corporation enters into a construction contract, but only if the contractor proves that the contractor paid the above statutory insurance premiums to the workers according to documentary evidence. Even if the amount equivalent to the insurance premiums was actually paid to the workers, if the contractor fails to submit such documentary evidence, the amount equivalent to the statutory insurance premiums should not be paid.

2) The purpose of each provision of Article 22(5) of the Framework Act on the Construction Industry and Article 26-2 of the Enforcement Decree of the Framework Act on the Construction Industry is to stipulate in the statement of contract price calculation the expenses to be borne by a constructor, such as health insurance premiums, so that the relevant expenses can be reflected in the construction cost calculation sheet so that the contractor may pay the cost appropriately through the realization of contract price, and prevent the contractor from making the cost of social insurance in advance due to the cost of social insurance, which is not clearly included in the construction cost, so that the contractor can include the cost of social insurance in the construction cost calculation sheet specifying the cost of social insurance in order to correct the situation where the contractor is not clearly included in the construction cost and the dispute over the obligor due to the failure to pay the cost of social insurance, and it does not require the contractor to pay it as the construction cost even if the contractor fails to actually pay

3) In light of the purport of the introduction of the ex post facto settlement system of health insurance premiums, etc., even if the provisions on the basis and procedure for ex post settlement of health insurance premiums, etc. in public contracts are established prior to the enforcement of the provisions of Article 22(5) of the Framework Act on the Construction Industry and Article 26-2 of the Enforcement Decree of the Framework Act on the Construction Industry [Article 73 of the Enforcement Decree of the Act on Contracts to Which the State is a Party (amended by Presidential Decree No. 15186, Dec. 31, 1996; January 1, 1997) and Article 73 of the Enforcement Decree of the Act on Contracts to Which the State is a Party (amended by Presidential Decree No. 15186, Jan. 1, 1997), the ex post settlement system under the Framework Act on the Construction Industry also needs to be established for public construction works. In other words, the ex post settlement system may be established at the time of the implementation of the Framework Act on the Construction Industry before the enforcement of the Framework Act.

4) On May 17, 2007, before the public notice of the instant case was issued, Article 22(5) of the Framework Act on the Construction Industry was amended to the effect that when the amount specified in the statement of contract amount calculation, such as health insurance premiums, exceeds the insurance premiums actually paid, etc. Accordingly, Article 26-2 of the Enforcement Decree of the Framework Act on the Construction Industry was amended to the effect that the matters concerning the settlement of accounts should be determined by Presidential Decree. Accordingly, Article 22(1) of the Addenda of the Framework Act on the Construction Industry (amended on May 17, 2007) provides that Article 22(5) of the Enforcement Decree of the Framework Act on the Construction Industry shall apply from the first contract agreement after this Act enters into force (Article 22(5) of the Framework Act on the Construction Industry (Article 22(5) of the Enforcement Decree of the Framework Act on the Construction Industry). Since the contract for the instant construction work was concluded on May 30, 2008, the Enforcement Decree of the Framework Act on the Construction Industry shall apply, unless there are special circumstances.

5) The Plaintiffs asserted that the health insurance premiums cannot be settled ex post by the Defendant Seoul Metropolitan Government because the contents of the instant construction project are not clearly indicated. However, the instant public announcement states that “the participants shall include details of tender prices (in the case of bids), national health insurance premiums and national pension premiums in accordance with the rates publicly notified by the Minister of Construction and Transportation, shall be included, respectively, in accordance with Article 26-2 of the Enforcement Decree of the Framework Act on the Construction Industry,” and that “the tender participants shall be well aware of all necessary matters, such as tender guide prepared by the end-user institution, and shall comply with the tender.” The basic concept of the instant public announcement of construction contract is to stipulate that “the contractor shall be aware of the fact that there are no ex post facto settlement of the construction insurance premiums under the Framework Act on the Construction Industry, such as the construction industry, the statement of special subscription to the construction project, the site descriptions and general conditions of the construction project, the agreement on the ex post facto adjustment of the construction contract, etc., and to the effect that the construction announcement of the instant construction contract is part of the construction contract.”

6) Article 26-2(3) of the Enforcement Decree of the Framework Act on the Construction Industry provides that "it may settle accounts" under Article 26-2(3) of the Enforcement Decree of the Framework Act on the Construction Industry, which is not compulsory provisions. Thus, the plaintiffs asserted that, by incorporating "government bidding and contract execution guidelines" into the contents of the contract agreement for the construction of this case, they agreed between the defendant Seoul Metropolitan Government on the content different from the above Enforcement Decree, they should observe the procedure, but they can settle health insurance premiums, etc. after the fact that the contract for the construction of this case was entered into after the plaintiffs' response to the public announcement of tender where there was no omission of the fact that the contract for the construction of this case was entered into. However, in light of the above facts and the evidence submitted by the plaintiffs that the plaintiffs and the defendant Seoul Metropolitan Government should exclude the provisions on the ex post facto settlement of accounts under the Framework Act on the Construction Industry, there is no reason to acknowledge that they agreed on the health insurance premiums, etc. only if they comply with the procedure under the "Government bidding and contract execution guidelines."

7) The plaintiffs asserted to the effect that even though the provision on ex post facto settlement of health insurance premiums was omitted in the public announcement of this case, if Defendant Seoul Metropolitan Government becomes able to settle accounts after the public announcement of this case, the Enforcement Decree of the Framework Act on the Construction Industry was pre-announceed on September 5, 2007 before the public announcement of this case, and the site site for the public announcement of this case was made on January 8, 2008 after the enforcement of the Framework Act on the Construction Industry and the Enforcement Decree of the same Act. Accordingly, the tender price was submitted on April 9, 2008 and the contract price under the construction of this case was concluded on May 30, 208. According to the above facts, it appears that the plaintiffs, a constructor, had been sufficiently aware of the right to ex post facto settlement of accounts under the Framework Act on the Construction Industry before or at least before the contract for the construction of this case, but it is difficult to view that the plaintiffs had failed to present such evidence under the premise that they did not present their health insurance premiums after the public announcement of bid price.

C. Regarding this, the plaintiffs: ① Article 22(5) of the Framework Act on the Construction Industry comprehensively delegated the Presidential Decree without specifically stipulating the contents, method, and procedure, etc. of the ex post facto settlement of insurance premiums, which are matters concerning the restriction of fundamental rights. This violates the principle of statutory reservation under Article 37(2) of the Constitution and the principle of prohibition of comprehensive delegation under Article 75 of the Constitution; ② Article 2(1) of the Addenda of the Framework Act on the Construction Industry should have different transitional provisions on the legal provision of this case (hereinafter "the supplementary provision of this case") based on the public notice of tender, although there should be different transitional provisions on the contract of this case as publicly notified before the enforcement of the revised Framework Act on the Construction Industry due to the lack of such transitional provisions, which violates the principle of prohibition of retroactive legislation under Article 13(2) of the Constitution or the principle of protection of trust under the Constitution. Thus, Defendant Seoul Metropolitan Government asserts that it cannot make ex post settlement pursuant to the above Ordinance.

First, we examine whether the legal provision of this case is unconstitutional because it violates the principle of statutory reservation and the prohibition of comprehensive delegation legislation.

Under the Framework Act on the Construction Industry, the ex post facto settlement system of insurance premiums, etc. provides that a constructor, such as insurance premiums, shall specify in the statement of contract amount calculation so that the relevant expenses can be reflected in the cost of construction work so that the contractor can properly pay social insurance expenses through the realization of contract amount, and prevents the contractor from causing fraudulent performance in the cost of social insurance. As such, the legislative purpose of the previous Act is to include the cost of social insurance in the cost calculation sheet of contract amount in the construction work so that the contractor can not clearly include the cost of social insurance in the cost of construction work and to correct disputes over the obligor, and it does not stipulate that the contractor shall pay the cost of construction work even if the contractor fails to actually pay the cost of the social insurance. Since the current provision of the Act of this case provides specific requirements for the application of the principle, such as "where the amount specified in the statement of contract amount calculation sheet of construction work exceeds the insurance premium actually paid, etc., it cannot be deemed that the contents of the Act of this case can clearly be deemed that the legislative method and its detailed method are different from the legislative requirement.

Next, we examine whether the supplementary provision of this case is unconstitutional because it violates the principle of retroactive legislation prohibition and the principle of trust protection.

In light of the amended provisions of this case, “the matters concerning the settlement of insurance premiums, etc. when the amount specified in the statement of contract amount calculation of construction works exceeds the insurance premiums actually paid.” The new provisions of this case only stipulate the transitional measures while amending the provisions of this case, and the provisions of the supplementary provisions of this case merely apply to the first contract after the enforcement of the amended Act ( January 1, 2008) and do not apply to the contract which was concluded before the enforcement of the amended Act. Thus, the supplementary provisions of this case cannot be deemed to be true legislation, and thus cannot be deemed to be a violation of property right by retroactive legislation prohibited under the Constitution. Since the plaintiffs can be sufficiently informed of the right to settle insurance premiums after the amendment of the provisions of this case before the conclusion of the contract in this case, even if they trust that they did not have been determined on the right to settle insurance premiums after the amendment of the provisions of this case, they cannot be deemed to have been more trust than the purpose of the amended provisions of this case. Therefore, it is difficult to view that the aforementioned provisions of this case were worth protecting the public interest.

Therefore, the plaintiffs' above assertion is without merit.

6. Conclusion

Therefore, the plaintiffs' appeal against the defendant Republic of Korea is unlawful and dismissed, and the plaintiffs' primary defendant Seoul and conjunctive defendant's claim against the defendant Republic of Korea are dismissed without merit. Since the part against the plaintiff in the first instance judgment against the main defendant Seoul is unfair with different conclusion, the part against the defendant in the first instance judgment against the defendant in the first instance judgment is revoked, and the part against the defendant in the first instance judgment against the defendant in the first instance judgment is revoked, and it is so decided as per Disposition.

(attached Form omitted)

Judges Lee Kang-won (Presiding Judge) early heat