In a case where a lessee subleases the leased object to a third party without the lessor’s consent, whether the lessor may file a claim for damages or a claim for restitution of unjust enrichment with the third party (negative in principle)

Even if a lessee, without the consent of a lessor, transfers the right of lease to a third party or obtains a profit from the leased object by means of sub-lease, etc., the lessor still has the right to claim a rent against the lessee unless the lease contract is terminated or the lease contract is lawfully terminated due to other reasons. Therefore, to the extent that the lease exists, the lessor cannot claim a compensation for the rent equivalent to the rent or a claim for the return of unjust enrichment against the third party.

Articles 618, 629, 741, and 750 of the Civil Act

Supreme Court Decision 2005Da55121 Delivered on December 7, 2006

Plaintiff (Attorney Yoon-ju, Counsel for the plaintiff-appellant)

[Defendant-Appellant] Defendant 1 and 2 others (Law Firm Round, Attorneys Park Jong-young et al., Counsel for defendant-appellant)

Seoul High Court Decision 2005Na31356 delivered on December 22, 2005

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined.

1. As to the assertion of misapprehension of legal principles as to unjust enrichment

Even if a lessee, without the consent of a lessor, transfers or subleases a right of lease to a third party for use or profit-making of the leased object, the lessor still has a right to claim a rent against the lessee unless the lease contract is lawfully terminated or the lease contract is terminated due to other reasons. Thus, to the extent that the lease contract remains in existence, the lessor may not claim a compensation for the rent or a claim for return of unjust enrichment against the third party for illegal possession (see Supreme Court Decision 2005Da5121, Dec. 7, 2006).

According to the reasoning of the judgment below, after the defendant company leased the factory of this case from the non-party 1 on May 22, 2002, the right to lease of this case was transferred in sequential order from the defendant company to the Dong Sea General Corporation (hereinafter "Dong Sea General Corporation"), the plaintiff, and eventually, the non-party 1 and the plaintiff entered into a new lease contract concerning the factory of this case. The non-party 2, who actually manages the Dong Sea General Corporation, transferred the factory of this case to the plaintiff on July 19, 2002 (However, the contract was entered into as of September 19, 2002), but had the defendant company use the factory of this case until transferring the internal machinery and equipment of the factory of this case to the defendant company. This is not identical to the contract of this case which was concluded between the non-party 2 and the non-party 2, even if it did not receive the right to lease of the factory of this case and the comprehensive transfer contract concerning the internal machinery and equipment of this case for the reasons attributable to the defendant company.

In contrast, the court below held that the plaintiff could seek restitution of unjust enrichment against the defendant company by deeming that the defendant company obtained a substantial benefit from the rent by occupying the factory of this case without the consent of the sub-leaser, and thus, the plaintiff who was not paid rent from the sub-leaser incurred losses due to the deduction of the rent equivalent to the rent from the lease deposit. Thus, the court below erred by misapprehending the legal principles on unjust enrichment, which affected the conclusion of the judgment, and the ground of appeal pointing this out has merit.

2. Conclusion

Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and this part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)