The starting point of the statute of limitations for the right to claim damages due to non-performance (i.e., the time the actual damage occurred) and method of determining whether the actual damage occurred / Where an attorney-at-law fails to perform the obligation under the delegation contract of a lawsuit, the starting point of the statute of limitations for the right to claim damages (i.

Articles 166 and 390 of the Civil Act, Article 64 of the Commercial Act

Supreme Court Decision 2002Da57119 Decided January 14, 2005 (Gong2005Sang, 268) Supreme Court Decision 2017Da215070 Decided June 19, 2017

[Defendant-Appellant] K&C Co., Ltd. (Law Firm Han & Lee LLC, Attorneys Lee Dong-han et al., Counsel for defendant-appellant)

Law Firm Man Law Firm (Attorney Oba-hwan, Counsel for defendant-appellant)

Seoul High Court Decision 2017Na2065877 decided May 9, 2018

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The lower court: (a) premised on the premise that the Defendant is liable for damages sustained by the Plaintiff due to the dismissal of the instant cause suit by negligence in breach of the duty of care as a law firm delegated by the Plaintiff by proxy under the instant delegation contract; and (b) determined that the extinctive prescription period of the Plaintiff’s right to claim damages against the Defendant (hereinafter “instant right to claim damages”) was five years as stipulated in Article 64 of the Commercial Act

The Plaintiff is a stock company with the purpose of collecting claims, and both the instant prior suit and the instant lawsuit constitute an act aimed at securing the property of liability for solar construction by revoking solar construction and the Nonparty’s fraudulent act prior to the collection of claims against Thai Construction Co., Ltd. (hereinafter “Tai Construction”). Therefore, it is reasonable to deem that the Plaintiff’s filing of the instant lawsuit constitutes an act closely related to the collection of claims, which is the Plaintiff’s business entity, and the conclusion of the instant delegation contract that appoints the Defendant as the legal representative for the execution of the instant lawsuit constitutes a commercial act closely related to the Plaintiff’s business.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the said determination by the lower court is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical and empirical rules, or by misapprehending

2. Regarding ground of appeal No. 2

A. The lower court accepted the Defendant’s defense that the instant claim for damages expired by prescription for the following reasons.

Around January 22, 2008, when the Defendant, who was the Plaintiff’s attorney, received all documents pertaining to the instant collective housing from the Nonparty during the prior suit, around January 22, 2008, the Plaintiff became aware of the Defendant’s fraudulent act and intention of death and injury through the Defendant. Around January 22, 2009, one year thereafter, the Defendant’s delegated affairs to the Plaintiff under the instant delegation contract due to the lapse of the limitation period for the instant lawsuit was impossible to perform. Therefore, the statute of limitations for the right to claim damages of this case begins from January 22, 2009. Even if not, the first instance court of the instant lawsuit was dismissed for the lapse of the limitation period, at least on April 8, 2010, it is reasonable to view that the Defendant’s delegated affairs under the instant delegation contract came to the status of nonperformance. Thus, the statute of limitation for the right to claim damages of this case begins from the time of the instant lawsuit.

B. However, we cannot accept the above determination by the court below for the following reasons.

(1) The extinctive prescription runs from the time when a right can be exercised (Article 166(1) of the Civil Act). In principle, the extinctive prescription of a right to claim damages due to a non-performance of obligation ought to run from the time of non-performance of obligation (see Supreme Court Decision 2002Da57119, Jan. 14, 2005). However, since a right to claim damages due to a non-performance of obligation is established at the time of actual occurrence of damage, the extinctive prescription ought to run from the time when the damage was actually realized. Whether a damage actually occurred should be determined objectively and reasonably in light of social norms (see Supreme Court Decision 2017Da215070, Jun

In a case where an attorney-at-law fails to perform his/her obligation under a delegation contract, it is unclear whether the damage has occurred, and it is difficult to determine the specific contents, scope, etc. of the damage, until the lawsuit subject to delegation becomes disadvantageous to the client. Therefore, barring any special circumstance, barring any special circumstance, it may be deemed that the damage would actually occur to the client only when the subject lawsuit becomes disadvantageous to the client or when the equivalent condition is confirmed, and it is reasonable to deem

(2) The fact that the Defendant was delegated by the Plaintiff to perform the litigation of the instant cause lawsuit, as well as the first instance court of the instant cause lawsuit, and until the instant cause lawsuit becomes final and conclusive, is apparent in the record.

Examining these facts in light of the legal principles as seen earlier, even if the limitation period of the instant action was expired on January 22, 2009, or the first instance court’s dismissal ruling on April 8, 2010 rendered on the instant action, it is reasonable to view that the time of actual damage to the Plaintiff is the time when the instant action, which the Defendant performed according to the Plaintiff’s delegation, became final and conclusive against the Plaintiff’s negligence, and thereafter, the extinctive prescription of the instant claim for damages ought to run.

(3) Nevertheless, the lower court determined that the extinctive prescription of the right to claim damages of this case from January 22, 2009 or April 8, 2010, which was prior to the confirmation of a suit seeking the cause of this case. In so determining, the lower court erred by misapprehending the legal doctrine on the starting point of the extinctive prescription of the right to claim damages due to nonperformance, and thereby adversely affected the judgment. The allegation contained in the grounds of appeal on this point is with merit.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the judgment of the court below is reversed, and 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

Justices Kwon Soon-il (Presiding Justice)