Where an administrative disposition plan and public notice under the former Act on the Maintenance and Improvement of Urban Areas and Residential Environments are made upon the termination of lease, whether there exists a ground for refusal to renew the contract under Article 10(1)7(c) of the former Commercial Building Lease Protection Act (affirmative), and whether the same applies to the circumstance that project implementation authorization and public notice have been made (negative in principle) / Whether the burden of proof exists as to the existence of a ground for refusal to renew

Where an improvement project is implemented pursuant to the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (wholly amended by Act No. 14567, Feb. 8, 2017; hereinafter “former Act”), the owner or lessee of the previous building may not use or benefit from the existing building until the date of transfer announcement (Article 49(6) of the former Act). Accordingly, the lessor is obligated to remove the tenants from the building within the relocation period prescribed for the smooth implementation of the improvement project. Accordingly, if the lease has already been completed, the lessor needs to recover possession of the building in order to remove the building in accordance with the relevant Act and subordinate statutes, and the lessor needs to recover possession of the building in accordance with the relevant Act and subordinate statutes; hereinafter “former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents”). However, there is no specific restriction on the approval for the implementation of the project within the renewal period prescribed by the former Act from the time of the lease to the time of the public announcement of the approval for the implementation of the project.

In light of this point, in light of the progress of the maintenance project, barring any special circumstance, such as where it is objectively anticipated that the authorization and the announcement of the management and disposal plan should be made within the short period upon the termination of the lease, the mere fact that the authorization and the announcement of the project implementation under the former Act was made cannot be deemed as necessary for the lessor to recover possession of the building for the removal of the building, etc., and therefore, there is no ground for refusal to renew the contract under Article 10(1)7(c) of the former Commercial Building Lease Act. As such, the burden of proving the existence of the grounds under Article 10(1)7(c) of the former Commercial Building Lease Act exists due to the fact that the authorization and the announcement of the management

Articles 10(1)7(c) and 10-4(1) of the former Commercial Building Lease Protection Act (Amended by Act No. 15791, Oct. 16, 2018); Articles 28(4) and 49(3) (see current Article 78(4) and (6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 14567, Feb. 8, 2017); Article 28(4) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 14567, Feb. 8, 2017); Article 288 of the Civil Procedure Act

Supreme Court Decision 2012Da62561, 62578 Decided July 24, 2014 (Gong2014Ha, 1650)

Plaintiff (Law Firm Yang & Yang, Attorneys Park Jong-ju et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Lee & Lee, Attorneys Kim Yong-nam et al., Counsel for the defendant-appellant)

Seoul Western District Court Decision 2018Na31860 decided June 21, 2019

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

On the grounds indicated in its reasoning, the lower court rejected the Defendant’s assertion that the instant lease agreement was terminated at the time when the Plaintiff’s notice of termination was delivered to the Defendant, and that it is not subject to protection of opportunity to recover the premium, as it constitutes a lessee who was in arrears for more than three years, including the period after the termination.

In light of the relevant legal principles and records, the above determination by the court below is just, and there is no error in the misapprehension of legal principles as to Articles 10-4(1) proviso and 10(1)1 proviso of the former Commercial Building Lease Protection Act (amended by Act No. 15791, Oct. 16, 2018; hereinafter “former Commercial Building Lease Protection Act”).

2. Regarding ground of appeal No. 2

Article 10-4 (1) of the former Commercial Building Lease Act provides, “The lessor shall not interfere with receiving premiums from a person who intends to become a new lessee arranged by the lessee according to the premium contract by doing any act falling under any of the following subparagraphs from three months to the expiration of the lease term, and thus shall not interfere with receiving premiums from the lessee who intends to become a new lessee pursuant to the premium contract.” Meanwhile, Article 10-4 (1) 7 (c) of the same Act provides that the lessor shall not be obliged to protect the opportunity to recover premiums if any ground for refusal of the contract exists. Meanwhile, Article 10-4 (1) 7 (c) of the same Act provides that one of the grounds for refusal of the contract shall be one of the cases where the lessor “the need to recover possession of the building for the purpose” in order to remove or reconstruct all or part of the building for the purpose of the contract in accordance with other statutes

Where an improvement project is implemented pursuant to the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (wholly amended by Act No. 14567, Feb. 8, 2017; hereinafter “former Act”), the owner or lessee of the previous building shall not use or benefit from the existing building until the date of transfer announcement (Article 49(6) of the former Act), and the project implementer may seek delivery of real estate against the owner, lessee, etc. (see Supreme Court Decision 2012Da62561, 62578, Jul. 24, 2014). Accordingly, the lessor has the duty to remove the tenant from the building within the relocation period prescribed for the smooth implementation of the improvement project. Accordingly, if the approval of the management and disposal plan and disposal plan and public announcement under the former Act have already been made at the end of lease, it is necessary to recover possession of the building for the removal of the building pursuant to the relevant Act and subordinate statutes, and there is no limit to the approval of the project implementation plan and public announcement under the former Act.

In light of this point, in light of the progress of the maintenance project, barring any special circumstance, such as where it is objectively anticipated that the authorization and the announcement of the management and disposal plan should be made within the short period upon the termination of the lease, the mere fact that the authorization and the announcement of the project implementation under the former Act was made cannot be deemed as necessary for the lessor to recover possession of the building for the removal of the building, etc., and therefore, there is no ground for refusal to renew the contract under Article 10(1)7(c) of the former Commercial Building Lease Act. As such, the burden of proving the existence of the grounds under Article 10(1)7(c) of the former Commercial Building Lease Act due to the fact that the authorization and the announcement of the management and disposal plan

The lower court determined that it is difficult to view that it was necessary to recover possession of the building for the purpose of removing or rebuilding all or most of the instant building to the lessor at the time of termination of the lease of the instant building solely on the circumstance that the authorization for the implementation of the redevelopment project was publicly announced as to the whole building of the instant building, and there was no other evidence to acknowledge

Examining the reasoning of the judgment below in light of the records, the above determination by the court below is just in accordance with the above legal principles, and contrary to this part of the grounds of appeal, the court below did not err by misapprehending the legal principles on the proviso of Article 10-4 (1) and Article 10 (1) 7 (c) of the former Commercial Building Lease Act,

3. Regarding ground of appeal No. 3

After comprehensively taking account of the adopted evidence, the lower court recognized the facts as indicated in its reasoning, and determined that the Defendant was liable to compensate the Plaintiff for damages due to interference with the collection of premiums equivalent to the cited amount in accordance with Article 10-4(3) of the former Commercial Building Lease Act.

In light of the relevant legal principles and records, the above determination by the court below is just, and there was no error in the omission of judgment or incomplete hearing as alleged in the grounds of appeal.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jong-hee (Presiding Justice)