Seoul Southern District Court 2010 Gohap22621 ( November 25, 2011)

property division of the debtor is excessive beyond the reasonable extent and constitutes a fraudulent act.

Even if the gift contract of this case was concluded by the debtor under the pretext of division of property and payment of consolation money as a result of the divorce between the debtor and his spouse, if the amount of debt is deducted from the total property value, there is no amount remaining, and it constitutes fraudulent act as it exceeds

2011Na102631 Revocation, etc. of fraudulent act

Appellant and Appellant

Korea

- Appellants

Shin XX

Seoul Southern District Court Decision 2010Gahap22621 Decided November 25, 2011

July 19, 2012

August 23, 2012

1.The judgment of the first instance shall be modified as follows:

A. The donation contract concluded around November 2006 between KimA and the defendant shall be revoked within the limit of KRW 000.

B. The defendant shall pay to the plaintiff 00 won and 5% interest per annum from the day immediately following the day this judgment became final to the day of complete payment.

2. All costs of the lawsuit shall be borne by the defendant.

1. Purport of claim

The contract of donation concluded around November 2006 between KimA and the defendant shall be revoked within the limit of 000 won. The defendant shall pay to the plaintiff 5% interest per annum from the day following the day when this decision is finalized to the day of full payment.

2. Purport of appeal

A. The plaintiff

The part of the judgment of the court of first instance against the plaintiff shall be revoked. The contract of donation concluded around November 2006 between KimA and the defendant shall be revoked within the limit of 000 won. The defendant shall pay to the plaintiff 5% interest per annum from the day following the day of this judgment to the day of complete payment.

B. Defendant

The part of the judgment of the first instance against the defendant shall be revoked, and the plaintiff's claim corresponding to the above revocation shall be dismissed.

1. Basic facts

A. The relationship between the defendant and KimA

On May 14, 1971, the defendant married with KimA on May 14, 1971, but was married on March 13, 2007.

(b) Conclusion, etc. of sales contracts;

1) On December 12, 1994, KimA entered into a sales contract with the European Union Housing Association (hereinafter referred to as the "PA") to sell 000 m2 000-2 8,847 m2 and 259.93 m2 on its ground-based m259 m2 (hereinafter referred to as the "real estate in this case") to sell 000 m2 (hereinafter referred to as the "first sales contract in this case"), and 000 won out of the sales price from the XX association from December 12, 1994 to April 23, 1999.

2) Since April 16, 2006, KimA and cooperative terminated the agreement on the first sale contract of this case. KimA sold the instant real estate at KRW 000 on May 4, 2006 to the OO system Co., Ltd. (hereinafter referred to as "OO") and to the OO and two other persons, but the OO et al. entered into a sales contract with KimA to pay KRW 00,000 out of the above purchase price to the Association, and the remaining KRW 00,000,000 to the Association respectively (hereinafter referred to as "the second sale").

3) On September 29, 2006, KimA completed the registration of ownership transfer for the instant real estate with the O on September 29, 2006, and received 000 won (hereinafter “the instant balance”) from OO and two other persons from September 29, 2006 to October 10, 2006.

C. Use of the balance of this case

1) Payment of waste disposal expenses

KimA paid KRW 000 out of the remainder of this case to the Gyeonggi Environment Construction from October 20, 2006 to October 25, 2006 (hereinafter “instant waste disposal costs”).

(ii)donations to their children;

The East KimB, KimCC, and KimD (hereinafter referred to as the "GlaB, etc.") demanded KimA to distribute part of the remainder of this case to them, and KimB, etc. from the remainder of this case, KimA paid KRW 00 on October 20, 2006 and KRW 00 on November 17, 2006 to KimB, etc.

3) Payment to the Defendant of division of property, etc.

On November 2006, KimA and the defendant, under the pretext of division of property and consolation money according to divorce: ① the KimA and the defendant living together with the defendant, who were the lessee, revert to the defendant the right to return the apartment lease deposit to the defendant; ② The KimA agreed to pay KRW 000 to the defendant (hereinafter referred to as the “instant donation contract”); and KimA paid KRW 000 in total to the defendant from the first half of November 2006 to the end of April 2007 (the above agreed amount was not paid).

D. Occurrence of transfer income tax due to the second sale of this case

1) On May 30, 2007, Kimyang Tax Office calculated capital gains tax on the transfer of the instant real estate at KRW 000, and filed a final return on capital gains tax, but did not pay the final return. On August 9, 2007, the head of Ansan Tax Office notified the KimA that he shall pay capital gains tax of KRW 00 by August 31, 2007 (hereinafter “the first capital gains tax of this case”).

2) On December 9, 2009, the head of the Ansan Tax Office notified that KimA shall additionally pay capital gains tax of 000 won until December 9, 2009 (the additional tax for failure to make a return and the additional tax for failure to make a payment are 000 won) on the grounds that KimA deducted the necessary expenses in the process of filing the said final return of capital gains tax from the excessive deduction of the amount of KRW 4,821,112,000 (hereinafter referred to as the “second capital gains tax of this case”).

3) The KimA did not pay the above transfer income tax at all.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence Nos. 4 through 6 (including the number of branches), the purport of the whole pleadings (the defendant asserts that Gap evidence No. 3 was made by intimidation of KimB, etc., but the entries of Eul evidence No. 12 alone are insufficient to recognize it, and there is no other evidence to acknowledge it).

2. Determination

(a)the existence of preserved claims;

1) Relevant Acts and subordinate statutes (as stated in the Enforcement Decree and the Schedule of the Attached Acts and subordinate statutes at the time of the second sale)

2) The Plaintiff exercised the obligee’s right of revocation regarding the gift contract of this case concluded between KimA and the Defendant with the claim for the first and second capital gains tax of this case against KimA as the preserved right. As such, first, we examine whether the Plaintiff has the obligee’s right of revocation.

According to the above laws and regulations, capital gains tax is paid by preliminary return and its tax liability is established on the last day of the month in which the amount which is the general tax base is settled, but if the transfer of ownership is registered prior to the settlement of the price, it shall be established on the last day of the month in which the receipt date of the registration is included. However, in the case of the transfer of real estate in this case, the transfer of real estate in this case was registered on October 10, 2006, or on September 29, 2006, the transfer of real estate in this case was registered on September 30, 206. Therefore, the transfer income tax of this case is deemed to have been established on September 30, 206 (tax claim is naturally established if the requirements prescribed by the law are met. Thus, the circumstance of notifying the second transfer income tax of this case to the head of Ansan Tax Office on December 2, 2009 cannot interfere with the establishment of the above taxation claim, and thus the transfer income tax of this case cannot be imposed on the second transfer income tax of this case.

Therefore, the taxation claims (hereinafter “instant taxation claims”) in the amount of KRW 000 (=00 won +000) excluding the additional tax amount among the transfer income tax of the instant L and 2 (hereinafter “instant taxation claims”) are already established at the time of November 2006, which was concluded by the instant donation contract, and thus, it constitutes a preserved claim in the exercise of the obligee’s right of revocation.

B. Establishment of fraudulent act

1) Whether the debtor, KimA, is insolvent

A) According to Gap evidence Nos. 3, Eul evidence Nos. 1, 2, and 6 (including numbers), and the appraisal result of the appraiser's right EE of the first instance court, the fact that KimA's active property as of Nov. 2, 2006 entered into the gift contract of this case can be acknowledged as follows. At the time KimA's passive property as of Dec. 1, 2006, the fact that there was a tax claim of this case of KRW 00 as of the time of the conclusion of the gift contract of this case is as mentioned above (the defendant's second transfer income tax of this case was generated on Dec. 3, 2009 after three years of the conclusion of the gift contract of this case. Thus, KimA could not be included in a passive property. However, the taxation claim of this case excluding the additional tax of the second transfer income tax of this case was already established on Sep. 30, 2006, but the claim of the defendant merely determined the amount of the transfer income tax of this case on Dec. 12, 2009.

Therefore, at the time of the conclusion of the gift contract of this case, KimA is positive property of KRW 000,000, and it is deemed that there was a situation of insolvency in excess of debt, as negative property of KRW 000.

B) Determination of the parties’ assertion

(1) The Plaintiff asserts that, in addition to the brokerage commission for the transfer of the instant real estate recognized in the foregoing paragraph (A), the KimA paid 000 won as the brokerage commission in the instant balance, and thus, it should be deducted from the active property of KimA. However, there is no evidence to prove that the above brokerage commission should be paid out of the instant balance. Rather, according to the statement in the evidence No. 3, the KimA merely recognizes the fact that: (a) out of the brokerage commission for the transfer of the instant real estate in May 14, 2006, the amount of KRW 00 out of the brokerage commission for the transfer of the instant real estate was paid on June 26, 2006 before receiving the instant balance; and (b) therefore, the Plaintiff’s assertion is without merit.

(2) The Plaintiff asserted that KimA’s purchase of the instant officetel heading XX643 (hereinafter “the instant officetel”) in Sungnam-si, Sungnam-si and paid 000 won in the remainder, and thus, KimA’s active property should be deducted from the remainder. However, there is no evidence to prove that KimA paid KRW 000 out of the instant balance. Rather, according to the evidence No. 3, KimA merely paid the instant officetel heading on May 19, 2006, prior to the receipt of the instant balance, as the Plaintiff’s above assertion is without merit.

(3) The defendant alleged that each donation contract against KimB et al. on October 2006 and November 17, 2006 against the plaintiff KimB et al. claimed that the amount paid by KimB et al. according to the above donation contract should not be deducted from the active property of KimB et al., and therefore, the plaintiff filed a lawsuit against KimB et al. on September 23, 2009 (Seoul Eastern District Court Decision 2009Gahap6293, Sept. 23, 2009) and was sentenced to the judgment accepting the plaintiff's claim on Sep. 23, 2009 (Seoul East District Court Decision 2009Gahap6293, Apr. 22, 2010; the plaintiff and the beneficiary of the case were not subject to dispute between the plaintiff and the defendant on Apr. 22, 2010 and the subsequent purchaser of the case.

(4) The defendant asserts that since KimA paid KRW 000 as the waste disposal cost of this case from the balance of this case, it should only deduct the above amount from the active property of KimA. However, the defendant's assertion is not sufficient to acknowledge it only with the statements in Eul evidence Nos. 9, Eul evidence No. 10-1, and 5. If the defendant's assertion is true, and if KimA's claim included the difference between the waste disposal cost (00 won) and the waste disposal cost (00 won) deducted from the above basic facts as it is included in active property, it does not change beyond the active property. Thus, the defendant's assertion is without merit.

2) Therefore, the instant donation contract is an act that further deepens the degree of insolvency of KimA, which is an insolvent condition, and becomes a fraudulent act against the Plaintiff, a creditor.

C. The intent of the debtor and the defendant to kill

According to Gap evidence 3 and Eul evidence 6, KimA used 00 won out of the balance of 000 won in this case, and intended to pay the first capital gains tax of this case to the remaining 000 won, but it can be recognized that the defendant requested 000 won as division of property and consolation money and agreed to pay 00 won to the defendant at the end of the consultation. Thus, KimA knew that the joint security of tax claims would be more deficient due to the conclusion of the gift contract of this case, and it is presumed that the defendant's bad faith is presumed.

D. Judgment on the defendant's defense

1) Determination on the bona fide argument

At the time of entering into the instant gift contract, the Defendant did not know that KimA was insolvent or that the degree of insolvency was serious due to the instant gift.

In a lawsuit for revocation of a fraudulent act, the obligor has the burden of proving that the obligor is maliciously, but the beneficiary or subsequent purchaser is presumed to be maliciously, so the obligee has the burden of proving that the beneficiary or subsequent purchaser is acting in bad faith, not the obligee's burden of proving that the beneficiary or subsequent purchaser is acting in bad faith. However, the evidence of the defendant's submission alone is insufficient to

Rather, according to the above evidence, the defendant can be found to have entered into the gift contract of this case with the knowledge that KimA had no particular property other than the balance of this case, and that the defendant used a considerable amount of money out of the balance of this case to KimA while demanding a divorce from KimA. In such factual relations, since the secondary sale of this case exceeds 14 billion won, it is generally anticipated that capital gains tax may be levied in KRW 100 billion due to the conclusion of the gift contract of this case, it shall be determined that the defendant was aware that the conclusion of the gift contract of this case would cause a lack of joint security of the tax claim of this case.

2) Determination on the claim for division of property following the divorce by agreement

A) Defendant’s assertion

The defendant asserts that the donation contract of this case is concluded by KimA under the pretext of division of property and payment of consolation money in divorce with the defendant, and it is within the reasonable scope in accordance with the purport of Article 839-2 (2) of the Civil Act, so it does not constitute revocation of fraudulent act

B) Determination

(1) In light of the fact that division of property following divorce is a liquidation of common property formed through mutual cooperation between both parties, it is not a fraudulent act, barring any special circumstance to recognize that division of property is excessive beyond a considerable degree pursuant to the purport of Article 839-2(2) of the Civil Act. However, if there are special circumstances to deem that division of property exceeds a considerable degree, it may be subject to revocation as a fraudulent act. Whether division of property is reasonable or not shall be determined in accordance with the general principle of division of property under Article 839-2 of the Civil Act, by comparing and balancinging the interests of one of the divorced parties and the interests of creditors, and as a result, whether division of property is reasonable in relation to the other party’s creditor. Meanwhile, if one of the divorced parties bears the obligation that becomes the object of division of property and the amount of division of property exceeds the above amount of division of property, it shall be determined based on the agreement between the other party’s creditor (see, e.g., Supreme Court Decision 200Da47509, Apr. 20, 2001).

(2) According to the above facts, on March 13, 2007, when the agreement between the defendant and the KimA is concluded, active property of the KimA on March 13, 2007, which is the date of divorce between the defendant and KimA, is KRW 00 after deducting KRW 200 million paid to KimB, etc. on November 17, 2006, and KRW 000,000, which is a passive property at that time KimA sold the real property of this case, which is the active property of the KimA, and received as a result of the formation of the balance of this case, is subject to division of property. The above positive property deduction from the active property value does not exist, while the defendant has only positive property of KRW 00,00,00, which was residing with the KimA without bearing any debt (the conclusion of the defendant's exclusive property), and it does not exceed the extent of division of property under Article 288 of the Civil Act, even if it does not exceed the extent of division of property of the defendant's property under the Civil Act.

(3) Therefore, since at least the part of the instant donation contract asserted as fraudulent act by the Plaintiff is deemed as fraudulent act against the Plaintiff, the Defendant’s assertion that the entire contract of this case does not constitute a fraudulent act as a legitimate division of property is without merit.

(e) Scope of cancellation and reinstatement;

As seen above, the instant donation agreement entered into between the defendant and KimA constitutes a fraudulent act detrimental to the plaintiff, who is a creditor, at least within the limit of 000 won upon the plaintiff's request, and thus, it shall be revoked within the limit of the above amount. Accordingly, the defendant shall pay to the plaintiff damages for delay at the rate of 5% per annum under the Civil Act from the day following the day when the judgment became final and conclusive to the day when full payment is made.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and since the judgment of the court of first instance that has partially different conclusions is unfair, the contract of donation concluded around November 2006 between KimA and the defendant shall be revoked within the limit of 000 won, and the defendant shall order the plaintiff to pay to the plaintiff 5% interest per annum from the day following the day when the judgment became final and conclusive to the day of complete payment. It is so decided as per Disposition by the court of first instance.