Seoul High Court-2016-Na2053495 (Law No. 181.09)

Whether a gift contract entered into between the debtor and the defendants constitutes a fraudulent act

Although thisA had been absent from the status of excess, the act of donation to the Defendants of the instant real estate, the only real estate owned by it, constitutes a fraudulent act detrimental to general creditors, including the Plaintiff, barring special circumstances. There is no other evidence to prove the Defendants’ good faith, and the Defendants are liable to compensate for the value.

Article 30 of the National Tax Collection Act: Revocation and Restoration of Fraudulent Act

2018Da210140 Revocation of Fraudulent Act

Korea

Lee Dong-hoon et al.

Seoul High Court Decision 2016Na2053495 Decided January 9, 2018

October 25, 2018

All appeals are dismissed.

The costs of appeal are assessed against the Defendants.

The grounds of appeal are examined.

1. As to the grounds of appeal on the period for exclusion of obligee's right of revocation

A. When the State exercises its right of revocation against a legal act of a delinquent taxpayer by making a claim preserved for a claim against the State, whether the State was aware of the grounds for revocation in relation to the starting point of the limitation period should be determined based on the tax official’s perception in charge of the duty to collect and preserve tax claims, barring any special circumstance. In light of the foregoing, the State may be deemed to have known of the grounds for revocation at that time when the said tax official knew not only the delinquent taxpayer’s disposal of property but also the existence of a specific fraudulent act and that the delinquent taxpayer had expressed his/her intent to injure (see Supreme Court Decision 2016Da20347, Jun. 15, 2017).

B. Based on evidence, the lower court rejected the Defendants’ assertion that, on March 19, 2015, the gift contract of this case was fraudulent act and its exclusion period has elapsed since the Plaintiff’s lawsuit of this case was filed one year after it became aware of the fraudulent act, etc. on March 20, 2015, and the Defendants’ assertion that, on the following grounds: (a) the public officials in charge of other duties conducted tax investigation on BB, etc., or the electronic data on EA was established; and (b) the Defendants did not know that the gift contract of this case was fraudulent act and the Defendants had intention to know that it was fraudulent; and (c) the Plaintiff’s assertion that the exclusion period had elapsed since the Plaintiff’s lawsuit of this case was filed one year after the date on which the Plaintiff was aware of the fraudulent act.

C. Examining the foregoing legal principles and the record, the lower court did not err in its judgment by failing to exhaust all necessary deliberations as to the starting point of the exclusion period, such as the Director in the Grounds of Appeal.

2. As to the ground of appeal on the preserved claim by obligee's right of revocation

A. As to global income tax, additional tax, and additional dues claims

1) In cases where the tax authority deemed that the gross income accrued from the company belongs to an executive officer or employee and disposed of income as bonus, unlike that on which the notice of change in the amount of income was served to the corporation that is the withholding agent, if the income was disposed of, regardless of whether the notice of change in the amount of income was served on the corporation, it constitutes “amount disposed of as bonus pursuant to Article 20(1)1(c) of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009)” and is subject to taxation of earned income tax. Since the amount of income is the date of providing labor during the pertinent business year which is subject to imposition, the amount of global income tax liability of the person who is the withholding agent is also established when the amount of income reaches 20 years of age 20,000 and the amount of additional tax imposed upon the creditor who is the withholding agent pursuant to Article 21(1)1(c) of the Framework Act on National Taxes (see, e.g., Supreme Court Decision 2004Du1668.

2) On the grounds indicated in its reasoning, the lower court determined that the Plaintiff’s global income tax and additional tax claims against EA are related to the amount reverted to the year 2008 through 2009 of EA, and that the said global income tax and additional tax claims were established around December 31, 2008 and December 31, 2009 at the end of the pertinent taxable period, and thus, the Plaintiff’s right to revocation of the instant gift contract is the preserved right of the obligee’s right to revocation of the instant gift contract, and that the amount of such global income tax are included in the additional charges accrued from the fraudulent act to the date of the closing of argument at the lower court.

3) Examining the reasoning of the lower judgment in light of the relevant legal principles and records, part of the lower judgment’s explanation is insufficient.

However, as otherwise alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the preserved claim against fraudulent act by erroneously determining the global income tax, additional tax, and the time when the claim for additional dues was incurred.

B. As to value-added tax and additional tax claims

1) In order for the secondary tax liability to be established, the occurrence of the fact that falls under the requirements, such as the failure of the principal taxpayer, etc. As such, at least the time of establishment of the secondary tax liability has passed after the lapse of “the time limit for payment of the principal tax liability” (see, e.g., Supreme Court Decisions 2006Du11750, Oct. 23, 2008; 2010Du13234, May 9, 2012). In addition, even though it is necessary for claims protected by obligee’s right of revocation to be, in principle, arising before the act that can be viewed as a fraudulent act was conducted, there is a legal relationship that already serves as the basis for the establishment of the claim at the time of the fraudulent act, and it is highly probable that the claim should be established in the near future. In fact, where a claim has been established due to the realization of the possibility in the near future, such claim may also become the preserved claim of obligee’s right of revocation (see, e.g., Supreme Court Decision 905Da343437.

2) According to the relevant legal principles and evidence adopted by the lower court, the head of a tax office may verify the receipt of BB’s false tax invoices and notify BB of the additional payment of each value-added tax, etc. on December 1, 2013. As such, the timing for establishing each of the value-added tax claims against EA, a secondary taxpayer, is after January 1, 2014 after the lapse of at least the “time limit for payment of the principal tax liability”. As such, each of the above value-added tax claims occurred after the lapse of three years and four months after August 4, 2010 upon which the gift contract of this case was concluded, it is difficult to view that the possibility was realized in the near future even if the legal relationship, which forms the basis for establishing the claim at the time of the donation

3) While the lower court determined that the Plaintiff’s claim for value-added tax against thisA was not determined at the time of the conclusion of the instant gift agreement, the Plaintiff’s claim for value-added tax against thisA was due to the false tax invoice received in each corresponding year, and the legal relationship that forms the basis for its establishment was established at the time of the instant gift agreement, and it could have been predicted that liability for tax payment would have been imposed on this Plaintiff, who is an oligopolistic shareholder and the representative director, because the said tax liability was not paid in view of the business and financial status of B, and the tax claim was determined on December 1, 2013, and thus, it was not appropriate to the lower court’s reasoning. However, according to the facts acknowledged by the lower court, even if the aggregate of each global income tax, additional tax, and additional dues on this case’s real estate exceeds KRW 00,000,000, which is close to the date of closing of argument at the lower court, the lower court was justifiable to have determined that the amount of the instant gift tax and the amount of the instant joint security claim should not affect the aforementioned amount.

3. As to the ground of appeal on the computation of the value compensation

The Defendants asserted that, in calculating the joint collateral value of the instant real estate, the secured amount should be deducted from the secured amount of each of the above secured claims, even though the court below did not deliberate on the secured amount of each of the above secured claims and omitted judgment as to whether to deduct the secured amount from the secured amount, the court below erred by misapprehending the legal principles on calculating the amount of compensation. However, this cannot be a legitimate ground for appeal as it was asserted only before the final appeal, and according to the reasoning of the court below and the record, each of the above secured claims, which were completed on the 2 real estate of this case, was established together with the secured amount of 110,00,000 and the secured amount of 27,00,000,000 won prior to the conclusion of the gift contract of this case. Accordingly, each of the above secured claims, including each of the above secured claims, which had already been completed with respect to the 1 real estate of this case, could not be accepted prior to the conclusion of each of the secured claims of this case prior to the extinguishment of the mortgage agreement of this case.

4. Conclusion

Therefore, all appeals are 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.