2016 Gohap520602 Payment for Construction Works

2017 Gohap 502069 (combined) Acceptances

1. A stock company;

Attorney Lee J-jin, Counsel for the defendant-appellant

2. B;

Law Firm Sam-hwan, Counsel for the plaintiff-appellant

Attorney Kim Yong-Nam, and Kim Jong-soo

C Housing Association

Law Firm Han-ro, Counsel for defendant-appellant

Attorney Lee Jong-soo, Justice Lee Byung-il

May 18, 2018

July 13, 2018

1. Of the instant lawsuit, the part of the Plaintiff Company A’s claim amounting to KRW 230,952,839 is dismissed.

2. The defendant,

(a) KRW 27,047,161 as well as the amount calculated by the rate of 6% per annum from October 16, 2015 to July 13, 2018 and 15% per annum from the next day to the day of full payment to Plaintiff A;

B. From March 17, 2016 to December 2016, 2016, Plaintiff B, as well as KRW 450,000,00,000.

13.To the extent of 6% per annum and 15% per annum from the next day to the day of full payment;

sub-payment.

3. The plaintiff A's remaining claims are dismissed.

4. Of the costs of lawsuit:

A. 90% of the portion arising between the Plaintiff A and the Defendant is the Plaintiff Company, and 10% is the Defendant:

B. The part arising between the Plaintiff B and the Defendant is the Defendant.

Each share shall be borne.

5. Paragraph 2 can be provisionally executed.

The Defendant shall pay to Plaintiff A 897,100,000 won with the interest of 6% per annum from September 26, 2015 to the service date of a copy of the complaint of this case, and the interest of 15% per annum from the next day to the day of complete payment, with the interest of 450,000 won to Plaintiff B Co., Ltd. and the interest of 6% per annum from March 17, 2016 to the service date of a copy of the complaint of this case, and with the interest of 15% per annum from the next day to the day of complete payment.

1. Basic facts

A. Status of the parties

The defendant is a regional housing association established for the purpose of carrying on the business of newly constructing and selling apartment units after purchasing the land of the Dadong-gu in Daegu-gu (hereinafter referred to as "the project of this case").The head of the Daegu Suwon-gu head of the Gu approved the establishment of the housing association for the defendant on June 9, 2015 in accordance with Article 32 of the former Housing Act (amended by Act No. 13435, Jul. 24, 2015) and relevant statutes.

B. Conclusion, etc. of a contract for construction works between the Plaintiff A and the Defendant

1) On November 25, 2014, Plaintiff A Co., Ltd. (hereinafter referred to as “Co., Ltd.”) entered into a construction contract with the promotion committee for the Defendant’s establishment (representative E; hereinafter referred to as “Defendant Promotion committee”) to build two housing exhibition halls to carry out the instant project, and the Defendant Promotion committee entered into the said new construction contract with the Plaintiff A to contract with the following contents (hereinafter referred to as “instant contract,” and “the building that was first to be constructed for each construction period,” and “the building that was to be constructed after each construction period,” respectively.

1. The name of the construction project: (tentatively: (1) the F building first floor (G Model House) within the Daegu-dong-gu, Daegu-gu, and H and four parcels construction period: (1) November 26, 2014 to December 19, 2014 (2) the period from March 25, 2015 to May 30, 2015: the contract amount: 3,850,000,000 won (including value-added tax 350,000,000 won); (2) the Plaintiff’s ex officio claim for the payment of the remainder payment of the construction cost (excluding value-added tax 1,050,000,000 won); and (3) the Plaintiff’s ex officio payment of the remainder payment of the construction cost (excluding value-added tax 60%) within 1,050,000,000 if the Plaintiff’s members were recruited; and (2) the Plaintiff’s payment of the remainder payment of the construction cost may be 1,050,0000,0000.

2) At the time of the conclusion of the instant contract, Plaintiff A presented to the Defendant Promotion Committee a written estimate stating the cost of the instant first model voucher construction project in KRW 1.588 billion, and the cost of the instant second model voucher construction project in KRW 2.264 million (each value added tax). Based on the results of consultation, the construction cost of the instant contract was determined as above.

C. The progress of the first model hybrid construction of the instant case

1) On December 24, 2014, Plaintiff A leased an existing model hybrid building located in the Daegu Dong-gu F, Daegu-gu, and performed facility construction, such as the installation of a 33 square district unit, and opened the first model hybrid of this case around December 24, 2014 in order to exhibit the model of the newly scheduled apartment. The Defendant Promotion Committee began to recruit its members from around that time.

2) On January 16, 2015, the Daegu Dong-gu Office notified I of the instant first model hybrids to restore or remove them. Accordingly, the Plaintiff removed the instant first model hybrids at the Plaintiff’s expense on January 1, 2014 at the Plaintiff’s expense.

D. Progress of the Defendant’s inaugural general meeting

The Defendant Promotion Committee notified its members to hold an inaugural general meeting for the establishment of the Defendant, and accordingly, on March 15, 2015, the Defendant’s inaugural general meeting was held. The agenda No. 3 of the above general meeting was “the selection of the contractor and the ratification of the contract of the subcontractor.” However, the above agenda included matters concerning “housing Exhibition Center’s contract services,” including the instant contract, and “lease of Housing Exhibition Site.” The agenda No. 3 was resolved with the consent of a majority of the Defendant’s members.

E. Progress of the construction of the second model hybrid in the instant case

1) On May 8, 2015, the Defendant entered into a construction contract with J on the following terms: (a) the amount of 715,000,000 construction works among the instant secondary model hybrid construction works (including value-added tax) and the period of construction from May 11, 2015 to August 30, 2015; and (b) the Defendant entered into a contract with J for construction works to be subcontracted to J.

2) On April 28, 2015, the head of Daegu Suwon District Court rendered a building permit for the instant secondary model lower-water construction, and the J submitted a report on commencement of construction around May 8, 2015.

3) On June 1, 2015, Plaintiff A notified the Defendant of the instant contract that it would claim additional construction cost on the ground that there was a change in the construction details (such as installation of elevators for disabled persons, installation of soundproof walls at construction sites, alteration of the construction area, removal of existing concrete floors, waste disposal, etc.).

4) On September 25, 2015, the approval for use was granted for the second model hybrid in the instant case.

F. The defendant's partial payment of construction price

1) On March 31, 2015, the Defendant paid the Plaintiff A KRW 11550,000,000,000,000,000,000 for the performance of the obligation under the instant contract, and the intermediate payment on April 29, 2015, KRW 11555,00,000,000, respectively.

2) On October 8, 2015, Plaintiff A filed a claim with the Defendant for the payment of the remainder of the construction price under the instant contract, but the Defendant did not additionally pay the construction price.

G. Assignment of claims by Plaintiff A

Pursuant to the instant contract, the Plaintiff transferred part of the claims held against the Defendant to the Plaintiff’s creditor and notified the Defendant of the fact of transfer as follows:

A bond transferee’s bond transfer amount (including won and value added tax), 1K49,000,000,000 on March 14, 2016, around March 10, 2016, around 2016:2 Plaintiffs B450,000,00 on March 14, 2016; and 167,000,000,000 around March 16, 2016;

(h) A collection order for the seizure and collection of claims;

M and N received a claim seizure and collection order from the court as follows, on the ground that the debtor is against the defendant, the defendant, and the third debtor, the claim subject to seizure, and the plaintiff, who has against the defendant, the plaintiff called "the amount up to the above claim amount out of the construction cost to be paid in the present and future, the contract construction work for HUG HG HG H (or the construction work for model parcels) and the construction cost to be paid in the future." The above decision was served on the defendant, who is the third debtor, and became final and conclusive around that time (hereinafter referred to as "the claim seizure and collection order of this case").

On February 23, 2017, 2017, Seoul Central District Court 2017 Taz. 1456N131, 755, 74017, September 23, 2017, 2017, the date of the original decision and the date of decision of the decision of the third debtor, which is the date of service of the third debtor, 1 Seoul Central District Court 2017 Taz. 269M997, 197, 2017.

(g) Results of appraisal;

Expert 0 suggested the appraisal opinion that the cost of the construction project performed by J is KRW 61,494,00, and the cost of the construction project performed by the rest of Plaintiff A is KRW 1,427,782,00, and the cost of the construction project for the creation and installation of apartment model is KRW 166,00,000.

[Reasons for Recognition] The facts without dispute, Gap's statements in Gap's Evidence Nos. 1 through 12, 17, 19, 21, Gap's Evidence Nos. 2, 3, 4, Eul's Evidence Nos. 6 and 7 (including each number; hereinafter the same shall apply), E's testimony, appraiser's appraisal result, the purport of the whole pleadings

2. Determination

A. Claim for the construction price and acquisition price under the instant contract

1) The defendant's obligation to pay the construction price

According to the above facts, Plaintiff A completed the instant 1 and 2 model hybrids in accordance with the instant contract, and the Defendant ratified the matters regarding the instant contract at the inaugural general meeting held on March 15, 2015, which was held on March 15, 2015, and barring special circumstances, the Defendant bears the obligation to pay the construction price under the instant contract to Plaintiff A or the Plaintiff B, the transferee of the instant bonds.

Meanwhile, the Defendant paid the Plaintiff A total of KRW 2,310,00,000 as the performance of the obligation under the instant contract, and the Defendant entered into a separate construction contract with J at KRW 715,00,000 with the contract amount of KRW 715,00,000 and had the Plaintiff carry out part of the instant secondary model housing project, as seen earlier, so the Defendant’s total amount of KRW 3,025,00,000 shall be excluded from the scope of the Defendant’s obligation.

2) Judgment on the defendant's assertion

A) Defendant’s assertion

(1) The Plaintiff A failed to meet the requirements for performing construction works pursuant to Articles 9 and 10 of the Framework Act on the Construction Industry and Article 13 of the Enforcement Decree of the same Act, and was not registered with the Minister of Land, Infrastructure and Transport, and thus was unable to perform the construction works of the first and second model house.

Even if the Plaintiff had no qualification or ability to perform construction works under the instant contract, it is invalid as a violation of the mandatory law to conclude the instant contract, and even if not, it constitutes deception against the Defendant, and thus, the instant contract is revoked by delivery of the briefs of July 20, 201 pursuant to Article 110 of the Civil Act, since it constitutes deception against the Defendant.

In addition, the plaintiff A is unable to legally construct the first and second models of this case since it was originally impossible for the contract of this case to perform the contract of this case smoothly. Thus, the contract of this case is to cancel the contract of this case by delivery of the above briefs.

(2) The Plaintiff A did not actually construct the instant 1 and the second model house, and even if not, the contract price is unfairly excessive according to the instant contract. In particular, with respect to the construction of the first model house, the remainder of the construction project excluding the model cost and the exclusive use area of 85 square meters and the exclusive use area of 85 square meters is not actually executed, and a false estimate was made. The Plaintiff A concluded the instant contract by setting the construction cost for the first model house at KRW 1.588,00,000,000 in total, which constitutes deception, constitutes deception, and thus, the instant contract is revoked in accordance with Article 110 of the Civil Act.

In addition, the conclusion of the instant contract with the Defendant’s initiative and experience to cover construction costs constitutes an unfair legal act as stipulated in Article 104 of the Civil Act and thus null and void.

(3) Without any explanation of the circumstances, such as the aforementioned false estimate and lack of execution capacity.

A general meeting resolution cannot be deemed valid, and deeming the contract of this case valid is contrary to the good faith principle.

B) Determination on the assertion of violation of the mandatory law

(1) Article 9(1) of the Framework Act on the Construction Industry provides that any person who intends to operate a construction business shall register with the Minister of Land, Infrastructure and Transport for each type of business prescribed by Presidential Decree (Article 9(1)). Article 9(1) of the Framework Act on the Construction Industry provides only criminal punishment against a person who violates Article 9(1). The Framework Act on the Construction Industry does not provide for the validity of a contract for construction works in violation of Article 9(1). The construction business is a type of business involving the participation of a large number of people and the long-term performance of a contract, which entails a long-term performance of a construction project, that would seriously undermine the safety of the transaction if the contract becomes null and void, it is reasonable to deem that Article 9(1) of the Framework Act on the Construction Industry does not deny the validity of the contract under the Private Law on the Construction Industry. Accordingly, even if Plaintiff A did not make a construction business registration,

(2) In addition, there is no evidence to deem that Plaintiff A deceiving the Defendant or Defendant Promotion Committee as to whether to register its execution capacity or construction business, and in fact, it cannot be deemed that the performance of the contract was entirely impossible in light of the fact that the first and second models of this case have been completed.

(3) Therefore, this part of the defendant's assertion is without merit.

C) Determination as to revocation and invalidity claim on the grounds of non-construction, excessive construction costs, etc. (the foregoing claim as to (2))

In light of the following facts or circumstances, the Plaintiff’s assertion of the basic facts as seen earlier, Gap’s evidence No. 31, witness E, and P’s testimony by comprehensively taking into account the overall purport of the pleadings:

A’s failure to perform the construction work under the instant contract, or the agreed construction amount is unreasonable and thus null and void. Therefore, the Defendant’s assertion that the construction amount constitutes grounds for revocation under Article 110 of the Civil Act, or constitutes unfair legal acts under Article 104 of the Civil Act, on the premise that the construction amount is unduly excessive, shall not be accepted.

① At the time of the instant contract, it was anticipated that at the time of the instant contract, the Plaintiff would rent the existing model voucher owned by I without newly constructing the instant first model voucher building (the place of construction is indicated in the contract as “in the G model voucher.” The term “G” stated in the contract appears to be written in writing as “I”.

In addition, the defendant opened the first model house of this case as scheduled, and opened the general meeting and held the first model house of this case to achieve the purpose of the original contract (if the plaintiff A removed the first model house of this case, it is reasonable to deem that the plaintiff A completed the performance of the obligation as long as it was done according to the plan to recruit the model house of this case and the members).

② Although the pelvis and outer wall works of the second model hybrid in the instant case were conducted by J, the remainder of the interior works, interior works, interior works, electricity and facility works, model hybrids works, etc. were completed by Plaintiff A under his responsibility.

③ Plaintiff A performed the instant primary model housing facility construction at his own expense after the instant contract was entered into. According to the terms of the instant contract, the membership recruitment rate of the Plaintiff did not reach 60% and thereafter the procedures were not followed. In addition, Plaintiff A entered into the instant contract at the stage of the promotion committee prior to the establishment of the Defendant. In addition, Plaintiff A did not have the Defendant’s own ability to establish the housing association at the stage of the promotion committee prior to the establishment of the Defendant, or due to the reasons such as land purchase cost.

As there are variables such as these, it is highly likely that the payment of construction cost will be delayed due to the lack of construction cost compared to the normal construction contract.

④ In light of the appraiser 0’s appraisal result, although the construction amount stipulated in the instant contract appears to have higher than the actual construction cost, it is difficult to view the above construction amount unfairly excessive in light of the following: (a) the characteristics of the instant contract (whether to recover investment funds and the uncertainty of the timing of recovery) and the compensation for the risk incurred by the plaintiff A are reflected in the construction cost; (b) no person, other than the plaintiff, has any person who is responsible for taking such risk and is responsible for taking a model house construction cost; (c) the instant contract aims to achieve the objective of the instant project rather than the building itself; and (d) the Defendant could achieve the purpose of inviting partners and promoting the instant project based on the instant contract.

⑤ In light of such circumstances, the Defendant entered into or ratified the instant contract, and there is no ground to deem that the Defendant was in the status of rashness and experience at the time, or that the Defendant was in the Plaintiff’s deception.

D) Determination on the invalidity of the resolution by the general meeting of the Defendant (the above assertion)

In full view of the purport of the entire pleadings in the statement No. 6 of the evidence No. 6, the fact that the book-keeping at the general meeting containing the contents of the agenda, including the instant contract, was distributed at the time of the Defendant’s general meeting, and the Defendant’s partnership office at the time the contract for the instant contract was kept and offered to the union members for inspection. In addition to the above fact-finding that the construction amount stipulated in the instant contract cannot be deemed excessive as seen earlier, even if there was no explanation as to the circumstances, such as false estimate and lack of execution capacity, such as the Defendant’s will, even if

The resolution of the general meeting on ratification of the contract of this case shall be valid, and deeming the contract of this case as valid cannot be deemed to be in violation of the good faith principle. Therefore, the defendant's allegation in this part

3) Calculation of the amount of claims by plaintiffs

A) The obligation of the Defendant to the Plaintiff prior to the completion of the construction work under the instant contract is KRW 825,00,000 (i.e., the entire contract amount of the instant contract 3,850,000,000 - KRW 715,00,000 of the contract amount against J - the Defendant’s already paid KRW 2,310,00,000).

B) As seen in the above facts, among the above claims against the Defendant under the instant contract, the Plaintiff A transferred KRW 450,000,000 to the Plaintiff B, KRW 49,000,000 to K, and KRW 68,00,000 to L. As such, the amount of the claim against the Plaintiff A after the said transfer of the claim is KRW 258,000 (= KRW 825,000,000) for— KRW 450,000 each—68,00,000 for 450,000,000 for 68,000,000 for each claim against the Plaintiff under the instant contract. The amount of claim against the Plaintiff B is KRW 450,000,000 for 450,000,000 for each claim against the Plaintiff.

C) As the collection order for the instant claim attachment and collection became final and conclusive, KRW 9,197,09 out of KRW 258,00,000 of the Plaintiff’s total claims KRW 258,00,000 of KRW 131,75,740 of the Plaintiff’s claims were transferred to M, and KRW 131,75,740 of the collection rights were transferred to N (total KRW 230,952,839). Accordingly, the amount of claims that the Plaintiff may claim against the Defendant under the instant contract is KRW 27,047,161 (=258,00,000 - KRW 9,197,099 – KRW 131,75,740).

(b) Claim for additional construction costs;

1) Plaintiff A’s assertion

In the process of obtaining the building permit for the second model house of this case, the competent authority demanded the installation of elevator and construction site soundproof walls for disabled persons, and the Plaintiff A accordingly bears the expenses equivalent to KRW 325,600,000 (including value-added tax) separate from the contract for the instant case and completed the additional construction. Accordingly, the Defendant is obliged to pay the Plaintiff A the above additional construction cost and damages for delay.

2) Determination

A) Comprehensively taking account of the purport of the written evidence No. 18, the Defendant filed an application for deliberation on a building permit with the Daegu Suwon-gu Office, the competent administrative agency, on March 1, 2015, on the scale of the building newly scheduled to be built in relation to the second model lower housing of this case, on the third floor, total floor area of 1,683.35 square meters above ground, and upon the recommendation of correction of the Daegu Suwon-gu Construction Council (such as change of stairs design, additional planting trees, additional planting of landscape trees, change of outer wall board, etc.) and the Daegu Suwon-gu Construction Council, the Defendant applied for a construction permit on April 28, 2015, on the following grounds: (i) the total floor area of the Defendant was 1,732.79 square meters (524.17 square meters) on April 29, 2015; and (ii) the construction permit was modified on April 28, 2015; and (iii) the design of this case was acknowledged as the final model of this case.

B) However, the following can be deemed as follows: (a) Plaintiff A, as a contractor of the second model housing construction of this case, may be deemed as liable for the use of a legitimate building upon the recommendation of the competent administrative agency; and (b) in the process of building permission and deliberation, there was a change in the building area and construction scope different from the initial design, but the contract amount under the contract of this case was determined to reflect the Plaintiff’s risk assumption rather than the construction cost according to the details as seen earlier; (c) the change in the construction scope of the above scope is more consistent with the intent of the contracting party; and (d) the Plaintiff obtained approval from the Defendant as to whether the Defendant was liable for the additional construction other than the contract of this case.

In light of the fact that there is no data, it cannot be deemed that there is an agreement between the Plaintiff and the Defendant that the Defendant shall pay the Plaintiff the construction cost incurred from the additional construction work, in addition to the construction cost under the instant contract, in addition to the construction cost under the said contract.

Therefore, this part of the plaintiff A's assertion is without merit.

C. Claim for damages

1) Plaintiff A’s assertion

Article 20 of the General Conditions for the Contract of this case provides that the defendant shall pay to the plaintiff A an amount equivalent to 30% of the total amount of the contract, if the date of commencement has been postponed by at least 15 days on the defendant's responsibility, and the period of commencement of the second model house of this case, which is stipulated in the contract of this case, shall be March 25, 2015.

However, the Defendant requested the design change several times from the new construction stage of the first model house, and the Daegu Suwon-gu Office, a competent administrative agency, issued a building permit on April 28, 2015 with respect to the construction of the second model house, and submitted the commencement report on May 8, 2015, the Defendant could start the said construction work on July 2015, because it did not confirm the unit household reputation related to the local house until June 26, 2015.

As such, the actual commencement date in relation to the construction of the second model house of this case was delayed by 15 days or more due to the defendant's fault, the defendant is obligated to pay 94,050,000 won [the total contract amount of this case = 3,850,000,000 won - 715,000,000 won of the contract amount to J] as compensation for damages under the contract of this case. The plaintiff A seeks to pay 31,350,000 won which is part of the contract amount and damages for delay.

2) Determination

A) The fact that the plaintiff A and the defendant agreed to claim 30% of the total contract amount to the defendant at the time of the delay of the commencement of the construction work for at least 15 days under Article 20 of the contract of this case is as seen earlier, but there is no ground to view the commencement of the construction work for the second model house of this case as meaning the commencement of the second model house of this case.

Rather, it is reasonable to view that the subject of the instant contract is the first model house and the second model house of this case, and that the claim amount was set at 30% of the total contract amount, and that the second model house of this case is scheduled after the construction of the first model house of this case, and that the purpose of the instant contract is to prevent the delay in the collection of the Plaintiff’s investment amount due to the delay in the commencement of construction due to the Defendant’s circumstances. The purpose of the instant agreement is to prevent the delay in the collection of the Plaintiff’s investment amount. In light of the first model house of this case, the Plaintiff can be paid the down payment at the time of recruitment of union members and more than 60% of the union members. In fact, after the opening of the first model house of this case, the Defendant paid the down payment and the intermediate payment to the Plaintiff after the opening of the first model house of this case, it is reasonable to deem that the first model house of this case was commenced. However, there is no evidence to recognize that the commencement of the first model house of this case was postponed.

B) Even if the commencement of the above commencement is deemed to mean the commencement of the second model house of this case, in order for the Plaintiff to claim damages due to the delay of the commencement to the Defendant pursuant to the above agreement, the extension of the commencement should be based on the Defendant’s cause attributable to the Defendant.

However, as seen earlier, in light of the fact that: (a) the design was modified as the recommendation for the correction of the Daegu Suwon-gu Office on April 28, 2015; and (b) it was difficult for J to file a commencement report on May 8, 2015, which was within 15 days from the date of the said construction permit; and (c) it is difficult to deem the commencement of the secondary model housing in itself impossible solely on the ground that the level of the unit household is not finalized; (b) even if the commencement of the secondary model housing in this case was commenced after the lapse of 15 days from March 25, 2015, which was the date of the commencement of the secondary model housing in this case, it is difficult to view that the said delay was due to the Defendant’s causes attributable to the construction; and (d) there is no other evidence to acknowledge it otherwise.

C) Therefore, the Plaintiff A’s assertion on this part is without merit.

D. Sub-determination

Ultimately, the part of the Plaintiff’s claim of KRW 230,952,839, which lost the collection authority upon confirmation of the seizure and collection order of this case, among the lawsuits in this case, is unlawful. The Defendant is liable: ① the construction cost of KRW 27,047,161, and the damages for delay calculated at the rate of KRW 15% per annum as stipulated in the Commercial Act, from October 16, 2015 (from October 8, 2015 to July 7, 2015, claiming payment of the construction cost after the approval date of use under Article 17(1) of the General Conditions of the Contract, until July 13, 2018; ② the amount of damages for delay calculated at the rate of KRW 27,047,161, to the Plaintiff; ② the amount of damages for delay calculated at the rate of KRW 450,00, KRW 16,216, and the amount of damages for delay from KRW 316,2016.

3. Conclusion

Therefore, the part of the plaintiff A's claim amounting to KRW 230,952,839 among the lawsuit of this case is unlawful, and thus, it is so accepted. The plaintiff A's claim for the remaining part is justified within the scope of the above recognition, and the remaining claim is dismissed as it is without merit, and the plaintiff B's claim is accepted as it is so decided as per Disposition.

Judges of the presiding judge;

Judges Hah For the purposes of taxation

Judges Lee Ho-won