[1] The case holding that the court below erred in the misapprehension of legal principle in holding that Gap corporation, which expropriated land due to urban planning facility project, is liable to pay damages for delay calculated by the rate of 20% as well as 20% under the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings from the day following the delivery of a written application for modification of the purport of claim prior to the pronouncement of remand judgment, on the ground that, in case where Gap corporation, which claimed for damages against the project implementer due to the increase in the land expropriated and the decrease in the price of remaining land, should have been accepted at the appellate court prior to the remanding of the claim

[2] The case holding that in a case where Gap corporation, who was expropriated land due to urban planning facility project, was decided to commence a rehabilitation procedure against Gap corporation during the course of claiming for compensation for losses incurred by the reduction of the remaining land price and the claim for compensation for losses incurred by Gap corporation's project operator, but the court did not know this, and the court rendered a judgment and delegated Eul corporation's agent to the same agent as Gap corporation's legal representative at the court of final appeal and delegated Eul corporation's agent to take over the lawsuit, the case holding that Eul corporation's ground of appeal pointing out the legitimate authority of the transferee who could participate in the lawsuit does not exist.

[1] Article 3(2) of the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings / [2] Article 8(2) of the Administrative Litigation Act, Article 424(2) of the Civil Procedure Act

[Defendant-Appellant-Appellant-Appellant-Appellant-Appellant-Appellant] The Debtor Rehabilitation and Bankruptcy Corporation (Law Firm LLC, Attorneys Kim Jae-sung et al., Counsel for defendant-appellant-appellant-appellant-appellant-appellant)

Korea Land and Housing Corporation (Law Firm Doll, Attorneys Gyeong-jin et al., Counsel for the plaintiff-appellant)

Supreme Court Decision 2010Du23149 Decided February 24, 2011

Seoul High Court Decision 2011Nu9388 decided October 6, 2011

Of the part concerning the claim for damages for delay of the lower judgment, the part against the Defendant ordering payment of 810,231,000 won to the Defendant in excess of 5% per annum from October 12, 2007 to February 24, 201, and 20% per annum from the next day to the day of complete payment, shall be reversed, and the judgment of the first instance shall be revoked, and the corresponding part of the Plaintiff’s claim shall be dismissed. The remainder of the appeal shall be dismissed. The Defendant’s total costs shall be borne by the Defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The lower court, as in the first instance trial, dismissed the Defendant’s appeal on the ground that, as long as it is not necessary to distinguish the Plaintiff from the Plaintiff at the time of taking over the instant lawsuit, the Defendant was liable to compensate for losses due to the decline in the remaining land price, and determined the amount of compensation as KRW 810,231,00,000, which is the day following the date of taking over the instant lawsuit, from October 12, 2007 to October 5, 2009, the delivery date of the application for amendment of the purport of the instant lawsuit, 5% per annum as stipulated in the Civil Act, and delay damages calculated at the rate of 20% per annum as stipulated in the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings (hereinafter “Special Cases Act”), from the next day to the day of full payment.

Article 3(2) of the Special Act on the Settlement of Special Cases provides that the provision of paragraph (1) shall not apply to a case where it is deemed reasonable for an obligor to dispute over the existence or scope of the obligation, before a judgment of fact-finding that declares that the obligor is obligated to perform the obligation is rendered. In this context, where it is deemed reasonable for the obligor to dispute over the existence or scope of the obligation to perform the obligation, it shall be interpreted that there are reasonable grounds for the obligor’s assertion as to the existence or scope of the obligation to perform the obligation. However, with respect to the judgment of the first instance which accepted the Plaintiff’s claim, the judgment was accepted by the Defendant’s appeal before the return of the appeal, and the judgment against the Plaintiff was rendered before the return of the appeal by the Plaintiff was reversed, and the judgment accepting the Plaintiff’s claim as in the judgment of the first instance after the remand was reversed, and therefore, the Defendant’s assertion was accepted in the appellate court prior to the reversal of the judgment (see, e.g., Supreme Court Decision 2006Da1469798, Jul. 14, 19709, 198).

According to the records, the proceedings of the lawsuit of this case are as follows. The first instance court ordered the plaintiff to pay the plaintiff the compensation for losses of this case, the amount of KRW 130,308,750, and the amount of KRW 810,231,750 with compensation for losses incurred due to the decrease in the price of remaining land, and the amount of KRW 940,539,750 with interest rate of KRW 50,539,750 with interest rate of 5% per annum from October 12, 2007 until October 5, 2009, which is the delivery date of the application for change of claim of this case, and interest rate of 20% per annum from the next day until the full payment date. The defendant's appeal was partially accepted in the judgment of the court of first instance before remand, and the judgment of the court below reversed the part of the judgment below against the plaintiff as to the compensation for losses of this case (the part of the judgment of this case was remanded to the court below).

Examining the process of the above lawsuit in light of the legal principles as seen earlier, if the defendant's above assertion was accepted by the court below prior to remanding the lawsuit in this case, it should be deemed that there are reasonable grounds to dispute about the existence or scope of the defendant's obligation to compensate for losses until the judgment is reversed. However, the court below erred by misapprehending the legal principles as to Article 3 (2) of the Act on Special Cases concerning the Dismissal of the defendant's appeal, which affected the conclusion of the judgment, based on the court below's determination that the defendant is liable to pay damages for delay calculated at the rate of 20% per annum from the day after the date of service of the application for change of the purport of the claim, which is before the judgment of remanding the plaintiff as to the remaining amount as cited by the court of first instance, due to price decrease

The ground of appeal pointing this out is with merit.

2. Regarding ground of appeal No. 2

In a case where a decision was made on the commencement of a lawsuit with respect to one party while the lawsuit was pending, but the court made a decision by the custodian without knowing it, the said decision was made to exclude the legitimate assignee’s authority to participate in the lawsuit, and thus, is unlawful in the procedure but is not null and void as it is unlawful, but can be claimed for revocation by appeal or retrial on the ground of defects in the power of representation. In light of Article 424(2) of the Civil Procedure Act, if it is confirmed that the procedure of the court below is legitimate, explicitly or implicitly after the judgment was rendered by the appellate court, such as taking over the procedure at the appellate court, and it is confirmed that the above grounds for appeal or grounds for retrial were legitimate (see, e.g., Supreme Court en banc Decision 9Da8971, Dec. 28, 199; Supreme Court Decisions 9Da89338, Nov. 14, 2003; 203Da3438, etc.).

According to the records, on April 1, 201, when the lawsuit of this case was pending in the court below, the Seoul Central District Court rendered a decision on commencing rehabilitation procedures for ELD Construction Co., Ltd. which was the plaintiff at the court below, and the pleading is complete, and the judgment is rendered against the above company, and the defendant filed an appeal against this procedure, and the plaintiff asserted the illegality in the above procedure as the ground for appeal, and the plaintiff delegated the same representative as the plaintiff's legal representative at the court below to the same agency as the plaintiff's legal representative at the court below.

Examining this in light of the above legal principles, since the plaintiff (the administrator of the above company) may be deemed to have ratified all the previous litigation procedures, the ground of appeal that follows the above procedural illegality has no ground for appeal, and therefore, this part of the ground of appeal cannot be accepted.

3. Conclusion

Therefore, the part of the judgment of the court below concerning the claim for damages for delay is reversed, and this part is sufficient for this court to directly judge, and thus, it is in accordance with Article 8 of the Administrative Litigation Act and Article 437 of the Civil Procedure Act

As legally determined by the court below, the defendant is liable to pay the plaintiff the compensation for losses of 810,231,000 won due to the reduction of the remaining land price. However, since a dispute over the existence or scope of the obligation to pay compensation is deemed to have considerable grounds until the judgment of remand is rendered, the damages for delay shall be paid at the rate of 5% per annum under the Civil Act from October 12, 2007, the day following the date of expropriation to February 24, 201, which is the date of adjudication of remand, and 20% per annum under the Act on Special Cases concerning the Settlement from the next day to the date of full payment, and the plaintiff's claim of this case shall be accepted only in the above amount. Accordingly, since the part on the claim for damages for delay of the first instance judgment exceeds the above cited scope, the plaintiff's claim shall be revoked, and the total expenses for the lawsuit shall be borne by the defendant, and it is so decided as per Disposition by the assent of all participating Justices.

Justices Jeon Soo-ahn (Presiding Justice)