Korea Electric Power Corporation (Attorney Jeong Jong-hee, Counsel for defendant-appellant)

Republic of Korea (Attorney Sun-chul et al., Counsel for the defendant-appellant)

September 1, 2016

Busan District Court Decision 2015Gadan209374 Decided January 14, 2016

1. Of the judgment of the court of first instance, the part against the defendant in excess of the money ordered to pay is revoked, and the plaintiff's claim corresponding to the revoked part is dismissed

The defendant shall pay to the plaintiff 64,789,465 won with 6% interest per annum from February 25, 2015 to September 22, 2016, and 15% interest per annum from the next day to the day of full payment.

2. The defendant's remaining appeal is dismissed.

3. One-half of the total costs of litigation shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

1. Purport of claim

The defendant shall pay to the plaintiff 121,772,285 won with 6% interest per annum from February 25, 2015 to November 12, 2015, and 15% interest per annum from the next day to the day of full payment.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

A. From November 16, 1984, the Plaintiff supplied the electricity to each type of contract with the outdoor breeding facility and the management building of the Busan Fisheries University (which was incorporated into the Busan Fisheries University; hereinafter “the instant school”) established and operated by the Defendant (hereinafter “the instant fish farm”) under the terms of the contract with the 80KKW agreement.

B. The fish farm of this case is currently used for the purpose of aquaculture research and development, aquaculture education, and fish experiments and practice, and fish farms for supporting experiment and practical training fish, which are classified into the management room, laboratory, indoor laboratory, indoor laboratory, seminar, seminars, management room, water quality control room, feed processing room, and machine factory).

C. At the time of November 16, 1984, according to the Plaintiff’s electricity supply regulations (electric power used directly for fish: power used directly for fish) and the actual use of the fish farm in this case at the time of the instant school, it is unclear whether the use of the fish farm in this case is subject to the supply of agricultural power for farming use.

D. On February 10, 192, the Plaintiff entered into a contract for electric use (hereinafter “instant supply contract”) with the following contents upon the application for electric use of the instant school (the term of the contract was changed only on July 4, 1992). The Plaintiff supplied agricultural power to the instant fish farm.

The voting power user located within the main sentence: The area of the expropriation of the Busan Fisheries University: the area of the use of the electricity for the purpose of education high-tension power A: the contract period of the school (university): 1,000K from February 10, 1992 to February 9, 1993: the application of the electricity fee: the same shall be as prescribed in Article 72 of the Electricity Supply Regulations; if both of the schools do not raise any objection to the contract within the contract period, the contract shall be deemed to continue on the same condition every one year after the expiration of the contract period. 3. The matters not specified in this contract shall be determined by the electricity supply regulations, and the interpretation of the electricity supply regulations shall be governed by the interpretation of the plaintiff. 4. The plaintiff shall approve the supply of mother and child in this case for the agricultural power (80KW) and industrial power (wastewater 15K).

E. The Plaintiff revised and implemented the rules on the supply of electricity, the terms and conditions of electricity, and the detailed rules on the implementation of the provisions on the supply of electricity, as stated in the attached Table. Since the Plaintiff’s terms and conditions were enacted on October 1962, it was operated as the terms and conditions on the supply of electricity several times, and the power directly used in the above two terms and conditions was changed to the power used for the fishery products aquaculture.

F. Even after the amendment and enforcement of the terms and conditions of electricity supply, the Plaintiff supplied agricultural power to the instant fish farm and visited the instant fish farm site on the ground of the implementation of the customer's daily survey on the mixing of agricultural use around December 2014.

G. On January 7, 2015, after the above on-site visit, the Plaintiff: (a) confirmed on-site the facilities and equipment for the agricultural use of the instant fish farm as a result of the on-site verification; (b) sent an official letter to the instant school stating that the agricultural use power shall be changed to the educational power and the penalty pursuant to the terms and conditions of the electricity supply shall be paid by January 19, 2015; and (c) on February 13, 2015, the Plaintiff violated the type of contract by using the educational power as the agricultural use power; and (d) sent an official letter to the instant school stating that the terms and conditions of the electricity supply and penalty of KRW 125,167,350 under the Enforcement Rule thereof shall be paid by February 24, 2015.

[Reasons for Recognition] Facts without dispute; entry of Gap's evidence Nos. 1 through 6, 8 through 14, 19, 20, 21, 24, 25, 26, 39, 40, 42, 43, 44, Eul's evidence Nos. 1, 5, and 12 (including each number; hereinafter the same shall apply); entry of Eul's evidence Nos. 2 and images, Gap's evidence Nos. 7 and 22, and the purport of the whole pleadings

2. Relevant provisions;

The terms and conditions of electricity supply, detailed rules, relevant statutes, etc. related to the instant case shall be as specified in the attached Table.

3. The plaintiff's assertion and judgment

A. The plaintiff's assertion

The payment of the electricity charges for the agricultural use of the instant fish farm by the instant school, an educational institution, violates the terms and conditions of the electricity supply and the rules on the implementation thereof, and thus, the Defendant is obligated to pay the Plaintiff the penalty in accordance with the terms and conditions of the electricity supply and the rules on the implementation thereof.

B. Determination

The Electric Utility Act, which is a public service business that supplies electricity essential to a large number of general consumers, excludes the principle of freedom of contract to ensure that the parties to the supply contract between the general electricity business and the general consumers respectively agree on the terms and conditions of the supply contract and comply with the exclusive supply regulations by excluding the principle of freedom of contract for the rational operation of the electricity business that supplies electricity essential to their lives, and to protect the users’ interests. In particular, the provision of the supply requires strict procedures from the standpoint of fair and reasonable determination of public utility charges. Such a provision of the supply has the nature as a general terms and conditions of the supply contract applicable to all the supply contracts between the general electricity business and the large and unspecified consumers in the supply area (see Supreme Court Decision 98Da

According to the former Electric Utility Act that was in force at the time of the conclusion of the instant supply contract, “the Plaintiff shall prepare terms and conditions on electricity rates and other supply terms and conditions and obtain approval from the competent Minister, and may, within the necessary scope, prepare terms and conditions on different rates and conditions from those prescribed in the basic supply terms and conditions, and allow the consumers of electricity to choose matters prescribed in the alternative supply terms and conditions in lieu of the basic supply terms and conditions, and, in principle, assume the obligation to supply electricity in accordance with the alternative supply terms and conditions.” The Plaintiff, without complying with the supply terms and conditions, voluntarily determines the supply terms and conditions of electricity and supplies electricity, provides that business licenses may be cancelled or suspended or criminal punishment may be imposed.

In light of the purport of the Electric Utility Act that prohibits parties to the terms and conditions of the supply contract between the general electricity business operator and the general consumers from individually concluding the terms and conditions of the supply contract by excluding the principle of freedom of contract in order to operate the electricity business, which is a public service business that supplies electricity essential to the lives of the general consumers and to protect the interests of the users, the Plaintiff and the instant school may prepare a new selective terms and conditions of the supply and conclude a contract pursuant to them, and may not exclude the application of the terms and conditions of the electricity supply or make an agreement different from the terms and conditions of the electricity supply.

As seen earlier, the fact that the electricity rates under the instant supply contract stipulate that the electricity rates shall be governed by the terms and conditions of the rules on the supply of electricity and that the unspecified matters shall also be governed by the regulations on the supply of electricity. However, the aforementioned stated matters cannot be specified in the electricity use contract in all the terms and conditions of the electricity rates and other supply. Therefore, matters not stated in the contract shall be deemed to mean

As such, the terms and conditions of the electricity supply are general terms and conditions, and so long as the terms and conditions of the electricity supply are incorporated into the terms and conditions of the instant supply contract by the Plaintiff and the instant school, they naturally have general binding force without asking the party's land and site. Thus, the types of the electricity used by the instant school are prescribed by the terms and conditions of the electricity supply and the rules of the enforcement thereof.

According to the evidence evidence evidence Nos. 12, 14, 21, 42, 43, and 44, it is recognized that the electricity used can be used for the fishery products farming business under the electricity supply terms and the enforcement rules of the above terms and conditions. In the case of laboratory and practice equipment of an agricultural educational institution, it is recognized that the electricity used for agriculture can be applied to the case of forming an independent corporation or separate accounting unit, or selling all or part of products periodically.

However, the fact that the use of the fish farm in the instant case does not constitute a fish farming business subject to the supply of electricity for agricultural use under the terms and conditions of the electricity supply. Nevertheless, there is no dispute between the parties to the instant fish farm and the Plaintiff’s supply of electricity for agricultural use from March 2010 to January 2015, the period for claiming the penalty of the instant case sought by the Plaintiff. Moreover, there is no evidence to acknowledge that the fish farm in the instant case constitutes a case where the fish farm constitutes an independent corporation or separate accounting unit, or a case where the Plaintiff sells all or part of the produced goods on a regular basis during the period for which the Plaintiff seeks penalty.

Meanwhile, according to the above evidence and the plaintiff's terms and conditions of the electricity supply and the enforcement rules thereof, the defendant is obligated to pay to the plaintiff the penalty [the difference between the amount equivalent to the charges calculated on the basis of the type of contract corresponding to the actual type pursuant to Article 44 of the former terms and conditions of the electricity supply and Article 29 of the Enforcement Rule thereof (hereinafter "effort rate"), the surcharge on the same amount, the value-added tax on the evasion rate (10%) and the amount of the electricity fund calculated on the basis of the relevant Acts and subordinate statutes shall be the penalty for delay] and damages for delay

The penalty amount to be paid to the Plaintiff by the instant school calculated by the Plaintiff is KRW 121,72,285, including the sum of KRW 56,982,820, and KRW 56,982,82,820, value-added tax, KRW 5,698,282, and KRW 2,108,363, which is the same amount as the evasion charge, from March 2010 to January 2015, and such penalty amount is deemed to have been led to the confession of the Defendant, as the Defendant does not clearly dispute the penalty amount.

According to the above facts, the instant school was obligated to pay the Plaintiff penalty of KRW 121,772,285 as well as damages for delay due to the breach of the contract type from March 2010 to January 2015, since the instant fish farm was supplied with agricultural-use electricity, and used electricity for purposes other than for each type of contract under the above electricity supply contract and the electricity supply terms and conditions, even though the instant fish farm is not subject to the supply of agricultural-use electricity.

4. The defendant's assertion and judgment

A. The defendant's assertion

1) The Plaintiff agreed to supply agricultural power to the instant fish farm at the time of entering into the instant supply contract, and thus, the Plaintiff should supply the agricultural power to the instant fish farm in accordance with the principle of priority in individual agreements.

2) After the conclusion of the instant supply contract, the Plaintiff did not explain the terms and conditions of the amended terms and conditions of the electricity supply and the implementation rules of the former terms and conditions of the electricity supply and the enactment and implementation of the terms and conditions of the former terms and conditions of the electricity supply and the rules of the implementation thereof to the instant school. If the instant school was unable to apply more to the instant fish farm, which had been subject to the application of the former terms and conditions of the electricity supply and the provisions of the former terms and conditions of the electricity supply and the provisions of the implementation thereof, and as a result, there was a clear difference in the electricity rates of the instant fish farm, the Plaintiff was obligated to explain the aforementioned circumstances to the instant school, and the instant school, which did not receive any notification or explanation from the Plaintiff, cannot apply the terms and conditions of the unilaterally modified terms and conditions of the former terms and conditions of the supply and the implementation rules of the former terms and conditions of the former terms and conditions of the supply, and the Plaintiff should explain or explain them to the instant school. If, at the time of the amendment of the terms and conditions of the foregoing, the Plaintiff’s claim was inappropriate.

3) The Plaintiff conducted various inspections on the instant fish farm for more than 30 years, but supplied the instant fish farm power to the instant fish farm. Therefore, the Plaintiff explicitly and implicitly consented to the supply of electricity for farming to the instant school.

4) The duty to pay the instant penalty ought to be premised on the existence of intention or negligence in the instant school as to the instant breach of the contract type. Since the instant school was unaware of the Plaintiff’s amendment, implementation, and modification of the terms and conditions of the electricity supply and the enforcement rules of the said terms and conditions, it was unaware that the instant fish farm was a facility subject to education, it did not have the duty to pay the instant penalty due to the intentional or negligent breach of the contract type

5) The amount of penalty imposed should be reduced unfairly because it is excessive.

B. Determination

(i)the determination on a claim;

In order to be the priority of an individual agreement, the plaintiff and the school of this case must be aware that the use of the fish farm of this case was the educational power, and it should be recognized that they agreed to be supplied with agricultural power.

However, each statement of evidence Nos. 8, 9, and 10 and the evidence submitted by the defendant alone at around November 16, 1984, or at the time of concluding the supply contract of this case, it is insufficient to recognize that the plaintiff consented to the supply of agricultural power despite being aware that the use of the fish farm in this case was an educational power, or that the plaintiff consented to the supply of agricultural power. Rather, it is unclear whether the use of the fish farm in this case is subject to the supply of agricultural power, and according to the former Electric Utility Act, it is possible to punish a criminal punishment if the agreement was made differently from the supply terms and conditions of electricity or the supply.

In addition, pursuant to Article 16(5) of the Electric Utility Act, the Plaintiff ought to supply electricity pursuant to the terms and conditions of the electricity supply pursuant to the said terms and conditions, and it should be viewed to the effect that the Plaintiff prohibits the Plaintiff from individually concluding the terms and conditions of the electricity supply between its customers and solely determines the terms and conditions of the electricity supply pursuant to the said terms and conditions of the electricity supply. In light of the aforementioned contents of the instant supply contract, it

The defendant's above assertion is without merit.

(ii)the determination on a claim;

In light of the following circumstances, it is reasonable to view that the school of this case was aware of the contents of the terms and conditions of this case regarding the selection of each type of contract, and it is considerably difficult for the Plaintiff to explain the contents of the terms and conditions of this case, since it is difficult to find it difficult for the Plaintiff to understand the specific status of electricity use or the current status of the fish farm in this case, the above argument by the Defendant is without merit.

① The Plaintiff’s provision on the supply of electricity and the provision on the supply of electricity were incorporated into the terms of the supply contract due to the conclusion of the instant supply contract, and thus, such terms and conditions have general binding force, as a matter of course, without asking the party’s land and site.

② If the provisions on the supply of electricity and the terms and conditions on the supply of electricity have been amended and published through lawful procedures under the relevant Acts and subordinate statutes, the terms and conditions of the instant supply contract between the Plaintiff and the instant school shall also be deemed to have been modified and published.

(3) In the case of the same power supply terms and conditions as in this case, a new contract with an individual consumer on a daily basis or with the modified supply terms and conditions are not binding upon the consent.

④ At the time of the conclusion of the instant supply contract, the instant school submitted an application for the use of electricity to the Plaintiff while complying with the Plaintiff’s provision on the supply of electricity. According to the power supply provisions and the terms and conditions of the electricity supply, the instant school is required to approve this provision in advance when the expropriation wishes to be newly established, expanded, re-used

⑤ In concluding the instant supply contract, the Plaintiff ordinarily visited customers to check whether the Plaintiff applied for electricity to fit for actual use. Therefore, it is difficult to deem that the Plaintiff was aware of the specific conditions or the current status of the instant fish farm, which serves as the basis for calculating electricity charges, at the time of concluding the instant supply contract.

6) The Plaintiff performs its duty to explain the terms and conditions by posting the terms and conditions of electricity supply and its detailed implementation rules on the Plaintiff’s place of business and Internet homepage. It is difficult to view that the Plaintiff has a duty to specifically explain all the terms and conditions to users

7. The instant supply contract is related to the power supply industry to which the present and future unspecified consumers are the parties, and thus, the obligation to specify and deliver the terms and conditions under the proviso of Article 3 (2) 2 of the Regulation of Standardized Contracts Act shall be exempted.

8. The instant school used the educational power, agricultural power, and industrial power as an educational institution that is not an individual consumer, but an individual consumer, and the instant school directly selected the type of contract for the instant fish farm and applied for electric use to the Plaintiff.

(iii)the determination on a claim;

It is insufficient to acknowledge that the Plaintiff’s employees or employees of the Plaintiff’s partner company knew or could have known the violation of the type of contract at the time of interrogation, solely with the descriptions of Gap’s Nos. 8, 8, 10, and 10, and Eul’s No. 10, and the descriptions and images of Eul’s No. 11-5, No. 11-5.

The defendant's above assertion is without merit without further examination.

(iv)decision on a claim;

In light of the aforementioned facts and the following circumstances known through the overall purport of each of the evidence and arguments, it cannot be said that there was no negligence on the Defendant regarding the breach of the above contract type regarding the electric charges of the fish farm in the instant case. The Defendant’s above assertion is without merit.

① The instant school seems to have known or could have known the difference between the educational power charges and the electricity charges for agricultural use and the subject of or criteria for the application of the agricultural power charges pursuant to the instant supply contract and the terms and conditions applied thereto.

② Although the instant school mainly uses educational power as educational institutions, it applied for the agricultural power on the instant fish farm, and applied for the industrial power on the sewage and wastewater facilities.

③ The Plaintiff’s provision on the supply of electricity and the terms and conditions of the electricity were incorporated into the terms and conditions of the instant supply contract due to the conclusion of the instant supply contract, and thus, such terms and conditions have the general binding force as a matter of course without asking the parties’ land and site. In addition, the instant school submitted an application for the use of electricity to the Plaintiff, while complying with the Plaintiff’s provision on the supply of electricity at the time of the conclusion of the instant supply contract, and according to the power supply provisions and the terms and conditions of the electricity supply, the acceptance is required to be approved in advance when the Plaintiff

(v)decision on a claim;

Article 44 of the Plaintiff’s terms and conditions of the electricity supply provides that if the customer uses electricity in violation of the terms and conditions of the electricity and the fees are not calculated reasonably, he/she shall be subject to a penalty up to three times the amount reasonably not calculated, and there is no provision that allows the evasion fee itself or damages to be claimed separately. Thus, the penalty under the Plaintiff’s terms and conditions of the electricity supply also has the nature of liquidated damages and penalty for breach.

According to Article 398(4) of the Civil Act, the agreement of a penalty is presumed to be liquidated damages, but the terms and conditions of the electricity supply include the term "liability" in the terms and conditions of the electricity supply, and do not distinguish between the evasion charge and the penalty surcharge, Article 44 of the said terms and conditions of the electricity supply provides that penalty shall be imposed within three times the evaded amount in accordance with the form of act; Article 29(2)3 of the Enforcement Rule of the said terms and conditions of the said terms and conditions of the electricity supply does not provide for damages separate from the penalty in addition to the penalty in this case; Article 29(2)3 of the Enforcement Rule of the said terms and conditions of the said terms and conditions of the said terms and conditions of the electricity supply provides for reduction or exemption of the penalty by allowing the Plaintiff to exempt or adjust the multiple of the penalty

However, the penalty of this case imposed by the Plaintiff seems to be excessive in consideration of the following circumstances that can be recognized by the evidence and the purport of the entire pleadings as seen earlier. The surcharge equivalent to the evasion charge of this case is to be imposed without imposing the penalty of this case, and the surcharge of this case is to be reduced to KRW 64,789,465 (i.e., the evasion charge, the value-added tax thereon, and the sum of the electricity funds (i.e., the above KRW 121,72,285 - the surcharge of this case 56,982,82,820). The

① Although the Plaintiff was able to discover the fact of the violation of the school of this case through an autopsy, on-site inspection, etc., the Plaintiff was paid the electricity fee from the school of this case without neglecting the state of the violation for a long time

② On November 16, 1984, it is unclear whether the use of the fish farm in the instant case is subject to the supply of agricultural power, and following the amendment and enforcement of the Plaintiff’s terms and conditions of the electricity supply and the detailed regulations, the fish farm in the instant case clearly became subject to the supply of educational power, not subject to the supply of agricultural power. As such, there are circumstances where it is difficult to deem the instant school to have intention against the breach of the contract type.

③ According to the Plaintiff’s guidelines for handling charges, in the case of agricultural power, such as fish farms, the purpose of the guidelines shall be verified by conducting general inspections, verification inspections, and special inspections. This is deemed to have been neglected for a long period of time due to the Plaintiff’s failure to comply with such guidelines. The Plaintiff was negligent in the occurrence and expansion of damages.

5. Sub-committee

Therefore, from February 25, 2015, the day following the deadline for payment for the Plaintiff’s penalty of 64,789,465 won and damages for delay calculated by 15% per annum under the Commercial Act from September 22, 2016, which is the date when the judgment was rendered by the Defendant, to September 22, 2016, and from the next day to the date when the payment is made by the Plaintiff, the Defendant is obliged to pay to the Plaintiff damages for delay calculated by 6% per annum under the Act on Special Cases Concerning

6. Conclusion

If so, the plaintiff's claim of this case is justified within the above scope of recognition, and the remaining claims are dismissed without merit. Since the part against the defendant who ordered payment in excess of the above recognized amount among the judgment of the court of first instance which partially different conclusions is unfair, it is revoked and the plaintiff's claim corresponding to the revoked part is dismissed, and the defendant's remaining appeal is dismissed as it is without merit.

[Attachment]

Judges Choi Jae-man (Presiding Judge)