[1] Whether an exception to the proviso of Article 21(1) of the Trust Act, which stipulates that a trust property may be subject to compulsory execution or auction, includes a case where a truster is a debtor (negative)

[2] In a case where Gap corporation, a land trust company, entered into a real estate security trust contract with Eul corporation, and Eul corporation disposed of the value-added tax on the sale price of new real estate as bonus for the representative director Eul corporation's representative director and the head of the competent tax office, who did not pay the withholding tax on the amount notified of change in the income amount, and thus the head of tax office attached Gap corporation's trust property, which is trust property, based on the delinquent tax claim against Eul corporation, the case affirming the judgment below that the above disposition is null and void on the ground that the tax claim against the truster does not constitute "the right arising in the course of performing trust affairs" under the proviso of

[1] Article 21(1) of the Trust Act (wholly amended by Act No. 10924, Jul. 25, 201) / [2] Article 21(1) of the Trust Act (wholly amended by Act No. 10924, Jul. 25, 201)

[1] Supreme Court Decision 2000Da70460 Decided April 12, 2002 (Gong2002Sang, 1114), Supreme Court Decision 2005Da9685 Decided September 7, 2007 (Gong2007Ha, 1548)

New Real Estate Trust Co., Ltd. (Law Firm Democratic, Attorneys Yoon Jae-sik et al., Counsel for the plaintiff-appellant)

Head of Ansan Tax Office

Seoul High Court Decision 2010Nu38242 decided May 25, 2011

The appeal is dismissed. The costs of appeal are assessed against the Defendant. On the third 10th of the judgment of the court of first instance, the “representative director of the Plaintiff” shall be corrected to the “representative director of the company outside Korea”

The grounds of appeal are examined.

A trust under the Trust Act is a legal relationship in which a truster transfers or disposes of a specific property right to a trustee, and has a trustee manage or dispose of such property right for a beneficiary’s interest or for a specific purpose (Article 1(2) of the Trust Act). If a trustee completes the registration of ownership transfer in the future of a trustee after a real estate is entrusted with the trust, the ownership is entirely transferred to the trustee inside and outside of the country, and is not reserved to the truster in an internal relationship with the truster (see Supreme Court Decision 2000Da70460, Apr. 12, 2002).

Meanwhile, Article 21(1) of the Trust Act provides that “The right arising before the trust or the right arising from the performance of the trust affairs shall not be subject to compulsory execution or auction against the trust property.” This legislative purpose is to ensure the independence of the trust property in order to smoothly achieve the purpose of the trust. In full view of the ownership relationship, etc. of the trust property arising from the trust as seen earlier, the “right arising from the performance of the trust affairs” under the proviso of Article 21(1) of the Trust Act, which exceptionally provides that the trust property may be subject to compulsory execution or auction against the trust property, is limited to the case where the trustee is a debtor, and it does not include the truster as the debtor.

Upon citing the reasoning of the judgment of the court of first instance, the court below rejected the Defendant’s assertion that each of the above real estate was attached on October 27, 2009 on the ground that: (a) the Plaintiff and Gyeonghee Industrial Development Co., Ltd. (hereinafter “Shee Industrial Development”) entered into a real estate-backed trust agreement on July 28, 2006; (b) completed the registration of ownership transfer under the Plaintiff’s name on each of the instant real estate on the same day; (c) the value-added tax on the sales price for the newly constructed trust real estate; and (d) the Defendant did not pay withholding tax on the amount of the sales price for the trust property, which was disposed of as bonus for the representative director of the non-party company; and (e) the Defendant did not pay withholding tax on the amount of the sales price for the non-party company’s representative director and notified of changes in the amount of income; and (e) the Defendant did not constitute a taxation claim under the proviso of Article 21(1) of the Trust Act.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court’s determination that the instant tax claim that the truster is liable for tax payment did not constitute “right arising from the performance of trust affairs” under the proviso of Article 21(1) of the Trust Act is justifiable as it is in accordance with the foregoing legal doctrine. In addition, the lower court’s determination that the instant seizure disposition taken against the property of a person who is not liable for tax payment is deemed null and void as a matter of course is justifiable in accordance with the relevant legal doctrine. Therefore, the lower court did not err by misapprehending the legal doctrine on “right arising from the performance of trust affairs” under the proviso of Article 21(

Therefore, the appeal is dismissed by the assent of all participating Justices, and the costs of appeal are assessed against the losing party. It is evident that there is any error in the reasoning of the first instance judgment maintained by the court below. It is so decided as per Disposition by the assent of all participating Justices on the bench, and it is corrected in accordance with Article 8(2) of the Administrative Litigation Act and Article 2

Justices Ahn Dai-hee (Presiding Justice)