Plaintiff (Law Firm Jeong, Attorneys Park Sung-chul et al., Counsel for the plaintiff-appellant)

Korea Exchange Bank (Attorney So-young et al., Counsel for the plaintiff-appellant)

January 16, 2015

1. The defendant shall pay to the plaintiff 328,614,109 won with 5% interest per annum from April 9, 2014 to February 6, 2015, and 20% interest per annum from the next day to the day of complete payment.

2. The plaintiff's remaining claims are dismissed.

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

4. Paragraph 1 can be provisionally executed.

From April 9, 2014, the defendant shall pay to the plaintiff 657,228,218 won with 5% interest per annum from the next day to the day of service of a copy of the application for modification of the purport of the claim of this case and the cause of the claim of this case, and 20% interest per annum from the next day to the day of complete payment.

1. Basic facts

(a) Status of a party;

1) SPP Co., Ltd. (the first trade name was “TPP Co., Ltd.,” and the trade name was changed as of February 12, 2003; hereinafter “SP”) was established on July 31, 1985 for the purpose of printing, manufacturing, and selling special PP and special PP, etc., and was declared bankrupt on November 7, 2013 by the Seoul Central District Court Decision 2013Hau187.

2) On October 1, 2002, the Plaintiff was appointed as the representative director of the non-party company and retired on February 1, 2013.

B. Retirement benefit scheme and Plaintiff’s retirement benefit amount of the Nonparty Company

1) In order to guarantee retirement benefits to employees under his/her jurisdiction, the non-party company set up a defined benefit plan among the retirement benefits scheme prescribed by the Guarantee of Workers' Retirement Benefits Act (hereinafter “Retirement Benefits Act”) and set aside the retirement benefits by selecting the defendant, etc. as a retirement pension trustee (Operation Management Agency and Asset Management Agency). Of the contents of the rules on defined benefit retirement pension in the non-party company’s final benefit plan

(1) The purpose of this Regulation is to ensure stable livelihood of workers by prescribing the matters concerning the implementation of the defined benefit plan (hereinafter referred to as the "System") established by the employer on the basis of the Guarantee of Workers' Retirement Benefits Act (hereinafter referred to as the "Act") with the consent of the workers' representative, and the name and address of the business (hereinafter referred to as the "business information") which is implemented under this Article shall be as follows. 1. Name: Es. 2. Address: 629-3. (1) The institution subject to the payment of pension benefits shall be an employee who provides labor to the business. (1) The institution subject to the payment of pension benefits shall be notified to the insured under the provisions of Article 1.

2) On October 1, 2002, the Plaintiff was recognized as being eligible for subscription to the said retirement benefit scheme, and became disqualified on February 1, 2013 for retirement.

3) Meanwhile, the Plaintiff wanting to receive retirement benefits in lump sum, and pursuant to the above retirement benefit scheme established by the Nonparty Company, the Defendant, a retirement pension trustee, was obligated to pay retirement benefits in lump sum to the Plaintiff according to the retirement benefit scheme established by the Nonparty Company, is KRW 657,228,218 after deducting taxes (hereinafter “instant retirement benefits”).

C. Loans extended by the Defendant against the Plaintiff

On March 26, 2008, the Defendant loaned KRW 1 billion to the Plaintiff at 17% per annum of interest for delay, and on July 2, 2008, the due date for repayment was determined and lent. The Plaintiff filed a lawsuit against the Plaintiff on the claim for loan payment at Seoul Central District Court 2012Da354466.

On March 28, 2013, the above court rendered a ruling that "the defendant shall pay to the plaintiff 528,322,269 won and 508,51,552 won with 17% per annum from December 20, 2012 to January 11, 2013, and 20% per annum from the next day to the date of full payment." The above ruling became final and conclusive around that time (hereinafter referred to as "loan Claim").

D. Defendant’s notice of set-off

On March 31, 2014, the Defendant notified the Plaintiff that the instant loan claim would be offset against the Plaintiff’s retirement benefit claim. (2)

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 to 4, Eul evidence 8 and 9 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Determination on the cause of the claim

The Plaintiff joined the retirement benefit scheme of the non-party company on February 1, 2013, but at the same time lost its eligibility to join the retirement benefit scheme, and the Plaintiff wants to receive retirement benefits in lump sum. Thus, the Plaintiff is obligated to pay the Plaintiff the amount of retirement benefits that the Defendant should pay in lump sum to the Plaintiff according to the retirement benefit scheme of the non-party company, after deducting the amount of the retirement benefits that the Defendant should pay in lump sum, and the facts constituting the 657,228,218 are as seen earlier. Therefore, the Defendant is obligated to pay the Plaintiff the above KRW 657,228,218 and delay damages therefrom, barring

3. Judgment on the defendant's defense of offsetting

A. The defendant's defense and the plaintiff's second defense

1) The Defendant’s defense that the instant loan claim is offset against the Plaintiff’s retirement benefit claim of this case by its automatic claim.

2) On such grounds, the Plaintiff is prohibited from seizing the entire retirement benefit claim of this case pursuant to Article 7(1) of the Retirement Benefits Act, and thus, the Defendant’s set-off is entirely prohibited, or the seizure of 1/2 out of the instant retirement benefit claim is prohibited pursuant to Article 246(1)4 or 5 of the Civil Execution Act, and thus, the Defendant’s set-off of 1/2 out of the instant retirement benefit claim of this case is prohibited.

B. Determination

1) Whether the instant retirement benefit claim constitutes a claim prohibited from transfer under the Retirement Benefits Act

A) In a case where a monetary claim against a third party obligor is prohibited from being transferred pursuant to the provisions of law, it cannot be commercialized even if it is not possible to seize it, barring special circumstances. However, Article 7(1) of the Retirement Benefits Act provides that “the right to receive benefits under the retirement pension plan shall not be transferred or provided as a security.” As such, a retirement pension claim under the Retirement Benefits Act shall be deemed prohibited from being seized on the total amount (see, e.g., Supreme Court Decision 2013Da71180, Jan. 23, 2014). Meanwhile, Article 497 of the Civil Act provides that “where a claim is not seized, the debtor shall not oppose the creditor by offsetting the total amount of the set-off.” Therefore, set-off against a retirement pension claim under the Retirement Benefits Act shall be prohibited.

B) However, the Retirement Benefits Act provides that an employee under Article 2(1)1 of the Labor Standards Act is subject to its application (Article 2 subparag. 1 and Article 3 of the Retirement Benefits Act). An employee under Article 2(1)1 of the Labor Standards Act refers to a person who provides labor to a business or workplace for the purpose of wage regardless of the type of occupation, regardless of whether the employee is a person who provides labor to a business or workplace for the purpose of wage, and whether the employee is a person who is in a subordinate relationship with the employer regardless of the form of a contract (see Supreme Court Decision 2012Do6537, Sept. 26, 2013, etc.). On the other hand, the representative director of a stock company has the authority to represent the company and perform his/her duties externally and externally. Thus, the status as the representative director is merely a formal and explicit purpose and thus, it does not constitute an employee under the Labor Standards Act, barring any special circumstance, such as providing labor under specific, individual command and supervision from the actual manager and having received remuneration in its nature (see, May 29, 2019, etc.).

C) In light of the above legal principles, the plaintiff was in office as the representative director of the non-party company as seen earlier. There is no evidence to acknowledge that there was no special circumstance, such as that the status as the representative director is merely a formal and nominal purpose, and thus, he provided labor under specific and individual command and supervision from the actual manager and received remuneration due to the nature of labor itself. Rather, in light of the evidence No. 5, the plaintiff appears to have actually operated the non-party company as the representative director and the largest shareholder of the non-party company. Thus, the plaintiff cannot be regarded as an employee under the Labor Standards Act, which is subject to the Act on

D) Therefore, the Plaintiff’s instant retirement benefit claim does not constitute a retirement pension claim prohibited from being transferred under the Retirement Benefits Act.

2) Whether the instant retirement benefit claim constitutes a claim prohibited from seizure under the Civil Execution Act

A) Article 246(1)5 of the Civil Execution Act provides that “An amount equivalent to 1/2 of retirement allowances and other wage claims of similar nature shall not be seized.” Article 497 of the Civil Act provides that “if a claim is not seized, the debtor shall not oppose against the creditor by offsetting.” Thus, a set-off against claims, such as retirement allowances, etc., under Article 246(1)5 of the Civil Execution Act, shall be permitted only for the portion exceeding 1/2 of the claim such as retirement allowances, etc.

B) Meanwhile, as seen earlier, although the Plaintiff does not constitute an employee under the Labor Standards Act, it is reasonable to deem that the instant retirement benefit claim constitutes retirement allowance, etc. under Article 246 (1) 5 of the Civil Execution Act, in light of the following: (a) Article 246 (1) 5 of the Civil Execution Act does not limit its application to retirement allowance, etc. for employees under the Labor Standards Act; and (b) the instant retirement benefit does not have remuneration according to delegation relation during the period of service as the representative director; (c) the instant retirement benefit also has the nature as a retirement allowance, and is subject to taxation as retirement income or wage under

C) Therefore, set-off is allowed only for the portion exceeding 1/2 of the instant retirement benefit claim.

3) Set-off

A) According to the facts based on the facts, the instant loans reached the due date on July 2, 2008, and the instant retirement benefit claims were created on February 1, 2013, which was the date when the Plaintiff retired from the Nonparty Company and arrived at the due date on February 15, 2013, which became the 14th day from the date when the Plaintiff retired from the Nonparty Company, and thus, both claims were set off on the basis that they reached the due date on February 15, 2013.

B) In addition, on March 31, 2014, the fact that the Defendant expressed his/her intent to offset the above two claims against the equal amount is as seen earlier.

C) Therefore, the part which exceeds one half of the retirement benefit claim of this case [i.e., KRW 328,614,109 from KRW 657,228,218 to KRW 328,614,109 (i.e., KRW 657,228,218 x 1/2)] shall be deemed to have been completely extinguished after being offset within the extent equivalent to the amount of KRW 543,521,87, retroactively to February 15, 2013, which is the above offset date, by the Defendant’s principal and interest up to the date of the above offset. Accordingly, the Defendant’s ground for the above offset is with merit within the extent of the above recognition.

4) Sub-determination

Therefore, the Defendant is obliged to dispute over the existence or scope of the instant retirement benefit from April 9, 2014, which is the part corresponding to 1/2 of the instant retirement benefit remaining offset as above against the Plaintiff, as sought by the Plaintiff after the due date, with respect to the amount of KRW 328,614,109, and damages for delay at each rate of 5% per annum prescribed by the Civil Act and 20% per annum prescribed by the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the following day to the date of full payment.

4. Judgment on the defendant's defense of deposit

As the Defendant deposited KRW 14,091,867 out of the retirement benefits of this case, it asserted to the effect that the claim for retirement benefits of this case was extinguished as much as the above amount.

In full view of the evidence evidence No. 10, the Defendant’s deposit of KRW 14,091,867, based on Article 248(1) of the Civil Execution Act, for the reason that the seizure of retirement benefit claim competes with each other, the Defendant’s deposit of KRW 14,091,867, based on Article 248(1) of the same Act for the reason that the seizure of retirement benefit claim was conducted. However, there is no evidence to prove that the Defendant’s deposit of KRW 14,091,867, based on the above execution deposit of KRW 201, 201.

5. Conclusion

Therefore, the plaintiff's claim of this case is accepted within the scope of the above recognition, and the remaining claim is dismissed as it is without merit. It is so decided as per Disposition.

Judges Cho Young-young (Presiding Judge) and Kim Jong-nam

1) Income tax of KRW 56,100,530, and total of KRW 61,710,580,050 for local income tax of KRW 5,610,050

2) Although the date on which the Defendant’s notice of set-off (No. 4-2) was served on the Plaintiff on the records of the instant case, it is not clear, it is deemed that the notice was served on March 31, 2014, which is the date of preparation of the notice for convenience.

3) Meanwhile, according to the evidence evidence No. 7, the non-party is acknowledged to have received a claim seizure and collection order as to the claim against the above bank by designating the plaintiff as the debtor and multiple banks including the defendant as the third debtor. However, the claim for retirement benefit of this case is not "deposit claim" subject to the above claim seizure and collection order, and the plaintiff does not lose its ability to collect the claim for retirement benefit of this case.

4) Article 14(1) of the Regulations on the Final Benefit Retirement Pension of the non-party company provides that “The grounds for payment of benefits shall be the loss of eligibility for membership prescribed in Article 11, such as retirement,” and Article 15(1) of the Regulations provides that “the employer shall make the payment of benefits within 14 days from the date on which the grounds for payment of benefits occurred.” Thus, the Plaintiff’s retirement from the non-party company and lost eligibility for membership shall be deemed to have caused the instant retirement benefit claim on February 1, 2013, which was lost, and on February 15, 2013, the date on which the said claim becomes due.

(5) Since the Plaintiff claimed for the payment of damages for delay from April 9, 2014, which was after the foregoing offset date ( February 15, 2013), the damages for delay against the retirement benefits of this case from the foregoing offset date is not considered.

Note6) 543,521,887 = 528,32,269 + 5,47,342 won + (=508,51,552 won per annum x 17% per annum x 23 days from December 20, 2012 to January 11, 2013) + 9,752,276 won (=508,51,552 won x annual 20% x less than 35 days from January 12, 2013 to February 15, 2013).

Note 7) However, the Defendant appears to have expressed the instant retirement benefit claim in the deposit form as “deposit claim”.

Note 8) Although the effect of execution deposit is not recognized because the Plaintiff did not deposit the full amount of KRW 328,614,109, the amount corresponding to one-half of the retirement benefits of this case remaining after offset as above, if the payment of the deposited amount after the receipt of the deposit is made and the distribution procedure is completed (see, e.g., Supreme Court Decision 2012Da91385, Jul. 24, 2014).