2013Da63028 (principal lawsuit) Damages

2013Da63035 (Counterclaim) damages

person

Seoul High Court Decision 200

Hyundai Construction Corporation

Seoul High Court Decision 2012Na11602 (Main Office), 2013Na2087 decided July 3, 2013

(Counterclaim) Judgment

May 24, 2016

The part of the lower judgment against the Plaintiff (Counterclaim Defendant) regarding the claim for penalty among the counterclaim claim is reversed, and that part of the case is remanded to the Seoul High Court. The remainder of the appeal is dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal Nos. 1, 2, and 4, the objective meaning of the language and text is clear, barring any special circumstance, in cases where the content of a contract is prepared in writing between the parties as a disposal document, the existence and content of the expression should be recognized. However, in cases where the objective meaning of the language and text is not clearly revealed, it shall be reasonably interpreted in accordance with logical and empirical rules, general common sense, and common sense of society, and transaction norms so as to be consistent with the concept of social justice and equity by comprehensively considering the contents of the text and text, as well as the motive and background leading up to the conclusion of the contract, the purpose and genuine intent to be achieved by the parties, and transaction practices, in a case where the content of the contract claimed by one party becomes liable to the other party (see Supreme Court Decision 200Da72572, May 24, 2002, etc.).

The lower court determined that, in light of the following: (a) the Defendant (Counterclaim Plaintiff; hereinafter referred to as the “Defendant”)’s payment guarantee for the loans borrowed by the Plaintiff (Counterclaim Defendant; hereinafter referred to as the “Plaintiff”) under Article 3(1) of the General Conditions of the Construction Contract (hereinafter referred to as the “instant provision”) after entering into the construction contract; (b) the specific developments leading up to the instant provision being modified in the course of entering into the construction contract; (c) relationship between the loan of the project financing (PF; hereinafter referred to as the “PF”); (d) relationship between the other provisions of the contract; (e) delay of business after entering into the contract; and (e) progress of discussions on measures to cope therewith, it is difficult to view that the Defendant did not guarantee the payment of the PF loans around January 207; and (e) further, until the commencement of the construction contract and the commencement of the construction contract, the Plaintiff would have attempted to obtain the loan for the purpose of purchasing the land, operating expenses, and financial operation expenses.

In light of the above legal principles and the evidence duly admitted by the court below, the above judgment of the court below is just. Contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles as to construction contract documents, or by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by omitting judgment as to Article 10(1) of the General Conditions of Construction Contract.

2. As to the grounds of appeal Nos. 3, 5, and 6

According to the evidence and the reasoning of the judgment below duly adopted by the court below, the plaintiff may rescind the contract in the event that the date of commencement agreed without justifiable reasons under Article 33 (1) 1 of the General Conditions of the Construction Contract has not yet started. At the time of application for approval of the construction project plan of this case, the plaintiff and the defendant limited the scheduled date of commencement on March 1, 2010. Meanwhile, Article 7 (1) of the Special Conditions of the Construction Contract of this case provides that "the plaintiff shall consult with the plaintiff in connection with the sale business, and the defendant shall have the final decision-making authority in relation to the sale agency business". The project of this case has been considerably delayed due to the delay in the purchase of land and the approval procedure due to the increase in the initial PF loan amount, and the balance of the existing PF loan amount has become too small, and it is difficult for the plaintiff to pay the additional loan amount to the plaintiff as well as the expenses incurred in sale, interest, construction costs, interest, etc., and etc., the change in the existing construction contract form of the payment guarantee or new payment guarantee plan.

As seen earlier, the Defendant’s obligation to guarantee the payment of additional PF loans is not recognized. Examining the foregoing facts in light of the foregoing, it is difficult to view that the sale and commencement procedure pursuant to the construction contract of this case did not properly go due to the Defendant’s unilateral causes attributable to the Defendant’s unilateral causes. Rather, it can be deemed that the Plaintiff failed to procure necessary expenses for continuing the business, such as sale in lots, due to the increase of financial costs due to external factors, and that the Plaintiff and the Defendant’s intent were inconsistent with the increase of financial costs, and thus, it cannot be deemed that the Defendant breached the obligation to commence the construction contract, which is the cause for termination of the contract.

Therefore, the decision of the court below that the defendant could not be deemed to have failed to perform the duty of commencement and sale is just, and contrary to what is alleged in the grounds of appeal, there is no omission of judgment on the scope of the duty of commencement and sale, violation of the duty of consultation, any error of law regarding the interpretation of the

3. As to the grounds of appeal Nos. 7 and 8

The lower court determined that the Plaintiff’s obligation to guarantee the payment of additional PF loans cannot be said to be the Defendant without any conditions, and rather, that the Plaintiff consulted with the Defendant regarding the direction for the implementation of the instant construction contract, the scale and timing of the execution of the funds, and the scale and timing of the additional PF loans pursuant to Article 1(2) and (3) of the instant construction contract. The lower court determined that the Plaintiff’s use of the land for the public sale, etc. constitutes grounds for termination of the contract under the general conditions of the instant construction contract, and determined that the sale schedule was set at a prompt time, and that the sale market was infinite, and that the sale market was infinite, and that there was no possibility of recovery. According to the evidence duly adopted by the lower court and the reasoning of the lower judgment, the lower court determined that the Plaintiff’s use of the land for the existing PF loans constitutes grounds for termination of the contract under the general conditions of the instant construction contract, and determined the total amount of the Plaintiff’s investment in the instant construction contract, the amount of the land and the project cost, the investment model, the project cost, and the project cost.

In order to recognize the termination of a contract due to nonperformance by violating each of the above provisions to the effect that the Plaintiff and the Defendant decided the matters in consultation with each other, it shall be interpreted that at least one party’s own refusal of consultation on the proposal of the other party concerning the promotion of the project, or any one party’s voluntary decision and implementation of the project without seeking consultation at all. However, it is difficult to achieve the objective of the contract for the construction of the instant case as a result of the failure to raise additional project costs in this case, as seen earlier, that it was difficult for the Plaintiff and the Defendant to reach a smooth agreement by giving priority to each other’s interests while holding consultations on various premises for additional loans, such as the foregoing pin situation, and it is difficult to say that the Plaintiff refused the agreement itself, and it is far from the fact that the Plaintiff’s decision and implementation of the project without seeking consultation at all. Accordingly, it cannot be deemed that there was a ground for the Plaintiff’s termination of the contract for the construction of the instant case’s agreement was a violation of the duty

Nevertheless, solely based on its stated reasoning, the lower court erred by misapprehending the legal doctrine on the grounds for non-performance of obligation and termination of contract, thereby adversely affecting the conclusion of the judgment.

4. Conclusion

The part against the Plaintiff regarding the claim for penalty among the counterclaim of the lower judgment is reversed, and that part of the case is remanded to the lower court, and the remaining appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-soo

Justices Kim Yong-deok

Justices Kim In-young

A person shall be appointed.