[1] In a lawsuit seeking confirmation, where there is a benefit to confirm the relationship of rights between one party and a third party or the relationship of rights between a third party

[2] In a case where the trust property is disposed of in accordance with a public sale procedure or under a negotiated contract due to a cause for disposal of trust property under a security trust agreement, whether the bidder or purchaser who participated in the relevant disposal procedure can seek confirmation of invalidity of the sales contract concluded between the purchaser and the trust company (affirmative in principle)

[1] In a lawsuit for confirmation, only the legal relationship between the parties cannot be confirmed. In a case where, in relation to the legal relationship between one party and a third party or the relationship between a third party, a dispute between the parties causes anxiety or risk in the relationship between the parties, and the other party’s legal relationship is an effective and appropriate means to eliminate anxiety or risk in the relationship between the parties’ legal relationship, there is a benefit in confirmation as to the relationship between one party and a third party or between a third party.

[2] In a case where the trust property is disposed of in accordance with the procedure for public sale or under a negotiated contract pursuant to the conditions of public sale established in the procedure for public sale due to the occurrence of the grounds for disposal of the trust property stipulated in the security trust contract, the legal status of bidders or bidders who proposed purchase (hereinafter “tenders, etc.”) who acquired the trust property in competition with the purchaser in accordance with the validity of the sales contract concluded between the purchaser and the trust company shall be directly affected by the legal status or legal interests protected by the law. Therefore, such bidders, etc. may seek confirmation of invalidity of the sales contract for the purpose of removing the uncertainty or risk in a valid and timely manner, barring any special circumstance. In this case, if the sales contract becomes null and void to bring a lawsuit, it does not necessarily have to satisfy the requirements that would be, or may be, the purchaser in the procedure for disposal of the trust

[1] Article 250 of the Civil Procedure Act / [2] Article 250 of the Civil Procedure Act

[1] Supreme Court Decision 2006Da77272 Decided February 15, 2008 / [2] Supreme Court Decision 2011Da80449 Decided November 28, 2013 (Gong2014Sang, 22)

Central Public Administration Co., Ltd. and one other (Law Firm Sinng, Attorneys Lee Sung-gu et al., Counsel for the defendant-appellant)

Korea Asset Trust Co., Ltd. and one other (Attorneys Park Il-soo et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2020Na2023576 decided November 26, 2020

The part of the judgment of the court below against the plaintiff corporation and the defendant is reversed, and that part of the case is remanded to the Seoul High Court. The final appeal by the plaintiff central public service corporation is dismissed. The costs of appeal between the plaintiff central public service corporation and the defendants are assessed against the above plaintiff

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

1. Case summary

The reasoning of the lower judgment and the record reveal the following facts.

A. The Sejong Housing Co., Ltd. borrowed land purchase funds, etc. from 14 financial institutions, including Gag Capital Co., Ltd. and 14 financial institutions (hereinafter referred to as the “Bagju”), and concluded a trust contract under which the lender jointly purchased the land as the first priority beneficiary was entrusted to the Korea Land Trust Co., Ltd. (hereinafter referred to as the “Defendant Assets Trust”), and the trust real estate was changed to the Defendant Assets Trust Co., Ltd. (hereinafter referred to as the “Defendant Assets Trust”).

After the debtor's default on the debt of the loan, the defendant's assets trust conducted the sale of the trust property by means of open competitive bidding (hereinafter "public sale") upon the request of the lender group, but all bidders were not present. After that, the defendant's assets trust made a public sale by means of a negotiated contract in accordance with the conditions of the public sale set out in the public sale procedure, eight companies, including the plaintiff corporation and the business IM (hereinafter "Plaintiff") and the defendant Pos Development Co., Ltd. (hereinafter "Defendant Pos Development"), submitted a proposal for purchase.

The Defendant’s asset trust concluded the instant sales contract to determine the purchase purchaser as the purchaser of the Defendant’s list, and sell each of the instant real estate in KRW 10.1 billion to the said Defendant, following the approval of the lender group.

B. The Plaintiff Company and the Plaintiff Company filed the instant lawsuit by asserting that the instant sales contract concluded pursuant to the agreement constitutes anti-social legal acts and thus null and void, since the Plaintiff Company and the Plaintiff Company did not participate in the procedures for the said free contract, and committed an illegal act, such as disclosing the price of the proposal for the purchase of the competing company, by participating in the procedures for the free contract as above, stating a high desire to purchase as the purchaser after the Defendant PS was determined as the purchaser. The Plaintiff filed the instant lawsuit by asserting that the instant sales contract constituted anti-social legal acts.

2. Whether there is a benefit to obtain confirmation of the invalidity of the contract from the plaintiff Lee business-MC

A. In a lawsuit for confirmation, only the relationship between the parties cannot be confirmed. In a case where, in relation to the relationship between one party and a third party or the relationship between a third party, there is an apprehension or risk in the relationship between the parties in the dispute between the parties, and the other party is an effective and appropriate means to eliminate anxiety or risk in the relationship between the parties, the legal relationship between the parties and the third party is likely to be confirmed (see Supreme Court Decision 2006Da7272, Feb. 15, 2008, etc.).

In cases where the trust property is disposed of in accordance with the procedure for public sale or under a negotiated contract pursuant to the conditions for public sale determined in the procedure for public sale due to the occurrence of the grounds for disposal of the trust property stipulated in a security trust contract, the legal status of bidders or bidders for purchase (hereinafter “tenders, etc.”) who have acquired the trust property in competition with the purchaser and trust company in accordance with the validity of the sales contract concluded between the purchaser and the trust company shall be directly affected by the legal status or legal interests protected by the law. Therefore, such bidders, etc. may seek confirmation of the invalidity of the sales contract for the purpose of removing the uncertainty or risk in a valid and timely manner. In such cases, if the sales contract is confirmed to become null and void, it is not necessary to satisfy the requirements that would necessarily become or are likely to become the purchaser in the procedure for disposal of trust property after the completion of the lawsuit (see Supreme Court Decision 2011Da80449, Nov. 28, 2013).

B. Examining the above facts in light of the legal principles as seen earlier, when the public auction on each of the instant real estate, which is a trust property, was fully conducted, the Defendant’s asset trust acquired a negotiated contract and adopted a method of selecting the purchaser from among them by receiving a proposal for purchase through public announcement, and the Plaintiff AppM was a purchaser who participated in the procedure and submitted a proposal for purchase. As such, it may be deemed that the legal status or legal interests protected by the contract of this case between the trust company and the purchaser, i.e., the Defendants, would be directly affected by the validity of the contract of this case. Accordingly, the Plaintiff ApM and the Defendants may seek the confirmation of invalidity of the contract of this case in order to effectively and appropriately eliminate

The lower court determined that, even if the instant sales contract becomes null and void, it cannot be deemed that there is a reasonable probability that the Plaintiff ApM would become a purchaser, and that there was no possibility that the Defendant’s assets trust would have any rights or legal status, and thus, there was no benefit to seek confirmation of the invalidity of the instant sales contract. The lower court erred by misapprehending the legal doctrine on the benefit of confirmation, thereby adversely affecting the conclusion of the judgment. The

3. Whether there is a benefit for the central public service of the plaintiff to seek confirmation of invalidity of the contract

The Plaintiff’s Central Public Officials asserted that there was a benefit to seek confirmation of invalidity of the instant sales contract, considering these parts, given that there was a separate request for purchase for the purchase of each of the instant real estate by himself/herself, and there were unavoidable circumstances in which they were unable to participate in the public auction in accordance with the solicitation of the Defendant’s Property Trust. However, the lower court determined that Plaintiff’s Central Public Officials’ seeking confirmation of invalidity of the instant sales contract against the Defendants cannot be an effective and appropriate means to resolve anxietys and risks in relation to legal relationships

The lower judgment is justifiable on the basis of the foregoing legal doctrine. In so determining, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on

4. Conclusion

Without further proceeding to decide on the remaining grounds of appeal by Plaintiff AMC, the part of the judgment of the court below against Plaintiff AM is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The appeal by Plaintiff A Central Public Service is dismissed as it is without merit. The costs of appeal between Plaintiff A Central Public Service and the Defendants are assessed against the said Plaintiff. It is so decided as per Disposition by the assent of all participating Justices on the bench

Justices Lee Dong-won (Presiding Justice)