The Korea Land and Housing Corporation (Law Firm Squa, Attorneys Kim Sun-tae et al., Counsel for the plaintiff-appellant)

Korea Land Trust Co., Ltd. (Law Firm Sejong and one other, Counsel for the plaintiff-appellant)

October 27, 2011

Seoul Central District Court Decision 2008Gahap112907 Decided August 18, 2010

1. Of the judgment of the court of first instance, the part against the defendant in excess of the amount ordered to be paid below shall be revoked, and the plaintiff's claim corresponding to the revoked part

The defendant shall pay to the plaintiff 16,38,561,516 won with 6% interest per annum from February 2, 2007 to February 2, 2012, and 20% interest per annum from the next day to the day of complete payment.

2. The defendant's remaining appeal is dismissed.

4. 6/10 of the total litigation costs shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

1. Purport of claim

The defendant shall pay to the plaintiff 39,152,951,804 won with 6% interest per annum from February 2, 2007 to the service date of a copy of the complaint of this case, and 20% interest per annum from the next day to the day of complete payment.

2. Purport of appeal

The part against the defendant in the judgment of the first instance shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed.

1. Basic facts

A. Conclusion of the trust contract dated December 29, 200

On October 1, 2009, the Korea Land Corporation (Korea Land Corporation was dissolved pursuant to Article 8 of the Addenda to the Korea Land and Housing Corporation on October 1, 2009, and the Korea Land and Housing Corporation was newly established following a merger between the Korea Land and Housing Corporation and the Korea Land and Housing Corporation, taking over the instant lawsuit as the Plaintiff on October 12, 2009, taking over the rights and obligations of the Korea Land and Housing Corporation; hereinafter collectively referred to as the “Plaintiffs”). On December 29, 2000, the Korea Land Corporation and the Korea Land and Housing Corporation (hereinafter referred to as the “Plaintiffs”). On December 29, 200, the Defendant entrusted the Defendant with the land ( Address 1 omitted) and four parcels outside the Korea Land and Housing Corporation, and the Defendant constructed apartment on the above land, sold the land and building as trust property, and settled profits after selling the land and the building as trust property (hereinafter referred to as the “Korea Land and Housing Corporation’s trust Agreement”), and the agreement was modified with respect to the payment of trust proceeds (the following agreement as follows:

Article 10 (Beneficiary and Right to Benefit)

1. The beneficiary of this trust shall be the plaintiff, but he shall be entitled to receive the consent of the third party.

(2) A beneficiary shall acquire trust proceeds calculated by the method prescribed in the trust deed.

Article 16 (Trust Accounting and Delivery of Profits)

(1) The calculation date for trust property shall be the last day of June and the last day of December of each year and the end of the trust, and the defendant shall prepare a statement of account for the relevant calculation period and submit it to the beneficiary.

Article 7 (Delivery of Profits under Special Agreement)

(2) Where sales proceeds from this project are determined to remain after appropriating project expenses, such as construction funds, due to the net operation of the project, they shall be delivered within one month from the end of each period for the settlement of accounts ( June 30, December 31).

Article 7 of the Special Agreement

(2) Where the sale in units of this project is net and the proceeds from sale in units are determined to remain, it shall be paid at intervals of four months, and it shall be paid within the extent that no borrowing has occurred.

B. The occurrence and payment of profits from the trust business of the Yongsan-dong District of this case

On June 30, 207, the trust deed of the Yongsan-dong District was terminated on and after June 30, 2007, and around October 2007, the Plaintiff and the Defendant determined a total of KRW 232,870,943,908 to be distributed to the Plaintiff (based on August 31, 2007). The Defendant notified the Plaintiff of an amount of KRW 70 billion on December 31, 2003; KRW 12.5 billion on May 28, 2004; KRW 23 billion on October 28, 2004; KRW 10.3 billion on March 30, 2005; KRW 70 billion on August 31, 2005; KRW 630 billion on the trust account of KRW 70.6 billion on the trust account of the Plaintiff.

C. Conclusion of the trust agreement dated December 27, 1996

On the other hand, on December 27, 1996, the Plaintiff entered into a sale-type land trust agreement (hereinafter “instant Daejeon ○○○ trust agreement”) with the Defendant and Seo-gu, Daejeon ( Address 2 omitted), which stipulates that the Defendant shall build and sell neighborhood living facilities and officetels (○○○○○○) on the said land, and the Defendant shall pay the Plaintiff the remainder after deducting all construction costs and expenses incurred in the sale of construction works, and the trust fees of the Defendant from the sale price (hereinafter “instant Daejeon ○○ trust agreement,” and “instant Daejeon ○○○ trust business”). The main contents are as follows.

Article 4 (Borrowing of Funds)

The defendant may appropriate funds necessary for the construction of buildings and the performance of trust affairs from trust property, or borrow funds at the expense of the plaintiff and beneficiary. In such cases, the borrowing of funds shall include borrowing from other trust property the defendant is the trustee.

Article 10 (Initial Beneficiaries)

The first beneficiary of this trust shall be the plaintiff.

Article 15 (Payment of Expenses)

(1) The following expenses shall be borne by a beneficiary:

1. Taxes, public imposts, and registration expenses for the trust property;

2. Design and supervision expenses and construction cost;

3. Repayment of loans, rental deposit, etc. and interest thereon;

4. Repair, preservation, and improvement expenses of real estate in trust, and fire insurance premiums;

5. Expenses incurred in performing the affairs of sale in lots;

6. Other expenses equivalent to the following subparagraphs:

(2) The defendant shall pay the expenses under paragraph (1) from the trust property, and if it is impossible to pay them, he/she may request and receive them to the beneficiary, and if necessary, have the beneficiary deposit a considerable amount in advance

(3) The defendant, without any negligence in the course of performing its trust affairs, shall be deemed expenses and shall be treated as prescribed in paragraph (2).

(4) Where a defendant has paid the various expenses under the preceding paragraph by subrogation, he/she shall be deemed to have received the relevant substitute payments and interest thereon from the trust property.

Article 16 (Appropriation of Expenses Incurred in Realization of Trust Property)

In the event that the repayment of a loan and interest thereon are insufficient to cover the expenses incurred without the fault of the defendant in the course of performing trust affairs, other expenses incurred in performing trust affairs, and the payment of the money by the defendant, the beneficiary shall be claimed, and if the money falls short of the money, the method and value which the defendant deems reasonable may be sold in whole or in part and appropriated

Article 17 (Trust Accounting and Delivery of Profits)

(1) The calculation date for trust property shall be June, the last day of December and the date of termination of the trust each year, and B shall prepare a statement of accounts for the relevant calculation period and submit it to beneficiaries.

Article 21 (Termination of Trust) The trust contract shall be terminated in the following cases:

1. Where the purpose of trust is achieved;

2. Where the purposes of trust can not be achieved;

3. Where the period of trust expires;

Article 22 (Delivery of Trust Property upon Termination of Trust)

Where the trust contract is terminated, the defendant shall, after obtaining approval from the beneficiary, deliver the trust property to the beneficiary by the certificate of beneficial rights and repayment in accordance with the following methods:

3. The redemption liabilities for borrowings, deposits for lease, etc., and other obligations shall be treated as follows:

B. The defendant may withhold the delivery of money belonging to trust property in order to secure funds for the repayment of borrowed money and other debts, and if the money for such reservation is insufficient, the defendant shall have the beneficiary deposit the shortage with the beneficiary: Provided, That with the consent of the creditor, the defendant may, by succession of the borrowed money and other debts to the beneficiary, be exempted from his responsibility.

Article 3 (Settlement of Trust Property's Settlement)

The settlement of unsold quantity and unclaimed amount at the end of the trust period shall be performed under the responsibility of the trust company which is the trustee.

D. The progress of the Daejeon ○○○○ Trust Business and the result of the relevant lawsuit seeking compensation for damages

Around August 197, 197: (a) the Plaintiff was selected at the Daejeon High Court 2, Daejeon High Court 1, 2, 2, 300, 2, 300, 196, 30, 400, 197, 40, 197, 206, 30, 196, 40, 50, 197, 206, 30, 40, 197, 40, 197, 206, 30, 197, 40, 197, 206, 20, 196, 30, 196, 30, 196, 40, 206, 196, 30, 196, 40, 206, 30, 200, 206, 206, 200.

E. The settlement, accounting, etc. of trust property of the Daejeon ○○○ Loan Trust Business

Article 3 of the instant Special Agreement on the Settlement of Trust Property at the time of the termination of the Daejeon ○○○○ Trust Contract was applied to the settlement of trust property. With respect to the settlement of loan debt, the Defendant may set up a reserved amount to cover the repayment of loan debt pursuant to Article 22 subparag. 3 of the instant Daejeon ○○○ Trust Contract, and may succeed to the beneficiary of the debt with the consent of the creditor, and may be exempted from its own responsibility. However, upon the termination of the instant trust agreement, the Defendant did not have succeeded to the Plaintiff’s debt with the consent of the creditor as stipulated in Article 22 subparag. 3 of the instant Daejeon ○○○○ Trust Contract. At the same time, the Defendant borrowed several financial institutions to carry out the instant Daejeon ○○○ Trust Business (short-term Company Loan Account) from various financial institutions to run the instant Daejeon ○○○○○ Trust Business, and the Defendant continued to use the borrowed money in the instant trust account at a 20-term trust account with the money borrowed from each of the instant trust accounts at a 20-term trust account.

[Ground of Recognition] A without dispute, Gap evidence 1 through 5, Gap evidence 8-1, 2, Eul evidence 10, Eul evidence 1, Eul evidence 2-1, 2, Eul evidence 3, Eul evidence 4-1 through 4, Eul evidence 5, 7, 10, and the purport of the whole pleadings

2. Determination as to the cause of action

The Plaintiff and the Defendant, around October 2007, determined the profits that the Defendant ought to pay to the Plaintiff (as of August 31, 2007) in total to KRW 232,870,943,908, which the Defendant paid to the Plaintiff a total of KRW 193,717,92,104 out of the above profits, as seen earlier. Thus, barring any special circumstance, the Defendant is liable to pay the Plaintiff a total of KRW 39,152,951,804, which was accrued to the Plaintiff pursuant to the trust agreement of the Yongsan-dong District, and delay damages therefrom.

3. Judgment on the parties' arguments

A. Defendant’s defense of set-off

On February 2, 2007, the defendant asserted that the defendant had already terminated prior to the filing of the lawsuit of this case by offsetting against the plaintiff's automatic claim (hereinafter "the right to claim settlement of expenses of this case") against the plaintiff's 39,152,951,804 won (the defendant asserts the right to claim settlement and the right to claim reimbursement of expenses of this case) under Article 60 of the Trust Act (hereinafter "right to claim settlement of this case") or the right to claim reimbursement of expenses under Article 42 (2) of the Trust Act (hereinafter "right to claim reimbursement of expenses of this case") in an equal amount, which the defendant had against the plaintiff.

B. Determination as to the allegation of offsetting the right to claim settlement of this case after the termination of the trust contract

(1) The defendant's assertion

The Trust Act (amended by Act No. 10924, Jul. 25, 201; hereinafter the same) provides for a separate chapter for the waiver of the right-holder’s legal relationship after the termination of the trust relationship. Chapter 6 provides that the provisions applicable mutatis mutandis at the time of the termination of the trust shall be limited to Articles 27, 49, and 50(2) (Articles 62 through 49, and 63 through 50(2) of the Trust Act, which are applicable mutatis mutandis to the waiver of the right-holder’s legal relationship. Since the former trust relationship is, in principle, newly established for the waiver of the right-holder’s legal relationship for the waiver of the right-holder’s legal relationship, to the truster’s legal relationship for the waiver of the right-holder’s legal relationship (negative of the trust property), and the provisions applicable mutatis mutandis to the waiver of the right-holder’s trust property for the waiver of the right-holder’s trust property, which are all applicable mutatis mutandis to the trust property’s legal relationship (negative of the trust property).

Therefore, the instant trust business terminated on December 31, 2002 on the expiration of the trust term, and the expenses incurred from the instant trust business, as a small property, belonged to the Plaintiff, the truster, in accordance with the provisions of Article 60 of the Trust Act. The waiver of the Plaintiff’s beneficial interest, which occurred after the completion of the instant Daejeon ○○○○○○ trust business, is no longer effective, and the Plaintiff is obligated to pay the expenses incurred from the instant trust business (negative) in accordance with the terms and conditions of the trust property finally reverted to the trust property. On February 2, 2007, the Defendant, along with the trust business balance statement, expressed an intention of offset against the Plaintiff regarding the claim for reimbursement of the expenses incurred from the instant Daejeon ○○○○○○○ trust business, accompanied by the instant trust business balance statement, and the Defendant expressed an intention of offset against the Plaintiff by the automatic claim for reimbursement of expenses incurred from the passive trust property (right to claim reimbursement of expenses) of the instant Daejeon ○○○ trust business.

Ultimately, prior to the filing of the instant lawsuit, the Plaintiff’s claim on the proceeds from the trust business of the Youngdong District was extinguished within the scope of equal amount with the Defendant’s claim on the settlement of accounts against the Plaintiff.

(2) Determination

According to Article 60 of the Trust Act, since Article 60 of the Trust Act provides that “if a person who has the right to whom the trust property belongs, is not specified in the deed of trust, the trust property shall be reverted to the truster or his/her heir,” Article 60 of the Trust Act shall apply to cases where the person who has the right to whom the trust property belongs belongs is not specified in the deed of trust. However, Article 22 of the Trust Act provides for the person who has the right to whom the trust property belongs when the trust property is terminated in the case of the Daejeon ○○○○○○ Trust Contract, and Article 60 of the Trust Act does not apply to the person who has the right to whom the trust property belongs

Even if Article 60 of the Trust Act applies to this case, the defendant's assertion is without merit for the following reasons.

Even if the trust property is included in the trust property under Article 60 of the Trust Act, in light of the fact that the trust property is owned by the trustee inside and outside of the country and the trust property not recognized is not an obligation for the trustee, it shall be deemed that the trust property or the trustee bears the obligation to a third party with respect to the trust affairs. However, the expenses incurred in the Daejeon ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○’s trust business claimed by the Defendant are an independent right recognized against the trust property or the beneficiary under Article 42(1) and (2) of the Trust Act, and it does not constitute a trust property (negative) under Article 60 of the Trust Act, since it does not bear any obligation against the third party. Therefore,

C. Determination as to the allegation of offset against the Defendant’s right to claim reimbursement of the instant expenses

(1) The plaintiff's second defense assertion

1) The Defendant is obligated to compensate the Plaintiff for damages incurred to the Plaintiff due to the Defendant’s breach of the Defendant’s duty of care in relation to the Daejeon ○○○○ Trust Business, and the Plaintiff’s above right to claim damages should be preferentially performed prior to the Defendant’s right to claim reimbursement of expenses, or the above right to claim reimbursement of expenses and the right to claim reimbursement of expenses are concurrently performed. Thus, it is impossible to offset the instant right to claim reimbursement of expenses because the

2) Offset of the instant claim with the instant claim for reimbursement of expenses is not permissible as it goes against the principle of independence of trust property, the prohibition of offset or compulsory execution under Articles 20 and 30 of the Trust Act, and the duty of loyalty to the beneficiary. In other words, the instant claim for reimbursement of expenses is a claim for reimbursement of expenses under Article 42 of the Trust Act, which is part of the trust property and is against Article 20 of the Trust Act. Such offset is ultimately contrary to Article 30 of the Trust Act, since the instant claim for trust property under the Daejeon ○○○○ Deposit Trust Contract, which is one’s own property, would result in the repayment of the trust property from the trust property under the trust property under the same agreement, which is one’s own property, and therefore, it is not permissible to offset against the beneficiary’s claim for the performance of the beneficiary claim against the beneficiary, and rather, offset against the beneficiary’s obligation of loyalty.

3) The Plaintiff renounced his/her status as a beneficiary under the Daejeon ○○○○○ Loan Trust Contract, and thus, pursuant to Article 42(2) and (3) of the Trust Act, the Defendant’s right to claim reimbursement of expenses against the Plaintiff, a trustee, was retroactively extinguished.

4) As to the existence and amount of the right to claim reimbursement of expenses for the Daejeon ○○○○ Trust Business, Article 63 of the Trust Act provides that “where the trust is terminated, the trustee shall make the final calculation of the trust affairs and obtain the approval of the beneficiary.” However, the Plaintiff does not have any approval for the instant Daejeon ○○○ Trust Business. Therefore, the Defendant shall assert and prove the amount of expenses incurred in the instant Daejeon ○○○○ Trust Business. In addition, where the trustee neglected to exercise due care as a good manager and the trustee has paid the trust expenses, the trustee cannot claim reimbursement of expenses because the extended expenses incurred due to such negligence falls under a case where there is no justifiable reason to bear or bear the trust expenses. As the Defendant breached its duty of care as a good manager, the extended expenses incurred therefrom shall be excluded from the right to claim reimbursement of expenses.

(2) Judgment on the Plaintiff’s assertion of re-defense

1) Whether the instant claim for reimbursement of expenses is a claim with a defense attached thereto

In full view of the purport of the statements and arguments stated in Eul evidence Nos. 3, 5, and 7, the plaintiff filed a lawsuit against the defendant for damages compensation ( Daejeon District Court 2007Gahap5834 case) on July 9, 2008 to the effect that "the defendant cannot be deemed to have violated the duty of prior consultation, or to have violated the duty of due care as a good manager, and the Daejeon High Court 208Na7183 on February 4, 2010 (Seoul High Court 2008NaNa7183) decided to dismiss the above part of the claim for damages, since the defendant exempted the plaintiff from the obligation to take over an unsold officetel, which is a contractor, without the plaintiff's consent, due to the defendant's breach of the duty of due care as a good manager, and thus, the plaintiff's appeal cannot be deemed to have been dismissed on February 4, 2010."

2) Whether a set-off is prohibited as against the principle of independence of trust property, Articles 20 and 30 of the Trust Act, and the trustee’s duty of loyalty

Article 20 of the Trust Act does not offset any claims belonging to the trust property against those belonging to the trust property. The purport of the provision is to prohibit a trustee from offsetting any claims held by the other party as the trustee of the trust against the other party and obligations borne by the trustee individually against the other party, and it does not prevent the trustee from offsetting any claims inherent in the trustee against the beneficiary against the beneficiary by making the trustee an automatic claim against the beneficiary. Meanwhile, the principle of independence of the trust property under Article 30 of the Trust Act means that the trustee's own property and trust property should be managed separately and treated separately in order to prevent the decrease of trust property and protect the beneficiary, etc. In addition, it does not mean that the trust property itself has a legal personality distinct from those of the owner or the nominal owner, and therefore, it does not mean that the trustee's automatic claim against the beneficiary is prohibited from offsetting any claims arising from the trust property or against the trust property's independent trust property's profit set-off against the beneficiary's own claims arising from offset against the trust property's independent trust property's profit claim (see Supreme Court Decision 2000Da2565, Sept. 26, 20, 20007.

In addition, even if the Plaintiff received profits from the trust agreement of the Gandong District and received profits, the Plaintiff, a beneficiary under the Daejeon ○○○○○○ Trust Contract of this case, is obligated to comply with the Defendant’s claim for reimbursement of expenses as a result of the instant Daejeon ○○○○ Trust Business. Therefore, allowing the Defendant’s offset cannot be deemed to be a case where the Plaintiff, a beneficiary, is at all disadvantageous to the Plaintiff or where the beneficiary’s interests are harmed. Therefore, the Plaintiff’s assertion on this part is without merit.

3) Whether the Plaintiff’s right to claim reimbursement of the instant expenses has expired due to the waiver of the right to benefit from the Daejeon ○○○ Trust Business

A) Relevant provisions of the Trust Act

Article 42(1) of the Trust Act provides that "the trustee may sell the trust property and exercise his/her right in preference to other rights-holder in receiving compensation for any taxes, public charges and other expenses and interest borne by the trustee in connection with the trust property, or any loss incurred by him/her to perform the trust affairs." Article 42(2) of the Trust Act provides that "the trustee may request the beneficiary to compensate for any loss incurred to him/her without any negligence, or require him/her to provide a reasonable security to perform any taxes, public charges and interest borne with respect to the trust property, or trust affairs," while Article 42(3) of the Trust Act provides that "the trustee may demand the beneficiary to reimburse the expenses incurred by him/her, but the same Article provides that "the provisions of the preceding paragraph shall not apply where the beneficiary renounces his/her rights."

B) The plaintiff's assertion

"Where a beneficiary renounces his/her right" under Article 42 (3) of the Trust Act is to waive his/her status as a beneficiary, and where a beneficiary renounces his/her right to benefit, the trustee's right to claim reimbursement of expenses already occurred to the beneficiary is also extinguished.

C) Defendant’s assertion

(1) In the case of a self-profit trust, the assertion that it is impossible to waive the right to benefit.

In the case of so-called self-profit trust that the truster becomes a beneficiary, the beneficiary may not waive the right to benefit. In the case of self-profit trust, since the truster has finally confirmed his/her intention to enjoy the trust benefits and to avoid the burden of the trust at the time of establishing the deed of trust, the waiver of the right to benefit is not allowed. The plaintiff cannot waive the right to benefit because he/she has already expressed his/her intention to benefit in a conclusive manner under the Daejeon ○○○○ Trust Contract

(2) A special agreement prohibiting the waiver of the right to benefit is asserted.

Article 10 and Article 15(1) of the Daejeon ○○○○ Trust Contract provide that all of the expenses shall be borne by the beneficiary. In addition, Article 13(1) of the Daejeon ○○○○ Trust Contract provides that “the beneficiary shall not transfer, succeed, or pledge the right to benefit without B’s consent,” and Article 20(1) provides that “the trust contract shall not be terminated.” In principle, the purport of prohibiting the termination or amendment of the trust contract is to clearly express the intention that it is impossible to terminate the trust contract in a way that the Plaintiff’s status as the beneficiary would be ultimately liable for the payment of expenses due to the waiver of the right to benefit and terminate the trust contract of this case by waiver of the Plaintiff’s right to benefit. As such, in any case under the Daejeon ○○○ Trust Contract, the Plaintiff, the beneficiary, was stipulated under a special agreement that the Defendant would bear the expenses incurred by the execution of the instant Daejeon ○○○ Trust Business, and thus, the Defendant would not be deemed to have waived the Plaintiff’s duty to bear the expenses under its name and the trust agreement.

(3) The assertion that the waiver of the right to benefit is impossible after the trust is terminated.

Since the provisions of Chapter 6 of the Trust Act that apply to a legal trust, which is a legal relation after the termination of the trust, do not have any explicit provision that applies mutatis mutandis Articles 51(3) and 42(3) of the Trust Act to waiver of the right to benefit, it is impossible to waive the right to benefit after the termination

④ The assertion of violation of the good faith and good faith

On December 26, 2000, the Defendant notified the Plaintiff of the amendment of the construction contract related to the special agreement to exempt the Plaintiff from the obligation to take over the unsold quantity in lots, which is the contractor of the Daejeon ○○○○ Trust Business. However, the Plaintiff started to raise a problem of the above special agreement that should not express any reply or opinion for a period of one year and six months or longer on May 20, 2002. However, at that time, the Plaintiff consented to the extension of the contract term of the Daejeon ○○○○○○ Trust Contract, and did not take any special measures thereafter, on June 13, 2007, on the ground that the Plaintiff violated the fiduciary duty as the trustee, and the Plaintiff did not waive its status as the beneficial owner while taking the damages lawsuit. This goes against the principle of trust and good faith on June 13, 2007, where the Plaintiff did not give notice to the Defendant of the violation of the duty to take care of 13.7 billion won on the part of the Defendant.

(5) Claim on the future effect of waiver of the right to benefit or the limitation on the timing of waiver of the right to benefit.

Even if it is possible to waive the Plaintiff’s right to benefit under the Daejeon ○○○○○○ Trust Contract, the part may not be exempted if the expenses already incurred, and may affect only the trust obligations that may arise in the future. Unless the beneficiary provides that he/she shall return the benefits he/she has enjoyed by unjust enrichment, it is reasonable to deem that there is no effect on the trustee’s right to claim reimbursement of expenses. Recognizing the retroactive effect of the waiver of the right to benefit is unfair contrary to equity because it excessively underminess the trustee’s right to expectation or position and is unreasonable, and thus, it cannot be exempted from the duty to compensate by the waiver of the right to benefit, in relation to the trust obligations already incurred when the beneficiary is able to enjoy trust benefits. Inasmuch as the Plaintiff renounced the right to benefit, it is reasonable to view that the waiver of the Plaintiff’s right to benefit ought to take effect retroactively to the extent that it is not possible to waive the Plaintiff’s right to benefit from the construction of Article 42(3) of the Trust Act. In this case, the Defendant’s waiver of the right to benefit constitutes a breach of Article 27(3) of the Trust Act.

D) Determination

(1) As to the assertion that it is impossible to waive the right to benefit in a self-profit trust

Article 51(1) of the Trust Act provides that a person designated as a beneficiary by an act of trust shall be presumed to have consented to the acceptance of the benefit of trust; Article 51(2) provides that where the benefit of trust is borne by the beneficiary, the beneficiary shall express his/her intention to the benefit of trust; and Article 51(3) provides that the beneficiary may waive the right of trust. In light of the form and order of the above provision, Paragraph (1) and Paragraph (2) of the same Article provides that when the beneficiary gives consent to the acquisition of the benefit of trust, it is reasonable to view that Paragraph (3) of the same Article provides that even if the beneficiary has already given consent to the acquisition of the benefit of trust, the beneficiary may waive the right of trust pursuant to Article 51(3) of the Trust Act if the beneficiary cannot waive the right of trust unless the beneficiary gives consent to the acquisition of the benefit of trust as alleged by the defendant, it is contrary to the purport of Article 51(3) of the Trust Act that restricts the truster's right to claim the benefit of trust under the current Trust Act, without any provision stipulating the truster's right to the trust property and any cost.

(2) Concerning the assertion of a special agreement prohibiting the waiver of beneficial rights

Article 15 of the Daejeon ○○○○ Trust Contract is a typical provision under the general purport of Article 42 of the Trust Act, and is merely a specific provision on the scope of expenses and the timing of repayment. Article 13(1) of the Daejeon ○○○○ Trust Contract does not relate to a beneficiary’s transfer of right to benefit, succession, and waiver of the right to benefit. Meanwhile, according to Article 56 of the Trust Act, a trust (self-profit trust) to which the truster takes full of the trust interest can be terminated at any time by the truster. Thus, the trust contract cannot be terminated under Article 20 of the Daejeon ○○○ Trust Contract where there is any inevitable reason. In this case, the trustee may claim damages arising from the termination to the beneficiary in consultation with the trustee. The purport of Article 15 of the Trust Act is that where the Plaintiff, who is the truster, seeks to terminate the trust contract without the Defendant’s fault, the truster cannot be seen as a waiver of the right to benefit under Article 56 of the Trust Act, and thus, it cannot be seen as a provision on the termination of the trust contract of this case.

Therefore, it is difficult to view that the provisions of the instant trust agreement asserted by the Defendant restrict the waiver of the Plaintiff’s right to benefit, or agreed between the parties to exclude the application of Article 42(2) and (3) of the Trust Act.

(3) On the assertion that the waiver of the right to benefit is impossible after the trust is terminated.

There is no provision that limits the time to waive the right to benefit in Article 51(3) of the Trust Act, and as seen thereafter, in the case of the instant Daejeon ○○○○○ Loan Trust Business, the legal trust relationship is not established after the termination of the trust contract. Therefore, the Defendant’s assertion on the premise that the legal trust relationship is established after the termination of the

④ As to the assertion of the good faith and good faith

This part of the defendant's assertion is to be judged as follows, as the next argument of future validity of the waiver of the right to benefit.

(5) On the argument that the waiver of the right to benefit will become effective in the future or any limitation is placed on the timing of waiver.

The waiver of the right to benefit under Article 51(3) of the Trust Act is not a waiver of the right to benefit, but a waiver of the status of the beneficiary, and such declaration of intent of waiver of such status of the beneficiary is considered a retroactive effect in principle, and Article 51(2) of the Trust Act provides that the trustee may claim the expenses or damages already incurred to the beneficiary, and Article 51(3) of the Trust Act provides that the beneficiary shall not apply where the beneficiary renounces his/her right to benefit. Therefore, it is reasonable to interpret that the beneficiary’s duty to compensate for the expenses or damages already incurred is extinguished in light of the fact that it is reasonable to interpret that the beneficiary’s duty to compensate for the expenses or damages already incurred is also extinguished.

However, in principle, even if the waiver of the right to benefit is recognized, the retroactive effect of the waiver of the right to benefit should be exceptionally restricted in special circumstances, such as the reversal of the existing legal effect and infringing on the legal stability, etc. or the waiver of the right to benefit is contrary to the principle of good faith or the principle of no speech

As in the instant case, if the Plaintiff’s claim on the instant real estate development project is recognized to have the retroactive effect on the waiver of the right to benefit even when the right to claim reimbursement expires within the equal amount due to the Defendant’s expression of set-off, the legal relationship becomes unstable upon the Plaintiff’s choice. On February 2, 2007, the time when the Plaintiff notified the Defendant of set-off intention, the Plaintiff is already informed of the final number of damages of KRW 39.1 billion due to the Daejeon ○○○○○ Loan Project, and the Plaintiff did not express his/her intent to waive the right to benefit in the instant real estate development project even if it was known that there is a high possibility that the Plaintiff would not have any potential retroactive effect on the waiver of the right to benefit in the instant real estate development project. Moreover, the Plaintiff’s refusal of the right to benefit in the instant real estate development project would be against the principle of equity and the risk of waiver of the Plaintiff’s right to benefit in the instant case’s real estate development by filing a lawsuit against the Defendant on June 13, 2007.

E) Sub-decision

Therefore, the plaintiff's second defense is without merit.

4) The existence and scope of the right to claim reimbursement of expenses under the Daejeon ○○○ Trust Business

(1) Whether approval of the plaintiff is necessary

Article 63 of the Trust Act only declares the legal doctrine that, upon termination of a trust, the trustee has an obligation to finally calculate the trust affairs, and that, when the beneficiary approves such accounting, the trustee is exempted from the liability to the beneficiary of the trust, and the beneficiary cannot take the transfer of rights, the payment of money, and other property responsibilities other than the final accounting with respect to the trustee, by asserting the content different from the final accounting. In such a case where the trust is terminated, it cannot be deemed that the trustee provides the requirements for claiming expenses or remuneration (see Supreme Court Decision 2005Da9685, Sept. 7, 2007). Therefore, the Plaintiff’s assertion that the existence of the right to claim reimbursement of expenses and the amount of the claim for reimbursement of expenses of the Daejeon ○○○○○○ Loan in this case needs to be approved

② Whether the expenses incurred after the termination of the instant trust contract by Daejeon ○○○○○○.

○ Plaintiff’s assertion

According to Article 3 of the Special Agreement on the Trust Contract at Daejeon ○○○○○○○○, the trustee is responsible for the settlement of unsold quantity and unclaimed amount at the end of the trust period. This means that the Defendant, as the trustee, bears the obligation to take over and settle the unsold amount generated after the completion of the building at Daejeon ○○○○○○○○, upon the expiration of the trust period, to the Si Corporation at the price set forth in the business proposal, etc. As such, the Defendant, as the trustee, should entirely take over the unsold amount at the end of the trust period of this case, under his/her own responsibility. Such affairs are merely those of non-trust duties performed by the Defendant, as the trustee, after the termination of the trust contract, and do not constitute an agreement trust, which is a business of managing and disposing of the trust property pursuant to the trust purpose stipulated in the trust contract with the Plaintiff, the truster, the trustee, and the trustee, as the trustee, is not a person responsible for the sale of the trust property at the end of the trust period (the meaning of the trust agreement and its incidental business affairs).

○ Defendant’s argument

Article 22 (Delivery of Trust Property upon Termination of Trust) and Article 3 (Settlement of Trust Property) of the Special Agreement provides for legal relations after the termination of the Trust Contract. This is because, in a case where the trust is terminated, the parties to the legal trust relationship (Article 61 of the Trust Act), which is recognized until the trust property is transferred to the right holder to whom the trust property belongs, have agreed in advance on the method of handling the affairs of the legal trust relationship (Article 61 of the Trust Act), and the legal trust affairs for the purpose of disposing of the unsold quantity in lots to be handled by the Defendant, have the nature of the legal trust affairs and for the purpose of devolving the proceeds of disposal to the Plaintiff by disposing of the unsold quantity in lots, are essentially the same as the affairs of the existing trust contract. Therefore, it is reasonable to apply mutatis mutandis to the quantity unsold in lots after

○ Judgment

Article 22 of the Trust Act provides for the right to dispose of trust property under Article 16 of the Trust Act. Article 62 of the Trust Act on the method of exercising the right to demand reimbursement of expenses by the trustee cannot be deemed a mandatory provision, and Article 62 of the Trust Act on the method of exercising the right to demand reimbursement of expenses by the beneficiary after the termination of the trust contract, and Article 16 of the Trust Act provides for the following circumstances: (a) the Plaintiff and the Defendant did not settle the trust property in accordance with Article 22 of the Trust Act through a lawsuit claiming compensation for damages between the Plaintiff and the Defendant after the termination of the trust contract, and the Plaintiff did not request the conversion of the trust property under the proviso of Article 22 subparag. 1 of the Trust Act; and (b) the Defendant’s disposal of the trust property after the termination of the trust contract cannot be deemed a mandatory provision; (c) the Defendant’s disposal of the right to demand reimbursement of expenses by means of a special agreement between the parties to the trust contract under the principle of private autonomy; (d) the Defendant’s disposal of the right to demand after the termination of the trust contract.

(3) Whether the difference between the external procurement interest rate and the trust account interest rate is included.

According to the main text of Article 31(1) of the Trust Act, a transaction conducted in violation of the above provision shall be null and void (see Supreme Court Decision 2005Da64552, Nov. 29, 2007). The transaction made in violation of the above provision shall be null and void (see Supreme Court Decision 2006Da62461, Jan. 30, 2009).

In this case, according to the evidence No. 28 of this case, the difference between the external procurement interest rate and the trust account interest rate in the Daejeon ○○○ trust business of this case may be recognized as being 754,501,173 [refer to evidence No. 28 of this case, 1997 (6,452,529), 198 (-79,657), 199 (-232,126,011), 200 (19,189, 199, 199, 200), 201 (43,595,916), 202 (426,639,207), 202 (426,639,207)] as of December 31, 202, and thus, it is reasonable to exclude this from the loan for consumption under Article 31 of the Trust Act.

④ Calculation of trust expenses for the trust business of Daejeon ○○○○ Bank

According to the evidence Nos. 2-2 and 30, according to the evidence Nos. 2-2 and 30, the expenses for the trust business of the Daejeon ○○○ Loan as of December 31, 2002 are as follows.

○ As of December 31, 2002: 33,289,742,791 won (i.e., the amount of revenues as of February 2, 2007 as of February 2, 2007: 49,490,327,231 - the amount of revenues since January 1, 2003 16,200,584,440 won)

○ Standard expenditure on December 31, 2002: 74,781,606,544 won (=8,643,297,035 Won-13,861 won after January 1, 2003)

As of December 31, 2002: 41,491,863,753 won (=74,781,606,54-33,289,742,791 won) + accrued prior to January 1, 2003 +438,841,380 won [the loan interest (1) out of the items of expenditure as stipulated in the evidence 30] + the unpaid trust remuneration amounting to 44,747,750 won [the trust remuneration (1) out of the items of expenditure as stipulated in the evidence 30]---754,50 won (the difference between the external procurement interest rate and the trust account charges amounting to 754,501,173 won from among the items of expenditure as stipulated in the evidence 30];

Total KRW 41,220,951,710 =41,491,863,753 +438,841,380 +44,747,750 won-754,501,173 won

○ Income from the exercise of the right to sell self-help after January 1, 2003: 3,280,301,229 won (=16,200,584,440 won-12,920,283,211 won)

Revenue 16,200,584,440 won - Costs 12,920,283,211 [Expenses = Expenditure 13,861,690,491- Loan Interest (1) 438,841,380- Trust Remuneration (1) 44,747,750 won- Trust Remuneration (2) 457,818,150]

∴ 2002. 12. 31. 기준 신탁비용 : 37,940,650,481원(=위 2003. 12. 31. 기준 총비용 41,220,951,710원- 2003. 1. 1. 이후 자조매각권 행사로 인한 수익 3,280,301,229원)

(5) Limitation on liability

In the case of land development trust, it is difficult to undertake a project over a long period and predict the real estate competition, and thus, a large-scale loss may occur depending on the circumstances. If a trustee is paid a professional in real estate trust business with discretion based on expertise and discretion, and the trust business is performed without achieving the purpose of the trust business due to unexpected changes in the economic situation, and it is recognized that the trust contract is terminated in advance, and the truster suffers a loss due to this reason, the truster may also restrict the trustee’s exercise of the right to claim reimbursement of expenses to the extent deemed reasonable from the perspective of the good faith principle and the sharing of damages, taking into account such circumstances together with the trustee’s negligence in the disbursement or bearing of trust expenses (see Supreme Court Decision 2004Da24557, Jun. 9, 2006).

In light of the following circumstances in which evidence Nos. 2-2, 2-2, 23-2, 24, 25, 28, and 30-2 of the evidence Nos. 23-2, and 24, 28, and 150 of the evidence Nos. 23-2, and the purport of the entire pleadings in the above facts, the amount of unsold in lots has occurred even after the period of trust expires due to the foreign exchange crisis commenced around November 1, 1997. The defendant was actually paid the trust fee of the Daejeon ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ KRW 2,514, 140 (=2,971, 958, 490-457, 818, and 150). In light of the good faith principle and the fact that the defendant received the trust fee as an expert for real estate trust business and conducted the trust based discretion.

D. Sub-determination

Therefore, 22,764,390,288 won (=37,940,650,481 won x 0.6, and less than won) out of the Plaintiff’s claim against the Defendant against the Defendant was already extinguished prior to the instant lawsuit by offsetting the Defendant’s claim for reimbursement of expenses of this case against the Plaintiff on February 2, 2007 by an automatic claim amount of KRW 22,764,390,288, which the Defendant had against the Plaintiff, from an equal amount. Thus, the Defendant’s counterclaim for offset is justified within the above scope of recognition.

4. Conclusion

Therefore, the defendant is obligated to pay the remaining profits to the plaintiff at intervals of four months from December 31, 2003 to four months from the date of payment (i.e., 39,152,951,804 won-22,764,390,28) and the above profit payment (i.e., the special terms of the modified contract of October 10, 2002). Thus, pursuant to Article 7 (2) of the same Act, the defendant is obliged to pay the remaining profits to the plaintiff at intervals of four months from the first payment date. Since the above profit is 10th payment, the payment date of the above profits is 36 months from the first payment date, 36 months from the second payment date (4 months x 9), and as such, the remaining part of the defendant's appeal to the plaintiff is dismissed within the extent of 20 days from the date of the first payment date to December 31, 2006 due to the ground for rejection as to the remaining part of the defendant's appeal.

Judges Maximum Full-time (Presiding Judge)

1) A trust to the effect that the owner of land entrusts the trust company with the land, and the trust company, as a trustee, performs an appropriate development act, such as constructing a new building on the land trusted to the trust company, creating a housing site, etc., and then jointly sell or lease the land and the ground buildings to collect input costs of the trust

2) The short-term trust account is a loan between the Defendant’s internal accounts, and the short-term trust account is a loan from the trust account of the instant trust business to the trust account of the Daejeon ○○○ Rental Trust Business.

3) The trust is classified into voluntary trust and legal trust, contract trust and will trust, private profit trust and public interest trust, self-profit trust and benefiting trust (other profit trust), passive trust and dynamic trust, business trust and non-business trust, management trust and disposal trust, land (development trust) trust and security trust, general trust and special trust, individual trust and collective trust, according to the criteria for its cause, form of creation, purpose, relationship between beneficiary and truster, nature of trustee's duty, etc.