[1] In case where a lessee sub-leases the object with the consent of the lessor, the legal relations between the lessor and the lessee, the lessee and the sub-lessee, the lessor and the sub-lessee, and the scope of the obligations directly borne by the lessee under Article 630(1) of the Civil Code

[2] In a case where a sub-lease and a sub-lessee change the scope of the obligation under Article 630(1) of the Civil Act by changing the terms of a sub-lease, whether the sub-lease may assert the terms of the sub-lease contract that the sub-lease change to the lessor (affirmative in principle) and whether the same applies to a case where the sub-lease and the sub-lessee reduces the rent under the sub-lease contract (affirmative)

[3] The case where the sub-lessee can set up a defense against the lessor due to the fact that the sub-lessee paid the rent to the sub-lessee

[1] In a case where a lessee sub-leases the leased object with the consent of the lessor, the former lease agreement between the lessor and the lessee continues to exist (Article 630(2) of the Civil Act), and a new sub-lease agreement between the lessee and the sub-lessee is established. Meanwhile, a direct legal relationship between the lessor and the sub-lessee is not formed, but the sub-lessee bears the direct obligation to the lessor for the protection of the lessor (Article 630(1) of the Civil Act).

In such cases, the sub-lessee is not liable to the lessor for the sub-lease due to the sub-lease contract, and at the same time, the lessee is not liable to the lessor as the lessee bears for the lease contract.

[2] The sub-lease and the sub-lessee may change the terms of the sub-lease contract in accordance with the principle of freedom of contract. Even if the scope of the obligation directly borne by the sub-lessee to the lessor pursuant to Article 630(1) of the Civil Act is changed, the sub-lease may assert the terms of the changed sub-lease contract to the lessor unless special circumstances exist to deem that the content of the sub-lease contract was made contrary to the intent of Article 630(1) of the Civil Act for the protection of the lessor who consented to the sub-lease. The same applies to a case where the sub-lease and the sub-lessee reduce

In addition, in calculating the amount of unjust enrichment equivalent to the amount of the rent that the lessee has to return to the lessor after the termination of the lease, if the amount of the rent at the time of unjust enrichment is not based on the actual amount of the rent at the time of unjust enrichment but based on the contract, it shall be based on the change in the rent that the lessee bears the direct obligation to the lessor, and shall not be based on the difference in the contract of the sub-lease prior to the change.

[3] A sub-lease cannot set up against a lessor due to the circumstances in which the sub-lease was made before the time of the sub-lease, but the rent that was paid after the time of the sub-lease can be set up against the lessor. Even if the rent was paid to the sub-lease prior to the time of the sub-lease under the sub-lease contract, if the time of the rent payment became due prior to the lessor's claim for the rent, it may set up against the lessor by such payment.

[1] Article 630 of the Civil Code / [2] Article 630 (1) of the Civil Code / [3] Article 630 (1) of the Civil Code

[1] Supreme Court Decision 2017Da265266 Decided December 28, 2017 (Gong2018Sang, 425) / [3] Supreme Court Decision 2006Da45459 Decided March 27, 2008 (Gong2008Sang, 604)

Plaintiff

Defendant (Attorney Park Young-young, Counsel for the defendant-appellant)

Suwon District Court Decision 2017Na66879 decided November 30, 2017

Of the lower judgment, the part on delayed rent and damages for delay as of November 9, 2016 and the part on the return of unjust enrichment equivalent to rent and rent thereafter are reversed, and this part of the case is remanded to Suwon District Court Panel Division. The Defendant’s remaining appeal is dismissed.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 and 2

A. In a case where a lessee sub-leases the leased object with the consent of the lessor, the former lease agreement between the lessor and the lessee continues to exist (Article 630(2) of the Civil Act); and a new sub-lease agreement between the lessee and the sub-lessee is established. Meanwhile, a direct legal relationship between the lessor and the sub-lessee is not formed, but the sub-lessee bears the direct obligation to the lessor for the protection of the lessor (see Supreme Court Decisions 630(1) of the Civil Act; 2017Da26526, Dec. 28, 2017).

In such cases, the sub-lessee is not liable to the lessor for the sub-lease due to the sub-lease contract, and at the same time, the lessee is not liable to the lessor as the lessee bears for the lease contract.

A sub-lease and a sub-lessee may change the content of a sub-lease contract in accordance with the principle of freedom of contract. Even if the scope of a sub-lease directly borne by a sub-lessee to a lessor pursuant to Article 630(1) of the Civil Act is changed, barring any special circumstance to deem that the content of a sub-lease contract was made contrary to the purport of Article 630(1) of the Civil Act for the protection of a lessor who has consented to the sub-lease. The same applies to a case where the sub-lease and the sub-lessee have reduced the rent under the sub-lease contract.

In addition, in calculating the amount of unjust enrichment equivalent to the amount of the rent that the lessee has to return to the lessor after the termination of the lease, if the amount of the rent at the time of unjust enrichment is not based on the actual amount of the rent at the time of unjust enrichment but based on the contract, it shall be based on the change in the rent that the lessee bears the direct obligation to the lessor, and shall not be based on the difference in the contract of the sub-lease prior to the change.

Meanwhile, a sub-lease cannot set up against a lessor due to the circumstances in which the sub-lease was made prior to the time of the sub-lease, but the rent that was paid after the said time of the sub-lease can be set up against the lessor (see Supreme Court Decision 2006Da45459, Mar. 27, 2008). Even if the rent was paid to the sub-lease prior to the said time of the sub-lease under the sub-lease contract, if the said time of the rent has arrived prior to the lessor’s demand for the rent, the lessee may set up against the lessor a defense against the said time of the rent.

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) On October 19, 201, the Plaintiff (including value-added tax) designated and leased the instant building to the Nonparty co-defendants of the lower court (hereinafter referred to as “non-party Nonparty”) as KRW 30 million, lease deposit, and lease term from December 10, 201 to December 9, 2021, and KRW 11 million, monthly rent (hereinafter “instant lease agreement”).

2) On September 4, 2012, the Nonparty: (a) set the second floor of the instant building to the Defendant as the deposit for sublease; (b) from October 20, 2012 to October 19, 2014 during the sublease period; (c) from October 20, 2012 to October 20, 2014; (d) KRW 2.5 million (excluding value-added tax); and (e) from October 20, 2012 to January 20, 2013 to October 19, 2014, the Nonparty sub-leases the instant building (hereinafter “instant sublease contract”).

3) The Plaintiff consented to the sublease, and the Nonparty did not delay that the lease contract amounting to the sum of KRW 147,324,000, as of November 9, 2016.

4) Upon filing the instant lawsuit, the Plaintiff expressed his/her intent to terminate the lease agreement on the grounds of the Nonparty’s delinquency in rent for at least two years, and the duplicate of the complaint containing such declaration of intent reached the Nonparty on December 23, 2016.

C. In this case, the Plaintiff sought reimbursement of the rent of KRW 117,324,00, which is the full amount of the rent under the lease agreement in arrears by the Nonparty as of November 9, 2016 (i.e., the rent in arrears - KRW 147,324,00,000), its delay damages, and its delay damages, calculated by the rate of KRW 30,000,000 per month from November 10, 2016 to the completion of delivery of the building in this case.

In regard to this, the Defendant: (a) paid the rent by July 19, 2016 to the Nonparty; (b) the Plaintiff is entitled to seek payment only for the subsequent rent; and (c) it is unreasonable that the Defendant, who transferred a part of the instant building, is liable for the whole rent under the lease agreement; and (c) as the Defendant reduced the rent between the Nonparty and the Nonparty under the sub-lease agreement, the Defendant argued that the amount of the reduced rent and the unjust enrichment equivalent to the rent should be calculated on the basis of the reduced amount.

D. Examining the above facts in light of the legal principles as seen earlier, since the rent under the instant sub-lease contract is smaller than the rent under the instant lease contract, the former lessee is obligated to pay directly to the Plaintiff, the lessor, within the scope of the rent under the instant lease contract, and if the rent under the instant sub-lease contract has been reduced between the Defendant and the Nonparty, barring any special circumstance, the Defendant is obligated to pay the reduced rent. Furthermore, the latter lessee’s unjust enrichment equivalent to the rent under the instant sub-lease to be returned to the Plaintiff by the time of delivery of the second floor part of the instant building after the termination of the lease is not based on the reduced rent, unless the latter is calculated as the unjust enrichment at the time.

Furthermore, even the rent under the sub-lease contract paid by the Defendant to the non-party to the sub-lease who is the sub-lease, and the rent under the sub-lease contract, which was paid after the time of the payment of the rent under the sub-lease contract, can be asserted against the Plaintiff by the payment that became due prior to the Plaintiff’s claim for the rent.

E. Nevertheless, without examining whether there was an agreement between the Nonparty and the Defendant on the change of the rent under the sub-lease contract, and the scope of the rent that the Defendant could oppose the Plaintiff among the rent paid to the Nonparty, the lower court maintained the first instance court, which fully accepted the Plaintiff’s claim, solely on the ground that (i) when the lessee sub-leases the leased object with the consent of the lessor, the sub-lessee directly assumes the duty to the lessor; and (ii) the lessee cannot oppose the Plaintiff, the lessor by agreement on the reduction of the rent under the sub-lease contract between the Defendant and the

In so determining, the court below erred by misapprehending the legal principles as to the scope of the obligation to pay the rent to the lessor by the lessee and the validity of the agreement to reduce the rent between the lessee and the lessee, and thereby failing to exhaust all necessary deliberations, which affected the conclusion of the judgment. The defendant's ground of appeal assigning this error is with merit.

2. Regarding ground of appeal No. 3

Examining the reasoning of the lower judgment in light of the record, the lower court did not err in its judgment that the instant sub-lease contract between the Nonparty and the Defendant does not constitute “where a lessee of a building allows another person to use the part of the building in question” under Article 632 of the Civil Act. In so doing, contrary to what is alleged in the grounds of appeal, by failing to exhaust all necessary deliberations,

3. Meanwhile, the Defendant did not submit the grounds of appeal on the part of the claim for delivery of the building of this case, and the petition of appeal did not contain any indication in the grounds of appeal on this part.

4. Conclusion

Therefore, of the lower judgment, the part on delayed payment and its delay damages until November 9, 2016, and the part on the return of the rent and its delay damages thereafter, are reversed, and this part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Defendant’s remaining appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jung-hwa (Presiding Justice)