2014Da202554 Damage, etc.

person

Dong-based Construction Corporation

Korea Land and Housing Corporation

Seoul High Court Decision 2012Na47236 Decided December 19, 2013

December 24, 2015

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court. The appeal on the Plaintiff’s claim for damages for delay 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 Plaintiff’s ground of appeal No. 1 (the part on claim for payment of damages for delay under an agreement) where the objective meaning of the language and text is clear, barring any special circumstance, where the existence of declaration of intent and its content should be recognized, barring any special circumstance. In a case where the objective meaning of the language and text is different from that of the language and text, thereby adversely affecting the legal relations between the parties, the content of the language and text should be more strictly interpreted (see Supreme Court Decision 2012Da92166, Jun. 12, 2014).

For the reasons indicated in its holding, the lower court determined that: (a) it is reasonable to interpret the Defendant’s cause attributable to “the delay of construction work” under Article 5(2) of the instant sales contract in a limited manner; and (b) even if Article 5(2) of the instant sales contract applies not only to the delay of construction work, but also to the delay of the timing of land use due to the Defendant’s cause attributable to the Defendant, it is difficult to view that the provision applicable to the instant case is difficult because it was proposed that the time of land use is delayed due to the Defendant’s cause attributable to the Plaintiff that occurred thereafter.

Examining the records in accordance with the above legal principles, the above determination by the court below is justifiable. In so doing, it did not err by misapprehending the legal principles on the interpretation of a sales contract.

2. As to the Defendant’s first ground of appeal

A. We examine the summary of the judgment of the court below related thereto.

(1) The lower court first acknowledged the following facts.

① From November 30, 2007 to December 20, 207, the Defendant made a public announcement of supply of each of the instant lands located within the building site for multi-family housing in Namyang-ju B housing site development zone (hereinafter “public announcement of this case”) on its Internet homepage, indicated that the number of households shall be 749 households in total, the floor area ratio shall be 160%, and that the contractor of the land shall comply with the draft design and promote the housing construction project in consideration of the details of the winning design, and that the buyer shall comply with the relevant laws, such as the district unit plan at the time of using the land, and that the criteria for restriction on construction (building-to-land ratio, floor area ratio, average floor number, etc.) on the district unit plan is the maximum limit.

② Under the supply condition attached to the instant announcement, the contractor of the land is required to promote the project in consideration of the design of the winning design, and the concept of the year-type commercial buildings and the allocation of building-to-land ratio, etc. of the winning design are stipulated as the compliance officer of the district unit plan, such as the concept of the winning plan and the layout of the remaining winning plan, the entrance plan, and the scar plan are listed as recommended matters.

③ The Guidelines for the Implementation of Class 1 District Unit Plan for the Housing Site Development Zone B attached to the instant announcement stated that the number of households in each of the instant land could not exceed 749 households in total, average horizontal 45 square meters, average floor 7 stories, floor area ratio below 160 per cent, etc. (4) The Plaintiff entered into a sales contract for each of the instant land with the Defendant on December 27, 2007 (hereinafter referred to as the “instant sales contract”) as a result of the application for parcelling-out in accordance with the instant announcement. According to the instant sales contract, the timing of land use would be December 30, 2009, and the Plaintiff is obliged to comply with construction-related matters under the implementation plan including the district unit plan.

(5) The floor area ratio, the number of households and the average number of floors, which are restricted on apartment construction sites, are very important factors in judging the feasibility of apartment sale projects.

6) The Plaintiff determined that the economic feasibility was established on the premise that each land of this case was constructed and sold by 160% of the floor area ratio and 749 apartment units of average square 45 square meters under the limitation on the 7th floor area ratio according to the district unit plan based on the current status design offered by the Defendant, and purchased each land of this case.

(2) Based on the above facts, the lower court determined that: (a) based on the plan on the current status design offered by the Defendant, the Plaintiff appears to have concluded each sales contract of this case by setting the sales price for the purpose of constructing and selling apartment buildings with profitability and possibility of sale by making maximum use of 160% of the floor area ratio and 749 households on each of the instant land; and (b) the Defendant concluded each of the instant sales contract for housing site development projects to create housing sites capable of housing construction and residential life by utilizing a group of land; (c) the purpose of the instant sales contract was to sell each of the instant land, which is the site for the construction of multi-family housing in the Namyang-ju B Housing Site Development Zone, to sell the instant land to the Plaintiff, and to cause the Plaintiff to resolve the housing shortage in the Seoul, Gyeonggi, and neighboring areas and to improve the stability and welfare of the residential life of the residents; and (c) to this end, it was necessary to give the motive for the implementation of the construction project by allowing the Plaintiff implementing the new apartment construction project to obtain adequate economic benefits; and good faith in the construction contract.

(3) Next, the lower court determined that the Defendant is liable to compensate the Plaintiff for damages suffered by the Plaintiff due to the nonperformance of the obligation as above, and that the Defendant is liable to return the damages for delay of the fourth installment and the property tax for the year 2010, which was paid to the Defendant, as unjust enrichment, even though it was impossible to construct an apartment with profitability and possibility of sale by making maximum use of the upper limit of the floor area ratio and the number of households on each land of this case, unlike the present phenomenon design presented by the Defendant, and at least around December 2008, the Defendant appears to have been aware of such circumstances upon the Plaintiff’s request for mitigation of restriction.

B. However, the lower court’s determination is difficult to accept for the following reasons.

(1) The principle of trust and good faith under the Civil Act refers to an abstract norm that a party to a legal relationship shall not exercise his/her right or perform his/her duty by taking into account the other party’s interest in a way that is contrary to equity or trust. In applying such principle to a specific legal relationship, the application of the principle shall be determined by taking into account all specific circumstances, such as the content of the other party’s interest, the correlation between the right or obligation to exercise or perform, and the other party’s trust (see Supreme Court Decision 2003Da34410, Oct. 10, 200).

(2) The facts acknowledged by the court below and records clearly indicate that the floor area ratio and the number of households presented in the announcement, etc. of this case are the maximum permissible limit in district unit planning. ② At the same time, the defendant offered a bid participants with the design proposal, which is attached to the announcement of this case, "D and F, which are land in this case for creative design as a special planning zone, have promoted a public bid for the design of this case for the purpose of creative design, and as a result, it can be seen that the construction of the building of this case can not be seen as having been ordered to be included in the 19th floor area ratio in the public announcement of land purchase and sale contract at the same time in the public announcement of the 2nd floor area plan of this case. The purpose of the sale and sale contract of this case can be seen as having been sufficiently stated in the 10th floor area ratio of each of the building participants in the public announcement of this case.

Therefore, even though the floor area ratio, etc. in the district unit planning cannot be seen as the content of the instant sales contract, whether the Defendant is obligated to cooperate not only with the Plaintiff to meet the maximum limit of the floor area ratio, etc. in the district unit planning but also to construct apartment buildings with profitability and possibility of sale should be examined in light of various specific circumstances indicated in the aforementioned legal doctrine

① In light of the purpose of the current situation design, including the fact that a housing developer, etc. purchases a housing site by bidding, a person who intends to purchase a parcel of land is in charge of self-verification of whether a profit can be created by using the parcel of land for its purpose under the conditions presented by the seller and the limitation of the relevant laws and regulations; ② the Defendant’s construction works for housing site development projects cannot be deemed as guaranteeing a reasonable profit at all times; ③ the construction design is the housing constructor’s responsibility and judgment; ③ the construction design is designed as if the Defendant secured the maximum floor area ratio and number of households in the district unit plan. However, even if the design offered to the tendering participants, it is difficult to view that the Defendant had the tendering participants more trust that the upper limit of the floor area ratio in each parcel of land in this case can be satisfied, even if the Plaintiff believed so, it can not be seen as reasonable trust; ④ the Defendant’s construction modification of the apartment site plan as the implementer of the housing site development project cannot be seen as having been made by the Defendant to the extent possible.

(3) Furthermore, even if the obligation under the good faith principle is acknowledged to the Defendant, the lower court’s factual relations and records revealed that (i) the Plaintiff, around December 2008, pointed out the problems of the current design proposal to the Defendant, and (ii) on February 6, 2009, the Plaintiff requested the Defendant to adjust the floor area ratio to 199.49%, to 1,144 households, and the number of households to 1,144 households, and on November 26, 2009, requested that the Defendant correct the error in the design proposal, such as requesting the Defendant to reduce and adjust the average number of floors from 10 stories to 10 stories, and (iii) on December 3, 2009, the Plaintiff neglected to apply for a change of the average number of floors of each of the instant land in question to 80%, to 10% of the total number of floors on the ground or to 20% of the total number of parking lots to 10% of the land supply plan.

(4) Nevertheless, the lower court, solely based on the circumstances indicated in its reasoning, determined otherwise by misapprehending the legal doctrine on contractual interpretation, thereby adversely affecting the conclusion of the judgment. In so doing, the lower court erred by misapprehending the legal doctrine on contractual interpretation, thereby adversely affecting the conclusion of the judgment.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal by the Plaintiff and the Defendant, the part against the Defendant is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion, and the appeal regarding the Plaintiff’s claim for damages for delay is dismissed. It is so decided as per Disposition by the assent of all participating Justices

Justices Park Sang-hoon

A person shall be appointed.