Korean Racing Association (Law Firm LLC, Attorneys Quota-jin et al., Counsel for the defendant-appellant)

Defendant-Counterclaim Plaintiff (Attorney Yoon Young-chul, Counsel for the defendant-Counterclaim plaintiff-appellant)

Defendant (Counterclaim Plaintiff) 2 and 3 others (Attorneys Seo Sung-sung et al., Counsel for the plaintiff-appellant)

July 12, 2019

Seoul Central District Court Decision 2016Da506972, 2016Gahap775 (Counterclaim), 2017Gahap543091 (Counterclaim) Decided October 18, 2018

1. All of the appeals filed by the Plaintiff (Counterclaim Defendant) and the Defendant (Counterclaim Plaintiff) 1 and the incidental appeals filed by the Defendant (Counterclaim Plaintiff) 2, the Defendant (Counterclaim Plaintiff), the Defendant (Counterclaim Plaintiff), the Defendant (Counterclaim Plaintiff), and the Defendant (Counterclaim Plaintiff) 4 are dismissed.

2. The costs of lawsuit after filing an appeal shall be borne by each person.

1. Purport of claim

A. Main lawsuit: It is confirmed that there is no damages liability described in the attached Table 1 list against the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) of the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”).

B. Counterclaim: The plaintiff shall pay to the defendant 1 the amount of KRW 1,366,820,00, KRW 37,950,000, KRW 38,10,000 to the defendant 3, and KRW 62,220,00 to the defendant 4, and KRW 181,410,00 to the defendant 5, and the amount of KRW 15% per annum from the day following the delivery of a copy of each of the counterclaim to the day of full payment.

2. Purport of appeal

A. The plaintiff

1) The part concerning the principal lawsuit in the judgment of the first instance is modified as stated in the purport of the principal lawsuit.

2) Of the judgment of the court of first instance, the part against the Plaintiff regarding the counterclaim is revoked, and all of the Defendants’ counterclaim claims falling under the revoked part are dismissed.

B. Defendant 1

1) Of the part against the above defendant in the judgment of the court of first instance, the part that confirmed that the above defendant did not exist in the part of the claim ordered under Paragraph 2 below shall be revoked, and the plaintiff's main claim corresponding

2) The part of the judgment of the court of first instance against the above defendant falling under the following part of the order ordering payment shall be revoked. The plaintiff shall pay to the defendant 541,328,000 won and 5% interest per annum from May 17, 2016 to October 18, 2018 and 15% per annum from the next day to the date of full payment.

3. Purport of incidental appeal by the defendant 2, 3, 4, and 5

A. Of the part against the above Defendants as to the principal lawsuit in the judgment of the court of first instance, the part to confirm that the above Defendants did not exist with respect to the claims ordered in Paragraph B below, and the Plaintiff’s principal lawsuit corresponding to the revoked part is

B. Of the part concerning the counterclaim in the judgment of the court of first instance, the part against the above Defendants, which falls under the following order, shall be revoked. The Plaintiff shall pay to Defendant 2 12,654,00 won, 12,66,000 won to Defendant 3, 20,748,000 won to Defendant 4, 34,242,00 won to Defendant 5, and 5% per annum from July 1, 2017 to October 18, 2018, and 15% per annum from the following day to the day of full payment.

1. Quotation of the first instance judgment

In this case where the plaintiff and the defendants repeat the same argument as the argument in the court of first instance, the reasons for the statement are as follows, and thus, it is identical to the entry in the reasoning of the court of first instance in addition to the entry in the reasoning of the judgment in the court of first instance.

○ The part of “3-A...............................”

A. Calculation of damages

1) According to each appraisal result of the appraiser ○○○○○ in the first instance trial, the above appraiser calculated the Defendants’ damages caused by the instant salt damage as follows. As seen above, each appraisal result of the above appraiser shall be deemed to be reliable as shown in the following 2). Therefore, it is reasonable to calculate the Defendants’ damages according to the above appraisal result.

【Damages List】

(4) The annual amount of loss (1), 1, 353, 320, 00.5 27, 160, 160, 160, 000, 160, 000, 160, 160, 100, 000, 000, 200, 360, 160,000, 2040, 20636, 240, 240, 240, 30, 240, 37, 200, 300, 37, 2000, 300, 37, 2000, 340, 400, 400, 37, 2000, 300, 400, 400, 4008, 3008, 3604, 2008

Note 1) Annual amount of damages

2) Considering the following circumstances acknowledged by comprehensively considering the testimony of the first instance court ○○○○○○, the results of the first instance appraiser’s appraisal, and the results of the fact-finding conducted by the court of first instance on the appraiser of the first instance, each of the above appraisal results of the first instance appraiser of the first instance court (hereinafter “appraisal”) cannot be deemed unreasonable on the ground that credibility of the appraisal results cannot be deemed unreasonable on the sole basis of the circumstances cited by the Plaintiff or the Defendants.

A) As to Defendants 2, 3, 4, and 5

① Defendant 2, Defendant 3, and Defendant 5: (a) cultivated seedlings, etc. at the place of settlement of iron, and Defendant 4 cultivated and sold fireworks to retailers from each of the above Defendants’ respective sources. Specifically, Defendant 2 and Defendant 3 cultivated seedlings, etc. for one year, and sold them to retailers; (b) cultivated seedlings, etc., which were purchased through the lease of land in the city, Si, Pyeongtaek-si, Pyeongtaek-si, etc. in order to prevent the damage of salt, for ten months; and (c) subsequently transferred the seedlings, etc. to the said Defendants to the farm members for two months, and sold them. On the other hand, Defendant 5 purchased seedlings, etc. at the farm members of the said Defendant, cultivated them for one year from the said Defendant’s farm members, and sold them to retailers. Defendant 4 cultivated them from the said Defendant’s farm members for two months.

② The appraiser calculated the amount of damage suffered by the said Defendants due to salt damage from 2013 to 2015, and at the time of conducting an appraisal investigation (from December 12, 2017 to January 25, 2018), the appraisal agent did not have the actual objects of the said iron, and the flowers did not exist.

③ Accordingly, the appraiser measured the area of the plastic farm part among the farms operated by the said Defendants, calculated the cultivation area, and calculated the annual gross income that could have been obtained when the damage was not caused to the salt of the said corporation. The appraiser calculated the “damage rate” due to the damage caused by salt of the Republic of Korea, and considered the amount calculated by multiplying the said amount of damage caused by salt of the said group by the damage rate.

Specifically, in determining the manufacturing income of the above Defendants, the appraiser calculated the manufacturing income based on the standard “amount of sales per area” and the “amount of sales per area” as follows, and used the standard manufacturing income based on the “area sales per area” as the basis for calculating the amount of damage suffered by the above Defendants.

The actual tax amount calculation method based on the sales amount per area: The value calculated by multiplying the sales amount of 146,269 million won by the total cultivation area of 355 square meters, which is calculated by dividing the sales amount of 146,269 million won by 355 square meters of the current status of flowers cultivation throughout the country, issued by the Ministry of Agriculture, Food and Rural Affairs.

The actual tax amount calculation method based on the sales volume of each area: The sales volume per area shall be calculated by multiplying the sales volume per area by "94.5 square meter" in the case of a grassland of Gyeonggi-do in 2013, and the sales volume per area by "7.5 square meter in the case of a iron market," and the sales volume per area by "7.5 square meter" in the case of a steel market, the sales amount per unit shall be calculated by averaging the sales unit price in the data on the current status of sales of flowers in 2015 submitted by Defendant 3 to the competent tax office in the case of the iron market, and 8,600 won in the case of a flowers, by applying the market unit price calculated by applying the average market price in the case of

In light of the above calculation method of the appraiser's above, the "area sales amount" is the value based on the nation-wide flower farmer, while the "area sales amount" is the value based on the Gyeonggi-do flower farmer, which is the basis of the above defendants' living. Thus, it is reasonable for the appraiser to use the "area per sales standard" as the basis for calculating the amount of damages.

On the other hand, in the case of the CF Defendants (Defendant 2, Defendant 3, and Defendant 5), the appraiser, as seen above, deemed the “pro rata revenues per area” calculated as in the case of the CF Defendants (Defendant 4), as it is. However, in the case of the CF in the first CF, the appraiser calculated the income based on the quantity of flowers seedlings verified by the head of the sales place, which was submitted by Defendant 4, as in lieu of the protocol revenues calculated as above, and recognized it as the manufacturing revenues for the above Defendant.

In addition, in calculating the damage ratio of the above defendants, the appraiser calculated the damage ratio by referring to the method of cultivation and sale of the above defendants, i.e., in the case of the defendants 2, i.e., in the case of the defendants 3, the situation cultivated at the farm site in this case and the compensation precedents of neighboring farm members only for 2 months after cultivating the real estate at the farm site in this case for 10 months, and 20% of the damage ratio, and in the case of the remaining defendants 4, and the defendant 5, the damage ratio was calculated by 40%, referring to the situation in which the farmland is cultivated at the farm site in this case and the compensation precedents of neighboring farm members.

④ On the other hand, in order for Defendant 2 and Defendant 3 to cultivate at the same place, and prevent salt damage, the appraiser: (a) leased land to the Pyeongtaek-si, Pyeongtaek-si, etc. and cultivated for ten months in the future; and (b) again, in order to transfer the said Defendants’ farmland to the farm members for ten months, the “land rent” and the “transport cost” arising from the transfer of the said Defendants’ farmland to the farm members for ten months was considered as additional expenses to avoid salt damage; and (c) calculated it as damages of

⑤ In addition, the appraiser considered the costs used for treating dead flowers, etc. as waste treatment costs, and calculated the costs as damages of the said Defendants.

6) As seen above, the appraiser’s above appraisal results excluded the above Defendants from the subjective assertion of damages in the case of unclaimed damaged flowers, and calculated the income that could have been earned if they had not been damaged by salt in the above cultivation area after calculating only the actual greenhouse cultivation area of the previous greenhouse which is a basis of living of the above Defendants, based on the Gyeonggi-do flower cultivation status, which is the basis of living of the above Defendants, and objective transaction data submitted by Defendant 3. In the case of Defendant 4, the head of the sales place is confirmed daily, and the amount of the income that could have been earned therefrom was calculated after calculating the damage rate, based on the calculation of the damage rate by the above defendants’ farming source operation method. In light of the appraisal method, the appraiser’s appraisal result can be sufficiently recognized, and it cannot be deemed that it is against or unreasonable in light of the empirical rule.

7) The Plaintiff asserts that it is unfair for the appraiser to take into account only the data in 2013 when calculating the early revenue of “amount of sales per area”. However, as seen above, since the appraiser did not finally adopt the standard early revenue of “amount of sales per area”, the Plaintiff’s assertion disputing the result of appraisal by the appraiser is not acceptable.

In other words, the plaintiff asserts that it is wrong that the plaintiff did not adopt the standard adjustment income for the "area sales amount", but that it is reasonable that the appraiser of the first instance court adopted the standard adjustment income for the "area sales amount" based on the basis of the living basis of the above defendants. Therefore, this part of the argument is rejected.

In other words, the plaintiff asserts that, in calculating the manufacturing revenue based on the sale price per area of the farm members, the "sale price" is unfair to substitute the sales price of the defendant 3 with the sales price, based on the current status of flowers cultivation in Gyeonggi-do.

However, in light of the fact that Defendant 3 submitted the annual statement of trading to the appraiser in 2015, and that there is no evidence to deem that the statement of trading was wrong, both Defendant 2, Defendant 3, and Defendant 5 operate the crypty of iron in the case of Overcheon-si ( Address omitted), and that the form of management is the same as the purchase of seedlings and cultivating them for one year, and then selling them to retailers, it is difficult to view that the calculation of damages by Defendant 2, Defendant 3, and Defendant 5, the unit sales price was based on the transaction statement submitted by Defendant 3, which is submitted by the appraiser to the appraiser.

In addition, the Plaintiff asserts that the protocol revenue that the appraiser used as the basis for calculating the amount of damage is too high compared to the amount reported to the competent tax office. However, since the protocol revenue that the appraiser used as the basis for calculating the amount of damage is “income that could have been obtained if it had not been damaged by salt,” it is reasonable that the above Defendants would have different from the amount reported to the competent tax office at the time when the loss was actually caused by salt, it is difficult to view that the appraisal result by the appraiser was erroneous.

B) As to Defendant 1

① Defendant 1 is operating a branch farmland at the above location. Unlike flowers, the branch farmland purchased seedlings and sold them for a multi-year period. Defendant 1 purchased seedlings and sold them to landscaping companies, etc. In addition to the branches that were damaged at the time of the appraisal of the instant case, the market price of the branch farmland was determined according to the characteristics of the goods, which are the artistic value of the branch farmland, and thus, the price difference for each branch farmland is significantly generated.

In light of this point, it is difficult to calculate the amount of damage caused by salt damage on the basis of the average value of the divisible farmer in the decentralization, and even if Defendant 1 increased the amount of revenue in 2014 and 2015 that was damaged by salt compared to that in the previous year, it is difficult to deem that there was no damage solely on such sole basis in light of the fact that the decentralization could be sold in the corresponding year.

Accordingly, unlike other Defendants, the appraiser appraised the amount of damage of Defendant 1 as to the amount of damage individually by calculating the amount of damage for each of the materials claimed by the above Defendant as dead.

Specifically, the value of each kind of diverse shall be calculated as "basic amount" when the damage to diverse is not caused, and after calculating "damage rate" due to salt damage, the amount calculated by multiplying the basic amount of diverse by the damage rate shall be considered as the amount of farming damage caused by salt.

② On December 22, 2015, Defendant 1 filed an application for conciliation with the Central Environmental Dispute Conciliation Committee, and submitted the initial materials damaged by Defendant 1 by photo, and reported Defendant 1’s damage at the SBS broadcasting station.

In addition, in around 2017, Defendant 1 requested the Korea Subdivision, an incorporated association, to appraise the amount of damage caused by the subdivision, and on May 10, 2017, the Korea Subdivision assessed the amount of damage as KRW 1.165 million.

The appraiser visited for about five times the deaf members operated by the defendant 1 to check with the dead or decomposed material, and confirmed the above photographs submitted by the defendant 1 to the Central Environmental Dispute Mediation Committee, the broadcast content of the SBS broadcasting station, and the appraisal report of the Korean Association of Subdivision, etc. The part which cannot be confirmed at the site was conducted based on the above materials, and the appraiser examined the characteristics of the material and sought an explanation for the amount of damage by visiting with the appraiser of the Korean Association of Subdivision, which is an incorporated association.

The appraiser determined the damage rate to 50% in consideration of the characteristics of plants cultivated, the natural death rate, the commercialization of the target trees, etc.

③ As such, the appraiser of the first instance court determined the damage rate due to salt 50% by taking into account the characteristics of the decentralization, and considering the following factors: (a) the appraiser of the first instance court individually appraised the damaged portion claimed by Defendant 1, and did not calculate the damage amount per area; and (b) the appraiser of the first instance court tried to grasp the damaged portion by referring to all objective materials secured by Defendant 1, not merely dependent on the statement of Defendant 1, but also on field surveys, photographs, broadcasting pictures, appraisal records of the incorporated association, and appraisal records of the Korea Subdivision, etc.; and (c) the damage rate due to salt 50% by taking into account the characteristics of the decentralization, nature tests, the degree of commercialization of the target trees, etc., the result of the appraisal by the appraiser of the first instance court is adequate; and (d) there is considerable difference between the above appraisal result and the case of the farmland of similar decentralization and the fact that the revenue amount of Defendant 1 increased rather than the import amount of Defendant 1 increased in the year 2014 and 2015.

④ Meanwhile, Defendant 1 asserts that all of the basic amounts of KRW 1,353,320,00 as damages is the basic amount of damages. However, the above amount is merely a basic material for calculating the amount of damages, and it cannot be recognized as damages by Defendant 1. In addition, it is difficult to accept the above Defendant’s assertion that Defendant 1 considered the damage rate of KRW 50,00 as 50,000, considering the characteristics of the subdivision, nature with death, and the degree of commercialization of the target trees, etc. in the first instance trial, and it is difficult to deem that there were reasonable and any errors and errors. In addition, Defendant 1 asserts that this part of the damages should be recognized as having been paid at the expense of powder, and that there is insufficient evidence to acknowledge this otherwise. Defendant 1’s assertion on this part is not acceptable.

2. Conclusion

Therefore, the judgment of the court of first instance is justified, and all appeals filed by the plaintiff and defendant 1 and incidental appeals filed by the other defendants are dismissed.

[Attachment]

Judges Jeong Jae-won (Presiding Judge)

(1) The result of the appraisal against Defendant 1 was calculated on the whole period of damage, while the result of the appraisal against Defendant 2, 3, 4, and 5 was calculated on the basis of annual damages. The “annual damages” constitutes only Defendant 2, 3, 4, and 5.