2013Da8836 Compensation for damages

A Council of Residents' Representatives

The Korea Housing and Urban Guarantee Corporation (Before Change: Korea Housing and Guarantee Corporation)

Debtor Rehabilitation D&D Construction Corporation, a lawsuit taking over the lawsuit of the D&D Construction Corporation

CD Construction Co., Ltd., the receiver’s taking over of the lawsuit

Seoul High Court Decision 2012Na43838 Decided October 4, 2013

June 23, 2016

The part of the judgment of the court below on the claim for defects before the inspection is reversed, and that part of the case is remanded to the Seoul High Court.

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

1. Article 9 (1) of the former Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 6925, Jul. 18, 2003; hereinafter referred to as the "former Act on the Ownership and Management of Aggregate Buildings") provides that a person who constructs and sells an aggregate building shall be liable for warranty due to defects in an aggregate building by applying mutatis mutandis the provisions on warranty liability of a contractor for an aggregate building under the Civil Act to the seller's warranty liability.

However, where a business entity becomes unable to perform a sales contract due to reasons such as bankruptcy, a housing sales guarantor shall be liable for the performance of the relevant house, or for the refund of the down payment and the intermediate payment paid, and where the method of performing the guaranteed obligation is determined to be the performance of the sale, a housing sales guarantor shall complete the registration of ownership transfer in the future of a buyer after completing the inspection of use or approval for use after completing the construction work of the relevant house and completing the registration of ownership preservation. As such, a housing sales guarantor of an aggregate building who has performed the sale contract is not a party to the sales contract, but has completed the construction work of a house in accordance with the terms of the sales guarantee contract and completed the basic matters of the sales contract, such as usage inspection or approval for use, registration, etc., so it may be deemed as a person who has built an aggregate building and sold it. In addition, the business entity cannot be deemed as having constructed a building or completed the sales contract, so long as the housing sales guarantor is unable to perform the duty of housing supply under the sales contract due to the loss of capacity to complete the construction work of the relevant house.

Therefore, if a house buyer sells a house in lots, he should bear the warranty liability as a seller under Article 9 (1) of the former Aggregate Building Act.

2. Nevertheless, the lower court, on the grounds indicated in its reasoning, determined that the extinctive prescription of the right to claim damages for defects prior to inspection was completed, and dismissed the corresponding claim on the ground that the extinctive prescription of the right to claim damages for defects prior to inspection was completed, on the ground that the Defendant’s performance as a guarantor of the sale of a house was not a seller under Article 9 of the former Aggregate Buildings Act, and thus, is not a seller of the same Act, and thus, is not liable for warranty accordingly. However, it is not liable for damages in lieu of

The judgment of the court below is erroneous in the misapprehension of legal principles as to the house sale guarantee and the warranty against defects under Article 9 of the former Aggregate Buildings Act.

3. Therefore, without further proceeding to decide on the remaining grounds of appeal, the part concerning the claim for defects prior to the inspection of use among the judgment below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating

Justices Park Jae-young

Justices Park Young-young

Justices Kim In-bok, Counsel for defendant

Justices Kim Jong-il