2016Da205779 Compensation, etc. for delay

A

Limited Liability Company ELS

Seoul High Court Decision 2014Na2037970 Decided December 30, 2015

September 28, 2016

The part of the judgment of the court below against the defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The defendant's remaining appeals are dismissed.

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

1. Where the agreement for liquidated damages is generally applicable to an estimate of the amount of damages. The agreement for liquidated damages calculated under the agreement is deemed to be excessive in light of the parties’ status, purpose and contents of the agreement, motives scheduled for liquidated damages, the rate of liquidated damages for delay to the contract amount, the amount of liquidated damages, the reasons for delay, and the transaction practices at the time of the agreement, etc., the court may reduce the amount thereof (see, e.g., Supreme Court Decision 2003Da6705, 6712, Apr. 28, 2005). The fact-finding or determination of the rate of liquidated damages is, in principle, belonging to the exclusive right of the fact-finding court. However, if it is deemed considerably unreasonable in light of the principle of equity, it is unreasonable that the defendant did not know that there was an excessive increase in the amount of liquidated damages for delay between the parties to the contract at the time of entering into the contract of this case and the defendant's duty to pay damages for liquidated damages for delay.

3. A. However, in full view of the following circumstances revealed by the record, the rate of reduction of liquidated damages for delay by the above 20% as determined by the court below is deemed to be considerably unreasonable in light of the principle of equity.

(1) At the time of approximately five years and eight months from the initial scheduled date of occupancy, in a situation where the long-term occupancy was delayed and the progress of the sale business was unclear, it seems that a new executor substituting the IMD would have been dismissed to avoid losses equivalent to the sales price already paid.

(2) Under the above circumstances, the Defendant purchased the instant building and site, and acquired the status of an event at the time and opened the construction, thereby resulting in the buyer including the Plaintiff’s losses.

(3) It is difficult to find out any cause attributable to the delay in the construction of the instant building, such as making efforts to proceed with the construction while filing an express lawsuit against the occupant of the building after the Defendant acquired.

(4) The most of the periods for which the Plaintiff sought liquidated damages in the instant case is the period during which IMWD was in the position of exercising the Si, and constitutes the period before the Defendant purchased the building and site and acquires the status of the executory.

(5) Since the Plaintiff et al.’s intermediate payment loans that occurred before the date of designation of occupancy is liable to the Defendant pursuant to the instant sales contract, there is no cost to be additionally borne by buyers, including the Plaintiff, even if the date of designation of occupancy is delayed.

(6) The Defendant is expected to continue to incur liquidated damages until the designated date of occupancy designation. If the instant construction is delayed, the Defendant also continues to increase the financial expenses incurred in purchasing the building and site and the intermediate payment interest burden of the buyers, etc., in addition to such liquidated damages for delay, the Defendant may be deemed to have increased the possibility that the Defendant may not complete the instant parcelling-out project due to the increase in the burden of financial burden.

B. Therefore, the court below erred by misapprehending the legal principles as to the recognition of the grounds for reduction of liquidated damages and the calculation of the ratio thereof, and the defendant's ground of appeal pointing this out is with merit.

4. Therefore, the part of the judgment of the court below against the defendant is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The defendant's remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok

Justices Kim Jae-han

Justices Kim In-young

Justices Lee Dong-won