In a case where Party A agreed to pay the agreed amount including the construction cost, and the issue is whether the agreed amount includes the value-added tax related to the construction cost, the case holding that the judgment below erred in the misapprehension of legal principles, although it is interpreted that Party A is included in the agreed amount, in light of the fact that there is no provision that Party A separately pays the value-added tax on the agreed amount, and that even if Party A paid the tax, it is not the taxpayer of value-added tax related to the construction cost, it is not that Party A, not the taxpayer of value-added tax, should pay the tax of capital gains tax, etc. imposed on Party A,

Article 105 of the Civil Act

Plaintiff (Lijin Law LLC, Attorneys Kang Yong-ki et al., Counsel for the plaintiff-appellant)

Defendant (Attorney Kim Si-soo, Counsel for defendant-appellant)

Seoul High Court Decision 2010Na84880, 84897 decided August 25, 2011

The part of the lower judgment against the Defendant (Counterclaim Plaintiff) regarding the principal claim and the part concerning unjust enrichment of KRW 6,540,000 among the counterclaim claims, and its delay damages, are reversed, and this part of the case is remanded to the Seoul High Court. The remainder of the appeal is dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Examining the reasoning of the judgment below in light of the records, the court below is justified in holding that the original of the agreement of this case which the plaintiff (Counterclaim defendant; hereinafter "the plaintiff") kept by himself was delivered to the defendant (Counterclaim plaintiff; hereinafter "the plaintiff") who is the other party to the agreement, but it cannot be readily concluded that the plaintiff and the defendant reversed the agreement of this case and invalidated it. There is no violation of law by misapprehending the legal principles as to the validity of the agreement, or by failing to exhaust all necessary deliberations, as alleged in the grounds of appeal. This part of the grounds of appeal is without merit.

2. Regarding ground of appeal No. 2

Based on its adopted evidence, the court below rejected the Defendant’s claim for payment of 1.3 billion won of the agreed amount (including 1,300,000 won - 98,000 won - 308,500,000 won - 300,000 won of the agreed amount - 300,000 won of the agreed amount (excluding value-added tax to be paid to the Plaintiff) and the amount of taxes including value-added tax was to be paid separately by the Defendant, and as of the time of paying 998,040,000 won to the Plaintiff, the court below rejected the Defendant’s claim for payment of 1.3 billion won of the agreed amount (excluding value-added tax, value-added tax, 73,500,000 won, - 3008,500,000 won of the agreed amount, excluding value-added tax, 7500,000 won of the agreed amount) and damages for delay.

However, it is difficult to accept the judgment that the value-added tax does not include 1.3 billion won including the construction cost to be paid to the Plaintiff for the following reasons.

The agreement of this case is based on the premise that the plaintiff can settle and pay the construction cost of this case from the defendant, and there is no provision that the plaintiff should pay value-added tax separately from the 1.3 billion won that the plaintiff should pay for the purchase of land and construction work. The agreement of this case does not mean that the defendant should pay the tax of capital gains tax, etc. imposed on the defendant in the future, and it seems not to mean that the defendant should pay value-added tax separately. The plaintiff also pays KRW 80 million from the amount of the investment payment in this case because it is argued that the actual payment of the plaintiff by the settlement of the investment amount of this case is KRW 50 million (Records 194). In light of the fact that the plaintiff asserted that the payment of the investment amount of this case was included in value-added tax of KRW 1.3 billion from the defendant, it is reasonable to interpret the agreement of this case as included in value-added tax within KRW 1.3 billion from the amount of the construction payment of this case.

Nevertheless, solely on the grounds indicated in its reasoning, the lower court determined that the value-added tax related to the construction cost is not included in KRW 1.3 billion, including the construction cost to be paid by the Defendant to the Plaintiff. In so doing, the lower court erred by misapprehending the legal doctrine on the interpretation of an agreement related to value-added tax, thereby adversely affecting the conclusion of

3. Conclusion

Therefore, the part of the judgment below against the defendant as to the main claim and the part concerning unjust enrichment of 6,540,000 won (73,50,000 won - 66,960,000 won) and damages for delay are reversed, and this part of the case is remanded to the court below for a new trial and determination, and the remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)