[1] The method of interpreting the intent of the parties expressed in the disposal document

[2] Whether a judgment on all the parties' arguments or methods of offence and defense should be indicated on the grounds of the written judgment (negative), and whether there is an error of omission of judgment in a case where the court's judgment does not indicate any specific and direct judgment on the matters alleged by the parties, but it is possible to find out whether the assertion is acceptable or not for the overall purpose of the reasoning of the judgment, or where it is obvious that the assertion will be rejected without actually

[3] Meaning of Article 2 of the Addenda to the Commercial Building Lease Protection Act (amended by Act No. 12042, Aug. 13, 2013) (hereinafter “Leases entered into or renewed for the first time after the enforcement of this Act”), and whether the lease is included in cases where the lease is not renewed after the enforcement of the amended Act and the expiration of the period, etc. is terminated (negative)

[1] In the event of a dispute over the interpretation of a contract between the parties, the interpretation of the intent of the parties expressed in the disposition document is at issue, the contents of the text, the motive and background of the agreement, the purpose to be achieved by the agreement, the parties’ genuine intent, etc. shall be reasonably interpreted in accordance

[2] The reasoning of a written judgment is sufficient to indicate the judgment on the party’s assertion and other means of offence and defense to the extent that it can be recognized that the text is justifiable, and there is no need to determine all of the parties’ allegations or means of offence and defense (Article 208 of the Civil Procedure Act). Therefore, even if the court’s judgment does not specify specific and direct determination on the matters alleged by the party, if it is possible to find out that the allegations have been cited or rejected in light of the overall purport of the reasoning of the judgment, it may not be deemed omission of judgment. Even if it is obvious that the assertion should be rejected even if the part in which the judgment was not actually

[3] Article 10(1) through (3) of the Commercial Building Lease Protection Act (hereinafter “Commercial Building Lease Protection Act”) which was amended by Act No. 12042, Aug. 13, 2013; and enters into force on the same day, provides that a lessee may not refuse a renewal unless there is a reason prescribed in the proviso of paragraph (1), and may be deemed to have been a contract again under the same conditions as the former lease, unless the lessee requests the renewal of the contract between six months and one month before the expiration of the lease term, including the initial lease term, within the scope not exceeding five years, including the initial lease term. Article 2(3) of the Commercial Building Lease Protection Act provides that Article 10(1), (2), and the main sentence of Article 10(3) of the aforementioned Act shall also apply to the lease exceeding the guarantee amount as prescribed by the Presidential Decree. Article 2 of the Addenda provides that “The latter shall apply from the lease concluded or renewed for the first time after the enforcement of this Act.”

In light of the language, content, and structure of the foregoing provisions, “a lease entered into or renewed for the first time after the enforcement of this Act” under Article 2 of the Addenda shall be deemed as “a lease entered into after August 13, 2013 or before August 13, 2013, which was concluded for the first time after the enforcement of the said amended Commercial Building Lease Act, but which was renewed after August 13, 2013. Therefore, it does not include cases where a lease is not renewed after the enforcement of the amended Act but is terminated due to the expiration, etc.

[1] Article 105 of the Civil Act / [2] Articles 208 and 451(1)9 of the Civil Procedure Act / [3] Articles 2(3), 10(1), (2), and (3) of the former Commercial Building Lease Protection Act (Amended by Act No. 13284, May 13, 2015); Article 2 of the Addenda (Amended by Act No. 13284, Aug. 13, 2013)

[1] Supreme Court Decision 2002Da23482 Decided June 28, 2002 (Gong2002Ha, 1816), Supreme Court Decision 2014Da1415 Decided June 26, 2014 (Gong2014Ha, 1463) / [2] Supreme Court Decision 2011Da98426 Decided October 31, 2013 (Gong2013Ha, 2122)

Plaintiff (Law Firm Lee & Lee LLC, Attorneys Lee Jong-ho et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Ro-Hy, Attorney Kim Dong-son, Counsel for defendant-appellant)

Incheon District Court Decision 2016Na1137 Decided February 17, 2017

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Interpretation of an agreement on the term of lease (Ground of appeal No. 1)

A. In the event that a dispute over the interpretation of a contract between the parties arises and the interpretation of the parties’ intent expressed in the disposition document becomes an issue, it shall be reasonably interpreted in accordance with logical and empirical rules by comprehensively taking into account the content of the text, motive and background of the agreement, the objective to be achieved by the agreement, the parties’ genuine intent, etc. (see, e.g., Supreme Court Decisions 2002Da23482, Jun. 28, 2002; 2014Da14115, Jun. 26, 2014).

B. According to the lower judgment and the record, the following facts are revealed.

(1) On January 2, 2013, the Plaintiff concluded a contract with the Defendant to lease the “○○○ Computer” (hereinafter “instant building”) with the “○○○○○○” factory building located in the Nam-gu Incheon Metropolitan City ( Address omitted) at KRW 100 million, monthly rent 10 million, monthly rent 10 million (excluding value-added tax), and the lease term from March 30, 2013 to March 30, 2015 (hereinafter “instant lease contract”).

(2) The instant lease agreement provides that “The term of lease shall be ten years from the date of initial use, and the rent may be increased from two years after the date of initial use. The Plaintiff approves the alteration of the structure of the building, and the Defendant shall restore the building to its original state if the Plaintiff wishes to do so after the termination of the contract. The Plaintiff within the contract period shall approve the sublease contract of the Defendant.”

(3) On March 29, 2013, the Plaintiff and the Defendant prepared a sub-lease agreement stating that “The term of lease shall be from May 16, 2013 to 24 months. The calculation of rent shall apply from May 16, 2013” (hereinafter collectively referred to as the “instant special agreement”), and that “the instant building leased by the Defendant for ten (10) years from May 16, 2013 shall be sub-leaseed to the unspecified majority.”

C. The lower court determined that it cannot be deemed that the term of lease under the instant lease agreement was set to ten years for the following reasons.

(1) The term of lease under the instant lease agreement is stipulated as “24 months” and the term “lease use period”, which is distinguishable from the term of lease by a separate special agreement, is used.

(2) On May 14, 2015, the Plaintiff demanded the Defendant to raise the lease deposit amount of KRW 30,000,000 to the Defendant. The Defendant proposed to raise the rent by 9% instead of raising the lease deposit, and required to specify this in the contract in lieu of raising the lease deposit, and thereafter, in currency with the Defendant, the contract should be renewed in the currency with the Defendant, or used the expression “recontract”.

(3) Although the instant special agreement could raise the monthly rent from two years later, it did not separately state the rate of increase or the amount of increase. It is difficult to view that the monthly rent, along with the lease deposit, did not ask whether or not there was an agreement on the monthly rent increase in light of the price fluctuation, as an important factor in the lease contract, as an important factor in the lease contract, set the term of lease without any condition of ten years.

(4) On May 30, 2013, the use of the building of this case was changed to Class II neighborhood living facilities in the factory around May 30, 2013. The lease term has an important meaning for the lessee. If the lessee considers that the lease term should be ten years exceeding the preferential status for re-contracts to recover input costs, the main text of the lease contract of this case should be set as 24 months and the terms of the special agreement of this case should be set separately.

(5) The Plaintiff’s written consent to sub-lease on March 29, 2013, and the confirmation document of facts dated April 13, 2015, and the conversation between the Plaintiff and the Defendant and the time prior to the expiration of the contract term of the instant lease agreement, are used to mean that “10 years will be secured.” However, in light of the above circumstances and the fact that the Plaintiff and the Defendant are not legal experts, it is merely merely an expression of the re-contract, and it is difficult to view the lease term itself as the grounds for setting the ten-year period itself.

(6) In conclusion, the instant special agreement provides that the term of the lease of this case shall be two years, and that the lessee shall have preferential rights and the duration for the renewal of the contract at the expiration of the term of the lease for the lessee’s business rights and the recovery of investment expenses.

D. Examining the reasoning of the lower judgment in light of the evidence admitted by the lower court, the lower court’s fact-finding and determination are justifiable in accordance with the legal doctrine on the interpretation of a contract. In so determining, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical

2. Whether a lease contract is renewed (ground of appeal Nos. 2, 3, and 5)

A. The reasoning of a written judgment is sufficient to indicate the judgment on the party’s assertion and other means of offence and defense to the extent that it can be recognized that the text is justifiable, and there is no need to determine all of the parties’ allegations or means of offence and defense (Article 208 of the Civil Procedure Act). Therefore, even if no specific and direct determination on a party’s assertion is indicated in a court judgment, if it is possible to find out that the assertion was cited or rejected in light of the overall purport of the reasoning of the judgment, it may not be deemed omission of judgment. Even if there is a part in which the decision was not actually made, if it is obvious that the assertion should be rejected even if there is a part in which the decision was not actually made, it is not necessary to reverse it on the ground of an omission of judgment due to the lack of influence on the conclusion of the judgment

B. According to the reasoning of the lower judgment and the record, the following circumstances are revealed.

(1) From March 14, 2015, the Plaintiff, from around March 14, 2015, engaged in negotiations with the Defendant regarding the renewal of the instant lease agreement, including adjustment of the lease deposit and monthly rent. However, the Defendant was detained on April 10, 2015 and was released by the detention cancellation on May 7, 2015, when the term of the lease expires due to the violent crime against Nonparty 1 (a person who operated a pharmacy at the place where the instant building was close at the place where the shop was located and was living with the Defendant).

(2) On May 14, 2015, the Defendant: (a) agreed with the Plaintiff on May 14, 2015 regarding the terms and conditions of monthly rent and re-contract with telephone; (b) agreed to prepare a contract and re-contract on May 24, 2015; but (c) did not terminate the contact with the Plaintiff and did not conclude a re-contract without any special reason. The Plaintiff sent a certificate of demand for re-contract to the Defendant on May 29, 2015, but returned.

(3) On June 2015, the Plaintiff attempted to keep a liaison with the Defendant, and had a telephone conversation with the Defendant on the first-come-served basis, and the Defendant had a sub-contract on the grounds of his criminal case.

(4) On June 27, 2014, the Defendant concluded a lease transfer contract with Nonparty 2 on the non-party 2 and the building in this case, and produced and used the Plaintiff’s seal without permission. Upon becoming aware of this fact, the Plaintiff notified the Defendant on June 5, 2015 that he/she could no longer comply with the re-contract. On June 8, 2015, the Plaintiff notified the Defendant that the instant lease was terminated due to the expiration of the lease term and the Defendant’s cause attributable to the Plaintiff.

C. In light of the above circumstances, although the Plaintiff guaranteed the Defendant’s preferential status and faithfully responded to negotiations on the instant lease agreement for the renewal thereof, it can be deemed that the instant lease agreement was renewed due to the Defendant’s fault, or did not reach a re-contract, and that the period of lease expired on May 16, 2015.

D. The lower court determined that the instant lease agreement terminated on May 16, 2015 with the expiry date, and accordingly, that the Defendant was obligated to pay the Plaintiff the remainder after deducting the rent, etc. unpaid from the lease deposit, and at the same time, to deliver the part possessed by the Defendant among the instant building to the Plaintiff. However, the lower court did not explicitly determine as to the Defendant’s assertion that the instant lease agreement was renewed on or around May 16, 2015 under the condition that the monthly rent would be increased by 9%. However, in light of the overall purport of the reasoning of the lower judgment, it can be deemed that the purport of rejecting the Defendant’s assertion is also included in the purport of rejecting the Defendant’s assertion. Even if not, it is apparent as seen earlier. Therefore, the lower court did not err by omitting the judgment, etc., contrary

E. In addition, the Defendant asserts that the instant lease agreement was implicitly renewed, but the lower court erred by misapprehending the legal doctrine, thereby omitting the judgment. However, the Defendant did not implicitly assert that the instant lease agreement was renewed, and thus, did not err by misapprehending the legal doctrine or omitting the judgment.

F. On June 3, 2015, the Defendant asserted that the Plaintiff’s breach of trust against the Defendant (i.e., entering into a double lease agreement with Nonparty 1, etc.) during the instant lease agreement, and that it would not be payable if the Defendant would be deducted from the unpaid rent to the Plaintiff. However, the lower court erred by omitting its judgment. However, the lower court determined that the instant lease agreement was terminated on May 16, 2015, as seen earlier. In so determining, the lower court’s rejection of the Defendant’s assertion on a different premise can be deemed as including the purport of rejecting the Defendant’s assertion on a different premise, and thus, it cannot be deemed as omitting its judgment.

3. Whether Article 10 of the Commercial Building Lease Protection Act applies (Ground of appeal No. 4)

Article 10(1) through (3) of the Commercial Building Lease Protection Act (hereinafter referred to as the “Commercial Building Lease Protection Act”) provides that a lessee may not refuse a renewal, unless there is any reason prescribed in the proviso of paragraph (1), and may be deemed to have been renewed under the same condition as the former lease, within a period not exceeding five years, including the initial lease term, with respect to the right to request renewal, within the extent not exceeding five years from six months to one month before the expiration of the lease term. Article 2(3) of the Commercial Building Lease Protection Act provides that Article 10(1), (2), and the main sentence of Article 10(3) of the aforementioned Act shall also apply to the lease whose guarantee amount exceeds the deposit amount as prescribed by the Presidential Decree, and Article 2 of the Addenda provides that “The same shall apply to the lease which is concluded or renewed for the first time after this Act enters into force.”

In light of the language, content, and structure of the foregoing provisions, “a lease entered into or renewed for the first time after the enforcement of this Act” under Article 2 of the Addenda shall be deemed as “a lease entered into after August 13, 2013 or before August 13, 2013, which was concluded for the first time after the enforcement of the said amended Commercial Building Lease Act, but which was renewed after August 13, 2013. Therefore, it does not include cases where a lease is not renewed after the enforcement of the amended Act but is terminated due to the expiration, etc.

The conversion deposit of the instant lease agreement exceeds the amount of security deposit stipulated in Article 2(1) of the Enforcement Decree of the Commercial Building Lease Protection Act as KRW 1.2 billion (including value-added tax) + KRW 11 billion for monthly rent x 100). Moreover, as seen above, the instant lease agreement was concluded on January 2, 2013 and renewed on May 16, 2015, which was subsequent to the enforcement of the amended Commercial Building Lease Protection Act. Accordingly, Article 10 of the Commercial Building Lease Act does not apply to the instant lease agreement.

The judgment of the court below to the same purport is justifiable in light of the above legal principles. The court below did not err by misapprehending the legal principles on the scope of application of the Commercial Building Lease Act.

4. Conclusion

The Defendant’s appeal is dismissed as it is without merit. The costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Chang-suk (Presiding Justice)