Whether it is permissible for the other party to make a re-claim of a set-off in a lawsuit against a claim for a set-off in a lawsuit where the claim for a set-off in a lawsuit takes effect under the substantive law (negative in principle)

The offset defense as a defense method is a kind of preliminary defense, which is conducted on the premise that the existence of the passive claim becomes final and conclusive, not a final and conclusive effect by the declaration of intention of offset in the lawsuit, but a case where the court makes a substantial decision on offset such as the existence of the passive claim in the lawsuit concerned, the effect of offset in the substantive law occurs.

In a case where the plaintiff re-argument of a set-off in the lawsuit in order to extinguish the defendant's automatic claim again, the court does not need to determine the re-argument of a set-off in the lawsuit in the lawsuit in case where the court rejects the defendant's counterclaim for the reasons unrelated to the plaintiff's re-argument of a set-off in the lawsuit. In a case where the defendant's counterclaim for a set-off in the lawsuit is deemed to be reasonable, since the defendant's automatic claim, which is the plaintiff's claim, and the defendant's automatic claim, are deemed to be extinguished at the same time as at the time of the set-off in the lawsuit, the plaintiff's automatic claim, which is the plaintiff's claim, does not exist within the scope of the set-off in the lawsuit, and even in this case, there is no need to determine the re-argument of the plaintiff's lawsuit. In addition, if the plaintiff has other claims against the defendant in addition to the claim that is the subject matter of the lawsuit, the plaintiff's claim may claim or institute a separate lawsuit.

Article 492 of the Civil Act

Supreme Court Decision 2011Da3329 Decided March 28, 2013 (Gong2013Sang, 739)

Chief Feungskbus Management Agency (Law Firm LLC, Attorneys Choi Young-min et al., Counsel for the defendant-appellant)

Defendant (Law Firm LLC, Attorneys Im Young-soo et al., Counsel for the defendant-appellant)

Supreme Court Decision 2010Da94540 Decided March 14, 2013

Seoul High Court Decision 2013Na23923 decided November 8, 2013

The part of the judgment below against the plaintiff and the part against the plaintiff among the judgment on the application for return of provisional payment shall be reversed, and this part of the case shall be remanded to Seoul High Court.

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

1. Regarding ground of appeal No. 1

A. As to the assertion regarding loans, management expenses, and non-management deductions

According to the reasoning of the judgment below, the court below determined as follows. The defendant loaned 37,698,00 won in total to the plaintiff on August 14, 2008, 19,200 won on August 26, 2008, 19,2000 won on August 16, 2008, and 1,000 won on October 1, 2008, + 17,498,000 won + 19,200,000 won + 1,000 won + 1,00,00,000 won in total, 30,000 won in total, 40,010,829 won in total (3,514,60,700 won in total) in terms of management expenses and other management expenses that the defendant paid to the plaintiff on behalf of the plaintiff, + 10,50,000 won in total + 10,500,000 won in total (7,5005)

In light of the records, the above determination by the court below is just, and contrary to what is alleged in the grounds of appeal, there were no errors in exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or in misapprehension of

B. As to the assertion regarding the deduction of the amount of provisional payment

1) According to the reasoning of the judgment below, the court below acknowledged the following circumstances based on the evidence adopted by the defendant. The court below determined that the defendant's total amount of KRW 109,935,049 ( KRW 12,658,025 on December 31, 2007 + KRW 15,552,979 on January 31, 2008 + KRW 35,727,337 on February 28, 2008 + KRW 1,972,067 on March 31, 200 + KRW 10,477,732 on April 30, 208 + KRW 13,546,90 on June 21, 200 + KRW 909 on July 30, 200, the defendant's deposit amount should be deducted.

2) However, it is difficult to accept such determination by the lower court for the following reasons.

A) According to the reasoning of the lower judgment and the evidence duly admitted and examined by the lower court, the following facts and circumstances are revealed.

(1) Around August 11, 2005, the Defendant assumed office as the president of the Plaintiff. A dispute with the business entity in charge of the instant officetel management services, which led to the failure to receive management expenses, etc., possessed by the business entity in good morals, and the management expenses paid by the business entity in arrears cannot be fully appropriated for the management expenses incurred by the Plaintiff. Thus, the Defendant appropriated the Plaintiff for the shortage of expenses by lending money under the pretext of provisional payment.

(2) Around July 31, 2007, a sum of KRW 104,123,580, which the Defendant loaned to the Plaintiff. On October 5, 2007, the Plaintiff decided to pay the above provisional amount to the Defendant on October 5, 2007, and transferred the above amount to the Defendant’s deposit account on the same day, and repaid the above provisional amount in full.

(3) From August 1, 2007 to October 5, 2007, the Defendant again lent KRW 61,216,694 to the Plaintiff under the name of a provisional deposit. On February 5, 2008, the Plaintiff decided to pay the said provisional deposit to the Defendant on February 5, 2008, and transferred the said amount to the Defendant’s deposit account on the same day, and repaid the said amount in full.

(4) Meanwhile, as of the end of each month from November 2007 to July 2008, the Plaintiff paid a total of KRW 50 million to KRW 60 million. As of the end of each month from November 2007 to KRW 190 million, the Plaintiff exceeded the management expenses to be paid for the following month. In addition, the Plaintiff’s payment of KRW 61,216,694 to the Defendant from August 1, 2007 to October 5, 2007, even if the balance of the deposit accounts as of February 29, 2008 to KRW 110,000,000,000, more than KRW 190,000,000 and the Plaintiff’s payment of the management expenses to the Defendant before December 31, 2007.

(5) It appears that the instant amount was paid by account transfer rather than cash transaction in that most of the instant amount was written at KRW 10,00. The Defendant did not specify the details of transactions corresponding to the said amount of deposits in its own account transaction.

(6) The substitute table for the instant provisional receipts (No. 6-1 through 7) is a document attached to the Plaintiff’s meeting minutes of the management body meeting held on October 10, 2008, after the Defendant’s representative qualification is at issue and the suspension of performance of duties against the Defendant was requested. However, in light of the fact that the signature of the management body at the meeting is entered in the same order of similar position, it appears that the substitute table attached to the same meeting minutes was written after the fact that the signature of the management body was entered in the same order of similar position.

B) In light of the above facts or circumstances, immediately after the Defendant assumed office as the president of the Plaintiff, the Plaintiff was required to borrow the provisional loan from the Defendant due to insufficient management expenses, compared to the management expenses in arrears. However, the provisional loan from October 5, 2007 was fully repaid and the management expenses to be paid by the Plaintiff were not overdue, and the balance from the Plaintiff’s deposit account from the end of November 2007 exceeds the management expenses to be paid in the following month, it is difficult to deem that there was a need for the Plaintiff to borrow a new provisional loan from the Defendant. On the other hand, in full view of the circumstances, it is difficult to deem that the Defendant failed to specifically state the why the provisional loan was needed after the Defendant asserted the provisional loan, and how it was paid in any way, and it is difficult to conclude that the evidence on the provisional loan from the Defendant’s submitted by the Defendant was an objective material with high credibility, and the circumstances stated by the lower court alone.

C) Nevertheless, the lower court acknowledged that the Defendant lent the instant provisional payment to the Plaintiff and deducted the Defendant from the Defendant’s amount of damages. In so determining, the lower court erred by failing to exhaust all necessary deliberations as to whether the instant provisional payment was necessary and the method of payment, and by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules. The Plaintiff’s ground of appeal pointing this out

2. Regarding ground of appeal No. 2

A. An offset defense as a means of defense in a lawsuit is a kind of preliminary defense that is usually conducted on the premise that the existence of the passive claim is confirmed, not a final effect by the declaration of intent of offset in a lawsuit, but a case where a court makes a substantial decision on offset, such as the existence of the passive claim in the lawsuit in question, etc., the effect of offset in a substantive law arises (see Supreme Court Decision 2011Da3329, Mar. 28, 2013).

In a case where the plaintiff's counterclaims in the lawsuit in order to again extinguish the defendant's automatic claim, if the court rejects the defendant's counterclaims in the lawsuit due to reasons unrelated to the plaintiff's counterclaims in the lawsuit, it is not necessary to determine the second offsets in the lawsuit. In a case where the defendant's counterclaims in the lawsuit are deemed reasonable, the defendant's automatic claim, which is the plaintiff's claim, and the defendant's automatic claim, are deemed extinguished on an equal amount at the time of offsets. Thus, the plaintiff's automatic claim, which is the subject of offset in the lawsuit, does not exist within its scope, and even in this case, it is unnecessary to determine the second offsets in the lawsuit. In addition, if the plaintiff has other claims against the defendant in addition to the claim claims which are the subject matter of lawsuit, if the plaintiff has other claims against the defendant in the lawsuit, it is possible to claim or file a separate lawsuit due to an additional change in the lawsuit. Thus, the plaintiff's counterclaims in the lawsuit does not generally have any profit to permit the second offset

Therefore, it is reasonable to view that the plaintiff's re-appeal against the defendant's defense of offset in litigation is not allowed unless there are other special circumstances.

B. According to the reasoning of the lower judgment and the record, the Plaintiff asserted that there is no claim to deduct the Defendant from the Defendant’s damages amount because the Plaintiff arbitrarily transferred the Defendant’s counterclaim of offset from the Plaintiff’s deposit account to the Defendant’s deposit account before July 31, 2008 by means of transfer, etc. from the Plaintiff’s deposit account to the Defendant’s deposit account, and thus, the Plaintiff has damages claim equivalent to the above amount against the Defendant. If the Plaintiff offsets the Plaintiff’s damage claim against the Defendant and the Defendant’s damage claim, such as the Defendant’s office management, etc., against the amount on equal terms, the Plaintiff did not have any claim to deduct from the Defendant’s damages amount due to the Defendant’s office management, etc., and accordingly, the lower court rejected the Plaintiff’s re-appeal

According to the above legal principles, the plaintiff's re-claim of offset in litigation itself cannot be accepted, and further decision of the court below on the existence of claims asserted by the plaintiff is justifiable in rejecting the plaintiff's counter-claim of offset in litigation or the plaintiff's re-claim. Ultimately, this part of the ground of appeal cannot be accepted.

3. Scope of reversal

The court below held that the plaintiff is liable to pay 307,873,739 won and damages for delay to the plaintiff, on the premise that the defendant is liable to pay 45,167,830 won and damages for delay to the plaintiff for the return of the provisional payment that the defendant paid to the plaintiff pursuant to the judgment of the court below prior to the remand of provisional execution.

However, the application for the restoration of provisional execution under Article 215(2) of the Civil Procedure Act is a kind of lawsuit in the process of a lawsuit, which is a condition subsequent to the change of the judgment on the merits. Thus, as long as the judgment of the court below is reversed for the aforementioned reasons, the scope of the provisional payment to be returned to the defendant is different. Thus, the part against the plaintiff among the judgment of the court below as well as the part against the plaintiff in the judgment on the application for the restoration of provisional payment

4. Conclusion

Therefore, among the judgment of the court below, the part against the plaintiff among the judgment of the court below against the plaintiff and the part against the plaintiff among the judgment on the application for return of provisional payment shall be reversed, and this part of the case shall be remanded to the court below for a new trial and determination.

Justices Jo Hee-de (Presiding Justice)