A lawsuit of demurrer against distribution may be instituted by a creditor who has appeared on the date of distribution and has raised an objection against the dividend amount of the other party within the extent that he/she has raised an objection on the date of distribution

A lawsuit of demurrer against distribution may be instituted by a creditor who appeared on the date of distribution and raised an objection against the dividend of the other party within the extent that he/she has raised an objection on the date of distribution, and in cases where the amount in arrears exists, it may be preferentially distributed by national taxes.

Daejeon District Court 2015 Gohap104934 Demurrer against distribution

§ 00. Minority Company

Overseas of the Republic of Korea

2016.05.25

2016.07.20

1. Of the instant lawsuit, the part regarding Defendant SD Construction and Kim QT is dismissed.

2. The plaintiff's claim against the defendant Republic of Korea and ChoW is dismissed.

3. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

Daejeon District Court Decision 2014Ma816 Dated July 28, 2015

Of the distribution schedule, the amount of dividends against the plaintiff shall be 170,285,961 won, and the defendants shall be corrected as 170,285,961 won

The amount of dividends shall be reduced or deleted within the extent above.

1. Basic facts

A. A contract for XW works and non-party works

On December 21, 2012, the Daejeon Industrial Complex Corporation (hereinafter referred to as the "SP") established the 3B-1BL Apartment Project (hereinafter referred to as the "1BL Landscape Project") with the price of 2,579,767,000 won in XWtos Co., Ltd. (hereinafter referred to as "XWtos") on December 21, 2012 (hereinafter referred to as "the contract of this case"). Thereafter, the said price was changed to 2,106,838,484 won.

B. Claim attachment and assignment order of Defendant SD Construction

1) On April 30, 2012, XW case borrowed 50 million won from Defendant SDR construction on April 25, 2012, “XW case borrowed from Defendant SDR construction as of May 3, 2012. If XW case fails to perform its obligation, a notary public, including the fact that he/she does not object to compulsory execution immediately, prepared a notarial deed of money consumption loan contract No. 1005 of Daejeon General Law Firm (hereinafter “notarial deed of this case”).

2) On December 17, 2012, Defendant SD Construction, with the title of execution of the instant notarial deed, filed an order of seizure and assignment as to KRW 300 million out of the claim for construction price under the instant contract that XW Party had against Nonparty Corporation as the Daejeon District Court 2012TTTT No. 17148, and received a decision of seizure and assignment order (hereinafter “instant assignment order”) from the above court. The said decision was served on Nonparty Corporation, the garnishee, on December 21, 2012.

C. Seizure of Defendant Republic of Korea

On January 23, 2013, Defendant Republic of Korea (Jurisdiction: Daejeon Tax Office, the first Western District Tax Office, in charge of the tax affairs on XW cases, but thereafter the competent authority was changed to the Daejeon District Tax Office) seized KRW 145,460,010, among the construction cost claims for XW cases, based on the corporate tax, wage and salary income tax, value-added tax, which Defendant Republic of Korea held against XW cases, for the non-party corporation. The above notification of attachment was served on the non-party corporation, the garnishee on January 24, 2013.

D. The plaintiff's seizure and collection order

1) No. 1 collection order

A) On September 26, 2012, the Plaintiff (former company’s trade name is “SW landscape”) filed an application with the Daejeon District Court for a payment order against XW cases for the payment of the construction cost under the Daejeon District Court 2012 tea10674. On September 26, 2012, the said court decided to make a payment order with the purport that “XW cases shall pay to the Plaintiff KRW 47,200,00 and delay damages,” and the said payment order was finalized on October 23, 2012.

B) On February 19, 2013, the Plaintiff: (a) filed an order of seizure and collection with the Daejeon District Court 2013TT2380, regarding KRW 77,169,727, out of the claim for construction price under the instant contract, which the XW case had against Nonparty Corporation; and (b) received the order of seizure and collection from the above court (hereinafter referred to as “the order of seizure and collection”). The above order of collection was served on Nonparty Corporation, the debtor, on February 22, 2013.

2) A collection order No. 2

A) On October 11, 2013, the Plaintiff filed a lawsuit against XW Party with Daejeon District Court 2013Kadan12867, which sought payment of the acquisition amount. On October 11, 2013, the said court rendered a judgment that “XW Party will pay the Plaintiff KRW 46,000,000 and damages for delay thereof,” and the said judgment became final and conclusive.

B) On March 17, 2014, the Plaintiff: (a) issued a seizure and collection order with the Daejeon District Court 2014TTT3925, regarding KRW 59,132,05, out of the claim for construction price according to the instant contract held by the Plaintiff against Nonparty Corporation; and (b) received a seizure and collection order from the said court (hereinafter “instant collection order”); and (c) issued a seizure and collection order with the said court’s order on March 17, 2014. The said collection order was served on Nonparty Corporation, the garnishee, on March 20, 2014.

E. Provisional seizure, etc. against Defendant ChoW’s claims

1) The designated parties listed in the attached Table 1 [Attachment 1] (hereinafter referred to as the "designated parties of this case") are Defendant ChoW as the designated parties, and as the claim for wages from August 25, 2012 to October 10, the Daejeon District Court 2013Kadan1338, which issued a provisional attachment order against the claim regarding KRW 32,40,000, out of the claim for the construction cost of the non-party construction, XW was issued by the above court on February 21, 2013. The above decision was served on the non-party corporation, the debtor of this case, on February 25, 2013.

2) After that, Defendant ChoW filed a lawsuit against XW case by Daejeon District Court 2013Kadan9038, which was the designated party to the instant 1’s designated parties. On July 25, 2014, the said court rendered a favorable judgment against Defendant ChoW (the Plaintiff in the instant lawsuit) that “XW” was paid for KRW 6,90,000 to Defendant ChoW, KRW 9,000 to the SelectionW, KRW 9,000 to the SelectionW, KRW 7,500,000 to the SelectionW, and KRW 9,00,000 to the SelectionW, and the said judgment became final and conclusive around that time.

F. A collection order, etc. against Defendant Kim QT’s claims and collection orders

1) The designated parties listed in attached Table 2 [Attachment 2] (hereinafter “the designated parties of this case”) were Defendant Kim QT as the designated parties. The Daejeon District Court 2013 tea6200, filed an application for a payment order against XWto. On July 3, 2013, the said court issued a payment order ordering XWto pay the instant 2 designated parties totaling KRW 348,205,341 and delay damages.

2) The above payment order was finalized around that time because it did not raise an objection from XW case. 46 of the designated parties among the instant two designated parties, excluding SongWG, literatureGD, and newDF, is Defendant QT as the designated party, and as the title title, Daejeon District Court 2014T issued a seizure and collection order for KRW 389,256,015, among the construction cost claims for the non-party construction, the XW case was issued by the above court on June 13, 2014. The above order was served on the non-party construction, the third debtor on June 16, 2014.

G. Deposit for the execution of the Nonparty Corporation

1) From April 28, 2014 to April 29, 2014, the Nonparty Corporation conducted a debt confirmation inspection on the 1BL landscaping construction and settled the construction cost of XW 30,024 won.

2) On June 20, 2014, the Non-Party Corporation deposited KRW 647,715,023 remaining after deducting KRW 82,930,00 for direct payment of overdue wage from KRW 769,10,024 for the Non-Party Corporation’s 1BL landscaping construction cost and KRW 38,45,00 for the warranty bond and KRW 38,45,001 for the warranty bond under Article 248(1) of the Civil Execution Act (hereinafter “the deposit of this case”).

3) On June 20, 2014, the deposit date of the instant case, the Nonparty Corporation reported the grounds for deposit under Article 248(4) of the Civil Execution Act to the Daejeon District Court. Accordingly, the Daejeon District Court 2014Ma816 (hereinafter “instant dividend procedure”) commenced the distribution procedure.

(h) Preparation of a distribution schedule and the plaintiff's objection to distribution;

1) On July 28, 2015, the Daejeon District Court prepared a distribution schedule that distributes the amount of KRW 49,308,626 to be actually distributed in the instant distribution procedure (hereinafter “instant distribution schedule”) as follows (hereinafter “instant distribution schedule”).

[Attachment of Distribution Schedule of this case]

2) The Plaintiff appeared on the aforementioned date of distribution, and raised an objection against the entire amount of KRW 23,779,425, which was distributed in the order of three priority in the Republic of Korea among the distribution schedule of this case, and filed the instant lawsuit on August 4, 2015.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 4, Eul evidence 1 to 3, Eul evidence 4, the purport of the whole pleadings

2. The plaintiff's assertion

For the following reasons, the Plaintiff asserts that the amount distributed to the Defendants among the instant distribution schedule should be deleted, and that the amount deleted should be distributed to the Plaintiff.

A. Defendant SD Construction

Defendant SD Construction was ordered to do so on the basis of the instant notarial deed. However, even though XWtos do not actually bear the obligation for Defendant SD Construction, the instant notarial deed was prepared in collusion with the Defendant SD Construction and falsely prepared. Therefore, Defendant SD Construction did not own the claim against XWtos, and the instant assignment order is invalid as it is based on false claims.

B. Defendant DW

Defendant ChoW received dividends from the designated parties in the instant dividend procedure as the instant designated parties to the instant case, which are XW workers. However, Defendant ChoW did not receive dividends from the dividends claim against XW, on the basis of the wage claim against XW. Defendant ChoW did not receive dividends from the dividends claim against other construction cost claims ( Daejeon District Court 2013TW 1190, 2013T 1057) and filed a lawsuit of demurrer against each of the distribution procedures. Defendant ChoW received dividends of KRW 32,40,00 in the instant dividend procedure. Defendant ChoW received dividends from the instant dividends amounting to KRW 32,40,000 in accordance with the outcome of the instant other lawsuit of demurrer against distribution. Defendant ChoW did not have the right to receive dividends in the instant dividend procedure.

C. Defendant Kim QT

Defendant Kim QT received dividends from the instant designated parties to the instant dividend procedure as the instant designated parties to the instant designated parties, which are XW-gu workers. However, the wage claims against XW-type by the said designated parties were false claims or repaid prior to the date of distribution of the instant case. Defendant Kim QT did not have the right to receive dividends in the instant dividend procedure.

(d) Defendant Republic of Korea

Defendant Republic of Korea (Jurisdiction: 00 years old), based on the delinquent tax amount of KRW 145,460,010 for XW case, seized the instant construction cost claim against the Nonparty Corporation, but the XW case’s delinquent tax amount was already repaid. Defendant Republic of Korea has no right to receive dividends in the instant dividend procedure.

3. Determination as to the legitimacy of the part of the instant lawsuit against Defendant SD Construction and Kim QT

A. A lawsuit of demurrer against a distribution may be brought by a creditor who has appeared on the date of distribution and raised an objection against the amount of distribution of the other party within the extent that he/she raised an objection on the date of distribution.

B. According to the foregoing, the Plaintiff appeared on the date of the instant distribution on July 28, 2015, and raised an objection only against the dividend amount of Defendant ChoW and KRW 23,779,425, which the Republic of Korea received dividends in the third order, and did not raise an objection against the dividend amount of Defendant SD Construction and QT.

C. Therefore, the part of the instant lawsuit against Defendant SD Construction and Kim QT is unlawful, seeking rectification of the distribution schedule on the part that did not raise any objection on the date of distribution.

4. Judgment on the merits

A. Relevant legal principles

The burden of proving the grounds for objection against distribution also conforms to the principle of distribution of the burden of proof in general civil procedure. Therefore, in the event that the plaintiff claims that the defendant's claim has not been constituted, the defendant is liable to prove the facts of the cause of the claim, and in the event that the plaintiff claims that the claim is invalid as a false declaration of agreement or extinguished by repayment, the plaintiff is liable to prove the facts constituting the grounds for disability

7. 12. See Supreme Court Decision 2005Da39617 Decided 12.

B. The part on Defendant ChoW

1) Defendant ChoW’s designated party to the instant case as the designated party to the instant case 1 and received a favorable judgment on July 25, 2014 against the Daejeon District Court 2013Kadan9038, and the fact that the said judgment became final and conclusive is as seen earlier. Accordingly, Defendant ChoW and the said designated party hold the wage claim amounting to KRW 32,40,000 for XW.

2) The Plaintiff asserts that Defendant ChoW has no right to receive dividends in the instant distribution procedure on the grounds that Defendant ChoW is likely to receive dividends in other distribution procedures.

3) According to the purport of the argument in Gap evidence No. 5, it is recognized that defendant ChoW filed a lawsuit of demurrer against the distribution against the Daejeon District Court Decision 2013Ma46549, Daejeon District Court, which was the distribution procedure for the claim for the payment of the construction price against XW World District Court Daejeon District Court Decision 2013Ma1190, which was the distribution procedure for the claim for the payment of the construction price against XW World District, and the lawsuit of demurrer against the distribution was filed by Daejeon District Court Decision 2013Ma46532, which was the distribution procedure for the claim for the payment of the construction price against XW World Welfare Foundation.

4) However, even based on the above facts acknowledged, Defendant ChoW failed to receive dividends in the above distribution procedures, and each of the aforementioned distribution procedures was not concluded as of the closing date of pleadings in the instant case. As such, Defendant ChoW did not receive dividends in each of the above distribution procedures. Moreover, it cannot be deemed that Defendant ChoW did not have the right to receive dividends in the instant distribution procedures solely on the circumstance that Defendant ChoW is likely to receive double dividends through each of the aforementioned distribution procedures.

5) The Plaintiff’s assertion on Defendant ChoW is without merit.

C. Part on Defendant Republic of Korea

1) On January 23, 2013, Defendant Republic of Korea seized KRW 145,460,010, out of the instant construction cost claims against the Nonparty Corporation for the purpose of preserving the corporate tax, wage and salary income tax, and value-added tax claims possessed by Defendant Republic of Korea against XW cases. Specific tax claims held by Defendant Republic of Korea against XW cases are as follows:

(Omission of List - Details of New Claim)

2) As to this, the Plaintiff asserts that, as XW case paid all the above national taxes owed to the Defendant Republic of Korea, there is no delinquent taxes which take precedence over the statutory due date, the Defendant Republic of Korea should pay to the Plaintiff KRW 23,779,425, which was apportioned to the Defendant Republic of Korea in the third order.

3) However, there is insufficient evidence to acknowledge that the respective statements in Gap evidence Nos. 9 through 12 alone have extinguished all of the above national tax claims against XW cases in the Republic of Korea. Rather, according to the evidence No. 6 of Eul, the defendant Republic of Korea still did not collect KRW 40,502,460 on July 7, 2012 among the tax claims listed in the above table, and it is recognized that the defendant Republic of Korea did not collect KRW 23,779,425 on the basis of the above amount. The above amount alone exceeds KRW 23,79,425 on the part of the dividends procedure in this case.

4) Meanwhile, Article 35(1) of the Framework Act on National Taxes provides that “National taxes, additional dues, or expenses for disposition on default shall be collected in preference to other public imposts and other claims,” which takes precedence over general claims. As such, insofar as Defendant Republic of Korea can be seen as holding a national tax claim against XW case, Defendant Republic of Korea has the right to receive dividends in the instant dividend procedure prior to the Plaintiff

5) The Plaintiff’s assertion against the Defendant Republic of Korea is without merit.

5. Conclusion

Of the instant lawsuit, the part regarding Defendant SD Construction and Kim QT is unlawful and dismissed, and the Plaintiff’s avoid.

DaW and Korea's claim against the Republic of Korea is dismissed as it is without merit. It is so decided as per Disposition.