Suwon Construction Co., Ltd. (Attorney Kim Jong-chul, Counsel for defendant-appellant)

Defendant (Law Firm Taeyang, Attorneys Indun-soo et al., Counsel for defendant-appellant)

April 7, 2015

1. The defendant shall be the plaintiff.

(a) deliver the real estate listed in the separate sheet;

B. From May 15, 2014 to the date on which delivery of real estate listed in the separate sheet is completed, money will be paid in 1,700,000 won per month.

2. The costs of the lawsuit are assessed against the defendant.

3. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Determination on the cause of the claim

(a) Facts of recognition;

1) On April 3, 2007, the Plaintiff completed the registration of ownership transfer regarding the Gangdong-gu Seoul Metropolitan Government ( Address omitted) ○○○○○○○○○○○○○○○○○○○○○○○○○○○○, the above aggregate building, referred to as “instant building,” and the above sectional ownership building referred to as “1504”).

2) On July 2, 2013, the Plaintiff entered into a lease agreement with the Telecommunications Industry Co., Ltd. (hereinafter “P2”) on the terms that the Plaintiff may lease an apartment house of 51 households and officetels 11 households, the sectional ownership of the instant building, including 1504 units, to Pakistan, up to May 14, 2014, lease deposit is KRW 90 million, lease deposit is KRW 90 million for an apartment, KRW 35 million for an apartment for a monthly rent, KRW 5 million for an officetel, and KRW 5 million per household for an officetel (hereinafter “instant lease agreement”) and delivered the said apartment house and officetel to PP.

3) On November 26, 2013, Pakistan entered into a sublease contract between the Defendant and the Defendant, 1504, 30 million won of the sublease deposit, 190 million won of the sublease monthly rent, 1.9 million won of the sublease period, and 1504 of the sublease period from November 26, 2013 to November 25, 2014, and the Plaintiff, a lessor, approved the conclusion of the said sublease contract on November 29, 2013.

4) The Defendant may recognize the possession from November 26, 2013 to the present date of 1504.

[Grounds for recognition] The respective descriptions and the purport of the whole pleadings of Gap 1-1-1-3, 2, 3, 4, 5, 8, 9, 11-9.

B. Determination

In light of the former lessee’s right to lease on the basis of the latter lessee’s right to lease, the former lessee’s right to lease on the basis of the latter lessee’s right to lease expires when the latter lessee’s right to lease expires due to the expiration of the lease period, etc. Therefore, the Defendant is obligated to return 1504, a lessor, pursuant to Article 630 of the Civil Act, to the Plaintiff as a lessee who obtained the lessor’s consent. Furthermore, the Defendant is obligated to return unjust enrichment equivalent to the rent due to the above use and profit, as the Defendant continues to possess 1504, even if the lease and the sub-lease have ceased to exist, and thus, the Plaintiff is obligated to return unjust enrichment equivalent to the rent due to the above use and profit. According to the appraiser Nonparty 2’s appraisal, barring any special circumstance, the monthly rent without a security deposit as to subparagraph 1504 after May 15, 2014 is recognized, and the Defendant is obligated to pay to the Plaintiff at the rate of KRW 170,000,00 per month.

2. Judgment on the defendant's assertion

A. The assertion that the lease contract was not terminated

The defendant asserts that the lease contract is valid until May 2017, since the plaintiff entered into the first lease contract with PPP around May 2012, the defendant asserts that the lease contract remains valid in accordance with Article 10(2) of the Commercial Building Lease Protection Act.

However, as seen earlier, the lease deposit for the lease contract between the Plaintiff and Pakistan is KRW 900 million. According to Article 2(1) of the Commercial Building Lease Protection Act and Article 2(1)1 of the Enforcement Decree of the same Act, the above Act applies only when the lease deposit is less than KRW 400 million. Thus, the above Act does not apply to the lease contract for the building of this case. Accordingly, the above part of the assertion is unacceptable.

(b) Defenses of simultaneous performance;

1) The Defendant asserts that ① the Defendant cannot deliver KRW 30 million to the Plaintiff until the Plaintiff received a refund of the deposit for sub-lease 30 million or ② the right to lease of KRW 900 million from the Plaintiff.

2) First of all, in relation to ① a defense, the former lessee’s Defendant cannot oppose the Plaintiff’s claim for the delivery of a sub-lease deposit against the sub-lease, which is the lessee (see, e.g., Supreme Court Decision 90Meu24939, Dec. 7, 190). Thus, the above assertion cannot be accepted.

3) Next, the following are examined: (a) the obligation of repayment of deposit and the obligation of return of the object of the lease are concurrently performed; (b) the lessee cannot exercise the right of simultaneous performance; and (c) the lessee cannot exercise the right of simultaneous performance. Of course, the Defendant, who is the lessee, can exercise the right of simultaneous performance of the right of simultaneous performance of the lessee. However, according to the legal principles stated in Supreme Court Decision 9Da3869 Decided May 8, 2001, the Defendant’s exercise of the right of simultaneous performance of the right of deposit cannot be deemed as closely related to the right of preservation (the right of simultaneous performance of the deposit) to exercise the right of vicarious performance (the right of repayment of the deposit) and the right of vicarious performance (the right of simultaneous performance) to exercise the right of vicarious performance (the right of vicarious performance). Even if the Defendant’s exercise of the right of simultaneous performance of the deposit cannot be deemed as necessary to secure the right of simultaneous performance of the deposit.

In regard to this, the defendant's assertion of the right to cancel the lease deposit between Pacific and the plaintiff was concluded by the plaintiff's coercion, so the contract to waive the lease deposit is revoked by acting in subrogation of the right to cancel the speculation, or the above lease deposit waiver agreement is re-claimed as null and void as a false declaration of agreement, but there is no evidence to acknowledge that the above waiver agreement was concluded by the plaintiff's duress and that it was a false declaration of agreement

4) Therefore, all of the defenses cannot be accepted.

(c) The assertion that the sublease contract remains until November 25, 2015;

1) The Defendant asserts that a sub-lease contract with the Pakistan continues to exist until November 25, 2014 pursuant to Article 4(1) of the Housing Lease Protection Act. However, if the right of lease of the sub-lease terminates due to the expiration of the period, etc., the extinction of the right of lease of the sub-lease is as seen earlier, and thus, the above argument cannot be accepted.

2) In addition, the Defendant asserts that the said sub-lease contract is not extinguished because the Plaintiff approved the sub-lease contract between the Defendant and the Pakistan, the term of November 29, 2013, “from November 26, 2013 to November 25, 2014,” and clearly expressed his/her intent to continue the sub-lease contract after May 15, 2014, which is after the expiration of the lease contract period. However, according to the statement Gap 11-9, the Plaintiff may recognize the fact that “the sub-lease deposit shall be returned to the sub-lessee at the responsibility of the sub-lease at the end of the lease period with the Plaintiff,” and therefore, even if the Plaintiff approved the sub-lease contract, it cannot be said that the said part of the sub-lease contract will continue to exist until the lease period. Therefore, the said part of the claim cannot be accepted.

3) Lastly, as long as Article 631 of the Civil Act provides that "in the event of sub-lease of the object with the consent of the lessor, the right of the lessee shall not be extinguished even if the contract is terminated by the agreement of the lessor and the lessee, even if the contract expires by the expiration of the contract, the application or analogical application of the above provision does not extinguish the lessee's right. However, the above provision aims to protect the lessee in a case where the lease contract is terminated by agreement between the lessee and the lessor, or where the lessee has unilaterally renounced the lease during the lease period, and the lessee has unilaterally renounced the lease period. Thus, the above provision does not apply to the case where the lease term expires as in this case. If the lease term expires, the sub-lessee acquires the right of lease entirely independent, and the Civil Act recognizes a system entirely different from the provisions of sub-lease. Therefore, the defendant's above assertion

D. The allegation that the party to the actual lease contract is the Plaintiff

Although the Defendant entered into a sub-lease contract in the form of a contract, the Defendant asserts that the sub-lease contract was concluded between the Plaintiff and the Defendant, in light of the fact that the sub-lease deposit and the monthly sub-lease are directly deposited into the Plaintiff’s account, and that the Plaintiff managed and supervised the sub-lease, and that the sub-lease is de facto excessive and substantial, and that the lessor was the Plaintiff, so the lease contract between the Plaintiff and the Defendant was concluded.

According to the statement of Gap 3, in the sub-lease contract between the plaintiff and Pakistan, the plaintiff stated that the 30 million won of the deposit for sub-lease and the 1.9 million won of the monthly rent should be deposited in the plaintiff's account. Accordingly, the plaintiff may recognize the fact that the plaintiff deposited each of the above money into the above account. However, if the contract is prepared in writing between the parties to the contract as a disposition document and the objective meaning of the text is clear, barring special circumstances, the existence of the expression of intent and its contents should be recognized (see Supreme Court Decision 2012Da21621, Nov. 27, 2014, etc.). In light of the fact that the plaintiff is clearly a sub-lease contract under the language and text of the above contract, and the plaintiff is not a party to the above contract, the above sub-lease contract cannot be interpreted as a direct lease contract between the plaintiff and the defendant. Therefore, the above argument cannot be accepted.

E. Violation of the good faith principle or abuse of rights

The Plaintiff demanded the conclusion of a new lease agreement with only 26.5% of the existing lease deposit and substantially increased the amount of lease deposit on the ground of another company after the termination of the said sub-lease agreement. This is the cross-fluor of a large enterprise beyond the limit of the increase in the rent, and the claim of this case cannot be allowed as it constitutes a violation of the good faith principle or an abuse of rights. However, the Plaintiff’s claim of this case cannot be viewed as a violation of the good faith principle or an abuse of rights merely because the Defendant asserts.

3. Conclusion

If so, the plaintiff's claim is justified.

[Attachment]

Judges Bo Jong-ho