2020Da208621 Undue gains

Korea

Gold Mine Business Co., Ltd. and one other

The Public Interest Service Corporation, Inc.

Law Firm Ear (Law Firm Earba)

[Defendant-Appellant] Plaintiff 1 and 1 other

Gwangju High Court Decision 2019Na21803 Decided January 8, 2020

June 24, 2021

All appeals are dismissed.

The costs of appeal are assessed against the Intervenor, and the remainder are assessed against the Defendants.

The grounds of appeal are examined.

1. The facts found by the court below are as follows.

A. The Defendant Intervenor’s Intervenor each holds 70% of the total shares in the Defendant Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s Intervenor’s 30% (33,000 shares) as a corporation aimed at real estate development and implementation.

B. On November 16, 2010, the Plaintiff decided and notified the Defendant’s Intervenor’s Intervenor of comprehensive real estate holding tax for the year 2010, and the corporate tax for the year 2010, July 1, 2011, respectively. On March 6, 2018, the Intervenor’s Intervenor paid only part of the Defendant’s Intervenor’s Intervenor’s delinquent tax claim amounting to KRW 5,015,78,600, including corporate tax and additional dues.

C. On December 20, 2010, the Intervenor: (a) held a temporary general meeting of shareholders on December 20, 2010 and resolved to provide interim dividends to shareholders; and (b) distributed KRW 2,762,54,050 to Defendant Gold-gu Enterprise Co., Ltd., and Defendant Sejong Co., Ltd., respectively (hereinafter “instant interim dividends”).

2. Of the grounds of appeal, determination on the part of the main claim(tax claim) (ground of appeal Nos. 1, 2, and 3)

For the reasons indicated in its reasoning, the lower court determined that the claim against the Plaintiff’s Intervenor was lawful, on the grounds that the claim amounting to KRW 5,015,788,600 against the Plaintiff’s Intervenor was not extinguished due to the completion of prescription, and that the part of the principal claim against the Defendants in the instant lawsuit filed by the Plaintiff on behalf of the Defendant joining the Defendant was lawful, and rejected

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not exhaust all necessary deliberations or did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, thereby adversely affecting the conclusion of the judgment.

3. Of the grounds of appeal, determination on the scope of the primary claim (the ground of appeal No. 4)

For the reasons indicated in its holding, the lower court determined that the amount to be returned by the Defendants to the Defendant Intervenor’s Intervenor with unjust enrichment was KRW 5,015,788,60, and delay damages, which amounted to the sum of the Plaintiff’s tax claims, and KRW 2,762,54,050, and delay damages, which amounted to KRW 5,015,788,60, and KRW 5,015,788,60, in collaboration with the Defendant Gold Enterprise Co., Ltd.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine on the establishment and scope of the right to claim restitution of unjust enrichment due to the illegality and invalidation of interim dividends, contrary to what is alleged in

4. Of the grounds of appeal, determination on the statute of limitations period of subrogation claim (the grounds of appeal No. 5) regarding the claim(the right to claim restitution of unjust enrichment due to illegality and invalidation of interim dividend)

A. (1) Even a claim for return of unjust enrichment is a claim for the return of the performance itself based on a contract which is a commercial activity. Article 64 of the Commercial Act, which provides for the five-year extinctive prescription, applies to cases where there is a need to promptly resolve the legal relationship in light of the background and cause of the claim, the status of the parties, and other relevant factors.

However, in cases where the content of the right to claim restitution of unjust enrichment does not seek the return of performance itself, or where the need for prompt resolution is not recognized, Article 64 of the Commercial Act does not apply, barring any special circumstance, and Article 64 of the Commercial Act applies to the period of extinctive prescription of ten years (see, e.g., Supreme Court Decisions 2001Da47825, Jun. 14, 2002; 2016Da271257, Sept. 10, 2019).

2) The Company may distribute profits within the limit of the amount of capital, the sum of the reserve funds and the earned surplus reserve accumulated during the period for the settlement of accounts, and the amount obtained by deducting the earned surplus reserve to be accumulated in the period for the settlement of accounts (Article 462(1) of the Commercial Act). If a company satisfies certain requirements, interim dividends may be paid, but at this time, there shall be possible profits available for dividends (Article 462-3(1) and (2) of the Commercial Act). If a company distributes profits or interim dividends even though there is no possible profits, if there is no profits available for dividends, it shall be deemed that the said provision goes against the said company’s claim for return of unjust

The right to claim the return of unjust enrichment cannot be seen as a claim arising from a commercial activity to which Article 64 of the Commercial Act applies, since a company distributes profits acquired by the company to its shareholders inside the scope of its business or commercial activity for its business purposes. Accordingly, the right to claim the return of unjust enrichment pursuant to the aforementioned statutory dividends cannot be deemed as having arisen based on a fundamental commercial activity. In particular, in a case where the distribution of profits or interim dividends has been performed even though there is no distributable profit, the right to claim the return of unjust enrichment from the shareholder is essential to promote the company’s capital adequacy and protect the company’s creditors, and thus, it is unnecessary to promptly determine the exercise of the right to claim the return of unjust enrichment for the recovery of unjust enrichment. Accordingly, the right to claim the return of unjust enrichment due to illegal dividends is subject to Article 162(1) of the

B. The lower court determined to the effect as above, on the ground of the illegality and invalidity of the interim dividend of this case, that the Civil Extinctive Prescription should apply to the Defendant’s claim for return of unjust enrichment on behalf of the Defendant’s Intervenor. Such determination by the lower court is in accordance with the aforementioned legal doctrine. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending

5. Conclusion

Therefore, all appeals are dismissed, and 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 Lee Ki-taik

Justices Park Jung-hwa

Justices Kim Jong-soo

Justices Noh Tae-ok