Plaintiff (Law Firm Dasan, Attorney Cho Jae-hun, Counsel for the plaintiff-appellant)

Tae-in Agricultural Cooperatives (Attorney Seo Sung-sung et al., Counsel for the defendant-appellant)

September 19, 2012

1. Of the instant lawsuit, the part of the instant lawsuit seeking confirmation of invalidity of the resolution for dismissal of the Plaintiff, constituted by an extraordinary board of representatives held on November 30, 201 by the Defendant, shall be dismissed.

2. All remaining claims of the Plaintiff are dismissed.

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

① As to the result of the Defendant’s inspection and dismissal of the Plaintiff at an extraordinary council of delegates held by the Defendant on November 30, 2011, the Defendant’s primary resolution shall be confirmed as null and void, and the conjunctive resolution shall be revoked. ② The Defendant confirms that the resolution of appointment of Nonparty 1 by the board of delegates held on February 10, 201 is null and void.

1. Basic facts

The following facts may be admitted if there is no dispute between the parties, or if the whole purport of the pleadings is taken into account in each entry of Gap evidence 1 to 7 and Eul evidence 3 (including each number).

A. Status of the parties

The defendant is a juristic person established for the purpose of enhancing the agricultural productivity of its members and promoting the expansion of markets for agricultural products produced by its members and the smooth distribution thereof as its members, and the plaintiff is a member of the defendant's council open around February 201, who is elected as a non-permanent auditor for a term of three years at the meeting of the defendant's council held around February 201.

B. Resolution to dismiss the Plaintiff from office on August 9, 2011

1) On July 18, 201, the Plaintiff notified the Defendant of the Defendant’s qualifications for the Defendant to undergo a regular audit from July 18, 201 to July 27, 201, but the Defendant already conducted a self-audit and a regular audit by the National Federation, and requested the Plaintiff to substitute for a subsequent settlement audit on the ground that there was no special problem, and there was a concern about flag farmers’ support projects, and an integrated audit and settlement audit according to custom.

2) On July 25, 2011, the Plaintiff: (a) notified the Defendant that the audit will be conducted in the form of a special audit instead of an overall regular audit in order to check the matters pointed out in the regular audit of the Federation; and (b) requested again to respond to the audit; (c) on July 28, 2011, the Defendant notified the Defendant that the special audit was conducted in extenuating circumstances; and (d) the budget for conducting the audit is insufficient.

3) As to this, the Plaintiff visited the headquarters of the Agricultural Cooperative Federation to request guidance for conducting audits. Accordingly, on August 3, 2011, the head of the above North Korean territory headquarters notified the Defendant of the business guidance to the effect that “the Defendant actively cooperates with the Plaintiff’s request for audit and inspection, and that it is desirable for the audit and inspection period, etc. to be conducted through mutual consultation, unless there exists any justifiable reason.”

4) Meanwhile, among the opposing opinions between the Plaintiff and the Defendant regarding whether to conduct an audit, 45 of the 61 representative of the Defendant requested the Defendant to convene an extraordinary board of representatives to dismiss the Plaintiff from the Defendant’s member pursuant to Article 12 subparag. 3 of the Articles of Incorporation and to dismiss the Plaintiff from the auditor pursuant to Article 57(2) subparag. 1 of the Articles of Incorporation on July 25, 2011.

5) Accordingly, on August 9, 2011, the Defendant held a temporary board of representatives among the non-party 2 and 61 representatives, and held a vote by hand on the matter of expulsion and dismissal of the Plaintiff. As to the matter of expulsion and dismissal of the Plaintiff, the Defendant decided on the agenda under 54 representatives present at the meeting, 43, 5, and 6, among the 54 representatives present at the meeting. As to the matter of dismissal of the audit, the Defendant resolved on the agenda under 45, 4, and 5, among the 54 representatives present at the meeting (hereinafter referred to as “resolution on August 9, 201”).

6) In the decision of August 9, 2011, the Defendant issued the following matters on the grounds that the Plaintiff’s member was dismissed and that the Plaintiff’s member was dismissed.

① After the first and second regular meetings held on January 23, 2009 and March 5, 2009 discussed the agenda items to be decided on agricultural machinery use incentives in a society, the Plaintiff also made a decision thereon. However, the 8th regular meetings held on October 30, 2009, which held on October 30, 2009, continued to interfere with the progress of the meeting and interfere with the promotion of the project.

② In the fourth regular period period held on June 15, 2009, the Plaintiff made a discount to nearby agricultural cooperatives when purchasing a large quantity of products such as fertilizers. The Defendant made a statement to the effect that agricultural cooperatives would be at a discount. However, as a result of the confirmation, the Plaintiff was proved to have made a false statement during the meeting by receiving a written answer that agricultural cooperatives did not make such a statement.

③ On October 1, 2009, the 7th regular meeting held on October 1, 2009 decided to pay the preferred payment (40,000 won per mail) for the first time for the first time for the first time for the first time for the first time for the first time for the first time for the first time for the first time. Although the Plaintiff participating in the said decision decided the price for the first time for the first time for the first time for the

④ As above, the Plaintiff made a statement to the 8th regular meeting held on October 30, 2009 that the 43,000 won of the first regular meeting, which was held on October 30, 2009, would have been good when the Plaintiff reconvened the issue of preferential payment that he/she had resolved in the 7th regular meeting, and made a insult to the president of the cooperative, who is the president, in an official position, by stating that he/she would have been well-run, rather than harming the president of the cooperative, and tried to take part in the smooth progress of the board of directors and the promotion of the projects of the agricultural cooperative, such as taking part in the demand for the purchase price increase and taking part in the demand for the purchase price increase.

⑤ The Plaintiff, who was an auditor, was in the process of preparing education for executive officers of the NAF, proposed by the Chairperson at the 6th regular meeting of the NAF in 2011 (on June 24, 2011), was unable to receive education for executive officers of the NAF, and the executive officers who want to receive education for the NAF while receiving education for the NAF, who would like to receive education for the NAF’s organization training, were defective, and distort the education for executive officers of the NAF, and denied the identity of the NAF.

C. Resolution to dismiss the Plaintiff from office on November 30, 201

1) Since August 22, 2011, the Plaintiff filed an application against the Defendant for provisional disposition suspending the validity of the Defendant’s resolution as of August 9, 2011, with this Court No. 2011Kahap123, and filed a lawsuit seeking revocation of the resolution as of September 8, 201, this Court No. 201Gahap738, Sept. 8, 2011.

2) In the case of the above provisional disposition on November 1, 2011, this court rendered a decision to suspend the effect of the resolution of expulsion of union members until the judgment on the merits became final and conclusive on the grounds that the reason for expulsion by the defendant does not constitute the reason for expulsion stipulated in the Agricultural Cooperatives Act (hereinafter “Agricultural Cooperatives Act”) and the articles of incorporation, among the defendant’s decision on August 9, 2011, on the ground that the reason that the reason for expulsion of union members does not constitute the reason for expulsion under the Agricultural Cooperatives Act (hereinafter “Agricultural Cooperatives Act”) and the articles of incorporation, and that there is a defect in the voting method by making the voting without a secret vote, which is the method of voting,

3) On November 14, 2011, 43 of the 61 representative of the plaintiff defendant's 61 representative demanded the defendant to convene an extraordinary board of representatives in order to again handle the matter on which the plaintiff is dismissed from the defendant's audit.

4) Accordingly, on November 21, 2011, the Defendant notified the board of representatives of November 30, 201 to the representatives of November 21, 201 that the Plaintiff’s dismissal from the auditor on the grounds stated above (2) through (n) No. 2) among the grounds for dismissal of the auditor’s resolution as of August 9, 201.

5) On November 30, 2011, the Defendant: (a) held a temporary board of representatives among Nonparty 2 and 61 representatives on the part of the chairperson and 57 representatives; (b) held a vote on an agenda item on the audit and dismissal of the Plaintiff in a secret voting method instead of a defective number of votes indicated in the above provisional disposition decision; (c) decided on the said agenda item with affirmative votes of 44 out of 57 representatives present; and (d) opposing votes of 13 representatives (hereinafter “decision on November 30, 201”).

6) As above, a new resolution to dismiss the Plaintiff was made against the Plaintiff, and the Plaintiff, in the lawsuit No. 2011Gahap738 of this Court on December 21, 2011, withdrawn the Defendant’s lawsuit seeking revocation of the audit dismissal resolution from among the Defendant’s resolution on August 9, 2011, and this court subsequently rendered a judgment revoking the resolution from among the Defendant’s resolution on January 11, 2012, which was issued on August 9, 2011 by the Plaintiff’s member. The judgment became final and conclusive on the 31st of the same month.

D. On February 10, 2012, the Defendant holds a board of representatives on February 10, 2012 and appoints Nonparty 1 as a new auditor instead of the Plaintiff, and completes the registration, thereby holding two current auditors.

E. Meanwhile, the defendant's articles of incorporation relating to the instant case are as follows.

Article 12 (Expulsion) An association may be expelled through a resolution of the general meeting if a member falls under any of the following subparagraphs:

3. Where it has inflicted loss on the cooperative, intentionally or by gross negligence, or has lost the credit of the cooperative;

Article 42 (Requests, etc. for Revocation of Resolutions)

(1) Members may request the Minister for Food, Agriculture, Forestry and Fisheries to cancel or confirm the cancellation or invalidity of election due to a resolution or election, or file a lawsuit with the court requesting the Minister for Food, Agriculture, Forestry and Fisheries, on the grounds that the procedures for convening a general meeting or the board of representatives, method of resolution, details of resolution, or

Article 51 (Fixed Number of Officers)

A cooperative shall have seven directors, including one head of the cooperative, and two auditors as its executives.

Article 5 (Terms of Office for Officers)

(1) The term of office of the president and directors of a cooperative shall be as follows, and that of an auditor shall be three years:

Article 57 (Dismissal of Officers)

(2) Members of a cooperative may dismiss an executive by any of the following methods, depending on the method for election of executives under Article 54:

1. Executive officers elected by the board of representatives shall be present at the request of at least 1/3 of the representatives, and a resolution for dismissal with the attendance of a majority of the representatives and with the consent of at least 2/

2. Part concerning the resolution of November 30, 201

A. Judgment on the Defendant’s defense prior to the merits

1) Summary of the assertion

In the case of the Defendant’s decision of dismissal from office as of August 9, 201, the effect of the first provisional disposition was suspended until the judgment on dismissal from office became final and conclusive. However, the effect of the above provisional disposition became final and conclusive upon withdrawal of a lawsuit seeking revocation of the lawsuit at the subsequent lawsuit on the merits, and accordingly, the auditor’s dismissal against the Plaintiff became final and conclusive. Therefore, the Plaintiff cannot be viewed as a party who can bring a dispute over the validity of the resolution by already losing the Defendant’s status as auditor at the time of the Defendant’s decision on November 30, 201. As such, the part disputing the defect of the instant lawsuit as of November 30, 201 is unlawful.

2) Determination

On November 1, 2011, in the case of the application for a provisional disposition, the defendant's decision to suspend the effect of the decision until the judgment on the merits became final and conclusive on August 9, 2011, on the ground that there was a defect in the method of voting by the audit dismissal as of August 9, 201, in the case of this Court No. 201Kahap123, the defendant held a board of representatives on November 30, 201 and decided again to dismiss the plaintiff from the defendant's audit. Accordingly, in the case of the merits in which the plaintiff was in progress at the time, the plaintiff withdrawn the lawsuit seeking the cancellation of the part concerning the audit dismissal among the resolution as of August 9, 2011, and the defendant appointed a new auditor on February 10, 2012 on the premise that the plaintiff was dismissed from the audit thereafter.

According to these facts, the defendant recognized the defects in relation to the result of the audit dismissal as of August 9, 201 without recognizing the validity thereof, and then, to supplement such defects, it held a council of delegates on November 30, 201 and made a resolution again to dismiss the plaintiff from the defendant's audit and inspection and denied the plaintiff's audit status based on it. Thus, the plaintiff is entitled to contest the validity of the resolution as of November 30, 201, which is a new resolution.

Therefore, this part of the defendant's defense is without merit.

B. Determination on the legitimacy of a lawsuit seeking confirmation of invalidity of a resolution

Examining ex officio as to the legitimacy of the part seeking confirmation of invalidity of the resolution of dismissal of auditors on November 30, 201, when an officer was dismissed from office before the expiration of his/her term of office, and if an officer is appointed and then the registration of appointment has been completed after appointment, then he/she shall be deemed to have failed to meet the requirements for protection of rights as a lawsuit for confirmation (see Supreme Court Decision 96Da24309, Oct. 11, 1996).

In this case, according to the evidence examined above, it is recognized that the defendant's articles of incorporation Article 51 provides that the number of auditors shall be two. Meanwhile, the defendant dismissed the plaintiff from the auditor through a resolution of November 30, 201, and then on February 10, 2012, the non-party 1 is appointed as a new auditor by the defendant, and the two persons are currently serving as the defendant's auditor.

In light of the above facts in light of the legal principles as seen earlier, since the defendant already appointed Nonparty 1 as an auditor and served as the auditor, barring special circumstances such as the absence or invalidation of a resolution made on February 10, 2012 by the defendant who appointed the succeeding auditor or the cancellation of the resolution, the defendant's claim for confirmation of invalidation is merely seeking confirmation of the past legal relations or legal relationship, and thus, there is no requirement for protection of rights as a lawsuit for confirmation. The materials of the plaintiff's internal tax payment alone cannot be deemed to be the absence or invalidation of a resolution made on February 10, 2012 or to have been revoked.

Ultimately, the Plaintiff’s lawsuit on this part is unlawful because it does not meet the requirements for protection of rights.

C. Determination on the claim seeking revocation of a resolution

1) Summary of the parties’ assertion

A) Plaintiff

① Since the Defendant’s removal of the Plaintiff was based on both false and irrelevant to the audit duties before the Plaintiff was appointed as an auditor, there is no substantial reason to justify the dismissal of the Plaintiff. ② Even if the Defendant’s dismissal ground is a fact, in light of the Agricultural Cooperatives Act that provides for the independence, term system, etc. of the auditor, the Defendant’s articles of incorporation, and the characteristics of the auditor’s duties, there should be serious breach of duty or illegality in order to dismiss the auditor. However, the Defendant’s dismissal ground does not constitute a reason for the Defendant’s removal. ③ On the other hand, the Plaintiff attempted to properly conduct an audit against the Defendant, but the Defendant decided to dismiss the Plaintiff. In light of the fact that the Defendant is a special corporation whose members are local farmers, unlike a general company, and thus, the Defendant’s dismissal ground is an organization in charge of public interest as a special corporation whose members are local farmers, and thus, the Defendant’s dismissal resolution on November 30, 201 should be revoked as it violates the Agricultural Cooperatives Act and the articles of incorporation.

B) Defendant

According to the Agricultural Cooperatives Act and the articles of incorporation, only procedural requirements are required for the dismissal of executive officers, but does not stipulate the grounds for dismissal, and as the defendant had the same grounds for dismissal as seen earlier, the decision of dismissal on November 30, 201 by the defendant was justifiable, and thus the plaintiff's claim for this part of the plaintiff's claim is unjust.

2) Determination

In light of the above, the following facts: ① Nonghyup Law and the Defendant’s articles of incorporation stipulate only the procedure and the quorum for dismissal of executives; ② Article 382(2) of the Commercial Act shall apply mutatis mutandis to local agricultural cooperatives; ② Article 382(2) of the Commercial Act provides that “the relationship between the company and directors shall apply mutatis mutandis to the relationship between the company and directors”; ③ Article 689 of the Civil Act provides that when it is difficult to maintain such trust relationship with both parties, the party may terminate the delegation contract at any time if the other party terminates the delegation contract at an unfavorable time without any inevitable reason. However, the Plaintiff’s dismissal of the Defendant’s auditor is difficult to maintain the trust relationship with the other party, barring any special circumstance, and the Plaintiff’s dismissal of the Plaintiff at any time for reasons other than cancellation of the delegation contract pursuant to Article 55 of the Agricultural Cooperatives Act, Article 382(2) of the Commercial Act, and Article 689(1) of the Civil Act cannot be seen as being based on the following circumstances.

3. Part concerning the resolution of February 10, 2012

The plaintiff asserts that the defendant's articles of incorporation provides two auditors' fixed number of auditors under Article 51 of the defendant's articles of incorporation. If a resolution of November 30, 201 that dismissed the plaintiff from the auditor is invalid or revoked, the resolution of February 10, 201, which appointed a new auditor instead of the plaintiff, violates the above articles of incorporation, and thus is null and void.

However, as seen earlier, insofar as the decision of November 30, 201, which dismissed the Plaintiff from the audit, violated the Agricultural Cooperatives Act and the Articles of Incorporation, and cannot be deemed to exist grounds for invalidation or revocation, the Plaintiff’s assertion on this part cannot be accepted.

4. Conclusion

Therefore, the part of the lawsuit in this case seeking confirmation of invalidity of the resolution of dismissal of the plaintiff, which was made by the temporary council of delegates held on November 30, 2011, shall be dismissed as it is unlawful. The remaining claims of the plaintiff shall be dismissed as it is without merit. It is so decided as per Disposition.

Judges Kim Sang-ok (Presiding Judge)