The judgment of the first instance shall be modified as follows:

The Defendant’s KRW 18,833,420 for the Plaintiff and its related expenses on June 1, 2017.

Facts of recognition

A. The Plaintiff is a company running the mechanical facility construction business, etc., and the Defendant is the owner of the new construction project, “E wedding hall” located in D and 13 lots of land in Ansan-si (hereinafter “instant building”).

B. On April 23, 2015, the Defendant awarded a contract for the construction of the instant building to C Co., Ltd. (hereinafter “C”) for KRW 4,290,00,000 (including value-added tax). The details of the said contract are as follows.

3. Date of commencement: May 4, 2015: The date scheduled for completion: 4,00 won (including value-added tax) on August 31, 2015;

9. Warranty liability rate: 3% of the guaranty money for defect repairs, and the rate of liquidated damages for delay for three years: 0.01% of the daily contract amount;

C. On May 8, 2015, the Plaintiff was awarded a subcontract with C for the construction cost of KRW 297,00,000 (including value-added tax) among the new construction works of the instant building; from May 10, 2015 to August 31, 2015, with the warranty bond rate of KRW 3%, the warranty bond rate of KRW 1/1,000 per day.

On December 1, 2015, the Plaintiff and the Defendant entered into an agreement on direct payment of subcontract consideration (direct payment agreement; hereinafter “instant agreement”) with the Plaintiff’s account within 30 days from August 20, 2015 to November 30, 2015, in addition to the original contract amount of KRW 270,000,000 (excluding value-added tax) with respect to the instant construction project. The Plaintiff and the Defendant entered into an agreement on direct payment of subcontract consideration (direct payment agreement; hereinafter “instant agreement”) with the purport that the Defendant shall pay the said construction price to the Plaintiff’s account within 30 days from the date of the provisional use of the building or the completion of the construction.

The instant agreement was accompanied by the detailed details of the additional construction works prepared as of November 25, 2015.

E. On December 1, 2015, the Defendant closely examined the status of the progress of the instant construction project to the Plaintiff on December 1, 2015, and confirmed that there was no problem in construction.