[1] The case holding that it is justifiable to refuse an application for postponement of the completion period to demand a distribution filed by the Korea Labor Welfare Corporation on the ground that the substitute payment was made after the completion period to demand a distribution in the voluntary auction procedure on the real

[2] Whether it is a reasonable legislative measure to determine the completion period for the demand for distribution by the executing court prior to the first sale date under Article 84(1) of the Civil Execution Act (affirmative), and where the court deems it particularly necessary, whether the substantive legal right subrogated by the Korea Labor Welfare Corporation under Article 84(6) of the same Act, which allows the extension of the completion period for the demand for distribution (negative)

[1] The case holding that it is justifiable to refuse an application for postponement of the completion period to demand a distribution filed by the Korea Labor Welfare Corporation on the ground that the substitute payment was made after the completion period to demand a distribution in the voluntary auction procedure for real estate owned by

[2] Claims, such as wages, which are property rights guaranteed in the Constitution, may be exercised through various procedures and methods, which are the rights to preferential repayment. Such claims for distribution under the Civil Execution Act should be made in the pertinent procedure legally in order to obtain preferential repayment in the specific real estate auction procedure (Articles 88(1) and 148 of the Act). The time when exercising the right to demand distribution is restricted by the completion period under Article 84(1) of the same Act. Such restriction is limited by limiting the right to preferential payment in the specific compulsory execution procedure, which may cause a final restriction on exercising the right to demand wages, etc. However, such restriction is merely a temporary restriction limited to specific procedure, and it does not affect the inherent nature of the right, i.e., the existence and content of the right and the exercise of the right under the substantive law. Since the efficient operation of the auction system achieved by such system belongs to more important public interests, it cannot be deemed that the court is not obliged to set the period for demanding distribution within the scope of the first time to the extent of the right to demand distribution prior to the date of sale.

[1] Articles 84, 88(1), and 148 of the Civil Execution Act / [2] Articles 84, 88(1), and 148 of the Civil Execution Act

[2] Constitutional Court en banc Order 2004Hun-Ma142 decided Dec. 22, 2005 (Hun-Gong111, 151)

Korea Labor Welfare Corporation

Changwon District Court Order 2007Mata817 dated May 4, 2007

The special appeal is dismissed.

The special grounds for appeal shall be deemed to be the grounds for appeal.

1. According to the records, the non-applicant 1 operated the vessel parts manufacturing business under the trade name "(trade name omitted)" from Jun. 30, 202, the non-applicant 1 was unable to comply with the order of the court below concerning the execution of the right to preferential payment from Jun. 30, 200 to Jun. 1, 2006, and 18 workers, including non-applicant 2, etc., were also retired at the same time as the business activities were suspended on Jun. 1, 2006, and 17 workers, including non-applicant 2, etc., were not paid by the business owner to receive substitute payment under the Wage Claim Guarantee Act. On Nov. 14, 2006, the non-applicant 206, which did not know of the completion period of the request for distribution by the court below to the head of the Changwon of the Busan District Labor Office for the reason that the special appellant did not have a right to demand distribution on Dec. 15, 2006.

2. Article 84(1) of the Civil Execution Act (hereinafter referred to as the “Act”) provides that the executing court shall determine the completion period to demand a distribution prior to the first sale date in order to correct the situation where the demand for distribution is permitted until the completion of the auction procedure. Article 84(6) of the Act provides that the court may extend the completion period to the extent that the auction procedure is unstable or the existing creditors’ interest in the demand for distribution is not undermined. When the special appellant has paid a substitute payment to his/her workers, he/she may subrogate the right to demand a distribution to the relevant business owner to the extent of the amount paid pursuant to Article 7 of the Wage Claim Guarantee Act or the Guarantee of Workers’ Retirement Benefits Act shall continue to exist in the above subrogated right. In light of such legal principles and statutory provisions, if the special appellant can demand a distribution, by extending the completion period to demand a distribution, the court may only dismiss the existing obligee’s interest, which would result in the cancellation of the execution procedure’s immediate appeal decision or rejection of the execution procedure, and it does not affect the execution order’s decision on the grounds of an immediate appeal.

In other words, the right to demand wages, etc. subrogated by the special appellant belongs to the property right guaranteed by the Constitution as seen earlier. However, such right to demand wages, etc. may be exercised through various procedures and methods. Under the procedural law to be preferentially reimbursed in the specific real estate auction procedure, the period for exercising the right to demand dividends is subject to restrictions on the completion period under Article 84(1) of the Act. Such restrictions are limited to cases where the exercise of the right to demand wages, etc. is limited in the specific compulsory execution procedure, and thus, may cause a result that may ultimately be limited to the exercise of the right to demand wages, etc., but such restriction is nothing more than a temporary restriction in essence on specific procedures, and it cannot be said that the intrinsic nature of the right to demand dividends, i.e., the existence and content of the right, and the exercise of the right under the substantive law, which may not affect the obligee’s right to demand dividends, and thus, it cannot be said that it is more reasonable for the court to determine the right to demand dividends within the scope of the first provision of Article 84 of the Act.

3. Therefore, the special appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Hwang-sik (Presiding Justice)