Korea Land and Housing Corporation (Law Firm Hanl, Attorney Shin-o, Counsel for defendant-appellant)

Hanyang and two others (Attorneys Kim Han-soo et al., Counsel for the plaintiff-appellant)

November 11, 2010

1. The Plaintiff:

A. The amount calculated by jointly and severally applying 300,876,460 won and the amount calculated by applying 6% per annum from August 12, 2009 to November 25, 2010, and 20% per annum from the next day to the date of full payment;

B. The Defendant Construction Mutual Aid Association shall pay 93,678,930 won, among the money stated in the above paragraph (a) above, and 6% per annum from June 17, 2010 to November 25, 2010, and 20% per annum from the following day to the date of full payment:

sub-payment.

2. The plaintiff's remaining claims against the defendants are dismissed.

3. 7/10 of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendants, respectively.

4. Paragraph 1 can be provisionally executed.

The plaintiff shall be jointly and severally liable for the defendant Hanyang Co., Ltd., and the defendant Construction Mutual Aid Association shall pay 6% interest per annum from August 12, 2009 to the delivery date of the copy of the complaint of this case and 20% interest per annum from the next day to the day of full payment.

1. Basic facts

A. Status of the parties

(1) The Korea National Housing Corporation newly constructed and sold (name omitted), apartment (hereinafter “the apartment of this case”) located in the Namyang-si, Namyang-si (hereinafter “the apartment of this case”) and received a pre-use inspection on August 18, 199, and the Plaintiff comprehensively succeeded to the rights and obligations of the Korea National Housing Corporation on October 1, 2009 (hereinafter “the Korea National Housing Corporation and the Plaintiff collectively referred to as “the Plaintiff”).

(2) On December 23, 1996, the Plaintiff contracted the construction of the instant apartment to Hanyang Co., Ltd. (hereinafter “Defendant Hanyang”) (hereinafter “instant contract”). The warranty period of the Defendant Hanyang’s warranty against the Plaintiff was ten years in the case of walls, columns, ten years in the case of walls, columns, beams, roof, main stairs, five years in the case of machinery and civil engineering, two years in the case of machinery and civil engineering, and two years in the case of other cases, Article 11(1) of the Rules on the Management of Multi-Family Housing (hereinafter “Defendant Gold Industry”), and the Defendant Geumyang Co., Ltd. (hereinafter “Defendant Gold Industry”) jointly and severally guaranteed the obligation of the Plaintiff under the instant contract against the Plaintiff.

(3) The defendant Hanyang concluded a warranty contract on the apartment of this case with the defendant Construction Mutual Aid Association. On August 1, 199 and November 1999, the defendant Construction Mutual Aid Association issued a warranty contract as listed below and delivered it to the plaintiff. Article 1 of the terms and conditions of the warranty contract of this case provides that "the defendant Construction Mutual Aid Association shall pay the other party (the plaintiff) the obligation owed to the other party by failing to perform the warranty after the contractor (the defendant Hanyang) received an inspection or inspection on the use of the front construction works (the new construction works of this case) and received the request for the performance of the repair due to the defects that occurred within the warranty period."

From August 8, 1606 to October 6, 209, 312, 3105, 245, 2408, 206. 5. From August 8, 2006, 206, 3105, 2458, 11,341, 6202, 1607 to October 6, 2004, 198, 198, 296. 46. 7. 7. 8, 296, 196, 30, 196, 196. 8, 196, 196, 196, 196. 4. 7, 130, 131, 4503, 1608, 206, 1963, 204, 206, 1964, 206.

B. Claim for defect occurrence, defect repair, etc. of the apartment of this case

(1) A defect arising from defective construction, etc. in the part of the apartment of this case and the section for exclusive use. The plaintiff received a request for defect repair from the council of occupants' representatives of the apartment of this case and requested the defendant Hanyang and Geum Ho-ho to repair the defect, and had the above defendants repair the defect.

(2) Despite the aforementioned defect repair, there still remain still defects in the section for common use and section for exclusive use of the apartment in this case. The council of occupants' representatives filed a lawsuit against the plaintiff, who was the seller on August 17, 2005 (Seoul Central District Court 2005Gahap73551), claiming damages in lieu of the defect repair of the apartment in this case (Seoul Central District Court 2005Gahap73551), and the plaintiff filed an application for the notice of lawsuit against the defendant on May 11, 2006, which was pending in the first instance trial, and served the notice of lawsuit to Hanyang on May 15, 2006.

(3) From the appellate court of the instant case (Seoul High Court 2007Na18784), the judgment was rendered on March 17, 2009 as follows. The Plaintiff appealed on this issue (Supreme Court Decision 2009Da32546) but the said judgment became final and conclusive upon dismissal of the appeal on July 23, 2009 (hereinafter “the final and conclusive judgment of this case”).

The plaintiff shall pay to the above council of occupants' representatives 791,675,241 won and 750,062,876 won among them, 41,612,365 won with 5% per annum from February 5, 2008 to March 17, 2009, and 20% per annum from the next day to the date of full payment.

35% of the total litigation costs shall be borne by the above council of occupants' representatives, and the remainder by the plaintiff.

(4) The Plaintiff spent 8,278,180 won as attorney fees and 23,087,830 won in the appellate court as attorney fees and stamp fees, etc. (In this regard, the Plaintiff asserted that the Plaintiff paid 80,344,816 won in total with attorney fees, etc. during the course of performing the said lawsuit, but the Plaintiff’s assertion that the above amount exceeded the above amount was insufficient to be recognized only with the entries of evidence No. 6, and no other evidence exists to prove otherwise). The council of occupants’ representatives held that the above council of occupants’ representatives paid 894,726,52 won on August 4, 2009 (i.e., the above amount of KRW 791,675,241 + damages for delay until August 4, 2009) and paid 103,051,311 won until January 27, 2010, respectively according to the final judgment of the amount of litigation costs.

(5) Meanwhile, around August 11, 2009, the Plaintiff claimed the payment of the above KRW 894,726,552 to the Defendant Hanyang.

[Evidence] Facts without dispute, Gap evidence Nos. 1, 2, 2 through 5, 7, 9, 10-1 to 12, and the purport of the whole pleadings

2. Determination as to the claim against the defendant Han-yang and Ho-ho industry

(a) Warranty against defects of contractors;

(1) Occurrence of liability

According to the above facts, unless there are special circumstances, the defendant Hanyang and Geumho industry are jointly and severally liable to compensate the plaintiff for damages in lieu of the repair of the apartment of this case during the warranty period of defect liability in accordance with the contract of this case.

(2) The defense of the extinctive prescription of the defendant Hanyang-ho Industry

Before determining the specific amount of damages that the Defendants should compensate for to the Plaintiff, we examine the aforementioned Defendants’ statute of limitations defense.

The Plaintiff’s right to claim damages in lieu of the defect repair of the apartment of this case is in accordance with the instant contract, and since the conclusion of the instant contract and the joint and several surety by the Defendant Gold Industry constitute commercial activities, the Plaintiff’s right to claim damages against the said Defendants constitutes a claim arising out of commercial activities, and the extinctive prescription for commercial claims is applicable.

However, in the case where the defect warranty period stipulated in the contract of this case among the defects in the apartment of this case is five years or less, it is apparent in the record that the plaintiff filed the lawsuit of this case on June 10, 2010 after five years from the expiration date of the defect warranty period (the expiration date of five years from the date of usage inspection to August 18, 2004). Thus, the part on the defect warranty period of the plaintiff's above right to claim damages against the above defendants of this case, which is less than five years, has already expired before the lawsuit of this case. Thus, the aforementioned defendants' defense of the statute of limitations is justified within the extent of the above recognition.

(3) Scope of liability

According to the purport of the evidence Nos. 1 and 7 of the evidence Nos. 1-7 and the whole pleadings, the expenses incurred in repairing defects for which the warranty period of defect liability under the contract of this case is 117,098,663 among the defects that occurred in the apartment of this case is 10 years, and according to the final judgment of this case, it is reasonable to limit the amount of damages to 80% of the cost of repairing defects in light of the fair burden of damages and the good faith principle when considering all circumstances. Thus, the defendant Hanyang-yang and the gold Industry are jointly and severally liable to pay the plaintiff the damages for the damages.

(b) Non-performance liability;

(1) Where a defect occurs in an object completed by the contractor, the contractor shall be liable for the warranty regardless of whether the contractor has been negligent. If the contractor fails to properly perform his/her obligations under the contract beyond the above warranty, the contractor’s physical and property damage is recognized in accordance with the general principle of incomplete performance.

In the case of this case, damages for delay paid by the plaintiff to the above council of occupants' representatives in accordance with the final judgment of this case, 103,051,311, 72,780,209, and 31,366,010 won (=8,278,180 won +23,087,830 won) incurred by the plaintiff in the course of the lawsuit (=8,278,180 won +23,087,830 won) shall be deemed as damages incurred to the plaintiff's property, which is the contractor of new apartment construction of this case, due to the failure to perform his/her obligations under the contract of this case, and there is a proximate causal relation with the non-performance of obligations of the defendant Hanyang,

(2) The above Defendants asserted that there is no reason to believe that there is no reason for the defect occurrence of the apartment of this case, but there is no evidence to acknowledge this. Thus, the above Defendants’ assertion is without merit.

C. Sub-decision

Therefore, the defendant Hanyang and the gold industry are jointly and severally liable for 300,876,460 won to the plaintiff (=93,678,930 won +103,051,051 won +72,780,209 won +31,366,010 won +) and damages for delay calculated at each rate of 20% per annum under the Commercial Act from August 12, 2009 to November 25, 2010, which is the day following the date when the claim for performance is filed by the defendant Hanyangyang, and the gold industry is liable for dispute as to the existence and scope of the above defendants' obligation to perform, until November 25, 2010, and until the day when the full payment is made.

3. Determination on the claim against Defendant Construction Mutual Aid Association

(a) The occurrence of liability for defect repair;

(1) According to the above facts, the defendant Construction Mutual Aid Association is obligated to pay the warranty bond equivalent to the repair cost of the apartment of this case within the warranty period after the date of inspection of use within the scope of the guaranteed amount to the defendant Hanyang and the respective plaintiff pursuant to the above warranty contract, unless there are special circumstances.

(2) The Plaintiff asserted that damages, such as delay damages and litigation costs, arising from the final judgment of this case are also subject to guarantee under the above contract. However, the submitted evidence alone is insufficient to recognize it, and there is no other evidence to acknowledge it, the Plaintiff’s above assertion is without merit

B. Extinctive prescription defense by Defendant Construction Mutual Aid Association

We examine the above defendant's defense of extinctive prescription prior to the judgment on the amount of the deposit to be paid to the plaintiff.

According to Article 67(2) of the Framework Act on the Construction Industry, the right to the deposit that the guarantee creditor has against the Defendant Construction Mutual-Aid Association ceases to exist due to the prescription if it is not exercised for five years from the date on which the guarantee period expires. If the expiration date of the guarantee in the above warranty bond falls on or before October 6, 2004, it is apparent in the record that the Plaintiff filed the lawsuit in this case on June 10, 2010 after five years have passed from the Plaintiff. Thus, the part of the Plaintiff’s right to the deposit against the Defendant prior to October 6, 2004, among the Plaintiff’s right to claim the deposit against the said Defendant, prior to the expiration date of the guarantee period, shall be deemed to have expired before the lawsuit in this case

C. Scope of liability

Of the defects that occurred in the apartment of this case, the fact that the cost of repairing defects for the defect liability period of 117,098,663 is the aggregate, as seen earlier. Considering the circumstances shown in the argument of this case, it is reasonable to limit the liability of the defendant Construction Mutual Aid Association to 80% of the cost of repairing defects according to the principle of fairness.

D. Sub-determination

Therefore, Defendant Construction Mutual Aid Association is obligated to pay damages for delay calculated at the rate of 93,678,930 won (=117,098,663 won x 0.8) and the rate of 6% per annum under the Commercial Act from June 17, 2010 to November 25, 2010, the date following the delivery date of a copy of the complaint of this case, which is the day when the above defendant was rendered a substantial dispute over the existence and scope of the obligation, and 20% per annum under the Act on Special Cases concerning Expedition, etc. of Legal Proceedings from the next day to the day of full payment.

The plaintiff also sought payment of delay damages from August 12, 2009 to the delivery date of the copy of the complaint of this case. However, if there is no fixed time limit for performance, the plaintiff is liable for delay of performance from the day after receiving the claim for performance. However, there is no evidence to acknowledge that the plaintiff claimed for payment of the above deposit to the above defendant prior to the delivery of the copy of the complaint of this case. Thus, the claim for

4. Conclusion

Therefore, the plaintiff's claim against the defendants of this case is justified within the scope of each of the above recognition, and each of the remaining claims is dismissed as it is without merit. It is so decided as per Disposition.

Judges Yellow-gu (Presiding Judge)