See Attached List of Plaintiffs (Law Firm Dakel, Attorneys Shin Young-chul, Counsel for the plaintiff-appellant)

more Bable S Development Co., Ltd. (Bae, Kim & Lee LLC, Attorneys Choi Promotion et al., Counsel for the plaintiff-appellant)

October 2, 2014

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The plaintiffs confirm that the defendant is in the position of ○○○○ hotel ○○○ and health clubs (hereinafter “instant club”) located in Seocho-gu Seoul ( Address omitted) operated by the defendant.

1. Basic facts

A. Status of the parties

1) Await Entertainment Co., Ltd. (hereinafter “Defendant”) had been engaged in tourist hotel business and other business activities incidental thereto from June 30, 1982, and has recruited and operated its members in the instant club with facilities such as health stations, private rains, and driving ranges.

2) The Plaintiffs entered into a contract with the Defendant under which the Defendant would pay a security deposit and annual fee (hereinafter “instant use contract”) to the Defendant in return for the Defendant’s provision of services to use the instant club (hereinafter “instant use contract”), and paid a security deposit to the Defendant, or paid a fee for change of the name by acquiring membership of the instant club, and used the instant club facilities at the time of paying annual annual fees.

B. The defendant's bylaws

The Defendant enacted and implemented the rules and regulations applicable to the members (hereinafter “former rules”) while operating the instant club. On January 1, 2012, the Defendant amended some of the contents of the rules (hereinafter “after amendment”). The main contents of the rules are as follows.

The membership fees shall be refunded at the time of withdrawal from the club only for the membership fees of regular members (the membership fees system) and corporate members. If a member does not wish to withdraw from the club, his/her membership fees shall continue to be qualified (for corporate members, regular members, and family members) by paying the membership fees. Article 12 (Restrictions on Use of Facilities), natural disasters, measures against laws and regulations, the renovation or repair of facilities, or other inevitable circumstances, all or part of the club facilities may be temporarily closed or restricted. This Rule of the Association of Article 13 (Amendment) may be amended as a necessary of the club of this case, and its effect shall apply to all members. Article 6(1) of the Regulations, if a member intends to withdraw from the club, he/she shall request his/her own signature seven days before the date he/she wishes to withdraw from the club.

After the revision of the table contained in the main text, a member of the Council 1. 1. A member may, at his/her own will, submit a report on the change of the facilities, submit it to this club, and withdraw. Article 12 (Restriction, etc. on the Use of Facilities) 1. A club may suspend or restrict the use of all or part of the facilities of this case after its prior public announcement, in cases where it is due to the improvement of the facilities, administrative guidance by relevant agencies, changes and measures by relevant Acts and subordinate statutes, significant changes in social circumstances and economic conditions, special events, or other unavoidable reasons. 2. A club may close its facilities if it is impossible to conduct its business due to inevitable circumstances for its operation. A club may establish an operating committee for the sound development and smooth operation of the club under Article 13 (Operation Advisory Committee), and the operating committee may consult and recommend all matters concerning the operation of the club of this case.

C. Defendant’s notice of termination of the contract

1) On January 29, 2013, the Defendant informed the Chairperson of the Operation Advisory Committee comprised of members of the instant club, including the Plaintiffs, of the purport that it would inevitably suspend the operation of the instant club from July 31, 2013, close the instant club, and refund the deposits and remaining membership fees to its members, as prescribed by Article 12(1) of the Regulations, and then notified the Chairperson of the Operation Advisory Committee on the same purport once again on February 14, 2013.

2) From March 29, 2013 to July 31, 2013, the Defendant posted a public notice stating that the operation of the instant club will be suspended within the instant club to the same purport, and notified the members of the instant club twice until July 31, 2013 (hereinafter collectively referred to as “instant termination notice”).

3) After the end of August 2013, the Defendant dismissed the employees of the instant club, and thereafter did not provide services until now since the closure of the instant club. From July 3, 2013, the Defendant deposited the amount equivalent to the above amount on October 10, 2013 against the members who returned membership deposits and remaining annual fees to the members or refused to receive the said membership deposits, etc., and filed a report on the closure of business with respect to the golf practice range in the instant club on October 22, 2013.

[Ground of recognition] Facts without dispute, Gap 1 through 11, 14, 15, 23 through 26, Eul 1, 3, 5, 6 and 12, and the purport of the whole pleadings

2. The plaintiffs' assertion

The plaintiffs asserts that since the notice of termination of the instant club is null and void for the following reasons, they still have the status as a member of the instant club.

1) The Defendant, while amending the rules prior to the amendment that fall under the terms and conditions, violated the obligation to clarify and explain in accordance with Article 3 of the Regulation of Terms and Conditions Act (hereinafter “Standard Terms and Conditions Regulation Act”). ② Article 18 of the Installation and Utilization of Sports Facilities Act (hereinafter “ Sports Facilities Act”) and Article 19 subparag. 5 of the Enforcement Decree of the same Act without undergoing prior consultation with the operating committee under Article 18 of the Installation and Utilization of Sports Facilities Act, cannot assert the rules after the amendment as the content of the instant service contract, and thus, the instant notice of termination based thereon is null and void.

2) Even if the rules are valid after the amendment, the grounds for termination of the instant use contract cannot be acknowledged, such as where, after the amendment, there is no ground to terminate the instant use contract even after the amendment, and it cannot be deemed that the Defendant was hostile to the Defendant in the course of operating the instant club.

3. Determination

(a) Facts of recognition;

The following facts are either not disputed between the parties, or acknowledged by comprehensively taking account of the overall purport of the arguments in the statements in Gap 18, 20, 27, 28, 29, Eul 2, 4, 7 through 16, 32 and 33.

1) Circumstances leading up to the amendment of the regulations

A) From August 27, 2011 to December 31, 2011, the Defendant posted a public notice stating that “Any partial amendment of the Rules has been made from January 1, 2012 to before the amendment, so that the content of the amendment can be perused and changed.” From January 1, 2012 to December 31, 201, the Defendant kept the full text of the amendment in the instant club.

B) On December 13, 2011, some members of the instant club, including the Plaintiffs, made a public announcement of convening the first general meeting of its members to form an advisory committee on operation pursuant to Article 13 of the Regulations after the amendment, and made a resolution with the Defendant that “after the amendment, they shall consult with the Defendant to reflect the provision that they shall be consulted and consulted in advance with the operating advisory committee on the matters regarding the rights and interests of some members of the instant club after the amendment, by holding the general meeting of its members and establishing the rules of the operation advisory committee, and by selecting each member of the general meeting and committee.”

C) Since February 7, 2012, executives of the Operating Advisory Committee decided to hold regular meetings after meeting with the Defendant’s executives, and requested revision of Article 13 of the Regulations after the amendment, following the amendment. On February 18, 2012, the Defendant announced the amendment of Article 13 of the Regulations after the amendment as follows. After the amendment, there was no particular objection to the Regulations after the amendment from the members until the Defendant issued the instant termination notice.

Article 13 (Operating Advisory Committee) An operating committee may be established for the sound development and smooth operation of a club, and the operating committee may provide advice and suggestions on all matters concerning the operation of this club and matters concerning the rights and interests of its members.

2) Current status, business losses, etc. of the instant club

A) approximately 75-90% of the sales amount of the instant club consists of annual fees of its members. The annual fees (based on January 1, 2013) of the instant club is limited to approximately 45-70% of the annual fees of other sports clubs in neighboring Gangnam-gu areas. The membership of the instant club was not traded in the membership exchange, unlike other sports clubs.

B) From June 2001 to January 201, 2013, the Defendant has raised the annual fee for the reporters who have continued to reduce the number of winners of the instant club as follows.

1,000,000 201-06-01, 2001-06-01, 800,000, 100 14.3 2004-07-01 90,000, 1000 1,007-05-01, 2007-05,000 1,000,000 1,000,000 1,000,11, 2008-05-01, 2008-05-01, 1000,000, 2000 - 05-1,000,000 - 05-01, 2005-01, 2000, 2000, 2000, 11-01,00-10, 3010-10, 3010

C) However, since approximately 30 years have passed since the instant club was operated exclusively for men and the membership recruitment was established, the size, facilities, structure, etc. of the instant club was deteriorated compared to other sports clubs recently established, the increase of annual fees was limited to prevent the enemy from causing the destruction of the facility. As a result, the Defendant suffered a business loss of KRW 20 million or KRW 50 million per year from July 1, 2008 to June 30, 2013 in the course of operating the instant club.

본문내 포함된 표 구분 30기 31기 32기 33기 34기 합계 2008. 7. 1.부터 2009. 6. 30.까지 2009. 7. 1.부터 2010. 6. 30.까지 2010. 7. 1.부터 2011. 6. 30.까지 2011. 7. 1.부터 2012. 6. 30.까지 2012. 7. 1.부터 2013. 6. 30.까지 매출액 사우나 수입(연회비) 725,676,000원 715,406,000원 736,954,000원 732,169,000원 725,242,000원 3,635,447,000원 식음료 수입 178,013,000원 64,357,000원 63,253,000원 64,760,000원 66,738,000원 437,121,000원 기타 수입 69,744,000원 24,556,000원 9,228,000원 6,150,000원 5,571,000원 115,249,000원 소계 973,433,000원 804,319,000원 809,435,000원 803,079,000원 797,551,000원 4,187,817,000원 직접비(매출원가) 재료비 56,230,000원 16,313,000원 12,701,000원 4,491,000원 17,169,000원 106,904,000원 노무비 310,981,000원 357,751,000원 295,750,000원 372,792,000원 398,344,000원 1,735,618,000원 경비 146,508,000원 259,938,000원 196,695,000원 142,871,000원 158,410,000원 904,422,000원 소계 513,719,000원 634,002,000원 505,146,000원 520,154,000원 573,923,000원 2,746,944,000원 간접비(매출원가) 608,777,000원 566,591,000원 602,845,000원 540,286,000원 498,625,000원 2,817,124,000원 판매관리비 107,927,000원 137,975,000원 83,014,000원 100,365,000원 101,207,000원 530,488,000원 영업손실 -256,990,000원 -534,249,000원 -381,570,000원 -357,726,000원 -376,204,000원 -1,906,739,000원

D) Accordingly, the Defendant decided to close the instant club in order to fully change the instant club to a new facility by completely replacing and redispositioning existing facilities and expanding the existing space compared to the previous space, improving the facilities by additionally installing women's friendship, swimming pool, and spas wave facilities, recruiting female members, and changing the methods of attracting female members or operating the club, etc.

(b) Validity of the articles of association after amendment;

1) Whether the Standard Contract Terms Regulation Act is violated

As seen earlier, the Defendant, while revising the regulations before the amendment, announced and kept the contents of the amendment in the instant club, and notified the Defendant of the discussions regarding the regulations after the amendment at the general meeting of its members, and did not raise any special objection to the regulations after the amendment for about 12 months prior to the issuance of the notice of termination of the instant case, and used the instant club continuously. In light of the following, it is reasonable to deem that the Defendant fulfilled its duty to clarify and explain the regulations after the amendment, as stipulated in Article 3(3) and (4) of the Terms and Conditions Regulation Act, since the amendment, it is reasonable to deem that the Defendant fulfilled its duty to explain and explain the regulations after the amendment. Accordingly, the Plaintiffs’ above assertion is without merit.

2) Whether the Sports Facilities Act is violated

Article 18 of the Sports Facilities Act provides that "a sports facility business entity shall observe matters prescribed by Presidential Decree for the protection of the rights and interests of its members, such as transfer and acquisition of membership, refund of membership fees, confirmation and issuance of membership cards, and organization and service of its representative body, etc." In addition, Article 19 of the Enforcement Decree of the Sports Facilities Act provides that "where a member requests to organize a steering committee representing its members, it shall be comprised of at least ten members, and matters concerning the rights and interests of its members shall be consulted in advance with the relevant steering committee."

As seen earlier, the Defendant’s public announcement of the details of the instant club’s rights and interests during the process of the amendment of the rules and the consultation with the Operating Advisory Committee should be deemed to have been partially amended by reflecting the matters resolved with respect to the amendment of the rules. Even if the above facts alone cannot be said to have gone through the consultation procedure with the Operating Committee prescribed by the Sports Facilities Act, the matters pertaining to the protection of the rights and interests of the members to be observed by the sports facility business entity under the provisions of the said Sports Facilities Act pertaining to (i) transfer and acquisition of membership by day; (ii) refund of membership fees; (iii) refund of membership fees to the annual members; (iv) confirmation and issuance of membership certificates; and (v) as seen above, matters pertaining to the rights and interests of the members that should be consulted with the Operating Committee in advance, on the premise that there exists a contractual relationship with the members; and (v) it is difficult to deem that the agreement with the members was terminated; and (v) it does not constitute a violation of the provisions of Article 30 of the Sports Facilities Act and its validity.

C. Validity of the termination notice of the instant case

1) In full view of the following circumstances acknowledged by the above facts and the evidence as follows, the operating status of the instant club, the period and degree of losses incurred by the Defendant’s continued operation of the instant club, the need to guarantee the Defendant’s freedom of business, the Plaintiffs’ damages incurred due to the termination of the instant contract, and the characteristics of the instant contract, which are continuous contracts, it is reasonable to deem that the Defendant had a circumstance that the Defendant continued to operate the instant club as the enemy at the time of the notice of termination of the instant contract was unable to operate the instant club in a normal manner, and it constitutes “a unavoidable reason” or “a case where it is impossible to operate the instant club due to inevitable operational reasons” as prescribed in Article 12 of the Rules after the amendment. Accordingly, the Defendant is liable for damages on the ground that the Defendant did not perform his duty to provide the instant use contract. Accordingly, the instant use contract was lawfully terminated at the time of closure of the instant club after a considerable period of time from the Defendant’s notice of termination. Therefore, the Plaintiffs

A) As seen earlier, the business losses suffered by the Defendant during the operation of the instant club from July 1, 2008 to June 30, 2013 are equivalent to half of the Defendant’s total sales of the instant club during the same period, and if the instant club continues to operate the same, it would be likely that the Defendant’s overall management might also adversely affect the Defendant’s business, and there is no other circumstance to deem that the instant club operation was caused by the Defendant’s fault.

B) As seen earlier, it is anticipated that additional funds will be required to replace the facilities of the instant club, change the structure, expand the area of the instant club, and add new facilities. It would be practically difficult for the Defendant to raise the security deposit or annual fee by raising the security deposit or annual fee without maintaining the instant use contract with the Plaintiffs.

C) From the year 2006, the Defendant presumed to have continuously increased annual fees to escape the enemy of the instant club, and it appears that the Plaintiffs could have predicted the financial difficulties for the operation of the instant club. Since the instant club is not a facility that is not capable of replacing it, the Plaintiffs are able to fully achieve the purpose of the instant use contract, such as health care, etc. using another sports club in their surroundings. Therefore, it is difficult to recognize special circumstances, such as the termination of the instant use contract, giving the Plaintiffs the suffering from unexpected damage or from irrestable pain.

D) Generally, in the event of a continuous contract without a fixed period of time, the parties are entitled to terminate the contract at any time by unilateral declaration of intention, even if there is no separate agreement on the reservation of the right to terminate the contract. Considering that the instant use contract is a continuous contract without a fixed period of time and the right to withdraw from the instant club at any time pursuant to the rules before and after the amendment is granted to the Plaintiffs, it is difficult to view that the instant use contract constitutes “other inevitable circumstances” under Article 12 of the Rules after the amendment of the circumstances in which the continued personnel of the instant club cannot continue its normal business, and it is difficult to deem that it is remarkably unfair for the Defendant to recognize the right to terminate the instant use contract.

2) Even if the Defendant is unable to terminate the instant use contract, as seen earlier, the Defendant cannot be deemed to possess the same facilities or spaces as the previous ones as the result of closure of the instant use contract. On the other hand, unlike the instant use club, the Plaintiff’s newly established use of a club appears to be a separate independent facility in light of all circumstances, such as the location, structure, and details of various sports facilities to be installed, such as a change in its operation method, unlike the instant use club, since it cannot be deemed that the subject matter of the instant use contract exists under social norms, and it is difficult to view that the Defendant is in a state where he can perform his own benefits under the instant use contract. Accordingly, the Plaintiff’s assertion in this regard is difficult to accept.

4. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Park Jae-young (Presiding Judge)

1) In the same purport, the Civil Act also provides that, with respect to a lease contract (Article 635), employment contract (Article 660), deposit contract (Article 669), etc. which falls under a continuous contract among typical contracts (Article 635), and in the absence of a term agreement, the parties may notify at any time of termination of the contract, and provided that, however, that such termination shall take effect after a certain period has elapsed from the date on which