Whether the “contractor” under Article 29(1) of the former Framework Act on the Construction Industry is limited to “contractor who runs a construction business after registration, etc.” under Article 2 subparag. 5 of the same Act (affirmative)

Article 29 (1) of the former Framework Act on the Construction Industry (amended by Act No. 8477 of May 17, 2007) provides that "a constructor shall not subcontract the whole of his contracted construction works or most of the major parts prescribed by the Presidential Decree to another constructor." Article 96 subparagraph 5 of the same Act provides that "a person who subcontracts in violation of Article 29 (1) shall be punished by imprisonment for not more than one year or by a fine not exceeding 10 million won." Article 2 subparagraph 5 of the same Act provides that "a constructor means a person who operates a construction business after making a registration, etc. under this Act or other Acts." Thus, the application of penal provisions under Articles 29 (1) and 96 subparagraph 5 of the same Article is limited to a subcontract to another constructor who makes a registration, etc.

Subparagraph 5 of Article 2, Article 29(1), and Article 96 subparag. 5 of the former Framework Act on the Construction Industry (amended by Act No. 8477 of May 17, 2007)

Supreme Court Decision 2000Do1081 Delivered on June 23, 2000

Defendant 1 and one other

Prosecutor

Attorney Kim-Hy-hwan

Daegu District Court Decision 2007No390 Decided November 2, 2007

All appeals are dismissed.

We examine the grounds of appeal.

1. The former Framework Act on the Construction Industry (amended by Act No. 8477 of May 17, 2007; hereinafter the same applies) provides that "a constructor shall not subcontract the whole of his contracted construction works or most of the major parts determined by the Presidential Decree to another constructor (Article 29 (1))." Article 29 (1) provides that "a person who subcontracts in violation of the provisions of Article 29 (1) shall be punished by imprisonment for not more than one year or by a fine not exceeding 10 million won (Article 96 subparagraph 5)." Meanwhile, "a constructor" means a person who operates a construction business after making a registration, etc. under this Act or other Acts (Article 2 subparagraph 5). Thus, the penal provisions under Articles 96 subparagraph 5 and 29 (1) of the former Framework Act on the Construction Industry shall be limited to cases where a constructor who makes a registration, etc. makes a subcontract to another constructor who has made a registration, etc. (see, e.g., Supreme Court Decision 2003Do1803.).

2. According to the reasoning of the judgment below, the court below held that even if Defendant 2 Co., Ltd. (the representative director at that time Defendant 1) subcontracted most of the whole or part of each of the construction works of this case that Defendant 2 Co., Ltd. (the representative director at that time Defendant 1) contracted to the Nonindicted Co., Ltd., as stated in the facts charged of this case, it cannot be punished by applying Article 96 subparag. 5 and Article 29(1) of the former Framework Act on the Construction Industry to this act, even if there is no evidence to find that the Nonindicted Co., Ltd. (the representative director at that time) was a person operating construction

In light of the above legal principles and records, the above fact-finding and judgment of the court below are justified and acceptable, and there is no violation of law such as misunderstanding of legal principles as to restriction on subcontracting of construction works under the former Framework Act on the Construction Industry, as alleged in the grounds of appeal.

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

Justices Yang Sung-tae (Presiding Justice)