Where an administrative agency imposed a penalty surcharge pursuant to Article 5, etc. of the Act on the Registration of Real Estate under Actual Titleholder’s Name on the ground of title trust before the commencement of reorganization proceedings on a reorganization company, the case holding that such disposition is unlawful as it was issued as to the claim for penalty already forfeited or extinguished

In a case where the administrative agency imposed penalty surcharges pursuant to Article 5, etc. of the Act on the Registration of Real Estate under Actual Titleholder’s Name on the ground of the title trust in the reorganization company prior to the commencement of reorganization proceedings, the case holding that the above disposition was unlawful as to the claim for penalty surcharges due to the title trust under the former Company Reorganization Act, on the ground that the administrative agency did not report it in the company reorganization proceedings, and its forfeiture and extinguishment is not included in the reorganization plan approved thereafter, and thus, the above disposition is not included in the reorganization plan approved thereafter, and thus, it is thus unlawful.

Articles 102 (see current Article 118 of the Debtor Rehabilitation and Bankruptcy Act), 122 (1) (see current Article 140 (2) and (3) of the Debtor Rehabilitation and Bankruptcy Act), 157 (1) (see current Article 156 (1) of the Debtor Rehabilitation and Bankruptcy Act), 241 (see current Article 252 of the Debtor Rehabilitation and Bankruptcy Act), Article 5 (1) 1 of the Act on the Registration of Real Estate under Actual Titleholder’s Name, Article 3-2 of the Enforcement Decree of the Act on the Registration of Real Estate under Actual Titleholder’s Name.

Plaintiff (Law Firm Apex, Attorneys Ansan-seok et al., Counsel for the plaintiff-appellant)

Pyeongtaek-gun Gun

October 15, 2009

1. The Defendant’s imposition of a penalty surcharge of KRW 233,173,00 against the Plaintiff on May 6, 2009 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. Nonparty 1 Co., Ltd. purchased 18,635 square meters (number 1 omitted) and 5,220 square meters (hereinafter collectively referred to as “each of the instant lands”) prior to the same Ri (number 2 omitted) in the Jinwon-gun, Jinwon-gun, Jinwon-gun. On September 19, 197, Nonparty 1 Co., Ltd. purchased the title of Nonparty 2, one of his employees, and completed the registration of ownership transfer in its name (hereinafter referred to as “instant title trust”).

B. On July 9, 1998, according to the former Company Reorganization Act (amended by Act No. 7428, Mar. 31, 2005; hereinafter the same), the non-party 1 corporation filed an application for commencing the company with the Seoul District Court for commencing the company and rendered a decision of commencing the company reorganization on Nov. 16, 1998. On December 3, 1999, the company approved the reorganization plan including the merger of the non-party 1 corporation.

C. Each of the instant lands was subsequently awarded by Nonparty 3 during the voluntary auction procedure and completed the registration of ownership transfer on November 10, 2006.

D. On July 14, 2008, the Defendant notified the director of the tax office having jurisdiction over the title trust of each of the instant cases from the director of the tax office having jurisdiction over the distribution on March 2, 2009. On May 6, 2009, the Defendant issued a disposition imposing a penalty surcharge of KRW 233,173,000 in total (hereinafter “instant disposition”) upon the Plaintiff pursuant to Article 5 of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”) and Article 3-2 of the Enforcement Decree of the same Act in relation to the title trust of this case.

(1) Land: Penalty surcharge of KRW 204,985,00 (number 1 omitted): Penalty surcharge of KRW 204,985,00 (=The appraised value of real estate of KRW 81,940,000 x the penalty surcharge of KRW 25%)

- Amount of KRW 81,940,000 = Standard market price of KRW 44,00 】 Area of land 18,635 square meters;

- A penalty surcharge rate of 25% = A penalty surcharge rate of 10% based on the appraised value of real estate + A penalty surcharge rate of 15% due to the transitional period of breach of duty.

(2) Land: Penalty surcharge of KRW 28,188,00 (number 2 omitted): Penalty surcharge of KRW 28,188,00 (=The assessed value of the real estate amount of KRW 14,09,000 x the penalty surcharge of KRW 20%)

- KRW 14,0940,000 = Standard market price of KRW 27,00 + Area of land 5,220 square meters;

- A penalty surcharge rate of 20% = A penalty surcharge rate of 5% according to the appraised value of real estate + 15% due to the expiration period of breach of duty.

[Reasons for Recognition] Facts without dispute, Gap 1 to 3 evidence, Eul 1 to 6 evidence (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion: The penalty surcharge resulting from the title trust of this case (hereinafter "the penalty surcharge of this case") is "property claim arising before the commencement of reorganization proceedings" under Article 102 of the former Company Reorganization Act, which constitutes a reorganization claim. However, since the defendant was excluded from the reorganization plan because it was not reported to the reorganization court and was exempted from the reorganization plan, the disposition of this case was unlawful.

(2) Defendant’s assertion: The obligation to pay penalty surcharges under the Real Estate Real Name Act is to commence a specific procedure by issuing a notice of payment of penalty surcharges within one month after the head of a Si/Gun/Gu confirms the violation of the Real Estate Real Name Act; and the exclusion period of penalty surcharges is to be calculated from the time when the title trust registration was completed, not from the time when the title trust registration was completed, but from the time when the cancellation was completed. Thus, the instant penalty surcharge constitutes “claim

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Whether the instant penalty surcharge claim constitutes a reorganization claim

(A) Articles 157(1) and 122(1) of the former Company Reorganization Act provide that a claim to collect under the National Tax Collection Act or the National Tax Collection Act is so-called “tax claim, etc.” which can become a reorganization claim under the Company Reorganization Act. Article 5(6) of the Real Estate Real Name Act provides that “If a penalty surcharge is not paid by the due date for payment under the provisions of paragraph (1), it shall be collected in the same manner as delinquent taxes are collected,” and Article 28(4) of the Local Tax Act provides that “Except as otherwise provided in this Act, the disposition on default of local taxes and impositions of local governments shall be in the same manner as delinquent taxes are collected.” Thus, penalty surcharges arising from title trust may become a reorganization claim under the Company Reorganization Act (Article 121(1)5 of the Company Reorganization Act does not fall under “a fine, minor fine, minor fine, and minor fine (hereinafter “fine, etc.”) prior to the commencement of reorganization proceedings, and thus, it cannot be seen that a public prosecutor’s execution of a penalty surcharge is clearly and applied mutatis mutandis.

(B) Meanwhile, the amount of penalty surcharge against a title truster who violates the Real Estate Real Name Act is determined by considering the value of real estate, the period of violation of duty, tax evasion, or the existence of the purpose of avoiding restrictions under tax laws and regulations. However, the transfer registration of ownership based on the title trust of this case had already been completed September 19, 197, which was prior to the decision on commencing the company reorganization procedure against the plaintiff. According to the provisions of Article 5 of the Real Estate Real Name Act and Article 3-2 of the Enforcement Decree of the same Act, the above penalty surcharge shall not exceed 30/100 of the real estate price, and 5/100 or 15% of the real estate price shall be added according to the real estate price assessed, and 50/10 or 15% of the real estate price shall be added according to the expiration of the period of violation of duty, and if it is not for the purpose of evading taxes or avoiding restrictions under Acts and subordinate statutes, it shall be deemed that the period of imposition of the penalty surcharge of this case is 20.

(2) Whether the instant penalty surcharge claim was extinguished

(A) In cases where the “tax claim, etc.," including the claim for penalty surcharge, constitutes a reorganization claim, the reorganization company shall, pursuant to Article 157 of the former Company Reorganization Act, be exempted from its liability for all reorganization claims and securities, except for the rights recognized under the reorganization plan or the former Company Reorganization Act, if the company fails to report without delay, at the latest, not later than the second meeting prior to the date of the commencement of the reorganization program (see, e.g., Supreme Court Decision 2001Du7268, Sept. 4, 2002); and where the approval of the reorganization program is decided, the reorganization company shall be exempted from its liability for all reorganization claims and securities (Article 241 of the former Company Reorganization Act).

(B) However, in the company reorganization procedure against the plaintiff, the defendant did not report the claim of the penalty surcharge in this case as a reorganization claim, and the fact that the reorganization plan approved thereafter does not include the claim of the penalty surcharge in this case is not a dispute between the parties, so the claim of the penalty surcharge in this case was forfeited or extinguished.

(3) Sub-decisions

Ultimately, the instant disposition is unlawful since it was issued with respect to the claim for penalty already forfeited or extinguished under the former Company Reorganization Act.

3. Conclusion

Therefore, we decide to accept the plaintiff's claim and it is so decided as per Disposition.

[Attachment] Relevant Statutes: omitted

Judges Song-Gyeong (Presiding Judge)