Plaintiff 1 and one other (Attorneys Lee E-hwan et al., Counsel for the plaintiff-appellant)

Korea Credit Guarantee Fund (Law Firm Hun, Attorneys Kim Jin-mo et al., Counsel for the defendant-appellant)

April 3, 2015

Seoul Central District Court Decision 2014Gahap570214 Decided February 13, 2015

1. The plaintiffs' appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The decision of the first instance court is revoked. The defendant's compulsory execution based on the ruling of recommending reconciliation as of June 28, 2012 is denied against the defendant in Seoul Central District Court 201Gahap98445 and revocation of fraudulent act.

1. Basic facts

(a) Confirmation of a ruling of recommending reconciliation;

1) On December 28, 2010, Nonparty 1, the father of the Plaintiffs, donated each of 1/2 shares of each of the above 1/2 shares of each of the real estate listed in the separate sheet (hereinafter “instant real estate”) owned by himself/herself to the Plaintiffs (hereinafter “instant gift agreement”), and on December 29, 2010, registered each of the above 1/2 shares under the name of the Plaintiffs as to each of the above 1/2 shares due to the instant gift agreement.

2) On the other hand, on September 21, 201, the Defendant filed a lawsuit against the Plaintiffs seeking reimbursement of the amount equivalent to KRW 3,209,584,666, the Seoul Central District Court 201Gahap9445, which is the Plaintiff’s mother, with the claim for reimbursement against the Plaintiffs as the preserved claim, and seeking compensation for the amount of restitution arising therefrom. On June 28, 2012, the above court revoked the instant donation contract concluded on December 28, 2010 with respect to the instant real estate within the limit of KRW 411,250,000, respectively. The Plaintiffs paid KRW 411,250,000 to the Defendant until July 12, 2012 by adding the settlement recommendation to the aforesaid amount to the settlement recommendation by 25% (hereinafter “the settlement recommendation”).

B. The rehabilitation procedure against Nonparty 1

On May 14, 2013, Nonparty 1 filed an application for rehabilitation with Suwon District Court 2013dan54, and received a decision of commencement of rehabilitation from the above court on May 28, 2013. On October 1, 2013, Nonparty 1 received a decision of completion of rehabilitation procedures by completing the obligation to repay rehabilitation claims prescribed in the rehabilitation plan on November 4, 2013.

[Reasons for Recognition] Unsatisfy, entry in Gap evidence 1, 3 through 10 (including each number in the case of provisional number), the purport of the whole pleadings

2. Summary of the plaintiffs' assertion

According to Article 251 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “ Debtor Rehabilitation Act”), when a decision to authorize a rehabilitation plan is made, the debtor is exempted from liability for all rehabilitation claims and rehabilitation security rights except for the rights recognized under the rehabilitation plan or the Debtor Rehabilitation Act. Nonparty 1 became exempt from liability for all rehabilitation claims and rehabilitation security rights by repaying all obligations modified according to the rehabilitation plan. Accordingly, it is not consistent with the substantive legal relationship, and any compulsory execution based on the ruling on recommending settlement of this case, premised on the fact that the defendant is able to enforce compulsory execution against Nonparty 1’s property, should be denied.

3. Determination

A. Whether there is any ground for objection to the claim

In addition, there is no evidence to acknowledge that the Plaintiffs paid to the Defendant each of the monetary obligations of KRW 411,250,000 as stipulated in the decision of recommending reconciliation in this case, and Article 251 of the Debtor Rehabilitation Act refers to the exemption under Article 251 of the Debtor Rehabilitation Act, not to be de facto extinguished, but to the effect that only the liability is extinguished and the obligation itself is still a kind of natural obligation which remains in existence, and thus, it is impossible to enforce the obligor’s performance (see, e.g., Supreme Court Decision 2001Da3122, Jul. 24, 2001). Even if the exemption against Nonparty 1 was made, it cannot be deemed that Nonparty 1’s repayment of the monetary obligation of KRW 411,250,00 as stipulated in the decision of recommending reconciliation in

B. Abuse of rights

1) Even if the right is based on the final and conclusive decision of recommending reconciliation, it should be exercised in good faith, and if the enforcement of the decision of recommending reconciliation does not fit the substantive legal relationship and becomes an abuse of rights, the Plaintiffs may seek exclusion of compulsory execution in such a case. Accordingly, this paper examines whether enforcement based on the decision of recommending reconciliation in this case constitutes abuse of rights.

2) In order for the contents of a ruling of recommending a compromise to be contrary to the substantive legal relationship and enforcement of the ruling of recommending a compromise constitutes an abuse of rights, the following should be considered in full view of all the circumstances such as the nature and contents of the right which can be executed by the ruling of recommending a compromise, the circumstances leading up to the establishment of the ruling of recommending a compromise, the circumstances leading up to enforcement after the decision of recommending a compromise, and the impact on the parties to the execution, etc.: (a) the enforcement of the ruling of recommending a compromise is considerably unfair and is clearly against the definition that it is obviously unreasonable to allow the other party to execute it (see Supreme Court Decision 2013Da75717, Feb. 21, 201

3) In light of the following circumstances, the rehabilitation plan approval order for Nonparty 1 with respect to the instant case is based on the premise that the instant real estate is already reverted to the Plaintiffs and the Plaintiffs are obliged to compensate for the amount determined in the decision on the recommendation for reconciliation of this case. On the other hand, if this premise is not that, in light of the purport of the decision on the recommendation for reconciliation of this case, the instant donation contract is subject to avoidance in the rehabilitation procedure, and the monetary liability of the Plaintiffs should have been treated as the property to be additionally repaid to the rehabilitation creditors, including the liquidation value. In full view of the fact that the contents of the decision on the recommendation for reconciliation of this case are contrary to the substantive legal relationship, or that it is considerably improper for the Defendant to enforce compulsory execution based on the recommendation for reconciliation of this case, and that it is obviously contrary to the definition of allowing the Plaintiffs to authorize compulsory execution, and there is no other evidence to acknowledge this otherwise.

C. Sub-committee

Therefore, the objection raised by the plaintiffs cannot be accepted.

4. Conclusion

If so, the plaintiffs' claims in this case shall be dismissed for all reasons, and the judgment of the court of first instance is just in this conclusion, and the plaintiff's appeal shall be dismissed for lack of reasons.

[Attachment]

Judges Kim Dae-ro (Presiding Judge)