Whether a disciplinary measure against an administrative violation may be imposed on a person who is not a real offender, but a person responsible for statutory violation (affirmative), and whether a disciplinary measure may be imposed even without intention or negligence on a violator of the administrative law (affirmative in principle)

Inasmuch as sanctions against violations of administrative laws are sanctions imposed based on the objective fact of violation of administrative laws in order to achieve administrative purposes, rather than a real offender, on a person prescribed as a person responsible for legal affairs, and barring any special circumstance, they may be imposed without intention or negligence on a violator. Such legal doctrine likewise applies to dispositions of suspension of business on the ground of illegal collection by credit service providers, etc. under Article 13(1) of the former Act on Registration of Credit Business, etc. and Protection of Finance Users.

Article 13(1)1 of the former Act on Registration of Credit Business, etc. and Protection of Finance Users (Amended by Act No. 11544, Dec. 11, 2012); Article 9 subparag. 1 of the former Act on Fair Debt Collection (Amended by Act No. 12594, May 20, 2014)

Supreme Court Decision 2012Du1297 Decided May 10, 2012

Mmerd loan limited liability companies

The head of Gwangjin-gu Seoul Metropolitan Government (Law Firm LLC, Attorneys Kim Dong-gu et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2013Nu28048 decided May 27, 2014

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Article 13(1) of the former Act on Registration of Credit Business, etc. and Protection of Finance Users (amended by Act No. 11544, Dec. 11, 2012; hereinafter “Credit Business Act”) refers to “credit service providers, etc.” and “if a credit service provider, etc. falls under any of the following subparagraphs, it may order the relevant credit service provider, etc. to suspend all or part of its business for a fixed period not exceeding one year in accordance with the standards prescribed by Presidential Decree.” Article 13(1) of the same Act provides that “where a credit service provider, etc. falls under any of the following subparagraphs, the credit service provider, etc. may order the suspension of business for a fixed period not exceeding one year.” Article 13(1)

Article 9 of the former Act on the Fair Debt Collection (amended by Act No. 12594, May 20, 2014; hereinafter “debt Collection Act”) provides that “A debt collector shall not engage in any of the following acts in connection with debt collection.” Article 1 provides that “the act of assault, intimidation, arrest or detention of a debtor or his/her related persons, or using deceptive scheme or force against him/her,” and Article 2 Subparag. 1 provides that “debt collector” means a person who, regardless of the cause of employment, contract, or delegation, carries out debt collection for a person who actually engages in credit business without registering his/her credit business under the Credit Business Act.

On the other hand, sanctions against violations of administrative laws are sanctions imposed based on the objective fact of violation of administrative laws in order to achieve administrative purposes. Thus, rather than a real offender, it is imposed on a person prescribed as a person in charge of law, and barring any special circumstance, it may be imposed without intention or negligence on a violator (see, e.g., Supreme Court Decision 2012Du1297, May 10, 2012). Such legal principle likewise applies to the disposition of suspension of business on the grounds of illegal collection by a credit service provider, etc. under Article 13(1) of the Credit Business Act.

2. A. Comprehensively taking account of the adopted evidence, the lower court acknowledged the following facts: (a) the Plaintiff was a corporation that registered credit business pursuant to the Credit Business Act; (2) the Nonparty, who is an employee of the Plaintiff, threatened the Plaintiff’s related persons, such as the Nonparty, while taking an obligor’s desire to talk with the Defendant in connection with debt collection on September 201; and (3) on December 5, 2012, the Defendant issued a disposition suspending the Plaintiff’s entire business for six months (hereinafter “instant disposition”) pursuant to Article 13(1) of the Credit Business Act on the ground that the Plaintiff violated Article 9 subparag. 1 of the Debt Collection Act by threatening the obligor or his related persons.

B. Examining the facts acknowledged by the court below in light of the aforementioned legal principles, the Plaintiff did not prevent his employee from threatening the debtor or his related person in connection with debt collection, and thus, the Plaintiff is subject to the disposition of business suspension as a legal person, and barring any special circumstance, it does not change the Plaintiff’s intention or negligence.

C. Nevertheless, the court below held that the disposition of this case is unlawful solely on the ground that the "in case where a credit service provider or a loan broker violates Article 9 of the Credit Business Act" under Article 13 (1) 1 of the Credit Business Act means a case where a credit service provider or a loan broker violates Article 9 of the Credit Business Act as a debt collector, and it is difficult to deem that the act constitutes a violation under Article 9 of the Credit Business Act just because the debt collector employed by the credit service provider committed an act of violation under Article 9 of the Credit Business Act. If a credit service provider is a legal entity, the act of intimidation of the non-party, who is an employee of the credit service provider, committed an act of violation under Article 9 of the Credit Business Act directly with the representative or an act of violation under Article 9 of the Credit Business Act, or an act of violation by another person's intent through aid or assistance, or a public offering, etc., and there is no evidence to see that the plaintiff's intent was involved. The court below erred in the misapprehension of legal principles as to interpretation and application of Article 13 (1) of the Credit Business Act.

3. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jo Hee-de (Presiding Justice)