[1] Whether the obligation to return a down payment is included in the “matters agreed upon between a sports facility business entity and its members” subject to succession under Article 27 of the Installation and Utilization of Sports Facilities Act and the “matters agreed upon between the sports facility business entity and its members” and the obligation to return a down payment to the members who cancelled the membership contract before the succession of the sports facility business

[2] The legal nature of interest to be added to the money to be returned as a result of the rescission of a contract (=return of unjust enrichment)

[1] Article 2 Subparag. 4 of the Installation and Utilization of Sports Facilities Act provides that “A member means a person who has agreed with a sports facility business entity to use the facilities of a sports facility business on a preferential basis or on more favorable condition than a general user.” Moreover, a membership agreement entered into between a sports facility business entity, such as a golf course, etc. and a user does not have any special restrictions as to membership qualifications. In addition, a membership agreement entered into between a sports facility business entity and a user does not, in principle, constitute an establishment requirement for the payment of membership fees. Meanwhile, Article 27 of the Sports Facilities Act provides that the purpose of maintaining a management system established in relation to the authorization and permission of a business and protecting the interests of many members who have entered into a use relationship with a sports facility business entity despite a change in the business entity, is to protect the interests of the sports facility business entity, even if the membership agreement was terminated or terminated by cancellation or termination, such rights and obligations also become subject to succession. Comprehensively taking into account the various circumstances, the obligation to return the down payment shall be paid only before the completion payment was concluded.

[2] When one of the parties cancels a contract, each party shall pay the other party with interest added to the money to be returned. The interest added here falls within the scope of restitution, which is a kind of restitution of unjust enrichment, and is not damages for delay of the obligation to return.

[1] Article 2 subparag. 4 and Article 27(1) and (2) of the Installation and Utilization of Sports Facilities Act / [2] Article 548 of the Civil Act

[1] Supreme Court Decision 2013Da85417 Decided December 23, 2015 (Gong2016Sang, 185) / [2] Supreme Court Decision 2011Da50509 Decided April 26, 2013 (Gong2013Sang, 931)

Plaintiff 1 and seven others (Law Firm Jae-sung, Attorneys Lee Jae- lodging et al., Counsel for the plaintiff-appellant)

Copi Global Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Song-chul et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2014Na2047274 decided May 21, 2015

All appeals are dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 27 of the Installation and Utilization of Sports Facilities Act (hereinafter “sports facilities Act”) provides that “When a sports facility business entity dies or transfers his/her business, or a corporate sports facility business entity merges with another sports facility business entity, the heir, the transferee of the business, the corporation surviving the merger, or the corporation established following the merger shall succeed to the rights and duties following the registration or report of the relevant sports facility business (including the matters agreed upon between the sports facility business entity and its members where members are recruited pursuant to Article 17),” and Paragraph (2) of the same Article provides that “auction under the Civil Execution Act (Article 17), realization under the Debtor Rehabilitation and Bankruptcy Act (Article 2), the sale of seized property under the National Tax Collection Act, the Customs Act, or the Framework Act on Local Taxes (Article 3), and Paragraph (1) shall also apply mutatis mutandis to a person who acquires an essential facility under Article 20 through 3 before the conclusion of the agreement with the sports facility business entity to use the sports facility business by succession to the status of the sports facility business entity.” However, the purport of Article 2 subparag. 4 of the Sports Facilities Act is also prescribed as a person who has no special agreement to use the sports facility business entity.

For the reasons indicated in its holding, the lower court determined that the scope of “member” protected by Article 27 of the Sports Facilities Act includes a person holding a claim to return a security deposit against a sports facility business entity by cancelling a membership fee by failing to pay the security deposit in full or obtaining the membership fee by concluding a membership agreement, and that the scope of the obligation that the Defendant succeeded under Article 27 of the Sports Facilities Act includes the obligation to return the down payment due to the cancellation of each of the instant membership agreements that the Nonparty Company owes to the Plaintiffs.

Examining the record in accordance with the aforementioned legal doctrine, the lower court’s aforementioned determination is justifiable. In so doing, the lower court did not err by misapprehending the legal doctrine on the subject of succession under Article 27 of the Sports Facilities Act, or by violating the Supreme Court precedents.

2. Regarding ground of appeal No. 2

When one of the parties cancels a contract, each party shall pay the other party with interest added to the money to be returned in such a case. The interest added here falls within the scope of restitution, and has the nature of return of unjust enrichment, and is not damage for delay of the duty to return (see Supreme Court Decision 2011Da50509, Apr. 26, 2013).

For the reasons indicated in its holding, the lower court determined that the Defendant, upon acquiring the status of the instant golf course concessionaire, succeeded to the obligation due to the cancellation of a membership contract, and accordingly, succeeded to the obligation to pay statutory interest on the down payment to be returned to the Plaintiffs

Examining the record in accordance with the aforementioned legal principles, the lower court’s aforementioned determination is justifiable. In so doing, it did not err by misapprehending the legal doctrine on the scope of succession subject to Article 27 of the Sports Facilities Act.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Sang-hoon (Presiding Justice)