Plaintiff 1 and seven others (Law Firm Jae-sung, Attorney Kim Gi-soo, Counsel for the plaintiff-appellant)

Culul Global Co., Ltd. (Law Firm Gyeongyang, Attorney Cho Jae-chul, Counsel for the plaintiff-appellant)

October 22, 2014

1. The defendant,

A. From September 7, 2010 to Plaintiff 1 30,000,000:

B. From September 28, 2010 to Plaintiff 2, 30,000 won and its related thereto:

C. From November 30, 2010 to Plaintiff 3, 20,000 won and its related thereto:

D. From November 8, 2010 to Plaintiff 4, 30,000 won and its related thereto:

E. From November 2, 2010 to Plaintiff 5, 200,000, and its related thereto:

F. From December 1, 2010 to Plaintiff 6, KRW 20,000 and its related thereto:

G. From November 8, 2010 to Plaintiff 7: 20,000,000 won and its related thereto:

H. From November 5, 2010 to Plaintiff 8, 200,000 won and its related thereto

By May 29, 2014, 5% per annum and 20% per annum from the following day to the day of full payment.

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

3. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Basic facts

A. Conclusion of a golf course membership agreement between the plaintiffs and EIMWD

1) The Plaintiffs entered into a golf course membership agreement (hereinafter “each of the instant membership agreements”) with EMWD Co., Ltd., and with respect to ○○○○ Golf Club (hereinafter “instant golf course”), which is being developed in Gangwon-si and Hongcheon-gun, Gangwon-do, and Hongcheon-gun, the Plaintiffs paid KRW 190,000,000 for each membership fee to the Plaintiffs, and paid the down payment to the Nonparty Company according to the said agreement. The date of the conclusion of each of the instant membership agreements and the details of the payment of down payment are as follows.

Plaintiff 1, Sept. 6, 2010, Sept. 7, 2010, Plaintiff 2, Sept. 28, 2010, Sept. 30, 2010, Plaintiff 30,000, Sept. 30, 2010, and Plaintiff 3, Sept. 6, 2010, 2010; Plaintiff 20,000,000 on Sept. 20, 200; Plaintiff 4, Sept. 6, 2010; Plaintiff 30,000, Oct. 20, 200; and Plaintiff 4, Sept. 6, 2010; Plaintiff 30,000, Oct. 30, 200; and Plaintiff 5, Sept. 6, 2010;

2) The main contents of each of the instant membership agreements are as follows.

(2) Upon receipt of a notice of deposit confirmation by the company, the contract shall enter into force at the time of receipt by the company after entering into the agreement and entering into force of the agreement (1) ○○○○ golf club membership agreement in the main text and deposit the down payment into the bank account designated by the company as prescribed in Article 5. (2) The company shall notify the applicant of the deposit confirmation in writing or by wire or by wire within one week after the deposit confirmation. (3) The applicant shall obtain the membership from the date of payment of the full amount of the deposit under Article 5, and maintain the qualification for five years unless there are reasons such as termination of the contract, deprivation of the qualification of the member, expulsion, expulsion, etc.

B. Non-performance of the non-party company

At the time of entering into each of the instant golf courses with the Plaintiffs, Nonparty Company agreed to temporarily open the instant golf course until September 201, 201, and to temporarily open the instant golf course until March 201, 201, and from March 1, 2012 (18 holes), it agreed to temporarily open the instant golf course due to the closure of the subcontractor’s road traffic around September 201, while the opening of the entire golf course of the instant golf course was completed, the Plaintiffs agreed to pay the remainder of the said golf course to the Nonparty Company upon completion of the opening of the entire golf course of the instant case. However, the Nonparty Company did not temporarily open the instant golf course due to the closure of the subcontractor’s road traffic around September 2012, and the extension of the temporary closing period until October 5, 2012.

C. Cancellation of contract for the non-party company and confirmation of a prior judgment

1) On December 1, 201, Plaintiff 3, Plaintiff 2, Plaintiff 4, Plaintiff 7, and Plaintiff 8, December 2, 2011; Plaintiff 5, December 3, 2011; Plaintiff 6, and Plaintiff 1, on February 2, 2012, expressed their intent to seek withdrawal from membership and return of down payment to the Nonparty Company; and each of the said declaration reached the Nonparty Company at that time; and thereafter, the Plaintiffs again reached the Nonparty Company on September 24, 2013, by expressing their intention to rescind each of the instant membership contracts on the grounds of the nonperformance of the Nonparty Company’s obligation.

2) Thereafter, on August 13, 2013, the Plaintiffs filed a lawsuit against Nonparty Company seeking the return of the down payment following the cancellation of each of the instant membership contract due to the nonperformance of obligations by Nonparty Company (Seoul Central District Court 2013Gahap61973), the said court rendered a ruling accepting all of the Plaintiffs’ claims on November 28, 2013, and the said judgment became final and conclusive on December 21, 2013.

D. Disposition of public sale of the instant golf course and acquisition of the Defendant’s status as the concessionaire of the instant golf course

1) On the other hand, around April 22, 2013 due to the business difficulties of the non-party company, the procedure of public auction was conducted on the entire site of the development project for the Gyeongwon-do Tourism Complex (hereinafter “instant project”), including the instant golf course site, and the defendant entered into a sales contract with the trust company of the instant project site on May 10, 2013 and acquired the ownership of the instant project site by concluding the sales contract with the non-real estate trust company, which is the trust company of the instant project site.

2) On June 5, 2013, the Defendant entered into an agreement with the non-party company to obtain the change of the status of the project implementer of the instant golf course including the approval of the instant golf course business plan. On August 23, 2013, the Defendant obtained the approval of the change of the instant tourism complex development plan (project implementer) from the Gangwon-do Governor, who is the approval authority for the instant project development plan, to the non-party company as the Defendant.

3) The Defendant acquired the instant project operator’s status in accordance with the foregoing modification approval, and the instant golf course operator’s status was also acquired upon the legal fiction of modification approval for the business plan of a registered sports facility business under Article 12 of the Installation and Utilization of Sports Facilities Act (hereinafter “Sports Facilities Act”) pursuant to Article 58(1)21 of the Tourism Promotion Act.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 through 12 (including branch numbers for those with additional numbers; hereinafter the same shall apply) and the purport of whole pleadings

2. Determination as to the cause of action

A. The parties' assertion

1) The plaintiffs' assertion

A) The term “member” protected under Articles 18 and 27 of the Sports Facilities Act is not interpreted to be limited to a person who fully pays a down payment or cancels a contract after the down payment, but also includes a person who has the right to claim the return of the down payment.

B) Article 27 of the Sports Facilities Act includes the obligation to return the down payment, which is the restoration upon the cancellation of each of the instant membership agreements, to the effect that the Defendant comprehensively succeeds to the rights and obligations following the registration or reporting of a sports facility business or the matters agreed upon between the sports facility business entity and its members.

C) Therefore, the Defendant who succeeded to the obligation to return the down payment of the non-party company shall pay to the Plaintiffs each down payment that the Plaintiffs paid and the damages for delay from the date of receiving each down payment from the Plaintiffs.

2) The defendant's assertion

A) The term “member” protected by Article 27 of the Sports Facilities Act is limited to the members recruited pursuant to Article 17 of the Sports Facilities Act. The Plaintiffs cannot be deemed as the members recruited accordingly.

B) The scope of “member” under Article 27 of the Sports Facilities Act, which the Defendant succeeded to the rights and obligations under the membership agreement, shall be construed by acquiring the membership fee in full before the succession of the sports facility business, and by limiting the membership fee to the person who continues to be a member at the time of succession of the sports facility business.

However, since the Plaintiffs did not fully pay the membership fees under each of the instant membership agreements and did not acquire the status of the members of the instant golf club, they do not constitute a member entitled to succeed to the obligation to return the membership fees. Even if the Plaintiffs acquired the status of the members of the instant golf club between the Nonparty Company, the Plaintiffs do not constitute a member under the Sports Facilities Act, just because the Plaintiffs rescinded the membership agreement between December 1, 201 and February 2, 2012, which was before the Defendant succeeded to the instant golf club business, and lost the status of the members of the instant golf club by cancelling the membership agreement, and at the same time, changed the status as a general creditor holding the right to return the membership fees to the Nonparty Company.

B. Relevant provisions

(3) Where a sports facility business entity or a person who has obtained approval for a business plan under Article 17 (1) (1) intends to recruit its members, he/she shall prepare and submit a membership recruitment plan to the Mayor/Do Governor or the head of a Si/Gun/Gu (limited to an autonomous Gu; hereinafter the same shall apply) by not later than 15 days prior to the commencement date of membership recruitment. (2) Where a person who intends to recruit its members under paragraph (1) submits a membership recruitment plan to recruit its members in an integrated manner with facilities for tourism business prescribed by Presidential Decree, he/she shall be deemed to have obtained membership recruitment under this Act.

C. Determination

1) As to whether the obligation to return the deposit exists

A) In full view of the results of fact-finding and the purport of the entire pleadings by the court of Gangwon-do, the non-party company submitted relevant documents, including a membership recruitment plan and a membership recruitment report, to the Governor of Gangwon-do, who is the competent authority. Accordingly, the plaintiffs recruited pursuant to Article 17 of the Sports Facilities Act by the non-party company.

It is a member.

B) Article 27 of the Sports Facilities Act provides that the transferee of a sports facility business shall succeed to the matters agreed upon between the sports facility business entity and its members in the event that the transferee of the sports facility business has recruited its members pursuant to the rights and duties following the registration or report of the sports facility business and Article 17 of the Sports Facilities Act. The scope of “members” protected under the above provision includes either the person who has paid the down payment or has cancelled the relevant contract after the conclusion of the membership contract,

(3) The purport of Article 2 subparag. 4 of the Sports Facilities Act does not include: (a) the following facts and circumstances, which show the overall purport of oral argument; (b) the term “member” means a person who has agreed with a sports facility business entity to use the facilities of the sports facility business on preferential basis or on favorable terms than ordinary users; and (c) the term “those who have acquired membership or paid the total amount of membership fees as prescribed by the detailed contents of the agreement entered into with the sports facility business entity” does not include, in principle, the so-called membership agreement with the content that the user acquired membership fees and provides convenience for the use of the sports facility as a requisite element of establishment; (c) the term “those who are subject to protection of rights and interests under the existing membership agreement” does not include a person who has acquired membership fees in full upon the conclusion of the agreement with the sports facility business entity under the Act on the Protection of Sports Facilities without the consent of the sports facility business entity under the said Act. However, the term “the person who has acquired membership fees” in this case’s initial purpose of the said Act does not include a person who has acquired membership fees in accordance with the said Act.

C) Next, as to whether the obligation to be succeeded by the sports facility business entity under Article 27 of the Sports Facilities Act and the obligation to return the down payment due to the cancellation of each of the instant membership agreements borne by the non-party company against the Plaintiffs is included in the scope of the rights and obligations that the non-party company owes to the Plaintiffs, the following facts and circumstances are acknowledged: ① the matters agreed between the non-party company and the Plaintiffs include not only the matters concerning the formation and performance of each of the instant membership agreements but also the duty to return upon the cancellation of the contract; ② Article 27 of the Sports Facilities Act provides the rights and obligations subject to succession as well as the status of the members, and does not stipulate the membership qualifications and membership status. Thus, even if the membership agreement was terminated or terminated upon the termination or termination, such rights and obligations are included in the subject of succession; ③ as long as the rights and obligations remain in accordance with the agreement between the sports facility business entity and the members, the Defendant’s obligation to return the down payment and the obligation to return the down payment to the non-party company before the cancellation of the contract’s succession.

(ii)with respect to the scope of damages for delay

A) The defendant asserts that even if the defendant's obligation to return down payment is recognized, the defendant's obligation to pay down payment to the plaintiffs of the non-party company cannot be viewed as the defendant's succession to the obligation to pay the interest in arrears due to the non-party company's default. Thus, the initial date of the interest in arrears shall be deemed not to be the date of payment of down payment, but the date of

B) On the other hand, as seen earlier, the Defendant succeeds to the obligation to return down payment due to the cancellation of each of the instant membership agreements that the Defendant owes to the Plaintiffs by the non-party company. Such Defendant’s obligation to succeed to the comprehensive right and obligation following the acquisition of the status of the golf club operator, and as long as the Defendant succeeds to the obligation to return down payment due to the non-party company’s nonperformance, it shall be deemed that the Defendant naturally succeeds to the obligation to return down payment due to the non-party company’s nonperformance, and as such, it shall not be deemed that only the obligation to pay for

3) Sub-decisions

Therefore, the Defendant is obligated to restore the Plaintiffs to its original state following the cancellation of each of the instant membership agreements, and to pay the Plaintiff 1 the down payment of KRW 30,000,000 from September 7, 2010 to the Nonparty Company the down payment of KRW 30,000,00 and the aforementioned payment of KRW 20,000 to the Plaintiff 2 from September 28, 2010; and to pay the Plaintiff 30,000,000 to the Plaintiff 3 at the rate of KRW 30,000 and interest for delay calculated from November 30, 200; from 20,000 to 20,000 to 20,000,000 to the Plaintiff 5; from 20,000 to 20,000,000 to 10,010 to 20,000 to the Plaintiff’s annual interest for delay calculated; and

3. Conclusion

Therefore, each of the claims against the plaintiffs against the defendant is justified and it is so decided as per Disposition by the assent of all.

Judges Choi Sung (Presiding Judge) (Presiding Judge)