Plaintiff (Attorney Kim Jong-jin, Counsel for the plaintiff-appellant)

Defendant (Defendant 1 of the Supreme Court Decision)

Republic of Korea (Defendant 2)

January 14, 2010

1. The plaintiff's claims against the defendant and the conjunctive defendant are all dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The plaintiff (1) In the first place, the defendant will pay to the plaintiff 20 million won and 20% interest per annum from the day after the day of the decision of this case to the day of complete payment with respect to the plaintiff 20 million won and 20% interest per annum from the day after the day of the decision of this case to the day of full payment.

1. Facts of recognition;

A. The Plaintiff failed to pay KRW 2,402,570, total value-added tax (e.g., September 30, 2001) and KRW 823,030,030 ( Nov. 30, 2001), while operating a personal business entity from around 2000 to 2001.

B. Preliminary Defendant, on May 8, 2004, seized 1/5 shares owned by the Plaintiff (hereinafter “Plaintiff’s shares”) among the forest land stated in the purport of the claim on May 8, 2004, and completed attachment registration on May 12, 2004.

C. Since then, the Plaintiff did not pay the above delinquent amount, the conjunctive Defendant requested the Korea Asset Management Corporation to sell the Plaintiff’s shares to the Korea Asset Management Corporation on August 26, 2004, and the Korea Asset Management Corporation sent a notice of public auction to the Plaintiff on September 22, 2004, and the notice of public auction was served on the Plaintiff on October 7, 2004.

D. However, on October 5, 2004, before receiving the notice of the above public auction, the Plaintiff paid the above amount in arrears (including additional dues) to the competent tax office on the same orchard on October 5, 2004.

E. Meanwhile, from around 2001 to around 2003, the Plaintiff was an oligopolistic shareholder holding 70% of the total outstanding shares of the non-party company. The preliminary Defendant, on September 22, 2004, designated the Plaintiff as the second taxpayer with respect to the delinquent amount equivalent to the share ratio of the Plaintiff among national taxes in arrears by the non-party company, and sent the notice of payment to the Plaintiff by registered mail, but the said notice was returned on November 20, 2004.

F. Ultimately, through the above public sale procedure, the share owned by the Plaintiff was sold to the Defendant on December 30, 2004, and the Defendant completed the registration of transfer of ownership in its name on January 14, 2005 on the share owned by the Plaintiff on the ground of the above public sale.

[Ground of recognition] The facts without dispute, Gap evidence 1 through 3, 5 through 8, Eul evidence 1, Eul evidence 1, the order of submission by this court, the head of the Suwon District Tax Office, the head of the Dongwon Tax Office, the result of each reply by the director of the Korea Asset Management Corporation and the purport of whole pleadings

2. The plaintiff's assertion and judgment

A. The plaintiff's assertion

The plaintiff did not receive the notification that he was designated as the second taxpayer with respect to the national taxes in arrears of the non-party company, and the notification of the attachment or the notification of the public auction in relation to the above taxes were not received, and thus both the tax imposition and the notification of the attachment against the plaintiff are null and void, and thus the subsequent public auction disposition conducted based on this is also null and void. Thus, the plaintiff is entitled to pay KRW 20 million as part of the conjunctive damages to the defendant who neglected his duty to inform the plaintiff of the fact of the non-party company's default and the designation of the second taxpayer and thereby caused the loss of the plaintiff to pay the above taxes.

B. Determination

(1) Article 11(1)3 of the Framework Act on National Taxes provides that "the service of documents shall be deemed to have been made upon the lapse of 14 days from the date of public announcement of the summary of the documents in cases prescribed by the Presidential Decree, such as where the documents were served by a person liable to receive the documents by registered mail, but returned without the recipient," and Article 7-2(1)3 of the Enforcement Decree of the same Act provides that "the service of documents by registered mail is deemed to be difficult because the documents were served by the addressee due to the absence of the recipient's notice of designation of the second taxpayer of the national tax in arrears by registered mail to the plaintiff, and the facts that the second taxpayer sent the notice of designation of the second taxpayer of the company's national tax in arrears to the non-party company were returned by public announcement of the above documents and the Enforcement Decree of the same Act shall be deemed to have no effect on the plaintiff's first disposition in arrears and the provisional disposition in arrears before the public auction is completed." Further, Article 47(1)3 of the National Tax Collection Act provides that "the public sale in arrears shall still have no effect on the plaintiff's previous public auction."

3. Conclusion

Therefore, the plaintiff's claim against the defendant and the conjunctive defendant is dismissed as it is without merit. It is so decided as per Disposition.

Judges Doese