2012 Ghana 24467 Claims

Seoul Guarantee Insurance Co.

Seoul Jongno-gu Kim Sang-ro 29 (Seong Dong-dong)

Service Place: 1834, 6th floor (Dual Dong) as the Daegu Seo-gu Office of Service

Representative Director;

Attorney Seo-dae et al., Counsel for the defendant-appellant

AA Industry Corporation

Daegu Suwon-gu 111, Daegu-ro 111

Representative Director;

Attorney Park Tae-ho, Counsel for the defendant-appellant

BB industry development corporation BB

Daegu Dong-gu Government Employees 45 (Gol Dong-dong)

Representative Director;

1. ForestCC (56);

2. NewD (57);

Defendant (Appointed Party) and Defendants Law Firm Jungwon, Counsel for the defendant-appellant)

[Defendant-Appellant]

May 29, 2014

July 31, 2014

1. The Plaintiff:

A. Defendant (Appointed Party) Industrial Development Co., Ltd., Defendant AB, Defendant ArCC, Defendant ArD, and Appointed KimF jointly pays KRW 250,179,233;

B. GGGs pay KRW 178,206,233 out of the above amount jointly and severally with Defendant (Appointed Party)’s BB industry development, Defendant forestCC, Defendant NewD, Selection KimF.

2. The plaintiff's remaining claims against the defendant (appointed party), the defendants, and the designated parties are dismissed.

3. The costs of lawsuit shall be borne by the Defendant (Appointed Party), the Defendants, and the designated parties.

3. Paragraph 1 can be provisionally executed.

In order to support the Cheong-gu Office, the Defendant (Appointed Party)’s development of BB industry, Defendant RCC, Defendant NewDD, and Selection KimF shall jointly and severally pay KRW 251,108,00,000, and Park GG would pay KRW 179,135,000 out of the above amount, jointly and severally with Defendant (Appointed Party)’s development of BB industry, Defendant RCC, Defendant NewD, and SelectionF.

1. Facts of recognition;

A. On December 3, 2010, the Plaintiff concluded a guarantee insurance contract between the Defendant (Appointed Party), BB Industry Development (hereinafter referred to as “Defendant Company”) and the Plaintiff’s Intervenor AA Industry Co., Ltd. (hereinafter referred to as “ Intervenor”), with a view to securing the obligation to pay the contract deposit under a road materials supply contract for Section 2. On November 3, 2010, the Plaintiff signed a guarantee insurance contract with Defendant Company (hereinafter referred to as “Defendant Company”) with the Defendant Company on November 30, 2012 (hereinafter referred to as “first guarantee insurance contract”) and issued an insurance policy with the Defendant Company. In relation to the foregoing guarantee contract, the Plaintiff Company jointly and severally guaranteed the obligation of the Plaintiff Company (hereinafter referred to as “Defendant”).

B. On December 3, 2010, the Plaintiff entered into a guarantee insurance contract between the Defendant Company and the Intervenor with a view to securing the obligation to pay the contract deposit under Section 2 road construction machinery rental contract. On December 3, 2010, the Plaintiff: (a) entered into a guarantee insurance contract with the Defendant Company; (b) the Intervenor; (c) the amount of the insurance contract; (d) the insurance period; and (e) the period of November 30, 2010 through November 30, 2012; and (e) issued an insurance policy with the Defendant Company. Defendant CC, newD, the Appointed, and the Selection KimFF (hereinafter referred to as the “second guarantee insurance contract”) with respect to the guarantee insurance contract. The Defendant Company agreed to pay the Plaintiff the amount of the Plaintiff’s insurance payment and the amount of delayed payment calculated by the Plaintiff within the maximum interest rate set forth by the Plaintiff, and (e) the Plaintiff may receive the Plaintiff’s claim for reimbursement for damages from the Defendant Company and the Defendant Company, even before the date following payment was made.

D. After that, as the Defendant Company failed to pay the Defendant Company’s debt properly and accumulated the delayed payment, the creditors of the Defendant Company started to provisionally seize the Defendant Company’s claim against the Intervenor from September 201 to December 22, 2011, and the implementation of the Defendant Company’s contract was difficult because the amount of the claim for provisional attachment exceeds a total of KRW 691,775,810. The Intervenor and the Defendant Company sought efforts to normalize the contract by making efforts to directly operate a part of the process around October 25, 201, but thereafter, the Defendant Company continued to resolve the delayed payment.

E. On December 5, 2011, the Intervenor notified the Defendant Company of the settlement, etc. of the overdue payment, and requested the Plaintiff to terminate the construction materials supply contract and the construction machinery rental contract (see Article 19(1)3 and Article 10 of the construction materials supply contract, and Article 13(1)2 of the construction machinery rental contract) by deeming that it is impossible to expect the Defendant Company to perform the contract on December 19, 201 (see, e.g., Article 19(1)3 of the construction materials supply contract). On December 20, 2011, the Intervenor filed a claim with the Plaintiff for KRW 251,108,00 as guaranteed insurance money (see, e.g., KRW 179,135,000, + KRW 71,973,000 insurance proceeds of the second guaranteed insurance contract).

[Ground of recognition] 1-7 of evidence Nos. 1-2, 1-6 of evidence Nos. 2, 3, 6, 7, and 8 of evidence Nos. 6, 2, 1-32 of evidence Nos. 9-2, 1-14 of evidence Nos. 13, and the purport of the whole pleadings

The purpose of a guarantee insurance contract is to take over by an insurer the amount of damages suffered by an obligee due to the obligor’s default is non-life insurance. The purpose of a guarantee insurance contract formally is to the same effect as a guarantee contract with the nature of the obligor’s default as an insured event. Therefore, the provisions on guarantee under the Civil Act, in particular, the provisions on the guarantor’s right to indemnity under Article 441 and below, are applicable. According to the facts established above, the obligor’s claim for insurance money to the Plaintiff is due. Thus, pursuant to Article 442(1)4 of the Civil Act (or pursuant to Article 8(1) of the Guarantee Insurance Contract, as seen above, since the Plaintiff was claimed by the Intervenor due to the obligor’s default of obligation due to the obligor’s default, the Plaintiff acquired the right to advance indemnity

Therefore, as the principal obligor, the remaining Defendants and the designated parties are joint and several sureties, and they are jointly and severally liable to pay the amount equivalent to the insurance money under each relevant guarantee insurance contract to the Plaintiff.

3. Judgment on the defendants' assertion

The defendants asserted that it is impossible to respond to the plaintiff's claim because they suffered a lot of damages due to the intervenor's illegal acts. The specific arguments and the judgment on them are as follows.

A. The Defendants asserted as follows: “The Intervenor paid the advance payment in the year 2010 that he received from the Daejeon Regional Land Management Office to the Defendant Company, which was the subcontractor, deposited it in the passbook opened under the joint name of the Intervenor and the Defendant Company, and appropriated it for the progress payment of the Defendant Company, and the advance payment in the year 2011 was not paid at all to the Defendant Company.” The Defendants asserted as follows: “The Intervenor violated Article 18 of the Fair Transactions in Subcontracting Act as unfair management interference with the subcontractor

The joint management of advance payment is a content already explained to the defendant company in the pre-contract process, and the defendant company is deemed to have accepted it and entered into a contract with the intervenor (No. 10-1). Moreover, it is deemed to have been used in full to ensure the proper performance of the contract by partially restricting the use of funds (No. 10-2). Thus, it is difficult to say that the joint management of advance payment is an act interfering with the subcontractor's management. Therefore, the defendants' above assertion is not correct.

B. The Defendants asserted as follows: “The Intervenor paid 13,300,960 won for the completion from September 7, 2010 to December 21, 2011 to the Defendant Company’s account in which the Intervenor did not pay the payment for the completion to the Defendant Company and did not pay the payment for the completion to the employees.” The Defendants asserted as follows: “The Intervenor violated Article 8 of the Fair Transactions in Subcontracting Act by allowing the Defendant Company to pay the payment for the shortage other than the above money.”

There is no evidence to acknowledge that the Intervenor violated Article 8 of the Fair Transactions in Subcontracting Act by unfairly cancelling the work entrusted by the Intervenor. Therefore, the Defendants’ assertion is not correct. The Defendants asserted that “the Intervenor did not pay for the completed portion of the construction work that the Defendant Company performed from September 21, 201 to December 21, 2011.”

According to the evidence No. 9-19-32, evidence No. 11-4, and evidence No. 15-11 of the above-term progress payment during the above-term period is acknowledged to have been paid in full to the Defendant Company in addition to the part directly paid or directly managed by the Defendant Company according to the Defendant Company’s request for material purchase, demand for direct payment, and direct management. Accordingly, the Defendants’ aforementioned assertion is not correct.

D. The Defendants asserted that “the Intervenor violated Article 4 of the Framework Act on the Construction Industry by unilaterally dividing the details of the subcontract made by the Defendant Company into three parts, such as construction, supply of materials, and lease of equipment, by unilaterally dividing the details of the subcontract made by the Defendant Company into three parts, including construction, supply of materials, and lease of equipment, and reporting a higher amount to the Daejeon Regional Land Management Office, and the rest of the supply of materials and lease of equipment, without reporting to the Daejeon Regional Land Management Office.”

There is no evidence to prove that the intervenor divided one contract into three contracts or unilaterally changed the content of the contract without agreement with the defendant company in order to conceal that the subcontract amount of the defendant company is lower than the bid price ratio set by the Daejeon Regional Land Management Office. Therefore, the defendants' above assertion is not correct.

E. The Defendants asserted as follows: “The Intervenor: (a) sold the 56,340,00 apartment bonds of 45 square meters in Gyeong-dong AAmck-dong, Sinsan-dong, Sinsan-si; and (b) received the payment of KRW 56,340,00 as the down payment after he purchased the 56,340,00 as the down payment at the recommendation of the Fair Trade Commission; (c) the Intervenor revoked the apartment sales contract and did not refund the down payment.”

The terms and conditions of payment in kind asserted by the Defendants are already explained to the Defendant Company before the conclusion of the contract, and the Defendant Company appears to have accepted them and entered into a contract with the Intervenor (Evidence A No. 10-1). On the contrary, there is no evidence to prove that the Intervenor had the Defendant Company, the subcontractor, provide any economic benefits in relation to the payment in kind of the above apartment without justifiable grounds. Accordingly, the Defendants’ assertion is not

F. The Defendants asserted that “the Intervenor set the subcontract price at an amount equivalent to 61% of the amount contracted by the ordering person unfairly lowers the subcontract price,” but the evidence submitted by the Defendants alone is difficult to acknowledge it, and there is no other evidence to acknowledge it. Therefore, the above assertion is not correct.

G. The Defendants asserted that “The Intervenor violated Article 13(4) of the Fair Transactions in Subcontracting Act by paying part of the price in substitute form or by electronic settlement method B2B even if the Intervenor received 100% of the advance payment from the ordering person.”

According to the statement No. 12-4 of the evidence No. 12-2, it is recognized that the intervenor agreed to pay part of the subcontract price with the defendant company in lieu of the above apartment bonds, the sales contract was cancelled, and the construction price was paid in cash. The B2B electronic settlement is a substitute payment for the bills recognized by Articles 2(14)2 and 13(7) of the Fair Transactions in Subcontracting Act, and the subcontractor obtains a loan from a financial institution as collateral for the credit sales claim against the principal contractor and the principal contractor redeems the loan with the principal contractor. Therefore, the above argument by the defendants is not correct.

H. The Defendants asserted that “the Intervenor is in arrears due to the increase in the cost of the Defendant Company and due to the occurrence of the delayed payment due to the increase in the cost of the Defendant Company, and the termination of the contract was unjust.” However, there is no evidence to prove that the Intervenor had the Defendant Company carry out only the provision of the materials to the Defendant Company, and there is no other evidence that conforms to the above assertion. Accordingly, the Defendants’ assertion is not correct.

(i) The Defendants asserted that “the Intervenor had engaged in an unfair act with respect to the Defendant Company even in the construction work at the Ansan East-dong Hagin Greenck Construction Work, the 2nd apartment complex 2nd apartment complex construction work, and the Daegu Seongbuk-gu Round Center.” However, there is no evidence to acknowledge that the Intervenor had not delayed payment of part of the advance payment, except for the Intervenor’s delay.

Meanwhile, according to the evidence evidence No. 24, the intervenor paid 50 million won out of the advance payment of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the river in Ansan for 113 days. The defendants' assertion is deemed to include the assertion that the damages for delay incurred therefrom should be offset against the obligations of the compensation of this case by the payment of the damages for delay (=50,000,000 X company's rate of 6% x 113/365, and less than KRW 113/365). The above damages for delay should be offset against the liability of the first guarantee insurance contract and the above damages for delay.

The defendants' assertion is correct only to the extent of the above recognition.

4. Conclusion

If so, the Plaintiff, Defendant (Appointed Party), Defendant BB Industry Development, Defendant PCC, Defendant NewD, and SelectionF, jointly and severally liable to pay KRW 250,179,233 ( KRW 179,135,00 - KRW 928,767 + KRW 71,973,00) to the Plaintiff. The Selection GG is jointly and severally liable to pay KRW 178,206,233 ( KRW 179,135,00 -928,767) out of the above amount with Defendant (Appointed Party)’s development of BB industry, Defendant PCC, Defendant NewD, and SelectionF, and the remainder of claims against the Defendants is dismissed.

Judges Lee Sung-sung