Choi Joon-kyu, The Lessee’s Legal Liability for Damages from Fire of Unknown Cause in the Leased Building -Comment on the Supreme Court en banc Decision, May 18, 2017, 2012Da86895, 86901, Ilkam Real Estate Law Review, Vol. 17, pp. 79-118.
<Abstract>
The recent Korean Supreme Court en banc Decision, May 18, 2017, 2012Da86895, 86901 ruled that, the lessee is liable to compensate the lessor for ‘contractual damages’ to the non-leased part of the leased building from the fire of unknown cause in the leased part of the building owned by lessor (lessee’s contractual liability), if the following conditions are met: (a) if a contractual breach on the part of a lessee, such as providing the cause of a fire by failing to preserve and manage the leased object, has been proven; and (b) if there is reasonable causation between the contractual breach and the damages incurred to the non-leased part. According to this ruling, when the fire accident of unknown cause occurred in the leased portion and the fire damaged not only the leased part but also the non-leased part of the leased building owned by lessor, the lessee’s contractual liabilities to the lessor can be compartmentalized. The lessee is certain to assume the compensation liability for contractual damages to the leased part, but may not be liable for contractual damages to the non-leased part. I think that this ruling is quite reasonable and fair for the following grounds. First, when the cause of fire was not identified and there may be possible and competing several causes of fire, the lessee’s contractual negligence nevertheless can be considered to exist, but at the same time the lessee’s negligence about tort liability may be considered not to exist. This seemingly odd and contradictory legal proposition can be justified, because the leased part is under the lessee’s exclusive control. Therefore, the lessee should actually bear ‘no-fault liability’ or ‘strict liability’ for the leased part. In such case the lessee’s contractual negligence may not be a natural and proved-by evidence one, but legally-constructed one. If we admit lessee’s liability for the non-leased part only on the ground of such legally-constructed negligence, this outcome would run counter to the purpose of the legal construction, and it is too harsh for the lessee, because the non-leased part was not under the lessee’s control and management. So, when it comes to the legal causation, we should take the object of such legal construction into consideration. We should admit the legal causation about the non-leased part, only when the lessee’s contractual negligence is proved by evidence. Second, the legal liability of the lessee should not depend on the ownership of the non-leased part, because the element that who owns the non-leased part at the time of fire accident is accidental, external and irrelevant circumstance to the lessee. When the owner of the non-leased part is not the party of the lease contract. the third party owner can only claim for tort liability (not contractual liability) against the lessee. Then he is certain to lose the case, because the lessee’s negligence about tort liability can not be proved. According to the opinion of the Korean Supreme Court, the lessor can not claim for compensation to the lessee about the non-leased part, if additional concrete circumstances to prove the lessee’s negligence are not confirmed. Therefore under this ruling, not only the lessor but also the third party owner can not get compensation about the non-leased part from the lessee unless additional concrete circumstances about lessee’s negligence are proven. So we can get to the same & non-absurd results. Third, the lessor as the owner of the leased building has superior information about the structure, facilities as well as other necessary matters for the maintenance and control of the non-leased portion of the building, and can manage the non-leased part more efficiently than the lessee. So it is efficient and fair for the lessor to assume the risk of fire accident about the non-leased part.
<Keywords>
Fire of unknown cause in the leased building Damages to the non-leased part of the leased building Compensation liability for contractual damages Tort liability Taking the protective purpose of legal norms seriously
Choi Joon-kyu, The Lessee’s Legal Liability for Damages from Fire of Unknown Cause in the Leased Building -Comment on the Supreme Court en banc Decision, May 18, 2017, 2012Da86895, 86901, Ilkam Real Estate Law Review, Vol. 17, pp. 79-118.
<Abstract>
The recent Korean Supreme Court en banc Decision, May 18, 2017, 2012Da86895, 86901 ruled that, the lessee is liable to compensate the lessor for ‘contractual damages’ to the non-leased part of the leased building from the fire of unknown cause in the leased part of the building owned by lessor (lessee’s contractual liability), if the following conditions are met: (a) if a contractual breach on the part of a lessee, such as providing the cause of a fire by failing to preserve and manage the leased object, has been proven; and (b) if there is reasonable causation between the contractual breach and the damages incurred to the non-leased part. According to this ruling, when the fire accident of unknown cause occurred in the leased portion and the fire damaged not only the leased part but also the non-leased part of the leased building owned by lessor, the lessee’s contractual liabilities to the lessor can be compartmentalized. The lessee is certain to assume the compensation liability for contractual damages to the leased part, but may not be liable for contractual damages to the non-leased part. I think that this ruling is quite reasonable and fair for the following grounds. First, when the cause of fire was not identified and there may be possible and competing several causes of fire, the lessee’s contractual negligence nevertheless can be considered to exist, but at the same time the lessee’s negligence about tort liability may be considered not to exist. This seemingly odd and contradictory legal proposition can be justified, because the leased part is under the lessee’s exclusive control. Therefore, the lessee should actually bear ‘no-fault liability’ or ‘strict liability’ for the leased part. In such case the lessee’s contractual negligence may not be a natural and proved-by evidence one, but legally-constructed one. If we admit lessee’s liability for the non-leased part only on the ground of such legally-constructed negligence, this outcome would run counter to the purpose of the legal construction, and it is too harsh for the lessee, because the non-leased part was not under the lessee’s control and management. So, when it comes to the legal causation, we should take the object of such legal construction into consideration. We should admit the legal causation about the non-leased part, only when the lessee’s contractual negligence is proved by evidence. Second, the legal liability of the lessee should not depend on the ownership of the non-leased part, because the element that who owns the non-leased part at the time of fire accident is accidental, external and irrelevant circumstance to the lessee. When the owner of the non-leased part is not the party of the lease contract. the third party owner can only claim for tort liability (not contractual liability) against the lessee. Then he is certain to lose the case, because the lessee’s negligence about tort liability can not be proved. According to the opinion of the Korean Supreme Court, the lessor can not claim for compensation to the lessee about the non-leased part, if additional concrete circumstances to prove the lessee’s negligence are not confirmed. Therefore under this ruling, not only the lessor but also the third party owner can not get compensation about the non-leased part from the lessee unless additional concrete circumstances about lessee’s negligence are proven. So we can get to the same & non-absurd results. Third, the lessor as the owner of the leased building has superior information about the structure, facilities as well as other necessary matters for the maintenance and control of the non-leased portion of the building, and can manage the non-leased part more efficiently than the lessee. So it is efficient and fair for the lessor to assume the risk of fire accident about the non-leased part.
<Keywords>
Fire of unknown cause in the leased building Damages to the non-leased part of the leased building Compensation liability for contractual damages Tort liability Taking the protective purpose of legal norms seriously