Busan local housing association whose business collapsed... Court: “Full installments must be returned to union members”

The promotion committee refused to return the installment payment even though the project was canceled.

The Local Housing Association Promotion Committee (hereinafter referred to as the Promotion Committee), which induced members to join the union by deceiving them by saying that they would return the entire down payment depending on the progress of the project, will return the entire contribution to the members.

According to the legal community on the 29th, the Eastern Branch of the Busan District Court recently ruled in favor of all plaintiffs in a lawsuit for the return of unfair profits filed by union members against a promotion committee in the Busan region.

The court ordered, "Pay the plaintiffs each contribution and administrative service fee, calculated at an annual rate of 12% until the date of repayment. The defendant shall bear the costs of the lawsuit."

Union members filed a lawsuit, claiming that the promotion committee encouraged them to join the union through the ‘Security Guarantee’ system and made them pay tens of millions of won, but did not return the installments.

The security guarantee system proposed by the promotion committee at the time of recruitment states that if the establishment of the union and the project are canceled, those wishing to join the union can receive a full refund, including the down payment paid. Members who joined the union at that time also received a letter of confirmation of the relevant contents.

However, it was revealed that the promotion committee did not even apply to the competent authority for approval to establish a union.

In particular, as the progress of the project was delayed and the outlook became uncertain, the Promotion Committee held an extraordinary general meeting and dissolved the union, giving up all rights related to the project due to conflicts among members due to an increase in project costs and project delays.

Nevertheless, the promotion committee did not want to return the amount paid, and as a result, some union members were faced with hardships in making ends meet.

Accordingly, union members filed a lawsuit against the local housing association to hold the promotion committee responsible for returning contributions due to the project's failure.

The union member's legal representative argued that the contributions paid by the union member in accordance with the guarantee of security for the union member and the agreement on dissolution and settlement of the union should be returned.

An official from Daeryun Law Firm (Limited), who was in charge of legal representation for the union members, explained, "If there had been no agreement to guarantee return, the plaintiffs would not have signed the subscription contract in this case. After emphasizing the existence of intentional deception, the promotion committee returned the contribution as unjust enrichment."

He added, “Deceiving victims with ridiculous and exaggerated advertisements is a clear crime of fraud,” and added, “If you want to withdraw your subscription after depositing the subscription fee or want to withdraw from the promotion committee or union, you must actively prove intentional deception in court, but the reality is that it is not easy to prove.”

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