The 7/9 share was purchased for 4.2 billion won. Why was an old appraised value used for the remaining share?

When Two Prices Are Attached to the Same Building

A person who purchased a 7/9 share of a certain building took KRW 4.2 billion as the transaction price. Yet in the trial to transfer the remaining co-owners' shares, a past appraised value that valued the entire building at approximately KRW 2.145 billion was used. The former figure is the transaction price of a partial share, and the latter is the appraised value of the entire building. Merely writing the two numbers side by side already shows a large difference, but if they are compared as though they were amounts indicating the same subject, the difference does not appear precisely.

Supreme Court Decision 2022Da244805 decided September 7, 2022 addressed precisely this relationship of prices in a partition of co-owned property. The court below ordered the co-ownership terminated by having one side acquire the other side's share and pay money. The Supreme Court emphasized the premise that the price to be paid in that method must be appropriate, and reversed the judgment of the court below, which relied on an old appraised value, and remanded the case to Daegu High Court.

The issue is not which document, an appraisal report or a sale and purchase agreement, is always the more authoritative. What must be connected is the amount of what was appraised at what time, who actually accepted that price, and who obtains what property if a share is transferred by trial. The price in this case was not a fixed figure attached to the object, but a subject of determination that had to be explained together with time, the scope of the transaction, and the result of the partition.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

The Path of the Transaction That Remains Even When the Plaintiff Changes

The persons who first filed the lawsuit were plaintiffs holding a 7/9 share of the building. The defendant held the remaining 2/9 share. This is not a case in which the defendant's share had been owned by the reconstruction project implementer from the outset, nor a case in which the owner of the entire building disputes only the price. The starting point is how to arrange rights that were divided among different co-owners.

While the lawsuit was pending, the plaintiffs' shares passed to the reconstruction project implementer. On the same day, the implementer completed a transfer of ownership registration of that share in favor of a trust company on the ground of trust. The trust company succeeded the original plaintiffs and participated in the lawsuit. That is why, in the party designations of the published judgment, the plaintiffs appear as persons who withdrew and the trust company appears as an intervenor-successor.

The registered name and the business interest must not be combined into one person. The counterparty whom the court below ordered to acquire the defendant's share is the intervenor-successor. Following the circumstances of that share acquisition, the Supreme Court explained that if a partition is carried out, the result is that the implementer effectively acquires the entire building and places it in trust for reconstruction. This is the judgment's assessment of the economic outcome of this case. It cannot be carried over into the general proposition that the settlor is treated as the legal owner in all trust property.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

The Day of Appraisal, the Day of Transaction, the Day the Trial Concluded

The dates appearing in the judgment are not all dates on which the price tag was prepared. The time when the standard data for tax assessment was notified, the base date of the appraisal, the time when the use of land was consented to, the date of sale recorded as the cause of registration, the date of transfer of ownership registration, and the date of the close of oral argument in the court of fact each serve different functions. If they are placed in a single bundle merely because they are documents from the same year, one misses why the Supreme Court directed that the appraised value be examined again.

In particular, November 10, 2021 and November 30, 2021 must not be interchanged. The former date is the date of the cause of sale recorded in the register, and the latter is the date on which the transfer of ownership registration in the name of the implementer was completed. The Supreme Court examined the November 2021 purchase price with material close to the date of the close of oral argument in the court below, March 2, 2022. It did not newly investigate the market price as of September 7, 2022, the date of the Supreme Court's pronouncement, and order compensation at that price.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

The Price Was Not a Simple Calculation Made After Choosing the Method of Partition

In a partition of co-owned property, if one thinks only of physically dividing the building, the determination in this case may seem unfamiliar. The full price compensation described in the judgment is a method that attributes the co-owned property itself to a particular co-owner and gives money corresponding to the share to the other co-owner. The legal doctrine set out by the Supreme Court is that this is permitted as one method of partition in kind under certain special circumstances. It is not a procedure such as partition by auction, in which the object is sold and the proceeds are divided.

At this point, it is not sufficient that one side merely wishes to have all of the property. The judgment requires consideration, together, of the cause from which the co-ownership arose, the ratios of the shares, the economic value after the partition and the wishes of the co-owners, and requires special circumstances in which attributing the property to a particular person is proper and giving money to the other co-owner does not impair substantive fairness. This article does not supplement the individual circumstances absent from the published full text and thereby determine all of those requirements anew.

The reason the Supreme Court placed the price at the forefront is that the amount is not merely arithmetic at the end of the judgment. The other party is made to convert the share of ownership held by that party into money by the trial. If, in a method chosen on the premise of an appropriate price, that price was not objectively calculated, the premise that supported the propriety of the method is also shaken. Therefore, the case cannot be brought to an end with the explanation that the decision to divide by this method came first and so the difference in amount is trivial.

Nor is it a judgment holding that a court must always order an auction whenever a difference in price is found. In this case, the Supreme Court did not accept a price calculation based solely on the past appraised value and ordered further examination. It does not say that this full text resolves every issue of newly deciding the method of partition, or issues concerning actual ability to pay or securing performance.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

What the Circumstance of Being Lower Than the Standard Value Explained

The appraised value adopted by the court below was KRW 2,145,356,730. The standard value for property tax, notified approximately four months earlier, was KRW 2,589,832,279. The exact difference between the two figures is KRW 444,475,549. The judgment describes this as a difference of approximately KRW 440 million, and states that no special circumstance can be seen for concluding that the market price or purchase price fell during those four months.

Here one must not generalize that an amount used for tax assessment is always the lower bound of market price. The Supreme Court cross-checked the appraised value in this case against other material. It did not explain the entire method of calculating the standard value for property tax, nor did it establish a rule that where tax material exists, an appraisal is unnecessary. This article likewise does not present a formula converting the standard value into the current sale price.

Read along the line of the judgment's reasoning, this comparison is a signal not to isolate the appraised value. If, as of the base date of the existing appraisal, there was already separate material higher than it, and there is the circumstance that the purchase relationship had proceeded earlier, then one must examine again whether the explanation that prices rose later and so it was natural that the value was lower at the time of the appraisal is sufficient. The Supreme Court cited grounds for doubting the assessment of that base date itself, in addition to the mere reason that the material was old.

On the other hand, from the published full text alone one cannot know what valuation techniques the appraiser used or which comparison cases were omitted. Because the body of the appraisal report and the attached materials have not been read directly, this article does not determine the appraiser's negligence or bias. The subject of this analysis is the relationship in which the court below used that appraisal result together with other transaction material.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

Why the Price of September 2020 Remains Relevant Even Though It Is uncertain

The Supreme Court states that it appears that the plaintiffs had already sold their shares for KRW 4.2 billion around September 2020 and, accordingly, completed the registration in November 2021. This is connected to the land use consent letter and to the plaintiffs' statement that, before the date of the cause of sale in the register, they had sold the site and the share but had not received the price. Yet this expression in the judgment cannot be rewritten as an established fact that the full KRW 4.2 billion was paid on a specific day in September 2020.

The explanation that there was a contract, the explanation of how much the transaction price was, and the explanation that the price was actually received are different facts. The published full text also records the statement that payment was not received. From the mere fact that the registration occurred later, one cannot reconstruct whether the contract was amended in the meantime, or the payment dates and amounts of the down payment, intermediate payment, and balance. The wording of the original of the land use consent letter and the scope of authority are likewise not material directly examined for this article.

The Supreme Court did not stake its entire reasoning on this uncertainty. It explained that even if the share price in September 2020 was lower than KRW 4.2 billion, at least the price around November 10, 2021 was clearly KRW 4.2 billion. Then a second reason remains: when valuing toward March 2, 2022, the actual purchase price of approximately four months earlier is a more appropriate basis than the appraisal of approximately one year and four months earlier.

This structure differs from halting all determinations because one particular contract date cannot be precisely reconstructed. If the foregoing inference holds, there is reason to take the purchase price into account even as of the base date of the appraisal, and even if that inference is not fully accepted, there is reason to take into account the purchase price close to the close of oral argument. Distinguishing the two paths shows which facts the judgment strongly affirmed and which portions it conceded hypothetically.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

The Explanation That Because the Implementer Purchased It, It Is Not an Objective Price

According to the reasons of the Supreme Court, the court below took the view that, because the sale price of the plaintiffs' shares was determined in a transaction with the reconstruction project implementer, it does not reflect the objective exchange value of the building. Because the full text of the court below's judgment has not been separately obtained, all other grounds cannot be reproduced. What this article examines is this explanation, which the Supreme Court introduced and criticized.

If that explanation is constructed strongly, the problem is that a share needed by a particular business operator may not provide the same utility to an ordinary purchaser. If the amount was paid by a purchaser with a business plan because of a special need, the question arises whether it can be said to be the market price that would be established among all persons. This sentence is an editorial argument for understanding the direction of the court below's reasoning. It does not acknowledge that the unpublished contract contained separate business rights or other consideration.

The Supreme Court, however, did not separate the result of this partition from that transaction. The implementer that purchased the share in question had already entered the path of the reconstruction project seeking to secure the remaining share, and placed it in trust with the current intervenor-successor. If the defendant's share also enters that path, the securing of ownership of the entirety for the project is effectively accomplished. Whether the economic effect for reconstruction generated by the partition can be left as it is, while the existing sale is removed from the analysis on the ground that the price is connected to reconstruction, is the core of understanding the Supreme Court's criticism.

The response in this case is not converted into the abstract rule that development profits must always be shared with the seller. The judgment took issue with a determination that disregarded the cause from which the co-ownership relationship arose, the ratios of the shares, the purpose and use plan of the partition, and the economic value after the partition. Nor is it an instruction to select the highest actual transaction price in any transaction and multiply it. Here, the actual transaction was material specifically connected to this co-ownership relationship and this purpose of partition.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

The 40 Percent Seen When the Denominator of KRW 4.2 Billion Is Changed

The judgment explains that the appraised value of the court below is merely approximately 40 percent of the building value the implementer itself set. If one directly divides the low KRW 2.1 billion range by KRW 4.2 billion, it is about half, so why 40 percent? Because KRW 4.2 billion is not the whole but the price of a 7/9 share. Converted to the whole at the same ratio, it becomes KRW 5.4 billion, and approximately KRW 2.145 billion is approximately 39.73 percent of that amount.

The figures below are an arithmetic comparison made by the author to understand the difference in the judgment. It applies the simple proportion assuming that the unit value of every share is the same, and there is also the computational premise that there is no separate adjustment factor. In particular, KRW 1.2 billion is not the amount of compensation to the defendant fixed by the Supreme Court. The disposition of this judgment did not directly order the payment of money but was a reversal and remand. That a calculation is accurate and that the calculation is the legally final amount payable are different matters.

The practical issue of reading shown by this table is the subject rather than the multiplier. Comparing the price of the whole and the price of a partial share as they are misdescribes the difference between the appraisal and the transaction. Conversely, even where a partial transaction price is converted into the whole, that whole price is not automatically fixed as the objective exchange value in the market. Only by first writing what the premises of the calculation are can one prevent the numbers from substituting for fact-finding.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

The Process by Which a Document Recording a Transaction Comes to Serve as the Basis for Price in Litigation

In this case, the purpose for which a document was originally created and the role it plays in the lawsuit diverge. The written consent to land use appears as a document containing a declaration of intent regarding the use of land, but the Supreme Court used it to read the fact that a sale relationship had already proceeded earlier. The registry record shows to whom a share was transferred and on what ground, and at the same time became the material linking the transaction price and the date of the ground to the price assessment.

The result of the expert appraisal commissioned at first instance is, in its original form, a professional assessment of the price as of the appraisal reference date. When it is used in the appellate court's calculation of the partition price, it becomes material for determining a transfer of property at a different point in time. Even accepting the accuracy of the document as it stands, the question remains whether it is material suited to a later reference date. Whether it was an appropriate assessment at the time it was prepared, and whether it can be used as it is in subsequent determinations, may be examined separately.

The plaintiffs' statements, too, must be distinguished between independent proof of the amount and explanation of the surrounding circumstances. A statement that the property had already been sold before registration but that the purchase price was not received explains the time gap between the transaction and the registration. From this alone, one cannot know the full course of all payments of the purchase price. The Supreme Court wove these materials together, and the drafter can reconstruct only the connections revealed in the published reasoning.

Accordingly, the movement of materials here is not a technical trace of which computer the original file was moved to. It is a movement in the chain of reasoning: materials from the transaction process enter the findings of fact, those findings become the basis for the price calculation, and finally connect to a litigation result that converts a co-owner's share of ownership into money. Rather than merely listing the names of documents said to have been viewed by the court, indicating which proposition each material carried reveals the gaps and strengths of the determination.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

An Assessment of Unfairness Is Directed at the Result, Not at Anyone's Mind

The Supreme Court explains what results follow where, while a high price was recognized and paid for earlier shares in the same building, a far lower standard of value is applied to the defendant's share. The implementing company or the intervenor in succession becomes able to acquire the remaining share for a low consideration and even to carry out the reconstruction project, while the defendant bears the result of being forced to sell the share under a standard conspicuously lower by comparison with the plaintiffs. The judgment's fairness argument rests upon this contrast.

Fairness is not reduced to the mere statement that the amounts on both sides must be equal. Where the co-owned shares differ, it is natural that the totals differ. What must be compared is the scope of the rights each party hands over and the standard of value applied to those rights. Because there is a connection consisting of the same building, the continuing purchase-and-trust relationship, and the plan for use after partition, one may ask the reason for employing different standards of valuation.

Here there is no material describing the implementing company as having planned from the outset to send the defendant out cheaply, or the trust company as having concealed that purpose. The published judgment does not show the entire course of the contract negotiations, the internal decision-making, or the parties' private sentiments. The court's assessment that the economic result brought about by the method of the court below is unfair is a separate matter from a finding that a particular person harbored a dishonest intent.

The course of events in which the defendant did not agree to the discussion of sale likewise requires the same caution. It is confirmed that there was contention from first instance over a plan for sale to a third party and that no agreement was reached. Why no agreement was reached, what amount the defendant demanded, and what circumstances existed in the defendant's life are not written in the published full text. Without needing to supplement this with a character judgment such as stalling or legitimate resistance, one can analyze the objectivity and fairness of the partition price chosen by the litigation.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

What Additional Material Would Lead the Relationship Between the Two Prices to Be Read Differently?

What follows is not a claim that such additional material actually existed in this case. Taking the confirmed facts and the Supreme Court's reasoning as the starting point, it is a research hypothesis examining what, if changed in another case, would require which portion to be reexamined. It is not a procedure of newly creating documents in order to obtain a particular result, but a question that distinguishes the range that records already in existence can explain.

For example, suppose that in the original transaction contract and the attached particulars, consideration for separate rights or obligations is clearly distinguished from the share price. Then there is reason to examine whether it is appropriate to use the entire total transaction amount as the exchange value of the same share. This article does not, however, newly assert that the KRW 4.2 billion in this case was commingled with the price of the land or other performances. The Supreme Court determined the KRW 4.2 billion to be the purchase price of the 7/9 share of the building, and the analyst does not replace that finding without grounds.

One may also suppose material showing that concrete changes affecting the value of the building occurred between the actual transaction date and the date of the close of oral argument. Such material raises anew the question whether the assessment ends merely because the transaction is more recent. Conversely, if an appraisal aligned to the same reference date explains why it reached a different result even after reviewing the circumstances of the transaction and the plan for use, the need to exclude either the appraisal or the transaction merely on the basis of their names is diminished. Even in this case, the conclusion is not fixed merely by the form of a new appraisal.

One may also conceive of a separate case in which it is proved that the current co-owner acquired the share independently, without any business connection with the prior purchaser, and that the plan for use after partition is entirely different. Then one must first determine whether the connection that is important in this case — purchase by the implementing company, trust, and acquisition of the whole — continues to exist. One must not bind all cases into the same structure merely because the word "trust" appears or the purpose is reconstruction.

What these hypotheses point to is not a direction of gathering only materials supporting the higher amount. It is a proposal to confirm together whether the existing appraisal has sufficient reasons, whether there are circumstances limiting the comparability of transaction prices, and whether the same standard is applied to the person who loses ownership and the person who acquires it. What connections are reinforced or severed is more important than the quantity of materials additionally secured.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property

The Provision Verified in 2026 and the Disposition Handed Down in 2022

Article 269 of the Civil Act on the Korea Law Information Center, verified on September 30, 2026, is marked as the version in force from March 17, 2026. Paragraph (1) provides that if no agreement on the method of partition is reached, a co-owner may file a claim for partition with the court, and paragraph (2) provides that where the property cannot be divided in kind, or where there is a concern that its value would be conspicuously reduced by division, the court may order an auction. The provision itself contains neither the KRW 4.2 billion of this case nor any particular formula of valuation.

The description of full monetary compensation as one form of partition in kind, and the arguments on fairness and price assessment required at that time, were verified in the judgment in this case. There is a need to separate the work of reading the current provision from the work of reading what determinations precedents have made under that provision. This article is not a material that, having surveyed in full all subsequent precedents and special statutes through 2026, guarantees that the same method is applied to any co-owned property.

The disposition actually rendered by the Supreme Court is the reversal of the judgment of the court below and remand to Daegu High Court. It is not a disposition ordering payment of KRW 1.2 billion to the defendant, nor a disposition prohibiting reconstruction, nor a disposition ordering the appraiser to pay damages. If the result of the remand proceedings, which has not been verified, or the actual payment of the price is added, the procedural end of this analysis changes.

The scope of verification of this article comprises the disposition and the entirety of the reasoning in the officially published full text of the Supreme Court decision, and the two paragraphs of Article 269. The full text of the judgment of the court below, the appraisal report, the sale contract, the original registry record, and the originals of the trust contract and the written consent to land use were not inspected. The descriptions of each material are based on what the Supreme Court wrote in the reasons for its judgment. The reasoning as to the price in September 2020 and the determination as to the price in November 2021 likewise preserved the difference in the wording.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property · Civil Act Article 269 — Version Indicated as in Force from March 17, 2026

Five Items to Keep Beside the Price Table to the End

Returning to the initial question, in this case the lower appraised price was not automatically discarded merely by the fact that a high transaction price existed. After aligning the transaction of a part of the share and the appraisal of the entire building to the same scope, distinguishing the appraisal reference date from the date of the close of oral argument in the court of fact, and connecting the relationship that changed through purchase and trust with the economic results after partition, it was determined that the assessment of the court below is difficult to accept.

When reading other materials as well, at least the subject, the share, the reference date, the counterparty to the transaction, and the purpose of the determination one seeks to use should accompany the price. These five items are an editorial arrangement of this article and are neither a submission format prescribed by law nor a mandatory procedure. It is a method of reading to examine whether a figure becomes a value that can be used as it is merely because an amount is written in a document.

In this case the litigation had to exercise the power to end the co-ownership relationship and, at the same time, explain the basis for the consideration therefor. When the course of the sale that already existed was erased and only the past appraised amount remained, who loses ownership at what value was placed at the center of the Supreme Court's determination. Reading the method of ending the co-ownership and the price together rather than placing them in separate columns is the most concrete analysis that can be drawn from this judgment.

Sources for this section: Supreme Court Decision 2022Da244805 Decided September 7, 2022 — Partition of Co-owned Property