The possessor's right to claim reimbursement of expenses from the rightful owner under Article 203 of the Korean Civil Act is generally recognized only in cases where the possessor lacks lawful authority—such as a contractual right—to occupy the property, and is therefore obligated to comply with the owner's demand for restitution. If, at the time of incurring the expenses, the possessor held a lawful title to possession based on a contractual relationship, they may assert a claim for reimbursement of those expenses under the applicable legal provisions or principles against the counterparty to the contract—but not against the owner under Article 203 of the Korean Civil Act. Accordingly, the Supreme Court views Article 203 as a special provision governing expense reimbursement between the possessor and the rightful owner, taking precedence over general provisions like unjust enrichment. This position has also sparked considerable academic debate regarding the legal nature of Article 203. Against this backdrop, the Supreme Court, in its recent decision decided December 24, 2024 (2020Da275744 and 2020Da275751, hereinafter referred to as “the Judgment”), held that a possessor may claim reimbursement for beneficial expenses incurred on land either when the rightful owner demands restitution under Article 213 of the Civil Act or when the possessor actually returns the land to the rightful owner. However, if the rightful owner merely seeks the implementation of the transfer of ownership registration procedure based on recovery of true title—without demanding restitution of possession—the possessor's right to claim reimbursement for beneficial expenses has not yet arisen, unless the possessor actually returns possession of the land. Furthermore, in cases involving the relationship between the possessor and the rightful owner, the Judgment held—without detailed reasoning—that a claim for restitution of unjust enrichment under Article 741 of the Civil Act cannot be exercised. However, even if Article 203 is considered a provision that prevails over claims for unjust enrichment, if the specific case does not satisfy the requirements of Article 203, it would be a more equitable interpretation to examine the validity of the unjust enrichment claim—based on its distinct requirements—especially in light of the incomplete coverage of Article 203. Given the need for more advanced discussion on the role of the right to claim reimbursement of expenses, it is time to adopt a forward-looking perspective regarding whether it can coexist with the right to claim restitution of unjust enrichment.
Sang Hun Kim (Tue,) studied this question.