Search Results
2017 (Kyo) 19
- Date of the judgment (decision)
2017.12.19
- Case Number
2017 (Kyo) 19
- Reporter
Minshu Vol. 71, No. 10
- Title
Decision concerning whether the presence or absence of claims without objections is allowed to be considered when deciding whether the approval of a proposed rehabilitation plan that prescribes a special clause on a home loan in the case of rehabilitation for individuals with small-scale debts was made by an act that was contrary to the principle of good faith
- Case name
Case of an appeal with permission against the ruling of the court of second instance to revoke a decision to make an order of confirmation of a rehabilitation plan
- Result
Decision of the Third Petty Bench, dismissed by the Supreme Court
- Court of the Prior Instance
Tokyo High Court, Decision of May 30, 2017
- Summary of the judgment (decision)
In the case of rehabilitation for individuals with small-scale debts, even if a rehabilitation claim was filed (including a case in which the rehabilitation claim is deemed to be filed pursuant to Article 225 of the Civil Rehabilitation Act) and no objection was made within the ordinary period for making objections or special period for making objections, various factors relating to the filing of the said rehabilitation claim etc., including the presence or absence of the said rehabilitation claim, can be considered when deciding whether the approval of a proposed rehabilitation plan that prescribes a special clause on a home loan was made by an act that was contrary to the principle of good faith.
(There is a concurring opinion.)
- References
Article 38, paragraph (2), Article 202, paragraph (2), item (iv), Article 225, and Article 231, paragraph (1) of the Civil Rehabilitation Act
Civil Rehabilitation Act
(Status of the Rehabilitation Debtor)
Article 38
(2) Where a rehabilitation proceeding is commenced, the rehabilitation debtor shall have the obligation, vis-a-vis creditors, to exercise the right set forth in the preceding paragraph and conduct rehabilitation proceedings in a fair and sincere manner.
(Order of Confirmation or Disconfirmation of Rehabilitation Plan Specifying Special Clauses on Home Loan)
Article 202
(2) Where a proposed rehabilitation plan that specifies special clauses on home loan is approved, the court, in any of the cases set forth in the following items, shall make an order of confirmation of the rehabilitation plan:
(iv) Where the resolution on the rehabilitation plan has been adopted by unlawful means.
(Cases Where Proof of Rehabilitation Claim Is Deemed to Be Filed)
Article 225 A rehabilitation creditor stated in the list of creditors shall be deemed, with regard to his/her rehabilitation claim stated in the list of creditors, to have filed a proof of rehabilitation claim on the first day of the period for filing proofs of claims, with the same content as that of the statements in the list of creditors, except where he/she has filed with the court, within the period for filing proofs of claims, a proof of said rehabilitation claim in question or proof to the effect that he/she does not have said rehabilitation claim.
(Order of Confirmation or Disconfirmation of Rehabilitation Plan)
Article 231 (1) In the case of rehabilitation for individuals with small-scale debts, where a proposed rehabilitation plan is approved, the court shall make an order of confirmation of the rehabilitation plan, except in the case referred to in Article 174(2) (or Article 202(2) if the proposed rehabilitation plan specifies special clauses on home loan) or the cases set forth in the following paragraph.
- Main text of the judgment (decision)
The appeal against the ruling is dismissed.
The cost of the appeal against the ruling shall be borne by the appellant.
- Reasons
Reasons for the appeal against the ruling argued by the counsels for the appellant, MURAKAMI Makoto, KESAMARU Hajime and AKAO Sayaka:
1. This is a case in which the presence or absence of an event that should be subject to an order of disconfirmation of a rehabilitation plan under Article 202, paragraph (2), item (iv) of the Civil Rehabilitation Act (hereinafter referred to as the “Act”) is contested with regard to a rehabilitation plan that prescribes a special clause on a home loan in the case of rehabilitation for individuals with small-scale debts whose rehabilitation debtor is the appellant (hereinafter referred to as the “Rehabilitation Proceedings”).
2. According to the case records, the outline of this case is as follows:
(1) An action for loss or damages (hereinafter referred to as the “Separate Action”) was brought against the appellant, who is a tax accountant, by the appellee, who was his client on the ground of his default in February 2013.
(2) In December, 2013, the appellant made a provisional registration (hereinafter referred to as the “Provisional Registration”) to the effect that he placed a mortgage on land and buildings that he possessed for securing a loan claim of 20 million yen that the appellant’s brother by blood, A, held against the appellant in accordance with a loan agreement as of October 10, 1999 (hereinafter referred to as the “Loan Claim”). In addition, the said land and buildings had a mortgage of the first order for securing a home loan claim relating to them (hereinafter referred to as the “Home Loan Claim”) and a registration to that effect had been made.
(3) In April 2016, the court of second instance of the Separate Action rendered judgment that ordered the appellant to pay 11.6 million yen and delay damages to the appellee. The said judgment became final and binding (the claim for compensation for loss or damages that became final and binding by the said judgment shall hereinafter be referred to as the “Claim for Compensation for Loss or Damages”).
(4) On August 26, 2016, the appellant made a registration of cancellation of the Provisional Registration.
(5) On September 7, 2016, the appellant filed a petition for the commencement of rehabilitation proceedings relating to the Rehabilitation Proceedings to the Tokyo District Court and, on the 20th day of the same month, obtained an order for the commencement of rehabilitation proceedings. The claim of about 40.27 million yen was entered in the list of rehabilitation creditors that the appellant submitted when filing the said petition, which number included the Loan Claim and the Claim for Compensation for Loss or Damages in addition to the Home Loan Claim and totalized the amount of rehabilitation claims or that of the estimated amount of deficiency.
(6) The appellee filed a proof of the Claim for Compensation for Loss or Damages within the period for filing proofs of claims, stating that the amount of its rehabilitation claim was about 13.45 million yen. A neither filed a proof of the Loan Claim nor a proof to the effect that he did not have the said loan within the aforementioned period for filing. Therefore, he was deemed to have filed a rehabilitation claim with the same content as that of the entries in the aforementioned list of rehabilitation creditors pursuant to Article 225 of the Act.
(7) Because neither the appellant nor holders of filed rehabilitation claim made objections within the ordinary period for making objections with regard to the Loan Claim and the Claim for Compensation for Loss or Damages, A and the appellee were entitled to exercise their respective voting rights according to the amount of filed rehabilitation claims pursuant to Article 230, paragraph (8) of the Act.
The number of voting right holders in the Rehabilitation Proceedings was 10 persons including the appellee and A, and the total amount of voting rights held by the voting right holders was about 37.05 million yen.
(8) On December 19, 2016, the appellant submitted to a rehabilitation court a proposed rehabilitation plan to the effect that he was exempted from 90% of the rehabilitation claims excluding the Home Loan Claim, and was going to repay them in installments, while prescribing a special clause on the Home Loan Claim in the said plan (hereinafter referred to as the “Proposed Rehabilitation Plan”).
(9) On December 27, 2016, the rehabilitation court made an order to refer the Proposed Rehabilitation Plan to a resolution. Only the appellee responded that he did not consent to the said plan within the period determined by the said court. The Proposed Rehabilitation Plan was deemed to be approved pursuant to Article 230, paragraph (6) of the Act, because the number of voting right holders who responded that they did not consent to the said plan was less than half of the total number of voting right holders and the amount of voting rights held by voting right holders who have thus responded did not exceed half of the total amount of voting rights held by all voting rights holders.
(10) On January 19, 2017, the court of first instance made a decision to make an order of confirmation of a rehabilitation plan for which the Proposed Rehabilitation Plan was approved as described in the aforementioned (9) (hereinafter referred to as the “Rehabilitation Plan”) (the decision in first instance). The appellee made an immediate appeal against the ruling with regard to the decision in first instance.
(11) Although the appellant was required to submit materials corroborating the Loan Claim in the court of prior instance, he did not submit an I.O.U. or objective materials corroborating the payment of money.
3. The court of prior instance revoked the decision in first instance and remanded this case to the court of first instance, stating that it was suspected that the appellant had the Proposed Rehabilitation Plan approved by his act that was contrary to the principle of good faith, such as that he intentionally entered the Loan Claim that did not actually exist in the list of rehabilitation creditors, and, thus, it was necessary to perform a thorough examination on the presence or absence of an act that was contrary to the principle of good faith including that of the Loan Claim.
4. The appellant argues to the effect that the decision of the court of prior instance, which stated that it was necessary to perform an examination on the presence or absence of the Loan Claim and revoked the decision in first instance, is illegal in that it erred in the interpretation and application of laws and regulations in light of the facts of this case, because the Loan Claim is a claim without objection as specified in Article 230, paragraph (8) of the Act and, therefore, the determination of whether the approval of the Proposed Rehabilitation Plan was made by an act that was contrary to the principle of good faith needs to assume the existence of the Loan Claim.
5. Article 231 of the Act requires that even after a proposed rehabilitation plan has been approved, an order of confirmation should be made by a rehabilitation court and the said court should make an order of disconfirmation in cases specified in the said Article in the case of rehabilitation for individuals with small-scale debts. We can construe that by requiring this procedure, the said Article intends to have the rehabilitation court examine again whether or not the approved rehabilitation plan is suitable to achieve the purpose of the Act, i.e., appropriately coordinating the relationships of rights under civil law between rehabilitation debtors and their creditors, with the aim of ensuring the rehabilitation of the debtors' business or economic life (Article 1 of the Act), and in this process, have the court protect holders of small claims as if it were their guardian, thereby protecting the common interests of rehabilitation creditors. From this standpoint, it is appropriate to construe that the phrase “where the resolution on the rehabilitation plan has been adopted by unlawful means,” an event for which an order of disconfirmation of a rehabilitation plan should be made as provided in Article 202, paragraph (2), item (iv) of the Act, which Article is applicable to a case in which a proposed rehabilitation plan prescribes a special clause on home loan in the case of rehabilitation for individuals with small-scale debts, refers to not only the case where the proposed rehabilitation plan has been approved due to fraud, intimidation or offering of an illicit gain committed upon the rehabilitation creditor(s) who have exercised voting rights, but also the case where the proposed rehabilitation plan has been approved as a result of an act that was contrary to the principle of good faith (refer to Supreme Court Judgment 2007 (Kyo) 24, the Decision of the First Petty Bench on March 13, 2008, Minshu Vol. 62, No. 3, p. 860).
Thus, taking the aforementioned purpose into consideration, it is appropriate to construe that, even if a rehabilitation claim was filed (including a case in which the rehabilitation claim is deemed to be filed pursuant to Article 225 of the Act) and no objection was made within the ordinary period for making objections or special period for making objections in the case of rehabilitation for individuals with small-scale debts, various factors relating to the filing of the said rehabilitation claim etc., including the presence or absence of the said rehabilitation claim, can be considered when determining whether the approval of a proposed rehabilitation plan that prescribes a special clause on home loan was made by an act that was contrary to the principle of good faith.
6. In this case, the appellant entered the Loan Claim in the list of rehabilitation creditors when filing a petition for the commencement of rehabilitation proceedings relating to the Rehabilitation Proceedings and the said claim was deemed to be submitted as a rehabilitation claim. However, the Loan Claim had arisen when the appellant’s brother by blood, A, had made him a loan of 20 million yen more than 16 years before he filed a petition for the commencement of rehabilitation proceedings relating to the Rehabilitation Proceedings. The Provisional Registration was made after the Separate Action was brought against the appellant, in December 2013, when more than 14 years had passed since the time of the aforementioned loan. Furthermore, the appellant did not submit an I.O.U. or objective materials corroborating the payment of money, although he was required to submit materials corroborating the Loan Claim in the court of prior instance. Therefore, there are circumstances indicating that the Loan Claim does not actually exist. Since no objection was made within the ordinary period for making objections with regard to the Loan Claim, A was entitled to exercise his voting rights that exceeded half of the total amount of voting rights, which resulted in the approval of the Proposed Rehabilitation Plan.
According to the circumstances described above, in this case, it should be said that there is a suspicion that the appellant had the Proposed Rehabilitation Plan approved by his act, such as intentionally entering the Loan Claim that does not actually exist in the list of rehabilitation creditors. Considering that the appellant, as a rehabilitation debtor, should have the obligation to conduct rehabilitation proceedings in a fair and sincere manner for his creditors (refer to Article 38, paragraph (2) of the Act), there is a suspicion that the Proposed Rehabilitation Plan was approved by an act that was contrary to the principle of good faith. Nevertheless, a thorough examination has not been performed with regard to whether the Proposed Rehabilitation Plan was approved by an act that was contrary to the principle of good faith, including that of the presence or absence of the Loan Claim.
7. According to the background described above, the decision by the court of prior instance, which revoked the decision in first instance, stating that the decision of the court of first instance that approved the Proposed Rehabilitation Plan as unreasonable, and remanded this case to the court of first instance in order to have further examination, is acceptable. The appellant’s argument is not acceptable.
Accordingly, the Court unanimously decides as set forth in the main text. However, there is a concurring opinion of one of the justice, KIUCHI Michiyoshi.
The concurring opinion of the justice, KIUCHI Michiyoshi, is as follows:
1. Actor of an act that is contrary to the principle of good faith
The point at issue in this case is whether the approval of the proposed rehabilitation plan was made by an act that was contrary to the principle of good faith. As the court’s opinion points out that the appellant who is a rehabilitation debtor has an obligation of fairness and sincerity toward his creditors, what matters in this case is that an actor of an act that is contrary to the principle of good faith is a debtor. The court’s opinion does not generally determine that the approval of the proposed rehabilitation plan by the exercise of voting rights based on a claim that does not exist in the substantive law is contrary to the principle of good faith.
In the case of rehabilitation for individuals with small-scale debts, there may be a case where a proposed rehabilitation plan is approved only by an act of a debtor without involvement of creditors, because an entry of a rehabilitation claim in the list of rehabilitation creditors by a debtor is deemed as a filing of a proof of the rehabilitation claim by the creditor (Article 225 of the Act) and a creditor is treated as consenting to the proposed rehabilitation plan unless he/she expresses his/her disagreement (Article 230, paragraph (6)). This case falls under such a case. The appellant entered A’s claim in the list of rehabilitation creditors and A, who held a majority of voting rights, did not express his disagreement, which resulted in the approval of the Proposed Rehabilitation Plan. What matters in this case is whether the appellant performed an act that is contrary to the principle of good faith with regard to the above point.
2. Determination within the proceedings and breach of the principle of good faith
The appellant argues that an issue of whether the approval of the proposed rehabilitation plan was made by an act that was contrary to the principle of good faith needs to assume the existence of the Loan Claim, because the said claim was determined to be existent within the proceedings without the appellee’s objection. However, even if it was determined to be existent within the proceedings, it does not prevent us from judging the appellant’s act, such as the entry of the Loan Claim in the list of rehabilitation creditors, as an act that is contrary to the principle of good faith.
The reasons for the above are as follows.
(1) Meaning of a determination within the proceedings
In the case of ordinary rehabilitation proceedings, an entry in a list of rehabilitation creditors is substantive determination and has the same effect as final and binding judgment through each case of an approval or disapproval of a rehabilitation plan, discontinuance of rehabilitation proceedings and revocation of a rehabilitation plan. Therefore, rehabilitation claims are enforceable by their entry in a list of rehabilitation creditors (Article 180, Article 185, Article 195, paragraphs (6) and (7), and Article 189, paragraph (8) of the Act). To the contrary, in the case of rehabilitation for individuals, an entry in the list of rehabilitation creditors does not have such effect. It is called as a determination of rehabilitation claims within the proceedings. However, the term of a determination within the proceedings does not have any special meaning. It only means that the proceedings consisting of filing of proofs of claims (including deemed filing of proofs of claims), making objections, and valuation are established, that standard claims (including voting rights) are determined through those proceedings, and that there is no appeal proceedings other than those proceedings. A determination within the proceedings does not have effect on an issue of whether it is possible to assert that there was an event that should be subject to an order of disconfirmation of the rehabilitation plan due to the appellant’s act that was contrary to the principle of good faith which resulted in the approval of the proposed rehabilitation plan.
(2) Relation with an event that should be subject to revocation of a rehabilitation plan
The Act provides that “(t)he rehabilitation plan has been established by unlawful means” (Article 189, paragraph (1), item (i) of the Act) as an event that should be subject to revocation of a rehabilitation plan, which becomes an issue after a determination of the rehabilitation plan. This phrase has the same meaning as “(w)here the resolution on the rehabilitation plan has been adopted by unlawful means” (Article 174, paragraph (2), item (iii) and Article 202, paragraph (2), item (iv) of the Act), which is an event that should be subject to an order of disconfirmation of a rehabilitation plan.
When voting rights of nonexistent claims are exercised by a debtor’s act and a petition for revocation of a rehabilitation plan is filed on the ground that such exercise falls under an event where the rehabilitation plan is established by unlawful means, such petition is not allowable to be filed if a rehabilitation creditor who files such petition asserts such event in an immediate appeal against the ruling with regard to an order of confirmation of the rehabilitation plan or does not assert it intentionally. Otherwise, a petition for revocation of the rehabilitation plan on the ground of such event is allowable to be filed within one month since the rehabilitation creditor learns of the existence of such event and within two years after the order of confirmation is made (Article 189, paragraph (2) of the Act). In that case, it does not become an issue that the creditor did not make an objection during the examination of claims because he/she had not known the nonexistence of his/her claims.
It can be said that revocation of a rehabilitation plan is “delayed disconfirmation of the rehabilitation plan,” because any rehabilitation claim modified by the rehabilitation plan shall be restored to its original state as a result of the revocation of the rehabilitation plan (Article 189, paragraph (7) of the Act). It is not appropriate to restrict a rehabilitation creditor’s assertion that there is an event that should be subject to an order of disconfirmation of the rehabilitation plan on the ground that he/she does not make an objection during the examination of claims, because a rehabilitation creditor who does not make an objection during the examination of claims may argue that the exercise of voting rights by a debtor’s act falls under unlawful means when filing a petition for revocation of the rehabilitation plan.
(3) Relation with bankruptcy proceedings
When a debtor enters a rehabilitation claim that does not actually exist in the list of creditors, which results in the approval of a proposed rehabilitation plan, debt relief provided in the said proposed rehabilitation plan is unlawfully realized. That is materially unlawful obtainment of debt relief. Making an order of disconfirmation of the rehabilitation plan in such case means not to allow unlawful obtainment of debt relief, which has the same purpose as that of non-grant of discharge in bankruptcy proceedings. In discharge proceedings, an act of entering a nonexistent claim in the list of holders of dischargeable claims with the aim of reducing distribution for creditors falls under an event that should be subject to an order of non-grant of discharge as submitting a false list of holders of dischargeable claims for the purpose of harming creditors (Article 252, paragraph (1), item (vii) of the Bankruptcy Act). With regard to grant or non-grant of discharge, whether a creditor makes an objection against a false claim during an examination of claims is not considered.
In bankruptcy proceedings that have the common purpose as rehabilitation proceedings, i.e., appropriately coordinating the relationships of rights under civil law between debtors and their creditors, with the aim of ensuring the rehabilitation of the debtors' business or economic life, an event that should be subject to non-grant of discharge against unlawful obtainment of debt relief is as described above. Such point should be also taken into consideration when determining whether the approval of a proposed rehabilitation plan by a debtor’s act that is contrary to the principle of good faith falls under an event that should be subject to an order of disconfirmation of a rehabilitation plan.
- Presiding Judge
Justice HAYASHI Keiichi
Justice OKABE Kiyoko
Justice KIUCHI Michiyoshi
Justice YAMASAKI Toshimitsu
Justice TOKURA Saburo
(This translation is provisional and subject to revision.)