Bid won at 33 billion mistakenly written as 330 billion
Sale canceled but public auction deposit not refunded
[Asia Economy Reporter Seongpil Jo] A bidder who mistakenly wrote the wrong amount in a real estate auction bid filed a lawsuit demanding the return of the auction deposit, claiming the bid was invalid, but lost in the first trial.
According to the legal community on the 3rd, the Seoul Administrative Court Administrative Division 7 (Chief Judge Kim Gukhyeon) ruled against plaintiff A in a lawsuit for unjust enrichment return filed against Korea Asset Management Corporation (KAMCO). In March last year, A wrote 33 billion won, the estimated price announced by the tax authorities for the real estate auction, but mistakenly added an extra '0', writing about 330 billion won. Afterwards, claiming it was a mistake, A requested, "Please do not decide me as the successful bidder," but KAMCO did not accept this, stating it was not a valid reason for cancellation. Although A was eventually awarded the bid, the sale decision was canceled due to non-payment of the purchase price, and A filed a lawsuit against KAMCO seeking cancellation of the disposition and the return of the 30 million won deposit paid at the time of bidding.
In court, A argued, "The bid amount was significantly higher than the minimum bid price, so KAMCO could clearly recognize the bid amount was a mistake," and "The sale decision is seriously and clearly invalid, so the cancellation disposition based on it is also invalid." However, the court judged that there was no defect in KAMCO's sale decision and cancellation disposition. Considering the nature of the auction procedure, which requires clarity and stability, the bidder's mistake was not regarded as a significant fact that would prevent the sale decision. The court stated, "Allowing changes or cancellations of bids could cause procedural confusion."
The content of the Bidder Compliance Rules, which A confirmed and agreed to before bidding, also served as the basis for this judgment. The rules stipulate that "The bid submitted by the bidder cannot be changed or canceled," and "The bidder must personally confirm the submission of their bid after bidding, and any disadvantages caused by failure to confirm are the responsibility of the bidder."
Regarding the claim for the return of 30 million won, the court said, "Since this claim is based on the argument that KAMCO's cancellation disposition is invalid, it is rejected without further examination." Under the current National Tax Collection Act, if the purchaser fails to pay the purchase price and the sale decision is canceled, the deposit is applied to national taxes related to seizure. Ultimately, due to adding an extra '0' in the real estate auction bid, A ended up effectively donating 30 million won to an unknown delinquent taxpayer.
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