If There Is No Causal Or Subordination Relationship Between The Facts Known And The Facts To Be Proven, The Court Shall Not Presume The Truth Of The Disputed Facts.

Legal News & Analysis - Asia Pacific - Taiwan - Dispute Resolution

13 April 2021
 

The Supreme Court rendered the 109-Tai-744-Zi Civil Decision of November 18, 2020 (hereinafter, the “Decision”), holding that although the court can presume whether a fact to be proven is true or not, still if there is no causal or subordination relationship between the facts known and the facts to be proven, the court shall not presume the truth of the disputed facts.

 

According to the facts underlying this Decision, Appellant Company A asserted that it was a subcontractor to the project at issue of its opposing party, Appellant Company B, and that both parties had entered into the project contract at issue with a total project price of NT$25,500,000.  Later after the acceptance inspection was conducted by the project owner, Company B only made a project payment of over NT$15,440,000 to Company A.  Therefore, Company A requested Company B to pay the remaining sum in excess of NT$9,690,000.  Appellant B contended that the project price of the project at issue should be NT$23,000,000 million rather than NT$25,500,000.  Over NT$15,440,000 had been paid by Company B with an instruction to D, not a party to this lawsuit, to wire NT$200,000 to Company A, and after the adjustment of the construction items in the project at issue, Company B should have paid over NT$6,990,000.  However, since the acceptance inspection of the project at issue had been completed and A had exceeded the two-year time limit, Company B could refuse to pay.
 

It was first pointed out in this Decision that under Article 282 of the Code of Civil Procedure, although the court may presume whether the facts to be proven are true or not based on the known facts, still the presumption shall be based on empirical rule; and if there is neither causal nor subordination or incompatible relationship between the known facts and the facts to be proven, the truth of such disputed facts certainly cannot be presumed.
 

It was further stated in the Decision that it was understood that there was no written agreement on when the contractual compensation for the project at issue would be paid.  The timing of the project owner’s payment of the compensation and the existence of an agreement on the timing of the compensation payment between the parties are two different matters.  The original trial court questionably jumped to the conclusion that both parties had agreed that Company A could not claim the payment for the project at issue from Company B based until Company B was paid by the project owner based on the fact that Company B had not made the project payment to Company A until the project owner paid.  In addition, the total price agreed between the parties on the project at issue is certainly an important offensive method.  The original trial court violated the law for insufficiency of grounds for making a determination unfavorable to Company A without specifying its opinions concerning the weighing of the arguments in the decision reasons.  Finally, the true reasons for wiring the payment varied, and a party bears the burden of proof with regard to the truth of the reasons.  Whether the remittance by D, not a party to this lawsuit, was used to pay for the project at issue is not without question.  The original trial court was rash when jumping to the conclusion that the remittance was made to pay for the project at issue and further making a determination unfavorable to Company A.  The gist of the appeals filed by both parties, who separately criticized the unfavorable portions of the original decision for violation of laws and regulations, is not groundless.  Therefore, the Supreme Court held that since the appeals of both parties were both well-grounded, the original decision was reversed and remanded to the Kaohsiung Branch of the Taiwan High Court.

 


 

For further information, please contact:  

 

Oli Wong, Lee Tsai & Partners

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