Law Firm Jeong-man, Counsel for the plaintiff-appellant

Attorney Lee Young-soo et al., Counsel for the defendant

Attorney Jeong-hee et al., Counsel for the defendant

1. Case summary and key issue

A. Review of the reasoning of the lower judgment and the record reveals the following circumstances.

(1) On May 16, 2008, the Plaintiff obtained approval from the Defendant for the construction project plan for new apartment units with a total of 34,054m of 430 units, including 1 omitted) 16 units of land in Ulsan-gu, Ulsan-gu, and 16 units of land. On April 6, 201, the Plaintiff obtained approval for the alteration of the construction project plan for new apartment units with a total of 26,78m27 units of land outside the same (number 2 omitted) 26,78m27 units of land, and obtained approval for the alteration of the construction project plan for new apartment units with a total of 26,78m27 units of land, 36m20, 400, 200, 300, 400, 206, 200, 300,0000,000 won after completion of the construction project plan for new apartment units, and 30,014.

(3) In accordance with the approval of the project plan of the apartment complex of this case, the Plaintiff was also designated as the implementer of the urban planning facility project that installs a small park of 2-147 m3m in length, 3-32m in small city, 3-33m in small city, 58m and 32m in length, 3-33m in small city, and 1,082m in length, and the above urban planning facility is gratuitously reverted to the Defendant pursuant to Articles 99 and 65 of the National Land Planning and Utilization Act (hereinafter referred to as “the above urban planning facility”). Accordingly, in calculating the development charges of the instant apartment complex of this case, the Plaintiff filed a lawsuit seeking the revocation of the disposition of this case including the amount of the cost invested by the Plaintiff to install the donation facility of this case (=2,662,046,638m in land, 638m in small city, 62,638m in small city, 728,000, hereinafter referred to as “the price of this case”).

(4) Meanwhile, on June 13, 2011, the Defendant’s sales price examination committee decided that the total sum of 143,349,937,676 won of the apartment sale price of the instant business (the housing site cost is KRW 40,334,348,500 among them) was set at KRW 124,009,000 within the upper limit of the upper limit of the sales price, and the Defendant approved the Plaintiff’s recruitment of occupants on June 15, 201.

B. The key issue of the instant case is whether the value of the donation facility of this case should be excluded from the “development cost” under Article 12(1)6 of the former Enforcement Decree of the Restitution of Development Gains Act (amended by Presidential Decree No. 25452, Jul. 14, 2014; hereinafter “Enforcement Decree”) when calculating the “development profit,” which serves as the criteria for imposing the development charges of the instant project.

2. Relevant provisions and legal principles

(a) Details of the statutes governing the restitution of development gains;

(1) According to the law, development charges to be paid by a person liable for payment shall be 25/100 of the development gains calculated pursuant to Article 8 (main sentence of Article 13). Development gains shall be calculated by adding up the value of the land subject to imposition at the end point of imposition (hereinafter referred to as "land at the end point of imposition"), (1) the value of the land subject to imposition at the starting point of imposition (hereinafter referred to as "land at the starting point of imposition"), (2) the increases in the imposition period, and (3) the development costs under Article 11 (Article 8). Development costs shall be calculated by subtracting the development costs under Article 11 (3) (Article 8).

(2) Article 12(1) of the Enforcement Decree of the Act on the delegation of the authority provides that "in the case of the value of donated facilities by detailed type of development costs, the value of the land shall be calculated by adding the cost of creating the facilities to the value of the land, and the value of the land shall be calculated by adding the increases in normal land prices during the imposition period to the land price as of the starting point," and "in the case where the purpose of the development project is to dispose of other persons, such as sale in lots, and the disposal price includes the value of public facilities or land, etc., it shall be limited to the case where the disposal price is calculated at the end

(3) According to the Act, in principle, the land price as of the starting point and the starting point of the imposition shall be computed on the basis of the officially assessed individual land price (Article 10(1) and the main sentence of Article 10(3): Provided, That in cases prescribed by Presidential Decree, such as where the State or a local government’s authorization, etc. is obtained with respect to the disposal price, the disposal price may be deemed the starting point; where the actual purchase price is objectively recognized as the normal transaction price, such as where the land is purchased from the State, etc., the actual purchase price or acquisition price (hereinafter “actual purchase price”) may be deemed the starting point of the starting point of the imposition (proviso to Article 10(3)); where the land price as of the starting point falls under the proviso to Article 10(3), the person liable for payment shall submit data proving the fact that the land price falls under the subparagraphs of the proviso to Article 10(3) to the competent administrative agency within the period prescribed by Ordinance of the Ministry of Land, Infrastructure and Transport as an exception to Article 10(2)1(3).

B. The meaning of the overall title provision of this case

(1) Article 10 of the Development Gains Refund Act amended by Act No. 4563, Jun. 11, 1993; Article 10 of the former Act provides that, in order to prevent disputes arising from different standards for calculation of the land price as of the starting point and the starting point, and to promote the operation of the newly introduced individual land price system, the development gains shall be calculated on the basis of the publicly assessed individual land price by avoiding from the previous calculation method of development gains, which deducts purchase price from the appraised value, and by integrating the price as of the starting point and the land price at the starting point, in order to calculate the starting point based on the actual purchase price (see, e.g., Supreme Court en banc Decision 96Nu1382, Mar. 20, 197).

(2) In light of such legislative intent, “development gains” under Article 10 of the Act and Article 11 of the Enforcement Decree shall be calculated based on the publicly assessed individual land price when calculating “development gains” as the base of development charges. In principle, where a person liable for payment intends to calculate the base price of the base price based on actual purchase price, he/she shall submit to an administrative agency within a given period, materials proving that the base price falls under the proviso of Article 10(3) of the Act, and only where the base price of the base price is calculated based on purchase price, the actual disposal price may be determined as the base price. In addition, where the actual disposal price can be determined as the base price, it shall be seven cases listed in each subparagraph of Article 11(1) of the Enforcement Decree, if the base price is calculated based on the actual purchase price and the actual disposal price is applied as the base price at which the actual disposal price is terminated.

(3) Meanwhile, according to Articles 8 subparag. 3 and 11(1)2 of the Act and the main sentence of Article 12(1)6 of the Enforcement Decree of the Act, the value of donated facilities falls under the expenses disbursed by a project operator in connection with the implementation of the relevant development project, and thus, is in principle included in “development expenses to be deducted from the land at the time of termination when the development charges are calculated,” which serves as the basis for imposing development charges. However, this case’s comprehensive provision upon delegation under Article 11(3) of the Act is an exception to Article 12(1)6 of the Enforcement Decree

As a result, "development project is subject to disposal, such as sale in lots, and its disposal price includes the value of public facilities or land, etc., it shall be limited to the case where the disposal price is calculated at the time of termination pursuant to Article 11, Paragraph 2."

Here, "Where the purpose of development project is to dispose of others, such as sale in lots, and the disposal price includes the value of public facilities or land, etc." means the development project which is subject to "subject matter of the provision of this case", and "where a project operator disposes of the price as the selling price authorized by the competent administrative agency after implementing the sale project under each subparagraph of Article 11 (1) of the Enforcement Decree," and "where the disposal price is calculated as the final price at the time of termination" under Article 11 (2) of the Enforcement Decree, "requirements for the application of the main sentence of subparagraph 6 which is limited to the subject matter," and "where the land price is calculated as the starting price at the time of the actual purchase price and the actual disposal price is applied as the final price at the time of the actual disposal price." Generally, the project operator sets the sale price by adding a certain amount of profit to the developer, and thus, the general provision of this case is based on the premise that the sale price at the above disposal price or the price of land is included in "total value of the public facilities or land."

However, there may be extremely exceptional cases where the disposal price does not include all or part of the value of the donated facility. This case’s comprehensive provision provides that development costs, such as the value of the donated facility, shall be necessarily deducted when the development charges are imposed. Article 8 subparag. 3 and Article 11(1)2 of the Enforcement Decree, including the instant comprehensive provision, cannot be deemed as a ground for recognizing or excluding “total value of the donated facility” as development costs. If the disposal price does not include the value of the donated facility at all, the value of the donated facility is deducted from development costs pursuant to the main sentence of Article 12(1)6 of the Enforcement Decree without the instant comprehensive provision, and thus, even if the value of the donated facility is not included in “part of the value of the donated facility,” it is reasonable to deduct the value of the donated facility as development costs if the project operator proves that the value of the donated facility should be deducted as development costs, in light of equity.

In full view of the above, the provision of this case is an exception to the main sentence of Article 12 (1) 6 of the Enforcement Decree, and where a project operator disposes of the sale price approved by the competent administrative agency after implementing a sale project under each subparagraph of Article 11 (1) of the Enforcement Decree as a whole, the land price at the starting point shall be calculated based on the actual purchase price, and the actual disposal price shall be deducted from the final land price including the “development cost” only where the land price is calculated based on the actual purchase price and the actual disposal price is applied as the land price at the end point, and the entire value of the donated facilities shall not be deducted from the “development cost” if the land price at the starting point and the expiration date are calculated based on the officially assessed individual land price.

3. Determination on the instant case

A. The lower court determined that the instant disposition was unlawful on the following grounds.

(1) Even if the purpose of the development project is to sell in lots, etc. to another person, if the value of the donated facility is included only in ‘part' in the disposal price, excluding the portion not included in the disposal price from the development cost based on the overall provision of this case is contrary to the principle of proportionality under the Constitution. Thus, the overall provision of this case can be applied to the disposal price only if the value of the donated facility is included in all of the value of the disposal price, and it

(2) In the case of the instant project, upon obtaining approval for the sale price lower than the maximum amount examined and decided by the sale price examination committee, the housing site cost included in the sale price of the instant apartment shall be deemed to have been reduced than the housing site cost calculated by reflecting the value of the instant donated facility at the time of the examination and resolution. Therefore, it is difficult to conclude that the sale price of the instant apartment is included in the sale price of the instant apartment. Therefore, in the instant project, the instant provision cannot be applied, and thus, the instant disposition that was made by excluding the entire value of the instant donated facility from the development cost by applying the instant provision is unlawful.

B. However, we cannot accept the judgment of the court below for the following reasons.

(1) The instant project is a development project stipulated in Article 11(1)1 of the Enforcement Decree, and constitutes the subject of the instant provision.

In light of the principle of proportionality under the Constitution, the lower court arbitrarily reduced the scope of the instant comprehensive provision. However, the “development gains calculated on the basis of the officially assessed individual land price” means the objective profit calculated by the method prescribed by the development gains restitution statute, and there is a specific difference from the development gains actually accrued to a project implementer (see, e.g., Supreme Court en banc Decision 96Nu1382, Mar. 20, 1997). Whether the land price should be deducted from the final point of time including the “development expenses” actually paid by the project implementer in relation to the implementation of the relevant development project is a matter belonging to the broad legislative discretion (see, e.g., Supreme Court Order 95HunBa37, May 28, 1998), and Article 11(3) of the Act delegates to the Presidential Decree. Article 12 of the Enforcement Decree of the Act, as a matter of principle, limits the calculation method of the instant comprehensive provision to the extent possible, including the instant comprehensive provision, to the extent possible, to the extent possible.

(2) As mentioned above, in the event that the sale price approved by the competent administrative agency is disposed of after the execution of the sale business under each subparagraph of Article 11(1) of the Enforcement Decree, the project operator shall be specially treated.

Unless there are any circumstances, the maximum sale price under Article 38-2 of the former Housing Act (wholly amended by Act No. 13805, Jan. 19, 2016) is set at the “development cost, including all business expenses, including the value of donated facilities, and thereby, it will transfer the value of donated facilities to the buyer. The maximum sale price under Article 38-2 of the former Housing Act (wholly amended by Act No. 13805, Jan. 19, 2016) is a system that regulates multi-family housing construction business entities to set the maximum sale price to below the sale price by setting the maximum sale price, as a response to the problem that real estate speculation is too high in the supply price of housing and increase in the housing cost for the middle and middle class, and it does not prohibit multi-family housing construction business entities to set the sale price by attaching profits at a reasonable level. Therefore, unless it is extremely exceptional, the “sale price determined within the scope of the maximum sale price is included in all business expenses, such as the value of donated facilities.”

As such, although special circumstances that the "sale price" did not reach the "sale price" should be proved by the plaintiff, the plaintiff asserted that the "sale price" was set lower than the upper limit of the sale price, but did not prove such special circumstances.

(3) If so, the “sale price determined by the Plaintiff” shall be deemed to include all the value of the donation facilities of this case. In the instant disposition, the land price and the time of termination, which are the items that serve as the basis for calculating the development charges, are not applied to the actual purchase price and the time of termination, based on the publicly assessed individual land price, which is the principle of calculating the land price, and thus, did not meet the requirements for recognition of the development costs of this case. Therefore, the value of the donation facilities of this case does not fall under the development costs that should be deducted from the final land price when calculating the development gains pursuant to the provisions of the instant comprehensive title. Therefore, the instant disposition calculated by the Defendant excluded the entire value of the donation facilities of this case from the development costs. Nevertheless, the lower court erred by misapprehending the legal principles on the interpretation and application of the instant comprehensive title provisions, which affected the conclusion of the judgment, thereby adversely affecting the conclusion of the judgment.

4. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won

Justices Kim Gin-soo

Justices Lee Jung-gu