July 5, 2018

2. The plaintiffs' respective remaining claims are dismissed.

3. 9/10 of the costs of lawsuit are assessed against the plaintiffs, and the remainder is assessed against the defendant.

The Defendant’s imposition of development charges of KRW 29,942,606,310 on the Korea Land and Housing Corporation on September 11, 2017, and of KRW 16,759,44,750 on the Plaintiff Gwangju Metropolitan City Corporation, and KRW 23,421,148,730 on the Plaintiff Jeonnam Development Corporation shall be revoked.

A. The Minister of Construction and Transportation, in accordance with Article 3 of the Housing Site Development Promotion Act (amended by Act No. 8384 of Apr. 20, 2006), designated 7,295,00 square meters of Magam, Dongdong-ri, Jeoncheon-ri, New Year-ri, Sinju for an urban development project for Gwangju-nam Joint Innovation (hereinafter “instant project”) on Nov. 23, 2006, as a planned area for housing site development (No. 2006-488 of the Ministry of Construction and Transportation).

B. On March 19, 2007, the Minister of Construction and Transportation, pursuant to Article 6 of the Special Act on the Construction and Support of Innovation Cities Following Relocation of Public Agencies (amended by Act No. 8656, Oct. 17, 2007; hereinafter “former Innovation City Act”), Articles 2 and 10 of the Addenda, designated an area identical to the housing site development area stated in the above paragraph as an innovation city development area for the project in this case, and designated as an implementer (No. 2007-80 of the Ministry of Construction and Transportation’s notice).

C. On May 31, 2007, the Minister of Construction and Transportation publicly announced the approval of the development plan of the instant business (No. 2007-195 of the Ministry of Construction and Transportation), and on October 26, 2007, changed the area designated as the planned area for the instant business from 7,295,000 square meters to 7,264,494.8 square meters, and publicly announced the approval of the implementation plan (No. 2007-451 of the Ministry of Construction and Transportation).

D. On February 3, 2014, the Minister of Land, Infrastructure and Transport publicly announced the completion of the project in the first phase (Public Notice No. 2014-70 of the Ministry of Land, Infrastructure and Transport), May 1, 2015 (Public Notice No. 2015-542 of the Ministry of Land, Infrastructure and Transport), and March 17, 2016 (final Public Notice No. 2016-342 of the Ministry of Land, Infrastructure and Transport), respectively.

E. On July 20, 2016, the Defendant imposed KRW 31,281,959,00 on the Plaintiff Korea Land and Housing Corporation, KRW 17,509,105,860 on Plaintiff Gwangju Metropolitan City Corporation, and KRW 24,468,792,280 on Plaintiff Jeonnam Development Corporation, respectively, as the development charges of the instant project.

F. On October 9, 2016, the Plaintiffs asserted an administrative appeal against the Central Land Expropriation Committee seeking revocation of the disposition of imposition of the above development charges. Accordingly, the Central Land Expropriation Committee rendered a ruling on July 20, 2017 to exclude the leased apartment business site from the subject of imposition of the said development charges and the housing site for migrants from the subject of imposition of the said development charges.

G. On September 11, 2017, the Defendant: (a) estimated development charges according to the above judgment; (b) imposed on the Plaintiff Korea Land and Housing Corporation KRW 29,942,606,310; (c) KRW 16,759,44,750 on the Plaintiff Gwangju Metropolitan City Corporation; and (d) KRW 23,421,148,730 on the Plaintiff Jeonnam Development Corporation as the development charges for the instant project (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1 to 3, Eul evidence 3 to 9 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. The plaintiffs' assertion

A. The instant project does not constitute a development project subject to the imposition of development charges listed in Article 5(1) of the former Restitution of Development Gains Act (Amended by Act No. 12245, Jan. 14, 2014; hereinafter “former Restitution of Development Gains Act”); Article 4 of the former Enforcement Decree of the Restitution of Development Gains Act (Amended by Presidential Decree No. 25452, Jul. 14, 2014; hereinafter “former Enforcement Decree of the Restitution of Development Gains Act”) and attached Table 1.

In a case where the Act providing for matters concerning the principal authorization and permission provides for the legal fiction that a principal authorization and permission has been obtained pursuant to other Acts, it shall be deemed that the principal authorization and permission has been obtained pursuant to other Acts, and it does not apply to all the provisions of other Acts premised on the fact that the authorization and permission has been obtained pursuant to other Acts. Therefore, the imposition of development charges on the instant project based on the legal fiction of authorization and permission is an arbitrary analogical interpretation.

B. Even if the instant project is deemed subject to the imposition of development charges, corporate tax related to the instant project should be recognized as development costs.

3. Relevant statutes;

Attached Form 1 is as shown in attached Table 1.

4. Determination on the legitimacy of the instant disposition

A. Whether the development charges of the project of this case are subject to imposition

1) Relevant legal principles

Article 15 (2) of the Enforcement Decree of the former Special Act on the Management of Intercity Transport in Metropolitan Areas (amended by Act No. 8251, Jan. 19, 2007; hereinafter “Wide Transport Act”) provides that “Any project prescribed by the Presidential Decree” means any project that constructs facilities other than housing and 20 or more households as one building after obtaining a construction permit under Article 8 of the Building Act. In light of the relevant provisions of the Intercity Transport Act, the term “project that constructs facilities other than housing and 20 or more households in the same building after obtaining a construction permit under Article 8 of the Building Act” constitutes a project objectively similar to those under subparagraphs 1 through 5 of Article 11 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents; Article 15 (2) of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents shall not be deemed to exceed the scope of delegation of the construction permit under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents.”

2) Determination

In light of the above legal principles, comprehensively taking account of the following circumstances acknowledged as a whole by comprehensively considering the aforementioned evidence and the fact-finding inquiry results of this court's inquiry into the Ministry of Land, Infrastructure and Transport, even if Article 5 (1) of the former Development Gains Refund Act and Article 4 and [Attachment 1] of the former Enforcement Decree of the Development Gains Refund Act do not explicitly stipulate the project subject to the imposition of development charges under the former Innovation City Act, the authorization and permission of the Housing Site Development Promotion Act, etc. is deemed as legal fiction under the former Innovation City Act, and the project of this case constitutes housing site development projects,

A) Article 5(1) of the former Restitution of Development Gains Act and Article 4 and attached Table 1 of the former Enforcement Decree of the Restitution of Development Gains Act lists the development projects subject to imposition of development charges. The aforementioned provisions include the housing site development projects, etc. under the Housing Site Development Promotion Act, but do not stipulate the projects under the former Innovation City Act.

B) Article 14(1) of the former Innovation City Act (amended by Act No. 8819 of Dec. 27, 2007) which had been in force at the time of approval of the implementation plan of the project of this case provides that the Minister of Land, Transport and Maritime Affairs, while granting approval of the implementation plan for an innovation urban development project, about matters about which the Minister has consulted with the head of the relevant administrative agency regarding authorization, permission, etc. as stipulated in the Housing Act, Housing Site Development Promotion Act, Building Act, etc. shall be deemed to have been obtained, and when the implementation plan was announced,

C) In the process of approving the implementation plan of the project of this case, the Minister of Construction and Transportation approved and announced the implementation plan of the project of this case through consultation with the head of the relevant administrative agency under the above provisions. Accordingly, the project of this case is deemed to have obtained relevant authorization and permission, such as approval of the project plan under the Housing Act, approval of the implementation plan for the housing site development project under the Housing Site Development Promotion Act, and permission and reporting under the Building Act. In light of the above legal principles, as long as approval of the implementation plan for the housing site development project under the Housing Site Development Promotion Act is deemed to have been granted due to approval of the implementation plan

D) The legislative intent and purpose of the former Innovation City Act are to facilitate the construction of an innovation city by prescribing the necessary matters in order to facilitate the construction of an innovation city with the public agencies, etc. relocated from the Seoul metropolitan area to another area, thereby promoting administrative convenience. In other words, in order to smoothly implement an innovation urban development project, there is a provision which is deemed as the approval of an implementation plan for the relevant laws and regulations necessary for an innovation urban development project. Therefore, in the absence of the former Innovation City Act, the project of this case is naturally included in the subject of imposition under the Development Promotion Act and other relevant laws and regulations, such as the Housing Site Development Promotion Act. Nevertheless, it is difficult to view that the instant project, which has the substance of the same authorization and permission, is exempt from the subject of imposition of development charges, to conform to the legislative purpose and purpose of the Innovation City Act.

E) The Enforcement Decree of the Development Gains Refund Act [Attachment 1] revised on July 14, 2014, provides that “in cases where it is deemed that an individual statute obtains authorization, etc. for a specific project, the development project subject to imposition of charges shall be deemed a development project subject to imposition of charges if it is deemed that the development project under subparagraphs 1 through 8 of the said Table has been authorized, etc.” In light of the results of the inquiry and reply to the Ministry of Land, Infrastructure and Transport of this Court, the addition of “non-performance” is aimed at preventing controversy by clearly stipulating that the said addition has been interpreted as a project subject to imposition of charges during the said period. It is difficult to view that a specific project for which authorization and permission are granted is newly included in the subject of imposition of charges.

F) Article 48(2) of the Innovation City Act provides, “The State and local governments may reduce or exempt development charges, as prescribed by the Development Gains Recovery Act, if necessary, to support the relocation of necessary public agencies to provinces and the construction of innovation cities.” This can be seen as a legislative provision on the premise that the innovation city development projects are subject to the imposition of development charges from the time of the enactment of the Innovation City Act.

G) Development charges under the Development Gains Refund Act are imposed in order to recover development gains that will accrue to the development project implementer or the landowner due to the execution of the development project or the change of a land-use plan, etc., and distribute them appropriately. In the case of large-scale development projects same as the instant project, the public interest nature that the project implementer implements on behalf of the State or a local government is very low to guarantee the development gains of the project implementer, and the development gains accrued from the instant project are large scale. Therefore, it is more consistent with equity or justice to recover the development gains accrued from the instant project as development charges and to revert them to the local government, etc.

(b) Reflection of development costs of corporate tax.

Article 12(1) of the Development Gains Refund Act provides that "where corporate tax is imposed on income accrued from the transfer of land subject to the imposition of development charges before the imposition of development charges after the commencement of imposition, an amount equivalent to the time of transfer from the commencement of imposition to the development costs may be appropriated in the development costs."

The corporate tax to be reflected in the development costs pursuant to the above provision is comprised of KRW 10,857,383,570 of the Korea Land and Housing Corporation, KRW 11,889,451,679 of the Plaintiff Gwangju Metropolitan City Corporation, KRW 11,528,471,406 of the Plaintiff Jeonnam Development Corporation, and KRW 11,528,471,406 of the Korea Land and Housing Corporation, KRW 28,191,490, and KRW 399 of the Plaintiff Korea Land and Housing Corporation, and KRW 15,779, KRW 31,956 of the Plaintiff Gwangju Metropolitan City Corporation, and KRW 22,051,423,404 of the Plaintiff Jeonnam Development Corporation, as shown in attached Form 2, are not in dispute between the parties concerned, or the entire purport of the pleadings in each of the above disposition is found to be unlawful.

5. Conclusion

Therefore, the plaintiffs' claims are justified within the above scope of recognition, and each of them is accepted, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.

(attached Form omitted)

Judges Han Freeboard State (Presiding Judge) Kim Yong-patho