Law Firm Identity, Attorney Park Jae-soo

Attorney Kim J-jin, Counsel for defendant-appellant

Government Legal Service Corporation (Law Firm LLC)

[Defendant-Appellee]

2. The costs of lawsuit shall be borne by the Plaintiff.

A. The plaintiff's status

Plaintiff’s non-profit incorporated association with the objective of managing and approving the use of musical works.

As a copyright trust management business, the defendant obtained permission from the defendant.

B. Provisions on the resignation system of the Plaintiff’s articles of incorporation

Articles 16(3) and 19(2) of the former Articles of Incorporation of the Plaintiff (amended by April 27, 2016, and amended by April 20, 2017, hereinafter the same shall apply) stipulate that two of the directors shall be nominated by the Chairperson from among the regular members and appointed by the Chairperson through a resolution of the board of directors (hereinafter referred to as "private system"), and the relevant parts are as follows.

Article 15 (Composition of Officers) (1) This Association shall have the following officers: 1.2 1. Chairperson (Standing Director), 2. 3. Directors (including the Chairperson, Vice-Chairperson, and outside directors) 21.3. Auditors (including the Chairperson, Vice-Chairperson, and outside directors) 21.3. Auditors shall take office with the approval of the Minister of Culture, Sports and Tourism.The Chairperson shall be elected at the general meeting.2 The Chairperson shall be elected at the general meeting according to the following classifications: 17 of the total number of directors shall be elected at the general meeting, and the religious field shall be included in shock: Provided, That the field of election by the Chairperson shall be one person from the full number of directors: 2. 3. 3. 2. 1. 2. 2. 3. 10 : 2. 10

(3) Of the fixed number of directors, two outside directors appointed by the chairperson from among the designated directors and non-member specialists with learning and experience from among the non-member members shall be commissioned by the chairperson following a resolution of the board of directors. (5) Two of the fixed number of auditors shall be elected at a general meeting, and one of the fixed number of auditors shall be commissioned by the chairperson after the resolution of the board of directors by the chairperson who is non-member accountant. (2) If a vacancy occurs in the designated director, outside director, or non-member auditor, the chairperson shall re-decide the resolution of the board of directors: Provided, That if the remaining term of office is less than one year, the

C. The Defendant issued an order to improve the business inspection and improvement order in 2016 to April 4, 2016 to December 12, 2016, on the ground that the designation of the Plaintiff may deepen the concentration of authority of one president in relation to the private system and be abused as a means of personnel support for the president election, etc., by March 31, 2017.

D. On February 23, 2017, the Plaintiff amended the articles of incorporation on April 20, 2017, the Plaintiff filed an application with the Defendant for permission to amend the articles of incorporation to the effect that “the method of appointing outside directors and external auditors” under Articles 16(3) and (5) and 19(2) of the former Articles of Incorporation was amended, and the Defendant approved the amendment on April 20, 2017 (hereinafter referred to as “the current articles of incorporation”), and the current articles of incorporation maintained without the amendment and abolition of the resignation system. The corresponding parts of the current articles of incorporation are as follows.

Article 16 (Election of Officers)(3) Of the fixed number of directors, two designated directors from among the regular members designated by the Chairperson shall be commissioned by the Chairperson following a resolution of the board of directors, and two outside directors from among non-members who have knowledge and experience shall be commissioned by the Chairperson through a resolution of the board of directors and the general meeting.

The chairperson shall be commissioned by the chairperson following the resolution of the society and the general meeting.Article 19 (Assistant Appointments of Officers) ② If there is a vacancy among the designated directors, the chairperson shall be commissioned by the chairperson through the resolution of the board of directors and the general meeting, and if there is a vacancy among outside directors and external auditors, it shall be commissioned by the resolution of the board of directors and the general meeting: Provided, That if the remaining term of office is less than one year, it shall not be commissioned.Article 1 (Enforcement Date) of the Regulations (Enforcement Date) of the Articles of Incorporation shall enter into force on the date of approval of the Minister of Culture, Sports and Tourism. Articles 3 (Transition Measures against Articles 16 and 19), 16 (3) and (5), and 19 shall

E. Defendant’s business inspection and improvement order in 2017 from August 23, 2017 to August 25, 2017, and from August 28, 2017 to August 29, 2017, the Defendant issued an order to improve the Plaintiff’s business inspection. As a result, the Plaintiff pointed out that the Plaintiff was not in compliance with the order to abolish the private company’s business inspection in 2016, and again issued an improvement order to abolish the private company’s designation until March 31, 2018 (hereinafter referred to as “instant improvement order”).

○ The Plaintiff has a private system (one director 21) that allows the president to appoint two of the regular members as directors. Among the trust management organizations, the trust management organizations operating the system may deepen the concentration of authority of one president and abuse it as a means of human resources to support the president’s election, etc., the organizations operating the system are only the Plaintiff, and it is difficult to find out the cases of operating the system in other fields, among the designated directors (B, C) designated by the president in accordance with the current articles of incorporation, C did not attend one time at the board of directors held in 2016-2017, and after the year 2015, activities are low to the extent that they may attend once at the meeting.

Unlike other directors elected through the election, in the case of designated directors commissioned by the nomination of the president, there is a high possibility of dynamicly attending the meeting, and in terms of the necessity of the operation of the plaintiff or democratic legitimacy, the defendant, who is not in existence, demanded to abolish the appointment director system in 2016, but has not yet been implemented until now.

(f) Resolution to amend the articles of incorporation on the abolition of the nomination director system;

On February 21, 2018, at the 55th regular meeting, the Plaintiff: (a) amended the current articles of incorporation to the effect that the nomination is abolished (the abolition of two master directors and the extension of the number of the elected directors) as follows; (b) however, the amended articles of incorporation to the effect that the enforcement date of the provisions of the amended articles of incorporation shall be the beginning of the next election after obtaining approval for the amendment of the articles of incorporation from the Defendant. The resolutions to amend the existing articles of incorporation are as follows:

Article 15 (Composition of Officers) (1) This Association shall have the following officers: 3. Directors (including the Chairperson, Vice-Chairperson, and Outside Directors) 21 and 16 (Election of Officers) 1 (Election of Officers) 19 out of the total number of directors shall be elected at the general meeting according to the following classification: 19 of the total number of directors shall be elected at the general meeting, and the religious sector shall include the public sector, but the religious sector shall include one of the total number of directors: 3: 2. 3. 2. 3. 2. 3. 2. 3. 12: 12. 12. 12. 3. 12. 3. The Chairperson shall be commissioned by the Chairperson after the resolution of the board of directors and the general meeting of outside directors recommended by the Chairperson from among non-member experts with knowledge and experience who are non-member experts with the total number of directors.Article 2 (Transitional Measures against Article 16(2), Article 22(2) and 35(4)).

사. 피고의 임원（지명이사）취임승인신청 반려처분 원고는 위와 같이 정관개정（안）에 대한 총회결의를 한 후 피고에게 정관변경허가 신청을 하기에 앞서, 지명이사 2인의 임기가 2018. 3. 27자로 만료됨에 따라 2018. 3. 2. 2018년도 제2차 임시이사회를 개최하여 현행 정관 제16조 제3항에 근거하여 소외 D, E을 지명이사로 선임하기로 결의한 다음, 2018. 3. 8. 고|고에게 임원취임승인을 신청하였다. 그러나 피고는 2018. 5. 24. 원고에 대하여 아래와 같이 '지명이사제도를 조속히 폐지하도록 한 이 사건 개선명령의 취지에 부합하지 아니한다’는 이유로 위 지명이사 취임승인신청을 반려하는 처분（이하 '이 사건 처분,이라 한다）을 하였다.

On February 21, 2018, the Plaintiff resolved to amend the articles of incorporation to abolish two designated directors from the next regular general meeting from the next regular director on February 21, 2018.The term of office of the director of the director-general shall be four years, because the term of office of the director-general is scheduled to be held in 2022, and the act of approving the appointment of the new director-general meeting is approved for the period of four years. Thus, it is determined that the appointment of the new director-general meeting is not in conformity with the purpose of the order for the improvement of the term of office to abolish the appointment director-general system as soon as possible.

H. On July 5, 2018, the Plaintiff filed an application for amendment of the articles of incorporation with the Defendant for amendment of the articles of incorporation, including the abolition of the nomination director system, decided at the 21st regular meeting of February 2018. However, the Defendant did not approve the application for amendment of the articles of incorporation with respect to the abolition of the nomination director system, on the ground that it does not comply with the purport of the instant improvement order demanding the abolishment of the nomination director system as soon as possible, by setting a separate transitional provision without reasonable grounds.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 through 9, Gap evidence 12, Eul evidence 1 through 8, Eul evidence 13 and 17 (including branch numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The instant disposition was taken on the ground that the Defendant did not comply with the purport of the instant improvement order, which demanded the revocation of the tentative director system as soon as possible. However, the Plaintiff, as a non-profit incorporated association, has autonomy in the election and composition of its executive officers. However, since the nominated director system does not explicitly violate the current law and has not explicitly violated the Plaintiff’s articles of incorporation approved by the Defendant, and the Plaintiff’s articles of incorporation has also existed, there is no legal ground for the Defendant to demand the revocation of the private company. Even if the Defendant has the right to manage and supervise the Plaintiff under the law, it cannot be the ground for the instant disposition, which is an indivative administrative disposition, unless there is an explicit delegation of the law. Accordingly, the

(ii) the deviation and abuse of discretionary power;

The defendant may cause corruption or harm to personnel affairs through the concentration of power over one chairperson. However, considering that the nominated director's 21 of the total 21 of the 21 of the 21 of the 21 of the 21 of the 21 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 201 of the 2010s the 201 of the 201 of the 201 of the 201 of the 201 of the 2010s 201 of the 2010s 201 of the 2010s 2010s.

In light of the fact that on July 5, 2018, the application for approval to amend the articles of incorporation, which was filed by the Defendant to abolish the private company system, the appointment of a designated director under the current articles of incorporation is limited to the appointment of a designated director under the current articles of incorporation before the amendment of the articles of incorporation is made, and the present performance of duties is significantly impeded due to the instant disposition, and the designation of an incorporated association, other than the Plaintiff 6, is stipulated in the articles of incorporation, the instant disposition constitutes a violation of the Plaintiff’s constitutional freedom of association, the freedom of general action

3) Violation of the principle of trust protection.

The plaintiff decided to appoint a private company based on the current articles of incorporation and applied for the approval of taking office. The current articles of incorporation, which provides the private company system, approved by the defendant on April 20, 2017, and thus, the defendant issued a public opinion statement. The plaintiff applied for the approval of taking office for the designated director based on the current articles of incorporation approved in accordance with legitimate procedures, and there is no reason attributable to the plaintiff. The plaintiff trusted the validity of the current articles of incorporation approved by the defendant, appointed a designated director based on this trust, and applied for the approval of taking office. However, the defendant's disposition of this case is a disposition against the approval of the current articles of incorporation, which violates the legitimate interest of the plaintiff trusted, and thus, the disposition of this case is unlawful in violation of the principle of protecting trust.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Whether a disposition is not based on law

Article 32 of the Civil Act provides that permission from the competent authority shall be obtained in the establishment of an association or foundation which is a nonprofit corporation, and Article 42(2) provides that any amendment of the articles of incorporation of an incorporated association shall be null and void without obtaining permission from the competent authority. In addition, Article 40 subparag. 5 of the Civil Act provides that the necessary matters to be stated in the articles of incorporation of an incorporated association shall be stated in the provisions on the appointment and dismissal of directors, and Article 37 provides that the competent authority shall inspect and supervise the affairs of the incorporated association. In full view of the above provisions, it is reasonable to find a law by examining the provisions on the appointment and dismissal of directors of a nonprofit corporation and deciding whether to permit the establishment or amendment of the articles of incorporation, and therefore, it is reasonable to deem that the competent authority extended the authority to supervise an incorporated association to the appointment and dismissal of specific directors and auditors, based on the above provisions of the Civil Act and the above articles of incorporation.

Therefore, even in this case where Article 15 (2) of the current articles of incorporation of the plaintiff provides that "the officer shall take office with the approval of the Minister of Culture, Sports and Tourism," the defendant's act of approval (authorization) is based on the plaintiff's articles of incorporation of a private corporation, so long as the plaintiff's act of approval (authorization) is related to the supervisory authority of the competent authority over the corporation, it is an administrative disposition under the public law, and the issue of whether to approve or refuse the appointment of the officer is within the jurisdiction of the defendant, and the defendant's application for approval of the appointment of the officer is bound by the defendant and does not necessarily require the approval (authorization) (see, e.g., Supreme Court Decisions 95Nu2883, Jul. 25, 1995; 98Du16996, Jan. 28, 200)

However, since fundamental rights such as freedom of association (Article 21(1) and freedom of general action (Article 10) are guaranteed to non-profit corporation incorporated associations, the competent authority's right to supervise incorporated associations should be exercised to the minimum extent necessary to respect the autonomy of incorporated associations and to ensure that incorporated associations can be operated in compliance with the law or the articles of incorporation. (c) Therefore, when the defendant refuses to apply for approval of taking office of the plaintiff, it should have reasonable grounds to restrict taking office provided for in the law or the articles of incorporation or the articles of incorporation, and to refuse to grant approval of taking office without such grounds should be deemed unlawful since it deviates from and abused discretionary authority.

2) Whether it is a deviation or abuse of discretionary power

In full view of the following facts and circumstances acknowledged by the statements in the above facts and evidence, Eul evidence Nos. 10 through 12, Eul evidence No. 14, 18, and 19, the instant disposition is not deemed unlawful beyond the scope of the discretion or abuse of discretionary power.

① The Plaintiff is a corporation which obtained permission for copyright trust management business from the Defendant for music copyright holders, etc., and supervised the use of copyrighted works, and collects user fees from users on behalf of the music copyright holders, etc., and distributes them to the holders of author’s property rights, etc. In addition, the Plaintiff has performed the above duties on an exclusive basis for about 24 years until the FF Association obtained permission for copyright trust management business around February 198. The Plaintiff’s number of members as of 2017 is about 27,346, annual usage fees is about 176.8 billion won, and the Defendant’s total amount of four of the organizations that granted permission for copyright trust management business for music field is about 54% of the total number of the Plaintiff’s members, and the annual amount of annual usage fees collected from the Plaintiff is about 82% of the total amount of the Plaintiff’s members, in light of the Plaintiff’s location and scope of business or the size of business, etc., and thus, the Plaintiff’s organization of transparency and fairness in management and supervision.

② In addition, from 2008 to 2018, the Plaintiff pointed out business problems in the inspection of state administration, etc. several times. In light of the main contents, it is doubtful whether, if the president or an executive, distribution of user fees to the relevant executive is properly made, such as the amount of distribution of user fees rapidly increased, and whether it is not used in general account without allocating user fees, and it is necessary to check and check the concentration of powers of the Plaintiff as the president in order to secure transparency and reliability in business management. Accordingly, the Defendant issued the instant order to abolish the nomination director system by conducting a business inspection in 2016 and 2017. In light of the Plaintiff’s designated director method and operating status, it is deemed that this would be valid and appropriate for the above purpose, and would be at least possible infringement, and that it would also be able to gain private interests or other public interests that infringe on the public interest to be achieved.

③ Nevertheless, despite the Defendant’s business inspection in 2016 and 2017, the Plaintiff failed to comply with the instant improvement order for a long time, and the Plaintiff decided to abolish the nomination director system on February 21, 2018, but to amend the articles of incorporation to the effect of the next election on February 21, 2018 (4 years after the date of abolition of the private company system). The Plaintiff appears to have delayed the implementation of the instant improvement order without reasonable grounds or delayed the implementation period more than necessary.

④ In particular, copyright trust management organizations in the music field under the supervision of the Defendant are four (4) including the Plaintiff, and all (the Plaintiff, FF Association, G Association, and H Federation), with the exception of the Plaintiff, a designated director system is not established and a specialized manager system is operated.

3) Whether the principle of protection of trust is violated

In general, in administrative legal relations, in order to apply the principle of the protection of trust to the acts of an administrative agency, the first administrative agency should name the public opinion that is the subject of trust to the individual, the second administrative agency should have the reason attributable to the individual with respect to the trust of the individual, the name of the opinion of the administrative agency should have been trusted, and the third administrative agency should have conducted any act against the above opinion list. Fourth, the administrative agency should have made a disposition contrary to the above opinion list, thereby causing an infringement on the interests of the person who trusted the opinion list. Lastly, when taking an administrative disposition in accordance with the above opinion list, it should not be likely to seriously undermine the public interest or legitimate interests of a third party (see, e.g., Supreme Court Decision 2004Du13592, Feb. 24, 2006).

In this case, according to the above, the Defendant approved the Plaintiff’s articles of incorporation, including the designated director system, and issued an order to abolish the designation system by March 31, 2017, which was stipulated in the Plaintiff’s articles of incorporation in the year 2016, and thereafter, on February 23, 2017, the Plaintiff applied for permission to amend the articles of incorporation on April 20, 2017, including “the method and method of appointing outside directors and external auditors” as stipulated in Articles 16(3), (5), and 19(2) of the former Articles of incorporation, and approved the amendment on April 20, 2017. As seen above, the current articles of incorporation amended on April 20, 201 stipulated the previous designation director system as it was. Accordingly, the Plaintiff held a temporary director meeting in the second year of March 2018 and resolved to appoint Nonparty D and E based on Article 16(3) of the current Articles of incorporation.

However, considering the aforementioned facts and evidence and the following facts and circumstances acknowledged by the evidence No. 15 and 16 evidence, i.e., (i) the Plaintiff’s application for permission to amend the articles of incorporation on February 23, 2017, that the amendment of the articles of incorporation requires not only the resolution of the board of directors but also the resolution of the general meeting. (ii) The amendment of the articles of incorporation to the effect that the above amendment was approved by the Defendant on April 20, 2017, which was 1 month after the date of permitting the amendment of the articles of incorporation, to the Plaintiff on May 26, 2017, 2017, it is difficult for the Defendant to request the above amendment of the articles of incorporation to the effect that the Plaintiff would complete its implementation on June 30, 2017; and (iii) the Plaintiff’s amendment of the articles of incorporation to the 20th anniversary of the amendment’s appointment of the 20th anniversary of the date of the amendment to the articles of incorporation.

4) Sub-determination

Ultimately, the instant disposition is lawful, and all the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

Judges Lee Jin-hoon

Judges Kim Yong-il

The Ministry of Culture and Tourism amended the Regulations on the Establishment and Supervision of Non-Profit Corporations under the Ministry of Culture and Tourism in 1999 to enhance the autonomy of non-profit corporations.

Regulations that restrict the free establishment and operation of a non-profit corporation, such as deletion of the regulations on approval and cancellation of the initial appointment (Article 13)

The reduction has reached now (see, e.g., evidence 10-1, 2).

2) The Plaintiff’s articles of incorporation provides that the term of office of directors shall be four years. The Plaintiff, after making a resolution to amend the articles of incorporation as above, shall permit the amendment thereto.

A resolution to appoint a new director on March 2, 2018, which was before the receipt of such a resolution, shall be made, and on March 8, 2018, an officer (the defendant applied for the approval of the appointment of a new director) (the defendant applied for the appointment of a new director)

Therefore, if the defendant approved the above taking office and approved the revised articles of incorporation, the time of abolition of the Nomination is the next election, namely, the time of next election.

The term of the appointed director shall be four years (2022) after the termination of his/her term of office.