Law Firm Governing Law Firm

[Defendant-Appellee] Plaintiff 1 and 1 other

Attorney Choi Han-hoon, Counsel for the plaintiff-appellant

The costs of appeal are assessed against the Plaintiff.

1. Case overview and key issue

A. According to the reasoning of the lower judgment, the following facts are revealed.

(1) The Plaintiff is the Housing Reconstruction Improvement Project Association established for the purpose of implementing the Housing Reconstruction Project (hereinafter “instant project”) at Ansan-si (hereinafter address 1 omitted). On November 7, 2014, the Defendant issued an authorization to implement the instant project to the Plaintiff, and announced it on the same day.

(2) On November 30, 2016, the Defendant provided guidance to the Plaintiff regarding the application for the instant loan agreement with respect to 3,226.8 square meters among 3,407 square meters of the road 3,407.8 square meters (hereinafter “instant road”). On December 21, 2016, the Plaintiff entered into a contract with the Defendant to lease the instant road between July 8, 2016 and March 31, 2019. The Defendant, on December 26, 2016, notified the Plaintiff of the said loan agreement with respect to the instant road of the loan charges of KRW 33,858,980 and the loan charges of KRW 70,013,490 in total and KRW 1038,470 in total with respect to the instant road in accordance with the instant loan agreement. < Amended by Act No. 14817, Dec. 27, 2017>

(3) On the other hand, when granting authorization for project implementation, the Defendant designated the instant road as the “infrastructure subject to disuse” under Article 65(2) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (wholly amended by Act No. 14567, Feb. 8, 2017; hereinafter “former Act”).

(4) Under Article 32(1)3 and (6) of the former Act, the Plaintiff asserts as follows on the premise that the usage fees or occupation fees for the use of the instant road are exempted by the authorization for project implementation under Article 32(1)3 and (6) of the same Act. In the first place, the instant loan agreement is null and void due to a violation of compulsory provisions or an unfair legal act, and thus, the Defendant is obligated to return the usage fees received as unjust enrichment. In preliminaryly, the Defendant’s act constituted tort by the Defendant’s public official, as the Defendant’s public official planned to impose indemnity, and forced the conclusion of the instant loan agreement, and thus, the Defendant

B. Key issues are whether the rent should be paid in cases where a housing reconstruction association occupies or uses an existing infrastructure site, the purpose of which is ceased to exist due to the implementation of the project.

2. Whether the obligation to pay rent arises;

A. Article 32(1)3 of the former Act provides that “When a project implementer has obtained authorization to implement a project, it shall be deemed that permission to occupy and use a road has been obtained under Article 61 of the Road Act,” and Article 32(6) of the same Act provides that “where it is deemed that a rearrangement project has obtained authorization, permission, etc. under other Acts pursuant to paragraph (1) or (2), it shall be exempted from the fee imposed for the relevant authorization, permission, etc., and the fee or occupation and use fee for the use or occupation of the relevant State-owned or public-owned land.”

B. In full view of the literal interpretation of Article 32(6) of the former Act and the relevant provisions of the former Act, where a road becomes general property due to the abolition of its use, the validity of permission for occupation and use deemed to have become extinct before the abolition of its use becomes subject to the conclusion of a loan agreement. In the event a housing reconstruction association occupies and uses an existing fundamental infrastructure site, the purpose of which is ceased to exist due to the implementation of the relevant project, the housing reconstruction association should pay rent according to the loan agreement, and the provisions on exemption from rent or occupation and use fees under Article 32(6) of the former Act cannot be applied

(1) If the language and text of a law itself consists of relatively clear concepts, in principle, another interpretation method is no longer necessary or limited. Even if it is intended to interpret the term used in a certain provision differently from the ordinary meaning of the text and text in light of the legislative intent and purpose of the law, it cannot disregard any other provision within the pertinent law, or any systematic relationship with other law or harmony with the entire legal system, and there is a certain limit (see Supreme Court Decision 2006Da81035, Apr. 23, 2009).

(2) The Public Property and Commodity Management Act (amended by Act No. 18086, Apr. 20, 202; hereinafter “Public Property Act”) stipulates that public property shall be classified into administrative property and general property according to its use (Article 5(1)); and all public property other than administrative property shall be determined as general property (Article 5(3)). In cases of administrative property, disposal shall be restricted by lending, sale, exchange, trust, payment in kind, or payment in substitutes, or not establishing private rights without any purpose (Article 19(1) main text): Provided, That when the head of a local government permits use or profit-making of administrative property to the extent that it does not interfere with its purpose or purpose, and permits use or profit-making thereof, administrative property shall be collected annually in accordance with the rate and method prescribed by Presidential Decree (Articles 20(1) and 22(1)); on the other hand, lease, exchange, trust, or establishment of private rights to use or profit-making in kind (see Articles 20(1) and 20(2) of the Act).2).

(3) Since the purpose of the existing road in a rearrangement zone for a housing reconstruction project is abolished and the function of the road is lost if it is used for general property, such as the site of a reconstruction apartment, etc., the permission to occupy and use the general property is no longer possible, and the occupation and use of the general property cannot be unilaterally imposed upon the disposition of the management agency, instead of going through the procedure of concluding a loan agreement on the general property and collecting the rent based on the agreement (see Supreme Court Decision 2014Du5903, Nov. 12, 2015).

(4) Article 33(2) of the Public Property Act provides, “Where the administrative property subject to the payment of rent or occupation fee under other Acts becomes subject to the payment of rent under this Act due to disuse or other reasons, Paragraph (1) shall apply mutatis mutandis to the calculation of the rent.” As such, it assumes that the administrative property becomes subject to the payment of rent if it becomes general property due to disuse or other reasons.”

(5) Meanwhile, Article 65(2) of the former Act provides for the free reversion of the infrastructure for rearrangement to the State or a local government, and the transfer of the infrastructure for rearrangement owned by the State or a local government, the purpose of which is ceased to exist in the latter part. Article 65(4) of the same Act provides, “The relevant infrastructure for rearrangement shall be deemed reverted to the State or a local government, or reverted to or transferred to a project implementer at the time of notifying the management agency of the completion approval after obtaining authorization of the completion of the relevant rearrangement project.” Therefore, the time when the existing infrastructure for rearrangement, the purpose of which is ceased to exist, is not the time when the project implementer is granted the authorization of the project implementation, and it is difficult to deem

(6) Following the amendment of the former Urban Improvement Act by Act No. 14567, Feb. 8, 2017, Article 97(7) of the same Act newly established the provision that “in the case of infrastructure owned by the State or a local government and ceased to be used for implementing a rearrangement project pursuant to paragraphs (1) and (2), the relevant facility charges shall be exempted during the period of implementation of the rearrangement project.” This can be deemed on the premise that the said provision was imposed prior to the establishment of the said provision. Since there was no clear transitional provision on the retroactive application of the said newly established provision, the said newly established provision applies only after February 9, 2018, which was one year after the enforcement date of the amended Act pursuant to Article 1 of the Addenda.

3. Determination on the instant case

A. Examining the facts in light of the aforementioned legal principles, in the case of the instant road, the purpose of the road was abolished on November 7, 2014, on which the Plaintiff was authorized to implement the project, and there is no room to apply the provision on the permission to occupy and use the road or the provision on the exemption from the usage fee or the occupation and use fee under Article 32(6) of the former Act. Accordingly, the Plaintiff is bound to enter into a loan agreement with the Defendant for the instant road site for the implementation of the project, and accordingly, is obliged to pay the rent.

B. The lower court rejected all Plaintiff’s primary and preliminary arguments in determining that the Plaintiff should conclude a loan agreement with the Defendant in order to use the instant road properly. The lower court is based on the legal doctrine as seen earlier, and did not err by misapprehending the legal doctrine on exemption of usage fees or occupation fees under Article 32(6) of the former Act, contrary to what is alleged in the grounds of appeal.

4. Conclusion

The Plaintiff’s appeal is dismissed as it is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jae-hyung

Justices Ansan-chul

Justices Lee Dong-gu