2. The costs of the lawsuit are assessed against the defendant.

A. On February 27, 2014, the Plaintiff, who is working as a professor of the Human Institutes from March 1, 1982, was appointed as a regular director upon the Defendant’s recommendation in accordance with the Defendant’s implementation plan for normalization of the school foundation B (hereinafter “instant private teaching institute”), and was in office as a director of the instant private teaching institute on October 3, 2015, and resigned from the position of director on October 3, 2015.

B. Until December 14, 2015, the Defendant: (a) preserved the amount of embezzlement of KRW 14.6 billion in total, including KRW 8.4 billion in basic profit-making property and KRW 6.2 billion in school expenses reserve; (b) amended the articles of incorporation for the purpose of appointing open directors, which are the conditions for the normalization of the instant driving school; and (c) requested the correction of two vacant auditors (hereinafter referred to as “instant request for correction”).

C. On February 3, 2016, the Defendant notified the Plaintiff of the revocation of the approval of taking office based on Article 20-2 of the Private School Act and Article 9-2 of the Enforcement Decree of the Private School Act on the ground that “the instant disposition” (hereinafter referred to as “instant disposition”) was not implemented for the matters requiring correction (i.e., embezzlement amounting to KRW 14.6 billion, amendment of the articles of incorporation for the appointment of open directors, and appointment of two vacant auditors).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 6, Eul evidence No. 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Relevant provisions

The entries in the attached Table shall be as specified in the relevant regulations.

(b) Whether the resigned director is subject to the disposition of revoking approval of taking office;

Article 22 subparagraph 2 of the Private School Act provides that "Where five years have not elapsed since the approval of taking office was revoked pursuant to Article 20-2, and five years have not passed since the approval of taking office was revoked pursuant to Article 20-2, and Article 54-3 (1) 1 of the Private School Act provides that "the person in whose case five years have not passed since the approval of taking office was revoked pursuant to Article 20-2" shall be disqualified for the head of the relevant school. However, if the cancellation of taking office is not permitted on the ground that the relevant executive already resigned even if there was a reason for cancellation of taking office as provided in the Private School Act, the officer in whose case the approval of taking office was revoked may avoid the application of Article 22 subparagraph 2 of the Private School Act and Article 54-3 (1) 1 of the Private School Act by resignation before the cancellation. Therefore, the plaintiff's assertion in this part is without merit.

(c) the existence of the reasons for the measure;

1) Whether the grounds for the disposition regarding the embezzlement (the grounds for the first disposition) exists, such as the basic property for profits of the president of the instant private teaching institute (hereinafter “the instant embezzlement”).

A) The specific grounds for the Defendant’s 1 disposition are as follows: “Plaintiff violated Article 27 of the Private School Act because it was impossible to detect the embezzlement of this case by failing to perform its duty of care as a director of the instant private teaching institute (Article 20-2(1)1 of the Private School Act); and “the operation of the Cuniversity established by the instant private teaching institute due to the instant embezzlement (Article 20-2(1)2 of the Private School Act).”

B) Comprehensively taking account of the respective descriptions of evidence Nos. 5 and 8 and the purport of the entire pleadings, the following facts can be acknowledged.

(1) From August 2014 to March 2015, D, the president of the instant private teaching institute, as indicated in the separate crime, embezzled KRW 8,397,734,00 of the basic property for profit-making purposes owned by the instant private teaching institute (i.e., KRW 7., KRW 7.5 billion + KRW 897,734,000, three times withdrawn from the existing basic property for profit-making purposes) and KRW 6.2 billion, total amount of KRW 14,597,74,00,00 for personal business purposes, and KRW 14,59,734,000 from the instant private teaching institute’s private teaching institute’s private interest. From around 2015 to the date of the instant crime, D, as listed in the separate criminal fact-finding list, made up one copy of the instant private teaching institute’s private interest document under the name of the relevant private teaching institute and one copy of the deposit account under the title of C. 5,015.

(2) On April 29, 2015, the second board of directors of the instant private teaching institute in April 2015, the Plaintiff decided to settle the accounts of corporations and school expenses for the fiscal year 2014, along with the following other directors.

C) In light of the following circumstances, in light of the overall purport of the facts and the pleading as seen earlier, the evidence alone presented to the court is insufficient to acknowledge that the Plaintiff was unaware of, or could have easily known, the embezzlement in the course of performing his duties as a director of the instant private teaching institute, even though it was not known, and there is no other evidence to acknowledge it otherwise.

(1) In order to conceal the embezzlement of this case, as seen earlier, D: (a) the head of the private teaching institute of this case and the certificate of deposit balance issued to Cuniversity was forged and altered; and (b) the manager of the secretariat of the private teaching institute of this case and the director of the school affairs support division were kept and kept in the office of the school affairs support division of Cuniversity; and (c) the director of the private teaching institute of this case and the director of the school affairs support division, without recognizing the embezzlement of this case, could have explained

(2) The Plaintiff, a non-standing director, merely deliberated on the budget and settlement of accounts based on the accounting materials, audit reports, etc. submitted as meeting materials by the board of directors, and was in a position to make it difficult to understand the details of accounting execution of the instant private teaching institute, and the submitted accounting materials were also falsified and altered as above.

D) Therefore, it cannot be said that the Plaintiff failed to detect the embezzlement and accounting fraud of the instant case by neglecting the duty of care as a director of the instant private teaching institute, thereby causing serious obstacles to the operation of the Cuniversity. The grounds for the first disposition do not exist, and the Plaintiff’s allegation in this part is with merit.

2) Whether there are grounds for action in respect of failure to comply with the Articles of Incorporation for the appointment of an open director (grounds for action 2)

A) The Defendant’s ground for the second disposition is that “the Plaintiff did not amend the articles of incorporation of the instant private teaching institute for the appointment of an open director due to the Plaintiff’s failure to perform his duty of care as a director of the instant private teaching institute. Therefore, the Plaintiff violated Article 27 of the Private School Act, and did not implement an order to modify the articles of incorporation for the appointment of the Defendant’s open director under Article 4(3) of the Private School Act (Article 20-2(1)1 of the Private School Act).”

B) According to Article 14(3), main sentence of (4), (5), (6), and Article 26-2 of the Private School Act, and Article 7-2(5), (8), and Article 10-6 of the Enforcement Decree of the Private School Act, a school juristic person shall open a private recommendation committee and open a private recommendation committee, and have at least five members and recommend 1/2 of the members of the open recommendation committee in the university council. Of those recommended twice by the open director recommendation committee, an open director shall be appointed by the articles of association. The matters necessary for the recommendation of open directors, method and qualification criteria for appointment, detailed matters concerning the organization, operation, and composition of the open director recommendation committee, and the composition, operation, etc. of the ordinary council shall be determined by the articles of association.

Meanwhile, Article 45 (1) of the Private School Act provides that "a person who intends to amend the articles of incorporation of a school foundation shall obtain approval from the board of directors with the consent of at least 2/3 of the fixed number of directors," and Article 45 (2) provides that "where the school foundation amends the articles of incorporation pursuant to paragraph (1), it shall submit the documents determined and publicly notified by the Minister of Education and report to the Minister of Education within 14 days," and Article 5 of the articles of incorporation of the private teaching institute of this case provides that "the amendment of the articles of incorporation of the private teaching institute of this case shall be subject to approval from the board of directors with the consent of at least 2/3 of the fixed

C) In full view of the respective descriptions of evidence Nos. 8, 10, 11, and 12 and the purport of the entire pleadings, the following facts can be acknowledged.

(1) On November 4, 2014, the board of directors of the instant private teaching institute, including the Plaintiff, discussed the amendment of the articles of association of the instant private teaching institute in order to stipulate matters concerning the board of directors in the articles of association of the instant private teaching institute. However, the board of directors did not decide on the amendment of the said articles of association at the F Religious Organizations (integrated) Gano Association and Hanoo’s Association, and decided again at the following meeting.

(2) On November 13, 2014, the board of directors of the instant private teaching institute, including the Plaintiff, considered the opinions of the Hano Association’s I directors and J auditors on the part of the Gano Association, and resolved on the amendment agenda of the articles of association of the instant private teaching institute, with the consent of 10 directors present among 15 directors, to establish the board of directors at C University established and operated by the instant private teaching institute, with the consent of 10 directors present among 15 directors.

(3) The articles of association of the instant private teaching institute were newly established with respect to the establishment, composition, functions (including deliberation on matters concerning the recommendation of members of the Open Director Recommendation Committee), operation, etc. of the board of directors, and were enforced from November 13, 2014.

D) According to the evidence evidence No. 8, the fact that the articles of incorporation of the instant private teaching institute did not provide for a director for opening the private teaching institute. However, considering the following circumstances revealed by adding the aforementioned facts and the overall purport of the arguments, the evidence submitted to the instant court alone is insufficient to deem that the articles of incorporation of the instant private teaching institute did not change to include a provision on appointment of a director for opening the private teaching institute as a director of the instant private teaching institute, and there is no other evidence to prove otherwise.

(1) In order to appoint an open director, an open director recommendation committee shall be organized, and in order to organize an open director recommendation committee, the college council shall be established in the college educational institution operated by the school educational foundation and recommend half of the members of the open director recommendation committee. However, the board of directors urged the board of directors to discuss the amendment of the articles of incorporation to the effect that the F religious organization (integrated) G union and Hono council shall be newly established for the purpose of certifying the institution evaluation of the Cuniversity’s institution. On November 13, 2014, the articles of association of the instant private teaching institute, including the Plaintiff, were newly established by the resolution of the directors of the instant private teaching institute. This can be deemed as a basis for the Plaintiff to implement the amendment of the articles of association of the instant private teaching institute for the future appointment of open directors, along with other directors.

(2) The resolution by the board of directors of the instant private teaching institute alone cannot amend the articles of association of the instant private teaching institute, and obtain the consent of the F religious organization (integrated) G Labor Association and both sides of the HU.S. In addition, at the time the Plaintiff was in office as a director of the instant private teaching institute, both associations did not agree to establish a new provision regarding the appointment of open directors in the articles of association

E) Therefore, there is no ground for the second disposition. This part of the Plaintiff’s assertion is with merit.

(iii) the existence of the reasons for the disposition with respect to the non-election of two auditors (the reasons for the disposition No. 3)

A) The Defendant’s ground for the third disposition is that “the Plaintiff did not appoint two auditors who are vacant due to the Plaintiff’s failure to perform his duty of care as a director of the instant private teaching institute.” As such, the Plaintiff violated Articles 24 and 27 of the Private School Act. The Plaintiff failed to comply with the Defendant’s order to appoint two vacant auditors under Article 4(3) of the Private School Act (Article 20-2(1)1 of the Private School Act).

B) According to Articles 20(1) and 24 of the Private School Act, if a vacancy occurs in the office of directors or auditors, the board of directors should appoint a vacant officer within two months, as prescribed by the articles of incorporation. Meanwhile, Article 20(1)2 of the articles of incorporation of the private teaching institute of this case provides that “An auditor shall be appointed by the board of directors on recommendation of one of the F Religious Organizations (integrated) G Labor Association and Hono Association and shall be appointed by the board of directors with the approval of the competent authorities.”

In full view of the purport of subparagraph 9-2 of the evidence No. 9-2 and the purport of the entire pleadings, the fact that a vacancy occurred due to the expiration of the term of two auditors, which was held by the first board of directors of the pertinent private teaching institute in March 31, 2014, may be acknowledged that no vacant auditor has been appointed until the instant disposition was taken. However, the resolution by the board of directors of the pertinent private teaching institute cannot be made by the resolution of the pertinent private teaching institute, and the process of recommending two candidates to be newly appointed by the F Religious Organizations (integrated) and the Hao’s Association should be prior to the process of recommending two candidates to be newly appointed by the FMI. However, according to the purport of the entire pleadings, it is difficult to deem that two candidates who are newly appointed by the two councils did not recommend two candidates to be newly appointed by the two councils. Thus, it is difficult to deem that the Plaintiff did not appoint any vacant auditor because it violated the duty

C) In addition, according to Article 20-2(2) of the Private School Act and Article 9-2(1) of the Enforcement Decree of the Private School Act, where it is evident that the competent authorities could not correct it within the required period even if they request correction (Article 9-2(1)1 of the Enforcement Decree of the Private School Act), or where the degree of corruption, such as accounting fraud, embezzlement, and bribery, is significant and its fact is clearly verified by a court decision or an audit by the competent authorities (Article 9-2(1)2 and 3 of the Enforcement Decree of the Private School Act), the approval of taking office may be cancelled without a request for correction. However, in the absence of such circumstances, the competent authorities may cancel the approval of taking office only where the relevant school juristic person fails to comply with the request for correction 15 days after the date on which the request for correction was made on the grounds of the subparagraphs of

The evidence presented by the Defendant and the circumstance asserted by the Defendant alone are difficult to deem that it is evident that the instant private teaching institute could not appoint two auditors vacant within the due date for demanding the correction, and there is no other evidence to acknowledge this. Accordingly, whether the instant private teaching institute may cancel the Plaintiff’s approval of taking office on the ground that it did not appoint two auditors vacant since it failed to comply with the instant demand for correction. As seen earlier, once the Defendant issued the instant demand for correction, including the appointment of two auditors vacant after the resignation of the director of the instant private teaching institute, the Plaintiff, who is not a director of the instant private teaching institute, was unable to take measures following the instant demand for correction as its officers at the time of demanding the correction. Since it is difficult to view that there were circumstances such as that the instant private teaching institute was unable to perform normal activities only by other directors remaining around the time of the instant request for correction, it cannot be deemed that the Plaintiff had a duty to continue to perform its duties as a director of the instant private teaching institute even after resignation. Therefore, it should not be held liable for the Plaintiff’s failure to comply with the instant demand for correction.

D) Therefore, there is no ground for the 3 disposition. This part of the Plaintiff’s assertion is with merit.

4) Sub-determination

The instant disposition shall be revoked as it is unlawful because there is no ground for disposition as seen earlier.

D. Whether discretionary authority is abused (family judgment)

1) The revocation disposition of taking office under Article 20-2 of the Private School Act constitutes a punitive administrative disposition. Whether a punitive administrative disposition deviatess from or abused the scope of discretion under the social norms or not shall be determined by comparing and balancing the degree of infringement on the public interest and the disadvantages suffered by an individual due to such disposition by objectively examining the content of the act of violation as the ground for the disposition, the public interest to be achieved by the act of disposal, and all the relevant circumstances (see, e.g., Supreme Court Decisions 2001Du7138, Feb. 5, 2002; 2006Du19297, Jul. 19, 2007).

The reason for revoking the approval of taking office under Article 20-2 (1) of the Private School Act is that "when a person violates the provisions of the Act, the Elementary and Secondary Education Act or the Higher Education Act, or fails to comply with an order issued pursuant to such provisions (Article 1) or fails to comply with such provisions (Article 20-2 (1)." Considering that Articles 10 and 31 (1) and (4) of the Constitution of the Republic of Korea recognize the freedom of private school establishment and operation, it is balanced to interpret that the scope of the violation is similar to that of the approval of taking office under Article 20-2 (1) 2 of the Private School Act, such as where the degree of the violation is similar to that of the revocation of the approval of the executive officer under Article 20-2 (1) 2 of the Private School Act.

2) Even if the ground for disposition No. 3 is acknowledged, considering the following circumstances, even if the aforementioned facts, the evidence mentioned above, and the evidence stated in Gap evidence Nos. 12 and 13, together with the purport of the entire pleadings, the instant disposition constitutes an abuse of discretionary power, and thus, constitutes an abuse of discretionary power, since it is excessively high, and thus, is in violation of the principle of proportionality, compared with the public interest to be achieved. The Plaintiff’s assertion on this part

A) In view of the purpose and text of the Private School Act intending to ensure the sound development of the private school by securing the autonomy of the private school and promoting the public nature, it shall be deemed that the case where the extreme public intervention, such as the cancellation of approval of taking office, is necessary even if there is a serious trouble or disturbance in the part of the educational functions of the school such as the selection of new students and classes, and the autonomy of the private school is damaged. However, the evidence submitted by the Defendant alone is insufficient to recognize that there was a serious obstacle to the important part of the educational functions of the Cuniversity due to the reasons for disposition 3.

B) In addition, it is difficult to readily conclude that there was a significant disadvantage to the instant private teaching institute due to the absence of two auditors who are vacant.

C) On July 30, 2014, while serving as a director of the instant private teaching institute, the Plaintiff attended the 6th board of directors to reject the agenda for selling K-si land, which is the property of the private teaching institute. On August 21, 2014, the Plaintiff attended the 7th board of directors, and proposed that the instant private teaching institute faithfully perform its duties as a director by demanding an explanation on the validity of the instant project in order to prevent the aggravation of the finance of the instant private teaching institute due to the defect in purchasing land in order to operate a tourist hotel business as a profit-making business, using the large amount of teaching expenses erroneously, and making efforts to investigate the feasibility as a site for the pertinent land. As seen earlier, it appears that the Plaintiff faithfully performed its duties, such as making efforts to amend the articles of

D) If the approval of taking office of the Plaintiff is revoked, the Plaintiff cannot be an executive of the school juristic person for five years pursuant to Article 22 subparag. 2 and Article 54-3(1)1 of the Private School Act, and may not be appointed as the head of the school. However, even though the Plaintiff’s flexibility regarding the grounds for disposition No. 3 is not yet attributable, it would be too harsh to give the Plaintiff, who was appointed as a director upon the Defendant’s recommendation for the normalization of the private teaching institute in this case, disadvantage the Plaintiff

3. Conclusion

The plaintiff's claim of this case is reasonable, and the costs of lawsuit are assessed against the losing defendant. It is so decided as per Disposition.

Judges Lee Dong-gu

Judge Lee Ho-hoon

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.