Imposition Time for Penalty Surcharge Case

[18-1(B) KCCR 1, 2005Hun-Ka17 and 2006Hun-Ba17

(consolidated), May 25, 2006]

In this case, the Constitutional Court pronounced the decision of nonconformity to the constitution since the Act on the Registration of Real Estate under Actual Titleholder's Name(hereinafter referred to as the "the Act") Article 5, the text of provision 2(hereinafter referred to as the "the statutory provision of this case") imposing penalty surcharge, based on equivalent of real estate at the time of imposing point, upon the case the violation of law had been ended violates requesting party's property right.

Background of the Case

Requesting party, the real owner of the real estate, did act of title trust, registering the ownership under other person's name. The issue of the case is whether the statutory provision of this case imposing the penalty surcharge based on the equivalent of real estate 'at the present day of imposing the penalty surcharge', upon the violation of the provision resulting in varying the specific amount of penalty surcharge depending on administrative agency's choosing the imposing point of penalty surcharge, violates property right, therefore, it is constitutional.

Summary of the Decision

The Constitutional Court, in 8:1 opinion, pronounced decision of nonconformity to the constitution of the statutory provision of this case violating complaint's property right, and ordered that its application shall be suspended until the revision. The summary of rationale is same as the following.

1. Majority Opinion of Eight Justices

In case the act of title trust still existed when the administrative agency imposed the penalty surcharge, the imposition is for the continuously committed illegal act so even if they determined equivalent value of real estate at the imposing point of penalty surcharge as standard for computing the penalty surcharge, it does not violate principle of proportionality and property right.

However, in case the act of title trust ended when the administrative agency imposed the penalty surcharge, if they determined equivalent value of real estate at the imposing point of penalty surcharge as standard for computing the penalty surcharge, due to increase of the penalty surcharge based on the increase of equivalent value of real estate, the arbitrary choosing of imposing point and etc. disinterest of wrongdoer is great, but after the relationship of title trust is already ended, public interest gained by collecting the wrongdoer's illegal interest and enforcing mandatory registration with the actual name, is not so great, therefore, it violates principle of proportionality and property right.

However, if the court found unconstitutionality decision in its entirety on the statutory provision of this case, there would be no standard on the basis in computing the penalty surcharge, to evaluate equivalent value of real estate, so it creates the legal vacuum which is even for the constitutional case in which they cannot impose penalty surcharge for legal violation, therefore, the court found decision of nonconformity to the Constitution and ordered that its application shall be suspended until the revision of the law, by May 31, 2007. If legislator does not revise the statutory provision of this case till the date stated above, it would become invalid from the very next day of the deadline, June 1, 2007.

2. Dissenting Opinion of One Justice

Since the contents of the statutory provision of this case contains the part which conforms with Constitution and the part which does not conform with the Constitution together, and the part which does not conform with the Constitution can be specified, the part which confirms should be kept and the part which does not conform should be invalidated. Therefore, the court should pronounce partial constitutionality, 'the part of the statutory provision of this case, which applies to the case after the relationship of title trust is already ended, computing penalty surcharge based on the equivalent value of real estate at time of the imposition, violates the Constitution'. The opinion of the majority invalidating the part which conforms the Constitution violates the principle of separation of power.