gallona Co., Ltd. (Law Firm Magyeongsung, Attorney Dogn-sik, Counsel for defendant-appellant)

The head of Seongdong-gu Seoul Metropolitan Government (Attorney White-soo, Counsel for defendant-appellant)

October 16, 2012

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on February 16, 2012 is revoked.

1. Details of the disposition;

A. The Plaintiff is running the construction of a new building on the ground of 17,490 square meters within a zone for special planning of piling Island located in Seongdong-gu Seoul ( Address omitted) (hereinafter “instant project”).

B. Considering that the above construction act constitutes subject to imposition of infrastructure charges as prescribed by the former Infrastructure Charges Act (amended by Act No. 9051, Mar. 28, 2008; hereinafter “former Infrastructure Charges Act”), the Defendant imposed an amount of KRW 8.3 billion on the Plaintiff, and the Plaintiff paid the amount around February 9, 2009.

C. Based on Articles 15 and 17 of the Urban Traffic Improvement Promotion Act, Article 13-2 of the Enforcement Decree of the same Act, and Article 8 of the Seoul Metropolitan Government Ordinance on the Establishment of Special Accounts for Transport Projects (hereinafter “Seoul Metropolitan City Ordinance”), the head of Seoul Special Metropolitan City imposed the traffic improvement contributions of KRW 2 billion (hereinafter “instant traffic improvement contributions”) on the Plaintiff, and the Plaintiff paid it to the Seoul Special Metropolitan City Mayor on June 30, 201.

D. The Plaintiff requested the Defendant to refund the instant infrastructure charges, deeming that the instant transport improvement charges fall under the subject matter of deduction under Article 8(5) of the former Infrastructure Charges Act and Article 7(8) of the former Enforcement Decree of the Infrastructure Charges Act (amended by Presidential Decree No. 21038, Sept. 25, 2008; hereinafter “former Enforcement Decree of the Infrastructure Charges”). However, the Defendant refused the Plaintiff’s request to refund the instant transport improvement charges on February 16, 2012, on the ground that the instant transport improvement charges were not subject to deduction of the infrastructure charges, for the cost of establishing the transport improvement measures provided under the conditions of deliberation at the time of traffic impact assessment, not falling under the subject matter of deduction of the infrastructure charges. In light of the fact that the instant transport improvement charges paid by the Plaintiff did not meet the requirements of deduction of the infrastructure charges, such as TSM (TTM) improvement costs, or the fridong expansion construction works, etc.

[Reasons for Recognition] Uncontentious Facts, Gap evidence 1, Eul evidence 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

According to Article 8(5) of the former Infrastructure Charges Act and Article 7(8) of the Enforcement Decree of the same Act, even in cases where a person liable to pay infrastructure charges pays an amount equivalent to the installation cost of infrastructure instead of directly installing infrastructure charges, the amount equivalent to the relevant installation cost shall be deducted from the infrastructure charges. The Plaintiff paid 2 billion won to the Defendant for traffic improvement contributions after paying the construction cost of approximately KRW 8.3 billion. The instant traffic improvement contributions are determined as the construction cost of the road appurtenant facilities (TSM construction cost) under the name of the installation cost of signal lights, relocation, installation of street sign, installation of illegal parking and stopping facilities, etc., 1.5 billion won as the construction cost of the road appurtenant facilities (TSM construction cost), and thus, the instant traffic improvement contributions were paid for the same purpose as that of the infrastructure charges, and thus constitutes the installation cost of infrastructure under the former Infrastructure Charges Act. Accordingly, the instant traffic improvement contributions paid by the Plaintiff are unlawful under the premise that the instant traffic improvement contributions are subject to deduction under Article 8(5) of the former Infrastructure Charges Act and Article 7(8) of the Enforcement Decree of the same Act.

B. Relevant statutes

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

C. Facts of recognition

1) The instant project implemented by the Plaintiff constitutes a project subject to traffic impact analysis and improvement plans under Article 15 of the Urban Traffic Improvement Promotion Act. The Plaintiff submitted a traffic impact analysis and improvement plan to the Mayor of Seoul Special Metropolitan City in accordance with Article 16(1) of the Urban Traffic Improvement Promotion Act in order to obtain approval, etc. for the instant project. The Mayor of Seoul Special Metropolitan City held a traffic impact analysis and improvement plan deliberation committee on August 6, 2007 and passed a resolution on the Plaintiff on the following: “A comprehensive traffic improvement plan including the TSM project for the surrounding areas of the instant project (including a road plan, expenses to be borne by the project implementer, and scope to be borne by the project implementer).”

2) In order to implement the results of the above deliberation, the Plaintiff submitted a report that prepared a comprehensive traffic improvement plan for the surrounding areas of the instant project site around May 201. The report is based on the main contents (the total project cost of KRW 2 billion) such as the improvement of the traffic environment surrounding the instant project site, the improvement of facilities for bicycle riding, the improvement of the pedestrian environment, the improvement of the public transportation system (TSM), and other (the improvement of sexual intercourse and the installation of internship lanes).

3) Accordingly, the Mayor of Seoul Special Metropolitan City imposed KRW 2 billion on the Plaintiff based on Articles 15 and 17 of the Urban Traffic Improvement Promotion Act, Article 13-2 of the Enforcement Decree of the same Act, and Article 8 of the Seoul Special Metropolitan City Ordinance on June 28, 201, and the Plaintiff paid it to the Seoul Special Metropolitan City Mayor on June 30, 201.

4) On August 30, 2012, the Defendant ordered the Sungdong Interconnection Construction Work and is currently under construction, and since Sungdong is a road for which an urban planning is determined, the Defendant did not obtain a separate procedure for determination of urban planning facilities or permission for development activities related to the said construction.

5) Meanwhile, around September 2012, the Defendant did not obtain any procedure or permission on the following grounds: (a) while promoting TSM projects, such as providing basic and working design services for TSM projects (such as improving traffic environment conditions, improving bicycle riding facilities, improving the pedestrian environment, and improving the public transport system); (b) on the other hand, deeming that separate urban planning facilities are not required to be determined or permitted in relation to the project;

[Reasons for Recognition] Evidence Nos. 7, Evidence Nos. 1 to 4, and the purport of the whole pleadings

D. Determination

Article 8(5) of the former Infrastructure Charges Act provides that "where a person liable to pay charges installs an infrastructure directly through the determination procedure of urban planning facilities or permission for development activities in accordance with the provisions of other Acts and such infrastructure belongs to the State or a local government, the amount equivalent to the relevant installation cost shall be deducted from the infrastructure charges." Article 7(8) of the Enforcement Decree of the same Act provides that "Article 8(5) of the same Act provides that "Where a person liable to pay pays an amount equivalent to the installation cost of infrastructure instead of the direct installation

Comprehensively taking account of the following circumstances acknowledged by the Plaintiff, in relation to the fulfillment of the requirements for deduction of the infrastructure charges under Article 8(5) of the former Infrastructure Charges Act and Article 7(8) of the Enforcement Decree of the same Act, the Plaintiff cannot be deemed to meet the requirements for deduction under Article 8(5) of the former Infrastructure Charges Act and Article 7(8) of the Enforcement Decree of the same Act solely on the basis that the Plaintiff paid the traffic improvement contributions amounting to KRW 2 billion in relation to the instant business, since the Plaintiff cannot be deemed to have satisfied the requirements for deduction under Article 8(5) of the former Infrastructure Charges Act and Article

① Under subparagraph 1 of Article 2 of the former Infrastructure Charges Act, the term "infrastructure" means roads, parks, green areas, water supply, sewerage, schools (including elementary, middle and high schools), waste disposal facilities (including incidental facilities and convenience facilities necessary for the display and use of their functions), and infrastructure charges are the amount imposed and collected to build infrastructure or to secure sites necessary for construction under subparagraph 2 of Article 2 of the Act (Article 2 subparagraph 3 of the former Infrastructure Charges Act). On the other hand, the Plaintiff's implementation of the project is related to the project subject to traffic impact analysis and improvement plans under Article 15 of the Urban Traffic Improvement Promotion Act to obtain approval from the head of Seoul Special Metropolitan City Mayor to implement the project in this case. The Plaintiff's implementation of the traffic improvement plan, including TSM projects, for the Plaintiff's implementation of the project in this case's surrounding areas after traffic impact analysis and improvement plan deliberation committee, is not required to establish the comprehensive traffic improvement plan (the cost of the project in this case's implementation of the project in this case's surrounding areas within 200 billion won.

② It is reasonable to deem that installation costs of infrastructure deducted pursuant to Article 8(5) of the former Enforcement Decree of the Infrastructure Charges Act do not refer to all expenses incurred in relation to infrastructure (such as the maintenance, repair, improvement, etc. of infrastructure) but means only expenses for infrastructure installed with the determination procedure of urban planning facilities or with the permission for development activities (see Supreme Court Decision 2010Du1919, Mar. 29, 2012). The same applies to cases where the obligor pays an amount equivalent to installation costs of infrastructure instead of directly installing infrastructure pursuant to Article 7(8) of the former Enforcement Decree of the Infrastructure Charges Act (i.e., the obligor has paid an amount equivalent to installation costs of infrastructure in order to obtain deduction pursuant to Article 7(8) of the former Enforcement Decree of the Infrastructure Charges Act or an amount equivalent to installation costs of infrastructure installed with the permission for development activities. However, it appears that the instant traffic improvement charges paid by the Plaintiff are to be used for the TSM project and the extension of infrastructure construction with the permission for development activities under the premise that it is unnecessary to obtain the permission for the permission for development activities or improvement work.

③ Traffic improvement contributions in the instant case are paid by the Plaintiff, who is a business operator subject to the formulation of traffic improvement plans under the Urban Traffic Improvement Promotion Act, as a traffic improvement project cost for the surrounding areas of the instant project site. The traffic improvement contributions in the instant case are reasonable to be considered as the cost of establishing comprehensive traffic improvement measures for the surrounding areas of the instant project site, and there is no direct relation to the installation of infrastructure or securing of land necessary for the installation of infrastructure facilities or the construction of infrastructure facilities for improvement of the construction of infrastructure in the instant case. In other words, the traffic improvement contributions in the instant case are not directly related to the installation of infrastructure facilities or the installation of infrastructure facilities for improvement of the construction of infrastructure facilities in the instant case.

3. Conclusion

The plaintiff's claim is dismissed on the ground that it is without merit.

[Attachment]

Judges Cho Il-young (Presiding Judge)