2016Guhap78462 Revocation of revocation of disposition of suspending solicitation

Educational Foundation of Seoul Digital University

The Minister of Education

December 20, 2016

January 20, 2017

1. The plaintiff's claim is dismissed.

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

The defendant's disposition of suspending recruitment of 40% (1,200 persons) compared to the fixed number of admission in 2017 offered to the plaintiff on October 17, 2016 shall also be revoked.

1. Details of the disposition;

A. On October 30, 2009, the Defendant approved the Plaintiff to convert from a lifelong educational establishment to a cyber university, which is one of the types of schools stipulated in Article 2 subparag. 5 of the Higher Education Act. The Defendant added the conditions of authorization, including the following: “The Plaintiff shall secure basic property for profit-making equivalent to 50% of the annual operating earnings of the school accounting as of the pertinent school year pursuant to Article 7 of the Regulations on the Establishment and Operation of Cyber Colleges (it may be governed by Article 3 of the Addenda to the Regulations on the Establishment and Operation of Cyber Colleges until 2012),” and “if the Plaintiff fails to comply with the requirements, it may revoke the approval for establishment of the university or take measures such as reducing the fixed number of students, suspending the enrollment of students

B. The Plaintiff, upon obtaining a conversion authorization, submitted a guarantee insurance policy replacing the shortage of basic assets for profit pursuant to Article 56(2) of the Enforcement Decree of the Lifelong Education Act. However, the Plaintiff failed to secure basic assets for profit as prescribed under the said authorization condition until three years have passed from the date of the conversion authorization. From December 12, 2012 to June 8, 2013, the Defendant ordered the Plaintiff to secure the shortage of basic assets for profit on four occasions, but issued a disposition suspending recruitment of 2,085 persons for fixed number of admission on August 26, 2013 (hereinafter “transfer disposition”).

C. After December 17, 2015, the Defendant issued an order to secure the shortage of basic property for profit-making purposes again to the Plaintiff, but failed to implement the order. According to the current status of securing basic property for profit-making purposes as of March 1, 2016, which was submitted by the Plaintiff to the Defendant, the Plaintiff secured only KRW 57.2% of the base amount of basic property for profit-making purposes, which is 37.2% of the base amount of basic property for profit-making purposes, 5.5 million won.

D. On October 17, 2016, the Defendant rendered a disposition suspending recruitment of 40% (1,200 persons) compared to the fixed number of admission for the year 2017 on the ground that the Plaintiff did not secure basic property for profit-making purposes (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, entry of Gap evidence 1, 4 through 6, 9 (including branch numbers, hereinafter the same shall apply) and the purport of whole pleadings

2. Related statutes;

It is as shown in the attached Table related statutes.

3. Whether the instant disposition is lawful

A. As to the legal basis of the disposition

1) The plaintiff's assertion

Inasmuch as there exist no individual criteria for administrative disposition applicable to cases where cyber colleges fail to secure fundamental property for profit as prescribed in the establishment standards, or standards for securing basic property for profit-making at private universities, which is a similar violation, the instant disposition is not based on statutes. The original purpose of basic property for profit-making purposes is to promote the soundness of finance, and the Plaintiff submitted a sound authorization and permission guarantee insurance policy, and the securing of basic property for profit-making purposes and the recruitment quota is not directly related, and thus, the instant disposition does not conform to the purport of statutes.

(ii)a group;

A) Article 2 subparag. 5 of the Higher Education Act provides that cyber colleges shall be established as one of the types of schools. Article 4 of the same Act provides that a person who intends to establish a school shall meet the standards for establishment prescribed by Presidential Decree, such as facilities and equipment. Article 2(1) of the Enforcement Decree of the same Act provides that matters concerning the standards for establishment of schools, such as facilities and equipment, which a person who intends to establish a school pursuant to Article 4(1) of the same Act shall separately be prescribed by Presidential Decree, and Article 7(1) of the Regulations on the Establishment and Operation of Cyber Colleges (hereinafter referred to as the "Rules of Cyber Colleges"), which is a Presidential Decree, shall secure profit-making assets equivalent to at least 50% of the total annual operating revenues of universities. In addition, Article 60(1) of the Higher Education Act provides that "the Minister of Education may order the founders, managers, or the heads of schools to rectify or change facilities and equipment of the schools if the person violates an order issued pursuant to education-related Acts and subordinate statutes or regulations thereunder."

B) Article 4(1) of the Higher Education Act and Article 7 of the Regulations on Cyber Colleges do not provide for the standard applicable to cases where the basic property for profit-making purposes cannot be secured pursuant to the above attached Table 4, but it is recognized that the standard applicable to cases where the basic property for profit-making purposes of private universities can not be secured are not established. However, Article 60(2) of the Higher Education Act provides that the standard is delegated to the Presidential Decree, but the standard is not established. Furthermore, in the general standard of subparagraph 1 (f) of the attached Table 4, if the standard of administrative disposition is not established in the individual standard of subparagraph 1 of the attached Table 4, it shall be in accordance with the standard of administrative disposition prescribed in the individual standard, and if there is no similar violation, it is reasonable to view that the standard of administrative disposition directly applied to the disposition in this case or applicable by analogy is not established in the individual standard of the above attached Table 4, taking into account the content, severity, and frequency of the act of violation, even if it does not meet the standard of individual disposition such as new announcement.

C) The purpose of securing fundamental property for profit is to promote the financial soundness of the cyber university. Article 7 of the Regulations of the cyber university is likely to arise if Article 7 of the Regulations of the cyber university fails to secure fundamental property for profit more than a certain standard, and the purport of the relevant statutes is to apply them to all the cyber colleges. Therefore, if the provisions violate the aforementioned provisions, the defendant can take certain sanctions against the relevant university. According to the standards set forth in attached Table 4 above, the suspension of student recruitment can be deemed as one of the sanctions.

D) Therefore, the Plaintiff’s assertion on this part cannot be accepted.

B. Whether the discretionary authority is deviates or abused

1) The plaintiff's assertion

The instant disposition is an exceptional disposition on the failure to secure fundamental property for profit-making purposes, and there was no precedent on sanctions against school juristic persons securing less than 50% in general in the case of private universities on the ground of its failure to secure the basic property for profit-making purposes until now, and in the case of cyber universities, it was authorized to convert without securing fundamental property for education, such as teachers, etc., and the instant disposition against the Plaintiff was in violation of the principle of equality. In comparison with these other cases, the instant disposition against the Plaintiff is against the principle of proportionality. The Plaintiff already secured basic property for profit-making purposes at the time of the instant disposition, and the instant disposition neglecting its duty of balancing due to its failure to take into account such circumstances and the developments leading up to its securing, etc.

B. Determination

In light of the following facts and circumstances, even if considering various circumstances alleged by the Plaintiff, the disposition in this case is deemed to contravene the principle of equality or to abuse the discretionary power assigned to the Defendant in violation of the principle of proportionality, even if it is considered that the disposition in this case goes against the principle of equality or is an abuse of discretionary power.

① From December 12, 2012, a three-year grace period after the approval of conversion, the Defendant issued an order to secure fundamental property for profit to the Plaintiff, and the Plaintiff failed to comply with the order on August 26, 2013 (with respect to the transfer disposition, the reason for the disposition was recognized, but the Defendant was sentenced to the revocation of the transfer disposition on the ground that it exceeded and abused discretion (Seoul Administrative Court Decision 2013Guhap59620 decided September 6, 2014), and the Seoul High Court Decision 2014Nu57074 decided September 4, 2015), and the Plaintiff failed to meet the requirements for securing fundamental property for profit even after the transfer disposition. The Plaintiff’s nonperformance period is considerably long as the Plaintiff failed to fulfill its duty.

② At the time of disposition by the Plaintiff, the degree of securing fundamental property for profit-making purposes is only 5.7 million won (4.5 billion won, 1.5 billion won, 1.2 billion won, 37.2 billion won, which is the standard amount for securing fundamental property for profit-making purposes at the time of disposition. Even if operating basic property for profit-making purposes is included in the basic property for profit-making purposes, evidence submitted alone cannot be deemed as satisfying all the requirements for securing fundamental property for profit-making purposes. Furthermore, there is no evidence suggesting that the above unsatisable state can be improved. The Plaintiff asserts that it is possible to secure fundamental property for profit-making purposes on the premise that part of the teachers who are fundamental property for education can be changed into basic property for profit-making purposes, but the change of use of basic property for profit-making purposes belonging to the accounts for profit-making purposes is not allowed in violation of Article 29 of the Private School Act (excluding the revision of statutes, but excluding the basic property for profit-making purposes, and the calculation of the general university’s basic property for profit-making without any change.)

③ The Plaintiff’s annual recruitment rate of one semester is 65.3% in 2014, 65.8% in 2015, and 71.1% in 2016 on the basis of April 1 of each year. The Plaintiff asserts that the above recruitment rate is limited to one semester, and that the Defendant’s recruitment rate was unlawful since it erred in misunderstanding important facts. Although the Defendant used the above recruitment rate data as examination data at the time of the instant disposition, it cannot be deemed that the Plaintiff’s recruitment rate is different from the fact at least on the basis of the pertinent date. In light of the Defendant’s examination contents, it is difficult to view that the Plaintiff’s above recruitment rate of 10% in 20% in 1,84, which applied 62.8% in 20% in 20% in 20% in 15% in 200 in 204 in 204 in 20% in 20% in 204 in 2015.

(4) In order to secure fundamental property for profit, the Board of Audit and Inspection discovered that the Plaintiff established two corporations in 2009 and 2010, paid an excessive amount of KRW 4.5 billion to the said corporations compared to the date of production of lectures, and appropriated the operating expenses of the corporation from 2010 to 2012 for the private purpose of the officers’ funds. It is also discovered by the Board of Audit and Inspection that the Plaintiff used the funds for the private purpose of the officers’ funds. It is difficult to view that the Plaintiff’s funds have been managed and operated in a sound manner.

⑤ A cyber university differs from the general private university’s educational operation system, such as purpose of establishment, type of academic degree, standards for establishing departments or majors, and its respective laws and regulations are different. In cases of a private university currently existing, most of the universities established prior to the strengthening of standards for securing basic assets for profit-making purposes are not in violation of statutes even if they secure only basic assets for profit-making purposes (applicable only to cases where relevant grounds, such as increase in the fixed number of students arise). Since current standards for securing of basic assets for profit-making purposes are considerably strict compared to the cases of a cyber university (it should secure basic assets for profit-making purposes equivalent to the total amount of school accounting operational revenues), it cannot be simply compared with the ratio of securing basic assets for profit-making purposes of a private university, which is converted from statistics. In addition, since a private university established by meeting the requirements for authorization, and if it fails to meet the requirements, it can not be deemed as necessary to impose sanctions on securing basic assets for profit-making purposes, in principle, if it fails to meet the requirements for authorization, it does not meet the requirements for authorization of the general university.

(6) As the Plaintiff, the educational foundation which was authorized to convert into cyber colleges from a lifelong educational establishment is 15 of the total 17 of the 17 lifelong educational establishments. Among them, the Plaintiff did not secure the fundamental property for profit only three years as of October 17, 2015, which is the date of the instant disposition. The remaining 14 instructors met the requirements for securing fundamental property for profit and fundamental property for education. Rather, the Defendant is conducting more strict regulatory policies, such as where the Plaintiff failed to secure basic property for profit, unlike the time of the approval of conversion into a cyber university for the lifelong educational establishment for which the Plaintiff applied for the approval of conversion into a cyber university for the last three years, and where it did not secure basic property for profit, which meets the requirements for the approval, unlike the time of the approval of conversion into the Plaintiff, the said disposition is harsh to the Plaintiff,

4. Conclusion

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

The presiding judge, the Korean Judge;

Judges Kim Gin-young

Judges Sok-beon

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.