Plaintiff Reconstruction Housing Association (Law Firm Boll, Attorneys Yellow-ho et al., Counsel for the plaintiff-appellant)

The Yangcheon-gu Seoul Metropolitan Government (Attorney Go Young-deok, Counsel for defendant-appellant)

December 20, 2007

Seoul Southern District Court Decision 2006Gahap8666 Decided January 12, 2007

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant shall pay to the plaintiff 853,458,600 won with 5% interest per annum from December 9, 2004 to the service date of a copy of the complaint of this case, and 20% interest per annum from the next day to the day of complete payment.

2. Purport of appeal

The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

1. Basic facts

(a) Approval of projects by the Yangcheon-gu Office;

(1) The Plaintiff filed an application with the Yangcheon-gu Office for the approval of the plan for each ○○○ reconstruction project (hereinafter “instant project”) of the said 1 and 3 complexes, as a reconstruction association established to promote a private housing construction project on the ground of 414-4 and 2 lots outside the same 414-3 and 1,921.39 square meters on the ground of 14-4 and 14 lots of land in Yangcheon-gu Seoul, Yangcheon-gu, Seoul.

(2) In approving the instant project plan on June 30, 2003, the head of Yangcheon-gu purchased public land (road: part of 857 on a new April 857 in Yangcheon-gu, Seoul) and public land (road) subject to disuse in the project site, which is disused in the instant project site, prior to the commencement of construction, under the conditions of implementation of the project plan for the said three complex project plan, and the head of Yangcheon-gu imposed the ownership (Paragraph 14) after the approval of the project plan, until the commencement of construction by following the procedure of the regulations on disuse after the approval of the project plan.

(3) On June 14, 2004, the head of Yangcheon-gu Office, upon approval of the modification of the above complex project plan, opened the inside roads to be installed in the project site as a function similar to the existing roads in order to maintain the existing passage passage of the residents in the surrounding area on a regular basis, and imposed the width of the sidewalk at least 2 meters (Paragraph 13).

(b) Conclusion of a sales contract and acceptance of donations;

(1) Under the above conditions, the Plaintiff entered into a sales contract (hereinafter “instant sales contract”) with the Defendant on December 8, 2004 with respect to the public land of Yangcheon-gu Seoul Metropolitan Government (hereinafter “instant public land”), which will be abolished as the instant project, as a road located within the instant project site, and paid KRW 990,315,000 as the purchase price for the said public land on December 8, 2004.

(2) Meanwhile, the area of a road newly built by the Plaintiff in the instant site is KRW 257.53 square meters, the value is KRW 455,828,100, and the area of a public report is KRW 224.65 square meters, and the value is KRW 397,630,50,000. The Plaintiff donated the said road to the Defendant.

(3) On May 4, 2005, when the Plaintiff paid the purchase price of the instant public site to the Defendant, the Plaintiff filed a civil petition to the effect that it would offset the price of the disused public site and the newly-established public site, and that the difference can only be paid. However, on May 13, 2005, the Defendant sent to the Plaintiff on May 13, 2005, that “the purchase price of the instant public site was added to the condition that the Plaintiff would recognize the plan applied by the former Urban Planning Committee to promote the development of the new 4th residential environment in the new 4th residential environment by recognizing the plan applied by the Plaintiff to be included in the project site to maximize the project and purchase the waste site before the commencement, as the road site in the project site was abolished in accordance with the business approval plan applied by the Plaintiff and the implementation conditions were met due to the sale decision and the completion of the purchase by the Plaintiff.”

2. Relevant statutes;

A. The former National Land Planning and Utilization Act (amended by Act No. 8250 of Jan. 19, 2007)

Article 2 (Definitions) The definitions of terms used in this Act shall be as follows:

13. The term "public facilities" means roads, parks, railroads, waterworks, and other public facilities prescribed by Presidential Decree;

Article 65 (Reversion of Public Facilities, etc. Following Development Activities)

(1) Where a person who has obtained permission for development activities is an administrative agency, if a person who has obtained such permission installs new public facilities or public facilities replacing existing public facilities, notwithstanding the provisions of the State Properties Act and the Local Finance Act, the newly installed public facilities shall revert gratuitously to the management agency to manage such facilities, and the existing public facilities shall revert gratuitously to the

(2) Where a person who has obtained the permission of development acts is not an administrative agency, the public facilities newly installed by the person who has obtained the permission of development acts shall revert gratuitously to the management agency to manage such facilities, and the public facilities, whose usage is to be ceased due to the development acts, may be transferred gratuitously to the person who has obtained the permission of development activities within the limit equivalent to installation costs of

B. Enforcement Rule of the former National Land Planning and Utilization Act (amended by the Ordinance of the Ministry of Construction and Transportation No. 426 of February 19, 2005)

Article 15 (Application for Authorization of Implementation Plan for Urban Planning Facility Project) Any implementer of an urban planning facility project who intends to obtain authorization for an implementation plan for an urban planning facility project under Article 97 (3) of the Decree shall submit an application for authorization for an implementation plan for an urban planning facility project in attached Form 9 to the Minister of

5. An appraisal report prepared by at least two appraisal business entities with respect to the properties of the State or a local government that are disused due to the implementation of an urban planning facility project (limited to cases where

6. Statement and drawings of public facilities to be newly installed as an urban planning facility project and statement of costs for installing such public facilities (limited to cases where the land is implemented by any person other than an administrative agency). In such cases, where land necessary for installing a new public facilities and land on which existing public facilities are installed are the same, only

(c) Act on the Improvement of Urban and Residential Environments (hereinafter “Urban Improvement Act”);

Article 65 (Reversion of Rearrangement Basis Facilities, Land, etc.)

(1) Where a Mayor, the head of a Gun or the Korea Housing Corporation, etc. constructs a new infrastructure for rearrangement or a infrastructure for rearrangement replacing the existing infrastructure for rearrangement as a result of the implementation of an improvement project, the existing infrastructure for rearrangement shall gratuitously revert to the project implementer, and the new infrastructure for rearrangement shall gratuitously revert to the State or a local government to manage such infrastructure, notwithstanding the provisions

(2) A new infrastructure built in the course of implementing an improvement project by a project implementer, other than the head of a Si/Gun or housing project, shall gratuitously vest in the State or a local government to manage such infrastructure, and a infrastructure owned by the State or a local government to be ceased to be used due to the implementation of an improvement project shall be transferred gratuitously to the project implementer to the extent equivalent to installation costs of

(3) Where the head of a Si/Gun intends to implement a rearrangement project including the matters concerning the reversion and transfer of infrastructure for rearrangement under paragraphs (1) and (2), or to authorize the implementation thereof, he/she shall hear in advance the opinions of the relevant management authority. The same shall also apply to any modification to the authorized matters.

(4) The project implementer shall notify the management agency of the kinds and details of the infrastructure to be reverted to the management agency and the property to be reverted to or transferred to the project implementer under paragraphs (1) and (2) before completion of the rearrangement project, and the relevant fundamental infrastructure shall be deemed reverted to the State or a local government, or reverted to or transferred to the project implementer when the management agency gives notice of completion approval

Article 7 (Transitional Measures for Implementation of Projects)

(1) Matters being implemented after obtaining approval of a project plan or authorization for project implementation under the previous Acts shall be governed by the previous provisions.

【Ground of recognition】 The fact that there has been no dispute, Gap’s 1 through 5, Gap’s 7, 8, 9, 11, 12, Eul’s 2 and 3 (including each number), each entry, video, and the purport of the whole pleadings

3. Determination

A. The plaintiff's assertion

The Defendant sold the instant public land at a cost to the Plaintiff within the extent corresponding to the installation cost of a road newly established and donated to the Defendant and a public news report having the same function as the road in substance. In its primary part, the instant sales contract is a significantly unfair contract concluded by taking advantage of the Plaintiff’s poor situation compared to the Defendant, which is absolutely poor compared to the Defendant, and thus null and void. The instant sales contract was concluded by the Plaintiff’s coercion, and thus the instant contract was revoked as a preliminary contract, and thus, the Defendant must return to the Defendant the amount equivalent to the installation cost of a public news report having the same function as the road and the road which the Plaintiff donated to the Defendant.

B. Determination as to whether the Defendant is obligated to transfer the pertinent public land without compensation

(1) The plaintiff's assertion

In light of the fact that the maintenance infrastructure newly built by a project implementer is reverted to the State or a local government without compensation to preserve the violation of private property rights of a project implementer within the reasonable extent or to promote the equity in the cost-bearing required for the construction of the maintenance infrastructure, and that the provision forms a "transfer" without compensation, the above provision is a mandatory provision compelling a transfer of the maintenance infrastructure to be disused within the extent equivalent to the cost-bearing cost of the construction of the newly constructed maintenance infrastructure, so the defendant is obligated to gratuitously transfer the land for public use to the plaintiff within the extent equivalent to the cost-bearing cost of the new construction of the maintenance infrastructure. Thus, the defendant is obligated to transfer the land for public use of this case to the plaintiff within the extent equivalent to the cost-bearing cost of the road and the public news contributed by the plaintiff to the defendant.

(2) Determination

(A) The latter part of Article 65(2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Presidential Decree No. 1860, Jun. 30, 2003) stipulates that “The maintenance infrastructure owned by the State or a local government, the use of which is abolished due to the implementation of a rearrangement project, shall be transferred to the project implementer without compensation within the extent equivalent to the installation cost of the newly installed maintenance infrastructure.” However, the head of Yangcheon-gu Office approved the instant project plan on June 30, 2003, prior to the implementation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by July 1, 2003). The fact that Article 7 of the Addenda to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents provides that “The approval of the project plan or the implementation of the project

(B) While the Plaintiff’s establishment and approval of the instant business plan were made on June 30, 2003, the Plaintiff asserted that the approval of the establishment was obtained on December 19, 2003, which was after the enforcement of the Urban Improvement Act, and the approval of the modification of the instant business plan was made on June 14, 2004, and the issue of attribution of public facilities is not about the project implementation method, and thus, the Urban Improvement Act applies.

However, even if the Plaintiff’s establishment authorization and modification authorization of the instant business plan were made after the enforcement of the Urban Improvement Act, so long as the approval of the instant business plan was made before the enforcement of the Urban Improvement Act, it cannot be applied, and the issue of attribution of public facilities is related to approval of the business plan, and is related to “project implementation method” as stipulated in Article 7 of the Addenda

(C) Therefore, the Plaintiff’s assertion on the premise that the Urban Improvement Act applies to the instant project is without merit.

C. Whether the instant sales contract constitutes an unfair contract

(1) The plaintiff's assertion

Article 65 (2) of the former National Land Planning and Utilization Act provides that public facilities, the use of which is abolished due to development activities, may be transferred without compensation to a person who has obtained permission for development activities within the extent equivalent to the installation cost of new public facilities. Thus, the Plaintiff newly established and transferred the instant public land to the Plaintiff within the extent equivalent to the installation cost of roads and public reports (greendo) donated to the Defendant by the Plaintiff is a legitimate exercise of discretionary authority, but the head of Yangcheon-gu approved the instant project plan on the condition that the Plaintiff purchase the instant public land before the commencement of the instant project by abusing or abusing discretionary authority. The Plaintiff may not implement the instant project itself if he/she knows that the approval condition of the said project plan is unreasonable, and even if he/she intends to receive relief through administrative litigation procedures, he/she would have suffered enormous property damage due to the delay of the project during that period, and without any inevitable reason, concluded each of the instant sales contracts with the Defendant in accordance with the approval condition. The instant sales contract is null and void by taking advantage of the Plaintiff’s extremely poor situation compared to the Defendant.

(2) Determination

① According to the evidence No. 2 and No. 9 through No. 15 (including various numbers), the Yangcheon-gu Urban Planning Committee, which was held upon the Plaintiff’s application for deliberation, passed the Plaintiff’s application on June 7, 200 on the condition that the 6th anniversary of the fact that the Plaintiff would purchase the public land, calculated the floor area ratio and applied for the approval of the project plan, respectively. ② Article 65(2) of the former National Land Planning and Utilization Act recognizes the administrative agency as to the transfer of the land free of charge, and the Plaintiff concluded the sales contract of this case with the competent administrative agency, even if the Defendant did not transfer the part equivalent to the cost of construction of the newly constructed road after the 7th anniversary of the fact that the 6th anniversary of the fact that the 6th anniversary of the above public land’s application, the Plaintiff could not be deemed to have obtained the approval of the 10th project plan and the installation cost of the new public facility under the above provision without consideration.

D. Whether the sales contract of this case was concluded by the defendant's coercion

(1) The plaintiff's assertion

The Defendant’s exercise of discretionary power to compel the Plaintiff to enter into the instant sales contract by force, and the Plaintiff’s conclusion of the instant sales contract by accepting the Defendant’s conditions without any choice to prevent damages due to business delay. Therefore, the instant sales contract should be revoked by coercion.

(2) Determination

However, there is no evidence to prove that the Defendant coerciond the Plaintiff regarding the instant sales contract, and the Plaintiff’s assertion that the instant sales contract was concluded by the Defendant’s coercion is without merit.

E. Therefore, the Defendant is obligated to transfer the pertinent public land to the Plaintiff without compensation, or the Plaintiff’s assertion that the instant sales contract was concluded by unfair contracts or duress is without merit.

4. Conclusion

Therefore, the plaintiff's claim of this case is dismissed due to the lack of reason, and the judgment of the court of first instance is unfair with different conclusions, and it is revoked, and the plaintiff's claim is dismissed.

Judges Choi Jae-in (Presiding Judge) Kim Dong-dong,

(5) With respect to the areas which are not subdivided or designated as Class-I general residential areas, Class-II general residential areas or Class-III general residential areas under the provisions of Article 30 or the provisions of Article 3-1 of the Enforcement Decree of the Act on Temporary Measures for the Improvement of Dwelling Conditions for Low-Income Residents, not later than June 30, 203, or the alteration of designation as other special-purpose areas under the provisions of Article 30, the provisions of Article 2-1-1-2-1-2-1-2-2-2-2-2-2-2-2-2-2-1-2-2-2-2-2-2-3-2-2-1-2-1-2-2-3-2-4-1-2-2-2-2-1-2-1-3-2-2-4-1-2-1-2-1-2-1-3-2-1-2-1-3-3-2-14-3-2-2-14-3-2-3-2-3-2-3-2-3-3-3-