Whether a road to be provided as basic living facilities by a project operator who implements a housing construction project or a housing site development project within a housing site development project district, which is a public project operator, includes “road within a housing complex, which connects roads to the same kind of road outside the relevant housing complex”

Notwithstanding Article 2 subparag. 8 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009; hereinafter referred to as the "former Housing Act"), Articles 21(1)2 and 23(1) of the former Housing Act, Articles 25 and 57 of the former Regulations on Standards, etc. of Housing Construction (amended by Presidential Decree No. 2072 of Feb. 29, 2008), Article 9(2)1 of the former Enforcement Rule of the Housing Act (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs No. 107 of Mar. 19, 2009), the housing site development project entity shall be deemed to be subject to construction of the same housing site, which directly provides a housing site development project entity with the same purpose as the former Housing Act’s provisions on the acquisition of land, etc. and the compensation for the same housing site development project to be implemented within the scope of the housing site development project.

Article 78(1) and (4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (Amended by Act No. 8665, Oct. 17, 2007); Article 2 subparag. 8, 21(1)2, and 23(1) of the former Housing Act (Amended by Act No. 9405, Feb. 3, 2009); Articles 25 and 57 of the former Regulations on Standards, etc. for Housing Construction (Amended by Presidential Decree No. 20722, Feb. 29, 2008); Article 9(2)1 of the former Enforcement Rule of the Housing Act (Amended by Act No. 1073, Mar. 19, 2009)

Supreme Court en banc Decision 2007Da63089, 63096 Decided June 23, 201 (Gong2011Ha, 1440)

Plaintiff 1 and nine others (Attorneys Kim Jong- full, et al., Counsel for the plaintiff-appellant)

Korea Land and Housing Corporation (Law Firm Barun, Attorneys Park Ho-ho, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2008Na28061 decided March 16, 2012

The judgment below is reversed and the case is remanded to Seoul High Court.

First, the defendant's grounds of appeal are examined.

1. On the first ground for appeal

A. (1) According to Article 78 of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 8665 of Oct. 17, 2007; hereinafter “former Public Works Act”), a project operator shall either establish and implement relocation measures or pay resettlement funds as prescribed by the Presidential Decree to a person who is deprived of his/her base of livelihood as a result of the provision of a residential building due to the implementation of a public project (hereinafter “person subject to relocation measures”), for a person who is deprived of his/her base of livelihood due to the implementation of a public project (hereinafter “person subject to relocation measures”), and the details of relocation measures shall include basic living facilities according to the relevant local conditions, such as roads, water supply facilities, drainage facilities, and other public facilities, etc. for the settlement area, and the expenses incurred therefrom

The purpose of Article 78(4) of the former Public Works Act is to provide a basis for living for those subject to relocation measures. As such, the term “basic living facilities according to the relevant regional conditions, such as roads, water supply facilities, drainage facilities, and other public facilities,” of the relevant provision refers to roads, water supply and drainage facilities, electric facilities, telecommunications facilities, gas facilities, or district heating facilities, which are installed by a project undertaker who implements a housing construction project or a housing site development project pursuant to the relevant statutes, such as Article 23 of the Housing Act, etc. (see Supreme Court en banc Decision 2007Da63089, 63096, Jun. 23, 201). The purport of the above judgment is to clarify the scope of the basic living facilities provided for in the Housing Act, since it is unclear whether any public facilities among various public facilities installed in the housing site development project district are included in the “basic living facilities in accordance with the relevant regional conditions, such as roads, water supply and drainage facilities, and other public facilities,” as stipulated in Article 78(4) of the former Public Works Act.

(2) According to Article 2 Subparag. 8 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009; hereinafter “former Housing Act”), “arterial facilities” refer to facilities that connect the key facilities located outside a housing complex (where two or more housing complexes are simultaneously developed, referring to each housing complex), such as roads, water supply and drainage systems, electrical facilities, gas facilities, communications facilities, and district heating facilities, to the same key facilities located outside the relevant housing complex.

Article 21 (1) 2 of the same Act provides that the standards for the installation of incidental facilities concerning the construction, etc. of housing constructed and supplied by a project undertaker shall be prescribed by the Presidential Decree. Accordingly, Article 25 of the former Regulations on Standards for Housing Construction (amended by Presidential Decree No. 20722, Feb. 29, 2008) provides that a housing complex where an apartment house is constructed as one of incidental facilities shall be adjacent to or at a time (referring to a road as prescribed by Article 4 of the former Enforcement Decree of the Housing Act (amended by Presidential Decree No. 21290, Feb. 3, 2009) and access roads to the housing complex shall be adjacent to the housing complex concerned after obtaining approval of a project plan under Article 16 of the former Housing Act (including access roads (including the period adjacent to the housing site concerned). Article 57 of the same Act provides that a project undertaker shall submit a plan for installation of facilities exceeding the standards prescribed by the Ordinance of the Ministry of Land, Transport and Maritime Affairs (amended by Presidential Decree No. 197, Mar. 19, 20009).

In addition, according to Article 23(1) of the former Housing Act, where a project proprietor implements a housing construction project in excess of the number of houses as determined by the Presidential Decree or a housing site development project in excess of the size as determined by the Presidential Decree, roads and water supply and sewerage systems shall be installed by a local government (paragraph (1) and electric facilities, telecommunications, telecommunications, gas or district heating facilities shall be installed by a person who supplies electricity, telecommunications, gas or heating to the relevant area (paragraph (2) but where a project proprietor intends to install facilities falling under subparagraph 1 as included in the housing construction project plan or housing site development project plan under Article 16(1), he/she

As such, roads, which are arterial facilities installed under a housing construction project or a housing site preparation project to which the former Housing Act applies, are responsible for connecting the entrance of a housing complex in the project district with roads outside the project district, and are essential facilities for achieving the functions of the housing complex, etc. and for passage of the residents, regardless of the length or width of the roads, and the project undertaker is obliged to install the roads in accordance with the former Housing Act and the housing construction project plan or housing site preparation project plan based thereon.

(3) In light of the above contents of the former Housing Act and the purport of the former Public Works Act or the en banc Decision, which seeks to provide a basis for living to the persons subject to relocation measures, as seen earlier, in addition to the functions and utility of the roads which are arterial facilities, the said Act and the former Housing Construction Promotion Act and the former en banc Decision, which are intended to provide a basis for living to the persons subject to relocation measures. The roads for which a project operator is required to provide a housing construction project or a housing site development project within a housing site development project zone, such as this case, are directly regulated by the above provisions of the former Housing Act, notwithstanding their length and width, and also include roads that correspond to arterial facilities as stipulated in Article 2 subparagraph 8 of the same Act, and all roads that connect the roads located outside the said housing complex, i.e., roads located outside the housing complex, which are related to the same kind of roads located outside

B. According to the reasoning of the lower judgment, the lower court rejected the Defendant’s assertion that the road, which is a basic living facility, should be at least 200 meters in length and at least 8 meters in width, and that the corresponding road area is only 37,672 square meters in size, and determined that the entire road area is at least 59,907 square meters in size as a basic living

Examining the reasoning of the lower judgment, the lower court’s determination is consistent with the foregoing legal doctrine, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine on the scope of roads, which are basic living facilities, as stipulated in Article 78(4

2. On the second ground for appeal

A. The term “basic living facilities, such as roads, water supply facilities, drainage facilities and other public facilities, etc.,” under Article 78(4) of the former Public Works Act, mean key facilities, such as roads, water supply and drainage facilities, electric facilities, communications facilities, gas facilities or district heating facilities, which are established by a project proprietor who implements a housing construction project or a housing site development project.

B. For the reasons indicated in its holding, the lower court determined that the total amount of the cost is included in the cost of creating basic living facilities as follows: (i) the cost of civil works, other than the cost of building roads, packing, water supply, and sewerage construction, excluding the cost of construction for waterworks, waterworks, and sewerage construction; (ii) the cost of construction for basic living facilities, i.e., the cost of construction for the total project area, not only the cost of construction for the road 59,907 square meters, which is a basic living facilities, but also the cost of construction for the total project area.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the evidence duly admitted, the lower court did not err by misapprehending the legal doctrine regarding the cost of creating basic living facilities or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, contrary to what is alleged in the grounds of appeal.

D. However, among the above judgment of the court below, the part that recognized the construction cost of roads and packaging construction cost of 4 billion won, the construction cost of 1 billion won for waterworks construction cost, and the construction cost of sewerage as 4.5 billion won for the following reasons is not acceptable.

According to the reasoning of the judgment below and the evidence duly admitted, even if the court below's approval of implementation plan for the housing site development project was based on Gap evidence 6-3 [the 4 billion won for road construction and packing construction, water supply and sewerage construction, and sewerage construction, which are the basis for the above amount, as the above amount, it is difficult to recognize that the construction cost was paid according to the above amount because the financial plan for approval of implementation plan for the housing site development project at the time of the housing site development project in this case was estimated. The court below also determined that the whole civil construction cost of the project in this case was changed not only to 14.5 billion won for the above evidence No. 6-3 but also to 15,201,194,00 won for the lapse of the time after the approval of implementation plan for the housing site development project in this case. In addition, according to the above evidence No. 8-5 (Presumption of Construction Cost), Eul evidence No. 16-2 (non-urban infrastructure construction cost in this case), the housing site development project in this case's price and packing construction cost.

Nevertheless, the lower court recognized the amount of the road construction cost, packing cost, waterworks cost, and sewerage construction cost as stated in the evidence No. 6-3 under the condition that there is no objective evidence to support the evidence other than the statement No. 6-3, and the other evidence contradictory thereto was submitted. In so doing, the lower court erred by misapprehending the legal doctrine on the degree of proof in civil litigation, or by exceeding the bounds of the principle of free evaluation of evidence contrary to logical and empirical rules, thereby adversely affecting the conclusion of the judgment.

3. On the third ground for appeal

A. Under the former Special Act on the Management of Intercity Transport in Metropolitan Areas (amended by Act No. 6939, Jul. 25, 2003; hereinafter “former Intercity Transport Act”), a person who implements a housing site development project under the Housing Site Development Promotion Act in a metropolitan area prescribed by Presidential Decree among metropolitan areas shall pay charges for intercity transport facilities to construct and improve intercity transport facilities (Article 11 subparag. 1); and the charges for intercity transport facilities shall be imposed and collected by the Mayor/Do Governor of the area where the project is implemented (former part of Article 11-4(1). The term “metropolitan area” refers to the area prescribed by Presidential Decree among the areas within the traffic life zones of the Special Metropolitan City, Metropolitan Cities, and their cities under Article 2(1)1 of the Local Autonomy Act (Article 2 subparag. 1); the term “wide traffic facilities” refers to traffic facilities covering two or more Special Metropolitan Cities, Metropolitan Cities, and Dos, which meet the requirements prescribed by Presidential Decree, such as urban railroads or railroads operated over two or more cities.

In light of the relevant provisions of the former Metropolitan Transport Act including these provisions, the charges for metropolitan transport facilities only imposed in metropolitan areas are required for the construction and improvement of metropolitan transport facilities in metropolitan areas, and the expenses incurred in raising the value of the housing site and housing in metropolitan areas are imposed on the project operator by the Mayor/Do Governor. In view of the fact that those subject to relocation measures who are supplied with the housing site for migrants in metropolitan areas have profits from the construction and improvement of metropolitan transport facilities, the charges for metropolitan transport facilities cannot be deemed as falling under the cost of installing basic living facilities to be provided to the person subject to relocation measures

B. Article 11-2(1)3 of the former Metropolitan Transport Act provides that no metropolitan transport facility charge shall be imposed on a housing site and a housing construction project in accordance with the implementation of relocation measures under Article 8 of the Act on Special Cases concerning the Acquisition of Land for Public Use and the Compensation Therefor. However, this provision merely provides that the Mayor/Do Governor, who is the authority imposing charges for metropolitan transport facility, shall not impose metropolitan transport facility charges on the land for the creation of a housing site and the construction of a housing following the implementation of relocation measures, to reduce the burden of a development project operator’s liability for payment. In a case where the development project operator actually paid metropolitan transport facility charges in the course of the creation of a housing site and the construction of a housing, even if the housing site includes a person subject to relocation measures, it does not mean that the charges for metropolitan transport facilities actually paid are excluded from

Therefore, even if an operator of a development project includes the amount equivalent to the charges for metropolitan transport facilities in the sale price entered into between the person subject to relocation measures according to the calculation of the charges for metropolitan transport facilities and the determination of the sale price, barring special circumstances such as the law or agreement to exclude it from the sale price, the portion equivalent to the charges for metropolitan transport facilities out of the sale price agreed by the sale contract cannot be deemed null and void. Thus, it cannot be deemed that the operator of a development project benefits in relation to the person subject to relocation measures

C. Nevertheless, the lower court determined otherwise by misapprehending the legal doctrine on the validity of the provision on the exemption of the charges for metropolitan transport facilities and the unjust enrichment of the sales contract of each of the instant sales contracts, while deeming that the charges for metropolitan transport facilities do not fall under the cost of basic living facilities, and thus, is null and void in violation of Article 11-2 (1) 3 of the former Metropolitan Transport Act, which is a mandatory law, and thus, the Defendant is obligated to return the amount equivalent to the charges for metropolitan transport facilities out of the sales price to the Plaintiffs as unjust enrichment.

4. On the fourth ground for appeal

The lower court determined that, in relation to the instant housing site development project, the direct expenses, sales expenses, general management expenses, and indirect expenses incurred in relation to the basic living facilities are the basic living facilities installation expenses, and thus the Defendant should return them to the Plaintiffs as unjust enrichment.

In light of the relevant statutes and legal principles as seen earlier, the lower court did not err by misapprehending the legal doctrine on the cost of installing basic living facilities, as otherwise alleged in the grounds of appeal.

5. Conclusion

Therefore, without further proceeding to decide on the Plaintiff’s grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

Justices Shin Young-chul (Presiding Justice)