wason Industry (Attorney Soh-young et al., Counsel for the defendant-appellant)

Sungnam Market (Law Firm Apex, Attorneys Lee Dong-san et al., Counsel for the plaintiff-appellant)

October 11, 2013

Suwon District Court Decision 2012Guhap15365 Decided April 4, 2013

1. Revocation of the first instance judgment.

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’s imposition of development charges of KRW 372,679,910 against the Plaintiff on October 11, 2012 shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

B. Relevant statutes

This court's explanation on each of the above parts is the same as the statement of the reasons in the judgment of the court of first instance. Thus, this court's explanation is citing it in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of

C. Determination

The purpose of the Restitution of Development Gains Act (hereinafter referred to as the “Act”) is to recover development gains accruing from land and properly distribute them to prevent speculation on land, promote the efficient use of land, thereby contributing to the sound development of the national economy (Article 1 of the Act); development gains refer to an increase in the value of land which is reverted to the person who executes the development project or the landowner in excess of increases in normal land prices due to the implementation of the development project, change of land-use plan, or other social and economic factors (Article 2 Subparag. 1 of the Act). Meanwhile, Article 5(1)1 of the Act and Article 4(1) [Attachment Table 1] of the Enforcement Decree of the Act provides that housing site development project or housing construction project subject to the imposition of development charges under the Housing Act shall be one of the housing site development projects, which are housing site development projects subject to the imposition of development charges, such as the housing site development projects under the Housing Act, shall be excluded from the objects of the imposition of development charges.

In light of the contents, form, purport, etc. of the relevant provisions, it is difficult to view that the instant multi-family housing construction project falls under the “housing construction project implemented on the land where the development project is completed due to the implementation of the development project subject to imposition of development charges” under Article 4(1) [Attachment 1] of the Enforcement Decree of the Act, which is excluded from the imposition of development charges under subparagraph 1 of the same Article.

① Considering the legislative intent of recovering development gains and properly distributing them to prevent speculation on land, promoting the efficient use of land, thereby contributing to the sound development of the national economy, the aforementioned exceptional reasons for exclusion from imposition of development charges should be strictly interpreted. However, the company housing of the Korean Institute of Korean Studies, which was constructed on the land of this case, was not subject to application pursuant to Articles 1 and 2 of the former Restitution of Development Gains Act (amended by Act No. 4275, Dec. 30, 1989; Act No. 4275, Feb. 26, 1986) upon approval for use on September 6, 1990 and February 26, 1986. In such cases, it is difficult to see that the development project subject to imposition of development charges has been implemented under the language and text thereof.

② Article 5(1)1 and (2) of the former Restitution of Development Gains Act (amended by Act No. 7709 of Dec. 7, 2005), Article 4(1) [Attachment Table 1] [Attachment Table 1] of the former Enforcement Decree of the Restitution of Development Gains Act (amended by Presidential Decree No. 19752 of Dec. 15, 2006), which provides for “site development project and housing construction project” as a housing site development project among the projects subject to the imposition of development charges under subparagraph 1 of Article 4(1) of the former Enforcement Decree of the Restitution of Development Gains Act (amended by Presidential Decree No. 19752 of Dec. 15, 2006), where only a housing construction project is conducted on land which is not necessary for site preparation project, it is not included in the project subject to development charges (see Supreme Court Decision 2008Du3968 of Dec. 24, 2009). However, the above Enforcement Decree is amended twice by Presidential Decree No. 19752 of the project subject of development charges.

③ After obtaining permission for development activities to change the form and quality of land necessary for the construction of collective housing in this case, the Plaintiff implemented a separate housing site development project that is distinguishable from the existing site creation during the period from October 8, 2010 to March 2, 2012 (Evidence No. 10, Evidence No. 17-1 to 4, the purport of the entire pleadings). In rendering the instant disposition, the Defendant calculated the amount of charges on the basis of the increase in land price generated during the pertinent project period (Evidence No. 9). Therefore, the instant disposition is not to recover the development gains acquired by the previous owner as the site of this case, but to recover the development gains acquired by the Plaintiff from the Plaintiff, and it is difficult to view the development gains that are contrary to equity.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, the judgment of the court of first instance shall be revoked and the plaintiff's claim shall be dismissed as per Disposition.

Judges Lee Jae-won (Presiding Judge) et al.