Plaintiff (Attorney Lee Dong-ju, Counsel for the plaintiff-appellant)

Hong Dong-dong 2 Rebuilding Housing Association (Law Firm Manon, Attorneys Han-ro et al., Counsel for the plaintiff-appellant)

June 12, 2007

Seoul Western District Court Decision 2005Gahap336 Decided July 14, 2006

1. Revocation of a judgment of the first instance;

2. The instant lawsuit shall be dismissed.

3. The total costs of the lawsuit shall be borne by the plaintiff.

1. Claim: it is confirmed that there exists a resolution of dissolution of the defendant at an extraordinary general meeting held by the defendant on January 10, 2005.

2. Purport of appeal: Revocation of the judgment of the first instance. The plaintiff's claim is dismissed.

1. Basic facts

(a) Establishment of the defendant association;

(1) The Defendant Mutual Aid Association is a reconstruction association established to implement a reconstruction project on the land of 1-58 and 76 lots of land in Seodaemun-gu, Seoul. The Defendant Mutual Aid Association is a government-owned or public-owned or public-owned land occupant of more than 70% of its members.

(2) On May 16, 2003, the Defendant Union obtained authorization from the head of Seodaemun-gu to establish a reconstruction association with respect to construction of new apartment units with 199 households above the above ground from the head of Seodaemun-gu pursuant to Article 44 of the former Housing Construction Promotion Act (amended by Act No. 6916 of May 29, 2003) (75 members), and thereafter, obtained authorization to change the number of members around December 30, 2003 pursuant to Article 16(2) and (3) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 6852 of December 30, 2002, Act No. 6852 of July 1, 2003).

B. The progress of promoting the reconstruction project by the defendant association

(1) On May 16, 2003, the Defendant Union entered into a contract with SeojuM Co., Ltd. to implement a reconstruction project at KRW 4,200,000 to KRW 4,500 to KRW 4,200 to KRW 4,500 per square year, but it did not obtain project approval until June 30, 2003, before the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents was implemented.

(2) Accordingly, according to the reconstruction method after certain partners including the plaintiff, etc., the floor area ratio is below 170%, the number of floors is expected to be paid in lump sum, the sale price of state-owned or public-owned land is about 270,00,000 won, and the redevelopment method is followed (it can be up to 10 floors, floor area ratio is 185-190% per annum, 4% per annum of non-public-owned land and public-owned land, and the sale price is anticipated to be paid in installments in 20 years, 220,000,00 won). In order to convert into redevelopment project, the plaintiff et al. presented an opinion that the defendant association, a reconstruction association, should be dissolved (this does not mean that the members opposing the progress of the reconstruction method, such as the plaintiff, expressed their opinions obtained in their own inquiry with the relevant authorities and related agencies, and it cannot be deemed legally finalized).

C. Holding, etc. of the special general meeting of this case

(1) At the time of January 3, 2005, the Plaintiff, the president of the Defendant Union, at the time of the dissolution of the Defendant Union, announced the convocation of an extraordinary general meeting of the Defendant Union (hereinafter “instant extraordinary meeting”) on the 10th of the same month, which was the agenda of the dissolution of the Defendant Union.

(2) On January 10, 2005, the Plaintiff presented an agenda to dissolve the Defendant Association, a reconstruction association, in order to carry out redevelopment projects by holding an extraordinary general meeting of this case.

(3) At the instant special general meeting, 37 of all the 81 members were present, and 30 of the 81 members were submitted. 17 of the 17 members who agreed to the present meeting, 20 of the 20 members who opposed to the 20 members, 16 of the 14 members who agreed to the 14 members, 33 of the 14 members who opposed to the dissolution of the 34 members, and 34 of the 34 members who agreed to the dissolution of the 30 association.

(4) The Plaintiff, who is the chairer and the chair, declared a closed meeting with the intent to withhold the approval and the outcome of the above dissolution until the determination of the invalidity of the written resolution was made due to the defect in the written resolution by Nonparty 1 and Nonparty 2, which expressed the opposing intent among the written resolution proposals. However, the Plaintiff did not specifically refer to who is liable for the invalidity of the written resolution, the time, and the method of determining the invalidity of the written resolution.

(5) Meanwhile, around January 18, 2005, the non-party 3 and the non-party 47 among the members of the defendant association demanded the plaintiff, the president of the association, to convene the special general meeting under Article 17 (4) of the Rules of the defendant association, but the plaintiff did not comply with such demand, and on February 5, 2005, the above 48 members convened the special general meeting under the joint names of the above 48 members. On February 5, 2005, the special general meeting consisting of 44 members present and 44 members submitted a written resolution, and the confirmation of the progress of the project for the prompt progress of the reconstruction project, among 48 members present, dismissed the plaintiff from the head of the association with the consent of 47 members present, and elected the non-party 4 as the head of the new association with the consent of 46 members present, and resolved a resolution on the confirmation of the progress of the project due to the reconstruction project with the consent of all members present.

D. Articles of association relating to the defendant union

Article 17 (Establishment of General Meeting) (1) A cooperative shall hold a general meeting comprised of all members.

(2) A general meeting shall be classified into an ordinary general meeting, an extraordinary general meeting, and an inaugural general meeting, and convened by the president of the association: Provided, That the inaugural general meeting shall be convened by the president

(4) Where the head of a cooperative deems it necessary, he/she shall hold an extraordinary general meeting after a resolution by a council of delegates: Provided, That where there is a request to convene an extraordinary general meeting from at least 1/2 of the incumbent members or from at least 2/3 of the incumbent representatives, he/she shall hold the extraordinary general meeting within one month, notwithstanding the necessity. In such cases, where the head of a cooperative fails to comply with a request to convene the general meeting within seven days, he/she may convene the extraordinary general meeting under the joint name of the cooperative members requesting the convocation of the general meeting and the joint name of representatives; where the head of a cooperative attends the meeting; and where the head of a

Article 18 (Matters to be Resolved by General Meeting) The following matters shall be determined by a resolution of the General Meeting:

4. Election and dismissal of the president of the association, and election and dismissal of executive officers;

5. Merger or dissolution of the association;

Article 19 (Resolution Method of General Meeting) (1) A general meeting shall be held with attendance of at least 1/2 of the incumbent members, and shall pass a resolution with the consent of at least 1/2 of the members present, and the Speaker shall exercise his

(2) Notwithstanding the provisions of paragraph (1), matters concerning the amendments and abolition under the subparagraphs of Article 18 shall be resolved with the attendance of not less than 2/3 of the incumbent members and with concurrent votes of not less than 2/3

(3) Members of the cooperative may exercise their voting rights in writing or by proxy. In such cases, it shall be deemed that the attendance referred to in paragraphs (1) and (2) is attendance.

[Reasons for Recognition] Unsatisfy Facts, Gap evidence 1-2, Gap evidence 2, 3, 7, 8, 15, 17, Gap evidence 4-1 through 37, Eul evidence 5-1 through 5, Eul evidence 1, 9, 16, 18, 19, Eul evidence 7-1 through 48, Eul evidence 8-1 through 48, Eul evidence 21-1 through 44, the purport of the whole pleadings

2. Related statutes;

(a) The Act on the Improvement of Urban Areas;

Article 24 (Convening of General Meeting and Matters to be Resolved) (3) The following matters shall undergo a resolution of the General Meeting:

12. Other matters necessary to determine important matters, such as those imposing economic burdens on partners, which are prescribed by Presidential Decree or the articles of incorporation.

Article 24 (Convening of General Meeting and Matters to be Resolved) (5) The procedures, timing, method of resolution, etc. of convening of General Meeting shall be prescribed by the

Article 27 (Application Mutatis Mutandis of Civil Act) The provisions concerning incorporated associations in the Civil Act shall apply mutatis mutandis to associations, except as otherwise provided for in this Act.

(b) Enforcement Decree of the Act on Urban and Residential Environment Improvement;

Article 34 (Matters to be Resolved by General Meeting) Matters subject to a resolution of General Meeting under Article 24 (3) 12 of the Act shall be as follows:

1. Merger or dissolution of the association;

C. Civil Act

Article 78 (Resolution for Dissolution of Incorporated Association) An incorporated association shall not pass a resolution for dissolution without the consent of at least three fourths of all the members: Provided, That other provisions stipulated in the Articles of incorporation, such provisions shall apply.

3. Determination on the lawfulness of the instant lawsuit

A. The defendant union's assertion

In addition, the Defendant Union asserts that, at the special meeting of February 5, 2005, there was no resolution of dissolution, which is the subject of the claim for confirmation of the instant case, and thereafter, the Defendant Union asserted that, on the premise of the existence of the Defendant Union, there was no resolution of dissolution, it is unlawful to seek confirmation of invalidity of the resolution of the special meeting of this case as there was no benefit of lawsuit, since the resolution of dissolution was passed at the special meeting of February

B. Determination

Therefore, the decision of the general meeting of the union members was made by expressing 33 members with respect to the resolution of dissolution of the defendant union at the special meeting of this case and 34 members with respect to the ballot counting of the written resolution of this case, and the number of opposing union members was aggregated with 33 members, and the plaintiff, the chairman, as the defendant, expressed the opposing opinion in the written resolution of the non-party 1 and the non-party 2, and declared the closure of the association with the intention to withhold the above dissolution until the decision of invalidity is made. The resolution of the general meeting of the union members was made by expressing 33 members with respect to the resolution of this case, and if 34 members were aggregated with the above 34 members, the resolution of dissolution was rejected formally in the above 4th general meeting of the defendant union, and even if the above 4th general meeting of the non-party union was invalid or invalid after the above 4th general meeting of this case, it cannot be seen that there was no resolution of dissolution of the union members at the above general meeting of this case, as the non-party 4 members without the resolution of this case.

4. Conclusion

Therefore, the claim for confirmation of the existence of the resolution of dissolution of this case is unlawful and thus it shall be dismissed, and the judgment of the court of first instance is unfair with different conclusions, so the above judgment is revoked, and it is so decided as per Disposition by the assent of all participating Justices.

Judge Lee Sung-sung (Presiding Judge)