It is sufficient that the contents of the association establishment authorization or project implementation authorization under the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents or the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents should be modified, and if the contents of the association are prescribed as the subject of resolution at the general meeting of association, whether it should be

The former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 8785 of Dec. 21, 2007) and the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Presidential Decree No. 21171 of Dec. 17, 2008) intend to change the form of disposition depending on the degree of importance of the subject of change, such as the procedure for authorization, and the procedure for reporting a minor change. Therefore, even if a minor change is sufficient for filing a report, it is reasonable to interpret that the resolution should be passed prior to filing a report if the subject of resolution by the general meeting of an association is prescribed by statutes or the articles of association. The validity of the resolution of the general meeting of an association should be determined depending on whether the contents of the resolution violate the mandatory law or interpretation of statutes or the articles of association, etc., and whether the resolution meet all procedural requirements such as whether the required resolution of the

Articles 16(1), 24(3)10, 28(1), and 48(1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 8785, Dec. 21, 2007); Articles 27 and 38 of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Presidential Decree No. 21171, Dec. 17, 2008)

Plaintiff (Appointed Party) 1 and four others (Attorney Cho Jong-hwan et al., Counsel for the plaintiff-appellant)

Plaintiff 6 and 11 others

New Distribution 5th Apartment Reconstruction Association (Law Firm Affiliated, Attorneys Kim Ma-tae et al., Counsel for the plaintiff-appellant)

Supreme Court Decision 2008Da93001 Decided October 15, 2009

Seoul High Court Decision 2010Nu8623 decided November 22, 2011

All appeals are dismissed. The costs of appeal are assessed against the defendant.

1. The appeal against the plaintiff (appointed party) against the plaintiff 4, 5 and the plaintiff 6, 7, and 17 is examined.

Defendant Cooperative appealed on the part of the lower judgment’s rejection of the lawsuit by the said Plaintiff (Appointed Party) and the Plaintiffs, but did not state the grounds of appeal in the petition of appeal and the appellate brief.

2. We examine the remaining grounds of appeal against the plaintiffs (appointed parties) and the plaintiffs.

A. As to the grounds of appeal Nos. 1 and 2

1) Article 16(1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 8785, Dec. 21, 2007; hereinafter “former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Presidential Decree No. 21171, Dec. 17, 2008; hereinafter “former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents”) separates the matters to be reported from the matters to be reported in the alteration of the authorization by requiring the procedure for the modification of the authorization for the establishment of the association. In addition, Article 28(1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 8785, Dec. 21, 2007; hereinafter “former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents”) from the date of reporting the modification of the authorization for the establishment of the association.

As can be seen, the reason why the former Act on the Maintenance of Urban Areas and the Enforcement Decree thereof distinguish the matters subject to authorization and the matters to be reported is to change the form of disposition depending on the importance of the subject matter to be changed, such as the procedure to obtain authorization, and the modification of minor matters should be subject to the procedure for filing a report. Therefore, even if the procedures for filing a report are met due to the modification of minor matters, it is reasonable to interpret that the resolution of a general meeting of an association should be passed prior to filing a report if the relevant Acts and subordinate statutes or the articles of association stipulate the subject matter to be resolved by the general meeting of an association. Furthermore, barring special circumstances, whether the resolution of a general meeting of an association is valid shall be determined depending on

2) According to the reasoning of the lower judgment and the record, the Defendant Union: (a) completed the registration of incorporation on July 29, 2003, which was after the enforcement of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents; and (b) held a general meeting on August 11, 2006 (hereinafter “instant general meeting”) among 445 members present at the meeting; (c) held the cases of ruling on reconstruction; (d) the cases of approval of the management and disposal plan (draft); (e) the cases of approval of the change in the business plan; and (e) the following resolution of the 11 agenda items with the consent of at least 6.06% of the members present at the meeting (294 members and 53.5% of the total members present at the meeting; and (e) the resolution of at least 25% of the total number of members present at the meeting with the consent of at least 6.25% of the voting rights of the members present at the meeting.

In full view of the provisions on the requirements for general resolution, the structure or contents of the rules of the Defendant Union, and the contents of the general resolution, and the purport of the provisions on the requirements for resolution of the general meeting, in cases where the agenda presented to the general meeting by the board of directors or the board of representatives objectively constitutes “matters concerning the property rights and bearing of expenses of the union members”, the method of special multiple resolutions shall be, in principle, followed: Provided, That in cases where the “matters concerning the property rights and bearing of expenses of the union members,” which have been already resolved by the method of special multiple resolutions, are modified within a minor scope, or where there are special circumstances, such as where the general intention of the union members corresponding to the special resolution has been confirmed through other resolutions on the agenda, it shall be interpreted that exceptions may be recognized (see Supreme Court Decision 2010Da7430, Nov. 1

3) Furthermore, the evidence duly admitted reveals the following: (a) the change of the project implementation plan that the Defendant Union received from the competent administrative agency on February 9, 2006, the total estimated cost of the project was KRW 109,656,00,000; (b) the general assembly of this case changed the project implementation plan to increase the total estimated cost of the project to KRW 134,063,247,347 on the ground of the expansion of balcony, resident common facilities, and the change of the design to the main rooftop (Article 8 agenda); and (c) the management and disposal plan including the content of calculating the estimated cost rate calculated on the premise of the changed project implementation plan (Article 6 agenda); and (d) the content of formulating the management and disposal plan including the content of calculating the value of rights to existing land or buildings owned by the association members by applying the estimated expense rate calculated on the premise of the changed project implementation plan (Article 6 agenda

Considering the contents of the regulations on the requirements for resolution by the association and the fact that each of the resolutions in this case does not constitute modification of minor matters provided for in Article 38 subparagraph 1 of the former Enforcement Decree of the Act on the Maintenance of Urban Areas and Dwelling Conditions for Residents by changing the total estimated project cost in excess of 10 percent from the initial amount, the agenda subject to each resolution in this case shall be objectively deemed to constitute “matters concerning the property rights and bearing of expenses of partners” and therefore, the method of resolution by special multiples provided for in Article 19(2)2 of the union rules shall be followed.

Therefore, each resolution of this case shall meet the requirement of attendance of at least 2/3 of all incumbent union members (45 of all 549 members present, 81.05% of all 549 members present, 81.05% of the number of union members present), and since it did not meet the requirement of affirmative votes of at least 2/3 of the voting rights of union members, the provisions of the law on the modification of the articles of association of each case concerning each of the resolution of this case shall apply mutatis mutandis to the amendment of the articles of association of the association, and it shall be

4) In the same purport, the lower court’s determination that each of the instant resolutions was null and void because it did not satisfy the quorum necessary for the interpretation of statutes or the articles of incorporation is just and acceptable. In so doing, it did not err by misapprehending the legal principles as to the requirements for modification of rebuilding resolution, contrary to what is alleged in

B. Regarding ground of appeal No. 3

The argument in the grounds of appeal in this part is that even if the resolution in this case constitutes a change in the rebuilding resolution regarding actual cost-bearing, the provisions of Article 20 (3) of the former Act on the Maintenance and Improvement of Urban Areas and Article 20 (4) of the former Act shall apply mutatis mutandis to the consent of at least 2/3 of the association members, the consent shall be based on written consent pursuant to Articles 20 (4) and 17 of the former Act and Article 28 (4) of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Article 28 (4) of the former Enforcement Decree of the Act. The consent in this case was already requested by at least 2/3 of the association members prior to the opening of the general meeting of this case. Thus, even if the consent in this case was already effective

The lower court rejected the allegation in this part of the grounds of appeal on the following grounds: (a) the Defendant’s association’s “written consent for business plan modification” and “written consent for rebuilding ruling, articles of association, and business plan,” which were submitted by its members, cannot be deemed as a written resolution for the instant general meeting; and (b) even if it can be deemed that the written consent for modification of business plan constitutes a written resolution for the instant general meeting, unless there is any evidence supporting that the said written consent for modification of business plan was submitted to the instant general meeting, the foregoing written consent for modification of business plan, etc. cannot be recognized as a written resolution for the instant general meeting; (c)

However, as seen earlier, each of the instant resolutions did not meet the special resolution requirements of the general meeting of the association under Article 19(2)2 of the Union Regulations, and the aforementioned “written consent on modification of the business plan” cannot be deemed as a written resolution of the above general meeting. Therefore, it is reasonable for the lower court to have rejected this part of the allegation by the Defendant Union. In so doing, it did not err by misapprehending the legal doctrine as

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Appointeds: Omitted

Justices Lee In-bok (Presiding Justice)