[1] Legislative purport of Article 80(1) proviso of the former Building Act regarding "residential buildings with a total floor area of 85 square meters or less (based on the household area in cases of multi-family housing)" under the requirements for reduction of non-performance penalty

[2] The method of calculating enforcement fines under the Building Act on the ground that the use of a building extended without any basic construction work is altered without permission

[3] Whether an administrative disposition subject to an administrative appeal is unlawful solely on the ground that the disposition agency did not comply with the duty of disclosure under Article 26 of the Administrative Procedures Act (negative) / Whether the above legal principle is equally applied to the duty of disclosure as to “the method of filing an objection and the institution of filing an objection” under Article 80(3) of the former Building Act (affirmative)

[1] Article 80(1) of the former Building Act (Amended by Act No. 13471, Aug. 11, 2015) / [2] Article 80(1) of the former Building Act (Amended by Act No. 13471, Aug. 11, 2015); Article 4(2) of the Local Tax Act; Article 4(1)1 of the Enforcement Decree of the Local Tax Act / [3] Article 26 of the Administrative Procedures Act; Article 80(3) of the former Building Act (Amended by Act No. 13471, Aug. 11, 2015) (see current Article 80(4))

[1] Supreme Court Decision 2009Du22942 Decided November 10, 201 / [2] Supreme Court Decision 2010Du8942 Decided December 8, 201, Supreme Court Decision 2017Du30764 Decided May 31, 2017 (Gong2017Ha, 1406) / [3] Supreme Court Decision 87Nu529 Decided November 24, 1987 (Gong198Sang, 183) Supreme Court Decision 2014Du3631 Decided April 29, 2016

Plaintiff

The head of Gwangju Metropolitan City North Korea;

Gwangju High Court Decision 2017Nu3488 decided September 28, 2017

The part of the judgment of the court below regarding non-performance penalty against unauthorized Use is reversed, and that part of the case is remanded to the Gwangju High Court. The remaining appeals are dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Article 80(1) of the former Building Act (amended by Act No. 13471, Aug. 11, 2015; hereinafter the same) provides, “The permission-granting authority shall impose a charge for compelling performance falling under any of the following subparagraphs on a building owner, etc. who fails to comply with a corrective order within the corrective period after receiving a corrective order pursuant to Article 79(1) and fails to comply with the corrective order within the given period: Provided, That in cases of a residential building with the total floor area (based on household area in cases of multi-family housing) of 85 square meters or less and a residential building prescribed by Presidential Decree among residential buildings in subparagraph 2, the amount prescribed by municipal ordinance of the relevant local government shall be imposed within the limit of 1/2 of the amount falling under any of the following subparagraphs.” The legislative purport of Article 80(1) of the same Act in the foregoing proviso is that “residential building with the total floor area (based on household area in cases of multi-family housing) of 85 square meters or less is practically small housing, and economic burdens between the owner and the owner.

B. On the grounds indicated in its reasoning, the lower court determined that the Plaintiff, etc.’s extension of the 14.88 square meters and 68 square meters of the 1st floor among the instant buildings without permission was illegally conducted for the purpose of increasing the number of households in violation of the permissible standards under the Building Act after obtaining approval for use by constructing multi-household housing (multi-household housing) with the total floor area of 712.17 square meters and 5th floor, and thus, did not constitute a violation of the Building Act by a tax resident residing in a small-scale housing area of 85 square meters or less, and thus, did not fall under the proviso of Article 80(1

In light of the above legal principles, the judgment of the court below is just, and contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles on the interpretation and application of mitigation requirements under the proviso of Article 80 (1)

2. Regarding ground of appeal No. 2

A. Article 80(1)1 of the former Building Act provides that “Where a building has been constructed in excess of the building-to-land ratio or the volume of the building, or without obtaining permission or filing a report, an amount calculated by multiplying the amount equivalent to 50/100 of the standard market value of one square meter applicable to the building in question pursuant to the Local Tax Act by the size of the non-compliant area” shall be imposed as charges for compelling compliance. Here, “standard market value of one square meter applicable to the building in question pursuant to the Local Tax Act” means the value determined by the head of a local government in accordance with “standards prescribed by Presidential Decree” taking into account the characteristics of each subject of taxation, such as transaction price, import price, new construction, building use, and the number of years elapsed, based on the structure, use, index by location of the building, the residual value rate calculated by the number of years elapsed of the building, the size and shape of the building, and other circumstances determined by the Minister of the Interior and Safety pursuant to Article 99(1)1(b) of the Income Tax Act.

The standard market price of a building established by the Minister of the Interior in 2015 upon delegation of the above statutes (hereinafter “instant standard adjustment”) provides that “The standard market price of a building in 2015 shall be determined through the formula of “the standard amount of new construction price of a building x applicable index (structure, use, location) x the residual value of elapsed years x area x special calculation x the calculation method of the standard market price for expansion/renovation buildings, etc.” in the part of “5.” “The standard market price of an extended building is divided into a building where the basic construction is performed and a building where the basic construction is not performed, and the standard market price of a newly constructed building in each structure of the relevant building shall be calculated by multiplying the standard market price of the building by the ratio specified in attached Table 1 [Attachment 1], and the relevant part shall be deemed a new construction year.” The [Attachment 1] provides that the calculation rate of a light-scale building that does not perform the basic construction works

As can be seen, the adjustment standard of this case reflects the fact that the calculation rate separately determined in the case of a building for which the basic construction is not based in calculating the statutory standard of the extended building is reduced rather than the construction cost when the basic construction is performed (see Supreme Court Decision 2010Du8942, Dec. 8, 201). In addition, the adjustment standard of this case does not distinguish the application of the calculation rate depending on whether the act of extension is legitimate while determining the statutory standard of the building. Thus, when calculating the amount of enforcement fines imposed on the legitimate extended building for a separate illegal act, the calculation rate of 0.85 should be applied (see Supreme Court Decision 2017Du30764, May 31, 2017). Ultimately, it is sufficient to calculate the amount of enforcement fines based on the construction without permission for the altered use of a building without permission for the basic construction, as prescribed in the Local Tax Act, based on the method of the local tax law, which does not apply to the local tax law.

B. The reasoning of the lower judgment reveals the following: (a) the Plaintiff completed a lawful extension report on June 2013, and thereafter extended 52.58 square meters to the 5th floor of the instant building without any foundation construction; and (b) the Defendant did not apply “0.85 percent of the calculation rate of the extended building without any basic construction work” in accordance with the instant adjustment standard in calculating the statutory standard for calculating the amount of enforcement fines for the portion of non-use change of the fifth floor in the instant disposition, which is the basis for calculating the amount of enforcement fines for the non-use change of the fifth floor.

C. Examining these facts in light of the relevant laws, regulations and legal principles as seen earlier, since the portion of unauthorized use of the fifth floor among the instant buildings constitutes a building that has been extended without foundation construction, the standard market price should be calculated by applying the calculation ratio of the extended building which does not perform the basic construction work, and the fact that the offense subject to charges for compelling performance is an unauthorized change of use should be considered when selecting and applying the imposition rate by type of violation (0.1 in the case of a change of use without foundation) stipulated in the Building Act and subordinate statutes.

Nevertheless, the lower court determined that there was no need to apply the part regarding “0.85 of the calculation ratio of the building extended without construction work,” among the instant adjustment criteria, since a non-performance penalty for the part concerning the unauthorized use of the fifth floor among the instant building was imposed on the unauthorized use of the fifth floor, not on extension. In so doing, the lower court erred by misapprehending the legal doctrine on the calculation of the statutory standard for the imposition of enforcement penalty, thereby adversely affecting the

3. As to the third ground for appeal

Article 26 of the Administrative Procedures Act provides, “When an administrative agency takes a disposition, it shall notify the party concerned of whether an administrative appeal, administrative litigation, or other objection may be filed with respect to the disposition, whether the procedure for filing an appeal, the period for filing an appeal, and the period for filing an appeal, and other necessary matters.” The provision regarding the notification procedure is limited to the fact that the period for filing an administrative appeal may be extended depending on cases where the administrative agency fails to comply with the duty of disclosure under the above provision, even if the other party to the administrative disposition intends to provide convenience in taking the procedure for filing an administrative appeal against the disposition, and thus, the administrative disposition subject to an administrative appeal cannot be deemed unlawful (see Supreme Court Decisions 87Nu529, Nov. 24, 197; 2014Du3631, Apr. 29, 2016).

Meanwhile, Article 80(3) of the former Building Act provides, “Where a person who has the authority to grant permission imposes a non-performance penalty pursuant to paragraph (1), he/she shall do so in writing specifying the amount, reason for imposition, payment deadline, receiving agency, method of filing an objection, institution of filing an objection, etc

Article 80(3) of the former Building Act provides the other party with convenience in responding to the disposition imposing a non-performance penalty. Thus, the duty of disclosure and the legislative purpose are the same as the duty of disclosure under Article 26 of the Administrative Procedures Act. Therefore, it is reasonable to view that the legal principle prior to the duty of disclosure under Article 26 of the Administrative Procedures Act is likewise applicable to the duty of disclosure under Article 80(3) of the former Building Act.

The lower court determined that, insofar as the Plaintiff’s filing of the instant lawsuit within the filing period and disputing the legitimacy of the instant disposition, the mere fact that the Defendant did not specifically state “the method of filing an objection and the institution of filing an objection,” as prescribed by Article 80(3) of the former Building Act, did not recognize the procedural defect to revoke the instant disposition.

Examining in light of the relevant laws, regulations and legal principles, the lower court did not err by misapprehending the legal doctrine on the duty of disclosure and procedural defect under Article 80(3) of the former Building Act, contrary to what is alleged in the grounds of appeal.

4. If so, the part of the charge for compelling the use of the disposition of this case against unauthorized Use is unlawful. Thus, the part of the charge for compelling the use of unauthorized Use among the disposition of this case is reversed, and this part of the case is remanded to the court below for further proceedings consistent with this Opinion. The remaining appeal is dismissed. It is so decided as per Disposition by the assent

Justices Ko Young-han (Presiding Justice)