Plaintiff 1 and five others (Law Firm Chungcheong, Attorney Kim Jong-sung, Counsel for the plaintiff-appellant)

The head of Seongdong-gu Seoul Metropolitan Government (Attorney Kim Jong-hun, Counsel for defendant)

May 6, 2009

1. The defendant shall demand that the defendant pay KRW 24,040,080 to the members listed in the attached list.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Basic facts

A. 326 residents of Seongdong-gu Seoul Metropolitan Government (hereinafter referred to as "Seongdong-gu"), including the plaintiffs, (hereinafter referred to as "applicants"), made a request for resident inspection (hereinafter referred to as "request for inspection of this case") under Article 16 (1) of the Local Autonomy Act (amended by Act No. 9577 of Apr. 1, 2009; hereinafter the same shall apply) to the head of Seongdong-gu Seoul Metropolitan Council on June 10, 2008, on the ground that the processing of affairs concerning the payment of monthly allowances of KRW 3,525,00 to the members of Seongdong-gu Council (hereinafter referred to as "the instant members of the Council") as stated in the attached list pursuant to the Ordinance on the Payment of Expenses for parliamentary Activities, etc. for Council Members of Seongdong-gu Seoul Metropolitan Council (amended by Ordinance No. 774 of Jan. 10, 2008; hereinafter referred to as "the instant Ordinance"), on June 10, 2008.

B. Accordingly, the Seoul Special Metropolitan City Mayor, from August 13, 2008 to October 11, 2008, audited the matters subject to the instant request for inspection, and subsequently, on October 12, 2008, pursuant to Article 16(3) of the Local Autonomy Act, (i) the Defendant failed to properly select members of the Deliberation Committee on Expenses for parliamentary Activities (hereinafter “Deliberation Committee”), and (ii) the procedures for public opinion polls conducted in relation to the increase of monthly allowances are inappropriate; (iii) the rate of increase in monthly allowances is not reflected in the determination in consideration of wages and inflation, financial independence, and income level (hereinafter “the audit results of this case”), and notified the Defendant of the audit results that the rate of increase in monthly allowances was not reflected in the determination in consideration of wages, inflation rate, and so forth; and (ii) after re-organizationing the Deliberation Committee, conducted a provisional payment based on public opinion polls in consideration of the amount of monthly allowances, and made a request for the amendment of the Municipal Ordinance to submit the proposal to the Defendant.

C. The Plaintiffs filed the instant lawsuit in accordance with Article 17(1) of the Local Autonomy Act, deeming that the instant request for measures does not include substantial measures to recover monthly allowances that had already been paid to the instant member, thereby making it impossible to recover the financial losses.

【Ground for Recognition: Facts without dispute, entry of Gap evidence 1-1, 2, and 4, the purport of the whole pleadings】

2. Determination on the plaintiffs' claims

A. Summary of the plaintiffs' claims

This Ordinance is deemed to be null and void for the following reasons. As the instant member is obligated to return the monthly allowances paid from the Defendant from January 2008 to December 2008 under the above Ordinance, the amount exceeding the monthly allowances of KRW 24,040,080 [24,080 [3,525,00 - 1,521,660 - 12] of the amount exceeding the monthly allowances of KRW 1,521,60 per month prescribed in the Seongdong-gu Seoul Metropolitan Council Ordinance on the Payment of Expenses for parliamentary Activities, etc. of Members of Seongdong-gu Seoul Metropolitan Council (amended by Ordinance No. 737, Feb. 1, 2007; hereinafter referred to as the “former Ordinance”), among the monthly allowances paid from the Defendant from January 1, 2008 to December 2, 2008, the Defendant is obligated to claim a return of unjust enrichment equivalent to the above amount to the instant member.

1) Illegality of the composition of the Deliberation Committee

The defendant and the chairperson of Seongdong-gu Council in violation of relevant Acts and subordinate statutes, such as the Local Autonomy Act, and guidelines of the Ministry of the Interior and Safety, have received multiple recommendations from candidates for deliberation committee members, other than multiple recommendations, and the final candidates have been selected as deliberation committee members by neglecting eligibility examination, etc., and the selection and appointment of deliberation committee members who can determine the standards for payment of monthly allowances, etc. in a fair and objective manner

2) Violation of procedures for gathering opinions from local residents

The purpose of Article 34(6) of the Enforcement Decree of the Local Autonomy Act is to secure the propriety and transparency of the process of collecting opinions of local residents, such as public hearings and survey of residents, and thereby securing the propriety and transparency of the process of determining the payment standards for monthly allowances, but the Deliberation Committee has conducted a public opinion poll without making a provisional decision on the amount of payment standards prior to the increase of monthly allowances. In addition, it has prepared a draft of a written statement, such as comparing the remuneration of the public officials of the Gu without considering all matters such as the rate of increase in remuneration for local public officials under Article 3(1)3 of the Enforcement Decree of the Local Autonomy Act and the rate of increase in the price, etc.

3) Violation of standards for payment of monthly allowances

Article 33(1)3 of the Enforcement Decree of the Local Autonomy Act provides that monthly allowances shall be calculated by comprehensively taking into account the income level of local residents, the rate of increase in remuneration for local public officials, the inflation rate, the performance records of activities of the local council, etc. within the scope of such amount in consideration of the financial capacity of the relevant local government. However, the Deliberation Committee set monthly allowances at KRW 1,521,660 of previous month or KRW 3,525,000 of increased monthly allowances, without considering income level, etc. of Seongdong-gu residents at all.

(b) Related statutes;

The entry in the attached Form is as specified in the relevant statutes.

C. Determination

1) As to the allegation of illegality in the composition of the Deliberation Committee

A) Article 34(1) of the Enforcement Decree of the Local Autonomy Act (amended by Presidential Decree No. 21075, Oct. 8, 2008; hereinafter the same) provides that “The Deliberative Committee established under Article 33(3) of the Act shall be comprised of 10 members if it is necessary to determine the standards for paying expenses under each subparagraph of Article 33(1) of the Act, and the head of a local government and the chairperson of a local council shall select five persons from among the persons recommended by academic circles, legal circles, press circles, civic groups, etc., and the head of a local government shall commission the head of a local government.” However, according to the evidence No. 7, the Ministry of Public Administration and Security shall not demand that a number of candidates be recommended from academic circles, legal circles, press circles, civic groups, etc., and the Ministry of Public Administration and Security should select a candidate after obtaining a recommendation of a candidate for the monthly allowance for the members of the local council, etc., even if the defendant does not have any error in the organization or guidelines of the Deliberative Committee.

B) In addition, Article 34(2) of the Enforcement Decree of the Local Autonomy Act provides that "a person who is eligible to become a review member shall be 19 years of age or older who has been registered as a resident in the district under the jurisdiction of the local government concerned continuously for one year prior to January 1 of the year in which the Committee is organized: Provided, That a person who is not entitled to vote pursuant to Article 18 of the Public Official Election Act and a public official belonging to such local government, council members, educational council members, and their spouses, lineal ascendants and descendants, siblings, and siblings shall not become a member of the review committee pursuant to Article 18 of the Public Official Election Act," and does not stipulate any specific qualification requirements as a review member. In full view of the purport of arguments in subparagraph 1 and 2, at the time of requesting the recommendation of the review committee, the defendant cannot be deemed to have been commissioned by the public official, educational committee members, and their spouses, lineal descendants, brothers and sisters and sisters of Seongdong-gu Seoul Metropolitan Government without being commissioned as a review committee member, and thus, the defendant cannot be deemed to have separately designated the above eligibility requirements.

C) Therefore, this part of the plaintiffs' assertion is without merit.

2) On the illegality of the procedures for gathering the opinions of local residents

A) Article 34(6) of the Enforcement Decree of the Local Autonomy Act provides that “When the Council intends to determine the amount under paragraph (5), it shall undergo procedures to gather opinions from local residents, such as public hearings and resident opinion surveys, etc. to ensure the propriety and transparency of such determination.” In view of the fact that the local autonomy system in Korea is implemented in accordance with the principle of organization of free democratic shareholders to reduce the State’s tasks and realize the ideology of democracy and separation of powers by treating the local autonomy under its own responsibility by the self-government organization within the region of the local government, the local autonomy system in Korea is to provide local residents with an opportunity to raise democratic capacity by directly participating in the determination procedure of monthly allowances, etc. of the Gu Council members, and to ensure that the Deliberation Committee is to promote the propriety of such determination and to reflect the opinions of local residents supporting the determination of the amount of monthly allowances, etc. in a transparent and fair manner.

Therefore, the "procedures for collecting opinions of local residents" under the above Enforcement Decree does not simply mean that the opinions of local residents are simply formally from the local residents, but also include a series of procedures and processes for reasonably forming opinions about the amount of monthly allowances, etc. under which sufficient information necessary for making decisions is given to local residents and allowing them to express their opinions in accordance with democratic procedures. In particular, the opinion gathering procedures should be conducted in an objective and neutral manner so as not to be distorted and reflected in the opinions of local residents. In conclusion, in order to conform to the purport of the provisions of the Enforcement Decree of the Local Autonomy Act and the Local Autonomy Act, the opinion gathering procedures should be conducted in a fair and neutral manner, such as ① providing accurate and sufficient information about various factors related to the determination of the amount of monthly allowances, etc. (income level of local residents under Article 33 of the Enforcement Decree of the Local Autonomy Act, increase rate of remuneration of local public officials, increase rate of local public officials, and performance results of local council activities, ② giving many possible local residents opportunities to participate, ③ Opinion gathering should be conducted in a fair and neutral manner so that does not

B) Based on the above legal principles, comprehensively taking account of the health unit, Gap evidence Nos. 4 and Eul evidence Nos. 8 and the purport of the entire arguments as to this case: ① did not provisionally determine the monthly allowance at the time of the residents’ opinion investigation; ② did not provide the residents with any information about all the factors to be considered in relation thereto; ② door No. 4 of the text of the residents’ opinion survey document (in the case of Seongdong-gu, the monthly average of KRW 2.62,00,000 per annum and KRW 31,460 per annum through the expense for parliamentary activities and monthly allowances). Since the improvement cost paid to the residents of the Gu, which was appropriate, was the answer items, it constitutes remuneration and information favorable for the improvement of the procedure by presenting only the total amount raised from 27% to 91% per cent per annum compared with the improvement of the previous year; ③ it was clear that the local residents’ opinion gathering risk of being provided during the period of 208 months per year, which is a public official, could not be recognized as a simple session allowance.

C) Therefore, this part of the plaintiffs' assertion is with merit.

3) As to the allegation of illegality in the payment criteria for monthly allowances

A) Article 33(1)3 of the Enforcement Decree of the Local Autonomy Act provides that the monthly allowance payment criteria shall be the amount which comprehensively takes into account the income level of local residents, the rate of increase in remuneration for local public officials, the inflation rate, the performance of activities of the local council, etc., and shall be determined by municipal ordinances within the scope of the said amount in consideration of the financial capacity of the relevant local government. Ultimately, the above provision does not present a specific and substantial standard for the monthly allowance per se (Article 33(1)3 of the Enforcement Decree of the Local Autonomy Act amended by Presidential Decree No. 21075, Oct. 8, 2008). Since Article 33(1)3 of the Enforcement Decree of the Local Autonomy Act provides that the monthly allowance payment criteria should be determined within the scope of 【20% after calculating the monthly allowance payment criteria according to the specific formula for each local government to solve the problems such as increase in the monthly allowance payment criteria arising from absence of such substantial standard, and the monthly allowance payment criteria should be determined within the scope of 【20%'s.

B) In mind, the following circumstances are acknowledged by the overall purport of the statement and pleading regarding the above facts: ① the income level of local residents of Seongdong-gu is 11 among 25 autonomous Gus, the rate of financial independence of Seongdong-gu is 2.0%, the rate of increase in the wages of public officials in 2008 is 2.5%, the rate of increase in the wages of local council members in 207 is 5.4%, and the rate of increase in the wages of local council members in 207 is 0%, and the annual salary rate is 0.4%, the rate of increase in the wages of local council members in 207 is 0%, and the annual salary rate is 0%, which is 0%, which is 1,521,60 won for the previous month, and the annual salary rate is 0%, which is 0%, as the result of the resolution of the Local Autonomy Act that the monthly salary rate of the local council members in 207 is 0% higher than that of the local council members.

C) Therefore, the plaintiffs' assertion on this part is also justified.

4) Sub-determination

As such, the determination of the standard amount of monthly allowances of the Deliberative Committee is illegal as it violates the provisions of Articles 33(1)3 and 34(6) of the Enforcement Decree of the Local Autonomy Act, and the ordinances of this case, which were enacted as a direct cause, shall also be deemed null and void as well. As such, the Defendant’s payment of monthly allowances in accordance with the above illegal ordinances is null and void as it is a decision-making person of the above Ordinance and a relation with the members of this case who receive the payment.

Therefore, among the monthly allowances based on the ratio of KRW 3,525,00 per month received from January 2008 to December 2008 pursuant to the instant ordinances, the instant council members are obligated to return the monthly allowances to the Defendant for unjust enrichment without any legal cause. Thus, the Defendant is obligated to claim a return of unjust enrichment equivalent to each of the above amounts to the instant council members pursuant to the provisions of Article 17 (2) 4 of the Local Autonomy Act, since the sum of KRW 24,040,080, which exceeds monthly allowances based on the ratio of KRW 1,521,660 per month prescribed by the previous Ordinance of the instant case.

3. Conclusion

Therefore, the plaintiffs' claims shall be accepted for the reasons of the reasons, and it is so decided as per Disposition.

[Attachment]

Judges Tae Tae-tae (Presiding Judge)