In cases where a road becomes a general property due to the abolition of its use, whether the legal effect of the permit to occupy and use ceases to exist before the abolition of its use (affirmative), and from that time, whether the management agency is prohibited from imposing the occupation and use fee on the basis of Article 43 of the former Road Act

Article 32(1)3 and (5) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 7392, Mar. 18, 2005; see current Article 32(6)); Article 43(1) of the former Road Act (Amended by Act No. 8976, Mar. 21, 2008; see current Article 66(1)); Article 72 of the former Local Finance Act (Amended by Act No. 7663, Aug. 4, 2005; see current Article 5 of the Public Property and Commodity Management Act); Article 87 of the former Enforcement Decree of the Local Finance Act (Amended by Presidential Decree No. 1926, Dec. 30, 2005; see current Article 8 of the Enforcement Decree of the Public Property and Commodity Management Act); the former Public Property and Commodity Management Act (Amended by Act No. 1056, Feb. 10, 2010)

Distribution 2 Complex Housing Reconstruction and Improvement Project Association (Law Firm Square et al., Counsel for the defendant-appellant)

The head of Seocho-gu Seoul Metropolitan Government (Law Firm LLC et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2013Nu19822 decided March 18, 2014

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Article 32(1)3 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 7392, Mar. 18, 2005; hereinafter “former Act”) provides that a project operator shall be deemed to have obtained permission to occupy and use a road under Article 40 of the Road Act when he/she obtains authorization for the implementation of the project. Article 32(5) provides that “If it is deemed that any authorization, permission, etc. has been granted for a rearrangement project pursuant to the provisions of paragraphs (1) and (2) of the same Act, the usage charges, etc. for the relevant administrative property shall be exempted.” Article 43(1)3 of the former Act (amended by Act No. 8976, Mar. 21, 2008; hereinafter referred to as “former Road Act”) provides that the administrative office may, if it is deemed that the administrative property has been used for the same purpose as that of the relevant public property, such as the whole or part of the public property is prohibited.

Therefore, in full view of the relevant provisions and the relevant legal principles, it is reasonable to interpret that if a road becomes general property due to disuse, the effect of the occupancy permit which was deemed before disuse is terminated, and from that time, the management agency cannot impose occupancy charges on the basis of Article 43 of the former Road Act.

2. According to the reasoning of the first instance judgment as cited by the lower court and the evidence duly admitted, the Defendant: (1) on December 31, 2004, the Defendant (hereinafter “instant authorization for project implementation”); (2) on January 5, 2005, publicly notified the authorization for project implementation of the instant case; (3) on January 5, 2005, the previous usage of the instant road was abolished as of January 5, 2005; (3) on April 26, 2012, the Defendant imposed KRW 19,481,039,510 (including value-added tax) on the instant site to the Plaintiff from May 1, 2007 to June 30, 2009; and (3) on December 26, 2012, the Defendant changed the usage fees of the instant site to imposition KRW 19,481,039,510 (including value-added tax); and (4) on each of the instant charges imposed on the Plaintiff.

Examining these facts in light of the legal principles as seen earlier, notwithstanding the fact that the site of this case was abolished on January 5, 2005 and general property was put into use, the court below erred in holding that the road of this case was included in the "charge, etc. imposed for the pertinent authorization, permission, etc." under the premise that the road of this case was continuously exempted from the road of this case even after the site of this case was abolished. However, the defendant did not err by misapprehending the legal principles as to the retroactive effect of the Act on the prohibition of administrative relations, etc. as alleged in the grounds of the ground of appeal, which affected the conclusion of the judgment, contrary to the allegation in the grounds of appeal.

3. Therefore, the appeal is 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.

Justices Kwon Soon-il (Presiding Justice)