In a case where a member becomes a person subject to cash settlement due to satisfying the requirements prescribed by the articles of association under Article 47 (b) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, whether the project implementer can impose and collect dues pursuant to Article 61 (1) of the same Act from the person subject to cash settlement (negative) and the case where a person subject to cash settlement is able to seek the refund of a certain portion of the rearrangement project costs incurred before the person subject to cash settlement loses his/her membership status

Articles 47, 60(1), and 61(1) and (3) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 11293, Feb. 1, 2012); Article 48 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. 27409, Jul. 28, 2016)

Supreme Court Decision 2013Du19486 Decided December 24, 2014 (Gong2015Sang, 202) Supreme Court Decision 2015Da207785 Decided August 30, 2016

Plaintiff

New Jinju Housing Reconstruction and Improvement Project Association (Law Firm Rowon, Attorneys Go Jin-ia et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2012Na104771 decided December 24, 2013

Of the part against the plaintiff in the judgment below, 12,279,478 won and damages for delay shall be reversed, and this part of the case shall be remanded to the Seoul High Court. The remaining appeals shall be dismissed.

The grounds of appeal are examined.

1. In light of the contents, form, and structure of Article 60(1), Article 61(1) and (3), and Article 47 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 11293, Feb. 1, 2012; hereinafter “former Act”), and Article 48 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. 27409, Jul. 28, 2016); and the process in which a project implementer imposes and collects the difference between the cost and revenue of a rearrangement project in the course of implementing a rearrangement project as a charge, if a member becomes a person subject to cash liquidation upon meeting the requirements stipulated in the articles of association of the former Act, a cooperative, who is a project implementer, cannot impose and collect surcharges under Article 60(1) and (3), and the purport of Article 601(1) of the former Act should be determined separately between the cooperative and its members, etc.

2. Based on its reasoning, the lower court determined that (1) pursuant to Article 43(4) and (5) of the Defendant’s articles of incorporation, a reconstruction association implementing a new apartment reconstruction project, the Defendant is obligated to pay cash settlement money and delay damages as indicated in the judgment on the instant real estate owned by the Plaintiff, a partner of the Plaintiff, who did not conclude a sales contract within the period for application for parcelling-out, and (2) pursuant to the premise that the Plaintiff is obligated to pay for the project cost of the association incurred until the Plaintiff loses its membership, as a matter of course, since the amount to be borne by the Plaintiff of the project cost is not reflected in the amount to be borne by the Plaintiff as a member of the association, and that the deduction amount is equivalent to the ratio of the appraised value of the instant real estate against the total asset value of the new apartment among the total project cost paid by the Plaintiff until the Plaintiff loses its membership (12,279

3. A. However, according to the legal principles as seen earlier, in order to impose the obligation to share the rearrangement project cost incurred before a person subject to cash clearing upon meeting the requirements set forth in the Defendant’s articles of incorporation becomes a person subject to cash clearing and loses his/her membership, the purport of the obligation to share ought to be determined in advance by the Defendant’s articles of incorporation, resolution at a general meeting of partners, or agreement between the Defendant and the Plaintiff, etc.

B. According to the reasoning of the judgment below and the records of this case, Article 10 (1) 5 of the defendant's articles of incorporation provides that "members shall bear the responsibility to pay expenses, such as maintenance project costs, liquidation money, dues, late payment charges, late payment charges, late payment losses, etc." (2) Article 43 (4) provides that "where a union member falls under any of the following subparagraphs, the union shall liquidate the buildings and other rights in cash within 150 days from the date of falling thereunder. The amount shall be calculated by calculating the arithmetic mean of the values appraised by at least two appraisal business operators recommended by the head of the Si/Gun." In each of the above subparagraphs, "1. application for parcelling-out, 2................. person who has withdrawn the application for parcelling-out, and 3...... person who is excluded from the object of parcelling-out by the management and disposal plan." (3) Article 43 (5) provides that "the union member shall conclude the

However, Article 10(1)5 of the above Articles of incorporation merely provides for the general obligation that members shall bear the duty of payment, such as the cost of rearrangement project, and rather, Article 43(4) and (5) of the above Articles of incorporation provides that the settlement money following the loss of a member’s status shall be calculated based on the amount appraised by an appraisal business entity for buildings or other rights, and does not provide for the settlement of rearrangement project costs. In light of the above provisions, it is insufficient to deem that the said provisions alone stipulate that a person subject to settlement of cash bears a certain portion of the cost of rearrangement project incurred before the loss of a member’

4. Nevertheless, the lower court did not examine the Plaintiff’s articles of association, the Defendant’s resolution at a general meeting of partners, or the agreement between the Defendant and the Plaintiff as to the obligation to share the rearrangement project cost incurred before the Plaintiff loses its membership, and concluded that the Plaintiff shared part of the rearrangement project cost, and deducted it from the Plaintiff’s cash settlement money.

Therefore, in so determining, the lower court erred by misapprehending the legal doctrine on the obligation of a person subject to the settlement of cash who lost its membership to share the rearrangement project costs, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal assigning

5. Therefore, among the part against the plaintiff in the judgment below against the plaintiff, the above 12,279,478 won and damages for delay which were deducted from cash settlement money are reversed, and this part of the case is remanded to the court below for further proceedings consistent with this Opinion. The remaining grounds for appeal are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim So-young (Presiding Justice)