In cases where a purchaser of land within a land transaction permission zone under the National Land Planning and Utilization Act fails to file an application for the registration of ownership transfer within the period prescribed by Article 10(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name, whether a penalty surcharge may be imposed pursuant to the said Act (negative in principle)

In light of the contents and structure of relevant statutes, such as Article 10(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name, Article 2(1) of the Act on Special Measures for the Registration of Real Estate, and Article 2(1) of the Act on Special Measures for the Registration of Real Estate under Actual Titleholder’s Name, even if a contract with respect to the transfer of ownership of real estate was concluded, where the validity of such contract did not take effect or the validity thereof expires retroactively, it shall be deemed that the contract for the land within the land transaction permission zone under the National Land Planning and Utilization Act is not subject to penalty surcharges under Article 10(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name. On the other hand, since a contract for the land within the land transaction permission zone under the National Land Planning and Utilization Act becomes null and void until the relevant administrative agency grants permission for the transfer or creation thereof, it cannot be subject to any claim for the discharge of rights

Article 10(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name; Article 2(1) of the Act on Special Measures for the Registration of Real Estate

Supreme Court en banc Decision 90Da12243 delivered on December 24, 1991 (Gong1992, 642) Supreme Court Decision 99Da40524 delivered on January 28, 200 (Gong2000Sang, 567)

Plaintiff (Law Firm LLC, Attorneys Jeon Byung-hee et al., Counsel for the plaintiff-appellant)

Themju Market (Law Firm Woo, Attorneys Jeong Jong-tae et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2008Nu31804 decided May 1, 2009

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

We examine the grounds of appeal.

1. Article 10(1) of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”) provides that “A person subject to Article 2(1) and Article 11 of the Act on Special Measures for the Registration of Real Estate and Article 2 of the Addenda of the Act on Special Measures for the Registration of Real Estate may exercise his/her right to claim the registration of ownership transfer, such as de facto completing the performance of the consideration in a quid pro quo relationship, but fails to file an application for the registration of ownership transfer within three years thereafter, a penalty surcharge shall be imposed.” Article 2(1) of the Act on Special Measures for the Registration of Real Estate provides that “A person who enters into a contract with the content of the transfer of ownership of real estate shall file an application for the registration of ownership transfer within

In light of the contents and structure of the relevant laws and regulations, even if a contract on the ownership transfer of real estate was entered into, if the contract does not take effect or expires retroactively, it shall be deemed that the contract does not fall under the subject of penalty under Article 10(1) of the Real Estate Real Name Act. Meanwhile, a contract on the land within a zone subject to land transaction permission under the Act on the Utilization and Management of the National Territory is null and void because the contract becomes null and void because it has not taken effect until the pertinent administrative agency obtains permission, and thus, a claim for performance of any content on the transfer or creation of rights cannot be made (see, e.g., Supreme Court en banc Decision 90Da1243, Dec. 24, 191; Supreme Court Decision 9Da40524, Jan. 28, 200). Even if a purchaser of land within a zone subject to land transaction permission did not file an application for the registration of ownership transfer within the period prescribed in Article 10(1) of the Act on the Real Estate Real Name.

2. The court below acknowledged the facts as stated in its reasoning, such as the fact that the non-party corporation purchased the instant land located within the land transaction permission zone and paid the price in full, and held that the non-party corporation was not obligated to file an application for ownership transfer registration of the instant land unless the competent authority obtained land transaction permission with regard to the sale and purchase contract of the instant land, and held that the instant disposition against the plaintiff who merged the non-party corporation was unlawful. The judgment of the court below is just in light of the aforementioned legal principles and records, and there is no error in the misapprehension of legal principles as argued in the above. The argument in the grounds of appeal on the premise that the non-party corporation or the plaintiff is obligated to file an application for ownership transfer registration under Article 10 (1) of the Real Estate Real Name Act cannot be accepted.

3. Therefore, the appeal is dismissed and all 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 Yang Sung-tae (Presiding Justice)