[1] The meaning of "the grant of a subsidy by false application or other unlawful means" under Article 40 of the Act on the Budgeting and Management of Subsidies

[2] The case holding that even if the village association received a subsidy to support the installation of joint use facilities to increase the convenience of residents damaged by the aircraft and used it as the installation cost of the utility tunnel, it cannot be deemed that it was received by "a false application or other unlawful means"

[1] Articles 40 and 42 of the Act on the Budgeting and Management of Subsidies / [2] Article 40 of the Act on the Budgeting and Management of Subsidies

[1] Supreme Court Decision 2006Do906 Decided November 23, 2006, Supreme Court Decision 2006Do8870 Decided December 27, 2007, Supreme Court Decision 2007Do8651 Decided February 1, 2008

Defendant

Defendant

Law Firm Jeong, Attorney Lee Na-young

Busan District Court Decision 2008No4747 Decided August 14, 2009

The judgment of the court below is reversed, and the case is remanded to Busan District Court Panel Division.

The grounds of appeal are examined.

1. As to the violation of the Act on Special Measures for Designation and Management of Development Restriction Zones for which a construction permit has been granted by fraudulent means, obstruction of performance of official duties, fraud

Article 30 subparagraph 2 of the former Act on Special Measures for Designation and Management of Areas of Restricted Development (wholly amended by Act No. 8975 of Mar. 21, 2008; hereinafter “Special Measures Act”) provides that “any person who obtains permission under the proviso of Article 11(1) or Article 12 by deception or other unlawful means shall be punished by imprisonment for not more than three years or by a fine not exceeding 30 million won.” Here, “a person who obtains permission by deception or other unlawful means” refers to a person who obtains permission by using deceptive means or any other unlawful act deemed unfair by social norms even though he/she is unable to obtain permission through normal procedures (see Supreme Court Decision 2006Do8600, Feb. 22, 2007).

In addition, according to Article 11 (1) of the Act on Special Measures, a building cannot be constructed in a development-restricted zone. However, according to Article 11 (1) 1 (d) of the Act, a person who intends to build a facility jointly used by residents in a development-restricted zone may do so with permission from the head of the Si/Gun/Gu. Article 13 (1) [Attachment Table 1] 5 (b) and (c) of the Enforcement Decree of the Act on Special Measures provides a village joint-use facility and a common-use shop for residents who can obtain permission as above. In principle, in a development-restricted zone, a village joint workplace and a common-use shop for residents in a development-restricted zone shall not be permitted to construct a building in violation of the purpose of designation, but the institutional purport of the provision that allows them to be installed with permission from the head of the Si/Gun/Gu in the case of a village joint-use facility or a common-use shop for residents in the development-restricted zone is not to resolve inconvenience caused by lack of living convenience facilities in the

In light of these legal principles, the court below is justified in finding guilty of this part of the facts charged, and there is no error in the misapprehension of legal principles as alleged in the grounds of appeal.

2. As to the violation of the Act on Fraud and Subsidy Budget and Management

Article 40 of the Act on the Budgeting and Management of Subsidies refers to the affirmative and passive act that is deemed fraudulent means or other acts that could affect the decision-making on the grant of subsidies, even though a person is unable to receive subsidies under the same Act through a normal procedure. In addition, Article 40 of the Act on the Budgeting and Management of Subsidies provides separate penal provisions as to the violation of the administrative procedures of subsidies under the same Act and Article 42 of the same Act. In light of the fact that Article 40 of the Act on the Budgeting and Management of Subsidies punishs only the cases where subsidies are actually granted, and the attempts to do so are not provided for in the same Act, and Article 42 of the same Act provides separate penal provisions as to the violation of the administrative procedures of subsidies, the purpose of which is to punish the violation of the State’s financial interests as the protected legal interest, and is not to punish the violation of the order or fairness of the administration of subsidies or the violation of the individual procedures of subsidies, and thus, the phrase “the case where subsidies are granted by illegal means” as provided in the same Article refers to the case where subsidies are granted beyond the amount to 1070.

In addition, Article 107 (1) of the former Aviation Act (amended by Act No. 9780 of Jun. 9, 2009) provides that "the Minister of Land, Transport and Maritime Affairs may, if necessary to prevent or reduce noise damage by aircraft, establish and implement noise damage prevention measures or require project operators or airport facility managers to establish and implement noise damage prevention measures, as prescribed by Presidential Decree." Article 272 (1) 4 of the Enforcement Rule of the same Act provides that one of the measures to prevent noise damage by aircraft may prepare and implement measures to support the installation of joint use facilities to increase the convenience of residents of noise damage, and Article 9 (1) 7 of the former Korea Airports Corporation Act (amended by Act No. 9548 of Mar. 25, 2009) and Article 11 (2) of the Enforcement Decree of the same Act provides that the Korea Airports Corporation shall install public use facilities within the scope of financial resources such as subsidies of the Government for noise damage prevention measures under Article 107 of the Aviation Act.

According to the reasoning of the judgment below and the evidence duly examined, “△△-dong Village Association” existed before the construction of the instant utility tunnel and the joint workplace by acquiring co-ownership shares of the site on August 31, 1981. The “△△-dong Community Association” constructed the instant utility tunnel and joint workplace as the property of the Village Association, and registered the instant utility tunnel and joint workplace in the name of “△-dong Community Association” on the instant utility tunnel and common workplace site and building. The Defendant, as the representative of △△-dong Village Association and △△-dong Community Association, did not perform the above series of affairs with the consent of village residents, and the Defendant was not obliged to individually receive subsidies from 1,200,000,000,000 won for the construction of the instant utility tunnel under the name of “△△-dong Community Association and △△-dong Community Association” and thus, it is difficult to view that the Defendant was subject to the aforementioned provision of subsidies by the head of the above-gu △△-dong community facilities as an unlawful means and expenses for the construction of the above.

Nevertheless, the court below found the defendant guilty of this part of the facts charged for the reasons stated in its holding, which is erroneous in the misapprehension of legal principles as to subsidies for the installation of joint use facilities to increase the convenience of residents damaged by aircraft, thereby affecting the conclusion of the judgment.

3. Conclusion

Therefore, the part of the judgment of the court below in violation of the Act on Fraud and Management of Subsidies shall be reversed, and this part shall be concurrently related to the remaining part of Article 37 of the Criminal Act and a single sentence shall be imposed on the defendant. Therefore, the entire judgment of the court below shall be reversed and the case shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition by

Justices Shin Young-chul (Presiding Justice)