The Allied Rebuilding Housing Association (Law Firm Bolar, Attorneys Clinical Hun-Ga et al., Counsel for the defendant-appellant)

Yangcheon-gu Seoul Metropolitan Government (Yong, Kim & Lee, Attorneys Jeong Ho-young et al., Counsel for the defendant-appellant)

October 29, 2009

Seoul Southern District Court Decision 2006Gahap8666 Decided January 12, 2007

Seoul High Court Decision 2007Na20763 Decided January 31, 2008

Supreme Court Decision 2008Da20751 Decided June 11, 2009

1.After the remand of the judgment of the first instance, changes, including the claims for extension in the trial of the first instance, as follows:

A. The defendant shall pay to the plaintiff 472,692,700 won with 5% per annum from December 9, 2004 to November 12, 2009, and 20% per annum from the following day to the day of full payment.

B. The plaintiff's remaining claims are dismissed.

2. Of the total litigation costs, 50% is borne by the Plaintiff, and the remainder is borne by the Defendant, respectively.

3. The part for which no provisional execution has been declared by the first instance court among the provisions of subparagraph 1 (a) may be provisionally executed;

1. Purport of claim

With respect to the plaintiff 887,299,734 won and 853,458,600 won among them, the defendant shall pay to the plaintiff an amount calculated at the rate of 5% per annum from December 9, 2004 to the service date of a duplicate of the complaint of this case, the amount calculated at the rate of 20% per annum from the next day to the day of complete payment, 33,841,134 won per annum from December 9, 2004 to the day of complete payment, 5% per annum from the next day to September 25, 2009, and 20% per annum from the next day to the day of complete payment (the plaintiff's claim was extended in the trial after remand).

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

(a) Approval of projects by the Yangcheon-gu Office;

(1) The Plaintiff filed an application with the Yangcheon-gu Seoul Metropolitan Government for the approval of the plan for each large-scale joint-use reconstruction project (hereinafter “the project in this case”) of the above 14th joint-use complexes, together with the building association established to promote the private-use housing construction project on the ground of 1,921.39 square meters outside the same (number 2 omitted) and 2nds of the same (number 2 omitted). The Plaintiff filed an application for the approval of the plan for each large-scale joint-use reconstruction project of the above 1 and 3th joint-use complexes (hereinafter “the project in this case”).

(2) Upon approval of the instant project plan on June 30, 2003, the head of Yangcheon-gu imposed the conditions of the implementation of the said three complex project plan, “public land (road: part of the 4-dong 857 of the Seoul Yangcheon-gu Seoul Metropolitan Government) to be disused before the commencement of the construction site in the instant project site” (Paragraph 4), “six meters of roads between 1 and 3 complexes shall be examined before the completion of the sale approval or the commencement of the construction of the pedestrian melt road” (Paragraph 13(b) and “public land (road) subject to disuse in the project site shall secure ownership after approval of the project plan and the commencement of the construction after the procedure of the relevant regulations on disuse” (Paragraph 14).

(3) On June 14, 2004, the head of Yangcheon-gu Office revised the plan for the first complex project on the condition that the approval of the change of the plan is approved, and on the condition that the plan is approved, the head of Yangcheon-gu Office constantly reviewed and implemented opening after being created as a function similar to the existing road to maintain the existing passage road for the residents in the surrounding areas. The head of Yangcheon-gu Office imposed the wind to plan the width of the sidewalk more than 2 meters in consideration of the establishment of the report around the project site and the scale of the

(b) Conclusion of a sales contract and acceptance of donations;

(1) On December 8, 2004, the Plaintiff entered into a sales contract (hereinafter “instant sales contract”) with the Defendant with respect to the new monthly (number 4 omitted) 559.5 square meters (hereinafter “instant public land”) located in the instant project, which will be abolished as the instant project, and paid KRW 990,315,000 as the purchase price for the said public land on December 8, 2004.

(2) Meanwhile, the area of the road newly constructed by the Plaintiff in the instant site (the remaining side of the complex project site and the north side road expanded by 2m wide, 3.53m wide by 2m wide by 6m wide by 45,828,100m wide by 45,828,100, 455,828,100, and 6m wide by 1m wide by 3m wide by 6m wide from the boundary line on the same side of the complex project site, and 3m wide by 224.65m wide by 224.65m wide by 3m wide from the boundary line on the same side of the three complex project site (hereinafter “instant public report”). The Plaintiff donated the above road to the Defendant with the aggregate of 3m wide by 397,630,500, 2500, 1964, 1696, 250, 1965, 2016.

(3) On May 4, 2005, when the Plaintiff paid the purchase price of the instant public site to the Defendant, the Plaintiff filed a civil petition to the effect that it would offset the price of the disused public site and the newly-established public site, and that the difference can only be paid. However, on May 13, 2005, the Defendant sent to the Plaintiff on May 13, 2005, that “the purchase price of the instant public site was added to the condition that the Plaintiff would recognize the plan applied by the former Urban Planning Committee to promote the development of the new 4th residential environment in the new 4th residential environment by recognizing the plan applied by the Plaintiff to be included in the project site to maximize the project and purchase the waste site before the commencement, as the road site in the project site was abolished in accordance with the business approval plan applied by the Plaintiff and the implementation conditions were met due to the sale decision and the completion of the purchase by the Plaintiff.”

[Reasons for Recognition] A’s 1-1 to 5, Gap’s 7-1 to 9-3, Gap’s 11-1-3, Gap’s 14-1 through 12-14, Gap’s 39-1 to 7, Eul’s 2 and 3-16-2, Eul’s 16-1 and 21-2, and Eul’s 21-1 through 23, the purport of the whole pleadings

2. Relevant statutes;

A. The former National Land Planning and Utilization Act (amended by Act No. 8250 of Jan. 19, 2007)

Article 2 (Definitions) The definitions of terms used in this Act shall be as follows:

13. The term "public facilities" means roads, parks, railroads, waterworks, and other public facilities prescribed by Presidential Decree;

Article 65 (Reversion of Public Facilities, etc. Following Development Activities)

(1) Where a person who has obtained permission for development activities is an administrative agency, if a person who has obtained such permission installs new public facilities or public facilities replacing existing public facilities, notwithstanding the provisions of the State Properties Act and the Local Finance Act, the newly installed public facilities shall revert gratuitously to the management agency to manage such facilities, and the existing public facilities shall revert gratuitously to the

(2) Where a person who has obtained the permission of development acts is not an administrative agency, the public facilities newly installed by the person who has obtained the permission of development acts shall revert gratuitously to the management agency to manage such facilities, and the public facilities, whose usage is to be ceased due to the development acts, may be transferred gratuitously to the person who has obtained the permission of development activities within the limit equivalent to installation costs of

B. Enforcement Rule of the former National Land Planning and Utilization Act (amended by the Ordinance of the Ministry of Construction and Transportation No. 426 of February 19, 2005)

Article 15 (Application for Authorization of Implementation Plan for Urban Planning Facility Project) Any implementer of an urban planning facility project who intends to obtain authorization for an implementation plan for an urban planning facility project under Article 97 (3) of the Decree shall submit an application for authorization for an implementation plan for an urban planning facility project in attached Form 9 to the Minister of

5. An appraisal report prepared by at least two appraisal business entities with respect to the properties of the State or a local government that are disused due to the implementation of an urban planning facility project (limited to cases where

6. Statement and drawings of public facilities to be newly installed as an urban planning facility project and statement of costs for installing such public facilities (limited to cases where the land is implemented by any person other than an administrative agency). In such cases, where land necessary for installing a new public facilities and land on which existing public facilities are installed are the same, only

(c) Act on the Improvement of Urban and Residential Environments (hereinafter “Urban Improvement Act”);

Article 2 (Definitions) The definitions of terms used in this Act shall be as follows:

4. The term "maintenance infrastructure" means roads, water supply systems, parks, public parking lots, utility tunnels (referring to the utility tunnels under Article 2 subparagraph 9 of the National Land Planning and Utilization Act; hereinafter the same shall apply), and other facilities prescribed by Presidential Decree as gas supply facilities necessary for residents' living;

Article 65 (Reversion of Rearrangement Basis Facilities, Land, etc.)

(1) Where the head of a Si/Gun, the head of a Gun, or the Korea Housing Corporation, etc. constructs a new infrastructure for rearrangement or a infrastructure for rearrangement replacing the existing infrastructure for rearrangement in the course of implementing an improvement project, the existing infrastructure for rearrangement shall gratuitously revert to the project implementer, and the new infrastructure for rearrangement shall gratuitously revert to the State or a local government to manage

(2) A new infrastructure built in the course of implementing an improvement project by a project implementer, other than the head of a Si/Gun or housing project, shall gratuitously vest in the State or a local government to manage such infrastructure, and a infrastructure owned by the State or a local government to be ceased to be used due to the implementation of an improvement project shall be transferred gratuitously to the project implementer to the extent equivalent to installation costs of

(3) Where the head of a Si/Gun intends to implement a rearrangement project including the matters concerning the reversion and transfer of infrastructure for rearrangement under paragraphs (1) and (2), or to authorize the implementation thereof, he/she shall hear in advance the opinions of the relevant management authority. The same shall also apply to any modification to the authorized matters.

(4) The project implementer shall notify the management agency of the kinds and details of the infrastructure to be reverted to the management agency and the property to be reverted to or transferred to the project implementer under paragraphs (1) and (2) before completion of the rearrangement project, and the relevant fundamental infrastructure shall be deemed reverted to the State or a local government, or reverted to or transferred to the project implementer when the management agency gives notice of completion approval

Article 7 (Transitional Measures for Implementation of Projects)

(1) Matters being implemented after obtaining approval of a project plan or authorization for project implementation under the previous Acts shall be governed by the previous provisions.

(d) Enforcement Decree of the Urban Improvement Act;

Article 3 (Maintenance Basis Facilities)

The term "facilities prescribed by Presidential Decree" in subparagraph 4 of Article 2 of the Act means the facilities falling under each of the following subparagraphs:

1. Greenbelts;

2. Rivers:

3. Public vacant land;

4. Scenics:

5. Fire extinguishing water supply systems.

6. Emergency shelters;

7. Gas supply facilities;

8. Facilities for joint use under subparagraph 5 of Article 2 of the Act (hereinafter referred to as "joint use facilities") to be installed in an improvement zone under subparagraph 1 of Article 2 of the Act (hereinafter referred to as "improvement zone") designated and publicly notified for a residential environment improvement project, which are included in the project implementation plan under Article 30 of the Act (hereinafter referred to as "project implementation plan") managed by the head of the relevant Si/Gun/autonomous Gu (hereinafter referred to as "head of the relevant Si/Gun");

3. Determination

A. The plaintiff's assertion

The Defendant sold the road newly established by the Plaintiff and donated to the Defendant and the function substantially the same as the road to the Defendant within the extent equivalent to the installation cost of the instant public news report, at a cost. As such, the instant sales contract constitutes an remarkably unfair contract concluded by taking advantage of the Plaintiff’s poor situation, which is absolutely poor compared to the Defendant, and thus invalid.

Preliminaryly, the instant sales contract was concluded by the Defendant’s coercion, and the Plaintiff revoked the instant sales contract on this ground.

Therefore, the defendant should return to the plaintiff the amount equivalent to the expenses incurred in installing the road and the pedestrian record which functions the same function as the road that the plaintiff donated to the defendant, as compensation for damages or unjust enrichment.

B. Determination as to the assertion that it constitutes an unfair juristic act and thus null and void

(1) Article 7(1) of the Addenda to the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents provides that “The previous provisions shall apply to a reconstruction association which has already obtained approval of a project plan or authorization for project implementation before the implementation of the Act.” Considering the various circumstances, including the fact that when obtaining approval of a project plan for a reconstruction project before the implementation of the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents, the administrative agency’s involvement in principle is terminated, and the members shall acquire the right to purchase land (see Supreme Court Decision 2005Du5369, Jun. 15, 2007) (see Supreme Court Decision 2005Du5369, Jun. 15, 2007). Therefore, it is difficult to view that Article 3 of the Addenda to the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents has the necessity or rationality to implement the remaining project by the procedure or method under the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents before the implementation of the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents.”

Article 65(2) of the Act on the Maintenance and Improvement of Urban Areas provides that “An infrastructure newly installed by a project implementer who is not the head of a Si/Gun or a housing construction project shall gratuitously vest in the State or a local government to manage such infrastructure, and an infrastructure owned by the State or a local government shall be transferred gratuitously to a project implementer within the extent equivalent to installation costs of the infrastructure newly installed by the project implementer due to the implementation of an improvement project.” This provision provides that “If a private project implementer installs public facilities within a project district, the ownership of such public facilities and site shall be attributed to the State or a local government without compensation, the provisions of Article 33(8) of the former Housing Construction Promotion Act, the former Urban Planning Act (amended by Act No. 6243, Jan. 28, 200; hereinafter the same shall apply) shall be deemed to have been amended by Act No. 6655, Feb. 4, 2002; the provisions of Article 52(2) of the former Act on the Maintenance and Improvement of Urban Areas, which are newly established within the scope of State or local government’s.

Therefore, it is reasonable to view that the latter part of Article 65(2) of the Act applies to cases where a private project implementer of a reconstruction project who obtained approval prior to the implementation of the Act enters into a contract with the State or a local government on the transfer or reversion of infrastructure owned by the State or a local government, the purpose of which is ceased due to the implementation of a rearrangement project after the implementation of

In addition, in light of the legislative intent of the latter part of Article 65(2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions, this is a mandatory provision compelling a transfer of the fundamental infrastructure to be disused within the extent equivalent to the installation cost of the fundamental infrastructure to be newly installed by a private project operator (see Supreme Court Decision 2007Du6663, Jul. 12, 2007). Thus, a sales contract, etc. concluded between a project operator and the State or a local government in violation of the above provision

According to these legal principles and facts acknowledged earlier, the legal provisions applicable to the instant sales contract concluded between the Plaintiff and the Defendant after the enforcement of the Urban Improvement Act are the latter part of Article 65(2) of the Urban Improvement Act. Of the public land of this case, even the part corresponding to the installation cost of the newly installed infrastructure by the Plaintiff is invalid in violation of the latter part of Article 65(2) of the Urban Improvement Act, which is a mandatory provision. Furthermore, the Plaintiff asserts that the entire sales contract of this case is null and void as it constitutes an unfair legal act. However, there is no evidence to view that there exists a significant imbalance between the payment and the consideration of the instant sales contract, or that there was a bad faith to the Defendant. Accordingly, the Plaintiff’s assertion on this part is unacceptable.

(2) Determination on the scope of nullification and the scope of restitution of unjust enrichment

Since the part which becomes null and void among the sales contract of this case is limited to the part where the Plaintiff purchased at a cost a considerable portion of the cost for the installation of fundamental infrastructure newly installed among the public land of this case, the scope of fundamental infrastructure newly established by the Plaintiff and its installation cost are examined.

(A) The plaintiff's assertion

With respect to the public report of this case, it was deliberated and resolved on the fact that the road 6m on June 4, 2003's side of the defendant urban planning committee set back two meters after the designation of the construction line, creating the post-designation as the pedestrian melter. In addition, on June 14, 2004, when the revision of the complex project plan was made on June 14, 2004, the defendant head of the Gu reviewed and implemented the opening at all times after being created as similar to the existing road in order to maintain the existing traffic dynamic line for the residents in the surrounding areas. In consideration of the establishment of the surrounding news report of the project site and the scale of the project, the head of the Gu imposed a condition of approval that the width of the report is to be planned at least

Accordingly, both the instant road and the public road installed by the Plaintiff while carrying out the instant project are installed a axis that separates the sidewalk from the complex, and the other side is adjacent to the roadway, and high-tension block and roadside trees have been installed. The function, form, and status of the road are the same.

Therefore, the public report of this case, like the road of this case, was installed on the roadway in accordance with the conditions of deliberation by the Defendant Urban Planning Committee and the approval of the project plan of the head of the Defendant, and its function, form, and status are the same as the road of this case and the urban planning decision was made, and its ownership directly belongs to the state or local government which directly manages the facility.

Therefore, since all of the public reports of this case, which perform the same function as the road of this case and the public reports of this case, are newly constructed and reverted to the defendant without compensation, the defendant shall refund all the amount equivalent to the cost of each construction

(B) Defendant’s assertion

In this regard, the defendant asserted that the public report of this case newly established by the plaintiff is not an infrastructure for improvement under the Urban Improvement Act, and the amount equivalent to the cost of installation is not included in the scope of return.

(C) Determination

(1) First of all, Article 65 (2) of the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents who are not the head of a Si/Gun/Gu or a housing project implementer shall be deemed to have the meaning of "infrastructure newly

Article 65(2) of the National Land Planning and Utilization Act provides that an infrastructure for rearrangement newly installed by a project implementer who is not the head of a Si/Gun or a housing construction project shall gratuitously vest in the State or a local government which will manage the infrastructure, and an infrastructure for rearrangement owned by the State or a local government which is ceased to be used due to the implementation of a rearrangement project shall be gratuitously transferred to the project implementer within the extent equivalent to the installation cost of the infrastructure newly installed by the project implementer. Meanwhile, according to subparagraphs 4(c) and (d) of Article 2 of the National Land Planning and Utilization Act and subparagraph 11 of Article 2 of the same Act, an infrastructure for rearrangement and improvement of infrastructure under the National Land Planning Act constitutes an urban management plan under the same Act and a plan for an urban development project or a rearrangement project under the Urban Planning and Utilization Act are included in an urban planning project for the implementation of an urban planning project and a rearrangement project under the same Act, which newly requires the restoration of urban functions under the National Land Planning and Utilization Act or for the efficient improvement of old and inferior buildings, referring to the National Urban Planning and Utilization Act that is newly established within 20.

Therefore, it cannot be deemed that all the land that functions the same as the rearrangement infrastructure, such as roads, etc., is newly constructed by the project implementer, and only the rearrangement infrastructure installed by the urban management plan constitutes the maintenance infrastructure's condition newly established by the project implementer under Article 65 (2) of the Urban Planning Act by the implementation of the rearrangement project.

(2) Although there is no dispute between the parties as to the fact that the road of this case is a road installed by the determination of the urban management plan, there is no evidence to recognize that the public report of this case is a road installed by the determination of the urban management plan [this part corresponding to the public report of this case]. In full view of the entries as prescribed in No. 2-3, No. 18, No. 14-1 through No. 14, No. 16-1, and No. 16-2, the defendant urban planning committee's overall purport of pleading and video, the construction line of this case is set up at two meters after the designation of the building line as a juries and the construction line was set up as a jum for the road of this case, and there was no other resolution that "6 meters between 1 and 3 complexes are built as a jum for the road of this case," the existing construction area of the road of this case shall be deemed to fall under the change of the project plan of this case by the head of the Gu to be established as an existing 26m area of the urban management plan.

(3) Therefore, the instant sales contract is null and void only for the part of the Plaintiff’s sales for the cost of the instant road installation among the public land, and the Defendant is obligated to return the amount equivalent to the cost of the instant road installation out of the sales price received from the Plaintiff as unjust enrichment.

(3) Judgment on the defendant's assertion

(A) The Defendant asserts that the State or the local government to which the delegating agency belongs shall be liable for damages arising from the delegated affairs of the agency. Since the instant sales contract is delegated affairs of the agency, the Defendant is not the subject of the liability for damages arising therefrom.

On the other hand, if the person who appointed and supervised a public official who committed a harmful act in the state liability for damages is different from the person who belongs to the relevant affairs, the State or local government, is liable for damages. However, this case is not liable for damages due to the illegal acts of the State or local government, but is disputing the existence of the obligation to restore the original state or return unjust enrichment due to the invalidation of the sales contract, and the obligation to restore the original state or return unjust enrichment due to the invalidation of the above sales contract, is against the defendant who is the party

(B) Although the Defendant calculated the floor area ratio on the newly constructed roads, etc. on the premise that the Plaintiff would purchase the land for the public use of this case at a cost, and obtained profits from the reduction of the floor area ratio, it would give excessive preference to the Plaintiff if the Plaintiff demanded the transfer of the land for the public use of this case within the extent corresponding to the installation cost of the roads, etc. installed by the Plaintiff. In such a case, it is argued that Article 65(2) of the Urban Improvement Act should not be applied. However, there is no evidence to acknowledge that the roads, etc. newly constructed by the Plaintiff were for the convenience of the Plaintiff’s members, and even if the Plaintiff secured profits by receiving the mitigation of the floor area ratio on the premise that the Plaintiff would purchase the roads, etc. to be disused at a cost, the application of the latter part of Article 65(2) of the Urban Improvement Act shall not be excluded in full view of the legislative intent and legal nature of the latter part of Article 65(2) of the Urban Improvement Act, the principle of reservation of administrative laws

(C) The defendant asserted that the project of this case was jointly implemented by the plaintiff and the building works of this case, and the actual construction of the road was performed by the building works of the building works of the building works, and the plaintiff cannot seek the return of the construction costs. However, the party to the contract of this case is the plaintiff, and the party to the contract of this case is the plaintiff, and the right to seek the return of the purchase price for the return of the purchase price for the return of unjust enrichment resulting therefrom is also the right to seek the return of the purchase price for the construction of the building works.

(3) Sub-determination

The Defendant is obligated to pay to the Plaintiff 472,692,700 won (=455,828,100 won + 16,864,600 won) equivalent to the cost of the instant road out of the purchase price that the Plaintiff received from the Plaintiff pursuant to the instant sales contract, and to pay damages for delay at each rate of 20% per annum under the Civil Act, from December 9, 2004 to November 12, 2009, the date when the Plaintiff paid the purchase price based on the said sales contract to the Defendant, where it is deemed reasonable to dispute about the existence or scope of the Defendant’s obligation to perform, and from the date of the instant judgment, the date when the judgment was rendered, until November 12, 2009, to the date when the payment is made.

C. Determination as to the assertion of declaration of intention by duress

(1) The plaintiff's assertion

The Defendant’s exercise of discretionary power to enter into the instant sales contract with the Plaintiff, and the Plaintiff had no choice but to have entered into the instant sales contract by accepting the Defendant’s conditions to prevent damages due to business delay. Therefore, the instant sales contract should be revoked by coercion.

(2) Determination

However, there is no evidence to prove that the Defendant, at the time of the conclusion of the instant sales contract, notified the Plaintiff of unlawful harm and caused the Plaintiff to feel fear, so the Plaintiff’s assertion that the instant sales contract was concluded by the Defendant’s coercion is without merit.

4. Conclusion

The plaintiff's claim is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. Since part of the judgment of the court of first instance different conclusions are unfair, the judgment of the court of first instance, including the defendant's part of appeal and the defendant's request for extension in the trial after remand, will be modified as above.

Judges Kim Chang-chul (Presiding Judge)