Committee for Recommendation of Opening Director of a School Foundation and four others (Law Firm Won et al., Counsel for the plaintiff-appellant)

The Minister of Education, Science and Technology (Attorney Nam-soo)

Defendant 1 and three others (Attorney Kim Chang-sik, Counsel for the defendant-appellant)

May 23, 2012

Seoul Administrative Court Decision 2010Guhap44085, 2011Guhap1891 (Consolidated) Decided October 21, 2011

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal, including the part arising from the supplementary participation, shall be borne by the Plaintiffs.

The first instance judgment is revoked. On August 30, 2010, the Defendant appointed the Defendant’s Intervenor 1, the Defendant’s Intervenor 2, the Defendant’s Intervenor 3, Nonparty 1, Nonparty 2, Nonparty 3, and Nonparty 4 as a director of a private teaching institute in the branch of a school foundation, Nonparty 6 as a temporary director, and revoked the disposition of appointing the Defendant’s Intervenor 4 as a director on January 10, 201.

1. Details of the disposition;

A private teaching institute is a juristic person that establishes and operates a common teaching institute. The Minister of Education, a telegraphic body of the Defendant, was bound by Nonparty 7, who was a director of the common teaching institute, for illegal admission and the receipt of money and valuables related thereto, on June 4, 1993, after cancelling the approval for the appointment of directors of the common teaching institute and appointing temporary directors, the private teaching institute was operated by temporary directors.

On August 30, 2010, the defendant appointed seven directors of private school (the defendant defendant 1, the defendant 2, the defendant 3, the defendant 1, the defendant 2, the defendant 3, the non-party 3, and the non-party 4) and one temporary director (the non-party 6) based on Article 25-3 (1) of the Private School Act (hereinafter referred to as the "Mediation Committee"), and appointed the defendant 4 as a director on January 10, 201 (hereinafter referred to as the "disposition of this case").

[Ground for recognition] Unsatisfy

2. Whether the lawsuit of this case is lawful

A. Legal principles as to standing to sue

With respect to the revocation of the instant disposition of appointing directors by the instant lawsuit, the Defendant asserted that the Plaintiffs did not have standing to sue.

A lawsuit seeking revocation of an administrative disposition may be instituted by a person who has a legal interest to seek revocation of the disposition (Article 12 of the Administrative Litigation Act). Here, legal interest refers to a case where there are individual, direct, and specific interests protected by the relevant laws and regulations or relevant laws and regulations, and does not include cases where general, indirect, and abstract interests are generated by the general public as a result of the protection of public interest (see, e.g., Supreme Court en banc Decision 2006Du330, Mar. 16, 2006). Accordingly, it is examined whether there is a legal interest to seek revocation of the disposition of this case against

B. Common part to the plaintiffs

1) Legal interest as an interested person under the Private School Act

A) Article 9-6(3) of the Enforcement Decree of the Private School Act

(1) The plaintiffs' assertion

Article 9-6(3) of the Enforcement Decree of the Private School Act provides that when the mediation committee deliberates on the appointment of directors, the committee shall hear the opinions of interested parties, such as executives and employees of the school. Therefore, the plaintiffs who are interested parties should be deemed to have legal interests protected by the relevant laws and regulations or relevant laws and regulations.

(2) Determination

B. The current Private School Act amended on July 27, 2007 has a provision that “If it is deemed necessary for deliberation, it may hear opinions from the relevant school juristic person, executives, employees of the relevant school juristic person, other interested parties, etc.” (Article 25-3). However, the current Private School Act amended on July 27, 2007 has a provision that “If it is deemed necessary for deliberation, it may hear opinions from the relevant school juristic person, executives, employees of the relevant school, other interested parties, etc.” (Article 9-6(3) of the Enforcement Decree of the same Act).

In light of such legislative history, the text of the enforcement decree, and the form thereof, it is reasonable to view that the procedure of hearing opinions from interested parties is not an essential procedure for deliberation, but an arbitrary procedure entrusted to the wide range of discretion of the Mediation Committee. Therefore, even if the Mediation Committee did not undergo such a procedure, the deliberation procedure cannot be deemed unlawful solely on such circumstance. In this sense, this provision does not seem to protect any individual, direct, and specific interests of interested parties, such as the right to state opinions. Therefore, it cannot be deemed that the Plaintiffs have a legal interest to seek revocation of the instant disposition of appointing directors, which was conducted through deliberation by the Mediation Committee solely on the ground that they constitute interested parties under this provision. This part of the Plaintiffs’ assertion is rejected.

B) Article 25(1) of the Private School Act

(1) The plaintiffs' assertion

Since the plaintiffs are interested parties under Article 25(1) of the Private School Act, they have the right to claim the cancellation of the disposition of appointing directors of this case, if there is no legal interest to seek the cancellation of the disposition of appointing directors of this case, the plaintiffs' right to claim the dismissal of temporary directors of this case is infringed, and furthermore

(2) Determination

The Defendant’s instant disposition of appointing a director is made after the temporary director is dismissed after deliberation by the Mediation Committee when it is recognized that the grounds for appointing a director have ceased to exist. Therefore, since the provisional director was already dismissed at the time of the Defendant’s instant disposition of appointing a director, it cannot be deemed that the Plaintiffs’ claim for dismissing a director is violated by the previous disposition of appointing a director. Furthermore, as long as viewed so, there is no room for infringement of the Plaintiffs’ claim for a trial. This part of the assertion is unacceptable

(ii) legal interest based on the Framework Act on Education and the Constitution.

A) The plaintiffs' assertion

The Framework Act on Education guarantees the right to learn to students (Article 3), guarantees the autonomy and expertise of education to teachers (Article 5(1)), recognizes the right to participate in school operation by school personnel, students, parents, and local residents (Article 5(2)), and stipulates that schools have public nature (Article 9(2)). In addition, these provisions aim to protect individual, direct, and specific interests by professors, employees, students, alumni associations, etc., such as the Plaintiffs. In addition, universities, professors, and professors’ associations are the entities of university autonomy guaranteed by the Constitution. Accordingly, the Plaintiffs have standing to seek revocation of the instant disposition of appointment of directors.

B) Determination

The instant disposition pertains to the appointment of directors operating the school foundation. However, the right claimed by the Plaintiffs is not related to the operation of the school foundation, not to the operation of the school foundation, but to the freedom of learning. Accordingly, it cannot be deemed that the above rights or interests of the Plaintiffs are infringed upon due to the appointment of directors operating the school foundation, and even if there is a possibility of infringement, it may be an indirect part of it (the Plaintiff did not assert any assertion as to what specifically affects the status or rights of the Plaintiff by the Defendant’s instant disposition of the appointment of directors or what status or rights are infringed).

In addition, the plaintiffs also claim the public nature of private school, but the general, indirect, and abstract benefits acquired as a result of the protection of public interest cannot be the legal interest.

In this respect, the above provisions alone cannot be deemed to have individual, direct, and specific interests seeking the cancellation of the instant disposition of appointing directors. This part of the assertion is rejected.

3) Legal interest in comparison with the previous directors

A) The plaintiffs' assertion

It is recognized that there is a legal interest in dispute over the appointment of directors as the former director immediately before a temporary director is appointed. The need to recognize such legal interest as the former director is the same as the plaintiffs who are school members. Furthermore, if the defendant's disposition of appointing directors is more favorable to the former director, it cannot be expected that the former director will dispute it. Therefore, even in light of these circumstances, the standing to sue should be recognized for school members such as the plaintiffs.

B) Determination

As a kind of an incorporated foundation established for the purpose of establishing and operating a private school, it is necessary to respect the founder’s intent at the time of its establishment, i.e., the purpose of its establishment. Since such a school foundation’s establishment is realized by the first director, who is a natural person constituting the decision-making body and the decision-making body, and then, the founder’s appointment of a director in the following manner: (a) the latter director’s appointment of a director in the manner in which the latter director is appointed; and (b) the latter director’s appointment of a director in the manner in which the latter director is appointed, thereby enabling the school foundation to realize the purpose of its establishment in a prompt manner. In this regard, the freedom of private school under the Constitution recognized as a school foundation is in a relationship with each other successively selected and appointed, the former director can be deemed to be a person who is the most closely adjacent to the duties of securing the independence and identity of the ordinary school foundation. Accordingly, the former director of the school foundation immediately before the appointment of a temporary director can be deemed to have a direct interest in the establishment purpose (see Supreme Court en banc Decision 2007.

However, the plaintiffs who are members of a school and do not have a position to directly participate in the operation of the school foundation cannot be deemed to have the same status as above of the previous directors in relation to the appointment of directors. Therefore, the plaintiffs who are school members cannot be deemed to have a legal interest in the appointment of directors corresponding to the previous directors.

Furthermore, an officer of a school foundation who is originally appointed by the board of directors as prescribed by the articles of association and takes office with the approval of the competent agency (Article 20(1) and (2) of the Private School Act). In such a case, it is difficult to find a ground to view that school members such as the plaintiffs have legal interest in seeking nullification or revocation of the appointment of an officer at the board of directors or the approval disposition by the competent agency. If there is no legal interest in dispute as to the appointment of an officer at the school foundation or the approval disposition by the competent agency, it shall be deemed that there is no legal interest in dispute as to the appointment disposition by the competent agency, unless otherwise provided in other Acts and subordinate statutes. The disposition to appoint a director at the competent agency is a relationship between the previous directors of the school foundation and the temporary directors of the school foundation, which are all dismissed and operated by the temporary directors, and thus, the appointment of a director at the competent agency is merely an appointment of a director on behalf of the competent agency, and it cannot be deemed that there is no need to dispute the new appointment or appointment of a director at the school foundation committee.

C. 3) Open Director Recommendation Committee of Plaintiff Educational Foundation

1) Plaintiff Open Director Recommendation Board

According to Article 22 of the articles of incorporation of a common teaching institute, three of the nine directors of a common teaching institute shall be an open director, and its open director shall be appointed from among those recommended by the Plaintiff Open Director. As such, the Plaintiff Open Director Recommendation Committee has the right to recommend an open director, there is a legal interest in dispute as to the instant disposition of appointment of a director.

2) Determination

In light of the following circumstances, in cases where a temporary director is dismissed and a director is appointed by the competent agency due to the removal of the grounds for appointment of the temporary director, the provisions of the articles of incorporation of the Private School or the Commercial School shall not apply to the appointment of more than a certain number of the directors from among the persons recommended by the Open Director Recommendation Committee. Therefore, the provisions on the recommendation for appointment of open directors cannot be the basis of the Defendant’s disposition for appointment of directors or relevant laws and regulations, and so long, there is no room for infringement on the Defendant’s right to recommend open directors from the Open Director Recommendation Committee due to the instant

(1) When an educational foundation appoints directors, the Private School Act provides that at least 1/4 of the fixed number of directors shall be appointed from among persons recommended by the Open Director Recommendation Committee (Article 14; hereinafter referred to as the "Open Director System"), but no such provision shall apply where a temporary director is dismissed and a director is appointed by the competent agency (Article 25-3(1)).

② Under Article 14 of the Private School Act prior to the amendment, an open director system was also set up in the Private School Act, and on the other hand, the same provision was deleted in the current Private School Act amended on July 27, 2007, where the competent authorities dismiss temporary directors and appoint directors, at least 1/3 of the directors as recommended by the school operating committee or the board of trustees’ council (Article 25-3(3)).

③ The purpose of introducing the open director system lies in enhancing democracy, transparency and public nature in the operation of school juristic persons by resolving problems that may arise if only a director of school juristic person is composed. However, under the Private School Act prior to the amendment, in a case where a director is dismissed and appointed by the competent agency, it is necessary to make the open director system even in a case where a director is appointed by the competent agency because the above procedures are not prepared for securing democracy, transparency and public nature. However, under the current Private School Act, the current provisions on the open director system should be deliberated by the Mediation Committee comprised of neutral members with highly professional knowledge recommended by the President, the Speaker of the National Assembly, and the Chief Justice of the Supreme Court. Accordingly, under the current Private School Act, it seems that the current provisions on the open director system should be deleted as seen earlier.

④ Plaintiff Recommending the purport that the competent authority should apply the provision on recommendation of open directors when appointing a director under the Private School Act. However, insofar as the provision on open directors is not applicable when appointing a director by the competent authority under the Private School Act, it is reasonable to deem that the provision on appointment of an open director under the articles of incorporation, which is a subordinate norm, does not apply likewise.

3. Conclusion

Since the plaintiffs' legal interest in dispute over the appointment of directors is not recognized due to the lawsuit of this case, the lawsuit of this case is unlawful. The judgment of the court of first instance with the same purport is just and the plaintiffs' appeal is without merit. The plaintiffs' appeal is dismissed

[Attachment-Related Acts and subordinate statutes omitted]

Judges Ansan-jin (Presiding Judge)

Note 1) Prior to the amendment by Act No. 8545 of July 27, 2007 (hereinafter “former Private School Act”).

2) The Supreme Court held that, inasmuch as a professor does not recognize the right to appoint a president or his/her right to participate in the act of appointing a president of a school juristic person in law or the articles of incorporation of the relevant juristic person, etc., it cannot be deemed that a professor is in a position to substantially participate in the appointment of a president of a private university or has a benefit of confirmation as to the act of appointing a president of a school juristic person (see Supreme Court Decision 95Da26971, May 31, 1996).

Note 3) The Open Director Recommendation Board is hereinafter referred to as the “Open Director Recommendation Board.”