Whether a person liable to pay a contribution under Article 138 of the Local Autonomy Act may be the case where a corporation receives special benefits from the establishment of property or public facilities of the relevant local government with human and physical facilities and continuously running a business (affirmative)

Local Autonomy Act uses the term “resident” as the subject of rights and obligations and as the subject of legal discipline under several provisions. There is no provision specifically defining the concept of “resident” under the Local Autonomy Act. Considering that various systems different from the legislative purpose, requirements, and effects are included, it is difficult to view the Local Autonomy Act as a premise for a single concept of residents. Whether a group, either a natural person or a legal entity, is a resident under the Local Autonomy Act shall be determined individually by taking into account the purpose and characteristics of the system by individual system, the language, contents, and structure of the relevant provisions scattered in the relevant statutes as well as the Local Autonomy Act.

Article 13(2), Article 14, Article 15, Article 16, Article 17, and Article 20 of the Local Autonomy Act provide for the participation right under the Local Autonomy Act or the relevant laws as the participation right (see Article 15 of the Public Official Election Act, Article 5 of the Residents' Voting Act, and Article 3 of the Recall of Elected Officials Act). Thus, it is clear that only natural persons are eligible for participation right over a certain age or resident registration (see Article 15 of the Public Official Election Act, Article 5 of the Residents' Voting Act, and Article 3 of the Recall of Elected Officials Act). Article 12 of the same Act is basically construed as a provision made with the intent to clarify the eligibility of residents to exercise various participation rights, etc. as provided for in Chapter 2. However, property, public facilities, rights to equal benefits, and rights to share expenses as provided for in Article 13(1) and obligations

Considering the purport of the contribution system under Article 138 of the Local Autonomy Act and the relationship with the resident tax system of equal portion, the “resident” who is a person liable to pay contributions under Article 138 of the Local Autonomy Act is basically identical to the “resident” who is a person liable to pay the equal portion of resident tax, but there is only a difference between the “resident,” who is a person liable to pay the local government’s property or public facilities, and where a part of the resident receives special benefits due to the establishment of the local government’s property or public facilities. Therefore, if a corporation has a “place of business” even if there is no principal office or head office within the district of

Article 12 of the Local Autonomy Act provides that “the qualification of a resident” is “the person who has a domicile within the jurisdiction of a local government” but this is mainly a provision that mainly takes into account the participation rights, etc. of natural persons, and the Local Autonomy Act does not have any separate provision regarding the meaning of an address. Article 36 of the Civil Act provides that “the address of a corporation” shall be “the seat of the principal office” and Article 171 of the Commercial Act provides “the address of a company” as “the seat of the principal office” but this provision is a provision that is made in the need to take a certain place as the basis of legal relations in the application of the Civil Act and the Commercial Act. Therefore, regarding the obligation to pay contributions under Article 138 of the Local Autonomy Act, the address of a corporation

Where a corporation receives special benefits from the establishment of a local government's property or public facilities with human and physical facilities and continuously running a business, a corporation may become a person liable to pay a contribution under Article 138 of the Local Autonomy Act. In particular, where it satisfies the requirements for imposing a contribution prescribed by municipal ordinances that specify the contribution system based on Article 138 of the Local Autonomy Act, it shall be liable to pay a contribution in accordance with the municipal ordinances, except in extenuating circumstances, such as double imposition of

Articles 12, 13, 14, 15, 16, 17, 20, 21, 22, 135, 138, 139(1), and 74 subparag. 4, and 75(1) of the former Local Tax Act (Amended by Act No. 17769, Dec. 29, 2020);

Korea Land and Housing Corporation (Law Firm LLC, Attorneys transferred to others)

Jinju Mayor (Law Firm Geum River, Attorneys Go-gu et al., Counsel for the plaintiff-appellant)

Busan High Court (Chowon) Decision 2016Nu10278 decided June 22, 2016

The judgment below is reversed, and the case is remanded to Busan High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Case overview and key issue

A. According to the reasoning of the lower judgment and the record, the following circumstances are revealed.

(1) On March 19, 2007, the Minister of Construction and Transportation: (a) designated on March 19, 2007, the Plaintiff, the Jinju-si, and the Gyeongnam-do Development Project as a joint project implementer, who is a member of the Jinnam-do Development Project, as a district for the development of the

(2) The Plaintiff applied for water supply construction works to the Defendant during the process of implementing the said innovation city development project and implementing a new construction project for apartments in A-1, A-4, and A-5. The Defendant issued the instant disposition that imposes water supply facility contributions (hereinafter “instant facility contributions”) on the Plaintiff on three occasions from August 5, 2013 to May 20, 2014 pursuant to Article 138 and Article 139(1) of the Local Autonomy Act (amended by Ordinance No. 1271, Jul. 13, 2016; hereinafter “instant Ordinance”).

(3) Meanwhile, on April 30, 2015, the Plaintiff had a principal office in Sung-nam-si ( Address 1 omitted). On the other hand, on April 30, 2015, the Plaintiff transferred to Jin-si ( Address 2 omitted).

B. The key issue is whether the Plaintiff, who did not have the main office or main office at the time of the instant disposition, can be the subject of the obligation to pay contributions under Article 138 of the Local Autonomy Act.

2. Persons liable to pay allotted charges under Article 138 of the Local Autonomy Act;

A. Relevant provisions and legal principles of the Local Autonomy Act

(1) According to the Local Autonomy Act, when a municipal ordinance prescribes matters concerning the restriction on the rights of residents or the imposition of obligations, a statutory delegation is required (proviso of Article 22). A local government may collect contributions from a person benefiting from a part of “resident” due to the establishment of its property or public facilities within the scope of benefits therefrom (Article 138), and matters concerning the collection of contributions (Article 139(1)). Article 14 of the instant municipal ordinance stipulating the collection of facility contributions is based on delegation of Article 138 and Article 139(1) of the Local Autonomy Act, and thus, a person liable to pay the facility contributions of this case must be a “resident” of the relevant local government.

(2) The Local Autonomy Act uses the term “resident” as the subject of rights and obligations and as the subject of legal discipline under several provisions. There is no provision specifically defining the concept of “resident” under the Local Autonomy Act. Considering that various systems different from the legislative purpose, requirements, and effects are included, it is difficult to deem the Local Autonomy Act as a premise for a single concept of residents. Whether a group of natural persons or juristic persons is a resident under the Local Autonomy Act shall be determined individually by taking into account the purpose and characteristics of the system by individual system, the language, contents, and system of the relevant provisions scattered in the relevant statutes as well as the Local Autonomy Act.

(3) There are ten chapters of the Local Autonomy Act. Of them, Chapter II provides for various rights of participation and obligations of residents as the title "resident." Article 12 of the first location in Chapter II provides that "any person having an address within the jurisdiction of a local government shall be a resident of the local government," and Article 13(1) provides that "The person having an address within the jurisdiction of the local government shall be a resident of the local government," and Article 13(1) provides that "The person having a right to use the property or public facilities of the local government, the right to equal benefits from the local government, the right to participate in local elections under Article 13(2), the right to participate in local elections under Article 14, the right to participate in the enactment or amendment of municipal ordinances under Article 16, the right to request residents to file a lawsuit from residents under Article 17, and the right to request recall of residents under Article 20, and finally, Article 21 provides that "a resident shall have the obligation to share expenses of the local government to which he/she belongs, as prescribed

Article 13(2), Article 14, Article 15, Article 16, Article 17, and Article 20 of the Local Autonomy Act provide for the participation right under the Local Autonomy Act or the relevant laws as the participation right (see Article 15 of the Public Official Election Act, Article 5 of the Residents' Voting Act, and Article 3 of the Recall of Elected Officials Act). It is clear that only natural persons are eligible for participation right over a certain age or resident registration (see Article 15 of the Public Official Election Act, Article 5 of the Residents' Voting Act, and Article 3 of the Recall of Elected Officials Act). Article 12 of the same Act is basically construed as a provision made with the intent to clarify the eligibility of residents to exercise various participation rights, etc. as prescribed in Chapter 2. However, property or public facility rights under Article 13(1), rights to receive equal benefits, and the cost-sharing of expenses under Article 21 cannot be deemed as

(4) Article 138 of the Local Autonomy Act provides, “A local government may collect a certain amount of contribution from a person benefiting from the establishment of a local government’s property or public facility within the scope of profit therefrom,” which is part of the part of Chapter VII of the Local Autonomy Act. A share of contribution pursuant to Article 138 of the Local Autonomy Act is given to the residents benefiting from the property of the local government and the installation of public facilities within the scope of profit therefrom, by allowing the residents benefiting from the property or public facilities within the scope of profit.”

Meanwhile, Article 135 of the Local Autonomy Act provides that “Local governments may impose and collect local taxes as prescribed by Acts.” Of the items of local tax, “resident tax” is one of the items of local tax so that local governments may share the burden of expenses necessary for providing administrative services to residents, and residents may share the burden widely by taking advantage of the local government’s administrative services. Resident tax is divided into equal portion, pro rata property portion, and pro rata employee portion. Resident tax is divided into equal portion, pro rata property portion, and pro rata employee portion. It constitutes a minimum basic membership fee to be paid to the local government to which they belong as members of the local government, which is a local government’s member qualification (see Constitutional Court en banc Decision 2004Hun-Ga22, Oct. 27, 2005). Article 135 of the former Local Tax Act (amended by Act No. 17769, Dec. 29, 202) provides that a local government liable to pay equal portion of resident tax is an individual, a business office, a local government, or a place of business (Article 74).

Considering the purport of the contribution system under Article 138 of the Local Autonomy Act and the relationship with the resident tax system of equal portion, the “resident” who is a person liable to pay the contribution under Article 138 of the Local Autonomy Act is basically the same as the “resident” who is a person liable to pay the equal portion of resident tax; Provided, That in cases of a juristic person, even if there is no principal office or head office within the jurisdiction of the relevant local government, if there is a “place of business”, the said juristic person constitutes “resident” who is a person liable to pay the contribution under Article 138 of the Local Autonomy Act, who is a person liable to pay the contribution.

(5) Article 12 of the Local Autonomy Act provides that “a person having a domicile within the jurisdiction of a local government” as “a person having a domicile within the jurisdiction of a local government,” but this is mainly a provision made in mind with respect to the right to participate of natural persons, etc., and the Local Autonomy Act does not have any separate provision regarding the meaning of an address. Article 36 of the Civil Act provides that “the address of a corporation” shall be “the location of the principal office,” and Article 171 of the Commercial Act provides “the address of a company” as “the location of the principal office,” but the said provision is established in the application of the Civil Act and the Commercial Act as the standard of legal relations. Therefore, regarding the obligation to pay contributions under Article 138 of the Local Autonomy Act, the address of a corporation shall not

Where a certain local government receives special benefits from the establishment of a local government’s property or public facilities with human and material facilities and continuously running a business, it shall be deemed that a local government is liable to pay contributions pursuant to Article 138 of the Local Autonomy Act. In particular, where a local government satisfies the requirements for imposing contributions prescribed by municipal ordinances that specify the system of contributions based on Article 138 of the Local Autonomy Act, it shall be deemed that the local government is liable to pay contributions in accordance with the municipal ordinances, barring special circumstances,

B. Examining the above facts in light of the aforementioned legal principles, since the Plaintiff was equipped with human and physical facilities in the process of implementing an innovative city development project and a construction project that newly constructs an apartment in a part of a part of the innovative city development project throughout several years, it may be deemed that the Plaintiff was a resident having the address at the time, and that the Plaintiff was a resident having the address at the time. If the project district created by the Plaintiff and the individual building constructed by the Plaintiff could have been supplied with water supply from the facilities at the time of the Jinju, it is reasonable to deem that the Plaintiff received special benefits from the installation of the facilities at Jinju-si by selling the project district in which water supply is supplied and the individual

However, the lower court determined that the instant disposition, on a different premise, violated Article 138 of the Local Autonomy Act, the mother of the instant Municipal Ordinance, and was unlawful, since the Plaintiff is not a resident of the Jin-si, but is not a person who receives special benefits from existing waterworks. The lower court erred by misapprehending the legal doctrine on Article 138 of the Local Autonomy Act without exhausting all necessary deliberations. The allegation contained in the grounds of appeal on this point is with merit.

3. Conclusion

The Defendant’s appeal is with merit, and the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Dong-won (Presiding Justice)