[1] Whether a “resolution of a general meeting” under Articles 24(3)5 and 85 subparag. 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents refers to a prior resolution (affirmative in principle), and where a “contract to become a partner other than those stipulated in the budget” is entered into, a prior resolution of the general meeting shall be required

[2] The case affirming the judgment below which found an executive of a housing redevelopment association guilty of violating the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents that he arbitrarily promoted a contract for commercial interior works without a resolution of the general meeting of the association members

[3] The case holding that where a "auditor" who is not an executive officer of a housing redevelopment association commits a violation of Article 85 subparagraph 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents in collaboration with an executive officer of a business performance, he may be punished

[1] Article 24 (3) 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 944 of Feb. 6, 2009) provides that "a contract which becomes a partner's burden, other than the matters stipulated in the budget, shall be decided by the general meeting as the subject of a resolution." The purpose of Article 85 (3) 5 of the same Act is to provide procedural guarantee for the association members to reflect their intent as it directly affects the rights and obligations of the union members. For this purpose, it is interpreted that Article 85 (5) 5 of the same Act provides a penal provision. It is difficult to recover in cases where a contract is concluded and implemented without a prior resolution of the general meeting, as well as to cause confusion in legal relations, and such situation may interfere with the free decision-making of the union members. Therefore, if an officer of the general meeting concludes a contract other than the matters stipulated in the budget without a prior resolution of the general meeting, it is difficult to conclude that it violates Article 85 (5).

[2] The case affirming the judgment below which found an executive of a housing redevelopment association guilty of violating the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 9444 of Feb. 6, 2009) that he/she arbitrarily promoted a contract for a commercial interior work without a resolution of the general meeting of the association members.

[3] The case holding that where a "auditor", who is not an executive officer of the Housing Redevelopment Cooperatives, committed a violation of Article 85 subparagraph 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 9444 of Feb. 6, 2009), jointly with an executive officer of the performance of duties, he may be punished as a joint principal

[1] Article 24 (3) 5 and Article 85 subparagraph 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 944 of Feb. 6, 2009) / [2] Article 24 (3) 5 and Article 85 subparagraph 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 9444 of Feb. 6, 2009) / [3] Article 30 of the Criminal Act; Article 24 (3) 5 and Article 85 subparagraph 5 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 9444 of Feb. 6, 2009)

[1] Supreme Court Decision 2005Do8426 decided Jan. 10, 2008 (Gong2008Sang, 249)

Defendant 1 and two others

Defendants

Law Firm Mau, Attorneys Kim Tae-tae et al.

Seoul Central District Court Decision 2009No2861 Decided November 27, 2009

All appeals are dismissed.

The grounds of appeal are examined.

1. Ground of appeal Nos. 1 and 2

Article 24(3) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 9444 of Feb. 6, 2009; hereinafter “former Act”) provides for matters to be resolved at a general meeting, and Article 24(3)5 of the same Act provides that “a contract that imposes a burden on union members, other than those stipulated in the budget,” and Article 85 subparag. 5 of the same Act provides that “any executive of a union that voluntarily promotes the projects under each subparagraph of Article 24(3) without going through a resolution of the general meeting under Article 24 shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 20 million won.” Article 25(2) of the same Act and Article 35 subparag. 1 of the Enforcement Decree of the same Act provide that the board of representatives may act on behalf of the general meeting, except for matters under Article 24(3)1, 2, 5 through 7 and 10.

Article 24 (3) 5 of the former Act provides that "a contract that becomes a partner of an association, other than the matters stipulated in the budget, shall be deemed as a matter of resolution by a general meeting." The purpose of Article 24 (3) 5 of the same Act is to provide procedural guarantee for the association members to reflect their intent, as it directly affects the rights and obligations of the association members, and to this end, it is interpreted as having a penal provision under Article 85 subparagraph 5 of the same Act. In light of the fact that where a contract is concluded and implemented without a prior resolution of a general meeting, it is difficult to recover legal relations, and such situation may cause confusion in the association members' free decision-making, and this situation may interfere with the association members' free decision-making, the "resolution by a general meeting" under Article 85 subparagraph 5 of the same Act means a prior resolution. Therefore, if an executive officer of the association concluded a contract that becomes a partner of the association without a prior resolution of the general meeting, it shall be deemed as a crime committed in violation of Article 85 subparagraph 5 of the former Act.

In the same purport, it is justified that the court below found the defendant guilty of the facts charged of this case that the contract for the instant commercial building construction without the resolution of the general meeting of the association members was concluded without the resolution of the general meeting of the association members and arbitrarily promoted the contract to become a partner other than the matters stipulated in the budget without the resolution of the general meeting of the association members.

2. Ground of appeal No. 3

An auditor of a cooperative may be punished as a joint principal offender when he/she commits a crime in violation of Article 85 subparagraph 5 of the former Act in common with an executive officer in charge of duties and an executive officer in charge of duties.

In the same purport, the court below found Defendant 3 guilty, and thus the ground of appeal disputing this point is not acceptable.

3. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)