E.S.P (Law Firm Apex, Attorneys Kim Woo et al., Counsel for the plaintiff-appellant)

The head of Gangnam-gu Seoul Metropolitan Government (Attorney Lee Sung-soo)

November 20, 2014

1. On December 27, 2012, the part exceeding 6,067,029,60 won among the disposition imposing waste disposal charges of KRW 10,663,408,490 against the Plaintiff is revoked.

2. The plaintiff's remaining claims are dismissed.

3. Of the litigation costs, 40% is borne by the Plaintiff, and the remainder is borne by the Defendant, respectively.

The Defendant’s disposition of imposition of waste disposal charges of KRW 10,63,408,490 against the Plaintiff on December 27, 2012, which exceeds KRW 3,112,717,982, shall be revoked.

1. Details of the disposition;

A. Status of the parties

The Plaintiff is a project implementer that is implementing the project for the construction of Bogeumjari Housing 2 in the Gangnam-gu Seoul Special Act on the Construction of Bogeumjari Housing, etc. (hereinafter referred to as the “instant project”) in the area of 70,819 square meters in the Seoul Special Metropolitan City, Seo-dong, Seo-dong, and Hodong-dong Seoul Special Metropolitan City.

(b) Details of imposing charges for waste disposal facilities;

1) Obligation to pay waste disposal facility charges

The area of the instant project district is not less than 300,00 square meters, and the Plaintiff is obligated to install waste disposal facilities or pay an amount equivalent to the installation cost of waste disposal facilities (hereinafter “waste disposal charges”) to the head of the local government in order to treat wastes generated in the said project district pursuant to Article 6(1) of the Act on Promotion of Installation of Waste Disposal Facilities and Support for Adjacent Areas

(ii) Submission of a payment plan for waste disposal facilities;

On December 5, 2011, the Plaintiff submitted a plan for the payment of waste disposal charges to the Defendant on December 5, 201, with the payment of waste disposal charges without installing waste disposal facilities in the instant business district.

3) Circumstances of the relevant case

A) Meanwhile, on February 18, 2011, the Korea Land and Housing Corporation, which is a project implementer implementing the Housing Construction Project (hereinafter “related project district”) in the Gangnam-gu Seoul Metropolitan Government Sejongdong, Gidong, and Seodong-dong, 940,677 square meters, submitted a plan for the payment of charges for waste disposal facilities related to the relevant project district to the Defendant on February 18, 201. The Defendant, who is the authority imposing waste disposal charges, calculated the “total amount of waste generated per day in Gangseo-gu, Gangnam-gu, Seoul, by dividing the “total amount of waste generated per day” into the “total number of population in Gangnam-gu” and the “amount of waste generated per day in the relevant project district” by multiplying the “amount of waste generated in the relevant project district” by the “amount of waste generated per day” and the planned number of population in the relevant project district. On May 27, 2011, the Defendant imposed charges of KRW 19,178,697,606.

B) The Korea Land and Housing Corporation filed a lawsuit against the Defendant seeking the revocation of the imposition of the above charges (Seoul Administrative Court Decision 201Guhap27704), and on November 15, 2012, the above court rendered a judgment revoking the imposition of the above charges entirely on the ground that “The Defendant’s method of calculating the amount of waste generated by an average source of waste generated in the Gangnam-gu Seoul Special Metropolitan City may not be deemed an appropriate estimate of the amount of waste generated in the relevant business district because it caused an excessive estimate of the amount of waste generated in the relevant business district, and thus, its objective rationality cannot be acknowledged. Therefore, the initial disposition of this case was in violation of the presumption of the amount of waste generated in the relevant business district by selecting the Gangnam-gu as a sample group as a whole and by estimating the amount of waste generated within the relevant business district.” The above judgment was finalized on December 7, 2012.

4) Disposition of imposing waste disposal charges on the Plaintiff

A) After the judgment on the above related case became final and conclusive, the Defendant calculated the “amount of daily waste generation per day in Gangnam-gu by multiplying the “amount of daily waste generation per person in the Gangnam-gu by the total number of population in the Gangnam-gu by the total number of population in the Gangnam-gu,” excluding the “amount of daily waste generation” in the total amount of daily waste generation of all the Gangnam-gu as a whole (i.e., the amount of daily waste generated in the instant project district)” and notified the Plaintiff of the scheduled amount of payment of waste disposal charges (11,560,000,000 as a temporary payment) on December 12, 2012.

B) On December 27, 2012, the Plaintiff filed an objection against the notification of the said scheduled payment details. However, on December 27, 2012, the Defendant imposed the Plaintiff a charge of waste disposal facilities of KRW 10,663,40 [1,067,029,00 for land purchase + KRW 4,560,337,740 for land purchase + food disposal facilities of KRW 1,506,691,80 for food disposal facilities + KRW 4,596,378,891 for the installation of facilities (= KRW 3,187,851,60 for incineration facilities + KRW 1,408,527,291 for food disposal facilities] (hereinafter “instant disposition”).

[Reasons for Recognition] Each entry of Gap evidence Nos. 1, 2, 4 and Eul evidence Nos. 5 and 6 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings without dispute

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Illegality of a method of calculating a daily estimated volume of wastes

The Defendant calculated the daily volume of wastes expected to have occurred in the instant project district based on the volume of wastes “the current status of the generation and disposal of nationwide wastes,” which is statistical data, and the volume of wastes expected to have occurred in Gangnam-gu as a sample group. ① The aforementioned “the current status of the generation and disposal of domestic and non-family wastes across the 2010 nationwide” is to calculate the volume of wastes discharged in the instant project district based on the volume of waste disposal facilities, and it is not practically impossible to classify the volume of wastes generated in the instant project district as well as the statistics that functioned to the variables such as the current population in various sources of generation, such as multi-use facilities, street waste, offices, stores, restaurants, etc., which are inappropriate in terms of the volume of wastes generated in the instant project district. ② Even if the volume of wastes anticipated to have occurred in the instant project district is calculated based on the “the current status of the generation and disposal of national wastes,” even if there are a mixture of large commercial facilities and amusement facilities in Gangnam-gu, and thus, many wastes are generated.

2) Illegality in the calculation of land purchase costs

① According to the Defendant’s calculation formula of land purchase cost, as long as the daily estimated waste volume is excessively calculated as above, it is inevitable to compute land purchase cost excessively due to an increase in the area of the facility site.

(2) The Gangnam-gu Seoul Metropolitan Government Ordinance on the Collection of Expenses for Installation of Waste Disposal Facilities and the Establishment and Operation of Funds (hereinafter referred to as the "Ordinance of this case") did not have any provision on the definition of the development cost, which serves as the basis for the unit price of site purchase, the Defendant calculated the development cost by dividing the total project cost, including direct personnel expenses, sales expenses, general management expenses, infrastructure installation expenses, capital expenses, etc. which are difficult to be considered as the costs

3) Illegality of calculating installation costs

① According to the Defendant’s formula for calculating installation costs of facilities, insofar as the daily volume of wastes expected to occur is excessively calculated as above, the excessive installation costs of facilities are to be calculated.

② According to the instant ordinances, the cost of installing combustible general waste installation costs and food disposal facilities shall be calculated by multiplying the estimated daily waste volume by 1.3 and the unit price per ton. The unit price per ton shall be based on the “average installation cost per ton of facilities in the Seoul metropolitan area, which is scheduled to be completed or completed in the relevant year,” but the cost of installing two facilities as average ton of the facilities completed in the recent five years, among facilities installed within the relevant year, shall be applied in the absence of any facilities scheduled to be completed or completed in the relevant year. However, the pertinent year refers to the year when the instant disposition was taken, and the part of the facility installation cost in the instant disposition based on the year when a payment plan was submitted is unlawful as it violates the instant ordinances.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Facts of recognition

1) Method of calculating the Defendant’s charges

A) Estimated volume of waste generated per day in the instant project district

In calculating the “amount of daily wastes expected to have occurred in the project district of this case”, the Defendant selected Gangnam-gu as a sample group based on the “2010 national waste generation and disposal status,” which is the statistical data published by the Ministry of Environment (Provided, That as seen above, the amount of daily waste generated in the place of business, excluding wastes generated in the place of business),” and calculated by multiplying the “amount of daily daily waste generated in the Gangnam-gu, Gangnam-gu, by the “amount of daily waste generated in the area of this case” calculated by dividing the “amount of daily waste generated in the area of this case by the total number of population of Gangnam-gu, Gangnam-gu, by the “amount of maximum change coefficient 1.3” and then multiplying by the “number of population planned in the project district of this case.” The daily waste generated in the project district of this case calculated through the following formula is 7.3 tons of general wastes

Quantities of wastes expected to occur per day in the main sentence = Quantity of daily living wastes generated per Gangnam-gu per person (amount of daily living wastes generated in Gangnam-gu / Total number of population in Gangnam-gu) ¡¿ the planned number of population in the project district of this case ¡¿ maximum change coefficient.

The daily amount of daily waste generated (wlo/day) per Gangnam-gu population (mme/day) of Gangnam-gu (mme/day) per head of Gangnam-gu (mme/day) shall be 274,90 570,900 570,095 11,650 37, 37, 259,50 259,50 259,50 0.55 6.891

B)Calculation of land purchase costs

Article 4(3) of the Enforcement Decree of the Act and Article 6(2)3 of the Ordinance of this case multiplied by the area of a site necessary for the “waste anticipated to have occurred per day” calculated as above (200 square meters in the case of incineration facilities per ton of wastes, and 70 square meters in the case of food disposal facilities). In other words, the Defendant calculated the cost of purchase of a site by the method of multiplying the housing site development cost in the instant project district by 3,123,519 square meters (i.e., project cost 1,024,222,594,00 square meters in the project cost ± 387,544 square meters in the area to be supplied for compensation.

Land purchase expenses for each facility included in the main sentence = volume of waste expected to accrue per day ¡¿ Area of site per ton ¡¿ Expenses for purchasing a site per square meter;

6.891 70 3,123,519 4,560,37,740 food disposal facilities 6.891 70 3,123,519 1,506,691,860 in total 6,067,067,029,60 in the cost of purchasing a site for the cost of purchasing a site, which is a site for each day of the volume of wastes (ton/metric) generated on a day classified in the main sentence of the Table contained in the main sentence.

C) Calculation of installation costs

(1) The Defendant calculated the installation cost by multiplying the installation cost of incineration facilities and food disposal facilities based on the “amount of daily waste anticipated to occur” calculated pursuant to Article 4(3) and (4) of the Enforcement Decree of the Act, and Articles 7(3) and 6(1) of the instant Ordinance by the average amount of waste generated per day.

Installation expenses for each facility included in the main sentence = Quantity of wastes expected to accrue per day ¡¿ average installation expenses for each ton.

Expenses incurred in installing (ton/day) average quantity of wastes expected to arise per day from the table classification contained in the main sentence (in total), 7.36,692,00,187,851,60 food treatment facilities 6.891 204,401,401,400 1,408,527,291 total sum 4,596,378,891

(2) Meanwhile, in calculating the average installation cost, the Defendant calculated the average installation cost of waste disposal facilities as completed in 2011 on the basis of the year 2011, which was submitted by the Plaintiff. The details are as follows.

436,692,00 won 436,692,00 won for the installation cost of average 90 tons of the facility capacity, which is included in the table classification in the main sentence (the completion of August 31, 201)

The average cost of installing food resource recovery facilities in Gwangju City (built on July 12, 201) for the installation of food and beverage supply facilities (construction completed on July 12, 201) at the Government's Office of Food and beverage Supply (construction completed on July 12, 201) located in the table classification in the main sentence, and included in the main sentence (157,437,000 won 204,401,000 won for the installation cost of 320,056,000 tons of 60 tons of food and beverage resource recovery facilities (construction completed on December 12, 2011) at the 135,709,000 won

2) The proportion of the instant project district and the residential and commercial areas of Gangnam-gu is as follows:

The ratio of commercial area (%) ratio (%) of the zone classification in the main text to the residential area (%) ratio (%) of the total of 5.8 54.2 the project district of this case in Gangnam-gu 0.7

3) Of the total area of the instant project district 770,819.m2, 104,978m2 among the area of the entire project district is planned to install other facilities, such as schools, neighborhood living facilities, social welfare facilities, religious facilities, etc.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 and 4, and the purport of the whole pleadings

D. Determination

1) Whether the calculation of the volume of waste to be generated per day is illegal

A) Consumed legal principles

The determination of the amount of waste generated in the project district of this case is an predicted determination of future facts, and the difference between the daily estimated amount of waste generated by the Defendant and the actual amount of waste generated in the project district of this case is inevitable. The method of calculating the amount of waste generated in the project site of this case does not have any provision in the relevant Acts and subordinate statutes including the instant ordinances, and the determination of the amount of waste generated in the project site of this case shall be deemed to be at the discretion of the Defendant, who is the authority imposing waste disposal charges. Accordingly, it may be deemed unlawful only where it is deemed that the method of calculating the estimated amount of waste generated in the day chosen by the Defendant is objectively unreasonable.

B) The statistical data on the basis of “2010 national waste generation and disposal status”

(1) As seen earlier, the Defendant was based on the “2010 national waste generation and disposal status” published by the Ministry of Environment in order to calculate the daily waste volume expected to have occurred per day on the instant project site.

(2) As to this, the Plaintiff asserts that, in calculating the expected volume of wastes generated a day, it should be based on the third-party statistical survey prepared by the Ministry of Environment in 2007 (hereinafter “third-party statistical survey”) rather than the statistical data that the Defendant used as the basis for calculating the volume of wastes generated a day (hereinafter “third-party statistical survey”).

In the Ministry of Environment, two copies of “the current status of the generation and disposal of nationwide wastes” and “the status of the generation and disposal of nationwide wastes” are published. In contrast to the fact that the current status of the generation and disposal of nationwide wastes is in the form of a annual report and are based on the total survey on the discharge of discharged wastes from the Republic of Korea, the “national statistics survey on wastes” is prepared every five years and based on the sample survey.

The third statistical survey, as alleged by the Plaintiff, presents the result of the statistical survey by residential form, urban scale, and season, and the statistical data classified by source of generation as above may be meaningful in calculating the quantity of wastes generated in the instant project district in which the migratory population is small. However, in light of the rapid changes in the industrial environment, it is necessary to calculate the quantity of wastes more accurately, the statistical survey is published around December 2007; ② the third statistical survey is conducted on only four separate local governments that do not include Gangnam-gu as samples; ② the third statistical survey is conducted on the basis of the current state of waste generation and disposal; ② the third statistical survey is conducted on the basis of the current state of waste generation and disposal; ② the fact that there is no limit to calculating the quantity of wastes generated in an area where the survey was not conducted, and ③ the purpose of the third statistical survey is to estimate the quantity of wastes generated in the nation as 10th nationwide based on the calculation of the quantity of wastes generated in accordance with the national standard statistical data on the present state of waste disposal and treatment.

C) The part calculated as a sample group of Gangnam-gu

In full view of the following circumstances, based on the above legal principles, the method of calculating the daily estimated volume of wastes based on the “the daily amount of wastes generated per day in Gangnam-gu, the total amount of wastes generated in the instant business district” with the sample group of Gangnam-gu, excluding the total amount of wastes generated in the workplace. As long as it seems relatively reasonable to anticipate the quantity of wastes generated in the instant business district based on the total amount of wastes generated in the process of calculation, even if the physical area was based on the quantity of wastes generated in the instant business district based on the Gangnam-gu’s whole area in the process of calculation, it cannot be deemed that the Defendant

(1) In the case of Gangnam-gu, the volume of wastes generated is relatively high compared to other Gus. This is deemed to have affected the building cost of office space, the ratio of workers to the population, the walking volume, and the daytime Population Index (the Defendant expressed it as the variables of the above floating population). However, the Defendant determined that the part having a direct correlation with the variables of the above floating population was industrial wastes at the time of the instant disposal, and followed the method of calculating the estimated volume of wastes generated per day on the basis of the total volume of wastes generated by the Gangnam-gu total volume of wastes generated by the place of business except the total volume of wastes generated by the place of business in Gangnam-gu. This seems to have tried to reflect the characteristics of the instant business district where the distribution of residential area is relatively larger than Gangnam-gu.

(2) As the construction and operation of schools, neighborhood living facilities, social welfare facilities, religious facilities, libraries, etc. are scheduled in the instant project site, waste related to the elements of the migratory population is likely to occur to a certain extent.

(3) It is difficult to accurately predict the current office size ratio, population ratio, walking volume, and daytime population index in the area where the housing site development project is still in progress, and it is difficult to select a similar group in terms of the project district in this case and the above elements.

(4) According to the “2010 nationwide waste generation and disposal status”, the Plaintiff asserts that the daily waste includes pure household waste and the waste discharged from a workplace that generates less than 300 km average per day. The flexible population of Gangnam-gu is engaged in a workplace that generates less than an average of 300 km per day or in using such a workplace and discharges waste. As such, the floating population of Gangnam-gu does not remove the floating population variables, such as “the cost of organizing office space, population preparation, the ratio of workers to walking volume, and the weekly population index,” etc. of the Defendant’s excluded workplace (the workplace that generates more than an average of 300 km per day), rather than the daily waste generated by the Defendant. Accordingly, it does not mean that Gangnam-gu’s sample group excludes only the amount of industrial waste generated.

Among the places of business located in Gangnam-gu, the daily average of less than 300 kilograms may be included in the daily living wastes of Gangnam-gu calculated by the Defendant, but “the current status of the generation and disposal of wastes across the 2010 nationwide” is divided into household wastes (such as wastes generated in homes other than workplace wastes), ② workplace wastes (such as wastes generated in workplaces which discharge not less than an average of 300 kilograms per day), ③ workplace wastes discharge facilities, and ④ construction wastes. Accordingly, according to the above data, the wastes generated in workplaces which discharge less than an average of 300 kilograms per day are classified into household wastes. Accordingly, the third statistical survey otherwise defines the wastes generated in the manufacturing industry as all kinds of wastes, other than the waste discharged from the manufacturing industry’s waste, manufacturing industry (market, commercial market), regardless of whether the wastes are discharged not more than an average of 300 kilograms per day.

In a situation where the ratio of a place of business that generates more than 300 km a day’s average and more than 300 km in Gangnam-gu is not clearly revealed, it cannot be readily concluded that the current population of Gangnam-gu is engaged in a place of business producing most of the wastes at a place of business or in using such place of business that generates less than average 300 km a day as the Plaintiff’s assertion, and no other data can be found to recognize it otherwise. As seen earlier, in light of the fact that the instant project site is planned to be established and operated by schools, neighborhood living facilities, social welfare facilities, religious facilities, libraries, etc., and wastes related to the elements of the current population are

2) Whether the calculation of land purchase cost is unlawful

Article 18-2 of the Housing Site Development Promotion Act, Article 11 of the Enforcement Rule of the same Act [Attachment] of the Housing Site Development Promotion Act, and Article 11 of the Enforcement Rule of the same Act (No. 2009-690 of the Ministry of Land, Transport and Maritime Affairs’s announcement on August 20, 2009) do not have any specific provision on the concept of the development cost of the housing site development project area, so for its interpretation, the provisions of relevant Acts and subordinate statutes, such as the Housing Site Development Promotion Act, should be referred to (see Supreme Court Decisions 2012Du28537, Aug. 28, 2014; 2013Du1270, Dec. 11, 2014; 200-2; 3. The same applies not only to the development cost of the public housing site, but also to the construction cost of the housing site, the total construction cost of the housing site is divided into the total construction cost, construction cost, direct construction cost, installation cost of the housing site, and other infrastructure cost.

3) Whether the calculation of installation costs is illegal or not

A) Relevant statutes and issues

(1) Article 4(3) of the Enforcement Decree of the Act provides that the cost for the installation of a facility shall be calculated by calculating a unit price per ton of the cost incurred in the installation of an incineration facility with a daily disposal capacity of 200 tons (the cost for installation per ton) and multiplying the expected volume of wastes. Article 7(2) of the instant Ordinance provides that the detailed method for calculating the installation cost per ton shall be based on the average installation cost per ton of the facilities in the metropolitan area where the construction or completion of the instant year is scheduled to be completed in the pertinent year, but if there is no facility to be completed or completed in the pertinent year, the installation cost per ton of the two facilities completed in the recent year shall be applied.

(2) On December 5, 2011, the Plaintiff submitted a plan for the payment of waste disposal facilities charges to the Defendant, and the Defendant issued the instant disposition imposing waste disposal facilities charges to the Plaintiff on December 27, 2012. Whether the “relevant year” as the basis for calculating the above ton installation costs should be deemed the year when the payment plan was submitted, or whether the instant disposition should be deemed the year when the instant disposition was issued.

B) the meaning of the year;

The above facts are as follows: ① Article 6(1) of the Act provides that the person who is obligated to install waste disposal facilities or pay an amount equivalent to the installation cost to the housing site developer in excess of a certain size to the Mayor having jurisdiction over the relevant area without installing waste disposal facilities shall submit the payment plan to the Mayor, etc. before the commencement of the relevant development project; and the Mayor, etc. in receipt of the payment plan shall confirm the appropriateness of the payment plan and notify the person who submitted the payment plan of the payment amount and the payment deadline. The Plaintiff’s liability for the payment of the charges to the housing site developer, who is the housing site developer, shall confirm the appropriateness of the payment plan of the Plaintiff’s submission, and actually establish the payment plan at the time of the imposition of the charges (the housing site developer may withdraw the payment plan and directly install waste disposal facilities until the imposition is made). ② Since the Mayor, etc. uses the payment plan to install waste disposal facilities to dispose of waste, it is deemed appropriate to calculate the installation cost at the time of imposition of the charges at the 10th anniversary of the date of installation installation.

C) Scope of revocation

With respect to the scope of revocation, only the evidence submitted by the parties or the evidence revealed by the court’s examination of evidence can not be calculated in detail when the year 2012 is deemed the year concerned (i.e., incineration facilities + food treatment facilities), and thus, the part of the facility installation cost of this case’s disposition of this case’s 4,596,378,891 should be revoked in its entirety.

3. Conclusion

Therefore, the part of the Disposition in this case exceeding 6,067,029,60 won should be revoked. The plaintiff's claim in this case is justified within the scope of the above recognition, and the remaining claims are dismissed as they are without merit. It is so decided as per Disposition.

[Attachment]

Judges next to the (Presiding Judge)

1) The “2010 nationwide wastes generated and disposed of” is classified into household wastes (such as wastes generated in homes other than workplace wastes), ② workplace wastes (such as wastes generated in workplaces which discharge not less than an average of 300 kilograms a day), ③ workplace wastes, and ④ construction wastes. Accordingly, according to the foregoing data, wastes generated in workplaces which discharge not more than an average of 300 kilograms a day is classified into household wastes. The third statistical survey otherwise defines such wastes as all wastes discharged from non-manufacturing businesses other than discharging facilities, non-manufacturing businesses (markets and commercial markets), regardless of whether they discharge not more than an average of 300 kilograms a day.