D. S.C. (Bae, Kim & Lee LLC, Attorneys Kim Yong-hwan et al., Counsel for the plaintiff-appellant)

Seoul Urban Gas Co., Ltd. (Law Firm Gyeongsung, Attorneys Lee Dong-sik et al., Counsel for the plaintiff-appellant)

Korea District Heating Corporation (Attorneys Park Jong-ho et al., Counsel for the defendant-appellant)

December 12, 2012

Seoul Southern District Court Decision 201Gahap17466 decided June 21, 2012 (main office), 2012Gahap7091 decided June 21, 2012

1. All appeals filed by the Plaintiff (Counterclaim Defendant) against the Defendant (Counterclaim Plaintiff) regarding the main lawsuit and counterclaim against Seoul Urban Gas Co., Ltd. and appeals filed against the Defendant Korea District Heating Corporation are dismissed.

2. The costs of appeal between the Plaintiff (Counterclaim Defendant) and the Defendant (Counterclaim Plaintiff) are assessed against the Plaintiff (Counterclaim Defendant) by aggregating the principal lawsuit and the counterclaim, and the costs of appeal between the Plaintiff (Counterclaim Defendant) and the Defendant Korea District Heating Corporation are assessed against the Plaintiff (Counterclaim Defendant).

The principal lawsuit: The Seoul Urban Gas Corporation shall pay to the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) the amount calculated by applying the ratio of 1,175,866,415 won to the Plaintiff (Counterclaim Plaintiff; hereinafter “Defendant”) and the amount calculated by applying the ratio of 20% per annum to the date of delivery of a duplicate of the complaint of this case to the date of complete payment.

Counterclaim: The Plaintiff shall pay to Defendant Seoul Urban Gas Co., Ltd. 281,343,159 won and the amount calculated by the rate of 20% per annum from the day following the day of service of a copy of the counterclaim to the day of complete payment.

The judgment of the court of first instance shall be revoked. The judgment of the court of first instance shall be revoked. The defendant Seoul Urban Gas Corporation shall pay 1,175,866,415 won to the plaintiff, and the defendant Korea District Heating Corporation shall pay 12,901,701,369 won per annum to the day of complete payment with respect to each of the above amounts.

Counterclaim: The part against the plaintiff in the judgment of the court of first instance shall be revoked, and the counterclaim claim filed by the defendant Seoul Urban Gas Corporation falling under the above revoked part shall be dismissed.

1. Quotation of judgment of the first instance;

The reasoning of this court's ruling is as stated in the reasoning of the judgment of the court of first instance, except for adding arguments and judgments of the parties to the case as stated in the following 2. Thus, this court's ruling is acceptable in accordance with Article 420 of the Civil Procedure Act.

2. The argument and judgment of the parties in the trial

A. Determination as to the Plaintiff’s assertion on Defendant Urban Gas

(1) Regarding the legal basis and nature of the facility contributions

(A) The plaintiff's assertion

The Plaintiff’s facility contributions imposed on the Plaintiff cannot be viewed as the beneficiary’s contributions due to the lack of legal grounds for their installation under the Framework Act on the Management of Charges. Accordingly, the facility contributions should be considered to have the nature of the fees, and accordingly, they should be deemed to bear only when the installation costs of gas supply facilities for the relevant gas user have occurred. In this case, the Plaintiff asserted that there was no reason to pay the facility contributions to the Defendant, and accordingly, the Plaintiff sought a return of the facility contributions already paid as unjust enrichment.

(B) Determination

1) First, as determined earlier, the facility contributions paid by the Plaintiff to the Defendant Urban Gas is based on the Urban Gas Business Act and its subordinate laws and regulations governing the installation cost sharing of gas supply facilities.

Article 19 of the Urban Gas Business Act (amended by Act No. 8186, Dec. 31, 1983; Article 19 of the same Act (amended by Act No. 813, Dec. 31, 1983; hereinafter “Urban Gas Business Act”) provides that “General urban gas business operators shall not refuse to supply gas to gas users in the permitted supply area without justifiable grounds, and shall not supply gas to areas other than the permitted supply area.” However, on February 8, 1999, Article 19 of the same Act was deleted, and amended by Act No. 8186, Jan. 3, 2007, the general urban gas business operator shall not refuse or suspend the supply of gas to gas users in the permitted supply area without justifiable grounds.” Meanwhile, Article 19-2 of the same Act (amended by Act No. 19-2) was newly established, and as recorded in the judgment of the court of first instance, general urban gas business operators may share all or part of installation costs of gas supply facilities or changes in gas supply contract.

2) In the amendment of the Urban Gas Business Act, when adopting the heating method as a regional heating under the Integrated Energy Supply Act, the purpose of the amendment is to protect the consumer choice for the heating method and to allow gas users to share all or part of the costs of installing gas supply facilities in order to ensure the overall improvement of the people by placing restrictions on the right to select urban gas to use by the supplier or refusing to supply urban gas, which is a fuel for the use of local heating heat sources, on the ground that the supply of urban gas for cooking alone does not secure profitability for the suppliers, and thereby hindering the fair competition in the heating market. In addition, the purpose of the amendment is to protect the consumer choice for the new housing site development zone, and to ensure that the general urban gas business operators impose a gas supply obligation on the general urban gas business operators in order to ensure the stable supply of energy, and to ensure that gas users share all or part of the costs of installing gas supply facilities in addition to the changes in the implementation of public works.

3) Meanwhile, as a type of personal burden, the State or a public organization is obligated to pay money to a person in a special relationship with a specific public project in order to bear expenses incurred in the relevant project, and thus, it is necessary to clearly establish the concept, type, permission requirements, etc. as the nature of such obligation is that there is room for restricting fundamental rights, which is in need of a clear formulation of a certain degree. By prescribing basic matters on the installation, management, and operation of charges, the basic matters on the installation, management, and operation of charges shall be prescribed in order to minimize inconvenience to the people and promote economic activities of companies by securing fairness and transparency in the operation of charges. The Framework Act on the Management of Charges was enacted on December 31, 201 and came into force from January

Article 3 of the Framework Act on the Management of Charges at the time of the enactment of the above provision that "the charges shall not be established unless they are governed by the provisions of Acts as provided for in the attached Table." The attached Table stipulates that "the charges established under the above Act shall not be established unless they are governed by the provisions of Acts as provided for in the attached Table." In the case where charges are imposed not provided for in the attached Table at the time of the enforcement of the above Act, the attached Table stipulates that "the charges shall be listed under various Acts." Since the above provision of Article 3 is established to make a request for improvement of the system for the abolition, etc. of the relevant charges through deliberation by the Committee, the above provision of Article 3 is maintained as it is, while several amendments are made, the new Act, such as charges for the total quantity exceeding the total quantity under Article 20 of the Special Act on the Improvement of Air Quality in the Seoul Metropolitan Area,

4) In light of the background and purport of the Framework Act on the Management of Charges, the form of the relevant provisions, and the progress of the amendment, etc., the Framework Act on the Management of Charges basically set out charges that were in force at the time of the enactment of the same Act in the attached Table and set the grounds for justification in order to check arbitrary administration in the event that charges infringing on fundamental rights are newly established in the future. It is difficult to interpret that all charges should be judged null and void without any legal basis, regardless of the existence of a clear legal basis without infringement on fundamental rights, or the name or nature of the obligation to pay money related to public works, regardless of the title or nature of the obligation to pay money in the above attached Table. In addition, it is reasonable to deem that there was no charge that was implemented under the Urban Gas Business Act at the time of the enactment of the above Act, and that there was no provision on the basis of the facility charges in the Urban Gas Business Act, which was established under the above background, and that there was no direct benefit or consideration in relation to the supply of urban gas to the user who pays the facility contributions in this case.

5) Therefore, the Plaintiff’s above assertion is without merit (as long as it is determined as above, the Plaintiff’s assertion that the facility contributions imposed by the Defendant Urban Gas have the nature of fees, not the charges, shall not be further determined).

(2) As to the invalidity of the Gyeonggi-do Urban Gas Supply Regulations

1) The plaintiff asserts that the Gyeonggi-do Urban Gas Supply Rules have the nature of the general terms and conditions of the contract, which is incorporated into the terms and conditions of the contract by entering into the supply contract between the plaintiff and the defendant Urban Gas Corporation, and the provisions on the facility contributions

2) On the other hand, the Plaintiff’s assertion on this premise is without merit, even though whether the urban gas supply provision constitutes a general contract clause and is incorporated into a contract, the Plaintiff’s share of facility contributions based on the Urban Gas Business Act cannot be deemed null and void in violation of each of the instant mandatory provisions.

(3) As to the assertion on the waiver of cooking facility contributions

(A) The plaintiff's assertion

The plaintiff asserts that as the plaintiff did not settle any more construction costs except pipeline construction costs and general facility contributions in the supply agreement with the defendant urban gas, the defendant urban gas business operator cannot additionally claim for the share of the facility for cooking exclusive regardless of the invalidity of the pipeline construction cost.

(B) Determination

1) On November 9, 2007, the Plaintiff entered into an agreement with the Defendant Urban Gas Business Act to supply arterial facilities to the extent of pipelines construction cost up to the boundary of the site by lot as facilities for supplying urban gas within a high-style urban gas district. Upon the Plaintiff’s request of the Defendant Urban Gas Business Act, the Plaintiff paid the piping construction cost and general facility contributions to the Defendant Urban Gas Business as above. According to the overall purport of evidence No. 3, Eul evidence No. 1 through 3, Eul evidence No. 1 through 4, Eul evidence No. 4-1, 5, Eul evidence No. 6-1, 2, and 6-1, and 2, the Plaintiff concluded an agreement to supply urban gas to the Plaintiff and the Defendant Urban Gas Business Act with the agreement to supply urban gas jointly with heating and cooking, but the Plaintiff was preparing to supply urban gas in line with the agreement to supply urban gas to the Plaintiff, and the Plaintiff was not able to obtain an adequate solution to the supply of urban gas only to the Defendant Urban Gas Business Act with the changed urban gas supply facility supply method.

2) The Plaintiff appears to have asserted the above purport that the additional construction cost settlement would be unfair on the ground that the above provision in the above agreement between the Plaintiff and the Defendant Urban Gas Business Act provides that "no retroactive application shall take place even after the occurrence of any amendments to the Urban Gas Business Act," but according to the above acknowledged facts, the provision was newly established on January 3, 2007 as Article 19-2 of the Urban Gas Business Act, which provides that "any general urban gas business operator may have the users share all or part of the installation cost of gas supply facilities," and entered into an agreement with the Plaintiff to supply urban gas only with cooking only on the ground that the agreement was concluded with the Plaintiff and the Defendant Urban Gas Business Act, and it is reasonable to interpret that the above agreement was not concluded on the condition that the Plaintiff would pay the cost of supplying urban gas only for cooking purposes, in light of the possibility of collecting the cost of supplying urban gas, and that the content of the amended urban gas plan and its agreement was not applied to the Plaintiff’s alteration of the supply of urban gas under the above provision and its agreement with the Plaintiff."

3) However, Article 23(1) and (3) of the former Housing Act provides that Defendant Urban Gas shall bear construction costs for pipelines construction up to the boundary of the site by parcel as facilities for the supply of urban gas in an urban development zone, and that is determined invalid as it constitutes an agreement clause contrary to the mandatory provisions of Article 23(1) and (3) of the former Housing Act. Therefore, the aforementioned provision results in failure to establish the premise that additional settlement or cost burden, such as the description, will not be imposed.

4) Therefore, as Defendant Urban Gas Business Act, which has the right to seek payment of the cost of cooking facilities to the Plaintiff, who is a gas user under the Urban Gas Business Act, can claim the cost of cooking facilities to the Plaintiff. Therefore, the Plaintiff’s above assertion is without merit.

B. Judgment on the Plaintiff’s assertion on Defendant heating System

(1) As to the assertion that a heat supply provision on construction cost charge is invalid in violation of the principle of statutory reservation

(A) The plaintiff's assertion

Although the details of construction cost charges are stipulated by the Integrated Energy Supply Act, the Defendant heating Corporation imposed construction cost charges on the Plaintiff pursuant to the Heat Supply Act and paid them unfairly to the Plaintiff. The Plaintiff asserts that the Defendant Heating Corporation should return them as unjust enrichment on the ground that it is based on invalid heat supply regulations in violation of the principle of statutory reservation.

(B) Details of the relevant legislation

1) First, Article 4 of the Framework Act on the Management of Charges (hereinafter “Framework Act”) provides that “The subject of imposition and collection of charges, purpose of establishment, requirements for imposition, standards for calculation, calculation, method of calculation, and rate of imposition, etc. shall be specified specifically and clearly.” Provided, That the details of requirements for imposition, etc. may be prescribed by Presidential Decree, Ordinance of the Prime Minister, Ordinance of the Prime Minister, Ordinance of the Ministry, or Municipal Ordinance or Municipal Ordinance or Municipal Ordinance, as prescribed by the relevant Act and delegated by the relevant Act.” Article 17(1) of the Integrated Energy Supply Act provides that “A business entity shall establish supply regulations on charges and other supply conditions and report them to the Minister of Knowledge Economy, as prescribed by Ordinance of the Ministry of Knowledge Economy.” Meanwhile, Article 18(2) of the Integrated Energy Supply Act

2) In addition, Article 13-2 of the Enforcement Decree of the Integrated Energy Act provides that the calculation standard for each usage shall be calculated by multiplying the unit subject to imposition by the standard unit price per unit. Article 19 of the Enforcement Rule of the same Act provides that the construction charges for supply facilities shall be imposed as one of the matters stated in supply regulations. Accordingly, the heat supply provision provides for the principle of the burden of construction expenses or the standards for imposition, etc. in detail as seen in the attached Form of the

(C) Determination

1) On the other hand, the fundamental rights of the people may be restricted only when necessary for national security, the maintenance of order, or the public welfare pursuant to Article 37(2) of the Constitution, but such restriction may be, in principle, possible only by law, and even if it is limited, it shall not infringe on the essential contents of the fundamental rights and shall not be limited to the necessary minimum extent. As the principle of statutory reservation is the principle of statutory reservation, the principle of statutory reservation requires not only the regulation by law, but also the regulation based on the law, so the form of restriction of fundamental rights does not necessarily need to be the form of the law, and if it satisfies the specification and clarity of the delegation as required by Article 75 of the Constitution based on the law, it can be restricted by delegated legislation.

2) In other words, even in the case of a charge, since the contents that stipulate matters such as imposition requirements and collection procedures are excessively abstract or ambiguous, the provisions of law or orders and rules, etc. according to the delegation of law shall be meaningful and clear. However, since the provisions of law, etc. have generality and abstractness and abstractness, there are many cases where their meaning can be embodied and clear through interpretation as a legal supplementary action, it is necessary that the regulations on the charge may clearly be meaningful in light of the legislative purport, overall structure and contents of the relevant law. In order to determine whether the delegation of law deviates from the delegation scope of superior law as predictability, the limitation of delegation of law should be determined by comprehensively considering the overall structure, purpose, purpose of the superior law, the contents of the delegation clause, the organic relation of the relevant law, etc.

3) With respect to this case, it is delegated to the Enforcement Decree of the Act on the Management of Charges to determine the standards for calculation, imposition, and collection of charges with respect to construction costs. The Integrated Energy Supply Act separately sets out supply regulations with respect to "charges or other terms and conditions of supply". Thus, it cannot be said that all detailed matters concerning construction costs charges should be determined by the Enforcement Decree on the sole basis of the fact that the matters prescribed by the Enforcement Decree are limited to the standards for calculation and imposition of charges, and that the matters to be delegated to the Presidential Decree are prescribed as above. The charges for construction costs are basically related to heat supply, and the specific amount of charges for construction costs and the unit price or standards prescribed therein are not required. Thus, it is necessary to supplement the contents such as the above "charges or other terms and conditions of supply", so it cannot be said that the details concerning construction costs are excluded from the contents to be determined under the supply regulations based on Article 17 of the Integrated Energy Supply Act.

4) Rather, it is reasonable to view that the provision on matters to be delegated to the Presidential Decree in the Integrated Energy Supply Act separately from the heat supply provision is an additional measure to ensure thorough imposition and enforcement of charges in relation to the restriction on fundamental rights of the people, and that the provision on comprehensive delegation of the supply provision should be regulated at least in the Enforcement Decree, and that the provision on the basis of calculation of charges and the outline of imposition method may be prescribed in the supply regulation within the limit of the delegated legislation, if necessary.

5) From this point of view, the charges for construction costs are imposed on beneficiaries in relation to the installation of district heating facilities and the supply of heat as a means thereof, and they are to be imposed on all users an amount calculated in an equitable manner. ② The heat supply regulations are determined by the competent authority, including the Ministry of Knowledge Economy, to review the appropriateness of the amount and determine whether to grant authorization accordingly; ③ The calculation of the charges for construction costs may cause a flexible need for coping with the possibility of change due to economic situation, housing construction scale, conditions, etc. in the calculation of the charges for construction costs, even if the provisions of the Enforcement Decree stipulate any more professional and detailed matters in the heat supply regulations despite the concreteness under the provisions of the Integrated Energy Supply Act, such matters may be sufficiently predicted. In light of the overall structure, purport, and purpose of the Integrated Energy Supply Act, the contents of the relevant delegation provisions, and the organic relationship of the relevant laws and regulations

6) Therefore, the Defendant’s assertion on a different premise is without merit.

(2) As to illegality in paying value-added tax

(A) The plaintiff's assertion

The Plaintiff asserts that the charge under the Framework Act on the Management of Charges refers to the obligation to pay money other than the tax imposed as prescribed by the Act in connection with a specific public project regardless of the provision of goods or services, and it is not subject to value-added tax in itself, and since the construction cost is the beneficiary charge that receives financial resources necessary for the public project called the supply of integrated energy from the relevant group without relation to the provision of goods or services, it is not subject to value-added tax, and as the Defendant heating Corporation is liable to pay value-added tax, the Plaintiff is not obliged to pay value-added tax to Defendant Heating Corporation.

(B) Determination

1) First of all, Article 2 of the Framework Act on the Management of Charges provides that "the term "charges" means monetary payment obligations other than taxes imposed in accordance with Acts in connection with a specific public project regardless of the provision of goods or services, regardless of the amount of contributions, charges, contributions, or other titles, by a person authorized to impose monetary burdens under Acts, such as the head of a central administrative agency, the head of a local government, or the head of a public organization or a corporation entrusted with administrative authority." However, the phrase " regardless of the provision of goods or services" in the above provision provides that even if the provision of goods or services does not necessarily comply with the provision of goods or services, it shall be deemed that the above requirement is not essential. Since all charges are not related to the provision of goods or services, the plaintiff's assertion that they are not subject to value-added tax uniformly on different premise is without merit.

2) Meanwhile, the Plaintiff and Defendant Heating Corporation concluded a heat supply contract with the content of paying construction cost charges, interest, late payment charges, and penalty, respectively, in accordance with Article 18(1) of the Integrated Energy Supply Act and the heat supply provision, as seen earlier. In addition to the overall purport of the pleadings, the Plaintiff and the Plaintiff filed a claim with the Plaintiff for construction cost charges under the heat supply provision, which is the basis provision under the heat supply contract concluded with the Plaintiff, based on the following: (i) the Plaintiff filed a claim with the Plaintiff for a separate calculation of value-added tax; and (ii) the Plaintiff received a purchase tax invoice after paying the construction cost charges and the value-added tax equivalent thereto, and then filed an application for a input tax deduction with the National Tax Service for the deduction of the relevant value-added tax amount; and (iii) the fact that the Defendant Heating Corporation also paid all the above value-added tax.

3) According to the above facts, the Plaintiff paid value-added tax pursuant to the transaction collection agreement with the Defendant heating Corporation, and even according to the criteria for imposition of construction cost charges under the heat supply provision stated in the attached Form of the judgment of the first instance court, the value-added tax is separately required to be paid, and it is difficult to deem that the Plaintiff has failed to meet the requirements for imposition of value-added tax, as the Plaintiff gains profits from heat supply without installing individual heating systems by concluding the above heat supply contract with the Defendant heating Corporation, and thereby gains from heat supply without installing individual heating systems. The Plaintiff is obligated to pay value-added tax at the trading stage, or at the trading stage, the Plaintiff bears the duty of a supplier to pay value-added tax, and ultimately imposes the final consumer burden upon the other party to the transaction. The supplier cannot refuse the payment of value-added tax on the ground that the Defendant Heating Corporation is a taxpayer under the characteristic of the value-added tax payment structure that pays the amount of value-added tax collected from the counterparty to the State.

(3) As to the assertion of deduction of costs corresponding to arterial facilities out of construction cost charges

1) The Plaintiff asserts that the cost of construction is the cost of construction of supply facilities borne by the user, and the cost of construction is part of the heat supply facilities owned by the Defendant Heating Corporation, and the cost of construction of arterial facilities is borne by the Defendant Heating Corporation, who is the person obligated to install under the Urban Development Act or the Housing Act. Thus, at least the cost of construction of arterial facilities should be deducted from the cost of construction

2) On the other hand, the plaintiff's assertion is premised on the existence of part corresponding to the cost of main facilities construction under the Integrated Energy Supply Act. Construction cost charges based on the above Act is entirely separate from the cost of installation under the Urban Development Act or the Housing Act, and the legislative intent and applicable area of each Act are different, and since both the cost of construction and the cost of installation are not related to the cost of installation of main facilities and urban gas pipeline facilities from the boundary of a housing complex to each household, even if the implementer bears the cost of installation of heating and urban gas pipeline facilities from the boundary of a housing complex to each household, it cannot be deemed that the implementer bears the cost of installation charges or the cost of installation charges even if the cost of installation charges are not related to each household from the boundary of a housing complex. The calculation of construction cost is based on the method of determining a certain unit price per contract area regardless of the actual cost of installation of a district heating facility in order to ensure equity for all users. Thus, the cost of installation charges calculated cannot be calculated separately from the cost of installation charges.

Therefore, we cannot accept the plaintiff's above argument.

3. Conclusion

The counterclaim claim of the defendant urban gas shall be accepted within the scope of 256,30,814 won and damages for delay thereof, and the remaining counterclaim claim of the defendant urban gas, the plaintiff's claim of the main lawsuit against the defendant urban gas and the claim against the defendant heating works shall be dismissed, without merit. The judgment of the court of first instance is just in conclusion, and all appeals against the plaintiff's main lawsuit and counterclaim against the defendant urban gas and appeal against the defendant heating works are without merit, and they are dismissed, respectively.

Judges Kim Jong-tae (Presiding Judge)