[1] In the case where a special supply contract entered into between a person subject to relocation measures and a project operator includes installation costs of basic living facilities under Article 78(4) of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor in the sale price, whether such part is null and void due to its violation of the mandatory law (affirmative)

[2] Whether a road to be provided as basic living facilities by a project operator who implements a housing construction project or a housing site preparation project within a housing site development project zone, which is a public project, includes all the “road within a housing complex, which connects roads to the same kind of road outside the housing complex, regardless of its length or width (affirmative)

[1] Article 78 (4) of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (amended by Act No. 8665 of Oct. 17, 2007) / [2] Article 78 (1) and (4) of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (amended by Act No. 8665 of Oct. 17, 2007), Article 2 subparagraph 8 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009), Articles 21 (1) 2 and 23 (1) and (6) of the former Act, Article 24 (4) [Attachment Table 24 (1) and (4) of the former Enforcement Decree of the Housing Act (amended by Presidential Decree No. 21290 of Feb. 3, 2009); Article 25 (2) of the former Enforcement Rule of the Housing Act (amended by Presidential Decree No. 219797 of Feb. 2, 2097)

[1] [2] Supreme Court en banc Decision 2007Da63089, 63096 Decided June 23, 2011 (Gong2011Ha, 1440) / [2] Supreme Court Decision 2012Da3303 decided September 26, 2013 (Gong2013Ha, 1937)

See Attached List of Plaintiffs (Law Firm Dump, Attorneys Lee Dong-young et al., Counsel for the plaintiff-appellant)

Korea Land and Housing Corporation (Law Firm Shin & Yang, Attorneys Yang Ho-soo et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2012Na15598 decided September 12, 2012

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

According to Article 78 of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (amended by Act No. 8665 of Oct. 17, 2007; hereinafter “former Public Works Act”), a project operator shall either establish and implement relocation measures or pay resettlement funds as prescribed by the Presidential Decree for persons who are deprived of their base of livelihood due to the provision of residential buildings due to the implementation of public works (hereinafter “persons subject to relocation measures”), and the contents of relocation measures include basic living facilities according to the relevant regional conditions, such as roads, water supply facilities, drainage facilities, and other public facilities in the resettlement area, and the cost necessary therefor shall be borne by the project operator (Article 4). Accordingly, if a special supply contract between a person subject to relocation measures and a project operator included the cost of installation of basic living facilities as stipulated in Article 78(4) of the former Public Works Act in the sale price of a housing site or housing, the portion of the special supply contract included the cost of installation of the basic living facilities in the sale price in violation of Article 78(360(6) of the former Public Works Act.

According to the reasoning of the judgment below, in concluding a special supply contract on the instant housing site with the Plaintiffs, who are subject to relocation measures, the Defendant calculated the supply price of the housing site by comparing the amount calculated by deducting basic facilities installation costs according to the Defendant’s calculation method based on the cost of creating the housing site and the amount equivalent to 80% of the cost of creating the housing site. In light of the aforementioned legal principles, if the supply price of the said housing site includes basic facilities installation costs in light of the aforementioned legal principles, the Defendant’s unjust enrichment is established. On the other hand, in the instant case where the supply price of the housing site is not determined based on the appraisal price, the cost of installing the basic living facilities is not calculated based on the supply price of the housing site equivalent

Nevertheless, the lower court calculated the upper limit of the sales price per 1 square meter after deducting the cost of installing basic facilities per 1 square meter from the appraisal price of the instant housing site, and determined each unjust enrichment against the Plaintiffs by calculating the amount exceeding the upper limit of the sales price calculated as above. In so doing, the lower court erred by misapprehending the legal doctrine on the standard and method of calculating unjust enrichment from the pre-sale price of the cost of installing basic facilities.

2. Regarding ground of appeal No. 2

(a) Scope of roads corresponding to basic living facilities;

The purpose of Article 78(4) of the former Public Works Act is to provide a person subject to relocation measures with a basis for living. As such, the term “basic living facilities according to the relevant regional conditions, such as roads, water supply facilities, drainage facilities, and other public facilities,” of the relevant provision refers to roads, water supply and drainage facilities, electric facilities, telecommunications facilities, gas facilities, or district heating facilities, which are installed by a project operator who implements a housing construction project or a housing site development project pursuant to the relevant statutes, such as Article 23 of the Housing Act, etc. (see the foregoing en banc Decision). The purport of the above decision is to clarify the items of basic living facilities through the concept of arterial facilities stipulated in Article 78(4) of the former Public Works Act, which are “basic living facilities according to the relevant regional conditions, such as roads, water supply and drainage facilities, and other public facilities, etc., which are to be provided as a basis for living in the housing site development project area.”

However, pursuant to Article 2 subparagraph 8 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009; hereinafter “former Housing Act”), “arterial facilities” refer to facilities which connect the key facilities located outside a housing complex (where two or more housing complexes are simultaneously developed, referring to each housing complex), such as roads, water supply and drainage systems, electrical facilities, gas facilities, communications facilities, and district heating facilities, to the facilities located outside the relevant housing complex for the same kind of infrastructure.

Meanwhile, if a project operator constructs roads corresponding to arterial facilities stipulated in Article 2 subparagraph 8 of the former Housing Act in the course of developing a housing complex by implementing a housing site development project, such roads are responsible for connecting the entrance of a housing complex located outside the housing site development project zone with roads located outside the housing site development project zone, regardless of the length or width of the roads, and are essential facilities for achieving functions such as the housing complex concerned and for passage of residents.

Examining the meaning of arterial facilities under the former Housing Act, the role and utility of roads as arterial facilities under the former Housing Act, and the purport of the above en banc decision, the roads that a project operator who implements a housing construction project or a housing site development project within the housing site development project zone, such as this case, shall be deemed to include all roads corresponding to arterial facilities under Article 2 subparag. 8 of the former Housing Act, i.e., roads connected to the same roads located outside the housing complex, regardless of their length or width.

Nevertheless, the lower court rejected the Plaintiff’s assertion that the roads falling under the basic living facilities as prescribed by Article 78(4) of the former Public Works Act are limited to the roads falling under the basic living facilities as prescribed by the Housing Act and its Enforcement Decree, and that the roads in the instant project district constituted the basic living facilities regardless of their length and width. In so doing, the lower court erred by misapprehending the legal doctrine on the scope of roads falling under the basic living facilities as prescribed by Article 78(4) of the former Public Works Act, thereby adversely

(b) Whether it constitutes basic living facilities, such as squares, parks, green areas, rivers, storage reservoirs, and reservoirs;

For reasons indicated in its reasoning, the lower court’s determination that squares, parks, green areas, rivers, reservoirs, etc. do not constitute basic living facilities as prescribed by Article 78(4) of the former Public Works Act is justifiable in light of the aforementioned legal principles. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the scope of basic living facilities as prescribed by Article 78(4) of the former Public Works Act

3. Conclusion

Therefore, 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 on the bench.

[Attachment] List of Plaintiffs: omitted

Justices Kim Yong-deok (Presiding Justice)