Hyundai Engineering Co., Ltd. (Law Firm East, Attorney Cho Jae-young, Counsel for the defendant-appellant)

Ulsan Metropolitan City Water Supply Headquarters Head of the East Business (Law Firm Earsens, Attorneys Park Jae-ho, Counsel for the plaintiff-appellant)

December 9, 2016

Ulsan District Court Decision 2015Guhap6587 Decided September 8, 2016

1. All appeals filed by the plaintiff and the defendant are dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

Of the imposition of KRW 880,276,90 against the Plaintiff on August 11, 2015, the Defendant’s imposition of KRW 398,370,00 and KRW 350,00 of the facility contributions in excess of KRW 481,838,00 shall be revoked, respectively.

2. Purport of Plaintiff’s appeal

The part of the judgment of the court of first instance against the plaintiff shall be revoked, and the part of the defendant's disposition of imposition of KRW 880,276,90 against the plaintiff on August 11, 2015 exceeding KRW 350,000 out of KRW 481,838,000,000, which was imposed by the defendant, shall be revoked.

3. Purport of defendant's appeal

The part of the judgment of the first instance against the defendant shall be revoked, and the plaintiff's claim corresponding to the above revocation shall be dismissed.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation on this case is as follows, except for the addition of “judgment on both parties’ arguments” under Paragraph (2) below with respect to the matters asserted by both parties again in the trial, and therefore, the reasoning for the judgment of the court of first instance is the same as that of the judgment of the court of first instance. As such, it shall be cited as it is in accordance with Article 8(2) of the Administrative Litigation

2. Determination as to both parties’ assertion of trial

A. The defendant's assertion

Considering the fact that the fixed water supply construction cost system is already scheduled to impose the actual cost and other construction cost, and that the fixed water supply construction cost is lower than the actual cost of the water supply in order to enhance the distribution rate of the water supply in underdeveloped areas, in the case of agricultural and fishing villages, while in the case of the developed urban area, it is inevitable to impose the fixed water supply construction cost higher than the actual cost of the water supply, even if the part of the instant disposition reaches about 12 times the actual cost of the construction, it should be deemed lawful.

B. The plaintiff's assertion

Article 15 (4) of the Ordinance of this case provides that the facility contributions shall be deducted as long as the existing water supply facilities are constructed in the place where the water supply facilities are already installed without asking whether the existing water supply facilities are demolished, and according to the above provision, even if the existing water supply facilities have been demolished as the business of this case, the part of the facility contributions in the disposition of this case that did not deduct the facility contributions should be revoked illegally.

C. Judgment on the defendant's assertion

In full view of the following circumstances acknowledged by the facts and evidence admitted by the first instance court, the part of the facility contributions in the instant disposition should be revoked as unlawful. Therefore, the Plaintiff’s allegation is without merit.

① Even according to the instant ordinances, in principle, the cost shall be calculated as actual cost in calculating the fixed construction cost. Considering that the construction project, such as the instant project, is a general principle that imposes the burden on the interested parties equivalent to the actual cost, even if the efficiency of administration and the distribution rate of tap water supply in underdeveloped agricultural and fishing villages through the fixed construction cost system can be improved, the difference between the cost and the cost should not be excessively increased.

② The fixed construction cost of this case amounts to approximately twelve times the actual cost. This is remarkably deviating from the principle of actual cost-sharing, and even considering the necessity and purport of the fixed construction cost system, it is deemed unlawful against the delegation purport of the Ordinance of this case or the principle of proportionality.

D. Judgment on the Plaintiff’s assertion

In full view of the following circumstances recognized by the first instance court’s factual basis and evidence, the part of facility contributions during the instant disposition is legitimate. Therefore, the Plaintiff’s above assertion is without merit.

① In Article 15(4) of the Ordinance of this case, there is no express statement to the effect that the existing water supply facilities are otherwise handled depending on whether the existing water supply facilities are demolished, but whether Article 15(4) of the Ordinance of this case is applied even when the existing water supply facilities are demolished shall be determined by comprehensively taking into account the purpose and purpose of the above provision, the overall regulatory system of the Ordinance of this case, and whether the water supply facilities are demolished.

② In light of the overall language and purport of the instant ordinances, it appears that the existing facility contributions are assumed that residents who are deemed to have profits from the existing water supply facilities should bear the beneficiary contributions in cases where the existing water supply facilities are installed. However, in cases where both the water supply facilities are removed and the new water supply facilities are installed, it is reasonable for residents, who are deemed to have profits from the new water supply facilities, to bear the beneficiary contributions, as the subject of the facility contributions and the facility contributions for the existing water supply facilities differs.

③ Considering the above nature of facility contributions, deduction of facility contributions pursuant to Article 15(4) of the Ordinance of this case ought to be deemed to apply only to cases where additional water supply facilities are installed on the premise that the existing water supply facilities are used as it is. This also accords with the interpretation of the phrase “where a shortage occurs in the facility contributions for the installation of already installed water supply facilities, the difference must be paid” under Article 15(4) of the Ordinance.

④ Furthermore, the substance of the facility contributions in the instant disposition ought to be taken into account not only ordinary facility contributions (beneficiary contributions) but also the aspect of the charge borne by the Plaintiff. The Plaintiff, the contractor of the instant disposition, applied for the installation of a new water supply facility to the Defendant. Inasmuch as the Defendant installed a new water supply facility upon such application by the Plaintiff, the Plaintiff was at the location to be liable for the charge pursuant to Article 71 of the Water Supply and Waterworks Installation Act and the Enforcement Decree of the Water Supply and Waterworks Installation Act and the Ordinance on the Collection of Water Supply and Waterworks in Ulsan Metropolitan City, Ulsan Metropolitan City. However, when the amount of the charge borne by the Plaintiff and other residents was calculated at a higher level than expected, the Plaintiff’s civil petition was filed and the amount of the charge borne by the Plaintiff was ultimately reduced for the purpose of reducing the amount of the charge borne by the Plaintiff on July 30, 2015 by Article 740 of the Enforcement Rule of the Ordinance on the Collection of Water-Supply Charges in Ulsan Metropolitan City, the amended Enforcement Rule of the said Ordinance (the instant project plan was imposed on the amount borne by the Plaintiff.

⑤ Even according to the previous precedents similar thereto (Seoul High Court Decision 2016Nu52165, which was pending in the court of final appeal as of the date of the closing of argument in this case, and its original decision), where a project operator has already paid the burden of water supply, the relevant municipal ordinances that are the basis for the imposition of the charge for water supply facilities are in essence illegal in violation of the principle of double imposition prohibition as stipulated under Article 5 of the Framework Act on the Management of Charges, which is charges imposed on the same object as the charge for water supply facilities, and thus, are in violation of the principle of double imposition prohibition as stipulated under Article 5 of the Framework Act on the Management of Charges. (In other words, it is determined that Article 138 of the Local Autonomy Act which limits the subject of the charge to residents if the charge for the installation of new water supply facilities is deemed a beneficiary contribution). In other words, it is unreasonable for a person who has provided a cause for the installation of new

3. Conclusion

Therefore, the plaintiff's claim is justified within the scope recognized by the court of first instance, and the remainder is dismissed as it is without merit. The judgment of the court of first instance is just in conclusion, and the plaintiff and the defendant's appeal are all dismissed.

Judges Kim Jong-cheon (Presiding Judge)

Judges Park Jae-up and imprisony Leave