[1] The method of calculating the cost of basic living facilities included in the supply price where the supply price of special supply housing falls short of the cost of creation

[2] Whether a road that is to be provided as a basic living facility to a person subject to relocation measures includes “road that connects a road located outside the relevant housing complex to the same kind of road located outside the relevant housing complex” (affirmative) and whether a “road installed by a project operator in the relevant housing complex, which connects a road located outside the relevant housing complex, etc. to a road located outside the relevant housing complex” (affirmative in principle)

[1] Where the supply price of a special supply house falls short of the cost of development, the cost of establishing basic living facilities, which is a part of the cost of development, cannot be deemed to have been included in the supply price; and where the supply price exceeds the “amount obtained by deducting basic living facilities installation costs from the cost of development,” only such portion should be deemed the cost of installing basic living facilities included in

[2] A road for which a project executor is required to provide a living-based facility to a person subject to relocation measures shall include, notwithstanding its length and width, roads corresponding to arterial facilities as stipulated in Article 2 subparagraph 8 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009), namely, roads linking roads located outside the relevant housing complex with roads of the same kind located outside the relevant housing complex; and a road for linking roads located outside the relevant housing complex with the entrance of the housing complex, etc. located outside the relevant housing complex within the public project zone, as a road installed by the project executor within the public project zone, shall be included in such facilities, barring special circumstances.

[1] Article 78 (4) and (8) of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects; Article 41-2 of the Enforcement Decree of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects / [2] Article 78 (4) of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects; Article 2 subparagraph 8 (see current Article 2 subparagraph 10) of the former Housing Act (amended by Act No. 9405, Feb. 3, 2009)

[2] Supreme Court Decision 2012Da3303 decided September 26, 2013 (Gong2013Ha, 1937)

See Attached List of Plaintiffs (Law Firm Chungcheong, Attorneys Permitted, et al., Counsel for the plaintiff-appellant)

E. E.S. Corporation (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2012Na62402 decided March 15, 2013

Of the judgment of the court below, the part against Plaintiffs 2, 4, 6, 13, 17, 18, 20, 21, 22, 23, 24, 25, 27, 28, 29, 32, 33, 34, and 35 and the part against which the remaining plaintiffs lost are reversed and remanded to the Seoul High Court. All appeals against the remaining plaintiffs are dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Judgment on the Defendant’s grounds of appeal

A. As to the scope of a person subject to relocation measures, who is the other party obligated to install basic facilities by the project implementer

Article 12(4) of the former Housing Site Development Promotion Act (amended by Act No. 10764, May 30, 201); Article 17(5) of the former Act on Special Measures for the Construction, etc. of National Rental Housing (wholly amended by Act No. 9511, Mar. 20, 2009) provides that “The Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (hereinafter “Land Compensation Act”) shall apply mutatis mutandis to the expropriation of land, except as otherwise provided for in each Act.” Article 78(1) of the Land Compensation Act provides that “A project operator shall establish and implement relocation measures or provide resettlement funds to a person who is deprived of their base of livelihood due to the implementation of public works (hereinafter “person subject to relocation measures”) at his/her own expense for the establishment and implementation of relocation measures or the payment of resettlement funds to a person subject to relocation measures at his/her own expense (hereinafter “the Act”) but shall delegate the construction of the building to a person subject to relocation measures by Presidential Decree No. 2015.

As such, the Land Compensation Act provides for the scope of a person subject to measures for relocation and the establishment of measures for relocation, etc., such person shall not be arbitrarily excluded from a person subject to measures for relocation as stipulated in the Act and subordinate statutes. However, the purport of the provision is not always limited to a person subject to measures for relocation, etc., and thus, a project operator may implement measures for relocation by expanding the scope of a person subject to measures for relocation including a person subject to measures for relocation to other interested parties, taking into account all the circumstances such as the nature of the relevant public project, details and details of the plan, and the need for the smooth implementation thereof. However, where the scope of the implementation of measures for relocation is expanded, the contents of the plan shall be divided into those of a person subject to measures for relocation and those of other related persons, and the establishment of measures for relocation of other related persons shall be deemed mutually advantageous without legal obligation. Therefore, the project operator shall be deemed to have broad discretion as to how to determine the scope of a person subject to measures for relocation or how to establish measures for relocation of those persons subject to measures for relocation.

According to the reasoning of the judgment below, the court below determined that ① Plaintiff 2, 4, 6, 13, 18, 20, 21, 22, 23, 24, 25, 27, and ② Plaintiff 29 who partially transferred the status of the sales contract to Plaintiff 29, ③ Nonparty 1, 32, and 33 who transferred the status of the sales contract to Plaintiff 34, and 35, did not provide a residential building, or Nonparty 2 transferred the status of the sales contract to Plaintiff 34, and 35, but it did not consider whether the owner of an unauthorized building or a non-resident falls under Article 40(3)1 of the Enforcement Decree of the Land Compensation Act, etc., but it also constitutes a person subject to relocation measures for the Defendant, who is a project implementer, on the grounds as stated in its reasoning. The judgment below erred by misapprehending the legal principles on the scope of a person subject to relocation measures, who is the other party to the basic living facility installation obligation.

On the other hand, the argument in the ground of appeal that the person subject to the relocation measures in the new zone 3 is not the one subject to the legal relocation measures since he refused the relocation measures established regarding the relevant project district, is the first argument in the final appeal and cannot be a legitimate

B. As to whether a person bears the duty to install basic living facilities in a special supply under the former Land Compensation Act

Pursuant to the proviso of Article 40(2) of the former Enforcement Decree of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Presidential Decree No. 20722, Feb. 29, 2008; hereinafter “former Enforcement Decree of the Land Compensation Act”), a project implementer may supply a housing site or house (hereinafter “special supply”) to persons subject to relocation measures under relevant Acts and subordinate statutes, such as the Housing Site Development Promotion Act or the Housing Act (hereinafter “Special Supply”) pursuant to the proviso to Article 40(2) of the former Enforcement Decree of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 8665, Oct. 17, 2007; hereinafter “former Land Compensation Act”), a project implementer may choose a relocation measure based on the delegation of Article 78(1) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects. Therefore, in the case of special supply, a project implementer must install basic living facilities under this provision at the project implementer’s expense (see Supreme Court en banc Decision 6307Da63636969, Jun.

According to the reasoning of the judgment below, the court below determined that the Defendant was responsible for the installation of basic living facilities for the persons subject to relocation measures in the new zone 2 district of this case, which performed special supply in accordance with the former Enforcement Decree

In light of the above legal principles, such determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the burden of installation of basic living facilities under the former Land Compensation Act.

C. Regarding the scope of the cost of installing basic living facilities and the establishment of unjust enrichment

1) The purpose of Article 78(4) of the former Land Compensation Act is to provide the person subject to the relocation measures with a basis of living. Thus, the term “basic living facilities according to the relevant regional conditions, such as roads, water supply facilities, drainage facilities, and other public facilities” under the relevant provision refers to the main facilities, etc. of roads, water supply and drainage facilities, electric facilities, communications facilities, gas facilities, district heating facilities, etc., which are to be installed by a project proprietor who implements a housing construction project or a housing site development project under the relevant statutes, such as Article 23 of the Housing Act (see Supreme Court en banc Decision 2007Da63089, 630

Meanwhile, Article 78 of the amended Land Compensation Act provides that the basic living facilities required to be provided as a basis for living shall be defined as basic living facilities at a normal level, such as roads, water supply facilities, drainage facilities, and other public facilities (Paragraph 4), and also the standards for the cost of basic living facilities shall be determined by the Presidential Decree (Paragraph 8). Accordingly, Article 41-2 of the Enforcement Decree of the Land Compensation Act provides that the basic living facilities at a normal level shall be defined as roads (including street lamps and traffic signals), water supply and sewage treatment facilities, electric facilities, telecommunications facilities, and gas facilities (Paragraph 1), and the cost of the basic living facilities borne by a project operator shall be calculated based on the cost of the basic living facilities to be installed in the relevant public service area, and the cost of the basic living facilities shall be calculated based on the construction cost, site cost, and various charges to be borne by the statutes in connection with the construction of the relevant facilities (Paragraph 2 and 3)

For reasons indicated in its holding, the lower court determined that the construction cost of street lamps and traffic signal, etc., the installation cost of sewage-house conduits, supervision cost (traffic signal, etc.), and incidental cost (the cost of design change review committee for street lamps, traffic signal, etc.) constituted the basic cost of living facilities to be borne by the Defendant for those subject to relocation measures for the new district 2 districts of this case covered by the former Land Compensation Act and those subject to relocation measures for the new district 3 districts of this case covered by the amended Land Compensation Act.

In light of the aforementioned legal principles, relevant regulations, and records, the judgment of the court below on this part is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the scope of installation costs of basic living facilities

2) If a special supply contract entered into between a person subject to relocation measures and a project operator included the cost of installing basic living facilities as stipulated in Article 78(4) of the former Land Compensation Act in the sale price, that part is null and void in violation of Article 78(4) of the former Land Compensation Act, which is a mandatory law (see Supreme Court en banc Decision 2007Da63089, 63096, supra). Such a legal principle also applies to a special supply contract to which the amended Land Compensation Act applies. Therefore, the unjust enrichment is established as much as the cost of installing basic living facilities included in the supply price of housing supplied to the person subject to relocation measures in the new zone 2 and new zone 3 zones.

Therefore, we cannot accept the allegation in the grounds of appeal that the judgment below to the same purport is justifiable, and that "the land cost out of the supply price of housing is calculated on the basis of the appraisal price unrelated to the development cost, and therefore, it cannot be deemed that the cost of basic living facilities was included in the cost, and that the supply price is calculated at the favorable appraisal price for the person subject to relocation measures, and the reduction effect of the supply price corresponding to the cost

3) Meanwhile, the lower court determined that the amount calculated by multiplying the cost of installing basic living facilities per unit area (one square meter) calculated by the formula of “cost of basic living facilities ± the cost of installing basic living facilities ± the cost of site supply for each unit area (one square meter) by the site area of the special supplied housing purchased by the Plaintiffs. However, among the lower judgment, it is difficult to accept the part of the lower judgment that unjust enrichment is constituted as to Plaintiffs 6, 17, 32, and 33, who purchased a house with exclusive use area of 59

According to the reasoning of the judgment below and the evidence duly admitted, land costs included in the supply price of housing with an exclusive use area of 59.9mm2, among the instant special supply housing, fall short of the development cost. As such, if the supply price falls short of the development cost, all of the cost of installing basic living facilities, which is a part of the development cost, shall not be deemed included in the supply price; and if the supply price exceeds the “amount obtained by deducting basic living facilities installation costs from the development cost,” only such portion is deemed the cost of installing basic living facilities included in the

In light of these legal principles, with respect to Plaintiffs 6, 17, 32, and 33, the portion exceeding “the amount obtained by deducting the cost of basic living facilities from the development cost” out of the supply price of housing with an exclusive use area of 59.9mm2, and thus, it constitutes unjust enrichment as much as the cost of basic living facilities that are included in the supply price and are transferred to the said Plaintiffs.

Nevertheless, the lower court determined that the amount calculated by multiplying the cost of basic living facilities per unit area (one square meter) equivalent to the total cost of basic living facilities to be borne by the Defendant even the said Plaintiffs who purchased the said housing without examining whether there was the cost of basic living facilities that were included in land costs among the supply prices of housing with an exclusive use area of 59.9 square meters and the amount thereof was unjust enrichment to be returned by the Defendant. In so doing, the lower court erred by misapprehending the legal doctrine on the scope of unjust enrichment from the total cost of basic living facilities, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment.

2. Judgment on the plaintiffs' grounds of appeal

A. As to the site cost for roads

A road for which a project operator is required to provide a basic living facility to a person subject to relocation measures shall include a road corresponding to an arterial facility defined in Article 2 subparag. 8 of the Housing Act, i.e., a road within a housing complex, which connects a road of the same kind outside the relevant housing complex to a road outside the relevant housing complex, notwithstanding its length or width (see Supreme Court Decision 2012Da3303, Sept. 26, 2013); and a road installed by a project operator in a public-service zone and which connects a road outside the relevant housing complex, etc. and the entrance of the housing complex, etc. in the relevant project zone and other roads outside the relevant project zone, except in extenuating circumstances.

According to the reasoning of the judgment below and the evidence duly admitted by the court below, the following facts are revealed: the roads installed by the defendant in the new zone 2 of this case are built between the main entrance of the housing complex including the housing units specially supplied by the plaintiffs and the existing ridge routes outside the project district, and the roads connected with the above roads and the above roads and the above roads and the roads outside the project district connected. In light of the legal principles as seen earlier, all of the roads installed in the new zone 2 of this case are the basic facilities for living, which are the roads in charge of the function of linking the entrance of the housing complex, etc. and the roads outside the project district.

Nevertheless, the lower court determined otherwise, that a road constructed by the Defendant in the new zone 2 of this case does not constitute arterial facilities, but cannot be deemed as a road that serves as a basis for living. In so determining, the lower court erred by misapprehending the legal doctrine on the scope of roads, which are the basic living facilities, thereby

B. As to the cost of underground facilities undergroundization and the burden of sewerage burden, the burden of sewage burden shall be borne by the person.

The court below rejected the plaintiffs' assertion that the costs of underground facilities should be included in the cost of basic living facilities, while recognizing the fact that the defendant bears the costs of undergroundization and the cost of sewerage burden.

In light of the trend of the duplicating of electric facilities, the undergroundization of electric facilities constitutes “basic living facilities according to the relevant regional conditions” or “ordinary level of basic living facilities”, and it is reasonable to view that the cost borne by the sewerage manager is the cost borne by the Sewerage Act in relation to sewerage, which is the basic living facilities, constituted the cost of installing the basic living facilities.

Nevertheless, the lower court determined otherwise by misapprehending the legal doctrine on the scope of the installation cost of basic living facilities, thereby adversely affecting the conclusion of the judgment.

C. Regarding road project costs, charges for metropolitan transportation facilities, Cooperation Fund for the Conservation of Ecosystem, and alternative forest resources creation expenses

Expenses, such as charges for facilities, such as roads, installed outside a public works zone, shall not be included in the cost of establishing basic living facilities, except in extenuating circumstances (see Supreme Court Decision 2012Da203799, Sept. 12, 2013). Meanwhile, the charges for metropolitan transportation facilities are borne by the implementer of a large-scale development project in accordance with the Special Act on the Management of Metropolitan Transport in Metropolitan Areas in relation to construction of traffic facilities, such as metropolitan roads and metropolitan railroads, to handle the wide-area traffic demand of metropolitan areas. Cooperation charges for the Conservation of Ecosystem is borne by the implementer of a specific development project in relation to conservation projects, etc. of ecosystems for the systematic conservation of the natural environment and the management and utilization of natural assets according to the Natural Environment Conservation Act. The expenses for creating alternative forest resources are borne by a person who intends to obtain permission for conversion, etc. under the

The court below is just in light of the above legal principles that the cost of road project, metropolitan transport facility charges, ecosystem conservation cooperative charges, and alternative forest resource creation expenses not included in the cost of basic living facilities outside the district. There is no error of law by misapprehending the legal principles on the scope of the cost of basic living

D. Regarding direct personnel expenses, sales expenses, general management expenses, and capital expenses

The lower court rejected the Plaintiffs’ assertion on the grounds that direct personnel expenses, sales expenses, general management expenses, and capital expenses are not related to the cost of basic living facilities.

However, in light of the reasoning of the lower judgment and the record, it is reasonable to view that the cost was calculated as “a certain percentage of the total sum of site cost and creation cost” or “a certain percentage of the cumulative total of net input amount,” and that, insofar as part of the site cost and creation cost constitute the cost of basic living facilities, the part corresponding to the cost of basic living facilities is also included in

Therefore, the judgment of the court below on this part is erroneous in the misapprehension of legal principles as to the scope of the cost of basic living facilities.

3. Conclusion

Therefore, the part of the judgment of the court below against Plaintiffs 2, 4, 6, 13, 17, 18, 20, 21, 22, 23, 24, 25, 27, 28, 29, 32, 33, 34, and 35 and the part against which the remainder of the plaintiffs were lost is reversed, respectively, and that part of the case is remanded to the court below for a new trial and determination. All appeals against the remaining plaintiffs are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Plaintiffs: Omitted

Justices Lee In-bok (Presiding Justice)