2020Guhap70526 Demanding operational expenses, etc.

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1. Seoul Special Metropolitan City;

2. The superintendent of education;

May 27, 2021

July 22, 2021

1. The part of the instant lawsuit against the superintendent of the Seoul Special Metropolitan City Office of Education shall be dismissed.

2. The plaintiff's claim against the defendant Seoul Special Metropolitan City is dismissed.

3. The costs of lawsuit shall be borne by the Plaintiff.

Defendant Seoul Special Metropolitan City (hereinafter referred to as “Defendant Seoul Special Metropolitan City”) shall pay the 590,325,764 won to A Co., Ltd. (hereinafter referred to as “A”) and the 12% interest per annum from the day following the delivery of a copy of the complaint to the day of full payment. Defendant Seoul Special Metropolitan City superintendent of education (hereinafter referred to as “Defendant superintendent of education”) shall revoke a disposition of refusal to change operating expenses made to A on June 8, 2020.

1. Details of the disposition;

A. On August 22, 2005, the Defendant Superintendent of the Office of Education publicly announced the instruction for private investment in new and reconstruction of four elementary schools (hereinafter referred to as the “instant schools”) and in facility maintenance and management projects in Seoul Special Metropolitan City.

B. On June 23, 2006, the Defendant Office of Education and A invested funds to newly construct and rebuild the instant school, thereby recognizing the right to manage and operate the instant school for a certain period of time as a concessionaire. A concluded a public-private partnership agreement to receive the rent and operating expenses of the instant school from the Defendant Seoul Metropolitan Government (hereinafter referred to as the “instant concession agreement”). Of them, the main contents of the operation expenses (hereinafter referred to as “A operation expenses”) and the changes thereof are as follows.

제3조(용어의 정의)본 협약에 달리 규정되지 아니하는 한 본 협약에서 사용하는 용어의 정의는 다음과 같다.- “운영비”라 함은 관리운영권 설정기간 동안 본 협약에 따라 사업시행자(A, 이하 같음)가 주무관청(피고 교육감, 이하 같음)으로부터 지급받는 본 시설의 유지관리 및 운영의대가로서 인건비, 유지관리비, 운영설비대체비, 부대비 및 제 경비를 말한다.제42조(운영비의 결정 등)① … 주무관청이 사업시행자에게 지급할 운영비의 표준비용(2005년 8월 22일 기준 불변운영비)은 금 7,173,400,000원이며, 그 구체적인 내역은 [별표 8] (운영비용 및 지급스케쥴)과 같다.제43조(운영비의 변경)협약당사자는 다음 각 호의 사유가 발생하여 본 협약에서 결정된 운영비의 변경이 필요하

If the competent authority determines that operating expenses are to be, it may change operating expenses through mutual consultation. In such cases, if the concessionaire requests an increase of operating expenses, it shall obtain a prior approval from the competent authority. 1. Where it is necessary to adjust operating expenses due to the change of the Acts and subordinate statutes and government policies related to the maintenance and management of the facilities and freight of the facilities;

C. The instant concession agreement stipulates that A, a concessionaire, shall enter into a delegation or entrustment agreement with a specialized operating company, etc. for the management, management, and operation of the instant school (Article 45(1)). Accordingly, on December 7, 2006, the Plaintiff entered into a management and operation agreement with A to be entrusted with the management, management, and operation of the instant school and to receive operating expenses (from the following, 'the instant management agreement'). Of them, the main contents of operating expenses (from the following) and the changes thereof are as follows.

Except as otherwise provided for in this Convention, the definitions of terms used in this Convention are as follows: The term "operating costs" shall mean personnel expenses, maintenance and management expenses (service charges, safety diagnosis expenses, operating facility maintenance expenses, repair expenses, etc.), operating equipment replacement expenses, incidental expenses and other expenses paid in compensation by the truster (A; hereinafter the same shall apply) according to the performance of this contract. During the operating period of Article 15, operating expenses shall be claimed and paid within five days after the performance evaluation of the concerned quarter is completed in accordance with Article 53 of the concession agreement, and the truster shall pay the operating expenses within seven business days after the date of actual receipt of the operating expenses from the competent authority. (4) If the truster directly pays part of the operating expenses, such as taxes and public charges, from the operating expenses to the trustee, the altered operating expenses under Article 43 (Modification of the concession) and Article 62 (Adjustment of Operation Expenses) of the concession agreement.

Where adjusted, the relevant operating expenses may be changed in consultation between the truster and the trustee within the scope of the expenses for the changed or adjusted operation.

D. On April 2, 2015 and October 25, 2019, Defendant Superintendent of the Office of Education responded that the minimum wage increase in A does not constitute a ground for change of operating expenses (amended by Act and subordinate statutes and government policies) under Article 43 subparag. 1 of the instant implementation agreement. Thereafter, on June 2, 2020, Defendant Superintendent of the Office of Education filed an application for change of operating expenses with the same purport as A, and Defendant Superintendent of the Office of Education responded to the same purport on June 8, 2020 (hereinafter referred to as “instant reply”).

[Reasons for Recognition] Facts without dispute, Gap's entries in Gap's Evidence Nos. 1 through 5, 7, 8, 14, 15 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings

2. Determination on the claim for operating expenses against Defendant Seoul Metropolitan Government

A. The Plaintiff’s annual minimum wage increase makes it difficult for the Plaintiff to pay the minimum wage as operating expenses under the instant concession agreement, and according to the annual basic plan, operating expenses should be adjusted in such cases. This constitutes a change in the statutes and government policies (subparagraph 1) under Article 43 of the instant concession agreement or a significant change in the conditions of maintenance, management, and operation (subparagraph 2). As such, Defendant Seoul Government is obligated to pay A operating expenses increased corresponding to the difference between the rate of increase in the minimum wage and the consumer price to A, and Defendant Seoul Government on behalf of A to compensate for the Plaintiff’s claim for the increased operating expenses for A under Article 16(2) of the instant management agreement from 2018 to 1 quarter 2020 (=228,877,726 won + KRW 285,806,4610,75757,767,764 won).

B. A shall receive operating expenses from the superintendent of education in return for the maintenance, management and operation of the instant school. The Plaintiff shall perform the duties of the management, management and operation of the instant school in accordance with the instant management contract concluded pursuant to Article 45(1) of the instant concession, and shall receive the Plaintiff’s operating expenses. All of the operating expenses and the Plaintiff’s operating expenses shall consist of personnel expenses, maintenance expenses, replacement of operating equipment, incidental expenses, and expenses. According to the instant management contract, A may pay the Plaintiff operating expenses (Article 15(1)) within seven days from the date of receipt of the operating expenses from the Defendant Seoul Metropolitan Government (Article 15(1)), and if the change or adjustment of the A transport expenses is made, the Plaintiff and A may change or adjust the operating expenses to the extent of the change (Article 16(1)), and pay the Plaintiff’s operating expenses after deducting some of the operating expenses of the instant school directly paid by A, such as taxes and public charges (Article 15(4)).

In the event that A receives the increased operating expenses from Defendant Seoul Metropolitan Government during the first quarter from 2018 to 2020, barring special circumstances, such as that A directly pays taxes, public charges, etc., the Plaintiff may seek the increased amount of expenses for the Plaintiff’s operation within seven days from that date. As such, the Plaintiff’s right to claim the Plaintiff’s operation expenses and the A operation expenses claim need to be prior to the increased amount of expenses for the Plaintiff’s operation expenses for the sake of the increased increase of expenses for the Plaintiff’s operation expenses with close relation, it is reasonable to deem that the need for preservation is recognized regardless of the debtor’s

The defendant's defense that the plaintiff's right to be preserved is merely a procedural right and the due date has not yet arrived, and that the plaintiff's subrogation claim is unlawful because the debtor's insolvency is not recognized.

C. According to the following facts and circumstances, it is difficult to view that there has been any change in the statutes and government policies as stipulated in Article 43 subparagraphs 1 and 2 of the concession agreement of this case, or any change in significant conditions, the Plaintiff’s claim against Defendant Seoul Metropolitan Government on such premise is rejected.

1) The purpose of this Act is to contribute to the stabilization of workers’ livelihood and the qualitative improvement of the labor force by guaranteeing the minimum wage level for workers who are the Minimum Wage Act (Article 1 of the Minimum Wage Act); the Minister of Employment and Labor shall determine the minimum wage by August 5 each year after deliberation by the Minimum Wage Committee (Article 8(1) of the same Act); and may require the Minimum Wage Committee to investigate the living cost and actual wage conditions of workers (Article 23 of the same Act and Article 19 of the Enforcement Decree of the same Act). The Minimum Wage Committee, as seen in Article 12, 13, 18, and 19 (Article 19 of the same Act) of the Minimum Wage Act, as seen in Article 12, 13, and 19 (Article 19 of the same Act). However, it does not seem that there was any change in laws and regulations regarding the purpose of the minimum wage system and the method and elements of determining the minimum wage system seeking the stabilization of workers’ livelihood after the conclusion of the instant concession.

2) According to the instant concession agreement, A shall carry out the project at its own risk and cost (Article 8(4)); Defendant Seoul shall pay A operating expenses calculated by applying the consumer price index fluctuation (Article 61) to the standard operating expenses set forth in Article 42(1) to the end of the immediately preceding quarter (Article 61); where demand for the instant school is increased or decreased than that set forth in the outline of the agreement, the parties to the agreement may demand an increase or decrease of operating expenses for each quarter (Article 62); where it is deemed necessary to change operating expenses due to changes in circumstances after the agreement is concluded (Article 86(3)); where it is deemed necessary to change operating expenses due to changes in statutes and government policies or significant changes in conditions, the parties may consult with each other to change operating expenses; and where A requests a change in operating expenses, it is reasonable to deem that the change under Article 43 of the instant concession agreement is exceptionally recognized as excess operating expenses calculated according to the standard operating expenses, and that A may not request a change in the relevant statutes and government policies at the time of the instant concession agreement or government policy.

3) The instant concession agreement and the instant management agreement were concluded in 2006, and the current status of the minimum wage increase rate from 2004 to 2021 are as follows. The minimum wage increase rate (9.2%) for the year 2006 which was concluded by the instant concession agreement and the instant management agreement was lower than the previous two years (10.3%, 13.1%) and the subsequent year was higher than the minimum wage increase rate for the year 2006, 2007, 2018, and 2019 only for March 15, 2019. It is difficult to view that the average increase rate of the minimum wage for the year 2006 was lower than the annual minimum wage increase rate for 7.19% (less than the second year). It is difficult to view that annual minimum wage has increased to the extent that it could not have been predicted at the time of conclusion of the instant concession agreement.

A person shall be appointed.

4) On May 7, 2019, the competent authority newly established Article 19(3) and (4) of the annual plan with the content that “if it is difficult to pay the minimum wage due to a change in the minimum wage as a simple labor service, the operating cost shall be adjusted.” On June 4, 2020, the adjustment of operating cost under Article 19(3) of the annual plan with the content that “in accordance with the difference between the minimum wage increase rate and the consumer price index increase rate, the concession agreement entered into before 2020 shall be calculated by applying the annual agreement as of 2020, and accordingly the adjustment of operating cost shall be calculated since 2021).” However, it is exceptionally recognized that operating expenses are changed due to the change in statutes and policies of the government or significant conditions, and Article 19(3) of the basic plan for private investment is not immediately calculated, and it is difficult to view the newly established basic plan with the content that Article 19(5) of the same Act seeks considerable adjustment from 201 to 2021st quarter.

3. Whether the request for revocation of the instant reply to the Superintendent of the Office of Education is legitimate

The plaintiff asserts that although the defendant's Superintendent of the Office of Education has a duty to adjust the AOperational Expenses, the response of this case should be revoked illegally.

The instant concession agreement concluded between A and the Seoul Metropolitan Government under the Act on Public-Private Partnerships in Infrastructure constitutes a contract under public law (see, e.g., Supreme Court Decision 2017Du46455, Jan. 31, 2019). It is reasonable to view that the Defendant’s Superintendent’s refusal to request the change of operating expenses under Article 43 of the instant concession agreement on behalf of the Defendant Seoul Metropolitan Government that is a party to the instant concession agreement is an expression of intent on an equal status to a party, and cannot be deemed a disposition as an exercise of public authority by an administrative agency on the superior status. The instant reply does not constitute a disposition subject to appeal. As such, the part on the Defendant’s Superintendent’s Office of Education

4. Conclusion

Among the lawsuit of this case, the part against the superintendent of education of the defendant is unlawful and dismissed, and the plaintiff's claim against the defendant Seoul Metropolitan Government is dismissed as it is without merit.

1) The Plaintiff is seeking the primary and conjunctive claim, but it is reasonable to view the two claims as a simple annexation relationship as compatible.