[1] In a case where a cyber university fails to fulfill its duty to secure basic assets for profit or fails to comply with a corrective order, whether the Minister of Education has discretion to determine the type of sanctions and the degree of sanctions (affirmative)

[2] The subject of judicial review of discretionary actions and the criteria for determination, and the subject of the burden of assertion and certification as to deviation and abuse of discretionary power

[1] Article 2 subparag. 5, Articles 4, 60(1) and (2) of the Higher Education Act, Article 71-2 [Attachment 4] of the former Enforcement Decree of the Higher Education Act (Amended by Presidential Decree No. 27611, Nov. 29, 2016); Article 2(1) of the Enforcement Decree of the Higher Education Act; Article 7(1) of the former Regulations on the Establishment and Operation of Cyber Colleges (Amended by Presidential Decree No. 28294, Sept. 19, 2017); Article 26 of the Administrative Litigation Act / [2] Articles 27 and 27 of the Administrative Litigation Act

[2] Supreme Court Decision 2015Du41579 Decided October 27, 2016 Supreme Court Decision 2016Du30866 Decided June 19, 2017 Supreme Court Decision 2017Du48956 Decided October 12, 2017 (Gong2017Ha, 2128)

Seoul Digital University (Attorney Kim Jae-hwan et al., Counsel for the plaintiff-appellant)

The Minister of Education (Law Firm Ansan, Attorneys Lee Sung-hwan et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2017Nu35075 decided September 15, 2017

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

The grounds of appeal are examined.

1. A. Article 2 Subparag. 5 of the Higher Education Act provides that cyber colleges shall be defined as one of the types of schools, and Article 4 provides that a person who intends to establish a school shall meet the standards for establishment prescribed by Presidential Decree, such as facilities and equipment.

According to delegation, Article 2(1) of the Enforcement Decree of the Higher Education Act provides that matters concerning the standards for establishing schools, such as facilities and equipment, shall be separately prescribed by Presidential Decree. Accordingly, Article 7(1) of the former Regulations on the Establishment and Operation of Cyber Colleges (amended by Presidential Decree No. 28294, Sep. 19, 2017; hereinafter “former Regulations on Cyber Colleges”) provides that the basic property for profits equivalent to or more than 50% of the annual total operating revenues of the university shall be secured.

Meanwhile, Article 60 (1) of the Higher Education Act provides, “The Minister of Education may order founders, managers, or the heads of schools to correct or modify any violation of education-related Acts and subordinate statutes or orders or school regulations thereon with respect to facilities, equipment, classes, school affairs, and other matters, within a fixed period of time,” and Article 60 (2) of the Higher Education Act provides, “The Minister of Education may order founders, managers, or the heads of schools to correct or modify such violation, as prescribed by Presidential Decree, if a person ordered to correct or modify under paragraph (1) fails to comply with such order within the designated period of time without justifiable grounds.”

According to delegation, Article 71-2 of the former Enforcement Decree of the Higher Education Act (amended by Presidential Decree No. 27611, Nov. 29, 2016) provides the detailed criteria for administrative dispositions under Article 60(2) of the Higher Education Act (attached Table 4).

Of the general criteria in subparagraph 1 (f) of the above [Attachment 4], the administrative disposition standards set forth in the individual criteria shall apply in cases where the criteria for administrative disposition are not set in the individual criteria, and where there is no similar violation, the administrative disposition standards shall be applied in consideration of the details, severity, frequency, etc. of the violation, and in cases where there is no similar violation, the reduction of the fixed number of students, the abolition of the department, the suspension of student recruitment, or the administrative disposition on the fixed number of students." Meanwhile, in the individual criteria in subparagraph 2 of the above [Attachment 4], the administrative disposition standards for non-performance of the obligation to secure fundamental property for profits under Article 7(1) of the

In full view of the contents and purport of the provisions of such statutes, in cases where a cyber university fails to fulfill its obligation to secure fundamental property for profit or fails to comply with a corrective order, it is reasonable to deem that the defendant has discretion to determine the types and degree of sanctions in consideration of the content, severity and frequency of the violation.

B. Furthermore, the judicial review of discretionary action is, in principle, subject to whether there is deviation or abuse of discretionary authority, taking into account the room for the discretion of an administrative agency regarding the determination of public interest. The criteria for such determination are erroneous facts and whether there is a violation of the principle of proportionality or equality (see, e.g., Supreme Court Decisions 2015Du41579, Oct. 27, 2016; 2016Du30866, Jun. 19, 2017). As to deviation or abuse of discretionary authority, the person who disputes the validity of such administrative action bears the burden of assertion and certification (see, e.g., Supreme Court Decision 2017Du48956, Oct. 12, 2017).

2. Review of the reasoning of the lower judgment and the record reveals the following circumstances.

A. The Plaintiff was originally a lifelong educational establishment, and obtained approval from the Defendant for conversion into cyber colleges on October 30, 2009. At the time of granting approval for conversion to the Plaintiff, the Defendant issued a three-year grace period on the duty to secure fundamental property for profit under Article 7(1) of the former Regulations on Cyber Colleges at the time of granting approval for conversion to the Plaintiff.

B. The Plaintiff failed to perform his/her duty to secure fundamental property for profit, and the Defendant ordered several times to secure fundamental property for profit, but the Plaintiff failed to comply with the order (the Defendant issued a disposition to suspend solicitation for 69.5% of the fixed number of admission in the year 2014, but on August 26, 2013, on the ground that there was an error of deviation or abuse of discretionary power, it became final and conclusive.)

C. After that, on December 17, 2015, the Defendant again ordered the Plaintiff to secure the fundamental property for profit, but failed to comply with the order.

D. Accordingly, on October 17, 2016, the Defendant rendered a disposition “40% (1,200) of the fixed number of admission” (hereinafter “instant disposition”) against the Plaintiff on the ground that the Plaintiff did not secure fundamental property for profit-making purposes.

E. The reasons why the Defendant, while rendering the instant disposition, set the recruitment suspension rate to 40% are as follows.

(1) According to the status of securing fundamental property for profit as of March 1, 2016, the Plaintiff submitted to the Defendant, as of March 1, 2016, secured only KRW 5.75 million out of the base amount for securing fundamental property for profit, 37.2% of the base amount for securing fundamental property for profit, and the failure ratio is 62.8%.

(2) According to Article 7(4) [Attachment 2] of the former Regulations on Cyber Colleges, the operating income of the school accounting shall be deducted only from the total operating income and donations, and the national subsidy shall be calculated by the method of not deducting the income. The base amount of securing basic assets for profit (i.e., the Plaintiff’s annual operating income of the school accounting) 15.46 million won was calculated by the method of not deducting the national subsidy under the above provision.

(3) Prior to the instant disposition, the administrative disposition committee adopted a proposal at the meeting of the administrative disposition committee, based on 62.8% of the Plaintiff’s non-performance rate of fundamental property for profit, 50%, taking into account the developments leading up to the instant offense, the details and seriousness of the offense, the frequency of offenses, the intent of improvement, the protection of legitimate interested parties, and the degree of undermining financial soundness. At the time, the Plaintiff’s data on the current status of the recruitment rate for new students was provided in 2014 through 2016. The Plaintiff’s recruitment rate for new students appearing in the above data was the recruitment rate for new students of a semester, and the Plaintiff’s recruitment rate for new students appearing in the first and

(4) The Defendant’s prior notice of the disposition with a recruitment suspension rate of 50% was defective, and the Plaintiff submitted his opinion three times, and the Plaintiff also submitted a statement of estimated funds, specifying the reduction of the amount of tuition fees and the details of the operator’s operation according to the prior notice. The estimate funds statement was made on the basis of the details of the registration fees revenue, which reflects all the number of new students of the Plaintiff

(5) After considering the Plaintiff’s financial aggravation and negative impact on the legitimate interested parties, the administrative disposition commission held later, after referring to the statement of estimated funds submitted by the Plaintiff, calculated the final administrative disposition in consideration of the Plaintiff’s financial aggravation and the negative impact on the legitimate interested parties. Accordingly, the Defendant issued the instant disposition with the solicitation suspension rate of 40% to the Plaintiff

3. Examining these circumstances in light of the legal principles as seen earlier, the following determination is possible.

When rendering the instant disposition, the Defendant considered the degree of infringement that the Plaintiff would suffer due to the disposition of the suspension of solicitation, such as financial aggravation, by referring to the supporting materials submitted by the Plaintiff.

Furthermore, it is difficult to deem that the Defendant calculated the standard amount for securing fundamental property for profit without deducting national subsidies as illegal because it is based on the provisions of the former cyber university, which was in force at the time. Considering the following: (i) the period during which the Plaintiff breached its duty to secure basic property for profit; (ii) the Plaintiff failed to comply with the order to secure basic property for profit several times; and (iii) the failure to secure basic property for profit is high, it is difficult to deem that the Defendant’s final disposition of this case, the rate of suspension of solicitation of which was set as

Nevertheless, the lower court determined that the instant disposition was erroneous by exceeding the discretionary authority. In so determining, the lower court erred by misapprehending the legal doctrine on deviation and abuse of discretionary authority, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit

4. 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.

Justices Kim So-young (Presiding Justice)