2017Nu59071 The revocation of revocation of the application for taking office

A Educational Foundation

The Minister of Education

Seoul Administrative Court Decision 2017Guhap51129 decided June 9, 2017

November 7, 2017

November 21, 2017

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

On January 19, 2016, the defendant's disposition of rejection of application for taking office against the plaintiff is revoked.

2. Purport of appeal

The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

1. Details of the disposition and related statutes;

The reasoning for this Court’s explanation is as follows, except for the addition of the following legal provisions to the relevant statutes, and thus, it is identical to the corresponding part of the reasoning of the judgment of the first instance. Thus, this Court shall accept it in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the

/ Private School Act

The definitions of terms used in this Act shall be as follows:

2. The term "school juristic person" means a juristic person established pursuant to this Act to establish and operate only a private school;

Article 3 (Private Schools, etc. Which may not be Established by Those Other Than School Juristic Persons)

(1) No person, other than a school foundation, may establish and operate a private school falling under any of the following subparagraphs:

1. Elementary schools, middle schools and special schools;

3. Industrial colleges, cyber colleges, junior colleges, and technical colleges Article 10;

(2) Officers of a school foundation initially established shall be stipulated by the articles of association.

Article 16 (Functions of Board of Directors)

(1) The board of directors shall deliberate and resolve on the following matters:

1. Matters concerning the budget, settlement of accounts, loans, and acquisition, disposal and management of property of the school juristic person concerned;

2. Amendment of the articles of association;

3. Matters concerning merger and dissolution of the school juristic person;

4. Matters concerning appointment and dismissal of officers;

5. Matters concerning appointment of the head and teachers of a private school established by the school foundation;

6. Important matters on management of a private school established by a school foundation;

7. Matters concerning profit-making business;

8. Other matters under its competence pursuant to Acts and subordinate statutes or the articles of incorporation.

2. Determination on the legitimacy of the instant disposition

A. Article 1 of the Private School Act provides that “The purpose of the Private School Act is to promote the sound development of a private school by securing its independence and promoting its public nature, in view of the special characteristics of the private school” (Article 1), provides that a private school shall not be established and operated by a school juristic person, other than a school juristic person (Article 3); and an initial officer of a school juristic person shall be determined by the articles of association (Article 10(2)); a school juristic person’s board of directors shall deliberate and decide on matters concerning the overall operation of a school juristic person and a private school, such as appointment and dismissal of executives (Article 16).

In principle, the autonomy of school juristic persons is guaranteed by being entrusted to the self-regulation of school juristic persons.

Meanwhile, in order to secure the public nature of the appointment of an executive officer of a school foundation operating a private school, the Private School Act limits the appointment of an executive officer by nationality, kinship, etc. (Article 21) and the duty of holding concurrent offices (Article 23). Article 20(2) provides that an executive officer appointed at the board of directors of a school foundation shall obtain approval from the competent agency (Article 20(2)). Article 20(2) provides that where an executive officer of a school violates relevant Acts, such as the Private School Act, or commits certain acts, such as causing serious trouble in the operation of the school, the competent agency may cancel the approval of taking office (Article

B. Although our Constitution does not have a separate provision on the freedom to establish and operate a private school, "private school freedom" is a basic right of a school juristic person recognized under Articles 10 (Right to Receive Education), 31 (1) (Right to Receive Education), and 31 (4) (the autonomy of education, professionalism, political neutrality, and autonomy of university) of the Constitution, and the director of the school juristic person is in a position to represent the independence and identity of the school juristic person (see Supreme Court en banc Decision 2006Da19054, May 17, 2007). As seen above, the overall operation of the school juristic person and the private school is performed by the board of directors of the school juristic person, and the board of directors has the right to appoint and dismiss the head of the private school as the highest decision-making body of the school juristic person. The appointment of directors who are its members is determined by the issue of how to actually form the main body of the private school, which is the fundamental right of the private school juristic person.

On the other hand, taking office of the competent agency for an executive of an educational foundation under Article 20 (2) of the Private School Act

Approval is a supplementary legal act that completes the legal effect by supplementing the act of appointing an officer of a school juristic person, and the competent agency may refuse to apply for approval of taking office even in the case where there exist grounds for revocation of approval of taking office under Article 20-2, in addition to the case where a person appointed as an officer of a school juristic person becomes disqualified as provided in Article 22 of the Private School Act (see Supreme Court Decision 2005Du9651, Dec. 27, 2007).

However, while guaranteeing the autonomy of school juristic persons for the appointment of an officer, the Private School Act regulates it through specific individual regulations, not by abstract and general provisions, with regard to the grounds for disqualification of an officer, grounds for restrictions on taking office, and grounds for cancellation of taking office.

In addition, the Private School Act provides a device that can ex post control an officer who has taken office in violation of the relevant laws such as the Private School Act after the officer of an educational foundation takes office (Article 20-2). In other words, the competent agency may revoke the approval of his taking office if a certain reason arises with respect to the officer who has taken office (Article 20-2), and where an investigation or audit for cancellation of the approval of taking office is conducted or there is a risk of serious damage to the operation of the school, the relevant officer may suspend the performance of his duties (Article 20-3), and where the normal operation of the educational foundation is difficult due to a vacancy of the director (Article 25), the private school has the authority to appoint temporary directors (Article 25), and to appoint temporary directors when the reason for taking office is recognized to be dismissed (Article 25-3).

Although the competent authorities may impose certain restrictions on the autonomous organizational structure of school juristic persons in order to ensure the transparency and efficiency of the operation of school juristic persons directly related to the public nature of education in private schools (see Constitutional Court en banc Order 2007Hun-Ma1189, 1190 (Merger) of the Constitutional Court, Nov. 28, 2013). As above, inasmuch as the Private School Act regulates the disqualification of an executive of a school juristic person in detail by specific regulations, and provides ex post control measures such as the cancellation of the appointment approval after the appointment of an executive, it may not be widely permitted to refuse an application for approval of executive officers on the ground that the competent authorities do not fall under specific individual regulations on the disqualification of executive officers. On the contrary, if a wide range of discretion is recognized to the competent authorities on the approval of executive officers, it may not be excluded from the risk of infringing on the freedom of private school.

Therefore, in order for the competent agency to refuse to approve the appointment of an officer appointed by the board of directors of a school juristic person, it should be necessary to prevent the appointment of the officer itself in advance, or there is a reason corresponding to the specific individual provisions of the Private School Act concerning the disqualification of an officer.

C. Examining the following circumstances, which are acknowledged by the respective statements and the entire purport of pleadings and evidence Nos. 3 through 30 (including virtual numbers), in light of the aforementioned legal provisions and legal principles, in the instant case where: (a) even if the content of the instant criminal case could not be less than those of the C, there is no reason to constitute specific individual provisions of the Private School Act concerning the grounds for disqualification, etc. for officers, it is difficult to view that the instant disposition taken by the Defendant alone constitutes a case where there is a necessity for important public interest or a reason corresponding to the above individual provisions, etc. to refuse to approve the appointment of directors of C; and (b) there is no other evidence to acknowledge

1) The net F, which is the Plaintiff’s founder, established E Co., Ltd. (hereinafter “E”), and operated 100% of the shares. E has contributed approximately KRW 150 million or KRW 270 million annually to the Plaintiff with its profits, and has played an important financial role in the Plaintiff’s operation from around 1983 to 2012, such as contributing approximately KRW 4.9 billion in total to the Plaintiff (the Plaintiff’s directors, and directors, stated that they were in charge of the Plaintiff’s role as “property for profit-making”).

2) The president of E’s representative director: (a) the networkF, inside directors, and H (the wife of the networkF), D (the networkF 3 South) and the auditor were the wife of D; and (b) G (the networkF 2 South) instead of the networkF around 2008 was appointed as the representative director. However, the appointment of G as the representative director was due to the reason that it is not desirable that the networkF would concurrently hold the position of the representative director of a profit-making corporation due to the relationship in which he/she was in office as the president of the B University; and (c) thereafter, the actual operation of E was still in charge of the networkF.

3) The networkF died on January 9, 2009, and thereafter, 2,384 out of 7,152 shares of E were divided into H, and 4,768 shares were owned by H. Meanwhile, H was the president of the Plaintiff, and D was the president of the two universities. D and C terminated at around 2011 and the representative director for E’s loans need joint and several sureties (G appears to have refused to assume joint and several sureties’s liability as the representative director). On January 201, 201, D and C committed a criminal act of forging and exercising the minutes of E board of directors, etc. to appoint C as the representative director.

4) Around July 11, 2011, H drafted a share of inheritance transfer/acquisition agreement with D, which provides that “D shall comprehensively delegate all the management rights, such as the right to appoint directors, as the chief director of the Plaintiff.” Moreover, D was appointed as the representative director through a general meeting of shareholders and a resolution of the board of directors held by the court around 2016 with the permission to convene a general meeting of shareholders of E and the resolution of the board of directors.

5) In light of the above facts, D and C have committed a crime of related criminal case in light of the need for its operation, such as the practical consideration of E, which has contributed significantly to the Plaintiff’s finance, and the handling of loan problems, etc., and there are circumstances to be considered in light of the circumstances.

(D) When the inheritance tax imposed upon co-inheritors causes risks to a public auction of E’s real estate, this also prevents a public auction with the funds that they received, etc.). Also, C did not have any criminal record, otherwise did not engage in any illegal or unfair conduct in relation to the operation of the Plaintiff or B University, and there was a clerical error in the amount of money equivalent to B University with scholarships or development funds, etc.

3. Conclusion

If so, the plaintiff's claim is reasonable, and the judgment of the court of first instance is just with this conclusion, and the defendant's appeal is dismissed as it is without merit.

Awards and decorations for judges;

Judges Lee Jong-chul

Judge Cho Jae-soo