[1] Whether the proviso of Article 49 (6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents applies or analogically applies to a housing reconstruction project for which a project implementer is not entitled to expropriate or use land, etc. in a rearrangement zone (negative)

[2] Whether the lessee should have the right to refund the deposit against the project implementer pursuant to Article 44(1) and (2) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (affirmative)

[1] In full view of the language and purport of Articles 38, 40(1), and 49(6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 11293, Feb. 1, 2012; hereinafter “Urban Improvement Act”), the proviso of Article 49(6) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents is limited to a rearrangement project for which a project implementer is entitled to expropriate or use land, etc. within a rearrangement zone under Article 38 of the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (hereinafter “Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents”), and it cannot be applied to a housing reconstruction project for which

Furthermore, the Act on the Improvement of Urban Areas and Dwelling Conditions provides that the legislative purpose and purport of the Act on the Improvement of Urban Areas and Dwelling Conditions and the characteristics of the housing reconstruction project under the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents, etc., and ① the Act on the Improvement of Urban Areas and Dwelling Conditions provide that the details of specific regulations are different depending on the public nature and public interest of each project for various types of housing reconstruction projects, and ② the Housing reconstruction project under the Act on the Improvement of Urban Areas and Dwelling Conditions are implemented for the purpose of "the improvement of residential environment in an area where infrastructure for rearrangement is good, but worn-out and inferior buildings are densely concentrated." (3) The Act on the Improvement of Urban Areas and Dwelling Conditions relatively lacks public nature and public interest compared to the Housing Redevelopment project for the purpose of restoring urban functions through the installation of infrastructure in an area where infrastructure for rearrangement is poor in the area where infrastructure for rearrangement is poor. (4) Accordingly, the Act on the Improvement of Urban Areas and Dwelling Conditions can be deemed as the basic framework of the Act on the Improvement of Urban Areas and Dwelling Conditions, etc.

[2] The legislative purport and purpose of Article 44(1) through (4) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 11293, Feb. 1, 2012; hereinafter “Urban Improvement Act”) and the systematic interpretation of each of the above provisions, etc. as well as ① Article 44(3) of the Urban Improvement Act provides the legal basis for the right to indemnity against the owners of land, etc. who have returned the deposit to the lessee. Thus, to exercise the right to indemnity against the owners of land, etc. under the aforementioned provision, the said provision assumes that the project implementer has the obligation to refund the deposit against the lessee to the owners of land, etc.; ② Article 44(4) of the Urban Improvement Act is also deemed to be a provision premised on the obligation to refund the deposit to the lessee to the owners of land, etc.; ③ It is against the legislative purport of Article 44(2) of the Housing Lease Protection Act, which is merely an obligation of the lessor to refund the deposit to the owners of land, etc.

[1] Articles 38, 40(1), and 49(6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 11293, Feb. 1, 2012); Articles 61 and 77 of the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor / [2] Articles 44(1), (2), (3), and (4) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 11293, Feb. 1, 2012)

[1] Supreme Court Decision 2008Da21549, 21556, 21563 Decided March 26, 2009

Busan District Housing Reconstruction and Improvement Project Association (Law Firm Squae, et al., Counsel for the plaintiff-appellant)

KF real estate trust Co., Ltd. (Law Firm Sejong, Attorneys Kim Yong-dam et al., Counsel for the plaintiff-appellant)

Defendant 1 and three others (Law Firm LLC, Attorneys Kim Jong-ju et al., Counsel for the defendant-appellant)

The Korea Amateur Association (Law Firm LLC, Attorneys Kim Jong-ju et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2011Na98831 decided June 7, 2012

The part of the judgment of the court below against the plaintiff out of the part against the defendant Lee Jong-chul and the part against the plaintiff is reversed, and that part of the case is remanded to the Seoul High Court. All of the defendants' appeals are dismissed. The costs of appeal are assessed against the defendants except the defendant Lee Jong-ro Association. The costs of appeal are assessed against the same defendants.

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

1. Judgment on the Defendants’ grounds of appeal

A. As to the non-existence of a claim for delivery of a building (Ground of appeal No. 1)

When a management and disposal plan is authorized and publicly announced pursuant to Article 49(6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 11293, Feb. 1, 2012; hereinafter “Urban Improvement Act”), a right holder, such as an owner, superficies, leasee, etc. of the previous land or structure, shall not use or benefit from the previous land or structure until the date of public announcement of relocation under Article 54 of the Urban Improvement Act, and a project implementer shall be able to use or benefit from the former land or structure (see Supreme Court Decision 2009Da53635, May 27, 2010).

In the same purport, the court below is just in holding that the defendants whose use or profit has been suspended as the lessee pursuant to the public notice of the approval of the management and disposal plan of this case are obligated to deliver to the plaintiff who acquired the right to use or profit from the real estate of this case the part possessed by them, and there is no error of law by misunderstanding the legal principles as to the existence of the right to request delivery of buildings under

B. As to the assertion on compensation for losses (Ground of appeal No. 2)

Article 38 of the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (hereinafter “Act on the Acquisition of Land, etc.”) is limited to projects falling under Article 8(4)1 of the Act on the Maintenance and Improvement of Urban Areas (Article 8(1) of the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor) when a rearrangement project implementer grants the authority to expropriate or use land, etc. under the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor within a rearrangement zone, and in case of a housing reconstruction project, it is deemed necessary to implement a rearrangement project urgently due to natural disasters or other inevitable causes unlike other rearrangement projects (Article 8(4)1 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Areas). Article 40(1) of the same Act provides that “The Act on the Maintenance and Improvement of Urban Areas and Dwelling Areas shall apply mutatis mutandis to expropriation or use of land or buildings for the implementation of a rearrangement project within a rearrangement zone except as otherwise provided in this Act.”

In full view of the language and purport of the above provisions, the proviso of Article 49(6) of the Act on the Maintenance and Improvement of Urban Areas shall be limited to a rearrangement project for which a project implementer is entitled to expropriate or use land, etc. in an improvement zone under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents pursuant to Article 38 of the Act on the Maintenance and Improvement

Furthermore, the Act on the Improvement of Urban Areas and Dwelling Conditions provides that the legislative purpose and purport of the Act, characteristics of the housing reconstruction project under the Act on the Improvement of Urban Areas and Dwelling Conditions, etc., and ① the details of the specific regulations are different depending on the public nature and public interest degree of each project with respect to various types of housing reconstruction projects. ② Housing reconstruction project under the Act on the Improvement of Urban Areas and Dwelling Conditions is implemented for the purpose of "the improvement of residential environment in an area where infrastructure for rearrangement is good, but where worn-out and inferior buildings are concentrated," and its public nature and public interest are relatively weak compared to the housing redevelopment project for the purpose of restoring urban functions through installation of infrastructure in an area where infrastructure for rearrangement is poor. ③ Accordingly, the Act on the Improvement of Urban Areas and Dwelling Conditions provides that the resolution of the difference between the owners of land, etc. and the owners of land, etc. should be made by means of private autonomy through the exercise of the right to demand sale without using public means such as expropriation and use, etc.

Therefore, the court below is just in holding that the plaintiff, the lessee of the housing reconstruction project of this case, who did not have the right to expropriate or use the housing reconstruction project of this case, has no obligation to compensate for business losses, etc. against the Defendants, the lessee, and there is no error of law by misunderstanding the legal principles on the application or analogical application of the provisions on compensation for losses under Article 49(

C. As to the assertion on the unconstitutionality of Articles 38 and 49(6) of the Act on the Improvement of Urban Areas (Ground of appeal No. 3)

(1) As to Article 38 of the Urban Improvement Act

The principle of equality, based on Article 11(1) of the Constitution, prevents a person from arbitrarily treating the same in essence. It means that not only when the statute is applied but also when the legislation is made, unreasonable discrimination should not be treated.

In light of the foregoing differences in the purpose and public interest of the housing reconstruction project and the housing redevelopment project under the Urban Improvement Act, the fact that a housing reconstruction project does not recognize, in principle, the authority to expropriate or use the housing reconstruction project differently from the housing redevelopment project is reasonable discrimination that reflects the difference in the nature of the project, and thus, cannot be deemed contrary to the principle of equality (see Constitutional Court Order 2011Hun-Ba363, Jan. 28, 2014).

In addition, the failure of the lessee of the housing reconstruction project to receive compensation for losses is an incidental result due to the failure of Article 38 of the Act on the Improvement of Urban Areas and Dwelling Conditions for Residents to grant the right to expropriate or use the housing reconstruction project implementer, and the said provision does not directly limit the lessee’s property right. Therefore, the said provision cannot be deemed as infringing the Defendants’ property right without any justifiable compensation, or infringing the essential contents of property

(2) As to Article 49(6) of the Urban Improvement Act

Article 49(6) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents is merely a provision on a right to claim a delivery against a tenant. In the case of a housing reconstruction project, it does not directly affect the conclusion of this case depending on the unconstitutionality of the above provision in the case claiming that it is against the Constitution that the project implementer does not apply the Public Works Act such as a housing redevelopment project, etc. to the expropriation method. Therefore,

(3) Sub-determination

In the same purport, the court below is just to reject the Defendants’ assertion on the constitutionality of each of the above provisions, and there is no error of law by misunderstanding the legal principles as to whether Article 38 and Article 49(6) of the Act is unconstitutional.

D. Regarding the status of possession (Ground of appeal No. 4)

This part of the grounds of appeal is merely an error in the selection of evidence and fact-finding, which belong to the exclusive authority of the court below, on the grounds that the status of possession by the defendants, recognized by the court below, differs from actual ones, and thus, cannot be viewed

2. Determination on the grounds of appeal by the Intervenor joining the Plaintiff (hereinafter “ Intervenor”)

A. As to the non-existence of the claim for return of the lease deposit by the Sungsung (hereinafter referred to as the “Defendant Sungsung”) of the Sungsung (Ground of appeal No. 2)

According to the reasoning of the judgment below, the court below determined as follows: (a) comprehensively based on the evidence of its employment, Defendant Diplomatic Association sold the building of this case which was used as a church building on April 30, 2008 to Defendant Diplomatic Construction Co., Ltd. (hereinafter “Defendant Diplomatic Construction”), the contractor of the new church construction; (b) KRW 5 billion is offset by the construction cost to be paid by Defendant Diplomatic Association on the date of the contract; and (c) KRW 35.616 billion was paid in part on June 19, 2008 by the acquisition of loan obligations and lease deposit obligations; (d) Defendant Diplomatic Association and Dental Construction Co., Ltd. shall rent the building of this case from Defendant Dental Construction Co., Ltd., the contractor of the new church, and (e) the remainder of the purchase price of KRW 2738,400,000,000,000,0000,000,000,000,000.

In light of the relevant legal principles and records, the above judgment of the court below is just and there is no violation of law of free evaluation of evidence against logical and empirical rules.

B. As to the assertion that the Sungsung does not constitute a lessee as provided by Article 44(1) and (2) (hereinafter collectively referred to as “instant provision”) of the Act on the Maintenance of Urban Areas and Dwelling Conditions for Residents (Ground of appeal No. 1)

(1) Scope of “Lessee” as stipulated in the instant provision

Article 44 (1) of the Act on the Maintenance and Improvement of Urban Areas provides that when it is impossible to achieve the purpose of creation of superficies, chonsegwon or right of lease due to the implementation of an improvement project, the right holder may terminate the contract, and the right holder may exercise the right to claim the return of the deposit for lease on a deposit basis, security deposit, and other money under the contract held by a person who is entitled to terminate the contract under the provisions of paragraph (1).

On the other hand, Article 3 (3) of the same Act provides that a project implementer who has paid the relevant money following an exercise of right to request a return under paragraph (2) may demand its reimbursement against the owners of relevant lands, etc., and Article 4 (4) provides that when the project implementer fails to demand a reimbursement under paragraph (3), the project implementer may seize the site or structure to be reverted to the owners of relevant lands, etc.

As such, the Act on the Maintenance and Improvement of Urban Areas strongly protects the legitimate rights of the lessee, etc. whose use and profit of the leased object is suspended against his/her will in accordance with the public notice on the approval of the management and disposition plan for the improvement project, and aims to promote the smooth implementation of the improvement project by extinguishing these rights early as an exception to the duration of the right, such as the term of lease under the contract, as an exception to the term of the contract.

In addition to the legislative intent and purpose of the above, the systematic interpretation of the above provisions, and ① Article 44(3) of the Urban Improvement Act provides the legal basis for the right of indemnity against the owners of lands, etc. of a project implementer who has returned deposits to the lessee. Thus, the project implementer is premised on the obligation to return deposits to the owners of lands, etc. in order to exercise the right of indemnity against the lessee under the above provision. ② Article 44(4) of the Urban Improvement Act also provides that the obligation to return deposits to the owners of lands, etc. is premised on the obligation to return deposits to the lessee to the owners of lands, etc.

(2) Whether Defendant Asung constitutes “Lessee” as stipulated in the instant provision

In full view of the evidence of its employment, the court below acknowledged the fact that the Sungsung Association had the right to return the lease deposit amount of KRW 27.384 billion under the lease agreement between the Defendant Multilater Construction Co., Ltd. on July 1, 2008, on the ground that the purpose of the lease cannot be achieved due to the implementation of the reconstruction project of this case, the court below accepted the fact that the lease agreement was terminated by the delivery of the preparatory documents dated September 2, 201, on the ground that the above lease was terminated, and in this case, the above lease was deemed to have been terminated. In this case, the Defendant Sungsung Association can seek the return of the deposit money to the Plaintiff, who is the project operator, the Plaintiff is obligated to return the money equivalent to the above deposit money to the Plaintiff, and that this obligation was related to the obligation to deliver the portion occupied by the Defendant Sungsung Association and that the Defendant had received the simultaneous performance objection.

However, this decision of the court below is not acceptable for the following reasons.

The trust under the Trust Act requires the trustee to manage and dispose of the property right for the purpose of the trust by transferring a specific property right to the trustee or disposing of it (Article 1(2) of the Trust Act). Thus, if the registration of ownership transfer is completed in the future of the trustee in the trust of real estate, the ownership inside and outside the country is entirely transferred to the trustee, and the ownership is reserved in the internal relationship with the truster. As such, the validity of the trust is that the trustee has the right to manage the trust property inside and outside the country as a result of the transfer of the ownership of the trust property to the trustee (see Supreme Court Decision 200Da70460, Apr. 12, 200).

According to the reasoning of the judgment below and the records, Defendant Multiple Construction concluded a real estate trust agreement with the intervenor on June 19, 2008 with the intervenor on the same day, completed the registration of transfer of ownership based on the above trust agreement with the intervenor on the same day, and Article 9 of the Trust Clause registered as the trust ledger pursuant to the above trust agreement provides that "if the truster does not have prior consent of the trustee, the truster shall not engage in any act of reducing the value by means of establishing the right, such as the lease, or changing the current state of the trusted real estate," and Article 10 (1) provides that "The status of the lease agreement entered into by the truster on the trust real estate before the trust agreement was entered into by the truster on the trust real estate shall be equal to that of the preferential beneficiary, and the claim for the return of the lease deposit of the lessee shall take precedence over the beneficiary's right to benefit." Article 10 (3) provides that "a new lease or re-lease contract after this trust agreement was concluded in the name of the truster on the condition of the trustee's prior consent, but the lease deposit shall be deposited to the trustee."

Examining the above facts in light of the above legal principles, since the ownership inside and outside of the instant real estate in accordance with the above trust agreement was completely transferred to an intervenor, a trustee, on June 19, 2008, which is the date of registration of the trust, only the status of a lessor as to the lease mentioned in the above attached Table 5 existing in the instant real estate as of the date of registration of the trust was succeeded to the trustee, and only the lease concluding with prior approval of the trustee pursuant to Article 10(3) of the above trust agreement can be set up against the trustee, who is the owner.

Therefore, barring special circumstances, such as the Plaintiff’s prior consent with regard to the above lease agreement entered into between Defendant Multilateral Construction on July 1, 2008, the Intervenor does not bear the obligation to return the deposit under the above lease agreement to the Defendant Sungsung Association. In such a case, in light of the legal principles as seen in the above paragraph (1), the Defendant Sungsung Association cannot exercise the right to claim the return of the deposit against the Plaintiff under the above provision.

However, according to the above separate sheet 5, the intervenor only known that the Sungsung Association was a lessee without a security deposit, and argued to the effect that he was unaware of the existence of a security deposit for lease under the above lease agreement, and it is difficult to find any evidence to acknowledge that the defendant Sungsung Association or the defendant Lee Sung Construction obtained prior consent from the intervenor at the time of examining the record.

Nevertheless, the court below did not examine whether the Sungsung or the defendant Multi-Family Construction obtained the intervenor's prior consent at the time of the conclusion of the above lease agreement, and accordingly, whether the defendant Lee Sung-sung constitutes the "Lessee" as stipulated in the provisions of this case, and therefore received the simultaneous performance claim of the defendant Lee Sung-dong church on the sole basis of the circumstances of the judgment. Thus, the court below erred by misapprehending the legal principles on the scope of the "Lessee" as stipulated in the provisions of this case and failing to exhaust all necessary deliberations, which affected the conclusion of the judgment.

3. Conclusion

Therefore, the part of the judgment of the court below against the plaintiff among the part against the defendant in relation to the sexual intercourse is reversed, and that part of the case is remanded to the court below for a new trial and determination. All appeals by the defendants are dismissed. The costs of appeal by the remaining defendants except the defendant sexual intercourse are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok (Presiding Justice)