Whether an innovation urban development project implemented based on the Special Act on the Construction and Support of Innovation Cities Following Relocation of Public Agencies is subject to development charges under Article 5 (1) 10 of the former Restitution of Development Gains Act and Article 4 [Attachment Table 1] 10 of the former Enforcement Decree of the Restitution of Development Gains Act (affirmative)

Article 5(1) of the former Restitution of Development Gains Act (amended by Act No. 12245, Jan. 14, 2014; hereinafter “former Restitution of Development Gains Act”) provides that “development projects subject to development charges shall be projects, etc. falling under any of the following subparagraphs,” including housing complex development projects ( subparagraph 1), industrial complex development projects ( subparagraph 2), tourism complex development projects ( subparagraph 3), urban environment improvement projects except where factories are built ( subparagraph 4), distribution facility site development projects ( subparagraph 5), hot spring development projects ( subparagraph 6), passenger vehicle terminal projects ( subparagraph 7), golf course construction projects ( subparagraph 8), etc. shall be prescribed as projects similar to those referred to in subparagraphs 1 through 8, and the former Enforcement Decree of the Development Gains Tax Act shall be prescribed as projects subject to development charges, etc., which are similar to those referred to in subparagraph 1 through 8, and the former Enforcement Decree of the Development Gains Tax Act shall be prescribed as projects subject to development charges under Article 5(1)4 and 5(1)4 of the former Enforcement Decree of the Development Gains Tax Act.”

Meanwhile, Article 48(2) of the former Special Act on the Construction and Support of Innovation Cities Following Relocation of Public Agencies (amended by Act No. 8656, Oct. 17, 2007; hereinafter “former Innovation City Act”) provides that the State and local governments may reduce or exempt development charges, etc., as prescribed by the Restitution of Development Gains Act, to support the relocation of public agencies and the construction of innovation cities to local areas and the construction of innovation cities.

In full view of the language and structure of the provisions of the former Act on Restitution of Development Gains and the provisions of Article 48(2) of the former Innovation City Act, an innovation city development project implemented based on the former Innovation City Act shall be deemed a project subject to development charges under Article 5(1)10 of the former Act and Article 4 [Attachment 1] 10 of the former Enforcement Decree of the Development Gains Refund Act.

Article 5(1) and (3) of the former Restitution of Development Gains Act (Amended by Act No. 12245, Jan. 14, 2014); Article 4 [Attachment Table 1] [Attachment Table 1] subparag. 10 (Attachment Table 1] of the former Enforcement Decree of the Restitution of Development Gains Act (Amended by Presidential Decree No. 25452, Jul. 14, 2014); Article 48(2) of the former Special Act on the Construction and Support of Innovation Cities Following Relocation of Public Agencies (Amended by Act No. 8656, Oct. 17, 2007) (see current Article 48(2) of the Special Act on the Construction and Development of Innovation Cities)

Korea Land and Housing Corporation and two others (Law Firm LLC, Attorneys Kim Sun-tae et al., Counsel for the plaintiff-appellant)

B. Jeju Market (Law Firm Tae, Attorneys Kim Sung-hun et al., Counsel for the plaintiff-appellant)

Gwangju High Court Decision 2018Nu5641 decided June 27, 2019

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

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

1. A. Article 5(1) of the former Restitution of Development Gains Act (amended by Act No. 12245, Jan. 14, 2014; hereinafter “former Restitution of Development Gains Act”) provides that “development projects subject to development charges shall be projects, etc. which fall under any of the following subparagraphs,” including housing complex development projects ( subparagraph 1), industrial complex development projects ( subparagraph 2), tourism complex development projects ( subparagraph 3), factories, etc., urban environment improvement projects ( subparagraph 4), distribution facility site preparation projects ( subparagraph 5), hot spring development projects ( subparagraph 6), passenger vehicle terminal projects ( subparagraph 7), golf course construction projects ( subparagraph 8), and projects similar to those referred to in subparagraphs 1 through 8 shall be subject to development charges, and Article 5(1) of the former Enforcement Decree of the Development Gains Act provides that “project subject to development charges and other projects similar to those referred to in subparagraph 1 through 8 shall be subject to development charges under the former Enforcement Decree.” Article 5(1)4 of the former Enforcement Decree of the Development Gains Act provides that development charges shall be delegated by Presidential Decree No.

Meanwhile, Article 48(2) of the former Special Act on the Construction and Support of Innovation Cities Following Relocation of Public Agencies (amended by Act No. 8656, Oct. 17, 2007; hereinafter “former Innovation City Act”) provides that the State and local governments may reduce or exempt development charges, etc., as prescribed by the Restitution of Development Gains Act, to support the relocation of public agencies and the construction of innovation cities to local areas and the construction of innovation cities.

B. In full view of the language and structure of the former Act on the Refund of Development Gains and the provisions of Article 48(2) of the former Innovation City Act, an innovation urban development project implemented based on the former Innovation City Act shall be deemed a project subject to the imposition of development charges under Article 5(1)10 of the former Act and Article 4 [Attachment 1] 10 of the former Enforcement Decree of the Development Gains Refund Act.

Article 4 [Attachment Table 1] of the Enforcement Decree of the Restitution of Development Gains Act amended by Presidential Decree No. 25452, Jul. 14, 2014; Article 4 [Attachment Table 1] of the Enforcement Decree of the Act on the Restitution of Development Gains shall be deemed to be a development project subject to the imposition of charges if the development project is deemed to have obtained authorization, etc. for a specific project under individual Acts and subordinate statutes in the remarks column of the said Table. This is not a method of strictly restricting the project subject to the imposition of development charges, but a method of adopting an example of legislation with a general provision as seen earlier. In the event the authorization of the development project under subparagraphs 1 through 8 of the said Table is deemed to have been granted, it shall be deemed to be a provision confirming that it constitutes a project subject to the imposition of

Meanwhile, Supreme Court Decision 2014Du40531 Decided December 15, 2016, which is invoked in the ground of appeal by the Plaintiffs, is a case concerning the interpretation of Article 2 subparag. 2 of the former Act on Special Cases Concerning the Securing of School Sites, Etc. (amended by Act No. 13006, Jan. 2015) that limitedly listed the business subject to the imposition of school site charges, contrary to Article 5(1) of the former Development Gains Refund Act, which applies to the instant case, and thus, it is inappropriate to invoke it in the instant case.

2. Although the reasoning of the lower judgment is partly inappropriate, the lower court is justifiable to have determined that an innovation urban development project implemented based on the former Innovation City Act constitutes a business subject to development charges. In so determining, the lower court did not err by misapprehending the legal doctrine on the interpretation of a project subject

3. Therefore, all appeals are dismissed, and the costs of appeal 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 Jae-hyung (Presiding Justice)