2020du42569 Non-permission for the establishment of a small and medium enterprise;

Co., Ltd.

Law Firm Governing Province, Counsel for defendant-appellant

Park Chang-chul et al., Counsel for the defendant-appellant

Human resource Gun;

Attorney Gyeong-tae et al., Counsel for defendant-appellant

Seoul High Court Decision 2019Nu1680 Decided June 15, 2020

March 11, 2021

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Relevant provisions and legal principles

A. Article 33 of the Support for Small and Medium Enterprise Establishment Act (hereinafter referred to as the “Small and Medium Enterprise Establishment Act”) provides for the approval of a business plan as follows. A founder who intends to engage in a manufacturing business may prepare a business plan, as prescribed by Presidential Decree, and obtain approval therefor from the head of a Si/Gun/Gu (hereinafter referred to as the “Mayor, etc.”) (Article 33(1)1); and the head of a Si, etc. shall notify whether to grant approval within 20 days from the date of receipt of the application for a business plan; and if a person fails to notify whether to grant approval within 20 days, he/she shall be deemed to have given approval on the following day after the 20th anniversary of the date of receipt of the application for a business plan (Article 33(3)); Article 33(3) of the Small and Medium Enterprise Establishment Act on the processing period of approval for a business plan and legal fiction of approval, thereby promoting the establishment of a sound industrial structure through the sound development of a small and medium enterprise (see Supreme Court Decision 2012Du3785, Mar. 14, 2013).

Article 21 (1) (main sentence) of the Enforcement Decree of the Civil Petitions Treatment Act pursuant to delegation by Article 18 of the same Act (hereinafter referred to as the "Civil Petitions Treatment Act") provides that "the head of an administrative agency may extend the treatment period once within the scope of the treatment period where he/she deems it impracticable to handle a civil petition within the treatment period due to extenuating circumstances." However, Article 3 (1) of the Civil Petitions Treatment Act provides that "Except as otherwise expressly provided for in other Acts, this Act shall apply to the civil petition."

B. In full view of the contents and structure of these provisions, and the purpose of legislation, Article 33(3) of the Act on the Establishment of Small and Medium Enterprise on the Civil Petitions Treatment and Approval Deemed to fall under “where there are special provisions in other Acts” as prescribed by Article 3(1) of the Civil Petitions Treatment Act. Therefore, the market upon receipt of an application for approval of a project plan does not have discretion to extend the treatment period at will pursuant to the main sentence of Article 21(1) of the Enforcement Decree of the Civil Petitions Treatment and Civil Petitions Treatment Act, and where the notice of approval is not given within 20 days after the date of receipt of the application for approval of the project plan, it is deemed that the approval of the project plan was made on the following day after

Meanwhile, according to Article 35(1) and (4) of the Small and Medium Enterprise Establishment Act, matters for which the Mayor, etc. has consulted with the head of the competent administrative agency regarding the relevant authorization and permission prescribed in each subparagraph of paragraph (1) when approving a business plan shall be deemed to have been granted the relevant authorization and permission. Such authorization and permission system has the legislative intent of simplification of administrative procedures by integrating the windows for the smooth implementation of the intended business, and does not purport to exclude the examination as to whether the intended business satisfies the substantive requirements of authorization and permission under relevant Acts and subordinate statutes. Therefore, only the matters for which the Mayor, etc. has consulted with the relevant administrative agency prior to approving the business plan are deemed to have the effect of deeming the relevant authorization and permission when granting approval for the business plan (see, e.g., Supreme Court Decision 2018Du43095, Oct. 25, 2018).

Even if an approval of a business plan is deemed to have been taken on the day following the 20-day processing period under Article 33(3) of the Small and Medium Enterprise Establishment Act without prior consultation on the matters related to the authorization and permission, a founder is merely entitled to the status of approval of a business plan under the Small and Medium Enterprise Establishment Act and does not have the status of obtaining the relevant authorization and permission. Therefore, a founder shall undergo the procedures for filing separate applications with the relevant administrative agency for the relevant authorization and permission necessary for the establishment of a factory. If a founder, after filing an application for a permission of development under the National Land Planning and Utilization Act necessary for the establishment of a factory, refuses the disposition of refusal, and such revocation becomes effective for the reason that the filing period is excessive, it is possible for the mayor, etc. to withdraw ex officio the approval of a business plan under the Small and Medium Enterprise Establishment Act on the grounds that the establishment of a factory is objectively impossible (see Supreme Court Decision 2019Du31839, Jul. 23, 2020).

2. Determination as to the instant case

A. On July 14, 2018, the day following the 20-day processing period from the date of the Plaintiff’s application for approval of a project plan, the lower court determined that the instant disposition on August 3, 2018, based on the premise that the Defendant could extend the processing period at will, was unlawful.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower judgment is justifiable and did not err by misapprehending the legal doctrine regarding the processing period of approval of a project plan under Article 33(3) of the Small and Medium Enterprise Establishment Act and the constructive approval

B. The Defendant asserts that the instant disposition on August 3, 2018, which became effective as of July 14, 2018, is justifiable as a disposition to revoke or withdraw ex officio the approval of the business plan. However, according to the clear text of the instant disposition (Evidence A1) as of August 3, 2018, it is clear that the instant disposition is “a rejection disposition against the Plaintiff’s application for the business plan,” or “a cancellation or withdrawal disposition on the premise that the approval of the business plan was already made,” and that it is not “a revocation or withdrawal disposition on the premise that the approval of the business plan was already made.” Thus, the Defendant’s assertion is rejected.

3. Conclusion

The Defendant’s appeal is dismissed as it is without merit, 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.

The presiding Justice shall mobilization by the presiding Justice

Justices Kim Jae-sik in charge

Justices Min Min-young

Justices Noh Tae-ok