[1] In a case where an administrative agency fails to reduce the period of business suspension by misunderstanding that a constructor does not fall under the grounds for business suspension, even though there are grounds for considering the reduction of business suspension period, when it imposes a business suspension order on a constructor under the Framework Act on the Construction Industry and the former Enforcement Decree of the Framework Act on the Construction Industry,

[2] Whether Article 80(1) [Attachment 6] of the former Enforcement Decree of the Framework Act on the Construction Industry stipulates the motive, content, and frequency of the act of violation, which is the standard for mitigation under Article 80(2) and the individual grounds for mitigation (affirmative)

[1] Where an administrative agency takes measures to suspend its business against a constructor pursuant to the provisions of the Framework Act on the Construction Industry and the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 26979, Feb. 11, 2016; hereinafter “Enforcement Decree”), where there exist grounds for the reduction of the period of suspension of business to the constructor, the administrative agency shall not be deemed unlawful when it takes into account the grounds for the suspension of business as well as when it takes measures to suspend its business according to the period of suspension of business prescribed in Article 80(1) [Attachment Table 6] of the Enforcement Decree without reducing the period of suspension of business, without reducing the period of suspension of business. However, if the administrative agency did not take into account the above grounds and did not reduce the remaining

[2] Article 80(1) [Attachment 6] of the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 26979, Feb. 11, 2016; hereinafter “Enforcement Decree”) provides that “the period of suspension of business according to the type and degree of the act of violation” under Article 80(1) [Attachment 6]. However, since [Attachment 6] does not simply provide the period of suspension of business for the individual act of violation, but also provides “the grounds and criteria for mitigation and aggravation”, it is problematic whether the provision of mitigation and aggravation in [Attachment 6] provides the method of calculating the period of suspension of business under Article 80(1) of the Enforcement Decree or the criteria for mitigation and aggravation of the same Article.

However, Article 80(1) [Attachment 6] of the Enforcement Decree reflects “the motive, content, and frequency of the act of violation” as stated in Article 80(1) [Attachment Table 6] of the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 24204, Nov. 27, 2012), which reflects “the motive, content, and frequency of the act of violation” as the basis for mitigation and aggravation of Article 80(2) of the Enforcement Decree. The purpose of Article 80 of the Enforcement Decree is “the degree, motive, and consequence, etc. of the act of violation” under [Attachment Table 6], and it does not be construed that it is difficult to view the same differently. Considering the history of Article 80 of the Enforcement Decree, Article 80(1) [Attachment 6] of the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 24204, Nov. 27, 2012). 208

In full view of these circumstances, Article 80(1) [Attachment 6] of the Enforcement Decree stipulates the motive, content, and frequency of the act of violation, which is the standard for mitigation under Article 80(2) and the individual grounds for mitigation. As such, inasmuch as mitigation was made after considering the motive, content, and frequency of the act of violation, etc. pursuant to [Attachment Table 6], it shall not be deemed that mitigation under Article 80(2) of the Enforcement Decree was not taken into account as to the relevant circumstances. Therefore, even if an administrative agency examines only the mitigation under [Attachment Table 6] as to the grounds for taking into account the motive, content, and frequency of the act of violation, and determines the period of suspension of business, it shall not be deemed that the disposition constitutes a deviation or abuse of discretionary authority.

[1] Article 83 of the Framework Act on the Construction Industry, Article 80(1) [Attachment 6] of the former Enforcement Decree of the Framework Act on the Construction Industry (Amended by Presidential Decree No. 26979, Feb. 11, 2016); Article 27 of the Administrative Litigation Act / [2] Article 83 subparag. 3 and 84 of the Framework Act on the Construction Industry; Article 80(1) [Attachment 6] and (2) of the former Enforcement Decree of the Framework Act on the Construction Industry (Amended by Presidential Decree No. 26979, Feb. 11, 2016)

[1] Supreme Court Decision 2012Du18660 Decided December 26, 2012

Sejong General Construction Co., Ltd. (Law Firm Inulul, Attorneys Han Han-soo et al., Counsel for the plaintiff-appellant)

Do Governor of Chungcheongnam-do (Law Firm Dongin, Attorneys Shin Sung-ho et al., Counsel for the plaintiff-appellant)

Daejeon High Court Decision 2014Nu10781 decided October 30, 2014

The judgment of the court below is reversed, and the case is remanded to Daejeon High Court.

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

1. The Framework Act on the Construction Industry (hereinafter referred to as the “Act”) stipulates that if a constructor fails to meet the standards for registration of construction business, the Minister of Land, Infrastructure and Transport may cancel his/her registration of construction business or order him/her to suspend construction business for a fixed period not exceeding one year (Article 83 subparagraph 3 of the same Act); and delegates the standards for cancellation of registration of construction business or the degree of violation; the period of suspension of business, and other necessary matters to be prescribed by Presidential Decree

Accordingly, Article 80(1) of the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 26979, Feb. 11, 2016; hereinafter “Enforcement Decree”) provides that “The period of suspension of business or the amount of penalty surcharges depending on the type and degree of offenses under Article 84 of the Act shall be as shown in attached Table 6”. [Attachment Table 6] provides that “The period of suspension of business or the amount of penalty surcharges may be increased or mitigated by up to 1/2 of the business suspension and the amount of penalty surcharges according to the individual criteria under subparagraph 2, taking into account the degree, motive, and consequence, etc. of the offense” in the “general standards” provides that “where the correction is completed after a violation due to an error in statutory construction, etc., and the circumstances need to be considered” and “where the relevant violation was committed within the latest three years (excluding corrective order and imposition of fines)” and “where the relevant constructor and his/her employees and workers have caused death or injury to each of the relevant violations, it shall be mitigated or mitigated for more than one month.”

Meanwhile, the main text of Article 80(2) of the Enforcement Decree provides that “The Minister of Land, Infrastructure and Transport may increase or reduce the period of business suspension or the amount of penalty surcharge within 1/2 of the amount of penalty surcharge pursuant to paragraph (1) in consideration of the motive, content and frequency of the violation, characteristics of construction related to the violation, bidding methods, etc.”

2. A. The reasoning of the lower judgment reveals the following facts.

(1) 원고는 토목건축공사업을 업종으로 하여 건설업 등록을 한 법인인데, 원고의 신용등급이 하락하여 종전에 건설공제조합으로부터 발급받은 보증가능금액확인서상의 보증가능금액이 법 제10조 , 시행령 제13조 제1항 제1호의2 에 따른 건설업 등록기준에서 요구하는 금액에 미달하게 되었다.

(2) On October 29, 2013, pursuant to Article 83 subparag. 3 of the Act, the Defendant issued a disposition of business suspension against the Plaintiff for five months (hereinafter “instant disposition”), which is one month mitigation on the ground that the “individual standard” under Article 80(1) [Attachment 6] of the Enforcement Decree constitutes “cases where the Plaintiff fails to meet the standards for registration of construction business” under Article 80(1) [Attachment 6] of the Enforcement Decree, and constitutes “cases where there was no fact of being subject to sanctions within the last three years,” which is a general reason for mitigation.

B. After recognizing such factual relations, the lower court determined that even if the period of suspension of business was reduced due to the grounds for mitigation and aggravation under Article 80(2) of the Enforcement Decree, it may be repeatedly mitigated pursuant to Article 80(2) of the same Decree, on the premise that the mitigation and aggravation of “1. General Standards” under Article 80(1) [Attachment Table 6] of the Enforcement Decree is separate from the provision on mitigation and aggravation of business under Article 80(2) of the same Decree. Furthermore, in this case, the lower court determined that: (a) the Plaintiff’s failure to meet the standards for the registration of construction business was not caused by the decline in credit rating of the Plaintiff; (b) the Plaintiff’s decline in credit rating was caused by a aggressive management; and (c) the Plaintiff did not constitute an abuse of discretionary authority under Article 80(2) of the Enforcement Decree of the same Decree for a longer period of 17 years, which is the grounds for mitigation under [Attachment 6], it did not constitute an abuse of discretionary authority under Article 80(2) of the Enforcement Decree.

3. However, we cannot agree with the judgment of the court below for the following reasons.

A. Where an administrative agency imposes a disposition of business suspension on a constructor pursuant to the provisions of the Framework Act on the Construction Industry and the Enforcement Decree thereof, where there exist grounds for the reduction of the business suspension period on the constructor, the administrative agency’s disposition of business suspension is unlawful when it did not reduce the business suspension period, without considering the relevant grounds, according to the business suspension period as stipulated in Article 80(1) [Attachment Table 6] of the Enforcement Decree without reducing the business suspension period. However, if the administrative agency did not take into account the aforementioned grounds and did not reduce the remaining business suspension period, the disposition of business suspension is an illegal disposition that deviates from and abused discretion (see Supreme Court Decision 2012Du18660, Dec. 26, 2012).

B. Article 80(1) [Attachment 6] of the Enforcement Decree provides that “the period of suspension of business according to the type and degree of the act of violation” under Article 80(1) [Attachment Table 6]. However, since [Attachment 6] does not simply stipulate the period of suspension of business for an individual act of violation, and also provides “the grounds and criteria for mitigation and aggravation”, it is problematic whether the provision of mitigation and aggravation under [Attachment 6] provides the method of calculating the period of suspension of business under Article 80(1) of the Enforcement Decree or the standard of mitigation and aggravation of the same Article.

However, Article 80(1) [Attachment 6] of the Enforcement Decree appears to reflect “the motive, content, and frequency of the act of violation” as stated in Article 80(1) [Attachment Table 6] of the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 24204, Nov. 27, 2012) by stipulating that “The degree, motive, and consequence of the act of violation may be increased or mitigated within the scope of 1/2 of the business suspension and penalty surcharge pursuant to the individual standards under subparagraph 2, taking into account the following factors,” and the purpose of Article 80(1) [Attachment Table 6] of the Enforcement Decree is not to be construed to have been reduced by taking into account “the degree, motive, and consequence of the act of violation” as stated in Article 80(1) [Attachment 6] of the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 24204, Nov. 27, 2012] Article 80(1 [Attachment 6].

In full view of these circumstances, Article 80(1) [Attachment 6] of the Enforcement Decree shall be deemed to stipulate individual grounds for mitigation by embodying “the motive, content, and frequency of the act of violation” which is the criteria for mitigation under Article 80(2). As such, inasmuch as mitigation was made after considering the motive, content, and frequency of the act of violation pursuant to the [Attachment Table 6], it shall not be deemed that mitigation pursuant to Article 80(2) of the Enforcement Decree was not considered for the relevant circumstances. Therefore, even if an administrative agency examines only the grounds for “the motive, content, and frequency of the act of violation” as prescribed in attached Table 6 and determines the period of suspension of business, it shall not be deemed that the disposition constitutes a case of deviation or abuse of discretionary authority.

C. Examining these legal principles in light of the facts as seen earlier, the circumstances that the lower court deemed that the instant disposition ordering five months of suspension of business falls under the grounds for mitigation are related to “the motive, content, and frequency of the act,” and so long as the period of suspension of business of the Plaintiff was reduced from six months to five months by applying the said [Attachment 6] to the Plaintiff, the Defendant considered “the motive, content, and frequency of the act,” among the criteria for mitigation under Article 80(2) of the Enforcement Decree. Therefore, the Defendant cannot be deemed to fall under “a case where the Defendant misleads the Plaintiff that he did not consider the grounds for mitigation at all or that he did not fall under the grounds for mitigation.” Moreover, even when considering all the above circumstances as seen by the lower court, it is too heavy in light of Article 80(2) of the Enforcement Decree that considers the motive, content, and frequency, etc. of the act

D. Nevertheless, on different premises, the lower court determined that the instant disposition was unlawful solely for the reasons indicated in its reasoning. In so determining, it erred by misapprehending the legal doctrine on mitigation of business suspension period under the Enforcement Decree of the Framework Act on the Construction Industry, thereby adversely affecting the conclusion of the judgment

4. Conclusion

The lower judgment is reversed without further proceeding to decide on the remaining grounds of appeal, 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 Lee In-bok (Presiding Justice)