[1] In a case where a public official in charge of calculating the officially assessed individual land price infringes on an individual's property right by determining the substantially unreasonable individual land price in violation of his/her official duty, whether the local government to which the public official in charge belongs is liable for damages (affirmative)

[2] In a case where the market (market) calculated the officially assessed individual land price as a "natural forest" where the actual use of the land was used, and requested an appraisal corporation to verify the land price; the appraisal corporation erroneously corrected the land use of the land as an "industrial" and calculated the verified land price; and the Si (Si) the real estate appraisal committee did not discover the error; and the officially assessed land price was determined and publicly announced at a price much higher than the reasonable price of the land, the case holding that the public official in charge of calculating the officially assessed individual land price, etc. violated official duties

[3] Whether the officially assessed individual land price has binding force such as guaranteeing the actual transaction price or collateral value in the transaction or collateral of the land (negative), and whether the local government, which decided and publicly announced the officially assessed individual land price, is liable for damages as to the damages incurred due to the transaction or collateral value of the land which falls short of the actual transaction price or collateral value of the land (negative)

[4] In a case where a public official in charge of calculating the officially assessed individual land price claims damages to a local government to which the public official in charge belongs on the ground that the public official in charge of the calculation of the officially assessed individual land price knew that there was sufficient collateral value of the remaining land, and completed the registration of creation of a neighboring mortgage on the relevant land and subsequently supplied the goods additionally, the case holding that it is difficult to view that there was a proximate causal relation between

[1] The officially assessed individual land price has a direct impact on the taxpayer's property rights and obligations due to the relationship that serves as the basis for calculating the land price in cases where the land price is calculated for the purpose stipulated by other Acts and subordinate statutes, such as the imposition of development charges and the imposition of land-related taxes. As such, a public official in charge of calculating the officially assessed individual land price is obligated to calculate the officially assessed individual land price according to the standards and methods stipulated in the Acts and subordinate statutes and the "Guideline on the Investigation and Calculation of Individual Land Price" by accurately investigating the characteristics of the land, such as the actual utilization of the land in question, and comparing the characteristics of the land by selecting a comparative standard with those similar to those of the land in question and comparing them. An appraisal business entity or Si/Gun/Gu real estate appraisal committee upon whom the land price is verified shall verify and deliberate whether the land price or verified is properly calculated according to the above criteria and methods, thereby taking measures to ensure that the reasonable individual land price is determined and publicly notified. Therefore, it is reasonable to deem that such duty is merely for the public interest or to regulate the internal order of the administrative agency.

[2] In a case where the market (market) calculated the officially assessed individual land price as a "natural forest" where the actual use of the land was used, and requested an appraisal corporation to verify the land price, and where the appraisal corporation calculated the verified land price by erroneously correcting the land use status of the land as an "industrial", and the Si (Si) the real estate appraisal committee did not find any error while deliberating on the verified land price, and where the officially assessed individual land price was determined and publicly announced at a price much higher than the reasonable price, the case holding that public officials in charge of calculating the officially assessed individual land price violated official duties on the calculation, verification, and deliberation of the officially assessed individual land price.

[3] The officially assessed individual land price may directly affect the taxpayer's property rights and obligations within the scope that serves as the basis for calculating the land price for the purpose stipulated by other Acts and subordinate statutes, such as the imposition of development charges and the imposition of land-related taxes. However, it cannot be said that the officially assessed individual land price has a binding force or binding force on the actual transaction price or security value in the transaction of the land in question or receiving the provision of security. Nevertheless, if the local government imposes liability for damages that may arise due to the actual transaction price or security value of the land in question, which falls short of the officially assessed individual land price, as well as the actual transaction price of the land in question or the actual transaction price in question, and as a result, the local government should be held accountable for damages arising in relation to various transaction relations between individual transaction parties. This would result in a lot of effort and expenses to attract a dispute over the transaction relation. This goes beyond the predictability scope for the occurrence of the results, and the land price used by the administrative agency goes beyond the scope of predictability for the creation of administrative purposes and the development scope of the national economy (amended by Act No. 2820.

[4] In a case where a public official in charge of calculating the officially assessed individual land price claims damages to a local government to which the public official in charge belongs on the ground that the public official in charge of the calculation of the officially assessed individual land price had committed an act of violation in the course of performing his duties and the damages therefrom, in a case where the public official in charge believed that there was sufficient collateral value of the remaining land trusted in the publicly assessed individual land price, and completed the registration

[1] Article 2 (1) of the State Compensation Act, Article 750 of the Civil Act, Article 11 (1), (3), (7), and Article 20 of the former Public Notice of Values and Appraisal of Real Estate Act (amended by Act No. 8852 of Feb. 29, 2008), Article 16 (1) and (2) of the former Enforcement Decree of the Public Notice of Values and Appraisal of Real Estate Act (amended by Presidential Decree No. 2072 of Feb. 29, 2008), Article 2 (1) of the State Compensation Act, Article 750 of the Civil Act, Article 11 (1), (3), (7), and Article 20 (7) of the former Public Notice of Values and Appraisal of Real Estate Act (amended by Act No. 8852 of Feb. 29, 2008), Article 208 of the former Public Notice of Values and Appraisal of Real Estate Act (amended by Presidential Decree No. 20185 of Feb. 29, 2008)

Medical Treatment Co., Ltd. (Law Firm Slex, Attorneys Im Sung-woo et al., Counsel for the plaintiff-appellant)

Gwangju City (Attorney Lee Do-hee et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2009Na48932 decided January 13, 2010

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The remaining parts of the grounds of appeal except for comparative negligence are also examined.

1. As to the illegality of the determination and publication of the officially assessed individual land price of this case

A. If the content of official duties imposed on a public official is not simply for the public interest or for the purpose of protecting the safety and interest of an individual from society members entirely or incidentally, but rather for the purpose of regulating the internal order of an administrative agency, the State shall be liable to compensate for the damage suffered by the victim due to the public official’s breach of such official duties to the extent that proximate causal relation is acknowledged. In determining the existence of proximate causal relation, the State shall comprehensively take into account not only the probability of the occurrence of a general result, but also the purpose of statutes and other rules of conduct imposing official duties, the form of harmful act, and the degree of damage (see, e.g., Supreme Court Decisions 91Da43466, Feb. 12, 1993; 97Da3613, May 8, 1998). The same applies to local governments and public officials belonging thereto (see Supreme Court Decision 2005Da48994, Apr. 10, 2008).

B. The officially assessed individual land price is determined and publicly announced by the head of a Si/Gun/Gu in order to impose development charges under the Restitution of Development Gains Act and to use land for purposes prescribed by other Acts and subordinate statutes [Article 11(1) of the former Public Notice of Values and Appraisal of Real Estate Act (amended by Act No. 8852, Feb. 29, 2008; hereinafter “Act”)]. In calculating and publicly announced officially assessed individual land price, the head of a Si/Gun/Gu shall calculate the land price using the land price comparison table on the basis of the officially assessed land price of one or more different land prices deemed to have similar usefulness to the relevant land, and shall maintain balance between the price of the relevant land and the officially assessed reference land price (Article 11(3) of the Act); the land price shall be determined and publicly announced by the head of a Gun/Gu after verification of propriety of the price of the individual land calculated; the land price shall be determined and publicly announced by the head of a Si/Gun/Gu based on the results of the investigation and appraisal of the land price (Article 20.

As can be seen, the officially assessed individual land price has a direct impact on the taxpayer's property rights and obligations, such as property rights and obligations, in cases where the land price is calculated for the purpose stipulated by other Acts and subordinate statutes, such as the imposition of development charges and the imposition of land-related taxes. As such, a public official in charge of calculating the officially assessed individual land price is obligated to verify and deliberate whether the land price or verified price is calculated properly in accordance with the above criteria and methods, and to take measures to ensure that the reasonable individual land price is determined and publicly notified by examining and deliberating on whether the land price or verified price is determined and publicly notified, not merely for the public interest or for the internal order of the administrative agency, but for the purpose of guaranteeing the property rights of each citizen. Therefore, if a public official in charge of calculating the officially assessed individual land price clearly infringes on the property rights of each citizen by seriously violating his/her duty to estimate the officially assessed individual land price in the course of performing his/her duties and comparing its characteristics.

C. According to the reasoning of the judgment below and the record, to determine and publicly announce the officially assessed individual land price of the instant land in March 2006, the Gwangju City: (a) calculated the officially assessed individual land price of the instant land by using the land as a natural forest for the purpose of determining and publicly announcing the officially assessed individual land price of the instant land in 2006; and (b) requested the ASEAN appraisal corporation to verify it; (c) the ASEAN appraisal corporation corrected the land use status of the instant land to an industrial sector, not an natural forest that actually uses the land use status of the instant land; and (d) calculated the verified land price of which was selected from among the reference land prices where comparative standard land is being used for industrial use; and (e) did not discover the above error; (b) although the Gwangju City Real Estate Assessment Committee deliberated on the verification price, it did not determine and publicly announce the officially assessed individual land price of the instant land of the instant land of the instant case in 206 as KRW 820,00 per square meter; and (c) in determining and publicly announcing the officially assessed individual land price of the instant land in 20000.

Therefore, in light of the aforementioned legal principles, the act of a public official belonging to the defendant calculated and publicly announced the officially assessed individual land price in 2007, which is considerably unreasonable due to the negligence of applying the land use status and comparative standard which are surveyed differently from the actual land of this case, constitutes a tort on his duty, as it violates the duty of calculating, verifying, and deliberating the

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as to official misconduct.

2. As to the proximate causal relation in damages

A. In full view of the relevant evidence, the lower court determined that the Plaintiff was liable to compensate the Plaintiff for the damages on the ground that the reason for calculating and publicly announcing the price of the reference land and individual land was intended to provide the real estate price to the general public who engage in real estate transactions in accordance with the provisions of Articles 1, 3(1), 10, and 11(1) of the Act, on the ground that the reason for calculating and publicly announcing the price of the reference land and individual land lies in the purpose of providing the goods to the general public who trusted the officially assessed individual land price of the instant land, which was mistakenly calculated by the public official in charge of the Defendant’s jurisdiction, and thereby, the Plaintiff incurred damages after supplying the goods in trust of the publicly assessed individual land price of the instant land of the instant case calculated as above, and thus, the Defendant was obligated to compensate the Plaintiff for the said damages.

B. However, we cannot accept the judgment of the court below for the following reasons.

(1) The liability for damages to be borne by a public official responsible for the calculation of the officially assessed individual land price, if a public official, etc. violates his/her official duty, can be recognized only as having proximate causal relation with the violation of his/her official duty. Thus, even if a public official, etc. responsible for the calculation of the officially assessed individual land price committed an act in violation of the statutes and the Guidelines for the Investigation and Calculation of Individual Land Price in the course of performing his/her duty, if a proximate causal relation is not acknowledged between

(2) Article 1 of the Act provides that the purpose of this Act is to make the price of real estate, such as land and housing, a public announcement of the reasonable price of real estate and to make it the standard for real estate price calculation. In addition, Article 10 of the Act provides that the officially announced price of officially announced land provides information on the land market and becomes the index for general land transaction. The purport of the provision is to provide information on the land in relation to the general public, and it is merely to provide the reasonable price of the party who trades the land by presenting a reasonable appraised value in relation to the land to the general public, and it does not mean the legal binding effect that the price of officially announced land or the price of officially announced land should trade the land as an index. The concept of the "reasonable price" stipulated in Articles 1 and 3(1) of the Act means the price which is deemed to have the highest possibility of establishing where a normal transaction is made in the ordinary market for the land and housing concerned, not the actual transaction price paid by the parties for the land exchange in the real market, but it means the most presumed price between trading parties.

Therefore, the officially assessed individual land price may directly affect the taxpayer's property rights and obligations within the scope that serves as the basis for calculating the land price for the purpose stipulated by other Acts and subordinate statutes, such as the imposition of development charges and the imposition of land-related taxes. However, in addition, the officially assessed individual land price cannot guarantee the actual transaction price or security value or have any binding force on the land transaction or the provision of security. Nevertheless, as in the case of this case, if the local government is liable to compensate for damages that may arise due to the actual transaction price or security value of the land in question or the actual transaction price of the land in question falls short of the publicly assessed individual land price, as in the case of this case, if the local government is liable to compensate for damages that may arise due to the failure of the actual transaction price or security value of the land in question, the damages arising in relation to various transaction relations between individual transaction parties would be subject to a non-discriminatory liability and may result in expenditure of many efforts and expenses. This goes beyond the scope of predictability for the occurrence of results, and the purpose and function of the national economy and the protection scope of the national economy.

(3) Furthermore, according to the reasoning of the lower judgment and the record, the Plaintiff had credit sales claims of KRW 2,415,806,05 through KRW 3,267,273,405 per month against the Nonparty after being provided the instant land by the Nonparty as collateral. However, from September 2006 to August 2007, the Plaintiff had credit sales claims of KRW 2,440,136,455 to KRW 3,806,529,387 each month during which the said credit sales claims were provided as collateral, and it is difficult to conclude that the Plaintiff additionally supplied the instant land at KRW 729,196,720 after August 207 due to the Plaintiff’s trust in the officially assessed individual land price and that it was difficult to view that there was a reasonable causal relation between the Plaintiff and the public appraisal corporation of KRW 500,000,000,000 in consideration of the fact that there was an additional credit sales claims of the instant land.

Nevertheless, the lower court determined otherwise. In so doing, the lower court erred by misapprehending the legal doctrine on proximate causal relation in damages, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the part against the defendant among the judgment below is reversed, and that part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Nung-hwan (Presiding Justice)