[1] Whether the disposition of approving the establishment of an urban environment rearrangement project promotion committee under the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents can be deemed unlawful (negative in principle), and the case where the validity of the disposition of approving the establishment of an association can be asserted exceptionally on the ground of illegality

[2] The method of calculating the number of owners of land or buildings where a number of state-owned or public land exists in a rearrangement zone under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents

[3] In a case where the State or a local government owns land or a building in the rearrangement zone, whether the consent to the establishment of a rearrangement project association and the promotion of a rearrangement project should be explicitly expressed in writing (negative)

[4] Whether Article 7 (3) of the former Enforcement Rule of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents [Attachment 4-2] of the Enforcement Rule of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents is legally binding in the form of "written consent for the establishment of an urban environment rearrangement project association", and where the Urban environment rearrangement project establishment promotion committee obtains consent to the establishment of an association by the written consent under the above form, the association's articles of association or draft

[1] Articles 13(1) and (2), 14(1), 15(4), and (5), 16(1), 18(1) and (2), 20, and 21 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); Article 28 of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [3] Articles 16(2) and (3), 17(1) and (2); Article 28 of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Presidential Decree No. 2277, Jul. 15, 2010); Article 28 of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [2] Article 16(1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. / [3] Article 16(16(2) of the former Enforcement Decree No. 1613) of the Act

[1] [4] Supreme Court Decision 2011Du8291 Decided December 26, 2013 (Gong2014Sang, 317) / [2/3] Supreme Court en banc Decision 2012Du1419 Decided April 14, 2014 (Gong2014Sang, 111)

Suwon Agricultural Cooperatives (Law Firm Yang Hun-Ga, Attorneys Lee Ho-ro et al., Counsel for the plaintiff-appellant)

Guang-si Market

Seohae Construction Co., Ltd. (Law Firm Round, Attorneys Lee Hong-hoon et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2012Nu3868 decided November 22, 2012

The appeal is dismissed. The costs of appeal are assessed against the Plaintiff, including the part resulting from supplementary participation.

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

1. Regarding ground of appeal No. 1

A. Since 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 “former Act”) meets the consent requirements and establishes an urban environment rearrangement project association through an inaugural general meeting, an application for authorization to establish an association cannot be deemed unlawful on the ground of defects in the establishment of an already extinguished association promotion committee (hereinafter “promotion committee”). However, in special circumstances where an application for authorization to establish an association can be deemed null and void due to a defect in the organization approval of the promotion committee, an application for authorization to establish an association may be deemed unlawful on the basis of the application. However, since an application for authorization to establish an association is made based on the establishment of a promotion committee or the establishment of an entity after the inaugural general meeting is formed through an inaugural general meeting, the application for authorization to establish an association cannot be deemed null and void on the grounds of illegality. The act of illegality can only be limited to the legislative intent of the promotion committee system that allows one promotion committee to carry out its affairs within one rearrangement zone under the former Act.

B. According to the reasoning of the judgment below and the record, the defendant, on August 21, 2009, designated and publicly announced the 14,413 square meters in Han-si ( Address 1 omitted) as an area to improve urban environment rearrangement projects; on November 6, 2009, the committee for the promotion of the urban environment rearrangement project in the amma-si (hereinafter “instant promotion committee”) submitted an application for approval for the formation of the promotion committee of this case to the defendant; on December 1, 2009, the defendant notified the promotion committee of this case to supplement “the request for supplementation” attached to the judgment below as to the above application as of November 6, 2009; accordingly, on December 15, 2009, the promotion committee of this case must re-written an application reflecting the above request for supplementation, and the defendant shall be notified to the defendant on December 28, 2009 as an area to reduce the size of the rearrangement zone of this case to 31,010 square meters.

C. Examining the above facts in light of the legal principles as seen earlier, the application of the Promotion Committee of this case on December 15, 2009 includes contents such as new representative and auditor appointment, partial change of the number of landowners and consenters, or expansion of the project area that did not exist in the above request for supplementation. Thus, the time when the Promotion Committee of this case applied for approval of composition to the defendant shall be December 15, 2009, and the above disposition of approval of composition did not meet the requirements under Article 13(2) of the former Act as amended on February 6, 2009, even if the above disposition of approval of composition did not meet the requirements under Article 13(2) of the former Act, such defect cannot be deemed as an illegal ground to the extent that the legislative intent of the Promotion Committee system under the former Act would be mitigated. Thus, the application for approval of establishment of the Promotion Committee of this case cannot be deemed unlawful or invalid,

Although the reasoning of the judgment below on this part is insufficient, the conclusion that rejected the Plaintiff’s assertion that the instant disposition is unlawful and invalid due to the defect in the organization approval of the committee of promoters is justifiable, and contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles on the validity of the organization approval of the committee of promoters

2. Regarding ground of appeal No. 2

For the reasons indicated in its holding, the lower court determined to the effect that the transfer of real estate owned in the instant rearrangement zone, including 24 square meters and around November 15, 2009, owned by Jindo-si ( Address 2 omitted) and 43 square meters, by dividing them into two equity shares in the instant rearrangement zone, and that the transfer of one of them to 24 persons, including the Nonparty, constitutes a title trust cannot be readily concluded, and that such transfer cannot be deemed an unlawful act that deviates from the provisions of the former Act on the Requirements for Consent of Owners, etc. of Lands, etc. for Establishing an urban environment rearrangement project cooperative.

Examining the reasoning of the judgment below in light of the relevant legal principles and records, the above determination by the court below is just and acceptable, and contrary to the allegations in the grounds of appeal, there were no errors of misapprehending the legal principles on title trust, etc. or failing to exhaust all necessary

3. As to the grounds of appeal Nos. 3 and 5

A. Regarding number of owners of lands, etc.

According to the main sentence of Article 16(1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Presidential Decree No. 2407, Jul. 31, 2012; hereinafter “former Enforcement Decree”), when a committee for the promotion of an urban environment improvement project intends to establish an association, it shall obtain authorization from the head of a Si/Gun, along with the articles of association, documents determined by Ordinance of the Ministry of Land, Transport and Maritime Affairs, etc. with the consent of at least 3/4 of the owners of land, etc. and at least 1/2 of land size. In addition, according to Article 17(1) of the former Act, the above consent shall be based on written consent using a seal imprint, and a certificate of seal impression shall be attached in such cases. Meanwhile, Article 28 of the former Enforcement Decree of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Presidential Decree No. 2407, Jul. 31, 2012; hereinafter “former Enforcement Decree”) provides that one parcel shall not be subject to any special cases.

According to the text of Article 16(1) of the former Act and the text of relevant statutes, such as Article 28 of the former Enforcement Decree of the Act, even if there are several parcels of state-owned or public land in a rearrangement zone, the number of owners of land, etc. shall be calculated by each owner regardless of the number of ownership (see Supreme Court en banc Decision 2012Du1419, Apr. 14, 2014).

B. As to the consent of the establishment of the association on state-owned and public land

1) Article 35(3) of the Constitution declares that “The State shall endeavor to enable all citizens to live a pleasant residential life through housing development policies, etc.” The former Urban Improvement Act is prepared to perform the constitutional obligations of this State, and its legislative purpose is to contribute to improving urban environments and improving the quality of residential life (Article 1).

According to the provisions of Article 3(1), (3) through (5), and (7) of the former Act, a person authorized to formulate a master plan for urban and residential environment improvement is the Special Metropolitan City Mayor, Metropolitan City Mayor, or Mayor, and a Mayor other than a large city with a population of not less than 50,00 (hereinafter referred to as "large city") with the exception of Seoul Special Metropolitan City and Metropolitan Cities shall obtain approval from the Do Governor when formulating or amending the master plan. The Special Metropolitan City Mayor, Metropolitan City Mayor, Do Governor (hereinafter referred to as "Mayor/Do Governor") or the Mayor of a large city intends to formulate or revise a master plan, or the Do Governor intends to approve the formulation or amendment of a master plan for a market which is not a large city market, the Special Metropolitan City Mayor, Metropolitan City Mayor, or Mayor shall consult with the head of the relevant administrative agency before deliberation by the local urban planning committee. In addition, when formulating or amending the master plan, the Special Metropolitan City Mayor, Metropolitan City Mayor, or Mayor shall report to the Minister of Land, Transport and Maritime Affairs in accordance with the provisions of Article 4(1), (2) and (5).

As such, the former Act on the Improvement of Urban Areas provides the basis for the establishment of a partnership project, such as the establishment of a master plan for urban and residential environment improvement and designation of a rearrangement zone, and provides various authority and roles to participate in the phased procedures for implementing a rearrangement project to the Minister of Land, Transport and Maritime Affairs or the Mayor/Do Governor

Meanwhile, the former Act on the Maintenance and Improvement of Urban Areas has separate provisions such as Articles 64 through 66 with regard to legal relations concerning State and public land provided to an urban environment rearrangement project between a rearrangement project association and the State or local governments. The State and public property in an improvement zone shall not be sold or transferred for any purpose other than a rearrangement project, etc., and shall actively support the implementation of a rearrangement project so that the project implementer can smoothly perform the rearrangement project by utilizing state and public land, and shall guarantee the right of prior consultation of the property management authority when the details of the State and public property disposal

In addition, the former Urban Improvement Act grants the Minister of Land, Transport and Maritime Affairs or the Mayor/Do governor the authority to report on the performance of the improvement project and the authority to make a report or submit data, or the public official under his/her jurisdiction to investigate matters concerning the project (Article 75). In certain cases, the former Urban Improvement Act grants the project implementer the supervisory authority to take necessary measures such as cancellation, modification or suspension of the disposition and suspension or modification of the project (Article 77).

2) Article 17(1) of the former Act provides that the method of consent of owners of a plot of land, etc. shall be based on written consent using a certificate of seal impression, and further, the former Act does not provide for the method of consent of the State or local governments, where the certificate of seal impression or the certificate of seal impression is not available.

Although the state or local governments also correspond to the owners of lands, etc. who should obtain consent to establish an association, it seems that the former Urban Improvement Act did not provide for the specific method of consent of the state or local governments, considering that the state or local governments are given various authority and role related to the rearrangement project pursuant to the former Urban Improvement Act, etc.

Therefore, it is reasonable to interpret that the consent to the promotion of the rearrangement project including the establishment of the state or local government which is the owner of land, etc. is not necessarily required to be explicitly expressed in writing.

3) However, the rearrangement project is aimed at the planned rearrangement of an area with poor urban functions or residential environment, and its implementation is consistent with the public interest to be achieved by the former Act on the Improvement of Urban Areas. Moreover, in accordance with the majority and area requirements for establishing an association under Article 16(1) of the former Act, only one rearrangement project association with multiple owners’ consent may be established regarding the rearrangement zone. Furthermore, if a rearrangement zone is designated in accordance with the procedure prescribed by the former Act and a promotion committee approved by the competent authority based on the rearrangement zone files an application for authorization to establish a rearrangement project association, it can be deemed that the implementation of the rearrangement project by the rearrangement project association is consistent with the public interest. Accordingly, the State and local governments obligated to realize the public welfare of citizens and residents should provide support and cooperate so that the rearrangement project to be implemented by the rearrangement project association established by the authorization of the competent authority can be implemented properly.

4) In light of the fact that the State and local governments are granted various public authority and roles in relation to the implementation of a rearrangement project, and that a local government representing the competent authority that approves the establishment of the rearrangement project association owns land in the rearrangement zone, the relevant local government can be deemed as consenting to the establishment of the rearrangement project association through the disposition of authorization to establish the association (see, e.g., Supreme Court Decisions 2004Du138, Mar. 11, 2005; 201Du14937, May 24, 2013). In addition, if the State or local government representing the authority designating the rearrangement zone owns the State or public land in the rearrangement zone, through consultation procedures, etc. from the establishment of the master plan for rearrangement and designation of the rearrangement zone to the specific disposition of authorization to establish the association of the competent authority, if it did not explicitly express objection to the establishment of the rearrangement project or the relevant rearrangement zone through consultation procedures, etc., it can be deemed that the State or local government has agreed to the establishment of the rearrangement project association (see, 2014.

C. As to the consent rate of this case

According to the legal principles as seen earlier, even if several parcels of state-owned land exist in the rearrangement zone, the number of owners of land, etc. should be calculated as one owner regardless of the number of ownership. Thus, even if the property management authority of several parcels of state-owned land in the rearrangement zone is different from the Ministry of Strategy and Finance, and the Ministry of Land, Transport and Maritime Affairs, the owners of land, etc. should be deemed as one State. Therefore, the number of owners of land, etc. on state-owned and public land in the rearrangement zone

Meanwhile, examining the records in light of the legal principles as seen earlier as to the consent to establish the association of the State-owned and public land, it can be deemed that the Defendant, the representative of the disposition agency of this case, has consented to the establishment of the association of this case through the disposition of this case, and the consent letter was submitted to the Promotion Committee of this case, and the State does not have any circumstance that explicitly expressed or opposed the objection to the establishment of the association of this case until the disposition of this case. Thus, it can be deemed that the Defendant consented to the establishment of the association of this case.

If the consent rate is calculated according to the above judgment, 40 owners of land, etc. and 30 consenters, and the consent rate is 75% (30 man/40) and at least 3/4 of the owners of land, etc. who are statutory consent rates are satisfied.

Therefore, the court below's reasoning on this part is somewhat inappropriate, but it is just to reject the defendant's assertion that the land owner failed to meet at least 3/4 of the land owner's consent requirements within the rearrangement zone of this case. In so doing, contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles on calculation of the number of consenters or failing

4. As to the fourth ground for appeal

Article 7(3) of the former Enforcement Rule of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs No. 506, Aug. 2, 2012) [Attachment 4-2] The written consent to the establishment of an urban environment rearrangement project association (hereinafter “legal consent”) is legally binding as it is delegated by superior statutes, such as Article 16(1) and (5) of the former Act. The committee did not attach the draft articles of association or articles of association of the association, or did not attach the draft articles of association of the association in obtaining the consent to establish the association in the same form as the written consent under the same form, or cannot be deemed null and void on the ground that the standards for bearing the burden of expenses or the matters concerning the ownership attribution are no more concrete (see Supreme Court Decision 2011Du8291, Dec. 26, 2013

In the same purport, the court below is just in holding that the written consent for the establishment of the association of this case is in accordance with the legal consent form, and that the consent form does not specify the estimated amount of shares for each owner of land, etc., or that the draft of the articles of association that have an executive officer, etc. of the association is not attached in the attached form, and there is no error in the misapprehension of legal principles as to the defect in the written consent for

5. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party, including the part arising from the participation in the appeal. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Yong-deok (Presiding Justice)