[1] Meaning of “the date of public notice of approval of project implementation” under Article 48(1)4 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (=the date of public notice of approval of the first project implementation plan) and where there is a change of a project implementation plan to substantially change the main parts of the first project implementation plan, whether the management and disposal plan based on the previous asset price assessed as of the date of public notice of approval of the first project implementation plan violates Article 4

[2] In a case where a notice of application for parcelling-out under Article 46 (1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents is not included in the assessment value of the previous asset price, whether the notice of application for parcelling-out and the

[1] Article 48(1)4, (2)1, (5)1, and (6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 12116, Dec. 24, 2013) / [2] Articles 46(1) and 48(1)4 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 12116, Dec. 24, 2013)

[1] Supreme Court Decision 2014Du15528 Decided November 26, 2015 (Gong2016Sang, 67)

Attached 1 List of Plaintiffs (Law Firm Benst, Attorneys Shin Young-cheon et al., Counsel for the plaintiff-appellant)

Attached 2 List of Intervenor joining the Plaintiff (Law Firm Benst et al., Counsel for the plaintiff-appellant)

Large Two District Housing Redevelopment and Improvement Project Association (Law Firm & 1 other, Counsel for the plaintiff-appellant)

Head of Nam-gu Busan Metropolitan City

Busan High Court Decision 2013Nu3221 decided April 15, 2015

Of the lower judgment, the part of the lower judgment regarding the claim for revocation of the amended management and disposal plan by the Defendant Dae-2 Housing Redevelopment Project Association on April 4, 2013 by the head of the Nam-gu Busan Metropolitan Government is reversed, and that part of the case is remanded to the Busan High Court. All appeals by the Plaintiffs and the Intervenors are dismissed.

The grounds of appeal and incidental grounds of appeal are examined.

1. As to the grounds of incidental appeal by the Defendant Large Two Housing Redevelopment and Improvement Project Association (hereinafter “Defendant Union”)

A. Article 48(1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 12116, Dec. 24, 2013; hereinafter “former Act”) provides that a project implementer (excluding a project implementer who implements a residential environment improvement project implemented by the methods provided for in Article 6(1)1 through 3 and a residential environment management project implemented by the methods provided for in Article 6(5)) shall, when the period for application for parcelling-out under Article 46 expires, establish a management and disposal plan including the following matters based on the current status of application for parcelling-out under Article 46 and obtain authorization from the head of a Si/Gun. As one of the matters to be included in the management and disposal plan under subparagraph 4, the price of the previous land or structure subject to parcelling-out and the announcement of authorization for project implementation shall be calculated based on the date on which permission was obtained in cases of a building removed pursuant to Article 48-2(2) prior to the authorization for a project implementation, and the size of the previous land or housing redevelopment plan shall be reasonably assessed as one of the land under the Act.

In addition to the language, purport, structure, etc. of the above provisions, improvement project, such as redevelopment and reconstruction under the former Act, is a project that the owner of land, etc. in an improvement zone newly constructs multi-family housing, etc. after investing the previous assets, etc., and divides development gains accruing from the sale of remaining multi-family housing, etc. to the general public according to the investment ratio among the members of the association. As the contents of the management and disposal plan, the appraisal of previous assets is for determining the relative investment ratio among the members of the association. ② Article 48(1)4 of the former Act stipulates that the appraisal of previous assets should be made as of the date of public announcement of the project implementation plan as a matter of principle, and it is unreasonable to evaluate the previous assets price as of the date of approval of the previous project implementation plan as of the date of public announcement of the project implementation plan, even if the project implementation plan has been modified, it can be seen that there is no provision that the new appraisal of the previous assets price will have to be changed after the alteration of the previous project implementation plan as of the date of public announcement.

B. The reasoning of the lower judgment reveals the following facts.

1) On November 16, 2005, the Defendant Cooperative was established with the approval of the head of the Nam-gu Busan Metropolitan City (hereinafter “the head of the Defendant”) in order to implement a housing redevelopment project in the area of 165,070 square meters in Nam-gu, Busan Metropolitan City on November 16, 2005, and established a project implementation plan on August 16, 2007 and obtained approval from the head of the Defendant (hereinafter “the first project implementation plan”), and established a management and disposition plan based on the application for parcelling-out from the members of the association, and obtained approval from the head of the Defendant on May 10, 2010 (hereinafter “the first management and disposition plan”).

2) However, the first project implementation plan was officially announced on May 26, 2011 and October 19, 2012 (hereinafter “instant project implementation plan”) and the scale of multi-family housing, total floor area, number of households by house type were changed compared to the first project implementation plan (hereinafter “instant project implementation plan”).

3) After the approval of the instant project implementation plan, the Defendant Cooperative established a management and disposal plan by receiving applications for parcelling-out from the members of the association, and passed a resolution at the general meeting on January 26, 2013, and the Defendant head of the Gu approved the amendment of the above management and disposal plan on April 4, 2013 (hereinafter “instant management and disposal plan”).

4) Meanwhile, when formulating the instant management and disposal plan, the Defendant Union used the appraised value of the previous asset price as it is based on August 22, 2007, which was the date of the first public announcement of authorization for the implementation of the instant management and disposal plan.

C. Examining these facts in light of the legal principles as seen earlier, even if the main part of the initial project implementation plan was substantially modified, such circumstance alone cannot be deemed as unlawful for the instant management and disposal plan established based on the previous asset price assessed as of the date of public notice of approval of the initial project implementation plan.

Nevertheless, on different premises, the lower court determined that the instant management and disposal plan was unlawful on the ground that it did not evaluate the previous asset price as of the date of the announcement of the approval of the instant project implementation plan and prepared based on the previous asset price assessed as of the date of announcement of the approval of the initial project implementation plan. In so determining, the lower court erred by misapprehending

2. As to the grounds of appeal by the Plaintiffs and the Intervenor joining the Plaintiffs

A. As to the allegation that the instant rearrangement zone designation disposition is invalid

1) Article 2 subparag. 3(c) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 8785, Dec. 21, 2007) and Article 2(2)1 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. 21098, Oct. 29, 2008) are “a building prescribed by ordinance of a City/Do as prescribed by Presidential Decree, which is inevitable to be removed due to structural defects, etc. caused by deterioration of the building” means a building for which 20 years have passed after its completion and which is inevitable to be removed due to structural defects, etc. (see Supreme Court en banc Decision 2010Du16592, Jun. 18, 2012).

However, in order for a defective administrative disposition to be null and void as a matter of course, it must be objectively obvious that the defect is in violation of the important part of the law and must be objectively obvious. In determining whether the defect is significant and obvious, the purpose, meaning, function, etc. of the law should be examined from a teleological perspective, and at the same time, reasonable consideration should be made on the specificity of the specific case itself. Meanwhile, in a case where an administrative agency takes an administrative disposition by applying a certain legal relationship or fact by applying a certain provision of the law, despite the absence of room for dispute over the interpretation of the law, the legal principle as to the legal relation or fact is clearly stated, and thus, if an administrative agency takes the disposition by applying the above provision of the law does not have any room for dispute over the interpretation, it shall be deemed that the defect is significant and obvious. However, even if the legal principle as to the legal relation or fact is not clearly revealed, if there is room for dispute over the interpretation of the law, it is merely erroneous as to the fact of the disposition requirements (see, e.g., Supreme Court en banc Decision 94Nu4615, Jul. 115, 2015).

2) According to the reasoning of the lower judgment, the lower court acknowledged the facts as indicated in its reasoning, and determined that: (a) as well as 45% of the total buildings which have been completed for at least 20 years after the completion of the instant rearrangement zone, the designation of a housing redevelopment zone may be deemed as having been classified and assessed as above by the Busan Metropolitan City Mayor as well as the maintenance period of the building, structural inferiorness, sanitary inferiorness, and residential obstacle; and (b) the designation of a housing redevelopment zone is based on the professional and technical judgment on urban policies for the necessity of restoring urban functions or for the efficient improvement and improvement of poor residential environment; and (c) the legal principles on the concept of old and poor buildings at the time of the instant rearrangement zone designation disposition are not clearly revealed, even if there were defects or defects, such defects cannot be deemed as null and void due to serious and clearness.

3) Examining the aforementioned legal principles and records, the lower court’s aforementioned determination is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the criteria for determining deteriorated and inferior buildings,

B. As to the procedural illegality of the resolution of the general assembly for the instant project implementation plan

1) According to the reasoning of the judgment below, the court below acknowledged the facts in its holding, and rejected the Plaintiffs’ assertion that: (a) even if some errors were found in the process of compiling the project implementation plan of this case at the general meeting of this case, the requirements for aggravated quorum were met; and (b) it is difficult to deem that there were circumstances to deem that the written resolution itself affected the establishment of the general meeting resolution of this case or distorted the opinions of union members; (c) it is impossible to deny the validity of the written resolution with the omission of resident registration number because the written resolution does not constitute essential matters; (c) it is impossible to deny the validity of the written resolution with the omission of resident registration number; (d) because the Defendant Union notified the union members of the change of the draft plan through the data distributed before the general meeting for the change of the project implementation plan, and the increased project cost was notified of the change of the plan, it was possible for union members to exercise their voting rights with full knowledge of the reasons for the change of the plan.

2) Examining the relevant legal principles and records, the lower court’s aforementioned determination is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the lawful requirements, etc.

C. As to the assertion that the management and disposal plan of this case is unlawful since the notice of application for parcelling-out is illegal

1) Article 46(1) of the former Act provides that a project implementer shall notify the owners of lands, etc. of the outlined charges, the period for application for parcelling-out, and other matters prescribed by the Presidential Decree within 60 days from the date of public announcement of authorization for project implementation under Article 28(4) and shall publicly notify the owners of lands, etc. of the land and structures subject to parcelling-out, and the matters prescribed by the Presidential Decree, such as the details of the site or structures subject to parcelling-out, in a daily newspaper published in the relevant area. Meanwhile, Article 48(1) of the former Act provides that when the period for application for parcelling-out under Article 46 expires, a project implementer shall establish a management and disposal plan that includes the following matters based on the current status of application for parcelling-out under Article 46 and obtain authorization from the head of Si/Gun. One of the matters to be included in the management

In light of the language, structure, etc. of the above relevant provisions, ① the former Act on the Maintenance and Improvement of Urban Areas only stipulates the details of general contributions to be included in the notification of application for parcelling-out and the announcement of application for parcelling-out, and ② the procedure for notification of application for parcelling-out and announcement of application for parcelling-out shall be conducted within 60 days from the date of public announcement of authorization for project implementation; and there is no ground to deem that evaluation of the previous asset price should be conducted as of the date of public announcement of authorization for project implementation before the expiration of the period under the former Act, the notification of application for parcelling-out under Article 46(1) of the former Act is not included in the assessment of the previous asset price, and it cannot be deemed unlawful, and it cannot

2) According to the reasoning of the lower judgment and the record, the Defendant Union notified the owners of land, etc. of the instant project implementation plan on October 25, 2012 after authorization for the modification of the project implementation plan, and notified the application for parcelling-out to the owners of land, etc. on October 25, 2012, including (1) average unit allotment price by household and the estimated price for parcelling-out by association members, (2) the estimated price for parcelling-out by residential facilities, (3) estimated proportional ratio, (4) estimated charges at the time of

Examining these facts in light of the aforementioned legal principles, even if the pre-existing asset value is not included in the notification of application for parcelling-out as the basis of the instant management and disposal plan, such circumstance alone cannot be deemed unlawful, or the management and disposal plan established based on such application procedure is unlawful.

Although the reasoning of the court below is partly inappropriate, the conclusion that the management and disposal plan of this case cannot be deemed unlawful is justifiable since the notification of application for parcelling-out is not illegal. Therefore, the court below did not err by misapprehending the legal principles on the procedure for notification of application for parcelling-out, as alleged in the

D. As to the allegation that the assessment of circumstances was unlawful

The ground of appeal on this part is that the cancellation of the instant management and disposition plan cannot be deemed to be significantly inappropriate for the public welfare, and it is based on the premise that the judgment of the court below that the instant management and disposition plan was unlawful. However, as seen earlier, as long as the judgment of the court below reversed the part of the claim for cancellation of the instant management and disposition plan on the ground that the instant management and disposition plan, which was made based on the previous asset price assessed as of the date of the public notice of the approval

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of incidental appeal by Defendant Union, the part of the lower judgment regarding the claim for revocation of the instant management and disposition plan is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. All appeals by the Plaintiffs and Intervenors are dismissed. It is so decided as per Disposition by the assent of all participating

[Attachment 1] List of Plaintiffs: Omitted

[Attachment 2] List of Intervenors joining the Plaintiff: Omitted

Justices Lee Ki-taik (Presiding Justice)