[1] In a case where a public project operator included basic facilities installation costs in the supply price of a housing site calculated on the basis of the cost of housing site preparation in a special supply contract for a housing site for which the project operator entered into with a person subject to relocation measures, whether unjust enrichment is established for the project operator (affirmative), and whether the cost of basic facilities installation can be calculated on the basis of the supply price of the housing site equivalent to

[2] The meaning of "basic living facilities according to the relevant regional conditions, such as roads, water supply facilities, drainage facilities, and other public facilities" under Article 78 (4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects

[3] Whether a project undertaker of a public project includes a “road which connects a road within a housing complex to the same road outside the relevant housing complex” regardless of its length or width (affirmative)

[4] Whether the charges for metropolitan transport facilities under Article 11 of the former Special Act on the Management of Intercity Transport in Metropolitan Areas constitute the installation cost of basic living facilities to be provided to the person subject to relocation measures as a basis for living (negative)

[5] Whether expenses, such as charges for roads established outside a public works zone, are included in the cost of establishing basic living facilities under Article 78(4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (negative in principle)

[6] In a case where one of the parties to a contract concludes a three-party contract with the other party or with the consent of the other party comprehensively transfers the status of the party to the contract to a third party, whether the third party is also transferred all the claims and obligations already incurred under the previous contract (affirmative)

[1] Article 78(4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 8665 of Oct. 17, 2007); Article 741 of the Civil Act / [2] Article 78(4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 8665 of Oct. 17, 2007); Article 23 of the Housing Act / [3] Article 78(1) and (4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 8665 of Oct. 17, 2007); Article 2 subparag. 4 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009); Article 17 subparag. 10 of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects Projects (amended by Act No. 15107 of the former Act No. / [see Article 2181 of the former Act)

[1] [1] [3] Supreme Court Decision 2012Da93435 Decided October 11, 2013, Supreme Court Decision 2012Da59268 Decided October 17, 2013 / [1/2/3] [4] Supreme Court Decision 2012Da9794 Decided October 24, 2013 / [1/2/4/5] Supreme Court Decision 2012Da203799 Decided September 12, 2013 (Gong1/2/6] Supreme Court en banc Decision 2007Da63089, 63096 (Gong2011Ha, 204)]

Plaintiff 1 and 11 others

Korea Land and Housing Corporation (Law Firm Barun, Attorneys Park Ho-ho, Counsel for defendant-appellant)

Seoul High Court Decision 2010Na114736 decided August 22, 2012

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 Plaintiffs’ appeals are dismissed.

The grounds of appeal are examined.

1. As to the grounds of appeal by Plaintiffs and Defendant regarding the method of calculating unjust enrichment

A. If a person subject to relocation measures is required to pay the project operator, etc. the cost of installing basic living facilities as stipulated in Article 78(4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 8665, Oct. 17, 2007; hereinafter “former Public Works Act”) to the project operator, etc. by including the cost of installing basic living facilities in the sale price under a special supply contract for a housing site or housing entered into between the person subject to relocation measures and the project operator or a supplier under his/her arrangement, the portion of the special supply contract that included the cost of installing basic living facilities in the sale price of the housing site or housing is invalid as it violates Article 78(4) of the former Public Works Act, which is a mandatory law (see Supreme Court en banc Decision 2007Da63089, 63096, Jun. 23, 2011).

In light of such legal principles, if the Defendant, as a project executor, included basic facilities installation costs in the supply price of a housing site calculated on the basis of the cost of creating the housing site in concluding a special supply contract with a person subject to relocation measures, as a relocation measure, such amount of unjust enrichment shall be deemed to be established. The supply price of the housing site does not vary on the ground that the cost of creating the housing site does not reach the cost of creating the housing site. In such a case, the cost of installing the basic living facilities is not calculated on the basis of the supply price of the housing site equivalent to the appraisal price (see Supreme Court Decisions 2012Da93435, Oct. 11, 2013; 2012Da59268, Oct. 17, 2013, etc.).

Therefore, as long as the cost of basic living facilities is included in the sale price of a multi-resident housing site, the part that included the cost of basic living facilities is invalid as it violates Article 78(4) of the former Public Works Act, which is a mandatory law, regardless of whether the cost of basic living facilities does not reach the cost of development of the housing site in the instant project district. Meanwhile, it is just to calculate the cost of legitimate sale per square meter by deducting the cost of basic living facilities per square meter from the cost of development of the housing site per 1 square meter, and contrary to what is alleged in the grounds of appeal, there is no error of law by misapprehending the legal principles on Article 78(4)

B. Meanwhile, according to the reasoning of the lower judgment, the lower court determined as follows: (a) the sales price is calculated by deducting the cost of basic living facilities per unit area (one square meter) from the amount calculated in the formula of “(the cost of housing site formation - the cost of basic living facilities)” ± the cost of basic living facilities per unit area (1 square meter); and (b) if the sales price paid by the Plaintiffs to the Defendant exceeds the sales price calculated

In this case where the Defendant set the supply price of the housing site at a certain amount at the cost of construction of the housing site at a certain amount, the aforementioned method of calculation by the lower court is justifiable as it calculated the cost corresponding to the cost of installation of basic living facilities included in the supply price of the housing site, as seen earlier. Therefore, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the method of

2. As to the plaintiffs and the defendant's grounds of appeal on the scope of the cost of establishing basic living facilities and basic living facilities

A. The purpose of Article 78(4) of the former Public Works Act is to provide a person subject to relocation measures with a basis of living. As such, the term “basic living facilities according to the relevant regional conditions, such as roads, water supply facilities, drainage facilities, and other public facilities” under the said provision ought to be deemed to mean key facilities, such as roads, water supply and drainage facilities, electric facilities, communications facilities, gas facilities, or district heating facilities, which are to be installed by a project proprietor who implements a housing construction project or a housing site development project under the relevant statutes, such as Article 23 of the Housing Act (see Supreme Court en banc Decision 2007Da63089, 63096, Jun. 23, 201

For reasons indicated in its holding, the lower court determined as follows: (a) site costs for telecommunications facilities, water supply and sewerage facility charges, road confirmation and packing charges, waterworks and sewerage construction costs, and electrical construction costs (Gae, etc) fall under the basic living facility installation costs; (b) other construction costs, outsourcing design costs, and research service costs, out of the total project area, are paid for the total project area, and only an amount equivalent to the ratio of the total project area of the road and communications facility to the total project area, which is the basic living facility installation cost; and (c) the lower court determined as follows: (a) the river claimed by the Plaintiffs to be included in the basic living facilities, cannot be deemed as the basic living facilities unless there is any evidence to acknowledge that it is the basic living facilities under Article 78(4) of the former Public Works Act; and (b) the lower court did not constitute landscaping construction costs that the Plaintiffs claimed to be included in the basic living facility installation costs, such as landscape architecture construction costs, etc. for the installation of “a green belt, street area, spantonton, sle, sle, tennis walls

In light of the above legal principles and records, the judgment of the court below on this part is just and acceptable. Contrary to the plaintiffs and the defendant's grounds of appeal, there were no errors by misapprehending the legal principles on the scope of basic living facilities or their installation costs.

B. Roads, which are arterial facilities installed under a housing construction project or a housing site preparation project to which the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009) applies, are responsible for connecting the entrance of the housing complex in the project district and the roads outside the project district, and are all indispensable facilities for achieving the functions of the housing complex, etc. and for passage of the residents, regardless of the length or width of the roads, and the project undertaker shall be liable to install the roads in accordance with the old housing statutes and the housing construction project plan or the housing site preparation project plan based thereon

In light of the purport of the former Public Works Act that seeks to establish a basis for living for those subject to relocation measures as seen earlier, the roads for which a project proprietor of public works such as the instant project provides basic living facilities to those subject to relocation measures, regardless of their length or width, shall be directly regulated by the provisions of the former Housing Act, regardless of their length or width, and shall include roads that correspond to arterial facilities as stipulated in Article 2 Subparag. 8 of the same Act, i.e., roads within a housing complex, which connect the roads of the same kind located outside the relevant housing complex to those located outside the relevant housing complex. Such interpretation shall be deemed reasonable in the case of public works implemented under the former Housing Construction Promotion Act, which have the same provisions as written in the former Housing Construction Promotion Act (see Supreme Court Decision 2012Da9794, Oct. 24, 2013, etc.).

In light of the above legal principles, the court below is just in holding that roads constructed in a project district did not ask their length or width and all of them constituted a site for basic living facilities. There is no error of law by misapprehending the legal principles on the scope of basic living facilities, contrary to what is alleged in the grounds of appeal

C. In light of the relevant provisions of the former Special Act on the Management of Intercity Transport in Metropolitan Areas (amended by Act No. 8251, Jan. 19, 2007; hereinafter “former Intercity Transport Act”), the charges for intercity transport facilities only imposed in the metropolitan area are imposed on the project operator by the Mayor/Do Governor on the costs incurred in the construction and improvement of the metropolitan transport facilities in the metropolitan area, which are required for the construction and improvement of the metropolitan transport facilities in the metropolitan area, and the charges for intercity transport facilities are also imposed on the project operator. In light of the fact that those subject to relocation measures who are provided with the housing site for migrants in the metropolitan area have profits from the construction and improvement of the metropolitan transport facilities, the charges for intercity transport facilities cannot be deemed

In addition, Article 11-2 (1) 3 of the former Metropolitan Transport Act does not provide that the operator of a development project actually paid the charges for metropolitan transport facilities in the course of creating a housing site and constructing a house, if the operator of the development project actually paid the charges for metropolitan transport facilities to persons subject to relocation measures, such charges shall not be excluded from the calculation of the purchase price of a house and a house. Thus, even if the operator of the development project includes the amount equivalent to the charges for metropolitan transport facilities in the sale contract entered into between the persons subject to relocation measures according to the determination of the purchase price and the sale price, barring special circumstances, such as the law or special agreement to exclude the charges from the sale price, the portion equivalent to the charges for metropolitan transport facilities among the sale price agreed under the sale contract shall not be deemed null and void, and the operator of the development project shall not be deemed to have benefit from the sale price equivalent to the charges for metropolitan transport facilities in relation to the persons subject to relocation measures without any legal ground

Unlike the above, the court below held that the charges for metropolitan transport facilities do not constitute the cost of basic living facilities, but it is invalid in violation of Article 11-2 (1) of the former Metropolitan Transport Act to include the charges for metropolitan transport facilities in the sale price to the plaintiffs, and thus, the defendant should return the amount equivalent to the charges for metropolitan transport facilities to the plaintiffs as unjust enrichment. Thus, the court below erred in the misapprehension of legal principles as to the validity of the provision on exemption from the charges for metropolitan transport facilities and unjust enrichment

D. In addition, the lower court determined that the contributions for the establishment of neighboring roads and the contributions for the establishment of outer roads also constitute the costs of establishing basic living facilities, but it is also difficult to accept this part of the lower court’s judgment.

Pursuant to Article 78(4) of the former Public Works Act, costs, such as charges on roads installed outside a project district, which must be naturally provided to persons subject to relocation measures, are difficult to be deemed to constitute the cost of “basic living facilities according to the relevant regional conditions”. If a person subject to relocation measures fails to transfer the cost, such as charges on roads installed outside a project district, it would result in a violation of equity in relation to the general buyers of the housing site and housing. Moreover, according to Article 41-2(1) of the Enforcement Decree of the Public Works Act amended by Presidential Decree No. 2071 on April 17, 2008, the term “basic living facilities at an ordinary level” under the main sentence of Article 78(4) of the Act means the cost of installing the relevant basic living facilities (including street lamps and traffic signal apparatus), water supply and sewage treatment facilities (subparagraph 2), electric facilities (subparagraph 4), telecommunications facilities (subparagraph 5), and the cost of installing the relevant basic living facilities, barring special circumstances, in light of the relevant construction cost of the relevant basic living facilities.

Therefore, the lower court’s judgment that the construction charges and the construction charges of the outer road, which are charges for roads installed outside the project district, also constitute the installation costs of basic living facilities. In so doing, it erred by misapprehending the legal doctrine on the scope of basic living facilities, thereby adversely affecting the conclusion of

3. As to the plaintiffs' grounds of appeal on the base date of damages for delay or interest

For reasons indicated in its holding, the lower court determined that the Defendant was liable to pay interest or delay damages only from the time the instant lawsuit was filed pursuant to Article 749 of the Civil Act, on the grounds that the Defendant could not be deemed to have received profit from the fact that there was no legal ground from the time when the Defendant received the sales price from the Plaintiffs, and there

In light of the relevant legal principles and records, the judgment of the court below on this part is just and acceptable, and there are no errors in the misapprehension of legal principles as alleged in the ground of appeal by the plaintiff.

4. As to the defendant's ground of appeal on the successor to rights and obligations

Where one of the parties to a contract transfers a position as a party to a contract comprehensively to a third party upon concluding a three-dimensional contract or obtaining the consent of the other party, the third party who has taken over the status as a party to a contract shall succeed to the transferor’s contractual position to have all the claims and obligations already incurred in the previous contract transferred (see Supreme Court en banc Decision 2007Da63089, 63096, Jun. 23, 201).

According to the reasoning of the lower judgment, the lower court determined that the Plaintiffs, who succeeded to the rights and obligations under the instant sales contract, comprehensively accepted the status of the contractor under each of the instant sales contract and obtained consent from the Defendant, comprehensively accepted the claim for return of unjust enrichment arising from each of the instant sales contracts.

In light of the above legal principles, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the succession of rights and obligations.

5. Conclusion

Therefore, the part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Plaintiffs’ final appeal is dismissed in entirety. It is so decided as per Disposition by the assent of all participating Justices

Justices Kim Shin (Presiding Justice)