Plaintiff (Law Firm ELBS Partners, Attorneys Lee Dong-soo et al., Counsel for the plaintiff-appellant)

The head of an office of education of Nasung District Office of Education (Law Firm Dasan, Attorney Dok-in)

October 17, 2018

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

On April 6, 2017, the Defendant’s appointment of Nonparty 1, Nonparty 2, Nonparty 3, Nonparty 4, Nonparty 5, Nonparty 6, Nonparty 7, and Nonparty 8 as temporary directors of the school juristic person’s ○○ Institute is revoked.

1. Details of the disposition;

A. The plaintiff's status

1) The school foundation’s ○○ Private Teaching Institute (hereinafter “○○ Private Teaching Institute”) is a school foundation established for the purpose of establishing and operating the ○○ Middle School located in an Ansan-si ( Address omitted), and the articles of incorporation of the ○ Private Teaching Institute stipulate that eight directors (including one chief director) shall be appointed as its executives for a four-year term of office.

2) Meanwhile, the Plaintiff was the grandchildren of Nonparty 14, who was the founder of the ○○ Driving Schools, and was employed as the principal of the ○ Middle School from March 1, 1999 to May 1, 2017, and was appointed as the director of the ○ Driving Schools on August 7, 2006, and was reappointed on November 29, 2010.

(b) A specific audit by the Gyeonggi-do Office of Education;

1) While the Gyeonggi-do Office of Education conducted a specific audit on the operational status of private school institutions from around April 4, 2016, it confirmed the fact that the Plaintiff committed the act of embezzlement, etc. of money in the accounts of the school expenses of the ○ Middle School, and conducted an audit on the overall operation of the ○○ School from May 30, 2016 to June 18, 2016.

2) As a result of the audit conducted as above, the Gyeonggi-do Office of Education found any illegality such as: (a) the appointment procedure of a new teacher and the execution of a financial defective subsidy; (b) improper execution of a fixed-term teacher recruitment procedure; (c) improper employment of a teacher in a disguised manner as an administrative practical agent; (d) improper notification of the appointment of an open director of a school foundation; (c) improper notification of convening a board of directors of a school foundation; (d) improper operation of the board of directors of a school foundation; (e) improper preparation of meeting minutes of a school foundation; (e) violation of the implementation procedure of a project for expanding school meal rooms; and (e) “Unauthorized construction of a meal room connected without permission”; and (e) determined that the appointment of six remaining excluding Nonparty 15 and Nonparty 16, among the eight directors of the ○○ Private School as of June 2016,

3) The Gyeonggi-do Office of Education requested an investigative agency to investigate the misconduct of the Plaintiff’s receipt of money and valuables and the embezzlement of accounts for school expenses. On November 14, 2016, the office of education notified the Defendant, ○○ Private Teaching Institute, etc. of the results of the disposition (request) audit on each of the cadastral matters listed in paragraph 2.

C. Follow-up measures by the Defendant

1) On November 29, 2016, according to the notice of audit results given by the Gyeonggi-do Office of Education, the Defendant issued a request to submit the result of corrective measures until December 14, 2016, on the ground that eight (6) executives of the ○○ Driving School and the Plaintiff were determined to fall under the grounds for revocation of approval of taking office due to the following reasons.

2) The Defendant did not take corrective measures in compliance with the corrective measures stipulated in the foregoing Paragraph 1. On December 16, 2016, notified Nonparty 17 of the revocation of the approval of taking office to Nonparty 17 of the opening director of ○○ Driving Schools. On January 3, 2017, the Defendant held a hearing on January 3, 2017, and revoked Nonparty 17’s approval of taking office on January 5, 2017.

3) Meanwhile, on December 1, 2016, the Plaintiff was detained on the charges of taking property in breach of trust and occupational embezzlement due to the recruitment of employees and accepting money and valuables related to solicitation for subcontracted projects, etc. On January 19, 2017, the said court rendered a judgment of two years, etc. on the ground that the Plaintiff was guilty of all the facts charged and sentenced the Plaintiff to imprisonment with labor for the said two years. After that, the Plaintiff appealed on the grounds of unfair sentencing in the judgment of the first instance court as the grounds of appeal, the said court rendered a judgment of two years, etc. on April 26, 2017 with respect to the Plaintiff on the grounds of unfair sentencing in the judgment of the first instance court. The said judgment was finalized at that time.

D. Appointment, etc. of provisional directors by the defendant

1) On April 6, 2017, the Defendant determined that it is difficult to normally operate the ○○ Institute in light of the audit’s results, etc. by the Gyeonggi-do Office of Education, and on April 6, 2017, the Defendant appointed eight persons, including Nonparty 1, Nonparty 2, Nonparty 3, Nonparty 4, Nonparty 5, Nonparty 6, Nonparty 7, and Nonparty 8 as temporary directors of the ○○ Institute (hereinafter “instant disposition”).

2) On July 10, 2017, the Plaintiff filed an administrative appeal seeking the revocation of the instant disposition with the Gyeonggi-do Office of Education Administrative Appeals, but the Gyeonggi-do Office of Education dismissed the said appeal on October 26, 2017.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 3 through 6, 8 through 12, 16, Eul evidence Nos. 1 through 6, 11 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings

2. Determination on the defense prior to the merits

A. Summary of defendant's defense

The Plaintiff is not the other party to the instant disposition, and even if the Plaintiff is a ○○ Private Teaching Institute’s property contributor or a former director, the Plaintiff’s property interest with respect to the ○○ Private Teaching Institute is not a legal entity, but merely a de facto fact. In addition, it is not recognized that the Plaintiff has the right to take emergency measures as a previous director on the grounds of criminal punishment due to the act of misconduct, such as embezzlement of school expenses and accounting, etc. Therefore, the Plaintiff has no legal interest in seeking revocation of the instant disposition.

B. Determination

1) Although the founder or the former director has property interest in the operation of a private school rather than legal interest in the private school (see, e.g., Supreme Court en banc Decision 2012Du6629, Jan. 23, 2014). However, the freedom of private school under the Constitution accepted by the school foundation is substantially realized by the directors who can be seen as having a relation in which it is appointed in succession. Among them, the former director can be seen as having a relation in which it is most adjacent to the duties of securing the independence and identity of the school foundation. As such, the former director who is in a position to represent the independence and identity of the school foundation, even if it is not recognized as having a right to take emergency measures by analogy of Article 691 of the Civil Act, he/she is a person who has a direct interest in the matter of appointing temporary directors (see, e.g., Supreme Court Decision 2006Da19054, May 17, 2007).

Therefore, in case where the competent authorities appoint temporary directors as a school juristic person having difficulty in normal operation of the school juristic person, the previous directors have a legal interest in dispute with the appointment disposition of temporary directors by asserting that there is no ground for appointment of temporary directors or that the appointment of temporary directors is illegal, and such interpretation will contribute to the resolution of dispute in a single way by preventing the repetition of procedures such as filing an appeal against the application for dismissal of temporary directors and the rejection disposition.

2) As acknowledged earlier, the Plaintiff is a former director of ○○ Private Teaching Institute whose term of office expires on November 28, 2014, and even if the Plaintiff did not have the right of urgent treatment as a previous director on the ground that the Plaintiff is subject to criminal punishment due to the act of misconduct, it is reasonable to deem that the Plaintiff has standing to sue to seek revocation of the instant disposition. Accordingly, the Defendant’s defense is groundless.

3. Whether the instant disposition is lawful

A. Determination of procedural defect arguments

1) Summary of the Plaintiff’s assertion

The instant disposition constitutes an infringing administrative disposition, since it completely suspends the authority of the Plaintiff and seven other directors who worked as directors of ○○ Driving Schools. Therefore, prior to rendering the instant disposition, the Defendant should have given prior notice of the disposition in accordance with the Administrative Procedures Act to the Plaintiff and seven other persons, or given an opportunity to present their opinions. However, the instant disposition was rendered without undergoing the aforementioned procedure, and thus, the instant disposition was unlawful on the ground that the procedural defect is unlawful.

2) Determination

A) Article 20(1) of the Private School Act provides that an officer shall be appointed at the board of directors as prescribed by the articles of incorporation. Paragraph (2) provides that an officer shall take office with the approval of the competent agency. Paragraph (3) provides that the term of office of a director shall be determined by the articles of incorporation, but the term of office of a director shall not exceed five years. Articles 18 subparag. 1 and 19(1)1 of the articles of incorporation of the ○○ Private School provides that eight directors (including one chief director) as an officer of the ○○ Private School shall be appointed and the term of office shall be four

B) However, the written evidence Nos. 21 and 22 alone is difficult to recognize that four persons, including Nonparty 18, Nonparty 19, Nonparty 20, and Nonparty 21, were subject to approval for taking office from the Defendant, the competent agency. Since there is no other evidence to acknowledge this, Nonparty 18, Nonparty 19, Nonparty 20, and Nonparty 21 cannot be deemed to have been in the position of each director of the ○○ Institute. Furthermore, on November 29, 2010, the Plaintiff was appointed as a director of the ○○ Institute on November 28, 2014; the term of office expired; Nonparty 15, and Nonparty 16 was appointed as a director of the ○○ Institute on September 13, 2012; the term of office expired; Nonparty 17 was not subject to the Defendant’s revocation of the instant disposition of taking office on September 12, 2016.

C) Meanwhile, the Plaintiff asserted to the effect that the term of office of the Plaintiff, Nonparty 15, and Nonparty 16, who is a director of the ○○ Private School, expired, and that the previous director’s emergency treatment rights are limited to the Plaintiff, Nonparty 15, and Nonparty 16, and that the previous director’s emergency treatment rights are violated. However, the instant disposition is acknowledged based on the aforementioned facts and evidence and the entire purport of oral argument. i.e., the Plaintiff was indicted on December 1, 2016 on the charge of giving and receiving money and valuables related to employment and solicitation of subcontracting, and on the charge of occupational embezzlement. Inasmuch as it is difficult to view that the previous director’s emergency treatment rights are not established after being convicted of all the above facts charged on January 19, 2017, it is difficult to view that Nonparty 1 and Nonparty 16 did not have any right to receive temporary directors’ emergency treatment rights again from the previous director of the ○ Private School without any special reason for the Plaintiff’s expiration of the term of office.

B. Determination on the assertion of succession to the defect of approval of taking office against the non-party 17

1) Summary of the Plaintiff’s assertion

The Defendant’s revocation of approval of taking office against Nonparty 17 on January 5, 2017 (hereinafter “instant prior disposition”) is unlawful for the following reasons, and the instant disposition that the Defendant appointed a temporary director of ○○ Private Teaching Institute as a follow-up measure of the instant prior disposition is also unlawful.

A) Based on the premise that this provision is a mandatory provision under Article 14(3) and (4) of the Private School Act concerning the appointment of an open director of the school foundation, the Defendant issued the preceding disposition in this case on the ground that Nonparty 17 was appointed in violation of the above provision, and each of the above provisions cannot be deemed to constitute a mandatory provision. Thus, the mere fact that there is a defect in the composition of the open director recommendation committee cannot be deemed to be unlawful.

B) Article 20-2(1) of the Private School Act provides that if an executive commits an act falling under any of the following subparagraphs, the competent agency may cancel the approval of the appointment of the executive. This provision does not apply to the cancellation of the approval of the appointment of the executive officer on the ground of a school juristic person’s unlawful act, and it does not apply to the cancellation of the approval of the appointment of the executive officer on the ground of an unlawful act of the school juristic person. Since there is no illegal act committed by the non-party 17, there

C) Since ○○ Private Teaching Institute was not subject to a request for correction from the Gyeonggi-do Office of Education or the Defendant to revoke the approval of taking office, the prior disposition in this case was erroneous in violating the procedure under Article 20-2(2) of the Private School Act.

D) On December 18, 2013, the Defendant approved Nonparty 17’s taking office on December 17, 2013, and the Gyeonggi-do Office of Education issued by the Gyeonggi-do Office of Education on March 2016, to strictly operate the appointment approval procedure of open directors in the future through the public notice that “the appointment procedure of open executives of the school foundation and the plan to improve qualification requirements” is “the notification that the appointment approval procedure of open directors will be implemented,” and the time when the appointment is implemented is specified from April 1, 2016, and the Gyeonggi-do Office of Education expressed its opinion that it is reasonable to take certain measures against the relevant persons of the Gyeonggi-do Ansan District Office of Education, which neglected to guide and supervise ○○ Private Teaching Institutes in the specific audit report on ○○ Private Teaching Institutes. In light of such

2) Determination

A) In a case where the preceding and subsequent dispositions independently cause a separate legal effect, the validity of the preceding dispositions shall not be asserted on the grounds of defects in the preceding dispositions unless there are special circumstances, except where the defect in the preceding dispositions is unreasonable and invalid (see, e.g., Supreme Court Decision 2016Du49938, Jul. 18, 2017).

However, the prior disposition of this case revoked approval of taking office against Nonparty 17 on the ground that the appointment procedure of Nonparty 17 was violated in the Private School Act. The prior disposition of this case is an independent administrative disposition in which the provisional director of ○○ Driving Schools is deemed difficult to normally operate ○○ Driving Schools, and the separate legal effects of each of the previous dispositions are generated. The prior disposition of this case was made on January 5, 2017 and the period for filing a lawsuit of this case was already over at the time of February 1, 2018, which was apparent and apparent that the previous disposition of this case was already over, and thus, the validity of the previous disposition of this case cannot be asserted on the ground of the defect of the prior disposition of this case, except where the defect of the previous disposition of this case is grave and obvious, and thus, the validity of the subsequent disposition cannot be asserted.

B) In order for an administrative disposition to be null and void as a matter of course, the mere fact that there is an illegality in the disposition is insufficient, and the defect is objectively obvious as it seriously violates the important part of the law (see, e.g., Supreme Court Decision 2003Du2403, Nov. 26, 2004). Any disposition contrary to the general principles of the administrative law, such as the principle of good faith, the principle of trust protection, and the principle of proportionality, is a legitimate act, and thus, it is merely a disposition for which the cause for revocation exists in principle, and it is not null and void (see, e.g., Supreme Court Decision 2002Du1465, Apr. 26, 2002).

Meanwhile, Article 14(3) of the Private School Act provides that a school juristic person shall appoint a director (hereinafter referred to as "open Director") equivalent to one-fourths of the total number of directors (Provided, That this shall be rounded down to a minority number) from among two times the number of members recommended by the Open Director Recommendation Committee, and Article 14(4) of the Private School Act provides that the Open Director Recommendation Committee shall have a school steering committee pursuant to Article 31 of the Elementary and Secondary Education Act, and the organization, operation, and composition thereof shall be determined by the articles of association, but the number of members shall be extended to not less than five and a half of the number of members and recommended by the Open Director Recommendation Committee

C) However, comprehensively taking account of the evidence as mentioned above and evidence evidence No. 2, the articles of association of the ○○ Private School provides that the school operation committee shall recommend persons eligible for appointment of open directors, not the committee for recommending open directors. The school operation committee regulations stipulate the procedures for and methods of recommending open directors. The school operation committee regulations do not stipulate any matters necessary for the recommendation of open directors. The ○○ Private School operation committee requested the recommendation of open directors to the committee for recommending open directors on September 30, 2013 without requesting the recommendation of members of the committee for recommending open directors. The ○ Private School operation committee recommended Nonparty 17 and Nonparty 22 to the school operation committee for the appointment of open directors on October 1, 2013. According to the articles of association, the ○○ Private School operation committee may decide to appoint Nonparty 17 to the committee for recommending open directors on October 7, 2013. According to the above articles of association, the committee for recommending open directors to the committee for recommending open directors on each of the following reasons.

D) Meanwhile, on November 29, 2016, the Defendant requested ○○ Private Teaching Institute to take corrective measures against Nonparty 17, etc., but did not take any measure, held a hearing against Nonparty 17, and revoked Nonparty 17’s approval of taking office on January 5, 2017.

E) In full view of the above facts and circumstances, the defendant can be deemed to have cancelled the approval of taking office against the non-party 17 in accordance with the procedures stipulated in the Private School Act. The grounds that the plaintiff violated the principle of trust protection as asserted by the plaintiff cannot be deemed as a material and clear defect of the previous disposition, and there is no other evidence to prove that there is an objective and obvious defect because it violates the important part of the relevant laws and regulations, such as the Private School Act. Accordingly, this part of the plaintiff's assertion is without merit without any need to further examine the remainder of the issue.

C. Determination on the assertion of deviation or abuse of discretionary power

1) Summary of the Plaintiff’s assertion

If the appointment of directors of the ○○ Private Teaching Institute is all invalidated from among eight directors of the Plaintiff and five (the Nonparty 18, Nonparty 21, Nonparty 20, Nonparty 19, and Nonparty 17) the former director, the right to take emergency measures against the Nonparty 23 and the other five (the Nonparty 24, Nonparty 25, Nonparty 26, Nonparty 27, and Nonparty 28). In addition, Nonparty 15 and Nonparty 16 are the legitimate director of the ○○ Private Teaching Institute, and their terms of office are expired, and their term of office expires, and they are not any grounds for disqualification. In light of the fact that it has not been objectively confirmed whether Nonparty 15 and Nonparty 16 intervene in preparing the minutes of the ○○ Private Teaching Institute with falsity, there is no special circumstance that could exclude the right to take emergency measures against the former director from being bound by the court at the time of the instant disposition, but it is not recognized that there was a special circumstance that could have been a conviction before the court.

Therefore, the Defendant had first taken such measures to normalize the board of directors of ○○ Driving Schools, but did not take such measures, and did not seek any opinion on the appointment of a provisional director to the previous directors of ○○ Driving Schools, thereby causing the publicization and socialization of private schools by de facto deprivation of the former directors’ control over ○○ Driving Schools by taking the instant disposition without seeking any opinion on the appointment of a provisional director. The instant disposition was unlawful since it exceeded and abused the discretionary power.

2) Determination

In full view of the following facts and circumstances that can be recognized based on the facts acknowledged earlier and the purport of the entire pleadings, ○○ Private School constitutes “when the school juristic person fails to fill the vacancy of directors and thus makes it difficult to operate the school juristic person normally,” as prescribed by Article 25(1)1 of the Private School Act at the time of the instant disposition, and solely on the circumstance that the Defendant appointed eight temporary directors of ○○ Private School, the Defendant’s instant disposition that appointed temporary directors pursuant to the deliberation by the Private School Dispute Mediation Committee for the prompt normalization of ○○ Private School is difficult to deem that the instant disposition that appointed temporary directors pursuant to the deliberation by the Private School Dispute Mediation Committee was an abuse of discretionary power. Accordingly, the Plaintiff’

① From October 2012, 012, ○○ Private School operated a board of directors with due care in violation of the Private School Act and subordinate statutes by preparing false minutes of the board of directors without legitimate holding a meeting of the board of directors. Since around 2013, ○○ Private School operated the board of directors without legitimate filling of vacancies, such as giving and receiving money and valuables related to the employment of teachers and employees, and embezzlement of accounts for school expenses, etc., which were detained by the Defendant, the competent agency, without obtaining approval of taking office, and the Plaintiff carried out the duties of ○○ Private School and ○○ Middle School without legitimate filling of vacancies. The Plaintiff did not recognize that the board of directors of ○○ Private School had been properly operated solely on the basis of the descriptions stated in subparagraphs 17 through 20.

② As seen earlier, there was no person who is in a legitimate position among those who were working for the director of the ○○ Driving Schools at the time the instant disposition was taken place, or whose term of office expires, and there was no person to recognize the right to take emergency measures among the previous directors of the ○○ Driving Schools. In addition, among the previous directors of the ○○ Driving Schools, Nonparty 23 resigned on or around December 2015, Nonparty 25 was dismissed from office on October 7, 2013, and Nonparty 27 was dismissed from office on May 26, 2014, and Nonparty 28 and Nonparty 24 did not obtain approval from the Defendant, and therefore, it was difficult to deem that the above previous directors have the right to take emergency measures. Accordingly, ○○ Driving Schools was in a situation where it is impossible to properly perform duties through the board of directors.

(3) The provisional directors system under the Private School Act and subordinate statutes is merely an institutional purpose to assist a school juristic person in crisis, due to the vacancy of directors, etc., in order to normalize the board of directors as soon as possible to achieve the purpose of the establishment of the school juristic person. It does not have the purpose to deprive the former directors who caused the crisis of the school juristic person, to deprive them of their right to operate the school juristic person, or to promote the publicization and socialization of private schools by changing the governance structure of the school juristic person. Temporary directors are limited to crisis management of the school juristic person temporarily in charge of the operation of the school juristic person, acts related to the operation of the school juristic person, and have the same authority as regular directors, and there is no authority to interfere with the autonomy of private schools such as the right to appoint regular directors. Thus, even if the defendant appointed eight temporary directors of the ○○ Private School by the instant disposition, it cannot be deemed that the ○ Private School is a

④ The Gyeonggi-do Office of Education requested the Private School Dispute Resolution Committee to deliberate on the appointment of ad hoc director of ○○ Driving Schools, and included three persons related to ○○ Middle Schools as persons eligible for ad hoc director, and the Defendant appears to have taken measures to ensure that the independence and identity of ○ Driving Schools are not undermined by appointing two persons related to ○ Middle Schools included in persons eligible for ad hoc director through deliberation by the Private School Dispute Resolution Committee.

(5) Where a private school dispute mediation committee appoints a regular director due to the removal of the grounds for appointment of a temporary director, it provides that it shall listen to the opinions of persons eligible for appointment of a regular director from persons who are able to maintain the independence or identity of the relevant school foundation, including directors of the relevant school foundation. As such, an institutional device is installed to ensure that a regular director can be appointed in a way that maintains the independence or identity of the school foundation (see Article 9-6, etc. of the Enforcement Decree of the Private School

6. If the operation of the ○○ Private Teaching Institute has been carried out for a long time, irreparable damage is forced to occur, such as impairing the trust of the ○○ Middle School teachers, school personnel, and students on the ○○ Private Teaching Institute, infringing on the students’ legitimate right to learn.

4. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.

(attached Form omitted)

Judges Hong Jin-chul (Presiding Judge)