School Foundation (Law Firm LLC, Attorneys Ansan-hwan et al., Counsel for the plaintiff-appellant)

The head of Gangseo-gu Seoul Metropolitan Government (Law Firm Han, Attorney Won-hee, Counsel for defendant-appellant)

November 19, 2014

Seoul Administrative Court Decision 2014Guhap57683 decided August 21, 2014

1. Revocation of the first instance judgment.

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s disposition of imposing enforcement fines against the Plaintiff on May 15, 2013 is revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is an educational foundation that operates ○ High School, ○ Foreign Language High School, ○○ Female High School, ○○ Female High School, and ○○ Female Middle School in Gangseo-gu Seoul ( Address 1 omitted).

B. From March 16, 199 to April 16, 2002, the Plaintiff entered into a sales contract for the land of 44,093 square meters in total (hereinafter “the entire land of this case”) with the area of 23 square meters in the vicinity of the existing school site, and paid all the price from April 10, 199 to April 30, 2002.

C. After the Plaintiff fully pays the price of the entire land of this case, the Plaintiff did not file an application for the registration of ownership transfer with the lapse of three years from the grace period stipulated by the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”). On August 31, 2009, the Defendant imposed a penalty surcharge of KRW 7,826,494,80 on the Plaintiff (hereinafter “previous disposition”).

D. The Plaintiff filed a lawsuit seeking the revocation of the previous disposition with this Court 2009Guhap47668, but was dismissed on April 22, 2010. The Seoul High Court appealed to 2010Nu15140, but was dismissed on January 21, 201, but the Plaintiff appealed to 201Du4312, but was dismissed on September 29, 201 (hereinafter “previous judgment”).

E. On October 12, 2012, the Defendant sent a prior notice to the Plaintiff stating that “The Plaintiff did not complete the registration of ownership transfer under the Plaintiff’s name even after one year has elapsed from the date of imposition of penalty due to the violation of the Real Estate Real Name Act or on which one year has elapsed from the date of imposition of penalty due to the violation of the Real Estate Real Name Act, or on which one year has elapsed from the date of the imposition of penalty due to the completion of a justifiable reason for not being registered under one’s name, (No. 4 omitted), (No. 5 omitted), (No. 6 omitted), (No. 81m2,359m2 (No. 7 omitted), (No. 8 omitted), (No. 8 omitted), and (No. 61m2,752m2 (hereinafter “instant land”). Therefore, in accordance with Article 6 of the Real Estate Real Name Act, the Defendant did not provide a prior notice to impose a charge for compelling performance under the Plaintiff’s name.

F. As between March 21, 2013 and April 22, 2013, the Plaintiff completed the registration of ownership transfer with respect to the instant land in the name of the Plaintiff. However, on May 15, 2013, the Defendant imposed on the Plaintiff a charge for compelling the performance of KRW 388,075,90 for the same reason as the foregoing (hereinafter “instant disposition”).

G. On August 16, 2013, the Plaintiff filed an application for adjudication on the instant disposition with the Seoul Special Metropolitan City Administrative Appeals Commission, but was dismissed on January 27, 2014.

[Ground of recognition] The items of Gap's 1 to 4, Gap's 6 to 8, Gap's 33 (including each number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The assertion on procedural defects

The Defendant, prior notice prior to the instant disposition, indicated the relevant law as “Article 6 of the Real Estate Real Name Act”, and there is no room to apply the said provision to the Plaintiff. Therefore, the Defendant did not specify the provisions that serve as the basis for the instant disposition at the time of the instant disposition. Therefore, the instant disposition was unlawful as it violates Articles 21(1)3 and 23(1) of the Administrative Procedures Act.

(ii) argument as to substantive defects

A) The assertion that the legal requirements are not satisfied

Since the Plaintiff completed the registration of ownership transfer on the instant land prior to the instant disposition, it does not constitute a case where the Plaintiff did not apply for the registration of ownership transfer under Article 10(4) of the Real Estate Real Name Act at the time of the instant disposition. Therefore, the instant disposition did not satisfy its legal requirements

B) The assertion that there are justifiable grounds

Since the instant land is farmland, the Plaintiff can complete the registration of ownership transfer of the instant land only with the permission to divert farmland. On March 29, 201, the Plaintiff submitted a proposal to formulate an “decision to alter an urban planning facility (school)” containing the content that allows the Defendant to use the instant land as a school site, and the relevant administrative agencies, including the Defendant, etc. delayed processing thereof; the Plaintiff faithfully responded to the Defendant’s request for supplementation; and agreed to contribute considerable area to a road site; and the decision to alter the “decision to alter an urban management plan (school)” on the instant land was publicly announced on February 7, 2013 and enabling the registration of ownership transfer of the instant land to be registered. Considering the above, it should be deemed that there was justifiable grounds for not completing the registration of ownership transfer under the name of the Plaintiff pursuant to Articles 10(4) and 6(1) proviso of the Real Estate Real Name Act until February 7, 2013, the said notification date.

C) The assertion that it is a deviation or abuse of discretionary power

Notwithstanding the language and text of Article 10(4) of the Real Estate Real Name Act, the imposition of enforcement fines constitutes discretionary act in light of the purport of imposing enforcement fines. However, considering the following circumstances alleged in Article 10(2) of the same Act: (a) the Plaintiff purchased all of the instant land including the instant land according to the direction of the Minister of Education, etc.; (b) the Plaintiff did not evade taxes, evade compulsory execution, or evade statutes; and (c) the Plaintiff paid penalty following the previous disposition, etc., the instant disposition was excessively harsh to

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Determination of procedural defects

According to Gap evidence Nos. 6 and Gap evidence Nos. 8, the defendant, prior to the disposition of this case, indicated the relevant law as "Article 6 of the Real Estate Real Name Act", and the disposition of this case is merely stated in the Real Estate Real Name Act and it does not specify specific provisions.

However, the following circumstances are acknowledged by comprehensively taking account of the evidence evidence No. 7’s overall purport of oral argument, namely, ① the notice of disposition that the Defendant sent to the Plaintiff on October 12, 2012, stating that “The Plaintiff did not complete the registration of ownership transfer under the Plaintiff’s name even after one year has elapsed from the date on which the penalty was imposed due to the violation of the Real Estate Real Name Act or on the date on which the justifiable reason for not being registered under its name ceases to exist. Therefore, the Plaintiff’s prior notice of disposition is scheduled to impose a charge for compelling compliance pursuant to Article 6 of the Real Estate Real Name Act.” ② The title of the written disposition is “the notice of imposition of a charge for compelling compliance in violation of the Real Estate Real Name Act,” and it appears that the Plaintiff’s prior notice of disposition cannot be deemed that there was any error in the area of the instant land and the amount of the assessment price of the instant real estate pursuant to Article 16(1) of the Real Estate Real Name Act.” Furthermore, it appears that the Plaintiff’s prior notice of disposition of this case is reasonable.

2) Determination of substantial defects

A) Determination as to the assertion that the legal requirements were not satisfied

Article 10 of the Real Estate Real Name Act provides that a penalty surcharge shall be imposed on a long-term unregistered person who fails to file an application for the registration of ownership transfer in accordance with paragraph (1) of the same Article. Paragraph (4) of the same Article provides that “If a long-term unregistered person fails to file an application for the registration of ownership transfer even after he/she has been imposed a penalty surcharge pursuant to paragraph (1), Article 6 (2) and (3) shall apply mutatis mutandis.” In addition, Article 6 (1) of the Real Estate Real Name Act provides that a person subject to the imposition of a penalty surcharge shall register a real right to the relevant real estate in his/her name without delay. Article 6 (2) of the same Act provides that “The person who violates paragraph (1) shall be subject to the registration in his/her name.” Article 6 (2) of the Real Estate Real Name Act provides that “The amount equivalent to 10/100 of the appraised value of the real estate shall be imposed upon the person who violated paragraph (1) of the same Article.”

In full view of the contents, structure, purport, etc. of the relevant provisions, the enforcement fine under Article 10(4) of the Real Estate Real Name Act shall be deemed not only to be a psychological compulsory means for a person who has not been imposed a penalty surcharge for the following reasons, but also to be a sanction against the non-performance of the obligation.

(1) Article 10 of the Real Estate Real Name Act provides for the imposition of penalty surcharges, charges for compelling the performance, and penalties under the title of “Punishment, etc. against persons unregistered for a long time”.

(2) The Real Estate Real Name Act explicitly stipulates that a person whose long-term registration was imposed with a penalty is obliged to carry out a real-name registration without delay, and whether to impose a charge for compelling the performance upon a person whose long-term registration was not registered, in light of the form and language of the provision that the charge for compelling the performance should be imposed upon the expiration of the

(3) As to the penalty surcharge, in a case where title trust is not for the purpose of evading taxes or avoiding restrictions under the laws and regulations, the penalty surcharge may be mitigated within a certain scope, but there is no provision on reduction of the penalty surcharge.

(4) Other laws on enforcement fines, for example, the Building Act or the Labor Standards Act provide that, even if the breach of the duty has expired, if the duty was performed before imposing enforcement fines and resolving the unlawful state, enforcement fines shall not be imposed. However, there is no provision to that effect in the Real Estate Real Name Act.

(5) While a number of laws with the enforcement fines system stipulate that enforcement fines may be repeatedly imposed until the time when administrative obligations are fulfilled, the Real Estate Real Name Act provides that enforcement fines shall be imposed only twice when one year has passed from the date when the enforcement fines are imposed and again one year has passed from the date when the enforcement fines are imposed.

(6) Interpretation that, even if a person whose real name registration has not been made is imposed a penalty, but if he applies for the real name registration before imposing the enforcement fine, the enforcement fine may not be imposed. It goes against the purport of the Real Estate Real Name Act’s order to enforce the performance of the real name registration obligation as soon as possible by imposing the enforcement fine by adding the penalty to the person who has not been registered for a long time, and by imposing it to the person who has not been registered for a long time.

Therefore, insofar as the Plaintiff did not file an application for the registration of ownership transfer within one year from the date of imposition of penalty, even if the Plaintiff completed the registration of ownership transfer on the instant land under the Plaintiff’s name while the enforcement fine was not imposed, the Defendant may impose the enforcement fine pursuant to Articles 10(4) and 6(2) of the Real Estate Real Name Act. Therefore, the Plaintiff’s assertion on this part is without merit.

B) Determination as to the assertion that justifiable grounds exist

Article 10 (1) (proviso) of the Real Estate Real Name Act refers to a case where there is a circumstance to deem that it is unreasonable to expect that a person who has no long-term registration will be responsible for performing his/her duty to apply for registration due to a statutory or de facto disability not attributable to him/her (see Supreme Court Decisions 2000Du6558, May 17, 2002; 2004Du14427, Jul. 12, 2007). Article 6 (1) (proviso) of the Real Estate Real Name Act and Article 6 (2) of the Real Estate Real Name Act are “justifiable cause” and Article 6 (2) of the same Act to the same purport.

In light of the above circumstances, the Plaintiff purchased the instant land with the knowledge that it was impossible for the Plaintiff to apply for the registration of ownership transfer unless it is designated as planned urban planning facilities because the instant land is farmland that the Plaintiff used or used for agricultural management. Thus, barring any special circumstance, it seems that there was a cause attributable to the Plaintiff to apply for the registration of ownership transfer within the grace period. ② It seems that the Ministry of Education and Human Resources Development’s re-investment instruction toward the Plaintiff does not necessarily require the Plaintiff to purchase the instant land as the school site. In addition, if it is somewhat somewhat necessary to secure additional site for the installation of facilities, the Plaintiff would have to have considered the method of purchasing the instant land or transferring part of the Plaintiff’s land as the party to the instant land. ③ The Plaintiff could not be deemed to have applied for the designation of the Plaintiff’s land as planned urban planning facilities in accordance with the Seoul Special Metropolitan City Mayor’s decision on February 24, 195, and the Defendant could not be deemed to have been aware that there was a high-level urban planning facility development project for the purpose of the instant land development project.

C) Determination on the assertion that it is a deviation or abuse of discretionary power

As seen earlier, the Real Estate Real Name Act does not give discretion to administrative agencies with respect to the imposition and collection of charges for compelling the performance of unregistered persons, and even if not, the following circumstances, which are acknowledged by comprehensively taking account of the evidence and the overall purport of pleadings as seen earlier, i.e., the Plaintiff appears to have illegally purchased the instant land, which is farmland for the purpose of securing school sites and is not designated as planned urban planning facilities. ② The Plaintiff appears to have failed to file an application for long-term registration in violation of the Real Estate Real Name Act in the course of purchasing farmland which cannot be acquired under the Plaintiff’s name under the Farmland Act. ③ The Plaintiff acquired and exercised ownership of the instant land, which is substantially farmland by allowing existing farmers to continuously cultivate the instant land without being designated as planned urban planning facilities. In light of such circumstances, the purpose of Article 6(1) of the Farmland Act is to avoid the provision that “farmland is not a person who uses or uses his own agricultural management, or is not a person who is not a person entitled to use the instant land.” The purpose of the Real Estate Real Name Act is to prohibit the title Trust Act from title Trust Act and to ensure the stability of real estate transactions.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed due to the lack of reason, and the judgment of the court of first instance is unfair with different conclusions, and it is so decided as per Disposition by the defendant's appeal.

[Attachment Omission of Related Acts]

Judges’ aid (Presiding Judge) Transfering of permanent equipment

(1) In fact, the Plaintiff was dissatisfied with the instant disposition, resulting in an administrative remedy proceeding, thereby resulting in the instant lawsuit.

2) Article 80(5) of the Building Act, which was enforced at the time of the instant disposition, and Article 33(6) of the Labor Standards Act

3) Article 30-2(4) of the Act on Special Measures for Designation and Management of Development Restriction Zones, Article 62(4) of the Welfare of Older Persons Act, Article 62(4) of the Farmland Act, Article 26(4) of the Special Act on the Safety Control of Publicly Used Establishments, Article 10-3(4) of the Outdoor Advertisements, etc. Control Act, Article 43(4) of the Act on Funeral Services, Etc.

4) Article 10(4) of the Real Estate Real Name Act shall also apply mutatis mutandis to the imposition of charges for compelling the performance of a person who has not registered for a long

5) The Plaintiff asserts that, since enforcement fines are newly imposed after the imposition of a penalty surcharge, the issue of whether there is a justifiable reason for not being able to file an application for registration under his/her name should not be determined by considering the circumstances prior to the imposition of a penalty surcharge, and the circumstances leading to the imposition of an enforcement fine after the imposition of a penalty surcharge should be independently considered. However, whether there is justifiable reason in imposing a enforcement fines shall be determined by comprehensively taking into account whether there is a circumstance that it is unreasonable to expect the performance of the duty to file an application for registration due to any statutory or de facto disability that is not attributable to the long-term unregistered person for the period from the time when the applicant for registration applies for registration to the time when the enforcement fines are imposed, and it shall not be determined by considering