Defendant

Defendant and Prosecutor

Kim Jong-gu (Lawsuit) and Kim Jae-Nam (Trial)

Law Firm Dawon, Attorney Kim Dong-chul

Incheon District Court Decision 2012 Godan10212 Decided January 9, 2013

The judgment of the court below is reversed.

Defendant shall be punished by a fine of KRW 1,500,000.

When the defendant fails to pay the above fine, the defendant shall be confined in a workhouse for the period converted by 50,000 won into one day.

In order to order the provisional payment of an amount equivalent to the above fine.

Of the facts charged in this case, the violation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents is acquitted.

The summary of the acquittal part in this judgment shall be publicly notified.

1. Summary of grounds for appeal;

A. misunderstanding of facts and misapprehension of legal principles by the defendant

On October 16, 2010, the ○○○ Development and Improvement Project Association (hereinafter “instant partnership”) changed the method of resolution lawfully at a temporary general meeting of the cooperative (hereinafter “instant general meeting”) and decided to select a designer accordingly, and entered into a design service contract with Nonindicted Incorporated Company 1 (hereinafter “Nonindicted Company 1”) in accordance with the above resolution. Since there was no invalidity or absence of the resolution at the above general meeting, it cannot be deemed that the Defendant, the head of the instant partnership, was voluntarily promoted the selection of a designer without a general meeting resolution, the lower court found the Defendant guilty of violating the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents due to the selection of a designer without a general meeting resolution among the facts charged in the instant case.

The Defendant, who is a member of Nonindicted 3, disclosed all details of monthly deposits and withdrawals of funds of the association in relation to the expenses related to the general meeting of the constructors, which is demanded by Nonindicted 3, and the detailed details of disbursement items of the above expenses are information managed by Nonindicted 4 Co., Ltd. (hereinafter “Nonindicted 4”) which is the company that vicariously executes the general meeting, and ultimately goes beyond the scope of disclosure obligation of the association prescribed by the law. Thus, the lower court found the Defendant guilty of violating the Act on the Maintenance and Improvement of Urban Areas and Residential Environments due to the refusal to disclose materials

B. The defendant and prosecutor's assertion of unreasonable sentencing

The defendant asserts that the above punishment of the court below (the fine of KRW 3,00,000) which gives excessive disadvantage to the defendant compared to the contents of the crime is too unreasonable, and the prosecutor asserts that the above punishment is too unreasonable in light of the intelligence of the method of crime.

2. Summary of the facts charged before the amendment and the judgment of the court below

A. Summary of the facts charged

On February 24, 2010, the Defendant is the head of the instant association established in Bupyeong-gu, Incheon, Bupyeong-gu, Incheon, to exercise overall control over the affairs of the said association.

(1) Violation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents due to selection of designer without resolution

On June 12, 2010, the Defendant tried to open an extraordinary general meeting of the pertinent union and to select a designer. However, it was impossible to select a designer due to failure to meet the quorum, and it was difficult to select the designer by the existing resolution method to directly attend the meeting and make decisions. The Defendant was willing to select a designer according to the amended articles of association after amending the articles of association to the effect that the method of selecting the designer may pass a resolution by attending the meeting by granting the right of representation of the union members.

The Defendant, around October 16, 2010, held an extraordinary general meeting of the pertinent redevelopment association at the Bupyeong-gu Incheon Metropolitan City Bupyeong-gu and changed the articles of association of the association about the method of the general meeting resolution, and the Defendant continuously selected Nonindicted Company 1 as designer according to the method of selecting the amended articles of association without obtaining authorization from the Bupyeong-gu Incheon Metropolitan City Office on the amended articles of association. On November 19, 2010, the Defendant arbitrarily promoted the selection of designer by concluding the design service contract with Nonindicted Company 1 without a general meeting resolution.

(2) Violation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents

The executives of an association shall comply with the documents and related data on the implementation of an improvement project at the request of members of the association or owners of the land, etc. for perusal

Even if the Defendant was requested to disclose data through the content verification that, around March 16, 2010, around April 4 of the same year, and around May 11, 201 of the same year, at the above partnership offices located in Bupyeong-gu, Incheon ( Address omitted) via three times, the Defendant rejected and did not disclose the data without justifiable grounds, even though the Defendant was required to disclose the detailed data, such as the receipt and withdrawal of expenses related to the general assembly related to the general meeting for selection of the contractor, from Nonindicted 3, a member

B. The judgment of the court below

The court below found the above facts charged guilty on the basis of macroscop evidence.

3. Judgment of the court below

A. Ex officio determination

Prior to the judgment on the grounds for appeal by the defendant, the part on the violation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents due to the refusal to disclose data among the facts charged by the prosecutor shall immediately comply with the request of the members of the association or owners of the land, etc. on the documents related to the implementation of the rearrangement project and related materials. Nevertheless, the defendant still rejected the request for the disclosure of detailed data, such as the details of receipt and withdrawal of expenses related to the general meeting of the contractor selection held on June 12, 2010 by Nonindicted 3, who is a member of the association office located in the Bupyeong-gu Incheon Metropolitan City ( Address omitted) around March 16, 201, and around May 11 of the same year, the above provision of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, which included the detailed data on receipt and withdrawal of expenses related to the general meeting of the contractor selection, without any justifiable reason, even if there is a change in the legal principles as to the revised provision of the Act on the Maintenance and Improvement of Residents and Improvement of Residents,".

B. Part on the violation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents due to selection of designer

(1) Facts of recognition

According to the evidence duly adopted and examined by the court below, the association of this case held the general meeting of this case on October 16, 2010; 118 members from among 1,147 members; 784 members attend the general meeting by submitting a written resolution; the association of this case shall transfer Article 13 (2) of the existing articles of association (hereinafter referred to as the "former articles of association") to the general meeting of this case as an agenda item 1; 12 (1) of the previous articles of association shall be excluded from the above articles of association of this case; 2) the association's case of selecting a designer among non-indicted 1 and non-indicted 2 as an agenda item 1; 3) the association of this case shall be presented to the non-indicted 1 and non-indicted 2 as an agenda item; 10 of the above bill of this case's letter of approval and the non-indicted 2's letter of approval for the above agenda item; 10 of this case's letter of approval and the letter of selection column 2 of the above agenda item shall be approved 19.

(2) Relevant statutes

The actual contents 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; hereinafter referred to as "Act").

Article 20 (Preparation and Alteration of Articles of Incorporation)

(1) The Association shall prepare the articles of association including the following matters:

10. Procedures, timing and method of convening a general meeting;

15. Matters to be included in the contract for the selection of the contractor or designer;

(s) Sponsey omitted

(3) Notwithstanding Article 16 (1) through (3), where a cooperative intends to amend its articles of association, it shall hold a general meeting and obtain authorization from the head of a Si/Gun with the consent of the majority of union members (referring to at least 2/3 in the case of paragraph (1) 2 through 4, 8, 12, or 15): Provided, That where it intends to amend any insignificant matter prescribed by Presidential Decree, it shall do so in the manner prescribed by this Act or the articles of association and report it to the head of a Si/Gun.

Article 24 (Convening of General Meeting and Matters for Resolution)

(3) The following matters shall undergo a resolution at a general meeting:

1. Amendments to the articles of incorporation (limited to amendments to insignificant matters under the proviso to Article 20 (3) determined to be resolved at a general meeting by this Act or the articles of incorporation);

6. Selection and change of a contractor, designer, or appraisal business entity (excluding a housing redevelopment project): Provided, That the selection and change of an appraisal business entity may be entrusted to the head of a Si/Gun after a general meeting resolution;

(s) Sponsey omitted

(4) Matters requiring consent of partners pursuant to this Act or the articles of association from among those under each subparagraph of paragraph (3) shall be referred to a general meeting.

(5) The procedures, timing, methods, etc. for convening a general meeting shall be determined by the articles of incorporation: Provided, That where a general meeting makes a resolution, at least 10/100 of members shall attend the meeting directly.

The actual contents of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter referred to as the “Decree”).

Article 32 (Minor Modifications to Articles of Association)

"Minor matters prescribed by Presidential Decree" in the proviso to Article 20 (3) of the Act means the following:

1. Matters under Article 20 (1) 1, 5, 6, and 10 of the Act;

2. Matters under subparagraphs 2, 3, 5, 8, 13, 14 and 16 of Article 31;

3. Other matters prescribed by municipal ordinance of a City/Do.

Article 31 (Matters to be Specified in Articles of Association)

"Matters prescribed by Presidential Decree" in Article 20 (1) 17 of the Act means the following matters:

14. The scope of matters subject to resolution at a general meeting;

(s) Sponsey omitted

(3) Articles of incorporation-related provisions

The Articles of Incorporation

Article 12 (Selection of Work Executor and Contract)

(1) A contractor shall be selected at a general meeting of the Ministry of Land, Transport and Maritime Affairs in accordance with the criteria for selecting a constructor of an improvement project (No. 2009-550 announced by the Minister of Land, Transport and Maritime Affairs) publicly notified by the Ministry of Land, Transport and Maritime Affairs: Provided, That a free contract may be concluded through a resolution at a general

Article 13 (Selection of Designer and Contract)

(2) Article 12 (1) through (3) shall apply mutatis mutandis to the selection of and contracts for a designer. In such cases, "contractor" shall be deemed "designer", respectively.

Article 21 (Matters to be Resolved by General Meeting)

The following matters shall be determined through a resolution of a general meeting:

1. Amendment of the articles of association;

6. Selection and alteration of the removal businessman, work executor and designer;

(s) Sponsey omitted

Article 22 (Resolution Method of General Meeting)

(1) A general meeting shall be held with attendance of a majority of all members, and pass resolutions with the consent of a majority of those present.

(3) Members of the cooperative may exercise their voting rights in writing or through an agent falling under each subparagraph of Article 10 (2). In case of a written event, it shall be deemed that the attendance referred to in paragraphs (1) and (2)

(4) If any cooperative member attends a meeting in writing pursuant to the provisions of paragraph (3), he/she shall express his/her intention on the agenda and make the agenda arrive at the meeting by the day

The Articles of Incorporation 1)

Article 13 (Selection of Designer and Contract)

(1) Designers shall comply with Article 23 of the Certified Architects Act and select or modify them through a resolution of the general meeting.

(2) A designer shall be selected by means of a general competitive bidding or selective competitive bidding, but a public announcement of a tender in a daily newspaper shall be given at least once, the site site descriptions shall be held, and a proposal for participation shall be submitted and selected at a general meeting shall be selected by the general meeting: Provided, That the same shall not apply to cases where the successful bidder is replaced by another person, subject to the resolution of the general meeting.

(3) Article 12 (2) through (3) shall apply mutatis mutandis to the selection of and contracts for a designer. In such cases, "contractor" shall be deemed "designer", respectively.

The actual contents of the project shall be selected as a contractor for the improvement project (No. 2009-550 of the Ministry of Land, Transport

Article 14 (Resolution of General Meeting)

(1) A general meeting may proceed with proceedings where a majority of partners directly attend. In such cases, where an agent prescribed by the articles of incorporation attends the meeting, it shall be deemed direct participation.

(2) Members may exercise their voting rights in writing in accordance with the articles of association, but in such cases, the number of direct participants referred to in paragraph (1) shall not be included in the number of persons involved, and persons related to constructors, etc. shall not request a written resolution in relation to the selection

(4) Determination

First, I examine the method of resolution applicable to the resolution of this case.

Article 24(3)6 and (4) of the Act requires the consent of its members, and the method of resolution at a general meeting is prescribed by the articles of association (Article 24(5) of the Act). According to the articles of association, a majority of its members shall attend a meeting, except as otherwise provided in the Act or the articles of association, and a resolution shall be passed with the consent of the majority of its members present (Article 22(1) of the former Articles of association). According to the former articles of association, the quorum for the selection of a designer shall be passed at the general meeting of the association (Articles 13(2) and 12(1) of the former Articles of association) in accordance with the “standards for the selection of the executor of the maintenance business” (Article 14(1) of the former Articles of association), a majority of its members shall be resolved at the general meeting of the association (Article 14(1) of the criteria for the selection of the executor of the maintenance business). However, according to the new articles of association, if 10/100 or more of its members directly attend the meeting (Article).

According to the above facts, the members of the association of this case proposed a change in the method of resolution on the selection of designer of the old articles of association and the selection of designer at the general meeting of this case, and at the same time, the resolution method is changed to the new articles of association with the consent of more than 2/3 of the union members as a result of voting on the above two agenda items. Thus, the members of the association of this case shall be deemed to have made the resolution of this case with the intention of selecting designer by the modified method. Thus, it is recognized that the resolution of this case satisfied

Next, Article 13(2) of the former Articles of Incorporation, which provides that Article 12(1) of the former Articles of Incorporation shall apply mutatis mutandis to a resolution of a general meeting concerning selection of a designer, does not merely apply to matters concerning the convocation procedure, time, and method of resolution (Article 20(1)10 of the Act), but also constitutes Article 20(1)15 of the Act, since Article 13(2) of the former Articles of Incorporation, which provides that Article 12(1) of the former Articles of Incorporation shall apply mutatis mutandis to a resolution of a general meeting concerning selection of a designer, Article 13(2) of the former Articles of Incorporation, does not merely apply to matters concerning the convocation procedure, time, and method of resolution (Article 20(1)10 of the Act). Thus, it cannot be deemed as a minor matter under Article

Finally, the resolution of this case was made by the modified method prior to the approval of the competent authority on the articles of incorporation to which the resolution of this case was modified, and is not effective by the modified method, and the resolution of this case does not require the approval of the competent authority on the design selection resolution itself. However, if it is intended to amend the articles of incorporation on the method of resolution, it is required to obtain the approval of the head of the competent Si/Gun with the consent of more than 2/3 of the union members. In this case, the above consent requirement of the union members in this case was met. As seen earlier, it cannot be deemed that there was an objective apparent defect in the resolution of this case because the head of Incheon Bupyeong-gu approved the amendment of the articles of incorporation after the amendment of the above resolution method, and it is not deemed that the defect was serious in light of the ratification of the resolution of this case at the association meeting of this case on March 19, 2011.

(5) Therefore, it cannot be deemed that the Defendant committed a crime falling under Article 85 subparag. 5 or Article 24(3) of the Act as stated in the facts charged, and there is no other evidence to acknowledge it. Thus, the judgment below which found the Defendant guilty of this part of the facts charged is erroneous in the misapprehension of the legal principles as to the relevant legal provisions.

C. The violation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents

(1) Facts of recognition

According to the evidence duly adopted and examined by the lower court, around February 28, 201, the Defendant requested Nonindicted Co. 3 to disclose the detailed statement of monthly admission and withdrawal of funds from the instant association from February 28, 201 to February 28, 201. On March 8, 2011, Nonindicted Co. 3 disclosed the monthly entry and withdrawal of funds to Nonindicted Co. 3, and sent content-proof mail accompanying the monthly revenue and disbursement details. Of the details, regarding the general meeting of the instant association’s selection held on June 12, 2010, Nonindicted Co. 4 was not required to disclose the details of the instant association’s monthly contribution and withdrawal, and Nonindicted Co. 3’s non-indicted Co. 4’s non-indicted Co. 1’s payment of the funds to Nonindicted Co. 4, 2010; on June 18, 2010, Nonindicted Co. 300 million won was not required to disclose the details of the instant association’s contribution to the general meeting.

(2) Relevant statutes

The actual legal provisions

Article 81 (Disclosure, Preservation, etc. of Related Data)

(1) The chairperson of a promotion committee or a project implementer (in cases of a cooperative, referring to the representative thereof, if the owners of a plot of land, etc. independently implement an urban environment rearrangement project) shall make the following documents and related data in parallel with the Internet and other methods so that members, owners of land, etc., or tenants may know about the implementation of an improvement project, and shall immediately comply with such request, if requested by members or owners of land, etc., to peruse or copy the following documents and data.

1. Operation rules of the promotion committee and its articles of association;

2. A contract for selection of a designer, work executor, removal business entity, and a specialized management business entity for rearrangement projects;

3. Minutes of the promotion committee, resident general meeting, general meeting of associations, and the board of representatives of associations;

4. Project implementation plan;

5. Management and disposal plans;

6. Official documents concerning the implementation of the relevant rearrangement project;

7. Audit report;

8. Other documents and related data prescribed by Presidential Decree regarding the implementation of the rearrangement project.

Note 2) 6

Article 86 (Penal Provisions)

Any of the following persons shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding ten million won:

6. The chairperson of a promotion committee, or the executives of an association (where the owners of land, etc. independently implement an urban environment improvement project, the representative thereof) who fails to disclose the documents and data related to the implementation of an improvement project in parallel with the Internet or by other methods, or fails to comply with the request for inspection and copying by the members or owners

The actual Act on the Maintenance and Improvement of Urban Areas

Article 70 Section 3)

(1) "Documents and related data prescribed by Presidential Decree" in Article 81 (1) 8 of the Act means the following documents and data:

1. Details of monthly deposits and withdrawals of funds;

(s) Sponsey omitted

(2) Pursuant to Article 81 (2) of the Act, the chairperson of a promotion committee or a project implementer (referring to an executive of a cooperative in cases of a cooperative, or a representative where an owner of a plot of land, etc. implements an urban environment improvement project under Article 8 (3) of the Act) shall notify in writing the following matters to the association members or the owners of a plot of land, etc.

1. A list of the subject matters of disclosure;

2. A summary of data to be disclosed;

3. Place of disclosure;

4. Scope of disclosure of information by subject;

5. Methods of perusal or duplication.

6. Expenses incurred in copying.

(3) Determination

The above relevant Acts and subordinate statutes stipulate the detailed details of the monthly deposit and withdrawal of funds of the redevelopment project association and related data to be disclosed, and even if the instant association entrusted the business affairs of holding the general meeting to pay a certain amount to Nonindicted Company 4 and paid the general meeting expenses, in order to determine whether the price and the expenses of the general meeting are appropriately calculated, the details of the general meeting expenses and their supporting materials shall also be deemed related data in the details of monthly deposit and withdrawal of funds under the above provisions and shall be included in the subject to disclosure. Such interpretation also accords with the purport of the establishment of the above disclosure obligation provision, i.e., transparency in the improvement project and the fulfillment of the rights to know of union members.

On the other hand, according to the above facts, since the association of this case was in custody of detailed expenditure, such as expenses for general meeting location lending, promotional personnel, mail delivery, order personnel, free gifts, etc. relating to the above contractor's general meeting, the defendant's non-disclosure of such contents is recognized as violating the duty of disclosure under Article 81 (1) of the Act, and such duty of disclosure is deemed as violating the duty of disclosure under Article 81 (1) of the Act, and the defendant's non-performance of the duty of disclosure has reached the result of non-indicted 3's rejection of the request for disclosure, thereby failing to comply with the duty of disclosure. The conclusion does not change on the ground that the financial resources of the general

Therefore, the defendant's argument disputing this part of the facts charged is without merit, on the ground of the above rejection reasons.

4. Conclusion

Therefore, the part of the judgment of the court below on the violation of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents due to the refusal to disclose data is reversed ex officio as above, and the defendant's appeal against the violation of the above Act due to the selection of designer without a general meeting resolution is justified. Thus, the judgment below is reversed pursuant to Article 364 (6)

As stated in the revised facts charged under the above 3-A.

1. The defendant's oral statement in court;

1. Examination protocol of the accused by the prosecution (including the part concerning the statement outside the prosecution 5);

1. The prosecutor’s statement concerning Nonindicted 6

1. The police statement of Nonindicted 5

1. Documents to be attached to the written complaint and investigation report (attached documents, such as certification of contents related to refusal to disclose to the complainant);

1. Article relevant to the facts constituting an offense and the selection of punishment;

Articles 86 subparag. 6 and 81(1) 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); selection of fines

1. Detention in a workhouse;

Articles 70 and 69(2) of the Criminal Act

1. Order of provisional payment;

Article 334(1) of the Criminal Procedure Act

The defendant, the president of the association, cannot be exempted from punishment corresponding to the fact that the expenses of the general meeting of the company selected by the association of this case for non-indicted 4 had reached a large amount of expenses, and that the disclosure of the detailed contents has not been requested several times from the association members, and the disclosure has not been made in accordance with the method prescribed by the law. However, the defendant, the president of the association, who is the head of the association, may not be exempted from punishment. However, in full view of the fact that there are extenuating circumstances as stated

The charges of violating the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents due to the selection of designer without a general meeting resolution are the same as the above 2-A. (1). This constitutes a case where there is no proof of crime as seen in the above 3-B., and thus, it is so decided as per Disposition by the assent of all participating Justices on the bench under the latter part of Article 325 of the Criminal Procedure Act, and by publicly announcing the summary of innocence in the judgment against

Judge Shin Young-young (Presiding Judge)

Note 1) Articles 13, 15, 16, 25, and 27 of the former Articles of Incorporation were modified (Evidence Record 58 pages).

Note 2) Since the latter part of Paragraph 1 of February 1, 2012 and the latter part of Paragraph 1 of Article 2 are transferred and newly established, it is not stipulated in the above former Act.

Note 3) was newly established by Presidential Decree No. 22277 on July 15, 2010 and enforced from July 16, 2010 (Article 1 of Addenda).