[1] Whether a disposition to designate an implementor of an urban planning facility project under the former National Land Planning and Utilization Act is established or effective only by means of “public notice” (negative)

[2] Requirements for establishing an administrative disposition and standards for determining whether an external administrative disposition is established

[3] The purport of the former National Land Planning and Utilization Act as a requirement to designate a private person as an implementer of an urban or Gun planning facility project, and the purport of setting the requirements for ownership and consent, and whether defects are significant in cases where the project implementer is designated even though the land subject to an urban planning facility project fails to meet the requirements for ownership and consent (affirmative)

[4] In a case where a disposition to designate an implementor of an urban planning facility project, which is a prior disposition, is null and void as a matter of course, whether a disposition to authorize an implementation plan prepared by the implementor of an urban planning facility project, which is a subsequent disposition

[5] Whether an implementation plan including the sale of a land subject to an urban or Gun planning facility project to a third party during the implementation period of the project and the installation of the relevant facility by a third party is allowed (negative), and whether a disposition authorizing such implementation plan is significant (affirmative in principle)

[1] In light of the structure and contents of Article 86(5) and (6) of the former National Land Planning and Utilization Act concerning the designation of a project implementer (amended by Act No. 11690, Mar. 23, 2013; hereinafter “National Land Planning Act”), Article 14 of the former Enforcement Rule of the National Land Planning and Utilization Act (amended by Ordinance of the Ministry of Land, Infrastructure and Transport, Mar. 23, 2013) (amended by Ordinance of the Ministry of Land, Infrastructure and Transport), an urban planning facility project under the National Land Planning and Utilization Act grants a specific person the authority to implement an urban planning facility project. The public announcement of the designation of a project implementer is an act of notifying an unspecified number of persons on the premise of the designation of the project implementer. The designation and public announcement are clearly distinguishable from the designation of the said project implementer, no such disposition may be deemed to have been established or effective only by the method of “public announcement.”

[2] In general, an administrative disposition can be deemed to exist in a case where the internal requirements for the establishment of the administrative disposition, such as the subject, content, and procedure, and the external requirements for the establishment of the external establishment of the administrative disposition, are satisfied. The external establishment of the administrative disposition refers to determining the point at which the administrative agency becomes bound by the administrative agency’s external expression of the external intent, and thus, whether an external establishment of a certain disposition is made ought to be determined by the administrative agency’s official method.

[3] An urban or Gun planning facility project is closely related to the realization of public welfare as a project for installing facilities determined by an urban or Gun management plan among infrastructure essential for urban formation or residents’ living. Therefore, the former National Land Planning and Utilization Act (amended by Act No. 11690, Mar. 23, 2013; hereinafter “National Land Planning Act”) provides that an urban or Gun planning facility project shall be implemented as a project capable of accommodating land, etc. is recognized as a public nature of the function of infrastructure installed as a project. However, in the event that an urban or Gun planning facility project is implemented by a private person, barring special circumstances, such as “public facilities” as prescribed by the National Land Planning and Utilization Act, the right to own, manage, and dispose of an urban or Gun planning facility project shall belong to the private person, who is the project implementer, and the National Land Planning Act does not specifically regulate the exercise of the right. Therefore, when an urban or Gun planning facility project is implemented by a private person, compared with the implementation of the project by an administrative agency or public organization.

Ultimately, the purpose of the National Land Planning and Utilization Act as a requirement for designating a private person as an implementer of an urban or Gun planning facility project is to supplement the public nature of an urban or Gun planning facility project implemented by a private person and to control unilateral expropriation by a private person. Therefore, if the National Land Planning and Utilization Act was designated as a project implementer even if it fails to meet the requirements for ownership and consent of the land subject to an urban planning facility project as prescribed by the National Land Planning and Utilization Act, such defect is serious as it violates

[4] In a case where a preceding and subsequent dispositions are aimed at a separate legal effect independently, if the preceding dispositions are null and void, the validity of the subsequent dispositions can be disputed on the grounds of defects in the preceding dispositions. If an executor of an urban planning facility project grants the construction of an urban planning facility project and grants the right to expropriate, and if the preceding dispositions do not meet the requirements for the designation of an executor of an urban planning facility project, it shall be deemed null and void.

[5] According to Articles 86(5), 98(1), 101, and 133(1)14 of the former National Land Planning and Utilization Act (amended by Act No. 11690, Mar. 23, 2013; hereinafter “National Land Planning Act”), a private person, who is a project implementer, shall complete construction of an urban or Gun planning facility project on his/her responsibility, and a private person, who is not designated as a project implementer, cannot implement an urban or Gun planning facility project. If a land subject to a project is sold to a third party and a third party is installed urban or Gun planning facility project during the project implementation period, such urban or Gun planning facility project is de facto changing into a project for development and sale of the land at a price at which development gains are excluded, so that a private person can obtain profits by selling it without any limit, and thus, a private person’s basic principle of urban or Gun planning facility project under the National Land Planning and Utilization Act, which permits the construction of the relevant land to be carried out by a third party without specific permission.

[1] Article 86(5) and (6) of the former National Land Planning and Utilization Act (Amended by Act No. 11690, Mar. 23, 2013); Article 14 of the former Enforcement Rule of the National Land Planning and Utilization Act (Amended by Presidential Decree No. 2013, Mar. 23, 2013); Article 1 of the Administrative Litigation Act / [2] Article 1 of the Administrative Litigation Act / [3] Articles 2 subparag. 7 and 13, 65, 9, and 101 of the former National Land Planning and Utilization Act; Article 8(1) and (3) of the former Enforcement Decree of the National Land Planning and Utilization Act (Amended by Act No. 11690, Mar. 23, 2013); Article 14 of the former Enforcement Decree of the National Land Planning and Utilization Act (Amended by Presidential Decree No. 2443, Mar. 23, 2013); Article 28(1) and (3)5) of the former Enforcement Decree of the National Land Planning and Utilization Act / [3]

[2] Supreme Court Decision 97Nu6889 delivered on August 20, 199 (Gong1999Ha, 2098) / [4] Supreme Court Decision 97Nu20502 delivered on September 8, 1998 (Gong1998Ha, 2433) Supreme Court Decision 99Du9889 delivered on September 5, 200 (Gong2000Ha, 2112)

Plaintiff 1 and one other (Attorney Yang Jae-py, Counsel for the plaintiff-appellant)

Duyang-gun (Law Firm Lee & Lee, et al., Counsel for the defendant-appellant)

Design professional director, etc. and one other (Attorneys Park Byung-soo et al., Counsel for the defendant-appellant)

Gwangju High Court Decision 2014Nu6066 decided February 4, 2016

All appeals are dismissed. The costs of appeal are assessed against the Defendant’s Intervenor, and the remainder are assessed against the Defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Validity of authorization for an implementation plan due to defects in the designation of the project implementer;

(a) Whether the designation of the project implementer is legitimate;

(1)Establishment of a project implementer designation in an urban planning facility project;

Article 86 of the former National Land Planning and Utilization Act (amended by Act No. 11690, Mar. 23, 2013; hereinafter “National Land Planning Act or the Act”) provides that a person, other than an administrative agency, may implement an urban or Gun planning facility project upon designation as the implementer of an urban or Gun planning facility project (paragraph (5)). In cases where an administrative agency designates as the implementer of an urban or Gun planning facility project, it shall publicly notify the details of such designation, as prescribed by Ordinance of the Ministry of Land, Infrastructure and Transport (paragraph (6)). Article 14 of the former Enforcement Rule of the National Land Planning and Utilization Act (amended by Ordinance of the Ministry of Land, Infrastructure and Transport, Mar. 23, 2013) provides that a public announcement of the details of designation as an urban or Gun planning facility project implementer shall be made by inserting the name, address, etc. of the project implementer

In light of the structure, contents, etc. of the provisions on the designation of a project implementer, an urban planning facility project under the National Land Planning and Utilization Act provides that an urban planning facility project grants a specific person the authority to implement an urban planning facility project, and an announcement of the details of the designation of a project implementer is an act of informing many unspecified persons of the details of the designation of the project implementer on the premise of the project implementer’s designation. The designation and announcement of the project implementer is clearly distinguishable, and the designation and announcement of the project implementer may be made by means of “public announcement”

Therefore, the lower court’s determination as to the lawfulness of the disposition that the Defendant’s Intervenor, limited liability company’s design professional candidate (hereinafter “participating”) designates as the project implementer of the second stage amusement park development project among the instant amusement park development project (hereinafter “instant disposition for designation of the project implementer”), is justifiable as of the date of establishment, rather than the date of public announcement of the designation. In so determining, the lower court did not err by misapprehending the legal doctrine on the establishment of the disposition for designation

(2) The time the instant disposition of designating the project implementer became effective

In general, an administrative disposition may be deemed to exist in a case where the internal requirements for the establishment of an administrative disposition, such as the subject, content, and procedure, and the external requirements for the establishment of an external indication of the outside, are satisfied (see Supreme Court Decision 97Nu6889, Aug. 20, 199). The external establishment of an administrative disposition refers to determining the point at which an administrative agency becomes bound by an administrative agency’s external expression of the external intent and is unable to freely revoke and withdraw. Thus, the external establishment of a certain disposition ought to be determined on the basis of whether an administrative agency’s external indication has

According to the reasoning of the lower judgment and the evidence duly admitted, the following facts are revealed. ① On October 18, 2012, the Defendant approved the intervenor’s internal document to be designated as the project implementer, and the public official in charge on the same day posted the public notice notice letter in the public notice column of the official announcement column of the official announcement column of the official announcement column of the official announcement column of the official announcement of the designation of the project implementer of this case. ② The contents of the above public notice letter are the same as those of the official announcement number and the date of public announcement, except

In light of the purpose of opening the website of a local government, the form of use, and the perception of the general public, posting the administrative decision on the website is an official method that generally expresses the intention of an administrative agency externally. Therefore, posting the above website is an official method that expresses the decision that the Defendant intended to designate the Intervenor as the project implementer, and thereby, the Defendant’s disposition of designating the project implementer of this case ought to be objectively established.

In the same purport, the lower court was justifiable to have determined that the instant disposition was unlawful on the ground that the Intervenor did not meet the requirement that the Intervenor will own at least 2/3 of the size of the land subject to the project, among the requirements for designation of the project operator at the time of the designation of the project operator, on the date on which the proposal for the designation of the Intervenor was published in the official bulletin, rather than on the date on which the content of the Intervenor was published in the official bulletin and was published on the official bulletin. In so doing, the lower court did not err

B. Whether the instant project implementer’s designation becomes invalid

(1) Article 2 Subparag. 7 of the National Land Planning Act defines urban and Gun planning facilities as facilities determined by an urban and Gun management plan among the infrastructure prescribed in subparagraph 6 with respect to urban and Gun planning facilities (Article 2 Subparag. 7 of the Act); and defines public facilities as “road, park, railroad, water supply, and other public facilities prescribed by Presidential Decree” (Article 2 Subparag. 13 of the Act); and only part of the infrastructure as “public facilities” under the National Land Planning Act. Such urban and Gun planning facilities project is, in principle, implemented by an administrative agency as a project implementer, and a person, other than an administrative agency, may implement an urban and Gun planning facility project only if he/she is designated

According to Article 86(7) of the National Land Planning and Utilization Act and Article 96(2) and (4), etc. of the former Enforcement Decree of the National Land Planning and Utilization Act (amended by Presidential Decree No. 24443, Mar. 23, 2013) upon delegation thereof, a private person, other than those prescribed by Presidential Decree, including “the State and local governments”, “public institutions prescribed by Presidential Decree”, “a person who intends to install public facilities to be gratuitously reverted to a management agency pursuant to Article 65 of the National Land Planning and Utilization Act” shall own land equivalent to at least 2/3 of the area of the land (excluding State and public land) subject to an urban/Gun planning facility project as an implementer of an urban/Gun planning facility project and obtain consent from at least a half of the total number of landowners. According to Articles 9 and 65 of the National Land Planning and Utilization Act, where a private person newly installs urban/Gun planning facilities because he/she is designated as an implementer of an urban/Gun planning facility project without compensation, such

An urban or Gun planning facility project is closely related to the realization of public welfare as a project for installing facilities, the systematic arrangement of which is decided by an urban or Gun management plan among infrastructure essential for urban formation or residents’ living. Moreover, the National Land Planning Act provides that an urban or Gun planning facility project may accommodate land, etc. is recognized as a project for the function of infrastructure installed as a project. However, in the event that an urban or Gun planning facility project is implemented by a private person, barring special circumstances, such as where the urban or Gun planning facility project falls under “public facilities” as prescribed by the National Land Planning Act, the right to possess, manage, and dispose of installed urban or Gun planning facilities belongs to a private person, who is the project operator, and the National Land Planning Act does not stipulate the exercise of such right. Therefore, when an urban or Gun planning facility project is implemented by a private person, the public nature may be relatively weak in terms of the aspect of maintaining the public function of the facility or the public belonging to the benefits generated in the course of operating and disposing of the facility, compared with the implementation by an administrative agency or public organization.

Ultimately, the purpose of the National Land Planning and Utilization Act as a requirement for designating a private person as an implementer of an urban or Gun planning facility project is to supplement the public nature of an urban or Gun planning facility project implemented by a private person and to control unilateral expropriation by a private person. Therefore, if the National Land Planning and Utilization Act was designated as a project implementer even if it fails to meet the requirements for ownership and consent of the land subject to an urban planning facility project as prescribed by the National Land Planning and Utilization Act, such defect is serious as it violates

(2) According to the reasoning of the lower judgment and the evidence duly admitted, 11 of the total number of the owners of the land subject to the project (referred to land excluding state-owned and public land in the determination of this part) submitted by the Intervenor to the Defendant in filing an application for designation of the project implementer was consented. The Intervenor owned 59.1% of the area of the land subject to the project, but the remaining consenters included the area of the land owned by 10 persons, the ownership rate is 74%. There is no material suggesting that there was a change in land owners or consenters until the contents of the instant disposition of designation of the project implementer were published on the website of the Gyeyang-gun-gun District.

Examining these facts in light of the above legal principles, the instant disposition of designating a concessionaire was conducted even when the Intervenor only owned 59.1% below the requirements for the designation of a concessionaire as prescribed by the National Land Planning Act, and its defect is significant. Moreover, the National Land Planning Act and subordinate statutes do not have any provision on the criteria for determining whether the Plaintiff satisfies the requirements for ownership, and thus, the “ownership” which serves as the basis for the requirements for the designation of a concessionaire is determined based on whether the Plaintiff acquires ownership under the Civil Act. There is no room for dispute over the interpretation of the meaning of ownership in the requirements for the designation of a concessionaire, as there is no legal basis to deem that the land actually owned by the applicant should be included therein. Therefore, even according to the Intervenor’s application itself, it is apparent that the Intervenor did not meet the requirements for ownership. It is serious that the defect that

As alleged by the defendant, whether the requirements for designation of a project implementer are met shall be determined as of the date of public notice of the disposition of designation of the project implementer. Even if the intervenor acquired ownership from seven original consenterss and owned 72.5% of the land subject to the project before the date of public notice, seven original consenters who transferred the land to the intervenor cannot be included in the total number of landowners as of the date of public notice, and should be excluded from the consenters, so the intervenor does not meet the requirements for consent (28.57% = 28.57% of the original consenters - 7 persons who transfer the land to the intervenor) ± 14 (21 persons who transfer the land to the intervenor - 7 persons who transfer the land) x 100).

(3) In the same purport, the lower court is justifiable to have determined that the defect in the designation of the project implementer of this case was so serious and obvious that it was null and void. In so determining, the lower court did not err by misapprehending the legal doctrine on the requirements for the invalidation of a defective administrative disposition as otherwise alleged in the grounds of appeal, or by omitting judgment, etc., affecting the conclusion of the judgment. The Supreme Court precedents cited

C. Whether the authorization disposition of the instant implementation plan is invalid

In a case where a preceding and subsequent dispositions are aimed at a separate legal effect independently from one another, if the preceding dispositions are null and void, the validity of the subsequent dispositions can be contested on the ground of the defect of the preceding dispositions (see, e.g., Supreme Court Decisions 97Nu20502, Sept. 8, 1998; 9Du9889, Sept. 5, 2000). In a case where an implementation plan formulated by an implementor of an urban planning facility project is null and void on the grounds that an implementor of an urban planning facility project permits construction of an urban planning facility project and grants the right to expropriate as an implementor of an urban planning facility project, which is a disposition granting the right to designate an implementor of an urban planning facility project, and the subsequent disposition, which is a prior disposition

In light of the above legal principles, it is inappropriate for the lower court to have determined that the defect was succeeded to for completing the legal effect of the construction of an urban or Gun management plan by combining the project implementer’s designated disposition and the authorization disposition of an implementation plan with each other. However, as seen earlier, given that the designation disposition of the instant project implementer, which was designated as the project implementer, was null and void as of March 14, 2013 (hereinafter “instant authorization disposition”), the said authorization disposition becomes null and void, and the lower court is justifiable in its conclusion that the said authorization disposition was null and void. In so doing, the lower court did not err by misapprehending the legal doctrine on the succession of defects in the prior disposition, contrary to what is alleged in the grounds of appeal.

2. Validity of the authorization and disposition of implementation plan due to defects in the authorization and disposition of implementation plan itself;

(a) Whether the disposition of authorization for the implementation plan including the sale of a site within the project implementation period and the installation of urban planning facilities by a third party is invalid;

(1) Whether the authorization disposition of the instant implementation plan is legitimate

According to the National Land Planning and Utilization Act, a private person, other than an administrative agency, may implement an urban or Gun planning facility project upon designation as a project implementer and at his/her own expense (Articles 86(5) and 101 of the Act). A private project implementer, upon completion of an urban or Gun planning facility project, shall undergo a completion inspection from an administrative agency (Article 98(1) of the Act), and may order a person who implements an urban or Gun planning facility project without designation as an implementer of an urban or Gun planning facility project, to suspend construction, rebuild or relocate structures, etc., or take other necessary measures (Article 133(1)14 of the Act).

According to the provisions of the National Land Planning and Utilization Act, a private person, who is a project implementer, shall complete construction of an urban or Gun planning facility project on his/her responsibility, and a private person, who is not designated as a project implementer, may not implement an urban or Gun planning facility project. If a private person sells a land subject to a project to a third party during the project implementation period and installs urban or Gun planning facility projects to such third party, such urban or Gun planning facility project is substantially affected by the public nature of an urban or Gun planning facility project by selling land at the price where development gains are excluded from the disposal counterpart or disposal conditions, etc. without any limit. Furthermore, unlike permitting a public project agency pursuant to the Industrial Sites and Development Act, etc., the National Land Planning Act does not explicitly provide for allowing a third party to sell the land subject to an urban or Gun planning facility project to a third party during the project implementation period, and such disposition should be deemed to be seriously defective, barring special circumstances contrary to the basic principles of an urban or Gun planning facility project under the National Land Planning and Utilization Act.

According to the reasoning of the judgment below, the instant implementation plan includes the fact that the total project cost of KRW 58.7 billion (land purchase cost, KRW 4.5 billion, KRW 9.1 billion, KRW 4.1 billion, construction work cost, KRW 43.6 billion, etc.), and that some land is sold at KRW 15.6 billion after completion of civil engineering appurtenant works, and construction cost is appropriated as project cost, and construction cost of KRW 28.3 billion is anticipated to be incurred on the site. In light of the aforementioned legal principles, inasmuch as the instant implementation plan contains the contents not permitted under the National Land Planning Act, the authorization disposition of the instant implementation plan was unlawful. In the same purport, the judgment of the court below that the instant implementation plan was unlawful, contrary to what is alleged in the grounds of appeal, did not err by misapprehending the legal principles on the timing of project disposal and project execution in an urban/Gun planning facility project.

(2) Whether the instant implementation plan’s authorization disposition is invalid

There is no lack of legal doctrine suggesting that the implementation plan that sells part of the project site to a third party within the project implementation period until the time the instant implementation plan is authorized, and that part of the facility is installed, under the National Land Planning and Utilization Act. There is no room for dispute over interpretation because the National Land Planning and Utilization Act does not explicitly prohibit the vicarious performance of an urban or Gun planning facility project and does not have any specific restrictions on the timing of disposal of an urban or Gun planning facility project. In light of these circumstances, the defect of the instant implementation plan’s authorization

Nevertheless, the lower court, which found the defect of the authorization disposition of the instant implementation plan on a different premise, found the error of misapprehending the legal doctrine on the invalidation of an administrative disposition as a matter of course. However, the instant implementation plan’s authorization disposition based on the instant project operator’s designation as a project operator, which is void as a matter of course, is null and void as seen above, and thus, does not adversely affect the conclusion

B. Whether the instant implementation plan’s authorization disposition is invalid due to the lack of requirements for project approval

(1) The lower court determined that the instant implementation plan was null and void because it is difficult to deem that the Intervenor had the intent and capacity to carry out the public project, and this is serious, clear, or significant defect. For that reason, the instant implementation plan was null and void. ① The Intervenor did not transfer the performance of the project until the time of the instant project implementer’s designation and did not meet the requirements for designation of the project implementer. ② The instant implementation plan includes lodging facilities and commercial buildings for the convenience of tourists, not amusement parks, in light of the composition of detailed facilities and the purpose of the project under the instant implementation plan. ③ The instant implementation plan is intended to transfer the status of the project implementer by selling part of the site for the instant project and having a third party install some facilities in accordance with the implementation plan, and there is no specific method of securing external capital. ④ The implementation plan under the instant implementation plan is completed only some of the 95 buildings originally planned to be newly constructed during the period of project implementation, which are to be divided into three buildings and added to the project implementer. However, the instant implementation plan was modified, but it cannot be deemed legitimate and effective.

(2) However, the lower court’s determination is difficult to accept as it is.

The circumstances revealed by the court below are not sufficient to readily conclude that an intervenor had no intent or ability to carry out the project at the time of the instant implementation plan’s authorization disposition. Specifically, the circumstance that the intervenor did not have business performance and failed to meet the requirements for ownership (i) cannot be uniformly deemed to have no capacity to carry out the project, and the intervenor did not have intent or ability to carry out the project since the intervenor acquired 74% of the area of the land subject to the project in his/her own name or another person’s name before the instant implementation plan was authorized. The circumstance that the instant implementation plan does not coincide with the concept of amusement park and was illegal in the process of the division of the project (ii) the circumstances that the authorization of the implementation plan was made in violation of the concept of amusement park, and is irrelevant to the intervenor’s ability to carry out the project. The circumstances that the sale plan of a certain project site, low ratio of equity capital, and the method of financing outside capital (iii) lack of capacity to carry out the project within the implementation period, and thus, the intervenor did not have any capacity to complete the project within the first project implementation period (iv).

(3) Therefore, on a different premise, the lower court determined that the instant implementation plan’s authorization disposition was null and void on the ground that the Intervenor had no intent and ability to carry out the project at the time of the instant implementation plan’s authorization disposition is erroneous by misapprehending the legal doctrine on the intent to carry out public works and the existence of capacity, thereby failing to exhaust all necessary deliberations. However, as seen earlier, the instant implementation plan’s authorization disposition is null and void for

3. Conclusion

The appeals by the Defendant and the Intervenor joining the Defendant are all dismissed as it is without merit. The costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-young (Presiding Justice)