Osan Transportation Co., Ltd. (Law Firm Rating, Attorney Hong Yong-il, Counsel for defendant-appellant)

Olsan Market

March 16, 2017

Suwon District Court Decision 2015Guhap64566 Decided October 11, 2016

1. Revocation of a judgment of the first instance;

2. On February 9, 2015, the Defendant’s disposition to return a subsidy of KRW 1,752,929,000 against the Plaintiff is revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff received operational improvement subsidies of KRW 2,768,429,000 (hereinafter “instant subsidies”) from the Defendant according to the bus financial assistance program from Osan-si to Osan-si from 2008 to 2014.

B. However, during the above period, the Plaintiff received the instant subsidy which was unfairly excessive in amount by omitting cash among the bus operation income by the method of increasing the amount of deficit. The Defendant, the representative director of the Plaintiff, from January 2007 to September 2009, was sentenced to one year and six months of imprisonment on April 24, 2015, and three years of suspended execution (U.S. District Court 2014Da730), and Nonparty 2, the representative director of the Plaintiff, from September 2009, was convicted of two years of imprisonment on June 5, 2015, three years of suspended execution [U.S. District Court 2014Da652,736 (Consolidated), Seoul High Court 2015No719], and the said judgment became final and conclusive as it is, respectively.

C. Meanwhile, on February 6, 2015, the Plaintiff deposited KRW 1,015,50,000 in Gyeonggi-do, which is in fact in charge of urban bus financial support business within the jurisdiction, as the principal deposit during the course of the above criminal procedure. On February 6, 2015, the Governor of Gyeonggi-do requested the Defendant to recover KRW 1,752,929,000 remaining after deducting the said deposit from the full amount of the instant subsidy (=2,768,429,000 of the instant subsidy – the said deposit KRW 1,015,50,000 of the said deposit) from the Plaintiff. Accordingly, on February 9, 2015, the Defendant notified the Plaintiff of the return of the subsidy (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap 1 through 5 evidence, Eul 3, 10, and 11 evidence, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although it is recognized that the Plaintiff received an excessive amount of the instant subsidy by means of increasing the hostile amount, even if the Plaintiff did not increase the hostile amount, the Plaintiff still remains in a state of hostileity, and thus, the Defendant should take measures to recover only the portion corresponding to the increased hostile amount by illegal means from the instant subsidy, but the instant disposition that was rendered on the premise that the full amount of the instant subsidy is subject to restitution is unlawful.

B. Relevant statutes

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

C. Determination

1) The Defendant’s qualification in the instant disposition revocation lawsuit

A) Article 50(1)2 of the Passenger Transport Service Act and Article 50(2)1 of the same Act provide that “A City/Do may subsidize or lend part of the required funds to a passenger transport service provider in the event of any reason, such as the operation of an unprofit routes. In such cases, matters necessary for the subjects and methods of subsidies or loans and the redemption of subsidies or loans shall be determined by municipal ordinance of the relevant City/Do.” Article 15 of the Gyeonggi-do Ordinance on the Management of Passenger Transport Services provides that “Where a passenger transport service provider carries out a business falling under any subparagraph of Article 50(2) of the Passenger Transport Service Act, the Do Governor may subsidize or lend part of the required funds if deemed necessary. Provided, That where the Do Governor delegates the authority on the license and registration of passenger transport service to the head of the relevant Si/Gun, the head of the relevant Si/Gun who has entrusted the authority may partially subsidize or lend the required funds. In such cases, matters concerning the methods and procedures for such subsidies shall be determined by the relevant Mayor/Gun, and Article 9(2) and attached Table 2 of the Gyeonggi Ordinance on the Passenger Transport Service Act.

Accordingly, Article 18 of the Ordinance on the Management of Passenger Transport Services at Osan-si (hereinafter “Osan-si Management Ordinance”) provides that “The Mayor may subsidize part of the required funds to a passenger transport service provider if there is any reason for operation, etc. of an profitabilityless route,” and Article 22 provides that “the Mayor may suspend the provision of subsidies or take necessary measures, such as recovering all or part of the subsidies already provided, where a person who received a subsidy has received it by fraudulent or other illegal means.”

In light of the above relevant statutes and the facts acknowledged earlier, since the defendant was delegated the authority to dispose of the subsidy of this case by the Gyeonggi-do Governor pursuant to Articles 18 and 22 of the Osan-si Management Ordinance, it is reasonable to view that the defendant's notification of the refund of the subsidy of February 9, 2015 to the plaintiff was made to the plaintiff pursuant to Article 22 of the Osan-si Management Ordinance according to the details notified by the Governor of the Gyeonggi-do. In such cases, the administrative agency that made the disposition of the recovery of the subsidy of this case externally

B) In addition, barring special provisions in other Acts, an administrative litigation seeking the revocation or invalidity of an administrative disposition shall be the defendant with the administrative disposition, etc., which was conducted under his/her name, which was the subject of the lawsuit, and it does not differ from that conducted by the instruction or notification of the superior administrative agency or other administrative agency. The administrative agency upon delegation or entrustment of authority does not mean any disposition made under its name under its legitimate authority. Since it was merely an internal delegation or delegation of authority, and it was merely an internal delegation or delegation of authority, and thus, without disclosing the name of the original administrative agency or the representative relation, an administrative agency, the title of disposition, without its authority, shall also be the defendant (see Supreme Court Decision 95Nu14688 delivered on December 22, 195).

However, the fact that the defendant notified the plaintiff of the return of KRW 1,752,929,00 among the subsidies of this case in his own name is recognized as above (the notice under the above defendant's name attached to the request for recovery of KRW 1,752,929,000 to the Gyeonggi-do Governor on February 6, 2015), so the above official questioning is attached to the notice under the above defendant's name, but it cannot be deemed as an external administrative disposition against the plaintiff since the above official questioning is the defendant and the harmony market, and it seems that it is only a reference material attached to the calculation when the defendant ordering the plaintiff to return the subsidy of this case, regardless of whether the defendant has a legitimate authority for the cancellation of the disposition of recovery of the subsidy of this case. The same applies to

2) Violation of the calculation of the scope of the subsidy restitution

Whether an administrative act is a binding act or discretionary act cannot be uniformly defined, and it shall be determined individually in accordance with the form of a provision that forms the basis for the pertinent disposition, stay, or language. In addition, administrative laws and regulations that form the basis for an indive administrative act must be strictly interpreted and applied, and shall not be excessively expanded or analogically interpreted in the direction unfavorable to the other party to the administrative act. Even if a teleological interpretation that takes into account the legislative intent, purpose, etc. is not entirely excluded, such interpretation does not deviate from the ordinary meaning of the language and text (see Supreme Court Decision 2011Du3388, Dec. 12, 2013).

Article 51(3) of the Passenger Transport Service Act provides that "the Minister of Land, Transport and Maritime Affairs, a Mayor/Do Governor, or the head of a Si/Gun shall order a passenger transport service provider to return a subsidy or loan to the passenger transport service provider when the passenger transport service provider has received a subsidy or loan under Article 50 by fraud or other improper means, and may recover the subsidy or loan in the same manner as delinquent national or local taxes are collected if the passenger transport service provider fails to comply with such order." Thus, the Minister of Land, Transport and Maritime Affairs, the Mayor/Do Governor, or the head of a Si/Gun shall order the passenger transport service provider to return the subsidy or loan to the " subsidy that the passenger transport service provider has received by fraud or other improper means," and the interpretation of the above provision

Therefore, the Defendant can calculate the corresponding portion of the subsidy that the Plaintiff increased by unlawful means and order the recovery only for that portion. If the subject of the instant disposition includes a subsidy that can normally be paid in excess of the amount that the Plaintiff could normally be paid in excess of the amount that was paid by unlawful means, the restitution disposition on that portion is unlawful and thus, should be revoked.

3) Scope of revocation of the instant disposition

A) In a lawsuit seeking revocation of a disposition, when the amount of lawful burden to be imposed is calculated based on the data submitted by the parties, only the portion exceeding the reasonable amount must be revoked, and in other cases, the entire disposition of imposition shall be revoked (see Supreme Court Decision 9Du5542 delivered on June 9, 200).

However, it is insufficient to recognize that the Plaintiff was unable to receive the full amount of the instant subsidy solely based on the evidence or data submitted by the Defendant in this case. Furthermore, it is difficult to calculate the amount of subsidies corresponding to the increased amount of subsidies by unlawful means. Moreover, it cannot be determined whether the amount of subsidies unduly paid exceeds the amount already deposited by the Plaintiff. Therefore, the instant disposition issued on the premise that the entire amount of the instant subsidies is subject to restitution should be revoked in its entirety without further review.

B) As to the foregoing, the Defendant asserted that the operating improvement subsidy in the instant case is a voluntary subsidy that determines the scale of the subsidy, etc. in accordance with the financial conditions, and thus, it can recover the entire amount of the subsidy granted, regardless of whether it constitutes an excessive portion of the subsidy granted by fraud or other improper means. However, the relevant provisions of the Act on the Recovery of Subsidies only provide that “where the subsidy was granted by fraud or other improper means, it may be returned” and there is no other legal basis to regard the payment of the subsidy as a legitimate object of the recovery of the subsidy granted by fraudulent or other improper means on the sole basis of the fact that the payment of the subsidy is voluntary.

② In addition, the Defendant cannot verify that the cash income omitted by the Plaintiff should be included in a certain route, and the operational improvement support fund is determined by examining all the route and cost of the bus and cross-country bus companies within the jurisdiction, and thus it is impossible to separately calculate the Plaintiff’s legitimate subsidy. Since basic data provided by the Plaintiff cannot be trusted, this case’s partial disposition is impossible from the beginning because it falls under a case where there is no decentralization in the administrative disposition or a part of the object of the disposition cannot be specified. Thus, the Defendant asserts that the instant disposition cannot be revoked even if there is some unlawful parts.

However, the circumstance alleged by the Defendant is merely merely a subjective circumstance of the Defendant, and it is not physically and logically impossible to compute and specify the portion that the Plaintiff received by false or unlawful means and the portion that the Plaintiff received by unlawful means regardless of such acts.

In addition, in cases where a single administrative disposition is differentiated or part of the disposition can be specified, if there is an error in the disposition, it is possible to revoke only a part of the disposition without completely cancelling the disposition, and in cases where there is no differentiation or a part of the disposition cannot be specified, it is not possible to revoke the whole disposition, but it is not possible to revoke the disposition in whole.

(3) The Defendant asserted that the Plaintiff’s claim for the instant subsidy was contrary to the good faith in submitting a letter that “in the event that the Plaintiff received subsidies by false or other unlawful means, he would return the subsidy without any objection.” However, the purport of the written statement submitted by the Plaintiff is not to return the excess subsidy due to false or other unlawful means, or to return the full amount of the subsidy including the subsidy that was paid in normal terms regardless of such intention. Therefore, seeking the revocation of the instant disposition ordering the Plaintiff to return the subsidy cannot be deemed to contravene the good faith principle.

All of the defendant's arguments are rejected.

3. Conclusion

Thus, the plaintiff's claim of this case should be accepted for the reasons, and the judgment of the court of first instance should be revoked as it is unfair to conclude otherwise, and the disposition of this case shall be revoked.

[Attachment]

Judges Kim Jong-ju (Presiding Judge)