[1] In the case of a reconstruction association, the scope of "project implementation method" under Article 7 (1) of the Addenda to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents ( December 30, 2002)

[2] Where a reconstruction association which obtained approval of a business plan under the former Housing Construction Promotion Act only provides for basic matters concerning cash settlement of land, etc. in its articles of association or agreement, the point of time when the obligation to pay liquidation money arises and the calculation of liquidation money

[3] Where a member of a reconstruction association who has obtained approval of a project plan under the former Housing Construction Promotion Act has completed the registration of ownership transfer based on the trust in the future of the reconstruction association, whether the association bears the obligation to transfer the ownership separately to the reconstruction association to receive settlement money (negative)

[1] Article 7 (1) of the Addenda to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Urban Areas and Dwelling Conditions for Residents”) which was enacted by Act No. 6852 on December 30, 202 and enforced July 1, 2003 provides that “The progress measures for the implementation of a project shall be governed by the previous Act if the project is being implemented after obtaining approval of the project plan or authorization for the implementation of the project under the previous Act.” In principle, when obtaining approval of the project plan for a reconstruction project before the implementation of the Urban Improvement Act, the administrative agency’s involvement shall be completed and the members shall acquire the right to purchase the building, and the right to transfer the newly constructed building or newly constructed building site shall be autonomously implemented by the Civil Act, and it shall not be deemed that the provisions of Article 7 (1) of the Addenda to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents are necessary or reasonable to exclude the existing project to be implemented by the reconstruction Association under the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Projects.”

[2] Where a reconstruction association which obtained approval of a project plan under the former Housing Construction Promotion Act prior to the enforcement of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents on December 30, 2002 provides for cash liquidation of land, etc., it shall make cash liquidation to the association members who did not apply for parcelling-out or withdraw the application for parcelling-out in accordance with the method and procedure stipulated in the articles of association or regulations. In addition, where the basic matters concerning cash liquidation are only provided in the articles of association or regulations, and where the time of the occurrence of the obligation to pay the settlement amount and the calculation of the settlement amount are not provided, in principle, the obligation to pay the settlement amount arises when the association members lose their status by failing to apply for parcelling-out or withdrawing it finally, and the settlement amount shall be calculated as of that time

[3] In a case where a reconstruction association approved as a project plan under the former Housing Construction Promotion Act before the enforcement of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents of December 30, 2002 bears the obligation to pay liquidation money to members, etc. who did not apply for parcelling-out, under the principle of fairness, members are obliged to transfer the ownership of land, etc. to a reconstruction association in the state where there is no restriction on rights, and in principle, the obligation to transfer ownership without such restriction on rights and the obligation to pay liquidation money to the reconstruction association is concurrently performed. However, in a case where a member has completed the registration of transfer due to a trust in the future for the land owned by the reconstruction association

[1] Article 7 (1) of the Addenda to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 6893 of May 29, 2003) and Article 6 (3) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [2] Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, Article 7 (1) of the Addenda (amended by Act No. 6893 of December 30, 2002) / [3] Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, Article 7 (1) of the Addenda (amended by Act No.

[1] Supreme Court Decision 2006Da64559 Decided June 25, 2009 (Gong2009Ha, 1197) Supreme Court Decision 2009Da78368 Decided January 28, 2010 (Gong2010Sang, 419) / [3] Supreme Court Decision 2008Da37780 Decided October 9, 2008 (Gong2008Ha, 1544) Supreme Court Decision 2010Da19204 Decided September 9, 2010

Seoul High Court Decision 201Na1446 delivered on May 1, 2012

Defendant 1 and four others (Attorneys Nam Jae-chul et al., Counsel for the defendant-appellant)

Defendant 6 (Attorney Kim Jong-soo, Counsel for the defendant-appellant)

Defendant 7 and three others (Attorneys Nam Jae-chul et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2009Na98821, 98838 decided December 24, 2010

Of the judgment below, the part on the counterclaim claim of the defendant (Counterclaim plaintiff) and the part on the claim for liquidation amount among the counterclaim claim of the defendant (Counterclaim plaintiff), 1, 2, 3, 4, 5, 7, 8, 9, and 10 are reversed, and this part of the case is remanded to the Seoul High Court. The remaining appeals by the plaintiff (Counterclaim defendant) and the defendant (Counterclaim plaintiff) are all dismissed.

The grounds of appeal are examined.

1. Grounds of appeal as to the counterclaim by the defendant (Counterclaim Plaintiff, hereinafter the defendant)

A. Of the grounds of appeal by Defendant 6, there is a misapprehension of laws applicable to the payment of liquidation money

(1) Article 7(1) of the Addenda to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Urban Improvement Act”) (amended by Act No. 6852 of Dec. 30, 2002) provides that “The progress measures regarding the implementation of a project shall be governed by the previous Act if the project is being implemented after obtaining approval of the project plan or authorization for the implementation of the project under the previous Act.” In principle, when obtaining approval of the project plan for a reconstruction project before the implementation of the Urban Improvement Act, the administrative agency’s involvement shall be completed and the members shall acquire the right to purchase the housing (the status of occupants), and it shall be deemed that the main provision of Article 7(1) of the Addenda to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 6852 of Jun. 15, 2007) provides that “The purpose of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents shall be excluded from the implementation of the project under the Act on the Maintenance and Disposal of Urban Areas and Improvement Projects.”

Therefore, in the case of a reconstruction association, “project implementation method” under Article 7(1) of the Addenda to the Act on the Improvement of Urban Areas and Dwelling Conditions shall include all the methods and procedures prescribed in Chapter 3 of the Act on the Improvement of Urban Areas and Dwelling Conditions, barring any special circumstances. Therefore, matters concerning such methods and procedures shall be governed by the previous provisions (see Supreme Court Decision 2006Da64559, Jun. 25, 2009).

(2) According to the reasoning of the lower judgment, based on the circumstances in its reasoning, the lower court determined that the Act on the Improvement of Urban Areas does not apply to the payment of liquidation money to the members who did not apply to the application for parcelling-out, on the ground that the instant reconstruction project was approved on October 13, 200 pursuant to the former Housing Construction Promotion Act repealed before the Act on the Maintenance

In light of the above legal principles, the above determination by the court below is just, and there is no error in the misapprehension of laws applicable to the payment of liquidation money to the association which did not apply to the reconstruction project of this case before the implementation of the Act on the Maintenance and Improvement of Urban Areas.

B. The Defendants’ ground of appeal contains misapprehension of legal principles as to the calculation of liquidation amount.

(1) Article 7(1) of the Addenda to the Act on the Maintenance and Improvement of Urban Areas (amended by December 30, 2002) provides that the approval of the project plan or the authorization of the project implementation under the previous Act is in accordance with the previous Act. However, unlike Article 47 of the Act on the Maintenance and Improvement of Urban Areas, the former Housing Construction Promotion Act, which has established a reconstruction-related provision prior to the enforcement of the Act, did not stipulate cash liquidation on land, buildings or other rights (hereinafter “land, etc.”) owned by or withdrawn from the members.

Therefore, where a reconstruction association which has obtained approval of a project plan under the former Housing Construction Promotion Act before the enforcement of the Act, has provisions on cash settlement of land, etc. in its articles of association or regulations, it shall make cash settlement in accordance with the methods and procedures prescribed by its articles of association or regulations for the members who have not filed an application for parcelling-out or who have withdrawn from the association (see, e.g., Supreme Court Decision 2010Da15134, Sept. 8, 201). In addition, where the articles of association or regulations stipulate only basic matters concerning cash settlement in accordance with the articles of association or regulations, etc., and where the time of the occurrence of the obligation to pay settlement money and the calculation of the settlement money are not prescribed, in principle, the obligation to pay settlement money, in principle, shall be deemed to arise when the members lose their status by failing

(2) According to the reasoning of the lower judgment and the evidence duly admitted by the lower court, the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) is a reconstruction association established on May 26, 199 to implement a housing reconstruction project with 31 apartments and 3 commercial buildings, and obtained approval on May 26, 200. The Defendants were co-owners of some of the above commercial buildings, and the Plaintiff was notified of the period for application for parcelling-out within 7 days from the date the Plaintiff was authorized to do so. The Plaintiff’s agreement provides that the Plaintiff may dismiss the Plaintiff’s members if the Plaintiff fails to apply for parcelling-out within the period for parcelling-out, and that the Plaintiff may, in principle, liquidate its shares in cash, hold 20 or more buildings before the date of application for parcelling-out, and that the Plaintiff did not dispose of and dispose of the rights of the Plaintiff’s properties within 20 days from the date of the application for parcelling-out, and that the Plaintiff did not establish an appraisal and disposal plan separately by the general meeting on February 24, 2001.

In full view of the above facts, in particular, the purport of Article 40 of the Plaintiff’s rules and the language and text of the management and disposal plan standards, which provides that the value of the standards for the establishment of a management and disposal plan concerning the properties of association members shall be the arithmetic mean of the appraised value of two or more certified appraisal and assessment agencies shall be determined in a fair and appropriate manner. In addition, “value of the right to manage and dispose of the property” under Article 7 of the Management and disposal plan standards means not the concept premised on a specific point, such as the time when the project plan is approved, but the appraised value of the object of cash liquidation calculated in a fair and appropriate manner, such as Article 40 of the rules, and it cannot be deemed that the above provision set the point of time for the calculation

As such, since the Plaintiff did not file an application for parcelling-out based on its rules, the Defendants were expelled from the members of the Plaintiff and the Defendants lost their membership in the Plaintiff’s association upon notification of the purpose of cash settlement on February 2, 2007, the Plaintiff is obligated to pay the liquidation money for land, buildings, etc. to the Defendants. Meanwhile, in this case where the Plaintiff did not separately set the time when the obligation to pay the liquidation money arises or when the settlement money is calculated in the Plaintiff’s rules or management and disposal plan standards, and there was no agreement with the Defendants and the Defendants, barring any other special circumstances, the liquidation money to be paid to the Defendants should be assessed and calculated in an appropriate way in the market price of land, buildings, etc. as of February 2, 207

(3) Nevertheless, the lower court determined otherwise, that the Plaintiff’s obligation to pay the liquidation money to the Defendants is not yet specific and practical, on the grounds that it is impossible to determine the value of the management and disposition right, and that the amount is not specified, the Plaintiff’s obligation to pay the liquidation money has not yet arisen, and rejected the Defendants’ claim on the settlement money claim. However, as to the remaining Defendants’ claim other than Defendant 6, the lower court acknowledged the Plaintiff’s obligation to pay the liquidation money to the extent that the Plaintiff is not dissatisfied.

The judgment of the court below is erroneous in the misapprehension of legal principles as to the calculation of liquidation money to be paid to the association members who did not apply for parcelling-out before the implementation of the Urban Improvement Act. Thus, the defendants' ground of appeal pointing this out is with merit.

C. The Defendants’ ground of appeal contains misapprehension of legal principles as to the duty of ownership transfer registration.

(1) In a case where a reconstruction association which obtained approval of a project plan under the former Housing Construction Promotion Act before the enforcement of the Act on the Maintenance and Improvement of Urban Areas bears the obligation to pay liquidation money to the association members, etc. who did not apply for parcelling-out, under the principle of equity, members are obliged to transfer ownership of land, etc. to the reconstruction association without limitation of rights. In principle, the obligation to transfer ownership without registration of restriction of rights and the obligation of the reconstruction association to pay liquidation money to the reconstruction association. However, in a case where the association members completed the registration of ownership transfer on the land, etc. already owned by the reconstruction association due to a trust in the future, they are not obligated to separately transfer ownership to receive liquidation money (see Supreme Court Decision 2008Da

In light of the aforementioned legal principles and the contents of the partnership agreement providing for settlement in cash and the fact that trust registration has been completed for the smooth progress of the reconstruction project, if the trust was terminated on the grounds that the Defendants lost their membership status due to the Defendants’ being expelled from the association members on the grounds that they did not apply for lawful application for parcelling-out to the Plaintiff, the trust property, which was the trust property, shall belong to the Plaintiff. As such, with respect to the real estate for which the Plaintiff completed the registration of ownership transfer due to the trust under its own name, the Plaintiff may obtain permission from the court on the ground that it is the trustee’s proprietary property pursuant to the proviso of Article 31(1) of the former Trust Act (wholly amended by Act No. 10924, Jul. 25, 201) and the cancellation of the registration and the trust registration. The Defendants cannot be held liable for the cancellation of the trust registration and the transfer registration due to the above trust property from the Plaintiff to the Plaintiff (see Supreme Court Decision 200Da924, Sept. 24, 2019).

(2) Nevertheless, the lower court determined that the Defendants’ obligation and the Plaintiff’s obligation to pay the liquidation money are concurrently performed, on the premise that the Defendants are liable to take over the procedure for registration of cancellation of trust registration and the procedure for registration of transfer of ownership based on the trust property attribution, and to implement the procedure for registration of transfer of ownership based on the liquidation

The court below erred in the misapprehension of legal principles as to the registration of real estate, which is a trust property, due to the loss of the status of a partner of a real estate trust in a reconstruction association, and thereby erred in the simultaneous performance relation with the plaintiff's obligation to pay liquidation money. Thus, the defendants

D. The remaining grounds of appeal by Defendant 1, Defendant 2, Defendant 3, Defendant 4, Defendant 5, Defendant 7, Defendant 8, Defendant 9, and Defendant 10

According to the reasoning of the judgment below and the records, the court below is just to dismiss all of the claims of the above defendants on the grounds as stated in its reasoning, and there is no error of law such as misunderstanding of legal principles or omission of judgment. The Supreme Court decision cited in the grounds of appeal concerns tort liability where a redevelopment project executor is not obliged to pay the liquidation money, and it is inappropriate to invoke this case and this case. The argument in the

The Defendants appealed to the part of the lower judgment’s claim for confirmation of invalidity, etc. of the management and disposition plan resolution, but the appellate brief duly submitted within the period for filing an appeal or submission does not contain any grounds of appeal as to it.

2. The Plaintiff’s ground of appeal as to the principal lawsuit

Based on the circumstances indicated in its holding, the lower court dismissed the Plaintiff’s principal claim seeking acquisition and implementation of the registration procedure as above against the Defendants on the ground that: (a) the Defendants were liable to take over the procedure for registration of cancellation of trust registration and the procedure for registration of transfer of ownership on the ground of reversion of trust property with respect to the instant real estate from the Plaintiff; and (b) the scope of the Plaintiff’s obligation to pay the liquidation money cannot be determined.

As seen above, the Defendants cannot be deemed to have the obligation to accept the registration procedure as above from the Plaintiff and to implement the registration procedure again to the Plaintiff. Thus, although the lower court’s decision was inappropriate, the lower court’s dismissal of the Plaintiff’s claim against the Plaintiff is justifiable in its conclusion.

Therefore, all of the Plaintiff’s grounds of appeal premised on the Defendants’ above obligations cannot be accepted.

3. Conclusion

The part concerning the counterclaim claim by Defendant 6 and the part concerning the claim for liquidation amount among the counterclaim claim by Defendant 1, Defendant 2, Defendant 3, Defendant 4, Defendant 5, Defendant 7, Defendant 8, Defendant 9, and Defendant 10 are reversed, and this part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Plaintiff’s appeal and the remaining appeals by Defendant 1, Defendant 2, Defendant 3, Defendant 4, Defendant 5, Defendant 7, Defendant 8, Defendant 9, and Defendant 10 are all dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Sang-hoon (Presiding Justice)