2017Nu79273 Requests for the cancellation of a comprehensive audit result disposition

A Educational Foundation

The Minister of Education

Seoul Administrative Court Decision 2016Guhap62320 decided September 29, 2017

May 4, 2018

June 8, 2018

1.The judgment of the first instance shall be modified as follows:

A. On March 11, 2015, the part of the Defendant’s notice of a comprehensive audit conducted by the Plaintiff on March 11, 2015, ordering the Plaintiff to suspend the operation of the practical music department and practice room with poor management and terminate the lease contract for B building, and to import the lease deposit amount of KRW 1,390,000,000 from the accounts of school expenses, among the dispositions indicated in the Disposition No. 23, the portion of the Defendant’s notice of the disposition that collected KRW 172,916,000 from C in the annual disposition No. 24, that the amount exceeding KRW 128,550,80 in the annual disposition that collected KRW 128,50 from C in the disposition No. 24, that the amount exceeding KRW 109,76,700 in the annual disposition that unfairly spent remodeling and repair costs of facilities from the accounts No. 25,000 in the annual disposition to the accounts of school expenses shall be revoked.

B. The plaintiff's remaining claims are dismissed.

2. Of the total litigation costs, 60% is borne by the Plaintiff, and the remainder is borne by the Defendant, respectively.

1. Purport of claim

As a result of a comprehensive audit conducted by the Defendant against the Plaintiff on March 11, 2015, the Defendant’s request for each disposition stated in the Disposition Nos. 1, 2, 3, 4, 9, 14, 17, 22, 23, 24, and 25 [Provided, That in the case of No. 24 annually, the construction cost of KRW 17,083,00 among the corrective (recied) items in the Disposition column shall be reduced to KRW 172,916,00] shall be revoked.

2. Purport of appeal

A. The plaintiff

The part against the plaintiff in the judgment of the court of first instance shall be revoked. The defendant's notification of the comprehensive audit result made to the plaintiff on March 11, 2015, the part against the plaintiff shall be revoked. Among the dispositions as shown in the Disposition No. 1 as a result of the Disposition No. 1 as shown in the Disposition No. 1 as a result of the audit result, the remainder of the Disposition No. 37,023,000 won, excluding the Disposition No. 2,3,4,9,14,17, excluding the Disposition No. 1 as to the revenue for the corporate accounts, and each Disposition No. 2,3,4,9,14, and17, excluding the Disposition No. 2070, excluding the Disposition No. 1,390,000 won, excluding the Disposition No. 272,916,000 won among the Disposition No. 24, excluding the Disposition No. 37,200, 2070, excluding the remaining Disposition No.

B. Defendant

The part against the defendant in the judgment of the first instance is revoked, and the plaintiff's claim corresponding to the revocation is dismissed.

1. Details of the disposition;

A. The Plaintiff is a school foundation that establishes and operates the E University (former F University; hereinafter referred to as the “instant University”).

B. From September 15, 2014 to September 26, 2014, the Defendant requested the Plaintiff and the instant university to submit a comprehensive audit (hereinafter referred to as “instant audit”) on March 11, 2015 when notifying the Plaintiff of the results of the comprehensive audit, and within 60 days after completing the implementation of the notified request for disposition.

C. On April 9, 2015, the Plaintiff filed an application with the Defendant for review seeking revocation of the instant disposition Nos. 1, 2, 3, 4, 9, 14, 17, 22, 23, 24, and 25 (hereinafter collectively referred to as “each disposition request”), and individually, “the instant disposition request” filed a request for revocation of the disposition Nos. 1, 2, 3, 4, 9, 14, 17, 22, 22, 23, 24, and 25” around June 2015, the Defendant changed the construction cost subject to the instant disposition No. 24 disposition request from KRW 17,083,00 to KRW 172,916,00, and all of the remaining applications were dismissed.

D. On June 5, 2015, the Plaintiff filed an administrative appeal with the Central Administrative Appeals Commission on the same purport as stated in the purport of the instant claim, but the Central Administrative Appeals Commission rendered a decision of dismissal on February 2, 2016, and sent the notification of the said decision to the Plaintiff on February 17, 2016, and served the notification of the said decision at that time.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, and 3, the purport of the whole pleadings

2. Relevant statutes;

Attached Form 2 shall be as shown in attached Table 2.

3. Whether each of the dispositions of this case is legitimate

A. Whether the request for disposition No. 1 of this case is legitimate

1) Summary of the parties’ assertion

A) Plaintiff

The Plaintiff and G Hospital had no mutually agreed interest rate on the unpaid amount of the lease deposit between the Plaintiff and G Hospital, and there was an understanding that the two parties should be at the rate of the fixed deposit interest rate, and the Plaintiff has received the amount calculated at the rate of 4.5% per annum from G Hospital. However, as the Plaintiff demanded to pay the amount calculated at the rate of 9% per annum from July 2010 to the issue under the tax law, G Hospital paid the corresponding interest for a certain period, and refused to pay the amount of the fixed deposit interest without agreement. Considering these circumstances, the Plaintiff’s application of the rate of 9% per annum per annum under the circumstances where there was no express agreement between the parties on the interest rate, and thus, there is an excessive aspect to apply the rate of 9% per annum per annum to the unpaid amount of the lease deposit at the rate of 9% per annum to the corporate accounts. The portion that demands to recover the amount of KRW 37,023,00 per annum and take measures for revenue.

B) Defendant

From July 2010, the Plaintiff received the amount calculated at the annual interest rate of 9% for the unpaid amount of the lease deposit from G Hospital. It is against social norms that G Hospital paid such money without any agreement for a considerable period of time, and considering that it is interest for the unpaid amount of the lease deposit, the annual interest rate of 9% cannot be deemed excessive.

(ii) the facts of recognition

A) On April 2006, the Plaintiff agreed to collect KRW 1.221 billion from G Hospital, including G Hospital No. 1503 Dongpo-si, 1403, which had been provided to the existing hospital employees as company houses, when transferring G Hospital operated as a profit-making business to H, which was the births of the president of the University of this case, and agreed to recover KRW 1.21 billion from G Hospital.

B) From April 16, 2008 to February 29, 2012, the Plaintiff recovered KRW 1.1 billion out of the above lease deposit 1.2 billion, and was unable to recover the remainder of KRW 120 million as of September 25, 2014, which is the date of the instant audit.

C) When the Plaintiff collects the above lease deposit from G Hospital in installments, the Plaintiff was paid the amount calculated at the interest rate of 4.5% per annum from March 1, 2007 to June 30, 2010 with the unpaid amount of the lease deposit calculated at the interest rate of 4.5% per annum from July 1, 2010 to February 8, 2012 as apartment usage fees, respectively. On August 31, 2014, the unpaid amount of the apartment usage fees under the apartment name calculated at the annual interest rate of 9% per annum for the unpaid amount of the lease deposit as of August 31, 2014 is 37,023,00 won in total.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 32 (including branch numbers; hereinafter the same shall apply), Eul evidence Nos. 1, 2 and 19, and the purport of the whole pleadings

3) Determination

A) It is reasonable to view that the Plaintiff and G Hospital agreed to pay the amount calculated at the rate of 9% per annum on the deposit for lease from July 1, 2010, comprehensively taking account of the following circumstances revealed through the facts acknowledged as above and the purport of the entire pleadings.

(1) In the absence of any agreement between the Plaintiff and the G Hospital, it is difficult to readily understand that the G Hospital continued to pay the amount calculated at an annual interest rate of 9% higher than the previous one with respect to the unpaid amount of the lease deposit during a period of approximately one year and eight months from July 1, 2010 to February 8, 2012. At least, it is natural to view that there was an implied agreement between the Plaintiff and the Parties on the fact that they would have to pay the interest rate of 9% per annum.

(2) The amount that the Plaintiff received as calculated at a certain rate with respect to the unpaid amount of lease deposit constitutes damages for delay, and thus, it is difficult to deem that the annual interest rate of 9% is higher than the interest rate on bank deposits even if it is higher than the interest rate on bank deposits.

(3) In light of the fact that Article 89 of the former Enforcement Decree of the Corporate Tax Act and Article 43(1) of the Enforcement Rule of the same Act, which was enforced on July 1, 2010, stipulate the interest rate of the current loan, which serves as the standard for determining market price in the application of the wrongful calculation method avoidance, as 8.5% per annum, the Plaintiff is highly likely to have agreed to the interest rate for the unpaid amount of the lease deposit at 9% per annum, considering

B) Therefore, the part of the Plaintiff’s claim on this part is lawful since the Plaintiff’s assertion on this part is without merit, since the Plaintiff’s claim on this part is lawful, which collected KRW 37,023,00,000 for the unpaid amount.

B. Whether the request for disposition No. 2 was lawful

1) Summary of the Plaintiff’s assertion

The Plaintiff’s selling K 107 Dong 403 (hereinafter “the apartment of this case”) to his employees in the amount of KRW 11.6 million does not constitute a transfer of the fundamental property on the ground that there is no apparent difference between the actual market price and the actual market price.

(ii) the facts of recognition

A) On December 1, 2011, the Plaintiff transferred the instant apartment to J of 11.6 million won, which was acquired to use as an official residence of the faculty members of the instant university, to the employees J of 1.6 million won. In this regard, the Plaintiff did not undergo an appraisal by an appraisal business entity and did not report to the competent authorities.

B) The average trading price of K three bonds transacted in the quarter of April 201 except the instant apartment is 133,366,666 won by the Ministry of Land, Infrastructure and Transport.

[Ground of recognition] Facts without dispute, Gap evidence No. 4, Eul evidence No. 20, the whole purport of pleading

3) Determination

A) According to Article 28(1) of the former Private School Act (amended by Act No. 13573, Dec. 22, 2015; hereinafter the same) and Article 11(1)2 and Article 11(5)3 of the former Enforcement Decree of the Private School Act (amended by Presidential Decree No. 25407, Jun. 30, 2014; hereinafter the same), where a school foundation operating a university sells fundamental property of less than 300 million won, it shall report to the competent agency along with an appraisal report by an appraisal business entity, etc.; and pursuant to Article 57 of the Financial and Accounting Rules, employees in charge of receiving, storing, or managing revenues, expenditures, goods, and property of a corporation and a school shall fulfill their duty of care as a good manager.

B) In full view of the above facts and the purport of the entire arguments as seen earlier, the Plaintiff’s sale of the above real estate was unfairly transferred to the price lower than the market price in violation of Article 28(1) of the former Private School Act and Article 11(1)2 and 11(5)3 of the former Enforcement Decree of the Private School Act.

(1) Examining the circumstances leading up to the sale of the instant apartment, due to the fact that J requested L director, etc. to transfer the instant apartment house acquired by the Plaintiff for the purpose of the official residence of the said university’s staff member to the extent of KRW 100 million, plus the amount of KRW 10 million (No. 20-2, 3).

(2) L and J knew that at the time of the transfer of the instant apartment, the market price was KRW 130 million (No. 20-2, 3).

(3) In the quarter of April 201, the Plaintiff mainly traded an apartment with the conditions similar to the instant apartment at a price below KRW 100 million, and at the same time K was traded at a price below the instant apartment at a lower than the instant apartment at the same time. In the quarter of April 2010, the Plaintiff asserted that the instant apartment transfer did not constitute a low-price transfer since K 4 bonds were traded at a price below KRW 100 million. However, the Plaintiff’s statement on the evidence No. 4 does not reveal that the instant apartment was traded at a price below KRW 100 million in the quarter of April 2011, and it is difficult to view that the market price at the time of the transfer of the instant apartment at the time of the instant apartment based on the transaction price before one year prior to the transfer.

(4) As seen above, the provisions of the former Private School Act, etc. aim at promoting the financial soundness of private schools by imposing restrictions on the disposal of basic property for education of school juristic persons. As such, deeming the low-price transfer of property as the donation of property under Article 35(1)2 of the Inheritance Tax and Gift Tax Act differs from the purpose and purport thereof. Therefore, the Plaintiff’s apartment transfer of this case cannot be said to fall under the low-price transfer of the apartment.

C) Therefore, the request for disposition No. 2 of this case pointing this out is legitimate, and the plaintiff's assertion on this part is without merit.

C. Whether the request for disposition No. 3 is legitimate

1) Summary of the Plaintiff’s assertion

According to the contribution resolution of the teachers and staff, since the teachers and staff have intent to voluntarily contribute to the "money transferred to a corporation", this is a donation of a nature different from the donation under Article 13 (1) 8-2 of the Enforcement Decree of the Private School Act, so it cannot be deemed unlawful to have been treated as the corporate accounting in accordance with the donator's intent

(ii) the facts of recognition

A) From August 21, 2012 to August 18, 2014, the Plaintiff appropriated KRW 786,482,000 paid by the faculty members of the instant university by deducting 7.5% of the salary in the corporate accounting (hereinafter “the instant donations”) in the revenues of the Plaintiff. The instant donations were written as “E substitute development donation” or “E substitute education donation.”

B) The letter of donation signed by the university faculty members of the instant case who paid the instant contribution is indicated as “the purpose of the donation is to deduct 7.5% of the total amount of salaries from the amount of salaries paid to the corporation for one year, and to contribute it as the amount of money transferred to the corporation for one year,” along with “the purpose of the donation is to designate the university of the instant case as the university subject to the restriction on the student loan due to the designation of the university

[Reasons for Recognition] Evidence No. 5, Evidence No. 4, and the purport of the whole pleadings

3) Determination

A) According to Article 29(1), (2), and (6) of the former Private School Act, the accounts of an educational foundation are classified into school expenses accounts belonging to a school established and operated by it and corporate accounts belonging to a corporation. Revenues belonging to school expenses accounts may not be transferred or lent to other accounts. Also, according to the Rules on Special Cases concerning the Financial and Accounting Rules of Private School Institutions (Attached Table 1), donations revenue is an item of revenue for both corporate accounts and school accounts. Provided, That Article 13(1)8-2 of the former Enforcement Decree of the Private School Act, amended by Presidential Decree No. 23974, Jul. 24, 2012; enacted from July 27, 2012, clearly stated donations received by a school for the purpose of school education as revenues belonging to school expenses accounts. This is reasonable to determine where a school foundation receives donations on behalf of an existing school foundation for the purpose of preventing donations from using such donations as operating expenses of the school foundation.

B) In full view of the following circumstances revealed by adding up the entire purport of the argument in the above facts, the donations in this case, which the Plaintiff received for the purpose of using in school education, seems to fall under the revenues from the accounts of school expenses.

(1) Although the phrase “donations” is written in the donation resolution signed by teachers and staff, considering the overall context and the background of the donation, it can be deemed that the donation was made for the purpose of developing the university of this case and providing school education.

(2) Even if Article 13 (1) 8-2 of the former Enforcement Decree of the Private School Act was not implemented at the time of the preparation of the donation resolution, the Plaintiff’s entry of the revenue into the E-development donation or E-education donation even after the enforcement of the said provision is consistent with the purpose of the donation in this case’s college’s school education.

(3) The payment of the instant contribution was made in such a way that the instant university’s payment was collectively deducted from the faculty’s salary, which is an item for personnel expenses in the accounts for school expenses.

(4) The Special Rule on the Rules on the Financial Accounting and Accounting Regulations of Private School Institutions (attached Table 1) merely stipulates that revenue of donations may be treated as revenue of each of the school foundations and schools, and it cannot be interpreted that revenue of donations belonging to revenue of other accounts can be treated as revenue of each of the school foundations and schools.

C) Therefore, the Plaintiff’s request for disposition No. 3 of this case, which pointed out that the above donation constitutes a donation for the purpose of school education, was lawful, and thus, the Plaintiff’s assertion on this part is without merit.

D. Whether the request for disposition No. 4 of this case was lawful

1) Summary of the Plaintiff’s assertion

The Plaintiff purchased a 211mm2 and a 126m2m square meters of Jeonnam-gun MTM (hereinafter referred to as the “instant land by adding up each of the above land”) because the fence of the instant university was necessary to purchase the instant land, and the purpose was to expand and transfer the crym2 to the instant land upon receiving the budget for the support of the SimA sports facilities. This is because the Plaintiff did not receive any budgetary support due to the reasons of the Youngnam-gun, Yongnam-gun, and thus, purchased the instant land without a plan to use it for education and not neglected to purchase the instant land.

(ii) the facts of recognition

A) On January 5, 2012, the Plaintiff purchased the instant land owned by KRW 48,350,000, which is the Plaintiff’s founder, and acquired its ownership.

B) The Plaintiff did not utilize the instant land for education until the time the Defendant’s audit was conducted.

[Ground of recognition] Facts without dispute, entry of evidence Nos. 22 and 26, purport of the whole pleadings

3) Determination

A) According to Articles 4 and 21(2) of the Regulations on the Finance and Accounting of Private School Institutions, the finance and accounting of corporations and schools shall be operated in a sound manner. The expenditure budget of the accounts belonging to schools shall not be used for any purpose other than its original purpose.

B) In full view of the following circumstances, the Plaintiff appears to have purchased the instant land with the expenditure budget for school expenses accounts without any plan to utilize it for education, taking into account the above facts acknowledged as having added the purport of the entire pleadings.

(1) From January 5, 2012, the Plaintiff acquired the instant land, to September 25, 2014, the audit date of the instant case, the Plaintiff left the instant land as a housing site.

(2) As shown in the Plaintiff’s assertion, it is difficult to believe that the Plaintiff’s evidence Nos. 13 (Certificate) was unilaterally stated by the University Life Sports Department professor R without objective data support.

(3) Nos. 6-1(Ss) and 6-1(s) are written on and after the instant audit and inspection, and there is no reason to acknowledge that the Plaintiff purchased the instant land for the purpose of expanding and relocating the scambing solely on the basis of such evidence.

C) Therefore, the Defendant’s request for disposition No. 4 of the instant case is lawful since it is pointed out that the Defendant’s request for measures to use the instant land for education or sell it, and thus, the Plaintiff’s assertion on this part is without merit.

E. Whether the request for disposition No. 9 of this case was lawful

1) Summary of the Plaintiff’s assertion

According to Articles 33(1) and 34(1) of the former Higher Education Act (amended by Act No. 12036, Aug. 13, 2013; hereinafter the same) and Articles 34(1) and 35(1) of the former Enforcement Decree of the Higher Education Act (amended by Presidential Decree No. 25157, Feb. 11, 2014; hereinafter the same), students who graduated from high schools or who have been recognized as having an equivalent or higher academic background pursuant to statutes are required to be selected according to the standards and methods for admission screening in conformity with the educational purpose. However, the agreement entered into with SP concluded with SP is recognized as having an academic background above high school graduate or higher since they passed SP through the unification and history examination. Since S is exercising the right to select students, Article 14(1) of the former Enforcement Decree of the Higher Education Act provides that the aforementioned provision on foreign students’ school curriculum cannot be applied in accordance with the former Enforcement Decree’s school regulations.

(ii) the facts of recognition

A) On January 201, 201, the University and China entered into an agreement with S to grant both degrees at the same time in the instant university (hereinafter referred to as the “instant agreement”) where the conditions necessary for graduation are met after studying at S for three years from the instant university. The main contents are as follows.

2.(1) Prior to entering the university of this case’s study, students must have the following conditions. (2) Prior to entering the university of this case’s study by the People’s Republic of China through a unification test or a sex unification test, students must have the following conditions. (3) (2) At all times, students must have the course of study for three years before the university of this case’s study is jointly established by S and the university of this case’s study, (1) must have the course of study for three years before the university of this case’s study. (3) At all times, students must have the course of study for the Korean language aptitude test or other comparable Korean language test that can be accepted, and pass the Korean language test. (3) The university of this case must first register the students as S and give notice of passing the conditions (Conditional) in the above university’s study. (2) After passing the university’s study, students management must comply with the applicable laws and regulations of the country’s study.

B) According to the additional recruitment outline for new students of the year 2012 college of the instant case, school life records shall be selected by reflecting 100% in the case of general recruitment.

C) The instant university failed to submit documents to verify qualifications for admission, such as high school graduates, while selecting students who entered S during the third additional recruitment period during the first semester of 2012 from the ordinary screening period to the regular screening period, or not reflecting school life records. As above, Chinese students selected from S have paid scholarships during the school study period and treated them as being exempted from school expenses, and has registered them as new students and managed them as students as stated in attached Form 1 Audit Report No. 9 [Attachment 9], Chinese student entrance screening and student management status.

D) The main contents of the school regulations (amended on April 29, 201) of the instant university are as follows.

Article 19-2 (Foreign Students) A foreigner who wishes to enter a school without recourse to Articles 45 and 46 of the school regulations may be granted admission to a special foreign student other than the prescribed number of students, unless such entry does not interfere with classes. ② If a special foreign student intends to transfer to a regular student, the corresponding provisions of Section 1 of Chapter III of the school regulations shall apply mutatis mutandis.4) Matters concerning foreign students which are not specified in the school regulations shall be separately determined.Article 23 (Admission Permission and Revocation) ① The total period of admission shall be permitted, and a person who is permitted to enter a school shall pay a minor amount of the school within the designated date. ⑤ Article 24 (Registration and Payment)(5) Registration shall be completed by leaving a fixed amount of deposit (tuition, admission fees, and other payments) and filing an application for enrollment.The qualifications for application for admission under Article 45 (Qualification for Admission) shall be as follows:

E) The main contents of the "Regulations on the Management of School Affairs for Foreign Students" at the University of this case are as follows.

Section 2(Definition of Terms) The term "foreign university or college" shall be defined as follows: ① The term "foreign university or college" shall be defined as follows. ② The term "foreign student" means a foreign student whose parents are both foreign nationals and who have foreign nationality and entered the Republic of Korea for the purpose of acquiring and training this school degree. ② The term "foreign student" shall be defined as a dual national and non-permanent student who has Korean nationality. (4) The term "joint academic degree student" shall be defined as a student who participates in the operation of the curriculum for the purpose of acquiring two high degrees at the same time by exchange with foreign universities, except as otherwise provided in other Acts and subordinate statutes or regulations relating to Article 3 (Scope and Admission). ② The application form for admission of foreign students (China) shall be defined as follows:

Benefits from the reduction of and exemption from school expenses may be granted, and matters concerning the payment shall be separately determined by the president of the principal school.

[Ground of recognition] Facts without dispute, Gap evidence 7, Eul evidence 6 and 17, witness of the first instance trial, the purport of the whole pleadings

3) Determination

A) According to Articles 33(1) and 34(1) of the former Higher Education Act and Article 34(1) of the former Enforcement Decree of the Higher Education Act, a person who may enter a university or college shall be a graduate from a high school or a person who has been recognized as having an equivalent or higher academic background pursuant to statutes. The head of a university or college shall select students to be admitted through a general screening or special screening from among those who have the above qualifications, and a general screening shall be a screening which selects general students according to general educational standards and shall be implemented in public by fair competition in accordance with the standards and methods for admission screening suitable for the educational purpose of the university or college.

B) Even if the university of this case entered into an agreement with S in China on the conditions for admission of students, it cannot be ruled out that the Higher Education Act stipulating the requirements for admission and the method of selection of domestic universities is effective. Furthermore, Article 4(4) of the Regulations on the Management of School Affairs for Foreign Students (China) of the university of this case includes the recognition of an exchange university in the list of documents to be submitted for admission by foreign students (China) and there are no other special provisions in the case of a participating student, students who entered the university of this case are also subject to the said regulations.

It is reasonable to view that it is reasonable.

C) Therefore, as seen earlier, the submission of documents to verify the eligibility for admission to high school graduates from the general screening to the fixed number of students who entered S, or registration without reflecting school life records, and continuing to manage the students in the course of study, constitutes a violation of Articles 33(1) and 34(1) of the former Higher Education Act, Article 34(1) of the former Enforcement Decree of the former Higher Education Act, and Article 4(4) of the Regulations on the Management of School Affairs for New Students and Foreign Students Students in the University of this case. The submission of the above documents is not stipulated as the obligation under the former Higher Education Act and its Enforcement Decree, and even if the fixed number of the cartoon, animation, and animation course that passed by S students falls short of the additional recruitment period, such circumstance alone does not change.

D) Therefore, the defendant's request for disposition No. 9 of this case pointing out the above point is legitimate, and the plaintiff's assertion on this part is without merit.

F. Whether the request for disposition No. 14 was lawful

1) Summary of the Plaintiff’s assertion

The university of this case has been suffering from the shortage through another budget exceeding the amount of the entrance fee revenue. The university of this case has not been directly involved in the entrance fee examination because the detailed contents of the entrance fee and the entrance fee allowance in Article 17 and [Attachment 1] and [Attachment 3] of the Regulations on Special Cases concerning the Financial and Accounting Rules of Private School Institutions are unclear, and thus, the entrance fee is paid to the teachers who contributed to the entrance examination but have not directly participated in the entrance examination. The expenses for the entrance fee and the public relations activities are paid from the entrance fee, which is merely an error in the management of the account, not an unfair execution of the entrance fee revenue. In addition, according to Article 22 of the Regulations on the Payment of the University of this case, the president may pay special bonus to the teachers and staff deemed to have contributed to the entry examination within budgetary limits, so the entrance fee paid to the teachers who contributed

(ii) the facts of recognition

A) On October 5, 2012, the Plaintiff paid a total of KRW 51,600,000 to 144 teaching staff members who did not take charge of the management of the entrance examination from October 5, 2012 to March 18, 2014, such as paying KRW 50,000 for the entrance examination allowances to educational administration majors who did not directly perform the entrance examination duties and facultyR.

B) On June 12, 2012, the Plaintiff paid KRW 84,092,92,920 to the account for entrance expenses, including the payment of KRW 1,750,000 to KRW 1,750,00 from June 12, 2012 to November 28, 2013 of the entrance presentation meeting and camping scams, commemorative scams, public relations scams, etc. for high school entrance expenses.

C) Article 22 of the Regulations on the Payment of Benefits of the University of this case provides that "the special bonus may be paid to the faculty members deemed to have contributed to the performance of their duties within budgetary limits, and detailed matters such as the method of payment of special bonus and the selection of persons eligible for payment shall be determined and implemented separately by

D) The revenue from the entrance fee of the pertinent university was KRW 55,695,00 in 2012, KRW 49,050,00 in 2013, KRW 52,986,00 in 2014, while the entrance fee was paid KRW 247,331,00 in 200 in 2012, KRW 227,437,00 in 200 in 2013, KRW 279,636,00 in 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 8, Eul evidence Nos. 7 and 8, part of the witness of the first instance trial, the purport of the whole pleadings

3) Determination

A) According to Articles 4, 21(2), 17, and 3 of the Regulations on Special Cases concerning the Financial and Accounting Rules of Private School Institutions, Article 17 and [Attachment Table 1] and 3 of the Regulations on Special Cases concerning the Financial and Accounting Rules of Private School Institutions, the financial and accounting of corporations and schools shall be operated in a sound manner. The expenditure budget of the accounts belonging to schools shall not be used for any purpose other than the original purpose, and the "in-time allowance" refers to the school personnel's allowance in charge of the entrance examination management, the "in-time allowance" refers to the expenses such as the consumption expenses, the fee for the travel expenses, the fee for the entrance examination, the "in-time expense" refers to the expenses for the production of promotional books, souvenirs, etc., and the bonus to the school personnel shall be disbursed as

B) The fact that the Plaintiff paid the entrance fee to the faculty members who did not take charge of the entrance examination management and that the payment was made from the entrance expenses account without paying the expenses for the entrance promotion from the publicity expenses account constitutes improper execution of the entrance expenses by deeming that it violates Article 17 and [Attachment Table 1] and [Attachment Table 3] of the Regulations on Special Cases concerning the Financial and Accounting Rules of Private School Institutions. The mere fact that the entrance expenses of the university of this case considerably exceed the corresponding entrance fees revenue or erroneous accounting management expenses are not justified.

C) In addition, unless there is any evidence that the foregoing allowance was paid pursuant to Article 22(2) of the University Benefit Regulations, it cannot be deemed that the above allowance was paid as a special bonus.

D) Therefore, the Plaintiff’s assertion on this part is without merit, since it was lawful to recover KRW 51,600,000,000, which was executed in improper manner, to take revenue measures for school expenses accounts, and thus, the Plaintiff’s claim on this part is without merit.

G. Whether the request for disposition No. 17 was lawful

1) Summary of the Plaintiff’s assertion

The amount of full-time assignment of teachers and rewards paid by the Plaintiff shall be classified into special bonuses paid by the president to teachers and staff deemed to have made a special contribution to the performance of his/her duties pursuant to Article 22 of the University Benefit Regulations

(ii) the facts of recognition

A) On September 19, 2012, the university of this case paid KRW 7,200,000 from the welfare expenses account and treated the remaining KRW 779,00 as the collection of job allowance to be collected separately, on the grounds that the professor V of the Department of Education, the professor of the sports department appointment department, the professor X of the Information and Computer Institute President, the associate professor X of the Information and Computer Institute Department, and the associate professor Y of the Health Department Y, who resigns from the position at issue, only after obtaining approval from the president and withdrawing the total amount of KRW 7,979,00 in cash.

B) On April 8, 2014, the university of this case obtained approval from the president without deliberation by the reward deliberation committee, and paid KRW 7,00,000 in total as the reward money for the Z campus.

C) Of the instant university’s reward regulations, the contents pertaining to the instant case are as follows.

Article 4 (Details of Rewards) of the Regulations on the Rewards for Teachers and Employees of the University of this case shall be separately determined by the Deliberation Committee on Rewards. Article 6 (Organization of the Deliberation Committee on Rewards) (10) The Deliberation Committee on Rewards shall be composed of about seven teachers and staff members, and the chairperson and members shall be appointed by the president: Provided, That deliberation on rewards for regular continuous service shall be omitted. (2) The Committee shall have an executive secretary to handle affairs, who shall be in charge of personnel affairs, and the executive secretary shall be the executive secretary.The Deliberation Committee on Rewards of Article 7 (Matters subject to Examination by the Committee) shall examine the following matters:

[Ground of recognition] Facts without dispute, entry of evidence Nos. 9 and 15, purport of the whole pleadings

3) Determination

A) According to Articles 4 and 33(1) of the finance and accounting rules of private school institutions, Article 15 subparag. 2, Article 17, and attached Table 1 of the Regulations on Special Cases concerning the Financial and Accounting Rules of Private school Institutions, and Article 15 subparag. 2, Article 17, and attached Table 3 of the Regulations on Special Cases concerning the Financial and Accounting Rules of Private School Institutions shall be operated in a sound manner. The expenditure means the method of check of a financial company, the method of depositing the funds into the bank's deposit account, or the method of transferring the funds through the computer network. The expenditure budget of the accounts belonging to a school shall not be used for any purpose other than its original purpose, and the accounting shall be fairly handled with objective data and evidence so that they can be trusted, and the "welfare expenses, which are items of expenditure for school expenses," refers to all kinds of welfare expenses, such

B) The Plaintiff’s payment of the pre-paid amount in the accounts of welfare expenses after cash withdrawal from the accounts of school expenses, and revenue disposal was made as if it was received without being actually paid the allowance to be collected separately, and the payment of the reward to the faculty members only with the president’s approval without examining the reward deliberation committee is in violation of Articles 4 and 33(1) of the Regulations on the Financial and Accounting of Private School Institutions, Articles 15 subparag. 2, 17, and 17 of the Regulations on Special Cases concerning the Financial and Accounting Rules of Private School Institutions and Articles 15 subparag. 2, 17, and 3 of the Regulations on

In addition, unless there is any evidence that the advance payment and the monetary reward as seen above have been paid pursuant to Article 22(2) of the University Benefit Regulations, it cannot be deemed that the advance payment and the monetary reward have been properly paid as a special bonus.

C) Therefore, the Plaintiff’s claim on this point is lawful, and the Plaintiff’s assertion on this point is without merit.

H. Whether the request for disposition No. 22 was lawful

1) Summary of the parties’ assertion

A) Plaintiff

(1) AC Co., Ltd. (hereinafter referred to as “AC”)’s lease agreement on the 2,3, and 5th above ground of AB building is a false contract. The instant university leased the 2,3rd above ground of B building as a practical music and practice room, and excluded the 5th above ground of B building from the leased object. From December 1, 2011, the instant university did not have leased the 2,3, and 5th above ground of B building in overlap with AC, and there was no fact that AD Institute (the name of September 17, 2013 is changed to “AE private teaching institute; hereinafter referred to as “private teaching institute”) used the practical music and practice room of the instant university.

(2) The market price and officially announced value of B building is remarkably large compared to the lease deposit 1.39 billion won paid by the instant university to the lessor while leasing part of the B building, and the lessor is the president. Therefore, there was no need for the instant university to take measures to preserve claims against the said lease deposit.

(3) The public performance practice room rental fee of the fourth floor of B building that the Plaintiff paid to AC is KRW 25,620,000.

B) Defendant

In duplicate with AC, it is reasonable to view that the instant university entered into a lease agreement on the AB building ground 2, 3, and 5, and that the instant private teaching institute used the B building on the whole floor of the B building. The neglect of claims preservation measures against the lease deposit is not justified.

(ii) the facts of recognition

A) On or before July 29, 2011, the instant university was used as a practical music department and practice room, 6th above Adong and a lodging room in the case of entry, publicity office and lodging room in the case of entry, publicity office and lodging room. The instant university leased the first floor under Adong, 2, 3, 5, 6, 7th above and the second floor above B, and the second floor above B, from this point of view, around July 29, 201.

B) From July 29, 201, AC had a lease agreement (hereinafter referred to as “the overlapping lease agreement of this case”) under the terms that AC leases 2, 3, and 5 floors from July 29, 201 to 600 million won (each floor level of KRW 200 million).

C) On August 9, 2011, AC filed an application for registration to establish and operate the instant private teaching institute with the competent authority on August 16, 201, and the registration was accepted on August 16, 201 by using the location of a private teaching institute as the two, three, and five floors above the ground of B building A, and on September 17, 2013, the location of a private teaching institute was at the time of receipt of a report on change of name.

D) Upon the change of the owner of B building on December 1, 201, the instant university entered into a new lease agreement with the D Lease Association (AF, wife AG, and H Co., Ltd.), and excluded the lease deposit amounting to KRW 1.39 billion in total, KRW 40 million in lease deposit, and excluded KRW 1.5 billion in lease property from KRW 1.39 million in lease property.

E) On December 1, 2011, AC concluded a lease agreement with respect to the fourth floor A, 50 million won in lease deposit, 2.2 million won in rent monthly, 10 million in lease deposit with respect to the fifth floor A, 1.1 billion won in rent monthly, 50 million in lease deposit with respect to B building A, 50 million won in lease deposit with respect to the first floor A, 1.42 on March 1, 2012, and 50 million won in rent and 500,000 won in total with the account of the representative AF of D Rental Association, which is the lessor.

F) According to the guidance on each floor’s facilities posted on August 27, 2013 on the Internet B Blobgs related to the instant private teaching institute, the 1st underground floor, 2nd ground 2, 3, and 7th floor of the instant university, which are the practical music department and practice room of the instant university, was introduced as the facilities of the instant private teaching institute.

G) From June 1, 2014, AI, in charge of the management of the practical music department and practice room of the instant university in B building from June 1, 2014, stated that at the time of audit of the instant case, the Plaintiff was able to have a fluent sium that he uses the practical music department and practice room of the instant university at the instant private teaching institute.

H) AC, which established and operated the instant private teaching institute, is the principal of the interest, the Plaintiff’s founder. The instant private teaching institute was established at the request of professors of the instant university for the purpose of attracting private teaching institute students as students of the instant university. The head of the department of practical music of the instant university is the advisor at the publicity site of the instant private teaching institute.

I) Students in the practical music department of the instant university have pre-contracteded and used the practice rooms of the A2 and the 3th floor through the Internet homepage, and there are specific details of use in 2014 and 2015.

(j) The officially announced value of B building A is KRW 5,170,360,000,000.

(k) From May 7, 2012 to August 28, 2013, the instant university leased the fourth floor of B building A for performance practice room rental, and paid KRW 2,5620,00 to AC total of the performance practice room rent.

[Reasons for Recognition] Gap's evidence Nos. 9, 16, 31, 34, 35, Eul's evidence Nos. 10, 11, 23, and 25, witness A of the first instance court's testimony and the purport of the whole pleadings

3) Determination

A) Whether the management of B building, which is a leased building for education, was defective

In full view of the following circumstances, it is difficult to readily conclude that the instant university and AC leased the two, three, and five floors overlapping each other in B building A, or that the instant private teaching institute failed to manage B building, a building leased for education, such as using the practical, musical, and music practice room of the instant university.

(1) At the time of the formation of the overlapping lease agreement of this case, the lessor is the representative of AC, a lessee, and KRW 600 million of the deposit money under the overlapping lease agreement of this case was paid to the lessor.

In light of the fact that there is no evidence to recognize that the overlapping lease contract of this case was made, despite the fact that the two lease contracts of this case were made, AC leased 1,4, and5 floors A Dong of B building on December 1, 201 and paid deposit KRW 200 million to AF on December 1, 201, and that the fixed number of personnel varies according to the facility area at the time of the establishment and operation registration of the private teaching institute of this case, the possibility that the overlapping lease contract of this case was falsely made for the establishment and operation

(2) The instant university, on December 1, 201, excluded the 5th floor of B building from the leased object on December 1, 201, and as AC leased the 5th floor of B building on the same day, the 5th floor of B building cannot be deemed to have been leased in duplicate.

(3) On February 10, 2012 and May 18, 2012, the Prosecutor of the District Prosecutors’ Office in Gwangju District Office issued a non-prosecution disposition on the grounds that there is insufficient evidence to acknowledge that the pertinent university used the stage installation work on the second floor of the building A in the instant case among the cases of occupational embezzlement against AF and accusation against the violation of the Private School Act, and that the said expenses were actually used in AC for the part that was executed as the faculty members of the instant university (Evidence No. 12).

(4) The statement made by AI that the instant university uses the practical music practice room at the instant private teaching institute is insufficient and it is difficult to believe it as it is.

(5) The mere fact that the instant private teaching institute was introduced into the instant private teaching institute facilities of B building A in B, is insufficient to recognize the fact that the instant private teaching institute has partially used the instant university’s practical music practice room.

B) Whether measures to preserve claims for the lease deposit were necessary

According to the purport of the above facts and the whole pleadings, from December 1, 2011, the Plaintiff leased from the D Lease Association the property of KRW 1.39 billion in total of the lease deposit amounting to KRW 1.9 billion, and paid the property of KRW 1.39 billion in school expenses. There is no evidence to recognize that the Plaintiff had the opposing power and fixed date to secure preferential payment rights under the Commercial Building Lease Protection Act. There is no evidence that the Plaintiff had the opposing power and fixed date in order to secure the preferential payment rights under the Commercial Building Lease Protection Act.

In such a case, in a case where the D Lease Association obtains a loan of B building as security or sells it by seizure due to nonperformance, etc., the university of this case may create a risk that all or part of the deposit money for lease up to the amount of KRW 1.39 billion paid by the school expenses accounts may not be recovered. As such, the officially announced value and market price of B building considerably exceeds the deposit money for lease, or the owner of B building is the president or the special party, it cannot be deemed that there is no need to take measures to preserve the claim against the deposit.

C) Whether the rent for performing practice rooms has been paid unfairly

In full view of the following circumstances, it is difficult to readily conclude that the Plaintiff paid the rent for the lease of the building A from AC to use the 4th floor of B building, taking into account the aforementioned facts and the purport of the entire pleadings.

(1) The fourth floor of building A is the place leased by the instant private teaching institute.

(2) At the time, the foregoing fourth floor was suitable for group practice as a broad space, unlike other places leased by the pertinent university as a practical music practice room, before being remodeled into the current Pianno practice room.

(3) Even though the Plaintiff had been able to practice the above organization through the existing leased space, there is no evidence to find that the above 4th floor was additionally leased without utilizing it properly.

D) Sub-committee

As seen earlier, it is recognized that the university of this case did not take measures to preserve the claim amounting to KRW 1.39 billion for lease deposit. However, considering the following facts: (i) it is difficult to readily conclude that the 2,3, and 5th floor of B building A were leased in overlap with the university of this case and AC or that the private teaching institute of this case was partially using the music and music practice room of the university of this case; (ii) it is difficult to recognize that the university of this case paid the rent for the 4th floor of B building B to AC; and (iii) the university of this case was partially leased for the practical music department of the B building and practical music, public relations office, and lodging room for students; and (iv) taking into account the officially announced value or market price of the B building, it cannot be deemed that the lease deposit amount was leased for KRW 1.39 billion without a monthly rent, and thus, it cannot be deemed that the Plaintiff’s claim to suspend the operation of the lease deposit within the scope of KRW 200,000.

I. Whether the request for disposition No. 23 is legitimate

1) Summary of the Plaintiff’s assertion

The university of this case paid 300 million won incentives to comply with the deadline for completion in line with the occupancy of a new dormitory instead of lowering the construction cost from 3.3 million won per square year to 3.3 million won. The university of this case, upon the request of the university of this case, was made on April 20, 2014 due to the delay in permission for conversion of mountainous district and permission for development to be obtained prior to completion permission, and the completion permission was delayed, and the purpose of the temporary use permission of March 10, 2014 and the purpose of the occupancy of a new dormitory was achieved. Thus, it cannot be deemed unfair to pay 179,184,908 won for the construction cost increased due to the modification of the design, instead of paying 179,184,908 won for the said incentive.

(ii) the facts of recognition

A) On September 5, 2013, the instant university entered into a construction contract with C and the instant construction of a dormitory (hereinafter “instant construction”) with the content that the contract amount shall be KRW 4,392,00,000,000 for the instant construction of a new dormitory, and the date of commencement shall be September 5, 2013; and the date of completion shall be February 28, 2014; and the term “the instant construction contract” (hereinafter referred to as “instant construction contract”).

B) On February 26, 2014, C requested the extension of the term of completion by sending a public letter stating that the process related to approval for use as of the present university of this case was completed, but the other minor process, each certificate of completion (electric, communications, fire fighting, elevator), and the settlement of construction cost are anticipated until April 20 of the same year, and the extension of the term of completion was requested. The university of this case, upon the above request of C on the same day, drafted a modified contract for the extension of the term of completion of the instant contract to April 20, 2014 (hereinafter referred to as the “instant modified contract”), and the said contract does not contain any provision regarding the payment of incentives.

C) On March 3, 2014, as a result of supervision of AJ Building Office, a supervisor of the instant construction project, the progress rate of the said construction project was 95%.

D) On March 2014, the Plaintiff submitted a plan for the restoration of a mountainous district permitted at the time of the new construction of a dormitory in the instant case to the AV market. On March 28, 2014, the Plaintiff received an approval for the restoration of a mountainous district and an order for restoration from the AV market.

E) On March 10, 2014, the instant dormitory was permitted for temporary use on March 10, 201, so that it was possible to move into a dormitory in a new semester, and on April 20, 2014, the instant dormitory was permitted for completion.

F) On June 11, 2014, the instant university paid incentives of KRW 300 million to C.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 17, 19, 20, 21, 36, 37, Eul evidence No. 24, witness A of the first instance trial, partial testimony, and purport of the whole pleadings

3) Determination

A) According to Articles 21(2) and 57 of the Rules on the Finance and Accounting of Private School Institutions, the expenditure budget of the accounts belonging to a school shall not be used for any purpose other than its original purpose, and the employees in charge of the receipt, demand, custody, or management of revenues, expenditures, goods, and property of a corporation and a school shall fulfill their duty

B) In full view of the following circumstances, the university of this case paid incentives of KRW 300 million to C, taking into account the above facts acknowledged, Gap evidence No. 50, the testimony of witness AS and the purport of the entire pleadings by the witness of this court.

(1) The instant university’s proposal of incentives in entering into the instant contract with C was intended to reduce the construction cost to ensure that students can promptly move into a dormitory in accordance with a new semester while lowering the construction cost, and thus, the said university’s presentation of incentives is satisfied as long as the purpose of the said university’s relocation into a new semester is achieved.

(2) According to the testimony of the witness AS at this court, the said incentive arrangement was stipulated to provide KRW 300 million to students when students can move into a dormitory in line with the opening of the new semester, and instead of settling the additional construction cost incurred by the Plaintiff’s request for design change, it appears that the instant modified agreement maintained incentive arrangements to ensure that students’ dormitories could move into a dormitory before the opening of the new semester as originally planned.

(3) Although incentive payment arrangements are not stipulated differently from the original contract of this case, considering the fact that the witness AA of the first instance trial testified to have omitted it in the course of preparing the contract, and that additional construction costs are not increased due to the demand for change of design, it is reasonable to deem that incentive agreements specified in the original contract of this case were not omitted in the instant modified contract of this case, but omitted in simple number, taking into account the fact that additional construction costs are anticipated to incur due to the demand for change of design.

(4) Although an application for approval of provisional use for the dormitory of this case was made on February 20, 2014, according to the administrative procedure, the provisional use approval was made on March 10, 2014, which was after February 28, 2014, the date of completion of the instant contract pursuant to the administrative procedure, and the progress rate was 95% on March 3, 2014 was 95%, which was directly responsible by the Plaintiff.

C) Therefore, even though the university of this case was not obligated to pay 300 million won incentives to C, the Plaintiff’s claim on this part is with merit, since the Plaintiff’s claim on this part is unlawful and revoked to order C to recover 300 million won incentives from C to take revenue measures for school expenses accounts.

j. Whether the request for disposition No. 24 is legitimate

1) Summary of the parties’ assertion

A) Plaintiff

(1) The university of this case was inevitably concluded with the Plaintiff, etc. with respect to construction delay, conflict with the contractor, additional burden of construction cost, etc., the intention of the university of this case and the Plaintiff, etc., which are able to perform within the scope of the budget.

(2) The entrance rain bridge of the initial construction works in Sub-section 1 is a stairs; the second construction works in Sub-section 2 and the third construction works in Sub-section 3 (the dormitory in this case); however, in the case of Sub-Section 2 and Sub-Section 3, the construction works in the way of stairs with a higher safety level. In the case of Sub-Section 1, the construction cost was similar to the construction cost in the case of Sub-Section 2 and Sub-Section 3, and the construction cost was settled by the installation in the non-construction in the detailed sub-section 1, so the construction cost was not settled and paid for the non-construction portion. The damages in the other part at the time of the second new construction works in Sub-section 2 are appropriated as KRW 88,730,000 in the contract amount, but the sudden increase in the rent in the actual other person's construction works, and thus, the construction cost was adjusted within the scope of the amount under the contract so excessive.

(3) Before the Plaintiff’s request for an audit and inspection, the Plaintiff had already been engaged in the repair of defects in the painting work on the second and third floors above the second and third floors above the ground. On September 30, 2014, the Plaintiff requested a repair of defects and completed the repair of defects thereafter.

B) Defendant

Negotiated contract concluded by the plaintiff does not correspond to exceptionally permitted cases under the law, and it is clearly different from the lectures of the lecture, the work plate, and the stairs, and the defective part of the floor construction is merely related to the implementation of the part pointed out in the audit.

(ii) the facts of recognition

A) From December 13, 201 to September 5, 2013, the university of this case entered into a private contract with the other party to the contract without entering into a contract for construction works, the contract amount of which exceeds KRW 27,93,590,000, as stated in attached Table 1’s disposition request [Attachment 1] of disposition of the audit result as well as a written request for disposition of disposition No. 24,00,000.

B) C holds 40% of the Plaintiff’s founder, the former president of the university of this case, and 60% of the shares of AT, the male president of the university of this case, respectively.

C) In the case of a new construction of the campus 2 and 3 Sub-section C implemented by C, the Gangwon-dos (slocks) as indicated in the design drawing was not constructed, and the total sum of the down payment was paid to C. 23,368,985.

D) In the case of a new construction contract under the Z campus Sub-Section 2, the amount of KRW 88,730,000 shall be calculated with the fee for 24 months, which is the loss of another workshop for design. C concluded a construction machinery lease agreement with the use fee of KRW 167,658,590, from January 1, 2012 to August 31, 2013, with the use period of the AU and other workshops from January 1, 2013 to August 31, 2013, with the use fee of KRW 167,658,590 (the use period thereafter seems to be changed to the use fee of KRW 190,346,09).

E) In the case of a new construction project in Sub-Section 2 of the Z campus, 407 parts of the Zampus 2 were defective construction work on the ground level 10,529,000 won above the contract amount and the third floor corridor floor floor 407.

[Ground of recognition] Facts without dispute, Gap evidence 10, Eul evidence 12, 13, and 25, and the purport of the whole testimony and pleading of the witness A of the first instance court

3) Determination

A) Whether the conclusion of a private contract is lawful

(1) According to Article 35(1) and (3) of the former Enforcement Decree of the Act on Contracts to Which the State is a Party (amended by Presidential Decree No. 26829, Dec. 31, 2015; hereinafter the same shall apply), where a construction project, manufacture, purchase, service, or other contract exceeds an amount under Article 26(1)5(a) of the former Enforcement Decree of the Act on Contracts to which the State is a Party, it shall be put into a general competition. In addition, in cases falling under any of the subparagraphs of Article 26(1)5(a) of the former Enforcement Decree of the Act on Contracts to which the State is a Party, a negotiated contract may be concluded. Article 26(1)5(a) of the former Enforcement Decree of the Act on Contracts to which the State is a Party (excluding specialized construction works under the same Act), provides that construction works under the Framework Act on the Construction Industry (excluding specialized construction works under the same Act), construction works of which the estimated price is less than KRW 100,000,00,00 per annum or per annum.

(2) According to the above facts, the university of this case entered into a negotiated contract with the contracting party without submitting a general competition for construction works exceeding KRW 200 million and a service contract exceeding the contract price of KRW 50 million. In particular, in the case of a three-party facility construction contract entered into with C, the contract amount was arbitrarily determined on the basis of the design price without setting the estimated price for the determination of the contract amount, which constitutes a violation of Article 35(1) and (3) of the former Enforcement Decree of the Act on Contracts to Which the State Is a Party. Furthermore, there is no evidence to acknowledge that the above contract constitutes an exceptional case where a negotiated contract under each subparagraph of Article 26(1) of the former Enforcement Decree of the Act on Contracts to Which the State Is a Party is a Party. In light of the content and purport of the above relevant statutes, it cannot be deemed justifiable to enter into a negotiated contract with C solely on the ground that construction delay, conflicts with the contractor, concerns about construction costs, additional burden of construction costs

B) Whether the non-construction or excessive portion was not settled from the construction cost

(1) According to Article 40(1) and (2) of the Rules on the Finance and Accounting of Private School Institutions, where a corporation and a school pay consideration for construction, manufacture, or purchase of goods, etc., and where such consideration exceeds 30 million won under Article 56(1) of the Enforcement Decree of the Act on Contracts to which the State is a Party, it shall be inspected in accordance with the contract, design or other related documents, or have the employees or specialized institutions conduct necessary inspections to confirm the performance of the other party’s contract, and the person conducting the inspection shall prepare a written inspection. In addition, according to Article 20(1) of the General Conditions of the Construction Contract, the Ministry of Strategy and Finance established by the Ministry of Strategy and Finance, a contracting officer shall adjust the contract amount in the event of increase

(2) First of all, the part of the non-construction of the Gangwon-do bridge is examined. According to the facts acknowledged as above and the purport of Gap evidence 10-1's video and arguments, although the safety stairs and safety launchings are deemed to have been partially constructed, in the case of the new construction of Chapters 2 and 3, the Gangwon-do bridge was not constructed by the slof type, which was the initial design. The video of No. 10-1 and evidence No. 52 are merely stated in the video of No. 10-1 and evidence No. 52, it is difficult to view that the Gangwon-do bridge was constructed in the construction of the new construction as a stairs, or that the stairs type is more safe than the slof type. Therefore, it is reasonable to deem that the Plaintiff violated the contract inspection and settlement obligations, unless there is any evidence supporting that the Plaintiff had undergone the procedure, such as the adjustment of contract amount following the preparation of the inspection report and inspection report, or the change in the construction method.

(3) Next, we examine the portion of the excessive appropriation of the fee for other workshops. According to the purport of the aforementioned facts and arguments, C actually disbursed KRW 167,658,590 for 12 months due to the price breadth, etc. of the fee for other workshops, and accordingly, the university of this case recognized the amount of KRW 88,730,00,00, which was included in design for the portion of the fee for other workshops. Therefore, it is difficult to deem that the fee for other workshops was excessively appropriated as the amount of KRW 44,365,200 corresponding to the unused portion of KRW 12 months.

C) As to the part of the request for failure to repair the defects of a hallwayed seal construction

According to the above facts of recognition, the part requiring C to take measures to reconstruct the defective construction part in the 2nd new construction project is lawful. Meanwhile, according to the evidence Nos. 10-4 and the evidence No. 24, the university of this case requested C to repair the defective construction part in September 30, 2014 and completed the defect repair work on January 24, 2015, but it seems that it was merely a performance of the demand for disposition in accordance with the audit and inspection of this case.

D) Sub-committee

Therefore, the portion exceeding 128,550,80 won (172,916,000 won - Parts 44,365,200 of the excessive appropriation of the damages incurred by other workshops) out of the disposition request No. 24 of this case, among the parts ordering C to recover KRW 172,916,00 from the disposition request No. 24 of this case, shall be revoked illegally. Thus, the plaintiff's assertion is with merit within the above recognition scope.

C. Whether the instant disposition request was lawful

1) Summary of the parties’ assertion

A) Plaintiff

The university of this case was replaced by the elevator of the building of this case due to the aging of the elevator of the building B, and most of the building were used by the university of this case, although underground parking lots, the first floor and the fourth floor are not leased, and the fourth floor and the fourth floor are used by the university of this case. For the convenience and safety of the university of this case, remodeling projects, such as installation of music rooms and public performances for the use and convenience of the university of this case, such as installation of music rooms and public performances for the purpose of the university of this case, are not considered to have been paid by the lessor for the cost of installation and restoration, and it is difficult to view that the lessor is to bear the cost of installation and public performance, and the lessor is to bear the cost of installation and public performance. In addition, the university of this case was actually paid KRW 19 million from the lessor's member AH, a member of the D Rental Association of this case, with the cost of replacement and remodeling. Therefore, the cost of such replacement and remodeling is not directly unlawful because it is a facility for school education.

B) Defendant

Expenses for facilities and equipment directly necessary for school education under Article 13 (2) 2 of the former Private School Act shall be strictly interpreted, and if buildings owned by specially related persons are leased and used, expenses for facilities and equipment shall not be disbursed from the accounts of school expenses.

(ii) the facts of recognition

A) From March 11, 2011 to December 26, 2012, the instant university spent KRW 109,762,000 in total for expenses incurred in repairing or remodelling B building, such as the statement of unfair repair details of B building, as shown in attached Table 1’s audit results from March 11, 201 to December 25, 201.

B) At the time of paying the aforementioned expenses, the instant university leased a square meter of 100 square meters from the D Lease Association for the purpose of music practice room, 186.01 square meters of Adong and 186.01 square meters of 2 stories of 3 stories of 186.01 square meters of 3 stories of 186.01 square meters of 7 stories of 104.43 meters of 7 stories of 7 stories of 104.43 meters of 104 meters of 104 meters of 186.01 meters of 6 stories of Adong and 6 stories of 186.01 square meters of 2 stories of dong land

C) DLease Partnership owns 1/3 shares of the president of the University of this case, wife AF, AG, and AH as a member, respectively. AH owns 1/3 shares of AF mother K.

D) On August 20, 2015, occupational embezzlement to AF, and accusation against violation of the Private School Act, the Prosecutor of the District Prosecutors’ Office in Gwangju District Prosecutors’ Office held that the instant university executed KRW 20,885,000 for the cost of repair of B buildings including the stage installation works of the second floor of B buildings on February 10, 2012, and KRW 4,664,000 for the cost of stage installation works of the second floor of B buildings on May 18, 2012 as school expenses accounts, a non-prosecution disposition is not imposed, and on the part that executed the total amount of KRW 82,575,000 for school expenses as indicated in the following table, public prosecution was instituted and sentenced to a fine of KRW 15 million on December 16, 2016 (Seoul District Court Decision 2016Da1010133).

A person shall be appointed.

A person shall be appointed.

E) On July 24, 2015, the instant university received KRW 19 million from AH, a member of the D Rental Association, as a general donation.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 9, 12, 25, Eul evidence Nos. 10, 14, and 18, the purport of the whole pleadings

3) Determination

A) According to Article 29(6) of the Private School Act and Article 4 of the Financial and Accounting Rules of private school institutions, revenues or property belonging to school expenses accounts cannot be transferred or lent to other accounts. The financial and accounting of corporations and schools shall be operated in a sound manner, and shall not be contrary to the State’s policies and society’s obligations as public institutions and the purpose of its establishment.

In addition, Article 13(2)2 of the former Enforcement Decree of the Private School Act provides that "expenses for facilities and equipment directly necessary for school education" shall be included in the expenditure item of school expense accounts. In full view of the provisions of Article 29 of the Private School Act and Article 13 of the Enforcement Decree thereof, and Articles 25 and 36 of the Financial and Accounting Rules of private school institutions, the accounts of school juristic persons shall be divided into school accounts and corporate accounts, and the revenues, especially those of school accounts, shall be limited to school accounts, such as transfer to other accounts or lending, as a result of the payment of entrance fees, tuition fees, etc. collected from students, and the budget of school accounts shall be executed after deliberation and resolution by the board of directors of school juristic persons, which are organized by the head of the school after consultation with the Advisory Committee on Budget and Settlement of Accounts of the relevant school. Thus, even if necessary facilities and equipment are installed at the time of the establishment of a private school, the accounts of the school juristic persons shall not be included in the construction expenses of the school juristic persons or 20.

In the lease contract, the lessor is obligated to maintain the conditions necessary for the use and profit-making of the object while the lease is in existence. Thus, if the object is damaged or damaged, the lessor is not obligated to repair unless it interferes with the lessee’s use and profit-making without any separate cost, and it is so minor that the lessee can easily and easily repair the object. However, if it is not repaired, the lessor is obligated to repair the object to the extent that it can not be used and profit-making according to the purpose determined by the contract.

(see, e.g., Supreme Court Decisions 94Da34692, Dec. 9, 1994; 2010Da89876, Jun. 14, 2012). Meanwhile, the term “profit cost” refers to the cost that the lessee invested to increase the objective value of the leased object. The lessee’s cost of repairing the leased object or cost of installing the leased object to operate his/her own business cannot be considered as beneficial cost (see, e.g., Supreme Court Decisions 80Da1581, Oct. 14, 1980; 80Da1852, Oct. 14, 1980).

B) Examining the facts acknowledged earlier in light of the aforementioned legal principles, it is reasonable to view that it cannot be disbursed from the accounts of school expenses even if the university of this case contributed to promoting the convenience and safety of the facilities and equipment directly necessary for school education, and it is reasonable to deem that it is not possible to claim reimbursement for future benefit in school expenses even if the university of this case was partially repaid after the audit of this case as a general donation, and the university of this case is able to claim reimbursement for future benefit in the future, and it is not different even if the university of this case was partly repaid as a general donation.

On the other hand, with respect to the second floor of B building A, used for a practice room by the instant university, KRW 20,855,000, paid for repair works including stage installation works on February 10, 2012, and KRW 4,664,00, paid for stage installation works on May 18, 2012 for the installation of soundproofs, soundproofing and smoking materials, and the installation of part-time finishing materials, etc., paid for the special purpose of the instant university, cannot be deemed as the portion of the lessor’s liability for repair, and it is reasonable to view that the expenses paid for the improvement of facilities and equipment necessary for school education can be disbursed from the accounts of school expenses as the expenses incurred for the improvement of facilities and equipment.

C) Therefore, the portion exceeding KRW 82,575,00, out of the portion that unfairly spent remodeling and facility repair costs of KRW 109,762,00,00 for the instant disposition No. 25, supra, should be revoked as unlawful, since the Plaintiff’s assertion is with merit within the scope of recognition as above.

4. Whether a request for heavy disciplinary action against the President AF of the University of this case is legitimate

The court's reasoning for this part is the same as the reasoning of the judgment of the court of first instance. Thus, the court's reasoning for this part is acceptable in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act

5. Conclusion

Therefore, the part of the Defendant’s order to suspend the operation of the practical music practice room of the instant disposition No. 22 and terminate the lease contract of the B building and to take revenue measures for the school expenses account of the Plaintiff. Of the instant disposition No. 23, the part of the Defendant’s order to recover the incentive payment of KRW 300,000,000 from C to take revenue measures for the school expenses account of the instant disposition. Of the instant disposition No. 24, the part of the Defendant’s order to recover KRW 172,916,000 from C to take revenue measures for the school expenses account of school expenses, which exceeds KRW 128,50,800, out of the amount of annual disposition No. 25 of the instant disposition request No. 25, the part of the Plaintiff’s order to revoke the Plaintiff’s request to take measures for remodeling and repair expenses of KRW 109,762,000,000 for the instant case’s annual disposition exceeding 128,500,000.

The plaintiff's appeal against the Gu shall be accepted in part, and the judgment of the first instance shall be modified as above, and it is so decided as per Disposition.

The presiding judge, the Korea Judge Judge;

Judges Kim Gung-sik

Judge Won-won

1) [The former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010)]

Article 89 (Scope of Market Price, etc.)

(3) In cases of lending or borrowing money under Article 88 (1) 6 and 7, notwithstanding paragraphs (1) and (2), the rate (referring to the rate under subparagraph 1 where no choice is made) of the following rates which the relevant corporation selects, as prescribed by Ordinance of the Ministry of Strategy and Finance, along with a report under Article 60 of the Act, shall be the market price, and the selected rate shall be applied to all the corresponding transactions, and shall be continuously applied in the business years thereafter: Provided, That where the rate under subparagraph 2 is selected but it is impossible to apply the rate under subparagraph 2 in the business year thereafter and there are any grounds prescribed by Ordinance of the Ministry of Strategy and Finance, the rate under subparagraph 1 may

1. Interest rate on overdrafts prescribed by Ordinance of the Ministry of Strategy and Finance;

[Enforcement Rule of the former Corporate Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 187, Feb. 28, 201)]

Article 43 (Calculation Method, etc. of Heavy Average Loan Interest Rate)

"The interest rate for overdraft loans specified by Ordinance of the Ministry of Strategy and Finance" in Article 89 (3) 1 of the Decree means 85/100 per annum.

(ii) [Inheritance Tax and Gift Tax Act]

Article 35 (Donation of Profits from Transfer by Transfer or High-Risk)

(1) Where property (excluding property prescribed by Presidential Decree, such as convertible bonds; hereafter the same shall apply in this Article) is transferred between specially related persons at a price lower than the market price or at a price higher than the market price and the difference between such price and the market price is at least the standard amount prescribed by Presidential Decree (hereafter referred to as "standard amount" in this paragraph), the date of acquisition or transfer of the relevant property shall be the date of donation and an amount calculated by subtracting the standard amount from the difference between such price and the market price shall

3) Although AF appealed against the above judgment, the judgment dismissing the appeal was rendered on March 20, 2018 (Supreme Court Decision 20165191). It is currently pending in the final appeal (Supreme Court Decision 2018Do5003).

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