Administrator of the Debtor Rehabilitation and Development Corporation (Law Firm Shin, Attorney Noh In-bok, Counsel for the plaintiff-appellant)

Do Governor of Gyeonggi-do;

April 23, 2014

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s revocation of registration of construction business against the Plaintiff on October 17, 2013 shall be revoked.

1. Details of the disposition;

가. 세윤산업개발 주식회사(이하 ‘세윤산업’이라 한다)는 토목·건축공사업 등을 사업목적으로 설립되어 2004. 5. 7. 토목건축공사업등록(등록번호 생략)을 마쳤고, 2010. 11. 15. 피고로부터 2008. 12. 31. 기준 건설업등록기준(자본금 12억 원) 미달을 이유로 영업정지 3개월(2010. 12. 1.~2011. 2. 28.) 처분을 받았다.

B. Accordingly, on April 3, 2013, the third-party prostitution industry applied for commencement of rehabilitation procedures (Tgu District Court 2013 Mahap17) due to business difficulties, and the said court rendered a decision to commence rehabilitation procedures pursuant to Article 49 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “ Debtor Rehabilitation Act”).

C. As of December 31, 201, the Defendant issued a reply to the Defendant on May 14, 2013, to the effect that, as of December 31, 2011, on the grounds that the leap industry was confirmed as a suspected company having failed to meet the registration standards (capital) and requested the leap industry to submit explanatory materials by June 7, 2013. On June 5, 2013, the leap industry responded to the Defendant to the effect that “the leap industry is subject to the rehabilitation procedure for the leap industry, taking into account the progress of the rehabilitation procedure for the leap industry.”

D. Accordingly, on July 30, 2013, the Defendant sent to the Sejong Industries a reply that “the requirements for registration prior to the commencement of rehabilitation procedures do not fall short of the requirements for temporary registration pursuant to Article 79-2 of the Enforcement Decree of the Framework Act on the Construction Industry” and at the same time, notified the submission of explanatory materials by August 30, 2013.

E. In addition to the written decision on commencing the rehabilitation procedure, the Defendant did not submit other explanatory materials. On September 4, 2013, the Defendant held a hearing on October 8, 2013 with the notice of attendance at the hearing on September 4, 2013. On the 17th of the same month, the Defendant issued a disposition to cancel the registration of construction business (hereinafter “instant disposition”) pursuant to subparagraph 3-3 of Article 83 of the Framework Act on the Construction Industry on the grounds that “if a person was subject to sanctions within the preceding three years due to lack of the standards for construction business (capital) but fails to meet the same standards for registration (capital 1.20 million)” (hereinafter “instant disposition”). Meanwhile, the Defendant asserted Article 83 subparag. 3 of the former Framework Act on the Construction Industry (amended by Act No. 11466, Jun. 1, 2012; hereinafter the same) as the basis of the instant disposition.

【Ground of recognition】 The fact that there has been no dispute, Gap's 1, 3, 4, Eul's 1 through 10, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Since the Sejong Industries received a decision on commencing the rehabilitation procedure on April 30, 2013 and is currently in progress, it constitutes a case where it temporarily falls short of registration standards pursuant to Article 83 of the former Framework Act on the Construction Industry and subparagraph 3 (a) of Article 79-2 of the Enforcement Decree of the same Act. Therefore, the Defendant’s disposition based on the premise that it does not meet the standards for temporary registration is unlawful.

2) The Framework Act on the Construction Industry aims to promote the proper execution of construction works and the sound development of the construction industry. The Debtor Rehabilitation Act aims to adjust the legal relationship between interested persons when the value at the time of continuing the debtor’s business is deemed to exceed the value at the time when the debtor’s business is liquidated. In light of the legislative intent, etc., given that the defendant’s disadvantage to interested parties, such as the creditors of the third and third industries, etc., is much greater than the public interest gained by the disposition in this case with respect to the third and third industries, the instant disposition is unlawful as it deviates from and abused discretion by violating the excessive prohibition principle, and is against administrative convenience.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Determination on the first argument

A) As to the statutes applicable to the instant disposition

Article 83 subparagraph 3-3 (hereinafter "amended Provisions") of the Framework Act on the Construction Industry newly enacted on December 1, 2012 when the Framework Act on the Construction Industry was amended on December 1, 2012, Article 83 subparagraph 1-2 (hereinafter "the Framework Act on the Construction Industry") should be determined not on the disposal price, but on the basis of the relevant laws and regulations at the time of the occurrence of the relevant illegal act or violation (see, e.g., Supreme Court Decisions 86Nu63, Jan. 20, 197; 2001Du3228, Dec. 10, 2002). In this case, the standard point of time for determining the non-conformity of the standards for registration of construction business is December 31, 201; and it is reasonable to deem that the revised provisions in Article 83 subparagraph 3 (3) (hereinafter "former Provisions") of the Framework Act on the Construction Industry, which was enforced on December 1, 2012.

B) As to whether a temporary registration falls short of the standards

The main sentence of Article 83 subparag. 3 of the former Framework Act on the Construction Industry provides that where the registration of construction business under Article 10 falls short of the standards for registration of construction business, the cancellation of the registration of the constructor or the suspension of business may be ordered for a fixed period not exceeding one year, except in cases prescribed by Presidential Decree, such as temporary falling short of the standards for registration. Article 79-2 subparag. 3 (a) of the Enforcement Decree of the same Act provides that "cases prescribed by Presidential Decree" in the proviso to Article 83 subparag. 3 (1) of the same Act means cases where the court has decided to commence rehabilitation procedures under the Debtor Rehabilitation Act and the procedure is in progress, among the cases where the capital

First, even in cases where rehabilitation procedures commence after the point of time for determining capital registration, the following circumstances are revealed as to whether it falls under subparagraph 3 (a) of Article 79-2 of the Enforcement Decree of the Framework Act on the Construction Industry, i.e., (i) the right to manage and dispose of the company's management and assets after the commencement of rehabilitation procedures, (ii) the right to manage and dispose of the company after the commencement of rehabilitation procedures, etc., (iii) the company undergoing rehabilitation procedures through a manager's exercise of management right, etc. may temporarily fall short of the standards for capital registration; (iii) if it is recognized as an exception even if a cause falling short of the standards for registration has already occurred before the commencement of rehabilitation procedures, it can be used as a means of avoiding punitive administrative dispositions; (iv) if the company which filed an application for commencement of rehabilitation procedures and the company which did not file such application falls short of the standards for the commencement of rehabilitation procedures, it is reasonable to acknowledge that the ground for exception has already occurred prior to the commencement of rehabilitation procedures falls short of the standards for registration under Article 38 (a).

According to the above facts, although three years have been subject to sanctions for failing to meet the criteria for registration of construction business (capital) within the last three years, the three-year-old industry came to fall short of the criteria for re-registration (capital) as of December 31, 2011, and thereafter, the three-leap industry applied for commencement of rehabilitation procedures on April 3, 2013 and received a decision to commence rehabilitation procedures. Thus, the three-leap industry does not constitute the "where the procedure is in progress upon receipt of a decision to commence rehabilitation procedures" under the proviso to Article 83 subparagraph 3 of the former Framework Act on the Construction Industry and subparagraph 3 (a) of Article 79-2 of the Enforcement Decree of the same Act. Therefore, the Plaintiff’s above assertion that the three-leap industry falls short of the criteria for registration is without merit.

2) Judgment on the second argument

A) The former Guidelines for the Management of Construction Business (amended by the Ministry of Land, Transport and Maritime Affairs Ordinance No. 243, Aug. 24, 2012; hereinafter the same) is an internal rule of the administrative agency established by the Minister of Land, Transport and Maritime Affairs with the aim of setting the standards necessary for promoting fairness and efficiency in managing construction business as prescribed by the Framework Act on the Construction Industry, the Enforcement Decree thereof, and the Enforcement Rule. In cases where the criteria for punitive administrative disposition are prescribed in the form of the Enforcement Rule or the guidelines of the administrative agency, in principle, it is nothing more than that of establishing the guidelines for internal administrative affairs of the administrative agency, and it has no effect of externally binding citizens or courts, and whether such disposition is legitimate or not must be determined in accordance with the contents and purport of the relevant Acts and subordinate statutes, as well as the above guidelines. Thus, the above guidelines for disposition cannot be immediately deemed legitimate, unless there are reasonable grounds for the imposition of sanctions in light of the contents and purport of the relevant Acts and subordinate statutes, and the content and purport of the relevant administrative disposition should be objectively compared to the extent of discretion.

B) In light of the following circumstances, the above facts and relevant statutes, and the evidence revealed by the Plaintiff, even if considering the various circumstances alleged by the Plaintiff, it cannot be deemed that the public interest that the Defendant intended to achieve through the instant disposition is less than the disadvantage that the Plaintiff would incur, and thus, the instant disposition cannot be deemed as either a violation of the principle of excessive prohibition, or a deviation or abuse of discretion, or an administrative convenience-based disposition (see, e.g., Busan High Court Decision 2010Nu2005, Sept. 10, 201). Therefore, the Plaintiff’s assertion is without merit.

(1) In order to promote the proper execution of construction works and the sound development of the construction industry, the Framework Act on the Construction Industry shall establish the standards for registration of technical capability, capital, facilities, equipment, etc. by type of construction business and take sanctions, such as cancellation of registration, thereby preventing defective construction works by a construction enterprise with no execution capacity in advance and ensuring safety in the lives of citizens, etc.

② On November 15, 2010, despite the fact that the Defendant had been subject to business suspension for the reason of falling short of the registration criteria for construction business (capital 1.2 billion won) as of December 31, 2008, there was a cause falling short of the criteria for registration identical to that for the previous disposition, and thereafter, the said industry continues to meet the criteria for registration of capital.

③ The proviso to Article 83 subparag. 3 of the former Framework Act on the Construction Industry provides that exceptions shall not be taken, such as cancellation of registration of construction business, when “the case prescribed by Presidential Decree, such as temporary failure to meet the standards for registration.” However, the Plaintiff does not fall under the proviso to Article 83 subparag. 3 of the former Framework Act on the Construction Industry and Article 79-2

④ Article 14(1) of the Framework Act on the Construction Industry provides that even if a constructor is subject to a disposition of cancellation of registration, he/she may continue to perform construction works contracted prior to such disposition, so that the Plaintiff may continue to perform the contracted construction works before such disposition.

⑤ The instant disposition conforms to the former Guidelines for Management of Construction Business, which is the defendant’s internal rules that set sanctions against legal violators, and the standards under the above Guidelines do not seem to be particularly unreasonable.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

【Related Acts and Subordinate Statutes】

Judges Kim Jong-dae (Presiding Judge)