[1] Where a statute delegates a specific matter to a municipal ordinance, the standard for determining whether the municipal ordinance complies with the limits of delegation

[2] Whether Article 20 of the former Ordinance on the Management of Subsidies of Hongsung-gun which provides for the return, etc. of subsidies exceeds the scope of delegation under Article 29(5) of the former Enforcement Decree of the Local Finance Act, which provides that “necessary matters concerning the application for grant, decision to grant, and use of subsidies” shall be prescribed by municipal ordinance (negative)

[1] Where a statute delegates a certain matter to a municipal ordinance, determination of whether the municipal ordinance complies with the limits of delegation shall be made by comprehensively examining the legislative purpose and contents of the pertinent statutory provision, the structure of the provision, and the relationship with other provisions. In addition, whether a new legislation was made beyond the bounds of delegation by expanding or reducing the scope of the terms used in the delegation provision beyond the bounds of the terms used in the delegation provision shall also be taken into account.

[2] Article 20 of the former Ordinance on the Management of Subsidies from Hongsung-gun (amended by Presidential Decree No. 25781, Nov. 28, 2014; hereinafter the same) cannot be said to have exceeded the scope of delegation under Article 29(5) of the former Enforcement Decree of the Local Finance Act (amended by Presidential Decree No. 25781, Nov. 28, 2014). The reasons are as follows.

1. As a beneficial administrative act, the granting of a subsidy is considerably wide range of discretion granted to the granting agency with respect to the selection and cancellation of the grant object, criteria and scope thereof, etc. In addition, in order to operate the grant in a sound and efficient manner, the granting agency needs to cancel the decision and receive the refund of the subsidy after ex post facto supervision as to whether the grant agency is in progress in accordance with the grant purpose or whether the success of the subsidy is possible. Furthermore, as long as the granting agency is able to perform its business concerning the grant of the subsidy and ex post facto supervision, the granting agency may be deemed to be included in the affairs of the granting agency, the revocation of the decision

② Even in light of the language and text of Article 29(5) of the former Enforcement Decree of the Local Finance Act, stipulating that “necessary matters concerning application for, decision on, and use of, subsidies” are delegated to municipal ordinances, it is difficult to readily conclude that the matters related to “return of subsidies” are included therein, thereby exceeding the bounds of delegation in accordance with the ordinary meaning of the language and text.

③ Furthermore, in light of the provisions of Article 17(1) of the former Local Finance Act (amended by Act No. 12687, May 28, 2014; hereinafter the same) and Article 17-2(5) of the former Local Finance Act that delegated matters necessary for the sound and efficient operation of subsidies to the Presidential Decree, the scope of delegation prescribed in Article 29(5) of the former Enforcement Decree of the Local Finance Act, deeming that matters necessary for the sound and efficient operation of subsidies include follow-up supervision, decision-making, revocation, and return of subsidies that are provided as matters for the sound and efficient operation of subsidies are also deemed to conform to the purport of delegation.

④ The form, language, and system of the relevant provisions of the Act on the Management of Subsidies concerning National Subsidies (hereinafter “Subsidy Act”) also support such conclusion. The Act on Subsidies provides for the basic matters concerning the “application, decision to grant, use, etc. of subsidies” with the aim of properly managing the budget of subsidies (Article 1). In addition to the application and decision to grant subsidies (Chapter 3), other than the implementation of subsidy projects (Chapter 4), the return of subsidies and sanctions (Chapter 5). In light of the content and system of the Subsidy Act, “application, decision to grant, use, etc.” used by Article 1 of the Subsidy Act, “application, decision to grant, and use, etc.,” can be deemed to include matters concerning the implementation of subsidy projects and the return of subsidies as a matter of course. There is no reason to deem otherwise in the interpretation of the scope of delegation under Article 29(5) of the former Enforcement Decree of the Local Finance Act.

[1] Article 22 of the Local Autonomy Act / [2] Articles 17(1) and 17-2(5) of the former Local Finance Act (Amended by Act No. 12687, May 28, 2014); Article 29(5) of the former Enforcement Decree of the Local Finance Act (Amended by Presidential Decree No. 25781, Nov. 28, 2014); Article 1 of the Subsidy Management Act

[1] Supreme Court Decision 2009Du17797 Decided April 29, 2010 (Gong2010Sang, 1035) Supreme Court Decision 2014Du37122 Decided April 7, 2017 (Gong2017Sang, 980)

Co., Ltd. (Attorney Song-young, Counsel for the defendant-appellant)

National Federation of Hongsung-gun, et al. (Attorney Song-young, Counsel for the defendant-appellant)

The Director of the Hongsung Military Agricultural Technology Center (Law Firm Newro, Attorney Lee Han-hun, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2006Na14888 delivered on August 2, 201

Daejeon High Court Decision 2017Nu10607 decided July 13, 2017

The part of the judgment of the court below against Defendant Hongsung-gun is reversed, and that part of the case is remanded to the Daejeon High Court. The appeals by Plaintiffs 3, 4, 5, 6, and 7 are all dismissed. The costs of appeal by Plaintiffs 3, 4, 5, 6, and 7 among the costs of appeal are assessed against the said Plaintiffs.

The grounds of appeal are examined.

1. As to the appeal by the defendant Hong Sung-gun

A. Statutory provisions regarding the recovery disposition of this case

(1) Article 17(1) of the former Local Finance Act (amended by Act No. 12687, May 28, 2014; hereinafter “former Local Finance Act”) provides that matters necessary for the sound and efficient operation of subsidies under Article 17-2(5) shall be prescribed by Presidential Decree. Following delegation, Article 29(5) of the former Enforcement Decree of the Local Finance Act (amended by Presidential Decree No. 25781, Nov. 28, 2014; hereinafter “former Enforcement Decree of the Local Finance Act”) provides for matters necessary for the application for the grant of subsidies or other public funds of a local government, the decision to grant, and the use of subsidies.

(2) Article 20 of the former Ordinance on the Management of Subsidies of Hongsung-gun (amended by Ordinance No. 21520, Dec. 30, 2014; hereinafter “instant Ordinance”) provides that “the head of the Gun may suspend the grant of a subsidy or order the return of all or part of the subsidy already granted if the person who received the subsidy deems that he/she falls under any of the following subparagraphs,” and that “when the subsidy program has no possibility of success (Article 1)” and “when the program has been completely or partially suspended (Article 2)” provide that the grounds for suspending the grant of subsidy or the return of the subsidy.

B. Relevant issues and legal principles

(1) The key issue is whether Article 20 of the instant Ordinance stipulating the return of subsidies exceeded the scope of delegation under Article 29(5) of the former Enforcement Decree of the Local Finance Act.

(2) In a case where a statute delegates a certain matter to a municipal ordinance, determination of whether the municipal ordinance complies with the limits of delegation shall be made by comprehensively examining the legislative purpose and contents of the relevant statutory provision, the structure of the provision, and the relationship with other provisions. In addition, whether a new legislation was made beyond the bounds of delegation by expanding or reducing the scope of the terms used in the relevant statutory provision beyond the bounds of delegation (see Supreme Court Decision 2009Du17797, Apr. 29, 2010, etc.).

C. Determination

Examining the above legal principles, Article 20 of the Ordinance of this case cannot be said to have exceeded the scope of delegation under Article 29(5) of the former Enforcement Decree of the Local Finance Act. The reasons are as follows.

(1) As a beneficial administrative act, the granting of a subsidy is considerably wide range of discretion granted to the granting agency with regard to the selection and cancellation of the grant object as well as the criteria and scope thereof. In addition, in order to ensure the sound and efficient operation of the grant of a subsidy, the granting agency needs to cancel the decision and receive a refund upon ex post facto supervision as to whether the grant agency is in progress in accordance with the grant purpose or whether the success of the grant is possible. Furthermore, as long as the granting agency can perform its business concerning the grant of a subsidy and ex post facto supervision, it may be deemed that the revocation of the decision and the grant are also included in the business affairs of the granting agency.

(2) Even if only the language and text of Article 29(5) of the former Enforcement Decree of the Local Finance Act stipulating that “necessary matters concerning application for, decision to grant, and use of subsidies” are delegated to municipal ordinances, matters related to “return of subsidies” shall be deemed to be included therein, and it cannot be readily concluded to have exceeded the bounds of delegation in accordance with the ordinary meaning of the language and text.

(3) Furthermore, in light of the contents of Article 17(1) of the former Local Finance Act and Article 17-2(5) of the former Local Finance Act, where subsidies can be granted to ensure the soundness of local finance, and matters necessary to operate subsidies in a sound and efficient manner, deeming that the delegation scope under Article 29(5) of the former Enforcement Decree of the Local Finance Act includes ex post facto supervision, decision to grant and order to return subsidies granted as matters necessary to operate subsidies in a sound and efficient manner, is in accord with the purport of delegation.

(4) The form, language, and system of the relevant provisions of the Act on the Management of Subsidies Related to National Subsidies (hereinafter “Subsidy Act”) also support such conclusion. The Subsidy Act provides for the basic matters concerning the “application for grant, decision on grant, and use, etc.” of subsidies for the purpose of promoting the appropriate management of the subsidy budget (Article 1), and stipulates the implementation of subsidy projects (Chapter 4), the return of subsidies, and sanctions (Chapter 5), other than the application for grant and decision on the grant of subsidies (Chapter 3). In light of the content and system of the Subsidy Act, “application for grant, decision on grant, and use, etc.” used by Article 1 of the Subsidy Act can be deemed to include matters concerning the implementation of subsidy projects and the return of subsidies as a matter of course. There is no reason to deem otherwise in the interpretation of the scope of delegation under Article 29(5) of the former Enforcement Decree of the Local Finance Act.

D. Sub-determination

Nevertheless, the lower court determined that the instant restitution disposition against the Plaintiff Hongsung-gun Federation on the basis of an invalid municipal ordinance is unlawful on the sole ground that only delegated matters concerning the application, decision to grant, and use of this subsidy under Article 29(5) of the former Enforcement Decree of the Local Finance Act concerning the application, decision to grant, and use of this subsidy cannot be seen as delegation to the extent of matters concerning the return of subsidy.

In so determining, the lower court erred by misapprehending the legal doctrine on the scope of delegation under Article 29(5) of the former Enforcement Decree of the Local Finance Act, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal

2. As to the appeal by Plaintiffs 3, 4, 5, 6, and 7 of the National Federation of Hongsung-gun, Kim Sung-gun

The lower court determined that the Plaintiff’s standing to sue the revocation of the notification of the instant return decision was not recognized, which was not the direct counterpart to the instant restitution disposition, against the Federation of the Hongsung-gun, Plaintiff 3, Plaintiff 4, Plaintiff 5, Plaintiff 6, and Plaintiff 7.

In light of the relevant legal principles and records, the judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there are no errors in the misapprehension of legal principles as to the party

3. Conclusion

Without further proceeding to decide on the remaining grounds of appeal by Defendant Hongsung-gun, the part of the judgment of the court below against Defendant Hongsung-gun is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. All appeals by Plaintiffs Hongsung-gun Federation, Plaintiffs 3, 4, 5, 6, and 7 are dismissed. Of the costs of appeal, the costs of appeal by Plaintiffs Hong-gun Federation, Plaintiffs 3, 4, 5, 6, and 7 are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cho Jae-chul (Presiding Justice)