[1] The meaning and scope of "when a subsidy is granted by illegal means" under Article 30 (1) of the Act on the Budgeting and Management of Subsidies

[2] The case holding that even if the Korea Federation of Trade Union did not receive money from the contractor in the process of applying for a subsidy while it did not make a report on it in the process of applying for a subsidy, and received the subsidy without making efforts to reduce the construction cost equivalent to the development fund at the time of concluding a construction contract, it does not constitute "when it received the subsidy in an unlawful manner" under Article 30 of the same Act

[1] "When a subsidy is granted by illegal means" under Article 30 (1) of the Act on the Budgeting and Management of Subsidies refers to the case where a subsidy is granted in excess of the amount that should be granted for affairs or projects that are not subject to the grant of a subsidy or that are not subject to the grant of a subsidy, and the case where a legitimate amount is granted for those projects, etc. which are entitled to the grant of a subsidy, even if used as a means that could be deemed to lack somewhat legitimate legitimacy in receiving a subsidy.

[2] The case holding that even if the Korea Federation of Trade Unions did not receive money from the contractor in the process of applying for a subsidy while it did not make a report on it in the process of applying for a subsidy, and received the subsidy without making efforts to reduce the construction cost equivalent to the development fund at the time of concluding a construction contract, it does not constitute "when it received the subsidy in an unlawful manner" under Article 30 of the same Act

[1] Article 30 (1) of the Act on the Budgeting and Management of Subsidies / [2] Article 30 (1) of the Act on the Budgeting and Management of Subsidies

[1] Supreme Court Decision 99Do4101 delivered on January 5, 2001 (Gong2001Sang, 469) Supreme Court Decision 2005Do573 Delivered on March 25, 2005, Supreme Court Decision 2006Do906 Delivered on November 23, 2006

Korea Trade Union Federation (Law Firm Geosung, Attorneys Kim Chang-hee et al., Counsel for the plaintiff-appellant)

The Minister of Labor;

Seoul High Court Decision 2006Nu5085 decided Oct. 20, 2006

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 30(1) of the Act on the Budgeting and Management of Subsidies (hereinafter “Act”) provides that “The head of a central government agency may cancel all or part of the decision to grant a subsidy when a subsidy program operator has received a subsidy by false application or by other unlawful means.” Here, “when the subsidy has been granted by improper means” refers to the receipt of a subsidy in excess of the amount to be granted for affairs or projects not subject to the grant of a subsidy or for which the subsidy has to be granted to the relevant project, etc., and even if the means that may be deemed to lack somewhat legitimate justification in the receipt of the subsidy have been used, it does not constitute the case where the subsidy has been granted with due amount for projects, etc. eligible to receive the subsidy (see Supreme Court Decisions 2005Do573, Mar. 25, 2005; 2006Do906, Nov. 23, 2006, etc.).

After compiling the adopted evidence, the court below determined that the Plaintiff’s receipt of the subsidy constitutes a case where the Plaintiff received a reasonable amount of the subsidy in light of the following: (a) the Plaintiff failed to report the details related to the development fund when it applied for the subsidy to the Defendant; (b) failed to make efforts to reduce the construction cost at the time of conclusion of the construction contract with the Defendant; (c) failed to make efforts to reduce the amount of the subsidy; or (d) determined the amount by the bid price within the scope of the subsidy; (d) received the entire development fund received from the contractor as the Plaintiff’s corporate account; (e) did not specify that the Defendant did not receive the subsidy in relation to the construction of the welfare center project, which is a subsidized project, in granting the subsidy; and (e) there is no special defect after the completion of the project as scheduled; or (e) did not make efforts to grant the subsidy to the Plaintiff in relation to the project, which is eligible to receive the subsidy; or (e) did not receive the subsidy from the above company, even if it received the subsidy from the above company.

In light of the above legal principles and the records, the above judgment of the court below is just, and it cannot be said that there were errors in the misapprehension of legal principles or the application of judicial precedents with regard to improper means as prescribed by the law.

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-dam (Presiding Justice)