In a case where a maintenance and improvement project association under the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents amends various articles of association requirements different from those of the other articles of association, and the quorum without a prior explanation of the requirements for resolution by each article of association, the whole amendment of the articles of association shall be deemed to have been rejected if the resolution did not meet the quorum necessary for the amendment as a result of voting (affirmative in principle)

Article 20 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (wholly amended by Act No. 14567, Feb. 8, 2017) stipulates differently the method of resolution at a general meeting in accordance with the specific provisions of the articles of association regarding the amendment of the articles of association. Specifically, matters requiring the consent of at least 2/3 of the members, matters requiring the consent of a majority of the members, and matters that can be modified according to the method of ordinary

If a union intends to modify several articles of association requirements different as above at a general meeting, it shall explain in advance to the union members about the quorum necessary for the modification of each provision, and make the quorum clear whether the resolution has been passed by each provision by dividing them into the same provisions. In contrast, in a case where the quorum, without prior explanation of the requirements for the resolution by each provision, is required to be held en bloc without distinguishing different provisions, if the quorum did not meet the quorum necessary for the modification as to some provisions as a result of the voting, it shall be deemed that the whole amendment of the articles of association was rejected, barring any special circumstance, and it shall not be deemed that the whole amendment of the articles of association was passed separately from the clauses in which the quorum is fulfilled. This is because the amendment of the articles of association governing the legal relations of an organization should be decided objectively and clearly.

Article 20 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (wholly amended by Act No. 14567, Feb. 8, 2017) (see Article 40 of the current Act)

See Attached List of Plaintiffs (Plaintiff 1 and 37 others, Counsel for the plaintiff-appellant)

Seoul High Court Decision 201Na1448 delivered on May 2, 2012

Seoul High Court Decision 2017Na2044269 decided April 6, 2018

All appeals are dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Article 20 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (wholly amended by Act No. 14567, Feb. 8, 2017; hereinafter “former Act”) prescribes the method of resolution at a general meeting in accordance with the specific provisions of the articles of association regarding the amendment of the articles of association of the association. Specifically, matters requiring the consent of at least 2/3 of the association members, matters requiring the consent of a majority of the association members, and matters that can be modified by the method of a general meeting resolution.

If a union intends to modify several articles of association requirements different as above at a general meeting, it shall explain in advance to the union members about the quorum necessary for the modification of each provision, and make the quorum clear whether the resolution has been passed by each provision by dividing them into the same provisions. In contrast, in a case where the quorum is to be held in a lump sum without a prior explanation of the requirements for the resolution by each provision, and without distinguishing different provisions, if the quorum did not meet the quorum necessary for the modification as to some provisions as a result of the voting, it shall be deemed that the whole amendment of the articles of association was rejected, barring any special circumstance, and it shall not be deemed that the whole amendment of the articles of association was passed separately from the clauses in which the quorum is satisfied. This is because the amendment of the articles of association governing the legal relations of organization should be decided objectively and clearly.

B. The lower court determined that: (a) the amendment of the instant articles of association constitutes the full amendment or amendment of the existing articles of association; (b) the amendment included a large number of provisions that require the consent of at least 2/3 of all union members or the consent of at least a majority of union members; (c) the data distributed in advance to all union members before the instant general assembly did not contain any explanation on the quorum necessary for the amendment; (c) the amendment was made en bloc without dividing items according to the provisions of the articles of association or the quorum; and (c) the head of the Defendant partnership only declared at the end of the instant general assembly that “the amendment was rejected at least 2/3 of the draft articles of association and the remainder was resolved,” and did not provide guidance on whether each provision was amended; and (d) the result of deliberation on the agenda distributed to union members after the instant general assembly was also the same. Based on its stated reasoning, the lower court rejected the amendment of the entire articles of association as long as the amendment required for the amendment of the instant articles of association was not satisfied.

C. Such determination by the court below is in accordance with the legal principles as seen earlier, and it did not err by misapprehending the legal principles as alleged in the grounds of appeal

2. As to the grounds of appeal Nos. 2 through 5

For the reasons indicated in its holding, the lower court determined that the agenda items Nos. 3, 4, 7, and 9 of the instant general meeting requires the consent of at least 2/3 of the members, and that the consent of a majority of the members present and a majority of the members present cannot be deemed passed

Examining the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine as otherwise alleged in the grounds of appeal.

3. Regarding ground of appeal No. 6

For reasons indicated in its holding, the lower court determined that the executives of the instant assembly at the general meeting shall be present at the majority of the union members and shall be appointed with the consent of the majority of the union members present at the inaugural general meeting in accordance with Article 15(2) of the Articles of Incorporation at the time of the inaugural general meeting. In addition, the lower court determined that the written resolution issued by Nonparty 1, Nonparty 2, Nonparty 3, Nonparty 4, Nonparty 5, Nonparty 6, Nonparty 7, Nonparty 8, Nonparty 9, Nonparty 10, Nonparty 11, Nonparty

In light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine as otherwise alleged in the grounds of appeal.

4. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Plaintiffs: Omitted

Justices Lee Ki-taik (Presiding Justice)