2017Guhap87746 Revocation of the full decision to grant subsidies, etc.

A University Industry Cooperation Foundation

Law Firm LLC et al., Counsel for defendant-appellant

Attorney Lee Young-young

Minister of Oceans and Fisheries

Government Legal Service Corporation (Law Firm LLC)

Attorney Seo-jin et al.

August 10, 2018

September 14, 2018

1. All of the Plaintiff’s claims are dismissed. 2. Costs of lawsuit are assessed against the Plaintiff.

The Defendant’s revocation of the entire decision to grant subsidies on September 21, 2017 to the Plaintiff and the revocation of the order to grant subsidies on October 27, 2017, respectively.

1. Details of the disposition;

A. On June 20, 2014, the Defendant publicly announced the “B Project Promotion Plan” (hereinafter “instant project”). The main contents of the instant project are as follows.

○○ Business Name: C○ 36 months from the date of commencement: Start-up of facility creation and test style: Start-up of 2-3 years: Budget for test style and management: 2 billion won (50% at the national expense + 50% at the national expense) (the national expense + 50% at the national expense) for major contents: Creation of a festival plantation (1 billion won at the national expense) and marine test style and management (1 billion won at the national expense)-as a result of a lot of survey in 2013, the method of implementation at the place where consultation is possible first among the candidate land: Model technology (dics), production (private goods) for participation: The Government-invested research institute, university, or non-profit specialized research institute test style established under Article 32 of the Civil Act: At least one fishery partnership corporation or at least five fishermen with the self-responsibility capacity.

B. On July 10, 2014, the Plaintiff filed a business application with the Defendant, and submitted a business plan with D fisheries partnerships (hereinafter referred to as “foreign corporations”) and E fisheries partnerships as participants (hereinafter referred to as “instant business plan”).

C. On September 24, 2014, the Defendant selected the Plaintiff as a business entity through a public announcement of the business plan and on-site inspection by the business applicants, including the Plaintiff, and notified the Plaintiff of this on September 24, 2014. Thereafter, upon the Plaintiff’s request, the Defendant changed the business period from “F located in Ansan-si, the first city located in Ansan-si,” to “JY-gun, the first city from October 7, 2014 to September 2017, respectively.

D. On July 27, 2015, the Plaintiff filed a claim with the Defendant for the payment of a subsidy of KRW 800 million, and the Defendant, on July 28, 2015, rendered a decision to grant a national subsidy of KRW 800 million (hereinafter referred to as the “decision to grant a national subsidy of this case”) to the Plaintiff, who is a subsidized business operator, and paid a subsidy of KRW 800 million to the Plaintiff. The Defendant, while granting the first decision to grant a subsidy of this case, added the conditions of granting a subsidy of the same contents as the attached Table 1 (hereinafter referred to as the “instant conditions of granting”).

E. On December 9, 2015, the Plaintiff filed a claim with the Defendant for the payment of KRW 200 million national subsidies, and the Defendant, on the same day, issued a decision to grant the national subsidies (hereinafter “instant second decision”) to pay KRW 200 million to the Plaintiff, who is a subsidized business operator, and paid the Plaintiff KRW 200 million national subsidies. The Defendant added the instant conditions of the issuance while granting the second decision.

F. After that, on February 13, 2017, the Defendant notified the Plaintiff of the temporary suspension of the instant project pursuant to Article 26 of the Subsidy Management Act on the ground that “The Plaintiff failed to implement the project several times, such as the execution of self-paid charges, even though the Defendant urged the Plaintiff to implement the project.”

G. On March 23, 2017, the Plaintiff requested the Defendant to adjust the contents of the business by excluding E-fisheries corporations among Non-Party corporations and E-U.S. corporations that are participants in the instant business, and the Defendant approved it on June 16, 2017.

H. After that, the Defendant, on the ground that the Plaintiff violated the terms and conditions of the instant delivery due to non-execution of the charges, etc., received hearings and prior notice procedures, and subsequently revoked the entire decision on the instant 1 and 2 grant (hereinafter referred to as “the instant disposition of revocation”) against the Plaintiff on September 21, 2017, and ordered the Plaintiff to return the subsidies (including interest) already paid to the Plaintiff pursuant to Article 31(1) of the Subsidy Management Act on October 27, 2017 (hereinafter referred to as “the Ordinance ordering the return of this case”). Meanwhile, the grounds for the instant disposition of revocation are as follows.

The fact that the ○○ subsidized project operator, who is a ○○ subsidized project operator, has not executed KRW 125 million (project operation and research costs) due to the failure to implement the ○○ subsidized project (hereinafter “instant ground for 1 disposition”). Nonparty 2, who is a subsidized project operator, submitted false documents for the purchase of seeds (amounted to KRW 50 million). The Plaintiff recognized the 2 disposition (hereinafter “instant ground for 2 disposition”). Nonparty 2, who is a subsidized project operator, failed to comply with the Defendant’s order to implement the subsidized project (as hereinafter “instant ground for 3 disposition”). The Plaintiff, ○○ subsidized project operator, included the 100,000 won of labor cost and KRW 50,000,000,000 (hereinafter “instant ground for 10,000,000 won): The 10,000,000 won of the instant subsidy implementation plan without approval for the modification of the project plan (hereinafter “the instant ground for 10,000,000 won”).

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence Nos. 2 through 7, 19 through 23, and the purport of the whole pleadings

2. Whether the revocation of this case and the return order are lawful

A. Summary of the plaintiff's assertion

1) The instant disposition and the return order should be revoked on the ground that there is no ground for disposition on the following grounds.

A) According to the instant project plan, the non-party corporation is obligated to manage and operate the aquaculture in good faith and to implement a test pattern, and the Plaintiff is obligated to manage and supervise the process of executing government subsidies and treasury contributions in an appropriate manner. The party who is obligated to execute treasury contributions in the instant project is a non-party corporation that is not the Plaintiff. If the non-party corporation does not execute treasury contributions, there is no way for the Plaintiff to enforce it.

Therefore, there is no ground for the first and third dispositions of this case under the premise that the plaintiff violated the obligation to execute self-paid charges (hereinafter referred to as "the principal of this case").

B) On November 9, 2015, the non-party corporation submitted to the Plaintiff a tax invoice, a statement of transaction, and a report on completion of seed entry and seedling entry to the H branch office in Chungcheongnam-gun, Chungcheongnam-gun, Chungcheongnam-gun. The Plaintiff not only reviewed the above evidential documents but also confirmed whether the subsidies were paid directly to the Plaintiff. Accordingly, the Plaintiff took all measures to accurately determine whether the requirements for the execution of subsidies were met for the purpose of the efficient and transparent enforcement of subsidies. Even if the above evidential documents submitted to the Plaintiff by the non-party corporation are false, it is not the non-party corporation that prepared false evidentiary documents, and thus, it cannot be held liable to the Plaintiff. Accordingly, there is no ground for the second disposition of this case (hereinafter referred to as the “instant Chapter 2”).

C) There is no ground to deem that the amount appropriated in the item of personnel expenses for the portion of the “satisfy production cost” out of the business budget of the instant project is limited to the amount of regular human resources. The details of calculation (240 million won: the manager X 36 months X 222,00) of the amount appropriated in the above personnel expense item among the business budget is merely a basis for calculating the amount of personnel expenses anticipated to be incurred in the implementation of the instant project. Therefore, the change in the business contents is not caused by recognizing the labor cost, not the regular human resources’ wage, as the above labor cost. Accordingly, regarding the disbursement of KRW 82,790,00,000 including the labor cost, not the regular human resources’ wage, which is KRW 51 million, not KRW 51 million,000,000,0000, not KRW 800,0000,0000,0000,0000,000 won, which is considered to have violated the Defendant’s duty to execute subsidies within the first year.

D) After confirming the details of the purchase in the new friendly manner of the non-party corporation, the Plaintiff confirmed the new friendly manner, and explained that the non-party corporation purchased new friendly terms for the purpose of testing the possibility of complex cultivation and securing economic feasibility. Accordingly, the Plaintiff recognized the amount appropriated in the general management expenses item other than the direct material cost (purchase cost) in the project budget. It cannot be deemed a significant change in the contents of the project. Accordingly, with regard to the execution of 10,40 million won with new friendly terms by the non-party corporation, it cannot be deemed that the Plaintiff violated the duty to execute subsidies in an efficient and transparent manner, or changed the details of the project without the Defendant’s approval. Even if the Defendant’s assertion is acknowledged, the Plaintiff’s execution of the subsidy project without the Defendant’s approval can not be deemed as a material change in the contents of the project. Accordingly, the Plaintiff’s execution of the subsidy project without the Defendant’s guidelines for preparing a report on the settlement of expenditure for the subsidy project (the instant amendment cannot be seen as a ground for cancellation of the subsidy (the instant amendment).

2) Even if the Plaintiff violated part of the terms and conditions of the instant grant, considering the following factors: (a) the Plaintiff did not use the subsidy granted in the instant project for the Plaintiff; (b) the violation of the terms and conditions of the instant grant that the Defendant used as the grounds for the disposition was related to the act of the non-party corporation; (c) the Plaintiff took all possible measures to implement the subsidy in an efficient and transparent manner; and (iv) the Plaintiff’s order to return the entire subsidy to the Plaintiff who is not responsible for the violation of the terms and conditions of the instant grant was excessively harsh, it shall be revoked by deeming that the instant disposition of revocation and the order of return was deviates from and abused by discretionary power (hereinafter referred

B. Relevant statutes

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

C. Determination

1) As to the ground of appeal No. 1

In full view of the following facts and circumstances, Gap evidence 3, 4, 17, Eul evidence 2, 4, 5, and 7, each of the following facts and circumstances, which can be recognized by comprehensively considering the overall purport of pleadings, the subsidized business operator of the project of this case, which is conducted as a national subsidy program, is deemed to be the plaintiff. Therefore, since the obligations of the subsidized business operator related to the project of this case, including the execution of self-charges, are all borne by the plaintiff in relation with the defendant, this part of the plaintiff's assertion on different premise is without merit. A) The promotion plan of the project of this case announced by the defendant on June 20, 2014 is limited to "government-invested research institutes, universities, or non-profit specialized research institutes established under Article 32 of the Civil Act," and the non-party corporation is not eligible to be a person eligible to be a project of this case. However, the above promotion plan is not a person eligible to be a non-party corporation, but a non-party corporation is in the position of joint testing with the plaintiff.

B) On July 10, 2014, the application for the instant project was made in the name of the Plaintiff, and on September 24, 2014, the Defendant also notified the Plaintiff of the selection of the project target, with the subsidized business operator as the Plaintiff on September 24, 2014.) The part concerning the project promotion organization, among the project plan submitted by the Plaintiff to the Defendant, is responsible for the Plaintiff’s overall business and on-site management. Specifically, the Plaintiff’s role is “project cost execution, settlement, preparation of business report, and project evaluation,” and the role of the Nonparty corporation is “the installation of a fish farm, fish farm, fish farm management (water exchange and general management), and post management.”

D) Each disposition of the instant first and second decision made by the Defendant against the Plaintiff is indicated as a subsidized business operator, and the terms and conditions of the instant grant are attached thereto. The Plaintiff claimed to the Defendant for the payment of KRW 1 billion from the national subsidy granted under the instant project in its own name, and the Defendant also paid the Plaintiff KRW 1 billion from the national subsidy to the Plaintiff.

2) As to the instant claim (2)

In full view of the purport of the argument in Eul evidence No. 15, on January 23, 2017, the plaintiff deemed that "the non-party corporation purchased marine seedlings from I and paid KRW 495 million to the defendant on July 1, 2015, and executed KRW 49,500,000,000,000,000 for the first one's own charges." The plaintiff submitted a report on the completion of the entry of seeds and seedlings for non-party corporation (Evidence No. 13-1), tax invoice (Evidence No. 13-2), transaction statement (Evidence No. 13-3), I business registration certificate (Evidence No. 13-4), H Admission report (Evidence No. 13-5), Chungcheongnam-gun, Chungcheongnam-gun, the purchase price (Evidence No. 13-5), the non-party corporation's purchase of seeds and seedlings (Evidence No. 136,500,000,000) and paid KRW 150,000.7.7.

However, comprehensively taking account of the purport of the Plaintiff’s arguments as to the execution of No. 24, 25, 28 through 31, and 35 certificates, the Defendant’s request for submission of “financial data, such as a copy of passbook 1 received by the Plaintiff and K,” pursuant to Article 4(5) of the former Regulations on the Management of Fishery Business Funds (amended by Ordinance of the Ministry of Oceans and Fisheries No. 399, Nov. 3, 2017), which was not issued by Nonparty 1 to the Defendant on July 12, 2017, the Plaintiff’s issuance of new seeds and seedlings No. 700,000,000,000 won for each of the above reasons for the issuance of new seeds and seedlings No. 50,000,000 won for non-party 1’s issuance of new seeds and seedlings No. 70,000,000 won for each of the above reasons for the issuance of new seeds and seedlings No. 1 to the Defendant. 700.

3) As to the instant claim (3)

In full view of Gap evidence Nos. 17 and Eul evidence Nos. 5 and the purport of the whole pleadings, it can be acknowledged that the labor cost items of "dual production costs" in the business budget of the project plan of this case include the following items of the budget calculation statement. Paragraph 2-A-1 of the terms of delivery of this case provides that "a subsidized business operator shall obtain the defendant's approval if he/she intends to change the contents of the subsidized project or to change the distribution of expenses incurred in the subsidized project (including the change of the details of the project known)," as mentioned above.

A person shall be appointed.

Since the Plaintiff is obligated to carry out business in accordance with the instant business plan submitted to the Defendant, it shall be deemed that the Plaintiff’s payment of KRW 240 million to a manager for the production of festival type as prescribed in the business budget of the instant business plan should be executed, and it shall not be used for any other purpose at will. However, in full view of the overall purport of pleadings in the evidence Nos. 15 and No. 15 and No. 23, even though the non-party corporation submitted a statement of execution of KRW 51 million to the daily worker labor cost, the Plaintiff’s accounting verification report (Evidence No. 15) prepared by L (P) prepared by L (P) for the instant business plan without examining whether the self-payment was executed in accordance with the instant business plan, and the non-party corporation’s execution of the government subsidy should not be recognized as execution of personnel expenses set as a manager for the production of festival type, and this constitutes a violation of the Defendant’s provision of subsidies under Article 10(2) of the Act and the grounds for revocation.

Therefore, this part of the Plaintiff’s assertion on a different premise is without merit.

4) As to the instant claim

In full view of the purport of Gap evidence Nos. 17 and Eul evidence Nos. 5, the budget of 500 million won is allocated to the direct material cost (purchase cost) item in the business budget of this case among the business budget of this case. The purpose of this project is to develop a festival model, so there is no doubt that the above seed and seedling purchase cost means the purchase cost of marine seeds and seedlings. Therefore, it should be used for the purpose of marine seed production through the budget-based festival type allocated to the part of the business budget of this case as the indirect cost (management, operation, public fee, general management, expendable material cost, operation and research cost) out of the budget of this case. However, in full view of the purport of arguments No. 18, 19, Eul, 15, and 23, the whole statement in the business plan of this case, the non-party corporation's purchase cost of marine seeds and seedlings was executed with the national subsidy of 10 million won, and the plaintiff can be recognized as the purchase cost of the new seeds and seedlings production cost of this case.

It constitutes a violation of Article 1-5(1)(e) of the Terms and Conditions and Conditions and Article 30(1)(2) of the Subsidy Management Act, which provides that a subsidy program shall not be modified without the defendant's approval, as well as the violation of Article 1-5(1)(e) of the Terms and Conditions and Conditions and the provision of Article 30(1)(2) of the Subsidy Management Act.

Therefore, this part of the Plaintiff’s assertion on a different premise is without merit.

5) As to the allegation 6 of this case

A) As to the instant disposition of revocation

In full view of the following circumstances that can be recognized by comprehensively taking account of the evidence and the purport of the entire pleadings as seen earlier, the revocation of the instant disposition does not constitute an unlawful act of deviation or abuse of discretion in the instant disposition, even considering all the circumstances cited by the Plaintiff. Therefore, the first Plaintiff’s assertion on a different premise is without merit.

(1) The instant project was implemented with the aim of developing a festival-type production model using reclaimed land to contribute to the increase of fishermen's income, etc., and subsidies provided to achieve such public purpose should be executed transparently and appropriately.

(2) The main contents of the instant project are to develop a festival culture culture production model by utilizing reclaimed land. Accordingly, it is the most important part in achieving the purpose of the instant project to ensure the development of sea ginseng seeds after establishing a festival culture culture hall and monitoring the development state, production volume, etc. of sea ginseng in conducting a test pattern. However, even though the Defendant urged the Plaintiff to implement the instant project on several occasions, the Plaintiff failed to proceed with the culture culture monitoring due to lack of self-payment charges, and thus, it was difficult to achieve the objective of the instant project. Accordingly, the Plaintiff, the general manager of the instant project, is highly responsible for the instant project.

(3) The Plaintiff asserts to the effect that the revocation disposition of this case was harsh on the ground that the party who violated the terms and conditions of the delivery of this case was a non-party corporation, but the subsidized business operator of this case is the Plaintiff. However, as seen earlier, the subsidized business operator of this case should be held liable for all of the subsidized business operators related to the implementation of the project, such as the execution of self-charges, in relation to the Defendant, and even if the subsidized business operator violated the terms and conditions of the delivery of this case due to the mistake of the non-party corporation, it

(4) Although the non-party corporation failed to execute KRW 500 million with the purchase price of marine seeds and seedlings but submitted false evidence as if it had been executed, the plaintiff recognized the execution of self-payment of KRW 500 million as it was without confirming financial data of the distribution business entity of marine seeds and seedlings. Even though there was a set of personnel expenses by specifying it as the payment for festivals production according to the business plan of this case, the non-party corporation without the defendant's approval was recognized to have executed the above personnel expenses. In addition, even though it is obvious that there was no purchase cost due to the establishment of the business budget of this case in the business plan of this case, the non-party corporation arbitrarily executed the execution of KRW 10 million with the purchase price without the defendant's approval. Thus, the non-party corporation's execution of self-payment of KRW 561 million with the execution of self-payment in violation of the terms and conditions of the delivery of this case cannot be considered to have been executed in consideration of the proportion of KRW 100 million with the national subsidy of KRW 81 million with the non-party corporation.

B) Article 31(1) of the Act on the Management of Subsidies provides that when the head of a central government agency revokes the decision to grant a subsidy, the head of a central government agency shall order the return of the subsidy corresponding to the revoked portion and the interest accrued therefrom by setting a deadline when the subsidy has already been granted to the revoked portion of the subsidy program. As such, when the decision to grant a subsidy has been revoked, the order to return the subsidy corresponding to the revoked portion shall be issued. Therefore, the order to return the subsidy following the revocation of the decision to grant a subsidy shall be deemed an binding act. Accordingly, the Plaintiff’s assertion on the different premise is without merit.

3. Conclusion

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

The presiding judge, the rank of the judge;

Judge Kim Gin-hun

Judges Kim Gin-jin

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.