Hanjin Electric Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Lee Dong-chul et al., Counsel for the defendant-appellant)

Incheon Metropolitan City (Law Firm Sejong, Attorneys Park Jong-jin et al., Counsel for the plaintiff-appellant)

October 20, 2015

Incheon District Court Decision 2011Guhap6053 Decided October 16, 2014

1. The decision of the court of first instance shall revoke the part of the claim in attached Form 3, 4, and 5, and dismiss the lawsuit corresponding to the revoked part;

2. The plaintiff's remaining appeal is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant shall pay to the plaintiff 5,691,746,000 won and 101,000,000 won per annum from the day following the commencement of expropriation to the day of delivery of the complaint, 20% per annum from the next day to the day of full payment, 5,590,746,00 won per annum from the next day to the day of delivery of the complaint, 5% per annum from the day after the commencement of expropriation to the day of full payment, and 20% per annum from the next day to the day of full payment.

1. Reasons for ruling and the plaintiff's assertion;

The reasoning for this Court’s explanation is as follows: (a) the provision is identical to the provision of Articles 8(2) of the Administrative Litigation Act, Articles 8(2) and 420 of the Civil Procedure Act, and the main text of Article 420 of the Civil Procedure Act, with the exception that “(b) the details on which the Plaintiff seeks additional compensation to the Defendant are written to the Defendant.”

2. Determination

A. Whether a lawsuit concerning the portion of the claim as set forth in [Attachment 3] Nos. 4 and 5 is lawful

According to Articles 73(1), 75-2(1), and 77(1) of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (hereinafter “Public Works Projects Act”), the Plaintiff seeks compensation for the income loss of rents, business loss, and expenses for the repair of the surface based on the attached Form Nos. 3, 4, and 77(1).

However, in order for a landowner to receive compensation for losses pursuant to Articles 73, 75-2, and 77 of the Public Works Act, only a remedy can be granted only when he/she objects to the adjudication after going through the adjudication procedures stipulated in Articles 34 and 50 of the Public Works Act. It is not allowed to immediately claim compensation for losses against the project operator without going through such adjudication procedures (see, e.g., Supreme Court Decisions 2009Du10963, Sept. 29, 201; 2011Du22587, Nov. 29, 2012; 201Du24092, Sept. 25, 2014).

However, as seen earlier, the Plaintiff requested the expropriation ruling to compensate for the cost of partially removing the factory structures in order to secure space for the advancement and access of large-scale vehicles (this is directly related to the portion of claims) (this is no evidence to have undergone the adjudication procedure as stipulated by the Public Works Act as of the closing of argument in this case as to the portion of claims Nos. 1, 2, 3, 4, and 5). Thus, the Plaintiff’s claim for compensation for damages as to Nos. 3, 4, and 5 is unlawful (However, the portion of claims Nos. 3, 4, and 5 is an indirect damage due to expropriation that is not subject to compensation under the Public Works Act and the Enforcement Rule of the Act on Acquisition of and Compensation for Land, etc. for Public Works (hereinafter “Enforcement Rule”) along with the portion of claims Nos. 1, 2, 3, and 3, 4, and 5, and the Plaintiff’s claim for compensation for damages under the Enforcement Rule of the Public Works Act cannot be deemed unlawful on the ground that it did not fall under civil procedure (see Supreme Court Decision 20111Du22218181).

B. Judgment on the merits

1) As to the claim Nos. 1 and 2 attached hereto

A) Whether Article 73(1) of the Public Works Act is applicable

Article 73(1) of the Public Works Act provides, “If the price of the remaining land is reduced or there is any other loss due to the acquisition of part of a group of land belonging to the same owner, or if it is necessary to install a new passage, ditch, fence, etc. or to construct other works on the remaining land, the project operator shall compensate for such loss or the cost of the works.”

However, it is clear that the loss of the claim portion Nos. 1 and 2 claimed by the Plaintiff is not a reduction in the price of the remaining land, and on the other hand, the "when construction of a passage, ditch, fence, etc. or other construction works are necessary on the remaining land" shall be deemed as the time the construction works are needed for the use of the remaining land, such as the access to the remaining land or the establishment of a boundary. The loss of the claim portion Nos. 1 and 2 claimed by the Plaintiff requires construction of a factory building, partial removal and finish of the building, removal and reconstruction of machinery and equipment, etc. to operate the factory in the same form as the previous one. Thus, it shall not be deemed as the loss of the remaining land.

B) Whether Article 75-2(1) of the Public Works Act is applicable

Article 75-2 (1) of the Public Works Act provides that "If the price of any remaining building is reduced or any other loss is incurred due to the acquisition of part of a group of buildings belonging to the same owner, the project operator shall compensate for such loss."

However, in this case, obstacles such as fences, trees, resting rooms, guard rooms, entrances, etc. on the factory site owned by the plaintiff are expropriated, and in light of the fact that the "building, standing trees, structures, and other things attached to the land" is stipulated in Article 75 (1) of the Public Works Act and it is difficult to view the obstacles in this case as "building, etc." and the "building, etc" in Article 75-2 (1) of the Public Works Act cannot be deemed as "building," and in conclusion, this case does not fall under the case where "part of the building," is acquired (it is apparent that the building with a thickness is not a building).

The plaintiff asserts that this case's obstacle is included in a building pursuant to Article 33 (1) of the Enforcement Rule, and thus, it constitutes a case where "part of the building" is acquired. However, Article 33 of the Enforcement Rule is only a case where the building evaluation method is provided.

C) Whether Article 77(1) of the Public Works Act is applicable

Article 77(1) of the Public Works Act provides, “The business losses incurred by the closure or suspension of business shall be compensated in consideration of the business profits, expenses incurred in the transfer of facilities, etc.” Article 47(1) of the Enforcement Rule provides, “The business losses in cases where the place of business is to be relocated due to the performance of public works shall be appraised by adding the operating profits, etc. corresponding to the period of suspension of business.” However, it is apparent that the losses in the claims No. 1 and No. 2 asserted by the Plaintiff are not the business losses incurred by the closure

Meanwhile, Article 47(3) of the Enforcement Rule provides that, as a result of the incorporation of part of a business facility into a public-service business, where the business cannot continue without installing a new facility or repairing the remaining facility, the business losses due to the reduction of the size of the business and the operating losses due to the reduction of the size of the business shall be appraised by adding the operating profit, etc. for the period required for the installation, etc. of the relevant facility. However, as long as the Plaintiff continues to conduct business as of the closing of argument in the instant case, as alleged by the Plaintiff, the hourly production capacity per hour falls below 8.9%, and the production capacity per production capacity reduces above 9.7% due to the increase of the production capacity by 9.7

D) Sub-determination

Therefore, the claims Nos. 1 and 2 asserted by the Plaintiff cannot be seen as subject to compensation under the Public Works Act and the Enforcement Rule.

2) As to the claim Nos. 6 of the Attached Claim for Compensation

This Court's reasoning is the same as the statement from the 13th to the 14th 10th 10 line of the reasoning of the judgment of the court of first instance. Thus, this Court's reasoning is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

3. Conclusion

Therefore, the lawsuit of the claim portion Nos. 3, 4, and 5 among the claims of this case shall be dismissed, and the remaining net part Nos. 1, 2, and 6 shall be dismissed. Since the claim portion of Nos. 3, 4, and 5 in the judgment of the court of first instance is unfair by different conclusions, the judgment of the court of first instance shall revoke its authority and dismiss the lawsuit corresponding to the cancelled part, and the claim portion of Nos. 1, 2, and 6 shall be justified as it is in conclusion, and the plaintiff's appeal shall be dismissed as it is without merit.

[Attachment]

Judges Goung-hun (Presiding Judge) (Presiding Judge)