[1] Whether it is permissible for a waterworks business operator, which is a local government, to impose the fixed construction cost that is publicly notified according to reasonable standards, not the actual construction cost but the cost of construction concerning water supply facilities among water supply facilities (affirmative)

[2] In a case where the public notice of the cost-bearing of construction works for water supply facilities among water supply facilities is given to the public notice of the cost-bearing of the fixed water supply construction cost, without properly reflecting the individual calculation factors, resulting in serious infringement on the principle of cost-bearing, whether the public notice is unlawful (affirmative)

[3] The meaning of "the premise of a judgment" as a requirement to examine whether the law orders, rules, ordinances, administrative rules, etc. under the law are unconstitutional or illegal, and whether the subject of adjudication to be declared by the court through specific norm control is limited to the provisions recognized as the premise of the judgment among the pertinent provisions (affirmative in principle)

[1] Considering the contents and purport of the proviso of Article 70 and Article 38(1) of the Water Supply and Waterworks Installation Act and Article 13(1), Article 12(1), and Article 12(3) of the Water Supply and Waterworks Installation Act as well as the following circumstances, the adoption of the aforementioned ordinances with respect to the bearing of the cost of construction works for water supply facilities in the waterworks (hereinafter “water supply construction cost”) cannot be deemed as going against the legislative intent or going beyond the scope of delegation. Therefore, it should be deemed that a waterworks business operator is also allowed to impose the fixed construction cost publicly notified according to reasonable standards, not the actual construction cost.

(1) When adopting a fixed amount system, the efficiency of administration may be improved, such as that construction costs need not be calculated every time water supply works are performed, and separate water pipes for each demand price are installed, thereby putting separate water pipes for each demand price, thereby resolving problems in which facilities are installed in an inefficient and efficient manner.

② The principle of equity with regard to the burden of water supply construction cost between ordinary housing and multi-family housing, and between rural areas, and between urban areas, may also be avoided to a certain extent due to excessive water supply construction cost. This accords with the purport of Article 2(6) of the Water Supply and Waterworks Installation Act that the State, a local government, and a waterworks business operator shall contribute to the universal supply of tap water to all citizens.

③ The actual construction cost is significantly affected depending on how much the area in which water supply facilities are to be installed is far from the existing water pipes. In determining actual construction cost for water supply, the actual construction cost may lead to a significant change in the construction cost to be borne by the applicant depending on the aforementioned contingency circumstances, even if the scale of the housing, the number of households, etc. are similar. However, the adoption of a fixed amount system may prevent such a change.

[2] When adopting a fixed amount system as to the cost of construction works for water supply facilities among water supply facilities (hereinafter “water supply construction cost”), it is inevitable that the cost of construction works for the water supply facilities calculated thereby would have a difference between the actual construction cost and the actual construction cost. When adopting a fixed amount system by ordinances of local governments, residents should accept such a difference in principle. However, even in the fixed amount supply construction cost system, as much as possible, the cost of construction works should be accurately reflected in the calculation factors prescribed in the relevant statutes so as to ensure that the principle of cost-bearing is consistent with the principle of cost-bearing. Therefore, in a case where the notice of fixed amount supply construction cost determined by the City Mayor does not reflect the individual calculation factors, and causes significant infringement on the principle of cost-bearing, such notice is against the purpose of delegation of the municipal ordinance, and is unlawful against the principle

[3] In order for a court to examine whether a statutory order, rule, municipal ordinance, administrative rule, etc. under the law (hereinafter “laws”) is unconstitutional or unlawful, it should be the premise for a judgment. The term “in the event that a specific case is pending in the court, and where it is at issue of whether a certain provision is unconstitutional or unlawful, a specific provision shall apply to a trial in the relevant case, and the court in charge of the relevant case shall make a different judgment depending on whether the provision is unconstitutional or unlawful. Therefore, the subject of a judgment to be declared as unconstitutional or unlawful by a court through a specific norm control is limited to a provision recognized as the premise for a trial in the relevant provision, unless there are special circumstances that make it impossible to maintain the remaining parts in the case where a part is invalidated because the whole of the pertinent provision is indivisible.

[1] Articles 2(6), 38(1), and 70 of the Water Supply and Waterworks Installation Act / [2] Articles 2(6), 38(1), and 70 of the Water Supply and Waterworks Installation Act / [3] Article 107(2) of the Constitution of the Republic of Korea

[2] Supreme Court Decision 2008Du19239 Decided October 29, 2009 (Gong2009Ha, 2024) / [3] Supreme Court Order 2002Hu113 dated September 27, 2002 (Gong2002Ha, 2652)

Hyundai Engineering Co., Ltd. (Law Firm East, Attorney Cho Jae-young, Counsel for the defendant-appellant)

Ulsan Metropolitan City Water Service Headquarters Head of the Dong-dong Project (Law Firm Governing Province et al., Counsel for defendant-appellant)

Busan High Court Decision 2016Nu22940 decided January 13, 2017

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

The grounds of appeal are examined.

1. A. In principle, a waterworks business operator shall bear the cost of installing the waterworks, but where a local government is a waterworks business operator, the cost of installing the water supply facilities among the water supply facilities (hereinafter “water supply construction cost”) may be prescribed by municipal ordinance concerning the bearing of the cost of installing the water supply facilities (the proviso to Article 70 and Article 38

Article 13 (1) of the Ulsan Metropolitan City Ordinance on Water Supply (hereinafter referred to as the "Ordinance of this case") stipulates that the applicant for water supply construction shall bear the cost of water supply construction. Article 12 of the Water supply construction cost shall be the sum of material cost, construction cost, road excavation and restoration cost, design fee, work executor's re-inspection fee, inspection fee, completion inspection fee, waterproof and flooding, and it shall be the fixed amount (paragraph (1)), and the amount shall be the sum of water supply construction cost (paragraph (3)) separately announced by the Mayor.

B. Considering the contents and purport of the relevant provisions as well as the following circumstances, the introduction of the fixed amount system by the instant Ordinance itself cannot be deemed to go against the legislative intent or to go beyond the scope of delegation. Therefore, it should be deemed that a waterworks business operator is also allowed to impose the fixed amount of construction costs publicly notified according to reasonable standards, not the actual construction cost.

(1) When adopting a fixed amount system, construction costs need not be calculated whenever each water supply construction is conducted, and the efficiency of administration can be improved by laying separate water pipes for each demand price (demand price) so as to resolve problems that the facilities can be installed in an inefficient and efficient manner.

(2) The principle of equity between general housing and multi-family housing, and between rural areas, and urban areas, can be ensured. Furthermore, due to excessive water supply construction costs, residents in rural areas, etc. are unable to apply for water supply works themselves. This accords with the purport of Article 2(6) of the Water Supply and Waterworks Installation Act that the State, local governments, and waterworks business operators should contribute to the universal supply of water to all citizens.

(3) The actual construction cost is significantly affected depending on how much the area in which water supply facilities are to be installed is far away from the existing water supply pipes. In determining actual cost of water supply construction cost, the actual construction cost may lead to a significant change in the construction cost to be borne by the applicant depending on the aforementioned contingency circumstances, even if the housing size and the number of households are similar. However, the adoption of a fixed amount system may prevent such a change.

C. In adopting a fixed amount system, it is inevitable for the water supply construction cost calculated therefrom to generate the difference between the actual construction cost and the convenient construction cost. When adopting a fixed amount system by ordinances of local governments, residents should accept such a difference in principle. However, even the fixed amount supply construction cost system should ensure that it accords with the principle of cost-bearing, as much as possible, accurately reflects the calculation factors prescribed by relevant Acts and subordinate statutes so as to ensure that it conforms to the principle of cost-bearing (see Supreme Court Decision 2008Du19239, Oct. 29). Article 12(1) of the instant Ordinance provides that the total cost-related construction cost-related cost-related cost-related cost-related cost-related cost-related cost-related cost-related cost-related cost-related cost announcement is also the same purport. Therefore, in a case where the public announcement of the fixed amount supply construction cost determined by the mayor causes a serious infringement of the principle of cost-bearing by uniformly setting the cost-related cost-related cost-related cost-related cost-related cost-related

D. In order for a court to examine whether a statutory order, rule, municipal ordinance, administrative rule, etc. under the law (hereinafter “laws”) is unconstitutional or unlawful, it should be the premise for a judgment. Here, “the premise for a judgment” refers to a specific case to be pending in a court; where the issue is whether a certain provision is unconstitutional or unlawful, the specific provision should apply to a trial in the relevant case; and where the court in charge of the relevant case makes another judgment depending on whether the provision is unconstitutional or unlawful (see, e.g., Supreme Court Order 2002Hu113, Sept. 27, 2002). Therefore, the subject for a judgment to be declared unconstitutional or unlawful by a court through a specific norm control is an indivisible combination of the relevant regulations, and thus, the whole of the relevant regulations becomes null and void, barring any special circumstance that leads to the result that the remaining parts cannot be maintained.

2. According to the reasoning of the lower judgment and the record, the following facts are revealed.

A. The Public Notice on Change in the Fixed-Term Water Supply Construction Costs (Notice No. 2012-127, Jun. 7, 2012; hereinafter “Public Notice”) enacted upon the delegation of the instant Ordinance divided the sections into seven stages based on 50-100 households with respect to multi-family housing, and setting the fixed construction cost per household for each section between 50 and 228,000 and 210,000 won at a minimum of 50 households. Specific details are as follows:

Of 51 to 100 up to 150 up to 151 to 200 up to 201 to 300 up to 401 households (wons) 228,000 218,000 215,000 213,000 212,000 211,000 211,000 210

B. In order to install water supply facilities to the 1,897 apartment units of this case, the Plaintiff applied for water supply construction works to the Defendant. On August 11, 2015, the Defendant applied to the Plaintiff the unit cost of the water supply construction cost of “not less than 401 households” in the instant public notice to the Plaintiff at KRW 210,000/households (hereinafter “instant public notice provision”) and imposed the Plaintiff a water supply construction cost of KRW 398,370,000 (=210,000 x 1,897 households) (hereinafter “disposition imposing the water supply construction cost of this case”).

C. The expenses actually incurred in water supply works executed by the Defendant are merely KRW 31,873,630, even if all construction contract amounts and government-funded materials are added up, and the amount of charges is about 12 times the actual construction cost.

3. A. Examining the above facts in light of the legal principles as seen earlier, the content of the instant public notice provision ought to be deemed null and void as it goes against the delegation purpose of the municipal ordinance and the principle of proportionality. Specific reasons are as follows.

(1) The instant announcement provision does not stipulate at all the reduction of construction cost due to the increase in the number of households for multi-family housing with at least 401 households. In the case of a large-scale apartment complex, the same construction cost is applicable to all multi-family housing with at least 401 households, even though they may be applicable to the large-scale apartment complex. This is to be too low to set the upper limit of the number of households and to reflect the scale and form of the recently newly-built

(2) As a result, the Plaintiff, who newly constructed apartment units with 1,897 households, bears a fixed construction cost of up to 12 times the actual construction cost. Even if considering the necessity and purport of the fixed construction cost system, the actual construction cost and the convenience are too large.

(3) In order to improve these problems, the Ulsan Metropolitan City Mayor enacted a public announcement on the change of the fixed-water supply cost of waterworks (No. 2016-224, Dec. 8, 2016; hereinafter “current Public Notice”) to the effect that the standard number of households is adjusted to 1,500 households and the calculation method of the seven-stage classification is changed to the calculation method based on the formula. Specific details are as follows.

The construction cost of at least 150,000-(won) 150,000-(50 x number of households) 75,000,000, which is included in the main sentence, below 50 households; and

B. As long as the announcement provision of this case is illegal and invalid, imposition of water supply construction cost should be deemed unlawful in principle, barring special circumstances that the amount imposed is close to the actual construction cost. In the case of imposition of water supply construction cost of this case, the amount imposed exceeds about 12 times the actual construction cost, and thus, it should be deemed unlawful against the principle of proportionality.

C. Of course, the provision of this case’s notice is unlawful and does not necessarily require the Plaintiff to bear only the actual construction cost. The provision of the fixed amount per Municipal Ordinance itself cannot be deemed unlawful, and as the Ulsan Metropolitan City Mayor has already enacted a current notice to improve the problems of the notice provision, the Defendant may re-insign the water supply construction cost to the Plaintiff by applying the current notice to which illegality is removed.

4. Although it is inappropriate for the lower court to determine that the entire public notice of this case was unlawful without limiting the scope to the “instant public notice provision,” which is recognized as the premise of judgment, the lower court is justifiable to have determined that the imposition of the instant water supply construction cost, which applied the instant public notice provision, was unlawful against the principle of proportionality. In so doing, it did not err by misapprehending the legal doctrine on the fixed water supply construction cost system, etc., which affected the conclusion of the judgment, contrary

5. The Defendant’s appeal is dismissed as it is without merit, 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.

Justices Lee Dong-won (Presiding Justice)