In the event that a public project operator entered into an apartment special supply contract with a person subject to relocation measures and included basic living facilities installation costs in the sale price in violation of Article 78(4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects, the extinctive prescription period of the right to claim the return of unjust enrichment that the person subject to relocation measures already paid to the project operator (=10 years)

The purpose of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (amended by Act No. 8665 of Oct. 17, 2007; hereinafter “former Act”) is to promote the promotion of public welfare and the appropriate protection of property rights through the efficient implementation of public works by prescribing matters concerning compensation for losses incurred by the acquisition or use of land, etc. necessary for public works through consultation or expropriation. Measures for resettlement under the above Act is a system established in order to restore the previous living conditions to those who lose their base of livelihood due to the provision of land, etc. necessary for the implementation of public works and to guarantee the living worthy of human dignity at the same time. In light of the above, it is difficult to conclude that contracts for special supply of apartment to those who are subject to relocation measures as part of measures for relocation are commercial activities for profit-making purposes. In addition, even if a project operator violates Article 78(4) of the former Act, which is mandatory provisions in a special supply contract for apartment houses, and thus a special supply contract becomes null and void, the period of sale claim of unjust enrichment under the above provision 16(6).

Articles 1 and 78(1) and (4) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works (amended by Act No. 8665 of Oct. 17, 2007); Article 64 of the Commercial Act; Articles 162(1) and 741 of the Civil Act

Supreme Court en banc Decision 2007Da63089, 63096 Decided June 23, 201 (Gong2011Ha, 1440)

Plaintiff 1 and 20 others (Attorney Soh-ho, Counsel for plaintiff-appellant)

Plaintiff 6 and two others (Attorney Soh Jeong-ho, Counsel for the plaintiff-appellant)

Seoul Housing and Urban Corporation (Law Firm, Attorneys Lee Jae-type et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2013Na20764 decided April 1, 2016

The part of the lower judgment against Plaintiffs 6, 18, and 20 is reversed, and that part of the case is remanded to the Seoul High Court. The Defendant’s appeal is dismissed. The costs of appeal against the Plaintiffs other than Plaintiffs 6, 18, and 20 are assessed against the Defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal by Plaintiffs 6, 18, and 20

A. According to the reasoning of the judgment below, the court below acknowledged the following facts based on adopted evidence: (a) Plaintiff 6, Plaintiff 18, and Plaintiff 20 donated 50% of the shares in the selling contract to each of the parties (hereinafter “other party”), but notified the Defendant of the claim equivalent to 50% of the unjust enrichment arising in connection with the instant selling contract; (b) Plaintiff 6, Plaintiff 18, and Plaintiff 20 again purchased the claim from the other party and notified the Defendant; and (c) the claim for return of unjust enrichment that the above plaintiffs and the other party received from the other party was arising from the payment of the purchase price under each of the instant selling contract as a commercial activity; and (d) it is reasonable to view that the above part of the claim for return of unjust enrichment within the scope of 60 years under the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 865, Oct. 17, 207; hereinafter “the former Public Works Act”) was invalid by the other party’s claim for return of unjust enrichment.

B. However, the lower court’s determination on this is difficult to accept for the following reasons.

The purpose of the former Public Works Act is to promote the promotion of public welfare and the appropriate protection of property rights through the efficient implementation of public works by prescribing matters concerning compensation for losses incurred by the acquisition or use of land, etc. necessary for public works through consultation or expropriation. Measures for resettlement under the same Act is a system prepared to restore the previous living conditions to those subject to relocation measures who lose their base of livelihood due to the provision of land, etc. necessary for the implementation of public works and at the same time guarantee a living worthy of human dignity (see Supreme Court en banc Decision 2007Da63089, 63096, Jun. 23, 2011, etc.). In light of the foregoing, it is difficult to conclude that the sale contract for the special supply of the apartment of this case to the above plaintiffs as part of measures for resettlement is a commercial activity for profit-making purposes. Moreover, even if the defendant is included in the sale price for basic facilities in the special supply contract of this case in violation of Article 78(4) of the former Public Works Act, which is mandatory provisions in the special supply contract of this case, and thus the above plaintiffs already seek the return of unjust profits to the defendant.

Nevertheless, solely for the reasons indicated in its holding, the court below erred by misapprehending the legal principles as to the extinctive prescription, thereby adversely affecting the conclusion of the judgment. Accordingly, this part of the ground of appeal is with merit.

2. As to the Defendant’s ground of appeal

According to the reasoning of the lower judgment, the lower court rejected the Defendant’s assertion contrary thereto, on the ground that, based on its adopted evidence, recognized the fact that the area of the site where the basic living facilities are installed in the instant project district is 475,695 square meters, and determined that the cost of the site for the basic living facilities in this case is 522,442,787,725 won (total site cost 3,835,630,6315,962 x total site cost 475,695 square meters x total site area 475,692,421 square meters, total site area / total site area 3,492,

In light of the relevant legal principles, such determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles regarding the cost of site and indirect cost calculation of the portion gratuitously reverted out of

3. Conclusion

Without examining the remaining grounds of appeal by Plaintiffs 6, 18, and 20, the part against the above plaintiffs in the judgment of the court below is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The defendant's appeal is dismissed. The costs of appeal against the plaintiffs except Plaintiffs 6, 18, and 20 are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok (Presiding Justice)