[1] Whether a third party who is not a landowner can become a partner of a "market improvement project corporation" under the Special Act on the Development of Traditional Markets and Shopping Districts (negative)

[2] Whether the existing corporation whose business purpose, etc. was modified to promote a market improvement project is also included in the "market improvement project corporation" under the former Special Act on the Development of Traditional Markets and Shopping Districts (affirmative)

[3] In a case where Gap corporation established for the purpose of "real estate sale and lease business" filed an application for approval for a market improvement project promotion plan with the head of the competent Gu to promote a market improvement project under the former Special Act on the Development of Traditional Markets and Shopping Districts, but the head of the competent Gu rejected the application, the case holding that Gap corporation consisting of third parties, not land owners, constitutes a market improvement project corporation

[1] Articles 18(2) and 30(1) of the former Special Act on the Development of Traditional Markets (wholly amended by Act No. 7945, Apr. 28, 2006; hereinafter “Special Act on the Development of Traditional Markets and Shopping Districts”) and Articles 4, 33(1) and (2), 34(1), and 41(1)3 of the former Special Act on the Development of Traditional Markets and Shopping Districts (wholly amended by Act No. 9887, Dec. 30, 2009; hereinafter “Revised Traditional Markets Act”) provide that “the owner of a land, such as a corporation established by a market improvement project, shall not be deemed a partner of the market improvement project, but shall not be deemed a landowner of the newly established land, such as a corporation established by a market improvement project to promote the market improvement project, and shall not be deemed as a partner of the market improvement project in addition to the existing market improvement project.

[2] The former Special Act on the Development of Traditional Markets and Shopping Districts (amended by the Special Act on the Development of Traditional Markets and Shopping Districts (amended by the "Special Act on the Development of Traditional Markets", Act No. 9887, Dec. 30, 2009; hereinafter the "Revised Traditional Markets Act") provides that, by adding new market improvement project corporations other than existing market improvement project cooperatives as the developer of the market improvement project, the market improvement project can be promoted more rapidly and smoothly by establishing a promotion committee instead of establishing a market improvement project association. The establishment of a project promotion plan for the market improvement project is 3/5 or more of the land size of each market improvement zone and the establishment of a project promotion plan to submit the project promotion plan to the head of Si/Gun/Gu or to obtain the project approval, it is reasonable to include a management and disposal plan in accordance with the provisions of the former Special Act on the Development of Urban Markets and Shopping Districts after the authorization for the implementation of the project, and to reflect the intention of the owners of land and other corporations to implement the existing market improvement project in accordance with the Act.

[3] In a case where Gap corporation established for the purpose of "real estate sale and lease business" obtained consent from at least 80% of landowners in a market area to promote a market improvement project under the former Special Act on the Development of Traditional Markets and Shopping Districts (amended by Act No. 9887, Dec. 30, 2009; hereinafter "Revised Traditional Markets Act"), and filed an application for approval for a market improvement project promotion plan with the head of the competent Gu after completing registration of modification to add "large-scale market improvement business" for the purpose of the business of the corporation, but the head of the competent Gu did not meet the requirements for the market improvement project under the amended Traditional Markets Act, the court affirmed the judgment below that the above disposition was lawful on the ground that Gap corporation was already established and is not a market improvement project corporation under the amended Traditional Markets Act, but Gap corporation including third parties, including land, is not a market improvement project corporation, and its conclusion is ultimately justified.

[1] Article 18(2) of the former Special Act on the Development of Traditional Markets (wholly amended by Act No. 7945 of Apr. 28, 2006) (see Article 55 of the current Special Act on the Development of Traditional Markets and Shopping Districts), Article 30(1) (see Article 41(3) of the current Special Act on the Development of Traditional Markets and Shopping Districts) of the former Special Act on the Development of Traditional Markets and Shopping Districts (wholly amended by Act No. 9887 of Dec. 30, 2009); Articles 4, 33(1) and (2), 34(1), and 41(1) of the former Special Act on the Development of Traditional Markets and Shopping Districts / [2] Article 30(1) of the former Special Act on the Development of Traditional Markets and Shopping Districts (wholly amended by Act No. 9887 of Dec. 30, 2009; Act No. 1309(1) and (3) of the former Special Act on the Development of Traditional Markets

EpF Global (Law Firm B et al., Counsel for the defendant-appellant)

The head of Jung-gu Seoul Metropolitan Government (Attorney Lee Jae-young, Counsel for defendant)

Seoul High Court Decision 2008Nu20187 decided March 31, 2009

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. According to the provisions of Articles 18(2) and 30(1) of the former Special Act on the Development of Traditional Markets (wholly amended by Act No. 7945, Apr. 28, 2006; hereinafter “former Traditional Markets Act”), a market improvement project association, head of Si/Gun/Gu (referring to the head of autonomous Gu; hereinafter the same shall apply), local government-invested public corporation established under Article 49 of the Local Public Enterprises Act, or the Korea National Housing Corporation established under the Korea National Housing Corporation Act may become a market improvement project developer.

However, according to the provisions of Articles 4, 33(1) and (2), 34(1), and 41(1) of the former Special Act on the Development of Traditional Markets and Shopping Districts (amended by the Special Act on the Development of Traditional Markets and Shopping Districts, Act No. 9887, Dec. 30, 2009; hereinafter “Revised Traditional Markets Act”), a person eligible to file an application for recommendation for approval for a market improvement project plan shall file an application with the head of Si/Gun/Gu, the committee of promoters, and land owners for the promotion of the market improvement project (hereinafter “market improvement project corporation”), a corporation established by owners of land, etc. (hereinafter “market improvement project corporation”), the head of Si/Gun/Gu, the Korea National Housing Corporation, or a local public corporation. In addition, a person who intends to obtain approval for a market improvement project plan shall establish a project promotion plan to the head of Si/Gun/Gu and apply mutatis mutandis for approval for the plan, and shall obtain the consent of at least three percent of the total area of land owners and at least the Act.

In full view of the circumstances such as the content, form, purport, and history of amendment of the relevant statutes, the market improvement project corporation under Article 33(2)3 of the amended conventional Market Act clearly provides for a corporation established by the “owner of land, etc. to promote the market improvement project; a third party who does not own land, etc. in the market improvement zone may be deemed to have different interests from the owner of the land, etc. with respect to the market improvement project; on the other hand, when all the owners of the land, etc. demand to become a partner of the corporation, establishing the market improvement project corporation becomes more difficult than establishing the market improvement project association. In addition, in order to establish the market improvement project corporation under the amended conventional Market Act, in addition to the market improvement project implementer, the establishment of the market improvement project corporation becomes more difficult than establishing the market improvement project association. However, in order to establish the market improvement project corporation under the amended conventional Market Act, all the owners of the land, etc. are not required to become a partner of the corporation, but at least its members shall be the landowner, etc., and a third party, not the landowner, etc.

B. In addition, the Revised Traditional Market Act provides that a new market improvement project corporation, other than the existing market improvement project implementer, can be promoted more rapidly and smoothly by establishing a promotion committee instead of establishing a market improvement project partnership. At least 3/5 of the land size of each market improvement project zone and 3/5 of the total number of land owners shall obtain consent from the head of each Si/Gun/Gu, and at least 3/5 of the Act on the Improvement of Urban Areas and Dwelling Conditions after preparing a management and disposal plan and obtaining the consent of the owners of land, etc. provided for in the Revised Market Act after the authorization for the project implementation is completed, so that the intent of owners of each project can be sufficiently reflected and properly supervised by an administrative agency. In light of the fact that the implementation of the market improvement project by changing the purpose of the existing corporation's business or its members or by establishing a new corporation, etc., it is reasonable to view that the existing corporation's project implementation by changing the purpose of the project is also included in the existing corporation's market improvement project purpose as well as in the Act on the Improvement of Urban Areas and Dwelling Projects.

C. According to the reasoning of the first instance judgment cited by the lower court, the lower court determined that the instant disposition was lawful on the ground that the Plaintiff’s establishment of a market improvement project corporation under Article 33(2)3 of the amended Traditional Market Act was not a corporation for the purpose of the market improvement project from the beginning, as a corporation established by landowners, etc. as its promoters, considering the language of the above provision and the context before and after the above provision.

In light of the above legal principles, the court below erred in finding that a market improvement project corporation includes only an existing non-corporate corporation, but the records show that at the time of the rejection of the case, the plaintiff includes the non-party 1, 2, and 3, and the non-party 1, 2, and the non-party 3 as its members. Thus, in light of the above legal principles, the decision of the court below is just in holding that the plaintiff including a third party who is not a land owner does not constitute a market improvement project corporation, and there is no error in the misapprehension of legal principles as to the market improvement project corporation under the amended customary market Act, such as the ground for

2. Regarding ground of appeal No. 2

A. In general in administrative legal relations, in order to apply the principle of the protection of trust to an act of an administrative agency, first, the administrative agency should name the public opinion that is the object of trust to an individual; second, the administrative agency's statement of opinion is justified and there is no cause attributable to the individual; third, the administrative agency should have conducted any act based on the individual's statement of opinion; fourth, the administrative agency's disposition contrary to the above statement of opinion should lead to an infringement of the individual's interest in trust; fourth, if any administrative disposition satisfies these requirements, it is against the principle of the protection of trust unless it is likely to seriously undermine the public interest or legitimate interests of a third party (see Supreme Court Decisions 98Du19070, Mar. 9, 199; 2004Du466, Jun. 9, 2006, etc.).

B. According to the reasoning of the first instance judgment cited by the lower court, the lower court acknowledged the facts as indicated in its reasoning after compiling the adopted evidence, and determined that the Defendant cannot be deemed to have conducted any public opinion or administrative guidance that could be trusted as to whether the Plaintiff constitutes a market improvement project corporation provided for in the amended Traditional Market Act at the time of filing the application for approval of the instant case, and thus, the instant rejection disposition contradicts the prior act of the Defendant and thus, cannot be deemed to be contrary to the good faith

In light of the above legal principles and records, the above determination by the court below is justifiable. In so doing, it did not err by misapprehending the legal principles as to the principle of trust protection as otherwise alleged in the grounds

3. As to the third ground for appeal

According to the reasoning of the first instance judgment cited by the court below, the court below acknowledged the facts as stated in its reasoning after compiling the adopted evidences, and determined that there is no room for discretion to the defendant in determining whether the case constitutes a market improvement project corporation under the amended customary market law. In full view of the background of the plaintiff's application in this case, the circumstances leading up to the return disposition in this case, and the reasons for the disposition, etc., the court below determined that the return disposition in this case cannot be deemed to be in violation of the principle of proportionality because it excessively excessively infringes on the private interest of the plaintiff compared to the public interest

In light of the relevant statutes and records, the above determination by the lower court is justifiable. In so doing, it did not err by misapprehending the legal principles as to deviation and abuse of discretionary power, such as the grounds for appeal.

4. Conclusion

Therefore, the appeal is 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.

Justices Park Poe-dae (Presiding Justice)