[1] The case affirming the judgment below holding that Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents shall apply in principle to the portion of the association members who do not apply for parcelling-out within the period of application for parcelling-out under the management and disposal plan of the market reconstruction association Gap, where "in principle, cash liquidation shall be made in accordance with Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents", although the reconstruction project association approved to establish an association under the Act on Special Measures for the Improvement of Urban Areas and Dwelling Conditions for Residents as a market reconstruction Association for the structural improvement of

[2] The time when a project implementer is obligated to pay settlement money for a person subject to settlement of cash pursuant to Article 47 subparagraph 1 and subparagraph 2 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (=the day following the expiration

[3] In a management and disposal plan of a market reconstruction association Gap, where "a person subject to cash settlement shall secure funds from the proceeds of sale in lots and real rights to all union shares after the date of approval for management and disposal of the relevant shares or the date of decision on the object of cash settlement, and liquidates them in cash", the case affirming the judgment below holding that the above provision is only a provision on the method of securing cash settlement funds, but it cannot be interpreted that the period during which the unsold building is due only when the unsold building is sold in lots

[4] The base point of time for assessing the value of the object of cash settlement when the project implementer is liquidated in cash to the person subject to cash settlement pursuant to Article 47 subparagraph 1 and subparagraph 2 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (=the day after the expiration date of the period of application for parcelling-out) and whether the court shall always evaluate the amount

[5] Where the articles of association or management and disposal plan of a reconstruction association to which the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents is not applicable provides that members who did not apply to the application for parcelling-out within the period of application for parcelling-out shall be paid in cash by applying Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, the point of time when the members who became a person subject to cash settlement lose their status

[1] Article 16 (2) of the former Act on Special Measures for the Structural Improvement of Small and Medium Enterprises and Vitalization of Traditional Markets (amended by Act No. 6852 of December 30, 2002) (see current Article 34 (2) of the Special Act on the Development of Traditional Markets and Shopping Districts), Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, Article 105 of the Civil Act / [2] Articles 46 and 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [3] Articles 46 and 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, Article 105 of the Civil Act / [4]

[2] [4] Supreme Court Decision 2010Da73215 Decided December 23, 2010 (Gong2011Sang, 226) / [2] Supreme Court Decision 2008Da37780 Decided October 9, 2008 (Gong2008Ha, 1544) / [5] Supreme Court Decision 2009Da81203 Decided August 19, 2010

Plaintiff 1 and eight others (Plaintiffs 5, 6, 7, and 8 et al., Counsel for the plaintiff-appellant)

New Market Reconstruction Association

Seoul High Court Decision 2009Na78728, 78735, 78742 decided May 18, 2010

All appeals are dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The court below determined that Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter referred to as the "Urban Improvement Act") applies to the reconstruction project association, which is a market reconstruction project association which has obtained approval from the head of the Gu as an association under Article 16 (2) of the Act on Special Measures for the Improvement of Small and Medium Enterprises and Vitalization of Traditional Markets (amended by Act No. 6852 of Dec. 30, 2002), but the defendant association did not make an application for parcelling-out in cash in accordance with the Urban Improvement Act and the rules of the association when it gives public notice of the application for parcelling-out to the members, and Article 7 of the administrative disposition plan of this case decided at the general meeting of the members of the defendant association, provided that "in principle, cash liquidation shall be made in accordance with Article 30 of the articles of association of the association and Article 47 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents who did not apply for parcelling-out within the period of application for parcelling-out."

In light of the records, the above judgment of the court below is just, and there is no error of law by misapprehending the legal principles on the application of the Act on the Maintenance of Urban Areas or the interpretation of the management and disposition plan

2. Regarding ground of appeal No. 2

A. Under Article 47 subparag. 1 and subparag. 2 of the Urban Improvement Act, a project implementer shall liquidate in cash land, buildings, or other rights within 150 days from the “date falling under the application for parcelling-out” in cases where an owner of land, etc. fails to file an application for parcelling-out or withdraws an application for parcelling-out, according to the procedures prescribed by Presidential Decree. Here, when an owner of land, etc. fails to apply for parcelling-out or has withdrawn an application for parcelling-out before the expiration of the period for application for parcelling-out has to be deemed to be the “date following the expiration of the period for parcelling-out” as prescribed by the project implementer pursuant to Article 46 of the Urban Improvement Act (see Supreme Court Decisions 2008Da37780, Oct. 9, 2008; 2010Da73215, Dec. 23, 2010, etc.).

B. According to the reasoning of the judgment below, according to Article 47 (1) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions applicable to the method of cash settlement under Article 7 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions, which applies to the method of cash settlement pursuant to the resolution of the general meeting of the members of the defendant association, the court below determined that the time when the obligation to pay liquidation money arises to the members who did not apply for the sale within the period of application for parcelling-out, and that on May 30, 2007, which is the 150th day from the date following the end of the period of application for parcelling-out by the defendant association, the obligation to pay liquidation money is due and due to the payment of liquidation money. Meanwhile, the court below held that Article 9 (1) 1 of the management and disposal plan of this case, which provides that "the person subject to cash settlement shall secure funds from the proceeds of sale in lots of all association shares after the date of approval for the management and disposal or the decision of cash settlement

In light of the above legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the due date of payment of liquidation money or the interpretation of management and disposition plan.

3. As to the third ground for appeal

A. (1) Under Article 47 subparag. 1 and 2 of the Urban Improvement Act, where a project operator liquidates in cash a person subject to the settlement of cash, the base point for assessing the value of land, buildings, or other rights subject to the settlement of cash shall be deemed “the day following the last day of the period for the application for sale of land, buildings, or other rights,” which is the time when the person subject to the settlement of cash incurs the obligation to pay the settlement money. Meanwhile, in a lawsuit seeking the payment of settlement money, the court shall not necessarily evaluate the settlement amount by the market price appraisal, but may evaluate the settlement amount by an appropriate method (see, e.g., Supreme Court Decisions 2008Da37780, Oct. 9, 2008; 2010Da73215, Dec.

(2) According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its reasoning after compiling the evidence of employment. The plaintiffs' cash liquidation amount as of January 1, 2007, which is the market price of previous assets as of January 1, 2007, which is the date following the expiration date of the period for application for parcelling-out in the defendant association, should be calculated at the price reflecting development gains, etc. from the time when the plaintiffs withdraw from the association. It is reasonable to view this amount calculated by multiplying the amount of appraisal of the plaintiffs' previous assets by the proportional rate calculated at the time of the assessment of the plaintiffs' previous assets. The management disposition plan of this case, which was decided by the general meeting of the members of the defendant association on November 9, 2006, calculated the amount of the plaintiffs' rights by multiplying the amount of appraisal of the plaintiffs' previous assets by the proportion (171.19

In light of the above legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the standard time or method of calculating cash settlement money as otherwise alleged in the ground of appeal.

B. According to the reasoning of the judgment below, the court below determined that Article 31 (2) of the articles of incorporation of the defendant association provides that "the non-owned state-owned land within the project site of this case shall be purchased in the name of the association and apportioned in proportion to the ratio of the area owned by each association member", and Article 32 (1) provides that "the total amount of the previous property assessed by each association member shall be the amount calculated by adding the acquisition price of the state-owned land to the total appraised value of each association member's land and building within the reconstruction project zone" Article 4 of the management and disposal plan of this case, including the value of the state-owned land purchased by the defendant association, calculated the total amount of all the association members' previous assets including the value of the state-owned land purchased by the defendant association, and Article 5 included the purchase cost of the state-owned land in the total expenditure, and the management and disposal plan of this case also includes the land in addition to the previous land owned by the plaintiffs' rights of the plaintiffs.

In light of the following circumstances revealed by the record, the court below notified the plaintiffs on October 9, 2008 that the plaintiffs' right value under the management and disposal plan of this case, which was calculated by including the rights to the above state-owned or public-owned land shares in the title of "Notice of Cash Distribution", which was "the defendant union's own right to the above state-owned or public-owned land shares" was the liquidation amount of the plaintiffs, and notified the plaintiffs that the plaintiffs would receive the liquidation amount as part of the liquidation amount due to the lack of financial resources for payment of liquidation amount (30.61%). The defendant union's association did not have the right to calculate the liquidation amount of the plaintiffs' previous state-owned or public-owned land shares as the settlement amount. On November 11, 2008, the sale of the real estate market, etc. is delayed and the liquidation procedure is late. Thus, the court below's determination is just in the misapprehension of legal principles as to the plaintiffs' right to the settlement amount, regardless of whether the plaintiffs' previous property shares were allocated to the plaintiffs.

4. As to the fourth ground for appeal

A. In the articles of association or management and disposal plan of a reconstruction association to which the Urban Improvement Act does not apply, where Article 47 of the Urban Improvement Act provides that an association member who has not filed an application for parcelling-out shall be paid in cash within the period for application for parcelling-out shall lose his status as an association member. It is reasonable to deem that the union member who has become a person subject to cash settlement shall lose his status as a union member. The time when the union member loses his status as a union member is established in cash settlement relationship and is the following day of the expiration of the period for application for parcelling-out as of the same time as the base point for assessing the value of rights, such as the time when the union's obligation to pay liquidation money arises and the land due to cash settlement. In addition, as long as the union member becomes a person subject to cash settlement loses his status as a union member from the following day after the expiration of the period for application for parcelling-out, it shall be deemed that the union member is exempted from the obligation to pay expenses

B. According to the reasoning of the judgment below, the court below rejected the defense of the defendant association that, as of November 2009, the defendant association suffered additional business expenses incurred in the defendant association as of November 2009, it acquired the settlement money claim against the plaintiffs and offset them with automatic bonds, on the ground that the union members required to make cash settlement in accordance with the management and disposal plan of this case because they failed to apply for parcelling-out within the period of application for parcelling-out as shown in the plaintiffs, should complete the settlement of cash with the defendant association at an early stage and thereafter do not incur losses.

In light of the above legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the duty to pay expenses by the union members who become subject to cash settlement.

5. Conclusion

Therefore, all appeals are 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 Lee In-bok (Presiding Justice)