Plaintiff (Appointed Party)

Defendant Rebuilding and Improvement Project Association (Law Firm B, Attorney Park Sung-hoon, Counsel for defendant-appellant)

November 3, 2006

Seoul Central District Court Decision 2005Gahap20588 Decided April 11, 2006

1. The plaintiff (appointed party)'s appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff (Appointed Party).

The judgment of the first instance shall be revoked.

1. The primary claim: the defendant confirms that the resolution of the special general meeting of the administration and disposal on December 19, 2004 is null and void.

2. Preliminary Claim: The defendant confirms that the decision on the standards for the allocation of the units of the management and disposal plan and the method of drawing lots is null and void among the cases finalized at the special meeting of the management and disposal on December 19, 2004 at the special meeting of the management and disposal plan.

1. Basic facts

The following facts are not disputed between the parties, or may be acknowledged by considering the whole purport of the pleadings in each entry in Gap evidence Nos. 1, 4 through 8, and Eul evidence Nos. 4, 6 through 21:

A. Status of the parties

The defendant is a housing reconstruction project implementer who has obtained approval from the head of the Gu in Seoul on April 30, 1998 pursuant to Article 44 of the former Housing Construction Promotion Act (wholly amended by Act No. 6916 of May 29, 2003) for the purpose of building 17 apartment units and 810 households of apartment units on the land outside Jongno-gu Seoul, Jongno-gu, Seoul and 111 on the ground, and the plaintiff (appointed party; hereinafter referred to as the "Plaintiff") and the designated parties are co-owners of the above-dong (land number 2 omitted) in the improvement zone executed by the defendant, and are co-owners of the above-dong (land number 2 omitted) apartment units on the ground.

B. The defendant's reconstruction resolution and application for parcelling-out

(1) On December 6, 1997, the defendant held an inaugural general meeting and held a rebuilding resolution (at the time, 495 members were submitted with the consent letter and the consent letter of the rebuilding resolution from 402 members). The contents of the rebuilding resolution among the contents of the consent letter of rebuilding resolution submitted from the members at the time, and the articles of incorporation of the defendant related thereto at the time are as follows.

1. Table 1. Design outline and site area of a newly constructed building: 42,259 square meters, and 162,926 square meters: 162,926 square meters, and 116 households of 15 Dong-15, 12-19, and 116.2. The cost of new construction and the cost of removal shall not be determined. The amount determined at the general meeting to select the contractor after the rent shall be determined at the time of this contract with the contractor, but the amount shall be determined according to the resolution at the general meeting of the management and disposal pursuant to Article 38 of the articles of incorporation on the allotment of the cost at the time of this contract; 4. Matters concerning the ownership of the sectional ownership of the newly constructed building shall be determined at the time of application for sale in accordance with Articles of incorporation 37 and 38.

The Defendant’s Articles of Incorporation

(8) An association shall notify each association member of the matters referred to in paragraph (1) within two weeks after the commencement of removal of an existing building after obtaining approval for its project plan. (1) The association shall apply for parcelling-out and the guidance for parcelling-out stating the period, place, method, reference matters, etc. for the application for parcelling-out and the project implementation plan; (2) The association members who intend to obtain parcelling-out of units, welfare facilities, etc., such as housing or commercial buildings, shall re-enter an application for parcelling-out within the period for parcelling-out determined by the association, accompanied by evidentiary documents attesting their rights, such as a certified copy of the land and buildings, within the period for parcelling-out determined and notified by the association.

(2) After receiving an authorization for project implementation, the Defendant issued a notice for the public announcement of the sale in lots and a notice for the application for parcelling-out to the members including the Plaintiff and the designated parties, and received the application for parcelling-out from the members of the association from May 19, 2004 to June 22, 2004 to each of the members of the association. The Plaintiff and the designated parties filed an application for parcelling-out of 44 square apartments.

C. Resolution and authorization of the Defendant’s management and disposal plan

(1) On December 19, 2004, the defendant held an extraordinary general meeting of management and disposition on the agenda item 1 to additionally incorporate the project site into the project site (64-1 and 64-16), held the following items (including 201 Dong office and Dong office), held the amendment of the articles of association of the association as the agenda item 3, held the confirmation of financial statements as the agenda item 4 (97 to April 30, 2004), held the consultation (4 to April 30), held the approval of the main contract with the execution company as the agenda item 6, held the confirmation of the management and disposition plan as the agenda item 7 as the agenda item, and attended the meeting of 537 members of the total number of 537 (including 171 persons who submitted a written resolution), and obtained an additional resolution from the head of the Gu to 414 members (including 51 members of the association, 55 members of the association, and 204 members of the Seoul Special Metropolitan City as the management and disposition plan.

(2) The main contents of the management and disposal plan (draft) resolved at the above special meeting are as follows.

1. Newly constructed apartment units: 1. The total number of members of the association shall be 810 households, 58 square meters (24 households for the portion of the association members), 195 households (11 households for the portion of the association members, 361 households for the portion of the association members, 8 households for the portion of the association members), 25 square meters (34 households for the portion of the association members) shall be determined by the following formula. 2. The value of each right to the housing site and building facilities for the members of the association shall be determined by the method of calculating the sale price of the previous land and building [24 households for the portion of the association members for the portion of the association members for the portion of the association members for the portion of the association members for the portion of the association members for the sale, 369 square meters (3 households for the portion of the association members for the portion of the association members for the sale, 360 square meters for the portion of the association members for the sale in lots, and the value of each right to the association members for the sale in lots shall be determined in principle:

(3) On December 22, 2004, the Defendant notified the members of the association of the amount of their rights and the result of an ordinary allocation in accordance with the application for parcelling-out. The Plaintiff, 2, 4, and 5, who applied for parcelling-out, assigned 33 square apartment units instead of 44 square apartment units applied for parcelling-out (in the order of the value of rights), and the Selection 3 was allocated 4 square-type apartment units after he was allocated 33 square-type apartment units.

(d) Changes in the horizontal shape of an apartment to be constructed;

Around September 3, 1999, the Defendant applied for a construction deliberation to the Jongno-gu Office as to the construction of 25 square-type 214 households, 33 square-type 738 households, and 43 square-type 136 households; however, around August 2003, the Defendant changed the design to the construction of 25 square-type 84 households, 33 square-type 500 households, 44 square-type 195 households, 58 square-type 32 households due to the implementation of the Seoul Urban Planning Ordinance, and applied for authorization for the change of the project plan. On May 3, 2004, the Defendant obtained the authorization for the implementation of the said housing construction project; thereafter, the Defendant changed the design to the construction of 25 square-type 34 households, 333 square-type 549 households, 44 square-type 195 households, 58 square-type 32 households.

2. The plaintiff's assertion

The plaintiff asserts that the resolution made by the defendant at the extraordinary general meeting of management and disposition on December 19, 2004 is null and void for the following reasons.

A. According to Article 47 (3) of the Multi-unit Building Act (hereinafter “the Multi-unit Building Act”), when a rebuilding resolution is adopted, a rebuilding resolution adopted at the inaugural general meeting (hereinafter “the first rebuilding resolution”) did not specifically state the outline of the design of the new building, estimated expenses incurred in removal of the building and construction of the new building, the apportionment of expenses incurred in relation to the apportionment of sectional ownership of the new building, and the matters concerning the allotment of sectional ownership of the new building (hereinafter “the first rebuilding resolution”) and the matters concerning the allotment of sectional ownership of the new building. Therefore, there is no rebuilding resolution. Thus, the above rebuilding resolution at the special general meeting of the management and disposal was adopted by the defendant without notifying the members of the amount and the result of the application for parcelling-out in advance in order to prevent the opposition of the members without notifying the members of the amount and the result of the right in advance. Thus, even if the rebuilding resolution was adopted at the general meeting of the above management and disposal, the defects existing in the first rebuilding resolution cannot be cured by the majority of the expenses incurred in the management and disposal plan.

B. The defendant applied for the construction of 25 square-type 214 households, 33 square-type 738 households, and 43 square-type 136 households at the time of applying for a construction deliberation on around September 1999, but applied for the construction of 25 square-type 84 households, 33 square-type 50 households, 44 square-type 195 households, and 58 square-type 32 households under Article 16 and 28 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents; however, the defendant applied for the construction of 25 square-type 34 households, 33 square-type 50 households, 44 square-type 195 households, and 58 square-type 32 households without the consent of the members of the association at the special meeting on the management and disposal, thereby null and void the above general meeting.

C. The resolution of the special general meeting of the above administration and disposal is null and void due to the procedural defect, because the resolution of the special meeting of the above administration and disposal was carried out without disregarding the opposing union members' right to speak, such as forced members to object or object to the agenda of the general meeting which the defendant distributed in advance.

D. Although the members of the association whose share in the site is 19.738 is 19.78 is simply calculated at a hostile rate, the resolution of the special general meeting of the above management and disposal has been passed so that the share in the site is equal to the shares in the union members of not more than 15 square meters and not more than 2 square meters, which is contrary to equity, and is contrary to equity, Article 47(4) of the Act on the Ownership and Management of Aggregate Buildings. (In the event that the plaintiff or the designated members did not purchase any flat apartment that they want to purchase, the defendant's excessive share in the land of not more than 13 square meters and reduced the number of the 25-type apartment by selling the 33-type apartment to the union members who own the land of not more than 13 square meters, and the number of the 33-type apartment units increases substantially due to the increase in the number of the 44-type apartment units, if the 333-type apartment units are equal to the above shares in the site or the right area, it would be invalid.

3. Determination

A. Determination on the validity of the initial rebuilding resolution and the extraordinary management and disposition resolution

(1) The validity of the initial rebuilding resolution

As seen above, the defendant held an inaugural general meeting on December 6, 1997 and adopted a rebuilding resolution by means of receiving a written consent for rebuilding. Of the contents of the rebuilding resolution, the estimated amount of expenses for demolition of buildings and new construction among the contents of the rebuilding resolution is not determined specifically as the contractor is not selected, and the apportionment of expenses is determined according to the general meeting resolution of management and disposal pursuant to Article 38 of the articles of incorporation, and the matters concerning the apportionment of expenses are also determined by the management and disposal plan pursuant to Articles 37 and 38 of the articles of incorporation, and Article 38(5) of the articles of incorporation provides that the allocation of expenses by square type of rebuilding house shall be determined in accordance with the management and disposal plan, taking into account the size, location, number of floors, etc. of the existing house owned by each association member. Thus, the first rebuilding resolution shall be deemed invalid unless there is any special reason to believe that the most important and essential matters among the contents of rebuilding resolution, the allocation of expenses, and the allocation of divided ownership, and the calculation of expenses is omitted or incomplete due to its contents.

(2) Validity of a resolution of an extraordinary general meeting of administration and disposition

(A) The nature of the management and disposition plan(s) and the quorum

A management and disposal plan (draft) adopted at an extraordinary general meeting of the above management and disposal has the meaning of specifically confirming the contents of reconstruction discussed in the course of rebuilding implementation, including the fact that the first resolution of rebuilding was the most essential part of rebuilding and the matters concerning the attribution of sectional ownership, without specifically prescribing the cost sharing, which is the most essential part of rebuilding and the matters concerning the reversion of sectional ownership, and it has the same meaning as a resolution to make an effective rebuilding resolution, so long as the first resolution of rebuilding has no validity as above, it shall have the character of a resolution to make an effective rebuilding resolution. Therefore, the resolution requires a resolution by the majority of 4/5 or more of the members, which is a special majority of the members at the time of rebuilding resolution (Therefore, the defendant'

(B) Whether the required resolution of the management and disposal plan (draft) is satisfied

① Examining whether the management and disposition plan’s proposal among the bills for the special meeting of management and disposition satisfies the quorum of 4/5 or more, it is clear in the calculation that the quorum of 4/5 was less than 4/5, given that 512 of the total number of 537 members present at the special meeting and the consent of 414 of them was obtained.

② Article 41(1) of the Aggregate Buildings Act provides that “If there exists an agreement in writing with 4/5 or more of the sectional owners and voting rights, it shall be deemed that there exists a resolution by the management and disposal body meeting.” Since such rebuilding resolution can be adopted at the management and disposal body meeting pursuant to Article 47(1) of the Aggregate Buildings Act, it shall be possible to make a written resolution under Article 41(1) of the Aggregate Buildings Act. Furthermore, the rebuilding association has a large number of its members, and the degree of interest and participation in rebuilding is complicated over a long time, and it is not necessary for the rebuilding association to have a separate resolution by 40 percent of the total number of sectional owners to the effect that the rebuilding resolution would have been adopted at the management and disposal body meeting (see, e.g., Supreme Court en banc Decision 200Da41720, Apr. 21, 2005). It is not necessarily necessary for the rebuilding association to have a separate resolution by the management and disposal body meeting to the effect that the rebuilding resolution would have been adopted.

③ As the Plaintiff did not notify the members of the amount of rights and the result of the application for parcelling-out in the above special meeting, the Plaintiff asserts to the effect that the above special meeting resolution is null and void, but such circumstance alone cannot be readily concluded that the above resolution is null and void.

(C) Sub-decisions

Therefore, the plaintiff's assertion that the resolution on the above management and disposal plan including the criteria for the allocation of the grade and the number of units and the method of drawing lots becomes null and void due to a quorum is without merit (the plaintiff claims that the plaintiff seeks confirmation on the invalidity of the resolution on the special general meeting of management and disposal on December 19, 2004, but the plaintiff asserts that the plaintiff's additional written consent after the above resolution is submitted by the union members, and that the defect is not cured. As seen above, the above resolution is not effective due to the lack of the quorum, but it is not valid since some union members separately agreed to the above resolution, and then the resolution is valid at that time by submitting a separate document to the purport that some union members agree to the above resolution. In light of the above, if the plaintiff's own resolution on December 19, 2004, which had been done before the above resolution, it is unlawful to seek confirmation on the past legal relations, it shall be deemed that the plaintiff actually disputes the validity of the resolution on the special meeting of management and disposal and the above management plan with some union members' consent submitted).

(b) Whether members consent to revise a business plan;

Around September 199, when the Defendant applied for the initial deliberation on construction, the construction of 25 square-type 214 households, 33 square-type 738 households, and 43 square-type 136 households. However, around August 2003, the project plan was revised to newly construct 25 square-type 84 households, 33 square-type 50 households, 44 square-type 195 households, and 58 square-type 32 households. In addition, the above project plan was revised to newly construct 25 square-type 34 households, 33 square-type 549 households, 44 square-type 195 households, and 58 square-type 32 households, and the Plaintiff’s design was modified to construct 45 square-type 195 households at the extraordinary general meeting of management and disposal as seen earlier, but there was no evidence to acknowledge that the Plaintiff’s consent was obtained from the members at the time of design change before the above revision of the Act.

(c) Whether there is any serious procedural defect in the course of the management and disposition special general meeting;

As alleged by the Plaintiff, it is difficult for the Defendant to easily believe that the entry of the evidence No. 11, which appears to be consistent with the fact that the Defendant used violent methods and carried out the extraordinary meeting, and according to the statement No. 6, it is recognized that the Defendant did not accept the opinion of some members demanding the Defendant to speak and proceed with the extraordinary meeting, but this circumstance alone is insufficient to readily conclude that the defect in the procedure of the extraordinary meeting is serious, and there is no evidence to acknowledge the Plaintiff’s assertion, and therefore, this part of the Plaintiff’s assertion

D. Whether the content of the resolution at the extraordinary general meeting for administration and disposal is contrary to equity

(1) As seen earlier, according to Article 47(3) and (4) of the Aggregate Buildings Act, when a resolution for reconstruction is adopted, matters concerning the removal of the building and the allocation of expenses incurred in constructing the new building and matters concerning the allotment of sectional ownership of the new building shall be determined. The above matters shall not be determined in accordance with the principle of equity among sectional owners. Thus, if the resolution for reconstruction considerably violates the equity among sectional owners as to the above matters, barring any special circumstance, it shall be null and void. However, the principle of equity in matters concerning the apportionment of expenses and the apportionment of sectional ownership is not solely based on the formal principle of equity, but shall be determined by comprehensively taking into account various circumstances of reconstruction projects, such as the conditions for the implementation of the reconstruction project and whether there are limitations under the Acts and subordinate statutes related to the construction, the technical limits on the construction design and construction, the minimization of expenses borne by the association members through maximizeizing the profit from the sale, the degree of unfair disadvantages between the majority members

(4) Article 41(6) of the amended Rules provides that "If the size of housing units to be sold by members is different from that of the association members after the implementation of the project, the association members shall pay the difference within the period determined by the association or the association shall pay the price calculated by converting the unit area of the building site into the unit area of the association because the rights of the association members are to be distributed to the association members on the basis of the value of the newly built apartment units, and the sale price of each building and unit is to be calculated by calculating utility index for each floor and location in order to ensure balance and equality in the share of the association members." Since Article 47(4) of the Aggregate Buildings Act provides that "if there is a difference between the size of housing units to be sold by the association members on the basis of the unit area of the previous building site and the size of the housing units to be sold by the association members after the implementation of the project, it is difficult to ensure that the number of new apartment units to be sold to the association members on the basis of the difference in the size and value of the new building units is to be sold.

4. Conclusion

Therefore, all of the plaintiff's primary and conjunctive claims of this case shall be dismissed as they are without merit, and the judgment of the court of first instance with the same conclusion is just, and the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment List of Appointed]

Judges Lee Jong-Un (Presiding Judge)