(영문) 부산지방법원 2014.12.18.선고 2014구합329 판결

1. The Defendant’s disposition of ordering the return of subsidies against the Plaintiff on August 6, 2013 is revoked. 2. The costs of lawsuit are assessed against the Defendant.

Purport of claim

The same shall apply to the order.

Reasons

1. Details of the disposition;

A. The Plaintiff is a social welfare foundation established on August 26, 1996 for the purpose of establishing and operating the disabled residential facilities under the Social Welfare Services Act and the Welfare of Disabled Persons Act.

B. On March 18, 2009, the Plaintiff filed an application with the Defendant for the new construction of C, which is a living facility of the severely disabled person, in the size of 700 meters of the total floor area of the first floor and the second floor above the ground, on the land outside Busan-gun, Busan-gun, and the Minister of Health and Welfare approved C on April 21, 2009 as a function reinforcement project of national subsidy (hereinafter “instant project”).

C. The Defendant organized the subsidy budget of KRW 984,60,000 (hereinafter referred to as the “instant subsidy”) with respect to the new construction works of the C (hereinafter referred to as the “facilities of this case”). Of the above budget’s financial resources, 50% of the above budget’s financial resources is state expenses, and 50% was local expenses borne by Busan Metropolitan City.

D. The Defendant delivered to the Plaintiff a total of KRW 970,363,000 on eight occasions from November 8, 2009 to August 12, 2010, according to the C’s work completion order.

E. However, on August 6, 2013, the Defendant decided and notified the Plaintiff of the refund of KRW 224,679,170 out of the instant subsidy up to August 14, 2013 (hereinafter “instant disposition”).

F. Accordingly, the Plaintiff filed an administrative appeal with the Busan Metropolitan City Administrative Appeals Commission on September 12, 2013, but the Plaintiff’s appeal was dismissed on October 22, 2013.

[Ground of recognition] The fact that there has been no dispute, Gap's evidence of subparagraphs 1 through 9 (including a branch number, hereinafter the same shall apply), Eul's evidence of subparagraphs 1 through 4, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) According to the Act on the Management of Illegal Subsidies without Authority to dispose of Subsidies (hereinafter “Subsidy Act”) and the Social Welfare Services Act, the person entitled to order the return of the subsidy of this case shall be the head of the central government agency in the case of the national subsidy, the Minister of Health and Welfare, and the head of the Busan Metropolitan City in the case of the local government. There is no evidence as to the fact that the Minister of Health and Welfare or the head of the Busan Metropolitan City may delegate such authority to the defendant who is the head of the local government, or

2) The disposition of this case’s procedural defect is deemed to be in accordance with Article 31(1) of the Subsidy Act, and in order to order the return of the subsidy, the revocation of the decision to grant the subsidy under Article 30(1) of the same Act shall be prior to the revocation of the decision to grant the subsidy. Although the decision to grant the subsidy was not revoked prior to the disposition of this case, the Defendant’s order to

3) The grounds for disposition in the absence of the grounds for disposition are "use of subsidies for which no approval is granted". In light of the relevant provisions of the Subsidy Act, the alteration of the Plaintiff's business contents does not constitute an alteration that requires approval from the head of a central government agency under Article 23 of the Subsidy Act, and even if the approval was not obtained, it cannot be deemed as an alteration that used subsidies for purposes other than those for which subsidies were granted under Article 22 of the same Act. Thus, the disposition in the instant case

(iv) the deviation and abuse of discretionary power;

The Plaintiff used the instant subsidy in the instant business, and the portion of the Plaintiff’s financial burden was increased, and the procedure was not well-grounded due to the change of the business contents, and thus, failed to take the procedure for the change of the business through the residents’ living support room belonging to the Defendant. Thus, if the Plaintiff knew of such procedure, the design would have been changed as a matter of course by obtaining the approval for the change of the business, and there is no reason attributable to the Plaintiff that the Plaintiff failed to submit settlement documents on some of the subsidies. In light of the circumstances, the Defendant’s disposition

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

1) On March 18, 2009, the Plaintiff submitted a business plan for the construction of the instant building to the Defendant, and was allocated KRW 492,300,000 as State subsidies and local subsidies of Busan Metropolitan City for the implementation of the instant project.

2) The Defendant granted subsidies following the progress of the instant project to the Plaintiff, and specified that the subsidies should not be used for any other purpose, except in extenuating circumstances, be executed with a credit card, and the balance should be returned at the same time as the execution is completed, and the settlement report should be implemented along with relevant evidential documents, and the pertinent laws and regulations and the Ordinance on the Subsidies of the plane Captain should be complied with.

3) During the process of the instant project, the Plaintiff filed an application for approval to revise the details of design to change construction materials from government-funded materials to private-funded materials, and filed an application for approval to revise the details of design with the Defendant on April 9, 2010. On May 8, 2010, the Plaintiff filed an application for approval to revise the project with the Defendant on May 14, 2010.

4) However, in the process of the construction of the instant facility, the Plaintiff changed the design contents related to the earth and sand construction (tampers, refixers, and re-treatment) in the process of construction of the instant facility, and changed the structure from the retaining wall structure to the natural stone structure, and partially changed the excellent pipes’ facilities to the natural stone structure, and constructed them differently from the design drawings on the initial project plan.

5) In the process of modifying the design as above, the Plaintiff obtained permission (the construction and jurisdiction of the Defendant) for the change of the form and quality of land and the change of excellent and sewage facilities under the Building Act, but did not obtain approval for the change of the business under the Subsidy Act (the jurisdiction of the Defendant’s residents’ livelihood support office). After completing the construction of the instant facility, the Plaintiff did not submit data to prove the project cost of the part of the earth and sand installed voluntarily upon the Defendant’s request for supplementation of the settlement documents and documents to pay insurance premiums

6) On June 10, 2010, the Plaintiff obtained a provisional approval for the instant facilities, and obtained authorization for the completion of the said facilities on May 4, 201.

7) On June 7, 2013, the Defendant accused D and his spouse, who was the president of the Plaintiff, directly involved in the construction process C, to the Busan District Police Station on charges of violating the Subsidy Act and embezzlement, etc. However, the Prosecutor F of the Dong District Prosecutors' Office of Busan District Prosecutors' Office, on November 29, 2013, issued a disposition that there was no suspicion of lack of evidence as to D's violation of the Subsidy Act and embezzlement of E.

【Ground of recognition】 Evidence Nos. 10 to 33, Evidence Nos. 5, 8 through 13, and 17 through 26, witness E’s testimony, and purport of the whole pleadings

D. Judgment on the plaintiff's first argument

1) The Subsidy Act and the Enforcement Decree of the same Act (hereinafter referred to as the “Enforcement Decree of the Subsidy Act”) provide that ① in the case of subsidies to local governments, the scope of projects eligible for subsidies, basic rate of subsidies shall be determined by the Presidential Decree (Article 9 of the Subsidy Act), ② in the case of projects of local governments eligible for subsidies under Article 9(1) of the Subsidy Act, “social welfare facilities and equipment support” shall be included, and the basic rate of subsidies shall be 50% (Article 4(1) and attached Table 1 of the Enforcement Decree of the Subsidy Act), and ③ in the event the head of a central government agency decides to grant subsidies, he/she shall notify the applicant of the decision to grant the subsidies without delay (Article 19(1) of the Subsidy Act). The Social Welfare Services Act provides that the State or a local government may fully or partially subsidize expenses incurred by a social welfare foundation (Article 42(1))

On the other hand, the Local Finance Act (amended by Act No. 11900, Jul. 16, 2013; hereinafter referred to as the "Local Finance Act") is a case where the local government was designated by the State as a financial resource for the government subsidy.

Only an organization may be subsidized (Article 17(1)), and the State may grant subsidies to a local government within budgetary limits if deemed necessary for policies or if deemed particularly necessary in light of the financial situation of a local government (Article 23(1)), and a City/Do may grant subsidies to a Si/Gun/autonomous Gu within budgetary limits if deemed necessary for policies or if deemed particularly necessary in light of the financial situation of a Si/Gun/autonomous Gu (Article 23(2)).

In addition, the Busan Metropolitan City Ordinance on the Management of Subsidies (hereinafter referred to as the "Seoul Metropolitan City Ordinance on Subsidies") provides that the Mayor may subsidize all or part of the expenses incurred in the project only when it is based on the financial resources of the government subsidy and is designated by the State (Article 4), and the Mayor shall notify the applicant of the decision on the grant of subsidies (Article 8 (1)), and the head of the Busan Metropolitan City Ordinance on the Management of Subsidies (hereinafter referred to as the "Ordinance on Subsidies") provides that the head of the Gun may subsidize all or part of the expenses incurred in the project only when designated by the State (Article 4). In determining the grant of subsidies, the head of the Gun may issue a letter of order added to the above conditions (Article 8 (1)).

2) Considering that the instant subsidies under the aforementioned relevant Acts and subordinate statutes are deemed reflected in the budget for revenue and expenditure of the State, Busan Metropolitan City, and Busan Metropolitan City, the instant sanatoriums correspond to social welfare security facilities, Article 2 of the Subsidy Act, Article 2 of the Busan Metropolitan City Ordinance on Subsidies, Article 2 of the Ordinance on Subsidies for the plane Captain, and Article 2 of the Ordinance on Subsidies for the plane Captain, the term "subsidies", "subsidized subsidy program operator," "indirect subsidy program operator," "indirect subsidy program operator," and "indirect subsidy recipient," it is reasonable to view that the Minister of Health and Welfare, in accordance with the Subsidy Act, the head of Busan Metropolitan City, the head of Busan Metropolitan City, the Defendant, and the Defendant, in succession, made a decision to grant subsidies to the Plaintiff in accordance with the Ordinance on Subsidies for the Busan

Therefore, in relation to the defendant's decision to grant subsidies, the plaintiff has the status of an indirect subsidy program operator or a recipient of subsidies in the relation with the decision to grant subsidies by the Minister of Health and Welfare. In case where an indirect subsidy program is implemented in the form of granting indirect subsidies to a social welfare foundation or an operator of social welfare facilities with the financial resources of subsidies from the local government, etc., the head of the local government who performed the indirect subsidy program may order him/her to return all or part of the indirect subsidies already granted if he/she violated the Acts and subordinate statutes by using the subsidies paid to him/her for other purposes. Even if the financial resources of such indirect subsidies are national subsidies or local expenses, it is reasonable to deem that the head of the central government agency (the Minister of Health and Welfare in the case of social welfare programs) or the head of the local government (the head of the Busan Metropolitan City) is not necessarily a person who has the right to revoke the decision to grant subsidies or to order the return of subsidies

In light of the above legal principles, the head of the Gun may suspend the grant of the subsidy or order the return of all or part of the subsidy already granted when the person who received the subsidy from the captain-gun Municipal Ordinance violated the statutes or the conditions of the subsidy (Article 17). The defendant's disposition of this case which ordered the revocation of some of the subsidies of this case and the return of the revoked portion is legitimate based on the Social Welfare Services Act and the Ordinance of the captain-Gun, therefore, the defendant's disposition of this case is legitimate. Therefore, the plaintiff's assertion that the disposition of this case was made by the non-authorized person

E. Judgment on the plaintiff's second argument

1) First, it is interpreted that an order to return a subsidy is premised on the revocation of the decision to grant a subsidy, in light of the purport of the provision of the Subsidy Act, with respect to the portion of the national subsidy in the instant disposition.

However, even though the defendant did not explicitly state the revocation of the decision to grant a part of the subsidy in this case before the disposition in this case, in light of the prior notification of the disposition in this case or the plaintiff's response to the plaintiff's opinion, it is interpreted that the defendant expressed the purport of ordering the return of the subsidy corresponding to the revoked part on the premise that the decision to grant the subsidy in this case is revoked. Thus, it is reasonable to view that the disposition in this case was carried out together with the revocation disposition of the decision to grant the subsidy in this case, which is the premise. 2) Next, in light of the fact that Article 42 (3) provides that "the State or local government may order the return of all or part of the subsidy already granted in certain cases" as the premise of the return order, it is not necessary to revoke the decision to grant a subsidy in this case on the premise that the decision to grant the subsidy in this case was revoked on the ground that the decision to grant the subsidy in this case was made on the basis of the above premise.

3) The plaintiff asserts that the disposition authority to revoke the decision to grant subsidies is limited to the Minister of Health and Welfare or the Busan Metropolitan City Mayor, but the defendant is entitled to revoke the decision to grant subsidies of this case as the head of local government implementing indirect subsidy programs.

4) Therefore, the Plaintiff’s assertion that the decision to grant the instant subsidy was unlawful because there was no administrative disposition revoking the decision to grant the instant subsidy prior to the instant disposition is without merit.

F. Judgment on the third argument by the Plaintiff

1) According to Articles 22, 23, and 25 of the Subsidy Act, a subsidized business operator who implements a project using a subsidy prohibits using the subsidy for purposes other than the project in question, and strictly regulates matters concerning the grant and execution of the subsidy, including the diversion of expenses incurred in the project in question, including the cancellation of the decision to pay the subsidy and the order to return all or part of the subsidy if the subsidized business operator violates such obligation, and the penal punishment also regulates the matters concerning the grant and execution of the subsidy, including the diversion of expenses incurred in the project in question, when he/she intends to modify the contents of the project in question or modify the distribution of expenses incurred in the project in question.

As such, strictly limiting the use of subsidies for other purposes in the Subsidy Act is to prevent the use of subsidies for other purposes than those of the subsidized project in question, including the use by the subsidized person for personal purposes, as well as the use of subsidies for other purposes of the subsidized project in question, according to the specific changes in the details of the project where the use of subsidies

The purpose of this study is to prevent the waste of the subsidy budget and to properly use the subsidy in accordance with its original purpose by considering the necessity and suitability of the subsidy.

2) The following circumstances, which can be acknowledged by comprehensively considering the aforementioned provisions and purport of the relevant laws and regulations, which can be found in the instant case’s return to the instant case, i.e., ① the Plaintiff’s partial revision of the instant project after the decision to grant subsidies did not obtain prior approval from the Defendant, ② partial revision of the Ministry of Health and Welfare’s guidance on the welfare facilities for disabled persons, which is the Ministry of Health and Welfare’s guidance on the welfare program, was delegated the authority to approve the project, and ③ modification of the project within the scope that does not go against the original purpose of the subsidized project and does not exceed the original subsidy. ③ The third Plaintiff obtained prior approval on modification of the project’s project’s contents before the modification of the project’s contents, and thus, it appears that the Plaintiff was aware of the fact that it was necessary to obtain prior approval on modification of the project’s project’s contents. (4) The Plaintiff’s duty to implement the project’s plan is separate from that of the subsidized project operator under the Building Act, and the Plaintiff’s modification of the project’s project’s project’s contents without obtaining approval on modification of the subsidy under the Act.

3) Therefore, the defendant can revoke all or part of the decision to grant the subsidy of the project of this case and order the return of the subsidy corresponding to the subsidy project of this case. Thus, the plaintiff's above assertion against this order is without merit.

G. Judgment on the plaintiff's fourth argument

1) If the competent administrative agency revokes a part of the revocation of the decision to grant subsidies on the ground of a violation of statutes or the terms and conditions of the decision to grant subsidies, the scope of revocation shall be individually determined by comprehensively taking into account the purpose and contents of the subsidy program, the contents of the relevant statute or the decision to grant subsidies, the violation of the relevant statute or the relevant decision to grant subsidies, the motive behind the violation, the proportion of the portion in violation of the subsidy grant project, the ratio of subsidies illegally used from the total subsidy granted, and other factors (see Supreme Court Decisions 2002Du1165, Jan. 28, 2005; 2003Du1288, May 16, 2003).

2) The following circumstances, i.e., (i) the instant case’s return to, and the facts and circumstances acknowledged earlier, (ii) the Defendant did not obtain prior approval from, the Defendant in business changes; (iii) most of the instant subsidies were normally executed for the implementation of the instant project; and (iv) the Plaintiff did not appear to have used the instant subsidies for personal purposes; (iv) the details of the Plaintiff’s self-payment after executing the instant project’s original project’s plan compared to the intended amount of the Plaintiff’s self-payment; (iii) there was no violation of other Acts and subordinate statutes other than the Subsidy Act, such as seeking advice from, and obtaining permission under the Building Act; and (iv) the opportunity for the modification of the original project plan was to create an environment where the disabled persons were unable to obtain prior approval, rather than personal purposes; and (v) the Plaintiff did not obtain prior approval for the alteration of the project’s project’s new project plan, and the Plaintiff did not appear to have failed to obtain prior approval for the alteration of the entire project’s project plan and its related documents.

3) Therefore, the defendant's disposition of this case is illegal as it deviates from and abused the limits of discretion, and the plaintiff's assertion in this part is with merit.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition by admitting it.