Whether the latter part of Article 65 (2) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents shall apply to the site of road constructed by a local government by implementing a land readjustment project as a part of an urban planning project (affirmative), and the validity of sales contract, etc. concluded by the

The latter part of Article 65(2) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 8785, Dec. 21, 2007; hereinafter “former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents”) provides that “The maintenance infrastructure owned by the State or a local government, the use of which is abolished due to the implementation of a rearrangement project, shall be transferred to the project implementer without compensation to the extent equivalent to the installation cost of the newly installed maintenance infrastructure.” Here, “the maintenance infrastructure owned by the State or a local government, which is gratuitously transferred to the project implementer” refers to the infrastructure owned by the State or a local government, which was already determined by an urban management plan under the former National Land Planning and Utilization Act (amended by Act No. 8819, Dec. 27, 2007; hereinafter “former National Land Planning

In a case where a road is in the form of a road and the designation and public announcement of routes and a road zone are determined and publicly announced pursuant to the Road Act, or where a road is constructed through the procedures as prescribed by the former Urban Planning Act (amended by Act No. 2435, Dec. 30, 1972; hereinafter referred to as the “former Urban Planning Act”), a public commencement act may be deemed to exist. In a case where a road site, which is one of public facilities managed by a local government as a result of the execution of a land readjustment project by a local government, becomes one of the public facilities managed by a local government, such land can be deemed as

According to Article 2 (1) of the former Urban Planning Act, an urban planning project can also be conducted by a land readjustment project. A road constructed by a local government by a land readjustment project as part of an urban planning project shall be considered as a public facility determined and installed by an urban planning project in accordance

According to Articles 12 and 15 of the Addenda to the former National Land Planning and Utilization Act (amended by February 4, 2002), urban planning determined by the former Urban Planning Act shall be considered as urban planning determined by the former National Land Planning and Utilization Act, and urban planning facilities under the former Urban Planning Act shall be deemed as urban planning facilities under the former National Land Planning and Utilization Act. Therefore, with respect to a site for a road installed by a local government which was implemented by a land readjustment and rearrangement project as part of an urban planning project, the latter part of Article 65(2) of the former Act shall apply, regardless of whether a road zone has been determined and publicly notified under the former National Land Planning and Utilization Act

In light of the legislative intent of the latter part of Article 65(2) of the former Act, since a private project implementer is a mandatory provision compelling a free transfer of the fundamental infrastructure to be disused within the extent equivalent to the installation cost of the fundamental infrastructure to be newly installed, a sales contract concluded between a project implementer and the State or a local government in violation of the said provision shall be null

Article 65(2) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 8785, Dec. 21, 2007; see current Article 97(2)); Article 2 subparag. 4, 7, and 30 of the former National Land Planning and Utilization Act (Amended by Act No. 8819, Dec. 27, 2007); Articles 12 and 15 of the Addenda (Amended by Act No. 4, Feb. 4, 2002); Articles 2(1)1, 3, and 12 of the former Urban Planning Act (Amended by Act No. 2435, Dec. 30, 197); Article 105 of the Civil Act

Supreme Court Decision 99Da5432 Decided February 25, 2000 (Gong2000Sang, 832) Supreme Court Decision 2007Du24289 Decided November 27, 2008 (Gong2008Ha, 1805) Decided August 11, 2009 (Gong2008Ha, 1805) Supreme Court Decision 2008Da20751 Decided June 11, 2009 (Gong2009Ha, 1107)

Law Firm Cheongju Apartment Housing Reconstruction and Rearrangement Project Association (Law Firm Cheong Law Firm et al., Counsel for the plaintiff-appellant)

Busan Metropolitan City (Law Firm Barun et al., Counsel for the defendant-appellant)

Busan High Court Decision 2013Na9406 decided June 4, 2015

The judgment below is reversed, and the case is remanded to Busan High Court.

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

1. Basic factual basis

According to the reasoning of the lower judgment and the record, the following facts are revealed.

A. The Plaintiff obtained authorization from the head of the Busan Metropolitan Government Shipping Government with respect to a housing reconstruction improvement project with respect to 198,035 square meters of land (hereinafter “instant rearrangement project”), which is located on June 25, 2003, authorization to establish an association on November 5, 2007, authorization to implement a project on November 5, 2007, and authorization to revise on July 20, 2009 from the head of the Busan Metropolitan Government Shipping Daegu-dong 1525 square meters of land.

In accordance with the authorization terms changed on September 22, 2009, the Plaintiff purchased from the Defendant the total area of 14,616 square meters of three parcels, including 14,670.8 square meters of three parcels, including 14,616 square meters, from among 1539,45.2 square meters of Busan Metropolitan City, Daegu-dong 1539.2 square meters (hereinafter “instant land subject to sale”), for KRW 22,202,730,000 (hereinafter “instant sales contract”), and paid the purchase price in full to the Defendant around that time.

The costs of installing infrastructure that the Plaintiff gratuitously reverted to the Defendant while implementing the instant rearrangement project are more than 10 billion won than the costs of installing infrastructure that he/she gratuitously transferred from the Defendant.

B. On September 12, 1970, the Minister of Construction and Transportation publicly announced on September 12, 1970 that the Mayor of Busan City ordered the implementation of the land readjustment project in Busan Central Eastdong District according to the former Land Readjustment Project Act (amended by Act No. 2848, Dec. 31, 1975; hereinafter “former Land Readjustment Project Act”). On June 13, 1974, upon the Defendant’s application for the change of the street network plan, he made a decision to modify part of the Busan Urban Planning under the land readjustment Project, including the change of the street network plan, and publicly notified it.

In 1974, the Korea National Housing Corporation purchased part of the land subject to the said land readjustment project from the defendant in order to newly build an apartment, and constructed the road by consultation with the defendant on June 13, 1974. The current status of the road constructed by the above alteration authorization and the road at the time when the implementation of the instant rearrangement project was approved is the same, and the land subject to the sale in this case is part of the road constructed at the time of sale.

At the time of the above modification, some roads within the land readjustment project zone were determined and publicly announced as new roads, and transferred to the Plaintiff without compensation under the instant rearrangement project. The land to be sold in this case was excluded from the land subject to the determination and public notice of new roads. The defendant completed the said land readjustment project on August 7, 1975, and registered the ownership preservation of the land to be sold in this case on August 9, 1976.

2. The judgment of the court below

The lower court deemed that the land to be sold in this case was already determined as a road from the determination of urban planning facilities under the former National Land Planning and Utilization Act (amended by Act No. 8819, Dec. 27, 2007; hereinafter “former National Land Planning Act”), but held that the land to be sold in this case for the following reasons does not constitute an infrastructure for rearrangement, the use of which is abolished by the instant rearrangement project.

With respect to the land to be sold in this case, there is no evidence to acknowledge that there is a public announcement of the designation or recognition of routes and road zones under the Road Act, or that a road was constructed through the procedures under the former Urban Planning Act (amended by Act No. 2435, Dec. 30, 1972; hereinafter “former Urban Planning Act”). A part of the urban planning roads included in the apartment site was determined and publicly announced as a new road, and the Defendant transferred only the portion determined and publicly announced as a road as above to the Plaintiff without compensation. In light of these circumstances, the sale in this case is merely a current status of the land to be sold.

3. Supreme Court Decision

A. The latter part of Article 65(2) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 8785, Dec. 21, 2007; hereinafter “former Act”) provides that “The maintenance infrastructure owned by the State or a local government and ceased to be used due to the implementation of a rearrangement project shall be transferred to the project implementer without compensation to the extent equivalent to the installation cost of the newly installed maintenance infrastructure.” Here, “the maintenance infrastructure owned by the State or a local government and gratuitously transferred to the project implementer” refers to the infrastructure owned by the State or a local government and already installed by an urban management plan under the former National Land Planning Act prior to the authorization for the implementation of a rearrangement project (see Supreme Court Decision 2007Du24289, Nov. 27, 2008, etc.).

In a case where a road is in the form of a road and a road zone is determined and publicly announced, or a road is constructed through the procedures prescribed by the former Urban Planning Act (see Supreme Court Decision 9Da5432, Feb. 25, 2000, etc.). In a case where a land becomes one of the public facilities managed by a local government as a result of the implementation of a land readjustment and rearrangement project by a local government, the land can be deemed as the land provided for the purpose of public facilities by the implementation of a land readjustment and rearrangement project by a local government (see Supreme Court Decision 98Da1607, 1614, Aug. 21, 1998, etc.).

According to Article 2 (1) of the former Urban Planning Act, an urban planning project can also be conducted by a land readjustment project. A road constructed by a local government by a land readjustment project as part of an urban planning project shall be considered as a public facility determined and installed by an urban planning project in accordance

According to Articles 12 and 15 of the Addenda to the former National Land Planning and Utilization Act (amended by February 4, 2002), urban planning determined by the former Urban Planning Act shall be considered as urban planning determined by the former National Land Planning and Utilization Act, and urban planning facilities under the former Urban Planning Act shall be deemed as urban planning facilities under the former National Land Planning and Utilization Act. Therefore, with respect to a site for a road installed by a local government which was implemented by a land readjustment and rearrangement project as part of an urban planning project, the latter part of Article 65(2) of the former Act shall apply, regardless of whether a road zone has been determined and publicly notified under the former National Land Planning and Utilization Act

In light of the legislative intent of the latter part of Article 65(2) of the former Act, since a private project implementer is a mandatory provision compelling a free transfer of the fundamental infrastructure to be disused within the extent equivalent to the installation cost of the fundamental infrastructure to be newly installed, a sales contract concluded between a project implementer and the State or a local government in violation of the said provision is null and void (see Supreme Court Decision 2008Da20751, Jun. 11, 2009, etc.).

B. Examining the above facts in light of the statutes and legal principles, the following conclusion can be derived.

In around 1970, the Defendant implemented a land readjustment project, which is an urban planning project, as a project zone, around the land to be sold under the former Land Readjustment Project Act. In around 1974, the Defendant sold part of the land subject to a land readjustment project to the Korea National Housing Corporation, and obtained authorization for modification of a land readjustment project on a road network plan according to the construction of apartment units. According to the modified authorization, the land subject to sale in this case was created into a road as at the time

The road created in the land to be sold in this case is a public facility installed as a result of the implementation of a land readjustment project, which has gone through the procedures prescribed by the former Urban Planning Act. As regards the land to be sold in this case, it shall be deemed that there has been an urban management decision on infrastructure under the former National Land Planning and Utilization Act, and the latter part of Article 65(2) of the former Act

C. Nevertheless, the lower court erred by misapprehending the legal doctrine on the establishment, etc. of roads, which are fundamental infrastructure for rearrangement under the latter part of Article 65(2) of the former Act, on the ground that there is no evidence that the land to be sold in this case was constructed through the designation of roads under the Road Act or the procedures under the former Urban Planning Act.

4. Conclusion

The Plaintiff’s appeal is with merit and is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Chang-suk (Presiding Justice)