The legislative purport of Article 27(2) of the Installation and Utilization of Sports Facilities Act / Where a certain facility originally fell under an essential sports facility under Article 27(2) of the Installation and Utilization of Sports Facilities Act, but the original purpose of the facility has been lost to the extent that it was unable to run the previous sports facility business by using it, and the actual business of the sports facility business has not been maintained, whether the facility still falls under an essential sports facility (negative) and whether the purchaser succeeds to the rights and obligations of the existing sports facility business operator in cases where such facility was sold in accordance with the procedures prescribed in each subparagraph of Article 27(2) of the Installation and Utilization of Sports Facilities Act (negative)

Article 27 of the Installation and Utilization of Sports Facilities Act (hereinafter “sports facilities Act”) aims to maintain management systems established in relation to the authorization and permission of a business and protect the interests of many members who have concluded a utilization relationship with a sports facility business entity despite the change of a business entity. In particular, even if Article 27(2) of the Sports Facilities Act does not constitute a transfer of business under paragraph (1) of the same Article, the legislative intent of Article 27(2) of the Sports Facilities Act is to apply mutatis mutandis to cases where the ownership of an essential facility according to the standards for the facilities of the sports facility business prescribed by Ordinance of the Ministry of Culture, Sports and Tourism (hereinafter “essential sports facility”) is transferred according to the procedures for an auction under the Civil Execution Act, etc. prescribed by each subparagraph of paragraph (2)

In light of the contents of Articles 11(1), 27(1) and (2) of the Sports Facilities Act, Article 8 [Attachment 4] of the Enforcement Rule of the Installation and Utilization of Sports Facilities Act, and the legislative intent of Article 27 of the Sports Facilities Act, etc., a facility originally fell under an essential sports facility under Article 27(2) of the Sports Facilities Act, but a facility remaining after a certain facility is worn out or removed, etc., has lost its function according to its original purpose of use and has reached the extent that it is impossible to operate the previous sports facility business by using the remaining facility due to its deterioration or removal, and the actual operation of the sports facility business has not been left, the facility may not be deemed to fall under an essential sports facility under Article 27(2) of the Sports Facilities Act. Even if such facility is sold in accordance with the procedures prescribed in each subparagraph of Article 27(2) of the Sports Facilities Act, such as an auction under the Civil Execution Act, and thus, a purchaser of the facility does not succeed to the rights and obligations of the existing sports facility business entity.

Articles 11(1) and 27 of the Installation and Utilization of Sports Facilities Act, Article 8 [Attachment 4] of the Enforcement Rule of the Installation and Utilization of Sports Facilities Act

Supreme Court en banc Order 2016Da220143 Decided May 25, 2016 (Gong2016Ha, 835), Supreme Court en banc Decision 2016Da220143 Decided October 18, 2018 (Gong2018Ha, 2183)

Plaintiff 1 and six others (Law Firm Western, Attorney Cho Young-ho, Counsel for the plaintiff-appellant)

MSPPP et al. (Law Firm P & P & P, Attorneys Seo-sik et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2017Na2052178 decided May 4, 2018

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

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

1. The judgment on the ground of appeal as to Defendant MSdibsky's Republic of Korea

A. Article 27(1) of the Installation and Utilization of Sports Facilities Act (hereinafter “Sports Facilities Act”) provides that a person who acquires essential facilities according to the facility standards prescribed by Ordinance of the Ministry of Culture, Sports and Tourism (hereinafter “essential sports facilities”) shall succeed to the rights and obligations arising from the registration or reporting of a sports facility business in addition to inheritance and merger. Paragraph (2) of the same Article also applies mutatis mutandis to a person who acquires the essential facilities according to an auction under the Civil Execution Act and other similar procedures.

A sports facility business entity shall install, maintain and manage facilities meeting the standards for facilities prescribed by Ordinance of the Ministry of Culture, Sports and Tourism according to the type of sports facility business (Article 11(1) of the Sports Facilities Act), and Article 8 of the Enforcement Rule of the Installation and Utilization of Sports Facilities Act (hereinafter “Enforcement Rule of the Sports Facilities Act”). [Attachment 4] of the above [Attachment 4] shall, regardless of the type of sports facility business, divide the essential sports facilities into convenience facilities, safety facilities, and management facilities according to the use of the essential sports facilities, regardless of the type of sports facility business, and determine the standards for facilities (1.A.). For skiing ground business, an essential sports facility is an essential sports facility (slofs including lifts necessary for slot lines), safety facilities, and management facilities (2. B.).

The legislative intent of Article 27 of the Sports Facilities Act is to maintain the management system established in connection with the authorization and permission of a business and to protect the interests of many members who have established a sports facility business relationship with the sports facility business entity (see, e.g., Supreme Court Order 2014Ma1427, May 25, 2016; Supreme Court en banc Decision 2016Da220143, Oct. 18, 2018). In particular, Article 27(2) of the Sports Facilities Act is to apply mutatis mutandis to cases where the ownership of an essential sports facility is not transferred according to the procedures such as an auction under the Civil Execution Act stipulated in each subparagraph of paragraph (2), even if the ownership of the essential sports facility is not a business transfer under Article 27(1) of the Sports Facilities Act.

In light of such provisions as the Sports Facilities Act, the Enforcement Rule of the Sports Facilities Act, and the legislative purport of Article 27 of the Sports Facilities Act, etc., in a case where certain facilities fall under an essential sports facility as prescribed by Article 27(2) of the Sports Facilities Act, but a facility remaining after the deterioration or removal of a part of the facilities, etc., loses its function according to its original purpose of use and became unable to run the previous sports facility business by using the remaining facilities, and the substance of the sports facility business remains not remaining, such facility cannot be deemed to constitute an essential sports facility as prescribed by Article 27(2) of the Sports Facilities Act. Even if such a facility is sold in accordance with the procedures prescribed by each subparagraph of Article 27(2) of the Sports Facilities Act, such as an auction under the Civil Execution Act, even if it is not applicable, it cannot be deemed that a person who purchased the relevant facility succeeds to the rights and duties of the existing sports facility business entity.

B. The lower court determined that the instant real estate could not be deemed an essential sports facility at the time of purchasing the instant skiing site and the building on the ground of auction by the conjunctive Defendant Ms. S.C., which included the instant real estate’s parking club, sirens, resting room, resting room, removal warehouse, removal house, s.f., and s., on the ground that the said facilities were considerably difficult to conduct the instant skiing ground business by using the said facilities, as well as to the extent that they did not meet the essential sports facility standards by themselves, and as they were likely to lose their functions in accordance with their intended purposes.

Examining the reasoning of the lower judgment in light of the foregoing legal doctrine, the lower court did not err by misapprehending the legal doctrine regarding essential sports facilities under Article 27(2) of the Sports Facilities Act, contrary to what is alleged in the grounds

2. Determination on the appeal against Defendant Alvidi Cases

The court of final appeal shall deliberate within the limit of the appeal pursuant to the grounds of final appeal (Article 431 of the Civil Procedure Act). The grounds of final appeal shall specify the grounds of final appeal and specify what points of the judgment below are in violation of the statutes, and shall treat the grounds of final appeal as failing to submit the grounds of final appeal when the grounds of final appeal do not state the aforementioned specific and explicit reasons (see Supreme Court Decision 2000Da29356, 29363, Mar. 23, 2001, etc.).

The Plaintiffs also appealed on the part against Defendant Alvidi case among the judgment below. However, since the final appeal and the final appeal submitted by the Plaintiffs did not state specific and explicit reasons as to this part, it should be deemed that the Plaintiffs did not submit the final appeal as to this part.

3. Conclusion

The plaintiffs' appeal is dismissed in entirety as it is without merit, 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.

Justices Lee Dong-won (Presiding Justice)