2013Na21155 Confirmation of invalidity of a resolution of a general meeting

(490127-1****)

Daegu

Attorneys Nam-jin et al., Counsel for the defendant

00 District Neighborhood* District Urban Development Project Cooperatives

Daegu

Representative of the Association

Law Firm Sejong-young, Counsel for the defendant-appellant

[Defendant-Appellee]

Daegu District Court Decision 2013Gahap950 Decided August 22, 2013

December 18, 2013

January 15, 2014

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

Each resolution made by the Defendant with respect to each of the items stated in the separate sheet at the extraordinary general meeting of October 26, 2012 and the extraordinary general meeting of February 19, 2013 is invalid.

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

The following facts are either in dispute between the parties or in accordance with the purport of the whole pleadings, and there is no counter-proofs in Gap's evidence of subparagraphs 1 through 4, and Eul's evidence of subparagraphs 1 through 10 (including the numbers when they are not specially indicated; hereinafter the same shall apply):

A. Status of the parties

Defendant Union is a cooperative established with the authorization of the head of the Daegu Metropolitan City Seo-gu Office on April 25, 2008 for the purpose of running an urban development project for the Daegu Han-gu 21,565 meters. The Plaintiff is a member of the Defendant Union as a person who owns land in the above business district and owns the land in the above business district.

B. Articles of association of the defendant association

The articles of incorporation of the defendant's association concerning this case are as follows.

Article 5 (Scope, Method and Period of Project) The scope of the project shall be determined by the project plan, and the method of implementation shall be determined by the replotting method under Article 20 of the Act, and the project period shall be from the date of authorization of the implementation plan to the date of disposition of replotting

Article 20 (Matters to be Resolved by General Meeting) The following matters shall be subject to the resolution of the General Meeting. ① Amendment of the articles of incorporation. ① A meeting of the General Meeting of the General Meeting is attendance of more than a majority of the members (including representatives). Resolution shall be made with the consent of more than a majority of the members (including representatives) present at the meeting, and when the numbers of votes of approval and disapproval are the numbers of votes of approval and disapproval, it shall be determined by the Chairperson.Article 30 (Standards for Land substitution Plan) (1) The Land substitution Plan shall be, in principle, in consideration of the characteristics of the project district, and if it is deemed unreasonable in the course of the project implementation,

(c) An extraordinary general meeting of the defendant association;

Around 15:00 on October 26, 2012, the Defendant Union adopted a resolution to change the land substitution plan from "area type" to "evaluation type" (hereinafter referred to as "resolution of the fourth general meeting") with the consent of 27 members present among 38 members and 15 of them.

Around 15:00 on February 19, 2013, the defendant union held the fifth special meeting and changed the contents of the articles of association of the defendant union from "area formula" to "evaluation formula" as stated in the attached Form with the consent of 20 members of 38, and with the consent of 20 among them, the defendant union decided to increase the project cost of KRW 19:185 million to "the fifth general meeting resolution" (hereinafter referred to as "the fifth general meeting resolution").

2. The parties' assertion

A. The plaintiff's assertion

Article 23(1) of the Articles of the Defendant Union’s articles of association provides that the matters concerning the resolution of the fourth and fifth general meeting of the Defendant Union are substantially modified. Thus, the Defendant Union’s articles of association cannot adopt a resolution with the attendance of the majority of its members and the consent of the majority of its members present. In accordance with Article 13(3) of the Urban Development Act, “the consent of at least 2/3 of the size of the urban development zone is required by Article 13(3) of the Urban Development Act.”

The resolution of the 4th and fifth general meeting of the defendant's union is null and void since it did not meet the above quorum requirements.

B. The defendant union's assertion

If an urban development project association meets the requirements prescribed by the Act and is established after obtaining authorization from the designating authority, the decision-making of the association thereafter shall be made by the resolution of a general meeting as prescribed by the articles of association.

The resolution of the fourth and fifth general meeting of the defendant union is valid since it was duly made in accordance with the quorum of the resolution stipulated in Article 23(1) of the articles of association of the defendant union.

3. Determination,

A. Effect under Article 23(1) of the Defendant’s Articles of Incorporation

1) Unless there exist special circumstances, the articles of incorporation of a juristic person and the regulations for its detailed business activities, etc. inside an organization shall be deemed valid, except in cases where it is deemed that the decision is considerably unreasonable in light of social norms, such as that it violates good morals and other social order, or that the decision procedure is considerably contrary to the justice (see, e.g., Supreme Court Decision 91Da29026, Nov. 24, 1992).

However, in cases where a housing reconstruction association makes a resolution on an agenda item related to "matters to be included in the contract with a contractor" that requires strict procedures for revision of its articles of association for the promotion of the housing reconstruction project, if the contents to be included in the contract are to be revised at the time of the initial resolution for reconstruction, it is reasonable to view that the provisions of Article 20 (3) and (1) 15 of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 7392 of March 18, 2005) that protect members of the association should apply mutatis mutandis to the amendment of the rights and obligations of the association at the time of the initial resolution for reconstruction, and thus, it is difficult to recognize that the provisions of the housing reconstruction association are to be included in the "matters to be included in the housing reconstruction association's articles of association" through the amendment of its articles of association with the majority opinion of the association members of the association at least 20 percent of the number of members of the association can not be approved by the amendment of the rights and obligations of the association (see Article 208).

2) In light of the above legal principles, the Defendant Union, which was established and authorized to implement an urban development project in accordance with the land size substitution plan, shall change the land substitution plan in the form of evaluation thereafter, and accordingly, the alteration or increase of project costs is not only a significant impact on the interests of the association members, but also a substantial change in the contents at the time of authorization for the establishment of the association. Therefore, the general quorum cannot be followed. Nevertheless, Article 23(1) of the Articles of association of the Defendant Union provides that the above matters shall be subject to the requirement of the “the attendance of the majority of the union members and the consent of the union members,” which is the general quorum, even when the above matters are resolved to be presented as the agenda of the general meeting. Thus, the validity cannot be recognized as being considerably lost

Therefore, even in cases where the articles of incorporation of the defendant association change matters concerning the share of the association members under Article 23 (1) of the articles of association of the defendant association, it shall be deemed null and void.

(b) Requirements for modifying expenses to be borne by association members;

Article 15(1) and (4) of the Urban Development Act provides that the provisions concerning incorporated associations in the Civil Act shall apply mutatis mutandis to matters not provided for in the Act when treating the land as a partnership after it satisfies the requirements for establishment of an urban development project association (the owners of land equivalent to at least 2/3 of the area of the land in the relevant urban development zone and the owners of land in the relevant area at least 1/2 of the total number of the landowners in such zone). Meanwhile, Article 42 of the Civil Act provides that an amendment of the articles of association shall be made only with the consent of at least 2/3 of the total members in relation to the requirements for amendment of the articles of association of an incorporated association, unless otherwise provided for in the articles of association regarding the requirements for amendment of the articles of association, the amendment of the articles of association shall be made based on the consent of at least two-thirds of the total members.

In full view of the contents and purport of the above provisions of the Urban Development Act, it is reasonable to interpret that each member has equal qualifications and shares, regardless of the size or value of the land in question (in this purport, the articles of incorporation of the defendant association does not vary with each member's shares in relation to the resolution at a general meeting and does not require the consent of the owner of land above a certain size) when the Urban Development Act obtains the consent of at least 2/3 of the members of the association in accordance with the resolution requirements stipulated in the Civil Act with respect to the amendment of the articles of incorporation of the urban development project association, and determines the intention of the association through a general meeting of the association (the above purport is that the articles of incorporation of the defendant association does not vary with each member's shares in relation to the resolution at a general meeting and does not require the consent of at least 1/2 of the total number of members and members of the association who own the land equivalent to at least 2/3 of the land in the urban development zone. However, such interpretation does not comply with the overall contents and purpose of the Urban Development Act's business plan, and it is difficult to require the association to be partially amended.

(c) Validity of a resolution of the fourth or fifth general meeting;

As seen earlier, in the fourth general meeting resolution, there are 38 members of the defendant association, 15 members of the association, and 20 members of the association, with respect to the fifth general meeting resolution, and with respect to the fifth general meeting resolution, each of the instant cases, which brought about changes to the expenses to be borne by the members of the association. According to the above facts of recognition, the resolution of the fourth and fifth general meeting of the defendant association is null and void because there is a serious defect that does not meet the Dong of 26 members (38 members x 2/3 of the members) required for the resolution of the relevant agenda.

4. Conclusion

Therefore, the resolution of the fourth and fifth general meeting of the defendant union is null and void because it does not meet the requirements for resolution, and as long as the defendant asserts that the resolution of each general meeting is valid and contests its validity, the plaintiff's claim of this case is reasonable, and therefore, the plaintiff's claim of this case should be accepted. The judgment of the court of first instance is just, and the defendant's appeal is dismissed as it is so decided as per Disposition.

Gangwon-do (Presiding Judge)

Freeboard Kim

The grandchildren Hospital; and

Site of separate sheet

Details of the general meeting resolution

1. Details of the resolution of the fourth general meeting (the extraordinary general meeting dated 26, 2012);

A land substitution plan shall be changed from "area formula to "evaluation formula";

2. Details of the fifth general meeting resolution (the extraordinary general meeting dated February 19, 2013);

In the contents of the articles of incorporation, "area-type replotting plan" shall contain the contents of "evaluation-type replotting plan";

To change the project cost and accordingly increase the project cost of KRW 190,1850,000.