Dongdaemun-gu Seoul Metropolitan Government (Law Firm TELS, Attorneys Lee Jae-in et al., Counsel for the plaintiff-appellant)

Session First Housing Redevelopment Project Association and two others (Attorneys Kim Young-dae et al., Counsel for the plaintiff-appellant)

May 18, 2011

1. The plaintiff's claims against the defendants are all dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendants shall pay to each Plaintiff 605,929,500 won with 5% interest per annum from February 18, 2008 to the service date of the duplicate of this case, and 20% interest per annum from the next day to the day of full payment.

1. Basic facts

A. At the time of February 18, 2008, the Plaintiff owned the Dongdaemun-gu Seoul ( Address 1 omitted), 433 square meters, 7-45 square meters, 387 square meters, 2 square meters in the same Dong ( Address 3 omitted), 62-34 square meters, 62-35 square meters in the same Dong, 62-36 square meters in the same Dong, 62-38 square meters in the same Dong, 62-38 square meters in the same Dong, 62-65 square meters in the same Dong, 422 square meters in 65-163 and 10 square meters in the same 65-163 square meters in the same Dong (hereinafter “instant 1 land”), and as at the time of February 18, 2008, the non-party, Seoul Special Metropolitan City, combined with the same 21 square meters in the same Dong, 62-121 square meters in the same Dong, 67-1374, 27.

B. On February 18, 2008, the Plaintiff sold the instant land owned by Nonparty 1 and 12 and the instant land owned by Nonparty 1 and Seoul Special Metropolitan City under Article 3(2)3 of the Seoul Special Metropolitan City Ordinance on the Management of Public Property and Commodity (hereinafter “instant sales contract”) as indicated in the attached sales contract, upon delegation from Seoul Special Metropolitan City, pursuant to Article 3(2)3 of the said Ordinance (hereinafter “instant sales contract”).

C. The Defendant Union concluded a sales contract for a part of the land as a buyer, and concluded a sales contract for a part of the land on behalf of the said Nonparty and 12.

D. A certified public appraisal corporation and the Defendant State’s certified public appraisal corporation (hereinafter “Bad Appraisal”) conducted an appraisal on the instant land at the request of the Defendant Union, and the result of the appraisal was used as the basic data for calculating the sales price of the instant sales contract.

E. According to the appraisal report prepared by the Defendant On-the-counter appraiser, the title is “appraisal of the site for public facilities for the authorization of the revolving one district housing redevelopment project,” the client’s “the head of the housing redevelopment project cooperative,” the purpose of the appraisal is “the evaluation of the transfer acquisition,” and the appraisal is “the appraisal for the free transfer and free transfer of land existing and newly installed public facilities within the district redevelopment project zone in the first district and the first district housing redevelopment project cooperative located in Dongdaemun-gu Seoul Metropolitan Government, which is implemented by the session-gu Seoul Metropolitan Council, which is implemented by the first district housing redevelopment project cooperative,” and the said appraisal report is accompanied by the land appraisal report on the land for the newly installed maintenance-based facilities (road sites) and the disused public facilities whose use is abolished. The appraisal value of the land in this case is as stated in the column of “the “the

F. According to the appraisal report prepared by the Defendant country’s appraisal report, title 1 is as follows: “The land appraisal report for public facilities for the authorization of the revolving one district housing redevelopment project; the client’s “the president of the revolving one district housing redevelopment project”; the purpose of appraisal is “the evaluation of transfer acquisition;” “the land for public facilities whose purpose is to disuse for the authorization of the housing redevelopment project for the first district unit redevelopment project; and the land for public facilities for the purpose of consultation on transfer and acquisition of the newly installed infrastructure (road and park sites); and the said appraisal report is accompanied by the land appraisal report for the infrastructure for maintenance (road sites) newly installed and the land for public facilities whose purpose is to be disused; and the national appraisal appraisal report for the land of this case is as stated in the column of “Naa appraisal (Defendant 3)” of

G. On September 2009, the result of the Seoul Special Metropolitan City’s audit and inspection, which was enforced on September 2009, submitted to the Plaintiff by the Defendant Union to purchase the instant land, the purpose of appraisal is not an appraisal report for the sale of state-owned and public land, not an appraisal report for the sale of state-owned and public land, and accordingly, it was pointed out that the instant land was appraised as an individual non-land, and accordingly, the amount of KRW 413,288,50 for Si-owned property and KRW 481,371,50 for Gu property was appraised and sold, respectively, and the caution measures was taken on that ground.

H. If the land of this case is appraised for the purpose of selling the City/Do property, the appraised value shall be as stated in the column of “sale price calculated as a result of re-appraisal” of the attached appraisal value.

[Ground of recognition] Facts without dispute, Gap evidence 1-1 through 18, Gap evidence 2-1 through 12, Gap evidence 3-1, 2, Gap evidence 5-1, 2-2, and the purport of the whole pleadings

2. Determination as to the cause of action

A. The plaintiff's assertion

1) When property is assessed in a housing redevelopment project, an arithmetic average of the values appraised by at least two appraisers selected and contracted by the head of a Si/Gun pursuant to Article 48(5)1 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Do Administration Act”). Nevertheless, the Defendant Union calculated the instant sales price by calculating the arithmetic average of the values appraised by the Defendant Ado Appraisal and the Defendant State Appraisal selected separately by the Plaintiff without requesting appraisal to an appraisal corporation selected by the Plaintiff.

2) In calculating the sales price as the instant land is used as a single building site or is in fact a co-ownership relationship is established, Article 66(5) of the Do Administration Act, Article 70(2) of the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor, and Article 20 of the Korea Association of Property Appraisers Guidelines for Land Compensation should be deemed as a complex and assessed en bloc.

3) As above, the Defendant Mutual Aid Association requested an appraisal corporation selected at will by the Defendant Mutual Aid Association in violation of Article 48(5)1 of the Do Government Act to conduct appraisal. The purpose of appraisal is not to sell state-owned or public land without compensation at the time of requesting appraisal, but to determine the purchase price at a price calculated as a result of the appraisal and assessment by determining the purpose of appraisal as the purpose of free transfer and free transfer of public facilities. This constitutes a case where the purchaser entered into a contract by false statement, submission of false documentary evidence, or

4) Notwithstanding the fact that according to the guidelines for the appraisal of land, etc. for public works and the guidelines for appraisal of land compensation, the Defendant’s temperature appraisers and the Defendant’s country’s appraisal should make a comprehensive assessment based on the actual use situation as of the time of appraisal, not the land category registered, but the land of this case, in accordance with Article 66(5) of the Do administration Act, Article 70(2) of the Act on Acquisition of and Compensation for Land, etc.

5) The Defendants calculated the sales price of the instant land in violation of relevant Acts and subordinate statutes at a remarkably lower level than the reasonable price and thereby causing damage to the Plaintiff. The Defendants are liable for joint tort under Article 760 of the Civil Act. The scope of compensation for damages is as follows: (a) the amount indicated in the “fixed sales price” column of the attached appraised value at the time of a reasonable evaluation; (b) the difference between the respective appraised value at the time of a reasonable evaluation; and (c) the amount indicated in the “fixed sales price” column of the attached appraisal value, which is the difference between the respective appraised value of the instant land;

B. Determination on Defendant Aion Appraisal and Defendant Aion Appraisal

In light of the purport of free transfer and acquisition of public facilities requested by the Defendant association, the fact that the Plaintiff and the Defendant’s Korean Association appraised and assessed the instant land in line with the purpose of free transfer and acquisition of the public facilities requested by the Defendant association is recognized as seen earlier. On the contrary, insofar as there is no evidence to acknowledge that the Plaintiff and the Defendant’s Korean Association knew that they requested appraisal for the purpose of free transfer and acquisition of the instant land, it is difficult to view that the appraisal of the instant land was unlawful, unless there is any evidence to acknowledge that the Plaintiff and the Plaintiff were aware of the request for appraisal for the purpose of free transfer and acquisition. Accordingly,

C. Determination as to the defendant union

1) Relevant statutes

◎ 도시 및 주거환경정비법

(2) Any infrastructure for rearrangement newly installed by a project implementer, other than the head of a Si/Gun or the Housing Corporation, etc., as a result of the implementation of an improvement project, shall gratuitously vest in the State or a local government to manage such infrastructure, and any infrastructure for rearrangement owned by the State or a local government to be abolished by the implementation of an improvement project shall be gratuitously transferred to the project implementer to the extent equivalent to installation costs of the newly installed infrastructure.

(3) Where the head of a Si/Gun intends to implement a rearrangement project including the matters concerning the reversion and transfer of infrastructure for rearrangement under paragraphs (1) and (2), or to authorize the implementation thereof, he/she shall hear in advance the opinions of the relevant management authority. The same shall also apply to any modification to the authorized matters.

◎ 구 도시 및 주거환경정비법(2008. 2. 29. 법률 제8852호로 개정되기 전의 것)

(4) The State or public property within the rearrangement zone may be sold or leased in preference to the project implementer, occupant or user by a private contract, notwithstanding the state or public property management plan under Article 12 of the State Property Act or Article 77 of the Local Finance Act, and the contracting methods under Article 33 of the State Property Act and Article 61 of the Local Finance Act.

(5) Notwithstanding the provisions of the State Property Act, the Local Finance Act and other relevant Acts and subordinate statutes concerning the management and disposal of State or public land, which may be sold or leased in preference to other persons under the provisions of paragraph (4), the previous use shall be deemed abolished from the date of public announcement of authorization for project implementation.

(6) The State-owned or public land to be sold preferentially for a rearrangement project under the provisions of paragraph (4) shall be assessed on the basis of the date when the authorization for project implementation is publicly notified, and the sale price in cases of a residential environment improvement project shall be 80/100 of the appraised amount: Provided, That the State-owned or public land for which a sales contract has not been concluded within three years from the date when the authorization for project implementation is

◎ 구 공유재산 및 물품관리법(2008. 12. 26. 법률 제9174호로 개정되기 전의 것)

Article 30 (Pricing of Property to be Disposed of) The price shall be determined in consideration of the market price under the conditions as prescribed by the Presidential Decree.

◎ 구 공유재산 및 물품관리법 시행령(2009. 4. 24. 대통령령 제22447호로 개정되기 전의 것)

(1) Where miscellaneous property is sold or exchanged pursuant to the provisions of Article 30 of the Act, the estimated price of the relevant property shall be determined by the head of a local government as the market price, and shall be disclosed to the public. In this case, the market price shall be more than the average of the appraised values by requesting two or more appraisal corporations under the Public Notice of Values and Appraisal of Real Estate Act, and the expenses required for the appraisal or division survey may be included.

2) Determination

According to Article 66 (4) of the former Enforcement Decree of the Do Government Act (amended by Act No. 8852 of Feb. 29, 2008), the sale price of the pertinent property shall be determined in consideration of the market price under Article 30 of the former Public Property and Commodity Management Act (amended by Act No. 9174 of Dec. 26, 2008). Under Article 27 (1) of the former Enforcement Decree of the Public Property and Commodity Management Act (amended by Presidential Decree No. 2247 of Apr. 24, 2009), the head of a local government shall determine the market price of the pertinent property at the market price and, in such cases, the price of the pertinent property shall be determined at the market price, and the market price shall be at least the arithmetic average of at least two appraisal and assessment under the Act on Real Estate and Commodity Management (amended by Presidential Decree No. 2247 of Apr. 24, 2009).

According to the above relevant provisions, the sale price of the land of this case shall be calculated based on the actual use situation, not the land category before disuse, based on the date of the public notice of authorization for project implementation, and the objective situation of general use. Since the sale price of this case is calculated based on the appraisal report for the purpose of transfer and acquisition of the land for public facilities whose use is abolished under Article 65(2) of the Do Government Act and the maintenance infrastructure newly installed (road and park site), it is reasonable to deem that the sale price of the land of this case

However, there is a relevant statute that the calculation of the sale price shall be determined by the head of a local government as the market price and shall be disclosed. The plaintiff's calculation of the sale price of the land of this case by using an appraisal report prepared at the request of the defendant association shall be deemed to violate the above-mentioned relevant provisions. Even if the defendant association submitted the appraisal report to the plaintiff without compensation, the purpose of the appraisal is not the sale of state or public property, unless the purpose of the appraisal report is falsely stated in the sale of state or public property, it shall be deemed to be either by

Therefore, it is not sufficient to recognize that the defendant union committed an unlawful act solely on the ground that the defendant union provided the plaintiff with a written appraisal for the purpose of transfer or acquisition without compensation. There is no evidence to acknowledge that the defendant union committed an unlawful act. Therefore, the above assertion against the defendant union is without merit

3. Conclusion

Therefore, all of the plaintiff's claims against the defendants are dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Park Jong-hee (Presiding Judge)