Hanjin Electric Co., Ltd. (Law Firm LLC, Attorneys Kim Tae-tae et al., Counsel for the plaintiff-appellant)

Incheon Metropolitan City (Law Firm Sejong, Attorneys Park Jong-jin, Counsel for the plaintiff-appellant)

August 28, 2014

1. The plaintiff's claim is dismissed.

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

With respect to the Plaintiff KRW 5,691,746,00 and KRW 101,00,000 among them, the Defendant shall pay to the Plaintiff 5% per annum from December 1, 2011 to the service date of a duplicate of the instant complaint, KRW 5,590,746,00 per annum from December 1, 201 to the service date of a duplicate of the instant complaint, 5% per annum from December 1, 201 to the service date of a duplicate of the application for modification of the instant claim, and 20% per annum from the following day to the day of full payment.

1. Details of ruling;

(a) Approval and public notification of the project;

- Magro 3th class 2 lines (e.g., e., e., inter-Dong International Rape), road expansion works (hereinafter referred to as the “instant projects”).

- Incheon Metropolitan City Notice No. 2009-337 of November 9, 2009, November 22, 2010, Incheon Metropolitan City Notice No. 2010-338 of November 22, 2010, April 25, 2011, Incheon Metropolitan City Notice No. 2011-105 of Incheon Metropolitan City Notice No. 201-117 of May 16, 201.

(b) Project operator: Defendant;

(c) Adjudication on expropriation by the Central Land Expropriation Committee on October 7, 2011;

- Subject to confinement: 5-17 square meters of land for a factory in Dong-dong, Incheon Metropolitan City, 5-177 square meters, 2,427 square meters of land for a factory in the same 5-172, 5-175 square meters, and 5-175 square meters of land for a factory in the same 5-174 square meters (the part between the existing factory warehouse and the factory warehouse in attached Form 1; hereinafter “instant incorporated land”) and obstacles on the ground (the fence, trees, resting rooms and floors, flowers, cremations, irrigation rooms, irrigation rooms, entrances, etc.; hereinafter “instant obstacles”).

- Commencement date of expropriation: November 30, 201

- Compensation for losses: 5,681,691,800 won for the land incorporated into the instant case (1,061,800 won per square meter) and compensation for the instant obstacles (197,162,000 won) in total; 5,878,853,800 won for the instant obstacles

- Dismissal of the Plaintiff’s additional compensation application

1) Plaintiff’s assertion: ① Compensation for expenses for reconstruction expenses for the instant obstacles, living rooms, fixed and climate parking lots, and self-stocks parking lots (including existing warehouses); ② remuneration for partial removal of factory structures in order to secure space for the smooth entrance and exit of large vehicles.

2) Determination by the Central Land Tribunal: ① In addition to the above compensation for the above compensation for the existing facilities (including the cost of removal for the installation of the existing facilities), the cost of the re-installation of the existing facilities (including the cost of removal for the installation of the existing facilities) is not subject to separate compensation; ② the change of the location of the crosswalk does not fall under the matters to be adjudicated; ③ even if the roads are partially assigned in front of the building located outside the project area of the instant project area, and there is little inconvenience in the upper, lower, and moving of the goods, the Plaintiff’s additional claim is dismissed on the ground that such fact alone does not objectively prove that the building cannot perform its original function and its actual operation is impossible

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 3, purport of the whole pleadings

2. The plaintiff's assertion

A. The Plaintiff used a road located between the building of the factory and the south-west, as a main passage for product raw materials, processed products, and finished products' loading, bringing in, and taking out. However, due to the expropriation of the incorporated land in the instant case, the considerable part of the said road, the movement and transport of products using large vehicles became impossible as before. After the expropriation of the incorporated land in the instant case, in order to operate the factory, the movement and transport of products was inevitablely made bypassing to the latter. In the process, there is a loss for which the process is delayed due to the overlap between the processing and loading of products, and the place of shipment, and there is a loss for which the existing living room is delayed, and in particular, the entry of large-scale truck is prohibited. The production capacity per production hour of the Plaintiff’s factory was reduced by 8.9% due to the foregoing changes in the process, and the production time per production capacity was increased by 9.7%, and the efficiency reduction in the above factory is more than 9%, and thus, it constitutes a reason for the Plaintiff’s business to continue.

Therefore, it is necessary to extend the front road to ensure the normal operation of factories (the recovery of the same production efficiency as before expropriation). The Plaintiff incurred loss from damage to the surface due to the transportation of products using a bypass route, and the construction cost for re-installation of obstacles. As such, the Defendant should pay the Plaintiff the total amount of KRW 5,691,70,00 as follows based on Articles 73(1), 77(1), and 75-2(1) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works (amended by Act No. 11690, Mar. 23, 2013; hereinafter “Public Works Act”) and Articles 32(2), 47(3), 33(1), and 35(2) of the Enforcement Rule of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (hereinafter “Enforcement Rule”).

B. Specific details that the Plaintiff seeks additional compensation to the Defendant are as follows.

(1) Construction costs 2,947,248,00 won to expand the construction cost due to the full-scale movement of logistics accompanied by the removal of the Plaintiff’s factory building, finishing, road construction, building removal of living pipes, removal of machinery and equipment, removal of other structures, etc.

② The total of KRW 1,404,300,000, total of KRW 788,890,000,000, the pure loss of the removal of factory buildings due to the above expansion works, and the amount of KRW 615,410,00,00,00, which is the profit of the rent of the side after the relocation of factory facilities.

③ Business losses amounting to KRW 1,060,000,000 for the period required for the above expansion work (45 days).

④ 2,360,000 won of the surface repair cost of the road damaged part of the road frequently caused by traffic congestions due to the expropriation of the incorporated land in this case.

⑤ At KRW 475,00,00, the Plaintiff’s expenses incurred for the reinstallation of the obstacles in the instant case (including 197,162,00 won, excluding the amount of obstacles already paid by the Defendant to the Plaintiff from KRW 277,838,00,00,00, excluding the amount of damages paid by the Defendant to the Plaintiff for the reinstallation of the obstacles in the instant case (including door, guard room construction, fence installation, electrical installation and septic tank construction, heating and cooling cable and in-house telecommunications cable distribution construction, cable distribution construction, telecommunications cable distribution construction,

3. Related statutes;

Attached Form 2 shall be as shown in attached Table 2.

4. Facts of recognition;

A. The Plaintiff is operating the instant factory (hereinafter “instant factory”) that produces transformers, mortars, pumps, etc. on the ground outside 5-5 and two lots of land adjoining to the land incorporated into the instant land.

B. The Plaintiff used the road located near the boundary of the instant factory (hereinafter “exclusive road”) as a mobile channel for loading, bringing in, and taking out goods. Examining the details of the operation schedule (total of 653 tons) of the aforementioned factory from August 1, 2011 to January 31, 2012, the Plaintiff used approximately 3.6 freight cars per day on the instant factory, and the percentage of vehicles below 1 to 5 tons is about 69%, about 5 tons and below 25 tons in the case of freight cars with at least 8%, and about 23% in the instant factory, and about 23% in the large rodr-droper’s use at the instant plant (total of 653 freight cars) for a large amount of 1 ton and less than 25 tons in the instant plant, the amount of 1 ton and less than 25 tons in the instant plant is about 18% in the usage rate at the instant plant.

C. The width of the front road was reduced as a whole due to the expropriation of the incorporated land in this case, and, in particular, the narrow width was merely 3 to 4 meters and thus, it can pass through the first one, but it is impossible to pass through or pass through a large rober, such as the previous one. After expropriation, the factory in this case partially changed the process by using a post-section for carrying materials and products, and as a result, the production time for the same process was increased due to the increase in input hours for transporting the transformers, the increase in transport volume using the rear roads, the decrease in the open space, etc.

D. Examining the sales of each product from January 1, 2009 to August 31, 2012 of the instant factory, the time when a large volume of monthly sales occurs and a large amount of sales occur is not fixed, and the share of the variable sales accounts for a large amount of variable sales.

E. On October 17, 2011, the Plaintiff entered into a contract for the installation of a guard room and fence with the Cheongjin General Construction Co., Ltd., and performed the installation of a Cheongjin General Construction Sticker’s security room from November 3, 201 to April 30, 2012, and fence installation works, electrical equipment and septic tank installation works, heating and cooling, optical cable and intra-company telecommunications cable distribution works, telecommunications cable conduits, and fire-fighting cable distribution works. The costs incurred by the Plaintiff to the said construction are KRW 475,00,000 (excluding value-added tax).

F. As to whether the productivity of the factory of this case has decreased, the main contents of the court's appraisal and supplementary request to Nonparty 1, Nonparty 2, and Nonparty 3 are as follows.

1) In light of the fact that the monthly difference between the change in the sales amount of the instant factory is higher than the number of times, the production capacity of the instant factory appears not to be a value with a limit, and it is more possible to make a larger sales depending on the number of weeks. Since the monthly and annual results of sales function as multiple factors, such as business and competition impact, production capacity, and price index, etc., the reduction in sales cannot be readily concluded as a result of the expropriation of the instant incorporated land, but it is nothing more than one factor.

2) However, it cannot be deemed that the production capacity of the factory of this case has been reduced directly on the ground that the production time has been increased because the production efficiency has been reduced partially due to the changes in the process due to the above expropriation, as various complex factors affecting the production amount and the production output, making it impossible to compute the quantitative reduction or the production loss amount, and the production time has not been increased due to the limit of the production spreading state.

3) The front road of the pumps factory and the mother factory is narrow so there is a possibility that vehicle accidents, such as rapid arrival and collision, etc. caused considerable inconvenience in the course of transportation of large products and materials, so it is difficult to view the situation of the factory in this case as the situation of the factory in this case is being carried out smoothly, and it is necessary to improve.

4) In order for the Plaintiff to secure the area of loading, transportation, and movement of the instant factories at the same level as before accommodation while maintaining the fences newly installed on the boundary after the expropriation of the instant incorporated land, construction of the front road entailing relocation installation, such as partial removal, finishing, road construction, removal of the building in the living room, removal of machinery and equipment, and other structures, is inevitable.

5) As to the Plaintiff’s application for appraisal and supplementation, which is to calculate the production process and the degree of loss of efficiency of the factory of this case based on the expropriation of the incorporated land, the said appraiser expressed the following opinions:

① It is unreasonable to determine the degree of loss of the efficiency of the production process due to the fluctuation of the production time per sales volume based on the sales volume, because the sales volume of a factory does not change depending on the sales volume, but does not vary depending on the production volume, and even based on the data submitted by the Plaintiff, the production time for the same process differs depending on the production volume, and even depending on the data submitted by the Plaintiff, it is also unreasonable to determine the degree of loss of the efficiency of the production process. There is no accurate data presentation by the Plaintiff on the financial information necessary to determine whether the productivity has been reduced due to changes in the cost of change in sales and the ratio of the fixed manufacturing cost, and no cost above a certain level may

(2) It is not reasonable to judge the degree of loss of the efficiency of the production process due to the total production capacity per total production hour, because the breadth of a change is severe and may act as an unrelated factor to confinement.

③ On the basis of the degree of loss of efficiency based on working hours in accordance with the manufacturing process schedule of the standard voltage model, which is the main production product of the factory of this case, the production capacity per hour has decreased by 8.9%, and the production capacity per production capacity has increased by 9.7%. However, the standard air demand time and actual working hours are not consistent, and the actual working hours required for the production of diverse products of the factory of this case are not appropriate as the basis for determining the degree of loss of efficiency in the production process due to severe changes in the width.

[Ground of recognition] The evidence before the court, the result of the appraiser 1, non-party 2, and non-party 3's request for appraisal and supplementation, the result of the on-site verification conducted by this court, the purport of the whole pleadings

5. Determination

A. As to the claim for the extension of the front road and the loss of assets and the loss of the business caused thereby

1) Provisions on compensation for losses on remaining land

According to Article 73(1) of the Public Works Act and Article 32(2) of the Enforcement Rule of the Public Works Act, where the price of the remaining land is reduced or other losses are incurred due to the acquisition or use of part of a group of land belonging to the same owner, or where the construction of a passage, ditch, fence, etc. or other construction works are necessary on the remaining land, the project operator shall compensate for such losses or construction expenses, as prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs, and where the construction is required on the remaining land, the losses shall be assessed as expenses incurred in the construction of the relevant facilities or construction works. In such cases, the losses to be compensated shall include not only the losses incurred due to the price formation factors, such as the land location conditions or access conditions, etc. due to the acquisition or use of part of the land, but also the losses incurred by the construction of the facilities installed due to the implementation of the acquisition or use project, the actual use conditions as at the time of the decision on expropriation, or the ease of transactions, etc. (see Supreme Court Decision 2010Du3149, Feb.

According to Article 75-2(1) of the Public Works Act, Articles 33(1) and 35(2) of the Enforcement Rule of the Public Works Act, in cases where repair of a group of buildings belonging to the same building owner is required due to the acquisition of part of the remaining buildings, the expenses for construction deemed ordinarily necessary to maintain the utility of the remaining parts of the building so that they can be used for its original purpose shall be compensated as repair costs. According to Article 77 of the Public Works Act and Article 47 of the Enforcement Rule of the Public Works Act, business losses due to the closure or suspension of business shall be compensated in consideration of the business profits, transfer costs, etc. of the remaining facilities. If the business facilities cannot be installed newly in the remaining facilities or the remaining facilities cannot be maintained without repair due to the incorporation of a part of the business facilities, the business losses due to the reduction of the business losses and scale shall be assessed by adding the business profits for the period required for the installation, etc. of the relevant facilities, and the expenses normally required

2) Whether the instant plant causes losses due to the decline in production efficiency

A) Based on each of the above provisions, the Plaintiff asserts that, as the expropriation of the incorporated land in this case causes losses to reduce the production efficiency and operating profit ratio of the factory in this case due to the expropriation of the incorporated land, it is necessary to extend the existing road in order to restore the previous expropriation condition, it falls under a construction project that requires repair in the remaining buildings or is normally necessary to maintain the utility of the remaining parts in order to ensure the use of the remaining parts for the previous purpose, and that the remaining facilities cannot continue to exist without repair, the Plaintiff also claims that the Defendant should compensate for the expenses for the full-scale road expansion project to secure the area of loading, transportation and movement, ② the expenses for the removal of the factory due to the above expanded construction, ② the amount of loss of the removed assets of the factory in this case and the amount of loss of the rent for the above expanded construction, and ③ the amount of loss of the business for the period (45 days) required for the above expanded

B) According to the above facts, since it was difficult for the Plaintiff to move and transport its products using only the front road as before and after the expropriation of the land incorporated into the instant factory, it is difficult for the Plaintiff to use a large-scale cargo vehicle in some sections, and to move and transport its products using the rear road. As a result, it is inevitable to change the production capacity of the instant factory due to the change in the location and size of the previous structure and the open container, and there is a decrease in the production efficiency. However, in light of the above facts and the overall purport of arguments, it is difficult to view that the production capacity of the instant factory is limited in light of the scope of changes in the sales of the instant factory, and thus, it is difficult to view that the above increase in the production capacity of the instant factory is difficult to readily determine that there was a decrease in the total production capacity or the decrease in the total production capacity, based on the average production pressure or the decrease in the total production capacity, etc., calculated based on the total production capacity per se before and after the instant increase in the production capacity of the instant factory.

3) Therefore, the Plaintiff’s claim for payment of KRW 2,947,248,00 for expansion of the instant factory based on the premise that the expropriation of the instant incorporated land causes a loss to the instant factory due to the expropriation of the instant incorporated land, or on the premise that the factory cannot be used, and KRW 1,404,300,000 for the loss of the assets thereby, and KRW 1,060,000 for business loss compensation amount, is without merit.

B. As to the part on the claim for damages on the surface

According to the above appraisal commission, the surface was damaged by the passage of large-scale cargo vehicles used in the process of bypassing the products or materials produced in a rupture plant to the rear side, and 2,360,000 won was required for the repair of damaged parts. However, as seen earlier, it cannot be readily concluded that the expropriation of the incorporated land in this case caused a loss due to the decline in productivity or value in the factory in the instant plant due to the decline in the use of the incorporated land, so long as the damage on the surface caused by the use of large cargo on the rear side does not constitute a direct damage due to the expropriation of the incorporated land in this case, the plaintiff's above assertion is without merit.

C. As to the claim for the re-installation cost of the obstacles of this case

1) According to Articles 75(1)2 and 73(1) of the Public Works Act and Article 32(2) of the Enforcement Rule, compensation for obstacles shall be made at the cost of relocation, but if the cost of relocation exceeds the price of obstacles, compensation shall be made at the price of such obstacles. On the other hand, if the construction of fences, etc. or other construction works are necessary on the remaining land due to the acquisition of a group of land belonging to the same owner, the cost of the installation of such substitute facilities or construction works must be compensated for the cost of the construction of the facilities. However, if the facilities required to be newly built have already performed the same function as those compensated for the removal cost or the price of the pertinent goods, the cost of the installation of the substitute facilities or the construction is the same in substance as the cost of the transfer of the said obstacles. Thus, the cost of installing alternative facilities shall not be separately compensated pursuant to Article 73(

The “unclaimed amount of the obstacles” calculated from the above appraisal commission is not revaluated at the time of expropriation itself as to the obstacles in this case, but is calculated by subtracting the amount of compensation for the obstacles in this case already paid by the Defendant, on the premise that the Plaintiff should compensate all of the expenses for re-installation of the obstacles in this case incurred. The fence, guard room, etc. re-built by the Plaintiff constitutes an alternative facility with the same or the same function as the obstacles in this case compensated by the Defendant according to the appraisal of expropriation. Thus, even if the expenses incurred by the Plaintiff for re-installation of the substitute facilities exceed the amount of compensation for the obstacles in this case, the expenses for the construction shall not be additionally compensated pursuant to Article 73(1) of the Public Works Act, separate from the compensation for the obstacles in this case. Accordingly, this part of the Plaintiff’s assertion is not acceptable.

2) On the other hand, the Plaintiff asserts that the remainder of the building should be paid even based on the compensation regulations for the remainder of the building. However, the “cases where the repair of the remaining building is required as a result of the acquisition or use of part of a group of buildings belonging to the same owner of the building” under Article 75-2(1) of the Public Works Act and Article 35(2) of the Enforcement Rule of the same Act refers to cases where part of the building was partially expropriated, but the remaining part of the building can be repaired and used for its original purpose and its use is not considerably difficult. In this case, the evidence submitted by the Plaintiff alone cannot be recognized that the remaining building cannot be used for its original purpose or its use is considerably difficult due to the expropriation of the obstacles in this case. Therefore, the transfer and installation expenses of the obstacles in this case claimed by the Plaintiff do not fall under the object of compensation for the remainder of the building, and therefore, the Plaintiff’s assertion is without merit.

6. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment]

Judges Cho Il-so (Presiding Judge)