Busan District Housing Reconstruction and Improvement Project Association (Attorney Kang Jae-chul et al., Counsel for the plaintiff-appellant)

Defendant 1 and 10 others (Law Firm Song & Yang, Attorneys Song Byung-soo et al., Counsel for the defendant-appellant)

September 6, 2011

1. Of the real estate listed in the separate sheet to the Plaintiff:

A. Defendant 1: (a) continuously connects each point of (b) section 2,780 square meters in the ship (A); (2), 9, 10, 11, 12, 13, 14, 15, 16, 7, and 6; and (c) connect each point of (B) section 38,39,40, 41, 42, 43, 44, 45, and 38; and (a) connect each point of (A) section 472.60 square meters in the ship; (b) connect each point of (A) section 48,50, 51, 47, 49, and 48; and (d) [Attachment 1] section 1; (b) section 336 square meters in the ship; (b) section 38,40,41, 56, 53, and 1); and (3); (c) section 157,157,75 and 198 square meters in order.

B. Defendant 2 received KRW 700,000,000 from the Plaintiff and, at the same time, connects each point of the attached Form 17,18,26,19,20,21,22, and17 with the indication of the attached Map 17,18,26,19,20,21,22, and 921.8m2

C. The Seongdong Diplomatic Association with the Defendant shall receive KRW 27,384,00,00 from the Plaintiff, and simultaneously connect each point of KRW 27,28,29,30,31,327 attached Table 1 (ma) in sequence with each point of KRW 164.57 square meters in the ship, KRW 45,45,52,53,54, and 45 attached Table 1 (ma), and connect each point of KRW 469.71 square meters in the ship, KRW 65,67,67,68,69, 70,72, and 65 of the attached Table 1 with the order of 27,384,00,000 and KRW 27,28,276,787,787,797,797,767,787,797,767,767, and666, in sequence with each point of the attached Table 1 (p).7,797,747,797,75,767,747,7

D. In the case of Defendant Han-Tech Co., Ltd., the part (F) on the ship (F) which connects each point of the attached Form 19,33,34,35,19, with a payment of KRW 10,00,000 from the Plaintiff, and simultaneously connects each point of the attached Form 19,33,34,35,

E. The Defendant Seoul Livestock Industry Cooperatives received KRW 1,600,000 from the Plaintiff and, at the same time, connected each point of the attached Table 32,31,36,37,32, the part on the ship (g) which is 352.17 square meters connected each point of the attached Table 1;

F. The Defendant Hanjin L&C Co., Ltd. received KRW 40,000,00 from the Plaintiff and, at the same time, connects each point of the attached Form 46,48,49,47, and 46, in sequence, to the (j) part 95.9 square meters in the ship;

G. At the same time, Defendant Social Welfare Foundation (Branch Offices) received KRW 100,000,00 from the Plaintiff, and, at the same time, connect each point of the attached Table 57,59,60,61,62,63,64,58,57, which is indicated in the attached Table 1 drawings;

H. Defendant 8 received KRW 106,00,000 from the Plaintiff and, at the same time, connected each point of the attached Table 81,82,83,80,79,81 in sequence, Defendant 8’s portion on board (V) is 521.46 square meters;

I. Defendant 9, while receiving KRW 50,000,00 from the Plaintiff, connects each point of the attached Table 94,95,96,92,91,94, in sequence, with each point of the attached Map 94,95,96,92,91,94;

(j) Defendant 10’s portion (A) is 194.62 square meters in the ship that connects each point of the attached Table 1,2,3,4,5,1 with the indication of the attached Table 2;

(k) In the case of Defendant Multi-Co., Ltd., Defendant Multi-Co., Ltd., the portion of 63.29 square meters inboard (B) that connects each point of which is indicated in the annexed drawing Nos. 6,7,8,9,10

India, respectively.

2. The plaintiff's remaining claims against the defendant 2, the KIS Association, the KIS Technology Industry Co., Ltd., the Seoul Livestock Industry Cooperatives, the Hanjindid Co., Ltd., the Korea Social Welfare Foundation, the Korea Senior Welfare Foundation, and the defendant 8 and 9 are dismissed, respectively.

3. Of the costs of lawsuit, the part arising between the Plaintiff, Defendant 1, 10, and Multi-Multiple Construction Co., Ltd. is borne by the Defendants. Of the costs of lawsuit, the part arising between the Plaintiff, Defendant 2, and the Korea Minhion Korea Association, Hansung Technology Industry Co., Ltd., Korea Livestock Industry Cooperatives, Seoul Livestock Industry Cooperatives, HanjinDC, Korea Social Welfare Foundation, Korea Elderly Welfare Foundation, and Defendant 8, and the remainder are borne by the Defendants, respectively.

4. Paragraph 1 can be provisionally executed.

주문 제1의 가. 차. 카.항 및 원고에게 별지 목록 기재 부동산 중, ⑴ 피고 2는 별지1 도면 표시 17,18,26,19,20,21,22,17의 각 점을 순차 연결한 선내 (다)부분 921.8㎡를, ⑵ 피고 대한예수교장로회 은성교회는 별지1 도면 표시 27,28,29,30,31,32,27의 각 점을 순차 연결한 선내 (마)부분 164.57㎡, 별지1 도면 표시 45,44,52,53,54,45의 각 점을 순차 연결한 선내 (타)부분 469.71㎡, 별지1 도면 표시 65,66,67,68,69,70,71,72,65의 각 점을 순차 연결한 선내 (너)부분 719.97㎡, 별지1 도면 표시 66,73,74,68,67,66의 각 점을 순차 연결한 선내 (더)부분 224.68㎡, 별지1 도면 표시 73,75,76,74,73의 각 점을 순차 연결한 선내 (러)부분 279.95㎡, 별지1 도면 표시 70,77,78,79,80,71,70의 각 점을 순차 연결한 선내 (머)부분 366.58㎡, 별지1 도면 표시 84,85,86,87,88,89,90,91,92,93,84의 각 점을 순차 연결한 선내 (서)부분 1,564.77㎡를, ⑶ 피고 한미기술산업 주식회사는 별지1 도면 표시 19,33,34,35,19의 각 점을 순차 연결한 선내 (바)부분 115.96㎡를, ⑷ 피고 서울축산업협동조합은 별지1 도면 표시 32,31,36,37,32의 각 점을 순차 연결한 선내 (사)부분 352.17㎡를, ⑸ 피고 주식회사 한진디앤드씨는 별지1 도면 표시 46,48,49,47,46의 각 점을 순차 연결한 선내 (차)부분 95.9㎡를, ⑹ 피고 사회복지법인 한국경로복지재단(분사무소)는 별지1 도면 표시 57,59,60,61,62,63,64,58,57의 각 점을 순차 연결한 선내 (거)부분 657.38㎡를, ⑺ 피고 8은 별지1 도면 표시 81,82,83,80,79,81의 각 점을 순차 연결한 선내 (버)부분 521.46㎡를, ⑻ 피고 9는 별지1 도면 표시 94,95,96,92,91,94의 각 점을 순차 연결한 선내 (어)부분 574.47㎡를 각 인도하라.

1. Basic facts

A. The Plaintiff is a housing reconstruction consolidation association that completed the registration of incorporation on July 28, 2003 pursuant to Article 18(2) of the former Housing Construction Promotion Act (amended by Act No. 6732, Aug. 26, 2002) and Article 10(1) of the Addenda (amended by Act No. 6732, Dec. 30, 2002) in order to remove the buildings above the Gangseo-gu Seoul and 66 lots and build new apartment and neighborhood living facilities on the site. The Plaintiff obtained authorization for the implementation of the project on May 26, 2009; the authorization for the alteration of the project on July 29, 201; and the head of Gangseo-gu Seoul Metropolitan Government publicly announced the management and disposition plan on January 12, 201.

B. The Defendants are the lessees of each corresponding part of the building located within the Plaintiff’s business area, which is located within the main text of Gangseo-gu Seoul Metropolitan Government ( Address 2 omitted), and each corresponding part of the building in question is occupied by the lessee of each corresponding part of the building in question.

[Ground of recognition] Facts without dispute, Gap's entries in Gap's 1 through 4, 10 through 17, 20, 21 (including each number), and the purport of the whole pleadings

2. Determination as to the cause of action

According to the above facts, when a management and disposal plan is authorized and publicly announced pursuant to Article 49(6) of the Urban Improvement Act, the owner, superficies, person having a right, lease right, etc. of the previous land or building may not use or profit from the previous land or building until the date of the public announcement of transfer under Article 54 of the Urban Improvement Act, and the project implementer may use or benefit from the former land or building (see Supreme Court Decision 2009Da53635, May 27, 2010). Thus, barring any special circumstance, the Defendants, the lessee, are obligated to deliver each of the pertinent real estate indicated in the order which they own to the Plaintiff, the implementer of the reconstruction project of this case.

3. Determination as to the assertion of compensation for losses by the remaining Defendants except for Defendant 10 (Defendant 9 of the judgment of appeal) (hereinafter “Defendant 1, etc. of the judgment of appeal”).

A. First, Defendant 1, etc. asserts that, even if a management and disposal plan is authorized and publicly announced, the real estate may be used and profitable until receiving a reasonable compensation from the Plaintiff pursuant to the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (hereinafter “Public Works Act”) pursuant to the proviso to Article 49(6) of the Act on the Acquisition of Land

In order to recognize the compensation for losses under the Public Works Act, the said provision is only applicable to the expropriation or use under the Public Works Act. According to Article 38 of the Urban Improvement Act, where a project implementer needs to implement a rearrangement project in an improvement zone, land, goods, or other rights under Article 3 of the Public Works Act may be expropriated or used. However, in the case of a housing reconstruction project, the said provision is only applicable only to “when it is deemed necessary to implement a rearrangement project urgently due to natural disasters or other inevitable causes.”

However, as seen earlier, the instant rearrangement project constitutes a housing reconstruction project, and otherwise, insofar as the Plaintiff’s assertion or proof exists as to the fact that the instant rearrangement project constitutes “when it is deemed necessary to implement the rearrangement project urgently due to natural disasters or other inevitable causes,” it cannot be deemed that the Plaintiff is liable to compensate for losses as alleged by the Defendants in the case of the housing reconstruction project based on the proviso to Article 49(6) of the Urban Improvement Act. Therefore, the aforementioned Defendants’ assertion is without merit.

B. Next, in the case of a housing reconstruction project under Article 38(1) of the Act on the Maintenance and Improvement of Urban Areas, Defendant 1, etc. provides that expropriation or use under the Act on the Maintenance and Improvement of Urban Areas shall be possible only for “when deemed necessary to implement a rearrangement project urgently due to natural disasters or other inevitable causes,” and does not stipulate the procedures for expropriation or compensation for right holders, such as the lessee, etc. in the reconstruction project. As a result, Article 49(6) of the Act on the Maintenance and Improvement of Urban Areas provides that the right holders such as the lessee, etc. shall be suspended from the use or profit-making without any justifiable compensation for the right holders such as the lessee. In particular, in comparison with the case of the redevelopment project, the non-existence of the provisions on the business loss compensation for commercial tenants such as the above Defendants is arbitrary discrimination without reasonable grounds, and thus infringing on the constitutional right to equality, and the right to property under the Constitution is unconstitutional.

In the case of a residential environment improvement project, housing redevelopment project, and urban environment rearrangement project, Article 38 of the Act on the Maintenance and Improvement of Urban Areas grants the project implementer the right to expropriate land, etc. under the Public Works Act if necessary. However, in the case of an urban reconstruction project with a strong nature of private profit-making business, the project implementer does not recognize the right to expropriate land, etc. under the Public Works Act that can unilaterally pay and deprive the property rights of the owners, etc. at a price lower than the market price. In the case of an urban reconstruction project with a strong nature of profit-making business, the project implementer does not recognize the right to expropriate land, etc. at the market price by obtaining the consent of the owners in the project area or by exercising

However, in the case of a housing reconstruction project as claimed by the above Defendants, if, in principle, a project implementer grants a right to expropriate land, etc. under the Public Works Act, it is difficult to accept because the purpose of legislation of the Urban Improvement Act, which provides for securing the project site by consultation with the owner or exercise of a right to demand sale, is to damage the purpose of legislation, and rather causes a wide infringement of the property rights of the owner, etc.

Furthermore, in light of the previous Housing Redevelopment Act and the Housing Construction Promotion Act, urban improvement project regulated by other Acts becomes a public nature for a reconstruction project. However, as seen earlier, the reconstruction project and redevelopment project cannot be evaluated as “public necessity” of a reconstruction project as equal to the “public necessity” of the redevelopment project, because the purpose and characteristics of the redevelopment project differ from those of the said redevelopment project, as seen earlier. Furthermore, the lease should be protected as “use and profit-making property rights” of the tenant. However, the lease rights are contractual rights arising from the lease project between the lessor and the lessee, which are not necessary to return the object of the reconstruction project to the lessor by its original state even if the lease contract is terminated, and the lessor is not obliged to return the leased object to the lessee by its original state or most of the leased property rights (see Supreme Court Decision 200Da172, supra.). In light of the fact that the lessor’s right to lease and profit-making property rights is not subject to the sale of the leased property rights, such as the right to lease and profit-making property rights, it is not subject to the lessee’s demand for renewal of the lease.

In addition, Article 44(1) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions (hereinafter “Urban Areas and Dwelling Conditions”) provides that a right holder may terminate a contract in cases where the purpose of creation of the beneficial right, such as a right of lease, or a claim equivalent thereto, is not achieved due to the implementation of an improvement project. Meanwhile, Article 44(2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions (hereinafter “Urban Areas and Dwelling Conditions”) provides that a right holder, such as a lessee, who is unable to achieve the contractual purpose due to an improvement project, shall be entitled to cancel the contract. Meanwhile, Article 44(2) of the same Act provides that the right holder may exercise the right to claim the deposit and other contractual money held by the right holder entitled to cancel the right to lease, thereby allowing the lessee to exercise the right to claim money

4. The judgment on the simultaneous performance of lease deposit made by Defendant 2 (Defendant 2 of the judgment of the court of appeal), the KIB Korea Association, the KIB Korea Livestock Industry Association, the Seoul Livestock Industry Association, the HanjinDC, the Korea Senior Welfare Foundation, the Korea Senior Welfare Foundation, the defendant 8 (Defendant 7 of the judgment of the court of appeal), and the defendant 9 (Defendant 8 of the judgment of the court of appeal) (hereinafter “Defendant 2, etc.”) (hereinafter “Defendant 2, etc.”)

Since Defendant 2, etc. terminated a lease agreement on each of the instant buildings pursuant to Article 44 of the Urban Improvement Act, they cannot respond to the Plaintiff’s request for extradition until the Plaintiff was returned the lease deposit.

According to Article 44 (1) and (2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions, when it is impossible to achieve the purpose of establishing superficies, chonsegwon, or right of lease due to the implementation of a rearrangement project, the right holder may terminate the contract, and the right holder who has terminated the contract may exercise the right to claim the return of deposit money, deposit money, and other money under the contract to the project implementer. As seen earlier, Defendant 2, etc., etc. could not use and profit from the property which is the object of the lease as the management and disposal plan for the

In full view of the facts without dispute and the purport of the entire pleading in the statement No. 5-1 through No. 9, the amount of the claim for the refund of the lease deposit with respect to each of the pertinent real estate stated in the order by Defendant 2, etc. can be acknowledged as identical to the amount stated in the order. Defendant 2, etc., terminated each lease contract by service of a preparatory document dated September 2, 201 on the ground that the purpose of the establishment of the right of lease cannot be achieved due to the implementation of an improvement project, and it is apparent that the above preparatory document reached the Plaintiff on September 6, 2011. Accordingly, each of the above lease contract was terminated. Accordingly, Defendant 2, etc., can seek the return of the deposit to the Plaintiff, the project implementer, etc. In this case, the Plaintiff is obligated to return each of the lease deposit stated in the order to Defendant 2, etc., and the delivery obligation by Defendant 2, etc. is related to the Plaintiff’s simultaneous performance with the Plaintiff’s obligation to return the deposit.

5. Conclusion

Therefore, Defendant 1, 10, and multiple comprehensive construction companies have a duty to deliver each of the above real estate as stated in the order to the Plaintiff. Defendant 2, the Korean Egynasium Association, the Hanmi Technology Industry Co., Ltd., the Korea Livestock Industry Association, the Seoul Livestock Industry Association, the Hanjin D&C, the Korea Social Welfare Foundation, and Defendant 8 and 9 are obligated to deliver each of the pertinent lease deposits specified in the order at the same time as the Plaintiff received the lease deposits specified in the order from the Plaintiff. Thus, all of the Plaintiff’s claims against Defendant 1, 10, and multiple comprehensive construction companies are justified. The claims against Defendant 2, the Korean Egynasium, the Korean Hanjin Technology Industry Co., Ltd., the Seoul Livestock Industry Association, the Hanjin Technology Foundation, the Korea Welfare Foundation, and the Korea Welfare Foundation for the Aged, the Korea Welfare Foundation for the Disabled, and the remaining claims are dismissed. It is so decided as per Disposition by the assent of all participating Justices.

[Attachment]

Judges Lee Dong-hoon (Presiding Judge) (Presiding Justice)