[1] The relationship between a construction business operator, a reconstruction association, and a member where a construction business operator supplies a newly constructed housing exceeding the scale of national housing pursuant to a construction contract entered into with a reconstruction association

[2] The case holding that the construction business operator cannot be deemed to have made unjust enrichment in case where the reconstruction association agreed to bear value-added tax on construction services when entering into a construction contract with the construction business operator, and the association members exempted from the liability to pay value-added tax under the former Regulation of Tax Reduction and Exemption Act share it to all of the association members

[3] The validity of a rebuilding resolution which does not stipulate the allocation or the basis of calculation to the extent that it does not reach an agreement on the apportionment of expenses again at the stage of rebuilding implementation (negative)

[4] The method of determining the apportionment of rebuilding expenses at the stage of rebuilding implementation

[5] Legal nature of the reconstruction association (=a non-corporate association) and restriction on the resolution of the general meeting

[6] The case holding that matters concerning the rebuilding association's share of rebuilding expenses determined by its board of directors were not acquired by the general meeting of the association members for approval, and its contents are also contrary to the equity and thus its validity cannot be recognized

[1] Where a construction business operator supplies a newly constructed housing unit exceeding national housing scale in accordance with a construction contract entered into with a reconstruction association, the construction business operator is liable to pay value-added tax, and thus, the construction business operator is entitled to collect value-added tax from the reconstruction association of the person who is supplied with the service. However, whether to finally enjoy value-added tax can be determined by an agreement between the construction business operator, reconstruction association, and association members, and it is not different because the reconstruction association does not regard it as a supply of goods subject to value-added tax regardless of the scale of housing when the housing unit is sold to association members. If there is a separate agreement between the parties to the transaction to bear value-added tax, the business operator may directly claim for the payment of the amount equivalent

[2] Where a reconstruction association agrees to bear value-added tax on construction services when entering into a construction contract with a construction business operator, and the association members exempted from the liability to pay value-added tax under the former Regulation of Tax Reduction and Exemption Act (wholly amended by Act No. 5584 of Dec. 28, 1998) by sharing this amount to all the association members, the case holding that the construction business operator cannot be deemed as unjust enrichment if there is no excess received value-added tax for each household even if there is value-added tax collected in excess of each household, in light of the total amount of value-added tax to be received and collected

[3] Matters concerning the apportionment of rebuilding expenses under Article 47 of the Act on the Ownership and Management of Aggregate Buildings are the criteria for the sectional owners to choose whether to participate in reconstruction, or whether to sell sectional ownership, etc. and not to participate in reconstruction in accordance with the market price. Considering that the contents of a rebuilding resolution are the most important and essential parts of the contents of the rebuilding resolution, a rebuilding resolution which does not provide for the allocation of expenses or the basis for calculation to the extent that it does not reach an agreement on the apportionment of expenses at the stage of the implementation of rebuilding shall be null and void unless there are special circumstances

[4] In a case where the general meeting of the association members makes a resolution on matters concerning the apportionment of expenses at the stage of implementing reconstruction without setting forth matters concerning the apportionment of expenses in the resolution for reconstruction, it is necessary to make a resolution by the majority of 4/5 of the association members by applying the quorum of the special number at the time of rebuilding resolution to ensure the equality among the association members conflicting interests. The contents of the resolution shall also be determined to maintain the equity among the association members

[5] Except as otherwise provided in Articles 71 and 72 of the Civil Code, a reconstruction association, as a non-corporate body, shall be subject to the application of the provisions on legal entities of the Civil Code. In light of Articles 71 and 72 of the Civil Code, unless otherwise provided in its articles of incorporation, a resolution may be passed only on the agenda of the meeting which was notified one week prior to its convocation

[6] The case holding that a reconstruction association's resolution was not obtained by multiple special quorums at the general meeting of association members for approval because the matters concerning the rebuilding cost sharing determined by the board of directors of the reconstruction association were unilaterally established without notifying the association members of its contents in advance, and its contents also contravenes equity such as allowing the association members of the national housing scale exempted from the liability to pay value-added tax to share the same value-added tax

[1] Article 105 of the Civil Act, Articles 2, 7, and 15 of the Value-Added Tax Act, Article 100 (1) 1 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 584 of Dec. 28, 1998), Article 63 (2) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 15976 of Dec. 31, 198), Article 96 (1) 2 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 1970 of Dec. 31, 1997), Article 96 (2) 9 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 1065 of the Restriction of Special Taxation Act, Article 106 (4) 1 of the current Enforcement Decree of the Restriction of Special Taxation Act), Article 30 of the former Enforcement Decree of the Housing Construction Promotion Act (amended by Presidential Decree No. 1970 of the Act)

[1] Supreme Court Decision 9Da33984 delivered on November 12, 1999 (Gong199Ha, 2497), Supreme Court Decision 2000Da21079 Delivered on June 28, 2002 (Gong2002Ha, 1775), Supreme Court Decision 2002Da38828 Delivered on November 22, 2002 (Gong203Da49153 Delivered on February 13, 2004) (Gong2004Sang, 506Da205964 delivered on June 26, 1995) / [3] Supreme Court Decision 206Da20598Da1596 delivered on June 26, 209 (Gong1998Ha, 1998) / [205Da75497 delivered on May 29, 205] Supreme Court Decision 2005Da75497 decided May 29, 2005

Plaintiff 1 and one other (Law Firm Bupyeong General Law Office, Attorneys Kim Nam-nam et al., Counsel for the plaintiff-appellant)

Hong 3-dong 27 Rebuilding Housing Association (Attorney Tae-soo, Counsel for the plaintiff-appellant)

Tae Young (Law Firm Barun, Attorneys Kang Jon-hun, Counsel for defendant-appellant)

Seoul High Court Decision 2001Na58131 delivered on December 24, 2003

Each appeal is dismissed. The costs of appeal are assessed against each party.

The grounds of appeal are examined.

1. Regarding the plaintiffs' grounds of appeal

A. As to the first ground for appeal

Where a construction business operator supplies a newly constructed housing unit exceeding national housing scale pursuant to a construction contract between a reconstruction association and a rebuilding association, the construction business operator is liable to pay value-added tax, and thus, the construction business operator is entitled to collect value-added tax from the reconstruction association of the person who is supplied with the service. However, whether the value-added tax is ultimately liable is determined by an agreement between the construction business operator, the reconstruction association, and the association members. It does not change because the reconstruction association's sale of housing units to the association members does not constitute the supply of goods subject to value-added tax regardless of the size of housing units. If there is a separate agreement between the parties to the transaction to bear value-added tax, the business operator may directly file a claim for payment of the amount equivalent to value-added tax with the person who is supplied pursuant to the agreement (see Supreme Court Decisions 9Da3984, Nov. 12, 199; 200Da21079, Jun. 28, 2002).

In full view of the evidence adopted in its judgment, the court below held that the defendant Hong 3-dong 27 Rebuilding Housing Association (hereinafter "the defendant company") entered into a contract for construction works for apartment reconstruction with the defendant Tae Young-gu Co., Ltd. (hereinafter "the defendant company"), and agreed to bear value-added tax on the construction services of the defendant company. The defendant union did not distinguish the part of value-added tax imposed under the above agreement from the members of the association with internal allocation of the value-added tax, and shared all of the members of the association without distinguishing the part of the member who is liable for value-added tax. Accordingly, the court below's determination that the defendant company was exempted from the liability for return of unjust enrichment under Article 100 (1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5584 of Dec. 28, 1998), and it did not err by misapprehending the legal principles as seen above. Thus, the court below's determination that the defendant company was exempt from the liability for return of unjust enrichment under Article 63 (2), Article 96 (1) of the Enforcement Decree of the Housing Construction Promotion Act.

The court below did not err in the misapprehension of legal principle as to unjust enrichment as otherwise alleged in the ground of appeal. This part of the ground of appeal cannot be accepted.

B. Regarding ground of appeal No. 2

Examining the reasoning of the judgment below in light of the records, the court below acknowledged that the articles of incorporation of the defendant association provided that the sale price of the defendant association shall be "the guidelines for the implementation of the cost-sharing system" with the consent of the majority of the union members present at the general meeting and with the consent of the majority of the union members present at the general meeting of union members. However, after the board of directors of the defendant association decided to select the defendant company as the executor of the reconstruction project of this case, the president of the defendant association entered into the provisional contract of this case with the defendant company as the cost-sharing unit (the above guidelines are increased than the above guidelines are applied). After 123 members attend the general meeting to approve the provisional contract of this case and 118 members among the 134 union members, the resolution of selecting the defendant company as the contractor of the defendant company should be adopted with the consent of the majority of the union members present at the general meeting of this case with the consent of the above majority of the union members present at the general meeting.

The judgment of the court below is not erroneous in the misapprehension of legal principles as to the modification of the articles of incorporation of the non-corporate company. This part of the ground of appeal is not accepted.

C. As to the grounds of appeal Nos. 3 and 4

Upon examining the reasoning of the judgment below in light of the records, the court below acknowledged that the contract of this case ratified by the general meeting of the members of the defendant association based on the evidence adopted in its judgment was concluded with the agreement to increase the construction cost when there is an increase in standard construction cost, or when the base team is exposed during underground ruptures, and the articles of incorporation of the defendant association are authorized to exercise the authority of the general meeting with respect to the increase or collection of the members' contributions. The head of the defendant association, etc. delegated the authority through the resolution of the board of directors and formed the modified contract of this case where the average unit price of the defendant company is increased from 1.8 million to 2.140,00,000 won, and rejected the plaintiffs' claim seeking unjust enrichment on the premise that the modified contract of this case is null and void.

As pointed out in the grounds of appeal, the court below did not err in the misapprehension of legal principles as to binding power or unjust enrichment of a provisional contract, or in the omission of judgment or the failure of reasoning in the judgment of the court below, and such judgment of the court below is not contrary to the concept of justice and equity. The ground of appeal on this part cannot be accepted.

2. As to the ground of appeal by the Defendant Union

According to Article 47(2) of the Act on the Ownership and Management of Aggregate Buildings, a resolution for rebuilding shall be adopted by the majority of 4/5 or more of sectional owners and voting rights. According to Articles 47(3) and (4) of the same Act, when a resolution for rebuilding is adopted, matters concerning the removal of a building and the allotment of expenses incurred in constructing a new building and matters concerning the allotment of sectional ownership of a new building shall be determined. Such matters shall not be determined in an equitable manner among sectional owners. However, the matters concerning the apportionment of rebuilding expenses shall not be determined in accordance with the principle of equity. However, considering that the matters concerning the apportionment of rebuilding expenses are the most important and essential part of the resolution for rebuilding, it shall be deemed that the standards for selecting whether the sectional owners would participate in rebuilding while bearing reasonable expenses, or whether the sectional ownership, etc. is sold at the market price and not participating in rebuilding. In addition, a resolution for rebuilding shall be deemed null and void unless there are special circumstances to the extent that the majority of the members did not agree on the apportionment of expenses at the time of rebuilding.

On the other hand, a reconstruction association shall be subject to the application of the provisions on legal entities of the Civil Act except for the provisions premised on legal personality as a non-legal entity. In light of Articles 71 and 72 of the Civil Act, unless otherwise provided in the articles of incorporation, a resolution may be adopted at a general meeting only on the purpose of the meeting notified one week prior to the convocation (see Supreme Court Decision 95Da56866 delivered on October 25, 1996).

According to the records, the defendant union may collect the shares of the union members (excluding investment in kind) with respect to the investment of the union members and the costs of the construction company at the time of the initial rebuilding resolution. The board of directors shall determine the amount of shares. The board of directors shall act on behalf of the union members with respect to the amount of shares or collection method, and the articles of association stipulate the general matters and principles concerning the apportionment of expenses, and the board of directors of the defendant union shall establish a plan to calculate the shares of the union members, regardless of the usual number of shares sold to the union members, by including the value-added tax in the total construction cost, regardless of the general number of shares sold to the union members. According to the method of calculation of the shares, the defendant union shall establish a plan to calculate the shares of the union members without notifying the union members of the above plan to pay the value-added tax in advance, and the defendant union shall not be held with respect to the above calculation method of the shares if it did not meet the purpose of the general meeting before the above general meeting is held.

Therefore, the defendant association should be deemed to have established the particulars of the calculation of the shares of each association member on February 8, 1996, and barring any special circumstance, in order to take effect for the association members, the above-mentioned apportionment of shares should be decided by a majority of at least 4/5 of the association members when the contents of the above apportionment of shares are notified to the association members before holding a general meeting in accordance with the legal principles as seen earlier, and the contents of the apportionment of shares should also be the contents of equity among the sectional owners. However, the above apportionment of shares determined by the board of directors of the defendant association were unilaterally formulated without notifying the association members of the contents thereof in advance, and thus, the general meeting of the association members for approval was also unable to obtain the resolution by the number of special quorum, and the contents thereof are contrary to equity, such as allowing the association members of national housing exempted from the obligation to pay value-added taxes to share the same value-added tax. Therefore, its validity cannot be recognized.

The court below did not decide whether the defendant union satisfied the special quorum and its contents are contrary to the equity among the union members in determining the internal intent of the union. However, the decision that the defendant union's assertion is not reasonable on the ground that there is a defect in the notification procedure, etc. is inappropriate for applying the above legal principle, but it is just in the conclusion that rejected the defendant union's argument.

The judgment of the court below is not erroneous in the misapprehension of legal principles as to the obligation of members to pay contributions in accordance with mistake of facts or internal decision as pointed out in the ground of appeal, which affected the conclusion of judgment.

3. Conclusion

Therefore, each appeal is dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Hyun-chul (Presiding Justice)