[1] The validity of an act of disposal of land secured by the authorities in recompense of development outlay without a resolution of the general meeting of association members or the board of representatives in lieu thereof (negative)

[2] Whether the board of representatives of the land subdivision rearrangement association may unilaterally dismiss a representative or appoint a vacancy in the fixed number of representatives by a resolution only for the remaining representatives (negative in principle)

[1] According to Articles 25, 26 subparag. 8, 27, and 66(1) of the former Land Readjustment Project Act (repealed by Act No. 6252 of Jan. 28, 200), when the land-building rearrangement association disposes of the land-building development recompense land, etc., it shall be subject to a resolution of the general assembly or the board of representatives established in lieu of the general assembly or the general assembly consisting of its members, and since this is an effective provision, the act of disposing of the land-building association without the resolution of the general assembly or the board of representatives in lieu thereof is invalid.

[2] On the ground that the appointment of a substitute by the board of representatives, which is the authority agency of the general meeting and the representative body of the entire association members, as a substitute for the public notice of the officers of an association which is merely the executive organ of the land partition association, can be properly reflected in the general meeting’s appointment of a substitute by the board of representatives, the appointment of a substitute by the board of representatives, which is the representative body of all the association members, as a legitimate procedure, shall not be allowed unless there is an explicit delegation by statutes, articles of association, or resolution of the general meeting, on the ground that the majority of the board of representatives is unilaterally dismissed or as a result, shall be appointed by the resolution of only the remaining representatives by the internal resolution of the statutes or articles of association.

[1] Articles 25, 26 subparagraph 8 (see current Article 26-4 subparagraph 8 of the Enforcement Decree of the Urban Development Act), 27 (see current Article 26-5 of the Enforcement Decree of the Urban Development Act), and 66 (1) (see current Article 44 of the Urban Development Act), Article 105 of the Civil Act / [2] Articles 22 (2) (see current Article 26-2 (2)), 27 (see current Enforcement Decree of the Urban Development Act), 31 (2) (see current Article 26-5 of the Enforcement Decree of the Urban Development Act), 26 (3) (see current Article 15 (4) and (4) of the Enforcement Decree of the Urban Development Act), and Article 20-2 (2) (see current Enforcement Decree of the Urban Development Act, e.g., Article 26-2 (2) of the Enforcement Decree of the Urban Development Act), and Article 26 (2) (2) (see current Enforcement Decree of the Urban Development Act), and Article 263 (4) of the former Enforcement Decree of the Urban Development Act

[1] Supreme Court Decision 94Da31242 delivered on February 24, 1995 (Gong1995Sang, 1434) Supreme Court Decision 2000Da44683 delivered on February 9, 2001, Supreme Court Decision 2000Da72671 Delivered on March 23, 2001 (Gong2001Sang, 981)

Seohae Construction Co., Ltd. (Law Firm Civil & Co., Ltd., Counsel for the plaintiff-appellant-appellant)

Ronam District Land Readjustment Association (Attorney Yoon Jae-sik, Counsel for plaintiff-appellant)

Seoul High Court Decision 2005Na105455 Delivered on March 23, 2006

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

According to Articles 25, 26 subparag. 8, 27, and 66(1) of the former Land Readjustment Projects Act (amended by Act No. 6252 of Jan. 28, 200; hereinafter “Act”), when the land rearrangement association disposes of the land recompense land, etc., it shall be subject to a resolution of the general meeting or the council of representatives established in lieu of the general meeting of the members, which is composed of the members, when the land rearrangement association disposes of the land recompense land, etc., it shall be subject to the resolution of the general meeting or the council of representatives established in lieu of the general meeting of the members. Thus, it shall be viewed as an effective provision. Thus, in violation of this provision, the act of disposing of the land rearrangement association without the general meeting or the council of representatives in lieu thereof shall be null and void (see, e.g., Supreme Court Decisions 94Da31242, Feb. 24, 199;

According to the reasoning of the judgment below, the court below decided on September 4, 2003 that the defendant union, the executor of the land readjustment project of this case, paid 4,610,850,000 won tender bond to the plaintiff company among the participating companies in the bidding procedure for the selection of project execution agent for the construction of collective housing within the project district of this case, and decided on September 4, 2003 to select the plaintiff company as an executor agent at the 6th meeting of the defendant union, which was entrusted with the authority to dispose of land allotted by the general meeting pursuant to Article 23 of the articles of association of the defendant union (hereinafter "articles of association"), and decided on September 9 of this year that the plaintiff company would sell the land allotted by the 6th meeting of this case as the executor agent, and rejected the above decision of the 206th meeting of the defendant union's representative's 3rd representative's 20 times of the above bid bond and the agreement to participate in the sale and purchase of the land allotted by the 6th meeting of this case.

In other words, the court below acknowledged that two persons, such as the above non-party 1, etc., are disqualified for representatives, but held that Article 23 of the articles of association provides that the special election of new officers and representatives following the resignation and dismissal of officers and representatives may be carried out by the resolution of the board of representatives, on the premise that Article 23 of the articles of association provides that 39 representatives from among the 43 incumbent representatives of the defendant's association may be carried out by the resolution of the board of representatives, the court below determined that the above 16 members, such as the non-party 2, etc., are included in the 35 representatives appointed by the representatives from among the 16 existing representatives who were dismissed or dismissed on the same day, and the above 14 representatives, such as the non-party 2, the non-party 1, etc., the non-party 2, etc., and the non-party 1, who participated in the 16th representatives' resolution is valid even if the remaining 23 representatives are not qualified for appointment.

However, according to the records and relevant Acts and subordinate statutes, the term of office of the non-party partnership's officers who are appointed by the general meeting from among the members as prescribed by the articles of association and auditors (Article 22); the president of the partnership shall act on behalf of the president of the general meeting or the board of representatives; the director shall assist the president of the partnership in the division of affairs and the auditor shall be appointed (Article 23); the number of representatives of the partnership's members shall be 1/10 or more of the total number of the union members elected at the general meeting as prescribed by the articles of association; the term of office of the non-party 3 representatives shall be determined by the articles of association within the scope of not exceeding four years; the term of office of the representatives shall be the remainder of the term of office of the non-party partnership's officers; the term of office of the non-party 2 representatives shall be fixed by the articles of association for appointment of the non-party 3 representatives, other than the fixed term of office and the fixed term of office of the directors (Article 27).

However, as long as the provisions of the Civil Act apply mutatis mutandis supplemently to the defendant association, matters concerning the composition and operation of the association, such as the election of executives and representatives, belong to the area of autonomous administration. Thus, each organization should be decided autonomously in accordance with its characteristics. However, as long as matters that have significant influence on the interests of all the association members, such as the disposition of land allotted by the authorities in recompense for development outlay, are not effective, the above Acts and subordinate statutes stipulate the appointment of executives and representatives as the discretionary matters of the general meeting in consideration of the impact on all the association members upon the formation of the board of representatives and the exercise of their authority. Meanwhile, the above Acts and subordinate statutes stipulate that the appointment of executives and representatives may be determined by the articles of association of the association as the discretionary matters of the general meeting. Since the articles of association of the defendant association based on the above Acts and subordinate statutes stipulate the matters concerning the establishment and operation of the general meeting on behalf of the executives and representatives, it is highly likely that some of the executives and representatives are appointed by the general meeting, and the remaining appointment of representatives may be reflected in the resolution of the general meeting.

Thus, at the time of the second meeting of the defendant association, 37 representatives (excluding 2 non-qualified representatives) among 43 representatives registered at the time of the second meeting of the board of representatives of the defendant association dismissed some representatives by voting on the ground that they interfere with the operation of the association, and filling of 21 representatives who are not more than 16 representatives due to the above dismissal and resignation of some representatives, etc. in the form of appointment of 21 representatives who are not more than a majority of the registered representatives, which resulted in the vacancy in the form of appointment of 21 representatives from among the remaining remaining representatives, the above statutes and the articles of association are clearly deviating from the scope of authority of

Nevertheless, without examining the above Acts, subordinate statutes and the articles of association and considering only the outcome of the resolution, the court below concluded that the resolution of this case at the 6th council of representatives is valid, on the premise that the resolution of this case at the 6th council of representatives is not defective in its establishment, there is an error of law by misunderstanding the legal principles as to the procedure for disposal of the land-building rearrangement association's recompense land and the procedure for resolution by the board of representatives of the association. The ground of appeal pointing this out is with merit.

Therefore, under the premise that it is not allowed to dismiss or substitute representatives on their own without specific delegations or authorizations of the general meeting of the defendant association, the court below should, in the composition and operation of the council of the defendant association until the resolution of this case, examine whether the quorum and the quorum under the articles of association in the composition and operation of the council of the defendant association should be considered, and the number of incumbent representatives at the time of the resolution of this case (the minutes of 206 pages shall be 36 persons in the minutes of the records, but there is a lot of room to see otherwise since only 35 persons in the list of present representatives in the records of 277 pages shall be signed directly or by proxy) among the qualified representatives who did not agree with the resolution of this case from the number of qualified representatives (five persons shall oppose the records, and three persons shall be deemed to have the authority to represent), and finally determine the validity of the resolution of this case by examining whether the quorum and the quorum under the articles of association are satisfied.

Therefore, without further proceeding to decide on the remainder of the grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices

Justices Cha Han-sung (Presiding Justice)