[1] Whether the treatment period of civil petitions filed for approval of a project plan and whether the treatment period can be arbitrarily extended to the market, etc. upon receipt of the application for approval of a project plan pursuant to Article 3(1) of the Support for Small and Medium Enterprise Establishment Act (affirmative), and whether there is discretion to extend the treatment period pursuant to the main sentence of Article 21(1) of the Enforcement Decree of the Civil Petitions Treatment Act (negative)

[2] The legislative intent of Article 35(1) and (4) of the Support for Small and Medium Enterprise Establishment Act, and the legislative intent of the relevant legal fiction of authorization and permission, and, in a case where the approval of a business plan is deemed to have been taken on the following day after the expiration of the 20-day processing period under Article 33(3) of the Support for Small and Medium Enterprise Establishment Act without prior consultation, whether the founder shall undergo the procedure of separate application by the relevant administrative agency for authorization and permission (affirmative)

[1] In full view of the contents, structure, and legislative intent of Article 3(1)1 and (3) of the Support for Small and Medium Enterprise Establishment Act, Articles 3(1) and 18 of the Civil Petitions Treatment Act (hereinafter “Civil Petitions Treatment Act”), the main text of Article 21(1)1 of the Enforcement Decree of the Civil Petitions Treatment Act (hereinafter “Enforcement Decree of the Civil Petitions Treatment Act”), Article 33(3) of the Small and Medium Enterprise Establishment Act on the treatment period of civil petitions filed for approval and the legal fiction of approval constitutes “cases where special provisions exist in other Acts” under Article 3(1) of the Civil Petitions Treatment Act. Accordingly, a market, etc. in receipt of an application for approval of a business plan does not have discretion to extend the treatment period at will pursuant to the main sentence of Article 21(1) of the Enforcement Decree of the Civil Petitions Treatment Act, and where it is not notified within 20 days from the date of receipt of the application for approval of the business plan, the pertinent disposition is approved as to the following date.

[2] According to Articles 35(1) and 35(4) of the Support for Small and Medium Enterprise Establishment Act, when a market, etc. approves a business plan, the pertinent authorization and permission shall be deemed to have been granted for the matters that had been consulted with the head of the competent administrative agency regarding the relevant authorization and permission under each subparagraph of paragraph (1). The legislative purpose of the legal fiction system is to simplify administrative procedures by integrating the counter for the smooth implementation of the intended business, and it does not purport to exclude the examination as to whether the intended business satisfies the substantive requirements of authorization and permission under the relevant Acts and subordinate statutes. Therefore, only the legal effect of the relevant authorization and permission is deemed to have occurred when the Mayor, etc. grants approval for a business plan only for the matters consulted with

Even if the approval of a business plan is deemed to have been taken on the date following the expiration date of the 20-day processing period under Article 33(3) of the Small and Medium Enterprise Establishment Act without prior consultation on the matters related to the authorization and permission, a founder is merely entitled to obtain the approval of a business plan under the Small and Medium Enterprise Establishment Act and does not have the status of obtaining the relevant authorization and permission. Therefore, a founder shall undergo the procedures for filing a separate application with the relevant administrative agency for the approval and permission necessary for the establishment of a factory. If a founder has filed an application for the approval of a business plan under the National Land Planning and Utilization Act necessary for the establishment of a factory, but a rejection disposition is taken, and the filing period for a lawsuit is too excessive, the Mayor, etc. may withdraw ex officio the approval of a business plan under the Small and Medium Enterprise Establishment Act on the grounds that

[1] Article 33(1) and (3) of the Support for Small and Medium Enterprise Establishment Act; Articles 3(1) and 18 of the Civil Petitions Treatment Act; Article 21(1) of the Enforcement Decree of the Civil Petitions Treatment Act / [2] Articles 33(3) and 35(1) and (4) of the Support for Small and Medium Enterprise Establishment Act

[2] Supreme Court Decision 2018Du43095 Decided October 25, 2018 (Gong2018Ha, 2264) Supreme Court Decision 2019Du31839 Decided July 23, 2020 (Gong2020Ha, 1698)

Seoul High Court Decision 200Na14488 delivered on August 1, 200

[Defendant-Appellant] The Head of Si/Gun (Attorney Mat-un, Counsel for defendant-appellant)

Seoul High Court Decision 2019Nu1680 decided June 15, 2020

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Relevant provisions and legal principles

A. Article 33 of the Support for Small and Medium Enterprise Establishment Act (hereinafter referred to as the “Small and Medium Enterprise Establishment Act”) provides for the approval of a business plan as follows. A founder who intends to engage in a manufacturing business may engage in a manufacturing business after preparing a business plan, as prescribed by Presidential Decree, and obtaining approval therefor from the head of a Si/Gun/Gu (hereinafter referred to as the “Mayor, etc.”) (Article 33(1)1). The head of a Si, etc. shall notify whether to grant approval within 20 days from the date of receiving the application for a business plan, and shall be deemed to have been approved on the date following the twenty days after the date of receiving the application for a business plan (Article 33(3)). The purpose of Article 33(3) of the Support for Small and Medium Enterprise Establishment Act is to promote the establishment of small and medium enterprises by enforcing the simplification and prompt processing of the procedures for approval of a business plan, thereby building a sound industrial structure through the sound development of small and medium enterprises (see Supreme Court Decision 2012Du375, Mar. 14, 2013).

The main text of Article 21(1) of the Enforcement Decree of the Civil Petitions Treatment Act pursuant to the delegation by Article 18 of the same Act (hereinafter “Civil Petitions Treatment Act”) provides that “the head of an administrative agency may extend the treatment period once within the scope of the treatment period of the civil petition where he/she deems it impracticable to handle the civil petition within the treatment period due to unavoidable reasons.” However, Article 3(1) of the Civil Petitions Treatment Act provides that “Except as otherwise provided for in other Acts, this Act shall apply to the civil petition.”

B. In full view of the contents, structure, and legislative intent of these provisions, Article 33(3) of the Act on the Establishment of Small and Medium Enterprises concerning the treatment period of civil petitions for the approval of a project plan and the legal fiction of approval should be deemed to fall under “where there is a special provision in other Acts” as prescribed by Article 3(1) of the Civil Petitions Treatment Act. Therefore, the markets, etc. in receipt of the application for the approval of a project plan do not have discretion to extend the treatment period at will pursuant to the main sentence of Article 21(1) of the Enforcement Decree of the Civil Petitions Treatment Act, and where the notice of approval is not given within 20 days after the date of receipt of the application for the approval of the project plan, it is deemed that the approval of the relevant

Meanwhile, according to Article 35(1) and (4) of the Small and Medium Enterprise Establishment Act, matters for which the Mayor, etc. has consulted with the head of the competent administrative agency regarding the relevant authorization and permission under each subparagraph of paragraph (1) when he/she approves a business plan shall be deemed to have obtained the relevant authorization and permission. Such deemed authorization and permission system is intended to simplify administrative procedures by integrating windows for the smooth implementation of the intended business, and it does not purport to exclude the examination of whether the intended business meets the substantive requirements of authorization and permission under the relevant Acts and subordinate statutes. Therefore, it is merely an effect of deeming the relevant authorization and permission when the Mayor, etc. takes measures only for the matters consulted in advance with the relevant administrative agency prior to approving the business plan (see Supreme Court Decision 2018Du43095, Oct. 25, 2018, etc.).

Even if the approval of a business plan is deemed to have been taken on the date following the expiration date of the 20-day processing period under Article 33(3) of the Small and Medium Enterprise Establishment Act without prior consultation on the matters related to the authorization and permission, a founder is merely entitled to obtain the approval of a business plan under the Small and Medium Enterprise Establishment Act and does not have the status of obtaining the relevant authorization and permission. Therefore, a founder must submit separate procedures for the approval and permission necessary for the establishment of a factory to the relevant administrative agency. If a founder has applied for a permission of development under the National Land Planning and Utilization Act necessary for the establishment of a factory, but the rejection disposition is taken and the filing period is excessive, and no further dispute becomes effective on the grounds that the establishment of a factory is objectively impossible (see Supreme Court Decision 2019Du31839, Jul. 23, 2020).

2. Determination as to the instant case

A. The lower court determined that the instant disposition on August 3, 2018, based on the premise that the Defendant’s processing period may be extended at will on July 14, 2018, on the following day after the expiration of the 20-day processing period from the date of the Plaintiff’s application for the approval of a project plan, was unlawful.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower judgment is justifiable and did not err by misapprehending the legal doctrine on the processing period of approval of a project plan under Article 33(3) of the Small and Medium Enterprise Establishment Act and the constructive approval system

B. The Defendant asserts that the instant disposition, as of August 3, 2018, was justifiable as a disposition to revoke and withdraw ex officio the approval of a project plan, which became effective as of July 14, 2018. However, according to the clear text of the instant disposition (Evidence A) as of August 3, 2018, the instant disposition is “a rejection disposition” as to the Plaintiff’s application for a project plan, and it is apparent that it does not constitute “a revocation or revocation disposition” as of the premise that the approval of a project plan was already made. Accordingly, the Defendant’s assertion is rejected.

3. Conclusion

The Defendant’s appeal is dismissed as it is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Dong-won (Presiding Justice)