2019Guhap63508 Action demanding the revocation of a disposition to appoint a provisional director

1. A;

2. B

The Minister of Education

c. School foundations;

May 26, 2020

July 16, 2020

1. The plaintiffs' claims are dismissed.

2. The costs of the lawsuit are assessed against the Plaintiffs, including the costs incurred by the supplementary participation.

The appointment of a provisional director against the Defendant’s Intervenor (hereinafter referred to as “ Intervenor”) on February 1, 2019 and February 8, 2019 shall be revoked in entirety.

1. Details of the disposition;

A. The Intervenor is a school juristic person that establishes and operates D University (E University was at the time of opening the school in 1988 and changed its name around 1993).

B. On January 4, 2005, Plaintiff A was appointed as a director of the Intervenor, and was reappointed on January 4, 2009; January 4, 2013; and January 4, 2017; and on October 1, 2015, Plaintiff B was appointed as the president of the Intervenor. Plaintiff B was appointed as a director of the Intervenor on February 11, 2009 and served on October 4, 2016.

C. From December 11, 2017 to December 27, 2017, and from January 10, 2018 to January 12, 2018, the Defendant issued a comprehensive audit to the Intervenor and the schools affiliated therewith, and issued an order to take corrective measures against the Intervenor on July 31, 2018, and issued an order to take corrective measures against the Intervenor on November 23, 2018 pursuant to Article 20-2(1) of the Private School Act on the ground of “unfair operation of the board of directors and preparation and events of minutes,” etc., of “the instant prior disposition” (hereinafter referred to as “instant prior disposition”).

D. The Defendant, upon deliberation and resolution by the Private School Dispute Mediation Committee, appointed six provisional directors of the Intervenor on February 1, 2019 pursuant to Article 25 of the Private School Act, and appointed one temporary director of the Intervenor on February 8, 2019 again on the same procedure and reason (hereinafter referred to as “instant disposition,” in total, of the disposition of appointing temporary directors for the said seven persons).

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 3, 4, Eul evidence 1 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

(i) procedural defects;

In the case of the instant disposition, the instant disposition was merely stated in the written disposition (Evidence A No. 1) pursuant to Article 25 of the Private School Act, and its content alone is not clear of what is the accurate legal basis and reasons. The instant disposition is an unlawful disposition that violates the duty of presentation of reasons under Article 23(1) of the Administrative Procedures Act.

2) Non-existence of grounds for disposition

Although the number of directors of an intervenor whose appointment is effective at the time of the instant preceding disposition is less than three (5) of the number of the board of directors (five) under the articles of incorporation, the right to urgently handle the previous duties is recognized until the previous director (G and K) is appointed. Moreover, since an application for suspending the execution of the instant preceding disposition was accepted and immediately suspended, the validity of the instant preceding disposition was suspended as soon as the application for suspending the execution of the instant preceding disposition was rejected, the Plaintiffs and J’s performance of the duties was also possible. Ultimately, since it cannot be deemed difficult to meet the requirements of the board of directors of the Intervenor at the time of the instant disposition, the Intervenor’s normal operation is not difficult,

3) Illegality of election in excess of the quorum

Even if the Intervenor at the time of the instant disposition, as long as it is not necessary to appoint a specific number of temporary directors when appointing temporary directors pursuant to Article 25(1)1 of the Private School Act, only the number of temporary directors capable of meeting the quorum of the board of directors should be appointed, unless there is a need to do so. Considering the number and M of former directors, including J and K, who are incumbent directors, and K, who can exercise emergency disposition rights due to invalidation of appointment of I and F, four directors in the capacity of the Intervenor’s board of directors at the time of the instant disposition were able to perform their duties. The Defendant, without considering these circumstances, took the instant disposition in which four directors in the capacity of the Intervenor’s board of directors at the time of the instant disposition, appointed a total of seven temporary directors in accordance with the prescribed number of directors (8) under the articles of incorporation. The Defendant did not have any ground for appointment of the remaining six temporary directors except for one shortage, and the above six temporary directors cannot be specified, the instant disposition in the end is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The Intervenor’s articles of incorporation (Evidence A) of the Intervenor is eight (including one chief director) and its term of office is four years (Article 18). The Intervenor’s board of directors is opened with a majority of the registered directors (five) and pass a resolution with the consent of a majority of the registered directors (Article 28).

2) The first reason for the instant prior disposition is that “the intervenor did not reach the number of members present at the meeting of the board of directors as of October 29, 2015, and the board of directors as of December 10, 2015, and the board of directors as of December 29, 2015, and the number of directors present at the meeting of the board of directors as of December 29, 2015 did not reach the quorum.” As the number of directors present at the meeting of the board of directors as of December 29, 2015, the first reason for the instant prior disposition was that “a director who did not attend due to an illness was present at the meeting of the board of directors and prepared the minutes of the board of directors as of December 29, 2015, by making a false resolution to be present at the deliberation and resolution on the agenda items to be presented.

3) On August 30, 2016, the Intervenor passed a resolution on the agenda on which Plaintiff B was appointed as a director at the board of directors meeting of August 30, 2016, at which F, who is not qualified as a director, was present. On November 21, 2016, at the meeting of the board of directors of I, F, and Plaintiff B, the Intervenor passed a resolution on the agenda on which Plaintiff A was appointed as a director, and the agenda on which the Plaintiff, F, and the Plaintiff were appointed as a director at the meeting of the board of directors

4) On November 12, 2018, K resigned from the Intervenor’s director (open director) position due to his/her health reasons and was accepted on November 27, 2018.

5) On November 26, 2018, the Defendant notified the Intervenor that “F and I will be appointed as a director at a meeting of the board of directors with procedural defects. F without the qualification of director, and F and I will not be qualified as an officer, 0, P and Q attending the board of directors. The Intervenor’s registered directors are 23) and that temporary directors will be appointed in accordance with Article 25 of the Private School Act for the future operation of the corporation.”

6) The status of the Intervenor’s director position before and after the instant disposition is indicated in the following table.

A person shall be appointed.

7) On December 14, 2018, the Plaintiffs, the other party to the instant prior disposition, and F, G, H, and I (hereinafter referred to as “Plaintiffs, etc.”) filed a lawsuit against the Defendant seeking revocation of the instant prior disposition with the Seoul Administrative Court. On September 19, 2019, the Seoul Administrative Court rendered a final and conclusive judgment of the Seoul Administrative Court (hereinafter referred to as the “Seoul Administrative Court”) which accepted the Plaintiffs’ claim on the grounds that “as part of the grounds for the instant prior disposition was present at the board of directors on December 29, 2015, the Plaintiff’s failure to meet the requirements for the prior disposition and prepared a false minutes” was deemed to fall under subparagraphs 1 and 2 (the act of violating the provisions of the Private School Act) of Article 20-2(1) of the Private School Act (the act of violating the provisions of the Private School Act) and on the grounds that “the degree of infringement of private interest of the Plaintiffs, etc. and the private school is significantly high,” compared with the public interest to achieve with the instant prior disposition.

8) On December 14, 2018, along with the filing of the instant lawsuit, the Plaintiffs, etc. filed an application to suspend the execution of the instant prior disposition on the same date as the filing of the instant lawsuit, but the Seoul Administrative Court rendered a decision to dismiss the said application by the Plaintiffs, etc. on January 3, 2019 (No. 13908 of 2018), and the Plaintiffs, etc. filed an appeal against this, the Seoul High Court dismissed the said appeal on August 8, 2019 (No. 2019Du1042).

9) On September 27, 2019, after the pronouncement of the first instance judgment of the instant lawsuit, the Plaintiffs, etc. filed a motion to suspend the execution of the instant preceding disposition again, and the Seoul Administrative Court accepted the said motion from the Plaintiffs, etc. on the same day. Although the Defendant filed a complaint and re-appeal, the Seoul High Court dismissed the Defendant’s above reappeal on October 28, 2019 (No. 2019Du1399), and the Supreme Court dismissed the Defendant’s said reappeal on February 21, 2020 (No. 2019No941).

[Reasons for Recognition] Facts without dispute, Gap evidence 20, 21, Eul evidence 3 to 10, the purport of the whole pleadings

D. Determination

1) Whether procedural defects exist

A) Article 2 subparag. 4 of the Administrative Litigation Act provides that "parties who are directly parties to the disposition of an administrative agency" (a) and "interested parties who are ex officio or upon application by the administrative agency" (b) and "parties who are directly parties to the disposition of the administrative agency" are interested parties who participate in the administrative procedure, and "parties" under Article 23(1) of the Administrative Procedures Act refer only to the parties directly counter to the disposition of the administrative agency.

However, as seen earlier, the instant disposition constitutes a disposition to appoint a provisional director against the Intervenor. As such, it is reasonable to deem that the 'party to the instant disposition under Article 23(1) of the Administrative Procedures Act is the Intervenor and the temporary directors appointed by the Intervenor. Therefore, the Plaintiffs’ assertion of defect in the process of insufficient reasoning based on the premise that the Plaintiffs are the parties to the instant disposition is a party to the instant disposition is without merit.

B) Even if the plaintiffs are parties to the instant disposition or are in a position to assert deficiencies in the presentation of reasons against the intervenors, it is difficult to recognize that there is a defect in the instant disposition for the following reasons.

Article 23(1) of the Administrative Procedures Act provides that when an administrative agency takes a disposition, the administrative agency shall present the basis and reasons for the disposition to the parties. This purport is to exclude the arbitrary decision of the administrative agency and allow the parties to properly cope with the administrative remedy procedure. Thus, in full view of the contents stated in the written disposition, relevant Acts and subordinate statutes and the overall process, etc. up to the disposition, where it is sufficiently possible to find out which basis and reason the parties to the disposition were made at the time of the disposition, and where it is deemed that there was no particular hindrance to moving into the administrative remedy procedure, the disposition is unlawful due to such failure to specify the grounds and reasons for

No appeal may be made (see, e.g., Supreme Court Decision 2012Du12570, Sept. 4, 2014).

In full view of the overall purport of the arguments in the evidence Nos. 3, 4, and 4, the defendant, prior to the disposition in this case, found the following facts: ① the defendant rendered the prior disposition in this case to the former and incumbent directors of the intervenor, including the plaintiffs, prior to the disposition in this case; ② the defendant notified the intervenor on Nov. 26, 2018 that the intervenor would be appointed as the two incumbent directors and will be appointed for the normal operation of the corporation in the future; ③ the plaintiffs would not reach the quorum for the board of directors under the articles of incorporation upon filing an application for suspending the execution of the prior disposition in this case; and ③ the plaintiffs would not reach the quorum for the board of directors under the articles of incorporation, and thus the intervenor's activities will be practically suspended.

Examining the above facts in light of the legal principles as seen earlier, even though the written disposition in this case does not expressly state the specific subparagraphs and subparagraph of Article 25 of the Private School Act, the Plaintiffs did not supplement the vacancy of the director at the time and thus it is difficult for the educational foundation to operate normally (Article 25 (1) 1 of the Private School Act), and the approval of taking office of the Intervenor was revoked due to the prior disposition in this case (Article 25 (1) 2 of the Private School Act). Since it is sufficiently known that the facts of the disposition in this case was taken on the grounds of the prior disposition in this case, there was no particular obstacle to the administrative remedy procedure. Accordingly, even if the grounds and reasons at the time of the disposition in this case were not specified specifically, the disposition in this case cannot be deemed unlawful.

2) Whether there is no ground to appoint a provisional director

A) Whether an administrative disposition was illegal in an administrative litigation shall be determined on the basis of the law and fact-finding status at the time when the administrative disposition was taken, and it shall not be affected by the amendment and repeal of the law or changes in the actual state after the disposition (see Supreme Court Decision 2007Du1811, May 11, 2007).

B) In full view of the following circumstances revealed through the aforementioned facts and the purport of the entire pleadings, the instant disposition based on the above facts is lawful, since the reasons under Article 25(1)1 of the Private School Act (when it is deemed that the normal operation of the school juristic person is difficult due to a school juristic person’s failure to fill the vacancy of directors) and Article 25(1)2 of the Private School Act (when the approval of taking office of the school juristic person was cancelled pursuant to Article 20-2) are acknowledged at the time of the instant disposition.

① On February 1, 2019 and February 8, 2019, the instant disposition was taken, no application was accepted for the suspension of execution of the instant preceding disposition, and the illegality of the instant preceding disposition was confirmed in the instant lawsuit. Therefore, the Plaintiffs and F, for whom approval of taking office was revoked due to the instant preceding disposition, were in a position that could not perform the Intervenor’s director regardless of the remaining term of office.

② Furthermore, even without considering the revocation of approval of taking office in accordance with the preceding disposition of the instant case, the Plaintiffs, who were selected and appointed as the Intervenor’s director at the board of directors meeting held on December 29, 2015, which was the F, I, as well as F, and I, of which the quorum was insufficient, cannot be deemed to have been duly selected and appointed as the Intervenor’s director. Thus, the Intervenor at least did not have five fixed number of members after January 3, 2017 when the term of office of Plaintiff A expired. Nevertheless, the Intervenor did not fill any vacancy even in the name near two years until the instant disposition was issued by the Intervenor.

Accordingly, the plaintiffs asserted that the defendant's assertion that the disposition of this case was made on the ground that the appointment of the plaintiffs was invalid constitutes an illegal addition or alteration of the grounds for disposition. However, since the grounds for the disposition of this case include the reasons under Article 25 (1) 1 of the Private School Act (when the school juristic person is deemed unable to properly operate the school juristic person because it does not fill the vacancy of directors), the circumstance that the approval of taking office of the plaintiffs was cancelled as well as the situation that the approval of taking office of the plaintiffs is invalid is merely a specific circumstance supporting the reason that "it is difficult to normally operate the school juristic person due to the vacancy of directors," and it is not different from each other from the basic facts, but rather is merely a concrete expression of

③ Ultimately, the Intervenor’s registered director who has maintained the position of director lawfully and effectively from the time of the instant disposition after the instant preceding disposition remains. As such, it is determined that the Intervenor’s normal operation was impossible at the time of the instant disposition.

④ Although the preceding disposition was revoked in the previous lawsuit of this case, and the plaintiffs' application for suspension of execution was accepted. However, as long as all the above decisions and decisions were only after the previous disposition of this case, the plaintiffs demanded the provisional dismissal of the defendant for the reasons for resolving the reasons for the provisional appointment, and the defendant may file a claim for revocation of the rejection disposition if the defendant rejected it, the previous disposition of this case is lawful at the time of determination based on the law and facts at the time of the disposition. Furthermore, even if the execution and validity of the preceding disposition were suspended by the suspension of execution after the disposition of this case, the pertinent disposition of this case, which was lawful at the time of the disposition, is not deemed to be unlawful again. Furthermore, regardless of the validity of the approval of the appointment of the plaintiffs, etc. or the revocation thereof, the decision of appointment of F, I, and the plaintiffs is null and void as seen earlier.

⑤ As long as the preceding disposition of this case is unlawful, the Plaintiffs and G are recognized as having the right of emergency disposal. Thus, the Intervenor’s right of emergency disposal is not difficult. However, it is separate from whether the former director whose approval of taking office has been cancelled for reasons of emergency disposal and cancellation of the approval of taking office as above. 6) Article 25(1) of the Private School Act provides that the competent authorities shall appoint temporary directors without fail. If the legitimacy of appointment of temporary directors is determined depending on the existence of the preceding director’s right of emergency disposal, it may be against the language and text of the above law, and if it is interpreted that the appointment of temporary directors cannot be made on the ground that the former director’s right of emergency disposal is recognized, it is impossible to appoint temporary directors if most of the former director’s right of emergency disposal exist, and the Plaintiffs and G, as well as the Intervenor’s right of temporary directors’ right of emergency disposal cannot be deemed to have been made lawfully under the premise that the Plaintiffs’ right of emergency disposal and appointment cannot be deemed to have been made under the premise that the former director’s right of emergency disposal and appointment cannot be made under the Private School Act.

6) The Plaintiffs asserted that the disposition of this case, which was based on the cancellation of the approval of taking office, is unlawful as long as the prior disposition of this case is unlawful, at least when the final decision to dismiss an application to suspend the execution of the prior disposition of this case becomes final and conclusive, or at least when the decision to dismiss the application to suspend the execution of the prior disposition of this

On the other hand, the provisional directors system under Article 25 of the Private School Act, even in cases where the board of directors is unable to perform its functions due to the vacancy of directors, etc., it is difficult to expect the restoration of functions by themselves due to the legal nature that the school juristic person, which is a first class of the incorporated foundation, does not exist. On the other hand, damage therefrom does not reside within the territory of the incorporated foundation, but return to all the members of the school, such as students, school staff, and parents, and ultimately infringes on students' right to receive education. Thus, the provisional directors system aims to prevent the infringement of students' right to receive education by normalizing the school juristic person, which is in crisis (see, e.g., Supreme Court Decisions 2012Du19496,9502, Jul. 23, 2015; 2005Hun-Ba101, Apr. 30, 2009).

Considering the significance and purport of the provisional director system and the language and purport of Article 25(1) of the Private School Act that provides for the appointment of the provisional director as an obligation of the competent agency, it is unreasonable to deem that the competent agency is obliged to promptly appoint temporary directors so as to minimize damage to the relevant school foundation and its schools while the abnormal situation of the board of directors of the relevant school foundation is not resolved. On the ground that legal disputes arising in the disposition related to the above abnormal situation have occurred, it is difficult to accept the Plaintiffs’ above assertion.

3) Illegality of election in excess of the quorum

In full view of the following circumstances revealed through the facts admitted above and the purport of the entire pleadings, it is determined that the defendant should appoint all seven persons meeting the Intervenor’s fixed number of directors at the time of the instant disposition as temporary directors. Accordingly, the plaintiffs’ assertion cannot be accepted.

① On January 3, 2017, when the term of office of Plaintiff A expired, only the director who could not meet the most long-term quorum was in office, and the appointment of Plaintiff A has been null and void or is made by a resolution of the board of directors by an unqualified person, and there was considerable legal uncertainty about its validity.

② Article 24-2 of the Private School Act provides that a private school dispute mediation committee shall be established under the jurisdiction of the defendant in order to deliberate on the appointment, etc. of temporary directors, and such committee shall deliberate on matters concerning the appointment of temporary directors. The instant disposition also seems to have deliberated and resolved on the grounds for and circumstances of the instant disposition and the number of temporary directors most appropriate, taking into account the circumstances and circumstances of the Intervenor.

③ Article 25-3(1) of the Private School Act provides that the term of temporary directors shall be minimized and the regular directors shall operate the board of directors in principle. However, a number of disputes have occurred in schools established and operated by a participant. In such a situation, it is deemed that the need to appoint temporary directors meeting the fixed number of directors may also be recognized in order to efficiently resolve matters concerning the operation of various industrial educational foundations, rather than appointing only a number of temporary directors who can satisfy the quorum of the board of directors, at the risk of de facto impossibility of operating the board of directors if any vacancy occurs due to resignation, accident, etc.

3. Conclusion

Therefore, the plaintiffs' claim is dismissed as it is without merit. It is so decided as per Disposition.

presiding judge, judge Park Jong-yang

Judges Kim Gin-ju

Judge Lee Professor

1) The invalidity of the above I and F’s resolution on the appointment of a director seems to have no dispute between the parties.

2) The fact that a resolution on the appointment of a director against the above 0 was made at the meeting of the board of directors, and is null and void is also deemed null and void.

3) This is the result that the resignation of K’s director, resigned on November 12, 2018, is not reflected.

4) On December 15, 2008, N was appointed as a director of the instant school juristic person and was reappointed on January 26, 2012, and retired from office on January 26, 2016 and January 26, 2015. N was hospitalized in a hospital due to dementia, a soldier, around October 2015, and was unable to attend the board of directors of the instant school juristic person since that time, and died on January 2016.

5) In a case where a disposition authority only changes a statute on the basis of the disposition, or specifically indicates the initial reason for the disposition, to the extent that it does not change the specific facts stated at the time of the disposition, it cannot be deemed that a new reason for disposition is added or modified (see, e.g., Supreme Court Decision 2012Du24825, Oct. 11, 2013).

6) The Seoul High Court Decision 2004Na30776 Decided February 14, 2006, cited by the plaintiffs as the grounds for the plaintiffs' claims, includes only judgment as to the legitimate scope of business of the former director whose approval of taking office was cancelled, and thus, it cannot be applied differently from the instant disposition regarding the appointment of temporary directors.

7) In addition, as recognized in the preceding lawsuit in this case, there are special circumstances to recognize that it is inappropriate for the former director whose term expires to perform the duties of the school juristic person, to have him/her perform the duties of the school juristic person, by taking into account the circumstances that: (a) the Plaintiffs and G, as recognized by the Plaintiffs and G, continued a resolution of defects in the requirements for the resolution that had been present at the board of directors on December 29, 2015, and prepared false minutes.

Considering that the right to take emergency measures is likely to not be recognized regardless of the appointment of provisional directors by the defendant.

8) In fact, by July 2019, four of the seven provisional directors appointed as the instant disposition from July 201 (see, e.g., evidence 17);

A person shall be appointed.

A person shall be appointed.