In a case where the Central Land Tribunal rendered a ruling of expropriation with the purport that it does not recognize business losses pursuant to Article 45 subparagraph 1 of the Enforcement Rule of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects for A engaged in livestock farming in an unauthorized building on the land to be incorporated into an ecological river construction project, the case affirming the judgment below that the above provision cannot be deemed to violate the delegation scope of the Act on Acquisition of and Compensation for Land, etc. for Public Works

In a case where the Central Land Tribunal rendered a ruling of expropriation with the purport that it does not recognize operating losses pursuant to subparagraph 1 of Article 45 of the Enforcement Rule of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (hereinafter “the above Rule provision”), on the land to be incorporated into an ecological river construction project, the case affirming the judgment below holding that: (a) even if an unauthorized building is used as a place of business, it is highly likely to prevent various illegal acts, such as deviation from administrative regulations or tax evasion on profits gained from the business in the relevant place of business, which is imposed on the relevant place of business; and (b) in the case of a procedure for permission under the Building Act, it is unreasonable for the Central Land Tribunal to operate a line of business in excess of the legal limit and receive compensation for total loss as business losses, the above provision contains the elements of “legal operation at a place” in the concept of “business,” and thus, it is hard to affirm the legitimate scope of delegation of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects.

Article 77(1) and (4) of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects; Article 45 Subparag. 1 of the Enforcement Rule of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects; Article 23(3) of the Constitution

Plaintiff 1 and two others (Attorneys Kim Jae-deok et al., Counsel for the plaintiff-appellant)

Korea

Daejeon High Court Decision 2013Nu688 decided November 7, 2013

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

We examine the grounds of appeal.

1. Article 45 Subparag. 1 of the Enforcement Rule of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (hereinafter “Public Works Act”) provides that “The business shall compensate for business losses pursuant to Article 77(1) of the Public Works Act, where a lessee continues to be equipped with human and physical facilities at a legitimate place (referring to a place which is not prohibited from piling up goods, such as an unauthorized building, etc., illegal form and quality alteration land and other Acts and subordinate statutes) prior to the date of project approval, etc.: Provided, That where a lessee operates his/her business at an unauthorized building, etc., it refers to a business for which the lessee is operating his/her business pursuant to Article 5 of the Value-Added Tax Act from one year prior to the date of project approval, etc. (hereinafter “instant Rule”).

2. A. According to the reasoning of the lower judgment, the lower court excluded the Plaintiffs’ following arguments, namely, the instant decision from the subject of compensation by applying the instant provision on business losses incurred by the Plaintiffs who owned the instant unauthorized building and engaged in livestock farming at present. The instant provision rejected the allegation that the instant decision is null and void on the grounds that it violates the principle of equity by excessively restricting the scope of delegation under Article 77 of the Public Works Act, thereby infringing citizens’ property rights and discriminating against the owners of unauthorized buildings and lessees without reasonable grounds.

The meaning of “business” under Article 77(1) of the Public Works Act, which provides for compensation in the event of the closure or suspension of business due to public works, instead of specifically defining the meaning of “business”, shall be delegated to the Minister of Land, Transport and Maritime Affairs with regard to the detailed methods of calculating and assessing the amount of business losses and the criteria for compensation. Accordingly, the provision of this case is amended by Ordinance No. 556 of the Ministry of Construction and Transportation on April 12, 2007, excluding the scope of business in an unauthorized building. ① When an unauthorized building is used as a place of business, it is highly likely to prevent various illegal acts, such as deviation from administrative regulations imposed on the place of business or avoidance of taxes on the gains from such business. ② When taking the procedure for permission under the Building Act, it is difficult to ensure that the provision of this case’s operating losses goes beyond the legal limit without obtaining permission under the relevant Acts and subordinate statutes and is in violation of the Act’s overall scope of compensation for losses arising from such unlawful act.

(1) Furthermore, in light of the following: (a) in the case of an operator who leases and operates an unauthorized building, generally is in an economically and socially poor position rather than an operator who operates the building on his own without permission; and (b) the lessee of an unauthorized building is likely to enter into a lease contract without knowing that the building he leased was an unauthorized building; (c) there is reasonable reason to discriminate against the owner of the unauthorized building with the lessee; and accordingly, (d) it is difficult to deem that the instant provision violates the principle of

B. Examining the specific contents, developments leading up to the amendment, and relevant legal principles and records of the instant rule provisions, the lower court’s aforementioned determination is justifiable and acceptable. In so doing, it did not err by misapprehending the legal doctrine on the instant rule provisions.

3. Therefore, all appeals are dismissed, 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 on the bench.

Justices Park Poe-young (Presiding Justice)