[1] Whether an administrative agency’s decision to reject an application for refund of infrastructure charges, in whole or in part, constitutes a disposition subject to appeal litigation (affirmative), and whether the case where the administrative agency’s refusal to refund the infrastructure charges is a delayed additional charge incurred due to the delay in payment (negative)

[2] In a case where a disposition of imposition of infrastructure charges is deemed null and void, or retroactively revokes a disposition of imposition due to an illegal cause, from the time of the disposition, whether the administrative agency should refund the person liable for payment with additional dues along with the infrastructure charges (affirmative) / In a case where the disposition of imposition of infrastructure charges was lawful at the time of the disposition, and the administrative agency duly collects the additional dues from the person liable for payment due to the delayed payment of the person liable for payment due to a justifiable cause, and the grounds for refund under Article 17(1) of the former Infrastructure Charges Act and each subparagraph of Article 15(2) of the Enforcement Decree of the same Act arise, whether the administrative agency should refund the person liable for payment to the person liable for payment

[1] In cases where an administrative agency imposed infrastructure charges without deducting the corresponding amount when a person liable to pay infrastructure charges has already been subject to imposition of the infrastructure charges at the time of the imposition of the infrastructure charges, the person liable to pay the charges, who is the other party to the disposition, may file a revocation lawsuit claiming that the administrative agency has breached its duty of deduction as an illegal ground and receive remedy for infringement of rights. Where a ground for refund under Articles 8(4) and (5) and 17(1) of the Act has already occurred after the person liable to pay the charges paid, an administrative agency may file an application for refund with the competent administrative agency along with evidentiary materials [Article 25(3) of the Addenda to the Enforcement Decree of the National Land Planning and Utilization Act (repealed by Act No. 9051, Mar. 28, 2008; hereinafter the same shall apply], and where an administrative agency refuses to pay the charges in whole or in part, it shall not be deemed that the person liable to pay the charges constitutes a legitimate ground for revocation of an administrative agency’s request for refund, in whole or in part of rights.

[2] The late payment penalty pursuant to Article 16(2) of the former Infrastructure Charges Act (repealed by Act No. 9051, Mar. 28, 2008; hereinafter “the Act”) shall naturally arise upon the lapse of the payment deadline, as it has the nature of damages for delay, when the payment obligor delays the performance of the obligation to pay the infrastructure charges imposed upon him/her. In cases where the disposition of imposition is void automatically or retroactively cancelled the disposition of imposition on infrastructure charges due to an illegal cause from the time of the disposition of imposition on infrastructure charges, additional dues shall lose the basis thereof, and thus, an administrative agency shall be deemed to have the obligation to refund the late payment penalty along with the infrastructure charges.

However, in a case where the imposition of infrastructure charges was lawful at the time of the disposition, and the administrative agency duly collected additional charges due to the lack of justifiable grounds upon the delay of payment by the person liable for payment, then the person liable for payment can only be deemed to have the obligation to refund all or part of the infrastructure charges initially imposed and collected by the administrative agency to the person liable for payment, even if the grounds for refund under Article 17(1) of the Act and Article 15(2) of the former Enforcement Decree of the Act on Planning and Utilization of Infrastructure Charges (amended by Presidential Decree No. 21038 of Sep. 25, 2008, Article 2 of the Enforcement Decree of the National Land Planning and Utilization Act (amended by Presidential Decree No. 21038 of Sep. 25, 2008), and solely on such circumstance, the administrative agency’s decision to refund should not be deemed to include the meaning of the decision to partially cancel the imposition of the original lawful infrastructure charges in the future. Therefore, the administrative agency’s obligation to pay the additional charges to the person liable for payment.

[1] Articles 8(4) and (5) and 17(1) of the former Infrastructure Charges Act (repealed by Act No. 9051, Mar. 28, 2008); Article 15(3) of the former Enforcement Decree of the Infrastructure Charges Act (repealed by Act No. 21038, Sep. 25, 2008; Article 2(1)1 of the Administrative Litigation Act / [2] Articles 16(2) and 17(1) and (2) of the former Infrastructure Charges Act; Article 2(2) of the former Enforcement Decree of the National Land Planning and Utilization Act (repealed by Presidential Decree No. 21038, Sep. 25, 2008; Presidential Decree No. 215(2) and (4) of the former Enforcement Decree of the Infrastructure Charges Act (repealed by Act No. 9051, Mar. 28, 2008)

[1] Supreme Court Decision 2013Du16807 Decided April 26, 2017 (Gong2017Sang, 1115) / [2] Supreme Court Decision 86Nu76 Decided September 9, 1986 (Gong1986, 1321) Supreme Court Decision 90Nu2833 Decided March 12, 1991 (Gong1991, 1195)

D Forest Industry Development Co., Ltd. (formerly: X-PP Development Co., Ltd.) (Attorney Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Head of Seo-gu Daejeon Metropolitan City (Law Office of Daejeon, Attorneys Han Won-gu et al., Counsel for the plaintiff-appellant)

Daejeon High Court Decision 2016Nu11061 decided August 18, 2016

The judgment of the court below is reversed, and the case is remanded to Daejeon High Court.

The grounds of appeal are examined.

1. As to whether a notice of refusal to refund infrastructure charges and additional dues is subject to appeal litigation

A. The issue of whether a certain act of an administrative agency can be the subject of an appeal cannot be determined abstractly and generally. In view of the fact that an administrative disposition is an enforcement of law with respect to a specific fact by an administrative agency as the subject of public authority, which directly affects the rights and obligations of the people, the determination should be made by taking into account the content and purport of the relevant Act and subordinate statutes, the subject, content, form, and procedure of the act, the substantial relation between the act and the disadvantage suffered by the interested parties, such as the other party, and the principle of administration by the rule of law and the attitude of the administrative agency and interested parties related to the pertinent act (see, e.g., Supreme Court en banc Decision 2008Du167, Nov.

B. The infrastructure charges system is a system that requires a causing agent to bear the cost of building, maintaining, or improving infrastructure, such as roads, parks, green areas, water supply, sewerage, schools, waste disposal facilities, etc., which are caused by construction of a building. This is introduced and implemented under the Infrastructure Charges Act on July 2006, and replaced by the imposition system for infrastructure installation costs newly established under the National Land Planning and Utilization Act on March 28, 2008. However, the repealed Act stipulates that the former provision shall govern the infrastructure charges to be imposed or refunded under the previous Act prior to the repeal (Article 2 of the Addenda to the repeal of the Infrastructure Charges Act (Act No. 9051, Mar. 28, 2008) and Article 2 of the Enforcement Decree of the National Land Planning and Utilization Act and the Enforcement Decree thereof (amended by Presidential Decree No. 21038, Sep. 25, 2008).

In the Act, “infrastructure charges paid by other Acts” or “infrastructure charges paid by a person liable to pay infrastructure charges in connection with the relevant development project and contributed to the construction of infrastructure directly shall be deducted from infrastructure charges (Article 8(4) and (5)). After paying infrastructure charges, the Act provides that “if the area subject to permission has decreased due to the cancellation of a building permit, the modification of a construction plan, or any other similar cause” (Article 17(1)). Furthermore, even in cases where there are “reasons for deduction” under Article 8(4) and (5) of the Act, the Act extended and expanded the grounds for refund by allowing the refund of infrastructure charges in accordance with Article 17(1) of the Act (Article 15(2)). As a result, the Act provides that “infrastructure charges shall be refunded from the date falling under any of the following subparagraphs to the date of the payment of infrastructure charges shall be refunded in accordance with the same standard as that of the refund charges pursuant to Article 17(1) of the Act (Article 17(2)3) of the Enforcement Decree) of the Act).

On the other hand, the Act provides that the date when a person liable for payment receives a building permit shall be determined and imposed on the infrastructure charges (Article 10); the administrative agency shall determine and impose the infrastructure charges within two months from the base date for imposition (Article 11(1)); and Article 21(Additional Dues) of the National Tax Collection Act shall apply mutatis mutandis where a person liable for payment fails to pay the infrastructure charges in full by the due date (Article 16(2); hereinafter referred to as “additional additional dues”).

C. As such, the Act and the Enforcement Decree provide for deductions and refunds with respect to infrastructure charges shall ensure that the principle of imposition of charges is complied with, by allowing a project operator to deduct the amount of various charges imposed in relation to the installation, maintenance, and improvement of infrastructure in accordance with various Acts and subordinate statutes in the course of implementing the relevant project, in calculating the amount of infrastructure charges (see Article 5(1) of the Framework Act on the Management of Charges).

If a person liable to pay infrastructure charges has already been subject to imposition of the infrastructure charges under Article 8(4) and (5) of the Act at the time of the imposition of the infrastructure charges, but an administrative agency imposed the infrastructure charges without deducting the corresponding amount, the person liable to pay the charges may file a revocation lawsuit claiming the administrative agency as illegal grounds for non-performance of the duty to deduct the amount. In cases where a ground for refund under Articles 8(4) and (5) and 17(1) of the Act arises after the person liable to pay the infrastructure charges has paid the infrastructure charges lawfully, an administrative agency may file an application for refund with the competent administrative agency along with evidentiary materials (Article 15(3) of the Enforcement Decree). In cases where an administrative agency refuses all or part of the refund charges, it accords with the legislative purport of the Administrative Litigation Act and the system for refund of the infrastructure charges. Accordingly, the determination of the person liable to pay the charges in whole or in part by an administrative agency to reject the application for refund does not directly affect the rights and obligations of the administrative agency as the person liable to pay the public authority.

D. Review of the reasoning of the judgment of the first instance, which partially accepted by the lower court, and the record reveals the following circumstances.

1) The Plaintiff is a project implementer that constructed the old-man apartment on the land outside 656-67 and 10 parcels of land, Seo-gu, Daejeon. The Defendant imposed an imposition of the total of KRW 527,04,600 on the Plaintiff in relation to the above construction project, but the Plaintiff did not pay the total of the infrastructure charges by the due date, and the Plaintiff did not pay it by the due date, and thus, the Plaintiff was liable to pay the late additional dues in accordance with Article 16(2) of

2) On January 10, 2013, the Defendant urged the Plaintiff to pay a total of KRW 527,04,60,000 in total of the unpaid infrastructure charges, and KRW 367,465,010 in total of the delayed charges accrued up to that time. Accordingly, the Plaintiff paid KRW 527,04,60 in total, and KRW 367,465,010 in total, over two occasions on January 15, 2013 and March 17, 2013.

3) After that, around 2014, the Plaintiff: (a) performed construction works to build and pack roads which are infrastructure related to the said construction project; and (b) paid the construction and sewerage charges. Accordingly, on August 18, 2014, the Plaintiff filed an application for refund of the infrastructure charges and additional dues already paid to the Defendant pursuant to Article 17 of the Act and Article 15(2) of the Enforcement Decree of the Act, stating that the total amount of KRW 1,172,93,500 paid for the construction and donation of the said road and the payment of the waterworks and sewerage charges should be deducted from the calculation of the infrastructure charges.

4) On September 2, 2014, the Defendant notified the Plaintiff of the purport that “The principal of the infrastructure charges already paid in 527,044,600 won and KRW 28,313,260 on the refund accrued until September 1, 2014 pursuant to Article 17(2) of the Act shall be refunded, but the Plaintiff shall be excluded from the refund due to delay in the payment of the infrastructure charges, 367,465,010 won incurred by the Plaintiff due to delay in the payment of the infrastructure charges (hereinafter “instant notification of refusal to refund”).”

E. Examining the foregoing factual basis in light of the legal principles as seen earlier, the instant notification of refusal constitutes a disposition rejecting part of the Plaintiff’s application for refund, which is subject to appeal litigation. The scope of a legitimate amount of refund or an administrative agency’s duty to refund is a matter to be determined after deliberation in the relevant area as to whether the disposition of refusal

In the same purport, the lower court did not err by misapprehending the legal doctrine regarding the eligibility for an appeal litigation and the nature of disposition, etc.

2. In cases where the grounds for the subsequent refund of the infrastructure charges have occurred, with respect to whether the late refund of the infrastructure charges is liable;

A. The late payment penalty under Article 16(2) of the Act, in cases where a person liable for payment delays the performance of the obligation to pay the infrastructure charges imposed by the person liable for payment, shall become effective as a matter of course upon the lapse of the time limit for payment (see Supreme Court Decision 90Nu2833, Mar. 12, 1991). In cases where the disposition of imposition of the infrastructure charges is null and void as a result of an illegal cause from the time of the disposition of imposition of the infrastructure charges, or where the disposition of imposition is retroactively cancelled, the additional dues shall be deemed to lose the basis, and thus, the administrative agency shall be deemed to have the duty to pay the charges and the additional dues shall also be refunded along with the infrastructure charges (see Supreme Court Decision 86Nu76

However, in a case where the imposition of infrastructure charges was lawful at the time of the disposition, and the administrative agency duly collected additional dues due to the cause for delay of payment by the person liable for payment, even if the cause for refund under each subparagraph of Article 17(1) of the Act, and each subparagraph of Article 15(2) of the Enforcement Decree, even if the person liable for payment has occurred, it is established only when the administrative agency is obligated to refund all or part of the infrastructure charges initially imposed and collected by the person liable for payment (the decision of refund by the administrative agency includes the meaning of the decision revoking part of the originally lawful infrastructure charges in the future). Such circumstance alone does not necessarily mean that the person liable for payment has the obligation to refund the person liable for payment up to the additional dues initially collected by the administrative agency. Therefore, in such a case, the administrative agency is merely obligated to pay the person liable for payment under Article 17(1) and (2) of the Act and the refund of charges and additional dues corresponding to the legal person.

B. According to the aforementioned factual basis, there is no reason to deem that the Defendant was illegal from the time of imposition of the infrastructure charges and late-payment charges collected by the Plaintiff, and the Plaintiff also asserted the refund of the infrastructure charges solely on the ground that the cause for refund occurred after the imposition was imposed. Therefore, in light of the aforementioned legal principles, it is reasonable to deem that the Defendant is only obligated to calculate the infrastructure charges again and pay the refund of the charges and late-payment charges to the Plaintiff, and that there is no obligation to refund the charges

Nevertheless, the lower court did not distinguish the grounds for refunding infrastructure charges from whether they were due to defects at the time of imposition or due to changes in circumstances after the imposition, and determined to the effect that the Defendant is liable to pay additional charges even in the event of changes in circumstances after the imposition. In so doing, the lower court erred by misapprehending the legal doctrine on the legal nature of additional charges and the scope of refund of infrastructure charges, thereby adversely affecting the conclusion of

3. Therefore, 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 on the bench.

Justices Lee Ki-taik (Presiding Justice)