Plaintiff (Law Firm Heavy, Attorney Kim Jae-sung, Counsel for the plaintiff-appellant)

The head of Gangnam-gu Seoul Metropolitan Government (Attorney Kim Chang-ho, Counsel for defendant)

August 28, 2007

Seoul Administrative Court Decision 2005Guhap2278 delivered on June 22, 2005

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

On May 12, 2003, the judgment of the first instance is revoked. In the first instance court, the defendant confirms that the imposition of a penalty surcharge of KRW 111,628,210 against the plaintiff on May 12, 200 is null and void. In the first instance, the imposition of a penalty surcharge of KRW 111,628,210 against the plaintiff on May 12, 2003 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation concerning this case is as follows, except for the addition of the judgment on the part claimed by the plaintiff, and therefore, it is consistent with the reasoning for the judgment of the court of first instance. Thus, it is accepted by Article 8 of the Administrative Litigation Act and Article 420 of the

[Supplementary Parts]

(3) Determination on the assertion that the penalty should be calculated on the basis of the value at the time of July 26, 1999

Article 5(2) of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Registration Act”) was amended to calculate the real estate value by the time when the title trust relationship was terminated or the time when the title trust was registered, and the proviso of Article 5(2) of the Addenda thereto is also applicable to the disposition of penalty surcharge imposed pursuant to the previous provisions, which is imposed pursuant to Article 5(2) of the amended Act, and the procedure of the administrative appeal or administrative litigation has not been terminated. The Plaintiff filed a lawsuit seeking cancellation of the ownership transfer registration under the name of the title trustee on the premise that the title trustee’s registration was terminated on July 26, 199 by the death of the former title trustee and on the other hand, on the premise that the title trust relationship with the real estate of this case was terminated. Thus, the time when the title trust relationship was terminated shall be deemed to be the date of the said lawsuit. The instant disposition of this case was calculated based on the real estate value of May 12, 2003 at the time of imposition of the penalty surcharge.

On the other hand, the reason that the plaintiff filed a lawsuit on the ground of the termination of the title trust cannot be deemed to have terminated the title trust relationship at that time. The title trust relationship was terminated only after the plaintiff filed a favorable judgment on December 30, 2004 when the Seoul Central District Court 2003Gahap40243 decided on the ground that the plaintiff filed a lawsuit on the ground of the termination of the title trust, and the defendant's calculation of the penalty surcharge of this case was against the calculation method based on the appraised value on May 12, 2003, which is the previous successor.

The plaintiff's assertion on this part is without merit.

(4) Determination as to the assertion of unconstitutionality of the Real Estate Real Name Act

(A) The plaintiff's assertion

Since Articles 12(2) and 5 of the Real Estate Real Name Act, Articles 3-2, 11(1), and 11(3) of the Enforcement Decree of the same Act are unconstitutional provisions against or against the principle of excessive prohibition and equality under the Constitution, the right to pursue happiness, and the State’s duty to guarantee family life, and thus, the instant disposition is null and void.

① According to the Constitutional Court Order 9Hun-Ga18 delivered on May 31, 2001, the possibility of imposing a penalty surcharge is to be excluded at all, taking into account the various elements of Article 5(1) of the Real Estate Real Name Act, and the principle of excessive prohibition as well as the principle of equality. It is highly likely that the penalty surcharge may be imposed at a reasonable level, taking into account the circumstances that the real name registration was not made within the grace period, the degree of anti-sociality of the title trust in question, etc. Accordingly, the amended Real Estate Real Name Act and Article 5 and Article 3-2 of the Enforcement Decree of the same Act also do not reflect all the circumstances that the real name registration was not made within the grace period, the degree of anti-sociality of the title trust in question, etc. Therefore, it still violates the principle of excessive prohibition and the principle of equality.

② In addition, the assessment of the penalty surcharge is based on the appraised value of the real estate on the date of imposition regardless of the reason for failure to register the actual name. The imposition rate of the penalty surcharge based on the past period of violation of duty to impose the penalty surcharge is set, and the imposition rate is set uniformly by simply dividing it into three stages without considering all the reason for failure to register the actual name.

③ Article 11(1) of the Real Estate Real Name Act provides that the existing title truster prior to the enforcement of the Real Estate Real Name Act shall carry out the real name-registration within a grace period of one year from the date of the enforcement of the Act. However, as an exception, where the real right to real estate is transferred from the title trustee to a third party pursuant to the joint collection, judgment, auction or other provisions of the Act, excluding “cases by inheritance.” This would result in compelling family members, who do not consent to the registration under the name of the actual right holder, to file a lawsuit against ethics, and thus, it is in violation of the principle of excessive prohibition and equality, and

(b) the sales board;

(1) In the Constitutional Court Decision 99Hun-Ga18, May 31, 2001, the Constitutional Court ruled that Article 5(1) of the former Real Estate Real Name Act (amended by Act No. 6683, Mar. 30, 2002; hereinafter the same shall apply) provides a penalty surcharge of 30/100 of the real estate price is merely merely just in itself, and it may be subject to excessive sanctions to determine a uniform rate regardless of whether the hidden intention of title trust is anti-social or not, there is no method of differential assessment according to the type of violation, and there is no other reason for other circumstances. The possibility that a penalty surcharge may be imposed may be imposed at all on the basis of various factors such as whether there was a benefit from tax evasion or speculation, how much the period of delay in the actual name registration, and how much the period of delay in the actual name registration is against the principle of excessive prohibition, as well as the principle of equality, and thus, the pertinent provision should be considered to the extent that the real name registration can be imposed within the society concerned.

Accordingly, Article 5 of the amended Real Estate Real Name Act and Article 3-2 of the Enforcement Decree of the Act provide that each tax shall be imposed within the limit of an amount equivalent to 30/100 of the value of real estate, taking into account the real estate value as of the date on which the administrative agency imposes the penalty on the amount of the penalty, the real estate value as of the date on which the administrative agency imposes the penalty, the real estate value as of the date on which the title trust relationship was already terminated or when the penalty is imposed, whether the real estate value at the time of termination of the title trust relationship, the period of violation, tax evasion, or the purpose of evading restrictions by the law, etc.

② Article 5(2) of the former Real Estate Real Name Act provides that the value of real estate as of the date on which a penalty surcharge is imposed, regardless of the termination of title trust relation or the existence of a real-name registration, shall be the real estate value which serves as the basis for calculating a penalty surcharge (hereinafter “real-name registration”). Article 5(2) of the same Act provides that the application has been suspended until the Constitutional Court Decision 2005Hun-Ga17, May 25, 2006, declared that the real-name registration was inconsistent with the Constitution, and accordingly, Article 5(2) proviso was newly established under the Act on the Registration of Real Estate Real Name as amended by Act No. 8418, May 11, 2007, if the title trust relation was already terminated or the real-name registration was made on the date on which a penalty surcharge was imposed, the value of real-name registration at the time of completion of title trust relation or the time of real-name registration shall be the real-name registration amount, and the proviso to Article 5(2) proviso to the same shall not apply to the administrative litigation.

In this case, the proviso of Article 5 (2) of the Addenda to the current Real Estate Real Name Act applies, so the amount of penalty surcharge shall be calculated by using the real estate value at the time of termination of the title trust relationship as the real estate assessment amount. As seen above, it is recognized that the defendant imposed the penalty before the expiration of the title trust relationship, and even if the time of termination of the title trust relationship is deemed to be a transfer, the defendant executed it in accordance with the standards of effective law with legitimate authority at the time of imposition of the penalty surcharge, and it cannot be said that the defect is significant and obvious, and thus, the disposition of imposition of penalty surcharge in this case cannot be deemed to be null and void on this ground (this is only a ground for revocation, and as seen above, the lawsuit in this case can be seen as a ground for

On the other hand, the reason why the real-name registration was not made should be separately taken into account in the proviso of Article 3-2 of the Enforcement Decree of the Act. Thus, the imposition rate of penalty surcharge was determined based on the real estate value and the expiration period of breach of duty, and it did not constitute a violation of the principle of excessive prohibition and the principle of equality.

③ Article 11(1) of the Act on the Registration of Real Estate under Actual Name excludes cases where the real right to real estate has been transferred to a third person by inheritance from the title trustee under the provisions of public collection, judgment, auction and other Acts, except for cases where the real right to real estate has been transferred by inheritance. This cannot be said to be a real right to real estate under the name of the existing title trustee in the case of a third party who has been transferred the right by any means other than voluntary methods such as public collection, etc., and thus, it cannot be said that the real right to real estate has been legally transferred and practically realized. In the case of inheritance, it is different from the circumstances in that the rights and obligations have been transferred from the title trustee to the heir, and the existing title trust relationship has been maintained as it is. Thus, it cannot be said that the exception to the real name registration violates the principle of equality under the Constitution unless the real right has been transferred by inheritance to a third party by inheritance, and that it is inevitable to file a lawsuit against his/her family members.

Ultimately, the Plaintiff’s assertion that the instant disposition is null and void on the premise that the statutory provisions of the Real Estate Real Name Act are in violation of the Constitution and null and void is without merit.

3. Conclusion

Therefore, the plaintiff's primary claim is dismissed as it is without merit, and the conjunctive claim shall be dismissed as it is unlawful, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is decided as per Disposition.

Judges Cho Jong-ok (Presiding Judge)