Whether a project implementer who is not the head of a Si/Gun under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents may claim settlement money by means of a party suit under public law (negative in principle)

As for the collection of settlement money under Article 57 (1) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, a simplified and economic special relief procedure such as the entrustment of collection or collection in accordance with the example of a disposition on default of local taxes is provided, a project implementer, other than the head of a Si/Gun, may not file a claim for settlement money by means of a party suit under public law, unless there are special circumstances such as a

Articles 57 (1), 58 (1), and 61 (5) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents

Supreme Court Decision 2014Da203588 Decided September 4, 2014 (Gong2014Ha, 2028)

Korea Land and Housing Corporation and one other (LLC, Attorneys Lee In-ho et al., Counsel for the plaintiff-appellant)

Defendant 1 and three others

Seoul High Court Decision 2015Nu48213 decided January 21, 2016

The judgment of the court of first instance is reversed, and the case is remanded to Suwon District Court Panel Division.

The grounds of appeal are examined.

1. The main sentence of Article 57(1) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Urban Improvement Act”) provides that “Where there is a difference between the price of land or building previously owned by a person who has purchased a building site or building and the price of the building site or building that has been purchased, a project implementer shall collect or pay an amount equivalent to the difference (hereinafter “settlement money”) from a person who has purchased a building site or building after the public announcement of relocation under Article 54(2) is made, and Article 58(1) provides that “if a person who has paid settlement money fails to pay it, a project implementer who is the head of a Si/Gun may entrust the head of a Gun with the collection of settlement money in the same manner as delinquent local taxes have been collected. In such cases, Article 61(5) shall apply mutatis mutandis, and Article 61(5) provides that “Where the head of a Si/Gun is entrusted with the imposition and collection of local taxes pursuant to the provisions of paragraph (4), a project implementer may impose or collect it in the amount.”

As such, as for the collection of settlement money prescribed in Article 57(1) of the Act on the Improvement of Urban Areas and Dwelling Conditions, simplified and economic special relief procedures, such as the entrustment of collection or collection in accordance with the example of dispositions on default of local taxes, are provided. Thus, barring any special circumstance, such as that the head of a Si/Gun has not complied with the entrustment of collection of settlement money by a project implementer, a project implementer, other than the head of a Si/Gun, may not file a claim for settlement money by means of a party suit under public law (see Supreme Court Decision 2014Da2035

2. citing the reasoning of the judgment of the court of first instance, the lower court determined that, with respect to the instant lawsuit seeking payment of settlement money (hereinafter “settlement money”) against the Defendants, who purchased an apartment newly constructed in accordance with the said project as a joint implementer of the Plaintiff Dongdong Housing Reconstruction and Improvement Project Association (hereinafter “Plaintiff Union”) as a member of the Plaintiff Dongdong Housing (hereinafter “Plaintiff Union”), which is the joint implementer of the new construction of an apartment building after removing Dong Dongdong-gu and 7 parcels of land outside Sungnam-si, Sungnam-si, and that there was no special remedy procedure, such as the collection entrustment,

3. However, according to the evidence duly admitted by the lower court, the Plaintiff Union requested the Plaintiff Union to cooperate with the purpose of entrusting the collection of the instant settlement money to the Sungnam-si on June 22, 2015, but Sungnam-si refused to entrust the collection of the settlement money of this case on June 26, 2015.

Examining these circumstances in light of the legal principles as seen earlier, it can be deemed that there are special circumstances where the Sungnam City refuses the entrustment of collection by the Plaintiffs, a project implementer who is not the head of the Si/Gun, thereby hindering the realization of the right to the settlement money of this case according to the collection procedure. Therefore, it is reasonable to deem that the lawsuit against the Defendants in this case seeking the payment of the settlement money of this case

Nevertheless, the lower court determined that the instant lawsuit was unlawful without properly examining such circumstances. In so determining, the lower court erred by misapprehending the legal doctrine on the claim for liquidation money and the benefit of protecting the rights thereof as stipulated in Article 57(1) of the Urban Improvement Act, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal on this point is with merit.

4. Therefore, the judgment of the court below is reversed. Since the Supreme Court is sufficient to directly render a judgment, this case is decided to be self-written, and the judgment of the court of first instance is revoked and the case is remanded to the court of first instance for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices

Justices Kim So-young (Presiding Justice)