[1] In a case where there is a defect in a project implementation plan established by a housing redevelopment and maintenance project association, which is a basic act, and there is no unique defect in the approval disposition of the project implementation plan by the competent administrative agency which is a supplementary act, whether it can immediately claim the invalidity of the approval disposition and seek the invalidity or revocation of the

[2] Whether it is permissible for a housing redevelopment project association to unilaterally decide that a person subject to cash settlement regardless of his/her will when it establishes a new project implementation plan after the project implementation plan based on the application procedure for parcelling-out has become invalidated (negative)

[3] In a case where the real estate owners in the housing redevelopment project zone established a new project implementation plan and authorized at the general meeting participating in the procedure of application for parcelling-out in accordance with the first project implementation plan after the approval of abolition of the first project implementation plan of the housing redevelopment project partnership was invalidated, and some of the persons eligible for cash liquidation who lost their membership failed to apply for parcelling-out in the procedure of application for parcelling-out in accordance with the first project implementation plan, the case holding that it is difficult to conclude that the resolution of the general meeting is invalid or that there is an illegal cause to the extent that

[1] The project implementation plan formulated by a housing redevelopment and improvement project association based on the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 12116, Dec. 24, 2013) constitutes an independent administrative disposition binding on interested parties if authorization and public notice by the competent administrative agency is given, and the approval disposition by the competent administrative agency constitutes a supplementary act that completes the legal effect of the project implementation plan. Therefore, if there is no defect in the project implementation plan, which is a basic act, and if there is a defect unique to the approval disposition, the confirmation or cancellation of the approval disposition should be sought. However, if there is a defect in the project implementation plan because there is no unique defect in the approval disposition, it should be sought to nullify or revoke the approval disposition, without delay, by asserting the invalidity of the approval disposition

[2] If a member of the Housing Redevelopment Project Association fails to apply for parcelling-out in the procedures for application for parcelling-out, it shall be a person subject to cash settlement on the day following the expiration of the period for application for parcelling-out and shall lose the status of the member. Even if the project implementation plan, which served as the basis for the procedure for application for parcelling-out, becomes effective in the future, it shall not be deemed that the legal effect of withdrawal from partnership relationship, which occurred before the project implementation period expires or has already been lost, is retroactively extinguished or that the status of the member is automatically restored. The association is allowed as an autonomous organization to grant a new opportunity for applying for parcelling-out and re-admission to cash in the course of establishing a new project implementation plan. However, it is allowed that the association unilaterally determines that a person subject to cash settlement restores the status of the member regardless of the intention of the person subject to cash settlement should be determined by applying for parcelling-out, regardless of the intention of the person subject to cash settlement, and it is against the legislative intent of Article 47(1) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions (amended by Act).

[3] Where the real estate owners in the housing redevelopment project zone in the housing redevelopment project zone established a new project implementation plan and authorized at the general meeting participating in the procedure of application for parcelling-out in accordance with the first project implementation plan after the approval of abolition was revoked, the case holding that it is difficult to conclude that there is an illegal ground to the extent that the resolution of the general meeting is null and void, or that there is no special reason to cancel it in the project implementation plan established through the resolution of the general meeting, even if the persons who are not qualified for the association members participated in the resolution of the general meeting but excludes them, there are no special circumstances to deem that there was a substantial impact on the result of the resolution of the general meeting on the establishment of the project implementation plan by sufficiently satisfying the quorum for the establishment of the project implementation plan, even if they were partly participating in the resolution of the general meeting

[1] Article 28 (see current Article 50) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 12116, Dec. 24, 2013) / [2] Article 47 (1) (see current Article 73 (1)) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 12116, Dec. 24, 2013) / [3] Article 19 (see current Article 39), Article 24 (see current Article 4, 45), Article 28 (see current Article 50) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 12116, Dec. 24, 2013)

[1] Supreme Court Decision 2009Du4913 Decided December 9, 2010 / [2] Supreme Court Decision 2008Da91364 Decided July 28, 201 (Gong2011Ha, 1717) Supreme Court Decision 2016Du34905 Decided December 1, 2016 (Gong2017Sang, 126)

Attached 1 List of Plaintiffs (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Attached 2 List of Intervenor joining the Plaintiff (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Operation Free Apartment Zone Housing Redevelopment and Improvement Project Association (Law Firm Choun et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2020Nu36498 decided August 19, 2020

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Case summary and key issue

A. Review of the reasoning of the lower judgment and the record reveals the following circumstances.

(1) On June 23, 2009, the Defendant is the Housing Redevelopment and Improvement Project Association established with authorization from the head of Gyeyang-gu Incheon Metropolitan City in order to implement housing redevelopment projects (hereinafter “instant project”) within the area of 63,813.30 square meters in Gyeyang-gu, Incheon Metropolitan City. The Plaintiffs are the owners of real estate in the instant project area.

(2) On January 25, 201, the Defendant established the first project implementation plan and authorized by the head of Gyeyang-gu Office on January 25, 201, followed the period of application for parcelling-out by setting the period of application for parcelling-out from April 4, 2011 to May 23, 201 of the same year, but 477 out of 807 owners including the entire land, etc. within the period of application for parcelling-out was applied for parcelling-out, and 330 persons including the Plaintiffs did not apply for parcelling-out. Accordingly, the Defendant reported the total number of members from 807 to 477 persons, and the head of Gyeyang-gu Office accepted it on August 2, 2011.

(3) On July 21, 2017, the Defendant applied for the approval of the abolition of the first project implementation plan to the head of Gyeyang-gu, and the head of Gyeyang-gu, which approved on September 13, 2017.

(4) At an ordinary meeting of the defendant held on January 27, 2018, the defendant adopted a resolution to amend the articles of incorporation (hereinafter “resolution to amend the articles of incorporation of this case”) under Article 9(6) of the defendant’s articles of incorporation, which read, “a person who has failed to apply for parcelling-out within the period of application for parcelling-out in the procedure of application for parcelling-out in accordance with authorization for project implementation (the person subject to cash liquidation) shall be reinstated when the project implementation is abolished (Provided, That it shall be deemed that the person is recovered from the date on which the report on the modification of the articles of incorporation of this case is accepted)” (hereinafter “resolution to amend the articles of this case”), and

(5) After that, the Defendant filed a report on the change of the total number of members from 477 to 799 under the premise that the owners of the land, etc. withdrawn from the partnership relations have recovered their status again in accordance with the instant Articles of association by failing to apply for parcelling-out in the first application procedure for parcelling-out, including the Plaintiffs, and the head of Gyeyang-gu Office accepted it on March 12, 2018.

(6) A new project implementation plan was formulated (hereinafter “instant project implementation plan”) with the consent of 570 persons among 572 persons present at the Defendant’s extraordinary general meeting (hereinafter “instant general meeting”) held on April 14, 2018 (hereinafter “instant general meeting”) and the head of Gyeyang-gu approved the project implementation plan on September 19, 2018.

(7) Based on the instant project implementation plan, the Defendant followed the procedure for application for parcelling-out by setting the period of application for parcelling-out from January 5, 2019 to February 26, 201, but the Plaintiffs did not apply for parcelling-out.

(8) The plaintiffs filed the lawsuit in this case seeking confirmation of invalidity of the amendment of the articles of incorporation of this case and cancellation of the project implementation plan of this case. The court of first instance declared that all plaintiffs' claims were accepted on January 10, 2020. The defendant appealed against this decision. However, at the defendant's ordinary meeting held on April 11, 2020, the amendment of the articles of this case, such as changing the articles of this case to "a person (person subject to cash liquidation) who did not apply for parcelling-out within the application period for parcelling-out in the application procedure for parcelling-out in accordance with the project implementation authorization, can recover his membership at the time of abolition of the project implementation authorization (Provided, That it is deemed that the change of the articles of this case is recovered from the date of acceptance of the report of change of union members)," and the amendment of the articles of this case was approved by the head of Gyeyang-gu Office on April 24, 2020, the appellate court continued to have withdrawn the appeal to nullify the amendment

B. The key issue of the instant case is (1) whether it is reasonable for the Plaintiffs to seek the cancellation of the instant project implementation plan against the Defendant without seeking the cancellation of the approval disposition by the head of Gyeyang-gu on the instant project implementation plan, (2) whether the Plaintiffs are legally interested in seeking the cancellation of the instant project implementation plan, and (3) whether the defects in cash clearing persons who are not the Defendant’s members in the instant project implementation plan should be deemed to be illegal for the cancellation of the instant project implementation plan

2. Determination of objects for litigation;

A. A project implementation plan formulated by a housing redevelopment and consolidation project association based on the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 12116, Dec. 24, 2013; hereinafter “Urban Improvement Act”) falls under an independent administrative disposition binding on interested parties if the approval and public notice of the competent administrative agency is made, and the approval disposition by the competent administrative agency constitutes a supplementary act that completes the legal effect of the project implementation plan. Therefore, if there is no defect in the project implementation plan, which is a basic act, and there is a defect inherent in the approval disposition as a supplementary act, the confirmation or cancellation of the approval disposition should be sought. However, if there is a defect in the project implementation plan because there is no unique defect in the approval disposition, it is necessary to seek the confirmation or cancellation of the approval disposition, and immediately seek the invalidity or cancellation of the approval disposition (see Supreme Court Decision 2009Du4913, Dec. 9, 2010, etc.).

B. In this case, the plaintiffs did not claim that there is an inherent defect in the approval disposition of the head of Gyeyang-gu Office on the project implementation plan of this case, but they asserted that the project implementation plan of this case is unlawful because there are defects in cash clearing subjects who are not the defendant's members in the resolution of the general meeting of this case. The lawsuit of this case seeking the cancellation of the project implementation plan of this case is legitimate on the premise that the lawsuit of this case is legitimate. The court below was just in making a decision on the main issue on the premise that the project implementation plan of this case

3. Whether legal interest exists to seek cancellation of the project implementation plan of this case

A. The lower court determined that the Defendant’s initial project implementation plan was invalidated upon the approval of the head of Gyeyang-gu Office on July 21, 2017, and thereafter, the Defendant newly established the instant project implementation plan and obtained the approval and public notice from the head of Gyeyang-gu and re-granted the authority to apply for the adjudication of expropriation pursuant to Article 40(1) and (2) of the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor, and thus, the Plaintiffs, who are those subject to cash settlement, have legal interests to seek the cancellation of the instant project implementation plan in order to prevent the expropriation of their own land, etc. or delay the time of the adjudication of expropriation.

B. Examining the reasoning of the lower judgment in light of the relevant provisions and legal principles, the lower judgment is justifiable, and it did not err by misapprehending the legal doctrine on standing to sue in revocation litigation.

4. Whether the project execution plan of this case is illegal due to defects in the resolution of the general meeting of this case

A. The lower court determined that, since 330 persons subject to cash settlement who did not apply for the application for parcelling-out in the first procedure for the application for parcelling-out did not have the defendant's membership at the time of the resolution of the general meeting of this case, 330 persons subject to cash settlement who did not have been qualified as an association member, and 136 persons among them participated in the resolution of the general meeting of this case, the resolution of the general meeting of this case should be deemed null and void due to serious defects, and therefore, the project implementation plan of this case,

B. If a member of the Housing Redevelopment Project Association fails to apply for parcelling-out in the procedures for application for parcelling-out, he/she shall be subject to cash settlement on the day following the expiration of the period for application for parcelling-out (see, e.g., Supreme Court Decision 2008Da91364, Jul. 28, 2011). Even if the project implementation plan, which served as the basis for the application for parcelling-out, becomes effective due to the expiration or abolition of the project implementation period, this only takes effect in the future (see, e.g., Supreme Court Decision 2016Du34905, Dec. 1, 2016). Thus, it cannot be deemed that the legal effect of withdrawal from an association that occurred before the project implementation plan is retroactively extinguished or has already been lost, or that the status of an association member is automatically restored. It is reasonable that the association did not grant a new opportunity to apply for parcelling-out and re-out to an association by applying for parcelling-out is an autonomous decision, but whether it is individually determined by applying for cash settlement or not.

C. However, considering the following circumstances in light of the relevant legal principles, it is difficult to readily conclude that the instant project implementation plan was invalid or that there was an illegal ground to the extent that it should be revoked solely on the ground that a person eligible for cash clearing who is not an association member participated in part of the resolution of the instant general meeting.

(1) A union’s general meeting is the highest decision-making body of the union, and the formulation and modification of a project implementation plan are matters resolved by the general meeting. As such, the general meeting has the discretion of autonomy and formation to formulate and modify a project implementation plan to the extent not contrary to superior statutes and the articles of incorporation. Therefore, the general meeting’s resolution, which establishes and amends a project implementation plan, has the procedure and the quorum stipulated in superior statutes and the articles of incorporation, and the contents of the resolution of the general meeting are not contrary to superior statutes and the articles of incorporation, shall not be readily denied the effect of the general meeting resolution (see Supreme Court Decision 2016Du3528

(2) Even if there are defects in the procedures such as a public notice of convening a general meeting of a cooperative, the absence of substantial interference with the members’ participation in the general meeting is insignificant and the resolution of the general meeting is not deemed unlawful (see, e.g., Supreme Court Decision 2018Du34732, Jun. 25, 2020). Therefore, the resolution of the general meeting in this case cannot be deemed unlawful solely on the ground that the notice of convening a general meeting was given not only to the members but also to the non-qualified cash clearing persons.

(3) Even if there are defects in the resolution of the general meeting of a cooperative, if it is deemed that such defects did not affect the result of the resolution of the general meeting, in light of various circumstances, such as the progress of the resolution and the exclusion of qualified persons from the voting, the resolution of the general meeting is not unlawful (see Supreme Court Decision 96Da23375 delivered on May 30, 197, etc.). Although 136 persons were present in the resolution of the general meeting of this case, 436 of the total number of 477 members were present even if 434 of them were excluded, the resolution of the general meeting of this case was made by the project implementation plan of the general meeting of this case with the consent of about 90% of the total number of union members and about 99% of the members present.

(4) Although the rearrangement project cost is essential to state in the project implementation plan (Article 30 subparag. 8-2 of the Urban Improvement Act), the rearrangement project cost at the formulation stage of the project implementation plan is merely a rough estimate that reflects the scale of the rearrangement project. Since the number of union members and persons subject to cash settlement who participate in the project to proceed with the project after the establishment of the project implementation plan is determined, it is difficult to accurately understand the total amount of cash settlement money to be paid to the person subject to cash settlement at the formulation stage of the project implementation plan. Furthermore, even if the amount of cash settlement money increases after the reduction of the amount of cash settlement money, even if the amount of cash settlement money increases thereafter, it is difficult to view that the number of union members or cash settlement money presented at the formulation stage of the project implementation plan has a direct impact on the proportion of union members and the amount of cash settlement money, or that it is an important matter of interest of union members (for this reason, Article 46(1) of the Urban Improvement Act also provides that the procedure for application for parcelling-out after the approval and announcement is made).

(5) There is no special circumstance to deem that there was any substantial impact on the outcome of the instant project implementation plan on the establishment of the instant project implementation plan, with some participation of the non-qualified cash clearing agents in the resolution of the instant general assembly.

D. Nevertheless, the lower court, on the grounds indicated in its reasoning, determined that the instant general meeting resolution was null and void due to serious defects, and that the instant project implementation plan formulated through the instant general meeting resolution was unlawful. In so determining, the lower court erred by misapprehending the legal doctrine on the establishment of the project implementation plan of the partnership general meeting, thereby adversely affecting the conclusion of the judgment.

5. Conclusion

Therefore, without further proceeding to decide on the remainder of the grounds of appeal, 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

[Attachment 1] List of Plaintiffs: Omitted

[Attachment 2] List of Intervenors joining the Plaintiff: Omitted

Justices Kim Jong-hee (Presiding Justice)