The meaning of "consultation" that should be held for more than three months as the requirement for exercising the right to demand sale under Article 18-2 of the former Housing Act and the method of determining whether the requirements for consultation are met and the burden of proving the fulfillment of the requirements (=project owner)

According to Article 18-2 of the former Housing Act (amended by Act No. 9405, Feb. 3, 209; hereinafter “former Housing Act”), a project operator who has obtained approval for his/her housing construction project plan pursuant to Article 16(2)1 may file a claim with the owner of a site (including buildings) to sell the site at the market price for which he/she has failed to secure title. In such cases, the provisions of paragraph (1) and Article 48 of the former Enforcement Decree of the Act on Ownership and Management of Condominium Buildings shall apply mutatis mutandis to the claim for sale of the land for consultation for the said period of not less than three months (the period of consultation) and for which the owner of the land is obliged to obtain approval for the said land for the said consultation (the period of time shall be hereinafter referred to as the “project operator’s name and location of the land for which he/she had agreed on the said land and the number of the land for which he/she has no prior to the said consultation). The provisions of Article 16(2)1 shall be construed as the landowner’s right to request for sale and sale of the land.

Articles 16(2)1 and 18-2 of the former Housing Act (Amended by Act No. 9405, Feb. 3, 2009); Article 48 of the Act on the Ownership and Management of Aggregate Buildings; Article 23(3) of the Constitution; Articles 16 and 26(1) of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (Amended by Act No. 11017, Aug. 4, 201); Article 8(1) and (5) of the Enforcement Decree of the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor.

Supreme Court Decision 2008Da12453 Decided July 10, 2008 (Gong2008Ha, 1152)

Chang Development Co., Ltd. (Attorneys Son Ji-yol et al., Counsel for the defendant-appellant)

Defendant 1 (Law Firm Sejong, Attorneys Kim Yong-dam et al., Counsel for the defendant-appellant)

Defendant 2 (Law Firm Sejong, Attorneys Kim Yong-dam et al., Counsel for the defendant-appellant)

Busan High Court (Chowon) Decision 2011Na1791, 1807 decided October 27, 2011

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. According to Article 18-2 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009; hereinafter “former Housing Act”), a project operator who has obtained approval for a housing construction project plan pursuant to Article 16(2)1 of the same Act may request the owner of a site for which he/she has failed to secure a title to use (including buildings) among the relevant housing construction sites to sell the site at market price. In such cases, he/she shall consult with the owner of the site subject to such claim for sale for a period of not less than three months (paragraph (1) and the claim for sale pursuant to Article 48(1) of the Act on the Ownership and Management of Aggregate Buildings (the proviso to paragraph (3)).

As above, granting a project proprietor who has obtained approval for a housing construction project plan by the former Housing Act a right to sell a site necessary for the housing construction project to purchase from the said owner is specifically stipulated to allow the project proprietor to deprive his/her property right against the landowner’s will in order to achieve the public interest, such as residential stability and improvement of housing level through housing construction and supply. Therefore, the substance of the right may be deemed to be the same as the public expropriation under Article 23(3) of the Constitution (see Supreme Court Decision 2008Da12453, Jul. 10, 2008). As a requirement that the project proprietor must undergo prior to the exercise of the right to demand sale (see Supreme Court Decision 2008Da12453, Jul. 10, 2008). Therefore, the term “consultation for three or more months prior to the right to demand sale is a procedural guarantee that the

Meanwhile, in the case of public expropriation, a project operator shall faithfully consult with landowners and persons concerned about compensation for land, etc. and shall determine matters necessary for consultation, such as procedures and methods for consultation (Article 16 and 26(1) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works (amended by Act No. 11017, Aug. 4, 201; hereinafter “former Public Works Act”). According to Article 8(1) of the Enforcement Decree of the Act on Acquisition of and Compensation for Land, etc. for Public Works following delegation (hereinafter “Enforcement Decree of the Public Works Act”), a project operator shall notify landowners and persons concerned of a request for consultation, stating the period, method, and amount of compensation (Article 1); the period and method of consultation (Article 26(2)); the land owner and person concerned (Article 3); the land owner’s name and address of the land subject to consultation or method and purpose thereof (Article 5(5) of the former Act); the land owner and person concerned (Article 3).

In addition to these circumstances, in light of the content, form, structure, legislative intent, etc. of the relevant Acts and subordinate statutes, “consultation” that requires a period of not less than three months as a requirement for exercising the right to demand sale refers to a specific and substantial consultation between a project operator and a housing site owner. In addition, barring any special circumstance, determination of whether a project operator who obtained approval for the housing construction project plan has presented a trade price or a reasonable ground for its calculation, whether the project operator has made efforts to conduct the consultation, and what attitude the housing site owner had expressed, should be comprehensively taken into account, and it is reasonable to deem that the project operator bears the burden of proving the fulfillment of such requirements.

2. Examining the reasoning of the lower judgment and the reasoning of the first instance judgment partially admitted by the lower court, in light of the evidence and records, ① the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) urged Defendant 1 (Counterclaim Plaintiff; hereinafter “Defendant”) to respond to the trade consultation on the land of this case incorporated into the business site by mail on May 27, 2008, which was after obtaining approval of the housing construction project plan of this case, on 3 occasions on 208, and on 3 occasions, September 4, 2008. This is merely the fact that Defendant 1 urged Defendant 1 to sell the land of this case, and did not present reasonable grounds for calculating the price of the land of this case and its calculation, and that Defendant 1 did not respond to the request for the conciliation procedure of this case against Defendant 2, the Plaintiff’s non-indicted 2, who did not respond to the request for the conciliation procedure of this case, and that Defendant 2, who did not respond to the request for the conciliation of co-owned property of this case, on 9636.

Examining these facts in light of the legal principles as seen earlier, it cannot be deemed that the Plaintiff, a project undertaker, made a specific and substantial consultation with Defendant 1, who is the other party to the claim for sale, on May 27, 2008, June 24, 2008, and September 4, 2008, with only the content of mail sent to Defendant 1 on three occasions on September 3, 2008, and the Plaintiff cannot be deemed to have held a specific and substantial consultation with the other party to the claim for sale. Moreover, even if consultation under Article 18-2 (1) of the former Housing Act may be held in a case involving a partition of co-owned property as provided in the above Changwon District Court Tongwon District Court 2006Da14980, the conciliation procedure is not limited to the entire land subject to the instant case, and it is insufficient to conclude that the consultation between the parties was completed in view of the circumstances where there was no data on the progress of consultation between the parties. Accordingly, the Plaintiff cannot be deemed to have completed the consultation under Article 18-2 (1) of the former Housing Act.

Nevertheless, the lower court determined otherwise, that the transaction consultation on the land of this case between the Plaintiff and Defendant 1 was terminated on February 19, 2009, and that the copy of the complaint of this case filed within two months thereafter was served on Defendant 1 on March 10, 2009, and the sales contract on the land of this case was concluded between the Plaintiff and Defendant 1. In so doing, the lower court erred by misapprehending the legal doctrine on the consultation as a requirement for exercising the right to demand sale under Article 18-2 of the former Housing Act, and thereby adversely affecting the conclusion of the judgment. The ground of appeal No. 2 pointing this out is with merit.

3. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)