Cable Infrastructure Corporation, Inc.

E. E.I.D. (Attorney Park Ho-hoon, Counsel for the defendant-appellant)

Daom Co., Ltd and one other (Law Firm B&S, Attorneys Kim Yong-sik, Counsel for the plaintiff-appellant)

July 2, 2015

Seoul Central District Court Decision 2013Kahap54109 Decided October 15, 2014

1. The part of the judgment of the court of first instance against Defendant Daom Co., Ltd. that ruled against the Plaintiff’s succeeding intervenor that constitutes the following payment order shall be revoked.

Defendant Daom Co., Ltd. shall pay to the Plaintiff’s Intervenor 412,113,425 won and interest thereon at the rate of 6% per annum from December 5, 2013 to August 20, 2015, and 20% per annum from the next day to the day of complete payment.

2. The plaintiff succeeding intervenor's remaining appeal against defendant Daom Co., Ltd. and the appeal against defendant 2 are dismissed, respectively.

3. Of the total litigation cost incurred between the Plaintiff’s succeeding intervenor and the Defendant Daom, 70% shall be borne by the Plaintiff’s succeeding intervenor, and the remainder 30% shall be borne by the Defendant Daom Co., Ltd., and the costs of appeal against Defendant 2 by the Plaintiff’s succeeding intervenor are borne by

4. The part on the payment of money as referred to in paragraph (1) may be provisionally executed.

1. Purport of claim

The defendants jointly and severally pay to the plaintiff succeeding intervenors 1.93 billion won with 20% interest per annum from the delivery date of a copy of the complaint of this case to the day of complete payment.

2. Purport of appeal

The part of the judgment of the court of first instance against the Plaintiff’s Intervenor, which ordered payment under the judgment of the court of first instance, shall be revoked. The Defendants jointly and severally pay to the Plaintiff’s Intervenor the amount of KRW 1 billion and 20% interest per annum from the delivery date of a copy of the complaint of this case to the day of full payment.

1. Basic facts

(a) Purchasing the project site by Defendant Daom Co., Ltd;

On February 22, 2011, Defendant Daom Co., Ltd. (hereinafter “Defendant Co., Ltd”) purchased KRW 12.5 billion (hereinafter “instant land”) with the Korea Land and Housing Corporation for the designated purpose of designating KRW 18,504,300,000 as a multi-family housing site of KRW 60-85,000,000,000; on the other hand, 1.25,60,000 won out of the purchase price shall be paid on the date of the contract; the remaining purchase price shall be KRW 2.82,3 million on August 22, 2011; and 2.82,000,000 won on February 222, 2012; and 2.82,80,000 won on August 17, 2013, respectively (hereinafter “instant contract”).

B. Conclusion of an agreement on new construction and sale of apartments

The Defendant Company intended to implement a housing construction project directly on the instant land, but modified the project plan by the method of a regional housing association which recruits and sells the members of the regional housing association, and on December 12, 2012, the Defendant Company entered into a business agreement on the instant land as an agent of the “(tentative name) regional housing association” and the Defendant Company entered into a new business agreement on the instant land with 340 apartment units and ancillary welfare facilities (hereinafter “instant apartment”) on the ground of the status of Si/Gun/Gu construction (hereinafter “instant apartment”), and the content relating to the instant case is as follows.

After the conclusion of this Agreement, the Defendant Company shall carry out the business of securing the project site and obtaining the authorization of the business through the Land Sales Contract. For the smooth promotion of the project as set forth in Article 5 (Business Apportionments and Responsibilities), the parties to this Agreement shall carry out the following business in good faith and shall be liable therefor. (1) The Defendant Company’s business scope shall be responsible for securing the ownership of the entire project site (3) the disposal of ground obstacles, removal, access road, packing and securing of access roads, cancellation of limited real rights, transfer registration of ownership, survey and cadastral adjustment, 5) and other matters related to the implementation of the project, including all business and cost-sharing to be carried out by the Defendant Company as the business agent, after the conclusion of this Agreement. (5) The Defendant Company’s application shall be made at least 10% of the total amount of the project to be carried out by the new Housing Association after the date of application for the establishment of the new Housing Association after the date of application for the establishment of the new Housing Association after the date of application for the establishment of the new Housing Association (3).

(c) Conclusion of a contract for sales agency;

On December 31, 2012, the Defendant Company delegated Defendant Company’s business affairs with respect to the recruitment of union members of the instant project to the channel infrastructure entity, and the channel infrastructure entity entered into a sales agency contract with the content of vicarious sales agency for the recruitment of union members (hereinafter “instant sales agency contract”). Among them, the content of the instant case is as follows.

(1) The company shall pay 0.0% of the total advertising fees for each of the 6.0.0% of the total advertising fees for each of the above 0.0.0% of the total advertising fees for each of the 10.0.0% of the total advertising fees for each of the above 6.0.0% of the total advertising fees for each of the above 6.0.0% of the total advertising fees for each of the above 6.0.0% of the total advertising fees for each of the above 6.0.0.0% of the total advertising fees for each of the above 6.0.0.0.0.0.00.0.0.0.0.0...0...0..0...0...0...00...0...00...0...00...0...00....00...00....010......00....010.....00....0.....0.....0..0...0......0....0.0....0...0....0...........0......0....

D. Cancellation of the instant sales contract

On June 17, 2013, when a channel infrastructure operator recruited members for the instant project in accordance with the instant sales agency agreement, the Korea Land and Housing Corporation cancelled the instant sales contract on the ground that the Defendant Company did not pay only the down payment out of the purchase price of the instant land, and that the remainder of the purchase price to be paid at intervals of six months thereafter was not paid.

E. Notice of termination of the sales agency contract of this case

1) On July 2, 2013, Defendant Company sent a public notice to the channel infrastructure operator stating that “it was unable to achieve the goal of at least 50% of the recruitment of union members by the end of May, 2013, which was promised by the channel infrastructure operator, as well as to implement the promise of at least 80% or maximum 95% of the allotment rate until June 30, which was the expiration date of the agency period stipulated in Article 5 of the instant sales agency contract, and thus, the instant sales agency contract should be terminated.”

2) On July 15, 2013, channel infrastructure created an answer to the Defendant Company stating that “The contract term was the first six months, and the contract term was open on April 26, 2013 due to the reasons attributable to the Defendant Company, and the expiration date has not yet yet arrived, and if wishing to terminate the contract, it would be desired to settle accounts in accordance with the instant parcelling-out agency contract.”

3) On December 5, 2013, channel infrastructure personnel expressed an intention to terminate the instant sales agency contract on the grounds of the Defendant Company’s nonperformance by serving a copy of the instant complaint on the Defendant Company.

(f) Assignment of claims to the Intervenor succeeding to the Plaintiff by channel infrastructure;

On the other hand, on November 16, 2013, after the filing of the instant lawsuit, the channel infrastructure contractor entered into an agreement with the Plaintiff’s succeeding Intervenor on the assignment of claims with the content that “claim amounting to KRW 1,938,000,000,000,000,000,000,000,000 in the lawsuit amount of lawsuit against the Defendant Company,” which is held by the channel infrastructure supplier against the Defendant Company. On June 3, 2014, the said notification was sent to the Defendant Company around that time.

[Reasons for Recognition] Facts without dispute, Gap's 1 through 3, 16 through 18, Eul's 9-1 to 5, the purport of the whole pleadings

2. Summary of the parties' arguments

A. The plaintiff's successor's assertion

1) Despite the fact that the channel infrastructure manager performed the recruitment of union members as stipulated in the instant sales agency contract, as the Defendant Company was unable to pay the purchase price of the instant land to the Korea Land and Housing Corporation, and the instant sales contract was cancelled, the Defendant Company became unable to perform its obligations under the instant sales agency contract to provide the instant land to the Korea Land and Housing Corporation for the purpose of carrying out the sales agency business of the channel infrastructure. Therefore, it is inappropriate to notify the termination of the instant sales agency contract by the Defendant Company. Rather, it is inappropriate for the Defendant Company to legally terminate the instant sales agency contract by the channel infrastructure manager due to the Defendant Company’s nonperformance of obligations. As such, the Defendant Company

2) On April 18, 2013, when the Defendant Company provided a model house and entered into a fund management agency contract between the Defendant Company, New Day, and Asian Trust Co., Ltd. (hereinafter “instant fund management contract”) on and after April 18, 2013, the channel infrastructure operator was capable of performing the recruitment business of union members for the instant business, and thus, the period of sales agency contract for the instant sales agency contract shall be deemed to have been changed from April 19, 2013 to October 18, 2013 in fact. The channel infrastructure operator recruited 117 union members from April 19, 2013 to September 23, 2013, so if the sales agency contract remains effective, the channel infrastructure operator could have achieved the maximum ratio of sales of liability. Accordingly, the Defendant Company is obligated to compensate for the total amount of KRW 1.98 million x 305 million apartment units (i.e., the sales agency’s maximum amount of liability x 600 million apartment units).

3) Even if the channel infrastructure is anticipated to have failed to achieve the maximum ratio of liability, the Defendant Company should compensate for the reliance profit of at least 1,220,565,290 won (i.e., labor cost of at least 673,455,00 won + general security cost of KRW 126 million + various advertising advertising cost of KRW 121,10,290).

4) Meanwhile, Defendant 2, as the representative director of Defendant Company, guaranteed the debt owed to Defendant Company’s channel infrastructure, and thus, bears the joint and several liability obligations.

5) Therefore, the Defendants are jointly and severally liable to pay the Plaintiff’s successor to the Plaintiff, who acquired the claim regarding the instant sales agency contract from the channel infrastructure, the performance profit of KRW 1.938 million or at least KRW 1,220,565,290 as compensation for damages, and the delay damages therefrom.

B. The defendants' assertion

1) The Defendant Company is not obligated to build a model house, and the Defendant Company is required to build a model house, but the channel infrastructurer is not able to perform the sales agency business. Since the channel infrastructurer has performed the recruitment business of members from January 9, 2013 immediately after the conclusion of the instant sales agency contract, it does not delay the recruitment business of members of the channel infrastructure due to the delay in the construction of the model house.

2) The sales agency contract of this case does not stipulate that the Defendant Company is obligated to secure the ownership of, and the right to use, the land of this case. The channel infrastructure manager recruited its members after June 17, 2013 when the sales contract of this case was rescinded, and thus, the Defendant Company cannot be deemed to have secured the ownership of, and the right to use, the land of this case in order to recruit its members.

3) Rather, channel infrastructure users failed to achieve 80% of the liability allotment rate for the recruitment of union members by June 30, 2013, which is the expiration date of the instant agency sale contract, and thus, the termination of the instant agency sale contract by the Defendant Company is lawful.

4) Even if the Defendant Company’s nonperformance of obligations is recognized, the number of members recruited by the channel infrastructure operator until June 30, 2013, which was the expiration date of the sale agency period, is merely 80 households and did not reach the sales rate of 50%, which is the minimum standard for claiming the sales commission under the instant sales agency contract, and thus, compensation for the performance profits cannot be accepted.

5) Furthermore, it is difficult to view that the Plaintiff’s succeeding intervenor’s claim for compensation for trust benefits was related to the sales agency contract of this case.

6) In addition, even if the liability for damages is recognized by the defendant company, the defendant 2 is merely a joint and several surety of the payment obligation of the sales agency fee for the defendant company's channel infrastructure, and it is not a joint and several surety of the liability for damages. Thus, the claim against the defendant 2

3. Determination as to the claim against the defendant company

A. Termination of the sales agency contract of this case and establishment of liability for damages

1) As to the Plaintiff’s Intervenor’s assertion of the termination of the instant parcelling-out agency contract and damages due to the Defendant Company’s nonperformance, the Defendant Company asserts that the instant parcelling-out agency contract was legally terminated on the ground of the nonperformance by the channel infrastructure, as the channel infrastructure manager did not achieve 80% of the liability allotment rate for the recruitment of union members until June 30, 2013, which is the expiration date of the period of the instant parcelling-out agency contract.

2) According to Article 5(1) of the instant parcelling-out agency contract, the period of parcelling-out agency contract from December 31, 2012 to June 30, 2013, which is the date of the conclusion of the instant parcelling-out agency contract, provides that the rate of parcelling-out shall be at least 80% of the total 340 households of the instant apartment complex, and at least 95% of the total number of 340 households of the instant apartment complex. The Defendant Company was unable to achieve the goal of 50% or more of the number of members until the end of May, 2013, and the period of parcelling-out agency contract of this case is at least 80% to the maximum 95% of the total number of members of the instant apartment complex x 30% of the total number of members of the instant apartment complex x 30% of the number of members of the instant apartment complex x 40% of the total number of members of the instant apartment complex x 60% of the sales agency contract of this case.

3) However, as seen earlier, the sales agency contract of this case clearly states the subject matter of sale as the apartment of this case to be newly constructed on the land of this case, and Article 2 stipulates that the defendant company delegates the recruitment affairs of the association members of the apartment of this case to the channel infrastructure. As such, the sales agency contract of this case is naturally premised on the construction of the apartment of this case, since the business of this case is conducted and the apartment of this case is newly constructed, the defendant company bears the contractual obligation to secure the ownership of the land of this case, which is the site for the business of this case, so that the channel infrastructure, which is the sales agency, can perform the sales affairs under the sales agency contract of this case.

However, around June 17, 2013, the Korea Land and Housing Corporation cancelled the instant sales contract on the grounds that the Defendant Company failed to perform its obligation to pay the purchase price of the instant land, as seen earlier, and comprehensively taking account of the absence of disputes between the parties or the overall purport of the pleadings in the evidence No. 18, the Korea Land and Housing Corporation, which was the owner of the instant land, announced that the instant land should be sold as a multi-family housing site on July 13, 2013, after cancelling the instant sales contract with the Defendant Company, can be recognized that it acquired ownership by purchasing the instant land from the Korea Land and Housing Corporation by another company that is not the Defendant Company, and therefore, it is reasonable to deem that the obligation under the instant sales agency contract was impossible for the Korea Land and Housing Corporation to acquire and maintain ownership or right to use the instant land from the Korea Land and Housing Corporation on June 17, 2013.

4) If so, the notice of termination as of July 2, 2013 regarding the instant sales agency contract of the Defendant Company, which was concluded after the cancellation of the instant sales contract and the Defendant Company lost its status as the purchaser of the instant land, was made on July 2, 2013. Thus, it cannot be said that the notice of termination was invalid as it was made in a state of impossibility of performing its contractual obligations under the bilateral contract. Rather, it is reasonable to deem that the instant sales agency contract was terminated by being served on the Defendant Company on December 5, 2013, wherein the channel infrastructure operator expressed his/her intent to terminate the instant sales agency contract on the ground of the Defendant Company’s nonperformance of obligations (the same is followed after the expiration of the period after June 30, 2013, which is the expiration date of the sales agency contract).

5) In addition, the Defendant Company is obligated to compensate for damages suffered by the Intervenor succeeding to the Plaintiff due to the nonperformance of the obligation as above by the Defendant Company.

(b) Scope of damages;

1) Whether to compensate for the performance interest

A) The Plaintiff’s succeeding intervenor asserts that if the instant sales agency contract was not terminated due to the reasons attributable to the Defendant Company, the channel infrastructure supplier would have gained a profit of KRW 1.938 million due to the performance of the contract.

B) According to Article 5(1) of the instant parcelling-out agency contract, the rate of sale of the responsibility of channel infrastructure is stipulated to be at least 80% among 340 households, all of the instant apartment units, and at least 95%. According to Article 6(1) of the instant parcelling-out agency contract, the fact that the fee per household is at least 6 million won is recognized as above.

C) However, according to Article 1(1) of the Special Clause of the sales agency contract of this case, if the 170 households are recruited from 340 households to 50% of the total number of households recruiting members, the channel infrastructure operator may claim a commission from the defendant company. The channel infrastructure operator may be paid a sales agency fee only when the recruited association members fully paid down down the down payment. The channel infrastructure operator recruited 80 households with full payment of the down payment by June 30, 2013, and recruited approximately 23.52% of the total number of 340 households of the apartment of this case, which are all households of the apartment of this case, and collected approximately 43.52% of the total number of the arguments in the letter of evidence No. 4 and 5. Comprehensively taking account of the purport of the argument as seen above, the channel infrastructure operator collected 74 households until June 17, 2013, and continued to perform the business of this case as to the sales agency of this case after the cancellation of the sales contract of this case.

According to the above facts, the channel infrastructure recruited only 74 households as members until the time when the sales contract of this case was terminated, and thereafter continuously recruited members, and thereafter recruited 117 households members. Thus, even if the Defendant Company fulfilled its obligation to acquire ownership (or profit from use and profit-making) of the land of this case, the channel infrastructure operator could not recruit 170 households, which serve as the basis for claiming the sales agency fees, until June 30, 2013, and even if the channel infrastructure operator continued to recruit members for a considerable period of time after September 23, 2013, it seems that not only 170 households, the basis for claiming the sales agency fees, but also 323 households, which correspond to the ratio of liability of the Plaintiff’s successor to the sale, could not recruit members of the 1170 households, which are the basis for claiming the sales agency fees, and therefore, it seems that there was no evidence to acknowledge otherwise due to the lack of evidence to acknowledge the profit of the sales agency contract of this case as the sales agency contract of this case.

Therefore, the plaintiff succeeding intervenor's claim seeking compensation for performance interest against the defendants is without merit.

D) As to this, the Plaintiff’s successor: (a) the Defendant Company provided a sample house at around April 19, 2013; (b) was able to substantially recruit union members thereafter; and (c) the instant funding management agreement also stipulates that six months from April 18, 2013, which is the date the Defendant Company entered into a contract for the recruitment of union members; (b) the period for the sale of the instant sales agency agreement was changed from April 19, 2013 to October 18, 2013; and (c) even if it is not, the period for the sale agency agreement of the instant case was automatically extended from July 1, 2013 to six months from July 1, 2013 under Article 5(2) of the sales agency agreement, and therefore, the channel infrastructure should not determine whether to compensate for the performance interest on the ground that it did not recruit union members of 170 households until June 30, 2013.

(1) First of all, the following circumstances revealed in Gap evidence Nos. 3, 9, and Eul evidence Nos. 4 and 5, i.e., channel infrastructure manager, from January 9, 2013 to June 2013, submitted a "one-day business report" stating the subscription for membership recruitment, contract status, publicity status, details of major business activities, etc. to the defendant company pursuant to Article 3 (1) 7 of the instant contract for the sale of buildings from January 9, 2013, the channel infrastructure operator appears to have been acting as a proxy for membership recruitment from January 9, 2013; ② the defendant company did not have any provision regarding the timing of providing a model house in the instant sales agency contract; ③ it is difficult for the defendant company to be able to carry out its membership recruitment business only with sample houses; ④ It is not a party to the instant fund management contract, and ④ it is difficult for the defendant company to enter into the instant contract with 10% of the total period from 20th to 15th to 16th 6th 20 months.

(2) Meanwhile, Article 5(2) of the instant parcelling-out agency contract provides that “If the Defendant company has not notified the company, the period of parcelling-out agency shall be automatically extended.” The Defendant company did not notify the channel infrastructure users of the reduction of the period of parcelling-out agency prior to June 30, 2013, which is the expiration date of the period of parcelling-out agency, and there is no dispute between the parties, and according to the above recognized facts, the period of parcelling-out agency should be automatically extended without setting the period (which seems to have not been extended for six months as alleged by the Plaintiff’s succeeding intervenor) (the Defendant company sent a statement to the channel infrastructure on July 2, 2013, immediately after the expiration date of the period of parcelling-out agency contract, on the ground of poor performance in the recruitment of union members, it is difficult to view it as valid, in light of the above purport of termination as seen earlier, and furthermore, the Defendant company’s expression of intent and its subsequent extension as legitimate extension of the period of parcelling-out agency.

However, even if the above period of sales agency is automatically extended, as seen earlier, even if the channel infrastructure continues to recruit members during the period of sales agency, the plaintiff's successor's assertion that the payment of performance benefits should be recognized only on the ground of the automatic extension of the period of sales agency, is without merit, since it appears that the 170 household members, which is the basis for claiming sales agency fees under the sales agency contract of this case, as well as 323 household members equivalent to the ratio of 95% liability for the sales agency contract of this case, could not recruit members.

2) Whether to compensate for trust interests

A) The Plaintiff’s succeeding intervenor spent the Plaintiff’s total labor cost of KRW 1,220,565,290 (=labor cost of KRW 673,455,00 in general expenses + KRW 126,00 in general expenses + KRW 421,10,290 in compensation for the trust interest. As such, the Plaintiff’s succeeding intervenor asserts that the said money should be paid from the Defendant Company as compensation for the trust interest, we examine whether the Defendant Company is liable to compensate for the said KRW 1,220,565,290 in compensation for the channel infrastructure or the Plaintiff’s succeeding intervenor.

B) In addition to each of the statements in Gap evidence Nos. 22, 26, and 32, it is recognized that the channel infrastructure manager spent KRW 412,113,425 as the former advertising fee, etc. in order to vicariously recruit members under the instant sales agency contract from December 31, 2012 to the termination of the instant sales agency contract.

The advertising expenses 70,215, 490 A26-1 through 122, 435, A27-1 through 163 online advertising expenses 25,39,39,39,28-1 through 163 online advertising expenses 25,396,80 A28-1 through 104 computer graphic production expenses 24,750,000 A29-1, 25, 20,240,000, and 26 printed materials production expenses 20,240,240,000, and 26 printed materials production expenses 67,497,700, 31-1 through 16, 12, 207, 200, and 321 through 412,413,425, and 25, respectively.

C) Furthermore, comprehensively taking account of the overall purport of pleadings as to personnel expenses and general expenses claimed by the Intervenor to be included in the trust interest, Gap evidence 21, and Gap evidence 3 through 51, the expenditure details (Evidence A 21) of the channel infrastructure prepared by the Intervenor was stated that the Intervenor paid labor expenses of 673,45,000 won to invite association members, general operating expenses of 12,600,000 won to be incurred by the Intervenor 2 for the purpose of conducting solicitation of association members by proxy, and it is difficult for the Intervenor 2 to recognize that the Plaintiff’s successor’s liability for damages incurred by the Plaintiff’s non-performance of obligation based on the following evidence:

D) Therefore, Defendant Company is liable to pay damages calculated at the rate of 412,113,425 won to the Plaintiff’s succeeding intervenor who acquired the claim for damages of channel infrastructure, as well as at the rate of 6% per annum as stipulated in the Commercial Act from December 5, 2013 to August 20, 2015, which is the date of delivery of a copy of the complaint of this case sought by the Plaintiff’s succeeding intervenor, until August 20, 2015, which is the date of delivery of a copy of the suit of this case, to the date of full payment, and to pay damages for delay calculated at the rate of 20% per annum as stipulated in the Act on Special Cases concerning Expedition, etc. of Legal Proceedings from the following day to the date of full payment.

4. Determination as to the claim against Defendant 2

On the other hand, Article 10 of the sales agency contract of this case provides that the representative director, who is the channel infrastructure, shall substitute the personal joint and several sureties at the time of the failure to pay fees without additional seals, as seen above. In addition to the whole purport of the pleadings in the statement No. 3, among the sales agency contract of this case, the fact that the defendant 2 is indicated as the representative director of the defendant company in the indication column of the parties in the sales agency contract of this case. However, in full view of the above evidence and the evidence No. 23-5 through No. 8, the whole purport of the pleadings, the following circumstances revealed that the non-party, who is the mother of the defendant 2, actually operated the defendant company, entered into the sales agency contract of this case, and the defendant 2 appears to have lent only the name of the defendant 2. In light of the process of concluding the sales agency contract of this case and the fact that the non-party was aware or could have been aware of the above fact on behalf of the defendant company, there is no evidence to acknowledge that the above channel is a joint and several liability between the defendant 2.

Therefore, the Intervenor’s claim against Defendant 2 cannot be accepted.

5. Conclusion

Thus, the plaintiff's claim against the defendant company by succession against the plaintiff's defendant company shall be accepted within the scope of the above recognition, and all remaining claims against the defendant company and claims against the defendant 2 shall be dismissed without merit. Since the part against the defendant company by succession in the judgment of the court of first instance concerning the defendant company by succession is partially unfair in conclusion, the part against the plaintiff by succession to the plaintiff by acceptance of part of the plaintiff's appeal and the part against the plaintiff by succession as to the above order for payment shall be revoked, and the payment of the above money shall be ordered against the defendant company, and the remaining appeal against the defendant company by the plaintiff by succession

Judges Han Chang-hun (Presiding Judge)

1) However, the Plaintiff’s succeeding intervenor asserts that the total amount of various advertising advertising expenses is KRW 412,113,425 in the preparatory documents dated March 24, 2015.

(2) Article 10(1) of the Local Housing Association Promotion Committee and the Defendant Company shall jointly and severally carry out the rental work, such as: (a) recruit members of at least 50% of the total number of households to be constructed, which are the requirements for applying for authorization to establish a new regional housing association, within six months; and (b) approving the establishment of the new regional housing association in the area (tentatively named).