[1] In a case where indirect losses occurred outside the public project implementation district as a result of the administrative plan and the implementation of the public project, which was established in trust in the administrative activities of the administrative entity, even though such acts were conducted, whether the provisions on compensation for such losses under the Enforcement Rule of the Public Project Compensation Act may be applied mutatis mutandis to the compensation for

[2] The case reversing the judgment of the court below which recognized the right to claim compensation on the ground that the provision on indirect compensation under the former Enforcement Rule of the Act on the Compensation for Public Loss and Compensation for Loss of Works is applied mutatis mutandis to the cost of installing a new building and the cost of modifying the new building design, in case where a new building site was constructed for the new building site after entering into a construction contract with a new building construction permit and subsequent construction

[1] In light of the purport of Article 23(3) of the Constitution and Article 3(1) of the former Land Expropriation Act (amended by Act No. 6656 of Feb. 4, 2002), Article 3(1) of the former Public Land Expropriation Act (amended by Act No. 6656 of Feb. 4, 2002), and Article 23-2 through 7 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Construction and Transportation No. 3444 of Dec. 31, 2002), if a person who trusted the administrative act of the administrative body to contribute to property or to reimburse expenses, etc. thereby the exercise of property rights is restricted due to a legitimate administrative plan established by the public necessity, and there is no explicit provision on compensation for indirect losses that occurred outside the public project execution zone, it may be easily predicted that such losses will occur due to the implementation of the public project, and if there is no specific provision on compensation for losses, it may be applied mutatis mutandis to the compensation for losses.

[2] The case reversing the judgment of the court below which recognized the right to claim compensation on the ground that the provisions on indirect compensation under the former Enforcement Rule of the Act on the Compensation for Public Loss and Compensation for Loss of Works are applied mutatis mutandis to the cost of installing a new building and the cost of modifying the new building design, in case where a new building site was constructed for construction site after obtaining a new building construction permit, but an administrative agency's decision to revise the

[1] Article 23(3) of the Constitution, Article 3(1) of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (amended by Act No. 6656, Feb. 4, 2002); Article 23-5 of the former Enforcement Rule of the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (amended by Act No. 344, Dec. 31, 2002); Article 23-6 (Enforcement Rule of the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor) / [2] Article 3(1) of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (amended by Act No. 6656, Feb. 4, 2002); Article 23-5(6) of the former Enforcement Rule of the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (amended by Act No. 344, Dec. 31, 2002)

[1] Supreme Court Decision 94Da38038 delivered on July 14, 1995 (Gong1995Ha, 2788), Supreme Court Decision 95Da29161 delivered on January 20, 1998 (Gong1998Sang, 551 delivered on June 11, 199 (Gong1999Ha, 1347), Supreme Court Decision 2001Da44352 delivered on November 26, 2002 (Gong2003Sang, 190)

Plaintiff (Attorney Kim Jong-il, Counsel for plaintiff-appellant)

Kimpo-si (Attorney Kim Jong-sub, Counsel for defendant-appellant)

Seoul High Court Decision 2003Na36791 Delivered on April 27, 2004

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

1. The lower court’s recognition and judgment

A. According to the reasoning of the lower judgment, the lower court comprehensively found the following facts: (a) the Plaintiff entered into a construction contract with Jeju Construction Co., Ltd. with a building permit to construct reinforced concrete tanks on the ground (hereinafter “instant site”) before Kimpo-si, Kimpo-si; and (b) entered into a construction preparation for construction works, such as construction of household facilities and temporary fences (hereinafter “family facilities, etc.”) with the cost of KRW 34,969,00; (c) however, the Plaintiff entered into an application for change of the above construction site under Article 14-2(1)2 of the former Act on the Utilization and Management of National Territory (amended by Act No. 6655, Feb. 4, 2002) and the same (amended by Presidential Decree No. 17816, Dec. 26, 2002; and (d) the Plaintiff entered into an application for change of the construction site into a new site under Article 11-2(6) of the Enforcement Decree of the Act on the Construction Permit of this case into a 20-6 site.

B. The court below determined that, in light of the above facts, the costs of installing the instant provisional facilities and the losses incurred by modifying the construction design are not direct losses caused by the expropriation of some of the above sites, but indirect losses caused by the Plaintiff’s restriction on the exercise of ownership on the instant development plan and the acquisition of public special laws accompanying the decision, Article 23(3) of the Constitution, Articles 45(1) and 51 of the former Land Expropriation Act (amended by Act No. 6656 of Feb. 4, 2002), and Article 23-2 through 7 of the Enforcement Rule of the Public Special Act (amended by Ordinance of the Ministry of Construction and Transportation No. 344 of Dec. 31, 2002), if the Plaintiff suffered property losses beyond the scope of property losses caused by the Plaintiff’s unlawful expropriation of property losses or other indirect losses caused by the Plaintiff’s unlawful expropriation of property losses beyond the scope of property losses caused by the public welfare’s exercise of property rights, the court below determined that the Defendant suffered property losses within the scope of property losses caused by such unlawful expropriation of property losses.

2. Judgment of the Supreme Court

However, it is difficult to accept such recognition and judgment of the court below for the following reasons.

A. In light of the purport of Article 23(3) of the Constitution of the Republic of Korea, Article 3(1) of the Land Expropriation Act, and Article 23-2 through 7 of the Enforcement Rule of the Public Special Act, even in cases where a person who trusted an administrative act of an administrative body to contribute to property or to reimburse expenses incurred outside a public project implementation zone is restricted from the exercise of property rights due to a legitimate administrative plan established by the public necessity, and there is no agreement between the victim and the project implementer on indirect losses incurred outside the public project implementation zone as a result of the implementation of the public project, and there is no express legal basis for the compensation, it can be easily predicted that such losses would be incurred due to the implementation of the public project, and in cases where the scope of the losses can be specified specifically, the relevant provisions of the Enforcement Rule of the Public Special Act on the Compensation for such losses may be applied by analogy (see, e.g., Supreme Court Decisions 94Da38038, Jul. 14, 1995; 205Da16965, Jan. 16, 196967

B. The provision of Article 23-6 of the Enforcement Rule of the Public Special Act, which provides that a construction permit shall be assessed and compensated if a structure or other facility outside a public project execution zone becomes unable to perform its original function due to the execution of a public project, which is the subject of compensation for losses, can be applied to the court below. However, according to the records, the plaintiff is aware of the fact that the building permit was modified for the purpose of construction of a reinforced concrete building without changing the structure or use of the structure or use of the building at the time of the modification of the building permit. Thus, there is room to view that the substantial part of the temporary facility installed outside the part which was not acquired through consultation is still usable according to the modified building permit. Accordingly, the court below should have determined what the facility installed on the building site in this case, and what form the temporary facility was installed, and what form the remainder of the building site in this case had been acquired.

Nevertheless, the court below judged that the provisions of Article 23-2 through 7 of the Enforcement Rule of the Special Act on the Law are applied mutatis mutandis to the provisions of Article 23-2 through 7. Thus, the court below did not err by failing to exhaust all necessary deliberations, which affected the conclusion of the judgment.

C. In addition, even if the Plaintiff suffered a loss equivalent to the cost of modifying the architectural design due to the implementation of the instant public project, there is no provision that the Plaintiff’s cost of modifying the architectural design shall be applied by analogy to indirect losses among the provisions of Articles 23-2 through 7 of the Enforcement Rule of the Public Special Act concerning indirect losses. Therefore, the right to claim compensation for losses cannot be acknowledged by analogy to the provision concerning indirect compensation under the Enforcement Rule of the Public Special Act concerning the cost of modifying the architectural design.

Nevertheless, the court below erred by misapprehending the legal principles on compensation for loss, thereby recognizing the defendant's obligation to compensate for loss. Accordingly, there is an error in the misapprehension of legal principles on the interpretation of indirect loss, etc. under Article 23 (3) of the Constitution, Articles 45 (1), 51 of the former Land Expropriation Act, and Articles 23-2 through 7 of the Enforcement Rule of the Public Special Act, which affected the conclusion of the judgment.

3. Conclusion

Therefore, without further proceeding to decide on the remaining 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 on the bench.

Justices Kim Young-ran (Presiding Justice)