Hyundai Engineering Co., Ltd. (Law Firm East, Attorney Cho Jae-young, Counsel for the defendant-appellant)

Ulsan Metropolitan City Water Supply Headquarters Head of the East Business (Law Firm Earsens, Attorneys Park Jae-ho, Counsel for the plaintiff-appellant)

July 7, 2016

1. Of the imposition of KRW 880,276,90 against the Plaintiff on August 11, 2015, the part regarding the water supply construction cost of KRW 398,370,000 shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. One-fourth of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

Of the imposition of KRW 880,276,90 against the Plaintiff on August 11, 2015, the Defendant’s imposition of KRW 398,370,00 and KRW 350,00 of the facility contributions in excess of KRW 481,838,00 shall be revoked, respectively.

1. Details of the disposition;

A. The Plaintiff is a construction company that performs new construction works of 1,897 households of apartments (hereinafter “instant apartment”) being implemented in Ulsan-gu, Ulsan-gu, Seoul-gu, with the approval of the housing construction project plan from Ulsan Metropolitan City (hereinafter “instant project”).

B. In order for the Plaintiff to install water supply facilities in the instant apartment, the Defendant calculated the construction cost of the instant apartment, which is a multi-family housing with at least 401 households, pursuant to the public notice of the change in the cost of supplying the fixed water according to the delegation of the Ulsan Metropolitan City Ordinance on Water Supply (hereinafter “instant Ordinance”) and Article 12(3) of the instant Ordinance (Public notice of the change in the cost of supplying the water supply facilities of the instant apartment, which is a multi-family housing with at least 401 households, pursuant to June 7, 2012, the Ulsan Metropolitan City Ordinance on Water Supply (hereinafter “instant Ordinance”).

○ Water supply construction cost of KRW 398,370,000 (=210,000 per household x 1,897 households; hereinafter “instant water supply construction cost”).

○ Facility Contributions 481,838,000 won (=254,000 won per household 】 1,897 households; hereinafter “instant Facility Contributions”).

○ Fees 68,900 won

○ Total 80,276,900

C. In approving the Plaintiff’s above application on August 11, 2015, the Defendant imposed KRW 880,276,90 in total, and fees for water supply construction costs, facility contributions, and fees calculated as above on the Plaintiff (hereinafter “instant disposition”), and the Plaintiff paid them.

[Reasons for Recognition] Unsatisfy, Gap evidence 1, Eul evidence 1, Eul evidence 6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Claim as to the water supply cost portion of the instant disposition

The public notice of this case is unlawful in violation of the purpose of delegation of the ordinance of this case and the principle of proportionality, the principle of equality under the Constitution, and the principle of cost-bearing, etc. As such, among the dispositions of this case, the part of the public notice of this case imposing a defendant's tax amount of KRW 398,370,000 much much than the actual cost incurred in water supply works is also unlawful.

2) Claim on the part of the facility contributions in the instant disposition

① The instant project is a project to remove old houses in the instant project site where the water supply facilities are already installed and newly build an apartment house. In light of the fact that approximately 519 households were living in the instant project site and used water supply facilities, ② Article 15(4) of the instant Ordinance provides for the deduction of facility contributions in cases of constructing an apartment house or an officetel at the place where the water supply facilities are already installed; ③ Article 9 of the Enforcement Rule of the Ordinance on the Collection of Charges for Water Supply of Ulsan Metropolitan City, Ulsan Metropolitan City, which is provided for the purpose similar to the instant Ordinance provides for the reduction of facility contributions, including facility contributions; ④ Other local governments, such as Seoul Special Metropolitan City, Gwangju Metropolitan City, and Gwangju Metropolitan City, apply for the improvement project or new water supply construction project, such as the amount of facility contributions paid by the existing household to the existing household located in the instant project site, and thus, it is unlawful to levy double contributions to the existing household from the existing household to the existing household to the existing household from the existing household to the existing household to the 1005 won contributions (i.e., 20010 won contributions to the existing household to the previous household.

(b) Related statutes;

It is as shown in the attached Form.

C. Facts of recognition

1) There were 435 buildings (429 buildings, 6 aggregate buildings) within the instant project site before the instant project was implemented, and approximately 519 households were residing therein.

2) As the existing buildings were demolished due to the instant project, all existing water supply facilities were removed, and new water supply facilities were installed.

3) The actual cost of water supply construction cost related to the apartment of this case is KRW 5,307,460 in the contract amount for construction work, KRW 26,56,170 in the government-funded materials, and KRW 31,873,630 in total.

[Reasons for Recognition] Unsatisfy, Gap evidence 5, 6, Eul evidence 7 and the purport of the whole pleadings

D. Determination

1) Determination on the water supply cost portion of the instant disposition

Article 12 of the Ordinance of this case provides that the expenses incurred in supplying water shall be the total expenses of material cost, construction cost, road excavation cost, design fee, work executor's re-inspection fee, completion inspection fee, water control and inspection, etc. The expenses incurred in addition to the above water supply construction cost shall be added to the actual expenses. The expenses incurred in supplying water shall be the fixed amount, and the amount shall be determined to the purport that it shall be determined separately by the Mayor. According to the delegation of the Ordinance of this case, the Ulsan Metropolitan City Mayor set the fixed amount supply construction cost (hereinafter "fixed amount construction cost") at 210,00 won per household in the case of multi-family housing with at least 401 households.

However, the fixed construction cost system is adopted to solve various problems caused by calculating and imposing the actual cost of the construction project due to the water supply construction cost and to enhance the efficiency of administration. However, according to this, it is inevitable to bear the construction cost in the amount different from the actual cost of the construction project, so it is unreasonable in violation of the general principle of cost sharing, so if possible, it should be ensured that the calculated elements stipulated in the related Acts and subordinate statutes are accurately reflected in the calculation cost.

Therefore, the Ulsan Metropolitan City Mayor, who has been granted the authority to determine the amount of the fixed construction cost under the instant ordinances, shall be obligated to determine it in accordance with the purport of the fixed construction cost system as above. In other words, the following circumstances recognized by the overall purport of the aforementioned facts and arguments, namely, the instant ordinances stipulate that ① in calculating the fixed construction cost, the expenses for material, construction cost, road excavation and restoration, design fees, work executor’s re-inspection fees, completion inspection fees, waterproof and inspection, “other expenses” shall be added to actual expenses; ② The expenses actually incurred in water supply works executed by the Defendant are limited to 31,873,630 won even when the sum of the construction contract amount, and the government-funded materials cost. On the other hand, the instant public announcement by the Ulsan Metropolitan City Mayor is clearly unlawful in light of the purport of delegation and proportionality of the instant ordinances.

Therefore, the part of the water supply cost of the disposition of this case based on the public notice of this case is also illegal and thus should be revoked.

2) Determination on the part of the facility contributions in the instant disposition

The municipal ordinances, etc. that grant benefits to residents are recognized as a broad range of legislative formation, rather than where the rights of residents are restricted or new obligations are imposed (see Supreme Court Decision 2007Du42, Jun. 12, 2008). Meanwhile, in cases where the text and logical interpretation of the ordinances, etc. are interpreted as not included in the subject to which benefits are granted, even if the benefits are somewhat unreasonable compared to the subject to the subject to which benefits are granted, the same benefits cannot be demanded unless additional legislative measures are taken (see Supreme Court Decision 2009Du1839, Jun. 23, 2009).

With respect to this case, Article 15 (4) of the Ordinance of this case provides that "the facility contributions in cases where a multi-family housing or an officetel is constructed in a place where water supply facilities have already been installed shall be calculated for each subparagraph, and the difference shall be paid if the facility contributions in the existing water supply facilities have been incurred." However, this provision applies to cases where the existing water supply facilities have been demolished, such as the Ordinance of this case, etc. at the time of the disposition of this case, when the existing water supply facilities have been demolished, there was no provision on the reduction of the facility contributions for the existing generation, and the fact that the existing water supply facilities have been installed due to the project of this case that all existing water supply facilities have been removed and the new water supply facilities have been installed cannot be claimed for the reduction of the existing water supply facilities out of the facility contributions in this case, unless additional legislative measures have been taken. On the other hand, since all the existing water supply facilities have been removed and new water supply facilities have been installed, the charges for the new water supply facilities are not the same as the charges for the previous water supply facilities in this case.

3. Conclusion

Therefore, the plaintiff's claim is justified within the above scope of recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Park Jae-jin (Presiding Judge)