Whether “a person who has contributed to the development of a school” and “a person who has contributed to the development of a school” as to the disposition of appointing regular directors by the competent authorities under Article 25-3 of the former Private School Act (affirmative) and the meaning of “a person who has contributed to the development of a school” and “a person who has contributed to the development of

Article 25-3 of the former Private School Act (amended by Act No. 8545 of Jul. 27, 2007) appears to include the purpose of protecting individual and specific interests of the persons who contributed to the appointment of regular directors and the persons who contributed to the development of the school (hereinafter “persons who contributed to the appointment of regular directors”). It is reasonable to view that considerable property contributors, etc. have legal interests protected by the competent authorities as to the disposition appointing regular directors. Furthermore, given that considerable property contributors, etc. should be able to represent the independence and purpose of establishment of school juristic persons, in light of the provisions of the private school Acts and subordinate statutes, the persons who contributed to the development of the school shall be deemed the contributors of property equivalent to or more than 1/3 of the basic property amount of the school juristic person in light of the provisions of the private school Acts and subordinate statutes, and other persons who contributed to the development of the school through the contribution or increase of property shall be construed as those who contributed to the formation or operation of basic property amounting to or more than 10% of the basic property for profit of the school juristic person.

Articles 25-3 and 10-2 of the former Private School Act (Amended by Act No. 8545, Jul. 27, 2007); Articles 1, 10, 24-3 (3), 25-3, and 26 (2) of the Private School Act; Articles 9-6 (3) and 4-2 of the former Enforcement Decree of the Private School Act (Amended by Presidential Decree No. 23928, Jul. 4, 2012); Article 12 of the Administrative Litigation Act

Plaintiff 1 and one other (Law Firm Barun, Attorneys Kim Yong-pung et al., Counsel for the plaintiff-appellant)

The Minister of Education, Science and Technology (Attorney Nam-soo)

Hanyang Institute of Education (Attorneys White Chang-hun et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2011Nu11756 decided November 30, 201

The part of the judgment of the court below against Plaintiff 2 is reversed, and that part of the case is remanded to the Seoul High Court. The appeal by Plaintiff 1 is dismissed. The costs of appeal by Plaintiff 1 are assessed against Law Firm Barun, including the part resulting from the participation in the appeal.

1. The plaintiff 1's appeal is examined ex officio as to the legitimacy of the appeal.

According to the reasoning of the judgment below and the records, Plaintiff 1 filed the instant lawsuit seeking revocation of the appointment of directors against the Intervenor on March 10, 2010, by asserting that Plaintiff 1 was the founder of the Intervenor joining the Defendant (hereinafter “ Intervenor”) and was duly appointed before a provisional director was appointed, and was in the position to represent the independence and identity of the educational foundation as the last regular director retired (hereinafter “previous director”), and that he was in the position to represent the independence and identity of the educational foundation. Plaintiff 1 died on April 8, 2011, while the lawsuit in the lower court is pending, the lower court declared the termination of the instant lawsuit between Plaintiff 1 and the Defendant on November 30, 201, and Plaintiff 1’s legal representative (LLC) submitted a written appeal with respect to the said judgment in the name of Plaintiff 1 on December 13, 2011.

However, given that the status of the founder and the former director of a school juristic person seeking the cancellation of the disposition of appointment of directors as a school juristic person is not subject to inheritance due to their nature, the instant lawsuit between Plaintiff 1 and the Defendant was terminated at the same time as Plaintiff 1’s death, and the right of attorney of Plaintiff 1, limited liability law firm, also extinguished at the same time.

Therefore, Plaintiff 1’s appeal filed by a law firm Barun after the extinguishment of its power of attorney is unlawful as it is filed by a person who is not entitled to represent the said Plaintiff.

2. The grounds of appeal by Plaintiff 2 are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

A. Even if a third party is not the direct counter-party to an administrative disposition, if the interests protected by law are infringed by such administrative disposition, the party is entitled to receive the decision of propriety by filing a revocation suit.

The legal interest here refers to a case where there are individual, direct, and specific interests protected by the relevant laws and regulations and relevant laws and regulations, and the case where only a person has a factual and economic interest, such as a general, indirect, and abstract interest commonly held by the general public as a result of the protection of public interest, does not include this.

In addition, the legal interest protected by the relevant disposition-based laws and regulations and the relevant laws and regulations is not protected by the prestigious provisions of the relevant disposition-based laws and regulations, but it is interpreted that the legal interest explicitly protected by the relevant disposition-based laws and regulations to achieve the administrative purpose of the pertinent disposition, and the legal interest that is protected by the relevant disposition-based laws and regulations does not explicitly protect the pertinent interest, and that the grounds for restricting the administrative agency under the relevant laws and regulations include the purpose of protecting the individual, direct, and specific interest that is not the pure public interest protection (see Supreme Court Decision 2003Du2175 delivered on August 16, 2004, etc.).

B. Article 25 of the Private School Act provides that where a school juristic person fails to fill the vacancy of directors and satisfies the statutory requirements such as when the normal operation of the school juristic person is deemed difficult, the competent authorities may appoint temporary directors, and further, the duties of such temporary directors, the duration of their terms of office, and restrictions on the appointment of regular directors.

With respect to the normalization procedure of school juristic persons for which provisional directors are appointed, the Private School Act (hereinafter “former Private School Act”) before it was amended by Act No. 7802 on December 29, 2005 and enforced on July 1, 2006, did not have any provision. However, if the former Private School Act (hereinafter “former Private School Act”) which was amended by Act No. 8545 on July 27, 2007 newly established Article 25-3 and recognized that the cause for the appointment of provisional directors ceases to exist, it shall, without delay, dismiss temporary directors and appoint directors, but the appointment of directors accordingly shall be made by the competent authorities after hearing the opinions of those who contributed to the development of the school or those who contributed to the development of the school, and at least 1/3 of those directors (hereinafter “regular directors”) shall be recommended by the school steering committee or the university deliberative committee.

Article 25-3 of the former Enforcement Decree of the Private School Act (amended by Act No. 8545, Jul. 27, 2007; hereinafter “Private School Act”) (amended by Presidential Decree No. 8545; hereinafter “the Private School Act”) re-established Article 25-3 of the former Enforcement Decree of the Private School Act (amended by Presidential Decree No. 23928, Jul. 4, 2012; hereinafter “the Private School Act”) provides for a school foundation in which temporary directors have been appointed to report the outcomes of its implementation at least once a year to the Private School Dispute Mediation Committee (hereinafter “Mediation Committee”); the Mediation Committee shall evaluate the outcomes of its implementation and notify the competent agency of matters as to whether temporary directors are dismissed or not; the competent agency shall immediately dismiss temporary directors and appoint regular directors after deliberation by the Mediation Committee; and Article 24-3(3) of the former Enforcement Decree of the Private School Act provides for the scope of the school foundation’s contributions to the development of the school foundation and its related persons, and the scope of its contributions may be determined by 1/3/3).

Article 1 of the Private School Act provides that the purpose of promoting the sound development of private schools by securing the independence and promoting the public nature of private schools shall be determined by prescribing that the purpose of promoting the sound development of private schools is to ensure the specificity, autonomy, and public nature of private schools. To establish school juristic persons, certain property must be contributed (Article 10 of the Private School Act). Since school juristic persons directly use their contributed property for education or make use of profit-making business to secure financial resources necessary for the operation of school juristic persons, property contributions are key factors in the establishment and operation of school juristic persons. In light of such importance of property contributions and contribution to school juristic persons, Article 10-2 of the former Private School Act and Article 4-2 of the Enforcement Decree of the former Private School Act, by reflecting the importance of property contributions and contribution to the school juristic persons who contribute property equivalent to at least 10% of the basic property for profit-making after the establishment of school juristic persons, provide for matters concerning contribution to the relevant school juristic persons within the scope of their basic property or contribution to the relevant school juristic persons whose livelihood is difficult.

A school juristic person is a kind of incorporated foundation established for the purpose of establishing and operating a private school, and must respect the intent of the founder at the time of its establishment at the time of its operation, i.e., the purpose of its establishment. Since such school juristic person’s establishment is realized by the articles of incorporation as well as by the directors who form the decision-making body and the decision-making body, it can be said that the founder first directors, the latter directors, and the latter directors are appointed in order in the manner of appointing their own successor directors, thereby enabling the latter directors to realize the purpose of its establishment in a timely manner (Supreme Court en banc Decision 2006Da19054 Decided May 17, 2007).

In full view of the status and role of a founder or a property contributor of a school foundation as well as the intent to contribute and honor thereof, and the various provisions of the private school laws and regulations established to realize the purpose of the establishment thereof, regulating that the former Private School Act requires dismissal of provisional directors and establishment of Article 25-3, which provides for normal school practices in which regular directors are appointed, as seen earlier, to contribute considerable property or to the development of the school, or to hear opinions of the contributors to the development of the school. This is because, as seen earlier, considering the substantial portion of the founders or property contributors, etc. in the operation of the relevant school foundation in light of the autonomy of the relevant private school foundation, it appears that the founder or the property contributor has a direct interest in the matter of appointing regular directors appropriate for the normalization of the school foundation and the implementation of the purpose of establishment of the school foundation. Accordingly, Article 25-3 of the former Private School Act appears to include the purpose of protecting individual and specific interests of the persons who contributed to the appointment of regular directors of the school foundation (hereinafter referred to as “reasonable property contributorss”) and persons who contributed property equivalent to more than 1/3 percent of the basic property should be determined as the school foundation.

C. Review of the reasoning of the lower judgment, the reasoning of the first instance judgment as cited by the lower court, and the record reveals the following facts.

On May 3, 1947, Plaintiff 2, along with Plaintiff 1, established the Seoul Women’s Research Institute and was appointed as a director. The foundation changed its organization into a school juristic person and became an intervenor following the change of its name. Meanwhile, the name of the Seoul Women’s Research Institute was changed to that of the Sejong University around October 1978.

On October 18, 2004 through November 3, 2004, the Defendant conducted a comprehensive audit on the Intervenor, and made a comprehensive audit and inspection on February 11, 2005, including a request for disciplinary action against an officer and employee, an order for preservation of property, a correction of seven parts, and an order for implementation of improvement of six parts (hereinafter “audit and inspection disposition”).

As of May 14, 2005, 7 of the Intervenor’s nine directors at the time of the audit and inspection disposition, the Defendant appointed seven temporary directors on May 20, 2005 on the ground that the Defendant failed to fully implement matters pointed out in the audit and inspection disposition on May 20, 2005, and had two directors and the Intervenor organize the board of directors. On July 20, 2007, the term of office of the first temporary directors expired, appointed seven temporary directors on July 20, 2007, and the second temporary directors appointed seven temporary directors on June 11, 2009.

On the other hand, the defendant, on April 12, 2006, ordered the intervenor to submit a normalization plan to convert it into a system of regular directors in 2006 until June 30, 2006, and the plaintiffs expressed their opinion on July 3, 2006 that the non-party to the former president should be thoroughly excluded during the normalization process. The intervenor, upon gathering the opinions of the members of the school on July 7, 2006 and November 2006, submitted to the defendant.

On January 14, 2008, the board of directors of the Intervenor submitted this case’s normalization plan to the Defendant on April 28, 2008, after gathering opinions from the Plaintiffs, the Nonparty, and the president of Sejong University. On May 15, 2008, the Defendant requested the Mediation Committee to deliberate on the Intervenor’s normalization plan. The Mediation Committee, which was held on June 5, 2008, attended the 11st Coordination Committee and the 2nd sub-committee, including the 2nd sub-committee, held on October 15, 2008, attended the meeting of the 2nd sub-committee, including the 2nd sub-committee, which was held on October 15, 2008. However, eight persons, including Plaintiff 2, the president of Sejong University, etc. opposed to the Nonparty’s return, which was the cause of the audit disposition, and any person, who was not a student-oriented director, can promptly receive the opinion of the selection and appointment-oriented director, focusing on the instant normalization promotion committee.

On December 10, 2009, the mediation committee set the distribution ratio of regular directors at the 47th mediation committee, and on February 22, 2010, decided to appoint seven regular directors at the 49th mediation committee, and the defendant appointed seven regular directors at the 49th mediation committee on March 10, 2010 (hereinafter “instant regular directors”).

D. According to the above facts, Plaintiff 2 participated in the Intervenor’s incorporation and participated in its operation as a director. In particular, after the cause for a temporary director appointment was terminated on April 12, 2006, the Intervenor’s normalization plan was actively expressed, and on April 28, 2008, the Plaintiff 2 participated in the preparation process of the instant normalization plan submitted to the Defendant and the deliberation process of the Mediation Committee thereon, and expressed its opinions as interested parties.

As seen earlier, according to the former Private School Act, a considerable property contributor constitutes an interested party with respect to the appointment of a regular director at the time of cancelling the reason for appointment of a provisional director. Since the former Private School Act applies to intervenors who were in the state of promoting the normalization at the time of the enforcement of the former Private School Act, if Plaintiff 2 satisfies the requirements of considerable property contributor, it shall be deemed that the Intervenor has a legal interest in the appointment of a regular director for the Intervenor. Furthermore, even if the appointment of a regular director was delayed due to the delay in the normalization procedure for the Intervenor’s appointment, and the appointment of a new director was made on March 10, 2010 after the amendment of the former Private School Act on March 27, 2007, if the above provision had already been amended pursuant to the provisions of the former Private School Act, and there is considerable interest in the Intervenor’s appointment of a new director as an interested party pursuant to the provisions of the former Private School Act, it shall be deemed that the above provision was amended and its interest would be extinguished as a matter of course by considering the content of the Plaintiff’s’s property contributor’s opinion.

E. However, the lower court, contrary to this, determined otherwise, that the instant lawsuit instituted by Plaintiff 2 was unlawful, on the ground that, even though Plaintiff 2 was the founder who established an intervenor by contributing property with the Plaintiff 1, who is the husband, was not a previous director, and did not have any legal interest protected by the law regarding the appointment of the intervenor’

Therefore, without examining whether Plaintiff 2’s founder falls under the requirements of substantial property contributors, etc., the instant lawsuit filed by Plaintiff 2 was unlawful solely on the ground that Plaintiff 2 was not a previous director of the Intervenor. Of the judgment below, the part of the judgment below against Plaintiff 2 is erroneous in the misapprehension of the legal principles as to the interest in the appointment of regular directors by considerable property contributors, etc., and failing to exhaust all necessary deliberations, which affected the conclusion of the judgment. The allegation in the grounds of appeal

3. Therefore, the part of the judgment of the court below against Plaintiff 2 is reversed, and that part of the case is remanded to the Seoul High Court. The appeal by Plaintiff 1 is dismissed, and the cost of appeal by Plaintiff 1 is assessed against the law firm (with limited liability) which filed the appeal by applying Article 8(2) of the Administrative Litigation Act, Articles 108 and 107(2) of the Civil Procedure Act, including the cost of participation in the appeal. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)