2019Da277133 School Facilities Project Expenses

Korea Land and Housing Corporation

Law Firm LLC et al., Counsel for the defendant-appellant

[Defendant-Appellant] Plaintiff 1 and 1 other

Seoul Metropolitan Government

Law Firm Chang-chul, Counsel for the defendant-appellant

[Defendant, Appellant] Park & Lee 1 other

Seoul High Court Decision 2018Na2063250 Decided September 19, 2019

February 4, 2021

The judgment of the court of first instance is reversed, and the judgment is revoked. The case is transferred to the Seoul Administrative Court.

The grounds of appeal are examined.

1. Case history

According to the reasoning of the lower judgment and the record, the following circumstances are revealed.

A. The Plaintiff was designated by the Minister of Land, Infrastructure and Transport on the basis of the former Special Act on the Construction, etc. of Bogeumjari Housing (amended by Act No. 12251, Jan. 14, 2014; hereinafter referred to as the “former Bogeumjari Housing Act”) and carried out a project for the development of the Seoul Gangnam-gu and Seocho-gu Bogeumjari Housing District (hereinafter referred to as the “instant project”). B while carrying out the instant project, the Plaintiff entered into the instant agreement with the superintendent of education delegated by the Seoul Special Metropolitan City Office of Education on April 2013 (hereinafter referred to as the “the instant agreement with the superintendent of education”) under Article 4-2 of the former Act on Special Cases concerning the Construction, etc. of School Sites (amended by Act No. 14604, Mar. 21, 2017; hereinafter referred to as the “former School Sites Act”). On the premise that the Plaintiff and the Superintendent of the Seoul Special Metropolitan City Office of Education delegated the installation of the instant project.

(1) The expenses for school facilities projects and internal expenses shall be fully borne by the Superintendent of an Office of Education. However, in the event of the development gains from a green area axis, the Plaintiff shall use the development gains as school facilities project expenses and bear the difference (Article 4 subparag. 2).

(2) In entering into this Agreement, capital costs (interest on construction costs) that are mutually different issues shall be separately consulted between the superintendent of education and the plaintiff (Article 11(2)).

(3) If there is a disagreement between the superintendent of education and the Plaintiff on the interpretation of the matters and the interpretation not provided for in the Convention, such consultation shall be decided or the relevant Acts and subordinate statutes and ordinances, such as the School Facilities Projects Promotion Act, etc. (Article

C. Accordingly, the Plaintiff established (name 1 omitted), (name 2 omitted), and (name 3 omitted) in the instant project district and transferred it to the Superintendent of the Seoul Special Metropolitan City Office of Education until December 2013. By April 2014, the Seoul Special Metropolitan City superintendent of education paid to the Plaintiff KRW 50.8 billion in total, excluding capital costs (construction interest), for school facilities companies and internal expenses.

D. The Plaintiff requested the Seoul Special Metropolitan City superintendent of education to pay the capital cost under Article 11(2) of the Convention, but the Superintendent of the Seoul Special Metropolitan City Office of Education refused to pay it. On January 11, 2016, the Plaintiff filed the instant lawsuit with the Seoul Central District Court seeking payment of approximately KRW 2.7 billion of the capital cost under Article 11(2) of the Convention against the Defendant who is a local government belonging to the Seoul Special Metropolitan City superintendent

2. The judgment of the court below

The lower court determined as follows.

A. In full view of the circumstances before and after the conclusion of the instant agreement, the content of Articles 11(2) and 12 of the instant agreement, etc., it is reasonable to deem that separate consultation on capital cost as stipulated in Article 11(2) of the instant agreement was attempted, but if no agreement is reached, it was agreed to have the person liable for the burden under the interpretation of the relevant Acts and subordinate statutes.

B. The instant project implemented based on the former Bogeumjari Housing Act is not a project subject to the application of the former School Sites Act because it does not fall under a development project under Article 2 subparagraph 2 of the former School Sites Act. Thus, the Plaintiff is not obligated to install school facilities under Article 4-2 of the former School Sites Act in relation to the instant project. Nevertheless, as the instant agreement was concluded on the premise that Article 4-2 of the former School Sites Act is applied to the instant project, the determination of the person liable to bear capital costs under Article 11(2) of the former Convention should be made in accordance with the interpretation of Article 4-2 of the former School Sites Act.

C. Comprehensively taking account of the regulatory structure, details, etc. under each item of Article 4-2 of the former School Sites Act, the development project implementers and the Superintendent of an Office of Education share the installation costs of school facilities only in cases where development gains have occurred through urban park and green area reduction, and where development gains have not occurred through urban park and green area reduction, it is reasonable to interpret that the Superintendent of an Office of Education bears the total amount of installation costs of school facilities.

D. The project in this case is a case where development gains through urban park and green area reduction have not occurred. Therefore, the costs of establishing new elementary and middle school in the project district in this case shall be borne by the superintendent of the Seoul Special Metropolitan City Office of Education.

E. If the Plaintiff is not a person responsible for installing school facilities or a person responsible for installing school facilities in accordance with the instant agreement, the Defendant is obligated to pay the amount equivalent to the statutory interest on the costs borne by the Plaintiff in accordance with the delegated person’s obligation to reimburse the costs, and such statutory interest equivalent is deemed to be included in the installation cost of school in a broad sense.

3. Judgment of the Supreme Court

We cannot accept the judgment of the court below for the following reasons.

A. According to Articles 11(2) and 12 of the instant Convention, the interpretation of the instant agreement shall first be discussed about the time when the Plaintiff first disbursed the installation cost of school facilities, the completion of construction and delivery of school facilities, and whether the Superintendent of the Seoul Special Metropolitan City Office of Education bears the capital cost according to the time gap between the time when the Plaintiff pays the settlement amount to the Plaintiff. However, if the agreement is not concluded, it shall be deemed that the agreement was made according to the interpretation of the relevant Acts and subordinate statutes,

B. The meaning of Article 4-2 of the former School Sites Act

(1) According to Article 4-2 of the former School Sites Act, where the implementer of a development project under each item of Article 4 (3) 1 supplies school sites free of charge in the Seoul Metropolitan area under Article 2 (1) of the Seoul Metropolitan Area Readjustment Planning Act, he/she shall install school facilities including small parks and landscaped green areas and supply them free of charge to City/Do offices of education as public property belonging to the special accounts of City/Do educational expenses (paragraph (1)). A development project operator who installs school facilities pursuant to paragraph (1) shall consult with the superintendent of education about the number and scale of schools, small parks and landscaped green areas to be installed in school sites, time and expenses for opening schools, etc., and a development project operator who installs school facilities pursuant to paragraph (1) may, notwithstanding Article 14 (2) of the Act on the Construction Costs and Green Areas, secure the area of school facilities or green areas less a maximum of 1/100 of the development project area from the basic areas under the same paragraph (3) (paragraph (3)) of the same Article).

(2) Article 4-2 of the former School Sites Act (amended by Act No. 9743 of May 5, 2009) is newly established in order to strengthen the responsibilities of the public development project implementer by increasing the demand for school establishment due to various development projects, but in some areas, it is difficult to establish a school due to the lack of financial resources, or by improving the problems such as the sale of housing in the absence of a school, and by providing the same public development project implementer as the Plaintiff with school facilities as well as school facilities free of charge. Accordingly, Article 4-2 of the former School Sites Act should be understood from the perspective of "the free supply system of school facilities by the public development project implementer" in light of such legislative intent.

(3) In other words, Article 4-2 (3) and (4) of the former School Sites Act shall apply to a public development project implementer pursuant to paragraph (1).

The purpose of the legislation is to compensate for some of the costs incurred by the public development project implementer caused by the free supply of school facilities within the reasonable scope, and to compensate for the installation costs of school facilities only within the extent that the cost is compensated for, by allowing the public development project implementer to less create urban parks or green areas than the standard areas prescribed by the relevant laws and regulations in the relevant development area and appropriating the development gains generated by the creation and sale of the relevant land in housing sites or commercial areas, etc.

It can not be seen as being the case.

(4) However, according to Article 4-2(2) and (5) of the former School Sites Act, it is reasonable to determine the difference between the public development project implementer and the superintendent of education on the basis of the principle of free provision of school facilities by the public development project implementer and the superintendent of education on the basis of the principle of free provision of school facilities as stipulated in paragraph (1), and to determine the method or rate of sharing the difference between the public development project implementer and the superintendent of education on the site of school facilities under Article 4-2(2) and (5) of the former School Sites Act, by taking into account all the circumstances such as the installation of small parks and landscaped green areas in the site of school facilities and the details and degree of the increased expenses at the request of the superintendent of education on the site of school facilities under Article 4-2(1) of the former School Sites Act, and the public development project implementer may claim reimbursement to the superintendent of education only to the amount exceeding his portion of the actual expenses.

C. Determination on the instant case

(1) The Seoul Special Metropolitan City Superintendent's Office of Education bears the total amount of the general expenses (facility project cost and internal expenses) incurred in the establishment of the elementary and middle school newly established within the instant project district through the instant agreement. However, according to the time gap between the time when the Plaintiff first disbursed the installation cost of school facilities and the time when the Superintendent of an Office of Education pays the settlement money to the Plaintiff

Therefore, in accordance with Article 12 of the present Convention, there was no agreement on the share of the capital cost incurred to the extent of the total amount. Therefore, according to the legitimate interpretation of Article 4-2 of the former School Sites Act in accordance with Article 12

The fact that the person liable to bear the cost should be determined is as mentioned above.

(2) According to the reasonable interpretation of Article 4-2 of the former School Sites Act, if the public development project implementer and the superintendent of education did not reach an agreement on the apportionment of school facilities installation costs, the court has to determine the method or rate of sharing the difference between the public development project implementer and the superintendent of education by taking into account all the aforementioned circumstances.

(3) However, the result of the above interpretation of the relevant laws and regulations is as follows: (a) the Superintendent of the Seoul Special Metropolitan City Office of Education has already paid approximately KRW 50.8 billion to the Plaintiff for expenses incurred in installing the remaining school facilities excluding capital costs; (b) the capital cost of this case claimed by the Plaintiff is merely about KRW 2.7 billion, which is merely about KRW 5 billion; and (c) even if capital costs are excluded, the Superintendent of the Seoul Special Metropolitan City Office of Education can be deemed to have borne almost most of the expenses incurred in installing the school; and (d) if the Superintendent of the Seoul Special Metropolitan City Office of Education bears the expenses incurred in installing the school, the Plaintiff would not bear all the expenses incurred in installing the school; and (e) it is not reasonable to have the Plaintiff bear the capital cost incurred in installing the school facilities, and to have it borne to the Superintendent of the Seoul Special Metropolitan City Office of Education.

(4) Nevertheless, the lower court determined that, in the case of the instant project, since the development gains through the reduction of urban parks and green areas did not occur at all, it is reasonable to fully bear the expenses incurred in establishing elementary and middle schools in the instant project district, and that the Superintendent of an Office of Education shall bear the capital expenses prescribed in Article 11(2) of the instant Convention, because such capital expenses are included in the expenses incurred in installing school facilities. In so determining, the lower court erred by misapprehending the legal doctrine on the free supply system of school facilities under Article 4-2 of the former School Sites Act, thereby

D. Determination as to the legal nature of the instant agreement and the method of litigation

(1) The term “party lawsuit” means a lawsuit concerning a legal relationship based on a disposition, etc. by an administrative agency, and other legal relations under public law, and refers to a lawsuit involving a party to such legal relationship, which is the defendant (Article 3 subparag. 2 of the Administrative Litigation Act). Contracts under public law refer to a public law act which is constituted with the agreement between equal parties for the purpose of causing the effect of public law. Lawsuits where either party to a contract under public law dispute against the other party or claims the performance thereof are disputes concerning legal relations under public law, barring special circumstances, such as where the substance of a dispute is not a dispute over the existence or scope of rights and obligations under public law, but limited to the specific calculation method and amount of the amount of the amount of damages (see, e.g., Supreme Court Decisions 2015Da21526, Nov. 9, 2017; 2017Ma637, Apr. 10, 2019).

(2) The instant agreement constitutes a contract under public law since the Plaintiff, an official corporation, entered into an agreement with the competent superintendent of education on the specific implementation method, timing, cost sharing, etc. in relation to the performance of the obligation to provide free school facilities under Article 4-2 of the former School Sites Act in the course of performing public administrative activities called the implementation of a project for the development of the Bogeumjari Housing District. Accordingly, disputes over the existence and scope of contractual obligations should be deemed as the subject of litigation under public law.

(3) In a case where the Plaintiff, without intention or gross negligence, files a civil suit against a case that ought to be filed as an administrative litigation, the court of the lawsuit, if having jurisdiction over the administrative litigation at the same time, shall deliberate and determine it as an administrative litigation, and shall transfer it to the competent court if not having jurisdiction over the administrative litigation (see, e.g., Supreme Court Decision 2015Da15526, Nov. 9, 2017).

(4) Nevertheless, the first instance court and the lower court did not take measures to transfer the instant claim to the competent court, and did so to determine the merits of the instant claim. In so determining, the first instance court and the lower court erred by misapprehending the legal doctrine on the legal nature of the instant agreement and the method of litigation.

4. Conclusion

Therefore, the judgment of the court of first instance is reversed ex officio, and the case is transferred to the competent court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

2. Judgment of the presiding judge

Justices Lee Dong-won

Justices Kim Gin-soo

A person shall be appointed.