The meaning of “a person who sells a building without filing a sale report” under Article 10(1) of the former Act, and whether a violation of Articles 10(1) and 5(1) of the same Act is established in cases where a person fails to file a sale report in order to avoid the regulatory procedure, such as a sale report and acceptance, because he/she fails to meet the lawful requirements for a sale report (affirmative in principle)

In light of the contents and purport of Article 2 subparag. 2, Article 5(1) and (3), and Article 10(1) of the former Act on Sale of Building Units (amended by Act No. 10462, Mar. 9, 201), “person who has sold a building without filing a sale report” under Article 10(1) of the said Act refers to a person who has entered into a sales contract with the buyer prior to approval for use of a specific building subject to the application of the said Act, i.e., a person who has entered into a sales contract, without filing a lawful sale report, and even if he/she fails to report the sale of a building in order to avoid the regulatory procedure on the sale report and acceptance of the sale report, barring special circumstances.

Articles 2 subparag. 2, 5(1) and (3), and 10(1) of the former Act on Sale of Building Units (Amended by Act No. 10462, Mar. 9, 201);

Defendant

Defendant

Attorney Go-joon et al.

Seoul Central District Court Decision 2011No2042 Decided September 2, 2011

The appeal is dismissed.

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

Article 5(1) of the former Act on Sale of Building Units (amended by Act No. 10462, Mar. 9, 201; hereinafter “former Act on Sale of Building Units”) provides that, as one of the regulatory procedures to protect buyers from damage caused by the sale of a building in an unsatisfyed state, a system of sale report shall be prepared, and where a seller of a building in units intends to sell a building in a certain size or use before obtaining approval for use under the Building Act, he/she shall report the sale to the construction authority (Article 5(1)). In such cases, a permitting authority shall review the details of the sale report and, if appropriate, accept the sale report (Article 5(3)). Meanwhile, a person who sells a building without filing the sale report or after filing the sale report by fraud or other improper means, shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 300 million won (Article 10(1)2). Meanwhile, “sale” in the foregoing Act refers to sale to at least two persons who constructed a building.

In light of the contents and purport of the above provision on the system for reporting sale in lots, the term "person who sells a building without reporting sale in lots" under Article 10 (1) of the former Act refers to a person who has entered into a sales contract with the buyer prior to approval for use of a specific building subject to the above Act without reporting sale in lots, i.e., a person who has entered into a sales contract, and even though he/she is entitled to make a lawful report on sale in lots, as well as a case where he/she fails to report sale in lots because he/she fails to meet the legitimate requirements for reporting sale in lots, barring special circumstances.

In light of the circumstances stated in its holding, the court below found the defendant as the representative director of the non-indicted corporation, who is the seller of the building of this case, only reported the sale of the first and second floor commercial buildings and restaurants (total floor area of 6,828.53 square meters) among the building of this case. Upon the receipt of the sale report, the court below found that each sales contract was concluded with the buyer prior to the approval for use of the building of this case with the content of the first and second floor and the third and fourth floor parking lots not included in the contents of the sale report. The court below found the defendant's act of selling the parking lot part of this case constitutes "the act of selling the building without filing a sale report" as stipulated in Articles 10 (1) and 5 (1) of the former Act and found guilty of the facts charged of this case.

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and evidence duly admitted, the lower court’s fact-finding and determination is justifiable. Moreover, the lower court did not err by misapprehending the legal doctrine on the former Act on Sale of Buildings by notifying the Defendant that the relevant public official could sell the parking lot part without filing a sale report, but merely by stating that “it is impossible to accept a sale report, even if the sale of the parking lot part is likely to violate relevant statutes,” it does not affect the establishment of the instant crime. It did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by failing to exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal.

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Shin (Presiding Justice)