[1] Whether the provisions of the former Housing Act and its Enforcement Decree concerning the qualification of a member of a regional housing association can be excluded from the application by the parties’ intent (negative)

[2] The legal nature and the method of interpreting the bylaws of the regional housing association

[3] The method of interpreting a juristic act in a case where the objective meaning is not clearly revealed by the parties’ language and text

[4] In a case where Eul, a member of the regional housing association Eul, lost the eligibility as a householder under the former Housing Act and the Enforcement Decree of the former Housing Act, and sought confirmation of non-existence of membership status against Gap association, the case holding that the judgment below which held that Eul did not lose the status as a member of the association as long as Eul did not terminate the membership agreement, in full view of the provisions of Article 32(7) of the former Housing Act, Article 38(1)1 and (2) of the former Enforcement Decree of the Housing Act, and the contents of partnership membership agreement, it is reasonable to view Eul as being a member of the association as being disqualified for the qualification of a householder due to the deprivation of membership as a member of the association, and as long as Eul did not terminate the membership

[1] A regional housing association is an association established for the purpose of acquiring housing by a large number of residents residing in an area under certain classifications [Article 2 subparag. 11(a) of the Housing Act] According to Article 32(7) of the former Housing Act (wholly amended by Act No. 13805, Jan. 19, 2016; enforced August 12, 2016), the method and procedure for establishing a regional housing association established with authorization from the head of the competent Si/Gun/Gu, standards for qualification of members of a regional housing association, and matters necessary for the operation and management of a housing association shall be prescribed by Presidential Decree. According to Article 38(1)1 and 38(2) of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 2744, Aug. 11, 2016; hereinafter the same shall apply], if the head of the relevant regional housing association fails to possess housing for exclusive use from the date of application for the establishment of the housing association to the date of approval for the establishment thereof, or its entire housing association.

The above regional housing association system is a system for residential stability through the purchase of houses by a homeless or small-sized householder residing in a certain area under certain classifications. The provisions of the former Housing Act and its Enforcement Decree concerning the qualifications of members of the regional housing association can not be said to be a provision that can be excluded by the parties’ will.

[2] According to Article 37(1)1(a)(3) and (2) of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 27444, Aug. 11, 2016), a person who intends to obtain authorization for the establishment of a regional housing association shall submit to the head of the competent Si/Gun/Gu along with the rules of association jointly signed by all the union members upon the application for authorization. The bylaws of the association include matters concerning the qualifications of union members, matters concerning the expulsion, withdrawal, and replacement of union members, timing and procedure for the burden of association members, and matters concerning the accounts of the association.

Such rules of association are fundamental rules and municipal rules that restrict not only the entire members of a regional housing association but also the institutions, i.e. the head of a cooperative, directors, board of directors, and general meetings. Therefore, they should be interpreted by the method of statutory interpretation that determines the normative meaning in accordance with objective standards, and they should not be interpreted arbitrarily by the method of a majority of the union members at the time of the management or interpretation of the author.

[3] Interpretation of a juristic act is clearly confirming the objective meaning that the party gave to the act of indicating it, and it does not include only the used language and text, but only the objective meaning that the party gives to the act of indicating it according to the contents of the language and text shall be reasonably interpreted. In a case where the objective meaning is not clearly expressed by the party’s language and text, it shall be reasonably interpreted in accordance with logical and empirical rules, and social common sense and transaction norms so that it conforms to the ideology of social justice and equity, comprehensively taking into account the form and content of the text, the motive and background leading up to the juristic act, the purpose and genuine intent of the party to the juristic act, transaction practices, etc.

[4] In a case where Party A, a member of a regional housing association, lost its eligibility as a householder under the former Housing Act (wholly amended by Act No. 13805, Jan. 19, 2016; hereinafter the same shall apply) and the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 27444, Aug. 11, 2016; hereinafter the same shall apply), and sought confirmation of the non-existence of membership status against Party A, the case holding that the lower court erred by misapprehending the legal doctrine and failing to satisfy the qualifications of Party A’s membership qualifications under each of the contract, and thus, it should be deemed that Party A’s membership status should not be forfeited or terminated upon the lapse of the date of entry into the contract, and that Party A’s membership status shall not be deemed to have been terminated immediately upon the lapse of the terms and conditions of the contract, and that Party A’s membership status shall not be deemed to have been forfeited or terminated upon the lapse of the qualifications under each of the contract.

[1] Article 2 subparag. 11(a) of the Housing Act, Article 32(7) of the former Housing Act (wholly amended by Act No. 13805, Jan. 19, 2016; see current Article 11(7)); Article 38(1)1 (see current Article 21(1)1) and (2) (see current Article 21(2)) of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 27444, Aug. 11, 2016; see current Article 21(2)); Article 18(3) of the former Enforcement Rule of the Housing Act (wholly amended by Act No. 353, Aug. 12, 2016; see current Article 105(2) of the former Enforcement Decree of the Housing Act / [2] Article 108(1) of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 2714, Aug. 14, 2016)

[3] Supreme Court Decision 2008Da9095, 90101 decided May 14, 2009 (Gong2009Sang, 837) Supreme Court Decision 2009Da67313 decided October 14, 2010 (Gong2010Ha, 2076)

Plaintiff (Attorney Lee Jin-jin et al., Counsel for the plaintiff-appellant)

Changwon-dong District Housing Association (Attorneys Kim Sung-hoon et al., Counsel for the defendant-appellant)

Busan High Court Decision 2019Na13608 decided May 28, 2020

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

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

1. The judgment of the court below

For the reasons indicated in its holding, the lower court rejected the Plaintiff’s claim for confirmation of non-existence of membership, on the ground that, only when the Defendant terminated the above contract pursuant to Article 10 subparag. 1 of the Joining Agreement, the Plaintiff’s membership, who is a member, should be deemed lost, and there is no evidence to acknowledge that the Defendant terminated the above contract.

2. Judgment of the Supreme Court

A. 1) A regional housing association is an association established by many residents residing in a certain area for the purpose of building a house [Article 2 subparag. 11(a) of the Housing Act] According to Article 32(7) of the former Housing Act (wholly amended by Act No. 13805, Jan. 19, 2016; hereinafter the same shall apply), the method and procedure for the establishment of a regional housing association established with authorization from the head of the competent Si/Gun/Gu, standards for qualification of members of a regional housing association, and matters necessary for the operation and management of a housing association shall be prescribed by Presidential Decree. According to Article 38(1)1 and (2) of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 2744, Aug. 11, 2016; hereinafter the same shall apply], if the head of the competent local housing association fails to possess a house for which he/she is entitled to obtain approval for the establishment of the housing association or its entire operation and management thereof for not more than 85 months.

The above regional housing association system is a system for residential stability through the purchase of houses by a homeless or small-sized householder who resides in a certain area under certain classifications. The provisions of the former Housing Act and its Enforcement Decree concerning the qualifications of members of the regional housing association cannot be said to be a provision that can be excluded by the parties’ will.

2) Meanwhile, according to Article 37(1)1 Item (a) and Article 37(2) of the former Enforcement Decree of the Housing Act, a person who intends to obtain authorization for the establishment of a regional housing association shall submit to the head of the competent Si/Gun/Gu along with the bylaws of the association jointly signed by all the union members. The bylaws of the association include matters concerning the qualifications of union members, matters concerning the expulsion, withdrawal, and replacement of union members, timing and procedure for the association members’ sharing of expenses, and matters concerning the accounts of the association.

Since these rules of association are fundamental rules and local laws that restrict not only the entire members of a regional housing association but also the institutions, namely, the heads of cooperatives, directors, board of directors, and general meetings, they should be interpreted by the method of statutory interpretation that determines the normative meaning in accordance with objective standards, and they should not be interpreted arbitrarily by the method of a majority of the members at the time of the management or interpretation of the authors.

3) Interpretation of a juristic act is clearly confirming the objective meaning that the party gave to the act of indicating it. Although it is not subject to the used language and text, it shall reasonably interpret the objective meaning given by the party to the act of indicating it according to the contents of the language and text regardless of what the party’s internal intent is. In a case where the objective meaning is not clearly expressed by the party’s language and text, it shall be reasonably interpreted in accordance with logical and empirical rules, and social common sense and transaction norms so that it conforms to the ideology of social justice and equity, comprehensively takes into account the form and content of the text, motive and background leading up to the juristic act, the purpose and genuine intent of the party to the juristic act, transaction practices, etc. (see, e.g., Supreme Court Decisions 2008Da9095, May 14, 2009; 2009Da6313, Oct. 14, 2010).

B. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) On May 26, 2015, the Plaintiff, who meets the requirements for membership of a regional housing association under Article 32(7) of the former Housing Act and Article 38(1)1 of the former Enforcement Decree of the Housing Act, signed the instant subscription agreement with the Defendant Promotion Committee with the purport that the Plaintiff shall join the Defendant’s association members and pay a contribution to the project cost and receive the ownership of one household of an apartment newly constructed in accordance with the housing construction project.

2) Article 10 subparag. 1 of the subscription agreement of this case provides, “(1) when the Plaintiff fails to faithfully perform the terms of the subscription agreement of this case, ② when the Plaintiff failed to pay the Plaintiff’s contribution on more than two consecutive occasions, ③ when the Plaintiff’s failure to pay the Plaintiff’s contribution, ③ when the Plaintiff’s failure to perform the housing supply order, such as double winning and unlawful resale, etc., was discovered, ④ when the Plaintiff was disqualified as a member of the housing association pursuant to relevant laws and regulations, ⑤ when the Plaintiff committed an act detrimental to the Defendant’s common interest in the promotion of the project, ⑤ when the Plaintiff did not cooperate in the implementation of this contract without justifiable grounds, or when it is deemed impossible to perform the project because the Plaintiff failed to comply with the agreement, etc., the Defendant may terminate the contract immediately without the notice of performance or any other separate measures, and Article 15 subparag. 3 provides, “The Plaintiff’s qualification as member of the association of this case shall automatically lose the contents of this contract.”

3) On November 9, 2015, the Defendant obtained authorization to establish a regional housing association, and succeeded to the status, rights, and obligations of the parties to the instant joining contract from the Defendant Promotion Committee.

4) Meanwhile, Article 8 of the Criminal Code of the defendant's union established and enforced at the time of the above establishment authorization, stipulated the same purport as that of Article 38 (1) 1 and (2) of the former Enforcement Decree of the Housing Act concerning the qualification of union members. Article 12 (1) of the Rules of the Union provides that "any union member shall not withdraw from the union at will: Provided, That where a union member intends to withdraw from the union due to an inevitable cause, he/she shall notify in writing the head of the union of his/her intention in accordance with the form of withdrawal determined at 15 days before the union, and the head of the union shall determine whether to withdraw from the union by a general meeting or a resolution of the board of directors." Article 8 (2) provides that "the qualification of union members of a person who is not qualified as union members under the relevant Acts and subordinate statutes and this Code shall be automatically lost." Article 38 (4) provides for the provision on the time when a union member is refunded to a person who loses his/her status as union member due to withdrawal,

5) On November 12, 2018, prior to the arrival of the occupancy date of the Defendant’s association housing, the Plaintiff lost the eligibility for the householder by changing the registration from the householder to a member of the household on the resident registration basis.

C. We examine these facts in light of the provisions of the former Housing Act and the Enforcement Decree thereof, and related legal principles. It is reasonable to deem that the Plaintiff is a member of the Defendant, since the Plaintiff loses the eligibility as a householder on November 12, 2018 and loses the Defendant’s membership. Even if the Defendant did not terminate the contract under Article 10 subparag. 1 of the instant subscription agreement, the Plaintiff cannot be deemed to maintain the Defendant’s membership or status. Specific reasons are as follows.

1) According to Article 32(7) of the former Housing Act, Article 38(1)1 and (2) of the former Enforcement Decree of the Housing Act, and Articles 8 and 12(2) and (4) of the Defendant’s Union Regulations, where a member becomes disqualified as a member of a regional housing association because he/she loses his/her eligibility as a householder before the date on which he/she can move into the Defendant’s association, as in the case of the Plaintiff, he/she shall be deemed to automatically lose his/her membership, and shall also be deemed to lose his/her membership status.

2) Article 10 subparag. 1 of the subscription agreement of this case provides the Defendant’s reasons for the termination of the subscription agreement of this case and the effect of the termination thereof. Of all, examining the part of Article 10 subparag. 1 of the subscription agreement of this case, the language and text of this case, “When the Plaintiff loses the Plaintiff’s membership pursuant to the relevant laws and regulations, the Defendant may terminate the contract immediately without the notice of performance or any other separate measures, and at this time, the Plaintiff’s membership qualification is automatically lost.” The ground for termination is “when the Plaintiff loses the Plaintiff’s membership pursuant to the relevant laws and regulations and regulations,” and the effect of termination is “the Plaintiff’s membership qualification is automatically lost.” Therefore, it is in fact the same. Accordingly, it is reasonable to deem that the part of this case’s subscription agreement of this case is naturally disqualified even if the Plaintiff loses the Plaintiff’s membership qualification without the termination of the contract of this case, and that the Defendant should notify the Plaintiff of this in the sense of confirming the Plaintiff

3) Article 15 subparag. 3 of the Agreement provides, “The matters not indicated in this Agreement shall be governed by the delegation, letter, covenant of association, and contract for construction works,” and the purport of the provision is to supplement the matters stipulated in the delegation, letter, and covenant of association regarding the contents not indicated in the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement. It does not necessarily mean to the effect that the contract for the Agreement for the Agreement for the Agreement for the Agreement for the Agreement

4) Ultimately, in full view of Article 10 subparag. 1 of the instant subscription agreement, and the relevant statutes and the provisions of the Association Regulations, even if the Defendant did not terminate the instant subscription agreement, the Plaintiff lost the Defendant’s membership as a result of being disqualified from being a householder on November 12, 2018, and thus, is no longer a member of the Defendant.

5) Meanwhile, with respect to the limitation on voluntary withdrawal of a member, Article 12(1) of the Defendant’s bylaws clearly stipulate that the limitation on voluntary withdrawal of a member shall be clearly divided into the grounds for disqualification of a member. There is no separate provision in the former Housing Act and relevant statutes, such as the Enforcement Decree thereof, the Defendant’s covenant, and the instant subscription agreement, that a member shall maintain the eligibility of a householder, or that a member shall not be disqualified by changing his/her eligibility as a householder. It is difficult to readily conclude that the Plaintiff, upon the Plaintiff’s forfeiture of the eligibility as a householder, committed an act in violation of

D. Nevertheless, on the grounds indicated in its reasoning, the lower court determined that the Plaintiff could not be deemed to lose the Defendant’s membership unless there is evidence that the Defendant terminated the said contract as prescribed by Article 10 subparag. 1 of the membership agreement of this case. In so determining, the lower court erred by misapprehending the legal doctrine on the interpretation and validity of the rules of regional housing associations, which prescribed the deprivation of membership of regional housing associations under the former Housing Act and the Enforcement Decree thereof, and on the interpretation of contracts

3. Conclusion

Therefore, 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 Lee Ki-taik (Presiding Justice)