〈Case in which the issue was whether a disposition imposing an indemnity charge on a project implementer that occupied and used general property among the state or public property included in a rearrangement zone of a housing redevelopment project was void as a matter of course〉[Gong 2024Ha, 1752]

【Holding】

[1] The effect of a disposition imposing an indemnity charge made against a person who is in a legal position justifying the occupation or use and profit of state property or public property (void as a matter of course)

[2] Where general property included in a rearrangement zone under a project implementation plan is scheduled to be transferred to the project implementer, whether the project implementer should be regarded as being in a legal position justifying its use and profit of that general property from the time the project implementation is authorized (affirmative in principle)

【Summary of Decision】

[1] The main text of Article 72(1) and Article 2 subparagraph 9 of the State Property Act and the main text of Article 81(1) and Article 2 subparagraph 9 of the Public Property and Commodity Management Act, which provide that an indemnity charge equivalent to 120/100 of the usage fee or loan fee for the property shall be collected from a person who uses and profits from or occupies state property or public property without a use permit or a loan contract, are construed to mean that, where the occupation or use and profit of state property or public property itself was made without any legal title whatsoever, an indemnity charge is collected in lieu of the usage fee or loan fee because the normal usage fee or loan fee cannot be collected. Accordingly, those provisions do not apply to a person who is in a legal position justifying the occupation or use and profit, and a disposition imposing an indemnity charge made against a person in such a legal position is void as a matter of course.

[2] Where general property included in a rearrangement zone under a project implementation plan is scheduled to be transferred to the project implementer, unless there are special circumstances such as the existence of other arrangements regarding the use relationship of that general property, the project implementer should be regarded as being in a legal position justifying its own use and profit of that general property from the time the project implementation is authorized for a reasonable period until it acquires ownership thereof. The reasons are as follows.

① Where there is unauthorized occupation of state or public property, the State or a local government is to unilaterally collect an indemnity charge by adding, in a punitive sense, an amount equivalent to 20% on top of the amount equivalent to the loan fee or usage fee that would have been payable had a loan or a use and profit permit been obtained. Meanwhile, even where a disposition imposing an indemnity charge cannot be made against an unauthorized occupant of state or public property, there are cases in which a civil claim for return of unjust enrichment is established; thus, the requirements for imposing and collecting an indemnity charge do not coincide with the requirements for establishing a civil claim for return of unjust enrichment.

② Under the former Act on the Improvement of Urban Areas and Residential Environments (before wholly amended by Act No. 14567 on February 8, 2017; hereinafter the ‘former Urban Improvement Act’), a project implementer intending to implement a rearrangement project must submit a project implementation plan including a land use plan and the like to the mayor, county governor, etc. and obtain authorization for project implementation from the mayor, county governor, etc. (Articles 28(1) and 30), and where the project implementation plan to be authorized includes matters concerning the disposal of state or public property, the mayor, county governor, etc. must consult in advance with the managing authority, and the managing authority so consulted must present its opinion within 20 days (Article 66(1) and (2)). Through this process of authorizing project implementation, the authorizing authority and the managing authority confirm the current status of the state or public property included in the rearrangement zone and decide on matters concerning its disposal, and it can be fully anticipated that, after the authorization of project implementation, the project implementer will occupy and use the state or public property in order to carry out the project.

③ Since various conditions and burdens may be imposed on an authorization of project implementation to the extent necessary for reasons such as the public interest, the authorizing authority may, in consultation with the managing authority, also set various conditions or burdens regarding the use relationship of general property scheduled to be transferred to the project implementer until ownership is transferred. Where the authorizing authority imposed no condition or burden regarding the use relationship of the general property and no other legal relationship regarding the use relationship of that general property exists, it is unreasonable, merely because the project implementer occupied and used, after the authorization of project implementation, general property whose ownership it was scheduled to acquire, to impose on the project implementer a punitive indemnity charge in the same manner as an ordinary unauthorized occupant, beyond seeking return of unjust enrichment equivalent to the loan fee.

④ With respect to administrative property among state or public property, a permit for use and the like is deemed granted once project implementation is authorized (Article 32(1) subparagraphs 12 and 13 of the former Urban Improvement Act), and even if such administrative property is withdrawn from its designated use and becomes general property, the title to occupy is construed not to lapse or be lost but to be maintained until ownership is acquired; therefore, a disposition imposing an indemnity charge in respect thereof is void as a matter of course because its defect is grave and obvious. On the other hand, with respect to general property among state or public property, there is no provision deeming a permit for use and the like to have been granted as in the case of administrative property; however, in terms of the project implementer's need to occupy and use the property in order to carry out the project and the awareness and anticipation of the authorizing authority and the managing authority in that regard, it is difficult to find any essential difference from administrative property, and since administrative property is also withdrawn from its designated use and becomes general property from the date of public notice of the authorization of project implementation, it is difficult to find any reasonable ground for treating them differently, at least in determining whether there is unauthorized occupation.

⑤ State or public property within a rearrangement zone may not be sold or transferred for any purpose other than the rearrangement project (Article 66(3) of the former Urban Improvement Act), and once the project implementation plan is authorized, such property may be sold or leased to the project implementer by private contract in priority over other persons (Article 66(4)). In this way, the former Urban Improvement Act guarantees the project implementer's position so that, after the authorization of project implementation, it may preferentially acquire ownership of the state or public property within the rearrangement zone.

【Referenced Statutes】

[1] Article 2 subparagraph 9 and Article 72(1) of the State Property Act, Article 2 subparagraph 9 and Article 81(1) of the Public Property and Commodity Management Act [2] Article 2 subparagraph 9 and Article 72(1) of the State Property Act, Article 2 subparagraph 9 and Article 81(1) of the Public Property and Commodity Management Act, Article 741 of the Civil Act, Article 28(1) (see current Article 50(1)), Article 30 (see current Article 52), Article 32(1) subparagraph 12 (see current Article 57(1) subparagraph 13) and subparagraph 13 (see current Article 57(1) subparagraph 14), and Article 66(1) (see current Article 98(1)), (2) (see current Article 98(2)), (3) (see current Article 98(3)), and (4) (see current Article 98(4)) of the former Act on the Improvement of Urban Areas and Residential Environments (before wholly amended by Act No. 14567 on February 8, 2017)

【Referenced Precedents】

[1][2] Supreme Court Decision 2007Da51536, December 13, 2007 (Gong 2008Sang, 14)
[1] Supreme Court Decision 2023Du42584, October 18, 2023
[2] Supreme Court Decision 2007Du6663, July 12, 2007 (Gong 2007Ha, 1284)
Supreme Court Decision 2011Da76402, July 16, 2014 (en banc) (Gong 2014Ha, 1576)

(Source: Supreme Court Decision 2023Da210991, October 8, 2024 [Return of Unjust Enrichment] > Comprehensive Legal Information, Precedents)