[edit] Supreme Court Decision 99Da45864 delivered on November 14, 2000 [Registration of Title Transfer]
【Main Issues】
[1] The legal nature of Article 72, Paragraph 1 of the Land Expropriation Act which requires the project operator to immediately notify the original owner or to provide public notice when any land becomes eligible to be repurchased, and whether a failure by the project operator under the Special Act on Acquisition of Land for Public Use and Compensation of Loss to notify the original owner or to provide public notice when a land becomes eligible to be repurchased, thereby causing expiration of the period for exercise of the right of repurchase, resulting in loss of the right of repurchase itself, constitutes a tort (affirmative)
[2] The method of calculation of the compensation for damage incurred by the original owner as a result of loss of the right of repurchase under the Special Act on Acquisition of Land for Public Use and Compensation of Loss
【Summary of Decision】
[1] The purpose of Article 72, Paragraph 1 of the Land Expropriation Act, applicable mutatis mutandis in accordance with Article 9, Paragraph 5 of the Special Act on Acquisition of Land for Public Use and Compensation of Loss, which requires the project operator to immediately notify the original owner or to provide public notice when any land becomes eligible to be repurchased, is to ensure the effective exercise of the right of repurchase clearly recognized by law, by first notifying the original owner in case where any land becomes no longer necessary for public use so that he may decide whether or not to repurchase such land, in light of the legislative reasons behind providing for the right of repurchase, namely the need to minimize the public burden, the need to protect the original owner who has involuntarily lost ownership, and the principle of equity. Accordingly, a failure by the project operator under the Special Act on Acquisition of Land for Public Use and Compensation of Loss to notify the original owner or to provide public notice, despite its duty to provide such notice or public notice under the above provisions, thereby causing expiration of the period for exercise of the right of repurchase, resulting in loss of the right of repurchase itself, constitutes a tortious act toward the original owner.
[2] The amount of damages to be compensated to the original owner for loss of the right of repurchase under the Special Act on Acquisition of Land for Public Use and Compensation of Loss would be the market price of the object property at the time of loss of the right of repurchase, less the repurchase price to be returned by the holder of the repurchase right upon exercising the right of repurchase. Accordingly, in case where the appraisal value of the object property at the time of the loss of the right of repurchase is less than or equal to the amount obtained by multiplying the amount of compensation paid under Article 9, Paragraph 1 of the Special Act on Acquisition of Land for Public Use and Compensation of Loss by the land price fluctuation rate of similar neighboring land unrelated to the relevant project until such time, the compensation amount may be calculated by deducting the amount of compensation paid from the said appraisal value. However, in case where the appraisal value is greater than the said product, the compensation amount would be {appraisal value at the time of loss of the right of repurchase - (appraisal value at the time of loss of the right of repurchase - amount of compensation paid land price increase rate)}, i.e. the amount obtained by multiplying the amount of compensation paid by the land price fluctuation rate of similar neighboring at the relevant time.
【Reference Provisions】 [1] Article 9, Paragraph 5 of the Special Act on Acquisition of Land for Public Use and Compensation of Loss, Article 72, Paragraph 1 of the Land Expropriation Act / [2] Article 750 of the Civil Code, Article 72, Paragraph 1 of the Land Expropriation Act / [3] Article 9, Paragraphs 1 and 3 of the Special Act on Acquisition of Land for Public Use and Compensation of Loss, Article 7, Paragraphs 1 and 3 of the Enforcement Decree under the same Act
Article 9 of the Special Act on Acquisition of Land for Public Use and Compensation of Loss (Right of Repurchase) (1) In case where the acquired land becomes unnecessary in whole or in part within 10 years from the acquisition date thereof, due to a discontinuation or change in the relevant project or for any other causes, the landowner at the time of acquisition or his general successor (hereinafter referred to as the repurchase right holder) may repurchase such land by paying to the project operator the amount equivalent to the compensation amount paid for such land, within one year from the date when the relevant land became unnecessary, or 10 years from the acquisition date.
(2) <omitted>
(3) In case where the land price has changed remarkably since the time of acquisition, the project operator and the repurchase right holder shall hold a mutual consultation on the repurchase price, and if an agreement cannot be reached through such consultation, a request may be made to the Land Expropriation Committee having jurisdiction over the location of the land for adjudication as provided for under the Presidential Decree.
(4) <omitted>
(5) The provision of Article 72 of the Land Expropriation Act shall apply mutais mutandis to the repurchase right under Paragraphs 1 and 2.
Article 72 of the Land Expropriation Act (Expiration of Repurchase Right) (1) When any land becomes eligible to be repurchased in accordance with Paragraphs 1 and 2 of Article 71, the project operator shall promptly notify the repurchase right holder thereof, provided that if the repurchase right holder is unknown other than due to negligence of the project operator, the notice shall be provided by public notice in accordance with the Presidential Decree.
(2) <omitted>
Article 750 of the Civil Code (Description of Torts) Any person who causes losses to or inflicts injuries on another person by an unlawful act, intentionally or negligently, shall be liable to compensate for damages arising therefrom.
Article 7 of the Enforcement Decree under the Special Act on Acquisition of Land for Public Use and Compensation of Loss (Exercise of Repurchase Right, etc) (1) The term "where the land price has changed remarkably since the time of acquisition"in Article 9, Paragraph 3 of the Act shall mean the case where the land price at the time of exercise of the repurchase right exceeds the amount obtained by multiplying the amount of compensation paid by the fluctuation rate in the price of similar neighboring lands which are unrelated to the relevant project, until the time of repurchase.
(2) <omitted>
(3) The provisions of Article 29, Paragraph 2, Article 29-2, Article 29-3, Articles 35 through 43, Articles 58 through 60 and Articles 73 through 75-2 of the Land Expropriation Act shall apply mutatis mutandis to the process, jurisdiction, commission and effect of the adjudication prescribed in Paragraph 1.
【Reference Cases】 [1] Supreme Court Decision 92Da34667 delivered on May 27, 1993 (Gong1993Ha, 1869), Supreme Court Decision 99Da51807 delivered on January 14, 2000 / [2] Supreme Court Decision 93Nu17225 delivered on May 24, 1994 (Gong1994Ha, 1843)
【Plaintiff, Appellee】 Kim Hyun-ok and 3 others (Attorney Yoon Byung-ho, Counsel for plaintiff-appellee)
【Defendant, Appellant】 Republic of Korea
【The Judgment of the Court Below】 Seoul District Court Judgment 99Na13910 delivered on June 30, 1999
【Disposition】 The part of the judgment of the court below with respect to the defendant shall be reversed and that part of the case shall be remanded to the Appellate Division of Seoul District Court.
【Reasoning】 The grounds for appeal are examined as follows.
1. With respect to Issue 1
The purpose of Article 72, Paragraph 1 of the Land Expropriation Act, applicable mutatis mutandis in accordance with Article 9, Paragraph 5 of the Special Act on Acquisition of Land for Public Use and Compensation of Loss (hereinafter referred to as Special Act), which requires the project operator to immediately notify the original owner or to provide public notice when any land becomes eligible to be repurchased, is to ensure the effective exercise of the right of repurchase clearly recognized by law, by first notifying the original owner in case where any land becomes no longer necessary for public use so that he may decide whether or not to repurchase such land, in light of the legislative reasons behind providing for the right of repurchase, namely the need to minimize the public burden, the need to protect the original owner who has involuntarily lost ownership, and the principle of equity. (see Supreme Court Decision 92Da34667 delivered on May 27, 1993.) Accordingly, a failure by the project operator under the Special Act to notify the original owner or to provide public notice, despite its duty to provide such notice or public notice under the above provisions, thereby causing expiration of the period for exercise of the right of repurchase, resulting in loss of the right of repurchase itself, constitutes a tortious act toward the original owner. (See Supreme Court Decision 99Da51807 delivered on January 14, 2000.)
The court of the first instance as quoted by the court below adopted the following facts: (a) Roh Soo-young owned 661 pyung of forests and fields of 661 pyong at 403-2, Pyungnae-ri, Migeum-eup, Namyangju-gun, Kyunggi-do before it was partitioned. The Seoul Regional Land Control Office, which is an agency of the defendant, purchased a part of the said land from Roh Soo-young following negotiations pursuant to the Special Act in or about 1986, for use as road for expansion of Kyung-Chun Expressway. A part of the purchased land was parceled out as forests and fields of 32 pyong (106㎡) at 403-3, Pyungnae-ri, Migeum-eup, Namyangju-gun, Kyunggi-do on March 21, 1986 and reclassified as road, with respect to which the registration of title transfer was effected in the name of the defendant on March 13, 1990. The remaining part of the purchased land was parceled out as the subject real estate on November 3, 1986, with respect to which the registration of title transfer was effect in the name of the defendant on the same day. (b) The defendant paid 1,758,120 won on April 7, 1986 and 2,271,680 won on December 31, 1986 to Roh Soo-young as the purchase price of the subject real estate. (c) As a result of completion of the road opening construction by the Seoul Regional Land Control Office, an agency of the defendant, the part (Ga) of 158㎡ out of the subject real estate, enclosed by the line connecting marks 1, 10, 21, 11, 12, 6, 7, 8, 9 and 1 (in that order) on the chart attached to the court below decision, became an asphalt-paved road; the part (Na) of 28㎡ enclosed by the line connecting marks 10, 13, 14, 15, 16, 12, 11, 21 and 10 (in that order) on the same chart became a steel and concrete waterway; and in the part (Da) of 390㎡ enclosed by the line connecting marks 17, 18, 19, 20, 5, 16, 15, 14 and 17 (in that order) on the same chart, incised and plated trees were planted for the safe use of the above parts (Ga) and (Na). However, part (Ra) of 592㎡, which was enclosed by the line connecting marks 13, 2, 3, 4, 20, 19, 18, 17 and 13 (in that order) on the same chart remained as forests and fields. (d) Roh Soo-young passed away on November 9, 1987 and the plaintiffs jointly inherited the assets of the deceased. (e) The defendant designated the subject real estate as a scheduled housing development zone on March 10, 1994. Based on these adopted facts, the court below concluded that: out of the subject real estate, the part (Ra) of 592㎡ which remained as forests and fields became unnecessary for the public project as a result of the reclassification as scheduled housing development zone on March 10, 1994, and the plaintiffs acquired the right of repurchase as to that part of the land in the capacity as the general successors of Roh Soo-young, and accordingly defendant was obligated to notify the plaintiffs or provide public notice as to the plaintiffs' right of repurchase; nevertheless, defendant failed to notify the plaintiffs or to provide public notice as to the plaintiffs' right of repurchase in breach of such obligation; defendant thereby caused expiration of the period for plaintiffs' exercise of the right of repurchase, due to the failure by plaintiffs to exercise that right within the repurchase period under Article 9, Paragraph 1 of the Special Act, thereby making it impossible for plaintiffs to exercise the repurchase right recognized by law, resulting in loss of the right of repurchase itself; and accordingly defendant is liable to the plaintiffs for damages arising therefrom.
From our examination of the record, the above determination of facts and the conclusions of the court below can be justified in light of the above legal principles and there was no reversible error in matters of law as to the existence on the tortious act relating to loss of the right of repurchase. Accordingly, this part of the grounds for appeal cannot be accepted.
2. With respect to Issue 2
A. On the premise that the amount of damages incurred by the plaintiffs due to loss of the right of repurchase should be the market price of the object property at the time of the plaintiffs' loss of the right of repurchase by expiration of the prescription period for exercise of the right of repurchase, less the compensation amount that should be returned by the plaintiffs if they were to exercise the right of repurchase, the court of the first instance as quoted by the court below concluded that the market price of the above part (Ra) as of November 3, 1996 was 220,224,000 won (372,000 won x 592㎡), and the compensation amount corresponding to that part was 2,046,049 won (4,036,800 won x 592 / 1,168, rounded off to the nearest won), based on the evidences adopted by that court, and accordingly that the amount of damages incurred by the plaintiffs was 218,177,951 won (220,224,000 won - 2,046,049 won).
B. However, the above determination of the court below on the scope of damages arising out of loss of the right of repurchase is not acceptable due to the following reasons.
The repurchase under Article 9 of the Special Act is becomes effective upon the repurchase right holder's payment to the project operator of the amount equivalent to the compensation it received, and unilateral notice of its intention for purchase within the repurchase period upon satisfaction of the requirements for repurchase, regardless of the intention of the project operator. Further, even if the land price has remarkably fluctuated from the time of the acquisition, the repurchase right holder must pay in advance the amount equivalent to the compensation it received (and such payment is sufficient) in order to exercise the right of repurchase, regardless of whether there was a significant increase or decrease in the price, unless there has been a successful consultation between the parties as to the price pursuant to Article 9, Paragraph 3 of the Special Act or the price has been determined by adjudication of the Land Expropriation Committee. (See Supreme Court Decision 92Da7832 delivered on June 23, 1992, Supreme Court Decision 93Da22241 delivered on August 24, 1993, Supreme Court Decision 94Da31310 delivered on February 10, 1995) However, the amount equivalent to the compensation which should be paid in advance to the project operator at the time of exercise of the right of repurchase under Article 9, Paragraph 1 of the Special Act is not necessary the same amount as the repurchase price to be ultimately paid by the repurchase right holder to the project operator. That is, taking together the provisions of Article 9, Paragraphs 1 and 3 of the Special Act and Article 7, Paragraphs 1 and 3 of the Enforcement Decree under the Special Act: ① if the price of the land to be repurchased at the time of exercise of the right of repurchase, i.e., the appraisal value at the time of exercise of the repurchase right, has not remarkably fluctuated since the time of the acquisition, so that such price is less than or equals to the amount of compensation paid under Article 9, Paragraph 1 of the Special Act (this is the compensation that the repurchase right holder received as the land price at the time of sale through negotiation, and is hereinafter referred to as compensation) multiplied by the fluctuation rate {(the original price + the increase amount) ÷ the original price}of similar neighboring land unrelated to the relevant project until the time of the repurchase, then the amount equivalent to the compensation would be the repurchase price (in such case, no issue of settlement arises as the repurchase price would be fully settled by the compensation paid by the repurchase right holder at the time of exercise of the right of repurchase); however, ② if the appraisal value of the land at the time of exercise of the right of repurchase has remarkably changed since the time of acquisition, so that such appraisal value exceeds the compensation multiplied by the fluctuation rate of similar neighboring land which is unrelated to the relevant project until the time of the repurchase, then the repurchase price would be the appraisal value at the time of exercise of the right of repurchase less the product of the compensation multiplied by the fluctuation rate (the increased amount of the land price / the original land price) of similar neighboring land which is unrelated to the relevant project (appraisal value at the time of the exercise of the right of repurchase - compensation fluctuation rate), unless there has been a successful consultation between the parties as to the price pursuant to Article 9, Paragraph 3 of the Special Act or the price has been determined by adjudication of the Land Expropriation Committee. (See Supreme Court Decision 93Nu17225 delivered on May 24, 1994; in such case, the repurchase right holder must additionally pay the difference between the repurchase price calculated as above and the compensation paid in advance at the time of exercise of the right of repurchase.)
Meanwhile, the amount of damages for loss of the right of repurchase would be the market price of the object property at the time of loss of the right of repurchase, less the repurchase price to be returned by the holder of the repurchase right upon exercising the right of repurchase. Accordingly, in case where the appraisal value of the object property at the time of the loss of the right of repurchase is less than or equal to the amount obtained by multiplying the compensation by the land price fluctuation rate of similar neighboring land unrelated to the relevant project until such time, the damages may be calculated by deducting the compensation from the said appraisal value. However, in case where the appraisal value is greater than the said product, the damages would be the appraisal value at the time of loss of the right of repurchase, less the repurchase price calculated in ② above {appraisal value - (appraisal value - compensation land price increase rate)}, i.e. the amount obtained by multiplying the compensation by the land price fluctuation rate of similar neighboring at the relevant time.
However, according to the records, defendant is clearly arguing that the price of the object of repurchase at the time of the loss of the right of repurchase had been remarkably changed since the time of acquisition, and accordingly that in calculating the amount of damages to be paid by the defendant, not only the compensation received by the plaintiffs' ancestor at the time of sale but also the repurchase price as calculated in ② above should be deducted from the appraisal value of the object of the repurchase, in accordance with Article 9, Paragraph 3 of the Special Act and Article 7, Paragraph 1 of the Enforcement Decree under the Special Act. Accordingly, the court below should have compared the appraisal value of the object of the repurchase at the time of loss of the right of repurchase by the plaintiffs as a result of expiration of the prescription period, with the amount obtained by multiplying the compensation by the fluctuation rate of similar neighboring land which is unrelated to the relevant project until such time, and deliberated as to whether the former exceeded the latter. Then, if the former did exceed the latter, the court below should have calculated the amount of damages incurred by the plaintiffs by deducting the repurchase price calculated in ② above from the said appraisal value.
Nonetheless, the court below calculated the amount of damages incurred by the plaintiffs with respect to the above part (Ra), which is the object of the repurchase in this case, based on the premise that the appraisal value would be less than or equal to the compensation pertinent thereto multiplied by the fluctuation rate of similar neighboring land which is unrelated to the relevant project until that time, without having determined the rate of increase in the land price of similar neighboring land which is unrelated to the relevant project at the time of loss of the right of repurchase. Accordingly, in the conclusion of the court below, there were reversible errors in matters of law on the issue of damages arising out of loss of the right of repurchase, due to a misinterpretation and misapplication of Article 9, Paragraphs 1 and 3 of the Special Act, and neglecting determination on facts alleged by the parties or failing to conduct a complete review, which have affected the conclusion of the judgment. The grounds for appeal addressing this point are justified.
3. Conclusion
Accordingly, the part of the judgment of the court below that ruled against the defendant shall be reversed and the relevant part of this case shall be remanded to the Appellate Division of Seoul District Court for retrial and determination. It is hereby decided as per Disposition. This decision is delivered with the assent of all Justices who reviewed the appeal.
Justices Suh Sung (Presiding Justice)
Yoo Ji-dam
Bae Ki-won (Justice in charge)
Park Jae-yoon
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