Hello, this is Attorney Park Jong-han of Cheongchul Law Firm.

In this installment, we look at the Supreme Court's settled position on which type of lawsuit must be used, before and after approval and public notice, to challenge a defective project implementation plan or management and disposition plan resolved at an association's general meeting.

[Question]

Where a general meeting resolution on a project implementation plan or management and disposition plan is defective, can confirmation of the invalidity of the resolution be sought through a civil lawsuit, and what kind of lawsuit must be filed after approval and public notice?

[Answer]

A. Legal Status of the General Meeting Resolution — A Procedural Requirement Leading to an Administrative Disposition

A redevelopment or reconstruction project association has the status of an administrative entity under the Act on the Improvement of Urban Areas and Residential Environments (도시 및 주거환경정비법, the "Urban Improvement Act"), and the management and disposition plan established by the association is a binding administrative plan that constitutes an independent administrative disposition, directly affecting the property rights and obligations of association members.

The Supreme Court en banc Decision 2007Da2428 (September 17, 2009) held that "a lawsuit against a housing reconstruction project association, an administrative entity under the Urban Improvement Act, disputing the validity, etc. of the association's general meeting resolution on a draft management and disposition plan is a lawsuit concerning the existence or validity of a procedural requirement leading to an administrative disposition, and it concerns a legal relationship under public law in that its outcome directly affects whether the administrative disposition is unlawful; accordingly, it constitutes party litigation (당사자소송) under the Administrative Litigation Act."

Therefore, before approval and public notice, a suit disputing the validity of a general meeting resolution is not a civil lawsuit but party litigation that falls within the exclusive jurisdiction of the Administrative Court, and if it is filed with a civil court it is transferred to the Administrative Court as the competent court.

B. After Approval and Public Notice, Only Appeal Litigation Is Available

Once a management and disposition plan has been approved and publicly notified, confirmation of invalidity cannot be sought for the general meeting resolution alone; the challenge must be brought through appeal litigation (항고소송) seeking revocation or confirmation of invalidity of the management and disposition plan itself, which is an administrative disposition.

The en banc decision above held that "once there has been approval and public notice of the management and disposition plan by the competent administrative agency, the management and disposition plan takes effect as an administrative disposition, and therefore revocation or confirmation of invalidity of the management and disposition plan must be sought through appeal litigation disputing the validity of the administrative disposition on the ground of defects in the general meeting resolution; separately from that, filing a suit for confirmation that isolates only the general meeting resolution, which is merely one of the procedural requirements leading to the administrative disposition, and disputes its validity is not permitted absent special circumstances."

The same principle applies to project implementation plans. Supreme Court Order 2009Ma596 (November 2, 2009) held that "in order to dispute the validity of the general meeting resolution in this case concerning the project implementation plan, which has already been finalized by the approval, etc. of the competent district head, only appeal litigation seeking revocation or confirmation of invalidity of the project implementation plan is available," and found that a stay of its effect or execution is possible only through an application for a stay of execution under the Administrative Litigation Act, not through a provisional disposition under the Civil Procedure Act.

C. Challenging the Earlier General Meeting Resolution After Approval of an Amendment

Even where, after the original general meeting resolution, the project implementation plan or management and disposition plan was amended through a new resolution and approved, a suit for confirmation disputing only the earlier resolution is in principle not permitted, and the challenge must be brought through appeal litigation against the amended plan.

Supreme Court Decision 2012Du24481 (October 13, 2016) held that "even where the general meeting of a housing redevelopment project association originally passed a resolution on the draft project implementation plan and draft management and disposition plan, and the project implementation plan and management and disposition plan were later amended through a new resolution at another general meeting and approved by the competent administrative agency, revocation or confirmation of invalidity must be sought through appeal litigation against the amended project implementation plan and management and disposition plan, which are administrative dispositions, and filing a suit for confirmation disputing the validity of the original general meeting is not permitted absent special circumstances; moreover, even if the earlier resolution on the pre-amendment drafts was defective, seeking confirmation of the invalidity of the earlier resolution is, absent special circumstances, no more than seeking confirmation of a past legal relationship or relationship of rights, so there is no interest in confirmation as a requirement for legal protection."

As to what counts as "special circumstances," Supreme Court Decision 2009Da63694 (October 28, 2010), in a case where a later general meeting ratified the earlier resolution as it stood or passed the same resolution again, held that "absent special circumstances, such as where the resolution of the residents' general meeting held again is found to be void due to defects, seeking confirmation of the invalidity of the earlier dismissal resolution is no more than seeking confirmation of a past legal relationship or relationship of rights and therefore lacks the requirement for legal protection," giving as an example the case where the subsequent resolution is itself void.

Further, Supreme Court Decision 2011Du30199 (November 28, 2013) held that "in the case of a project implementation plan, if subsequent acts have taken place on the premise that its approval is valid, such as the allotment notice and allotment application procedures, expropriation procedures against members who did not apply for allotment, and the establishment and approval of a management and disposition plan, then if the original project implementation plan is confirmed void or revoked, that series of subsequent acts premised on its valid existence also loses effect retroactively; therefore, the mere fact that a new project implementation plan substantially amending the original one was established and approved by the head of the city or county does not uniformly extinguish the interest in suit for seeking confirmation of the invalidity of the original project implementation plan, and it must be examined case by case whether such subsequent acts have created, or continue to maintain, an appearance of forming public-law legal relationships to an extent that affects the rights and obligations of owners of land, etc." Accordingly, where subsequent procedures based on the earlier plan remain, such as allotment applications, expropriation and a management and disposition plan, the interest in disputing the validity of the earlier plan may not be extinguished even if an amendment has been approved.

Article 48 (approval of management and disposition plans) and Article 28 (approval of project implementation) of the former Urban Improvement Act, cited in the above precedents, correspond to Articles 74 and 50 of the current Urban Improvement Act (도시 및 주거환경정비법). Before filing suit, it is therefore necessary to check whether approval and public notice have been made and whether an amendment has been approved, and to choose the proper form of action between party litigation and appeal litigation.

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