The Supreme Court rendered the 106-Tai-Shang-1399 Civil Decision of December 6, 2017 (hereinafter, the “Decision”), holding that in case of urban land readjustment conducted by the private sector, if the readjustment committee and the original land owners have agreed to the distribution of readjusted land, such distribution may certainly be conducted pursuant to the agreement to the extent that the rights and interests of others are not undermined and within the scope of the free disposal rights originally enjoyed by the parties.
According to the facts underlying this Decision, the Plaintiff filed a complaint, alleging that the Defendant was a member of an organization set up pursuant to Article 58 of the Equalization of Land Rights Law and the Rules for Encouraging Urban Land Readjustment by Land Owners (hereinafter, the “Rules”). However, the Defendant adopted a resolution during its directors’ meeting to adopt a proposal submitted for discussion to recognize and announce the distribution results of land readjustment (hereinafter, the “2006 Resolution at Issue”) without calling a members’ meeting. The Plaintiff believed that the resolution at issue was illegal since it prevented the Plaintiff from receiving the differential land value compensation. Therefore, an objection was raised during the announcement period, but subsequent coordination also failed. The Defendant separately adopted during its directors’ meeting a resolution to distribute another land of the Plaintiff during the Defendant’s directors’ meeting (hereinafter, the “2012 Resolution at Issue”). Therefore, a complaint was filed to confirm that the 2006 Resolution at Issue and the 2012 Resolution at Issue were both invalid. The original trial court rendered a decision in favor of the Plaintiff. Dissatisfied, the Defendant appealed.
According to the Decision, in case of urban land readjustment conducted by the private sector, if the readjustment committee and the original land owners have agreed to the distribution of readjusted land, such distribution may certainly be conducted pursuant to the agreement under the principle of private law autonomy to the extent that the rights and interests of others are not undermined and within the scope of the free disposal rights originally enjoyed by the parties. As for land owners who do not reach the agreement, relevant laws and regulations shall be followed to reasonably consider the needs and rights and interests of the original land owners.
According to the Decision, the Defendant’s charter specifically provided that land owners could use the cost equivalent lands created in the readjusted zone or paid the differential land value to offset or pay for the readjustment cost. In addition, the land readjustment agreement executed with the readjustment company also provided that both parties shall waive their claims with respect to the land distribution ratio after the readjustment as well as differential land value which should be received or paid when it is generated by applying the distribution area calculated above to the deducted readjustment burden for land readjustment by public agencies. Since the above agreement was either adopted by way of a resolution adopted during a members’ meeting or by a resolution adopted during an authorized directors’ meeting, the agreement could certain bind the Plaintiff. The original trial court jumped to the conclusion that the Defendant’s resolutions at issue had failed to pay the differential land value compensation in violation of Article 60 of the Equalization of Land Rights Law without investigating or expounding the grounds. Therefore, the original decision, which was found to be rash, was reversed and remanded.