Supreme Court: "Even if the audit request for Incheon Wangsang Marina subsidy recovery is dismissed, residents can still file a lawsuit"
[Asia Economy Reporter Kim Hyung-min] The Supreme Court has ruled that residents can file a resident lawsuit even if their audit request regarding unfair or illegal acts by local governments has been dismissed.
The Supreme Court's First Division (Presiding Justice Lee Ki-taek) overturned the lower court's ruling that dismissed the appeal in a damages lawsuit filed by five Incheon citizens, including Mr. Lee, against Incheon City, demanding that Incheon City file a recovery lawsuit for 16.7 billion KRW against former Mayor Song Young-gil and Wangsang Leisure Development. The case was remanded to the Seoul High Court on the 15th.
The court stated, "Unless there are special circumstances that deem the audit request in this case improper due to failure to meet other legal requirements for resident audit requests, residents can directly file a resident lawsuit."
In September 2014, Incheon City supported 16.7 billion KRW out of 50 billion KRW for the installation of temporary structures at Wangsang Marina on Yeongjong Island for the Incheon Asian Games yacht events.
This was based on an agreement signed in March 2011 during former Mayor Song's tenure between Incheon City and Wangsang Leisure Development.
However, in March 2015, Incheon City determined in a special audit that facilities attracted through private investment are not subject to local government support, deeming the support improper and ordered the recovery of the funds.
In response, 396 Incheon citizens requested a resident audit from the Ministry of Culture, Sports and Tourism in March 2015, demanding the return of the support funds. However, the Ministry dismissed the request, stating that Incheon City's support did not violate any laws.
Subsequently, some citizens filed a resident lawsuit against Incheon City claiming damages.
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The first and second trials, based on the Local Autonomy Act, held that only when the audit agency actually conducts an audit following a resident audit request can a resident lawsuit be filed, and thus ruled that the plaintiffs did not have the qualification to file a resident lawsuit, dismissing the damages claim.
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