Supreme Court: "Strict Interpretation Required for 'Related Materials' Subject to Disclosure under Urban Maintenance Act"... "Transcripts Must Be Preserved"

Reconstruction Association Minutes Are Not Disclosure-Eligible Meeting Records
Financial Statements Are Also Not Related Materials of Settlement Reports

Supreme Court Grand Bench. Photo by Supreme Court

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The Supreme Court has ruled that the term 'related materials,' which the chairman of the housing reconstruction maintenance project promotion committee or the project implementer is obligated to disclose to union members under the Urban and Residential Environment Maintenance Act (Urban Maintenance Act), should be interpreted strictly.

Since the law delegates the authority to specify the documents or 'related materials' that must be disclosed to a Presidential Decree, expanding the scope of 'related materials' subject to criminal punishment without explicit provisions in the law or enforcement decree violates the principle of legality in criminal law.

The Supreme Court's Second Division (Presiding Justice Cheon Dae-yeop) announced on the 20th that it overturned the lower court's ruling that sentenced Mr. A, the chairman of the housing reconstruction maintenance project promotion committee indicted for violating the Urban Maintenance Act, to a fine of 1.5 million won, and remanded the case to the Seoul Northern District Court.

The court stated, "The lower court regarded the stenographic records and cash flow reports as 'related materials' under the Urban Maintenance Act in the indictment. This judgment misinterpreted the legal principles concerning 'related materials' under Article 124, Paragraph 1 of the Urban Maintenance Act, which affected the verdict and constitutes a legal error."

Mr. A was accused of violating relevant laws that require the parallel disclosure of documents such as residents' general meeting minutes and related materials to union members, landowners, and tenants online and offline within 15 days, by failing to disclose meeting materials, minutes, and stenographic records created between 2015 and 2019.

The Urban Maintenance Act mandates the mandatory disclosure of certain documents and related materials to ensure transparency and public interest, preventing corruption by union executives who manage massive project funds colluding with construction companies. However, the Act does not clearly define what constitutes 'related materials,' requiring interpretation through the law and Presidential Decrees to determine the scope of materials subject to disclosure.

Article 124 (Disclosure of Related Materials) Paragraph 1 of the Urban Maintenance Act states, "The promotion committee chairman or project implementer shall disclose the following documents and related materials concerning the implementation of the maintenance project within 15 days after their creation or modification, using both the internet and other methods to allow union members, landowners, or tenants to access them," listing items such as ▲minutes of the promotion committee, residents' general meeting, union general meeting, union board of directors, and delegates' meetings (Item 3), ▲monthly detailed cash inflow and outflow statements (Item 8), ▲settlement reports (Item 9), and ▲other documents and related materials concerning the maintenance project as prescribed by Presidential Decree (Item 11).

Accordingly, under the delegation in Item 11 of Article 124 Paragraph 1, Article 94 (Disclosure and Notification of Materials) of the Enforcement Decree of the Urban and Residential Environment Maintenance Act, a Presidential Decree, stipulates disclosure targets and supporting materials such as ▲matters related to sales announcements and applications, ▲annual fund operation plans, ▲monthly construction progress of the maintenance project, ▲detailed contract changes with service providers such as designers, constructors, and specialized maintenance project managers, and ▲changes in maintenance project costs.

If the documents or supporting materials mandated for disclosure under Article 124 of the Urban Maintenance Act are not disclosed within the prescribed period using both the internet and other methods, the violator is subject to punishment under Article 138 (Penalties) Paragraph 1 Item 7 of the Urban Maintenance Act, which includes imprisonment for up to one year or a fine of up to 10 million won.

In the trial, the key issue was whether stenographic records or cash flow reports, which are not explicitly regulated as disclosure targets in the law or enforcement decree, could be considered 'related materials.' The prosecution included these in the indictment, arguing that stenographic records are related materials to the minutes, which are disclosure targets under the Urban Maintenance Act, and that cash flow reports are related materials to the settlement reports, thus mandatorily subject to disclosure.

The first trial court found Mr. A guilty of violating the Urban Maintenance Act and sentenced him to a fine of 1.5 million won.

The court judged that the failure to disclose the stenographic records of the residents' general meeting and inaugural general meeting held on December 19, 2015, as well as the materials and minutes of four promotion committee meetings held in 2018, were all guilty. However, it acquitted Mr. A of charges related to the payment documents for stenographic record preparation dated November 24, 2018, the 2018 cash flow report prepared in December of the same year, and the violation of parallel disclosure timing for the 2018 card usage statement.

The court viewed payment documents related to stenographic record preparation as evidence documents, differing in nature from detailed cash inflow and outflow statements that summarize the cash flow process.

In particular, the court pointed out that the 'monthly detailed cash inflow and outflow statements,' which are disclosure targets, are prepared after the month has passed. Including cash flow documents, which are mostly prepared immediately upon inflow or outflow, as 'related materials' subject to disclosure would lead to the awkward result that these documents must be separately disclosed within 15 days from their earlier preparation date than the monthly statements.

The appellate court rejected Mr. A's claim that 'stenographic records' are not related materials but accepted the prosecution's appeal regarding the cash flow report part, which was acquitted in the first trial, and found him guilty.

The court reasoned that to determine whether the minutes were genuinely prepared and whether the decision-making contents of union members were properly reflected, stenographic records, meeting materials, and meeting results should be included as related materials of the minutes stipulated in the disclosure obligation regulations. It also cited the information disclosure items specified in the Seoul Metropolitan Government's B operation guidelines appendix, which mandates the chairman of the housing reconstruction maintenance project promotion committee to disclose not only the 'minutes' of the residents' general meeting or promotion committee but also 'stenographic records' (or audio or video materials), 'meeting content guidebooks,' and 'original scanned files of written resolutions' within 15 days.

On the other hand, the court recognized the cash flow report as related materials directly related to the disclosure target 'settlement report' and found Mr. A guilty for disclosing it belatedly.

However, while expanding the scope of guilt, the court maintained the fine of 1.5 million won, considering that the union was experiencing financial difficulties around the time Mr. A took office as chairman and that union members petitioned for leniency.

However, the Supreme Court overturned the judgments of the first and second trials, reasoning that the concept of 'related materials,' which must be strictly interpreted under the principle of legality, was expansively interpreted.

The court first cited existing Supreme Court precedents, stating, "The principle of legality requires that crimes and punishments be defined by law to protect individuals' freedom and rights from arbitrary exercise of state penal power. In light of this, penal laws must be interpreted strictly, and it is impermissible to excessively expand or analogically interpret explicit provisions to the detriment of the defendant, as this violates the principle of legality."

The court noted, "The Urban Maintenance Act specifically enumerates the documents subject to disclosure in each item but does not separately stipulate criteria for determining 'related materials.' Furthermore, it delegates to the Presidential Decree the authority to add other documents and related materials requiring disclosure."

It continued, "Therefore, expanding the scope of 'related materials' beyond the documents explicitly listed in each item solely to achieve regulatory objectives such as ensuring transparency, public interest, or union members' right to know, without explicit legal or delegated enforcement decree provisions, violates the principle of legality's requirement for penal law interpretation."

The Supreme Court concluded that stenographic records or recordings under the Urban Maintenance Act are 'items to be stored' rather than 'items to be disclosed' like minutes. It also ruled that cash flow reports, which the prosecution interpreted as related materials to settlement reports, are not inseparably connected to settlement reports and thus cannot be included as disclosure targets.

This content was produced with the assistance of AI translation services.