The Supreme Court ruled that Gyeonggi Province's decision not to pay a reward to a person who reported illegal resales of apartment pre-sale rights due to reasons such as a lack of budget was not unlawful. The court said whether to pay a reporting reward falls within the discretion of provincial and metropolitan city governors.
The Supreme Court's First Division (Presiding Justice Shin Sook-hee) on Dec. 11 sent a suit back to the Suwon High Court, overturning a lower court ruling that had ordered Gyeonggi Province to pay a reward in a case filed by a person identified as A seeking to cancel the province's rejection of a reward application.
In Nov. 2015, A reported 1,141 cases of illegal resale of apartment pre-sale rights in the Seoul metropolitan area to Gyeonggi Province, the Seoul Metropolitan Government, and the Incheon Metropolitan City Government. Of these, 52 cases resulted in final criminal convictions. In June 2019, A applied to Gyeonggi Province for an 85 million won reporting reward for the 52 cases.
However, Gyeonggi Province did not pay the reward. The province said there were no funds because the Gyeonggi Provincial Council cut the reporting reward budget when setting the 2019 budget.
Gyeonggi Province also cited a statutory interpretation by the Ministry of Government Legislation stating that the payment of rewards may be withheld or reduced at the discretion of provincial and metropolitan city governors. The possibility that an excessive reward could be paid to a specific individual was also offered as a consideration. A filed an administrative appeal with the Central Administrative Appeals Commission, but it was dismissed.
The court of first instance ruled that Gyeonggi Province must pay A the reward. The bench said, "The defendant (Gyeonggi Province) refused to pay the plaintiff's reporting reward application arbitrarily without justifiable reason."
The appellate court reached the same conclusion. The appeals bench said, "We cannot find circumstances suggesting a compelling public-interest need to refuse payment of the reward."
But the Supreme Court reached a different conclusion. The court said, "Article 92 of the Housing Act does not specifically set criteria for whether to pay a reward," adding, "The payment of a reward is a discretionary act in which provincial and metropolitan city governors are granted discretion over whether to pay."
Article 92 of the Housing Act provides that "provincial and metropolitan city governors may pay a reward, as prescribed by presidential decree, to those who report to the competent authority those who resell or broker the resale of pre-sale rights in violation of Article 64 (restrictions on the resale of dwellings)."
In addition, the Enforcement Decree of Article 92 of the Housing Act provides that "provincial and metropolitan city governors must pay the reward within 30 days from the date of application in accordance with the payment standards prescribed by ordinance of the Ministry of Land, Infrastructure and Transport." The Supreme Court said, "If a decision has been made to pay the reward, it is interpreted to mean that payment must be completed within 30 days from the date the application was received."