Supreme Court: “Local government heads have discretion over paying rewards for reporting illegal transfers of pre-sale rights”

[The Financial News] The Supreme Court of Korea has overturned and remanded a lower court ruling that ordered the payment of an informant reward to an applicant who reported illegal transactions of apartment pre-sale rights in the Greater Seoul area. The court held that the payment of such rewards may be determined at the discretion of the heads of local governments.
According to the legal community on the 18th, the First Petty Bench of the Supreme Court of Korea (presiding Justice Tae-ak Rho, Justice of the Supreme Court of Korea) recently reversed the appellate court decision that had canceled Gyeonggi Province’s disposition refusing to pay 85 million won in informant rewards for 52 cases of illegal transactions and remanded the case.
In November 2015, Mr. Kim reported 1,141 cases of illegal transactions involving apartment pre-sale rights in the Greater Seoul area. Criminal penalties were finalized in 52 of those cases. Pursuant to the Housing Act, Mr. Kim applied in June 2019 to then-Governor of Gyeonggi Province Lee Jae-myung for an informant reward of 85 million won in relation to two of the cases. However, Gyeonggi Province refused to pay the reward, citing the lack of a secured budget and the position that the payment of informant rewards is at the discretion of provincial governors.
Mr. Kim subsequently filed a lawsuit in March 2023 seeking the annulment of Gyeonggi Province’s refusal to pay, and both the trial court and the appellate court ruled in his favor. The appellate court held that Gyeonggi Province had arbitrarily refused payment without just cause.
The Supreme Court of Korea, however, reached a different conclusion. It stated, “The payment of rewards under Article 92 of the Housing Act constitutes a discretionary administrative act, in which the authority to decide whether to pay is vested in the mayors and provincial governors.”

hwlee@fnnews.com Lee Hwan-joo Reporter