Supreme Court: "Authority to Grant Gyeonggi-do Transfer Discount Subsidies Lies with Mayors and County Governors"

Court: "Delegation of Tasks Such as Payment of Gyeonggi-do Subsidies to Mayors and County Governors"

The Supreme Court has ruled that the authority to provide subsidies related to discounted transfer fares in Gyeonggi Province lies with the ‘mayors and county governors,’ not the provincial governor.

The Supreme Court’s Third Panel (Presiding Justice Ahn Cheol-sang) announced on the 21st that in a lawsuit filed by the bus company Korail Networks against the Governor of Gyeonggi Province and the Mayor of Gwangmyeong City, demanding the cancellation of the refusal to pay loss compensation, the court dismissed Korail Networks’ claim against the Governor of Gyeonggi Province and partially accepted the claim against the Mayor of Gwangmyeong.

Korail Networks operated bus number 8507 on the route between KTX Gwangmyeong Station and Seoul Sadang Station under a city bus limited license granted by Gwangmyeong City from December 2016 to November last year, and requested financial support from Gwangmyeong City.

Gwangmyeong City requested loss compensation support from Gyeonggi Province, but Gyeonggi Province notified that subsidy payments were not possible.

When Korail Networks requested subsidies again from Gwangmyeong City and Gyeonggi Province in January 2019, Gyeonggi Province informed Gwangmyeong City and Korail Networks of the same position as before.

Ultimately, Korail Networks filed a lawsuit seeking to cancel Gyeonggi Province’s refusal to pay subsidies and to confirm that Gwangmyeong City’s ‘inaction’ (failure to perform a duty) in not responding directly to the subsidy application was illegal.

The first trial court dismissed the lawsuit against Gyeonggi Province, stating that "the subject of financial support is the Mayor of Gwangmyeong City, not the Governor of Gyeonggi Province." It also ruled that Gwangmyeong City’s failure to decide on the subsidy payment was illegal.

The second trial court ruled that "it cannot be seen that the Governor of Gyeonggi Province delegated the financial support duties to the Mayor of Gwangmyeong City," and judged that the refusal by the provincial governor to pay subsidies was unjust. Since the second trial court judged that the authority to pay subsidies belonged to the Governor of Gyeonggi Province, all claims by Korail Networks against Gwangmyeong City were dismissed.

However, the Supreme Court held that "it is reasonable to view that the authority for subsidy payments and related duties of Gyeonggi Province is delegated to the mayors and county governors." The court reasoned, "If the authority for licensing and registration of passenger automobile transportation businesses is delegated to the mayors and county governors, then according to the Gyeonggi Province ordinance stating that the method and procedure of financial support are also determined by the mayors and county governors, the duties related to subsidy payments are delegated to the mayors and county governors, including the Mayor of Gwangmyeong."

Furthermore, the court stated, "When administrative authority is delegated, the authority is transferred to the delegatee, who must exercise it under their own responsibility. Regarding the affairs handled by cities, counties, autonomous districts, or their heads that are delegated by the city or province, they must be supervised and guided by the provincial governor. The response to subsidy payment applications must be made by the Mayor of Gwangmyeong City, and the Governor of Gyeonggi Province is not the authority to decide on subsidy payment applications," the court ruled.