Review of problems with the compensation system for flower business and improvement plans
Authors:   Korean Public Land Law Association, Bae Myung-Ho 
Published: September 2022

Compensation for flower complex business is emerging as a significant social issue along with the so-called the compensation for the 3rd term New Town development. The problems and its solutions should be searched for from the legal and theoretical grounds such as ① the principle of just compensation pursuant to Clause 3 of Article 23 of the Constitution ② realization of social justice of equality before public charge ③ scheming to balance the public and private interests ④ stability of a legal life. Flowering plant is a plant cultivated for ornamental and processing purposes. Business refers to an act of continuously repeating the same kind of activity with a profit-making purpose. When compared with the concept of business in terms of the Commercial Law, the concept of business in terms of “the Land Compensation Act” is substantially disparate in the sense that profitability is excluded and legitimacy of business sites is added. For convenience’s sake, flowering plant business in development restricted areas is classified into 5 types.
According to Clause 1 of Article 77 of the Land Compensation Act and Article 45 of the Enforcement Regulations of the same Act, the element of the business is that the business should be continuously operated equipped with human and physical facilities in a legitimate business site prior to the date of business acknowledgment notice and abide by the business authorization as stipulated in operating its business.
The elements for the legitimacy of the business sites should be interpreted in connection with individual laws such as Clause 1 of Article 56 of the National Land Planning Act, Clause 1 of Article 20 of the Construction Act, Article 12 of the Act on Restricted Development Areas and Paragraph 1 of Article 12 of the Enforcement Regulations of the same Act [Annex 4]. The recent adjudication and precedents by the National Land Eminent Domain Committee have been summarized in this study. Most of the cases except for the “Urban Development Project of Gimhae Sameo District” were in legal disputes within the restricted development areas, where, in particular, the legitimacy of the business sites was the main controversial issue.
While the three cases prior to this case pertains to type 1 and 2 of the flowering plant business, the private investment project of the 2nd Gyeongin Expressway is regarded as type 4 where the plaintiffs cultivated pot plants outside for a certain period of time and brought in greenhouses to sell them to retailers.
Seoul Administrative Court dismissed the claim for compensation for business loss, judging that the installation of each greenhouse could not be regarded as a minor development activity according to the regulations above mentioned. Thereupon, the plaintiffs appealed against the decision, but Seoul appellate Court also dismissed plaintiffs' appeal for the compensation. It was also dismissed by the Supreme Court as a trial with the reason of no need for further hearing. According as the legitimacy of business sites is required to be a legal element, it is rather against the principle of equality in the fair comparison between the private interests of those who complied with the law and those who violated the law to compensate the people with the public charge who do not meet the requirements, even having committed the illegal acts and to give policy-oriented consideration for them. Therefore, the exclusion of the element of legitimacy of business sites is likely to be inconsistent with the principle of fair burden.