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  • Interpretation
  • No.652
  • Date
  • 2008/12/05
  • Issue
    • Does “reasonable period of time” stated in J.Y. Interpretation No. 516 have an upper limit?
  • Holding
    •     Article 15 of the Constitution provides that the people’s property rights shall be protected. Although the State may expropriate the people’s property pursuant to the law when it is necessary for the purpose of public use or other public interests, fair compensation shall be promptly given. If and when the original compensatory disposition becomes final and binding due to the lapse of statutory remedial period, and the compensation is paid in full, any subsequent discovery of errors by the Special Municipality or County/City concerning the land value criteria upon which the original compensatory disposition is based that result in the shortfall of the original compensation and render the original disposition unlawful, such competent authorities shall withdraw the original compensation disposition ex officio, render a lawful compensatory disposition, and notify the land-use petitioner to pay the discrepancies to the original landowner. The original expropriation shall become invalid in the event the discrepancies remained unpaid after a certain period of time.  J. Y. Interpretation No. 516 shall accordingly be supplemented.
  • Reasoning
    •     Article 15 of the Constitution provides that the people’s property rights shall be protected. Although the State may expropriate the people’s property pursuant to the law when it is necessary for the purpose of public use or other public interests, fair compensation shall be given. This compensation is due to the expropriation of property. For owners of expropriated property, this is a special sacrifice for the sake of public interests, and the State shall compensate the loss with respect to the deprivation of property or the constraints on rights. Therefore, in light of the purpose of the Constitution to protect the property rights of the people, the compensation must be fair and prompt, as several interpretations rendered by the Judicial Yuan have so dictated (See Interpretation Nos. 400, 425 and 516).
      
    •     Land price and other compensation due to expropriation shall be paid no later than fifteen (15) days after the period of public notice is expired, and in case the compensatory amount is adjusted after being re-evaluated or as the result of an administrative grievance proceeding, the discrepancies shall be paid within three (3) months since the date the result is determined (See the first sentence of Article 233 of the Land Act, the first sentence of Article 20, Paragraph 1 and Article 22, Paragraph 4 of the Eminent Domain Act).  J. Y. Interpretation No. 516 also held: “Article 233 of the Land Act clearly stipulates that land price and other compensation from expropriation of land shall be paid no later than ‘fifteen (15) days since the expiration of public notice.’ Although this statutory period may be extended because of the governing authority’s submission for re-evaluation in light of objection on the amount of compensation, the governing authority shall nevertheless immediately notify the person in need of land use once the compensatory amount is determined, and impose the period within which payment shall be made and remitted to the landowner. Such period shall not exceed fifteen (15) days as provided in the above-stated Land Act (See Yuan-tze No. 2704 and Interpretation No. 110). In the event the amount of discrepancies is exceedingly large that requires the expenditure of reserved fund, or there are other special circumstances that render the payment within fifteen (15) days impossible, payment shall nevertheless be promptly made within a reasonable period of time since the date re-evaluation is determined or the eminent domain shall be deemed invalid.”  These strict requirements on compensatory payment period over expropriation are to uphold the constitutional objective of protecting people’s property rights and the function of procedural safeguards on such protection.
      
    •     While J. Y. Interpretation No. 516 deals with payment period after the objection proceeding on expropriation compensation, in light of the constitutional requirement for adequate and efficient compensatory payment, however, it is applicable mutatis mutantis to situations where error is discovered after the original compensatory disposition becomes final for the lapse of statutory period and the discrepancies must be paid.  As a result, if the Special Municipality or County/City should discover that the land value that serves as the basis of its disposition is erroneous only after that disposition has become final and the shortfall amount has been paid, thereby rendering such disposition unlawful, in accordance with the first sentence of Article 117 of the Administrative Procedure Act, the Special Municipality or County/City may indeed at its discretion decide whether to rescind the original disposition and enter a lawful one instead with disbursement for the discrepancies. However, given that there is objectively a shortfall concerning the original compensation already, the status quo, therefore, constitutes a serious violation of the constitutional requirement for adequate compensation. Consequently, to uphold the constitutional requirement that adequate and efficient compensation be provided, the Special Municipality or County/City has no room to exercise its decision not to rescind; i.e., to undo the final but unlawful disposition as a matter of authority, issued another lawful disposition, notify the land-use applicant to pay the discrepancies and transfer that payment to the land owner within a reasonable period of time  If the discrepancies are not paid after the period is expired, the approved expropriation shall immediately be deemed invalid.  J. Y. Interpretation No. 516 is hereby supplemented to conform with the Constitution objective in protecting the property rights of the people.
      
    •     The so-called reasonable period of time indicated above shall be clearly stipulated by legislative act based on the constitutional requirement for prompt compensatory payment.  Before such legislation comes into being, the reasonable period of time shall be determined, based on the principle of promptness and on case-by-case basis, by factors such as the amount of the compensatory discrepancies, the appropriation of the budget and reserve fund, and the reasonable expectation of time the land-use applicant needs for fund-raising.  This is because the land-use applicant cannot possibly foresee circumstances where errors are discovered after the original disposition becomes final with compensatory discrepancies incurred, nor can the applicant be obligated to arrange such discrepancy payment in advance.  Should the above stated provisions of the Land Act or Eminent Domain Act be applied [strictly] so that the Special Municipality or County/City must notify the land-use applicant as well as complete the payment and transfer of compensatory discrepancies within fifteen (15) days or three (3) months, hardship is often created both in reality and in law (such as the relevant limitation by the Budget Act).  Nevertheless, to avoid the situation where the Special Municipality or County/City continuously delay payment of the compensatory discrepancies, thereby infringing upon the rights of the original landowner, and taken into consideration the aforementioned factors, the maximum of this reasonable period of time shall be no more than two (2) years. 
      
    •     Prior to the legislative enactment of a clear stipulation, the starting date of the above-stated reasonable period of time shall be the date the re-evaluation decision of the Committee on Land Price and Land Values Standards of the Special Municipality or County/City becomes final.  This is because the unlawfulness of the original compensation disposition is caused by the erroneous land value criteria based on which the Special Municipality or County/City renders the original compensation disposition, and the Special Municipality or County/City shall submit to the Committee on Land Values and Normal Land Values for re-evaluation (See Articles 154, 165 and 247 of the Land Act, Articles 22 and 30 of the Eminent Domain Act and Articles 15 and 46 of the Equalization of Land Rights Act).  If the unlawfulness of the original compensation disposition is resulted from errors in the original publicly announced current land value, the reasonable period of time shall start from the date the public notice of the corrected land value by the Committee on Land Values and Normal Land Values becomes final.
      
    • Translated by Spenser Y. Hor, Esq. and Chien Yeh Law Offices.
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