The case of Song v. the Dalian Management Committee regarding the confirmation of the illegality of an administrative act.

Handling Attorney: Lin Lin

Keywords: levy, marine area compensation, failure to perform statutory duties, unlawful administrative act

[Case Summary]

This case is a remanded case for retrial. In 2007, the plaintiff, Mr. Song, acquired ownership of the above-ground structures and a 50-year operating right over the Gaolicheng Fishing Port in Zhuanghe City through an auction procedure. The boundaries and area of the fishing port were determined according to the port boundary map, with the land area within the port covering approximately 31 mu, which is collectively owned by Dazhang Village, Mingyang Town. On July 1, 2006, the Villagers’ Committee of Dazhang Village leased a portion of abandoned wasteland and rocky shoals along the northern shore at the western end of the Gaolicheng Port to Mr. Shi. On May 29, 2010, Mr. Shi transferred the aforementioned site, along with processing facilities, factory buildings, and office buildings, all as a single package, to Mr. Zuo. On January 12, 2011, the Garden Mouth Economic Development Bureau signed a “Compensation Agreement for the Reclamation of Sea Use Rights” with Mr. Zuo, stipulating that while reclaiming the sea use rights, the Garden Mouth Economic Development Bureau would also take over the related land use rights and acquire the onshore buildings and associated facilities. On March 28, 2011, the Garden Mouth Economic Development Bureau issued a notice titled “Announcement Regarding the Reclamation of Bottom-Deployed Vessels and Onshore Supporting Facilities from Mr. Zuo (Mr. Shi and Mr. Shi Moumou)” to the Mingyang Subdistrict Office and all villages, informing all stakeholders that if they had any disputes or objections regarding the ownership of the reclaimed assets, they should promptly report such issues to the Marine Management Division of the Garden Mouth Economic Development Bureau or inquire about the detailed information concerning the relevant assets. On March 31, 2011, the plaintiff, Mr. Song, filed an objection with the Garden Mouth Economic Development Bureau, arguing that in 2007, the Ocean and Fisheries Bureau had auctioned off the ownership and operating rights of the above-ground structures of the Gaolicheng Fishing Port to Mr. Song. According to the “Port Boundary Map of Gaolicheng Fishing Port in Zhuanghe City,” the land area involved in the onshore projects intended for acquisition by the Garden Mouth Economic Development Bureau fell within the scope of the fishing port. Therefore, the acquisition of these port-related projects should have been negotiated and resolved with the plaintiff, Mr. Song. However, the Garden Mouth Economic Development Bureau did not respond to Mr. Song’s objection. On October 24, 2011, the Garden Mouth Economic Development Bureau and Mr. Zuo signed a “Supplementary Agreement,” under which both parties agreed to compensate Mr. Zuo an amount of 5.98 million yuan. On November 8, 2011, the Management and Operation Station of Mingyang Town, Zhuanghe City, paid the compensation to Mr. Zuo. Furthermore, the former Dalian North Yellow Sea Economic Development Zone and the Dalian Garden Mouth Economic Zone have been merged into the Dalian North Yellow Sea Economic Development Zone. The North Yellow Sea Management Committee is an agency dispatched by the Dalian Municipal People’s Government; thus, the North Yellow Sea Management Committee possesses the administrative authority to lawfully reclaim the sea use rights involved in this case and provide compensation to the holders of such rights. The plaintiff, Mr. Song, contends that the administrative actions taken by the North Yellow Sea Management Committee—namely, its leasing and acquisition of Mr. Zuo’s land and onshore facilities—have infringed upon his legitimate rights and interests, and therefore he has filed a lawsuit.

[Focus of the Dispute]

1. The scope of rights that the plaintiff, Mr. Song, acquired through auction over the Goryeong Fishing Port; 2. Whether the administrative act by which the defendant, the North Yellow Sea Management Committee, leased and acquired the land and onshore facilities belonging to Mr. Zuo constitutes an illegal act that should be revoked; 3. Whether the plaintiff, Mr. Song, has standing to bring this lawsuit.

Does Quan’s filing of the lawsuit exceed the statute of limitations?

【Judgment Result】

The first-instance judgment after remand for retrial confirmed that the administrative actions taken by the North Yellow Sea Management Committee—specifically, its acceptance of the lease and acquisition of land and onshore facilities belonging to Zuo and Shi—during the process of reclaiming their marine use rights were unlawful and are hereby revoked.

【Reasoning of the Ruling】

The administrative actions taken by the Garden Mouth Economic Development Bureau regarding the lease of collectively-owned land within the Left Navy Fishing Harbor, as well as the acquisition of buildings and structures and other assets, are found to be unlawful due to insufficient key evidence, failure to fulfill statutory duties, and obvious impropriety. Therefore, in accordance with the law, these actions should be revoked.

[Lawyer’s Perspective]

Regarding the key points of contention in this case, the counsel handling the case holds the following views: 1. The scope of rights acquired by the plaintiff, Mr. Song, through this auction encompasses, within the harbor boundary—extending eastward to the summit of Gao Li Chengshan and the southern dike, westward 200 meters inland from Liu Wang Tou, southward to the southern side of the breakwater, and northward to the base of the northern mountain range—a total area of 283 mu, including 252 mu of harbor basin and 31 mu of harbor land, along with ownership of all ground-level structures and a 50-year operating right within the fishing harbor zone. 2. After receiving the plaintiff, Mr. Song’s, objection to the ownership of the assets proposed for compensation, the Huayuankou Economic Development Bureau, without conducting any investigation, hearing, or decision-making procedures, relied solely on the asset valuation details jointly confirmed by itself and Mr. Zuo to assess and determine the amount of compensation. Thus, it failed to fulfill its statutory duty as the party entering into the administrative compensation agreement. Furthermore, after Shenghua Appraisal pointed out that certain assets held by Mr. Zuo had defects in their ownership, the Huayuankou Economic Development Bureau did not gather additional evidence nor conduct a thorough verification and determination of the ownership of the assets proposed for compensation. Instead, it continued to base its administrative compensation action on the assessment results provided by the appraisal report, thereby also failing to fulfill its statutory duties. Consequently, the administrative compensation agreement signed between the Bureau and Mr. Zuo lacks sufficient supporting evidence. 3. The plaintiff, Mr. Song, has a direct interest in the administrative act at issue and is thus entitled to bring this lawsuit. The North Yellow Sea Management Committee’s acceptance of the lease and occupation of the harbor land under this agreement constitutes a continuing infringement; therefore, the statute of limitations for filing this lawsuit should be calculated from the date the act ceased. Accordingly, the plaintiff, Mr. Song, has not exceeded the statute of limitations for filing this lawsuit.