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2017 (Gyo-Hi) 404

2018.11.16
2017 (Gyo-Hi) 404
Minshu Vol. 72, No. 6
Judgment on case in which a prefectural assembly faction which, or a prefectural assembly member who, received political research funds and political activity funds allocated under the Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Activity Funds (Kanagawa Prefectural Ordinance No. 33 of 2001; its title prior to amendment by Kanagawa Prefectural Ordinance No. 42 of 2013, “Kanagawa Prefectural Ordinance on the Allocation, etc. of Political Research Funds”) does not have an obligation to return unjust enrichment even if some of the expenditures stated in the income and expenditure reports on these funds did not actually exist
Case seeking a declaratory judgment of wrongful receipt of political activity funds by Kanagawa Prefectural Assembly members
Judgment of the Second Petty bench, quashed and decided by the Supreme Court
Tokyo High Court, Judgment of July 10, 2017
A prefectural assembly faction which, or a prefectural assembly member who, received political research funds and political activity funds under the Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Activity Funds (Kanagawa Prefectural Ordinance No. 33 of 2001; its title prior to amendment by Kanagawa Prefectural Ordinance No. 42 of 2013, “Kanagawa Prefectural Ordinance on the Allocation, etc. of Political Research Funds”), which does not provide that political activity funds, etc. should be allocated by individually designating specific uses but provides that a certain amount should be allocated for each month based on a decision made for each fiscal year and an income and expenditure report should be submitted for each fiscal year and that any balance that remains after subtracting the total amount of expenditures that are compliant with the use criteria from the amount allocated for a fiscal year should be returned, does not have an obligation to the prefecture to return unjust enrichment even if some of the expenditures stated in the income and expenditure report on these funds for a fiscal year did not actually exist, unless the balance that remains after subtracting the amounts of expenditures that did not actually exist and those of expenditures that are incompliant with the use criteria from the total amount of expenditures stated in the income and expenditure report for the fiscal year falls below the amount of political activity funds, etc. allocated for the fiscal year.
Article 100, paragraphs (14) and (15) of the Local Autonomy Act (prior to amendment by Act No. 72 of 2012); Article 100, paragraphs (14), (15) and (16) of the Local Autonomy Act; Article 13, paragraph (1) of the Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Research Funds (Kanagawa Prefectural Ordinance No. 33 of 2001, prior to amendment by Kanagawa Prefectural Ordinance No. 42 of 2013); Article 14, paragraph (1) of the Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Activity Funds (Kanagawa Prefectural Ordinance No. 33 of 2001); and Article 703 of the Civil Code



Local Autonomy Act (prior to amendment by Act No. 72 of 2012)

(Investigation, Demand for Appearance and Testimony and Production of Records, Political Research Funds, etc.)

Article 100, paragraphs (14) and (15)

(14) An ordinary local government may allocate political research funds to factions or members of its assembly pursuant to the provisions of its ordinances to cover part of their expenses necessary to contribute to research and studies by members of its assembly. In such case, the entities to which such political research funds are to be allocated and the amount of, and the method of allocation of, such political research funds shall be specified by an ordinance.

(15) Each of the factions which or assembly members who receive the political research funds as set forth in the preceding paragraph shall submit to the chairperson an income and expenditure report on such political research funds pursuant to the provisions of the relevant ordinance.



Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Research Funds (Kanagawa Prefectural Ordinance No. 33 of 2001, prior to amendment by Kanagawa Prefectural Ordinance No. 42 of 2013)

(Refund of Political Research Funds)

Article 13, paragraph (1)

(1) If any balance remains after subtracting the total amount of expenditures (meaning expenditures to cover any of the expenses listed in Article 9) paid from political research funds by a faction or assembly member during a fiscal year from the total amount of political research funds allocated to the faction or assembly member for the fiscal year, the faction or assembly member shall refund the amount of such balance no later than May 31 of the following fiscal year.



Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Activity Funds (Kanagawa Prefectural Ordinance No. 33 of 2001)

(Refund of Political Activity Funds)

Article 14, paragraph (1)

(1) If any balance remains after subtracting the total amount of expenditures (meaning expenditures to cover any of the expenses listed in Article 3) paid from political activity funds by a faction or assembly member during a fiscal year from the total amount of political activity funds allocated to the faction or assembly member for the fiscal year, the faction or assembly member shall refund the amount of such balance no later than May 31 of the following fiscal year.



Local Autonomy Act

[Investigation, Demand for Appearance and Testimony and Production of Records, Political Activity Funds, etc.]

Article 100, paragraph (14), (15) and (16)

(14) An ordinary local government may allocate political activity funds to factions or members of its assembly pursuant to the provisions of its ordinances to cover part of their expenses necessary to contribute to research and studies and other activities by members of its assembly. In such case, the entities to which such political activity funds are to be allocated, the amount of, and the method of allocation of, such political activity funds, and the scope of expenses to which such political activity funds may be allocated shall be specified by an ordinance.

(15) Each of the factions which or assembly members who receive the political activity funds as set forth in the preceding paragraph shall submit to the chairperson an income and expenditure report on such political activity funds pursuant to the provisions of the relevant ordinance.

(16) The chairperson shall strive to ensure the transparency of the uses of the political activity funds as referred to in paragraph (14).



Civil Code

(Obligation to Return Unjust Enrichment)

Article 703 A person who has benefited (hereinafter in this Chapter referred to as "beneficiary") from the property or labor of others without legal cause and has thereby caused loss to others shall assume an obligation to return that benefit, to the extent the benefit exists.
The judgment of prior instance shall be quashed and the judgment of first instance revoked.

The appellee’s claim shall be dismissed.

The total cost of litigation shall be borne by the appellee.
The reasons for the petition for acceptance of final appeal filed by the counsels for the appeal, SHIMAZAKI Tomoki et al.



1. This case is an action filed by a local resident against the local government in which the appellee, who is a resident of Kanagawa Prefecture (hereinafter referred to as the “Prefecture”): (1) alleges that (i) some of the expenditures stated in the income and expenditure reports on the political research funds and political activity funds (hereinafter collectively referred to as, “Political Activity Funds, etc.”) allocated to prefectural assembly faction B (hereinafter referred to as the “Faction”) for the period from fiscal year 2011 (excluding April 2011; the same applies hereinafter) to fiscal year 2013 (hereinafter collectively referred to as the “Fiscal Years”) were not actually spent, and (ii) the Faction should refund to the Prefecture such part of the Political Activity Funds as corresponds to the aforementioned expenditures as unjust enrichment, but (iii) the appellant has unlawfully failed to demand such refund; and (2) seeks a declaratory judgment against the appellant confirming that the appellant’s failure to exercise its authority to demand return of unjust enrichment from the Faction is illegal, pursuant to Article 242-2, paragraph (1), item (iii) of the Local Autonomy Act (hereinafter referred to as the “Act,” whether before or after the amendment mentioned below).

2. An outline of the facts related to the case duly confirmed by the court of prior instance is as follows:

(1) The Act prior to amendment by Act No. 72 of 2012 provided: that an ordinary local government may allocate political research funds to factions or members of its assembly pursuant to the provisions of its ordinances to cover part of their expenses necessary to contribute to research and studies by members of its assembly, in which case the entities to which such political research funds are to be allocated and the amount of, and the method of allocation of, such political research funds shall be specified by an ordinance (Article 100, paragraph (14) of the Act); and that each of the factions which or assembly members who receive such political research funds shall submit to the chairperson an income and expenditure report on such political research funds pursuant to the provisions of the relevant ordinance (paragraph (15) of the same article). As a result of the amendment of the Act by Act No. 72 of 2012: “political research funds” was renamed as “political activity funds”; the purpose for which these funds are allocated was modified to “to contribute to research and studies and other activities by members of [the prefectural] assembly” (Article 100, paragraph (14) of the Act); and the chairperson is required to strive to ensure the transparency of the uses of political activity funds (paragraph (16) of the same article).

(2) In response to the provisions of the Act described above, the Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Activity Funds (Kanagawa Prefectural Ordinance No. 33 of 2001; its title prior to amendment by Kanagawa Prefectural Ordinance No. 42 of 2013, “Kanagawa Prefectural Ordinance on the Allocation, etc. of Political Research Funds”; hereinafter the ordinance prior to such amendment is referred to as the “Former Ordinance” and the ordinance amended by such amendment as the “New Ordinance” and both collectively as the “Former and New Ordinances”) provides as follows concerning Political Activity Funds, etc. in summary:

a. Political Activity Funds, etc. shall be allocated to factions or members of the assembly, in a monthly amount of 530,000 yen per assembly member. The method of allocation of Political Activity Funds, etc. shall be, for each faction: (i) Allocation to the faction; (ii) allocation to its assembly members; and (iii) allocation to the faction and its assembly members. The amount of allocation in the case of allocation to a faction shall be calculated by multiplying the monthly amount per assembly member by the number of assembly members belonging to the faction (Articles 2 and 3 of the Former Ordinance and Articles 2, 4 and 5 of the New Ordinance).

b. The expenses which may be covered by political research funds allocated shall be research and study expense, training expense, meeting expense and other expenses specified by the Rules (Article 9 of the Former Ordinance). In this regard, the Rules for Enforcement of the Kanagawa Prefectural Assembly Ordinance on the Allocation, etc. of Political Research Funds (Public Notice of Kanagawa Prefectural Assembly Chairperson No. 1 of 2001 prior to amendment by the Kanagawa Prefectural Assembly Chairperson Notification No. 1 of 2013) listed “document preparation expense” as one of the expenses listed above, and specified the nature of document preparation expense as the “expense incurred by the faction or assembly member in the preparation of documents necessary for deliberation in the assembly.”

The expenses which may be covered by political activity funds are a total of 11 expense items, including research and study expense and document preparation expense. Of these, the nature of document preparation expense is the “expense incurred by the faction or assembly member in the preparation of documents necessary for activities conducted by the faction or assembly member” (Article 3, appended table of the New Ordinance; hereinafter the provisions of the Former and New Ordinances, etc. concerning these expenses which may be covered by Political Activity Funds, etc. are referred to as the “Use Criteria”).

c. Upon receipt of notice from the chairperson that a faction notification stating the method of allocation, etc. of Political Activity Funds, etc. has been received, the governor shall promptly decide on the allocation of Political Activity Funds, etc. for the relevant fiscal year. Upon receipt of a claim for Political Activity Funds, etc. covered by the decision from the representative and assembly members of the faction subject to such decision, the governor shall allocate Political Activity Funds, etc. for each month on the 16th day of such month in principle (Articles 6 and 8 of the Former Ordinance and Articles 8 and 10 of the New Ordinance).

d. The representative and each of the assembly members of each faction shall submit to the chairperson an income and expenditure report stating the amounts of income, expenditure and balance of the Political Activity Funds, etc. for each fiscal year and other information required by the Rules, as well as copies of supporting documentation, etc. evidencing expenditures from the Political Activity Funds, etc. stated in such income and expenditure report (hereinafter collectively referred to as an “Income and Expenditure Report, etc.”), no later than May 15 of the following fiscal year (Article 12, paragraph (1) of the Former Ordinance and Article 13, paragraph (1) of the New Ordinance).

e. If any balance remains after subtracting the total amount of expenditures (meaning expenditures to cover any of the expenses listed in item b above) paid from the Political Activity Funds, etc. by a faction or assembly member during a fiscal year from the total amount of Political Activity Funds, etc. allocated to the faction or assembly member for the fiscal year, the faction or assembly member shall refund the amount of such balance no later than May 31 of the following fiscal year (Article 13, paragraph (1) of the Former Ordinance and Article 14, paragraph (1) of the New Ordinance; hereinafter these provisions are referred to as the “Refund Rules”).

(3) For each of the Fiscal Years, the Prefecture allocated to the Faction, by means of allocation to the faction, Political Activity Funds, etc. in the amount calculated by multiplying the monthly amount of 530,000 yen by the number of assembly members belonging to the Faction. The amounts allocated were 253,340,000 yen for fiscal year 2011, 266,060,000 yen for fiscal year 2012 and 267,120,000 yen for fiscal year 2013.

(4) In each of the Fiscal Years, the Faction allocated, directly to each of its assembly members, a certain monthly amount from the Political Activity Funds, etc. received, and requested the assembly members to submit, for each quarter, relevant expense sheets and account books, as well as supporting documentation, etc. evidencing expenditures.

The supporting intervener in the final appeal, who was an assembly member belonging to the Faction, submitted expense sheets, receipts, deliverables, etc. to the Faction, alleging that he had incurred a total expenditure of 5,188,050 yen to cover document preparation expenses (for printing prefectural government reports) on 11 occasions (hereinafter referred to as the “Expenditures”), as shown in the exhibit to the judgment of first instance. A breakdown of the Expenditures by year was: 1,587,600 yen in fiscal 2011, 2,296,350 yen in fiscal 2012 and 1,304,100 yen in fiscal 2013. However, the Expenditures did not actually exist, and the aforementioned receipts were fictitious.

(5) The amounts of income (including interest on deposits) and the amounts of expenditure of Political Activity Funds, etc. reported by the Faction in its income and expenditure reports for the Fiscal Years submitted to the prefectural assembly chairperson were as follows. Of these amounts of expenditure, the amounts of document preparation expense included the Expenditures.

a. Political research funds for fiscal 2011

Total amount of income: 253,340,234 yen

Total amount of expenditure: 265,685,163 yen (including document preparation expenses of 5,636,344 yen)

b. Political activity funds for fiscal 2012

Total amount of income: 266,060,409 yen

Total amount of expenditure: 284,603,062 yen (including document preparation expenses of 6,052,390 yen)

c. Political activity funds for fiscal 2013

Total amount of income: 267,120,318 yen

Total amount of expenditure: 275,655,553 yen (including document preparation expenses of 6,377,528 yen)

3. Based on the facts related to the case described above, the court of prior instance decided as follows in summary and accepted the appellee’s claim.

In a case where certain expenditures stated in an income and expenditure report do not actually exist, receiving Political Activity Funds, etc. by such means as submitting fictitious receipts is extremely inconsistent with the ensuring of the transparency of the uses of Political Activity Funds, etc., which is a point of the Act, the Former and New Ordinances, etc. understood from their provisions, and it is appropriate to consider that unless exceptional circumstances exist, there are no legal grounds for receiving Political Activity Funds, etc. corresponding to such expenditures. In the present case, it should be correct to state that attempts were made to receive money as Political Activity Funds, etc. by submitting false, fictitious receipts. Although the balance remaining after subtracting the amounts of the relevant Expenditures from the total amount of expenditure stated in the income and expenditure report for each of the Fiscal Years exceeds the amount of Political Activity Expense, etc. allocated, no exceptional circumstances mentioned above are found to have existed. There are no legal grounds for the Faction to receive Political Activity Funds, etc. corresponding to the Expenditures which were false, and the amount of Political Activity Funds, etc. corresponding to the Expenditures should be returned as unjust enrichment.

4. However, the court of prior instance’s decision described above is unacceptable, for the following reasons:

(1) According to the Former and New Ordinances, while Political Activity Funds, etc. are to be allocated each month, the decision to allocate them is to be made for each fiscal year and an income and expenditure report is also to be submitted for each fiscal year. In the meantime, the Act and the Former and New Ordinances limit the uses of Political Activity Funds, etc. Therefore, any balance of the Political Activity Funds, etc. allocated for a fiscal year that remains after appropriating them to expenditures that are compliant with the aforementioned uses should be returned as unjust enrichment, since there are no legal grounds to keep the balance. The Court considers that the Refund Rules make it clear that an obligation to return unjust enrichment accrues in such case.

In addition, the Former and New Ordinances do not provide that Political Activity Funds, etc. should be allocated by individually designating specific uses; instead, it is fair to say that these ordinances intend to ensure that Political Activity Funds, etc. allocated are appropriated to expenditures that are compliant with the Use Criteria, through the following procedure: The governor makes a decision on the allocation of Political Activity Funds, etc. for each fiscal year; a certain amount of Political Activity Funds, etc. is allocated each month based on the decision; the uses of Political Activity Funds are identified by having income and expenditure reports, etc. submitted afterwards; and if any balance of the Political Activity Funds, etc. remains after appropriating them to expenditures that are compliant with the Use Criteria, such balance must be refunded. Furthermore, the Former and New Ordinances do not read that the total amount of expenditure stated in an income and expenditure report must not exceed the amount of Political Activity Funds, etc. allocated for the fiscal year, nor do they read that if the former amount does exceed the latter amount, what part of the total amount of expenditure is covered by the Political Activity Funds, etc. must be stated in the income and expenditure report. Based on the provisions of the relevant ordinances described above, even if expenditures that did not actually exist are stated in an income and expenditure report on Political Activity Funds, etc., one cannot say that the faction or assembly member who received the Political Activity Funds, etc. obtained them without legal grounds unless the total amount of expenditures compliant with the Use Criteria that are stated in the income and expenditure report for the fiscal year falls below the amount of Politically Activity Funds, etc. allocated for the fiscal year.

Therefore, it is appropriate to consider that a prefectural assembly faction which, or a prefectural assembly member who, received Political Activity Funds, etc. under the Former and New Ordinances does not have an obligation to the prefecture to return unjust enrichment even if some of the expenditures stated in the income and expenditure report on these funds for a fiscal year did not actually exist, unless the balance that remains after subtracting the amounts of expenditures that did not actually exist and those of expenditures that are incompliant with the Use Criteria from the total amount of expenditures stated in the income and expenditure report for the fiscal year falls below the amount of Political Activity Funds, etc. allocated for the fiscal year.

(2) Based on the facts related to the case described above, the balance that remains after subtracting the amounts of the relevant Expenditures from the total amount of expenditure stated in the Faction’s income and expenditure report for each of the Fiscal Years does not fall below the amount of Political Activity Funds, etc. allocated for each of these years. Therefore, it is not correct to say that the Faction has an obligation to return unjust enrichment.

5. The court of prior instance’s decision that is inconsistent with the above contains violations of law that obviously affect its judgment. The appellant’s arguments are well-grounded in that it is consistent with the above arguments, and the judgment of prior instance should inevitably be quashed. Then, since the appellee’s claim is groundless for the reasons discussed above, the judgment of first instance should be revoked and the appellee’s claim dismissed.

Accordingly, the Court unanimously decides as set forth in the main text.
Justice KANNO Hiroyuki

Justice ONIMARU Kaoru

Justice YAMAMOTO Tsuneyuki

Justice MIURA Mamoru
(This translation is provisional and subject to revision.)