2023.12.12

2022 (Gyo-Hi) 317

Minshu Vol. 77, No. 9

(Civil Case)Judgment concerning whether or not a person, who won an election but has lost the position of a member of the assembly of Osaka City retrospectively under Article 251 of the Public Offices Election Act, holds a claim for return of unjust enrichment against Osaka City with regard to the political activities prescribed in Article 5 of the Ordinance on Payment of Expenses for Osaka City Assembly Political Activities (Osaka City Ordinance No. 25 of 2001) that were carried out by a political faction consisting solely of the election winner

Case seeking return of unjust enrichment

Judgment of the Third Petty Bench, quashed and decided by the Supreme Court

Osaka High Court, Judgment of July 1, 2021

1. A person, who won an election but has lost the position of a member of the assembly of Osaka City retrospectively under Article 251 of the Public Offices Election Act, does not hold a claim for return of unjust enrichment against Osaka City with regard to the political activities prescribed in Article 5 of the Ordinance on Payment of Expenses for Osaka City Assembly Political Activities (Osaka City Ordinance No. 25 of 2001) that were carried out by a political faction consisting solely of the election winner.

2. A person, who won an election but has lost the position of a member of the assembly of Osaka City retrospectively under Article 251 of the Public Offices Election Act, does not hold a claim for return of unjust enrichment against Osaka City with regard to the activities carried out thereby as an assembly member.

(There are a concurring opinion and a dissenting opinion concerning 2.)

(Concerning 1 and 2) Article 251 of the Public Offices Election Act, Article 703 of the Civil Code

(Concerning 1) Article 100, paragraph (14) of the Local Autonomy Act, Article 2, Article 5, and Appended Table 1 of the Ordinance on Payment of Expenses for Osaka City Assembly Political Activities (Osaka City Ordinance No. 25 of 2001)

(Concerning 2) Article 203, paragraphs (1) and (3) of the Local Autonomy Act, Article 2, and Article 5, paragraphs (1) and (2) of the Ordinance on Remuneration, Reimbursement of Expenses, and End-of-Term Allowances for Osaka City Assembly Members (Osaka City Ordinance No. 32 of 1956)

1. The judgment in prior instance is modified as follows.

The judgment in first instance is modified as follows.

The appellee of final appeal shall pay to the appellant of final appeal, 14,114,611yen, with delay damages accrued at the rate of 5% per annum on a part of that amount (13,420,943 yen), for the period from February 14, 2020, and on the other part of the same amount (693,668 yen), for the period from February 17, 2020, until payment is completed for both amounts.

2. The total court costs shall be borne by the appellee of final appeal.

I. Outline of the case

1. The outline of the facts lawfully determined by the court of prior instance is as follows.

(1) The appellee of final appeal won the election of members of the assembly of Osaka City (hereinafter referred to as "city assembly members") held on April 7, 2019.

On September 6, 2019, with regard to the abovementioned election, the appellee was given a judgment of conviction for the crime under Article 221, paragraph (3), item (i) of the Public Offices Election Act and paragraph (1), item (i) of the same Article (Vote-buying by a candidate for a public office) to sentence them to imprisonment for one year with five-year suspension of execution (hereinafter referred to as the "Judgment of Conviction"). On February 13, 2020, the Judgment of Conviction became final and binding.

(2) As indicated in 1. in the attachment of the judgment in first instance, the appellant of final appeal paid the appellee 10,010,611 yen, consisting of the sum of the assembly member's remuneration for the period from May 2019 to February 2020 and the end-of-term allowances for June 2019 and December 2019, minus the amount of tax withheld at source (hereinafter referred to as the "Assembly Member's Remuneration, etc.").

(3) On June 19, 2019, the appellee formed a political faction consisting solely of the appellee (hereinafter referred to as the "Political Faction").

As indicated in 2. in the attachment of the judgment in first instance, the appellant paid the Political Faction a total of 4,104,000 yen as expenses for political activities for the period from July 2019 to February 2020 (hereinafter referred to as the "Expenses for Political Activities").

2. In this case, the appellant alleges against the appellee that, as a result of the Judgment of Conviction having become final and binding, the appellee's victory in the election mentioned above has been nullified under Article 251 of the Public Offices Election Act and the appellee has lost the position of a city assembly member retrospectively, and based on this allegation, the appellant seeks, among other claims, return of an amount equivalent to the Assembly Member's Remuneration, etc. and an amount equivalent to the Expenses for Political Activities, as unjust enrichment. The appellee disputes the appellant's claims, asserting a defense of a set-off against their claim for return of unjust enrichment in the same amounts as the abovementioned amounts equivalent to the Assembly Member's Remuneration, etc. and the Expenses for Political Activities.

II. Concerning part of the reasons for a petition for acceptance of final appeal stated by the counsel for final appeal, IWAMOTO Yasuaki and TAKEMURA Makiko, related to expenses for political activities

1. Under the abovementioned facts of the case, the court of prior instance ruled that, as a result of the Judgment of Conviction having become final and binding, the appellee's victory in the election mentioned above has been nullified under Article 251 of the Public Offices Election Act and the statutory cause of the payment of the Expenses for Political Activities has been lost retrospectively, and therefore, the appellant holds a claim against the appellee, who was the only member of the Political Faction, to seek return of an amount equivalent to the Expenses for Political Activities as unjust enrichment. Determining as summarized below, the court of prior instance partially upheld the appellee's defense of a set-off and upheld the appellant's claim for return of unjust enrichment to the extent of the amount that remains after the set-off.

It can be said that before the Judgment of Conviction became final and binding, the appellant had obtained a benefit from the reasonable research and study, etc. carried out by the Political Faction using part of the Expenses for Political Activities within the limits of expenses prescribed in the Ordinance on Payment of Expenses for Osaka City Assembly Political Activities (Osaka City Ordinance No. 25 of 2001), and therefore the appellee holds a claim against the appellant to seek return of unjust enrichment in an amount equivalent to that part of the Expenses for Political Activities.

2. However, the abovementioned determination by the court of prior instance cannot be affirmed, for the following reasons.

Expenses for political activities to be paid under the abovementioned Ordinance are paid to support necessary expenses for research and study and other activities carried out by city assembly members. Those expenses cannot be regarded as being paid as compensation for political activities prescribed in Article 5 of the same Ordinance (hereinafter simply referred to as "political activities"). Even if the political faction consisting solely of a person who won an election but has lost the position of a city assembly member retrospectively under Article 251 of the Public Offices Election Act, has carried out political activities, this fact cannot be the grounds for evaluating that the appellant has obtained a benefit from such political activities.

In that case, it should be said that the abovementioned election winner does not hold a claim for return of unjust enrichment against the appellant with regard to the political activities carried out by that political faction.

Consequently, it cannot be said that the appellee holds a claim for return of unjust enrichment against the appellant as alleged in their defense of a set-off mentioned in 1. above.

3. For the reasons stated above, the abovementioned defense of a set-off cannot be upheld in whole. The determination by the court of prior instance that partially upheld this defense contains a violation of law or regulation that has clearly influenced the judgment, and the counsel's arguments are well-grounded.

According to the abovementioned facts of the case and the explanation given in 2. above, the appellant's claim for return of an amount equivalent to the Expenses for Political Activities as unjust enrichment and claim for interest accrued thereon as prescribed in the first sentence of Article 704 of the Civil Code are totally well-grounded.

III. Concerning part of the reasons for a petition for acceptance of final appeal stated by the counsel for final appeal, IWAMOTO Yasuaki and TAKEMURA Makiko, related to assembly member's remuneration, etc.

1. Under the abovementioned facts of the case, the court of prior instance ruled that since the statutory cause of the payment of the Expenses for Political Activities has been lost retrospectively, the appellant holds a claim against the appellee to seek return of an amount equivalent to the Assembly Member's Remuneration, etc. as unjust enrichment. Determining as summarized below, the court of prior instance partially upheld the appellee's defense of a set-off and upheld the appellant's claim for return of unjust enrichment to the extent of the amount that remains after the set-off.

It can be said that before the Judgment of Conviction became final and binding, the appellant had obtained a benefit from the reasonable activities carried out by the appellee as a city assembly member except for the period during which he was arrested and detained, and therefore, the appellee holds a claim against the appellant to seek return of unjust enrichment in amounts equivalent to the amounts of the assembly member's remuneration and end-of-term allowances paid during the period except for the abovementioned period.

2. However, the abovementioned determination by the court of prior instance cannot be affirmed, for the following reasons.

Where a person who won an election of assembly members has committed the crime prescribed in Article 251 of the Public Offices Election Act in connection with that election and has been sentenced to punishment, it should be said that the election winner has significantly harmed the fairness and appropriateness of elections for public offices, which serve as the foundation of democracy, and in light of this point, that Article of the Public Offices Election Act is interpreted as nullifying the effect of the victory in the election retrospectively in such case. According to this, even if the election winner who has lost the position of a city assembly member retrospectively under that Article had carried out activities as a city assembly member, there is no choice but to evaluate that such activities have no value in terms of the relationship with the appellant.

In that case, it should be said that the abovementioned election winner does not hold a claim for return of unjust enrichment against the appellant with regard to the political activities carried out thereby as a city assembly member.

Consequently, it cannot be said that the appellee holds a claim for return of unjust enrichment against the appellant as alleged in their defense of a set-off mentioned in 1. above.

3. For the reasons stated above, the abovementioned defense of a set-off cannot be upheld in whole. The determination by the court of prior instance that partially upheld this defense contains a violation of law or regulation that has clearly influenced the judgment, and the counsel's arguments are well-grounded.

According to the abovementioned facts of the case and the explanation given in 2. above, the appellant's claim for return of an amount equivalent to the Assembly Member's Remuneration, etc. as unjust enrichment and claim for interest accrued thereon as prescribed in the first sentence of Article 704 of the Civil Code are totally well-grounded.

IV. Conclusion

For the reasons stated above, the Court modifies the judgment in prior instance as indicated in paragraph 1 of the main text of the judgment.

Accordingly, the Court unanimously decides as set forth in the main text of the judgment, except for the dissenting opinion by Justice IMASAKI Yukihiko regarding Section III. Justice HAYASHI Michiharu provides a concurring opinion regarding Section III.

The concurring opinion by Justice HAYASHI Michiharu is as follows.

I agree with the majority opinion, but in light of the dissenting opinion by Justice IMASAKI Yukihiko regarding Section III, I would like to give some supplementary comments.

Section III addresses the issue of how to evaluate the activities carried out as a city assembly member by a person who won an election but has lost the position of a city assembly member retrospectively under Article 251 of the Public Offices Election Act.

The effect of the victory in an election is considered to be lost retrospectively under that Article. As explained in the majority opinion, in light of the reason why that Act provides for retrospective nullification of the victory in an election, it must be said that activities carried out by the abovementioned election winner before losing their position are not such activities as carried out by a city assembly member who has been legitimately elected, and there is no choice but to evaluate these activities as having no value in terms of the relationship with the appellant. Justice IMASAKI states that: since the fact remains that the appellee appears to have carried out activities as a city assembly, their activities should be duly evaluated; however, due to the difficulty in nature for the court to go into an assembly member's activities and evaluate the objective value of the activities, there is no choice but to regard the amount of benefits to be retained by the appellee as being the same as the legitimate amount of the assembly member's remuneration, etc. commensurate to the period during which the appellee was supposed to perform their duties as an assembly member. However, although we cannot deny that it is difficult and inappropriate for the court to go into an assembly member's activities and evaluate the objective value of the activities, it is unreasonable as the interpretation of the existing law to evaluate that the activities carried out by the abovementioned election winner before losing their position have completely the same value as the legitimate amount of the assembly member's remuneration, etc., despite the fact that these activities are legally defective.

However, as pointed out by Justice IMASAKI, the fact remains that the appellee appears to have carried out activities as a city assembly member, and it may be appropriate in some cases to allow such person, who won an election but has lost the position as a city assembly member retrospectively under Article 251 of the Public Offices Election Act, to retain certain benefits, but for that purpose, some measure needs to be taken to substantiate this idea. It may be a possible approach to set out certain rules regarding in what cases, through what procedures, and to what extent such election winner should be allowed to retain benefits, for example, by a method wherein a city assembly deliberates on the evaluation of the activities carried out by such election winner and votes on a resolution based on the results of the deliberations, thereby limiting the claim for return of unjust enrichment against such election winner to a certain extent. In any case, it seems that, until now, the practice of not claiming the return of unjust enrichment against such election winner has been adopted without sufficient discussion on how to treat an assembly member's remuneration, etc. already paid to an election winner. I expect that Osaka City and other local governments will take the opportunity upon this judgment to discuss these issues thoroughly.

The dissenting opinion by Justice IMASAKI Yukihiko is as follows.

With regard to Section III of the majority opinion, which relates to the part of the determination by the court of prior instance concerning the assembly member's remuneration and end-of-term allowances (hereinafter referred to as the "assembly member's remuneration, etc."), I dissent from the majority opinion and consider that the relevant part of the determination by the court of prior instance should be affirmed.

The appellee won an election for city assembly members but was subject to a final and binding judgment of conviction for the crime under Article 221, paragraph (3), item (i) of the Public Offices Election Act and paragraph (1), item (i) of the same Article. Article 251 of this Act provides that if a person who won an election has committed a prescribed crime in connection with the election and has been sentenced to punishment, the victory in the election by the election winner is to be nullified. Since the nullification under this Article is considered to become effective retrospectively as of the time of the victory in the election, the appellee is deemed to have never held the position of a city assembly member. The claim regarding the assembly member's remuneration, etc. that had been paid to the appellee was extinguished retrospectively under that Article.

Given the above, the question is how to evaluate the acts performed by the appellee as a city assembly member before the judgment of conviction became final and binding. More specifically, even though the appellee was disqualified as a city assembly member, the fact remains that the appellee appears to have carried out activities as a city assembly member, and the appellant has obtained a benefit from the services provided by the appellee without statutory cause (how to evaluate the benefits mentioned here will be discussed later). Therefore, it seems undeniable that the appellee is to acquire a claim for return of unjust enrichment against the appellant. A claim for the assembly member's remuneration, etc. based on the activities carried out as a city assembly member and a claim for return of unjust enrichment in an amount equivalent to the assembly member's remuneration, etc. arising due to the disqualification as a city assembly member are different claims that were generated from incompatible facts. The majority opinion seems to argue that the claim for return of unjust enrichment is not generated, but there remains a question as to whether this point has been sufficiently discussed.

As mentioned above, the claim for the assembly member's remuneration, etc. is extinguished under Article 251 of the Public Offices Election Act. This Act is a law that provides for elections of members of assemblies of local governments, and due to its nature, the same Article is effective only to the extent of the retrospective extinguishment of the claim for the assembly member's remuneration, etc., and therefore it is difficult to consider that the effect of the same Article extends to the legal relationships under private law which result from such extinguishment of the claim. In addition, it is literally clear that Article 203 of the Local Autonomy Act, which provides for the assembly member's remuneration, etc., does not address rights held by a person who has been disqualified as an assembly member. Furthermore, as a general rule, a resolution adopted at an assembly meeting, in which an assembly member whose victory in an election has been nullified has participated, is not immediately affected but remains effective, and the nullification serves as a cause of re-deliberation under Article 176, paragraph (4) of the Local Autonomy Act. This may be considered as proof that the Act recognizes the activities by such assembly member as having some value, while recognizing such resolution adopted with the participation of the relevant assembly member as being defective. If so, it is reasonable to give due evaluation to such activities as well. In short, as long as the existing law applies, it must be said that there is no reason to deny the existence of a claim for return of unjust enrichment to be acquired by a disqualified assembly member due to the activities carried out thereby as an assembly member, and in this case, there is no choice but to acknowledge that the appellant has the obligation to return unjust enrichment to the appellee.

Even if a person who has committed an election crime and has been disqualified as an assembly member is allowed to retain benefits as the counter-performance of their provision of services in the form of a claim for return of unjust enrichment, this must be based on the objective evaluation of the services thus provided, and the amount of the benefits is not necessarily required to be the same as the legitimate amount of the assembly member's remuneration, etc. However, assembly members' activities are wide-ranging and diverse due to their nature, and although there is a relationship in which the assembly member's remuneration, etc. is paid as compensation for their duties (services), it is an abstract relationship. Hence, it is difficult and inappropriate for the court to go into such activities and evaluate their objective value. For these reasons, I conclude that, in this case, the amount of the benefits to be retained by the appellee must be recognized as being the same as the legitimate amount of the assembly member's remuneration, etc. commensurate to the period during which the appellee was supposed to perform their duties as an assembly member. In the first place, it is sufficiently possible as a policy measure to deduct a certain amount from the legitimate amount (or evaluate the amount of benefits as zero, as argued by the majority opinion) under the reasonable substantive requirements and due procedures and based on the decision by a person in a proper position. If such policy measure is institutionalized, one would not find it unreasonable to allow a person who has harmed the fairness in elections to obtain benefits. However, such measure has not been implemented in this case.

For the reasons stated above, I consider that the determination by the court of prior instance that partially upheld the appellee's defense of a set-off should be affirmed.

Justice HAYASHI Michiharu

Justice UGA Katsuya

Justice NAGAMINE Yasumasa

Justice WATANABE Eriko

Justice IMASAKI Yukihiko