OSAKA — The Osaka High Court on Thursday ordered the estate of a deceased former mayor of Kyoto to pay 2.6 billion yen to compensate the city for his 1992 role in the purchase of a piece of property at more than double the appropriate price.
The former mayor, Tomoyuki Tanabe, died in December after the high court proceedings concluded. If the ruling is finalized, his family will either have to give up inheriting his assets or bear the responsibility of reimbursing the city’s coffers, according to sources close to the case.
The high court ruling, which sharply increased the amount of damages from an earlier district court ruling, was on a suit filed by 900 Kyoto residents against the city’s purchase of a mountainous land plot for 4.7 billion yen while Tanabe was serving as mayor.
The damages awarded are believed to be the highest ever for a suit filed by residents against local administrators.
The plaintiffs hailed the court’s decision, saying it reflects the current trend recognizing the importance of people’s involvement in local government.
Presiding Judge Takiko Takeda said the amount paid by the city was “far above an appropriate price” and that the deal violated the city’s duties under accounting rules.
The 1.34-sq.-km plot stretches between Kyoto’s Nishikyo Ward and Takatsuki, Osaka Prefecture.
The land was originally purchased in the late 1980s by an Osaka-based developer who planned to build a golf course there.
However, residents around the area launched a campaign opposing the golf course’s construction, and the city of Kyoto decided in March 1992 not to authorize the construction project.
The developer filed a mediation petition with the Kyoto Summary Court seeking compensation from the city, and in May 1992 the court ordered the city to purchase the plot for about 4.7 billion yen on condition that the deal is approved by the city assembly. The city of Kyoto followed the order and later bought the land from the developer at the designated price following approval by the assembly.
The following year, the 900 plaintiffs sued the city, saying that the price paid for the plot was too high and urging Mayor Tanabe to return 4.35 billion yen to city coffers.
In 2001, the Kyoto District Court determined that the plot in question had a reasonable market value of 2.1 billion yen at the time of the deal, and ordered the former mayor to return 470 million yen to the city coffers after deducting twice the market price.
Both Tanabe, who quit as mayor in 1996, and the plaintiffs appealed the ruling to the high court. The land is now a public park.
In Thursday’s ruling, the high court said it was illegal for the Kyoto Municipal Assembly to authorize the deal without examining whether the price was fair.
However, the court concluded that Tanabe alone is liable for the damages because he failed to consult a relevant city commission before proposing the deal and did not explain to the assembly whether the price was reasonably set, the judge said.
Teruo Tanabe, a lawyer who represented the late mayor, said he would urge the mayor’s family to appeal the ruling to the Supreme Court.
“I am surprised by the ruling. It is against the law to hold the former mayor responsible (for the deal) because the land purchase was approved by the city assembly,” the lawyer said.
Kyoto Municipal Government officials, who declined to be named, also called the ruling unacceptable, emphasizing that the late mayor made the deal legitimately. They said Tanabe followed the order of the summary court and obtained the approval of the city assembly.
Though the ruling, if it stands, would bring 2.6 billion yen to the city’s coffers, one senior city official maintained: “That is not the point. The mayor made the land deal following proper procedure, and a court ruling that calls such a decision illegal affects the fundamental principles of government administration.”
Haruji Fujimoto, who heads Kyoto’s Project Promotion Office, said the city has no plans at the moment to ask Tanabe’s family to pay the money, although the family will become legally liable for the damages once they inherit the late mayor’s assets.
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