When an act (or a decision) of an administrative body is challenged in a lawsuit seeking an annulment of the administrative act, the question may arise whether the administrative body may add or alter the grounds for its act having admitted that the purported grounds for its own act did not accord with the objective factual circumstances at the time of the act in question. According to the Supreme Court decision 83Nu396, dated 25 October 1983, “in order to give substantive effect to the rule of law by ensuring an adequate opportunity for the counterpart of an administrative act to defend its case and to protect citizens' reliance on the administrative act, addition or change of grounds for an administrative act is not allowed. However, if the proposed addition or change of grounds shares the 'identical factual basis' with the grounds originally advanced, it would exceptionally be allowed.” Also see Supreme Court case 85Nu694, dated 21 July 1987. The ruling was repeated in a number of subsequent cases on this issue.
Whether to allow an addition or alteration of grounds for an administrative act in the course of a litigation seeking its annulment is a question of striking a balance between procedural propriety of an administrative act and avoiding wasted costs in a litigation. The question is one of value judgment or priority among competing objectives of a litigation. The extent to which an addition or alteration of grounds is to be allowed (if it is to be allowed), will have to be determined by a balancing exercise weighing the values of administrative procedural propriety and judicial objective of speedy and just resolution of a dispute. The defect in the presentation of grounds of an administrative act is regarded by the Supreme Court as a separate ground for an annulment of the administrative act. The administrative body is allowed to cure the defect only in narrowly defined cases. The court examines the wrongfulness of an administrative act as of the time of the act. Limiting the administrative body's subsequent addition or alteration of grounds is aimed at maintaining the validity and robustness of the requirement that reasonable grounds must be given for an administrative act. These positions adopted by the Court indicate that the proceedings for an annulment are in the nature of a review procedure rather than an appeal procedure. The Court seems to lay more emphasis on ensuring procedural propriety of an administrative act, rather than on the speedy resolution of a dispute.
The Court examines whether the 'identity of the factual basis' is maintained in order to decide whether or not, and to what extent, the Court is going to allow the proposed addition or alteration of grounds of an administrative act. While this standard is employed in a coherent manner, the standard itself is somewhat formalistic and the Court does not appear to take into account the needs for adopting such a standard in the first place. The standard should be reformulated from the standpoint of ensuring substantive rule of law by guaranteeing procedural rights for citizens. The ‘identity of factual basis’ should be treated merely as one of the criteria, rather than the all-important criterion. Whether to allow addition or alteration of grounds must be determined by examining whether ‘the counterpart’s right to defend its case is materially affected’ as well as whether the identity of factual basis is maintained. An addition or alteration of grounds may affect legal arguments even though the 'factual basis' may remain identical. Whether to allow such a change must be determined by comprehensively examining, among others, whether the counterpart would clearly have held a different view as to the efforts, time and expenses required to defend its case. It is hoped that the Supreme Court adopts a somewhat more flexible and comprehensive approach as suggested in this paper.