Australian Building and Construction Commissioner v Harris

Federal Court of Australia|2017-06-29|Before: Siopis J

The first respondent has contravened s 500 of the Fair Work Act 2009 (Cth) by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the Fair Work Act on 25 May 2015.

The first respondent is to pay a pecuniary penalty of $2,000 to the Commonwealth.
The applicant's application, dated 3 August 2015, against the third respondent is dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

SIOPIS J: 1 In May 2015, Georgiou Group Pty Ltd (Georgiou Group) was the head contractor on a construction project known as the Joondalup Multi-Storey Carpark on a site at Boas Avenue, Joondalup in Western Australia (the site). The project manager for Georgiou Group was Mr Daniel Metcalfe. 2 The first respondent, Mr Tawa Harris, was at that time an employee and officer of the third respondent, the Construction, Forestry, Mining and Energy Union (the CFMEU). Mr Harris ceased to be an employee and officer of the CFMEU in April 2016. 3 One of the subcontractors engaged by Georgiou Group to undertake work on the project was a company, BLD Group Pty Ltd (BLD Group). 4 On 25 May 2015, there were employees of BLD Group working at the site on the project. 5 At approximately 8:00 am on 25 May 2015, Mr Harris telephoned Mr Metcalfe and advised him that some of the employees of the subcontractor, BLD Group, had not been paid their full wages for the previous week. On making an inquiry of the BLD Group, Mr Metcalfe learned that in transitioning to a new payroll system there had been underpayment of wages of the BLD Group employees at the end of the previous week. Mr Metcalfe was advised that the shortfall would be credited to the bank accounts of the affected BLD Group employees during the course of that day. 6 At about 9:30 am on 25 May 2015, Mr Harris met with Mr Metcalfe at the site office. The site office was located at 96 Reid Promenade, Joondalup, which was a short distance away from the site. At the meeting, Mr Metcalfe advised Mr Harris of the information he had learned from BLD Group and that the shortfall in wages would be paid that day. Further, in the presence of Mr Harris, Mr Metcalfe again telephoned BLD Group and confirmed that the payments would be made that day. 7 During the course of the meeting, Mr Harris told Mr Metcalfe that he wanted to go on to the site to speak to the affected employees. Mr Metcalfe told him that as Mr Harris had not lodged a right of entry notice, he was not permitted to enter the site. 8 Mr Harris then left the site office and entered the site at approximately 9:40 am. Once on the site, Mr Harris walked to the area near the sheds known as the "smoko area" and spoke with a group of affected BLD Group employees. Mr Metcalfe and Mr Robert Rowe, the site manager for Georgiou Group, approached Mr Harris and directed him to leave the site. During the course of the encounter, the following conversations took place: (a) Between Mr Metcalfe and Mr Harris: Metcalfe: You don't have a right of entry so you have to leave site. I'll have to follow company procedures if you refuse to leave. Are you refusing to leave? Harris: We're just doing our job, just trying to get the boys paid. Metcalfe: Are you refusing to leave site? Harris: We're just doing our job, just trying to get the boys paid. (b) Between Mr Rowe and Mr Harris: Rowe: I understand why you are here and I agree with you, but can't you have this meeting off site? Harris: We're not leaving site. Rowe: You have to leave. You don't have a right of entry and are trespassing and I will call the police. Harris: Do what you've got to do mate, that's why you get the big bucks. 9 Notwithstanding that Mr Metcalfe and Mr Rowe had directed Mr Harris to leave the site, Mr Harris continued his meeting with the BLD Group affected employees. 10 At about 9:45 am, Mr Rowe telephoned the police to report Mr Harris' activities. At about 10:15 am, Mr Harris left the site. 11 A short time later that morning, Mr Harris and Mr Metcalfe had another conversation in the street outside the site office during which Mr Harris said to Mr Metcalfe words to the effect: "I'm giving it until this afternoon to see that the guys have been paid." 12 At approximately 2:00 pm on that day, Mr Metcalfe telephoned Mr Harris to advise that the BLD Group employees had been fully paid.

The originating application 13 On 3 August 2015, the applicant, now referred to as the Australian Building and Construction Commissioner, commenced a proceeding in this Court against Mr Harris, another officer of the CFMEU, Mr Peter Joshua and the CFMEU. The application was subsequently discontinued against Mr Joshua and the originating application and statement of claim were amended to reflect that circumstance. 14 By the amended application, the applicant claimed a declaration that Mr Harris contravened s 500 of the Fair Work Act 2009 (Cth) by acting in an improper manner whilst exercising, or seeking to exercise, rights in accordance with Pt 3-4 of the Fair Work Act on 25 May 2015. The applicant also claimed a declaration that by reason of s 793 of the Fair Work Act, the CFMEU is taken to have contravened s 500 of the Fair Work Act on 25 May 2015 as a result of the impugned conduct of Mr Harris. Further, the applicant sought orders that pecuniary penalties be imposed upon each of Mr Harris and the CFMEU by reason of their respective contraventions of s 500 of the Fair Work Act, and orders that the pecuniary penalties be paid to the Commonwealth. 15 Each of the respondents initially filed a defence which was non-responsive and claimed privilege. The matter was listed for trial on 31 May 2016 and 1 June 2016. 16 However, following a mediation conference, the applicant discontinued the claim against Mr Joshua, and, as mentioned, amended his application and statement of claim. Further, each of Mr Harris and the CFMEU filed amended defences which comprised admissions in respect of the factual allegations contained in the amended statement of claim. In his amended defence, Mr Harris also admitted that he had contravened s 500 of the Fair Work Act by acting in an improper manner. However, the CFMEU continued in its amended defence to plead, as it had done in its original defence, that it had not contravened s 500 of the Fair Work Act notwithstanding the operation of s 793 of the Fair Work Act. It is useful to set out the relevant pleading in relation to this issue. In the amended statement of claim, the applicant pleaded: Contraventions by Harris 25. By reason of the matters set out…above, Harris, as a permit holder, exercising, or seeking to exercise, rights in accordance with section 484 of the Act, acted in an improper manner in contravention of section 500 of the Act. Contraventions by CFMEU 26. By reason of the matters set out…above, and by operation of s 793 of the Act, the conduct of Harris…is taken to be the conduct of the CFMEU. 27. By reason of the matters set out in paragraph 25 [sic] above, the CFMEU contravened section 500 of the Act. 17 In its amended defence, the CFMEU pleaded: 27. The Third Respondent admits paragraph 26. 28. The Third Respondent denies paragraph 27 because: i. s 793 of the Act makes the conduct of the First Respondent the conduct of the Third Respondent; ii. s 500 does not impose any obligation on any person other than a permit holder which means a permit holder as defined in the Act; iii. the Third Respondent is, and was not at any material time, a permit holder within the meaning of the Act; and iv. so it follows the Third Respondent cannot contravene s 500 of the Act. 18 Following the amendments to the statement of claim and the defences respectively, referred to above, the trial dates were vacated and the parties filed written submissions on the liability of the CFMEU and penalties. 19 The applicant contended in his submissions that an appropriate penalty in relation to the contravention of s 500 of the Fair Work Act by Mr Harris was between $2,040 to $3,060 and in relation to the contravention of that section by the CFMEU, the appropriate penalty was between $20,400 to $25,500. 20 As mentioned, the CFMEU contended that it did not contravene s 500 of the Fair Work Act as pleaded by the applicant, and so was not liable to pay any pecuniary penalty.

did the cfmeu contravene s 500 of the fair work act? 21 It is appropriate that I deal first with the question of whether, on the basis of the matters pleaded and admitted, the CFMEU contravened s 500 of the Fair Work Act as alleged by the applicant. 22 As mentioned, the applicant alleged that the CFMEU contravened s 500 of the Fair Work Act because by s 793(1) of the Fair Work Act, the conduct of Mr Harris was taken to be the conduct of the CFMEU. 23 Section 500 of the Fair Work Act provides as follows: A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner. 24 The CFMEU observed that a "permit holder" is defined in s 12 of the Fair Work Act as "a person who holds an entry permit", and also pointed out that the definition of "entry permit" in s 12 of the Fair Work Act states "see s 512". 25 Section 512 of the Fair Work Act provides: The FWC may, on application by an organisation, issue a permit (an entry permit) to an official of the organisation if the FWC is satisfied that the official is a fit and proper person to hold the entry permit. 26 Section 793(1) of the Fair Work Act provides: Any conduct engaged in on behalf of a body corporate: (a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official; is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body. 27 The CFMEU contended that it was apparent from the foregoing that a "permit holder" referred to in s 500 of the Fair Work Act can only be a natural person. The CFMEU went on to observe that by reason of s 27 of the Fair Work (Registered Organisations) Act 2009 (Cth), the CFMEU is a body corporate. It followed, contended the CFMEU, that s 500 of the Fair Work Act was not addressed to it, as a body corporate, with the further consequence that it was incapable of contravening s 500 of the Fair Work Act. Further, said the CFMEU, the attribution by s 793(1) of the Fair Work Act of Mr Harris' conduct as the conduct of the CFMEU, did not alter the tenor of s 500 of the Fair Work Act, nor did it render the CFMEU liable for the contravention of a statutory provision not capable of being contravened by a body corporate. 28 In support of this contention, the CFMEU relied upon the following observations of Charlesworth J in the case of Director of the Fair Work Building Industry Inspectorate v Robinson (2016) 241 FCR 338 (Robinson) at [47]-[51]: 47 The CFMEU is an organisation of employees registered under the Fair Work (Registered Organisations) Act and is a body corporate by reason of s 27 of that Act. 48 Section 793 does not, of itself, fix upon a body corporate liability for contraventions found to have been committed by its officers, employees or agents. Rather, it attributes to the body corporate the conduct and state of mind of its officers, employees and agents in prescribed circumstances. The question of whether the body corporate has contravened the FW Act (and, if so, on how many occasions) must be answered by assessing the facts, namely the conduct and state of mind attributed to the body corporate, against the elements of the contravention said to have been committed by it. 49 Two further things should be said about s 793 of the FW Act. The first is that s 793 does not exhaustively prescribe the legal means by which the state of mind held by, or the conduct engaged in by, a body corporate may be ascertained. Its purpose is to provide for an expanded range of persons whose conduct and state of mind might be ascribed to a body corporate than that which exists at common law, whilst at the same time preserving the common law doctrines: Walplan Pty Ltd v Wallace (1985) 8 FCR 27 at 35-37; Tesco Supermarkets Ltd v Nattrass [1972] AC 153. 50 The second thing to be said about s 793 arises from my earlier observation that it does not directly operate to fix liability for a contravention on a body corporate; it is not to be regarded as a codification of the doctrine of vicarious liability: cf Trade Practices Commission v Tubemakers of Australia Ltd (No 2) (1983) 76 FLR 455 at 474-475; 47 ALR 719 at 739 (Toohey J). The mere fact that two employees of the CFMEU have each contravened the FW Act does not of itself, demand the conclusion that the CFMEU is liable for two contraventions. 51 The conduct attributed to the CFMEU by the operation of s 793(1) comprises the conduct of the Yarrawonga meeting and the words spoken there, together with the conduct of the Airport meeting and the words spoken there. As it was accepted by the parties that the flyer was distributed by or on behalf of the CFMEU, it is not necessary to draw upon s 793 to make a finding about that particular fact. 29 The applicant, on the other hand, relied upon the decisions of Collier J in Director, Fair Work Building Industry Inspectorate v Bolton (No 1) [2016] FCA 816 (Bolton (No 1)) and Director, Fair Work Building Industry Inspectorate v Bolton (No 2) (2016) 261 IR 452 (Bolton (No 2)) to contend that the CFMEU's submission was not supported by authority. 30 In Bolton (No 1), the Director of the Fair Work Building Industry Inspectorate (the director), had commenced an application for declarations and penalties in which the director alleged that certain union officers had contravened s 500 of the Fair Work Act and by reason of their conduct, and the operation of s 793 of the Fair Work Act, the CFMEU had also contravened that section of the Fair Work Act. The CFMEU made admissions that it had contravened s 500 on the basis of the conduct of its officers and the operation of s 793 of the Fair Work Act. 31 By reason of the admissions made by the CFMEU, the hearing before Collier J was confined to the question of the appropriate penalties to be imposed on the union officers and the CFMEU. However, after that hearing and whilst judgment was reserved, judgment in Robinson was delivered and the CFMEU, relying upon the observations of Charlesworth J referred to at [28] above, applied to withdraw the admissions made that by reason of the conduct of its officers and the operation of s 793 of the Fair Work Act, it had contravened s 500 of the Fair Work Act. Collier J refused the CFMEU's interlocutory application. 32 Accordingly, in Bolton (No 2), a penalty was imposed on the CFMEU in respect of each of the contraventions of s 500 of the Fair Work Act on the basis of the CFMEU's admissions that, by reason of the operation of s 793 of the Fair Work Act, and the impugned conduct of each of the union officers, the CFMEU had, thereby, in its own right, contravened s 500 of the Fair Work Act. 33 The applicant submitted that the Court should follow Bolton (No 1) and Bolton (No 2) as comprising the Court's most recent authorities on this issue. 34 The applicant relied, in particular, upon the following observations of Collier J in Bolton (No 1) at [33]: At this interlocutory stage it is not appropriate for me to undertake a detailed examination of s 793 of the FW Act, its application in the three proceedings, or the application of principles discussed in Robinson at [48]-[49] in either the completely unrelated proceedings in SAD 58 of 2015 or the present cases. It is, however, relevant for me to note the following points: • Section 793 of the FW Act, in substance, statutorily attributes to the corporation the conduct of the individuals referred to in the section: Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 at [58]; Australian Workers' Union v Leighton Contractors Pty Limited [2013] FCAFC 4 at [86]; Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd [2015] FCAFC 23 at [121]. • Section 793 is of broad application: Katzmann J in Australian Workers Union v Leighton Contractors Pty Ltd at [87]. • Section 793 provides that the relevant conduct is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body corporate. There is no distinction in s 793 between attribution of knowledge of contraventions by "permit holders", and other contraventions of the FW Act. • There is existing authority of this Court to the effect that a union can be liable for contraventions by a permit holder in respect of unlawful entry pursuant to s 500 of the FW Act: for example Darlaston v Parker [2010] FCA 771; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 199. (Original emphasis.) 35 Further, submitted the applicant, the observations made by Charlesworth J in Robinson were not made in the context of a claim that the CFMEU was liable for a contravention of s 500 of the Fair Work Act, and, therefore, greater weight should be accorded to the authorities referred to by Collier J in Bolton (No 1). 36 In my view, the applicant's submissions are not to be accepted for the following reasons. 37 First, the cases referred to by Collier J at the last dot point in [33] in Bolton (No 1) as comprising the existing authority that a union can by reason of s 793, be liable for contraventions by a permit holder of s 500 of the Fair Work Act, did not consider the distinction between the attribution to a body corporate of conduct under s 793 and the attribution to a body corporate of liability for a contravention of the Fair Work Act, discussed by Charlesworth J in Robinson. 38 The first case referred to in that respect was Darlaston v Parker (2010) 189 FCR 1 (Darlaston). In Darlaston, the applicant, the acting director of operations at the Office of the Australian Building and Construction Commissioner, alleged that the respondents, which included two unions, had contravened s 767(1)(b) of the Workplace Relations Act 1996 (Cth). It was alleged that by the operation of s 826(2)(a) of the Workplace Relations Act, the conduct of the individual respondent union officers was taken for the purposes of the Workplace Relations Act, to have been engaged in by the CFMEU and the CFMEU (NSW branch) and, accordingly, the unions in their own right had contravened s 767(1)(b) of the Workplace Relations Act. The terms of s 826(2) of the Workplace Relations Act were materially similar to the terms of s 793(1) of the Fair Work Act, and the terms of s 767(1) of the Workplace Relations Act were materially similar to the terms of s 500 of the Fair Work Act. 39 For the purposes of determining whether the unions, as well as the union officers, had contravened s 767(1)(b), Flick J concentrated on whether the conduct of the individual respondents in question fell within the ambit of s 826(2) of the Workplace Relations Act. It was assumed that if the conduct fell within the ambit of that section, that the liability of the unions was established. There was no discussion as to the distinction between the attribution of conduct to the unions and whether the unions were, as bodies corporate, capable of contravening s 767(1) of the Workplace Relations Act. 40 The second case referred to was Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 199 (CFMEU (No 2)). In CFMEU (No 2), a similar approach to that in Darlaston was adopted to the determination of the liability of the CFMEU in respect of the conduct of its officers in contravening s 500 of the Fair Work Act. 41 In my view, therefore, neither of these cases stands as authority which would preclude this Court from having regard to the merits of the contentions of the CFMEU which rely on the observations of Charlesworth J in Robinson. 42 It is the case, that the contravention alleged in Robinson was not a contravention of s 500 of the Fair Work Act. Rather, Robinson was concerned with a contravention of s 417(1) of the Fair Work Act which provided that industrial action was not to be organised or engaged in, before the nominal expiry date of an enterprise agreement. The persons to whom the prohibition in s 417(1) was addressed included a union. The union was, therefore, capable of contravening that section. 43 In Robinson, union officers who were located at two different car park locations, at about the same time, encouraged construction site employees not to attend work on that day to protest against the park and ride facilities available to the employees. 44 The director contended that by the operation of s 793, the conduct of union officers at each of the two car park locations, meant that the union was liable for two contraventions of s 417 of the Fair Work Act. It was in this context that Charlesworth J made the observations referred to at [28] above, and rejected the director's contention. Charlesworth J, in essence, found that the attribution to the union of the conduct of the union officers did not axiomatically result in there being two contraventions of s 417 of the Fair Work Act. Rather, Charlesworth J approached the question of the number of contraventions by the union by having regard to the conduct of the union "as a whole". On that analysis, Charlesworth J found that there had only been one contravention. 45 The fact that Robinson deals with a contravention of s 417, does not, in my view, render the observations of Charlesworth J as inapplicable to an alleged contravention of s 500 of the Fair Work Act. If anything, the facts and circumstances of this case are a fortiori because in Robinson the prohibition in s 417 was addressed to the union, whereas the prohibition in s 500 is not addressed to the union. 46 Further, the observations of Charlesworth J in Robinson referred to above, were cited with approval by Jessup J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Yarra's Edge Case) [2016] FCA 772. In that case, there were five union officers who engaged in conduct in contravention of s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act). Jessup J found that it did not follow that by the operation of s 69(1) of the BCII Act (which was in materially similar terms to s 793(1) of the Fair Work Act), the union was liable for the same number of contraventions. 47 At [19], Jessup J observed: All of the organisers were employees of the CFMEU, and thus officers by the operation of s 69(3). Their conduct was attributed to the CFMEU. It does not follow, however, that the CFMEU contravened s 38 as many times as the organisers in total did. This provision had an effect which differed in an important way from s 48(2): it was the conduct, not each contravention, which was attributed to the building association (see Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525 at [50]). Having attributed the conduct, the question remains: did that conduct amount to engagement in unlawful industrial action within the meaning of s 38, and if so, to how many separate instances thereof? On the facts of the present case, it would, in my opinion, be artificial to regard the conduct of the CFMEU as having amounted to a separate engagement in industrial action in respect of the conduct of each of the five organisers concerned. 48 Jessup J went on to find that the CMFEU contravened s 38 of the BCII Act once. 49 Secondly, the language of the Fair Work Act distinguishes between the attribution of conduct as in s 793, and the attribution of liability for a contravention of a provision of the Fair Work Act by another party as in s 550(1). 50 Section 550(1) of the Fair Work Act provides as follows: A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision. (Emphasis added.) 51 In my view, the observations of Charlesworth J in Robinson have application to the circumstances of this case, and it follows that the CFMEU's contention that it did not contravene s 500 of the Fair Work Act is to be accepted. 52 I, accordingly, dismiss the applicant's claims against the CFMEU.

the penalty for mr harris 53 The task of the Court in imposing a penalty has been described as follows in Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [91]: At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations. 54 The maximum penalty for a contravention of s 500 of the Fair Work Act which occurred on 25 May 2015, is $10,200. Mr Harris contended that the appropriate penalty was no more than $1,020. 55 The cases have identified a number of factors which may be taken into account in determining an appropriate penalty. These factors are not to be regarded as a rigid check list and the relevance of the factors will vary from case to case. However, it is important to observe that the primary objective of the imposition of a pecuniary penalty is for the penalty to operate as a deterrent. 56 The factors which, in my view, are relevant to the circumstances of Mr Harris' contravention are: (a) the nature and extent of the contravening conduct and the circumstances in which the conduct occurred; (b) the extent of any loss or damage sustained as a result of the contravention; (c) whether or not the contravention was deliberate; (d) whether Mr Harris had cooperated with the enforcement authorities; (e) whether Mr Harris has previously contravened industrial legislation; and (f) the need for specific and general deterrence. 57 The nature and extent of the contravention is set out above. The gravamen of Mr Harris' contravening conduct was the fact that he entered the site without an entry permit, and in the knowledge that he did not have such a permit and in the face of objections expressed by Mr Metcalfe. Further, Mr Harris refused to leave the site, in defiance of the directive from Mr Rowe. Mr Harris contended that he was carrying out a legitimate function of a union, namely, ensuring that employees were paid wages due to them. It is the case that it is a legitimate function of a union to assist its members in ensuring that they are paid their wages. However, that function must be exercised lawfully. In this case, before Mr Harris engaged in the unlawful conduct, Mr Harris had already been assured by Mr Metcalfe that the employees would be paid that day. 58 The period of time that Mr Harris remained on the site was relatively short, namely, about 35 minutes. However, what characterises Mr Harris' conduct was that it was deliberately unlawful and defiant. 59 There was no allegation that any pecuniary loss was suffered by any party by reason of Mr Harris' unlawful conduct. 60 Mr Harris did cooperate with the enforcement authority by admitting his contravention and amending his defence. This was late in the day because the matter had already been set down for trial. However, by reason of his cooperation, the Court and the parties were spared the time and expense of the trial. This cooperation counts in Mr Harris' favour. 61 Mr Harris has previously been found to have contravened industrial legislation. A penalty of $1,250 was imposed in relation to a contravention of s 348 of the Fair Work Act which occurred on 22 October 2013. 62 Mr Harris is no longer a union officer and this affects the question of specific deterrence. However, there is a need for the penalty to reflect general deterrence in light of the deliberate and defiant aspect of Mr Harris' conduct which reflected a disrespect and disregard for the law. It is this element of Mr Harris' conduct which renders his conduct serious. 63 Having regard to these factors, and applying an "instinctive synthesis", in my view, the appropriate penalty to be paid by Mr Harris is $2,000. 64 I observe that the applicant withdrew his original application for an order requiring that Mr Harris pay the penalty personally. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

Workplace Relations Act 1996(Cth)ss 767(1), 767(1)(b), 826(2), 826(2)(a)

Building and Construction Industry Improvement Act 2005(Cth)ss 38, 69(1)

Fair Work Act 2009(Cth)ss 12, 417, 417(1), 500, 512, 793, 793(1)

At a glance

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