Ingrid Margaret Stephenson v Parkes Shire Council; Natalee Stephenson v Parkes Shire Council; ; Jay Stephenson v Parkes Shire Council; ; South West Helicopters Pty Limited and anor. v Essential Energy

Supreme Court of NSW|2016-06-10|Before: Bellew J

INTRODUCTION

In these proceedings I delivered judgment in respect of liability on 19 December 2014: Stephenson v Parkes Shire Council and ors. [2014] NSWSC 1758 ("the liability judgment").
On 19 June 2015, having received further submissions, I delivered judgment in respect of damages and apportionment: Stephenson v Parkes Shire Council and ors. (No 2) [2015] NSWSC 719 ("the damages judgment").
At the time of delivering the damages judgment, and for the purposes of making final orders, I directed the parties to bring in Short Minutes reflecting the conclusions I had reached on the issues of liability, damages and apportionment.
I was then advised that one party wished to bring some further matters to my attention before any final orders were made. Those matters were raised on 24 July 2015 and are canvassed in a further judgment: Stephenson v Parkes Shire Council and ors. (No 3) [2015] NSWSC 1166 ("the third judgment"). I did not, in delivering the third judgment, make any findings which affected any of the conclusions I had reached in the liability judgment, or the damages and apportionment judgment.
Following the delivery of the third judgment, the parties were again directed to bring in Short Minutes of Order reflecting my conclusions. The parties were also given the opportunity to provide submissions as to costs (although to some extent, the issue of costs had been canvassed in previous submissions).
After giving the parties a lengthy opportunity to prepare the Short Minutes which were the subject of my previous order, I was advised that quite apart from issues as to costs, no agreement could be reached regarding the form of the final orders to be made. The parties then filed further written submissions as to what each considered to be the appropriate form of those orders.
On 14 December 2015, whilst judgment in respect of final orders and costs was reserved, a motion was filed by Parkes Shire Council seeking that the proceedings be re-opened. That motion was returnable before me on 5 February 2016.

THE FINAL ORDERS

Whilst there was consensus reached between the parties in some respects as to the form of the final orders to be made, their respective positions differed in others. In reaching the conclusions set out below, I have taken into account the submissions received from the parties. Short Minutes are to be prepared, with respect to each set of proceedings, in accordance with the conclusions set out below.

Ingrid Stephenson v South West Helicopters Pty Limited & Parkes Shire Council

In these proceedings, Ingrid brought an action against South West and the Council seeking damages: 1. under the Compensation to Relatives Act 1897 (NSW) (the CTRA); and 2. for nervous shock.
The following cross-claims were brought: 1. South West v EE (the first cross-claim); 2. EE v the Council (the second cross-claim); 3. South West v the Council (the third cross-claim); and 4. the Council v South West (the fourth cross-claim).
I have previously concluded that Ingrid is entitled to damages against each of South West and the Council, in respect of each of her causes of action. She is therefore entitled to a judgment against each of those parties.
I undertook separate assessments of damages in respect the two causes of action brought by Ingrid. In these circumstances, separate judgments for the respective amounts of damages for which each of South West and the Council have been adjudged to be liable should be entered in Ingrid's favour, so as to properly reflect my findings. In addition, the Short Minutes should record the effect of s. 151Z(1)(e) of the Workers Compensation Act 1987 (NSW) ("the WCA").
In terms of the four cross-claims, judgments should be entered in respect of the first, third and fourth, with the second to be dismissed. In that respect, any orders for judgment must obviously reflect the findings I reached in respect of apportionment. However there is an issue as to the terms of any such orders. The Council proposes that the amount of the judgment be stated in the orders. EE and South West each propose that the orders be expressed in terms of the percentage of responsibility that I have determined is to be borne by each respective party.
There is little or no material difference between those two approaches. Expressing the orders in terms of a monetary sum, calculated according to my findings as to damages and apportionment, will mean that the orders are clear. The Short Minutes in respect of each set of proceedings should be prepared on that basis.
Accordingly, in respect of proceedings 339465/2009: 1. judgment should be entered in favour of Ingrid against each of the Council and South West in the amount of the damages assessed; 2. the orders should record the effect of s. 151Z(1)(e) of the WCA; 3. there should be judgment for South West against EE on the first cross-claim in a sum representing 10% of the judgment amount payable by South West to Ingrid; 4. the second cross-claim should be dismissed; 5. there should be judgment for South West against the Council on the third cross-claim in a sum representing 20% of the judgment amount payable by South West to Ingrid; 6. there should be judgment for the Council against South West on the fourth cross-claim in a sum representing 80% of the judgment amount payable by the Council to Ingrid.

Proceedings 339470/2009 - Natalee Stephenson v South West Helicopters Pty Limited and Parkes Shire Council

Proceedings 339471/2009 - Jay Stephenson v South West Helicopters Pty Limited and Parkes Shire Council

These proceedings were brought by each of Natalee and Jay respectively, against South West and the Council, seeking damages for nervous shock.
The following cross-claims were brought in each case: 1. South West v EE (the first cross-claim); 2. EE v the Council (the second cross-claim); 3. South West v the Council (the third cross-claim); and 4. the Council v South West (the fourth cross-claim).
There is no dispute that Natalee and Jay are each entitled to a judgment in the amount of damages that I have assessed, against each of South West and the Council.
Accordingly, in respect of proceedings 339470/2009: 1. judgment should be entered in favour of Natalee against each of the Council and South West in the amount of damages assessed; 2. there should be judgment for South West against EE on the first cross-claim in a sum representing 10% of the judgment amount payable by South West to Natalee; 3. the second cross-claim should be dismissed; 4. there should be judgment for South West against the Council on the third cross-claim in a sum representing 20% of the judgment amount payable by South West to Natalee; and 5. there should be judgment for the Council against South West on the fourth cross-claim in a sum representing 80% of the judgment amount payable by the Council to Natalee.
In respect of proceedings and 339471/2009: 1. judgment should be entered in favour of Jay against each of the Council and South West in the amount of damages assessed; 2. there should be judgment for South West against EE on the first cross-claim in a sum representing 10% of the judgment amount payable by South West to Jay; 3. the second cross-claim should be dismissed; 4. there should be judgment for South West against the Council on the third cross-claim in each case in a sum representing 20% of the judgment amount payable by South West to Jay; and 5. there should be judgment for the Council against South West on the fourth cross-claim in each case in a sum representing 80% of the judgment amount payable by the Council to Jay.

Proceedings 339501/2009 - Parkes Shire Council v South West Helicopters Pty Limited

In these proceedings the Council brought an action against South West pursuant to s. 151Z of the WCA in respect of compensation payments made following the death of Mr Buerckner.
The following cross-claims were brought: 1. South West v EE (the first cross-claim); and 2. EE v the Council (the second cross-claim).
The Council is entitled to a judgment against South West in the amount of damages assessed, plus interest. It will be necessary for the parties to agree upon the calculation of interest up to 24 June 2016, on which date I propose to make the final orders.
In respect of the first cross-claim, judgment should be entered in favour of South West against EE in an amount representing 10% of the judgment amount payable by South West to the Council, plus interest.
The second cross-claim should be dismissed.

Proceedings 339502/2009 - Parkes Shire Council v South West Helicopters Pty Limited

In these proceedings the Council brought an action against South West pursuant to s. 151Z of the WCA in respect of compensation payments made following the death of Mr Stephenson.
The following cross-claims were brought: 1. South West v EE (the first cross-claim); 2. EE v the Council (the second cross-claim); 3. South West v the Council (the third cross-claim).
The Council is entitled to a judgment against South West in the amount of damages assessed, plus interest. Again it will be necessary for that interest to be calculated up to 24 June 2016 and agreed upon by the parties. An order should be made directing South West to pay that judgment sum to the Council before making any payment to Mrs Stephenson in respect of her claim under the CTRA.
In respect of the first cross-claim, there should be judgment entered in favour of South West against EE in an amount representing 10% of the judgment entered in favour of the Council against South West, plus interest.
The second cross-claim should be dismissed.
In respect of the third cross-claim, judgment should be entered in favour of South West against the Council in the amount of damages assessed, plus interest.

Proceedings 20544/2009 (297846/2009) - South West Helicopters Pty Limited and Country Connection Airlines Pty Limited v Essential Energy

In these proceedings South West and CC brought an action against EE.
A cross claim was filed by EE against the Council.
Judgment should be entered for South West against EE in the amount of damages assessed, plus interest.
Judgment should be entered for CC against EE in the amount of damages assessed, plus interest.
At [176] of the apportionment judgement I determined that the claims brought by CC and South West against EE were apportionable claims within the meaning of Part 4 of the Civil Liability Act 2002 (NSW). I also concluded that EE was one of four concurrent wrongdoers. In these circumstances the cross-claim should be dismissed.

Submissions on behalf of Ingrid, Natalee and Jay

Counsel for each of Ingrid, Natalee and Jay relied upon r. 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("the Rules") which encompasses the general rule that costs follow the event.
Counsel also addressed r. 42.34 which is in the following terms: 42.34 Costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court (1) This rule applies if: (a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and (b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants. (2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted.
Counsel appeared to accept that prima facie, r. 42.34 applied in the present case. However, it was submitted that I would be satisfied that the litigation of the issues in this Court, rather than in the District Court, was warranted because: 1. the various sets of proceedings (which were transferred to this Court with the consent of all parties) resulted in a significant combined award in favour of Ingrid, Natalee and Jay; 2. a number of cross-claims were brought which added significant complexity to the matter, justifying the proceedings being litigated in this Court; and 3. the various proceedings also involved difficult issues of statutory construction which added further complexity.
Counsel also pointed out that r. 42.34 became operative on 10 September 2010, which was after the proceedings were commenced by each of Ingrid, Natalee and Jay.
In all of the circumstances, and given that each of Ingrid, Natalee and Jay succeeded in their respective claims, counsel submitted that each was entitled to an order for costs against the respective defendants, such costs to be paid on the usual basis.

Submissions of EE

In support of his submissions in respect of costs, senior counsel for EE read (without objection) an affidavit of Asha Gabrielle McDermott of 3 July 2015.
Senior counsel for EE submitted that South West had ultimately established an entitlement to a "disproportionately small sum" of damages in proceedings 20544/2009. It was submitted that there had been no proper evidentiary basis for the majority of the damages which had been claimed by South West and that despite this, South West had "persisted in pursuing inflated claims". This, it was submitted, had resulted in a situation where the costs incurred, and the associated use of court time in order to determine damages, were significantly disproportionate to the amount(s) which were ultimately in issue, as well as being disproportionate to the damages which were ultimately awarded.
It was further submitted that CC was in a similar position in respect of its claim in the same proceedings for damages in respect of the costs of modification of another helicopter. Senior counsel for EE submitted that the documentary evidence adduced in support of this claim (such as it was) was clearly and obviously deficient. He pointed out, in particular, that the claim for investigative costs brought by South West had completely failed, and that the claim for the damages to the hull of the helicopter involved in the crash had been agreed between the parties in any event.
It was submitted that in all of these circumstances there should be no order as to costs in respect of the claims brought by South West and against EE. Alternatively, it was submitted that any order for costs in favour of either of those parties should be limited to an order for a proportion of costs which was commensurate with the limited degree of success in each. In this respect, it was submitted that an amount of 10% would be appropriate.
In respect of the cross-claims brought by EE against the Council in each of the proceedings 339501/2009 and 339502/2009, senior counsel for EE submitted that a costs order should be made which required South West to: 1. pay EE's costs in respect of each cross-claim it brought against the Council; and 2. pay the Council's costs of defending those cross-claims brought against it by EE.
As to the second of those matters, to avoid duplication and to recognise the obligations imposed by ss. 56 and 58 of the Civil Procedure Act 2005 (NSW) ("the CPA"), it was submitted that South West and CC should be ordered to pay the costs of the Council directly, pursuant to s. 98(1)(b) of the CPA.
Finally, it was submitted that the costs of the remaining cross-claims overlapped with the costs of the defence of the various claims. It was submitted that subject to the specific submissions previously set out, the most equitable way of disposing of the issue of costs was to order that each party to the various cross-claims bear its own costs. It was submitted that to do otherwise would be to invite an apportionment which was overly complicated and potentially inconsistent.

Submissions of the Council

The Council relied on an affidavit of Patrick Keali'I Williams of 23 July 2015, which was read without objection.
It was submitted on behalf of the Council that the Court was given a wide discretion in respect of costs pursuant to both the CPA and the Rules. Particular reliance was placed on r. 42.1, the terms of which I have already noted. It was submitted that the term "event" as it is used in that rule extended to any disputed question of fact or law such that in the present case it was appropriate for the court to make orders with respect to the separate proceedings brought by the various parties.
The Council relied on the fact that it had been successful in each of the proceedings it had brought against South West pursuant to s. 151Z of the WCA, in circumstances where those proceedings had been strenuously defended. It was submitted that in these circumstances the Council was entitled to its costs of each of those proceedings.
In the proceedings brought by it against South West in respect of compensation payments made to Mr Stephenson (being proceedings 339502/2009), the Council pointed out that although South West had brought the third cross-claim against it seeking damages of more than $800,000.00, it had succeeded in recovering only a small percentage of that sum. It was submitted that whilst the usual starting position may be that costs follow the event, there were cases in which it was nevertheless be appropriate to order that a successful party be deprived of its costs, or of a portion of its costs, if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument.
It was further submitted on behalf of the Council that the court retained a discretion to award costs against a plaintiff who recovered only nominal damages, because an award of nominal damages was not the "event" at which such a plaintiff was aiming: Alltrans Express Pty Limited v CVA Holding Pty Limited [1984] 1 WLR 394 per Stephenson LJ; Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306. It was submitted that the reasoning expressed in these authorities was of particular significance in circumstances where the Council had incurred costs in defending the cross-claim brought by South West. It was pointed out that such costs included costs associated with retaining an expert forensic accountant whose opinions largely prevailed over the expert retained by South West. It was submitted that in the end result, a significant (and disproportionate) amount of court time, resources and costs had been spent in the litigation of a claim which resulted in an award of damages which was less than the jurisdictional limit of the Small Claims Division of the Local Court.
In these circumstances, it was submitted that notwithstanding that South West had damages awarded in its favour, an order for costs should be made in favour of the Council against South West in respect of the third cross-claim brought in proceedings 339502/2009. In the alternative, it was submitted that the Council should be properly regarded as the successful party in those proceedings, having limited the amounts awarded to minimal sum. On this basis, it was submitted the appropriate order was that each party bear its own costs.
The submissions on behalf of the Council then turned to the claims brought by South West and CC against EE, in which EE had filed a cross-claim against the Council (proceedings 20544/2009). It was pointed out that I had determined that the claims brought by CC and South West against EE were apportionable claims under Part 4 of the CLA. It was submitted that in these circumstances, because the cross-claim brought by EE against the Council had failed, and had been untenable from the outset, the Council was entitled to its costs of defending that cross-claim.
In respect of the proceedings brought by Ingrid, Jay and Natalee, the Council conceded that the plaintiff in each case was entitled to an order for costs. It was submitted that the Court's discretion should be exercised so as to order that South West, the Council and EE pay the costs of each of Ingrid, Jay and Natalee in a proportion consistent with my determination as to apportionment, namely: 1. South West - 70%; 2. the Council - 20%; 3. EE - 10%.
It was further submitted on behalf of the Council that the unusual complexity of the present proceedings, together with the variety of issues, cross-claims, and differing statutory regimes under which the issues fell to be determined, justified costs being awarded separately against each defendant. This, it was submitted, was consistent with the approach taken in Shan v Zhang (No 2) [2007] NSWSC 1355.
The Council's submissions then turned to the costs orders to be made in respect of the cross-claims filed in the proceedings brought by each of Ingrid, Natalee and Jay. It was submitted on behalf of the Council that there should be no order as to costs in respect of any of these cross-claims. It was submitted that in circumstances where liability had been apportioned between all of the defendants, the cross-claims were otiose, that the issues raised by those cross-claims had been agitated through the other proceedings, and that only notional additional costs had been incurred in relation to such cross-claims, as they had no real work to do.
Finally, the Council relied on the affidavit of Mr Williams in support of a conclusion that Notices to admit facts were served by the Council on South West and EE, each of whom had responded by disputing such facts. It was submitted on behalf of the Council that the facts disputed were subsequently proved and that accordingly, the Council was entitled to a particular costs order in its favour in respect of cost of proving such facts, pursuant to r. 48.8 of the Rules.
In supplementary submissions, the Council emphasised that it remained its primary position that costs in the proceedings brought by Ingrid, Jay and Natalee should be awarded separately against each defendant. In the alternative, it was submitted that if joint and several costs orders were made: 1. the costs payable to each of Ingrid, Jay and Natalee should be apportioned between the tortfeasors via the cross-claims filed in each of those proceedings; and 2. the apportionment of those costs between the tortfeasors should be consistent with the apportionment of liability, i.e.: South West should pay 80%; the Council should pay 20%; and there should be an adjustment as between EE and South West to reflect the apportionment as between them.
It was submitted on behalf of the Council that such an approach was consistent with the decision of Handley JA in James Hardie & Co Pty Limited v Wyong Shire Council [2000] NSWCA 107; (2000) 48 NSWLR 679 at [23].

Submissions on behalf South West

It was accepted on behalf of South West that each of Ingrid, Jay and Natalee was entitled to an order for costs against it and the Council, being the named defendants in the proceedings brought by each of those persons. It was submitted that South West and the Council had each been adjudged as being entitled to contribution from EE for the damages and costs payable to each Ingrid, Natalee and Jay, and that the power under s. 98 of the CPA permitted the Court to make an order that EE also pay part of the costs in the proceedings brought by each of Ingrid, Natalee and Jay.
It was further submitted that the appropriate order in the proceedings brought by South West and CC against EE (proceedings 20544/2009) was an order for costs in favour of South West.
It was otherwise submitted that as between South West, CC, EE and the Council, each party had enjoyed "a measure of success and/or failure" in the proceedings. It was submitted that in light of the complexity of the multiple proceedings which had been brought, together with the fact that all of the proceedings were heard concurrently, it was not practical to attempt to separate the costs in each of the proceedings, and the costs in respect of each of the cross-claims. It was further submitted that the disposition of each of the proceedings turned upon the one set of issues which required the consideration of a single body of evidence and law. It was submitted that in these circumstances the appropriate course to adopt was to make "a general order" in respect of costs which applied across all of the proceedings.
For these reasons it was submitted that in the circumstances, rather than attempting to make costs orders reflecting each party's success on individual claims and issues, I should order that: 1. South West, the Council and EE pay the costs of each of Ingrid, Natalee and Jay in equal contributions; 2. South West, CC, the Council and EE otherwise bear their own costs.
It was submitted that such an approach was consistent with authority which supported the following propositions: 1. costs are awarded as a partial indemnity to a successful party for legal expenses incurred in a proceeding: Gundry v Sainsbury [1910] 1 KB 645 at 649; Cachia v Hanes (1994) 179 CLR 403 at 410-411; 2. where a plaintiff has to prove liability against all defendants and establish responsibility of each defendant, the whole of that plaintiff's costs are incurred in proving the case against each of the defendants. There is therefore substantial justice in making joint and several costs orders against all defendants: Tsu v Nemeth [2012] NSWCA 29 at [55]-[56]; Perigo v Workers Compensation Nominal Insurer (No 3) [2013] NSWSC 6 at [11]; 3. rule 42.1 of the Rules provides that costs ought follow the event and where the event is the recovery of judgments against all defendants, it is appropriate that joint and several costs orders against all defendants are made, with a right to contribution between such defendants; Tsu v Nemeth [2012] NSWCA 29 at [55]-[59]; [73]-[74].
In response to the submission made on behalf of EE that South West and CC should be ordered to pay the Council's costs of the cross-claim brought by EE, South West submitted that there was no reason to deal with costs of that cross-claim separately to, or on a different basis from, the costs of the other proceedings. Accordingly, it was submitted that such costs should be dealt with through the "global approach" which had been proposed.

Ingrid Stephenson v South West Helicopters Pty Limited & Parkes Shire Council

In these proceedings Ingrid is entitled to an order for costs against the Council and South West.
Given the conclusions I have previously reached, EE should also pay a proportion of those costs. In my view, it is appropriate that each of the Council, South West and EE pay Ingrid's costs in accordance with my conclusions as to apportionment. Accordingly: 1. South West should pay 70% of Ingrid's costs; 2. the Council should pay 20%; and 3. EE should pay 10%.
As I have previously noted, there were various cross-claims filed in these proceedings. There were also cross-claims filed in the other sets of proceedings to which I have referred. The entirety of the cross-claims raised a multiplicity of issues, all of which were litigated and determined essentially on the one body of evidence, although in some cases pursuant to different statutory regimes. Many of the issues relevant to the cross-claims overlapped with the issues in the various sets of proceedings which were brought.
In these circumstances, there should be no order as to costs with respect to any of the cross-claims filed in the proceedings brought by Ingrid.

Proceedings 339470/2009 - Natalee Stephenson v South West Helicopters Pty Limited and Parkes Shire Council

Proceedings 339471/2009 - Jay Stephenson v South West Helicopters Pty

Limited and Parkes Shire Council

Natalee and Jay are each entitled to an order for costs against the Council and South West. The costs in each case should be apportioned between the Council, South West and EE in the proportions set out in [69].
For the reasons stated in [72] above there should be no order as to costs in respect of any cross-claim filed in the proceedings brought by Natalee.

Proceedings 339501/2009 - Parkes Shire Council v South West Helicopters Pty Limited

The Council was successful in these proceedings against South West. There is no reason why an order for costs should not be made in favour of the Council. That order should include an order, pursuant to r.42.8(2) of the Rules, in respect of the costs incurred by the Council in proving the facts the subject of the notices to admit which were served, such facts having been disputed by South West.
For the reasons set out in [72] above, there should be no order as to costs in respect of the first and second cross-claims.

Proceedings 339502/2009 - Parkes Shire Council v South West Helicopters Pty Limited

The Council was also successful in these proceedings and is entitled to an order for costs against South West. I have previously noted the submissions made on behalf of the Council regarding the costs of the third cross-claim brought against it by South West. Clearly, the damages recovered by South West pursuant to that cross-claim were substantially less than those which were sought.
In Yazgi (supra) the Court (Beazley JA (as her Honour then was), Ipp and Tobias JJA) observed (at [24]): "In the case where there are multiple issues litigated, the court may, in the exercise of its discretion, order that a successful party have part only of its costs. However, it does not necessarily follow that that is the appropriate order. The commencing position is that costs follow the event so that a successful party is entitled to costs. It may be appropriate to order that a successful party be deprived of costs, or a portion of costs, if the matters upon which that party is unsuccessful took up a significant part of the trial, either by way of evidence or argument".
In the present case, a significant amount of court time was taken up dealing with evidence and submissions in respect of claims made by South West which were ultimately unsuccessful. That said, South West did recover some damages and could not be said to have been completely unsuccessful. I am not persuaded that this is a case in which I should order costs against South West in respect of the third cross-claim. In the circumstances there should be no order as to costs.
For the reasons expressed at [72] above, there should be no order as to costs in respect of the first and second cross-claims.

Proceedings 20544/2009 (297846/2009) - South West Helicopters Pty Limited and Country Connection Airlines Pty Limited v Essential Energy

The damages recovered by South West and CC against EE were minimal. Many of the individual claims for damages were unsupported by the evidence. Accordingly, the observations in [78]-[80] are equally applicable in this instance. In the circumstances, and notwithstanding that South West and CC were each successful in recovering damages against EE, there should be no order as to costs of those proceedings. Similarly, and for the reasons previously expressed at [72] above, there should be no order as to the costs of the cross-claim.

ORDER

I make the following order: 1. The parties are to bring in Short Minutes reflecting the conclusions reached in this judgment by 5:00pm on Thursday 23 June 2016.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 May 2019

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