Kostov v Registrar of the Federal Court

Federal Court of Australia|2021-12-13|Before: Farrell J, Thawley J

The application be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

INTRODUCTION 1 The applicant sought to file two documents dated 18 December 2020: (1) first, an application for an extension of time in which to apply for an order for review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) of a decision of the Official Trustee in Bankruptcy made on 15 November 2018; and, (2) secondly, an affidavit in support of that application for an extension of time. 2 On 13 January 2021, a Registrar of the Court refused to accept either document for filing. That decision was made under Rule 2.26 of the Federal Court Rules 2011 (Cth) which provides: 2.26 Refusal to accept a document for filing - abuse of process or frivolous or vexatious documents A Registrar may refuse to accept a document (including a document that would, if accepted, become an originating application) if the Registrar is satisfied that the document is an abuse of the process of the Court or is frivolous or vexatious: (a) on the face of the document; or (b) by reference to any documents already filed or submitted for filing with the document. 3 The Registrar provided his reasons for refusing to accept Ms Kostov's documents for filing by way of a letter dated 13 January 2021. The reasons were: In considering these documents, I have considered Order 4 of the orders of the Court made on 20 July 2020 in proceeding NSD30/2019 (Order) and the associated reasons for judgment published by Justice Farrell on 31 July 2020 (Reasons). I note that you seek to apply to the Court for an extension of time to "review the decision of the Respondent that Section 60(4) of the Bankruptcy Act 1966 (Cth) did not apply, to proceedings before the NCAT Tribunal, the decision made on 15 November 2018" (Proposed Application). In my view, the relief sought in the Proposed Application is identical to the relief sought in proceeding NSD30/2019: see Reasons, in particular at [3]. The legal merits of this claim were considered and rejected: see Reasons, in particular at [28]. While noting your email to the Registry of 23 December 2020, there can be no doubt that the Order applies to the Proposed Application: see Reasons at [30]. I note there is no suggestion that the costs referred to in the Order have been paid. In these circumstances, the Proposed Application can be clearly seen to be foredoomed to fail. It follows that the documents are an abuse of the process of the Court. 4 The reference to Order 4 in the first paragraph of the Registrar's reasons was a reference to the following order made by Farrell J on 20 July 2020: Pursuant to r 39.03(2) of the Federal Court Rules 2011 (Cth), any further proceedings brought by the applicant against either of the respondents [Australian Financial Security Authority and the Official Trustee in Bankruptcy] for some or all of the same or substantially the same causes of action or relief as those claimed in these proceedings be stayed until the costs the subject of order 3 have been paid. 5 The reference to proceeding NSD30/2019 is a reference to Justice Farrell's decision in Kostov (Bankrupt) v Australian Financial Security Authority, in the matter of Kostov [2020] FCA 1105 (Kostov v AFSA). 6 In summary, the Registrar considered that the documents which Ms Kostov had sought to file were an abuse of the process of the court for two reasons: (1) first, he considered that the relief sought by Ms Kostov was identical to the relief which had been sought and denied in Kostov v AFSA; and (2) secondly, he concluded that Order 4 of the orders made on 20 July 2020 in Kostov v AFSA applied to the application which the applicant proposed to commence by filing the documents and was operative because Ms Kostov had not paid the costs which had been ordered. 7 Ms Kostov seeks an extension of time to commence proceedings to review the Registrar's decision. In the draft originating application the subject of her request for an extension of time for review of the Registrar's decision, Ms Kostov stated the details of her claim and the grounds of application as follows: Details of claim The Applicant is aggrieved by the decision because: 1. The Registrar has made an erroneous decision, and denies the Applicant, the right to have a wrongful decision, of AFSA reviewed, per normal administrative review process, which is, causing her harm, loss and damage to property, and further, financial loss. 2. The Applicant has suffered, and continues to suffer, loss and harm as a result of the Respondent refusing to allow her decision be reviewed, and therefore asks this honourable Court to review the Registrar's decision. 3. The Registrar, is denying the Applicant, the basic legal right, to have an administrative decision, reviewed, by this Court, of which, she is legally entitled. Grounds of application 1. In his letter of 13 January 2021, the Registrar stated, my application for Judicial Review of the Trustee's decision (NCAT decision) of 15 November 2018, fell within orders made by Her Honour Farrell J, on 20 July 2020. Such, is in error. 2. My application, for administrative review, of the Trustee (NCAT) decision, of 15 November 2018, does not fall within, those orders. This, is a simply administrative review, of a decision, made 18 months prior, to the orders made, by Her Honour Farrell J. I am not seeking, any recourse, or financial benefit, against the Trustee, I am simply seeking, a review of their decision, that a personal injury action, I had filed, prior to my purported bankruptcy, of 18 July 2018, does not fall within Section 60(4), of the Bankruptcy Act, which states: (4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of: (a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or (b) the death of his or her spouse or de facto partner or of a member of his or her family. 3. I therefore submit, the Registrar, has erred in this letter of 13 January 2021, that my application falls within the orders of 20 July 2020, and such is an abuse of power by the Registrar, as the Registrar, is denying the Applicant, the basic legal right, to have an administrative decision, reviewed, by this Court, of which, she is legally entitled. 4. I also submit, that it is appropriate, a Judge, make the determination, as to the applicability of the orders of 20 July 2020, especially as they relate to a personal injury action contained within Section 60(4) of the Bankruptcy Act, especially in circumstances where, the said decision, has caused myself serious personal injury, which requires to be rectified. 8 Ms Kostov's application for an extension of time was listed for a case management hearing on 1 September 2021. She did not appear. The Court made the following orders on that occasion: • The applicant is to file any submissions, limited to 10 pages, in support of her application for an extension of time by 8 September 2021. • The application for the extension of time is to be determined on the papers. 9 No submissions have been filed. 10 For the reasons which follow, the application for an extension of time is dismissed.

CONSIDERATION 11 The present application is one for an extension of time to seek judicial review of the Registrar's decision - see: rr 31.02 and 1.39 of the Rules. The Registrar's decision is of an administrative character and susceptible to review pursuant to s 5(1) of the ADJR Act - see: Satchithanantham v National Australia Bank Limited [2010] FCAFC 47; (2010) 268 ALR 222 at [49] (Marshall, Cowdroy & Buchanan JJ); Nyoni v Murphy [2018] FCAFC 75 at [32]-[37] (Barker, Banks-Smith & Colvin JJ). 12 The Court's discretion to extend time is unconfined by any express words. Any relevant matter may be taken into account. The applicant's affidavit states that she is unwell and has been unwell for some time. She also stated that she had difficulties managing legal proceedings on account of the difficulties caused by the current COVID-19 pandemic. Taking into account the applicant's difficult circumstances, I consider there is an adequate explanation for the delay in the circumstances and would not reject the application for an extension of time on that basis. 13 One important consideration in considering whether to extend time is the merit of the proposed application. It is convenient to examine separately the two bases for the Registrar's decision in examining the merit of Ms Kostov's application for an extension of time.

Registrar's first reason - identical relief 14 Was the relief which the applicant sought by her proposed application for an extension of time and draft originating application the same as the relief which the applicant had sought in Kostov v AFSA? 15 The relief sought in the proposed application for an extension of time was an extension of time. The relief sought in the proposed draft originating application was to "review the decision of [the Official Trustee in Bankruptcy] that Section 60(4) of the Bankruptcy Act 1966 (Cth) did not apply, to proceedings before the NCAT Tribunal, the decision made on 15 November 2018". 16 In Kostov v AFSA at [3], to which the Registrar referred in his reasons, Farrell J set out a summary of the applicant's applications. That summary included: In the proceedings before the Court for hearing on 8 July 2020, Ms Kostov's applications were: (1) An originating application filed on 3 January 2019 as amended on 23 April 2019 … (2) A further amended application dated 27 April 2020. That application sought interim relief as follows: (a) Review by the Federal Court of a decision made by the Official Trustee and notified to the New South Wales Civil and Administrative Tribunal (NCAT) in relation to proceedings NSW 2814/18/4 between Ms Kostov and Amelie Housing (formerly known as Ecclesia Housing Limited) in a letter from Terrence Arnold (a case manager acting for the Official Trustee) dated 15 November 2018 (November 2018 letter), (see [64(1)] below). The November 2018 letter was copied to Ms Kostov and Peterson Haines Lawyers on behalf of Amelie Housing. It is useful to note that Ms Kostov was locked out of social housing owned by Amelie Housing on 1 June 2018 (after proceedings brought by Ecclesia Housing Limited for Ms Kostov's eviction arising from Ms Kostov's failure to pay rent) and her chattels were placed in storage. A number of proceedings in NCAT and the Supreme Court of New South Wales related to that issue; … (3) An interim application filed on 21 May 2020. Ms Kostov sought … judicial review of the decision notified in the November 2018 letter … (4) An application under r 20.31(3) of the Federal Court Rules 2011 (Cth) for the production of documents … 17 According to this summary, Ms Kostov sought judicial review of the decision notified in the letter of 15 November 2018 made by the Official Trustee in Bankruptcy in her "further amended application" and her "interim application": paragraphs 2(a) and (3) above. This summary must be read with the reasons as a whole, referred to in more detail below. 18 As noted earlier, in the proceedings determined by Farrell J, Ms Kostov sought relief under an "interim application" and a "further amended application".

Ms Kostov's interim application 19 By her "interim application" filed on 21 May 2020, Ms Kostov sought the following order (Order 5) (see Kostov v AFSA at [72]): 5. The Decision dated November 2018, of the Official Trustee in relation Amelie Housing and the Respondent be submitted for Judicial Review, as it involves a decision-maker, by an officer of the Commonwealth, and therefore reviewable as an error of law. 20 The "interim application" was accompanied by an unsigned affidavit which Farrell J treated as submissions. As her Honour records at [73], it included the following: Request for Judicial Review of Trustee Decision 21. I ask this Court note, that I intend to file a Judicial Review Application, to review the decision of the Official Trustee made in November 2018. My reason for asking such, is, that I had sought to review the said decision in the Administrative Appeals Tribunal, only, to have the Respondent use CBP Lawyers, to aggressively strike out, what should have been, a very simple, and no cost review of a decision. I therefore advised the AAT that in light of the conduct of the Respondent, the appropriate course to take, was to have this decision reviewed, by the Federal Court. 22. The decision related to the Trustee, wrongly interfering in a personal injury matter, of which, had commenced in June 2018, prior, to the purported bankruptcy which occurred in my abscence on 18 July 2018. Therefore, Section 60(4) of the Bankruptcy Act, should have applied, whereby, such a personal injury matter, was exempt, from interference by the Respondent, as [t]he matter, was a serious matter, with Ms Carrie Peterson, offering myself $8000 on 1 August 2018 to settle the matter, and then $10,000 on 8 October 2018, both amounts, I could not accept, as the costs and damage, far exceeded, those amounts. 23. Without my knowledge, as pleaded in paragraph 18 and 19 above, Ms Carrie Peterson, had been liasing [sic] direct with the Respondent on this matter, not including me in communication, which is a breach of the basic practice of the Courts, of which, Ms Peterson, a Solicitor, and AFSA, a government entity, would know. She did not disclose, that she had offered myself, the sums of compensation, pleaded in 22 above. 24. The Respondent (and Official Trustee) came to the decision, that this matter was not exempt pursuant to Section 60(4). They came to this decision, after consulting direct with Ms Peterson, and excluding myself. 25. As I detail above, my simple attempt to have the decision reviewed in the AAT had been aggressively attacked by the Respondent, for reasons unknown. It is highly improper conduct on behalf of the Respondent, which had caused myself significant financial harm, exposure to fraud and loss of property, and I therefore seek relief from these Courts, to have such a decision, reviewed[.] 26 The misconduct of the Respondent is serious, and it is entirely inappropriate these current proceedings continue, until the interim relief I ask, is dealt with. The issue of my purported bankruptcy, most certainly should not have resulted in myself now being exposed to extortionate and unverified cost claims, which far exceed, the initial claim, of the petitioner. 21 Farrell J addressed this claim in Kostov v AFSA, stating: 217 Fifth, the plea at [5] of the interim application is that the decision in the November 2018 letter (see [64(1)] above) be submitted for judicial review. Ms Kostov's affidavit dated 18 May 2020 contains submissions in relation to this plea at [21]-[26] (see [73] above). 218 Ms Kostov did not identify the legal basis on which the Official Trustee's decision advised to NCAT, Ms Kostov and Amelie Housing in the November 2018 letter might be subject to judicial review. Ms Kostov merely noted that it was a decision of a Commonwealth body and reviewable as a matter of law which would indicate that Ms Kostov might be seeking review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). Such a decision might also be subject to review by the Court under s 90-15(1) of Sch 2 to the Bankruptcy Act (the Insolvency Practice Schedule (Bankruptcy)). 219 In the absence of argument from either party about the legal basis on which such a review might be conducted, including whether a decision of the Official Trustee of the kind reflected in the November 2018 letter falls to be reviewed under the ADJR Act, it is inappropriate to consider this matter in any depth. It is sufficient to note that, as the decision was made on or around 15 November 2018, Ms Kostov would require an extension of time to file her application under either the ADJR Act or the Insolvency Practice Rules (Bankruptcy) 2016 (Cth). Section 11(3)(a) of the ADJR Act requires the application to be filed within 28 days after the November 2018 letter was given to Ms Kostov and s 90-80 of the Insolvency Practice Rules requires an application made under s 90-15 to be made no later than 60 days after the day on which the person making that application became aware of the trustee's act, omission or decision giving rise to the application. 220 Such an extension should not be granted because any application to review the decision recorded in the November 2018 letter would lack merit. 221 The proceedings to which the November 2018 letter related were commenced in the Supreme Court of New South Wales on 3 October 2018, some months after the sequestration order was made against Ms Kostov's bankrupt estate. Those proceedings were the subject of a judgment published by Fagan J on 1 February 2019 as Kostov v Amelie Housing (NCAT Appeal). At [11]-[14], Fagan J found that, as Ms Kostov was bankrupt at the time she commenced the proceedings, she had no standing to commence them since that right was "property" (within the definition in s 5 of the Bankruptcy Act) which had vested in her trustee under s 58 of the Bankruptcy Act and the right to bring proceedings is included within the concept of divisible property within s 116(1)(b). In drawing that conclusion, Fagan J relied on (among other authorities) the decision of McKerracher J in Rana v Musolino [2010] FCA 476 at [47]. Further, at [15]-[16], Fagan J found that the exception to "divisible property of the bankrupt" created by s 116(2)(g) of the Bankruptcy Act for any right of the bankrupt to recover damages for "personal injury or wrong" was not engaged by the proceedings, contrary to Ms Kostov's submissions. Justice Fagan's reasoning reflects the reasoning in the November 2018 letter and I perceive no error in it so that no error of law is revealed in the November 2018 letter. 222 Contrary to Ms Kostov's beliefs as reflected in the materials before the Court, it is irrelevant for the purposes of s 60(4) of the Bankruptcy Act that Amelie Housing locked her out of premises she occupied and her personal effects were sent to storage before her bankruptcy and her view that her cause of action based on those events was for a "personal injury or wrong" is wrong in law. 223 Ms Kostov has already availed herself of a complaint to the Inspector-General about the Official Trustee's failure to consult her before issuing the November 2018 letter. It was the subject of Mr Shaw's letter to Ms Kostov dated 15 February 2019. In that letter, Mr Shaw concluded that as the proceedings to which the November 2018 letter related were commenced after Ms Kostov became bankrupt, s 60(4) of the Bankruptcy Act, which permits a bankrupt to continue proceedings commenced before he or she became bankrupt where the proceedings are in respect of "any personal injury or wrong done to the bankrupt", had no relevance. The Court perceives no error in that conclusion for reasons previously given. 224 Mr Shaw further said that a trustee in bankruptcy had no obligation to consult a bankrupt before making such a decision and the Official Trustee had taken legal advice on the basis of which it made its decision. Mr Shaw also noted that the fact Ms Kostov had failed to file a statement of affairs some seven months after becoming bankrupt "makes it harder for the Official Trustee to administer your estate effectively, and is prolonging the period of your bankruptcy". The Court agrees. 225 For completeness, in the Court's view it was entirely open to the Official Trustee to form the view that it should not prosecute the proceedings commenced by Ms Kostov having regard to its duty to act in the interests of the estate in a commercially sound manner and to seek to minimise the costs, not only for the benefit of creditors of the bankrupt estate, but also for the benefit of the other parties to those proceedings in circumstances where those proceedings sought to recover only a small amount of damages and had no reasonable prospect of success. 22 Farrell J declined to make Order 5 which Ms Kostov had sought. In the course of refusing that order, Farrell J noted that it was not appropriate to consider in any depth whether a decision of the Official Trustee of the kind reflected in the November 2018 letter falls to be reviewed under the ADJR Act: at [219]. Her Honour noted that Ms Kostov would require an extension of time for such an application (at [219]) and that "[s]uch an extension should not be granted because any application to review the decision recorded in the November 2018 letter would lack merit": at [220]. Her Honour gave reasons why such an application would lack merit. Her Honour's comments were made in the context of Ms Kostov having asked the Court to note that she intended to file an application for judicial review of the 15 November 2018 decision - see: paragraph 21 of the submissions extracted at [20] above. 23 It cannot be said that Ms Kostov's "interim application" sought judicial review of the 15 November 2018 decision. Further, Farrell J did not determine the application of the ADJR Act to the decision of 15 November 2018 in her reasoning at [217] to [225]. As a matter of substance, Mr Kostov sought an extension of time to permit her to make such an application.

Ms Kostov's further amended application 24 By her "further amended application", Ms Kostov sought interim relief. Farrell J recorded: 66 The interim relief sought by Ms Kostov [in her further amended application] was: (1) The Federal Court set a hearing to review the respondent's decision made on 15 November 2018. 25 Farrell J addressed this claim by reference to her reasons for refusing the relief which had been sought by Order 5 in the "interim application", stating: 226 The Court was not satisfied that it should grant any of the interim relief sought in the further amended application (see [66] above), not least because Ms Kostov did not appear on 8 July 2020 to prosecute that application. 227 For the reasons set out above, Ms Kostov has no reasonable prospect of success in any hearing before the Federal Court for review of the Official Trustee's decision memorialised in the 15 November 2018 letter for the reasons set out above. 26 Again, it cannot be said that Ms Kostov sought judicial review of the 15 November 2018 decision by the interim relief requested in the "further amended application" as opposed to asking for a date to be set to review the decision. Farrell J determined not to set a hearing for review of the decision of 15 November 2018 because there was "no reasonable prospect of success in any hearing before the Federal Court": at [227]. As a matter of substance, Farrell J refused an extension of time for Ms Kostov to seek judicial review of the 15 November 2018 decision.

Registrar's second reason - Order 4 27 The application for an extension of time which the Registrar did not permit Ms Kostov to file related to proceedings she proposed to bring against the Official Trustee in Bankruptcy. The grounds of the proposed application against the Official Trustee in Bankruptcy were as follows: Grounds of application 1. The Applicant, had taken legal action, for personal injury and loss, against Amelie Housing, for an event that occurred prior to the purported bankruptcy of 18 July 2018, the event, occurring on 1 June 2018; 2. Such a claim, was so strong and valid, that Amelie Housing, had offered, $8000 in cash, and $10,000 thereafter, as an offer, to settle such proceedings; 3. The Respondent, erroneously decided, that Section 60(4) of the Bankruptcy Act, did not apply to proceedings, already commenced, and that such, was not a "personal injury" claim, which was wrong, as such a decision was, and I therefore, have suffered loss and detriment, in terms of financial loss, as particularised above. Legislation: BANKRUPTCY ACT 1966 - SECT 60 Stay of legal proceedings (4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of: (a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or (b) the death of his or her spouse or de facto partner or of a member of his or her family. 28 Given the reference to s 60(4) of the Bankruptcy Act, it is relevant to note that Farrell J made the following observation in Kostov v AFSA at [28] and [30]: 28 Seventh, Ms Kostov is wrong in her belief that s 60(4) of the Bankruptcy Act applied to the conduct of proceedings she commenced against Amelie Housing on 3 October 2018. Those proceedings were commenced after she became bankrupt and they related to a tenancy agreement and removal of Ms Kostov's chattels to storage. The proceedings were therefore clearly not commenced before she became bankrupt and they were not an action for "personal injury or wrong", both preconditions to the operation of s 60(4) of the Bankruptcy Act. The fact that Ms Kostov was locked out from the premises the subject of the tenancy on 1 June 2018 and her chattels removed to storage before her bankruptcy has no bearing on the operation of s 60(4). Any right Ms Kostov had to commence proceedings arising out of events which occurred before her bankruptcy vested in the Official Trustee under s 58 of the Bankruptcy Act when the sequestration order was made so that she had no standing to commence those proceedings and her cause of action was not for "personal injury or wrong" within s 116(2)(g). Ms Kostov has already been told that by Fagan J in Kostov v Amelie Housing (NCAT Appeal) [2019] NSWSC 16 at [11]-[16] and in Mr Shaw's letter (see [46(6)] below). … 30 Ninth, the Court accepted that it was appropriate to make the order sought by the respondents that any other proceedings which Ms Kostov may bring against any of the respondents for causes of action or relief which are the same or substantially the same as that sought in these proceedings should be stayed until she has paid the costs of these proceedings. That order was made having regard to Ms Kostov's conduct in these proceedings and a similar pattern of conduct which is evident when she litigated many of the same issues in proceedings before Robertson J and against Amelie Housing in NCAT and the Supreme Court of New South Wales (see Kostov v Amelie Housing [2018] NSWSC 1800 (Fagan J) and judgments cited therein and Kostov v Amelie Housing (NCAT Appeal) (Fagan J)). 29 The relief sought in the application for an extension of time falls within Order 4 made by Farrell J on 20 July 2020. The application to extend time to seek judicial review of the decision of 15 November 2018 claimed "substantially the same … relief" as Ms Kostov had sought by her "interim application" and "further amended application". 30 It follows that Order 4 would apply to the proceedings which Ms Kostov proposed to commence.

Discussion 31 It is clear that the Registrar understood his task and carried it out in accordance with the authority conferred on him by the statute. There is nothing which suggests that the Registrar did not actually and reasonably form the opinion that the applicant's documents constituted an abuse of process - see: Cristovao v Registrar Trott [2019] FCAFC 88. 32 Even if a ground of review of a kind within s 5 of the ADJR Act were established, there is insufficient prospect of this Court granting relief to warrant extending time to bring the application. The application for an extension of time the filing of which was refused by the Registrar sought relief which was, as a matter of substance, the same as the relief which Ms Kostov sought in Kostov v AFSA. Farrell J refused the relief which had been sought by the "interim application" and the "further amended application" because an extension of time was needed to review the 15 November 2018 decision and an extension of time should not be granted. The reasons for her Honour's conclusions included that the proposed judicial review application enjoyed no reasonable prospect of success and that, in pursuing it, Ms Kostov was attempting to re-litigate matters which had already been judicially determined in the Supreme Court of New South Wales: Kostov v AFSA at [227] and [247]. In addressing the question of costs and whether there should be a stay of further proceedings, Farrell J stated (emphasis added): 247 … [T]he Court accepts that by these proceedings, Ms Kostov did, in effect, seek to review the sequestration order by her suggestion that the proceedings should be converted into judicial review proceedings. By seeking review of the decision advised in the November 2018 letter, Ms Kostov has sought to re-litigate issues decided by Fagan J in Kostov v Amelie Housing (NCAT Appeal) at [11]-[16]. Indeed, in the proceedings with Amelie Housing in NCAT and the Supreme Court of New South Wales which are the subject of many judgments, Ms Kostov demonstrated persistence of an unusual order and a frequent failure to attend at hearings to prosecute her applications indicative of a vexatious litigant. 33 In these circumstances, the Court is unlikely to grant relief under the ADJR Act even if the Registrar's decision was attended by material jurisdictional error.

CONCLUSION 34 The proposed application for judicial review has insufficient merit to warrant extending time. Accordingly, the application is refused. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Thawley.

Federal Court Rules 2011(Cth)rr 1.39, 2.26, 31.02

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