Hayward and Linares (No.2)
[2019] FCCA 3136
•6 November 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HAYWARD & LINARES (No.2) | [2019] FCCA 3136 |
| Catchwords: COSTS – Application for costs by the applicant arising out of a discrete court event in connection with the costs application – no basis for awarding costs – application dismissed. PARENTING – Application by the applicant for an interim order providing for him to spend time with the children in the general presence of the paternal grandmother rather than at contact centre pending the completion of an experts report – application opposed – where an order containing the words “in the general presence of” is unsatisfactory when there have already been contravention proceedings and when minds may differ about what this means – where it is impossible for the court to be sure at an interim stage that time other than at a contact centre would be sufficiently protective of the children if the mother’s concerns have merit – where supervised time at the contact centre is preserving the applicant’s relationship with the children – where time at a subsidised rate may end in January 2020 but where the report is expected to be available at about that time and where the appropriate course is for the court to look at the matter again once the report is released – application dismissed. COSTS – Application by the respondent for costs of and incidental to the interim parenting application – application dismissed – parties to bear their own costs of and incidental to this application. |
| Legislation: Family Law Act 1975 (Cth), ss.60CC, 70NDA, 70NDB, 70NDC, 117 Federal Circuit Court Rules, r.21 |
| Cases cited: Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 Hayward & Linares [2019] FCCA 2379 |
| Applicant: | MR HAYWARD |
| Respondent: | MS LINARES |
| File Number: | NCC 1545 of 2018 |
| Judgment of: | Judge Terry |
| Hearing dates: | 27 September 2019 |
| Date of Last Submission: | 27 September 2019 |
| Delivered at: | Newcastle |
| Delivered on: | 6 November 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Kelly |
| Solicitors for the Applicant: | Duncan Maclean & Associates |
| Counsel for the Respondent: | Mr Curtis |
| Solicitors for the Respondent: | Wordsworth Lawyers |
ORDERS
(1)The father shall pay the mother’s costs of and incidental to the contravention proceedings determined on 29 August 2019 fixed in the sum of $10,454.00.
(2)The father shall pay the amount of $10,454.00 to the mother by no later than 5.00pm on 6 February 2020.
(3)The father’s application for the mother to pay his costs of and incidental to the court event on 19 September 2019 fixed in the sum of $2,310.00 is dismissed.
(4)The father’s application in a case filed on 25 September 2019 is otherwise dismissed.
(5)The mother’s response to the application in a case filed on 27 September 2019 is otherwise dismissed.
(6)Each party shall bear their own costs of and incidental to the father’s application in a case filed on 25 September 2019.
IT IS NOTED that publication of this judgment under the pseudonym Hayward & Linares (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1545 of 2018
| MR HAYWARD |
Applicant
And
| MS LINARES |
Respondent
REASONS FOR JUDGMENT
Introduction
I have three applications before me:
i)An application by the mother for an order that the father pay her costs of and incidental to contravention applications determined on 29 August 2019 fixed in the sum of $18,135.50.
ii)An application by the father that the mother pay his costs of and incidental to a court event on 19 September 2019 fixed in the sum of $2,310.00.
iii)An application by the father for interim parenting orders.
The law applicable to the mother’s costs application
I dismissed the father’s contravention applications on the basis that the mother had a reasonable excuse.[1] This engages ss.70NDA, 70NDB and 70NDC of the Family Law Act and one of the orders I made on 29 August 2019 was that the matter be adjourned to 19 September 2019 to consider whether any orders should be made pursuant to s. 70NDB and s. 70NDC.
[1] Hayward & Linares [2019] FCCA 2379
Ss. 70NDA and 70NDB in combination provide that if the court dismisses a contravention application because it finds that the respondent had a reasonable excuse for contravening the order and the contravention resulted in a person not spending time with a child then the court may make a further parenting order that compensates a person for the time a person did not spend with a child and must consider making that kind of order.
S. 70NDC(1) provides as follows:
If the court does not make an order under section 70NDB in relation to the current contravention, the court may make an order that the person who brought the proceedings (the applicant) pay some or all of the costs of another party, or other parties, to the proceedings.
S. 70NDC (2) provides that in certain circumstances the court must consider making a costs order. The mother’s solicitor submitted that subsection (2) applied but this is not correct. Subsection (2) only applies if the applicant has previously brought contravention proceedings. The father filed two contravention applications on 8 February 2019 and they were heard together and were both dismissed but this does not mean that one of them is a previous contravention application for the purposes of s. 70NDC (2).
Neither party asked me to make an order under s.70NDB for compensatory time.
The mother’s solicitor submitted that s. 70NDB did not apply because the mother had a reasonable excuse for contravening the order but this is not correct.
The father did not seek an order pursuant to s. 70NDB either orally or in his application in a case filed on 25 September 2019.
The fact that the father did not seek such an order is arguably the end of the matter but even it had been pursued I would not have made such an order.
S. 70NDB(2) provides that the court must not make an order under paragraph (1)(c) if it would not be in the best interests of the child for the court to do so and there is absolutely no doubt that it would not be in the children’s best interests in this case for me to do so.
The issue of whether the children are at risk of harm in the father’s unsupervised care remains a live issue between the parties. They have agreed to the preparation of a Chapter 15 experts report which will address this and other issues but at present I cannot make a finding about whether it would be appropriate for the children to spend unsupervised time with the father.
An order for compensatory time would not have been appropriate and neither party proposed it and I am therefore at liberty to consider the respondent’s application for costs.
S. 117 is the general provision about costs in the Family Law Act. Subject to some exceptions, including a particular section in the contravention part of the Family Law Act which mandates the award of costs, it provides that each party to proceedings under the Act should bear their own costs However s.117(2) provides that the court may award costs if it considers that there are circumstances that justify it doing so and in considering what order to make under subsection (2) the court must have regard to the matters in s. 117(2A).
Whether or not I make an order for costs pursuant to s.70NDC(1) is a matter of discretion and I consider it appropriate to have regard to the matters in s. 117(2A) in order to decide whether I should exercise that discretion.
The final issue which requires consideration is the basis on which costs should be awarded.
R.21.02(2) of the Federal Circuit Court Rules provides as follows:
(2)In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.
The mother sought indemnity costs and pursuant to r.21.02(1)(a) the court has the power to award indemnity costs but r.21.10 of the Federal Circuit Rules 2001 provides as follows:
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a)costs in accordance with Parts 1 and 2 of Schedule 1; and
(b)disbursements properly incurred.
The father’s counsel pressed me to order costs in accordance with the schedule if I determined to award costs at all.
The parties submissions
The mother’s counsel relied on the written submissions filed by her solicitor on 17 September 2019 and made some brief oral submissions.
In his written submissions the mother’s solicitor principally relied in support of his application for costs on the fact that the mother had been wholly successful.
In support of his case that indemnity costs should be awarded he referred to the fact that on 2 May 2019, a week prior to the commencement of the contravention hearing, he sent a letter to the father’s solicitors inviting the father to withdraw the applications on the basis that they had little or no prospects of success. He informed the father’s solicitors that if the matter proceeded to hearing and the father was unsuccessful the mother would be seeking costs and relying on the letter in support of that application.
The father’s counsel submitted that these were not proceedings which should attract an indemnity costs order.
He asked the court to have regard to the fact that the mother’s solicitor had not attached all relevant costs agreement to her solicitor’s affidavit filed on 27 September 2019.
He further submitted that the amount of $18,135.50 might well include costs associated with the mother’s initiating application or other matters which were not costs of and incidental to the contravention application.
The father’s counsel appeared to concede that the mother was entitled to costs in some amount but said that it should be costs at scale and should be for the equivalent of a half day hearing.
The basis for this was that the father’s counsel complained about the manner in which the contravention hearing was conducted. The court asked the father to give evidence and be cross-examined first and the mother then gave evidence and was cross-examined. The father’s counsel submitted that if the court had adopted what he submitted was the proper procedure and required the mother to give evidence first the hearing would have been considerably shortened and might have been contained in one day instead of going over to a second day. He said that any calculation of costs should take this into account because it would be unfair if the additional cost incurred as a result of the way the court chose to run the proceedings was visited solely on the father.
Conclusion about the mother’s costs application
When a claim for indemnity costs is made the usual practice is for a copy of the relevant costs agreement signed by the party claiming costs to be provided. The father’s counsel complained that not all of the mother’s costs agreements were attached to the affidavit filed by her solicitor on 27 September 2019 but even if this is correct it is not necessarily fatal to the mother’s claim for indemnity costs. There is no Federal Circuit Court rule requiring costs agreements to be provided if indemnity costs are claimed although it is certainly prudent that this be done.
A more significant concern is that the mother’s solicitor arrived at the claimed amount of $18,135.50 by deducting from a total bill of $22,352.00 items which he said related to matters other than the contravention applications.
This was essential because there are items in accounts sent to the mother which clearly relate to other matters. The contravention applications were not filed until 8 February 2019 and were not sent to the mother’s solicitors until 11 February 2019[2] and the accounts include work done in January 2019. They also includes items such as “correction to DWC on prior arrangement for Y’s first day at school” and “Read further email MD – parent teacher nights 12 & 13 February and email to L”
[2] From Annexure F of Wayne Chaffey’s affidavit
The mother’s solicitor deducted some items from the total of $22,352.00 but it is impossible for me to be sure looking at the itemised accounts whether all the remaining work related solely to the contravention applications. This is not to accuse the mother’s solicitor of deliberate wrongdoing; inadvertence or a particular view about whether an item related to the contravention or to the substantive proceedings could give rise to an error in the total.
This alone would make me cautious about awarding costs in the sum sought by the mother but in addition indemnity costs are not commonly awarded, requiring as they do the losing party to pay all of the costs of the successful party which could include excessive work due to an anxious client.
There is no closed category of cases in which indemnity costs may appropriately be ordered but in Colgate-Palmolive v Cussons Pty Ltd[3] Sheppard J said that the kind of situations in which indemnity costs might be considered included cases where a litigant had:
·Commenced or continued an action knowing it to have no chance of success.
·Made false or irrelevant allegations of fraud.
·Made groundless allegations which prolong a case.
·Imprudently refused an offer to compromise.[4]
[3] Colgate-Palmolive Company v Cussons Pty Ltd [1993] 46 FCR 225
[4] Colgate-Palmolive Company v Cussons Pty Ltd(supra)
I do not consider that anything about this matter justifies an indemnity costs order.
The fact that a letter was sent to the father’s solicitor by the mother’s solicitors a week before the hearing was due to commence inviting the father to withdraw his application is a relevant consideration as to whether costs should be awarded at all but in the circumstances of this case it is not a sufficient basis for awarding indemnity costs. I cannot using 20/20 hindsight confidently assert that the father’s contraventions had no reasonable prospects of success prior to the evidence being tested and I do not consider that they were brought in bad faith.
If costs are to be awarded at all the appropriate approach is to use the scale in the Federal Circuit Court Rules.
Neither party provided any assistance in how the scale should be applied but in my view the relevant items are:
Item Number
Description
Value
1
Initiating or opposing an application up to the completion of the first court date
$2,162.00
6
Preparation for final hearing - one day matter
$4,608.00
13(a)
Daily hearing fee 15 February 2019 for a short mention
$294.00
12
Advocacy Loading
$147.00
13(b)
Daily Hearing Fee 9 May 2019 for a half day
$1,081.00
12
Advocacy Loading
$540.50
13(b)
Daily Hearing Fee 19 July 2019 for a half day
$1081.00
12
Advocacy Loading
$540.50
Total
$10,454.00
This obviously leaves some work unaccounted for, including preparation of the written costs submission filed on 17 September 2019 and the attendance of the mother’s solicitor at the hearings on 9 May and 19 July 2019. I acknowledge that it is a bit rough and ready but it is the best I can do in the absence of any assistance from the parties and it is preferable for the parties if costs are fixed rather than the matter having to be referred for taxation which will simply involve them in further work and expense.
I am also satisfied in broad general terms that it is an appropriate amount. It is reasonably proportionate to the total claimed by the mother on an indemnity basis if regard is had to the risk that some of that amount relates to the substantive proceedings and not the contravention applications and to the fact that a claimant for party/party costs usually recovers considerably less than their actual costs.
I am conscious of the fact that the parties were at court for a full day on both 9 May and 19 July 2019. However part of this involved waiting for the matter to be reached and I have only included an amount for a half day hearing on each day because there is no reason why the father should have to bear the whole cost of the fact that the matter was heard on circuit and that what would ordinarily have been a one day matter became a two day matter.
The next issue of course is whether I should order that the father to pay that amount.
I intend to have regard to the matters in s. 117(2A) in order to determine whether there are circumstances justifying a costs order. The first of those is the financial circumstances of the parties and I have no information about their financial circumstances. However they are both employed and are both privately funding their legal representation. There was no suggestion by either counsel that there was something about their financial circumstances which either mitigated against or operated in favour of a costs order being made.
There are no relevant conduct issues. Each party filed documents in a timely fashion and were ready and willing to take part in the hearing when it was called on.
The proceedings arose out of the mother’s failure to comply with an order but I was satisfied that she had a reasonable excuse for doing so.
The mother was wholly successful and I also have regard to the fact that the father had a choice about whether to run the applications. I cannot say that he had no reasonable prospects of success prior to the evidence being tested but he took a risk in running them, especially in the light of the evidence of his witnesses that at first blush some of his actions caused them disquiet.
An alternative to trying to hammer down the mother’s concerns by running the contravention applications was to agree at an early stage to abandon the contravention applications and cooperate in a report being prepared. The father was urged by the court to consider this alternative but would not agree to it. He insisted on running the contravention applications and was unsuccessful.
I intend to order that the father pay the mother’s costs of and incidental to the applications fixed in the sum of $10,454.00.
The father’s counsel submitted that the fact that the contravention hearing took place might mean that a final hearing was shortened because some issues in dispute were thoroughly explained at the contravention hearing.
It is unclear to me what impact he was submitting this should have on whether costs were awarded at all or on the quantum of costs and I do not accept that it is a valid consideration. I have no means of assessing whether it will be the case and if so to what extent and a final hearing may never be required.
The mother incurred costs in running the costs application. Her solicitor prepared submissions and then an affidavit and attended two court events and on the second occasion her counsel also attended[5]. However the mother’s solicitor did not have the matter in a proper state of preparation on the first occasion, both court events were partially used for other purposes and father would have had some minimal costs thrown away on the first occasion.
[5] All attendances were by telephone.
I do not intend to order that the father pay the mother’s costs of and incidental to the costs application.
No submissions were made about time to pay but I intend to order that the father have three months to pay the costs, which should allow him to organise his affairs and arrange for this to occur.
The father’s costs application
In his application in a case filed on 25 September 2019 the father sought costs in the sum of $2,310.00 arising out of the court event on 19 September 2019. His solicitor Mark Daly affirmed an affidavit in support of this application.
This costs application is without merit. As the mother’s counsel correctly submitted the matter was listed before me on 19 September for consideration of any costs applications which parties wished to make arising out of the contravention hearing, consideration of whether make-up time should be ordered which I was required by s.70NDB of the Family Law Act to consider and to consider how to progress the competing applications for final orders which were before the court.
The time thrown away in relation to the costs application on 19 September 2019 was trifling and there is no justification for departing from the provision that each party should bear their own costs of and incidental to that mention.
I also note that the amount claimed is outrageous. I am particularly troubled by the decision of the father’s solicitor to travel to Newcastle for the mention which was something for which he claimed $630.00. He could have attended by telephone as the mother and her solicitor did. It is imperative that each party in this matter do their utmost to ensure that they rein in their legal costs.
The father’s application for costs in relation to the mention on 19 September 2019 is dismissed.
The father’s application for interim parenting orders
Background
The parenting dispute concerns X, 8 and Y, 6.
The parties separated on 7 May 2016 when the children were 4 and 2 and between May 2016 and May 2018 the children spent time with the father by agreement between the parties.
On 21 May 2018 the father filed an application seeking parenting orders. His application was given a first return date of 13 July 2018 and on that day the parties settled the matter and consent orders were made. They provided for the children to live with the mother and spend time with the father on alternate weekends, for an overnight in the off-week and for defined periods during school holidays.
Time pursuant to those orders continued until 23 November 2018 after which the mother ceased making the children available. She sent the father a letter explaining why and in December 2018 filed an application seeking to vary the orders.[6]
[6] This is described in more detail in Hayward & Linares (supra), my judgment in the contravention matter.
The mother’s initiating application was given a first return date of 15 February 2019. The father filed a response on 14 February 2019 also seeking a change to the orders but he also filed two contravention applications on 8 February 2019.
On 15 February 2019 the father pressed for the contravention applications to be heard and a hearing date was allocated.
Following this I suspended the July 2018 order concerning the children spending time with the father to prevent any further contravention applications being filed. Neither party sought any interim parenting orders but by agreement between them the father commenced spending supervised time with the child at Town B Children’s Contact Centre on 2 March 2019.
When the matter came before me on 19 September 2019 following delivery of the decision in the contravention proceedings the father’s counsel said that the father wished to seek interim parenting orders and on 25 September 2019 the father filed an application in a case seeking the following orders:
i)The parties’ children X and Y spend time with him each alternate weekend from 9.00am to 5.00pm on Saturday and 9.00am to 5.00pm on Sunday and from 12 noon until 6.00pm on Christmas Day with such time to take place in the general presence of the paternal grandmother.
ii)The children have telephone communication or if agreed communication by some other electronic means with him each Wednesday between 5.30pm and 6.30pm.
The father also sought an order that the children spend time with him from 9.00am to 5.00pm on … 2019 being his 40th birthday. I was unable to hand down a decision prior to that date so that application is no longer relevant.
The mother filed a response on 27 September 2019 seeking that the application in a case be dismissed and she sought costs of and incidental to the application.
The parties submissions
The father is keen to see his children and in his supporting affidavit he said that he was concerned that the visits at the contact centre might end after January 2020 because the parties had used up their share of subsidised supervised time. He also said that the two hour supervised visits at the contact centre took place in a confined indoor setting which was unsatisfactory. and he sought an order that he be able to spend time with the children at his home.
The father denied being guilty of any inappropriate behaviour in respect of the children and denied that he posed a risk to them. However he said that for the time being he was willing to spend time with the children under the supervision of the paternal grandmother and would ensure that she was within sight when he was spending time with them.
It was clear from the evidence the paternal grandmother gave at the contravention hearing that she did not believe that the father had done anything wrong.[7] However she swore an affidavit for the interim parenting matter saying that she was fully aware of the risks that the children’s mother raised and was willing to supervise time between the father and the children to reduce those risks.
[7] Hayward & Linares (supra), paragraph 64.
The mother continued to assert that the children had been subject to emotional abuse, harassment and manipulation during unsupervised visits with the father. She maintained that since unsupervised visits ceased the children had been more settled, had ceased feeling the need to keep secrets and had ceased feeling the need to castigate her for not believing in God and not loving the father anymore.
The mother set out in her affidavit things she said she did to make the supervised visits enjoyable. She also set out her efforts to support good relations between the children and the father’s family.
The mother said that she did not trust the paternal grandmother to supervise the children or trust the father to do the right thing by the girls and that she would feel great anxiety if orders were made as he proposed.
She opposed telephone calls saying that she did not trust that the father would have reasonable child-led conversation on the phone. She said that she would consent to the children phoning the father if they asked but they did not ask.
Discussion
I intend to deal with this matter by delivering short form reasons.
The difficulty for the father is that because of his insistence that the contravention applications be run at the expense of progressing the substantive applications the issue of whether the children are at risk in his care for the reasons suggested by the mother is unresolved.
The children have been spending time with their father for two hours at a contact centre since 2 March 2019. This has enabled him to maintain a relationship with them so that if it transpires after the report is prepared and if necessary a hearing conducted that the mother’s concerns are unfounded and that extensive unsupervised time with the father should resume (or even that equal time should be ordered which is in his current application) the father will not be a stranger to the children.
Time at the contact centre involves the supervisor being constantly present and being close to the father and children and monitoring everything the father says and does. The father proposed that this time cease and that instead the children spend eight hours with him on two consecutive days in the general presence of the paternal grandmother. He did not explain what he meant by the term “in the general presence of”. That raises a concern straight away in terms of enforcement and the risk of further contravention proceedings but it also means that it is unclear whether it will be sufficiently protective of the children should the mother’s concerns be valid.
It is troubling that the father said in his affidavit that he would ensure that the paternal grandmother was within sight when he was spending time with the children but did not say that he would ensure they were never out of earshot of her. I accept that this may be inadvertence but given the nature of the mother’s allegations it raises a concern which I cannot presently resolve.
Another problem is that the paternal grandmother is supportive of the father and does not believe that he has done anything wrong. This could mean that she would be unconcerned if the father and the children temporarily drifted out of her sight and hearing and that she was not sufficiently vigilant.
The mother on the other hand would be hyper vigilant. She would be likely to react to anything the children said to her upon coming home by viewing it through the prism of her concerns and might consider that she was justified in ceasing to comply with the order. The last thing these parties need is more stress, cost and expense arising out of non-compliance with orders.
In addition requiring the mother to comply with such an order in the absence of her concerns being properly addressed would be stressful and anxiety provoking for her and she is the children’s primary carer.
Depending on the findings ultimately made the mother may in due course be required to master her anxiety but at present I cannot robustly require her to do so.
On the current state of the evidence I cannot make an assessment of the likely effect on the children of making this order or a finding about whether it would place them at unacceptable risk of harm.
Telephone communication could also cause issues in this case. The father did not ask that the children be given privacy during the calls and given the mother’s hyper vigilance there is a risk that she will form the view that the father has said or done something suspicious during the calls and fail to comply with the orders or that the calls will result in stress and tension for the mother and the children.
I cannot be satisfied that it would be in the best interests of the children to make the orders sought by the father concerning his time and communication with them and I intend to dismiss his application.
I said as follows in my judgment in the contravention proceedings and this remains the case:
A full inquiry into the matter may lead to the conclusion that the mother is wrong to be concerned and is misinterpreting the situation; alternatively the father may amend his behaviour in the future; but nothing has happened since the mother filed her application which suggests that she should reconsider her position prior to that full inquiry taking place.
The father is maintaining a relationship with the children by spending supervised time with them at the contact centre. The report is due to be released early in the New Year. The substantive matter is listed for mention on 3 February 2020 following the release of the report and I have given the parties liberty to apply to relist the matter at an earlier date if the report is released at a substantially earlier date.
I was not asked to consider making alternative orders if I did not accede to the father’s proposal. There was no suggestion that either party intended to withdraw their agreement to supervised time continuing at the contact centre and I do not consider it necessary to make any alternative orders.
It is a great shame that we were not able to order a report in this matter earlier. It may not resolve the matter, particularly given that the father is seeking equal time and the mother opposes such an outcome, but it will provide the court with a necessary tool to enable it to conduct a full hearing. Its content may also suggest that the interim arrangements need to be reconsidered before a final hearing but that remains to be seen.
The mother’s application for costs of and incidental to the father’s application in a case filed on 25 September 2019
I do not intend to order that the father pay the mother’s costs of and incidental to the application in a case filed on 25 September 2019.
There was some merit in the father bringing an application given that his time at Town B Children’s Contact Centre at a subsidised rate may soon end. He has been unsuccessful in obtaining the orders he sought but I do not consider that in respect of this application there is any reason to depart from the general rule in s. 117(1) of the Family Law Act that each party bear their own costs.
I certify that the preceding ninety one (91) paragraphs are a true copy of the reasons for judgment of Judge Terry
Date: 6 November 2019
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Remedies
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Procedural Fairness
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