Richmond River Broadcasting v Australian Broadcasting Tribunal
[1992] FCA 92
•06 MARCH 1992
Re: RICHMOND RIVER BROADCASTERS PTY LTD and TWEED RADIO and BROADCASTING CO
PTY LIMITED
And: AUSTRALIAN BROADCASTING TRIBUNAL; CHAIRMAN OF AUSTRALIAN BROADCASTING
TRIBUNAL; NORTHERN NSW FM PTY LIMITED and NORTHERN RIVERS FM RADIO LIMITED
No. 107 of 1990
FED No. 92
Administrative Law
(1992) 106 ALR 671
(1992) 34 FCR 385
(1992) 26 ALD 704 (extracts)
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1) Administrative Law - Application for radio licence - Inquiry by Australian Broadcasting Tribunal - Issue by Division of Tribunal conducting the inquiry of a "preliminary view" regarding the commercial viability of the incumbent licensees in the proposed licence area - Whether the issue of that document means that the person constituting the Division is disqualified from concluding the inquiry because of apparent bias.Broadcasting Act 1942, ss.15c, 81.
HEARING
SYDNEY
#DATE 6:3:1992
Counsel for the Applicants: M. Slattery and J.Berwick
Solicitors for the Applicants: Boyd House and Partners
Counsel for the First and Second Respondents: M.G.Sexton
Solicitors for the First and Fourth Respondents: Australian Government Solicitor
Counsel for the Third and Fourth Respondents: W.H.Nicholas QC and T.J. Hancock
Solicitors for the Third and Fourth Respondents: Maxwell, Eyers and Miller
ORDER
The Application be dismissed.
The applicants pay to each of the respondents their costs of the proceeding.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an application under the Administrative Decisions (Judicial Review) Act 1977 and s.39B of the Judiciary Act 1903 to review a decision of the second respondent, Mr P.B. Westerway, the Chairman of the Australian Broadcasting Tribunal, that Mr T. O'Keefe, a member of the Tribunal, should continue to constitute the Division of the Tribunal in respect of its inquiry into the grant of a commercial radio licence to serve Lismore and surrounding areas. The inquiry is being conducted in connection with licence-granting power conferred upon the Tribunal by s.81 of the Broadcasting Act 1942. Section 15C(1) of that Act empowers the Chairman to constitute a Division of the Tribunal for the purpose of a particular inquiry. By subs.7(c) the Chairman may replace a Division member with another member of the Tribunal.
The Tribunal is the first respondent to the application. The applicants, Richmond River Broadcasters Pty Limited and Tweed Radio and Broadcasting Co Pty Ltd, are incumbent commercial radio licence holders in the district. They operate respectively under the call signs 2LM and 2MW. The third and fourth respondents, Northern NSW FM Pty Limited and Northern Rivers FM Radio Limited, are each applicants for the new licence.
The applicants' contention that Mr O'Keefe should not continue to constitute the relevant Division arises out of the manner in which the inquiry has so far been conducted. The applicants say that an objective bystander would reasonably apprehend that Mr O'Keefe had predetermined a critical issue in the case; namely, whether the operations of the incumbent licensees would remain commercially viable if a new licence was granted. The respondents accept that this is the appropriate test of bias. As is evident from the decision of the High Court of Australia in Laws v. Australian Broadcasting Tribunal (1990) 170 CLR 70 at 81 and 100, it is not necessary to show actual bias. However, the test applied in Laws must be read subject to the exposition of Gaudron and McHugh JJ. at 100:
"When suspected prejudgment of an issue is relied upon to ground the disqualification of a decision-maker, what must be firmly established is a reasonable fear that the decision-maker's mind is so prejudiced in favour of a conclusion already formed that he or she will not alter that conclusion irrespective of the evidence or arguments presented to him or her."
Their Honours went on to refer to the High Court's decision in Regina v. Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group (1969) 122 CLR 546 wherein the Court rejected the notion that a fair and unprejudiced mind was necessarily one which had not thought about a particular subject or formed any views about it. The essence of the doctrine of apparent bias is that an objective bystander would reasonably apprehend that the decision-maker had a closed mind - not necessarily an uninformed mind - on the relevant question.
It is not necessary, in order to evaluate the applicants' case, to set out each step in the inquiry. But certain aspects of the evidence must be mentioned. The evidence is entirely documentary and undisputed.
It appears that, in accordance with the practice which it has adopted in recent times, the Tribunal set out in this inquiry to maximise the use of documents, as distinct from oral evidence and submissions. To this end, directions were given at an early stage. They have been varied from time to time. No complaint is made of that fact.
The earliest material document is a letter dated 10 April 1991 sent by the Tribunal to the applicants. That letter stated that the Tribunal had revised its procedures for commercial licence grant inquiries and that, in the case of ongoing inquiries including the subject Lismore inquiry, "the relevant division of the Tribunal will be adapting the new approach to meet the circumstances of the particular inquiry". A copy of the revised procedures was enclosed.
The enclosed document included discussion about procedures for determining the issue of commercial viability. It attached a sample of what the document called a "draft framework" for assessing commercial viability. The procedures document explained that it was intended to tailor this sample to meet the circumstances of individual inquiries.
The procedures document continued:
"The document sets out the Tribunal's initial position in relation to relevant comparative financial data, i.e. the proposed group of comparable markets, relevant financial analysis, the appropriate historical time period for such analysis, and the form in which it would be released. The framework will also include a description of the process the Tribunal proposes to follow in assessing commercial viability based on the approach taken in its most recent grant inquiries.
...
The detailed commercial viability framework will be provided in draft form to applicants at the time that the Tribunal calls for submissions. Other parties to the inquiry will be supplied with the framework once their status is established. Following consideration of the response to the draft by the parties the final form of the commercial viability framework can be issued, including the aggregated annual revenue growth factor for the group of comparable markets.
The resolution of the form of the commercial viability framework should take place in writing and only under special circumstances should a preliminary conference be necessary."
The draft framework set out the steps to be adopted in determining viability and the data to be used for that purpose. It concluded:
"Following comment by parties on the draft economic and financial framework, and consideration by the Tribunal of these responses, a revised framework will be provided to the parties. This will include:
(g) an aggregated annual revenue growth factor for the group over the relevant time period for the group of comparable markets as in 5(d) above."
A major complaint of the present applicants is that the Tribunal departed from the procedure envisaged in this last passage.
I do not think that there is any doubt that the Tribunal went further along the path of determining commercial viability in advance of an oral hearing than was indicated on 10 April 1991. On 1 July 1991, the Tribunal wrote to all the parties involved in the Lismore inquiry enclosing an amended timetable for that inquiry. In its letter the Tribunal referred to the determination of commercial viability in these words:
"In the time which has elapsed since the original decision in this inquiry the Tribunal has developed its methodology in relation to the establishment of commercial viability. In addition there have been a number of inquiries where the Tribunal has examined the factors found to be useful in determining whether or not a service will be viable. The model commercial viability framework ('the framework') must be adapted for application in this inquiry with reference to evidence concerning the market and comparable markets. To that end the Tribunal will require the parties to respond to updated financial data, and to provide new data and information relating to the socio-economic aspects of commercial viability.
...
In other inquiries the Tribunal has also sought parties' comments on how such information may effect each party's revenue projections. The Tribunal will again do so in this inquiry.
The framework specifically tailored for the Lismore area will be presented to all parties for their comment and submission in relation to the assumptions and methodology as well as the actual figures used. It will represent the Tribunal's preliminary view of the commercial viability of the market taking into account the data and information provided by parties as required by Direction 16.
The revised Tribunal procedures provide for the early presentation of the framework in the directions phase from (standard) Direction 9 onwards. In the circumstances of this inquiry, where the ordinary directions phase has been completed, the Tribunal proposes to issue further directions recognising that the basis for financial analysis has already been established, while still allowing an appropriate period to enable the parties to respond to the material submitted. ...
Parties will have the opportunity to make submissions in relation to the new material, update material already provided and revise relevant documents on the basis of the financial information now available. The further directions are designed to facilitate this process. Parties should consider the draft timetable and the draft further directions and then indicate whether there are any difficulties in proceeding this way. Your response, even if only indicating agreement, should reach the Tribunal by close of business on Friday 12 July 1991."
12. The evidence does not reveal the present applicants' response to this letter, but it is not suggested that either of them made any objection. This is a matter of some present importance because the attached timetable referred specifically to the provision by the Tribunal of "a preliminary view of commercial viability for Lismore". In order to put the matter in context, it is desirable to set out the steps in the timetable, some of which had already occurred:
"3 April 1991: Tribunal provided draft commercial viability framework ('the framework') to all parties to licence grant inquiries.
23 April 1991: Response from Richmond River Broadcasters to the framework.
1 July 1991: Tribunal provided:
(a) Draft Timetable;
(b) Draft Further Directions; and
(c) Revised Appendix C to the Lismore report. 12 July 1991: Parties to respond to Timetable and Directions. 19 July 1991: Tribunal to issue Timetable and Directions. 2 August 1991: Parties to provide updated information in accordance with Direction 16:
(a) Financial projections;
(b) Socio-economic indicators relating to commercial viability;
(c) Material in relation to events which have occurred since 18 December 1989. 16 August 1991: In accordance with Direction 17, parties to respond to updated information provided by Tribunal and parties;
6 September 1991: Tribunal to provide a preliminary view of commercial viability for Lismore, taking into account information supplied by parties under Direction 16 and responses provided under Direction 17.
20 September 1991: Parties to respond to the Tribunal's preliminary view.
8-12 October 1991: Hearing.
November 1991: Report."
As is often the way, the timetable slipped. On 3 September, the Tribunal wrote specifying revised dates. But the steps outlined in July were retained. In that letter the Tribunal drew the parties' attention to a Government announcement of amendments to the Broadcasting Act affecting, amongst other things, the determination of commercial viability. The Tribunal stated that, notwithstanding the Government's announcement, it would not make any conclusions on financial viability "under the new regime" until it had become law. However, against the possibility that the completion of the inquiry was overtaken by the amendments, the parties were asked to make submissions on alternative bases: the position under the existing rules and under the proposed new rules.
On 26 September the Tribunal again wrote to the parties further amending the timetable, but retaining the same steps, including the issue by it of a preliminary view on commercial viability.
Apparently the procedures envisaged by the timetables were followed. On 17 December 1991, the Tribunal issued to the parties a lengthy document, signed by Mr O'Keefe. The document was entitled:
"LISMORE COMMERCIAL FM RADIO GRANT INQUIRY
PRELIMINARY VIEW OF THE COMMERCIAL VIABILITY OF THE LISMORE MARKET" It commenced:
"My preliminary view is that the existing AM service of 2LM Lismore will remain commercially viable after the introduction of a new independent commercial FM radio service. This view is based upon: . socio-economic factors indicative of the state of the Lismore market; and
. a conservative assessment of revenue growth over the first five years of operation of the new entrant to the market, as well as an assessment of future expenditure including the reduction of operating costs in response to lower revenue levels."
Mr O'Keefe then set out reasons for his "preliminary view". These reasons extend over 21 pages of writing and several pages of statistical tables. In those reasons, Mr O'Keefe expressed views about factual matters and future events. These views were expressed in the normal language of a report or statement of reasons for decision. The findings set out were often referred to as "conclusions", without any qualification to the effect that they were merely preliminary findings.
17. A similar, though shorter, document was issued at the same time in relation to the commercial viability of 2MW.
The documents setting out the preliminary views were sent under cover of a letter which invited a response by 24 January. That letter referred to a projected oral hearing at which "the question of the commercial viability of the incumbent and of 2MW will form an important part".
On 20 January 1992, before any response by either of the present applicants to the Tribunal's preliminary views, the Tribunal wrote to inform the parties of the commencement on 1 January of the amending legislation, the terms of which were set out. The amendments included what the Tribunal described as a limitation of the circumstances to which the Tribunal might have regard in determining commercial viability. The letter included the following passage:
"Because these changes have a bearing on the substantial issues before the Tribunal in this inquiry, parties are invited to make submissions upon them."
Four days later both the present applicants lodged with the Tribunal detailed submissions regarding the Tribunal's preliminary views concerning commercial viability. The submissions contested numerous aspects of the preliminary findings announced on 17 December. They argued that the preliminary view of commercial viability was erroneous. But they contained no protest about the Tribunal having proceeded to indicate a preliminary view or to suggest that its action affected the previously announced intention for Mr O'Keefe to hold an oral hearing on 9 and 10 March.
On 11 February the Tribunal wrote to the present applicants. responding to their submissions. A series of detailed questions was put to each existing licensee. These questions all concerned financial aspects of the applicants' operations. They apparently arose out of the Tribunal's consideration of the submissions of 24 January. The evidence does not disclose what response, if any, was given by the applicants.
The Tribunal's letter of 11 February probably crossed with a letter written by the applicants' solicitors to the Chairman of the Tribunal. This letter referred to the documents of 17 December and, for the first time, raised an objection:
"Hence the Lismore Preliminary View and the 2MW Preliminary View contain a conclusion by the Tribunal Division that 2LM and 2MW respectively will remain commercially viable following the introduction of a new independent FM radio service. In reaching these conclusions the Tribunal has made a decision regarding a fundamental issue of the Lismore Inquiry, that is, the commercial viability of existing services. These decisions have been made prior to the receipt of all evidence and submissions relating to the issue and prior to the scheduled hearing in, this matter. As the Tribunal has reached conclusions on one of the fundamental issues we respectfully submit on behalf of 2LM and 2MW that the Tribunal has pre-judged the issue of commercial viability, judgment on which should not be made until the Tribunal had received all written, submissions and considered the evidence and addresses at the hearing. As the Division has already made determinations regarding 2LM and 2MW's commercial viability at this premature stage of the proceedings 2LM and 2MW submit that the only method by which this injustice can be remedied is that the Tribunal Division, as it is presently constituted, be replaced. It is respectfully submitted that it is only by adopting this course of action that the Lismore Inquiry can proceed without being affected by the bias introduced by the premature conclusions contained in the Lismore Preliminary View and the 2MW Preliminary View." Mr Westerway responded to this letter on 21 February 1992. In his letter he said:
"Let me say at the outset that all views, findings, conclusions, determinations and decisions, if any, contained within those documents are part of the preliminary views by the Tribunal and nothing more. An examination of the course of the inquiry shows that on 3 April 1991 the Tribunal circulated to all parties a commercial viability framework. The provision of the framework was the first step in a timetable which also included an opportunity for all parties to provide updated financial, socio-economic and other information, in accordance with Direction 16, by 4 October 1991. The parties had an opportunity to comment upon that material, in accordance with Direction 17, by 1 November 1991.
In accordance with Direction 18, you have been afforded an opportunity to respond to the Tribunal's preliminary views. We note that detailed responses were received from you by 24 January 1992, pursuant to this direction.
Further, you and all parties will have an opportunity to make any further submissions in relation to commercial viability at the public hearing in this inquiry, scheduled for 9-10 March 1992, in Lismore. The fact that the Tribunal would express a preliminary view in this inquiry was made known to all parties by reason of the timetable and directions which were issued to parties in a final form on 19 July 1991. In summary, the Tribunal has indicated from an early stage that it intended to provide a preliminary view on commercial viability. It has also provided ample opportunity for parties to respond and there will be a further opportunity to do so.
Accordingly, I refute your suggestion that the Tribunal has prejudged the issue of commercial viability and/or that any bias, actual or apprehended, exists as a result of the course followed in this inquiry. I have, therefore, made the decision that Mr O'Keefe should continue to be the Division of the Tribunal for this inquiry."
On 3 March 1992 I saw counsel for the present applicants in chambers and granted leave to serve an Application returnable on 5 March. On that day the matter proceeded to a final hearing and was adjourned until today for judgment. The urgency of the matter is occasioned by the fact that Mr O'Keefe still proposes to proceed with the oral hearing next Monday.
Counsel for the applicants put their clients' case in three ways, which overlap. Firstly, they say that it was represented to the applicants by the document of 10 April 1991 that the Tribunal would do no more, prior to an oral hearing, than provide a "framework" for the determination of commercial viability and, following submissions upon that "framework", a revised framework. Counsel say that a "framework" is no more than a list of issues to be discussed; it falls short of conclusions, even preliminary conclusions. In going as far as it has, counsel say, the Tribunal has demonstrated a closed mind. Secondly, counsel argue that the wording of the "preliminary views" themselves demonstrate a closed mind; the wording is the language of final conclusions. Thirdly, it is said that the preliminary views contain findings on matters not raised or proved in evidence. This fact not only raises a question of natural justice, say counsel, but once again demonstrates the Tribunal's closed mind.
I do not think that there is substance in any of these submissions. As to the first matter, it is true that the documents of 11 April went no further than to refer to a framework and a revised framework. But the accompanying letter clearly indicated that the general procedures set out in the enclosure would be subject to adaption in particular cases. At least by early July, it was plain to all the parties that the Tribunal proposed to make, and announce to them, a preliminary finding on commercial viability. This was to be done in advance of any oral hearing but only after opportunity to the parties to provide documentary material on the issue of commercial viability, to see the submissions of other parties, and the Tribunal's own file material, relevant to that issue and to respond. As counsel for the applicants conceded, it would have been open to the Tribunal to decide the licence applications - or at least to decide the issue of commercial viability - without holding any oral hearing at all, provided that all the parties had a full and fair opportunity to see the relevant material, to make written submissions and to reply to the submissions of others. If this be so, as counsel also conceded, the Tribunal could not be placed under a greater disability because it chose to give to the parties the advantage, before any final decision was made, of being informed of its preliminary view and the opportunity, both in writing and orally, to dissuade it from that view.
The only circumstances in which it could be said that the course adopted by the Tribunal was inappropriate would be if it had misled the parties as to the course it would take, causing them to defer information or submissions which they otherwise would have wished to provide, but which were not provided because the parties did not realise the Tribunal would proceed to a decision. But there is no question in this case of the parties being misled. The Tribunal clearly outlined the proposed procedure on 1 July. The dates of various steps subsequently changed, but not the procedure. It is clear that the present applicants knew and understood the Tribunal's proposed course. They have never suggested otherwise.
The language used in the documents of 17 December is, as I have said, the language of findings. It reads like a draft report. Perhaps, sensibly enough, Mr O'Keefe intended that it would serve as the basis of the Tribunal's final decision, if his tentative findings were not displaced by further information or submissions. But I do not think that the language of the document indicates that Mr O'Keefe's mind was closed to further information or argument. The document was clearly described as a preliminary view. In releasing it to the parties, the Tribunal invited responses. As the letter of 11 February shows, the Tribunal has in fact considered the responses made by the two incumbent licensees and has been interested enough in what they have said to call for additional information. The picture is of a Tribunal working with the parties to arrive at factually accurate conclusions - not one whose mind is closed.
The other point put by the applicants requires a reference to the content of the preliminary view. One of the matters relevant to the commercial viability of the incumbent licensees is the size of the local radio advertising market after the commencement of a new service. This requires consideration of the question whether there will be a "one-off" growth factor, occasioned by the fact that there are now two competing advertisers rather than a monopolist. The incumbents argued that there would be no "one-off" factor in the case of Lismore and they cited the experience of the Gold Coast. Mr O'Keefe referred to these submissions in his "preliminary view" and made this comment, at para 55:
"The document supplied by the Tribunal demonstrates that different levels of growth have occurred in different markets. It is not an argument to say that the Gold Coast had a one-off growth of x% so Lismore will also have a growth of x%. The Gold Coast economy was affected by the pilots' strike and a downturn in the property market at the same time that the new FM service was introduced. If the new service had not been introduced there may not have been any growth. Also the incumbent converted to FM and changed to a format very similar to that proposed by the new service. In this situation management policy did not maximise market revenue. The Tribunal hopes that the services in the Lismore market will take cognizance of the experience of other markets."
The present applicants say that Mr O'Keefe was not entitled to reject their argument about the Gold Coast by referring to the pilots' strike and property downtown and this is indicative of his closed minded attitude to their case. They say that there was no evidence before him on those matters. But these two events had been referred to by Northern NSW FM in its response to the incumbent stations' submissions. It is true that there was not evidence of these events. But both were matters of some notoriety of which a court would be entitled to take judicial notice, at least in a general way. I do not see that Mr O'Keefe was in any worse position than a court. It must be remembered that he did not use these events as a basis for any factual finding, in which case more precise information might have been required. He merely referred to them to show why he was disinclined to put weight on the Gold Coast experience in assessing the likely Lismore "one-off" factor.
Two other matters were referred to by Mr O'Keefe in connection with the Gold Coast: the incumbent's conversion to FM and a format similar to the proposed new service and - if it be a second point - that "management policy did not maximise market revenue". As to the first matter, this was a statement about a matter which would be well known to the Tribunal. It was a statement that was either right or wrong. If the incumbents thought it wrong, it would be a simple matter to check the position and put Mr O'Keefe right. I think that Mr O'Keefe was entitled to use information available to the Tribunal for the purpose of evaluating the submissions put to him, providing that he disclosed to the parties the nature of that information. This he did.
It is not clear to me that the "management policy" referred to is a separate point. Mr O'Keefe may simply have been referring to the change already mentioned. If he had in mind something else, he should identify it so that the parties may deal with it, if they wish. But even if Mr O'Keefe had in mind some other, unidentified fact, that does not reflect upon his willingness to deal on their merits with the parties' responses to the "preliminary view" he has expressed.
Counsel for the third and fourth respondents referred to the Full Court judgment in Kaycliff Pty Ltd v. Australian Broadcasting Tribunal (1989) 90 ALR 310 and particularly to what was said at 317-319. At those pages the Court referred to authorities which emphasise that the mere possession, and even expression, of an opinion upon an issue does not necessarily disqualify a tribunal of fact from proceeding to determine a case. It is worth quoting the Court's own comment, at 319:
"For our part, we respectfully concur in the view that expression by a court or tribunal of its current view of an issue may be advantageous, on occasions, rather than otherwise. The rules as to apparent bias must be balanced against the desirability of a thoroughly fair contest and the latter may positively favour a disclosure, without any equivocation, of an opinion held by the court or tribunal at a particular stage of the proceedings. In the absence of such disclosure, there may be a justified resentment on the losing side, based on their not having been made aware of the direction of the thinking of the court or tribunal on a particular issue and not having been given a fair opportunity to turn it into another path."
I respectfully agree with this comment. It is an everyday event for judges to indicate to counsel, during the course of a hearing, their impressions of a case, including their impressions of witnesses and of the facts. They do so to assist counsel. It is always an advantage for counsel to know the way in which the judge's mind is working; submissions may be targeted to the aspect of the case which is troubling the judge. Where a judge takes this course nobody would suggest that the judge ought then to be disqualified from concluding the case. The reason is that the judge is merely expressing a tentative view and inviting a response which he or she may take into account in determining whether to adhere to, or abandon, that view in the final decision. The readiness to listen and be persuaded is the critical matter.
There is no reason of principle why an administrative body such as the Australian Broadcasting Tribunal should not take a similar course. In a matter as complex as commercial viability it is helpful for any preliminary view to be carefully considered and fully stated. It is advantageous for it to be stated in writing, so that it may be more easily digested, and responded to, by the parties. As with the case of a judge, what is critical is that, until the issue is finally decided, any view which is expressed be merely a preliminary view, with a clear invitation to the parties to respond critically to it, and that the decison-maker be genuinely willing to consider on their merits any responses which might be made. I do not believe that a person who takes this course would be regarded by an objective observer as unable to bring an impartial and unprejudiced mind to the issues to be resolved. On the contrary, such a decision-maker would be seen as conscientiously grappling with those issues, in a way designed to extract maximum assistance from the parties. I think that this is what Mr O'Keefe has been doing in this case.
Having regard to the above, it is not necessary for me to determine an alternative submission put by counsel for the third and fourth respondents: that, by responding to the Tribunal's "preliminary view", the present applicants waived their entitlement to object to Mr O'Keefe continuing to conduct the inquiry. In that regard counsel referred to what was said in Vakauta v. Kelly; both in the Court of Appeal by McHugh JA - see (1988) 13 NSWLR 502 at 528-532 - and in the High Court - see (1989) 167 CLR 568 at 586-588. I say no more than that it seems to me that there is considerable force in the argument of waiver. In saying that, I take into account the period which elapsed between the issue of the "preliminary view" and the lodgment of the present applicants' submissions, they being represented by solicitors skilled in this area of law, and their knowledge that the lodgment of those submissions would involve, not only the Tribunal, but also the third and fourth respondents in the considerable task of dealing with them.
The Application should be dismissed with costs.
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