Stefani and Secretary, Department of Employment (Social services second review)
[2015] AATA 678
•8 September 2015
Stefani and Secretary, Department of Employment (Social services second review) [2015] AATA 678 (8 September 2015)
Division
GENERAL DIVISION
File Number
2014/5443
Re
Sylvia Stefani
APPLICANT
And
Secretary, Department of Employment
RESPONDENT
DECISION
Tribunal Senior Member R W Dunne
Date 8 September 2015 Place Adelaide The decision under review is set aside and the matter is remitted to the respondent to be dealt with in accordance with these reasons. .
....................[Sgd]..............................................
Senior Member R W Dunne
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – participation payments – Newstart Allowance – participation failure – suspension of Newstart Allowance – Reporting Statement sent – applicant attempted to report on line, but attempt rejected – Newstart Allowance cancelled – whether automatic cancellation provision applies – decision under review set aside.
LEGISLATION
Social Security Act 1991 (Cth), ss 593 and 601
Social Security (Administration) Act 1999 (Cth), ss 42B, 68(2), 80, 85, 95, 108, 109 and 129
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Beadle v Director General of Social Security (1984) 6 ALD 1
SECONDARY MATERIALS
Guide to Social Security Law: Section 3.1.13 Compliance Framework for Participation Payments
REASONS FOR DECISION
Senior Member R W Dunne
8 September 2015
INTRODUCTION
The applicant, Ms Sylvia Stefani, was granted Newstart Allowance (“NSA”) on 23 February 2011. She was classed as a jobseeker and as such was required to attend interviews with employment services providers and submit Reporting Statements to the respondent (“Centrelink”). On 5 February 2014, Centrelink sent a letter to Ms Stefani stating that her NSA was cancelled from 11 December 2013 because she had not reported. On 27 April 2014, Ms Stefani sent a letter to Centrelink appealing the decision to cancel her NSA for not reporting on 21 January 2014. On 19 May 2014, an Authorised Review Officer (“ARO”) affirmed Centrelink’s decision to cancel the applicant’s NSA. On 5 August 2014, Ms Stefani lodged an application for review of Centrelink’s decision with the Social Security Appeals Tribunal (“SSAT”). On 10 September 2014, the SSAT affirmed the decision under review. Ms Stefani has now applied to this Tribunal for review of the decision of the SSAT.
At the hearing Ms Stefani was represented by Ms Margaret Riley (from the Welfare Rights Centre) and Centrelink was represented by Mr Adam Hay (from the Department of Human Services). The Tribunal received into evidence the T documents[1] lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975.
[1] Exhibit R1.
ISSUE FOR THE TRIBUNAL
The issue for the Tribunal’s consideration is whether the decision made by the Social Security Appeals Tribunal, on 10 September 2014, to affirm the decision by an Authorised Review Officer on 5 February 2014 to cancel Ms Stefani’s Newstart Allowance payments was the correct or preferable decision.
LEGISLATION
The legislation relevant to the decision in the present case is contained in the Social Security Act 1991 (“Act”) and the Social Security (Administration) Act 1999 (“Administration Act”). Part 2.12 of the Act sets out the provisions for receiving NSA, and Division 1 of this Part sets out the qualifications and payability requirements for NSA. Section 593 of the Act provides for the criteria for qualification for NSA. Essentially, a person is qualified for NSA in respect of a period if:
(a)the person satisfies the Secretary that, throughout the period, the person is unemployed; or
(b)throughout the period, or for each period within the period, the person satisfies the activity test.
Section 601 of the Act provides when a person satisfies the activity test. Essentially, a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person:
(a)is actively seeking; and
(b)is willing to undertake,
paid work in Australia, other than paid work that is unsuitable to be undertaken by that person.
People receiving participation payments, such as NSA, are subject to the compliance arrangements in Division 3A of the Administration Act. People receiving participation payments are referred to as job seekers. The object of Division 3A is set out in s 42B of the Administration Act, which reads:
“Object of this Division
(1) The object of this Division is to encourage people to participate in employment and engage with employment services. It is also the object of this Division to secure compliance with a person’s obligations and requirements in relation to participation payments, and to ensure that those who do not comply are re-engaged with employment services as quickly as possible.
(2) However, this Division is not intended to punish a person who has a reasonable excuse for failing to comply with such obligations.”
The “Compliance Framework for Participation Payments” is contained in the Guide to Social Security Law (Section 3.1.13). In Section 3.1.13, the objectives of the compliance framework are set out. They read:
“Objectives of the compliance framework
The purpose of the compliance legislation is to encourage job seekers to meet their mutual obligation requirements. That is, to do all that they can to find work and participate in employment services and other activities designed to improve their job prospects. Job seekers who have a good reason for not meeting their requirements should not be penalised. Job seekers who do not meet their mutual obligation requirements should be reconnected with employment services as quickly as possible.”
In Section 3.1.13, the role of employment services providers and DHS (which includes Centrelink officers) is set out. Relevantly, the role of DHS officers reads:
“Role of DHS
The legislation gives DHS officers, as delegated decision-makers, some discretion when deciding if a job seeker has a reasonable excuse for failing to meet their requirements and in deciding if they have been persistently non-compliant. This discretion is limited, however, if a job seeker fails to give prior notice of their excuse when it was reasonable to expect them to do so.
Even where no reasonable excuse exists, the legislation also gives DHS the discretion not to apply a NSNP failure, a connection failure, a non-attendance failure, a reconnection failure or a serious failure, despite the failure being applicable. …”
The following provisions of the Administration Act are also presently relevant. They read:
“68 Person receiving social security payment or holding concession card
(1) Subsection (2) applies to a person to whom a social security Payment (other than utilities allowance or energy supplement under Part 2.25B of the 1991 Act) is being paid.
(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:
(a)inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;
(b)give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;
(c)give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.
...”
“80 Cancellation or suspension determination
(1) If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a)who is not, or was not, qualified for the payment; or
(b)to whom the payment is not, or was not, payable;
the Secretary is to determine that the payment is to be cancelled or suspended.
(2) Subsection(1) does not authorise the Secretary to make a determination if:
(a)the payment of a social security payment to a person has been cancelled or suspended by the operation of another provision of the social security law; and
(b)the determination would take effect at or after the time at which the cancellation or suspension referred to in paragraph (a) would take effect.
…”
“85 Resumption of payment after cancellation of suspension
(1) If:
(a)a person’s social security payment is:
(i) cancelled by force of section 93 or 94; or
(ii) cancelled or suspended under section 80, 81 or 82; or
(iii) cancelled under Part 3C (schooling requirements); and
(b)the Secretary reconsiders the decision; and
(c)as a result of the reconsideration, the Secretary is satisfied that, because of the decision:
(i) the person did not receive a social security payment that was payable to the person; or
(ii) the person is not receiving a social security payment that is payable to the person;
the Secretary is to determine that the social security payment was or is payable to the person, as the case requires.
…”
“95 Automatic cancellation – failure to provide a statement under subsection 68(2)
(1) If:
(a)a person who is receiving a social security payment is given a notice under subsection 68(2) requiring the person to give the Department a statement or a number of statements; and
(b)the notice relates to the payment of the social security payment in respect of a period or a number of periods specified in the notice; and
(c)the person does not comply with the notice so far as it relates to a particular period;
then, subject to subsection (2), the social security payment is cancelled, by force of this section, on the first day in that period.
(2) If the Secretary is satisfied that, in the special circumstances of the case, it is appropriate to do so, the Secretary may determine in writing that subsection (1) does not apply to the person on and from a day specified in the determination.
(3) The day specified under subsection (2) may be before or after the making of the determination.”
“108 Definition
In this Subdivision:
‘favourable determination’ means a determination under section 78, 85 or 85A.”
“109 Date of effect of favourable determination resulting from review
(1) If:
(a)a decision (the original decision) is made in relation to a person’s social security payment; and
(b)a notice is given to the person informing the person of the original decision; and
(c)within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the determination embodying the original decision took effect.
…”
“129 Application for review
(1) Subject to subsections (3) and (4), a person affected by a decision of an officer under the social security law may apply to the Secretary for review of the decision.
(3) If:
(a)an officer makes a decision under the social security law in relation to pension bonus, low income supplement or essential medical equipment payment; and
(b)notice is given to the person concerned;
the person is not entitled to make an application under subsection (1) for review of the decision more than 13 weeks after the giving of the notice.
…”
BACKGROUND
Further to the matters that are described in paragraph 1 of these reasons, the material background in this case (largely extracted from the statements of facts, issues and contentions prepared by Ms Riley and Mr Hay) follows below.
On 29 November 2013, Ms Stefani’s employment services provider (“ESP”) made an appointment for her to attend an appointment with the provider on 6 January 2014. On that date, Ms Stefani failed to attend the appointment and a “Participation Report - Failure to Attend Provider Appointment” was furnished to the respondent. In the report, the ESP recorded that the applicant had given prior notice of her inability to attend the appointment. When the ESP indicated that a further appointment was required, a contact attempt with the applicant failed on 7 January 2014, but another appointment was made.
On 8 January 2014, Centrelink sent a letter to Ms Stefani stating that her NSA was suspended because she had failed to attend her appointment with the ESP. Centrelink also stated that the applicant’s NSA would be cancelled if she did not contact them. On 8 January 2014, Centrelink also sent letters to Ms Stefani enclosing her Reporting Statement for the period 11 December 2013 to 21 January 2014.[2] The letters stated:
“Your Reporting Statement is enclosed. If you are using self-service (online or phone), you do not need to return this form. …”
“You will need to attend interviews with us, this may include Personal Contact interviews. You will be notified when you are required to attend an interview.”
[2] Exhibit R1, T6 pages 47, 50 and 52.
On 21 January 2014, Ms Stefani contacted Centrelink via the internet. Centrelink records show that she reported for the period 11 December 2013 to 21 January 2014. She had no income to report and no changes to report. Centrelink advised her that her report was not successful and there was a participation failure due. On 28 January 2014, Centrelink sent a letter to Ms Stefani stating that they did not receive her Application for Payment form on 21 January 2014, and that her payments since 11 December 2013 may be recovered. On 29 January 2014, Ms Stefani attended the appointment with her ESP. On 1 February 2014, Ms Stefani contacted Centrelink via the internet that she was reporting for the period 11 December 2013 to 21 January 2014. The Centrelink record shows that she had no income to report and no changes to report, and that there was a participation failure due and the report was not successful.
On 6 February 2014, the applicant complained by email to Centrelink concerning the suspension of her NSA. In her phone calls to Centrelink on 6 February 2014, she was told that there would be an “expected wait time of 80 minutes”, and there was no option for a call back. On 6 February 2014, Centrelink sent a letter to Ms Stefani stating that, after consideration about her failure to attend an appointment with her ESP on 6 January 2014, a decision had been made that no failure occurred.
On 17 February 2014, Ms Stefani accessed her Centrelink record on line, including her payments details. On 21 February 2014, her record shows that a debt for the period 11 December 2013 to 7 January 2014 in the amount of $1,018.99 was raised because “an Application for Payment was not lodged for the debt period”. Centrelink attempted to contact Ms Stefani by telephone on three occasions, without success, on 24 February 2014 (twice) and on 25 February 2014. On 25 February 2014, Centrelink sent a letter to Ms Stefani stating that Centrelink’s Customer Relations Unit was investigating her complaint. The writer (Ms Morwena Tornquist) stated that she had tried unsuccessfully to contact Ms Stefani by telephone to discuss her complaint and asked if she could call Customer Relations on 1800 050 004.
On 15 January 2015, Ms Stefani lodged an application for NSA and the reporting statement in respect of the reporting period the subject of this review. As a result, Ms Stefani is now in receipt of NSA and, as a result of lodging the reporting statement, the debt of $1,018.99 raised on 21 February 2014 has been reduced to zero.
APPLICANT’S EVIDENCE
It was Ms Stefani’s evidence that she lived with her sister and had caring duties for her mother. She had continuously received NSA from March 2005 until January 2014, when on 8 January 2014 it was suspended. There had been dealings with the respondent up to January 2014, but over the last 18 months there had been difficulties in making contact and submitting reporting forms in person. It was necessary for her to report her earnings and anything else on line. However, on 6 January 2014 when she was unable to attend an appointment with her ESP, having given prior notice of her inability to do so, she received two letters from Centrelink on 8 January 2014. In one letter she was told to report her employment income and other changes in circumstances in a Reporting Statement. She had to report for the period 11 December 2013 to 21 January 2014 on 21 January 2014. In the other letter she was told that, as she had not attended an earlier appointment, her NSA was suspended. She said she understood that, when she had been unable to attend the appointment, her ESP had made another appointment for her to attend on 29 January 2014. When she received a further letter from Centrelink dated 28 January 2014 to contact them within 14 days, she said she did not think she had to do anything. She attended the appointment on 29 January 2014, there was no discussion with the ESP and the next appointment was made for February 2014.
On 5 February 2014, Ms Stefani said she received another letter from Centrelink. This letter stated that her NSA had been cancelled from 11 December 2013 because she had not reported. However, on 6 February 2014 Centrelink sent a further letter to the applicant. This letter stated that, as she did not attend an appointment with her ESP on 6 January 2014, a decision had been made that no failure had occurred. On 6 February 2014, Ms Stefani said that she tried to call Centrelink. She then sent a SMS message to complain about the suspension of her NSA. The Centrelink record shows that she was told that there would be an “expected wait time of 80 minutes” (there was no option for a call back). She referred to the letter she had written to the ARO on 27 April 2014 appealing the decision to cancel her NSA made on 5 February 2014 within the permitted 13 week time-frame.
In cross-examination by Mr Hay, the applicant acknowledged that she knew how to report and what the requirements for reporting were. When questioned about the letters she had received from Centrelink about the cancellation of her NSA she said that the communications were confusing. She referred to the letter dated 25 February 2014 sent by Centrelink’s Customer Relations Unit and the letter dated 6 February 2014 which stated that when she did not attend an appointment with her ESP on 6 January 2014, a decision had been made that no failure had occurred. The author of these two letters was the same person (Ms Morwena Tornquist).
CONSIDERATION
Was the decision made by the Social Security Appeals Tribunal, on 10 September 2014, to affirm the decision of an Authorised Review Officer on 5 February 2014 to cancel Ms Stefani’s Newstart Allowance payments the correct or preferable decision?
In my view, this case is an example of a breakdown in communication between Centrelink and its client. It involved two processes – reporting requirements and participation requirements. Although Ms Stefani appeared well versed in reporting requirements, she became confused by what appeared to be a conflict in her case between the reporting requirement and the participation requirement.
Mr Hay submitted that the two processes or issues should not be conflated. He submitted that the reporting requirement in Ms Stefani’s case was a “red herring” and that the whole matter turned on the applicant’s refusal to submit her reporting statement. When letters were sent by Centrelink to Ms Stefani on or around the same day (8 January 2014), they occurred independently in relation to the participation issue and the reporting issue. And the reporting issue did not arise as a result of participation failure. In my view, Ms Stefani did not refuse to submit her reporting statement. She attempted to do so, but it was rejected on line. She could see from Centrelink records on 21 January 2014 and 1 February 2014 that she had attempted to report. No income for the period 11 December 2013 to 21 January 2014 was reported. There were no changes that she declared that she had not already told them about. Although the Centrelink record indicated that her report was not successful and that she had to contact Centrelink, letters she had received from Centrelink were not consistent and were understandably confusing her.
By way of background, on 29 November 2013, Ms Stefani’s ESP made an arrangement for her to attend an appointment on 6 January 2014. She was unable to attend the appointment, having given prior notice of that inability to her ESP. A further arrangement was made for an appointment on 29 January 2014. On 8 January 2014, Centrelink sent two letters (or possibly three letters) to Ms Stefani relating to her failure to attend on 6 January 2014. In one letter, she was advised that her NSA was suspended. In the other letter, she was sent her Reporting Statement for the period 11 December 2013 to 21 January 2014 which she was required to report on 21 January 2014. She also needed to attend interviews, which might include Personal Contact interviews. On 21 January 2014, she contacted Centrelink via the internet. Centrelink advised her that her report was not successful and that a participation failure had occurred. On 1 February 2014, Centrelink record shows that Ms Stefani again contacted Centrelink via the internet. The report was again unsuccessful and a participation failure occurred. On 5 February 2014, Ms Stefani was advised that her NSA was cancelled from 11 December 2013 because she had not reported. Following that letter, on 6 February 2014 Centrelink sent another letter to her stating that, notwithstanding her failure to attend an appointment on 6 January 2014, a decision had been made that no failure had occurred.
During the course of the hearing, Ms Riley referred to s 42B of the Administration Act. I note that an object of Division 3A, in which s 42B appears, is to secure compliance with a person’s obligations and requirements in relation to participation payments. I also note that the Division is not intended to punish a person who has a reasonable excuse for failing to comply with their obligations. Ms Riley also referred to the “Compliance Framework for Participation Payments” in Section 3.1.13 of the Guide to Social Security Law. Section 3.1.13 sets out the objectives of the compliance framework. In this regard, I note that Section 3.1.13 states that jobseekers who have a good reason for not meeting their mutual obligation requirements should not be penalised. In relation to Division 3A, Section 3.1.13 also refers to the role of Centrelink officers as delegated decision-makers. I note that such Centrelink officers are given some discretion when deciding if a job seeker has a reasonable excuse for failing to meet their mutual obligation requirements. Moreover, in her closing Ms Riley submitted that, when standing in the shoes of the decision-maker, the Tribunal is able to exercise the discretion in relation to a job seeker’s mutual obligation requirements. In making this submission, she agreed that she was referring to s 95(2) of the Administration Act.
Section 95(2) of the Administration Act was referred to in the decision of the SSAT made on 10 September 2014. There, the Member said that s 95(2) permits the Secretary (or the SSAT exercising a power of the Secretary) to determine that the cancellation provision in s 95(1) does not apply if the Secretary is satisfied that, in the special circumstances of a case, it is appropriate to do so. In her decision, the Member determined that the automatic cancellation provision in s 95(1) of the Administration Act does apply in Ms Stefani’s case. With respect, I do not agree with the Member’s determination. In my view (standing in the shoes of the Secretary), for the reasons that follow, I am satisfied that there a special circumstances in Ms Stefani’s case and it is appropriate to determine that s 95(1) does not apply to Ms Stefani on and from the date of the Tribunal’s decision.
There are a number of decisions of Courts and Tribunal’s that have considered the meaning of “special circumstances”. Many of these decisions relate to particular provisions of the Act, such as s 1237AAD. Decisions of Courts have found that, to constitute “special circumstances”, the circumstances must be “unusual, uncommon or exceptional”: see Angelakos v Secretary, Department of Employment and Workplace Relations [3]. In Angelakos, Besanko J said:[4]
“I note her Honour’s reference to the Tribunal in the case before her probably overstating the test. I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.” [Emphasis added]
[3] [2007] FCA 25.
[4] [2007] FCA 25 at [33].
In Secretary, Department of Social Security v Hales,[5] French J (as he then was) said:[6]
“The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. …”
[5] (1998) 82 FCR 154.
[6] (1998) 82 FCR 154 at [162].
In re Beadle v Director General of Social Security,[7] the Tribunal there said:[8]
“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”
[7] (1984) 6 ALD 1.
[8] (1984) 6 ALD 1 at [3].
In his closing, Mr Hay submitted that receiving Centrelink letters is not a special circumstance. He submitted that receiving Centrelink letters, as a Centrelink customer, was not unusual or uncommon. As such, s 95(2) of the Administration Act was not enlivened and no discretion should be exercised by the Tribunal. However, in giving close attention to the particular statutory context in which the expression special circumstances occurs in s 95(2), I am of the view that receiving Centrelink letters, as a Centrelink customer, that are inconsistent or unclear is unusual or uncommon. And receiving Centrelink letters, sent on the same day that are clearly inconsistent and do not accord with Centrelink records, constitute “special circumstances”.
To summarise, in accordance with s 95(2) of the Administration Act, I am satisfied that, in the special circumstances of her case, it is appropriate to determine that s 95(1) does not apply to Ms Stefani. Having particular regard to what the SSAT Member said in her decision, I am of the view that s 95 is not the relevant provision under which Ms Stefani’s NSA may be cancelled and s 80 of the Administration Act is the relevant provision. It follows that the decision made by the SSAT on 10 September 2014 was not the correct or preferable decision. Standing in the shoes of the Secretary, as I have found that s 95(1) does not apply, the NSA payment to Ms Stefani has not been cancelled by the operation of another provision of the social security law and therefore s 80(2) does not apply, I am satisfied that s 80(1) becomes the relevant cancelling provision. As it appears that Ms Stefani sought review under s 129(1) of the Administration Act, on 27 April 2014, within 13 weeks of the decision by Centrelink on 5 February 2014 to cancel her NSA, s 109(1), when read with s 108 and s 80(1), can apply. Although in reading s 108, s 78 and s 85A are not relevant, s 85 can permit a resumption of payment as cancellation has occurred by force of s 80(1) and there is a favourable determination under s 108.
I note that on 21 February 2014, a debt for the period 11 December 2013 to 7 January 2014 was raised in the amount of $1,018.99. On 15 January 2015, as a result of lodging her reporting statement the debt was reduced to zero. Hence, Ms Stefani effectively last received her NSA on 7 January 2014.
Given the operation of s 80(1), when read with s 85, s 108 and s 109 of the Administration Act, I am of the view that Ms Stefani is entitled to back payment of arrears of her NSA from 8 January 2014 to 14 January 2015.
DECISION
The decision made by the Social Security Appeals Tribunal, on 10 September 2014, to cancel the applicant’s Newstart Allowance payments under s 95(1), is set aside and the matter is remitted to the respondent to be dealt with in accordance with the above reasons.
I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne ....................[Sgd]....................................................
Administrative Assistant
Dated 8 September 2015
Date(s) of hearing 21 July 2015 Solicitors for the Applicant Ms M Riley, Welfare Rights Centre (SA) Inc Advocate for the Respondent Mr A Hay Solicitors for the Respondent Department of Human Services
Key Legal Topics
Areas of Law
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Administrative Law
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Employment Law
Legal Concepts
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Appeal
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Judicial Review
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Procedural Fairness
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Statutory Construction
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Remedies
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