Weather & Albeniz
[2007] FamCA 606
•9 May 2007
FAMILY COURT OF AUSTRALIA
| WEATHER & ALBENIZ | [2007] FamCA 606 |
| FAMILY LAW - COSTS – Set aside assessment - Service |
| Family Law Act 1975 (Cth); Family Law Rules 7.01, 7.02, 7.05, 7.12, 19.13, 19.20, 19.21, 19.22, 19.23, 19.27, 19.37, 19.38 |
| APPLICANT: | MS WEATHER |
| RESPONDENT: | MR ALBENIZ |
| INTERVENOR: | ETHERINGTONS SOLICITORS |
| FILE NUMBER: | SYF | 4582 | of | 2003 |
| DATE DELIVERED: | 09 May 2007 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | MULLANE J |
| HEARING DATE: | 8 May 2007 |
REPRESENTATION:
| SOLICITOR FOR THE APPLICANT: | Ms Scanlan of Messrs Scanlan’s Lawyers |
| SOLICITOR FOR THE RESPONDENT: | There was no appearance by Messrs Moss Krouk & Associates, Solicitors |
| SOLICITOR FOR THE SECOND RESPONDENT: | Ms Oakley Of Messrs Etheringtons, |
Orders
The Wife’s Application in a Case filed on 4 April 2007 so far as it seeks to set aside the Costs Assessment Order of 20 March 2007 is refused and dismissed.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Mullane delivered this day will for all publication and reporting purposes be referred to as Weather & Albeniz.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 4582 of 2003
| MS WEATHER |
Applicant
And
| MR ALBENIZ |
Respondent
And
ETHERINGTONS SOLICITORS
Second Respondent
REASONS FOR JUDGMENT
INTRODUCTION
This was a hearing of the wife's application to set aside a Cost Assessment Order made on 20 March 2007 for the applicant wife to pay the respondents, her former solicitors, costs of $26,805.33 in respect of work done for her in property proceedings between her and the husband.
The wife alleges she was not served with any itemised account.
RELEVANT RULES
The following are relevant rules as to costs:
19.13 Steps before costs recovery
A lawyer may start or continue a case to recover costs from a client only if:
(a) the lawyer has served on the client an account and a costs notice, and no request for an itemised costs account has been made under rule 19.20; or
(b) an itemised costs account has been served on the client and:
(i)a Notice Disputing Itemised Costs Account (Form 15) has not been served under rule 19.23;
(ii)a Form 15 has been served under rule 19.23 and the dispute has been resolved by agreement between the parties; or
(iii) a Form 15 has been filed under subrule 19.24 (3) and the dispute has been determined or the Form 15 has been withdrawn.
19.20 Request for itemised costs account
A person who has received an account (except an itemised costs account) and wants to dispute the account, or any part of it, must, within 28 days after receiving the account, request the lawyer who sent it to serve an itemised costs account for the whole or part of the account disputed.
Note lawyer must give a costs notice to a client on receiving instructions and must, when serving an account or an itemised costs account, include a reference to the costs notice (see subrule 19.03 (2)).
19.21 Service of lawyer's itemised costs account
(1)person entitled to costs must serve an itemised costs account on the person liable to pay the costs within 28 days after:
(a)or lawyer and client costs — receiving a request for an itemised costs account; or
(b)or party and party costs:
(i) the order requiring payment of costs was made; or
(ii) the date when the entitlement to costs arose.
Note A person entitled to costs may serve an itemised costs account even if the person liable to pay the costs has not requested it.
(2)For party and party costs, the person entitled to costs must serve a costs notice at the same time as the itemised costs account is served under subrule (1).
19.22 Lawyer's itemised costs account
(1)An itemised costs account (the "account") must specify each item of costs and expense claimed.
(2)Each item specified in the account must be numbered and described in sufficient detail to enable the account to be assessed.
(3)The account must set out, in columns across the page, the following information:
(a) in relation to each item for which costs are payable:
(i) the date when the item occurred;
(ii)a description of the item, including whether the work was done by a lawyer or an employee or agent of a lawyer;
(iii) the amount payable for the item;
(b)at the end of the column setting out the amount payable — the total amount payable for the items.
(4) For each expense claimed, the account must include:
(a) the date when the expense was incurred;
(b) the name of the person to whom the expense was paid;
(c) the nature of the expense; and
(d) the amount paid.
19.23 Disputing itemised costs account
A person served with an itemised costs account may dispute it by serving on the person entitled to the costs a Notice Disputing Itemised Costs Account (Form 15) within 28 days after the account was served.
Note 1 A person may apply for an extension of time to dispute an account (see rule 1.14).
Note 2 If no Form 15 is received and the costs are not paid, the person entitled to the costs may seek a costs assessment order (see rule 19.37).
Note3 If the parties agree on the amount to be paid for costs, they may file a draft consent order (see Part 10.4 for consent orders).
19.27 Notification of hearing
A party filing a Form 15 must give the party who served the itemised costs account at least 14 days notice of the court event and the date fixed for the event under rule 19.26.
19.37 Costs assessment order -- costs account not disputed
(1) This rule applies to a person entitled to costs who:
(a) has served an itemised costs account under rule 19.21; and
(b) has not received a Form 15 under rule 19.23.
(2) A Registrar may make a costs assessment order if the person has filed:
(a) a copy of the itemised costs account; and
(b) an affidavit stating:
(i)when the itemised costs account was served on the person liable to pay the costs;
(ii)the amount (if any) that has been received or credited for the costs;
(iii)that the person liable to pay the costs has not served a Form 15 under rule 19.23; and
(iv)that the time for serving a Form 15 has passed.
(3)If a costs assessment order is made under subrule (2), the person entitled to costs must serve a copy of the order on the person liable to pay costs.
19.38 Setting aside a costs assessment order
(1)This rule applies to a party who is liable to pay costs and receives a costs assessment order under rule 19.31 or subrule 19.37 (3).
(2)The party may, within 14 days after receiving the costs assessment order, apply to have it set aside.
Note If a party wishes to object to a costs assessment order after an assessment hearing has taken place, the party must do so in accordance with Part 19.8.
The relevant rules as to service are:
7.01 Service
Service of a document may be carried out by special service (see Part 7.2) or ordinary service (see Part 7.3) unless otherwise required by a legislative provision.
Note Certain applications must have other documents served with them. For example, an Application for Final Orders (Form 1), when served, must be accompanied by the brochure mentioned in rule 2.03; when a subpoena is served, the witness must be paid conduct money.
7.02 Court's discretion regarding service
(1)A court may find that a document has been served or that it has been served on a particular date, even though these Rules or an order have not been complied with in relation to service.
Note Rule 7.17 also sets out when a document is taken to have been served.
(2)The court may order a party, or a person applying to intervene in a case under rule 6.05, to serve a document or give written notice of a matter or case to a person specified in the order.
7.05 Special service
A document that must be served by special service must be personally received by the person served.
Note For proof of service, see Part 7.4.
7.12 Ordinary service
If special service of a document is not required, the document may be served on a person:
(a) by any method of special service;
(b) if the person has given an address for service:
(i)by delivering it to the address in a sealed envelope addressed to the person;
(ii)by sending it to the address by post in a sealed envelope addressed to the person; or
(iii) by sending it to the facsimile or e-mail address stated in the address for service by electronic communication addressed to the person (see rule 7.16);
(c) if the person has not given an address for service:
(i) by handing it to the person;
(ii)by delivering it to the person’s last known address or place of business in a sealed envelope addressed to the person; or
(iii)by sending it by post in a sealed envelope addressed to the person at the person’s last known address or place of business;
(d)if a lawyer representing the person agrees, in writing, to accept service of the document, by sending it to the lawyer; or
(e)if the person’s address for service includes the number of a lawyer’s document exchange box, by delivering it in a sealed envelope, addressed to the lawyer at that box address, to:
(i) that box; or
(ii)a box provided at another branch of the document exchange for delivery of documents to the box address.
Under Rule 17.03 (item 12 of table 7.1) service of an account for costs or an itemised account for costs can be by ordinary service.
BACKGROUND
Etheringtons Solicitors acted for the wife in property proceedings between her and the husband from August 2003 to August 2006.
In November 2006 the wife obtained advice from the NSW Law Society about the solicitors’ costs. She conceded in her affidavit she was advised she was “entitled” to itemised costs accounts. She does not state in her affidavit precisely what the Law Society advice was.
By 14 November 2006 the wife had instructed her present solicitors, “Scanlan’s” to act for her and Ms Margaret Scanlon is the solicitor in that firm who has had the carriage of the matter on the wife’s behalf. There is no evidence that the Wife or Ms Scanlon requested Etheringtons to provide an itemised costs account. Instead Ms Scanlon wrote to Etheringtons on 15 November 2006 in the following terms:
I refer to my telephone conversation with. [Mr H] of yom office 14 November 2006 p.m. and confirm that I have been instructed to engage D G Thompson Legal Costs Lawyers to have your bills costed for the purposes of negotiations and payment.
I ask that you co-operate with D G Thompson and/or the assessor if they ask to inspect your files. If you do not and I am forced to obtain an order from the Supreme Court to gain access to your files then I will be seek a full indemnity costs order against you.
I confirm that I have been instructed to deal directly with [Mr A] to arrange payment of any outstanding memoranda.
On 30 November DG Thompson , Legal Costs Lawyers, wrote to “Scanlan’s as follows:
[MS M] & [THE WIFE] v ETHERINGTONS SOUCITORS
Thank you for your instructions to prepare a Notice of Objection in this matter.
We confirm that we allocated this matter as follows:
Type and Nature of Service: VIP Notice of Objection - Non-Legal Service
Due Date: April 23, 2007
Our Consultant/Lawyer: Ghania Dib
Our Fee: $250.00 per hour + 10% GST
If the due date set out above is not suitable, please advise us immediately upon receipt of this letter.
We enclose a copy of our Costs Agreement. This sets out the conditions upon which we accept your offer of instructions. Please note that Our Fee is payable within 30 days.
Please feel free to phone us at any time should you wish to discuss any aspect of this matter while it is with us. Ask either for the consultant or lawyer who is handling this matter for you, or for our Production Manager.
The wife was away in Perth from 9 December 2006 to 23 January 2007.
Meanwhile on 10 January 2007 Mr Etherington of Etheringtons Solicitors swore and filed an affidavit under rule 19.37. He annexed among other things:
·A 7 page costs account dated 15 August 2005 (not an itemised account in accordance with rule 19.22) detailing work done, but not including separate charges for each item, and addressed to the wife at her residential address;
·A 3 page costs account dated 23 February 2006 (not an itemised account in accordance with rule 19.22) detailing work done, but not including separate charges for each item, and addressed to the wife at her residential address;
·A 34 page itemised costs account dated 20 September 2006 ( itemised in accordance with rule 19.22) for the period 23 October 2003 to 8 September 2006 addressed to the wife at her residential address;
·A 2 page itemised costs account dated 14 November 2006 (itemised in accordance with rule 19.22) for the period 6-7 November 2006 and addressed to the wife at her residential address; and
·A 4 page itemised costs account dated 5 December 2006 (intemised in accordance with rule 19.22) for work additional work done in the period 23 August 2006 to 4 November 2006 and addressed to the wife at her residential address.
In the affidavit Mr Etherington swore that each of these he “caused to be delivered by ordinary post” on the date of the account to the address of the wife and accompanied by a “notice of Rights”.
The affidavit also gave evidence that no form 15 Notice Disputing Itemised Costs Account had been served on the Solicitors and no payment had been received from the wife. The affidavit was not served upon the wife or her solicitors as the rules do not require service of such an affidavit.
On about 20 February the wife instructed Ms Scanlon to organise a meeting with Etheringtons to attempt settlement of their claims for costs. On 2 March the wife, accompanied by Ms Scanlan and the wife’s adult daughter, met with Mr Etherington and Ms Mitchell, a solicitor with the firm. The settlement negotiations were unsuccessful.
A Registrar made the Costs Assessment Order on 20 March 2007, in exercise of the power under Rule 37 and apparently in reliance upon the contents of Mr Etherington’s affidavit. The order was served on the Wife by facsimile sent to her solicitors, “Scanlan’s”, on 23 March, and they accepted service on the wife’s behalf. It is common ground that as at the making of the Costs Assessment Order no form 15 had been filed and the wife had not disputed any item in any Itemised Costs Account of Etheringtons.
In her submissions on 8 May Ms Scanlan conceded that on 21 March the wife and her daughter inspected the court file, including the affidavit of Mr Etherington (including the itemised costs accounts). Copies were made of these documents and sent to “Scanlan’s” by express post. Ms Scanlan at first conceded in submissions that she received the itemised bills from the wife on 23 March, but later said she didn’t receive it till 23 or 24 March.
On 23 March Ms Scanlan wrote to Etheringtons as follows:
I refer to your letter of today's date and advise that I am instructed to accept service of all documents, in all matters about costs between your employer, [Ms M] and [the wife].
Pursuant to the Family Court rules, please serve me with a copy of the Form 2 Application, Supporting Affidavit and Affidavit of Service proving personal service of the originating application upon my client. In the event that you cannot prove service, I put you on notice that I will be applying to the Family Court to appeal the Registrar George's decision with full costs being awarded in my client's favour, in yet another application made by your employer whilst on notice:
1. That my client was interstate when the application was filed.
2.My client intended to have all the bills cost assessed by D G Thompson, in all the matters managed by your employer when she returned from Perth in late January 2007.
3.I am instructed to accept service of all legal documents in relation to [Ms M] and [the wife].
Just for the record, apart from all the other facts your employer was aware of, I am amazed that you can even contemplate that your employer can file an application including a person in a cause of action, then obtain an order without giving that person a chance to defend themselves. I note that in this jurisdiction you must serve the documents personally (particularly a Form 2 Application in a Case) and obtain an Affidavit of Service that proves service.)
On 27 March Etheringtons wrote to Scanlan’s as follows:
We refer to your letter of 23 March 2007.
The Application in a Case was filed 10 January 2007 with a supporting affidavit of Paul Martin Etherington of the same date, which we now enclose.
Your client did not contact Etheringtons Solicitors within 28 days of receiving the itemised accounts referred to in the affidavit of Paul Martin Etherington. In addition, your client did not serve, within 42 days, a notice disputing costs (Form 15). We do not believe that your client was not within the jurisdiction when each of the accounts were sent to her.
We note your assertion that "your client intended to have all the bills cost assessed by D G Thompsons when she returned from Perth in late January 2007". Your client's intention to do so and actual actions in doing so, are two different things.
Firstly, she would have been out of time by waiting until late January 2007 to do anything for the Family Law matters. We note that the court did not allocate a date when the application for assessment was filed and dealt with the matter on the papers. In addition, the court did not require service of the application on your client in the circumstances where she had already been served with the itemised accounts and the notice of rights and had taken no action in relation to that. Our firm complied with the procedure pursuant to Rule 19.37 of the Family Law Rules 2004 and accordingly, we were within our rights to do so.
Your client has never served on us, in the non-Family Law matters, any applications for assessment. It was indeed because of your client's failure to do anything that we took action against her. We note that we have still have not received anything from D G Thompsons, despite the fact that "it was her intention to do so in late January". It is now late March 2007 and she still has not served any such application for assessment.
Our firm has undertaken work for your client over a period of years and has not received any payment. Her repeated promises to "pay the accounts" came to nothing and accordingly we are entitled to be frustrated with her continued delay.
We look forward to receiving payment of the amount due.
On 4 April 2007 Scanlan’s filed an Application in a Case seeking orders as follows:
1. That the Costs order made by Cost Assessment Registrar J George on 20 March 2007 be set aside.
2. That the applicant pays the respondents full indemnity costs in relation to this Application.
3. That the matter is heard on an urgent basis.
It appears from Ms Scanlan’s submissions that Scanlan’s intended this application to be an application under Rule 19.38 for the Costs Assessment Order to be set aside; not an application for the court to re-exercise the powers of the Registrar as a review. But it appears they did not did not understand procedure for disputing a bill, because although they filed an affidavit by the wife, they did not seek permission to file a form 15 out of time, they did not file any form 15 and the wife did not include a draft form 15 in the her affidavit or state in the affidavit any item in the itemised accounts that she disputes. The Application was issued and returnable on 17 April.
On 17 April 2007 at 8.51am the solicitor for the wife faxed a letter dated 16 April to my associate (Exhibit A) in the following terms:
I refer you to the enclosed medical certificate and advise that I am unable to appear 17 April 2007 because I cannot speak and I cannot stand without becoming dizzy.
I am instructed to make application to adjourn the matter to a day that I can appear.
I note that this matter was listed as urgent on the basis that the Applicant informed D G Thompson that they did not intend to and have not to date, provided them with access to the files because the matter had already been resolved in the Family Court and it was not necessary. If that is not the case, then the matter is not urgent, however I note that it should be resolved quickly because I have been informed by D G Thompson that they will finish preparing the objections by 23 April 2007.
A medical certificate was attached to the letter in which a general practitioner stated she had seen Ms Scanlan for “acute Laryngitis and Pharyngitis”. It did not disclose what problems this was causing her or why she could not attend Court or appear for the wife.
The Associate sent a return message to the solicitor advising that if an adjournment is sought, such an application cannot not be made by mail and would have to be made by someone appearing in Court at 10am.
In Court on 17 April 2007, the date for hearing of the wife’s application, the wife was represented by Ms Bateman of counsel. Ms Oakley appeared for Etheringtons. Ms Bateman applied for an adjournment because of the illness of Ms Scanlan. Ms Bateman was disadvantaged because she did not have the solicitor’s file and had not been briefed about the issues. However, the wife was present and so was her adult daughter and they gave instructions to Ms Bateman.
Ms Oakley informed the Court that when she received notice of the adjournment application in a phone call to Scanlan’s at about 5.00pm the previous evening, she requested a copy of a medical certificate, but she had still not been given one.
I was told that the wife was denying receipt of all of the accounts listed by Mr Etherington in his affidavit. I expressed concern that that was not clear from the affidavit she had sworn. I also expressed concern that Mr Etherington’s evidence about service was hearsay only, but there was clearly a very serious issue being raised that the wife had not been served with any of the accounts. I advised the parties of the need to each review the evidence they had filed on this issue as it may be necessary to provide additional evidence.
I noted that the wife had still not filed any form 15 disputing any item in any Itemised Costs Account of Etheringtons and no dispute had been raised. I spoke directly in the courtroom to the wife and her adult daughter, who spoke fluent English, and told them that if the wife was denying receipt of accounts the solicitors claimed were sent to her, she should make sure careful and specific evidence was given about that and suggested that if she said she was away in Perth when some of the documents were allegedly sent to her, there should be evidence about the arrangements she had for her mail during her absence, etc.
I also told the wife and her daughter I was concerned that the wife appeared to have had legal representation from Scanlan’s for a considerable period and no form 15 had been filed to raise any dispute with any item in any Itemised Costs Account. I intimated that this could prove fatal to the wife’s application on the next occasion. I expressed concern that on the face of it the wife’s legal representation by Scanlen’s may have been less than adequate.
The adjournment was granted until 8 May, the parties were ordered to file and serve any additional affidavit material by 27 April and issues about the costs of the adjournment were reserved.
The wife swore a fresh affidavit on 27 April and filed it that day. The husband did not file any further affidavit. The hearing proceeded on 8 May. Ms Scanlan appeared for the wife and Ms Oakley for Etheringtons.
SERVICE OF ITEMISED COST ACCOUNTS BEFORE COST ASSESSMENT ORDER
Despite what transpired on 17 April 2007, the wife, in her affidavit does not deny receipt of the accounts dated 15 August 2005 and 23 February 2006. She says only:
"I never received an account that was itemised".
That is inconsistent with Etherington's letter of 27 March 2007 to her solicitors which states it encloses a copy of Mr Etherington's affidavit of 10 January. In the Court room when I raised this with Ms Scanlan, she alleged that the affidavit was not enclosed with the letter. But there was no evidence to that effect and nor was there evidence that Scanlons raised any such omission with Etheringtons.
The wife's evidence that:
"I never received an account that was itemised".
is also consistent with Ms Scanlon's concession in Court on 8 May that the wife and her adult daughter searched the Court file on 21 March and obtained a copy of Mr Etherington's affidavit. Copies of the itemised cost accounts are annexed to that affidavit.
The wife's attendance on the Law Society to obtain advice about the solicitor's costs suggests that by then (November 2006) she had received accounts (not necessarily itemised) from the solicitors. She then knew, one must presume, that she was entitled to request itemised cost accounts. The wife was legally represented by Scanlans from November 2006. The rules clearly placed an onus on her to request itemised cost accounts. But she made no such request. That supports the proposition that she already had received the itemised cost accounts, so she did not make a request for itemised accounts.
That proposition is also supported by her evidence that she considered three firms of cost consultants, and chose DG Thompson Legal Cost Lawyers. It also supported by her solicitors being instructed to engage Thompsons, notifying Etheringtons Solicitors requesting Thompsons be given access to Etherington's file, and the letter of Thompsons of 30 November 2006 confirming instructions to prepare a Notice of Objection.
It is extremely unlikely that the wife and her solicitors would select and instruct a cost consultant to prepare the form 15 Notice of Objection without having received any itemised cost account(s) to which she proposed to object. It would be impossible for the consultant to advise as to which charges should be objected to or prepare a Notice of Objection, unless the consultant was first given an itemised bill. It also appears it would be a waste of time for the consultant to inspect Etherington’s file, unless the consultant already had an itemised bill showing the items for which the client was being charged and the amounts.
It is concerning that the due date for the preparation of the Notice of Objection in Thompson's letter of 30 November 2006 is 23 April 2007, but there is no evidence that Scanlans or the wife requested Etheringtons to agree to additional time to file the Notice of Objection (form 15) or even notified Etheringtons of any intention to file one.
On the evidence, the wife did not notify Etheringtons of any intention to file a Notice of Objection until 9.46 am on 17 April 2007 when Scanlans faxed a copy of the letter from Thompsons to Etheringtons. That was nearly 5 months after Thompson’s letter was received.
It goes to the wife's bona fides and credit too that although she has now has had the benefit of legal representation and cost consultants since November, she has still not disputed a single item in any of the three itemised cost accounts.
Etheringtons have not provided any direct evidence of service of the three itemised cost accounts. Rule 19.23 provides that the person liable to pay costs has 28 days after service of the itemised cost account to file any Notice of Objection.
The Registrar made the Cost Assessment Order on 20 March 2007.
On the question of whether the wife was served with the three itemised costs accounts (or any of them) on or before 20 February 2007, the Court is satisfied on the balance of probabilities that the wife's evidence, so far as it is that she did not receive any itemised cost account before that date, is false. The Court is satisfied on the balance of probabilities that she received one or more of the 3 itemised costs accounts before 30 November 2006.
The evidence does not permit the Court to make a positive finding that any specific itemised costs account was served on the wife before 20 February 2007. Nor does the evidence establish on the balance of probabilities that the wife had received all three itemised cost accounts by service or other means by 20 February 2007.
However, on the other hand the evidence does not permit the Court to conclude that the wife was not served with any of the three itemised costs accounts before 20 February 2007.
CONCLUSION
These proceedings are not a rehearing of the proceedings before the Registrar. they are proceedings to set aside the Costs Assessment Order. There is an onus on the applicant to satisfy the Court that there is a ground for setting aside the Registrar's order. The basis of the application is that there was an injustice to the wife in that she did not receive the itemised costs accounts and accompanying pamphlets before 20 February 2007.
The consequence if the ground were established would be that the procedure before the Registrar was defective and the decision should be set aside.
But the applicant has not established that ground on the balance of probabilities. She has not established on the balance of probabilities that she did not receive all 3 itemised costs accounts at least 28 days before the Registrar made the Costs Assessment Order.
The wife's application should therefore be dismissed.
COSTS OF THE APPLICATION
The wife and Etheringtons have until, under the rules, 28 days to apply for a Costs Order. Presumably the wife will need to obtain legal advice from different lawyers about her rights in respect of her lawyer's advice and representation. It may be that she will be advised to seek an order for Scanlons to indemnify her regarding her costs of her application and any costs of Etheringtons that she is liable to pay.
ORDERS
(1)The wife's application in the case filed 4 April 2007 is refused and dismissed.
I certify that the preceding twenty six (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Mullane.
Associate:
Date: 19 June 2007
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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Appeal
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Remedies
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