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Schenker AG and Schenker (NZ) Limited v Commerce Commission [2013] NZCA 114 (17 April 2013)

Last Updated: 24 April 2013

IN THE COURT OF APPEAL OF NEW ZEALAND
CA162/2012

BETWEEN SCHENKER AG AND SCHENKER (NZ) LIMITED
Appellants

AND COMMERCE COMMISSION
First Respondent

AND AIR NEW ZEALAND LIMITED
Second Respondent

AND CATHAY PACIFIC AIRWAYS LIMITED
Third Respondent

AND EMIRATES
Fourth Respondent

AND JAPAN AIRLINES INTERNATIONAL CO LIMITED
Fifth Respondent

AND KOREAN AIRLINES CO LIMITED
Sixth Respondent

AND MALAYSIAN AIRLINE SYSTEM BERHAD LIMITED
Seventh Respondent

AND SINGAPORE AIRLINES LIMTED AND SINGAPORE AIRLINES CARGO PTE LIMITED
Eighth Respondent

AND THAI AIRWAYS INTERNATIONAL PUBLIC COMPANY LIMITED
Ninth Respondent

AND QANTAS AIRWAYS LIMITED
Tenth Respondent

AND BRITISH AIRWAYS PLC
Eleventh Respondent

Hearing: 14 March 2013

Court: Harrison, White and Priestley JJ

Counsel: P N Collins and M Singh for Appellants
J C L Dixon and K Rusbatch for First Respondent
S Ladd and C Milne for Second Respondent
I J Thain for Third Respondent
J L Land and A Pope for Third to Ninth Respondents
P Barratt for DHL Global Forwarding (New Zealand) Ltd (Non-party given leave)

Judgment: 17 April 2013 at 3 pm

JUDGMENT OF THE COURT


A Appeal dismissed.


  1. Costs for a standard appeal on a band B basis are awarded to the first and second respondents and to DHL. An additional set of costs is awarded on the same basis to the seven respondents for whom Mr Land appeared. In each case we certify for one counsel only.

____________________________________________________________________


REASONS OF THE COURT


(Given by Priestley J)

Introduction

[1] This appeal raises the important issue of what requirements a non-party to a civil proceeding must satisfy to obtain access to documents on a High Court civil proceeding file.
[2] We state the obvious at the outset. The fate of each application will ultimately depend on its context. To what documents is access sought? Why? What is the nature of the proceeding? What particular interests and factors must be weighed? For each access request these inquiries will inevitably differ.
[3] The appellants, Schenker AG and Schenker (NZ) Ltd, were collectively a non-party to a proceeding initiated in the High Court by the Commerce Commission (the first respondent) under the Commerce Act 1986. The Commission alleged that various airlines[1] had engaged in anti-competitive behaviour by fixing certain elements of the prices of in-bound and out-bound air cargo services for New Zealand.[2]
[4] Schenker is a large freight forwarder which operates on an international basis and has been involved with various of the respondent airlines through freight-forwarding contracts. In July 2011 Schenker’s solicitors made a request for access to the High Court file.[3] In a judgment released on 24 February 2012 Asher J declined the request.[4] This appeal challenges that judgment.[5]

The request

[5] Schenker lodged requests in July 2011 with the Registrar of the High Court at Auckland under r 3.9(4) of the High Court Rules (relating to access to documents during the substantive hearing phase) and under r 3.11 (for access by a person not otherwise eligible). Both applications were effectively in identical terms.
[6] The only reason advanced in the letters of request was that Schenker “may have suffered loss as a result of the alleged conduct in these proceedings”. There was no further amplification or detail about what Schenker’s interest in the court documents might be. The request did, however, specify what documents Schenker wanted to access. These were:
[7] In short, on the basis that the alleged conduct of the parties against whom the Commerce Commission was making a claim may have resulted in some loss to it, Schenker considered it should effectively have access to all the documents which had been before the Judge in the proceeding.
[8] Mr Collins accepted in his submissions there was no evidence pointing to any other reason. He submitted that possibly the documents might be relevant to contemplated parallel litigation. But the type of litigation and its forum was not a matter on which Mr Collins could assist us.
[9] Schenker’s request was opposed which led to it being dealt with under subpart 2 of Part 3 of the High Court Rules to which we now turn.

Relevant Rules

[10] The Rules set out a clear process which applies to applications by non-parties who wish to obtain access to documents on a court file.[6]
[11] Rule 3.5 defines the key terms of “access”, “court file”, and “document”. There was no dispute over the applicability of these terms so we need not dwell on them. Suffice to say that “access” includes copying, which is what Schenker had in mind, and that “document” is broadly defined as “any written material in the custody or control of the court that relates to a proceeding”. The definition extends to interlocutory applications and includes documentary exhibits, video recordings, other images, and records in electronic form.
[12] Rule 3.9 sets out the mechanism for an access request. It provides:

3.9 Access to documents during substantive hearing stage

(1) This rule applies during the hearing of a proceeding (other than the hearing of an interlocutory application) and until—

(a) the close of the 20th working day after the court has given the final judgment on the proceeding; or

(b) the discontinuance of the proceeding before the final judgment is given.

(2) During the period to which this rule applies, any person may access any of the following documents relating to the proceeding:

(a) any pleading, reference, notice, or application filed in the court:

(b) affidavits, depositions, or other written statements admitted into evidence for the purposes of the hearing:

(c) documents admitted into evidence for the purposes of the hearing:

(d) if any evidence given orally at the hearing has been transcribed, a transcript of that evidence.

(3) Despite subclause (2), a Judge may, on his or her initiative or on request, direct that any document, or part of a document, relating to the proceeding not be accessed without the permission of a Judge.

(4) A request for access to a document under this rule is made informally to the Registrar by letter that—

(a) identifies the requested document; and

(b) gives the reasons for the request.

(5) The following provisions apply when a request for access to a document is made under subclause (4):

(a) the Registrar must promptly give the parties or their counsel a copy of the request:

(b) a party who wishes to object must, before the relevant deadline (within the meaning of rule 3.10), give written notice of the objection to the Registrar, to the person who made the request, and to the other parties or their counsel:

(c) on receipt of an objection, the Registrar must promptly refer the objection and the request to the Judge for determination:

(d) unless the document is subject to a restriction stated in subclause (3) or in rule 3.12, the Registrar must promptly give the person who made the request access to the document—

(i) if the Registrar receives no objection before the expiry of the relevant deadline (within the meaning of rule 3.10); or

(ii) if the parties or their counsel earlier agree that the person be given access to the document:

(e) every request that relates to a document that is subject to a restriction stated in subclause (3) or in rule 3.12 is taken to be a request for the permission of a Judge, and must be promptly referred to the Judge by the Registrar.

(6) The Judge may determine an objection referred to the Judge under subclause (5)(c) or a request for permission under subclause (3) or (5)(e) in any manner the Judge considers just.

(7) For the purposes of subclause 2(b) and (c), “admitted into evidence” does not include evidence admitted provisionally.

[13] Unless subcl (3) applies and access is dependent on a Judge’s permission, the initial request, which can be informal, must be made under subcl (4). This subclause is clearly the gateway through which “any person” must enter to exercise the broadly cast right to access set out in subcl (2).
[14] Subclause (5) sets out relevant time periods. Parties must be notified of the request. There is a “relevant deadline” within which a party must give written notice of an objection.[7] If no objection is received, the Registrar must, under r 3.9(5)(d), give prompt access to the person making the request. If an objection is made, however, the request for permission must be referred to the Judge. Rule 3.9(6) confers on the Judge a broad discretion to determine both objections and requests in a manner which is considered “just”. However, the exercise of that discretion must be informed by r 3.16 which provides:

3.16 Matters to be taken into account

In determining an application under rule 3.13, or a request for permission under rule 3.9, or the determination of an objection under that rule, the Judge or Registrar must consider the nature of, and the reasons for, the application or request and take into account each of the following matters that is relevant to the application, request, or objection:

(a) the orderly and fair administration of justice:

(b) the protection of confidentiality, privacy interests (including those of children and other vulnerable members of the community), and any privilege held by, or available to, any person:

(c) the principle of open justice, namely, encouraging fair and accurate reporting of, and comment on, court hearings and decisions:

(d) the freedom to seek, receive, and impart information:

(e) whether a document to which the application or request relates is subject to any restriction under rule 3.12:

(f) any other matter that the Judge or Registrar thinks just.

[15] Clearly a Judge, when considering an access request which has attracted objections, is carrying out a discretionary exercise which incorporates an evaluative weighing of r 3.16 factors. It is unnecessary, for the purposes of this judgment, to embark upon an analysis of relevant dicta in May v May[8] and Austin, Nichols & Co Inc v Stichting Lodestar.[9] As Tipping J observed in Kacem v Bashir:[10]

[32] But, for present purposes, the important point arising from Austin, Nichols is that those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion involves an assessment of fact and degree and entails a value judgment. In this context a general appeal is to be distinguished from an appeal against a decision made in the exercise of a discretion. In that kind of case the criteria for a successful appeal are stricter: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong. The distinction between a general appeal and an appeal from a discretion is not altogether easy to describe in the abstract. But the fact that the case involves factual evaluation and a value judgment does not of itself mean the decision is discretionary.

[16] Suffice to say that an appeal against the exercise of discretion under r 3.9(6) is unlikely to succeed unless an appellant can show that the discretion was exercised on a clearly flawed basis,[11] and/or by demonstrating an evaluation which was clearly awry and, in the view of the appellate court, wrong.

The High Court Judgment

[17] Asher J had the advantage of being the Judge who had presided over the stage one hearing to which we have referred. Before Asher J, Mr Collins submitted that there was a “presumption of accessibility” which flowed from open justice being the paramount considerations under r 3.16 and the access regime. The Commerce Commission too seems to have accepted that submission,[12] but sought restricted access in relation to information it had received from non-parties, being freight forwarders, exporters, and importers who had provided commercially sensitive information to the Commission on a voluntary basis and who had generally co-operated. One such party was DHL, one of Schenker’s major competitors.
[18] The Judge then referred to the parties’ co-operative effort of filing various agreements to a statement of facts and schedules, an agreed bundle of documents, and agreements on market issues. These documents, collectively (referred to by the Judge as “the protocol”), comprised many hundreds of pages containing much detail sourced in interviews conducted by the Commission with freight forwarders, importers, and exporters. The protocol was part of the evidence considered by the Court at the stage one hearing. The statement of facts was prepared by the parties on the basis it was for the purpose of the New Zealand air cargo proceedings only and did not constitute an admission by any of the defendants in other proceedings in New Zealand or elsewhere.[13]
[19] The Judge then turned to Schenker’s submission that the effect of r 3.9 was effectively to create a presumption of accessibility, this being a consequence of the r 3.16(c) principle of open justice factors. This submission was buttressed by references to a Law Commission report.[14] Schenker had also cited BNZ Investments Ltd v Commissioner of Inland Revenue[15] in which Wild J had held, in relation to requests for permission to access court documents, that the principle of open justice was paramount and had effectively created a presumption of disclosure.[16] He referred to the provision of court documents to non-parties as being an “unintended consequence” of making open justice a paramount consideration and one that must be tolerated lest that paramount consideration be undermined.[17]
[20] A different approach had been adopted by Mallon J in Chapman v P[18] who approached r 3.16 on the basis that none of the relevant factors had been “given special primacy over the other factors and so a balancing exercise is required”.[19]
[21] Asher J assessed the procedural framework (and in our view correctly so) thus:

[26] Rule 3.9(2) sets out the basic proposition that “any person may access” the defined court documents. The rules then go on to create a default position whereby that access will be achieved if there is no objection. Rule 3.9(5) provides that the request for access is to be promptly given to the parties or their counsel, and that a party who wishes to object must do so before the relevant deadline. If there is no objection, the Registrar must promptly provide the documents.

[27] While that is the default procedural position, in the event that a party who has been served with notice of the request objects to it, the matter is then referred to a Judge for consideration. At that point the default position with its bias towards access no longer applies and the Judge must determine the request and objection applying r 3.16, which sets out the matters to be taken into account. Rule 3.16 sets out six matters, and the introductory words require the Judge to take into account “each ... [matter] that is relevant to the application, requests or objection”. There is therefore nothing in the words of the rule to indicate that primacy is to be given to any of the six particular matters, only one of which is the principle of open justice. To the contrary, the rule states that they are all to be weighed in the balancing. As is usual with such lists of matters, some will be relevant to the particular request and some will not, and some matters may assume primacy given the particular facts. But none has automatic primacy.

(Footnotes omitted.)

[22] The Judge considered that the structure of the rules and what he termed “the unambiguously non-hierarchical listing of the six r 3.16 matters”[20] demonstrated that the Law Commission’s recommendation that open justice and freedom of information were to be the cornerstones of rules covering access to court records had not in fact been adopted by the Rules Committee. He concluded:

[29] I conclude that open justice is not the paramount consideration in the new access regime. As has been observed, it is a principle and not a freestanding right. It is just one of the matters to be taken into account, and there is no presumption in favour of disclosure. In this regard I respectfully prefer the reasoning of Mallon J in Chapman to that of Wild J in BNZ Investments Ltd, and agree with the observation in McGechan that the r 3.16 factors “do not represent a hierarchy”.

(Footnotes omitted.)

[23] The Judge then stated that the six matters listed in r 3.16 were the background against which a court must consider the nature of and the reasons for the request.[21] This approach is undoubtedly correct. The r 3.16 factors need to be assessed and weighed against the request for access. We note the reason advanced here[22] was that Schenker may have suffered loss as a result of the alleged conduct of the respondents. The Judge described this reason as “underwhelming”.[23]
[24] The Judge went on to say:

[31] There is a real distinction between r 3.16(c) (the principle of open justice) and r 3.16(d) (freedom to seek, receive and impart information). The first, which is to encourage fair and accurate reporting and comment on court hearings and decisions, is relevant to applications by media organisations and commentators but has little relevance to an application by a private party pursuing a commercial purpose. It is significant that the principle of open justice is given a limited definition in the rule. The second, freedom to seek and receive information, is directly relevant when an interested private party is seeking information for its own purposes.

We shall return to this later. Undoubtedly Asher J was correct, in the context of the request before him, to focus on subcl (d), but subcl (c) (the principle of open justice) might not necessarily be limited to media organisations and commentators. Nor, in the context of non-party applications, might it have limited relevance.

[25] The Judge went on to identify and weigh relevant r 3.16 factors. Under the subcl (a) ground (orderly and fair administration of justice), he considered it was important to ensure that the provision of information by the parties to one another should be provided without the fear of it being disclosed to third parties or used “for purposes ulterior to the hearing”.[24] He viewed this as a particularly relevant consideration given the contents and scope of the protocol.[25] He considered that the interests of justice should encourage full disclosure.[26]
[26] Turning to the subcl (b) ground (confidentiality and privacy interests) the Judge accepted, as did Schenker, that some of the material in the statement of agreed facts and schedules was confidential. Dealing with the suggestion that this issue could be dealt with by redaction, the Judge, weighing the subcl (b) factor against the reason advanced by Schenker for access, was of the view that the cost of redaction (which at that stage Schenker had not offered to pay) and the time a redaction exercise would consume were important factors. He considered that changing the agreed confidential nature of the documents comprising the protocol would be “most unfair to the parties who relied on [this confidentiality clause]”.[27]
[27] The Judge concluded that to give disclosure of the protocol materials to Schenker “for no apparent good reason” would go against the orderly and fair administration of justice and in particular would reverse the confidential basis on which the protocol information had been provided.[28]
[28] The Judge regarded as “more difficult”[29] whether minutes, pleadings, issues lists, and submissions, should, together with the transcript, be disclosed. In that regard he noted there was a full judgment available which set out the issues and the Court’s findings. The pleadings and submissions, however, contained detailed references to personnel and to confidential and commercially sensitive material. The transcript was limited to opinion evidence given by expert witnesses on the issue of whether there was a New Zealand market. So access to the minutes, pleadings, issues lists, submissions, and the transcript was refused.

Analysis

[29] Mr Collins realistically acknowledged the difficulties confronting him. He accepted at the outset the r 3.16 factors were not hierarchical. He submitted, however, the Judge had given insufficient weight to the principles of open justice which would fall away if only relevant to media requests.
[30] He submitted that the request was a legitimate one to assist Schenker with contemplated parallel litigation. This submission contrasted with the written submissions of counsel for many of the respondents which saw the request as being in the nature of a fishing expedition by an international competitor.
[31] Mr Collins submitted there were identifiable errors in Asher J’s judgment. Inevitably there was a degree of overlap. These were:
[32] Four of these six grounds clearly challenge the weight the Judge gave to various factors in carrying out a discretionary and evaluative exercise. As earlier noted, appellate courts are rightly reluctant to intervene in a weighting exercise unless it is clear that the discretionary exercise or its result are wrong.[30]
[33] We consider the Judge correctly approached his task under rr 3.9 and 3.16 and reached a correct conclusion. Schenker was a non-party. The reasons advanced for access to court records were broadly cast and vague. Even if there were contemplated parallel proceedings (which was not specified in the request), there would undoubtedly have been relevant limitation periods confronting Schenker both in New Zealand and overseas jurisdictions. The Judge referred to this.[31] The Commerce Commission made no allegations of anti-competitive behaviour after February 2006.
[34] By way of illustration of the specificity required to justify an access order, we refer to GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in rec).[32] In that case, access to pleadings in three proceedings was granted by Potter J where the applicant submitted such access would assist in contemplated proceedings involving the parties to three litigation files. The applicant, however, advanced eight specific reasons as to why access would assist.[33]
[35] We reject the submission that the Judge gave insufficient weight to the subcl (c) principle of open justice. Justice, as administered by the independent judicial arm of government, is open.
  1. The principle of open justice which has common law origins has been examined by this Court and the Supreme Court alongside the s 14 right contained in the New Zealand Bill of Rights Act 1990 to seek, receive, and impart information of any kind in any form.[34] Undoubtedly the fundamental right enshrined by s 14 and the principle of open justice overlap. Citing leading Australian authority, Asher J concluded that open justice is a principle, not a freestanding right.[35] We agree with that approach.
[37] Rule 3.16(c) neither heightens nor diminishes that principle. Rule 3.16 is not hierarchical. None of its subclauses, including subcl (c), can be prioritised. The relevance and weight ascribed to each subclause will depend on the context of each r 3.9 request and in particular the nature of and the reasons for an application or request. It is trite to observe that each request will give rise to different considerations and will require a specifically focussed evaluation.
[38] Rule 3.16(c) in any event contains the critical adverb “namely”. The principle is to be applied in a r 3.16 context to encouraging fair and accurate reporting of and comment on hearings and decisions. The Judge was right to comment[36] that the subclause could have little relevance to a request by a private party pursuing a commercial purpose. That was Schenker’s situation. But it might not necessarily follow that the principle will always have limited applicability to a non-party request. Nor may the class of non-parties be limited to the media and commentators. We make this comment solely to ensure that Asher J’s analysis[37] is not seen as having a wider application than he intended.
[39] We consider the Judge was correct to treat Schenker’s request as primarily one to which subcl (d) applied (to seek and receive information). We also consider that the Judge was correct in his weighting of the subcl (a) and (b) factors. Highly relevant in the context of the proceeding to which Schenker’s request attached was the subcl (a) fair administration of justice factor and the subcl (b) protection of confidentiality factor. We consider it would have been wrong in principle to grant a request which would have had the effect of rendering nugatory the basis on which the parties had placed the protocol evidence before the Court.
[40] In that regard we note the submission of Mr Dixon for the Commerce Commission that there is a legitimate public interest in protecting disclosed information of that type. Parties might otherwise have little incentive to participate in what Mr Dixon termed “the Commission’s leniency and co-operation programmes”. We accept that negotiating the statements of fact contained in the protocol was a significant undertaking for all parties, containing as they did documents which were commercially sensitive and which were provided in confidence to the Commission.
[41] The Judge’s approach is further re-enforced by the submission of Ms Barratt for the non-party DHL. We accept that DHL would never voluntarily have provided sensitive commercial information relating to its clients’ fee structures and costings but for its clear understanding that such information would be protected from examination by one of its global competitors such as Schenker.
[42] In short we consider that the administration of justice is best served, in the context of this particular request and proceeding, by ensuring that the Commerce Commission is able to gather evidence and give assurances of confidentiality in appropriate cases. This was one such case. The weighting and conclusions of Asher J were correct.
[43] We see no reason to interfere with the Judge’s approach and conclusion relating to redaction. Nor do we see any merit in the submission that the judgment was outwardly silent on a r 3.13 request. The outcome would inevitably have been identical.
[44] There might, as is accepted in Mr Dixon’s submissions, have been some sense in allowing Schenker’s request to copy the pleadings. However, it is hard to see what benefit would result for Schenker which could not be gained from reading the first stage judgment in the proceeding (or subsequent judgments). We note too that the Judge considered there were portions of the pleadings which referred to confidential information.
[45] Our conclusion is that Asher J correctly exercised his r 3.9(6) discretion. In particular his evaluative consideration of the nature of the reasons for Schenker’s request under r 3.16 cannot be faulted.

Result

[46] For these reasons the appeal is dismissed.

Costs

[47] All respondents are entitled to costs. This was accepted by Schenker. Costs for a standard appeal on a band B basis are awarded to the first and second respondents and to DHL. An additional set of costs is awarded on the same basis to the seven respondents for whom Mr Land appeared. Despite the fact that a number of the respondents appeared with two counsel, we certify costs in each case for one counsel only.

Solicitors:


Glaister Ennor, Auckland for Appellants
Meredith Connell, Auckland for First Respondent
Bell Gully, Auckland for Second Respondent
Kensington Swan, Auckland for Third to Ninth Respondents
Jones Fee, Auckland for DHL Global Forwarding (New Zealand) Ltd (Non-party given leave)


[1] Which included the second to eleventh respondents and other airlines who are not parties.

[2] A “stage one decision” determined that there was a market in New Zealand (a jurisdictional requirement) for air cargo services from overseas countries and regions to New Zealand. Commerce Commission v Air New Zealand Ltd (2011) 9 NZBLC 103,318 (HC).
[3] See [6] for the precise nature of this request.
[4] Commerce Commission v Air New Zealand Ltd [2012] NZHC 271.

[5] The second to ninth respondents unsuccessfully challenged this Court’s jurisdiction to hear the appeal. Schenker AG v The Commerce Commission [2012] NZCA 245, (2012) 21 PRNZ 167.

[6] Rule 3.8, largely permissive, applies to the right of parties to access a court file or documents.

[7] A “relevant deadline” is prescribed by r 3.10 and is relatively tight (three working days), a trap perhaps for lawyers unfamiliar with the Rules.


[8] May v May (1982) 1 NZFLR 165 (CA).
[9] Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
[10] Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 (footnotes omitted).

[11] The traditional May v May analysis of failing to consider relevant matters and/or considering irrelevant matters: see May v May, above n 8, at 170.
[12] Commerce Commission v Air New Zealand Ltd, above n 4, at [7].
[13] See generally at [11]–[14].
[14] Law Commission Access to Court Records (NZLC R93, 2006).
[15] BNZ Investments Ltd v Commissioner of Inland Revenue (2010) 24 NZTC 23,997 (HC).
[16] At [36].
[17] At [38].
[18] Chapman v P (2009) 20 PRNZ 330 (HC).
[19] At [31].
[20] At [28].
[21] At [30].
[22] Above at [6].

[23] At [37]. Mr Collins in his submissions to us accepted that he was unable to amplify this reason, describing it quaintly and colloquially as “it is what it is”.
[24] At [39].
[25] Above at [18].
[26] At [40].
[27] At [46].
[28] At [49].
[29] At [51].
[30] Above at [15].
[31] At [34].

[32] GFD I LLP v Melview (Kawarau Falls Station) Investments Ltd (in rec) [2012] NZHC 1796.
[33] At [15].

  1. [34] Mafart v Television New Zealand [2006] NZSC 33, [2006] 3 NZLR 18 at [7] and [39]; R v Liddell [1995] 1 NZLR 538 (CA) at 546; and Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 (CA) at [41].

[35] John Fairfax Publications Pty Ltd v Ryde Local Court [2005] NSWCA 101, (2005) 62 NSWLR 512 at [29], approved in Seven Network Ltd v News Ltd (No 9) [2005] FCA 1394, (2005) 225 ALR 256 at [23].
[36] At [31], set out above at [24].
[37] At [36].


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