[2016] FWC 1690


Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Mr Tre Hain
Ace Recycling PTY LTD


SYDNEY, 16 MAY 2016

Application for relief from unfair dismissal – Verbal altercation with CEO – Applicant’s language directed to the CEO was a valid reason for dismissal – Procedural unfairness – Applicant seeking notice and unpaid wages – Unfair dismissal application not appropriate vehicle for recovery of unpaid wages – Failure to pay entitlements on termination of employment may go to fairness - Respondent in liquidation – Remedy for unfair dismissal granted.


[1] Mr Tre Hain applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to his dismissal by Ace Recycling (QLD) Pty Ltd (Ace). Mr Hain worked for Ace as a labourer from 26 November 2014 until his dismissal on 22 September 2015.

[2] Mr Hain was dismissed by text message following a verbal altercation by telephone with the owner of Ace, Mr Tony Di Carlo. It is not in dispute that during that altercation Mr Di Carlo swore at Mr Hain, and Mr Hain called Mr Di Carlo an “old cunt”. Mr Hain’s case is that he was directed to work overtime in circumstances where he had not been paid for previous overtime, and that when he raised this with Mr Di Carlo, his response was aggressive, which provoked the verbal altercation that ensued. Mr Hain said that he was a good employee and no issue had been previously been raised about his conduct, capacity or work performance. Mr Hain was represented before the Commission by his partner, Ms Verhagen.

[3] Ace failed to file a response to Mr Hain’s application, attend conciliation, file material in compliance with Directions or answer queries from the Commission relevant to the matter. An appearance for Ace was entered at the hearing by an employee, Mr Fernando, who was permitted to make submissions and to cross-examine witnesses for Mr Hain and to give evidence. Mr Fernando did not seek to call any other witnesses. The Company’s position as articulated by Mr Fernando is that:

[4] While I have some sympathy with this submission it is also the case that it takes two to tango. Ace did not take advantage of the many opportunities it was given to put its case before the Commission and as a result, Mr Hain’s evidence about Mr Di Carlo’s part in the altercation was uncontested. Mr Fernando also asserted that Mr Hain was a substandard employee and had made claims for payments to which he was not entitled.

[5] Mr Hain’s application was made within the time required in s. 394(2) of the Act. It is not in dispute that Mr Hain is a person protected from unfair dismissal as defined in s.382 of the Act. Ace has not asserted that it is a small business and on the basis of responses to questions I asked at the hearing I am satisfied that it was not. 2 The dismissal was not a case of genuine redundancy. The matter was dealt with by way of a hearing, as it was considered that this was the appropriate course.


[6] The manner in which the parties have conducted the application has caused delay in the Commission dealing with it. Mr Hain went on an overseas trip from 27 October until 28 November and was not available to attend a conciliation conference until after his return. Mr Hain said that he went on this trip because he had an opportunity to do so. The application was served on Ace on 13 October 2015 directed to the attention of Mr Di Carlo, who effectively ignored the matter and made no effort to file a response as sought or to otherwise engage with the Commission. Notes on the file indicate that staff of the Commission telephoned Ace on a number of occasions and confirmed the contact email address for Mr Di Carlo to which the Commission was directing correspondence.

[7] A conciliation conference was listed on 30 November 2015, after Mr Hain’s return to Australia. Ace did not attend the conciliation conference and did not request an adjournment or provide an explanation for non-attendance. When attempts to communicate with Ace were unsuccessful, the application was listed for hearing from 2 to 4 March 2016 (later reduced to one day – 3 March 2016) and Directions were issued for the parties to file and serve submissions and witness statements. Mr Hain filed his submissions and witness statements on 4 January 2016 in accordance with the Directions. Ace was required to file its material by 25 January 2016 and did not comply with that Direction or seek an extension of time in which to file material.

[8] On 28 January 2016, in response to an email from the Commission seeking clarification from Ace as to whether it intended to seek permission to call witnesses at hearing, Mr Fernando advised that the Company was in voluntary administration. Mr Fernando further advised that the application for an unfair dismissal remedy was disputed and Ace would file witness statements by Wednesday 3 February. Ace did not file witness statements by 3 February 2016, or at all.

[9] After a number of fruitless attempts by the Commission to obtain further clarification from Ace in relation to its trading status to enable consideration of whether the Commission was stayed from hearing Mr Hain’s application by the operation of the Corporations Act 2001 (the Corporations Act), I issued Directions on 12 February 2016 requiring Ace to file evidentiary material by 19 February, about its trading status and/or to advise whether it asserted that Mr Hain’s application was stayed by the operation of the Corporations Act. The correspondence informed Ace that if no response was received, I would determine the matter of whether the application before the Commission was stayed and, and if necessary, hear and determine Mr Hain’s application for an unfair dismissal remedy, in a manner that may be adverse to Ace.

[10] No response was received from Ace and on 22 February 2016 my Associate contacted the Company by telephone and email. Email correspondence was also sent to the Managers/Liquidators of Ace seeking clarification about the Company’s trading status. On 24 February 2016, Mr Wollinski, on behalf of the Managers/Liquidators, responded as follows:

[11] Attached to Mr Wollinski’s correspondence was an Order of the Supreme Court of Queensland pursuant to s.459A of the Corporations Act that Ace be “wound up by the court in insolvency”. The correspondence from the Liquidator/Manager was forwarded to Mr Hain. On 24 February 2016, I corresponded with the parties advising my preliminary view that Mr Hain’s application for an unfair dismissal remedy is not stayed by the Corporations Act, and requiring a response by 25 February as to whether they had a different view. On 26 February 2016, having received no response to previous correspondence, my Associate again forwarded an email to the parties confirming that the hearing in relation to Mr Hain’s application for an unfair dismissal remedy would be held on Thursday 3 March 2016.

[12] On 3 March 2016, the day of the hearing, Mr Fernando contacted my Chambers at 9.09 am and spoke with my Associate, who explained that if the Company was not represented at the hearing an Order may be made against the Company. At 9:17am on that date, Mr Fernando again contacted my Chambers and spoke with my Associate who informed him that the matter would proceed and that Orders may be made against Ace.

[13] The Hearing proceeded on 3 March 2016. Mr Fernando entered an appearance for Ace and tendered a document on the letterhead of “Ace Recycling” dated 3 March 2016, signed by Mr Neil Jenkins, General Manager, authorising Mr Fernando to “act” on behalf of Ace in respect to Mr Hain’s application for unfair dismissal remedy. Mr Fernando cross-examined Mr Hain on his evidence and was given leave to provide some oral evidence.


[14] Obtaining evidence about the trading status of Ace or its reasons for dismissing Mr Hain was akin to pulling teeth. At the hearing, Mr Fernando stated that the application for voluntary administration was “knocked back” 3 and that the company is now in liquidation. I reiterated to Mr Fernando my preliminary view that on the material before me the Corporations Act did not stay Mr Hain’s application in the Commission and invited Mr Fernando to provide any submissions to the contrary.4 Mr Fernando made no submission to the contrary.5

[15] The Supreme Court Order, sent to the Commission by the Liquidator, evidences that Ace is being wound up in insolvency pursuant to s.459A of the Corporations Act. Section 471B of the Corporations Act provides:

[16] There are a number of Decisions of the Commission to the effect that the Commission is not a “court” for the purposes of provisions of the Corporations Act, which stay civil proceedings against corporations that are “in a court”. 6 On the basis of the evidence before me, and in the absence of any submission to the contrary from either Ace or the Liquidator, I am satisfied that the Commission is not stayed by the Corporations Act from dealing with Mr Hain’s application for an unfair dismissal remedy. It is therefore necessary to consider whether Mr Hain’s dismissal was unfair on the grounds that it was harsh, unjust or unreasonable.


[17] In considering whether it is satisfied that a dismissal was unfair on the basis that it was harsh, unjust or unreasonable, the Commission must take into account the criteria in s.387 of the Act, as follows:

[18] The employer bears an onus of establishing that there was a valid reason for a dismissal. 7 A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”8 The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts,9 and the validity is judged by reference to the Tribunal’s assessment of the factual circumstances as to what the employee is capable of doing or has done.10 

[19] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable.  A dismissal may be:


[20] Mr Hain states that he commenced employment with Ace on 26 November 2014 but was employed “off the payroll” until 30 April 2015. As evidence of the date he commenced employment with Ace, Mr Hain tendered a copy of a text message exchange conducted on 25 November 2014 with Jesse Seidenkramps, a current employee of Ace, in the following terms:

[21] Mr Hain also states that he was employed on a full time basis and tendered pay advice slips evidencing this. In the absence of evidence to the contrary I am satisfied that Mr Hain’s employment with Ace commenced on 26 November 2014 and that he was employed on a full time basis.

[22] According to Mr Hain, on 22 September 2015, Mr Scot Monahan, Production Manager, informed employees that Mr Di Carlo required everyone at the yard to work overtime and that “if they didn’t they would be sacked”. Mr Hain advised Mr Monahan that he refused to work overtime on that day as he had “still not been paid from previous overtime”. Mr Monahan requested that Mr Hain contact Mr Di Carlo to discuss this refusal.

[23] Mr Hain contacted Mr Di Carlo at 2:04pm on 22 September 2015 by telephone and had a conversation with Mr Di Carlo in the following terms, as described in Mr Hain’s witness statement:

[24] After this phone call Mr Hain left work as he had completed his ordinary hours for that day. On returning to his home, Mr Hain noticed that he had a missed call from Mr Di Carlo. Mr Hain’s message preferences convert voice messages to text. The converted text message from Mr Di Carlo tendered by Mr Hain was in evidence and states:

[25] Mr Hain said that he did not respond to the message because he considered that Mr Di Carlo was attempting to provoke him. An hour later, Mr Hain received a text message from Mr Di Carlo stating:

[26] Mr Hain said in his oral evidence that his dismissal “came out of the blue”. After his dismissal, Mr Hain met with Mr Di Carlo and attempted to negotiate his claim for unpaid wages. The unpaid wages claimed by Mr Hain include payment in lieu of notice on termination of employment, 24 ordinary hours worked in the week he was dismissed, five hours of overtime and accrued annual leave. Mr Hain also said that he was not paid superannuation entitlements during the period of his employment. Mr Hain said that after a meeting with Mr Di Carlo, agreement was reached in relation to these matters but Mr Di Carlo did not honour the agreement. After further attempts to contact Mr Di Carlo to settle the matter were unsuccessful, Mr Hain filed his unfair dismissal application.

[27] Mr Hain obtained alternative employment the day after his dismissal from Ace. 12 This employment is not full-time, and is undertaken through a labour hire agency. As previously noted, Mr Hain proceeded on an overseas trip from 27 October until 28 November. Under cross-examination, Mr Hain maintained that during the telephone conversation on 22 September 2015, Mr Di Carlo initiated the abuse and he retaliated. Mr Hain denied that he claimed overtime that he was not entitled to and maintained that although machines were broken on the day for which he claimed overtime, he was still performing work including cleaning up the yard. Mr Hain also said that Mr Monaghan was his supervisor on that date and did not send employees home.

[28] Mr Hain denied that he fixed his car on three days in the week before his dismissal on which he claimed sick leave. Mr Hain said that he had influenza B and pointed to the fact that he had provided medical certificates and a written diagnosis of influenza B, which were tendered to the Commission as appendices to his witness statement. Mr Hain agreed that he had provided these documents during a meeting with Mr Di Carlo after his dismissal, but said that he had not been required to provide proof of his illness before his dismissal. Mr Hain was paid sick leave for these days at the time the leave was taken. Further, Mr Hain said that he was the only employee with a key to the Company’s premises and was entrusted with opening and locking the premises, indicating that he was not a substandard employee.

[29] Ace was warned on some six occasions of the repercussions of failing to put evidence in support of its case to the Commission, and those warnings were ignored. Notwithstanding non-compliance with Directions of the Commission, Ace was permitted to call evidence from Mr Fernando. However, it emerged from Mr Fernando’s evidence that he is a new employee of Ace and was not employed at the time Mr Hain was dismissed. 13 Mr Fernando agreed that Mr Monaghan was Mr Hain’s supervisor and was present at the yard on the date that the machines were broken down. Mr Fernando also agreed that there was no documentary or other evidence before the Commission to support the contention that Mr Hain was a substandard employee.14 Further, Mr Fernando conceded that he had no evidence to contradict Mr Hain’s assert that he had been entrusted with a key to the Company’s premises and with opening and locking those premises. Ms Verhagen put to Mr Fernando that if Mr Hain was a substandard employee as asserted, why was it that Mr Di Carlo had indicated to Mr Hain that if he remained employed at Ace until Christmas he would receive a substantial bonus. Mr Fernando that he had been told the same thing and the bonus payment was an incentive to retain staff. 15


[30] Turning to the criteria in s. 387(a) of the Act, with respect to the question of whether there was a valid reason for Mr Hain’s dismissal, Mr Hain gave undisputed evidence about the conversation he had with Mr Di Carlo on 22 September 2015. On that evidence Mr Hain directed a totally offensive comment to Mr Di Carlo, the CEO of Ace. While I accept that Mr Hain raised a reasonable query about payment for overtime he claimed to have worked, and that Mr Di Carlo used some profanity during the conversation, that profanity was not in the form of an insult directed to Mr Hain. Rather, it was to underscore points Mr Di Carlo was making about his own financial circumstances. Had Mr Hain left it at “that’s not my fucking problem you owe me money”, it may have been an understandable response in the context of the conversation. However, Mr Hain took matters to an entirely different level when he went on to call Mr Di Carlo an “old cunt”.

[31] Such conduct on the part of Mr Hain changed the basis of the conversation from a robust – albeit profanity laden – discussion about the subject of overtime payments that Mr Hain believed he was owed, to a discussion in which Mr Hain behaved in a manner that was rude and disrespectful of Mr Di Carlo and his position as CEO, and was not justified. While there was no evidence from Mr Di Carlo about the effect of that comment, considered objectively, it is offensive and indicative of a breakdown in the employment relationship. In my view, an employer will generally have a valid reason to dismiss an employee who directs such a comment to the CEO or a manager or to another employee, although there may be other factors – such as provocation – that make the dismissal otherwise unfair.

[32] On Mr Hain’s own evidence of the conversation with Mr Di Carlo, I do not accept that it was reasonable for Mr Hain to make the comment that he made or that he was provoked to such an extent that it was justified. I am satisfied and find that Mr Hain calling Mr Di Carlo an “old cunt” was a valid reason for dismissal.

[33] Ace has not established that Mr Hain was a substandard employee or that he claimed overtime to which he was not entitled, and I do not accept that these matters were reasons for his dismissal. The assertions in this regard are contrary to the evidence of Mr Hain, which I accept. It is improbable that a substandard employee would be given a key to the premises and made responsible for locking and unlocking them. In any event if these matters were reasons for Mr Hain’s dismissal, there was no evidence that he was notified or given an opportunity to respond to them.

[34] In relation to whether Mr Hain was notified of the reason for his dismissal, as provided in s. 387(b) of the Act, I have no doubt that in the circumstances of the altercation, Mr Hain would have well understood the text message sent to him later in the afternoon by Mr Di Carlo in which Mr Di Carlo referred to himself as “the old man” and told Mr Hain “do not come back tomorrow” as being a reference to the verbal altercation earlier that day. I do not accept Mr Hain’s evidence that his dismissal came out of the blue in the context of what he said to Mr Di Carlo during that altercation. In my view, an employee who speaks to the CEO in the manner Mr Hain did should not be surprised at being dismissed.

[35] However, Mr Hain was notified of his dismissal and summarily dismissed by text message. I do not accept that a text message is an appropriate mechanism to advise an employee of dismissal and the reasons for it. The purpose of such notification is to trigger other incidents of procedural fairness such as an opportunity to respond to a reason for dismissal based on capacity or conduct. An employee who is notified of a dismissal by text message and simultaneously informed that the dismissal is immediate, has not been notified of the reason for dismissal in the context of s. 387(b) of the Act and the related provisions relevant to procedural fairness.

[36] In relation to s. 387(c) of the Act, Mr Hain had no opportunity to respond to the reason for his dismissal. Mr Hain was verbally abused by Mr Di Carlo for raising a query about his entitlement to be paid overtime, a matter which he had every right to seek information about. Mr Di Carlo’s reaction to Mr Hain’s query was totally inappropriate. If Mr Di Carlo believed that Mr Hain was not entitled to overtime he could have met with him to discuss the matter. Instead Mr Di Carlo verbally abused Mr Hain and when Mr Hain reacted to that verbal abuse, dismissed him without any further discussion. Had a discussion been held, Mr Hain might have apologised for making the comment, or Mr Di Carlo may have accepted that Mr Hain should have been paid for overtime previously worked, or that it was reasonable for Mr Hain to refuse to work overtime when he had not been paid for previous overtime. I note however, that Mr Hain appeared to have no remorse about his offensive and inappropriate language or that he directed that language to Mr Di Carlo rather than simply using it to emphasise his point in the argument with Mr Di Carlo.

[37] As there were no discussions relating to the dismissal, the question of whether Mr Hain requested a support person does not arise, so that s. 387(d) is not relevant. It is improbable that Mr Hain was dismissed for unsatisfactory work performance and s. 387(e) is not relevant. As previously noted, if Mr Hain was dismissed for those reasons he was notified of or given an opportunity to respond to, any such issues.

[38] In relation to s. 387(f) there is no evidence about how the size of the enterprise impacted on the manner in which Mr Di Carlo dealt with Mr Hayne. Given the manner in which Mr Di Carlo engaged with Mr Hain, and with the Commission, it is doubtful that Ace has dedicated human resource management specialists or expertise, as such specialists would not have advised Mr Di Carlo to act in the manner that he adopted in his dealings with Mr Hain and with the Commission.

[39] I also consider, pursuant to s. 387(h), that there are other matters relevant to whether Mr Hain’s dismissal was unfair. In this regard, I have given consideration to whether Mr Hain’s conduct was serious misconduct justifying summary dismissal, and have concluded that it was not, for the following reasons. Mr Di Carlo has systematically ignored every opportunity offered to him to put his case in defence of Mr Hain’s application for an unfair dismissal remedy. Ace has called no evidence about the altercation in the hearing of the application and has made no submission addressing whether Mr Hain’s part in the altercation constituted serious misconduct as opposed to misconduct. On Mr Hain’s undisputed version of the altercation, Mr Di Carlo used inappropriate language and behaved in a manner which is neither reasonable nor appropriate for the CEO of a firm with 43-48 employees. An employee who queries terms and conditions of employment should not be spoken to by a manager, much less the CEO, in such a manner and in those circumstances Mr Hain’s part in the verbal altercation was not serious misconduct, notwithstanding that it was a valid reason for dismissal

[40] Mr Hain’s uncontested evidence is that he was asked to work overtime in circumstances where he had not been paid for overtime that he had previously worked. Mr Hain also maintains that when he was dismissed, he was not paid his accrued entitlements or notice. While an unfair dismissal application is not an appropriate vehicle to deal with failure to comply with legislative entitlements with respect to notice or payment in lieu, or claims for payment of amounts to which the employee was legally entitled, such a failure goes to fairness and is a matter that can be taken into account in an overall assessment of whether a dismissal was unfair.

[41] In the present case, after weighing the criteria in s. 387 of the Act, I have concluded that Mr Hain’s dismissal was unfair. While there was a valid reason for dismissal, the altercation occurred as a result of an inappropriate response from Mr Di Carlo to a query from an employee about payment for overtime. The dismissal was procedurally unfair and in the context of the overall tone of the telephone conversation between Mr Hain and Mr Di Carlo on 22 September 2015, Mr Hain’s part in the altercation did not warrant summary dismissal.


[42] Having decided that Mr Hain was unfairly dismissed it is necessary to determine whether he should have a remedy. In relation to remedy, s. 390 of the Act provides as follows:

[43] For reasons set out below, s. 391 of the Act in relation to remedy is not relevant. In relation to compensation s. 392 of the Act provides:

[44] Pursuant to ss. 390(1)(a) and (b) of the Act, I am satisfied that Mr Hain was a person protected from unfair dismissal and that he has been unfairly dismissed. Mr Hain has made an application for an unfair dismissal remedy under s. 394 of the Act and in my view should have a remedy for his unfair dismissal. Mr Hain does not seek reinstatement. He has found other employment and Ace is in liquidation. Accordingly, I am satisfied and find that reinstatement is not appropriate.

[45] I also consider that an Order for compensation is appropriate. In relation to the consideration in s. 392(2)(a), Ace is in liquidation and Mr Hain will need be treated as a creditor. There is no evidence from Ace that the Order for compensation in this matter that I intend to make will have any additional impact on its current situation. In relation to s. 392(2)(b) of the Act, Mr Hain’s uncontested evidence establishes that he had 11 months service with Ace.

[46] I have concluded, for the purposes of s. 392(2)(c), that Mr Hain would have remained in employment for a period of no more than five weeks from 22 September 2015. In reaching this conclusion I have taken the following matters into account. It is probable that the verbal altercation between Mr Hain and Mr Di Carlo would have been a significant barrier to long term employment. There is no evidence from Mr Hain that he would have remained in employment for a lengthy period but for his dismissal and the comment that he made to Mr Di Carlo during their telephone altercation is not indicative of an intention to have a long term relationship with either Mr Di Carlo or his Company. Mr Hain started new employment the day after his dismissal and thereafter concentrated on recovering unpaid wages from Ace. It was only when this effort was unsuccessful that Mr Hain made his unfair dismissal application.

[47] Mr Hain’s opportunity to go on an overseas trip might have arisen even if he remained in employment, and Mr Di Carlo may not have granted him leave to undertake the trip. On the basis of the wages claim articulated by Ms Verhagen on behalf of Mr Hain, he did not have sufficient leave at the point he was dismissed to cover a one month absence from work. There was also a real possibility that the financial situation which caused Ace to go into liquidation on 29 January 2016 would have impacted on employment at an earlier time and that Mr Hain could have been terminated on that basis.

[48] Mr Hain provided evidence of his wages establishing that he was paid $828.00 per week gross ($705.00 net) for ordinary hours. In the five week period after his dismissal, Mr Hain would have earned $4,140.00 gross ($3,525.00 net) had he remained in employment. In that same period, Mr Hain earned an amount of $3,038 from the employment he obtained. I assume that the figures provided by Mr Hain are net earnings on the basis of the bank statement he provided. Mr Hain did not provide gross figures for his earnings. He stated that his new employment is casual and performed for labour hire agencies. In all of the circumstances I consider it appropriate to award Mr Hain an amount of $828.00 less tax according to law, as compensation for his unfair dismissal. An Order to that effect will issue with this Decision.

[49] Mr Hain was also provided with information from the Liquidator of Ace about making a claim for outstanding entitlements. If Mr Hain is entitled to unpaid wages and superannuation, then that is a matter he can take up with the Liquidator. I intend to provide a copy of this Decision and the Order arising from it to the Liquidator. I trust that notwithstanding that it has played no part in these proceedings to date, the Liquidator will deal appropriately with Mr Hain.

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 1   Transcript of proceedings PN192.

 2   PN30 to PN33.

 3   PN12.

 4   PN13 to PN15.

 5   PN16.

 6   For example see: Bruce v Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen) [2013] FWC 2704, findings in respect of the Corporations Act were not disturbed by the Full Bench in Bruce v Fingal Glen Pty Ltd (in liq) [2013] FWCFB 5279; Christie v Kennedys Personal Training Pty Ltd [2015] FWC 7274.

 7   Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 5; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 at 204.

 8   Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.

 9   Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.

 10   Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.

 11   Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR  410 at 465-8 per McHugh and Gummow JJ.

 12   Transcript of proceedings PN64.

 13   Transcript of proceedings PN89.

 14   Transcript of proceedings PN194.

 15   Transcript of proceedings PN200.

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