Author: Laura Betts

24 Feb

A Bequest Made in Error

Laura Betts In the News, Litigation, Wills Tags: , , 0 Comments

I recently came across an article which describes how a woman in the United States inadvertently gifted a share of her estate to the wrong beneficiary.

It would appear Esther Patton wanted to thank her local fire department for their dedication and service to her over the years. She instructed her lawyer to include a bequest to the Sebastopol Fire Department in her Will. However, Ms. Patton was mistaken, as it was in fact the Gold Ridge Fire District who had responded to her calls approximately once a month over the course of several years.

While the two fire departments were located in close proximity to one another, they serviced different areas.

When the Sebastopol Fire Department received a cheque for nearly $82,960.00 USD and a letter explaining that the funds were a token of Ms. Patton’s gratitude, it became clear that an error had been made.

Thereafter, uncertainty arose as to who was legally entitled to the bequest, Sebastopol or Gold Ridge.

There was no ambiguity on the face of the Will, in that the Will clearly directed the gift was to go to Sebastopol. However, on the totality of the evidence, it was clear Ms. Patton had intended that gift go to Gold Ridge.

The Ontario Court of Appeal case, Robinson v. Rondel, confirmed that where there is no ambiguity on the face of the will and the testator has reviewed and approved the wording, the court may rectify the will and correct unintended errors in three situations:

(a) where there is an accidental slip or omission because of a typographical or clerical error;

(b) where the testator’s instructions have been misunderstood; or

(c) where the testator’s instructions have not been carried out.

In this case it was not necessary for the parties to seek the assistance of the Court as they amicably agreed that that Sebastopol would keep 1/3 and Gold Ridge would keep the remaining 2/3.

Nevertheless, this article illustrates the issues that can arise when inadvertent mistakes are made in the preparation of a Will.

Other Hull & Hull LLP Blogs & Podcasts that may be of interest to you:

Thank you for reading.

Laura Betts

23 Feb

Adoption and Estate Planning in Japan

Laura Betts Estate Planning, General Interest, In the News Tags: , , , , 0 Comments

A recent article published in the Japan Times explains how changes to domestic tax legislation could be causing a rise in the number of adoptions in Japan.

Apparently, the tax changes which were introduced in Japan in 2015 lowered the existing tax exemption threshold from ¥50 million to ¥30 million and reduced the existing deduction of ¥10 million for each heir to ¥6 million per heir.

As a result, the estates of a significantly wider segment of the population are now subject to inheritance taxes, and there appears to be a corresponding rise in the number of individuals seeking to reduce their tax burden through adoption.

According to the article, adoption for the sake of “financial adjustment” has always been a common practice in Japan. In fact, such adoptions, usually of adults who only need to be at least one day younger than the adopting parent, constitute the overwhelming majority of adoptions in Japan. In many cases, adults are adopted when a family does not have someone to take over a family business or a male heir who can carry on the family name. The article states that more recently, however, such adoptions appear to be motivated by the desire to reduce inheritance taxes.

The article refers to a recent case of the Supreme Court of Japan, in which the deceased had adopted his son’s son (his “grandson”), thus giving him four heirs instead of three — his son, his grandson (now second son) and two daughters. As a result, the son’s family stood to receive more of the father’s assets than either of the daughters.  The daughters commenced proceedings seeking that the adoption be declared void as it had merely been intended as a tax-savings measure. However, the Supreme Court of Japan ruled that the intention to reduce the amount of taxes would not automatically annul the adoption itself and upheld the adoption, which many believe in effect, condones this practice.

This is not the first time adoption has been used in estate planning. Before same-sex marriage was legalized, adoption was used on occasion in Canada and the United States as a means of ensuring the transfer of an inheritance between same-sex couples. An article published in the New York Times in 2009, which outlines the use of adoption for such purposes can be accessed here.

Other Hull & Hull LLP Blogs & Podcasts that may be of interest to you:

Thank you for reading.

Laura Betts

21 Feb

What happens when an estate trustee dies?

Laura Betts Executors and Trustees Tags: , , 0 Comments

Section 2 of Ontario’s Estates Administration Act provides that upon a person’s death, all real and personal property formerly vested in him/her, with the exception of jointly owned property, will devolve to and become vested in his/her estate trustee, subject to the payment of estate liabilities, for those beneficially entitled thereto (i.e. the beneficiaries).

What happens when the estate trustee who has been actively administering an estate, and in whom the estate property has vested, dies before the administration is finalized?  Will this prevent the estate from being distributed?

Section 3(2) of the Trustee Act  provides, where there are multiple estate trustees and one dies then the powers and duties of the deceased estate trustee will vest in the survivor(s) unless the Will contains a provision to the contrary.

If the sole appointed estate trustee, or the sole surviving estate trustee, dies before the estate has been fully administered and an alternate estate trustee is named in the Will, then the alternate would apply to the court for a Certificate of Appointment of Succeeding Estate Trustee With a Will to obtain the authority to deal with the estate assets.

If there is no alternate estate trustee named in the Will, or the alternate named estate trustee decides to renounce his/her right to act as estate trustee, the executorship will “devolve to” (pass to) the executor named in the sole or last remaining executor’s Will (the “New Estate Trustee”).  The New Estate Trustee will need to apply to the court for a Certificate of Appointment of Succeeding Estate Trustee With a Will in order to obtain the authority to deal with the estate assets.

However, only an executor who has proved a Will can transmit the executorship of the original estate. In other words, for devolution of executorship to apply, the original estate trustee must have obtained probate (i.e. a Certificate of Appointment) before she/he died.

The executorship will not devolve where the sole estate trustee, or the last surviving estate trustee:

(i) dies intestate (without a Will);

(ii) fails to appoint an estate trustee; or

(iii) fails to prove the Will (i.e. does not obtain probate).

In such circumstances the original estate must be administered as if no executor had ever been appointed. While this may delay the administration of the original estate, it should not prevent that estate from being distributed.

Thank you for reading.

Laura Betts

Other Hull & Hull LLP Blogs & Podcasts that may be of interest to you:

 

16 Dec

Are Embryos Entitled To An Inheritance?

Laura Betts Estate & Trust, Estate Planning, In the News, Litigation, Trustees Tags: , , , , , 0 Comments

A rise in the use of assisted reproductive technologies has resulted in many novel legal issues.

It would appear that Modern Family actress, Sofia Vergara, is embroiled in the most recent case to push the boundaries in this area.

According to a recent article published by Global News, Vergara is apparently being sued by two frozen embryos, which she created with her former partner, Nick Loeb in 2013.

Following their split in 2014, Nick tried, unsuccessfully, to sue Vergara for custody of the embryos.

A new lawsuit recently commenced in Louisiana,  claims the embryos, which have been named Isabella and Emma, are being deprived of their inheritance from a trust by not being born.

The claim which is being advanced by the Trustee of the trust, is seeking that the embryos be transferred to Nick so that they can be born and receive their inheritance.

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Whether an embryo has a right to inherit is a question that has concerned estate practitioners for some time, particularly, in circumstances where an embryo is implanted and born after the donor’s death.

In Ontario, section 47(9) of the Succession Law Reform Act provides that descendants and relatives of the deceased conceived before and born alive after the death of the deceased shall inherit as if they had been born in the lifetime of the deceased and had survived the deceased. However, there is no legislation in Ontario which explicitly provides or denies children conceived after death the status of a child of the deceased. As such, without proper planning, children conceived and born through the use of assisted reproductive technologies may be unintentionally disinherited.

This case poses a novel argument which is clearly relevant to estate practitioners. It will be interesting to see how it is decided.

Thank you for reading.

Laura Betts

 

Other articles which may be of interest to you:

15 Dec

Defamatory Facebook Posts Result in $65,000 Damage Award

Laura Betts General Interest, Litigation Tags: , , , 0 Comments

When disputes arise regarding a loved one’s Estate tensions often mount, but don’t go venting your frustrations on social media!

In recent decision of the British Columbia Supreme Court, Pritchard v. Van Nes, 2016 BCSC 686, the Honourable Justice Saunders found the defendant liable to pay $50,000 in damages for defamation, plus another $15,000 in punitive damages as a result of posts made to Facebook.

Facts

The plaintiff was a school teacher. He and his family became neighbours of the defendant in 2008. Tensions between the plaintiff and defendant began in 2011, when the defendant installed a large fish pond along the rear of her property. The structure was on two levels, and had water flowing over two waterfalls. The plaintiff began complaining to the defendant about the noise created by waterfalls, and their relationship began to deteriorate. In the years that followed, there were numerous disagreements concerning the defendant’s dog defecating on the plaintiff’s property, parking issues, trespassing and loud parties.

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The defendant chose to vent on Facebook in a manner that was considered defamatory. She identified the plaintiff by his first name, his occupation, the school and the school district in which he worked, and by his position as her next-door neighbour.

The defendant’s friends commented, liked and shared the post with others. One friend even went so far as to send the plaintiff’s employer an email advising them of the allegations.  As the defendant had over 2000 friends on Facebook, the posts quickly went “viral”.

This had a devastating impact on the plaintiff’s career as a teacher.

Result

Ultimately, Justice Saunders found the defendant liable for not only the defamatory comments she had personally posted to Facebook, but also the republication of her comments by her Facebook friends (including by way of email) and any new defamatory comments made by her Facebook friends.

Justice Saunders held that the republication through Facebook “was the natural and probable result of the defendant having posted her defamatory remarks” (para 84).  The defendant had “impliedly authorized the republication”, and ought to have known that republication was not limited to social media only. Accordingly, the defendant was liable for republication through other mediums, including email (para 87).

Given the seriousness of the allegations and the extent of the harm suffered, Justice Sunders awarded the plaintiff the plaintiff general damages for defamation of $50,000 and punitive damages of $15,000.  He also found the plaintiff was entitled to his costs.

Conclusion

Liability for third-party defamatory comments on one’s personal account, whether on Facebook or another social media platform, is still an emerging legal issue in Canadian law. The prevalence of social media renders this decision applicable to practically every area of the law. It will be interesting to see how it is applied in the future.

 Thank you for reading,

Laura Betts

Other articles that might be of interest:

13 Dec

Can a tenant in common acquire another tenant in common’s interest through adverse possession?

Laura Betts Executors and Trustees, General Interest, Litigation Tags: , , , , 0 Comments

In a recent decision of the Queen’s Bench of Alberta, Verhulst Estate v. Denesik, 2016 ABQB 668, the Honourable Madam Justice Shelley considers whether a tenant in common can acquire another tenant in common’s interest through adverse possession.

Given the limited case law on this issue in Alberta, Madam Justice Shelley reviews the existing case law in the other Canadian provinces, including Ontario.

Facts

Mr. Denesik and Mr. Verhulst, were business associates who acquired three parcels of land as part of a joint venture in 1995. The parcels consisted of a 159 acre woodlot (the “larger parcel”), and two smaller river lots totalling 96 acres (the “river lots”). Denesik and Verhulst held title to all three parcels as tenants in common.

Denesik and Verhulst began logging the three parcels, and the proceeds from the logging operation were used to pay off the mortgage secured against the parcels. The logging operation ceased in or around 1996. Shortly thereafter, Denesik moved a mobile home onto the larger parcel. Denesik did not pay anything to Verhulst for his use and occupation of the property, however, he did pay the property taxes up until 2015.  Verhulst lived in the city with his family, and held his interest in the parcels as an investment without in any way occupying the parcels.

Verhulst passed away in 2008. Verhulst’s Estate applied for an order of partition and sale in relation to the three parcels. Denesik then applied for a declaratory judgment for title to the land, based on a claim in adverse possession.

At First Instance

The matter was heard at first instance by Master Schlosser, who concluded there was no time at which Verhulst was dispossessed and Denesik ’s action of putting a trailer onto a portion of the larger parcel in 1996 was insufficient to establish a claim to the entirety of the larger parcel, much less the river lots [See, Denesik v Verhulst Estate, 2016 ABQB 36].

Appeal

Denesik appealed the decision. The main issue for consideration on the appeal, not specifically addressed by the lower court, is whether a tenant in common can acquire another tenant in common’s interest through adverse possession.

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Justice Shelley noted that Alberta was the only province in Canada (with the exception of Quebec) which did not have specific legislation enabling an adverse possession claim.

In Ontario, s. 11 of the Ontario Real Property Limitations Act, R.S.O. 1990 c L-15, provides a legislative scheme, which sustains adverse possession claims as between joint tenants or tenants in common [para 32]. See, Zigelstein v. Stobinski (1985) 51 O.R. (2d) 562.

In the absence of legislation enabling adverse possession in Alberta, Justice Shelley was required to consider the issue in the context of the Torrens land titles system. Ultimately, she found that given Alberta’s lack of explicit authorization for a claim between tenants in common, it would be extremely difficult if not impossible, to establish such a claim in Alberta [para 51].

Citing the Ontario decision in Zigelstein, Justice Shelley went on to say that even if an adverse possession claim is possible, for it to succeed, it is likely that the actions of one tenant in common would need to arise to the level of something akin to ouster. Not wishing to make use of the property does not equate to an intention to abandon ownership.

Justice Shelley dismissed the appeal, stating that Verhulst’s indifference arose out of his intended use of the parcels of land as an investment vehicle, and was not an indication that he had given up possession or an ownership interest.

Find this topic helpful?  Please also consider these related Hull & Hull LLP Blogs:

Thank you for reading.

Laura Betts

21 Oct

International Estates: Foreign Nominees, Ancillary Grants and Resealing

Laura Betts Estate Planning, Executors and Trustees, Wills Tags: , , , , , , , , 0 Comments

Issues involving estates with international aspects are on the rise. Technological advances over the last century have resulted in increased mobility and connectivity, such that people are now choosing to invest, live, work, study or retire abroad. As a result, it is becoming increasingly common for people to pass away with assets, such as bank accounts, investments or real estate, in foreign jurisdictions.

International estates becoming increasingly common
“… it is becoming increasingly common for people to pass away with assets, such as bank accounts, investments or real estate, in foreign jurisdictions.”

What happens when an individual dies with assets located in Ontario but is domiciled in another jurisdiction?

Attaining the authority to deal with assets located in Ontario can be puzzling for a foreign personal representative charged with the task of administering these assets.

Common law has traditionally distinguished between moveable property (personal property) and immoveable property (land or interests in land). Moveable assets are typically governed by the law where the deceased was domiciled, whereas immoveable assets are typically governed by the law where the land is situated.

However, in Ontario, a grant of probate is typically required in order for a personal representative to establish his or her authority to deal with assets located in Ontario. Banks and land titles offices  generally require a grant of probate before they will release or transfer the assets. This position is the same whether or not a grant has been obtained from a court in some other jurisdiction.

It is possible to have a foreign grant recognized in Ontario, in lieu of obtaining probate in Ontario. Depending on the size of the worldwide estate, this may be the better option, as tax is typically levied on the value of the worldwide assets with a grant of probate in Ontario. If seeking recognition of a foreign grant in Ontario, estate administration tax will likely only be levied on the value of the assets in Ontario.

Where the original grant was made in a Province or Territory of Canada or a country that is a member of the Commonwealth, an Application may be made for Confirmation by Resealing of Appointment of Estate Trustee. The procedure is the same whether the deceased died with or without a Will. The requirements for a Confirmation by Resealing are set out in Rule 74.08 of the Ontario Rules of Civil Procedure (the “Rules”).

Where the original grant was made in a country that is not a member of the Commonwealth and the deceased died with a Will an Application may be made for a Certificate of Ancillary Appointment of Estate Trustee With a Will. The requirements for a Certificate of Ancillary Appointment are set out in Rule 74.09 of the Rules.

Where the original grant was obtained in foreign jurisdiction and the deceased died without a Will, an Application may be made for a Certificate of Appointment of Foreign Estate Trustee’s Nominee as Estate Trustee Without a Will. The requirements of this Application are set out in Rule 74.05.1 of the Rules.

Thank you for reading.

Laura Betts

20 Oct

Huang v. Braga: Appointment of Litigation Guardian for a Self-Represented Litigant

Laura Betts Capacity, General Interest, Guardianship, Litigation, Power of Attorney Tags: , , , , 0 Comments

Pursuant to Rule 7.01(1) of the Ontario Rules of Civil Procedure (the “Rules”) a Litigation Guardian is required to commence, continue or defend proceedings which involve a person under a disability.

“Disability” is defined in Rule 1.03(1) to mean a person who is (a) a minor, (b) mentally incapable within the meaning of section 6 or section 45 of the Substitute Decisions Act, 1992, whether that person has a guardian or not, or (c) an Absentee within the meaning of the Absentee Act.

The procedure and requirements for the appointment of a Litigation Guardian are different for  plaintiffs/applicants and defendants/respondents.

The initial appointment of a Litigation Guardian for a plaintiff or applicant occurs without a court order upon the filing of an affidavit with the court setting out the information outlined in Rule 7.02(2).

Where the party under a disability is a defendant or respondent to a proceeding, Rule 7.03(1) states that a Litigation Guardian must be appointed by motion to the court unless the exceptions set out in Rule 7.03 (2), (2.1) or (3) apply. These exceptions include the prior appointment of a Guardian or a valid Attorney for Property with express powers to act as Litigation Guardian, or where the Office of the Children’s Lawyer is representing a minor’s interest in an estate or trust. Where there is no appointed guardian or attorney under a power of attorney, any person not under a disability may act as a Litigation Guardian. Where there is no person willing to act as Litigation Guardian, the Public Guardian and Trustee may be appointed.

Procedure and requirements for the appointment of a Litigation Guardian.
“The procedure and requirements for the appointment of a Litigation Guardian are different for plaintiffs/applicants and defendants/respondents.”

Litigation Guardians are necessary to protect parties under disability, but also to protect opposing parties and court procedures.

A recent decision of the Ontario Superior Court of Justice, Huang v. Braga, 2016 ONSC 6306, considers the appointment of a litigation guardian for a defendant or respondent in circumstances of mental incapacity.

In that case, the defendant had retained five different counsel over 13 years. She had fired her  counsel, rejected a large settlement and insisted on proceeding to trial. A capacity assessment was ordered and she was found to be incapable of acting for herself in the action, but capable of managing her property. On review of the totality of the circumstances, Archibald J. found the defendant to be a party under a disability and issued  Judgment appointing the Public Guardian and Trustee to act as litigation guardian.

Archibald J. refers to the decision in C.C. v. Children’s Aids Society of Toronto, [2007] OJ No. 5613, which establishes the following test for whether a Litigation Guardian is required:

  • The person must appear to be mentally incapable with respect to an issue in the case; and
  • As a result of being mentally incapable, the person requires legal representation to be appointed by the Court.

In addition, Archibald J. states that the cause of incapacity must stem from a source of mental incapacity such as mental illness, dementia, developmental delay or physical injury and not from some other reason such as lack of sophistication, education or cultural differences.

Archibald J. states that in determining whether a person “appears to be mentally incapable” the following factors should be considered:

(a) The person’s ability to know or understand the minimum choices or decisions required and to make them;

(b) An appreciation of the consequences and effects of his or her choices or decisions;

(c) An appreciation of the nature of the proceedings;

(d) The person’s inability to choose and keep counsel;

(e) The person’s inability to represent him or herself;

(f) The person’s inability to distinguish between relevant and irrelevant issues; and,

(g) The person’s mistaken beliefs regarding the law or court procedures.

Traditionally the Court has accepted the following types of evidence in support of same:

  • medical or psychological evidence as to capacity (including, a capacity assessment, report or doctors certificate);
  • evidence from persons who know the litigant well;
  • appearance and demeanour of the litigant;
  • testimony of the litigant; and,
  • opinion of the litigant’s own counsel.

Thank you for reading.
Laura Betts

18 Oct

Weigand v. Weigand Estate: Limitation Periods and Dependant Support Claims

Laura Betts Common Law Spouses, Estate Planning, Executors and Trustees, Litigation, Support After Death Tags: , , , , , 0 Comments

Section 61(1) of the Succession Law Reform Act (the “SLRA”) provides that an application for dependant’s support must be made within 6 months from the issuance of the Certificate of Appointment of Estate Trustee (also known as “Probate”).

An application may be made beyond the six-month limitation period, with leave as, s. 61(2) of the SLRA provides the Court with discretion to allow an application to be made by a dependant “at any time with respect to any portion of the estate remaining undistributed at the date of the application”.

Weigand v. Weigand Estate, 2016 ONSC 6201, deviates from prior case law, granting leave for an application for support, after assets of the estate had been distributed.
“Generally, case law has interpreted s. 61(2) to limit any claim made after six months to the remaining, undistributed portion of the estate, and to bar any claim made after the assets have been fully distributed.”

Generally, case law has interpreted s. 61(2) to limit any claim made after six months to the remaining, undistributed portion of the estate, and to bar any claim made after the assets have been fully distributed. Paul Trudelle previously blogged on this application of s. 61(2).

The recent decision of the Ontario Superior Court of Justice in Weigand v. Weigand Estate, 2016 ONSC 6201, deviates from this prior case law, in that it grants leave for an application for support, despite the fact that the assets of the estate had already been distributed.

In that case, the Deceased died on May 5, 2013. He was survived by his common law spouse and three children from a prior marriage. The Deceased left a Will, in which he named his common law spouse the Estate Trustee and sole beneficiary of his Estate. The Estate consisted of the matrimonial home, two promissory notes and the Deceased’s bank accounts.

The common law spouse obtained probate on November 5, 2013 and took steps to administer the Estate. Eleven months after the Estate had been fully administered, two of the Deceased’s three children brought an Application for leave to advance their respective claims for dependant support. They alleged to have been misled by the common law spouse and provided Affidavit evidence, which was corroborated by evidence from their grandfather. Specifically, they alleged that the common law spouse had told them she intended to sell the house and distribute the proceeds equally among the Deceased’s children. They relied on her promise, to their detriment, as the home was subsequently transferred into the common law spouse’s name after the limitation period had expired.

In deciding to grant leave, George J, stated that the discretion to extend (or refuse) is a question of what is equitable between the parties, in all the circumstances (para. 32). He stated that it would be wrong to allow the respondent to rely on the fact that she has distributed the Estate as a basis to not grant an extension and that it would be unconscionable to allow her to defeat a claim by virtue of a passed limitation period (para 34). He also reasoned that it was inconceivable that the language used in s. 61(2) was intended to shield administrators who engage in such behaviour (para 34).

Thank you for reading.

Laura Betts

12 Aug

What Should an Estate Trustee do when a Beneficiary Cannot be Located?

Laura Betts Estate & Trust, Executors and Trustees, Wills Tags: , , , 0 Comments

An estate trustee’s duties in administering an estate include, among other things, the distribution of all estate assets in accordance with the terms of the Will or the rules of intestacy in the event there is no Will.  However, in order to make such a distribution, the estate trustee will be required to identify any and all beneficiaries rightfully entitled to a share of the estate.

For most estates, this is often a simple and routine task. However, where the deceased has a large extended family, complications may arise in both determining and locating beneficiaries, particularly, in circumstances where the deceased dies without a Will.

An estate trustee must make “reasonable inquiries” to identify beneficiaries. Unfortunately, there is no statutory definition for what constitutes reasonable inquiries. What is considered reasonable will depend on the particular circumstances of the estate. However, this may include speaking with family, friends and neighbours of the deceased, searching through the deceased’s personal effects and papers for the beneficiary’s contact details or conducting searches using online search engines such as Canada.411, www.cyndislist.com; www.rootsweb.com; www.ancestry.com and www.jewishgen.org.

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Often, estate trustees will hire a professional researcher or a genealogist to assist them in locating a missing beneficiary. Such professional researchers often have access to databases that are not available to the general public. The Archives of Ontario can provide a list of accredited researchers both in Canada and internationally. The International Commission for the Accreditation of Professional Genealogists also maintains a database on their website which can be accessed here.

Despite such reasonable efforts, an estate trustee may still be unable to locate a beneficiary or may have concerns that not all possible heirs have been ascertained. If the estate trustee wishes to proceed with the administration in such circumstances, he/she will need to bring an Application for the advice and direction of the Court and swear an affidavit in which he/she outlines the efforts taken to locate the missing beneficiaries. This affidavit must be filed with the Court on notice to the Office of the Public Guardian and Trustee. As such, it is important for an estate trustee to document any and all steps taken to locate a missing beneficiary, and if an expert is retained, obtain a copy of his/her search efforts as well.

On hearing the Application, the Court may require that the estate trustee take additional steps, or that a period of time passes to ensure that the missing beneficiaries will not come forward at a later time.

Thank you for reading.

Laura Betts

 

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