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Pearl Bay [2007] QBCCMCmr 60 (6 February 2007)

Last Updated: 20 February 2007

REFERENCE: 0734-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:
30248
Name of Scheme:
Pearl Bay
Address of Scheme:
Pearl Bay HOPE ISLAND QLD 4212


TAKE NOTICE that pursuant to an application made under the abovementioned Act by

The Body Corporate for Pearl Bay CTS 30248

I hereby order that the application for an order that the Respondents alter the Deck to correspond with Committee approved plans (as per exhibit 7) to Clause 17.1 of the By-Laws, within 30 days of this order is dismissed.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0734-2006

"Pearl Bay" CTS 30248

Application

The Body Corporate for Pearl Bay CTS 30248 (the applicant) has sought the following orders of an adjudicator against Ian and Shirley Schurmann (the respondents):

...that the Respondents alter the Deck to correspond with Committee approved plans (as per exhibit 7) to Clause 17.1 of the By-Laws, within 30 days of this order.

The Scheme

Pearl Bay CTS 30248 is a 60 lot scheme registered under the Body Corporate and Community Management Act 1997 and is operating under the Body Corporate and Community Management (Standard Module) Regulation 1997.

Jurisdiction

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Grounds

The applicant states that on or about August 2005, the respondents built a deck without committee or council approval. They refer to by-law 17.1 which states:

An owner of occupier of a Lot shall not paint or repaint or carry out any work to the exterior of the building on any Lot except as approved by the Committee in writing. Any work, alteration, improvement or structure carried out or erected in breach of this by-law may be forthwith removed with or without notice of the Body Corporate, Manager and each of their respective employees, agents and contractors and any entry on to the Lot pursuant to this by-law shall not constitute trespass. Whilst the original Owner continues to won one lot in the Scheme, it shall have a right to veto all approvals given by the Committee pursuant to this by-law.

On the basis of this by-law, the applicant’s solicitor argues that, because the respondents did not seek approval, they had the right to remove the deck without notice. They advise however, that they only require to deck to be altered to comply with "Committee approved plans".

They provide a letter showing that the body corporate manager wrote to the respondents on 16 August 2005 advising the works were unauthorised and requiring plans to be submitted to the Body Corporate architect.

They provide a letter dated 18 August 2005 from the original developer of the scheme to the chairperson of the scheme. They advise they understand the Body Corporate has initiated action and that the Body Corporate would also be writing to the Gold Coast City Council in relation to the approval status of the deck. The body corporate manager wrote to the council on 19 August 2005 and followed up with the council on 6 December 2005. The letters provided by the applicant show that the applicant advised Council that the deck had been built without authorisation of the Body Corporate and therefore the respondents were in breach of the by-law.

They enclose a Show Cause Notice from Council to the respondents dated 5 January 2006. It notes the lack of a development permit and states that the deck had been constructed within the waterfront set back.

The Body Corporate says it issued a Notice of Continuing Contravention of by-law 17 on 18 January 2006.

On or around 28 January 2006, the applicant wrote to Gold Coast City Council seeking retrospective approval for the deck and stating that "The deck is generally in accordance with plan of development for this area. The deck has been constructed by a registered licensee and we have also the approval of neighbour where the deck is at its highest level".

The applicant includes a copy of a fax addressed from the body corporate manager to the respondents dated 16 March 2006. The fax states "As discussed the new plans from Paul Cook". Piecing together aspects of the application, I have drawn the conclusion that Paul Cook is the "Body Corporate architect". Attached to the fax are plans titled "Pearl Bay Rear Decks – Control Cross Section" and "Pearl Bay Rear Decks – Control Plan". They are dated March 2006.

On 26 April 2006 the body corporate manager wrote to the respondents advising that the Paul Cook plans of March 2006 were the accepted design for the scheme and that the current deck would not be approved. They point out the current deck also poses a privacy concern for neighbours. The state they understand the respondents have a copy of the plans.

The respondents responded on 30 May 2006 stating they had not received the plans prior to that letter. The respondents ask if they can talk about resolving the issue.

They state there have been no further interchanges since that time.

Certain other correspondence is attached to the application. From that content it can be gleaned that there is a Deed of Covenant operating within the scheme as part of a layered development. For the sake of formality, I note that I have no jurisdiction in relation to the enforcement of deeds of covenant.

Submissions

A submission was received from the respondents through their solicitor. Firstly they offer some additional evidence and then move into legal argument.

Evidence Submitted

The respondents advise that when they first wished to built the deck, they contacted Oyster Cover Management (representing the principle scheme) and sought guidance. In accordance with that requirement, they sent plans to Paul Cook, who rejected the deck on the basis it was too high and needed to be stepped down and that certain landscaping was required.

They say that six months later they submitted new plans to Paul Cook which were also rejected. However the only feedback received was that a letter of approval was required from the next door neighbour. The respondents provide a copy of a letter from Graham Marshall dated 14 September 2005, where he states he has no objection to the deck (which by then had already been constructed and is after the date this application was lodged by the applicant).

Construction was begun in early August 2005 and completed within 5 days. Estimated cost was $10,000.

On 23 August 2005 (after receiving the letter from the body corporate manager dated 16 August 2005), the respondents contacted the body corporate manager and the architect by phone. They say the architect requested the respondents to send a copy of the plan and the letter from the neighbour to him.

The respondents state that on phoning the body corporate manager again on 29 August 2005, they were told to get a certifier and an approval stamp and forward them to the body corporate manager.

They say that on 12 September 2005, the Gold Coast City Council inspected the deck and advised that construction was acceptable except for the absence of railings. The respondents then discussed problems they were having in relation to the powder coating for the railing, however once complete, it was installed immediately.

The respondents advise that they provided both the architect and Gold Coast City Council with each others contact details, on the understanding the representative of Gold Coast City Council had said he would liaise with the architect.

They advise than in October, after some difficulties in communication, the Gold Coast City Council advised the respondents to get a certifier and relevant plans drawn up. They say the representative of the Gold Coast City Council told them to apply for relaxation of the waterfront guidelines.

They say that based on committee meeting minutes dated 27 October 2005, they concluded that liaison between the architect and Gold Coast City Council was taking place. Specifically the minutes state "The GCCC was to inspect the deck and inform the Body Corporate of the outcome".

The respondents say they engaged the services of a certifier on 22 November 2005 and followed up on the certifier’s advice to engage a particular drafter and obtain a plan of development. They say they received the plans from the drafter some time in December and on 30 December 2006 advised the Gold Coast City Council that it had the plans, the plan of development and would be using the council certifier. I note the drafter’s plans provided with their submission are dated 12 January 2006.

The show cause notice from council was dated 5 January 2006. They say that it is at this point that the respondents realised that there had been a breakdown in communication between the parties. The respondents went to council when they found that the person they had been liaising with was on leave. They provided council with a copy of documentation relevant to the relaxation of waterfront guidelines on that day and then provided council with a copy of all relevant documentation on 16 January 2006.

On 8 March 2006 council sent advice that the deck was generally in accordance with requirements but that their approval would be conditional on approval by the Body Corporate. The respondents enclose the letter in support of this.

It was on 4 April 2006 that the committee minuted its decision to adopt the plan dated March 2006 and referred to by the applicant. Specifically the minutes state:

The committee resolved that the community manager send a letter to the owner of lot 523 and advise the owner of the new design plan for decks that have been approved by Paul Cook and Vanwell. The owner of lot 523 is to make changes accordingly, to be compliant with the approved plans. Decks are also required to be painted in the same tones as the dwelling for aesthetic reasons".

The respondents point out that the plans sent by the Body Corporate to them on 26 April 2006 are described as "typical cross section" and "typical pool/revetment plan".

The respondents enclose a request by them (dated 10 May 2006) to discuss the matter with the chairperson. They also enclose a response from the body corporate manager of the same date, advising that the chairperson was away, but they would take the matter up on his return. They are not aware of the applicant making any contract pursuant to their request.

The minutes of the committee meeting of 26 May 2006 state:

The Committee RESOLVED to meet with Mr & Mrs Schurmann, the owners of Lot 523, regarding the deck built without Body Corporate approval. It was requested my Mrs Schurmann that she meet with the Committee, however the Committee has declined to do so, as every request from the Committee to Mr & Mrs Shurmann (sic) to rectify the deck has been ignored. The Committee RESOLVED to appoint a solicitor to make an application to the Commissioner over this issue.

Based on the Committee meeting minutes of 6 October 2006, the respondents suggest that the Committee has missed the point that this office is attempting to resolve the issue on an amicable basis through conciliation. The minute reads as follows:

The Committee noted that the Body Corporate Adjudicator has contracted members of the Committee to arrange for a mediation meeting with the owners of lot 523. The Adjudicator corresponded to the committee noting that any mediation cannot occur until the owners of lot 523 return to Australia from overseas. The Committee noted that this was not acceptable as their application was clear for the amendment or the removal of the said deck and therefore requested the Community Manager to correspond to the Adjudicator overseeing the application advising the Committee wish to continue with the order that is being sought by the Body Corporate Committee.


The respondents argue that this demonstrates the Committee’s "continued dispute driven attitude".

They say that all of the above demonstrate:

Incomplete and selective portrayal of the facts by the applicant;
The confusion surrounding a simple construction;
That the respondents acted in good faith at all times.


Legal Submissions

The respondents note that the relevant by-law applies to the exterior of the building. They go on to say that most dictionary definitions refer to an outside surface and that the deck cannot be characterised as the exterior of the building. They further argue that the by-law applies a prohibition to any "work, alteration, improvement or structure to the exterior of the building". They say that if the "work" includes work to the pool, then something like pavers or the pool itself must be affected and that has not occurred here.

They argue that if by-law 17 does apply, then the respondents argue that there is no reasonable ground for objecting to the deck and that the burden of meeting their requirements is too onerous.

They say by-laws are made by a Body Corporate pursuant to a statutory power and the exercise of this power by a Committee must be reasonable. The Body Corporate and the architect it engaged to prepare a plan for the deck have not provided reasons as to why they would not approve the deck in its current form.

They argue the plans submitted by the architect are referred to as only "typical" and do not consider the individual requirements of the Respondents, nor do they reflect any consultation with the Respondents. They say a lack of attention to detail is partly demonstrated by the fact that the architect advised the Respondents that a step down would be required, however this requirement is not even shown on the submitted plan. They say another example is the setback requirement which would render the deck impractical. They say that by imposing a setback, movement around the deck is restricted. They say the plan does not correlate with the shape of the Respondents’ Lot. They say the plan submitted by the architect shows an angled Lot whereas in actual fact the Respondents’ Lot is rectangular.

They state by-law 17.1 purports to allow the Committee to withhold approval on an entirely arbitrary basis and that withholding approval in these circumstances under such a By-law is plainly unreasonable. They say it might be different if by-law 17.1 provided an objective standard by which certain constructions must abide and that standard was both reasonable and attainable. If the deck constructed by the Respondents was then found by the Committee not to comply with the standard it would be a proper exercise of the Committee’s powers to withhold approval on the basis of non compliance with an objective standard.

Finally they argue that an adjudicator may make an Order that is just and equitable to resolve a dispute pursuant to section 276 of the Body Corporate and Community Management Act 1997. Therefore they say that if "if the Commissioner" finds that the deck forms part of the exterior of the building and the respondents installed a deck around part of their pool without the written consent of the Committee, there are however special circumstances which require a just and equitable Order to be made. These include the fact that the Respondents have spent a significant amount of money in installing the deck. Also, the deck is neither a practical disturbance, aesthetically displeasing and has all relevant Local Authority approvals.

Response to Submissions

The applicant advises that the owners of Lot 522 have not been approached about the deck. They enclose a letter dated 27 December 2006 where these owners state one of their motivations for moving in was the "strict covenants and by-laws applying to all extensions......." The owners of lot 522 say they have lost considerable privacy due to the deck and they have lost the ability to relax in their own back yard. They fear it will affect their resale value. They also state they have sufficient background to provide adverse comment on the proximity of the deck to the waterline and boundaries. They say if the deck is allowed to stay in its current form, then it sets a favourable precedent for all work to proceed without committee consent.

The applicant disputes the respondents’ interpretation of the minutes of the committee meeting of 4 April 2006. They say it "merely means that Mr Cook and Vanwell had approved a new design plan for decks...."

The applicant clarifies that on 26 May 2006, the committee resolved not to meet with the respondents. They note that the respondents do not dispute they built the deck without approval.

They argue that the exterior of the building in terms of by-law 17 needs to be interpreted broadly given the objective of the by-law to prevent inappropriate development. They argue it would be disempowering the Body Corporate to rule the by-law does not apply to the structures such as decks. They argue that changing the by-law would be difficult due to the need for a general meeting and that lot owners could make inappropriate changes in the interim.

They go into detailed arguments as to why by-law 17 applies to the erection of decks.

They state that the decision of the committee was not unreasonable and the decision should not be based on any cost to the respondents to rectify the situation. They do not concede that the required works will be onerous and note the respondents have not made any submissions as to the likely cost.

They state the grounds of the refusal are"


"based upon the adverse effect on the amenity of the Body Corporate, and a concern that if the By-laws are not upheld then a message will be sent to all other Lot Owners that they can disregard the By-Laws".


They say that if the respondents had followed proper procedure, the respondents would not be facing the prospect of having to reduce its size.

They say architect’s plan is a generic plan setting minimum distance from boundaries, height etc. They state that the committee’s position is that as long as the exterior minimum dimensions are not compromised, any application will have a good chance of being approved.

They say that the fact that the committee’s decision is not arbitrary is demonstrated by the concern of the owners of Lot 522.

They say the only just and equitable result is for the deck to be removed or altered in accordance with guidelines.

They note the lack of Gold Coast City Council approval.

They say the cost the respondents might incur, is a result of their own actions.

Determination

Section 58 of the Act provides:

(1) If a community titles scheme (scheme A) is a subsidiary scheme, scheme A’s community management statement (other than the unaffected provisions) has effect subject to the community management statement for each community titles scheme for which scheme A is a subsidiary scheme.

(2) In subsection (1)--

unaffected provisions means--

(a) the lot entitlement schedules in scheme A’s community management statement; and
(b) the provisions of scheme A’s community management statement prescribed under a regulation applying to scheme A.

In my view, this means that the subsidiary scheme by-laws apply to the extent that they do not conflict with the by-laws of the principle scheme. The principle scheme’s by-laws in relation to alterations appear to be limited to the supply of utilities (see by-law 3.1, CMS 28389). As the by-laws in operation in Pearl Bay appear only to be additional to Oyster Cove’s, I conclude that they are not in conflict with the principle scheme and prima facie apply in this matter.

Without attempting to address the reasons why I regard the construction of the deck as an exterior alteration, I will simply state that I reject the submissions of the respondents that the construction of the deck is not captured as effecting the exterior appearance of the lot.

However, I will draw the parties to the following aspects of the Act:

Section 180(1) of the Act provides:

If a by-law for a community titles scheme is inconsistent with this Act (including a regulation module applying to the scheme) or another Act, the by-law is invalid to the extent of the inconsistency.

Example for subsection (1)--
If a by-law for a community titles scheme purporting to give a body corporate manager, service contractor or letting agent exclusive use of common property is inconsistent with the regulation module applying to the scheme, the by-law is invalid to the extent of the inconsistency.


Section 163 of the Act provides:

(1) A person (an authorised person) authorised by the body corporate for a community titles scheme may enter a lot included in the scheme, or common property the subject of an exclusive use by-law, and remain on the lot or common property while it is reasonably necessary--
(a) to inspect the lot or common property and find out whether work the body corporate is authorised or required to carry out is necessary; or

(b) to carry out work the body corporate is authorised or required to carry out.

(2) The power of entry may be exercised--
(a) in an emergency--at any time; and

(b) in other cases--
(i) for entry to the lot mentioned in subsection (1)--at a reasonable time after at least 7 days notice of the intended entry has been given to--

(A) the owner of the lot; or

(B) if the owner is not in occupation of the lot--the occupier of the lot; and

(ii) for entry to the common property mentioned in subsection (1)--at a reasonable time after at least 7 days notice of the intended entry has been given to--

(A) the owner of the lot to which the exclusive use by-law attaches; or

(B) if the owner of the lot mentioned in subsubparagraph (A) is not in occupation of the common property--the occupier of the common property; and

(iii) in compliance with the security or other arrangements or requirements ordinarily applying for persons entering the lot or the common property.


Section 33 of the Standard Module states:

(1) At a meeting of the committee--
(a) a question is decided by a majority of votes of the voting members present (either in person or by proxy) and entitled to vote on the question who are voting; and

(b) each voting member entitled to vote on a question to be decided has 1 vote on the question.

(2) Without limiting subsection (1), if a quorum is present, a decision supported by a majority of the votes of the voting members present and entitled to vote on the decision is a decision of the committee.

(3) To avoid doubt, it is declared that a voting member who is an executive member has only 1 vote, even if the person holds more than 1 of the positions of chairperson, secretary and treasurer.


While I have not been asked to look at this issue and will not be making orders in that regard, parties should note that there are serious questions regarding the validity of a large portion of by-law 17. In my view the by-law is valid only to the following extent:

An owner of occupier of a Lot shall not paint or repaint or carry out any work to the exterior of the building on any lot except as approved by the Committee in writing.

The remaining portion of the by-law is sufficient for the purposes of this application.

Section 94 of the Act states that:

(1) The body corporate for a community titles scheme must--
(a) administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme; and

(b) enforce the community management statement (including any by-laws for the scheme); and

(c) carry out the other functions given to the body corporate under this Act and the community management statement.

(2) The body corporate must act reasonably in anything it does under subsection (1).

Therefore in determining the respondents’ application for retrospective approval of their deck, the committee is required to act reasonably. In determining whether or not the Body Corporate has acted reasonably, it is not sufficient to consider the fact that a request for approval is made in hindsight.

The applicant’s summarises that their position is reasonable because:

The Body Corporate has consistently and clearly advised the respondents that the deck breaches the by-laws, and that the deck was constructed in complete disregard for the by-laws and council requirements;
The adverse affect on the amenity of the Body Corporate;
Concern that if the by-laws are not upheld then a message will be sent to all other lot owners that they can disregard the by-laws;
The concerns of the residents of Lot 522 next door;
The architect’s plan sets minimum distance requirements, height requirements, including a step down;
Therefore their decision was not arbitrary.


The respondents say the Body Corporate’s position is not reasonable because:

The burden of reducing the deck size is too onerous;
No reasons have been given by the committee or the architect as to why the deck is not satisfactory in its current form;
The architect’s plans are only described as "typical" and do not amount to a specific approval in relation to the respondents’ lot;
The set back requirement would make the deck impractical;
Approval can be withheld on an arbitrary basis as the by-law does not provide an objective basis by which certain constructions should be governed.


I refer again to Section 58 of the Act and the fact that the principle scheme by-laws are silent on the issue of alterations to appearance (other than maintenance, landscaping and signage). Therefore in terms of by-laws alone, this scheme is not bound by the expectations of the principle scheme. As mentioned earlier, I have no jurisdiction in relation to Deeds of Covenant.

However, the involvement of the architect in "approving" designs, suggests to me that the Body Corporate committee is confusing its role in administering the scheme as a Body Corporate, with the belief it has either some sort of rights and/or responsibilities to the original developer under the Deed of Covenant. I accept it may be that the committee prefers to consult with an architect for their opinion, but much of the wording of the committee meeting minutes gives the impression that the committee is not forming its own opinions in relation to the plans placed before them.

It appears to me then, that the procedure in contacting the architect for "approval" was really aimed at satisfying the requirements of the Deed of Covenant rather than satisfying the committee. Ultimately, the developer has demonstrated a lack of interest in pursuing the matter under the Deed. In any event, in my mind it has taken quite a considerable amount of time before the Body Corporate provided the respondents with any firm indication of their requirements i.e. the period of time that elapsed before guidance was given was at least from August 2005 until March 2006. Given attempts made for approval prior to this time, in my mind the respondents have been at the mercy of the committee for that last 7 months and, if the respondents’ recollection is correct, at least another 6 months before that time.

I do not regard even a 7 month delay in securing "approval" from those in authority as reasonable. However, I am aware that in the end the respondents did proceed with the works, without the final written approval of the committee. In any scenario, this is a risky course of action. The applicant is correct in noting that it was the respondents’ decision to risk construction without final approval and that the cost of rectification should not be an issue to influence the outcome.

The decision to proceed was said to have been made on the basis of consent of the next door neighbour, as required by the architect. The date of the written consent of the owners of Lot 524 is after the date this application was lodged and it appears that the consent of owners on the other side was not sought (though again, I note the complaint of Lot 522 is also after the date the application was lodged). The date of each of the documents signed by the neighbours tends to tarnish the veracity of both documents in my mind.

While the respondents allege that there is no step down included in the prototype/generic plans, I can decipher the step down within the plans made available and, from the photographs supplied by the respondents, I can see that this requirement has been included in the deck they did build (in accordance with the request of the architect). This increases my confidence in the respondents’ assertions that they did make genuine attempts to follow proper procedure in the first instance, even though they have demonstrated either ignorance of, or disregard for, council planning processes.

I have some discomfort with the committee’s attempt to introduce a prototype/generic deck guideline some 7 months after it came to their notice that an approval was required.

In my mind the requirements advised to the respondents have caused the respondents to go through the expense of 2 design attempts, to then sometime later, find guidelines have been published that would force them through a third design process. As the respondents themselves have been owners since 2003, the Body Corporate has had ample opportunity to introduce prototype designs. Therefore, I do not regard it as appropriate for the respondents’ deck to be assessed against a standard that did not come into existence, until at least 7 months too late.

Despite the fact that the order sought by the applicant has essentially been addressed (by my view that the prototype is unfair standard to impose on the respondents), it still remains appropriate that I consider the reasonableness of the committee’s decision to refuse the request for the deck to remain in its current form.

Apart from the letter from the owners of Lot 522 citing privacy concerns, the only material aspect in which the committee indicates the current deck is undesirable is in relation to the set back from the water course.

Within a community living environment, indeed in most suburban developments, backyard privacy is hard to come by. It is not made clear to me whether it is the dimensions or height of the deck that was actually built or the existence of a deck at all that has increased the next door neighbours perception of loss of privacy. While the existence of the prototype implies that the construction of decks is an acceptable part of living within this community, the applicant and the next door neighbour have failed to specify why this particular deck is so troublesome to others’ privacy. Without evidence lead in this regard, I do not feel compelled to place a significant degree of weight on the presence of this complaint.

It is of some interest to me that the respondents have been able to produce evidence that the council is prepared to approve the deck in its current form, subject only to approval by the Body Corporate. It therefore seems apparent that the council has examined the issue of the water front set back and found it reasonable to allow an exception in the respondents’ case. The applicant has not advised me of any particular reason why they regard compliance with the set back as critical to the amenity of the scheme.

The applicant’s reasons for not allowing an exception are:

The lack of regard they allege on the respondents’ part;
Loss of some unspecified aspect of amenity;
Creation of an adverse precedent in relation to the enforcement of by-laws.


The vagueness of the first two points above make them far from compelling reasons to require the respondents to refashion the existing deck.

The committee’s concern in relation to the setting of a precedent is understandable to the extent that there is a remote chance that an approval could later be used against them by another lot owner who claims discrimination. If that is so, there is a benefit to the Body Corporate in referring the matter to this office, where adjudicators have no relationship with lot owners at all. When an application is made, parties have no notice of which adjudicator the matter may be referred to.

However despite the referral of matters to an adjudicator, all parties to this dispute and potential disputes should bear in mind that applications for alterations such as these, must always be assessed on their individual merits. Since the chance that any two decks will be identical is remote, the risk of the Body Corporate having to defend allegations of discrimination, are relatively small even if they were to approve this deck.

In the circumstances, I am not prepared to make the orders sought and will dismiss the application accordingly.


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