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Sitka Law Group
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Personal Real Estate Corporations

Last year, we saw a drastic increase in the number of licensed realtors who inquired about incorporating a personal real estate corporation. A personal real estate corporation (“PREC”) allows licensed realtors to take advantage of the benefits of incorporating. Specifically, by incorporating, a licensed realtor may take advantage of tax savings through lower tax rates (currently the small business tax rate is 13% on the first $500,000 of taxable income and 26% thereafter) and income splitting.

In order for a licensed realtor to incorporate a PREC, the licensed realtor and the PREC must comply with the provisions of the Real Estates Services Regulations, B.C. Reg. 269/2010. The following is a summary of the criteria that must be met:

• The licensed realtor must be the sole president, director and voting-shareholder of the PREC;

• The licensed realtor is employed by the PREC or acting as an independent contractor for the PREC;

• Any non-voting shares are legally and beneficially owned by the licensed realtor or an affiliated person or entity of the licensed realtor (i.e. a spouse, child, a corporation, all of the shares of which are owned by the licensed realtor or a spouse or child of the licensed realtor, or a trust, all of the beneficiaries of which are the licensed realtor or a spouse or child of the licensed realtor);

• The PREC only provides real estate services or services that facilitate real estate services (in other words, the PREC may not actively trade in stocks or bonds or develop real estate);

• The licensed realtor and the PREC must each have a real estate license and the licensed realtor must be licensed to the same brokerage as the PREC; and

• The legal name of the PREC must include the legal name of the licensed realtor or a recognizable short form of the legal name, follow by the term “personal real estate corporation”.

If you are a licensed realtor is who is able to retain income in the PREC or take advantage of income splitting, then a PREC may be a great option for you. However, a PREC may not be appropriate for all licensed realtors. If you are interested in incorporating a PREC or obtaining further information regarding a PREC, please feel free to contact Sitka Law Group.
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Spinal Cord Injury Leads to Cost of Future Care Award of $4.5 Million

The case of Warick v. Diwell [2017] BCSC 68, involves a 59-year-old Plaintiff who sustained significant injuries in 2009 in a collision with an oncoming semi-truck/trailer unit driven by the Defendant that crossed into the Plaintiff’s lane. In addition to her paralyzing spinal cord injury, the Plaintiff also sustained perforation of her large and small intestines and damage to her bladder. She had undergone six surgeries to address these injuries by the time of trial, and further surgeries continued to be a possibility. She also sustained fractures of her left wrist and two bones in her left hand.
By trial, the Plaintiff’s personal injury claims arising from the accident had all been settled except the matter of the cost of her future care. Mr. Justice T.A. Schultes made the following comments regarding future care assessments:

"[201] The essential principles that determine an award for the cost of future care are not really in issue in this case, with each party simply emphasizing different aspects of the same overall body of authority in their submissions.

[202] With respect to the standard of proof to be met, “[a] plaintiff who seeks compensation for future pecuniary loss need not prove on a balance of probabilities … that she will require future care because of the wrong done to her. If the plaintiff establishes a real and substantial risk of future pecuniary loss, she is entitled to compensation...”: Graham v. Rourke (1990), 74 D.L.R. (4th) 1 (Ont. C.A.).

[203] Claims made for future care must be both medically justified and reasonable. An award “should reflect what the evidence establishes is reasonably necessary to preserve the plaintiff's health”: Milina v. Bartsch (1985), 49 B.C.L.R. (2d) 33 (S.C.) at paras. 199 and 201; aff'd (1987), 49 B.C.L.R (2d) 99 (C.A.).

[204] This requirement of medical justification, as opposed to medical necessity “requires only some evidence that the expense claimed is directly related to the disability arising out of the accident, and is incurred with a view toward ameliorating its impact”: Harrington v. Sangha, 2011 BCSC 1035, at para. 151.

[205] The question has often been framed as being whether a reasonably-minded person of ample means would be ready to incur a particular expense: Andrews v. Grand & Toy Alberta Ltd., [1978] 2 S.C.R. 229 at p. 245.

[206] The evidence with respect to the specific care required does not need to be provided by a medical doctor: Jacobsen v. Nike Canada Ltd. (1996), 19 B.C.L.R. (3d) 63, (S.C.) at para. 182. However, there must be some evidentiary link drawn between the physician's assessment of pain, disability, and recommended treatment and the care recommended by a qualified health care professional: Gregory v. Insurance Corporation of British Columbia, 2011 BCCA 144 at para. 39.

[207] Damages for the cost of future care are assessed, not mathematically calculated: Uhrovic v. Masjhuri, 2008 BCCA 462 at paras. 28-31. There is an inherent degree of uncertainty and discretion in making such awards. Because awards are made “once and for all” at the time of trial, judges must “peer into the future” and fix the damages “as best they can”. This includes allowing contingencies for the possibility that the future may differ from what the evidence at trial indicates: Krangle (Guardian ad litem of) v. Brisco, 2002 SCC 9, at para. 21.

[208] While no award should be made in relation to an expense that the plaintiff will not actually incur (Izony v. Weidlich, 2006 BCSC 1315 at para. 74), the focus of inquiry when a justified item or service was previously unused, is whether it is “likely to be incurred on a going forward basis”: Gilbert v. Bottle, 2011 BCSC 1389 at para. 251.

[209] A plaintiff is not entitled to an award for that portion of their costs of future care that will be publicly funded. However, the risk that access to public funds may be lost in future is a proper basis to provide a contingency in the award: Boren v. Vancouver Resource Society for the Physically Disabled, 2003 BCCA 388 at para. 25[6].)"
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BC Court of Appeal Holds That ICBC Income Loss Benefits Can Be Revived Beyond 104 Week Mark

The case of Symons v. Insurance Corporation of British Columbia, 2016 BCCA 207, involves a Plaintiff who was seriously injured in an April 20, 2008 rear end collision. She was off work for two weeks and received short-term disability benefits from ICBC under s. 80 of the Insurance (Vehicle) Regulation, B.C. Reg. 447/83. Well over 104 weeks from the date of the collision, injuries resurfaced leaving the Plaintiff totally disabled and unable to work. ICBC refused to reinstate the disability benefits. At trial, Mr. Justice Baird ordered ICBC to reinstate the disability benefits. ICBC appealed the decision but the Court of Appeal upheld the trial judgement. The Court of Appeal provided the following reasons:

"[10] It is common ground that Part 7 of the Regulation provides no-fault accident benefits to insured individuals as defined in s. 78. Ms. Symons is an insured for the purpose of Part 7. Section 80 provides for disability payments for 104 weeks post-accident and s. 86 provides for benefits beyond 104 weeks. The provisions are set out below:

Disability benefits for employed persons

80 (1) Where, within 20 days after an accident for which benefits are provided under this Part, an injury sustained in the accident totally disables an insured who is an employed person from engaging in employment or an occupation for which the insured is reasonably suited by education, training or experience, the corporation shall, subject to section 85, pay to the insured for the duration of the total disability or 104 weeks, whichever is shorter, the lesser of the amounts determined under paragraphs (a) and (b): …

Disability beyond 104 weeks

86 (1) Where an injury for which disability benefits are being paid to an insured under section 80 or 84 continues, at the end of the 104 week period, to disable the insured as described in the applicable section, the corporation shall, subject to subsections (1.1) and (2) and sections 87 to 90, continue to pay the applicable amount of disability benefits to an insured described in section 80 or 84 …

[11] ICBC submits that the meaning of s. 86 clearly states that at the end of the 104 week period, in order to receive benefits under s. 86, an insured must be disabled and receiving benefits. There must be an ongoing disability for which benefits are being paid, and Ms. Symons was not receiving benefits at the end of the 104 week period. Her disability did not flare up until after that period passed. ICBC says that the Regulation does not permit for the reinstatement of s. 86 benefits.

[12] It is ICBC’s position that the provisions are unambiguous that a person may receive s. 86 benefits only if he or she was already receiving s. 80 benefits, which Ms. Symons was not. The 104-week period for payment to Ms. Symons under s. 80 ended on April 27, 2010. At that time, she last received a disability benefit dated May 2, 2008. Her total disability occurred later. Section 86 says “where an injury for which disability payments are being paid to an insured under s. 80 … continues, at the end of the 104 week period, to disable … the corporation shall … continue to pay” (emphasis added.). The section, ICBC says, is clear and unambiguous, and therefore, that is the end of the analysis.

[13] Ms. Symons says that ICBC’s argument ignores the contextual and purposive approach to statutory interpretation found in Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42 and Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27. She says that the interpretation advocated by ICBC would result in unfair and absurd results. For example, if a person received s. 80 benefits for 104 weeks less the final day, that person would be ineligible for s. 86 benefits. ICBC acknowledges this outcome, but says this is a practical limitation imposed by the legislature."

The Court of Appeal emphasized the need for the regulations to be considered in the context of the legislative scheme to provide a universal, compulsory insurance program and went on to provide:

"[23] ICBC argues that that was a case where the plaintiff was already entitled to s. 86 benefits when they were stopped, and then reinstated. I think this cuts too fine a line. Brewer says a person receiving s. 80 benefits can be reinstated if he later becomes disabled from the original injury and Halbauer says a person receiving s. 86 benefits is entitled to have them reinstated if he or she is subsequently disabled because of the original injury. In my view, if the sections are read, as ICBC suggests, to mean that only a person who is disabled “at” the 104-week mark can obtain benefits after that period, that interpretation does not accord with the context and object of the legislation, nor within the reasoning of Halbauer.

[24] Reading the words of this legislative scheme in its entire context, harmoniously with the whole of the scheme and purpose, leads to the conclusion that if a person who was disabled as a result of an accident returns to work, and then, because of setbacks or otherwise, is again totally disabled due to the accident, she qualifies for benefits under s. 86, even if she was not disabled on the “magic” day at the end of 104 weeks. This interpretation is consistent with the object of the Act—to provide no-fault benefits for persons injured in motor vehicle accidents.

[25] In my opinion, the decisions in Rashella and Andrews have been overtaken by Halbauer and Charlton.

[26] Thus, the trial judge did not err in his conclusion that Ms. Symons was entitled to be reinstated for disability benefits under s. 86.

[27] I would dismiss the appeal."
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BC Supreme Court Awards $50,000 For Persistent Soft Tissue Injuries

The case of Smith v. Evashkevich, [2016] B.C.J. No. 1415, involves a 34 year old male Plaintiff who was injured in a rear end motor vehicle collision on June 8, 2010. Liability for the collision was accepted by the Defendant. The Plaintiff had been in two prior motor vehicle collisions from which he had recovered prior to the subject collision. The Plaintiff was awarded $50,000 in non-pecuniary damages for persistent soft tissue injuries to his neck, shoulders and back. Mr. Justice Steeves provided the following reasons for the award:

"74 Considering the expert evidence summarized above with the evidence at trial, I conclude that the plaintiff continues to have complaints of pain and stiffness in his neck, shoulders and back as a result of the June 2010 accident. This is supported by medical findings of tenderness on palpation. The plaintiff, his family and close friends also describe the plaintiff's discomfort with his neck and shoulders.

75 These have always been soft-tissue symptoms, albeit persistent ones. The plaintiff was prescribed with a muscle relaxant on July 5, 2010 for the accident injuries. After that he has used over the counter medication.

76 I note the comment of the defendant's expert, Dr. Arthur, that he could find no objective findings on his examination but I also note his findings of restricted motion of the head and neck and "slight tenderness" to palpation over the right trapezius musculature. Whether this is an objective finding is a matter of debate but it is a finding of pain and limitation of movement consistent with the plaintiff's complaints and the observations of others.


84 In summary the plaintiff continues to suffer from soft tissue injuries in the neck, shoulder and back that can be causally related to the 2010 accident. While there are flare-ups he manages the symptoms well and he does not miss work as a result of them. He does not golf or snowboard like he did before the accident and he is more withdrawn in his relationships. There is some general anxiety as a result of the chronic nature of the plaintiff's symptoms but anything more is related to his feeling of being overwhelmed at work.

85 In these circumstances I conclude an award of $50,000 for non-pecuniary damages is appropriate.


115 The plaintiff suffered soft tissue injuries from the June 8, 2010 motor vehicle accident caused by the negligence of the defendant. Some of those injuries continue.

116 The plaintiff is entitled to the following damages:
(a) Non-pecuniary damages: $50,000
(b) Future income loss: $40,000
(c) Loss of housekeeping capacity: $3,000
(d) Cost of future care: $2,040
(e) Special damages: $2,600
Total $97,640"
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B.C. Homebuyer Loan Plan

In December, Premier Christy Clark announced a program to assist BC first time homebuyers to accumulate their down payment.

The application process is now open and BC Housing Minister Rich Coleman advises that as of January 16, 2017 there were 29 applications submitted. If you are interested in applying, the application form can be found in the link.

The terms of the loan are as follows:
• it will be amortized over 25 years;
• the first five years of the loan will be interest free with the remaining term at current interest rates;
• it will be for purchases up to a maximum of $750,000.00 to a maximum of 5.0% of the purchase price (thus the maximum loan you could receive is $37,500.00);
• the loan amount must be matched by the buyer(s);
• the loan is only available for purchases that complete after February 15, 2017; and
• it is recommended that you apply for the loan after you save sufficient funds for your down payment but before you start making offers on properties.

The criteria to qualify for the loan include the following:
• the applicant must be a Canadian citizen or permanent resident for five years;
• the applicant must have a household income under $150,000.00 per year;
• the applicant must be pre-approved for a high ratio mortgage; and
• the home being purchased must be used as the principal residence of all individuals on the title for the five years after purchasing.

If successful, the program may assist some buyers with purchasing a property that they could not otherwise afford and/or reduce costs of ownership. With the program, a buyer that currently has a down payment of $50,000.00 could access an additional $37,500.00 government loan, thus putting $87,500.00 down. The first five years of the government loan is interest free, thus the buyer would save approximately $5,201.00 in interest in the interest free period (assuming the buyer received $37,500.00 and an interest rate of 3.0%).

However, the program does raise some questions:
• will this further drive up prices in the real estate market;
• when the interest free period expires, will the owner be able to manage the mortgage payments;
• will the owner be able to borrow less from the conventional lender as the payments on the government loan will be part of the calculation for how much the borrower qualifies for. Typically, the more expenses/debt a borrower has, the less the borrower will qualify for; and
• many conventional lenders do not allow a second mortgage on a property, will the lenders allow this government mortgage.

If you are purchasing or selling a property and need assistance with the transaction, feel free to call Sitka Law Group. We would be happy to assist you with the transaction and answer any questions that you may have.

Sitka Law Group is conveniently located on Shelbourne Street in Saanich, near Downtown Victoria and Oak Bay.

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We are frequently approached by clients who are either professionals (i.e. realtors, doctors, dentists, physiotherapists, optometrists, etc.) or who have a sole proprietorship and are thinking about incorporating and require advice.

There are several advantages and disadvantages associated with incorporating that must be considered prior to determining whether incorporating is the appropriate business structure for you. Some of the factors that should be considered include the following:

if you are a professional, whether your professional association will allow you to incorporate and, if so, what restrictions the association may place on the corporation.
Incorporating creates a separate legal entity – one that has rights and obligations just like an individual person. Among other things, a corporation can acquire assets, be the subject of litigation and enter into contracts. This can be advantageous because if the corporation breaches a contract, it is the corporation that may be liable for damages. However, in actual practice, it is not unusual to see a personal guarantee required by an individual on behalf of the corporation.
A corporation allows the shareholders of the corporation to have limited liability. The shareholder’s liability is typically limited to the amount that the shareholder has agreed to pay for shares. However, this also may offer less protection than anticipated if personal guarantees have been required and provided.
The ownership of the corporation can be transferred through the transfer of shares. This not only allows for the efficient transfer of ownership, but it also potentially allows the corporation to raise capital through the sale of shares.
In our experience, the most common reason for incorporating is the tax benefits that may be achieved through tax deferral, dividends and income splitting. We recommend that you discuss this advantage further with your accountant prior to incorporating.
There are a number of factors that should be weighed in determining whether incorporating is the ideal business structure for you. The foregoing list is not all inclusive so we strongly recommend that you contact your accountant and corporate lawyer before you make the decision to incorporate.

If you would like to learn more about incorporating, feel free to contact Sitka Law Group for a free initial consultation. We are located on Shelbourne Street near the border of Saanich, Oak Bay and Victoria.

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Do I need a power of attorney?

A power of attorney, or a POA, is a legal document that allows one person, the “Adult”, to appoint another person, the “Attorney” to assist with legal and financial matters (note that Attorney does not mean lawyer in this context). A POA is part of a basic estate plan which, in addition to a POA, includes a representation agreement, a will and sometimes, trusts.

The Attorney can perform a number of financial transactions on behalf of the Adult, including but not limited to, the following:
• paying the Adult’s bills;
• preparing and filing tax returns;
• dealing with the Adult’s investments and accounts; and
• buying, selling or mortgaging the Adult’s property.

A POA is typically used as an incapacity planning tool, allowing someone to assist the Adult with their financial affairs should the Adult lose capacity. However, a POA can also be useful if the Adult will be unavailable to deal with their own financial affairs, for example if they are travelling.

Often, we have clients inform us that they don’t require a POA due to the fact that their spouse is joint on all assets with them. While this may reduce the requirement for a POA, a spouse still cannot sign the documentation necessary to refinance or buy or sell a property without the POA. Thus, if one of the owners of the property has lost capacity, the other owner of the property will be required to apply to the court for committeeship, a lengthy, expensive process.

Additionally, if you are the shareholder of a company you should be aware that if you have lost capacity, neither your spouse nor your Attorney can sign corporate documents on your behalf. Accordingly, shareholders of small companies should consider having a corporate POA prepared in order to allow the business to carry on in the event that the controlling shareholder loses capacity.

Consideration should be taken in choosing your Attorney as your Attorney will have full access to your finances. While they are prohibited from acting inappropriately, this prohibition certainly does not guarantee that there will not be any abuse by the Attorney. At Sitka Law Group, we recommend that we hold the original POA and only release on certain agreed upon conditions. It is our hope that this will reduce the possibility of abuse.

Should you have questions about a power of attorney or wish to have one prepared, please feel free to contact Sitka Law Group. We are conveniently located on Shelbourne Street near the intersection of the borders of Victoria, Oak Bay and Saanich.

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Do you have a child? Five reasons to get a will done...

We are often asked by clients whether they require a will. Our typical response is that (almost) everyone needs a will, however, it is especially important if you have children. You will want to ensure that children are properly cared for both financially and emotionally.

Here are five reasons to have a will if you have a child:

1. Age of inheritance. If you do not have a will, your children will receive their share of the estate upon turning 19. We find that the large majority of clients wish for the funds to be held in trust, giving the trustee authority to release funds for medical, education and other needs with the majority of the funds to be held to a later age (for example, 25 years).

2. Guardianship. If you pass away while your child is a minor, you will want to name someone to be legally responsible for your child. If you do not have a will, you have no control over who will raise your children.

3. Trustee. If you have a beneficiary that will not receive their funds immediately, the funds will be held in trust by the trustee (often the trustee and the executor are the same person). If you pass away and your minor child is a beneficiary your trustee will hold the funds for the child until the child reaches the stipulated age. Your trustee is typically empowered with releasing funds to your child for education, health care and general well-being so you want to ensure that your trustee clearly understands your wishes.

4. Executor. The executor is the person or company that you appoint to carry out your wishes. Your executor will ensure that all the assets are accounted for, pay out your debts and provide the funds to your beneficiaries.

5. Beneficiaries. Your beneficiaries are the people that inherit your estate when you pass away. If you do not have a will, BC legislation, the Wills, Estates and Succession Act (“WESA”) will determine who your beneficiaries are. In creating a basic estate plan, often the spouse is named as beneficiary, followed by the children. You will want to ensure that your family is properly cared for. Often clients will also obtain insurance from their advisor to provide further support.

If you have any questions about your will, whether it be reviewing your current will, or preparing a new will, please feel free to contact Sitka Law Group. We are located on Shelbourne near the border of Saanich and Victoria and we are happy to help by providing advice and drafting documents.
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I’m going to make my will; how do I choose a guardian?

One of the main reasons that young families choose to prepare a will is their desire to name a guardian for their minor child. Without a will, you have no control over who the guardian of your child will be should you pass away while your child is a minor.

It is important to not only appoint a guardian in your will, but to also appoint an alternate guardian in case the primary guardian cannot, or will not, act.

The difficult decision is often who to appoint as the guardian. Questions that should be considered in determining who you child’s guardian will be include the following:

• Where does the guardian live? Is the location suitable for your child? Will it require your child to relocate?
• How are the guardian’s finances?
• Does the guardian have any children of his or her own?
• Would you rather have family or friends raise your children;
• Does your guardian have religious beliefs?
• Who does your child feel comfortable with?
• Would the guardian have the time and energy to dedicate to your child?
• If the guardian is in a relationship, do you want to appoint both spouses or one? If they separate, who would you want your child to ultimately live with?

The foregoing list is not exhaustive; each family’s circumstances will require a unique analysis.
Once you have decided on the person to appoint, it is very important to discuss the decision with them prior to finalizing your will. You should make sure that they understand the role and what it encompasses, including the fact that if you have young children, this could be a very long-term responsibility for your guardian. Once you have discussed the role with your guardian, give your guardian the opportunity to consider the decision before providing a response. It is crucial that they appreciate the responsibility as it is not unusual for an appointed guardian to decline to act when it becomes necessary.

If you have questions regarding the foregoing, please feel free to contact Sitka Law Group for a free consultation. We are located on Shelbourne Street near the intersection of the borders of Saanich, Oak Bay and Victoria.

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I have been in a car accident, what do I do next?

On average, there are approximately 35,000 car accidents per year on Vancouver Island. That works out to be almost one hundred car accidents per day. On the Island, there are almost 300 cyclists involved in in motor vehicle accidents per year.

In Victoria, the highest incidence of car accidents typically occurs at intersections along Douglas Street, the Island Highway and Burnside.

If you are in one of the 35,000 car accidents there are a number of steps to take, both immediately after the car accident and in the months and years that follow.
There are several steps to take if you have been involved in a car accident. The following is a non-exclusive list of such steps:

• At the scene of the accident you should assess injuries and call 9-1-1 if anyone is hurt;
• You should exchange information with those involved and with potential witnesses;
• If you are able to, take pictures of the accident scene including the damage to the vehicles, the positioning of the vehicles and any debris on the road;
• If you are injured you should go to the hospital - if your injuries are only minor, you may wish to simply go to your general practitioner (GP);
o Seeking medical help will not only help you with your recovery but will create a set of records if you seek compensation in the future for your injuries. In Victoria, not everyone is fortunate enough to have a GP. Even if you don’t have a GP you should still regularly attend a clinic to follow up and obtain treatment advice. It is preferable to attend the same clinic for continuity of treatment and records.
• After meeting with the doctors, it is a good idea to consult a personal injury lawyer to determine your options;
o The options are typically to negotiate a settlement with ICBC directly, or to hire a lawyer to assist you through the ICBC claims process up to and including final resolution of your claim. If you plan to meet with a lawyer, feel free to review our prior blog regarding questions to ask when meeting with a personal injury lawyer:
• After you receive the necessary medical attention you should also promptly notify ICBC of the accident.
In the months that follow the accident, whether you hire a personal injury lawyer or not, you should focus on your recovery and monitor your improvements. You should keep records of your out of pocket expenses relating to the car accident as these may be reimbursed by ICBC.

If you, or someone you know, has been in a car accident please feel free to contact Sitka Law Group for a free consultation. We will discuss your rights and your options so that you can make an informed decision. Sitka Law Group is conveniently located on Shelbourne near the intersection of the borders of Victoria, Oak Bay and Saanich.
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