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CPO MASTERCLASS Bob Pritchard Weightmans LLP

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  • CPO MASTERCLASS

    Bob Pritchard Weightmans LLP

  • www.emlawshare.co.uk

    What Will Be Covered

    • Recent Case law

    • Recent changes to legislation

    • Appropriation/interference with rights

    • 10 Top Tips for successful CPO

    • Housing Act CPOs

    • Scenario discussion and questions

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    CPO – Recent Renaissance

    • Increased use of CPO

    – brownfield sites/ town centre schemes –

    fragmented and often uncertain ownerships

    – Infrastructure schemes – linear CPOs

    – Garden communities

    • CPO “means to an end” – scheme delivery rather

    than simply site assembly (see later)

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    Recent Case Law

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    BARKER) v (1) SECRETARY OF STATE FOR

    HOUSING, COMMUNITIES & LOCAL GOVERNMENT

    (2) LONDON BOROUGH OF BARNET (2018)

  • www.emlawshare.co.uk

    BXC Case

    • Challenge to BXC CPOs No.1 and No.2

    • Claimants owned plot 19 in CPO2 area

    • Full and final offer to purchase the claimants' land

    for £4.2 million – made on day 1 of inquiry

    • Claimants rejected that offer, insisting that they

    wanted a much larger sum

  • www.emlawshare.co.uk

    BXC Case

    • Claimants argued:-

    – Barnet had failed to enter into meaningful

    negotiations with them to acquire their

    premises

    – Barnet had not provided adequate evidence to

    demonstrate that it had taken reasonable

    steps to acquire the premises by agreement.

    – Decision that there was a compelling case was

    disproportionate

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    BXC Case

    • Decision:

    – CPO guidance should be followed

    – guidance requires acquiring authority to

    demonstrate that it had taken reasonable

    steps to acquire all of the land and rights

    included in the CPO by agreement.

    – acquiring authorities were expected to provide

    evidence that meaningful attempts at

    negotiation had been pursued or at least

    genuinely attempted

  • www.emlawshare.co.uk

    BXC Case

    • Meaningful negotiations - clear that the

    Claimants’ property was for sale and they were

    prepared to accept a sum of money for it - but

    only one which was far in excess of that which

    had been offered by Barnet

    • The sums offered were equivalent to the amount

    which would be awarded in relation to a CPO.

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    BXC Case

    • The amount of money demanded by the

    claimants was wholly at odds with the

    appropriate amount, given the land's market

    value.

    • Clear that there had been attempts to sell by

    agreement, that those attempts had been

    rebuffed by a wholly unrealistic approach to the

    valuation of the property, and that reasonable

    attempts at meaningful negotiations had been

    made

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    R (on the application of DANIEL CHARLESWORTH)

    (Claimant) v CROSSRAIL LTD (Defendant) &

    BERKELEY FIFTY-FIVE LTD (Interested party) (2018)

  • www.emlawshare.co.uk

    Crossrail

    • JR of Crossrail’s decision to dispose of land on

    the open market and to treat B55 as the holder

    of a qualifying interest.

    • Crossrail subsidiary of TfL and acts on its behalf

    on land acquisition

    • Claimant held a lease of business premises in

    Woolwich - freeholder was the LDA

    • The premises were CPOd under the Crossrail

    Act 2008 and demolished in order for the railway

    to be built.

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    Crossrail

    • Land was to be disposed of - Crichel Down

    applied

    • Para.10 - former owners were to be given a first

    opportunity to repurchase the land they had

    previously owned unless its character had

    materially changed.

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    Crossrail

    • Crichel Down Rules supplemented by C10 Land

    Disposal policy:-

    – Applies where land has materially changed in

    character and requirement to offer back would

    be otherwise excluded under para 10

    – Holders of Qualifying Interests will be given

    opportunity to acquire at market value

    before offered to general market

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    Crossrail

    • Railway and station at Woolwich constructed –

    surface of site no longer required for railway

    purposes

    • Material change in character of land in course of

    construction – so Rule 10 applied.

    • C10 then applied – Crossrail opted to dispose of

    land as one large site including separate plots.

  • www.emlawshare.co.uk

    Crossrail

    • Crossrail considered that B55 had a QI as it had

    bought the freehold from the LDA prior to the

    acquisition of the land for the Crossrail project

    and sold it to TfL a few days later.

    • When both the Claimant and B55 expressed an

    interest, Crossrail offered the site for sale on

    the open market.

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    Crossrail

    • The claimant challenged that decision on the

    ground that he had been deprived of his rights

    as a dispossessed property owner.

    • Claimant also disputed B55’S eligibility to hold a

    QI, claiming that TfL had not acquired the land "by

    or under threat of compulsion" so that para.7 of

    the Rules did not apply.

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    Crossrail

    • HELD:

    • Para.10 Crichel Down applied because there had

    been a material change in the character of the

    land in the course of the Crossrail construction

    works.

    • Crossrail correctly concluded that the C10 Policy

    applied to the land in issue and had been entitled

    to dispose of it as a single site.

  • www.emlawshare.co.uk

    Crossrail

    • B55 QI?

    – land in issue fell within the compulsory

    acquisition powers of the Act and was needed

    for Crossrail

    – TfL had the power to CPO the land and would

    have had to exercise those powers in order to

    build the station if an agreement had not been

    reached with relevant landowners – including

    B55.

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    Crossrail

    – The transfer to TfL had been negotiated on the

    basis that those CPO powers existed

    – clear from para.7 of the Rules that the fact that

    land was acquired voluntarily did not mean

    that it was not acquired under the threat of

    compulsory purchase powers.

  • www.emlawshare.co.uk

    Crossrail

    – The exception in para.7, where land was

    offered for sale before the negotiations for

    acquisition, did not apply because compulsory

    acquisition was imminent at the time of the

    transfer to TfL.

    – Accordingly, Crossrail had lawfully applied the

    Policy to the land in issue

  • www.emlawshare.co.uk

    Recent Legislative Reforms

    • Housing and Planning Act 2016

    • Neighbourhood Planning Act 2017

    • September 2017 and April 2018

  • www.emlawshare.co.uk

    Confirmation of CPOs

    • From 6 April 2018 Secretary of State has had to

    publish a timetable(s) in relation to steps to be

    taken when confirming a compulsory purchase

    order.

    • The targets mean that acquiring authorities must

    be notified within 10 days of the close of the

    public inquiry into the CPO of the expected date

    of the Secretary of State’s decision.

  • www.emlawshare.co.uk

    Confirmation of CPOs

    • Target dates for confirmation of CPOs are also

    included in the updated guidance.

    • Target that 80% of cases should be decided

    within 20 weeks of the close of the public inquiry

    – with the remaining cases decided within 24

    weeks.

  • www.emlawshare.co.uk

    Advance payments of CPO compensation

    • If requested, amount payable is:-

    – 90% of the agreed sum for compensation or

    – 90% of the acquiring authority’s estimate of the

    compensation due, if possession is taken

    before compensation has been agreed.

    • Prior to 6 April 2018 advance payments had to

    be made within three months from the date of

    request or when possession is taken (if later).

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    Advance payments of CPO compensation

    • Post 6 April 2018 acquiring authority must, within

    28 days of receiving a request for an advance

    payment, decide whether or not it has enough

    information to estimate the amount of

    compensation payable. If the acquiring authority

    needs more information, it must then require the

    claimant to provide it.

  • www.emlawshare.co.uk

    Advance payments of CPO compensation

    • Payment must be made:-

    – by the date of service of a notice of entry or

    GVD

    – or within two months of a request from a

    claimant (if later).

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    Removal of second-bite compensation

    • Claimants are no longer entitled to claim

    additional compensation where, within 10 years

    of the completion of the compulsory purchase by

    the acquiring authority, a planning decision is

    made granting consent for additional

    development on the land.

  • www.emlawshare.co.uk

    Time period for confirmation notices

    • Must serve and publish a confirmation notice

    within six weeks of a CPO being confirmed

    (unless a longer period is agreed between the

    acquiring and confirming authorities).

    • CPO becomes operative on the date of the

    confirmation notice.

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    Compensation for disturbance

    • Disturbance compensation for business tenants

    and lessees with a break clause reformed

    • Previously It was assumed that the landlord would

    terminate the tenant’s interest at the first

    available opportunity (Bishopsgate Space

    Management v London Underground (2004)).

    • Under the new provisions, the prospect of

    continuation or renewal of the tenancy is to be

    taken into account.

  • www.emlawshare.co.uk

    No Scheme World

    • Towards A Compulsory Purchase Code: (1)

    Compensation (Law Commission 2003)

    • “the most difficult subject we have had to

    address in this project: the complex and

    intractable problems arising from the so called

    Pointe Gourde (or “no-scheme”) rule.”

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    Bloor – Supreme Court

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    Bloor – Supreme Court 2017

    • “ The Upper Tribunal’s decision in the present case is

    a powerful illustration of the potential complexities

    generated by the 1961 Act in its unamended form. It is

    to be hoped that the amendments currently before

    Parliament will be approved, and that taken with the

    2011 amendments they will have their desired effect

    of simplifying the exercise for the future. It is no

    criticism of the tribunal if parts of their reasoning may

    appear obscure at first sight and require some

    unpicking. ......”

  • www.emlawshare.co.uk

    Concept of “no-scheme world”.

    • Assumes that the scheme underlying the compulsory

    purchase was cancelled on the valuation date (the

    date of entry and taking possession of the land – if not

    agreed earlier).

    • Compensation for interests in land is its open market

    value in the “no-scheme world”, disregarding both

    any increase or decrease in the value of the land

    which is solely attributable to the particular purpose

    for which it is acquired, and the acquiring authority’s

    need for the land for that purpose.

  • www.emlawshare.co.uk

    September 2017 Reforms

    • The new sections (s6A-6E inserted into the LCA

    1961) articulate the no-scheme principle and set

    out the parameters of how the “scheme” is to be

    approached.

    • Subsections (2) to (5) provide for special cases

    including under s. 6D(3) and (4) where “land is

    acquired for regeneration or redevelopment which

    is facilitated or made possible by a relevant

    transport project”

  • www.emlawshare.co.uk

    September 2017 Reforms

    • Relevant transport project - a transport

    project carried out in the exercise of a

    statutory function or by the exercise of

    compulsory purchase powers (regardless of

    whether it is carried out before, after or at the

    same time as the regeneration or

    redevelopment)

  • www.emlawshare.co.uk

    Land Value Capture? – HCLG committee

    Report 10 September 2018

    • “…..we believe that the Land Compensation Act 1961 requires

    reform so that local authorities have the power to compulsorily

    purchase land at a fairer price. The present right of landowners to

    receive ‘hope value’—a value reflective of speculative future

    planning permissions—serves to distort land prices, encourage

    land speculation, and reduce revenues for affordable housing,

    infrastructure and local services. We do not believe that such an

    approach would be incompatible with human rights legislation, as

    there would be a clear public interest and proportionality case to

    make this change.”

  • www.emlawshare.co.uk

    Overriding and Appropriation

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    Overriding and Appropriation

    • Overriding – powers conferred on LAs and other

    bodies authorising infringements of private rights in

    relation to land (e.g. easements and rights to light)

    when carrying out or maintaining works or

    subsequently using land

    • Appropriation – decision by a LA to appropriate land

    it holds for one statutory purpose to some other

    statutory purpose - often to take advantage of powers

    to override rights

  • www.emlawshare.co.uk

    s.203 HPA 2016

    • Replaced powers to override rights acquired or

    appropriated for planning purposes previously in

    s.237 TCPA

    • Although the powers under s.203 are broadly the

    same as those under s.237, there is a new

    requirement that the power will apply where the

    LPA “could acquire the land compulsorily” for

    the purposes of the development.

    • Development must have planning permission

  • www.emlawshare.co.uk

    S203 HPA 2016

    • Could land have been CPOd for planning

    purposes?

    • Would facilitation of development justify an

    interference with the rights of third parties?

    • Is there a compelling case in the public interest?

  • www.emlawshare.co.uk

    Spurs Tests

    • Consideration 1: The use of statutory powers is

    required in that:

    – (i) The infringements cannot reasonably be

    avoided;

    – (ii) The easements to be interfered with cannot

    reasonably be released by agreement with

    affected owners;

    – (iii) The development is prejudiced due to the

    risk of injunction and adequate attempts have

    been made to remove the injunction risks.

  • www.emlawshare.co.uk

    Spurs Tests

    • Consideration 2: The use of statutory powers will

    facilitate the carrying out of the Development;

    • Consideration 3: The Development will

    contribute to the promotion and improvement of

    the economic, social, or environmental well-being

    of the area and therefore be in the public interest;

    • Consideration 4: The benefits of the

    Development could not be achieved without

    giving rise to the infringements of the identified

    rights ;

  • www.emlawshare.co.uk

    Spurs Tests

    • Consideration 5: Is it in the public interest that

    the development is carried out?

    • Consideration 6: Is the public interest to be

    achieved proportionate to the private rights being

    infringed by the action of Section 203?

  • www.emlawshare.co.uk

    Compensation

    • Compensation for interference with rights or

    breach of restrictive covenant - the diminution

    in value of the claimant's land as a

    consequence of the interference or breach of

    covenant

    • n.b. claimant will not be able to pursue an

    injunction to prevent the interference from

    taking place - remedy is a claim for

    compensation.

  • www.emlawshare.co.uk

    Appropriation - Open Space

    • Before appropriating open space must:-

    – advertise intention to appropriate for two

    consecutive weeks in a newspaper

    circulating in the local area;

    – consider any objections to the proposed

    appropriation

    • “Open Space” – land laid out as a public

    garden, or used for the purposes of public

    recreation, or land which is a disused burial

    ground.

  • www.emlawshare.co.uk

    N.B. Appropriation of Commons

    etc.

    • General power – s. 122 LGA 1972

    • BUT appropriation of common, fuel or field

    garden allotment above a 250 square yard

    threshold can only be carried out pursuant to

    s.229 TCPA 1990 - subject to procedural

    requirements including submitting the order to

    the Secretary of State for confirmation.

  • www.emlawshare.co.uk

    Test For Appropriation

    • 2 separate conclusions required:-

    – land is no longer required for the purpose for

    which it is held

    – needed for the new purpose.

    • whether the land is no longer required for the

    current purpose is solely for the LA acting in

    good faith

    • In reaching this decision the LA must consider

    the public need within the locality for the

    existing use

  • www.emlawshare.co.uk

    Western Power Case (2013)

    • Cardiff Council held the relevant land as

    public space.

    • 1976 - fenced off

    • Part of the land was used for allotments - the

    other (disputed) part as a car park and a

    grassed strip ancillary to the allotments.

    • No documentation showing that it had been

    appropriated in accordance with s.122 of the

    1972 Act

    • Council sought ‘official’ appropriation.

  • www.emlawshare.co.uk

    Western Power

    • Western Power grounds of challenge

    – Council had not performed its statutory duty

    under s122

    – Council had placed excessive emphasis on

    the current use of the land,

    – Council had taken into account incorrect and

    therefore irrelevant factors including that

    current information showed that there was

    actually a deficit of open space compared

    with requirements

  • www.emlawshare.co.uk

    Western Power

    • The Court decided:-

    – Council had made it clear that its decision

    would be whether the land was no longer

    needed as public trust land.

    – It was entitled to take into account the

    submissions of, and use of the land by, the

    Allotments Society – even though this was

    facilitated by the unlawful exclusion of the

    public.

  • www.emlawshare.co.uk

    Western Power

    • BUT

    – incorrect and inadequate information was put

    before the Council e.g. - couldn’t reach a

    decision on need in the locality for a public

    space when the material deficiency in space

    in 3 relevant wards was not disclosed or was

    misrepresented

    • Council’s decision to appropriate the land was

    quashed.

  • www.emlawshare.co.uk

    Moore Case (2014)

    • SoS decision to confirm appropriation of

    allotment land challenged

    • SoS decision had been on basis of 600-650

    dwellings

    • Day after that decision the number increased to

    750

    • Increase could have affected decision to

    confirm - so it was quashed

  • www.emlawshare.co.uk

    10 Key Issues for Successful CPOs

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    Key Issue 1 – The Compelling Case In the

    Public Interest

    • Essential question – will the public benefit associated

    with the proposals outweigh the interference with private

    rights?

    • Applies to any CPO action

    • Clays Lane case – compelling case was given status as

    legal test for CPO

  • www.emlawshare.co.uk

    Key Issue 2 - Don’t Forget The Scheme!

    • CPO is essentially about scheme delivery

    • Identify the scheme at the outset – level of detail will

    vary but need to have a clear idea of what the end

    product should be

    • Regeneration CPO issues

    – Escape velocity

    – Viability v. step change

    – Phasing

  • www.emlawshare.co.uk

    Key Issue 3. – Reports

    • Often have an initial “In Principle” Report

    • This can assist with negotiations and reduce level of

    objections

    • Whilst CPO action will not follow immediately care

    needed in drafting

    – Can be referred to at inquiry

    – Need to draft it to avoid the accusations that

    authority had predetermined the use of CPO with

    regard to a particular landowner

  • www.emlawshare.co.uk

    Key Issue 3. – Reports

    • ‘Final’ Report

    • Should aim to be in a position to make CPO without delay

    • Matters to cover:-

    – “Compelling case in the public interest” – members should have sufficient information before them to allow them to come to an informed decision

    – Refer to powers and how the statutory tests are met (see later)

    – Planning

    – Funding

    – Delivery mechanism – e.g key aspects of DA

    – Human rights (eg A8, A1 First Protocol)

  • www.emlawshare.co.uk

    Key Issue 3. – Reports

    • ‘Final’ Report

    – Make sure delegations are dealt with

    – If authority is needed to continue with voluntary

    acquisitions recite powers.

    – Draft Statement of Reasons should be

    appended if at all possible

    – Accurate CPO plan is important – if in doubt

    about extent of boundary, put land in

  • www.emlawshare.co.uk

    Key Issue 3. – Reports

    • ‘Final’ Report

    • Consequences of getting it wrong

    – Possible challenge

    – But more likely difficulties at Inquiry

  • www.emlawshare.co.uk

    Key Issue 4. – CPO Powers

    • Section 226(1)(a) TCPA 1990 as amended - key

    regeneration power (including housing based

    regeneration)

    • If there is a specific power should use this rather

    than opting for general LGA power

  • www.emlawshare.co.uk

    Key Issue 4. – CPO Powers

    • Whilst planning permission is not a pre-requisite,

    still necessary to establish a robust planning basis

    for a CPO under Section 226(1)(a)

    • Significant advantages if a planning permission

    is obtained for the underlying scheme before the

    Order is made and especially before the CPO

    Inquiry (see later)

  • www.emlawshare.co.uk

    Key Issue 5. – Planning Backing

    • CPO Guidance - no planning or other barriers to

    proceeding with scheme

    • Guidance suggests that planning permission need

    not be in place (different emphasis for highway

    schemes) BUT

    – Needs to be a good reason why not!

    – Can it be available pre – inquiry?

    – If not in place, robust planning policy backing

    even more important.

  • www.emlawshare.co.uk

    Key Issue 5. – Planning Backing

    • Planning Policy

    – Helps to support scheme authority are

    promoting

    – Can help to resist rival schemes

  • www.emlawshare.co.uk

    Key Issue 5. – Planning Backing

    • Policy Includes:-

    – Development Plan

    – SPD – including development briefs

    • Possibility of non – statutory policy backing to be

    adopted at a later stage – (BUT risk area – see

    Skipton Properties)

    • NB links to other policy docs e.g.

    – Regeneration policies

    – Transport policy

    – Economic policy

  • www.emlawshare.co.uk

    Key Issue 6. - Deliverability

    • Scheme must be acceptable from a planning

    policy perspective and also from a

    viability/deliverability point of view – the two

    should overlap under local plan system

    • Proposals should have a reasonable prospect of

    being achieved within a reasonable timescale

  • www.emlawshare.co.uk

    Key Issue 6. - Deliverability

    • Funding may be:-

    – Wholly private sector

    – Wholly public sector – increasingly rare !

    – Combination – regeneration CPOs will

    commonly fall in this category

  • www.emlawshare.co.uk

    Key Issue 6. - Deliverability

    • Negotiations - start early and keep on throughout

    process – deals often done in run up to and

    sometimes during the inquiry!

    • Avoid impression that CPO is first rather than

    last resort

    • Need to ensure consistency with deals –

    particularly where there are a large number of

    similar properties

    • Identify “problem plots” early on and build into

    strategy

  • www.emlawshare.co.uk

    Key Issue 7. – Partnership Working

    • Developer procurement

    – When? – ideally pre CPO but it depends on

    circumstances

    – Partnership approach crucial – input into

    planning process can be very helpful

  • www.emlawshare.co.uk

    Key Issue 7. – Partnership Working

    • CPO anchored projects often involve a number of

    disciplines and partners

    • Assemble team early on

    • Need to have:-

    – Clear roles and responsibilities;

    – Strong and clear leadership;

    – Appropriate and flexible decision making

    arrangements;

    – Core team and others to call on;

    – Clear project plan

  • www.emlawshare.co.uk

    Key Issue 8. – Human Rights

    • CPO will interfere with individual rights.

    • Key point will public benefit outweigh the interference?

    • Article 1 First Protocol – property rights

    • Article 8 – right to home private and family life

    • Address at all stages of process including:-

    – Board/Cabinet/Council report requesting authority to make CPO;

    – Statement of Reasons;

    – Statement of Case;

    – Evidence

  • www.emlawshare.co.uk

    Key Issue 9. - Relocation

    • Aim to demonstrate that interference with individual

    rights is proportionate by employing a relocation

    strategy that minimises interference with individual

    rights.

    • Residential - relocation strategy essential, -

    Inspectors at CPO inquiries have considered

    individual re-housing issues

    • Commercial - continuity of provision (eg retail) –

    consider economic impact of CPO action and need to

    minimise it

  • www.emlawshare.co.uk

    Key Issue 10. – Anticipate Objections

    • Common ones:-

    – Need to protect private rights should outweigh

    public interest

    – Viability not established

    – Scheme can be delivered without CPO

    – Land can be excluded – particularly land on

    CPO boundary

  • www.emlawshare.co.uk

    Housing Act CPOs

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    Housing Act CPOs

    • Section 17 HA 1985 empowers local housing

    authorities to acquire land, houses or other

    properties by compulsion for the provision of

    housing accommodation.

    • Acquisition must achieve a quantitative or

    qualitative housing gain.

  • www.emlawshare.co.uk

    Empty Properties

    • Last resort in situations where there appears to

    be no other prospect of a suitable property being

    brought back into residential use.

    – How long has property has been vacant?

    – What steps has the authority taken to

    encourage the owner to bring it into acceptable

    use and the outcome; and

    – What works have been carried out by the

    owner towards its reuse for housing purposes?

  • www.emlawshare.co.uk

    Housing v Planning Powers

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    Scenario and Discussion

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    Check out the website …

    www.emlawshare.co.uk