Moreton Bay council secretly helped mayor’s donor win $20 million deal

Australia's third-largest council handed a key contract to one of the mayor's political donors without a tender. Now, as the Crime and Corruption Commission investigates, council insiders are questioning how the deal was reached and whether some councillors were kept in the dark.

By Mark Solomons
11 September 2018 — 9:37pm

Talking points

  • Moreton Bay Region Industry and Tourism Ltd describes itself as the "official destination management organisation" of the region. 
  • It runs the council's visitor centres as well as events including the Redcliffe Kitefest and local food and wine festival as well as regular business conferences.
  • MBRIT is funded by subscriptions from local businesses and state government grants in addition to the almost $4 million a year it receives from Moreton Bay Regional Council.
  • MBRIT chairman and chief executive Shane Newcombe also chairs the Regional Development Association Moreton Bay, a federally-funded liaison body between local business and the Commonwealth.
  • The Newcombe family's car business, Village Motors, is a supplier to Moreton Bay Regional Council.
 

Moreton Bay Regional Council helped a financial backer of the mayor and other councillors win more than $20 million-worth of outsourced council work by giving him confidential internal financial documents and letting him write the performance criteria for the deal, council whistleblowers claim.

In May 2016, the council handed wealthy local businessman Shane Newcombe’s company Moreton Bay Region Industry and Tourism Ltd a three-year contract to run events and promote tourism worth almost $7 million, without a tender.

This photo of Shane Newcombe and Moreton Bay mayor Allan Sutherland at a Broncos pre-season match in Redcliffe last year was shared on Mr Newcombe's Facebook page.

This photo of Shane Newcombe and Moreton Bay mayor Allan Sutherland at a Broncos pre-season match in Redcliffe last year was shared on Mr Newcombe's Facebook page.

Photo: Facebook

The deal with Mr Newcombe in mid-2016 led to the effective closure of the council’s events department with the loss of more than 10 jobs.

Former council staffers allege councillors voted for the deal in 2016 with at least some of them not knowing that Mr Newcombe had been given unfettered access to sensitive council documents.

Those councillors were also unaware he had been coached for a key presentation to the full council by a small group of councillors, all of whom had received financial backing from Mr Newcombe's family.

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Confidential council documents handed over to donor

So many confidential documents were downloaded to give to Mr Newcombe, one former staffer said, it set off an alarm in the council’s records department.

Councillors and staff who raised questions about the lack of a competitive tender were told there was no other company that could do the work.

The contract was this year enlarged and extended - a year early - for four years, making it worth as much as $23.5 million in total, the council’s biggest single procurement.

The council has published no details of the renewed contract and has refused to respond to repeated enquiries about it. 

No councillors declared conflicts of interest at the closed-session May 2016 vote. This was in spite of mayor Allan Sutherland and three other councillors having been beneficiaries during the 2016 election campaign three months earlier of a $20,000 donation by the Newcombe family to Moreton Futures Trust, a vehicle used to fund Cr Sutherland’s mayoral campaigns in the last two local elections.

The main beneficiary of the trust has been Cr Sutherland. But it also supported the electoral campaigns of councillors James Houghton, Julie Greer and Peter Flannery in 2016. It also provided $2500 to the campaign of deputy mayor Mike Charlton during the 2012 campaign, which was later repaid.

A council staffer has revealed Crs Charlton and Greer were the only councillors who attended a secret meeting in early 2016 where Mr Newcombe conducted a “dry run” of a presentation on the benefits of the MBRIT deal in front of the mayor and chief executive Daryl Hitzman.

The purpose of the meeting was Mr Newcombe “getting feedback to ensure no other councillor prevented (the deal) from going through” at the subsequent formal presentation and vote, the former staffer said. 

“It was very secret squirrel,” said the same former staffer.

Fairfax Media understands that key financial information showing how much the MBRIT arrangement would save council was removed from the final presentation on the instructions of Mr Hitzman.

Mr Newcombe is a director of Newcombes Holdings, the company that donated to Moreton Futures Trust and owns local car dealership Village Motors. It is controlled by Mr Newcombe’s mother, Marlene.

Cr Sutherland testified at public hearings at the Crime and Corruption Commission last year that he had been “happy not to know” who the donors to the trust were because “it’s hard to have a conflict when you don’t know who the donor is”.

But he then told the hearing: “I knew Newcombe Holdings had put money in there.” 

Fairfax Media revealed last month that the CCC is investigating the circumstances surrounding the May 2018 contract renewal.

Councillors delegated that decision to chief executive Daryl Hitzman after seven of them declared “perceived conflicts of interest” on the basis they were friends of Mr Newcombe or had attended his wedding the previous week.

None of the five councillors who had received financial support from Moreton Futures Trust in the 2012 or 2016 elections mentioned this at the meeting.

Questions are now being raised about the initial award of the contract in 2016, which the councillors present voted for unanimously.

Council insiders have told Fairfax Media the outcome was never in doubt, saying that since at least late 2015 they had been expected to give Mr Newcombe whatever he asked for to make sure the deal went through. 

“It was a done deal,” one former staffer with detailed knowledge of the dealings with Mr Newcombe said.

“Our directions were very clear. We had to make this happen.”

Shane Newcombe was a regular visitor to Moreton Bay Regional Council

A former council manager said Mr Newcombe had attended “at least 10” meetings at council premises with Mr Hitzman and other senior officers between March and June 2016 to discuss the outsourcing of council activities and had met regularly with other staff, who he had asked to give him comprehensive information on all the events run by council.

“Shane Newcombe wanted the whole lot,” another former staffer said. 

"He wanted as much detail as he could.

“What it cost us, the hire of everything, how many staff and volunteers were needed.

“The documents were to give him what he needed as quickly as possible.”

The staffer revealed that so many documents were downloaded on to USB sticks to give to Mr Newcombe it triggered an alarm on the council’s computer system.

“When we downloaded the USBs we were contacted by the records department,” the staffer said. 

“When you download more than four documents it shows up on their system. We had to explain what it was for and that we’d been told to do it.

“They were available on the council system but you would only look at it if it was your area. It was confidential. You would not share it with anybody.”

The staffer said Mr Newcombe had requested and been provided information that included detailed budget breakdowns of the cost of running events such as the Urban Country Music Festival, the Decades rock music event and smaller events such as annual Christmas concerts in various divisions.

The documents included detailed profit and loss statements for each event, and even invoices issued to suppliers.

“They were massive. It was everything that it cost to run those events - traffic management, food, accommodation, all the hire equipment and alcohol.” 

'You do what you have to do to get it across the line'

The former manager said staff had felt under pressure because of the close relationship between Mr Newcombe and the councillors and chief executive and because the deal “was going to happen regardless”.

“We were just facilitating the outcome,” the former manager said.

“It was a culture of ‘you do what you have to do to get it across the line’. 

“You did things that weren’t right but you would have been sacked if you didn’t.”

MBRIT has not staged the Urban Country Music Festival or the Decades music event since it has had the council events contract. Both were loss-making under council.

When councillors voted for the MBRIT deal, the motion included a requirement for Council to agree a “service level agreement” with MBRIT that would govern how MBRIT was expected to perform and limit the council’s financial liability.

Documents obtained by Fairfax Media show that this document was authored a month after the vote - by Mr Newcombe.

An email sent by Mr Newcombe to a council staffer in June 2016 headed “SLA Draft Notes” had attached to it a detailed 20-page document titled “MBRIT Service Level Agreement”, the metadata of which shows the author was “Shane Newcombe”. 

The accompanying email states: “I have put this together the best I can! I will have some time during today to look at it again … But I think it’s a good first draft to be discussed with Daryl and Stew.”

Fairfax Media understands “Daryl” is chief executive Daryl Hitzman and “Stew” is Stewart Pentland, the council’s director of planning and economic development since 2015.

The council has declined to provide a copy of the service level agreement, despite repeated requests from Fairfax Media.

The former employees all said Mr Hitzman had informed staff there was no need for a competitive tender because there was only one company that could provide the services and this provided an exception to the usual tendering rules under Queensland local government regulations.

“We kept asking, doesn’t this have to go to tender?’ one of them recalled. 

Council does not reveal details about the deal

Division two councillor Peter Flannery, the council’s spokesman on economic development, said councillors had accepted there would be no tender for the outsourcing project in 2016 because they had decided no-one else could do the job.

“When we first gave the contract it was discussed - are there any other businesses? But nobody knew of anyone,” he said.

Cr Flannery received just under $4000 in political donations from Moreton Futures Trust in the 2016 local elections. He did not declare a conflict of interest in the votes on the MBRIT contract in 2016 or 2018.

The former staffers were unwilling to be identified for fear of recriminations, but said they would be willing to provide evidence to investigators. 

The council did not answer detailed questions. A spokesman said: “Council understands that the CCC is currently investigating a complaint from a ratepayer. With an investigation underway, it’s not appropriate for council to comment further.

“Please contact us at the conclusion of the CCC’s investigation.”

Fairfax Media submitted questions separately to the mayor Allan Sutherland and each of the other 12 councillors.

Division one councillor Brooke Savige said she had no recollection of councillors being told prior to the May 2016 vote that Mr Newcombe had been given detailed council financial information to facilitate him winning the outsourcing contract.

If she had known that Mr Newcombe had authored the service level agreement, she said, “that would be something that would put up a lot of red flags for me”. 

“That doesn’t sit well with me at all,” she said.

Councilor Adrian Raedel (division 12), who had previously raised concerns about the MBRIT deal, said he had not been present at the meeting to award the contract on May 17, 2016 so had not participated in the vote.

The Australian has reported Cr Raedel was the subject of an unrelated investigation by the CCC into a complaint made by Mr Hitzman regarding Cr Raedel's relationship with a donor. The CCC confirmed it was investigating a Moreton Bay councillor, without identifying who it was.

Councillor for division three, Adam Hain, said: “Haven’t our PR department given you press releases on this? I’m not going to comment to Fairfax Media on things from 2016,” before hanging up.

Other councillors did not respond to questions. Nor did Mr Newcombe. 

Moreton Futures Trust came under intense scrutiny during the CCC’s Belcarra hearings into local government last year. The CCC was later critical of it and organisations like it in its report to the state government, arguing that they obscured the true sources of politicians’ financial support.

 
Mark Solomons

Mark Solomons is an investigative journalist for Brisbane Times.

 

Five councillors and mayors due to be automatically suspended

By Felicity Caldwell
17 May 2018 — 5:43pm

Under laws passed on Thursday night, councillors charged with serious integrity offences - such as bribery, corruption and fraud - will be automatically suspended on full pay, pending the outcome in court.

Local Government Minister Stirling Hinchliffe will now have more powers to sack councils.

Local Government Minister Stirling Hinchliffe will now have more powers to sack councils.

Photo: AAP Image/ Dave Hunt

Local Government Minister Stirling Hinchliffe confirmed five councillors would be affected.

It is understood the provision will affect Logan mayor Luke Smith, Ipswich former mayor Andrew Antoniolli, two members of councils from remote Indigenous communities and one other councillor.

A sixth councillor would have been affected, but was disqualified because of a failure to attend the required number of meetings.

 
Mr Hinchliffe said he was "pretty confident" the councillors involved were aware they would be stood down.

"Because they are indeed clearly integrity offences that they relate to," he said.

The automatic suspension would be lifted if the person was found not guilty or the charges were dismissed.

Mr Hinchliffe will also write to every councillor and mayor in Queensland to advise them of the new rules.

Logan mayor Luke Smith took to social media on Thursday night in response to the new laws.

"So while then (sic) State Government is claiming credit to stop innocent Mayors charged with corruption, the m1 is still a mess at 6:00 pm - what is this government actually doing?" Mr Smith posted on Facebook. 

The powers were among two bills passed through Parliament, which ban donations from property developers at a local and state government level, establish an Office of the Independent Assessor to investigate and deal with misconduct and ban people convicted of integrity offences from being a councillor for up to seven years.

The LNP unsuccessfully tried to also ban political donations by unions.

The bills will come into effect upon assent by the Governor, which could be as early as next week.

The laws also give Mr Hinchliffe more powers to sack councillors, mayors - and dissolve entire councils - "in the public interest".

What is in the public interest will be decided on considerations, such as complying with the law, accountability and transparency, corruption or serious maladministration and not managing conflicts of interest, Mr Hinchliffe said.

Mr Hinchliffe began moves to appoint an administrator at the Ipswich council and asked councillors why they should not be sacked earlier this month after the crime watchdog charged Cr Antoniolli with seven counts of fraud.

Ipswich councillors still have until May 24 to show cause as to why they should not lose their job.

But Mr Hinchliffe would be able to move to sack councillors in Ipswich - should he decide to take that action - as soon as the bill becomes law, rather than waiting for the current show cause period to expire.

That would mean issuing another show cause notice, of between seven to 28 days.

Mr Hinchliffe said the reforms would make mayors, councillors and councils more accountable to their communities.

"There are currently a number of mayors, councillors and council officers in Queensland facing dozens of criminal charges between them," he said.

"The Crime and Corruption Commission has warned there are more charges on the way.

"Our reforms are not designed to catch those who make genuine mistakes, but to deal with the tiny minority not living up to community expectations."

 

Fraser Coast voters choose George Seymour as new Mayor in by-election, replacing sacked councillor, Chris Loft

Updated about 11 hours agoSun 6 May 2018, 3:58pm

Fraser Coast Regional Councillor and acting Mayor, George Seymour, has claimed victory in this weekend's mayoral by-election, and will replace sacked councillor Chris Loft.

With 82 per cent of the vote counted at 1.30pm on Sunday, Cr Seymour holds more than 39 per cent of the vote with just over 23,000 votes — more than twice that of his nearest rival, fellow councillor Darren Everard.

The by-election was unusual in that it was the first time a Mayor had been sacked in Queensland without the whole council being sacked.

Chris Loft was dismissed as Mayor of the Fraser Coast by Local Government Minister Stirling Hinchliffe in February for "serial breaches" of the principles in the Local Government Act.

Speaking outside the Maryborough Town Hall this afternoon, Cr Seymour said the polls were pretty clear.

"I'm feeling good about the result," he said.

Cr Seymour said he now wanted to focus on the future.

"The council needs to improve. I get that," he said.

"The first two years of the council's four year term have been tumultuous, wracked with division and debate.

"We need to unite the council."

Cr Seymour is a member of the ALP. The 38-year-old, softly-spoken Californian went to university in Brisbane before moving to Hervey Bay 14 years ago.

Jobs, region's outer communities a priority

 

Cr Seymour spent Sunday morning in Maryborough for a Labour Day march and the city's Pubfest event, before heading to the region's southernmost town of Glenwood in the afternoon for a progress association meeting.

He vowed not to neglect the region's outer areas, where some residents are resentful of the council's 2008 amalgamation of Hervey Bay City, Maryborough City, Woocoo Shire and most of Tiaro Shire.

Cr Seymour also promised to improve the council's relationship with businesses to tackle the region's unemployment rate, which at 10 per cent is nearly twice the national average.

"The council needs to work really closely with businesses and people who are proposing to invest," Cr Seymour said.

"The last two years have meant that our eyes were taken off that.

"Once we have a stable council we can focus on bigger picture issues.

"I've already started talking to businesses about bringing jobs to the region."

Cr Seymour has also been a vegan for 20 years, eschewing animal products including leather.

"I try to lead a life without harming anyone; human or other types of animals."

'The better man won': defeated mayoral candidate

Fellow councillor Darren Everard conceded defeat, saying "the better man won".

"The man couldn't beat the machine in the end," he said.

"George is a good fella and I'm sure he'll do a good job.

"Tomorrow's a new day and we'll spend it making the Fraser Coast a better place."

Community disillusionment was a common theme in the lead-up to the election.

"The comments I'm getting about the council I really can't say on radio," candidate Paul Forst, a boilermaker, told ABC Wide Bay.

"There's no doubt that the council has lost the respect of the community."

CCC to investigate allegations of corruption relating to Gold Coast City Council decision-making - 2 March 2018

 

The Crime and Corruption Commission (CCC) has determined it is in the public interest to advise it has commenced an investigation into allegations of corrupt conduct relating to decision-making by some Gold Coast City Council councillors.

The allegations broadly involve possible conflicts of interests relating to decisions on a range of development matters on the Gold Coast.

The CCC referred some matters in September 2017 to the then Department of Local Government, Infrastructure and Planning to investigate subject to the CCC’s monitoring role.

The CCC has since considered an interim report from the Department.

The allegations, which raise a reasonable suspicion of corrupt conduct, will now be investigated by the CCC.

It is important to note that all allegations should be treated as unsubstantiated until the investigation is finalised.

Whilst the investigation is progressing, the CCC is unable to comment further. This includes not commenting on specific developments or decisions of the Council that are the subject of the investigation.

--ENDS--

Logan Council CEO reinstated

Sharon Kelsey has told the ABC she will resume work as Logan City Council CEO on May 14, after councillors voted seven to five in February to sack her.

Dissenting Logan councillor Darren Power said at that time he believed she was fired illegally.

Logan City Mayor Luke Smith, who has also been charged with official corruption by the CCC, did not take part in the vote to sack Ms Kelsey.

There is no suggestion Ms Kelsey has been under investigation by the CCC.

The Queensland Industrial Relations Commission (QIRC) decided Ms Kelsey should return to work on an interim basis.

Ms Kelsey is also making an application for a full re-instatement, which will be heard before the QIRC in late July.

Ipswich council and others can expect to face more charges, CCC chairman says

Updated Fri at 5:46pmFri 4 May 2018, 5:46pm

Queensland Crime and Corruption Commission (CCC) chairman Alan MacSporran says more charges are likely to be laid as part of investigations into councils in Ipswich and elsewhere.

He was speaking outside State Parliament after the Queensland Government demanded Ipswich councillors show cause why they should not be sacked as the region's corruption scandal widens.

The CCC charged Mayor Andrew Antoniolli with seven counts of fraud on Wednesday.

 

A total of 12 people from Ipswich Council, also including former mayor Paul Pisasale and two council CEOs, are facing 66 charges amid a series of ongoing CCC investigations.

"You can expect more charges," Mr MacSporran said.

"I'm not going to discuss any further operational details but I can tell the public that the investigation, which has gone for some considerable time, is nearing its completion so far as the investigation into corrupt conduct goes."

He said there were 226 corrupt conduct complaints received from the local government sector in the reporting period from last August until February this year, a 38 per cent increase on the previous 12 months.

Mr MacSporran said the CCC also continued to investigate other councils, including the Gold Coast.

"I'm not prepared to discuss what they involve but they'll speak for themselves when we take action, if we do," he said.

"Gold Coast is about to start. There's plenty of evidence of complaints being made about the Gold Coast City Council and its functioning."

Also on Friday, former Fraser Coast mayor Chris Loft lost his Supreme Court bid to have his sacking overturned.

Local Government Minister Stirling Hinchliffe sacked Mr Loft in February for misconduct.

Speaking outside court in Brisbane, Mr Loft said he was disappointed by the ruling.

"I can put my hand on my heart and say that everything I've done was with the best of intentions and for the ultimate benefit of the community that elected me and that I've been proud to serve as well as the staff on the council who were hurting," he said.

"With the benefit of hindsight, some of the decisions I've made have perhaps been naive."

Ipswich City Council mayor Andrew Antoniolli resigns, entire council dropped

HOURS after its mayor stood down because of corruption charges, the entire Ipswich City Council has been dropped.

AAPMay 3, 201810:46am
 

THE Queensland government will appoint an administrator at Ipswich City Council amid a widening corruption scandal that has seen a dozen people charged and the council facing the sack.

Local Government Minister Stirling Hinchliffe announced the move in state parliament on Thursday, a day after Mayor Andrew Antoniolli, the second major to be charged, was slapped with seven fraud offences by the Crime and Corruption Commission.

Mr Antoniolli, who will front court later this month, denied any wrongdoing and initially said he wouldn’t stand down, but changed his mind on Thursday morning.

Former Ipswich Mayor Andrew Antoniolli.

Former Ipswich Mayor Andrew Antoniolli.Source:Supplied

Mr Hinchliffe will also ask the entire council to show cause as to why it should not be disbanded.

“The impacts we’ve already seen are devastating, on the moral of council staff, including on the personal well-being of individuals and on council’s ability to deliver good policy outcomes and on the Ipswich community as a whole,” he told state parliament.

“I have reached the conclusion that Ipswich City Council can no longer function effectively.” Twelve people, including two mayors and two chief executive officers, are facing a total of 66 charges from the CCC’s investigations into the council. Mr Hinchliffe will next week ask Premier Annastacia Palaszczuk’s cabinet to consider strengthening his legislative powers to dismiss councils when they lose the trust of communities.

“I believe this course of action is necessary to restore public confidence in the Ipswich City Council,” he said.

Ms Palaszczuk said too many charges had been levelled at too many officials for the council to maintain confidence.

“Enough is enough,” she said.

“This will stop and I am stopping it.” Mr Antoniolli, elected in August on a platform of integrity and transparency, is alleged to have used council funds for his own use for five years until May 2017 to buy auction items from charities.

Rogue local Labor MP Jo-Ann Miller applauded Mr Hinchliffe’s move on Thursday but said more needed to be done to clean up the Labor-affiliated council. “The community is saying to me that they’ve had enough, they’ve had a gutful of all of this,” she told ABC Radio on Thursday.

“They’re saying that the stench does not only come from the dumps in Ipswich, it’s also coming from the council.”

QLD COUNCIL CORRRUPTION

Logan Mayor accused of corruption over power boat allegedly received from campaign donor

Updated 26 Mar 2018, 5:24pmMon 26 Mar 2018, 5:24pm

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Video: Logan Mayor Luke Smith was charged at the Beenleigh watch house. (ABC News)

A charge of official corruption against Logan City Mayor Luke Smith centres on allegations he received a luxury boat from a Chinese developer who donated tens of thousands of dollars to his election campaign fund, the ABC can reveal.

 

Queensland Crime and Corruption Commission (CCC) officers today charged Councillor Smith with three offences: official corruption, perjury and failing to correct his register of interests.

This morning, Cr Smith was taken to the Beenleigh watch house, south of Brisbane, and later granted bail.

He is expected to appear in the Beenleigh Magistrates Court on April 17.

In a statement after his release, Cr Smith said he would be vigorously defending the charges laid by the CCC.

"For the past year I have been willingly and openly assisting the CCC with their investigation as part of Operation Belcarra," he said.

"To this day I have not been given the details of the allegations sitting behind these charges but I will be absolutely fighting this to the end."

Operation Belcarra was set up to investigate the conduct of candidates in four south-east Queensland councils, including Logan, during the 2016 local government elections.

Logan remains the only Queensland council still under investigation.

 

The CCC will allege Cr Smith "knowingly gave false testimony at a public hearing related to Operation Belcarra".

The ABC understands the charges of official corruption and failing to correct his register of interests relate to allegations Cr Smith received the boat from a Chinese developer.

The same developer donated tens of thousands of dollars to Cr Smith's election campaign fund, known as Logan Futures.

Earlier this month, CCC investigators executed a search warrant on a Gold Coast boat seller seeking documents relating to the sale by Cr Smith of the 2012 model Sea Ray 240 Sundeck.

The Sea Ray 240 Sundeck can carry 10 passengers and features a forward-boarding ladder, cockpit wet bar and stereo system.

The CCC was investigating how much, if anything, Cr Smith paid for the luxury boat.

The ABC understands Cr Smith sold the boat last year.

Cr Smith said given the situation and nature of the charges, he would not be commenting on the boat issue, and would allow the legal process to run its course.

 

The CCC told the ABC it was "unable to comment about matters that are before the court. The investigation into Logan City Council remains ongoing."

Local Government Minister Stirling Hinchliffe would not comment on whether Cr Smith would be stood aside.

"I'm seeking further advice around a range of matters, but I don't believe that I do have the powers to stand aside the Mayor, because of these matters that are unproven, matters that are before the courts," he said.

 

"The Palaszczuk Government is absolutely committed to delivering reform to local government, because we know there is a cloud hanging over local government in Queensland, because of a range of and a number of issues.

"That's not fair to the vast majority of mayors and councillors across the state.

"We've got to see reform, reforms that make changes to local government to ensure that it can be returned to that place of respect in our community, and that very important role that it has in delivering good governance to the people of Queensland."

Logan City Council released a statement after Cr Smith was charged.

"Logan City Council is aware that officers from the CCC visited council's administration building on Monday morning (March 26) in relation to an ongoing investigation," the statement said.

"Council's duty of care remains with the community and its staff.

"Council respects the ongoing legal process and will continue to cooperate with all CCC-related matters."

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Video: A review of the Sea Ray 240 Sundeck (ABC News)

 

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First posted 26 Mar 2018, 11:25amMon 26 Mar 2018, 11:25am