22 September 2023 – Stephen Dilley and Richard Morgan
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(9.30 am)
Mr Blake: Good morning, sir. Can you see and hear me?
Good morning, sir.
Sir Wyn Williams: Good morning.
Mr Blake: We have Ms Page asking questions this morning.
Sir Wyn Williams: Yes.
Mr Blake: Thank you.
Stephen Dilley
STEPHEN DILLEY (continued).
Questioned by Ms Page (continued)
Ms Page: Good morning, Mr Dilley.
Stephen Dilley: Good morning.
Ms Page: The strategy of focusing on the old case of Picton, it was something of a legal sleight of hand; would you accept that?
Stephen Dilley: No.
Ms Page: You ostensibly focused the claim on the signed cash accounts but, meanwhile, you called witnesses to say that Horizon was working correctly?
Stephen Dilley: We called witnesses, as far as I recall, that covered cash accounts and their experiences with the Horizon computer system.
Ms Page: Well, let’s look at the judgment. It’s at POL00004325. If we look at page 5, please, the end of paragraph 11. What we get is a sentence that begins “Since”; do you see that?
Stephen Dilley: Yes.
Ms Page: “Since Mr Castleton accepts the accuracy of his entries in the accounts and the correctness of the arithmetic, and since the logic of the system is correct, the conclusion is inescapable that the Horizon System was working properly in all material respects, and that the shortfall of £22,963.34 is real, not illusory.”
He then goes on to say:
“I shall nevertheless consider the points made by Mr Castleton in relation to the reliability of the Horizon System.”
He proceeds to raise them and then dismiss them, in effect.
Stephen Dilley: Yes.
Ms Page: So the result of calling your witnesses was that the judge found that the Horizon System was working properly?
Stephen Dilley: At Mr Castleton’s branch, he was satisfied from the witnesses of fact that they had not been able to – Anne Chambers in particular, that her investigation hadn’t uncovered an issue with the Horizon System at his branch.
Ms Page: Indeed, that was something that eventually was more or less pleaded. If we can just take that document down and look at the Reply and Defence to Counterclaim, my reference for that is LCAS0000190. This is the Re-amended Reply and Defence to Counterclaim with a statement of truth signed by you, Mr Dilley, yes?
Stephen Dilley: I can’t see the statement of truth but if I’ve signed it then I shall accept that I have.
Ms Page: Yes, it’s on page 3. I don’t think we need to necessarily go to it.
Stephen Dilley: Okay.
Ms Page: But if we can scroll down – well, you can certainly see it, if you like.
Stephen Dilley: Yes, I have signed that.
Ms Page: There we are. Then on page 1, if we go down to paragraph 3, please, we can see it says:
“With respect to paragraphs 5 and 6 of the Defence, Fujitsu Services have looked at the Claimant’s computer system and have confirmed that the losses recorded by the Defendant were caused by a difference between the physical transactions that actually occurred and were recorded on the system by the Defendant or his assistant as taking place and the cash in hand that was declared by the Defendant relating to those transactions, and accordingly those losses were not caused by the Claimant’s system’s software or hardware.”
So we have that there and that is said to be from Fujitsu Services having looked at the claimant’s computer system. What evidence did you base that on?
Stephen Dilley: My recollection is we had – insofar as the computer system was concerned, we had two witnesses from Fujitsu, Anne Chambers and Andy Dunks. There was also a gentleman called Andrew Wise, who worked for the Post Office.
Ms Page: Who was Post Office?
Stephen Dilley: He was, yeah. So they were witnesses who were able to talk to the system.
Ms Page: Do you say that Anne Chambers and/or Andrew Dunks looked at the claimant’s computer system and confirmed that the losses recorded by the defendant were caused by, et cetera; do you say that’s what they said?
Stephen Dilley: It’s 17-odd years ago and so I would have to be, you know – I can’t recall everything that they said now, but what is before the Inquiry today is our note of what was said at the trial. So the Inquiry has that information.
Ms Page: This was really the sleight of hand at work, wasn’t it, Mr Dilley?
Stephen Dilley: Not at all.
Ms Page: This case was not about signed cash accounts, was it? It was about saying that the Horizon System worked and making Mr Castleton an example wasn’t it?
Stephen Dilley: No.
Ms Page: Putting his head on a spike, so to speak?
Stephen Dilley: Not at all.
Ms Page: Let’s turn to the subject of disclosure. You spoke about the distinction between disclosure of the Fujitsu product generally and disclosure of issues at the Marine Drive branch. Going back to the start of matters, following the conference with counsel – and I took you to the note of that yesterday, remember the conference which wasn’t held with Post Office and then Mr Beezer wrote a letter about it afterwards?
Stephen Dilley: Mm-hm.
Ms Page: In that letter, if we go to POL00071081, at page 1, if we scroll down a little, at the bottom there:
“One other point raised by Richard was the integrity of the Fujitsu product generally. Just to confirm, I understand that Royal Mail/Post Office know of no issues with the Fujitsu system and are confident that it operates correctly. Please discuss this with me information you have a different”, and I think it’s going to say “view”.
Stephen Dilley: Mm-hm.
Ms Page: At the start there Mr Morgan, anyway, felt it was important to look at the integrity of the system as a whole?
Stephen Dilley: Mm-hm.
Ms Page: Yes?
Stephen Dilley: Mm-hm.
Ms Page: Did you disagree with that?
Stephen Dilley: No, not –
Ms Page: So you didn’t think –
Stephen Dilley: Not at Mr Castleton’s branch and that’s why we went to see Fujitsu, why we’ve gone to see them in June. We’ve gone through the points put in Mr Castleton’s Part 18 response followed by –
Ms Page: Yes, hold on just a minute. I’m trying to get to one specific point here, which is that Richard – Morgan, obviously – said that he raised the issue of the integrity of the Fujitsu product generally and he seems to have considered that to be something that needed to be looked into. Did you disagree with that?
Stephen Dilley: I would have wanted to have been told by Post Office if it didn’t consider the Fujitsu system to be robust. But when I had – whenever I had conversations with them, as the evidence that I’ve put in and the attachments amply demonstrate, the message we got was that Post Office were confident in their system.
Ms Page: I see. Well, then let’s look at some more specific matters. The Tivoli event log, which had not been disclosed before trial but which Ms Chambers referred to in her evidence, that, in effect – not intentionally but that, in effect, revealed a failure of disclosure, didn’t it, in the sense that something which she referred into evidence had not been previously disclosed and she obviously felt the need to refer to it and it had not previously been disclosed? So, in that sense, there was a failure of disclosure; is that fair?
Stephen Dilley: I’m thoughtful about the Tivoli event logs. You have to disclose something in civil litigation that could help your case, that could harm your case – when those disclosure rules were in place, they’ve changed now – or your opponent’s case. The Tivoli event logs didn’t help Post Office’s case nor did they harm it, nor did they help Mr Castleton’s case. So, for the sake of argument, we disclosed them, but – and I was content to do so to avoid the argument, but actually, they became a non-issue.
Ms Page: All right, so you don’t accept that that was a failure, despite her referring to them in her evidence?
Stephen Dilley: I would have preferred to have had them earlier and disclosed them earlier but I don’t know. I don’t think that was a disclosure failing.
Ms Page: Let’s also then just consider the message store. That’s something which in this Inquiry we’ve become used to. It’s a very large set of data, isn’t it, that encompasses all the transactions that take place in all the branches but certainly, in this case, in Mr Castleton’s branch, yes?
Stephen Dilley: I have no reason to doubt what you’re saying.
Ms Page: All right. Well, if you – if we look at your witness statement, you deal with this at paragraph 335. It’s WITN04660100, paragraph 335, which I think is on page 149. Ah, yes, so 335 starts earlier in the document but what we’re looking at here is you quoting from a covering letter which came subsequent to the original disclosure because you wanted to make sure that Mr Castleton had certain items which hadn’t been in the original disclosure; is that a fair summary?
Stephen Dilley: Yes, and on the 22nd – prior to 22 November, we’d been providing Mr Castleton’s solicitors with disclosure, both in May and afterwards, but we put a name on it, on 22 November, and I think I said to Fujitsu “What is it, you know, is it a device? How would you describe it?” And they said it was best described as the message store, and it’s at that point in time we put a name to it.
Ms Page: Yes, I see. So what you said in your letter was:
“The message store audit trail referred to as document 1 contains details of everything that is recorded at the counter by Horizon. It is located at Fujitsu. The message store itself is of considerable size and we believe that the Post Office has obtained from Fujitsu and disclosed everything from the message store that falls to be disclosed pursuant to CPR 31.6. However, if you seek any further information from it, please contact Brian Pinder of Fujitsu Services to make an appointment directly (and copy us in). Mr Pinder is at Lovelace Road [et cetera]. He has stated that you would need to specify precisely what information that you require from the message store as it can take some time (hours to days) to retrieve from the servers, although this would greatly depend upon the information required.”
Then you talk about the court ordering of inspection.
Stephen Dilley: Mm-hm.
Ms Page: In effect, what you said was you can look at the message store but it’s going to be nigh on impossible for you to get anything useful out of it?
Stephen Dilley: I also say we believe that the Post Office has obtained from Fujitsu and disclosed everything from the message store that falls to be disclosed but we didn’t have any objection to Mr Castleton looking at it.
Ms Page: All right. Let’s go back a bit in and talk about the letter that Lee Castleton’s solicitors wrote about week 42. We touched on it yesterday. This is the letter where Mr Castleton had gone through the transactions for week 42 and he had said that he felt that there were missing transactions, yes?
You originally wrote to Penny Thomas at Fujitsu –
Stephen Dilley: I did.
Ms Page: – and you eventually got back a response from Gareth Jenkins and Anne Chambers, yes?
Stephen Dilley: (The witness nodded)
Ms Page: So if we could have a look at that it’s WBON0000027. We can see at the top there that it’s – the author is Gareth Jenkins but, in fact, he does refer to Ms Chambers in that first introductory paragraph there; do you see that?
Stephen Dilley: Yes.
Ms Page: It says the two of them have undertaken an analysis of all transactions that took place in cash accounts week 42, and this was in September 2006.
Stephen Dilley: (The witness nodded)
Ms Page: If we go down to “Analysis undertaken”, it’s pretty dense reading but I would like to put on record what they said:
“The initial set of data obtained was the extract from the Transaction Log that was submitted to Post Office Limited as supported supporting evidence (ARQ 421).
“Subsequently a complete extract of audit data for the period concerned was obtained. This included non-transactional data (including opening figures) and the electronic Cash Account information (which was subsequently submitted to Post Office’s back end systems) and represents the same information as was printed on the paper Cash Account which Mr Castleton signed at the time to indicate that it was correct.”
So, just pausing there, in order to do this work they had obtained a complete extract of audit data for the period concerned, yes?
Stephen Dilley: Yes.
Ms Page: That was not disclosed, was it?
Stephen Dilley: Well, we disclosed all of the transaction logs and the event logs –
Ms Page: Yes, that’s covered in the paragraph above, which says that “We initially looked at the extract from the Transaction Log”?
Stephen Dilley: What I don’t now recall discussing with them is – I don’t recall going through this document with Fujitsu.
Ms Page: Let’s carry on –
Stephen Dilley: I can see, you know, the cash account information which they referred to in that paragraph, second paragraph under “Analysis undertaken”, for example. The cash accounts had been provided by way of recollection –
Ms Page: Yes, certainly the cash accounts but not this complete extract of audit data, yes?
Stephen Dilley: Well, we did disclose, didn’t we, the existence of the message store –
Ms Page: You did.
Stephen Dilley: – and we produced everything from it that we thought was disclosable.
Ms Page: Let’s go down to the next paragraph, and it says:
“The figures examined have been compared with both the electronic Cash Account information retrieved and also copies of the paper cash accounts for week 42 (and also weeks 41 and 43) held by Post Office Limited …
“This check identified a transaction missing from the ARQ 421 data for a value of 92p on 12 January. This transaction did not included its Start Time (a known fault that occasionally happens) and so the ARQ extraction process ignored it. However it would not have been ignored by the accounting functions at the counter and a report would have been generated that night as part of the overnight checks.
“Unfortunately, this report is not audited and so is not available for examination. However we do not believe that this report is material to the case.”
This was a report in relation to a known fault in the system?
Stephen Dilley: Mm-hm.
Ms Page: This was not investigated or disclosed, was it?
Stephen Dilley: Well, I’m told in that document that the report is not available for examination and that it’s not material to the case.
Ms Page: This is coming from Fujitsu marking their own homework, isn’t it?
Stephen Dilley: Well, they know you have to disclose documents that are relevant to the case.
Ms Page: How do they know that?
Stephen Dilley: Because I’d written to them on 22 November 2005, I’d explained all the details of the case, what it was about, what was going on. They knew that there was a civil claim. They knew the points Mr Castleton was putting and I went to see them, and I went through the points that Mr Castleton was putting to them. They were well aware that civil litigation was going on, and –
Ms Page: Did you –
Stephen Dilley: Sorry.
Ms Page: Did you explain to Anne Chambers, after receiving this report, her disclosure obligations?
Stephen Dilley: I don’t recall.
Ms Page: No. Well, let’s go down to the next paragraph.
“Having done that, a copy of the Reference Data in use at all branches at that time was obtained that defines how each transaction at the Branch maps onto the various lines of the Cash Account. This Reference Data was then used to summarise all the transactions according to where on the Cash Account Report they would appear, thus enabling the Cash Account Table totals to be reconstructed.”
Stephen Dilley: Mm-hm.
Ms Page: So, in order to analyse week 42’s transactions, the people at Fujitsu obtained a complete extract of the audit data and a copy of the reference data in use at branches. Neither of those were produced and disclosed to Mr Castleton, were they?
Stephen Dilley: I don’t have anything to add to what I’ve already said on this.
Ms Page: So Mr Castleton’s attempt to analyse week 42 was clearly not going to work, was it? Because he didn’t have the same information that the people at Fujitsu had used to do that analysis, did he?
Stephen Dilley: Well, there is actually one further point. I spoke to Mr Turner, who was Mr Castleton’s solicitor then at Rowe Cohen Solicitors, on the phone and I told him about this analysis that had been done. We had a phone call and he said to me –
Ms Page: We’ll come to that phone note, actually before we start talking about it. Let’s do that.
Sir Wyn Williams: Hang on a minute. This is becoming, if I may say so, a detailed re-examination of one particular point – a detailed re-examination in this Inquiry of one particular point and, Ms Page, with a little latitude either way, your time slot was 40 minutes, which is significantly – you have had longer than that already. So I think we need to confine this, if we may.
But, as I see it, Mr Dilley, there seems little doubt that some, at least, of these documents were not disclosed. Your answer to that is you didn’t think they were disclosable. I may or may not, depending on where this all takes me, have to make up my mind about that, but that’s the reality of this, isn’t it?
Stephen Dilley: Yeah, and Mr Castleton’s – I put this to Mr Castleton’s solicitors –
Sir Wyn Williams: No doubt in due course, I will be shown the relevant document if I need to be but it doesn’t have to be in cross-examination.
Stephen Dilley: Mr Castleton’s solicitors told me then that it wasn’t this week that they were concerned about, and had –
Sir Wyn Williams: Are you actually telling me that you can remember particular conversations with Mr Castleton’s solicitors now?
Stephen Dilley: I’ve got an attendance note that shows I spoke to Mr Castleton’s solicitor about this and, notwithstanding that they’d written to us in June about week 42 and we’d commissioned this work –
Sir Wyn Williams: Are you saying that –
Stephen Dilley: They then said it was week 49 that was the issue.
Sir Wyn Williams: Are you saying that you explained to Mr Castleton’s solicitors exactly what work Mr Jenkins and Ms Chambers had done and he said “Oh, well, fair enough but you don’t need to disclose that” or something along those lines?
Stephen Dilley: I don’t recall the fine details – that level of detail of the conversation but I did explain that we had looked at it, that they’d been through it and that they were satisfied with it. And that’s when – and I did take him through that, and that’s when he said it was week 49, and I was left thinking “Well, what was the point of all that then?”
Sir Wyn Williams: Well, let me be clear about you say you’re saying, that Mr Jenkins, who hadn’t made a witness statement, as far as I’m aware –
Stephen Dilley: No.
Sir Wyn Williams: – together with Ms Chambers, who certainly had made a witness statement, though I’m not sure of the chronology of whether it had been served by the time of this conversation, you told them that they had carried out an investigation and they were satisfied, in effect, that, as a result of it, that no information had come to light which assisted Mr Castleton’s case; is that it, the summary?
Stephen Dilley: It is, save that I can’t remember whether I told him it was Mr Jenkins and Mrs Chambers that had done that, but I would have said it was Fujitsu.
Ms Page: Would it assist to bring up the note, sir?
Sir Wyn Williams: Yes, but then I think, as I’ve said, Ms Page, you will have to persuade me that you’ve got any time left after we’ve done that.
Ms Page: It’s POL00069604. If we look at it, it says, in paragraph 1:
“I referred him to his letter …”
That’s the letter where they raised the issue of cash accounts for weeks 41 and 42, yeah, and you deal with the fact that you say that the figures don’t stack up. I don’t propose to read through it all. Presumably this is something that you’ve read, yes?
Sir Wyn Williams: Sorry, Ms Page, are you addressing me or the witness then?
Ms Page: Sorry, I was talking to Mr Dilley.
You’ve read this, haven’t you?
Sir Wyn Williams: Fine, thanks.
The Witness: Sorry, this attendance note?
Ms Page: Yes.
Stephen Dilley: Mm-hm.
Ms Page: Where do you say that you explained to Mr Turner that there had been an analysis done by Fujitsu of the cash accounts?
Stephen Dilley: I would have done so at the time. But it is not recorded in this note.
Ms Page: I see. So you say that, although you didn’t record it in this note, you told him that and you can remember that from 2006?
Stephen Dilley: My memory of that is distant but I would have said that to him because it was not me that had done the analysis.
Ms Page: Are you prepared to take it from me that there is an email which shows that the report we were just looking at from Ms Chambers and Mr Jenkins was not disclosed –
Stephen Dilley: Yes.
Ms Page: – and that is the only phone note that I’ve found which deals with week 1 and your discussions about that with Mr Turner?
Stephen Dilley: Yes.
Ms Page: Well, sir, my point on that is finished. I do have other material. I know that there is a lot of underestimation on the part of counsel as to how long it will take to deal with matters but I do have quite a lot more material. I crave your indulgence.
Sir Wyn Williams: Well, I think, actually – and this a general remark, which applies not just to you, Ms Page, but to everyone who asks questions, including me, for that matter – the written material is there to be read and digested by me and, as a generalisation, let me just put it like that, after-the-event elaborations of the written material, especially when they’re after the event by very many years, don’t tend to impress me, wherever they come from, compared with what was written contemporaneously, all right?
Ms Page: Would it make matters easier if I were to put something in writing with the other documents I wish to take Mr Dilley to?
Sir Wyn Williams: When your team comes to address me, no doubt you will address me orally and in writing and at length about your best points, if I can put it in that way, Ms Page, and I’m sure that you will refer to these issues, if you think them important. That, again, goes for every other recognised legal representative and, for that matter, Counsel to the Inquiry.
The plain fact is that, if we were to seek to investigate every point which every recognised legal representative thought important in oral evidence, there would be a very, very, very long Inquiry and that is to be avoided.
Ms Page: I do understand that, sir. This is an important witness for Mr Castleton –
Sir Wyn Williams: I understand that.
Ms Page: – and there are quite a number of other matters I’d like to have put. If I may, I’ll put them in writing, sir.
Sir Wyn Williams: Yes. I think, in order to preserve the reasonable progress of the Inquiry, if you put those in writing to me, and I think it appropriate to seek Mr Dilley’s further answers in the light of that, either in writing or orally, then I will consider that, but don’t think we can just go open-ended today, so to speak.
Ms Page: Thank you, sir.
Sir Wyn Williams: So let’s have the next set of questions coming from Ms Dobbin, I think.
Questioned by Ms Dobbin.
Ms Dobbin: Thank you, sir.
Mr Dilley, my name Clair Dobbin. I represent Gareth Jenkins. I want to ask you about three topics, if I may. The first topic is the meeting that took place at Fujitsu on 6 June 2006 and I’m going to ask if we can please bring up POL00071427. Mr Dilley, this is a document that you’ve seen before, it’s just that the reference number is different.
Stephen Dilley: Thank you.
Ms Dobbin: In terms of what was discussed at that meeting, I think we can see, if we look at the first page, we looked at number 1 yesterday but if we look at 2, there is some discussion about Horizon worked, yes? That’s at paragraph 2.
Stephen Dilley: Mm-hm.
Ms Dobbin: I think we can tell, if we go over the page, that that was a fairly high level discussion, correct?
Stephen Dilley: Yes.
Ms Dobbin: If we carry on, we can then see that there is discussion of the specific topics that had been referred to in Mr Castleton’s Part 20 reply, correct?
Stephen Dilley: Mm-hm.
Ms Dobbin: If we look – perhaps if we take, for example, the first topic “non-communication between the PCs” and we look at the note, we can see, for example, that it was suggested that the transaction logs could be retrieved, yes?
Stephen Dilley: Yes.
Ms Dobbin: Again, I’m not going to go through every one of these, Mr Dilley, but if we just go thorough, for example, and look at screen freezing, which was dealt with on the next page, yes?
Stephen Dilley: Mm-hm.
Ms Dobbin: If we look at the final paragraph at that section, do you say the one that reads:
“At the end of the session it is all communicated …”
Stephen Dilley: Mm-hm.
Ms Dobbin: Again, we see reference to it being possible, though it might be difficult, to look at the recovery session in the audit trails, correct?
Stephen Dilley: Mm-hm.
Ms Dobbin: Again, if we just go over the page, we can see that the discussion ended with the sixth of the topics “balance snapshots”, yes?
Stephen Dilley: Mm-hm.
Ms Dobbin: Then the discussion moved on, didn’t it, to the investigation that had been carried out by Mrs Anne Chambers the year before, yes?
Stephen Dilley: Mm-hm.
Ms Dobbin: We have already seen, I think, that she was able to say at the conference that, in terms of the analysis she had carried out, she couldn’t see a systems reason to explain the discrepancy; is that right?
Stephen Dilley: That’s right.
Ms Dobbin: All right. What that looks like, Mr Dilley, or how it appears, is that that was a discussion, essentially, about how the component parts of Horizon worked in relation to those topics that Mr Castleton had set out in his Part 20 reply; do you agree?
Stephen Dilley: Mm-hm.
Ms Dobbin: And suggestion as to some of the other material that could be looked at in relation to that; is that right?
Stephen Dilley: Yes.
Ms Dobbin: Presumably, that was the first post or the first consideration of the issues that you would consider in further detail as part of the process of taking witness statements from those people who you thought you might call in the trial process?
Stephen Dilley: Not entirely. We’d written to Fujitsu on – as I’ve mentioned, on 22 November, and told them what was happening but, at that time, we didn’t have Mr Castleton’s Part 20 – Part 18 response, so his allegations were even vaguer at that point in time and we’d asked them to produce an expert report that we never got.
Ms Dobbin: Yes. So this was your first meeting, wasn’t it?
Stephen Dilley: This was the first physical meeting that we – that I’d had with him.
Ms Dobbin: So can we just be clear about the letter that you’re referring to. That was the letter that had been sent in November 2005 the previous year?
Stephen Dilley: Sorry, 2005, via Mr Samuel. That’s the letter I’m referring to.
Ms Dobbin: Yes.
Stephen Dilley: Yeah.
Ms Dobbin: You’d heard nothing from Fujitsu since then, correct?
Stephen Dilley: I hadn’t and I turned the page on our correspondence file before I came to give evidence, and I just can’t see any response from him.
Ms Dobbin: Yes, so again, just returning to the point, this was the first meeting that you had with those individuals who might be able to help you in this case, correct?
Stephen Dilley: Yes.
Ms Dobbin: You expected, following on from that meeting, that there would then be the iterative process of taking witness statements from them, yes?
Stephen Dilley: Yes, but I’d flagged that in advance, as well, to Brian Pinder of Fujitsu, that we would want to take a statement.
Ms Dobbin: Quite so. I think it’s right then that, based on your understanding of the meeting, you drafted a witness statement from Mr Jenkins, correct?
Stephen Dilley: Yes.
Ms Dobbin: We have a version of that witness statement and perhaps we can call it up, it’s at FUJ00122284. I think you have been provided with this Mr Dilley, haven’t you?
Stephen Dilley: I have but I don’t recall seeing these annotations at the time, and I certainly have checked our correspondence file to see whether we were provided it and I couldn’t see it on there. That doesn’t mean that we weren’t but I just can’t remember seeing these responses, and I think that I did not.
Ms Dobbin: It’s quite an important document, isn’t it?
Stephen Dilley: Yeah.
Ms Dobbin: Can we just look at it and see why it’s important. So if we look at page 1 of the document, we can see, can’t we, that he sets out how he’s made his annotations, correct?
Stephen Dilley: Mm-hm.
Ms Dobbin: He says that he’s highlighted parts of it that he wanted to emphasise?
Stephen Dilley: Mm-hm.
Ms Dobbin: Yes?
Stephen Dilley: Mm-hm.
Ms Dobbin: Now, I don’t have time to go through every single comment that he made –
Stephen Dilley: No.
Ms Dobbin: – and I’m going to pick it up at paragraph 16, but if there’s anything that you want me to draw to attention, then please do say.
Stephen Dilley: Mm-hm.
Ms Dobbin: So if we look at paragraph 16, so first of all you had drafted for Mr Jenkins your understanding of how double accounting worked, yes?
Stephen Dilley: Yes, and he’s saying that’s what – that’s not what he meant.
Ms Dobbin: Exactly, and I think you had understood that there was a physical document that was the analogue of every Horizon transaction, correct?
Stephen Dilley: Correct.
Ms Dobbin: What he was setting out was that you had gotten that pretty much fundamentally wrong, yes?
Stephen Dilley: Yeah, he was saying double-entry accounting means something else. But I don’t think he’s saying that there wasn’t a corresponding physical document for a transaction.
Ms Dobbin: Absolutely. These goes on I think at the end of that part of his comment to explain to you, for example, that POL would have some of the physical documentation in terms of a reconciliation process, correct?
Stephen Dilley: Correct.
Ms Dobbin: If we go over the page, please, and it’s right to say that you had asked Mr Jenkins a series of questions in this witness statement as well, hadn’t you?
Stephen Dilley: Mm-hm, correct.
Ms Dobbin: You asked him whether or not there was any data to show whether or not the computer terminals didn’t communicate with each other, and he explained to you about the EOD check that was made at the end of the day, didn’t he?
Stephen Dilley: Mm-hm.
Ms Dobbin: He went on to explain to you that the audit trail would have information about that and that that was something he could check for you, correct?
Stephen Dilley: Mm-hm.
Ms Dobbin: He also explained that it wasn’t in the data that he had looked at as yet, correct?
Stephen Dilley: Mm-hm. That’s right.
Ms Dobbin: If we go on again to look at paragraph 17, you had asked him another question about what the postmaster would see; do you see that?
Stephen Dilley: Yes.
Ms Dobbin: Again, he said to you, didn’t he, he would need to investigate that further –
Stephen Dilley: Yes.
Ms Dobbin: – but he could give you a rough idea, correct?
Stephen Dilley: Correct.
Ms Dobbin: Again, if we could look at paragraph 19. I just want to draw your attention to this paragraph. You had asked about what was the transaction log and he explained to you –
Stephen Dilley: What that was.
Ms Dobbin: – what that was. He had already said, hadn’t he, at the meeting that that was something that could be obtained?
Stephen Dilley: And we did disclose transaction logs, yes.
Ms Dobbin: Yes, I’m quite sure you did but I think the point is that at a very early stage he was pointing to the availability of these materials; correct?
Stephen Dilley: Mm-hm.
Ms Dobbin: Again, if we go over the page, please, to paragraph 23. This is consideration of ONCH and, again, if we look at the very final part of that paragraph that starts “I think there may be some confusion here”, Mr Jenkins was trying to clarify to you, wasn’t he, what he understood Mr Castleton’s case or what, in fact, Mr Castleton was saying, correct?
Stephen Dilley: Yes, correct.
Ms Dobbin: Again, on paragraph 26 – and this is still on ONCH, thank you – again, we can see he’s highlighted again an explanation that he was giving to you about the final report, correct?
Stephen Dilley: Yes.
Ms Dobbin: If we follow his words, he, in fact, tells you that the way that you had put it was too strong?
Stephen Dilley: He did.
Ms Dobbin: I’m going to move on, if I may, to paragraph 35, which was the section on balance snapshots?
Stephen Dilley: Mm-hm.
Ms Dobbin: You had set out and referred, I think, to some of the documents in respect of this?
Stephen Dilley: Mm-hm.
Ms Dobbin: We can see that from 36(a):
“Gareth this is document 3.”
What he said underneath that was:
“I will need to carry out a more detailed analysis to explain exactly what is going on here.”
Yes?
Stephen Dilley: Mm-hm.
Ms Dobbin: Again, at the very final paragraph in that, on that page, he referred again to the fact that he hadn’t examined the detail of the documents.
Stephen Dilley: Yes.
Ms Dobbin: He was saying to you, I think in fact, that the documents you had referred to weren’t, in fact, complete; is that correct?
Stephen Dilley: Yeah.
Ms Dobbin: Then if I may, Mr Dilley, if we go over the page to paragraph 38, what you had drafted for Mr Jenkins was the statement:
“There are no grounds for believing that the problems Mr Castleton says he experienced with his computer would have caused either theoretical or real losses.”
Stephen Dilley: Yes.
Ms Dobbin: Then there was the reference to the reconciliation of paperwork, which he had already corrected.
Stephen Dilley: Yes.
Ms Dobbin: We can see that what Mr Jenkins said was:
“Not sure I can agree to this without looking more closely at what has gone on.”
Stephen Dilley: Correct.
Ms Dobbin: It’s for all of those reasons, isn’t it, that that was an important document?
Stephen Dilley: It was an important document and it’s a much more measured document than the information provided to me in the physical meeting that we had.
Ms Dobbin: That document couldn’t fairly be described, could it, as Mr Jenkins having an answer for everything, could it?
Stephen Dilley: That document couldn’t, no.
Ms Dobbin: That’s how you characterised his approach, didn’t you, in your witness statement?
Stephen Dilley: Yes, in the June meeting when we met Mr Jenkins – and my recollection of this is distant – he was very bullish, very confident, very knowledgeable about the system, and you have to listen to the words and the language people use and the way they say it. And I left that meeting with the sense that Fujitsu – as a whole, not just Mr Jenkins, but him in particular – were really confident about the operation of the system at that branch.
Ms Dobbin: So there’s two things about that, Mr Dilley. First, it may be that your memory of the meeting is faulty, given that it happened so long ago.
Stephen Dilley: That may be. However, I record quite close to the meeting that that was my memory of it.
Ms Dobbin: Well, the second point is that it may be that your understanding of what was being discussed at the meeting was incomplete because, as I’ve already said, this was the first meeting, the first point in the process whereby the evidence and your understanding would be developed by the process of taking witness statements?
Stephen Dilley: It’s fair to say that this document shows that there was a bigger picture but I left the June meeting with a very clear impression from Fujitsu, really clear, and I recorded that at the time. It’s in emails, it’s in my evidence, that that’s the impression I got.
Ms Dobbin: You accept, don’t you, that the way you characterised Mr Jenkins’ evidence – or, sorry, Mr Jenkins’ approach in your witness statement at paragraph 179, whereby you said he had an answer for everything, you accept, having seen this document, that that can’t stand as a general observation?
Stephen Dilley: I believe – I don’t actually. At the meeting, at the meeting, he had an answer for all the allegations and that’s what I mean at paragraph 179. I’m not talking about at paragraph 179 this document.
Ms Dobbin: Yes.
Stephen Dilley: So my observation of – my understanding of what he was telling me at that meeting, was really strong.
Ms Dobbin: Right. So, notwithstanding the fact that we know that at the meeting reference was made to the further material that could be looked at in respect of what Mr Castleton was saying, first of all, you still maintain, do you, that that was the impression given to you?
Stephen Dilley: Yes.
Ms Dobbin: Then, second, my question was actually this: as a matter of general observation about Mr Jenkins’ approach, do you accept that what you said at paragraph 179 can’t stand, looked at in light of his witness statement and the comments he made, Mr Dilley?
Stephen Dilley: My – what I accept is that my paragraph 179 in which I use the words “Mr Jenkins had an answer for each of the allegations” refers directly to his approach at that meeting. This draft statement is much more measured than how he was at that meeting.
Ms Dobbin: Notwithstanding that you had asked Mr Jenkins a number of questions and that he was in a position, obviously, to help you with how Horizon worked, why is it that you’re saying you’re not sure if you saw this statement or …
Stephen Dilley: I don’t remember everything from this case quite clearly but I do have a reasonably good memory. I can’t remember seeing this. That doesn’t mean to say that I didn’t. I’ve gone this week and turned the page of our correspondence file, page by page, to see whether I got an email from Mr Pinder or Mr Jenkins attaching this and I couldn’t find one there. So do I 100 per cent rule out that I didn’t see this? No. But do I believe I saw this? No.
Ms Dobbin: Why wouldn’t you have pursued it and wanted to check what Mr Jenkins had said, particularly in response to your questions?
Stephen Dilley: This ultimately moved on. In August 2006, I spent a lot of time driving around physically meeting witnesses, interviewing them, taking notes of meetings and developing witness statements of fact. Counsel became – once he saw how the draft witness statements of fact were shaping up, he became happier with the case. I sent to him the draft statement I’ve written for Mr Jenkins and there were two points that counsel had on that. One was that, because we’d got these witness statements of fact, we felt that we no longer needed it; and the second was that Mr Jenkins’ evidence was really opinion evidence. And we were alive – and counsel was alive to that and I was alive to that.
Sorry –
Ms Dobbin: No, I didn’t mean to interrupt you, I apologise, Mr Dilley.
So really is what you’re saying that, because you had decided that you would instruct an expert, what Mr Jenkins said in response to your questions or any comments that he had made on that witness statement really went by the wayside?
Stephen Dilley: Yes.
Ms Dobbin: I don’t think you spoke to Mr Jenkins to explain to him why you didn’t want a witness statement from him?
Stephen Dilley: I don’t recall speaking to him to say that, no.
Ms Dobbin: Could we please bring up FUJ00154733. Mr Dilley, you may have come to realise – I don’t know if this is a Fujitsu thing, whereby people set out emails they’ve been sent in the body of an email, and then reply to them. If you’re familiar with this, you might be able to tell that what Mr – this is an email from Mr Jenkins but he set out in the body of it an email that was sent to him from Mr Pinder; do you follow –
Stephen Dilley: Mm-hm.
Ms Dobbin: – how it’s set out? So we can see Mr Pinder said to him:
“Just been chasing Stephen up re your attendance and any matters still outstanding for us [I think that’s Post Office Account] as follows …”
Then he says “(my words)”:
“He states that although you would probably make a good witness, it is for evidential reasons that you cannot be called. To do with evidence of ‘opinion’, ‘expert’ evidence and ‘real’ evidence, etc, etc, (complicated legal issues nothing to do with personalities).”
Stephen Dilley: Mm-hm.
Ms Dobbin: We can see how Mr Jenkins replies:
“Fine (I won’t try and understand what this means!)”
I think we can tell from that, can’t we, that you must have given Mr Pinder an explanation which he then tried to pass on to Mr Jenkins, correct?
Stephen Dilley: Mm-hm.
Ms Dobbin: So you never had that conversation with him, whereby you explained the differences between the type of evidence that witnesses could give?
Stephen Dilley: Not as far as I recall.
Ms Dobbin: Yes. Thank you, Mr Dilley. Thank you, sir.
Questioned by Sir Wyn Williams
Sir Wyn Williams: Thank you, Ms Dobbin.
Just one more question from me, Mr Dilley, and it follows this issue about the distinction between expert evidence and factual evidence, which you mention on a number of occasions.
Ms Chambers has told me at the Inquiry and also written that she felt that she was being treated as an expert evidence (sic). I simply want to ask you this: at any stage before she gave evidence, did you explain to her the difference between a witness of fact and a witness of opinion?
Stephen Dilley: That may be answered by the attendance note – may possibly be answered by the attendance note of the meeting we had at counsel’s chambers with four witnesses – I think it was in September 2006 – of whom Anne Chambers was one. It may not be answered by that note. I can’t recall.
Sir Wyn Williams: All right, well, we will –
Stephen Dilley: But if we’d have –
Sir Wyn Williams: Hang on –
Stephen Dilley: But, irrespective of whether it is or is not answered at that statement, I don’t have a direct recollection on the point. But I think it’s entirely possible that it’s something that we or counsel would have said, that “You’re here to make statements of fact and not opinion”.
I think in terms of Anne Chambers’ feelings, she – we did regard her as being knowledgeable in her subject, yes, but she was asked to give evidence of fact and what she had found at Mr Castleton’s branch and then, latterly, the Callendar Square branch.
Sir Wyn Williams: I appreciate that, in practice, the distinction between fact and opinion may blur. I’m used to that, obviously. I was more interested in my question in determining what you may have said to her about what would happen if she was asked questions which required her to offer an opinion.
Stephen Dilley: Yeah, I can’t recall specifics at this distance, I’m sorry.
Sir Wyn Williams: That’s all right. Thank you.
Is that it Mr Blake?
Mr Blake: It is, sir. Sir, if it assists, just for the transcript, for any parties’ submissions in due course, the reference to that meeting on the 11 September 2006 at counsel’s chambers is POL00069622.
Sir Wyn Williams: Thank you very much.
Mr Blake: Thank you.
Sir Wyn Williams: Thank you, Mr Dilley, for your very detailed witness statement and obviously your detailed evidence. I’m sorry that I caused you to return this morning but what has occurred this morning convinced me that if I’d gone on as I was urged to do, by some at least, my concentration powers would have waned so I’m sorry you were inconvenienced but sometimes, as you know only too well from your professional experience, these things happen.
All right Mr Blake, where do we go now?
Mr Blake: Thank you, sir. Can we take a 15-minute break, please?
Sir Wyn Williams: Yes, certainly.
Mr Blake: Thank you very much.
(10.31 am)
(A short break)
(10.49 am)
Mr Beer: Good morning sir, can you see and hear me?
Sir Wyn Williams: Yes, I can, thank you.
Mr Beer: May I call Richard Morgan, please.
Sir Wyn Williams: Yes.
Richard Morgan
RICHARD HUGO LYNDON MORGAN KC (sworn).
Questioned by Mr Beer
Mr Beer: Thank you Mr Morgan, please do sit down. As you know, I’m Jason Beer, I ask questions on behalf of the Inquiry. Can you give us your full name, please?
Richard Morgan: Richard Hugo Lyndon Morgan.
Mr Beer: Thank you for coming to give your evidence to the Inquiry today and for the provision of a witness statement previously. We’re very grateful to you for the assistance that you are giving to this investigation. You should have in front of you a hard copy of that witness statement?
Richard Morgan: I do.
Mr Beer: It’s in your name and dated 19 May 2023.
Richard Morgan: It is.
Mr Beer: If you turn to the last page of it, which is, I think, page 31, is that your signature?
Richard Morgan: It is.
Mr Beer: I think before I ask you whether it’s true to the best of your knowledge and belief, there are five corrections or amendments that you would wish to make?
Richard Morgan: There are.
Mr Beer: Can we go through those, please. I think the first is on paragraph 3 on page 1; is that correct?
Richard Morgan: Yes, just as a matter of completeness I also corresponded with Linklaters and obtained confirmation from them that there was no privilege maintained.
Mr Beer: So in the first sentence there where you say:
“… correspondence I have had with members of the legal team for the Inquiry and my original instructing Solicitors (Bond Pearce are now known as Womble Bond Dickinson) …”
You would add in “and also Linklaters”?
Richard Morgan: Yes.
Mr Beer: Thank you. Then on page 18, please.
Richard Morgan: Yes, paragraph 56.
Mr Beer: Paragraph 56. Thank you. What is the amendment or addition you wish to make to 56?
Richard Morgan: So, having seen further documentation since I produced this, I now see, although I didn’t remember at the time, that there was no expert evidence called at trial by either side.
Mr Beer: Thank you very much. You do say there, again, a review of the transcript of the hearing would confirm the position one way or the other and you’ve now seen a transcript or a note of the transcript?
Richard Morgan: I’ve seen a transcript of one day of the hearing and a note of the opening – of the morning of the opening.
Mr Beer: Thank you. I think the third correction or addition is page 21, paragraph 63.
Richard Morgan: Yes. So in that paragraph I talk about the settlement discussions that were conducted between Bond Pearce and Mr Castleton. I now see that I was actually copied in on emails which recorded that Post Office was seeking an undertaking from Mr Castleton. I don’t remember seeing those emails – sorry, I don’t remember those emails from the time.
Now, having seen them, I see that I did see the undertaking. I don’t recall being asked or advising in relation to the undertaking but I did – I definitely did see those emails.
Mr Beer: Thank you very much. At page 22, paragraph 65.
Richard Morgan: Yes, having now seen the transcript of one day of the hearing, it reminds me, or it records that Mr Castleton did ask for a break at least on that afternoon to take some medication and I asked the judge for an adjournment and an adjournment was granted.
Mr Beer: So that relates to the last couple of sentences:
“I do not recall him ever saying to me personally that he did need a break or that he could not go on.”
Richard Morgan: Yes, so now, having seen the transcript, it reminds me that he must have asked me.
Mr Beer: Thank you. Then page 25, paragraph 77?
Richard Morgan: Yes, there’s a typo in the last sentence. It should say, “I just do not think that person was me”.
Mr Beer: So delete the first “was”?
Richard Morgan: Yes.
Mr Beer: Thank you, with those amendments, are the contents of that witness statement true to the best of your knowledge and belief?
Richard Morgan: They are true, yes, to the best of my knowledge, information and belief.
Mr Beer: Can I start with your career qualifications and experience. You’re a barrister having been called to the Bar in 1988; is that right?
Richard Morgan: Yes.
Mr Beer: You were appointed Queen’s Counsel, as it then was, in 2011 –
Richard Morgan: Yes.
Mr Beer: – which is after most but not all of the events that we’re going to look at, correct?
Richard Morgan: Yes.
Mr Beer: I think, at all times relevant to the questions that I’m going to ask you, you practised in Chancery commercial and insolvency law.
Richard Morgan: Yes.
Mr Beer: You tell us that, before the Lee Castleton case, you’d been instructed by Tom Beezer of Bond Pearce?
Richard Morgan: Yes.
Mr Beer: But you believed this was your first instruction, the Castleton case, is that right, on behalf of the Post Office?
Richard Morgan: Yes.
Mr Beer: As it turned out, it was to be the first in a line of cases in which you were instructed by the Post Office after judgment was obtained against Mr Castleton. I think that’s right?
Richard Morgan: I think that’s putting it a bit high. I was approached on a number of subsequent occasions where an initial preliminary approach was made. I think there was only one case where I apparently produced a Defence and Counterclaim but, otherwise, none of the other sets of instructions ever led to anything substantive.
Mr Beer: They’re set out just so we’ve got them, I think, on page 29 of your witness statement.
Richard Morgan: Yes, that’s it. That’s all I can see from my chambers records anyway.
Mr Beer: Just slow down a moment. It takes a little while for the document to be displayed and, therefore, for people who aren’t in the room who are following to see it. So paragraph 91, you say:
“According to my Chambers’ fee system, I received the followed other sets of instructions on behalf of [the Post Office].”
In 2007, a case called Aslam, where you gave some advice by telephone; later in 2007 a case called Bilkhu, where you had a telephone conference and settled a Defence and Counterclaim.
Richard Morgan: Well, I settled a draft Particulars of Defence and Counterclaim. I don’t have a record of ever settling the final version.
Mr Beer: In 2011, you received instructions in Scott Darlington and had a consultation in October and December that year?
Richard Morgan: Yes.
Mr Beer: Then, over the page, please. You received instructions from the Post Office in a case called Prosser, and you gave some preliminary advice but then that wasn’t followed up with instructions?
Richard Morgan: No.
Mr Beer: June 2012, a short telephone consultation. We’re going to look at that in a moment.
Richard Morgan: I’m not sure, was that a telephone – I’m not sure whether that was a telephone conference or in person.
Mr Beer: Sorry, it was in person, quite right. Can we look at that please?
Richard Morgan: Of course.
Mr Beer: It’s POL00006484. You’ll see it’s a Bond Pearce attendance note of a conference at your chambers, Maitland Chambers, on Tuesday, 12 June 2012. We can see that you are recorded as having been present, along with Daniel Margolin. Was he then a junior barrister from your chambers?
Richard Morgan: Yes, he was.
Mr Beer: A solicitor from Bond Pearce, Gavin Matthews?
Richard Morgan: I don’t remember him.
Mr Beer: You don’t remember him?
Richard Morgan: No. I don’t remember either Susan Crichton or Hugh Flemington either.
Mr Beer: If I can jog your memory at all I will try. Susan Crichton, an in-house solicitor at the Post Office, at that time I believe she was Post Office’s general counsel; does that ring any bells?
Richard Morgan: No.
Mr Beer: Hugh Flemington, also an in-house solicitor at the Post Office.
Richard Morgan: Yes.
Mr Beer: If we just read through the attendance note:
“It was recognised that an impasse had been reached in relation to the Horizon litigation which [the Post Office] is seeking to address. The question is what is the best way of breaking that impasse.”
Do you remember that, at this time, the litigation that is being referred to was a potential group action on behalf of a large number of subpostmasters against the Post Office, arising from action taken against them by the Post Office on the basis they said of faulty Horizon data?
Richard Morgan: No, I don’t. I received a copy of this document in the supplemental bundle last week or the week before. I went back and checked my chambers’ records as to what was shown in relation to this con. I don’t seem to have received any formal instructions in relation to it, there’s no record of the papers being delivered before the con occurred.
I seem to think, although I don’t know why, that Daniel Margolin was going to be instructed to produce a written opinion in relation to something but, aside from that, that’s – what is shown in this attendance note, that’s the limit of my recollection, I’m afraid. I’m sorry I just don’t have any recollection.
Mr Beer: So you can’t remember now the litigation which is referred to in that first –
Richard Morgan: No.
Mr Beer: – bullet point. If we just scroll down to see whether there’s anything else that jogs your memory. Do you see at the end of the third bullet point, it says:
“… Access Legal will start to pursue all the civil cases they’re currently sitting on.”
Do you remember a firm of solicitors called Shoosmiths, who –
Richard Morgan: I know the name.
Mr Beer: You know the name of the firm of solicitors?
Richard Morgan: Yes.
Mr Beer: Do you remember the firm of solicitors Shoosmiths, who were acting, I think, then on behalf of five clients where they had delivered letters of claim and said that there were another 85-odd clients who they were consulting on in relation to potential claims, and Access Legal was the part of Shoosmiths, the branding part of Shoosmiths, that was bringing the claim or threatening to bring the claims?
Richard Morgan: I have no recollection of that at all. As I say, from my chambers system it looks like there was a con booked, they turned up for 30 minutes. My impression of all of the occasions on which the Post Office contacted me after Castleton was they wanted to see whether there was any expertise that I could bring to bear on their approach or their litigation that might assist. And they – on each occasion, I gave them pretty much the same answer.
Mr Beer: Let’s look at what is recorded then. So we’ve read the first bullet point. The second bullet point:
“The proposal to instruct an independent expert to prepare a report on the Horizon System is the highest risk response to the issue.”
Does that appear to be you setting out or framing the issue for discussion, namely whether an independent expert should be instructed to report on the Horizon System?
Richard Morgan: Look, I’m afraid I genuinely I don’t know because I’ve got no recollection and I don’t think I got instructions. So whether this note is recording what I was being told or whether it’s recording a conversation, I just don’t know.
Mr Beer: It continues:
“What will it achieve? It will not be able to address any of the civil/criminal cases dealt with under ‘Old Horizon’. Will it seek to review particular cases? If so, which ones?”
Would that have been your view at the time?
Richard Morgan: It seems a sensible expression of what it would achieve.
Mr Beer: So a series of hypothetical questions or questions are set out: what will it achieve; will it be able to address the civil or criminal cases dealt with under “Old Horizon”; and will it be able to review particular cases? Would you agree that this note appears to record you questioning, for these three reasons, the wisdom of instructing an expert to produce a report?
Richard Morgan: Yes, it’s quite possible, but as I – it’s quite possible but I just have no specific recollection of this meeting.
Mr Beer: Can we turn to the third bullet point:
“Whatever the findings of the expert report it will not resolve the problem. [The Post Office] will be ‘damned if they do and damned if they don’t’. If the findings are that there are no issues with Horizon people will see that as a ‘whitewash’ whereas if the findings are negative that will open the floodgates to damages claims by [subpostmasters] who were imprisoned for false accounting and Access Legal will start to pursue all the civil cases they are currently sitting on.”
Again, do you think this paragraph records advice that you were giving?
Richard Morgan: No, and the reason for that answer is I was just not intimately involved in prosecutions or other civil claims.
Mr Beer: You may not have been intimately involved. It may have been that people arrived at your chambers and asked you for a view on things, over the course of half an hour. Why doesn’t this read as if it’s you giving the advice?
Richard Morgan: I don’t know. I mean, it does – if you look at the bottom of that page, there is something that’s attributed directly to me. I mean, my problem, Mr Beer, is that I just have no recollection of this at all. The document says what it says. You can attribute to me the high level answers if you want to but I just don’t remember saying it.
Mr Beer: That third paragraph that we’re looking at, do you now see any significant issue with the view that is recorded there?
Richard Morgan: I agree that, whatever the findings of the expert report, it won’t resolve the problem. I agree that the Post Office would be damned if they did and damned if they didn’t. If it was a clean bill of health, then it would be a whitewash and, if it was negative, then obviously it would invite claims.
I’m not sure about what the false accounting allegations are to do with because I’m not a criminal lawyer and I don’t deal with those cases.
Mr Beer: If an independent expert said that there were problems with the integrity of Horizon, that might indeed open the way to damages claims –
Richard Morgan: Absolutely.
Mr Beer: – by subpostmasters, who had been convicted of criminal offences of false accounting on the basis of Horizon data?
Richard Morgan: Mr Beer, I don’t know because I wouldn’t know the basis upon which convictions were obtained.
Mr Beer: Again, just looking at that paragraph, do you see any significant issues or problems with the advice that’s being given there?
Richard Morgan: I’m not sure that that’s necessarily a fair question because I’m not sure that I’m giving the advice. I’m also not in a position to give any advice in relation to the criminal law aspects.
Mr Beer: What would have happened if they had started to discuss the impact of an independent report that showed that there were problems with Horizon data and that had consequences for the pursuit of civil claims that some solicitors were sitting on in a conference that you were giving? Would you have said, “Stop, that’s nothing to do with me” –
Richard Morgan: Well –
Mr Beer: “– I’m not a criminal law expert”?
Richard Morgan: I think, if the question is read back, you’ll find that you asked me about in the consequences of civil claims?
Mr Beer: Yes.
Richard Morgan: Then you’ve asked the – you’ve added to it what would the consequences be in relation to criminal claims. I don’t advise on criminal law and I would almost certainly have said, “I can’t give you advice in relation to the criminal prosecutions”.
Mr Beer: I’m not asking you about advice on criminal prosecutions and this isn’t anything to do with criminal prosecutions, this third bullet point. It’s about civil claims arising from people who have been imprisoned, perhaps wrongfully.
Richard Morgan: Again, my answer would be the same, that I would feel decidedly uncomfortable and would almost certainly say that I’m unable to advise on civil claims advising from criminal prosecutions. It’s just not an area of law in which I practise.
Mr Beer: Would you regard it as appropriate in commercial litigation involving a private corporation to advise that a step should not be taken because it might increase the number of claims brought against the private corporation?
Richard Morgan: Yes.
Mr Beer: Would your view be that any different considerations apply if the putative defendant is a public authority or a public corporation?
Richard Morgan: Potentially, yes.
Mr Beer: What are those different considerations that apply if the putative defendant is a public authority or a public corporation?
Richard Morgan: Well, one might want to think about what the public law duties are of that public corporation, but I was being asked to advise a private company.
Mr Beer: Is that how you viewed the Post Office?
Richard Morgan: Post Office Limited.
Mr Beer: You didn’t see them as a public corporation?
Richard Morgan: I didn’t see them as a public corporation, no.
Mr Beer: Where the Government holds a single share in the company on behalf of the public?
Richard Morgan: I didn’t see them as a public corporation governed by administrative law.
Mr Beer: So, in any advice that you gave on this occasion, you would have been approaching this as a commercial Chancery litigator?
Richard Morgan: Yes.
Mr Beer: Therefore, it would be appropriate to advise such a party that they should not take a step, such as commissioning an expert report, even if it revealed that Horizon data was unreliable because that might open the Post Office to more damages claims?
Richard Morgan: Yes, I think so – I think I would. I might be wrong in that, but …
Mr Beer: Can we read on. It is said that:
“[Post Office] will always have this problem – some people will never trust computers and will always believe that they have an inherent problem.”
Was that view that you held at the time?
Richard Morgan: I think it’s likely that it would have been a view that I held at that time, yes.
Mr Beer: It continued:
“A less risky approach is to agree to take the relevant MPs privately through particular cases in which they are interested.”
Is that, given the limitations that you have expressed already on the type of role that you would perform, advice that you would give or would have given?
Richard Morgan: That’s likely, yes. The problem with all of this is that my information or the information provided to me never extended to identifying specific problems. It was a generic “There’s a problem with”. I never felt that any individual was ever going to answer everybody’s concerns in a generic sense and so, if there were particular cases, then it was appropriate to examine those particular cases on an item-by-item basis.
Mr Beer: That’s a different point to “Don’t instruct an expert because the expert might uncover problems with Horizon and you will thereby face more claims”, isn’t it, which seems to be the effect of the third bullet point?
Richard Morgan: It does seem to be the effect of the third bullet point but I’m not sure that that’s quite what it’s getting at. With any computer system there can be problems. There can be screen freezes, there can be loss of data, and so on and so forth, in a – any hypothetical system. And I’m not – I’m just giving an example.
Some of those problems might be quite innocuous, some of them quite cause no loss of data, no changes, whatever. But if you get a report that comes back and says “Well, you get screen freezes or there are power cuts”, then all that does is set a hare running. The only way to look at a problem like this, in my opinion, sitting here now, is to look at specific examples and work out what went wrong, and that’s seems to be what I might be articulating in the pre-penultimate paragraph:
“A less risky approach is to agree to take the relevant MPs privately through particular cases in which they are interested.”
So work through specific examples and see if there’s a problem.
Mr Beer: But without the involvement of an independent expert?
Richard Morgan: Well, there could be an independent expert.
Mr Beer: The note continues:
“[The Post Office] needs to engage with its stakeholders by perhaps sending out a questionnaire about Horizon to [subpostmasters] getting their views and seeking to address the more sensible ones. This is more a PR exercise.”
Is that advice that you gave?
Richard Morgan: I don’t know.
Mr Beer: Would you understand a PR exercise to be something that is done to look good to the outside world –
Richard Morgan: Yes.
Mr Beer: – and to placate the subpostmasters?
Richard Morgan: Yes.
Mr Beer: Would you regard that as appropriate advice to give to a private corporation?
Richard Morgan: No – well, a private corporation wants to keep its customer base happy but a private corporation also wants to find out if there are problems with its systems. Now, if there are problems with their – with your systems and the stakeholders express and articulate what those problems are in a way that’s identifiable, then, of course, you should engage with them.
Mr Beer: The last bullet point records that you’re:
“… happy to discuss possible approaches and merits of each with the Board of [the Post Office] at any time.”
Richard Morgan: Yes.
Mr Beer: That certainly suggests that no decision was reached in the course of this consultation, if nothing else?
Richard Morgan: Let me be frank, Mr Beer. From what I can remember, which is close to nothing, as assisted by my chambers records, some people turned up in chambers and we had a preliminary discussion about the possibility of being instructed, so the suggestion that this represents concluded, considered advice, I think, is putting it a little high. I don’t –
Mr Beer: Nobody suggested that, other than you.
Richard Morgan: Yeah. But the way you’re suggesting that this is a record of a definitive piece of advice, given after a consideration, I think is perhaps a little unfair.
Mr Beer: We’re working with what you and your instructing solicitors have given to us?
Richard Morgan: Ah, those are not my – those are my former instructing solicitors.
Mr Beer: Can we turn to the Lee Castleton case.
Richard Morgan: Of course.
Mr Beer: Can we turn up paragraph –
Richard Morgan: Sorry, I should also say that, so far as I’m aware, I’ve provided no documents to the Inquiry. I didn’t have any. So, insofar as that question suggested that I had provided documents to the Inquiry, it’s based on a false premise.
Mr Beer: No, it was based on the correct premise that you’ve given no documents to the Inquiry. That’s why we’re working with just –
Richard Morgan: So it’s just the documents that my former instructing solicitors have provided?
Mr Beer: Correct. Can we turn to paragraph 25 of your witness statement on page 7, please.
Richard Morgan: Yes.
Mr Beer: If we just read paragraph 25 together, you say:
“Nevertheless, at a very high level, the issue in the case [the Castleton case] was whether there was a discrepancy of around £25,000 between (i) the cash and stock Mr Castleton held at the end of the period when taken together with cash sent back to the Post Office and all other receipts received by the Post Office from the branch and (ii) the cash and stock Mr Castleton was given at the start together with the cash and stock that he received whilst trading. If those cash and stock numbers could be established by reference to primary documents, then it was possible to prove what the correct figure [before] the closing balance should be forensically without reference to the Horizon System, and hence whether there was a real, as opposed to illusory, discrepancy.”
Just taking some parts of that in the second line “cash and stock Mr Castleton held at the end of the period”; was it your belief that evidence could be ascertained of those figures by counting and by documents other than documents produced by Horizon?
Richard Morgan: Yes.
Mr Beer: Reading on:
“… when taken together with cash sent back to the Post Office and all other receipts received by the Post Office from the branch …”
Again, was it your belief that those facts and matters could be established by counting or by documents other than documents produced by Horizon or does that, in part, depend on documents generated by Horizon?
Richard Morgan: My difficulty at this remove in time is that I can’t remember the format of the documents and I think also there may be a mismatch between the way the question is asked and the documents that we’re referring to. There were documents that were printouts and those documents were vouched by Mr Castleton on a regular basis, either daily or weekly. I am unclear in my own mind whether those were documents produced by Horizon that Mr Castleton then verified or whether they were documents produced by Mr Castleton that Mr Castleton then signed off on.
Mr Beer: That’s a very important distinction, given the legal case that you were to run at trial?
Richard Morgan: I’m not sure that it was because a verification of a statement of account by an agent carries the same implication as the document actually being produced by the agent, or at least that would have been my submission, I suspect, at trial.
Mr Beer: Reading on under the second part of the sentence (ii):
“… the cash and stock that Mr Castleton was given at the start …”
As far as you can remember, was that a matter that could be ascertained without reference to the data produced by the Horizon System.
Richard Morgan: Yes, I think so, because I think – and it’s something that I picked up rereading the transcript – I think there was a form P242, or something like that, that was signed by the outgoing and the incoming subpostmasters at the changeover of the accounting periods.
Mr Beer: Exactly, and then completing the rest of (ii):
“… together with the cash and stock that he received whilst trading.”
That would have depended, in part, on records generated by Horizon, wouldn’t it?
Richard Morgan: That goes back to the point about –
Mr Beer: What you can remember?
Richard Morgan: Yes, and whether it was a record generated by Mr Castleton or generated by Horizon that he then verified.
Mr Beer: You carry on:
“If those cash and stock numbers could be established by reference to primary documents …”
Sitting here now, can you remember whether those cash and stock numbers could all be established by reference to primary documents, ie other than documents produced by Horizon?
Richard Morgan: So, again, we’re going to differ about what a document produced by Horizon is. If Mr Castleton has signed off on a document and said, “This is what had happened”, then I would call that Mr Castleton’s document rather than Horizon’s document. There is also a problem that, in my own mind, I have this period of two to three weeks prior to the trial where I had volumes and volumes of documents that I went through and reconciled painfully by myself, but I can’t remember what the documents were, only that I did undertake the exercise.
And, in my own mind, those are what I would call primary documents, so they were documents on which there was a manuscript verification by Mr Castleton saying that, effectively, these figures are true.
Mr Beer: You say words to that effect in paragraph 26, if we continue reading.
Richard Morgan: Yes, sure.
Mr Beer: “I think that some of the primary documentation prepared by Mr Castleton must have been provided to me at some point early on and I notice that he signed off on daily and/or weekly figures (I cannot remember exactly what documentation was produced, I only have some recollection that there was a body of accounting documentation, and there were some manuscript documents). It therefore seemed to me that the deficiency could be proved by simply adding up all the manuscript figures produced, and all the calculations signed off, by Mr Castleton and without reference to any records produced only by a computer.”
Are you there saying that there was a manuscript record for each transaction, effectively a handwritten mirror or shadow of what was on Horizon?
Richard Morgan: No, and if I’ve given that impression, I’m sorry.
Mr Beer: If we go further on, to paragraph 27, you say in the second line:
“… I recalled that there was a line of authorities in relation to accounts stated and settled accounts. When I researched that line of authorities, I realised there was authority for the argument that if Mr Castleton was tendering his own figures to [the Post Office], he was vouching their accuracy. I therefore advised that we should realign our pleaded case to take this point and we should try to establish the true trading position by reference to Mr Castleton’s own documents (by which I mean documents produced and/or verified by Mr Castleton, rather than printouts from Horizon).”
What if the printouts from Horizon were the documents verified by Mr Castleton?
Richard Morgan: Well, then he was verifying their truth or accuracy as that particular date.
Mr Beer: What if he was saying at the same time as verifying them, “These are not accurate but I have got to verify them, otherwise I can’t continue trading into the next trading period”?
Richard Morgan: Well, there you’re asking me a hypothetical question.
Mr Beer: Do you not recall the evidence about the calls, the many calls, he made to the helpline?
Richard Morgan: I do recall those. I also recall his evidence that each and every one of his records of transactions at the end of the week were accurate.
Mr Beer: In that they recorded discrepancies and shortfalls?
Richard Morgan: In that they recorded the actual figures for the branch for that particular week.
Mr Beer: And he was simultaneously phoning in to the helpline and saying that “The figures shown on these trading statements aren’t the product of transactions conducted by me”?
Richard Morgan: His evidence at trial was that he had checked all the figures and they were true and accurate. I put to him, quite aggressively at one point, that, in fact, he was making up the figures, for instance for cash that he had received, and he maintained his position throughout, as he was perfectly entitled to do, that his accounts were true and accurate.
Now, of course, because of the way the case was pleaded, if his accounts were not true and accurate, then the entire matter would have gone off for a formal account to find out what the actual trading position had been throughout that period. But that turned out not to be necessary because his sworn evidence at trial was that the accounts were true and accurate.
Mr Beer: Over the page, please, to paragraph 29, and scroll down a little bit, the last four or five lines, you say:
“Instead, I needed physical records of cash and stock in, cash and stock out, and a calculation at the end of the day for what should be left after it had all been taken into account. If that was done, then it seemed to me that the operation of the Horizon System was irrelevant.”
That essentially developed into your principal case strategy; is that right?
Richard Morgan: Yes.
Mr Beer: I just want to look at the reasons why you developed that case strategy. Can we go back, please, to page 6 and the opening paragraph of – the opening part of paragraph 22. You say:
“It seemed obvious to me that trying to prove forensically that an entire computer network operated properly was going to be a very difficult, if not impossible, exercise, and it also seemed that Mr Castleton had not identified any mechanism by which errors were allegedly being generated.”
Then if we could look also at page 9, at paragraph 29, about halfway through, about seven or eight lines in, you say:
“… trying to recreate an entire hardware and software system to replicate what was in pace at the time of the relevant events would probably be extremely difficult, if not impossible, and that I didn’t see how I could prove that there were actual losses by reference simply to what a computer printout said.”
Then page 10, please, paragraph 33, about eight lines in:
“I think that I thought that even if the network could be reconstituted, I could not prove that it was impervious to external modifications (by which I mean hacking, unauthorised alteration, etc). I was generally concerned that if I was going to have to prove the case by reference to Horizon logs, I wanted to know whether there were possible ways that the system could be manipulated and I wanted to understand whether there was a context in which any other, and if so how many, incidents had been reported. I don’t recall ever being told that there were incidents or weaknesses and the issue seemed to fall away …”
Then, lastly on this topic, page 13, please, paragraph 43:
“I thought it was difficult to prove a loss only by reference to the Horizon IT System because in oral argument at trial I would be able to do no more than point to a computer printout and say that the printout showed that there was a loss. To my mind that did not prove a loss, it only proved what the sum of the figures produced by a machine showed when a calculation was undertaken and what figure was produced as a result of that calculation.”
I referred you to four extracts from your witness statement saying roughly the same thing, but amplifying in places the reasons. When you gave that advice to the Post Office did anyone say, “No, hold on, this is easy. We have people with expertise, either in our organisation or in Fujitsu, who can prove the integrity of the Horizon System and the data that it produces”?
Richard Morgan: May I unbundle the question slightly? I am not sure that I ever gave advice in strident terms that I couldn’t prove it in that way. I think the advice that I gave is that there was a nice, clean cut way thorough to the proof of the loss, by going by way of accounts stated or an agent’s running account.
I think that a lot of what I’ve said there is my own internal thought process about how difficult it was going to be to prove the case if all I had was a piece of paper produced by a computer. Yes, there are provisions within the Civil Evidence Act that would have had enabled me to rely on it but it wasn’t a very satisfactory way to go about formal proof of a loss.
Sorry, can I –
Mr Beer: If we just go back to paragraph 33 on page 10, please.
Richard Morgan: Sorry, can I just write something down because I’d like to go back on something?
Mr Beer: Yes, of course.
Richard Morgan: Sorry, paragraph 33 on page 10? Yes.
Mr Beer: The second half of the paragraph, where you say:
“I think I thought that even if the network could be reconstituted, I could not prove that it was impervious”, et cetera.
Richard Morgan: Yes.
Mr Beer: You give essentially three questions that ought to arise, would this be right, if you’re seeking to prove, in legal proceedings, a loss based on data produced by computer. There may be external modifications made to the system, the system may have been manipulated, and what about other incidents that have occurred and may have been reported?
Richard Morgan: Basically, yes.
Mr Beer: We now know, through the judgments of Mr Fraser in the Bates litigation and, in particular, his Horizon Issues judgment, that there were, even by this time, a large number of bugs, errors or defects which afflicted the integrity of Horizon System and which either did or were capable of causing discrepancies and shortfalls in the financial and accounting records produced by Horizon.
When you advised the Post Office of this legal approach, “Let’s not seek to prove the integrity of the data that Horizon produces; let’s rely on the accounts that Mr Castleton has vouchsafed”, did anyone from the Post Office say words to the effect of “Well, that’s a relief because, in fact, we’ve got some bugs, errors or defects in the system”?
Richard Morgan: Absolutely not. And I think, by way of clarification of your question, I don’t think I ever put it as “Let’s avoid using the Horizon System as a means of proving the case”, it was “This is a nice, straightforward way of proving the loss”.
So I wasn’t comparing and contrasting the two positions. I think what happened – I think what happened, sitting here now – is that I recognised that there were going to be problems proving the case in one way and I suggested that an agent’s account was a better way of dealing with it or that that was the way to prove the case.
I’m not sure that at the time I said or gave advice to Post Office that they shouldn’t use Horizon because of the difficulties but they should use the agent’s account. I just simply said, “You should use the agent’s account route”.
Mr Beer: When you put it in that more simplified form, did anyone say, “Well, that’s good because we may have some real issues in being able to evidence and/or prove that the Post Office has suffered a genuine loss here, as opposed to it being an artifact of the system”?
Richard Morgan: No, they didn’t. In fact, at all times, there’d been a – well, professed to me, had been a high degree of confidence that Horizon was a sound system.
Mr Beer: So nobody said “Your nice legal point, Mr Morgan, is of, therefore, real practical help to us because otherwise we may be in real difficulties in proof”?
Richard Morgan: No.
Mr Beer: So your evidence is that you came up with a nice legal point because not of any actual knowledge about problems with Horizon but because you presumed there would be such problems or at least it would be difficult to show that there weren’t such problems?
Richard Morgan: Yes. It’s just too – it’s a £25,000 claim and a computer system like Horizon struck me, back in 2006, as being a huge beast with all sorts of things that were going on, not the least of which would be upgrades to software, dropping out of dial-up networks, or ISDN or ADSL or whatever was being used at the time. So why have a difficult case when you can have an easy case?
Mr Beer: Did anyone say, “Well, hold on, in criminal proceedings, Mr Morgan, we don’t do it that way. We have to prove the integrity of the Horizon System and we do that by calling evidence to show the integrity and accuracy of the data that Horizon produces”?
Richard Morgan: No, I don’t remember anybody ever talking me through what was going on. I don’t even remember people telling me about criminal proceedings, if I’m right. I can’t recall any occasion in which anybody ever talked about how they did things in criminal trials or even the existence of criminal trials.
Mr Beer: Would you agree that the Post Office should not have proceeded with a civil claim, had they been genuinely concerned that the loss alleged was not a genuine loss or an actual loss to them?
Richard Morgan: Sorry, so you’re asking me a hypothetical question. I’m –
Mr Beer: Yes, that sometimes happens.
Richard Morgan: I’m sorry.
Mr Beer: And I realised I was asking it, so there’s probably no need to tell me.
Richard Morgan: Thank you, Mr Beer. I think from an ethical position I would have been in some difficulty if I thought that I was being asked to run a case that my lay client had no belief in the integrity of the underlying claim. So –
Mr Beer: So had that been put to you, what would you have advised?
Richard Morgan: “I can’t continue to act”. I’d have withdrawn., I think.
Mr Beer: It would have –
Richard Morgan: Depending on quite how it came out but I would have been decidedly unhappy.
Mr Beer: It would therefore have altered your advice that the Post Office should simply rely on the signed cash accounts of Mr Castleton?
Richard Morgan: I think I’d have told them they’d have to discontinue if they didn’t think there had been a genuine loss.
Mr Beer: So if you had found out before the trial that data produced by Horizon, that formed the basis of signed cash accounts, was unreliable or may have been unreliable, what would your advice have been to the Post Office?
Richard Morgan: I would have wanted to look quite carefully at what was being said by Mr Castleton and, indeed, the note that I took earlier, when I said “Can I just write something down”, was in fact something that came back to mind.
So the pleadings in this case were quite unusual, in that the accuracy of Mr Castleton’s signed figures was positively averred by him in the pleadings. Do you have the Defence, by any chance?
Mr Beer: We do. We’ve got the amended Defence.
Richard Morgan: Yes, that’s what I was thinking of.
Mr Beer: LCAS0000294.
Richard Morgan: Thank you.
Mr Beer: If we flip to the next page, you’ll see the substance of the amended Defence and Counterclaim.
Richard Morgan: Yeah, that’s not the relevant paragraph. If you go over to the –
Mr Beer: Next page? You might be thinking of 6.
Richard Morgan: No, sorry. Could you go back up the page, please? Yeah, it’s paragraph 3.
Mr Beer: What’s the point you’re making on the basis of paragraph 3?
Richard Morgan: He’s admitting that he’s producing these accounts.
Mr Beer: Then if we look at paragraph 7A:
“The said Cash Account … for week 51 is not an account stated behind which the Defendant is not entitled to go …”
Then some reasons are set out.
Richard Morgan: Yes.
Mr Beer: “It does not constitute an absolute acknowledgement …
“All of the accounting in it was done by the Defendant and not the Claimant …
“The Claimant does not allege that the account was approved by it …
“The Claimant does not allege that the account was entered by it as agreed in its books nor recognised by it in some way as correct.”
Richard Morgan: Yes.
Mr Beer: I think you’ve got to read 7A with 3?
Richard Morgan: Quite possibly, but the fact of the matter is that there was no dispute as between the parties that the documents upon which the claimant was relying in the case were documents produced and verified by Mr Castleton personally.
Mr Beer: So you developed this strategy at essentially an abstract or academic level –
Richard Morgan: Yes.
Mr Beer: – not because of anything you’d been told about the practical difficulties of proving the accuracy of data produced by Horizon?
Richard Morgan: That’s correct.
Mr Beer: Can we look, please, at WITN04660100. It’s Mr Dilley’s witness statement from whom we’ve just heard and he was one of your instructing solicitors. Can we just look at page 34, please, and look at paragraph 67. Just scroll up so you can get the date, thank you.
Conference on the 11 September at your chambers. He says in 67:
“At that point in time, we were considering and developing case strategy. I can see from the note we believed we had a difficulty proving the loss. From memory, this was not because those instructing us had any doubt that there was a loss; it was rather a question of how it could be demonstrated. From my note and distant recollection, I believe it was in part because Ms Oglesby had told us that a subpostmaster could change data inputted into Horizon after the event. One idea counsel had was that we should take the starting position (by way of an opening audit) and the ending position (a closing audit) and see what the difference was. An alternative was to rely on the admission in the cash accounts that Mr Castleton had signed.”
Richard Morgan: Mm.
Mr Beer: This evidence seems to suggest that the nice legal point, as I have been calling it, was a consequence of a difficulty or a belief in a difficulty in proving the loss; can you see that?
Richard Morgan: Yeah. Yes, I can.
Mr Beer: Was that something that was made clear to you, “Never mind your nice legal point, Mr Morgan, there is, in fact, a difficulty in proving losses using Horizon”?
Richard Morgan: I don’t remember that forming any part of my thought process. Sorry, I don’t remember a specific fact of anybody saying subpostmasters could change the data inputted into Horizon was part of the consideration. I think in my witness statement I’d already said that I was concerned about whether data could be changed.
Mr Beer: But you’ve pitched that at a theoretical –
Richard Morgan: Yes.
Mr Beer: – any computer system can have data change –
Richard Morgan: Yes.
Mr Beer: – approach?
Richard Morgan: Rather than “Oh, this is what somebody is going to say in this case”.
Mr Beer: Yes.
Richard Morgan: Also, I mean, Mr Dilley says what he says but why would a subpostmaster change the data to show that he owed money to the Post Office? But there we are. Anyway, there we are. That’s what he says.
Mr Beer: So you say that, in fact, you developed this point at the abstract or academic level, not because of the kind of thing that’s recorded here, that there was actually a difficulty in proving the loss on this system?
Richard Morgan: As I sit here now, Mr Beer, yes, that’s my recollection. I don’t have any recollection of developing it as a responsive strategy. My recollection, correct or incorrect, perfect or imperfect, is that this was a high level theoretical issue.
Mr Beer: Can we look, please, at POL00071081. This is an email dated 21 August 2006 and you are neither a sender nor a recipient but it refers to your view or something that you are said to have said. If we just look under “Overview”.
Richard Morgan: Yes.
Mr Beer: So this is Mr Beezer writing to Ms Talbot, copying Mr Dilley in:
“Richard Morgan believed the case to be one with a good chance of success but he did warn that was dependent upon the accountancy evidence stacking up in our favour (I return to this below) and also upon acceptance of the costs in taking this matter to trial. We have discussed costs before. I also return to this point below.
“A further point made by Richard Morgan was that we should endeavour to move the main area of focus in the case away from the Horizon system if possible. Richard suggested a method to do that would be to prove (if possible) the physical cash losses at the Marine Drive branch by reference to all the other documentation created around the transactions, not simply by reference to what was in fact recorded on the Horizon system. So for example when a cheque is deposited there is (as I understand it) a counterfoil filled out which is sent off daily by the subpostmaster, with all cheques eventually ending up at EDS. If the Horizon system was later found not to match the physical remittances an error notice is generated. One of the issues in this case is that there were few error notices generated suggesting that the physical remittances did match the Horizon inputs. Clearly, to attempt to look into such matters in the level of detail likely to be required will be costly and time consuming.”
Then if we just look at the foot of the page, please:
“One other point raised by Richard was the integrity of the Fujitsu product generally. Just to confirm, I understand that Royal Mail/Post Office know of no issues with the Fujitsu system and are confident that it operates correctly. Please discuss this with me if you have a different view.”
If we just go back to the end of the third paragraph, please, on page 1. Just scroll up a little bit. Thank you. So the paragraph beginning “A further point”:
“… we should endeavour to move the main area of focus … away from [Horizon] if possible.”
Then at the end of the paragraph:
“One of the issues in this case is that there were few error notices generated suggesting that the physical remittances did match the Horizon inputs.”
On the Post Office’s case, ie that Mr Horizon (sic) had made genuine losses –
Richard Morgan: Sorry, Mr Castleton had made genuine losses.
Mr Beer: Yes, Mr Castleton had made genuine losses, would that absence of error notices suggest an unreliability of the Horizon reporting, as you understood it?
Richard Morgan: No.
Mr Beer: Why not?
Richard Morgan: Because the absence of error notices, according to this note, suggests that the physical remittances did match the Horizon inputs.
Mr Beer: Isn’t that a problem on the case, that there was a match between the actual cash and the inputs?
Richard Morgan: Not that I understand. Sorry, I’m trying to reconstruct what was going on a long time ago –
Mr Beer: I understand.
Richard Morgan: – and this isn’t my note and I don’t know how it all works, but I thought the fact was that the Horizon inputs did match up with what Mr Castleton was signing off and that did, at the end of the day, show that there was a loss. And so the fact that there were few error notices suggested that the figures produced by Horizon and the figures produced by Mr Castleton were the same and did show a loss. But, you know, that’s by the by, isn’t it?
Mr Beer: Can I attempt to move things on –
Richard Morgan: Of course.
Mr Beer: – and look at some evidence of what was and was not disclosed to you about any bugs, errors or defects in Horizon and the data produced by it. We’ve looked already – no need to turn it up – at paragraph 33 of your statement, where you say you don’t recall ever being told about any incidents or weaknesses with Horizon.
Richard Morgan: Can I just clarify that slightly? I then go on to say that other – there were occasions when screens had frozen or whatever but nothing ever specific and nothing in relation to Marine Drive.
Mr Beer: Can we look, please, at POL00072741. This is an attendance note of 16 August 2006 of a conference held between you and your instructing solicitors that day. If you just scroll down a little bit, you can see the context. You discuss next key dates and then you, on the first page, run through the particulars of claim with you outlining some passages and then your clients or solicitors referring to some answers or comments upon them.
Then if we go over the page, please, the same is done on the Defence and then on page 3 the Reply to the Defence. The same on page 4.
Then if we go to page 5, it appears that you started to discuss the witness evidence. Can you see under the heading of “John Jones”?
Richard Morgan: Yes.
Mr Beer: Then if we scroll down – no, we’ve got it there, thank you. Do you see under the third paragraph under the heading “John Jones”, there’s a passage with an asterisk and “RM”, which I think, in context, refers to you?
Richard Morgan: Yes.
Mr Beer: You’re recorded as saying:
“… we need to know what sort of security or protection Marine Drive had on its dial-up Internet. Was it password protected?”
Then this:
“Can Fujitsu get in and change the raw data after Castleton inputted this?”
Richard Morgan: Mm-hm.
Mr Beer: So you were, would you agree, asking some difficult but reasonable questions of the Post Office here and, in particular, can Fujitsu get in and change data after Mr Castleton has inputted it?
Richard Morgan: Yes.
Mr Beer: Would you agree that that’s a question that any person presenting evidence originating from a computer, and which they rely on to prove a loss, would have to ask in court proceedings?
Richard Morgan: I’m going to give you a one-word answer, which is no. I’m going to go on to explain because in civil litigation it’s an adversarial system and each side depends – or each side’s arguments are responsive to those made by the other side. So at the end of the day, it would depend how Mr Castleton articulate his case as to why he said errors were being created by Horizon.
But before I went anywhere near taking a case forward on the basis of a single category of evidence, I wanted to understand what the weaknesses might be and what landmines might lie in my path to the trial.
So, at this stage, I’m trying to flesh out where could this all go wrong for me.
Mr Beer: Did you ever get an answer back to that question?
Richard Morgan: Not that I recall, no.
Mr Beer: No, and I can say there doesn’t appear to be one recorded in the papers, so far as I can see.
Richard Morgan: Yes.
Mr Beer: That’s obviously not definitive.
You asked whether Fujitsu could change data –
Richard Morgan: Yes.
Mr Beer: – essentially. We now know that Fujitsu could amend data and that, for a period of time, there was an unaudited and unauditable method of them doing so. Would you expect that information to have been revealed to you in answer to your direct question?
Richard Morgan: I think I’d have liked to have known it.
Mr Beer: What would you have done if you’d been told Fujitsu can get access to the system to change data and there’s not a method of auditing when and in what circumstances they’ve done so?
Richard Morgan: I think I would have wanted to take a good hard look around the secondhand motor vehicle I was being sold as the Post Office’s case and kicked the tires rather more carefully, to use a metaphor.
I think I would have felt decidedly uncomfortable at the very least and would have changed the dynamic of the enquiries that I was making and the advice I was giving, I think. And that’s, again, an answer to a hypothetical question. But on the fortunately very few occasions when litigants have revealed extremely adverse information, it rather alters the dynamic between counsel and lawyers.
Mr Beer: With that striking metaphor in our minds, I wonder whether we could take the lunch break. As you know, sir, we’re breaking early at 11.55 today and coming back at 12.55.
Sir Wyn Williams: Yes, that’s fine, Mr Beer.
12.55.
The Witness: Would you be kind enough to give me the usual warning, just so that it’s on the record?
Sir Wyn Williams: I will. I think that you are well aware that you should not speak to anyone about the evidence which you have given and which you may give this afternoon, but I should tell you that you shouldn’t discuss your evidence with anyone, and I think that’s a sufficient warning for someone who is King’s Counsel.
The Witness: Thank you.
Mr Beer: Sir, 12.55. Thank you.
(11.56 am)
(The Short Adjournment)
(12.55 pm)
Mr Beer: Good afternoon, sir, can you see and hear me?
Sir Wyn Williams: Yes, I can.
Mr Beer: Thank you very much.
Mr Morgan can we just go back to the document we were looking at shortly before lunch to ask one supplemental set of questions on it. It’s POL00072741.
If you remember, I was asking you questions about what evidence was and wasn’t disclosed to you about bugs, errors or defects –
Richard Morgan: Yes.
Mr Beer: – and difficulties with producing data from Horizon, and the extent to which this informed or didn’t inform the nice legal point that you developed. We had looked at the questions that you had asked on page 5 about can Fujitsu get in and change the raw data.
Can we look at page 6, please. If we look at the foot of the page, please, three paragraphs from the bottom, this is in the context of some other case, and you say:
“I would like also to know if it is a genuine one-off and I would like to know if the number of allegations and the number of paper cases that have occurred. Other than the Bajaj and Bilkhu cases how many other allegations have been made and how many have come to trial and the outcomes of those. These need to be of a particular issue of persistent shortfalls allegedly attributable to the computer system.”
First of all, I take it that, in line with the evidence you’ve given previously, you don’t remember asking questions of that sort at this remove of time?
Richard Morgan: I’ve got no specific recollection, no. I’m just trying to think about what – so I think there must have been mention in my instructions about Bajaj and Bilkhu but I can’t remember –
Mr Beer: What would your interest have been –
Richard Morgan: – what was said.
Mr Beer: I’m sorry, I spoke over you.
Richard Morgan: That’s all right.
Mr Beer: What would your interest in discovering allegations concerning persistent shortfalls attributable to the computer system have been?
Richard Morgan: Well, obviously I’d want to know if there was some deficiency in the Horizon System that was causing artificial losses. If there was a problem in there, I wanted to know about it sooner rather than later. The last thing one wants to do is to get to three or four weeks before trial and find that there’s been some finding somewhere else that there is a real problem. It’s all about risk management and understanding the profile of the evidence.
Mr Beer: Where it refers to how many other cases have come to trial and the outcome of those, would you have been interested in both criminal and civil cases, ie it didn’t matter where the allegation had been made of a persistent shortfall attributable to the computer system?
Richard Morgan: I’d like to say yes, I’m not sure that I was necessarily sufficiently alive to the fact that the Post Office was prosecuting people to have that degree of sophistication in my question. I think it would have just been, at that time, the open question, you know, what other cases are there and are they showing there’s a problem?
Without understanding what the allegation is in each individual case and what the outcome is, one is not going to know whether that’s going to impact on the evidence that’s going to be given in the specific trial in relation to which I was being instructed but I certainly wanted to understand the overall terrain within which the dispute was going to occur.
Mr Beer: So you would cast the question and, therefore, the net relatively widely at that stage?
Richard Morgan: Yes, I’m trying to find out what’s going on. I’m saying what – you know, without being so crude as to say “Give me full and frank disclosure”, I want to know are there any unexploded landmines that I’m going to step on if I go down a particular course? Is there anything that’s going to come out that I should know about now? Generally, with sophisticated firms of solicitors, they know that that’s what you’re asking them when you say, “What’s out there?”
I think I would have assumed that with Mr Beezer and Mr Dilley.
Mr Beer: Did you ever get an answer to this question. We’ve asked about the Fujitsu having access question; did you get an answer to this question?
Richard Morgan: I think in relation to this question, and it’s only because of documentation that I’ve read recently, I think that the Bilkhu case hadn’t even been issued. I hesitate to ask a question – I think I’m right in that and I don’t think I ever got an answer in relation to Bajaj.
Mr Beer: But what about the wider question?
Richard Morgan: I didn’t get an answer in relation to that, no at least I – sorry. That sounds very definite. I do not recall now an answer to that then.
Mr Beer: Can we look, please, at FUJ00155767. It’s an email exchange which you’re included on. It’s just over a month before trial and, if we just go to the foot of the page, please, there’s an email from Mr Dilley of 31 October to Brian Pinder and you’re on the copy list; can you see that?
Richard Morgan: Yes, I can.
Mr Beer: If we just read through it together:
“One of the witnesses in the Castleton case is Greg Booth who was the temporary subpostmaster at Marine Drive branch from 21 April to 28 May 2004. [He is now at Newbury].
“Greg spoke to me last week and reported that his computer froze … whilst he was serving a customer and was partway through a transaction. The transaction had not been settled. It related to a postage label. When he logged back in again, the computer had lost the transaction of £1.27. The computer did not prompt him to try to recover it. Greg is away this week, but I will be contacting him upon his return to obtain a supplemental witness statement about this point. Prior to then Greg’s evidence was that he had never known the system to lose a transaction. In this particular case, Greg was up £1.27 because he had taken money from a customer. However, I anticipate the reverse would have happened if he had been paying money out.
“Although this is for a small amount the principle on the face of it seems concerning because it suggests that the Horizon System can (albeit rarely) lose transactions. Castleton’s solicitors will try to exploit any weakness and we must be prepared for a possible attack on this point. Our counsel has requested that Fujitsu review the Newbury Post Office’s Horizon data for those days period to see if you can tell whether the system froze and lost the transaction and what the explanation may be.
“We have to serve witness statements very shortly. I will have to prepare a supplemental witness statement …”
Now, Mr Booth, I think you’ll recall was – Gregory Booth, was one of three subpostmasters that operated the Marine Drive branch immediately after Mr Castleton had been suspended and was ultimately dismissed, and his evidence was, can you help with this, adduced at trial to seek to demonstrate that those who operated the Marine Drive branch after Mr Castleton left did so without difficulties being caused by the Horizon System.
Richard Morgan: I don’t remember now but I’ll take your word for it that that is an accurate reflection of the record.
Mr Beer: In due course – we needn’t turn it up – the judge referred to Mr Booth’s evidence, it’s paragraph 24 of he’s judgment, saying:
“Mr Booth experienced no significant discrepancies other than two which were deliberately induced to check the operation of the Horizon System having regard to Mr Castleton’s allegations.”
At the foot of the previous page, your solicitor says:
“Although this for a small amount the principle on the face of it seems concerning because it suggests that Horizon can (albeit rarely) lose transactions.”
Would your view be the same, irrespective of the amount –
Richard Morgan: Yes –
Mr Beer: – it’s the principle?
Richard Morgan: Sorry, I didn’t mean to overspeak. Yes, and without wishing to try to look too wise after the event, that’s why I’m asking for Fujitsu to have a look at it and explain it.
Mr Beer: It seems that, even before you received this email, you had spoken to or communicated in some way with Mr Dilley because he says, “Our counsel has suggested that Fujitsu review”?
Richard Morgan: Yes, that would be what this email suggests.
Mr Beer: So if matters like this had been drawn to your attention, this was a small sum of money, but revealed a principal issue of concern, would you have treated the other revelations in a similar way?
Richard Morgan: I would hope so, yes.
Mr Beer: Can we look on, thirdly, please, at POL00070126. This is telephone attendance note on Mandy Talbot by SJD3, who is Mr Dilley, and you; can you see that?
Richard Morgan: Yes.
Mr Beer: “MT [Mandy Talbot] saying that today’s news about problems with the Horizon System at the Falkirk branch had come as a bolt from the blue, that she had known nothing about it and that Fujitsu did not give any indication. Could we get a Fujitsu witness to give evidence?
“[Richard Morgan] saying that we need a Fujitsu witness to identify why this was a problem, but Lee Castleton’s was not. Was there a latent defect or a software problem from a subsequent update or a hardware problem specific to that branch?
“[Richard Morgan] saying he was concerning about whether we have to give disclosure of this fact. He thought probably yes, but wanted to find out if the judge thought it was relevant. [Richard Morgan] was prepared to put off a decision on this until after his opening. [Richard Morgan] asked [Mandy Talbot] to get some definitive answers from Fujitsu. [Richard Morgan] saying that we may finish in court by lunchtime tomorrow.”
You’re recorded as saying that you needed a Fujitsu witness identifying why this was a problem but that Mr Castleton’s was not.
Richard Morgan: Yes.
Mr Beer: Did you assume that the problem did not afflict Mr Castleton’s branch?
Richard Morgan: That’s a very simple question with quite a complicated answer. I made no assumptions about what was going on at Mr Castleton’s branch. I made no assumptions about what was going on at any other branch. By this stage, I was – I think the case had started on – was it the 4th and this is the 6th, so this is the Wednesday. I can’t quite remember. So the trial had started. I was –
Mr Beer: I don’t think that chronology is exactly right.
Richard Morgan: Isn’t it? I can’t remember. But the issues were the accounts stated point and Mr Castleton’s case was that – it was called the – the Horizon System was causing problems but he didn’t say how or why. I didn’t know what the issue was with – what’s the name of the branch? The Falkirk branch.
Mr Beer: Falkirk, yes.
Richard Morgan: I wanted to know what was going on. Mr Castleton was wanting to call some other subpostmasters about issues that were going on in their branches and the question was whether it was relevant to the Castleton trial that other subpostmasters had had problems and, if so, what those problems were.
As I recall it, and this is reconstructed from what is said or what appears in the transcripts and the notes of the hearing that were provided to me, the judge ruled on that and said that, although the witness evidence was admissible to show that there were errors or there were problems that had occurred in other branches, there wasn’t going to be a trial of the other issues within the Castleton trial.
So it all happened in a very compressed time frame, as far as I can recall, and there was a ruling on the admissibility or relevance of issues in other branches that meant that this went back onto the backburner. That’s my recollection.
Mr Beer: So just on the chronology, yes –
Richard Morgan: Yes, thanks.
Mr Beer: – this the morning of the opening.
Richard Morgan: Yes, thanks. So the case –
Mr Beer: The trial opened on Wednesday, 6 December?
Richard Morgan: Yes, I think there were two pre-reading days, I think. I thought the first day of the trial was Monday, the 4th.
Mr Beer: Let’s put it a different way. I think we can agree that this was the day on which you opened the case.
Richard Morgan: Fine, thank you. Sorry, I don’t wish to argue with you. That’s just my recollection.
Mr Beer: The judgment that you’re referring to, I think if we look at POL00021678, this is a copy of the judgment –
Richard Morgan: Yes.
Mr Beer: – and –
Richard Morgan: Ah, yes. This remains me of this where I’ve reconstructed what happened from. I can’t remember the precise order. Again, if we had the benefit of the transcripts, we’d see exactly what had happened.
Mr Beer: I think if you turn to page 8, please, and look at paragraph 22:
“During the hearing, Mr Castleton sought to adduce evidence of other complaints from subpostmasters of other post offices about the Horizon system. I admitted … the fact that there were a few such complaints, but I refused to admit evidence of the fact underlying such complaints, since that would have involved a trial within a trial.”
Richard Morgan: Yes.
Mr Beer: Essentially, was that your submission on behalf of the Post Office?
Richard Morgan: I – again, I’m afraid I genuinely can’t remember. I suspect it may have been, though. I think that’s.
Mr Beer: But it was permissible to say there had been a few complaints but what those complaints were or the facts of them underlying them was not admissible?
Richard Morgan: I’m not sure that I would have put it exactly like that, but that’s the way it’s recorded.
Mr Beer: In the event, did you give disclosure of the facts concerning the Callendar Square or Falkirk bug?
Richard Morgan: I don’t recall giving disclosure. Sorry, I don’t recall my solicitors giving disclosure is the accurate answer.
Mr Beer: Thank you. Yes, that can come down, thank you.
Can we turn, please, to the way that the case was put on accounts stated and settled accounts and just go back to paragraph 27 of your witness statement, please, on page 8. You say in the second line:
“… I recalled that there was a line of authorities in relation to accounts stated and settled accounts … I realised that there was authority for the argument that if Mr Castleton was tendering his own figures to [the Post Office], he was vouching their accuracy. I therefore advised that we should realign our pleaded case to take this point and we should try to establish the true trading position by reference to Mr Castleton’s own documents …”
Then paragraph 92, please, on page 31 of the witness statement. You have been asked whether there were any other matters you would like to bring to the attention of the Chair and you say you’ve seen various books articles and comments that make reference to the Post Office v Castleton case:
“The general assumption in those materials seems to be that, in some way, the operation of the Horizon IT System was an issue in the case that led to judgment being given in favour of [the Post Office]. However, a review of the pleadings, the witness statements and the judgment should provide enough information to confirm that the case in fact turned on Mr Castleton’s own signed books, records and accounts produced by him as the agent of [the Post Office].”
That matches what Mr Dilley told us repeatedly yesterday. He said the Post Office succeeded in its claim, in spite of the computer system; it succeeded in its claim on the basis of physical accounting records.
Can we just look at the pleadings, please, starting with LCAS0000190. This is the Re-amended Reply and Defence to Counterclaim and we can see, if we go to page 3 and scroll down, it’s settled by you; can you see that?
Richard Morgan: Yes.
Mr Beer: If we go back to page 1, please, and look at paragraph 3. It’s pleaded:
“With respect to paragraphs 5 and 6 of the Defence, Fujitsu Services have looked at the Claimant’s computer system and have confirmed that the losses recorded by the Defendant were caused by a difference between the physical transactions that actually occurred and were recorded on the system by the Defendant or his assistant as taking place and the cash in hand that was declared by the Defendant relating to those transactions, and accordingly those losses were not caused by the Claimant’s system’s software or hardware.”
We ought to look, I think, at just what paragraphs 5 and 6 of the Defence had said, LCAS0000294. If we go to page 3, paragraphs 5 and 6, Mr Castleton had pleaded:
“The Defendant repeatedly sought assistance from his managers within the Claimant company during the period over which the apparent shortfall accumulated. No assistance was forthcoming. The Defendant avers that any apparent shortfall is entirely the product of problems with the Horizon computer and accounting system used by the Claimant.
“The Defendant further avers that, he will be able to demonstrate through a manual reconciliation of the figures contained within the daily balance snapshot documents created by the Defendant during the course of his tenure as subpostmaster at the Marine Drive branch Post Office, which were remove from the post office on the Defendant’s suspension, that the apparent shortfalls are in fact nothing more than accounting errors arising from the operation of the Horizon system.”
So Mr Castleton’s case was that the shortfalls were entirely a product of the Horizon System, yes?
Richard Morgan: That’s what he says.
Mr Beer: In the Reply and Defence to Counterclaim, you pleaded that that was denied, that the losses were not caused by the claimant’s system’s software or hardware?
Richard Morgan: Yes.
Mr Beer: Can you help us on what material that was based?
Richard Morgan: My instructions.
Mr Beer: Where were those instructions obtained from?
Richard Morgan: My instructing solicitors.
Mr Beer: By what means?
Richard Morgan: Well, at this distance in time, I can’t recall but …
Mr Beer: But you recall what was pleaded: that Fujitsu had – we’d better get the wording exactly right.
Richard Morgan: Yes.
Mr Beer: LCAS0000190, paragraph 3:
“… Fujitsu Services have looked at the Claimant’s computer system”, et cetera.
Richard Morgan: Yes.
Mr Beer: Again, and appreciating the distance of time, can you recall anything more than “That was based on my instructions, which came from my solicitor”?
Richard Morgan: No.
Mr Beer: Can we look, please, at POL00069801. If we look at the foot of the page, just scroll up a little bit, just a tiny about more, there’s an email from you to Mr Dilley of 8 November.
Richard Morgan: Yes.
Mr Beer: Then if you scroll up to the top of the page, you’ll see he says:
“I thought it would be easiest [solicitors often say this] to reply in blue below next to your original email.”
Richard Morgan: And, of course, we have the benefit of a black and white copy.
Mr Beer: Exactly so. So it is doubtless easiest for them. If we scroll down, please. I think we can see from the typescript where you’re speaking and he’s replying?
Richard Morgan: Yes, I think my points end with question marks and then the text after that is –
Mr Beer: Exactly, and I think in original they would be blue.
Richard Morgan: Yes.
Mr Beer: “At what time of day was Castleton suspended?
“Who arranged for the temporary subpostmaster to take over?”
Scroll down please:
“Was the sub post office shut …
“When was the P242 signed …
“Did the branch trade”, et cetera.
There’s a very wide range of issues upon which you’re seeking instructions there but not the one that I’m asking about.
Richard Morgan: Yes.
Mr Beer: Again, can you recall how that information had been provided –
Richard Morgan: No.
Mr Beer: – namely that Fujitsu had examined the system?
Richard Morgan: No.
Mr Beer: In any event, quite aside from the nice legal point, the reliability of the product of Horizon, at at least this branch, was an issue or potentially an issue in the trial?
Richard Morgan: Potentially an issue, yes. Although, if you go back to the defence, you’ll have seen that the averment was that Mr Castleton would be able to establish from the primary figures that they were artificial errors rather than real – sorry, artificial deficiencies rather than real deficiencies. So his case was based upon the written figures rather than the product of Horizon.
Mr Beer: But, in any event, would you agree that disclosure had to be given by the Post Office in relation to the question of, if it possessed such documents, whether such losses were caused by Horizon, irrespective of your legal point?
Richard Morgan: One would have to look very carefully at the scope of the disclosure obligation and the information that was being sought. Now, at this stage, Mr Castleton was represented by solicitors and they no doubt explored disclosure issues with my instructing solicitors but disclosure was not an issue with which I was involved or upon which I was instructed, as far as I remember, anyway.
Mr Beer: Can we, lastly, on this subtopic look, please, at LCAS0000197. This is a typed copy of a recording of, amongst other things, I think your opening of the case on 6 December 2006. If we could turn, please, to pages 14 and then 15, please, starting at 14.
Richard Morgan: Do we know who the author of this document was?
Mr Beer: I believe, from the designation, it’s Mr Castleton’s solicitors, ie LCAS means Lee Castleton, so the Unique Reference Number I called out. But I can check that if we take break or when we take a break in the afternoon. You look quizzical.
Richard Morgan: I just didn’t understand Mr Castleton to have solicitors instructed and it’s normally –
Mr Beer: No, no, no, now.
Richard Morgan: Oh, right.
Mr Beer: He’s got solicitors in this Inquiry –
Richard Morgan: Ah, I see.
Mr Beer: – who have obtained a copy of the recording and have had it transcribed.
Richard Morgan: I see. Not by an official transcriber, though.
Mr Beer: Is there a point on that?
Richard Morgan: No, it’s just normally I would trust Smith Bernal as being an authorised transcriber, whereas I just don’t know what this document – I have no idea. It’s just a piece of paper that purports to record what is stated and I just wondered what the provenance of the document was, that’s all.
Mr Beer: Shall we look at the piece of paper?
Richard Morgan: Mm, by all means.
Mr Beer: Page 14. In fact to give you some context we should start at 13. Just under “I’m grateful” 23.38, you are –
Richard Morgan: I’m sorry. I’m not sure I’m there. Oh, I’ve got it, thank you.
Mr Beer: You’re recorded as saying:
“No, no, of course. For the assistance perhaps of Mr Castleton what I was trying to do for the Court is.”
The judge said:
“Is give me background.
“You: A very general background as gentler introduction at this stage as I can. Then I propose to address your Lordship very briefly on one point of view that arises on the burden of proof.
“Judge: Yes.
“And then even if I’m right on that issue of burden of proof it might be of assistance to the court and to Mr Castleton if I complete a comprehensive opening so the Court has presented to it in as neutral a way as possible.
“Answer: Yes.
“The primary documents.
“Yes.
“There will come a point at which I will make some submissions as to my primary case …
“But I hope that will be of help to Mr Castleton to relieve him of any burdening of opening the case.
“Yes, quite.
“And also provide a balanced view of the primary documents before I make some submissions as to why we’re bound to win, otherwise wouldn’t be here but [hopefully] that’s of assistance [for] Mr Castleton.”
Then over the page, judge says:
“The biggest issue in this case seems to be whether the computer is working properly, isn’t it?
You say:
“Well, that’s how Mr Castleton would like to portray it.
“Judge: Yes.
“You: And it’s a matter your Lordship may have to consider.
“Yes.
“But I’d invite your Lordship to listen to my opening and understand …
“The facts. Much like a pocket calculator a computer is only a tool that reflects the information that’s entered on to it …
“And the way the system is meant to work is that Mr Castleton is meant to check the underlying physical transactions against what’s shown on the printout.”
He says:
“I see. Well, I’ll leave it to you to explain that in due course.”
Then you say:
“And your Lordship in fact touches the core of this question the core of this trial … and that is is this a trial about an account product produced by an agent …
“Which is verified by him or is this a trial which is a rampage through how a computer system works and whether this is whether Mr Castleton can say that the computer has anything to do with this trial at all.
“Judge: When you say it’s an account …”
Then there’s an unclear passage:
“… which it may well be but it’s still open to Mr Castleton to say that the account is wrong …”
You say:
“It’s still open to Mr Castleton to say the account is wrong in certain limited respects.
“Judge: If the computer’s wrong, if it can be shown that the computer’s wrong.”
You say: “If he could show the computer were wrong.
“Yes.”
You say:
“… in my respectful submission he could only do that by producing physical evidence as to why it was wrong …
“And that is going to be the nub of the dispute.”
So this is the first time we see the strategy of relying upon the vouchsafing of the physical cash account being deployed at the trial, I think.
Richard Morgan: Being deployed at the trial, yes. It was deployed in the amended statement of Particulars of Claim.
Mr Beer: Yes, yes. I meant orally –
Richard Morgan: Yes.
Mr Beer: – at opening. So was the trial about whether the Horizon-produced documents included accurate cash accounts?
Richard Morgan: No. Well, not as far as I understood it. The trial, or the claim, was based upon Mr Castleton’s signed statements of account.
Mr Beer: Where had those documents all come from?
Richard Morgan: Mr Castleton.
Mr Beer: No, no, where had the documents that he had signed, where had they come from?
Richard Morgan: I don’t know.
Mr Beer: What had produced them: a computer?
Richard Morgan: Thinking back all these years, some of them may have been produced by a computer, some of them may have been produced by one of those sort of typing calculators, some of them may have been produced purely in manuscript. I think the lists of amounts of cash by denomination were manuscript documents.
Mr Beer: But the end – I’m so sorry. The end of week cash accounts –
Richard Morgan: Yes.
Mr Beer: – which were a principal document that you relied upon as the agent’s account –
Richard Morgan: Yes.
Mr Beer: – they were produced by Horizon, weren’t they?
Richard Morgan: They may well have been, yes.
Mr Beer: They –
Richard Morgan: I – sorry, I’m not trying to be difficult, I genuinely can’t remember. I think they were printed documents and I think they were signed off by Mr Castleton.
Mr Beer: Can we turn to a different subtopic, please, and look at some tactical issues. Can we go back to paragraph 52 of your witness statement, please, which is on page 16, and scroll down. Thank you. You say:
“I have no idea what the tactical position of [the Post Office] was in this litigation or what reasoning was behind it.”
Yes?
Richard Morgan: Yes.
Mr Beer: You say that you:
“… advised explicitly that the costs were going to be out of all proportion to the amount at stake, but [you] continued to be instructed to progress the matter to trial.”
You even advised that:
“… a drop hands settlement should be attempted, but that does not seem to have been taken up.”
Yes?
Richard Morgan: Yes.
Mr Beer: So you had no idea at all of what the Post Office’s tactics were in this litigation, why it was continuing to fight it, why it was continuing to spend money on it?
Richard Morgan: I thought it was commercial madness.
Mr Beer: And you used that word –
Richard Morgan: I might well have done, yes.
Mr Beer: – in an email –
Richard Morgan: I tend be quite blunt about my views.
Mr Beer: – yes, about stopping this madness?
Richard Morgan: Yes.
Mr Beer: I just want to see whether things were revealed to you about why your client was pursuing this madness.
Richard Morgan: Sure.
Mr Beer: POL00069490. This is a telephone attendance note of a conversation between Mr Dilley and you on 10 October 2006.
Richard Morgan: Yes.
Mr Beer: If you just read the first three paragraphs to yourself to get some context, rather than diving straight in.
Richard Morgan: Yes.
Mr Beer: In the fourth paragraph, it records that you think you thought:
“… we should play some brinkmanship and press for a December trial. If they disclose an experts report that harms us as they are [going to be] so late, we can always ask the court to vacate the trial. However at the moment, they have not disclosed an experts report and he thinks we can go to trial without one. However, he wants us to get client approval for this strategy.”
On the issue of brinkmanship, what do you understand you to have meant in this context?
Richard Morgan: Yes, so this was a question that was posed to me at the outset and I have thought about it. I don’t have a direct recollection now of what was being said but I can reconstruct what I would have been thinking, if that would be of help.
Mr Beer: Yes, please.
Richard Morgan: So you have what is, by High Court standards, a tiny piece of commercial litigation going to trial. You have some generalised allegations that haven’t been particularised and you have some directions for exchange of evidence and exchange of expert evidence.
It is quite clear that the longer this case drags on, the more of a gaping wound the costs are going to become. They’re already wholly disproportionate to the amount at stake and something has got to force the issue, either to – that will either result in the case becoming clear, the evidence, the expert evidence articulating what it is that the defendant is pointing at, or it needs to be go to trial. What you can’t do is just let it roll on and on and on.
So press for the December trial, see if that provokes the service of the evidence that’s going to be used by way of defence. If it does actually provide a defence, then we might need to seek an adjournment. If it doesn’t, then you just go to trial.
Mr Beer: Thank you. Can we turn forward to POL00072432. This is an attendance note on 16 October, so six days after the conversation we’ve just looked at. It’s not an attendance note upon you; it’s Mr Dilley on Mandy Talbot.
Richard Morgan: Yes.
Mr Beer: If you just read the first couple of paragraphs to yourself to get some context. Then if we look at paragraph 3:
“Counsel was much happier with the case now we had all these witness statements and thought they were really thorough and we didn’t really need expert evidence … Counsel therefore wants to play some brinkmanship with the other side, ie push for a December trial, but preserving our ability to get that adjourned if they serve a late report we need to deal with. I said that we could prepare for a December Trial if necessary and I was happy to do so, but I was concerned to make sure that we could reply to any expert report served by [Mr] Castleton. I also thought that our counsel was effectively trying to ambush the other side because he thinks that when we serve these fifteen witness statements on them, they will be knocked reeling a bit. Mandy appreciates the tactics of this. She said that the only thing was with a December trial is that the Post Office get very busy before Christmas generally. She will speak to her colleagues and come back to me on counsel’s tactical ideas.”
There’s a subsequent email, no need to – sorry, subsequent telephone attendance note saying that the Post Office are happy enough to follow counsel’s advice and go for the December trial, purely as a tactic. That’s POL00069453.
The type of brinkmanship spoken of here is of a slightly different flavour, isn’t it? Was it part of your strategy to ambush Mr Castleton?
Richard Morgan: No, not at all. We’d had a CMC, I think, in September or October of this year.
Mr Beer: Of that year?
Richard Morgan: That year.
Mr Beer: It was a pre-trial review, not a –
Richard Morgan: I’m grateful – where Mr Castleton was represented by counsel and we had both said that this case was not suitable for the High Court, and we had invited the master to adjourn it off to Central London County Court. And the master had declined to do that. He wanted to hold it to a trial date in October to December 2006.
So it was a court driven direction for a hearing and the hearing had been fixed, and there had been directions down to the hearing. It’s hardly an ambush when everybody has been told about it by the master giving the directions. And I felt we should hold it because, otherwise, not only were we going to be staying in the High Court and not getting the advantage of the earlier hearing date that the master was keen to achieve when he kept us in the High Court, but we wouldn’t be getting the evidence that he’d directed be served.
So I don’t think – I mean, with respect to Mr Dilley, I don’t think he’s correct to describe it as an ambush.
Mr Beer: Thank you. Can we move, please, to page 15 of your witness statement at paragraph 49. Page 15, please, paragraph 49. You say:
“I have absolutely no idea why or by whom the Castleton case was considered a test case – although I note that Mandy Talbot apparently said it had ‘almost become a test case in spite of itself’ [in an] attendance note of … 11 September 2006 … As far as I was concerned, it was a single case to be decided on its own facts, as with every other case. I did not adjust the issues to run it as a ‘test case’, nor was I asked to run it as a test case for anything (I was only ever instructed to been a claim to recover amounts owing). The case was not presented to the court as a test case, and in my view the judgment does not read as if the judge treated it as a ‘test case’ of anything.”
So reading that together, it was your view that this was not a test case in any sense of that word, or those words, for the Post Office?
Richard Morgan: Yes. It was a single one-off case.
Mr Beer: Can we look, please, at POL00069622, which is the attendance note you referred to there. This is a six-page attendance note of a conference held with you, two solicitors from Bond Pearce and a number of the witnesses that the Post Office was going to use at Mr Castleton’s trial.
Richard Morgan: Yes.
Mr Beer: It’s at your chambers. If we just go to page 5, please, and look at the end of the document. Thank you. “Meeting with Mandy Talbot”:
“Tom [that’s Tom Beezer, I think] explained that the big issue in this case was proving the loss. Horizon is like a big calculator and it can be changed after the event (Tom went on to explain why).”
Just thinking back to the answer you gave about the issue of whether you got an answer to the reasonable question you asked – can the system be changed after the event – presumably you don’t now recall receiving this explanation nor indeed what the explanation was?
Richard Morgan: No.
Mr Beer: Again, thinking back, do you think this played any part in the strategy of deploying a nice legal point that there were actual real difficulties on the ground in proving a loss?
Richard Morgan: No, I don’t think I do recall this playing any part because I just think the sequencing is wrong. I think I’d already taken the decision by that stage, that it needed to be by way of settled account or accounts stated. I thought – look, it’s such a long time ago but my feeling at this remove is that that decision or my advice was given in August and that it then, sort of, rolled forward.
Mr Beer: At the foot of the page:
“Mandy Talbot said that the difficulty is this has almost become a test case in spite of itself. The Post Office other solicitors’ cases are waiting and watching on this.”
Then it turns to consider settlement.
Did you know of any reason why Mr Castleton’s case might be singled out as a test case, instead of other cases involving allegations that there were issues with the Horizon System?
Richard Morgan: Not – I don’t remember knowing any at the time, no. I don’t know any now and I don’t remember knowing any at the time.
Mr Beer: Would you expect a client who viewed their case to be a test case to ordinarily inform you of that fact so that you would have knowledge of it when conducting the litigation?
Richard Morgan: In my professional experience, the only occasion on which a client has told me that a case is a test case is when it’s been a Government department and Government departments then ask for particular arguments to be run in particular ways so as to achieve a result that is useful for other cases. And I have not been lead counsel instructed on those cases; I’ve been acting as junior to the Treasury devil.
So I’ve seen it happen, I’ve seen it happen for Government departments, I’ve never experienced it for a commercial client and the considerations are rather different.
Mr Beer: Do you now recall what you made of being given this information?
Richard Morgan: Given what information?
Mr Beer: What’s recorded at the foot of the page.
Richard Morgan: No. Should I?
Mr Beer: What effect would that information have on you?
Richard Morgan: I don’t think it would have any effect at all because I don’t think there was anything I could do. I had a case. My obligation was to run it to the best of my ability, in accordance with my instructions. But my instructions weren’t “Run it in this way so that we get a precedent to achieve X or Y or Z”. My instructions were “There is a debt of £25,500-odd owing by Mr Castleton on the basis of what’s shown through his branch, please take the claim to trial”.
It wasn’t – a Government department would say, “Please take the case to trial and achieve this result on the basis of these arguments”. That was – my discretion as to how the case was put at trial was never circumscribed.
Mr Beer: I see. So you weren’t given instructions to try to establish a legal point?
Richard Morgan: Yes, that’s right.
Mr Beer: You weren’t given instructions to try to establish the integrity of the Horizon System, either (a) insofar as it worked in the Marine Drive branch or more generally?
Richard Morgan: Exactly. And, indeed, had I been asked to do that, I think I would have given them a pretty succinct answer as to why I wasn’t going to do that and how I couldn’t do that, particularly not on the basis of the evidence that I had.
Mr Beer: Well, also, such an approach would be inconsistent with your primary strategy of proving the case on the account?
Richard Morgan: Yes.
Mr Beer: So I am asking you what became of this. You’ve got somebody saying to you here, an important person within the Post Office, “This has become a test case”.
Richard Morgan: Well, she – sorry, or –
Mr Beer: Almost –
Richard Morgan: There was a conversation in a conference in September 2006 at which Mandy Talbot was present. Mr Lister or Mr Beezer, or whoever it was, took an attendance note and recorded something that may or may not have been said within that conference. I don’t remember her using those words but, there again, I don’t really remember the meeting at all. And “almost become a test case in spite of itself”, if those were the words used by Mandy Talbot, they don’t – if I was cross-examining, I wouldn’t be putting it to the witness that Mandy Talbot was saying that it should be run as a test case.
It’s more of an observation by an individual as to what she thought was happening to the case but there we are. I mean, I just can’t assist you as to what she thought she was saying, why somebody has seen fit to take a note of it or what it means, but it certainly didn’t impact upon what I was doing.
Mr Beer: Can we therefore look to some other documents to see whether they provide some help.
Richard Morgan: Of course.
Mr Beer: POL00072741. This is an attendance note of a telephone conference between you, Tom Beezer, Stephen Dilley and Adrian Bratt on 16 August 2006. You discussed the pleadings on page 1 and, if we go over to page –
Richard Morgan: Sorry, can we just – yeah, so you can see here that we’re already discussing pleading it as an account by an agent.
Mr Beer: Yes.
Richard Morgan: Yes.
Mr Beer: If we go over to page 2, please, you discuss the defence and then the discussion ranges a bit more broadly than that, if we go to the foot of that page. You’re recorded as saying, this is two paragraphs from the bottom:
“… this would be better off in the Chancery/Commercial list of Central London County Court. We should write to the other side and explain issues of proportionate use of High Court time and effectively use our letter as a shield to the judge.”
Mr Dilley:
“This would have settled without the computer/Horizon issue and the subsequent subpostmaster’s bloggers website.”
Richard Morgan: Yes.
Mr Beer: What did you understand or what do you understand that to refer to: the case would have settled but for the computer/Horizon issue?
Richard Morgan: That Mr Dilley thought there was something that was stopping the case settling and that – well, interpreting it now, that Mr Castleton was being led to believe that his losses were illusory by the fact that other people were saying that there was something going on.
Mr Beer: Was there any suggestion made to you at this time that it was important to the Post Office to vindicate the reputation of Horizon?
Richard Morgan: No and, as I’ve just been saying, that didn’t form part of my strategy nor was it communicated to me, nor could I have run it, had it been – had I been told to do it on the basis of the material that I had.
Mr Beer: Can we look, please, at POL00069794. This is a telephone attendance note of a conversation with you on 9 November 2006, made by Mr Dilley and the conversation was with Mr Dilley. If we can look, please, at the second paragraph from the bottom, that’s Mr Dilley:
“I said that ultimately, the Post Office driver had been getting a judgment against Mr Castleton to show that the computer system wasn’t wrong and deter other subpostmasters from bringing a claim. I therefore thought the most important thing for them was getting judgment for the full amount, and that we wanted as much costs recovery as possible, but given that I had previously told the Post Office that Mr Castleton’s asset position was unclear, I think that if there is going to be any movement at all in our negotiating position it is going to be on costs.”
So what this note records you as having been told, a month or so out from trial, was that the driver for the Post Office had been to get a judgment against Mr Castleton to show its computer system wasn’t wrong and to deter other subpostmasters from bringing a claim. That’s not about recovering the money, is it?
Richard Morgan: No, I agree.
Mr Beer: It wasn’t about the sums involved in either the claim or the counterclaim?
Richard Morgan: Yeah, I can see that.
Mr Beer: And you were being told, according to this note, it was to get a judgment to show the integrity of a computer system and about deterrents?
Richard Morgan: Yeah, I can see that.
Mr Beer: Had that been expressed to you previously? I mean, looking back at some of the things that we have earlier looked at, the earlier attendance notes, when you were saying it’s “madness” to continue to litigate this claim, and they said, “No, it’s important for us to continue it”. Do you think, thinking back, that that’s what they regarded this case as about, the Post Office?
Richard Morgan: I genuinely don’t think so. I mean, I hadn’t focused on this at all and it certainly hadn’t formed any part of my thought process in preparing for this hearing. I didn’t recall this as being information conveyed to me. I’m quite surprised to see it there now.
I don’t recall it at the time and had I focused on that, I think my response would have been that I couldn’t – I simply couldn’t prove that the system wasn’t wrong. It just wasn’t an achievable objective.
Mr Beer: Can we look next then at POL00069775. You’ll see from page 1 that you’re copied into this email chain here.
Richard Morgan: Yes.
Mr Beer: If we start at the back of the chain, please, on page 3.
If you just look slightly above that please, Frankie.
You’ll see that the chain starts off with something you’re not copied in on: an email from Mandy Talbot to a range of people within the Post Office and to Mr Dilley, 10 November 2006:
“… solicitors … have substantially accepted our counter offer.
“Castleton is not prepared to have judgment … against him …”
Scroll down, please:
“Castleton is prepared to make an open statement that [the Post Office] can use as it chooses exonerating the HORIZON System. I now [seek] your assistance …”
Then skipping a paragraph:
“I, Mr L Castleton … admit that a sum of money was owed by me to Post Office Limited as a result of errors which arose whilst I was the postmaster at the above office. I had thought that this debt arose due to a malfunction of the HORIZON System but I [now] accept that I was mistaken and that the debt arose out of human error. I declare that the HORIZON System did not contribute to the errors in any way and formally withdraw all statements I made to the contrary.”
Then scrolling up, please. Mr Baines, on the same day, says:
“Mandy,
“I think the draft says all that it needs to.
“… a few minor changes … revised text as follows:
“‘I, Mr Lee Castleton … admit that a sum of money was owed by me to Post Office Limited as a result of errors which arose whilst I was the postmaster at the above office. I had thought that this debt arose due to a malfunction of the HORIZON system but I now accept that I was mistaken and that the debt arose out of human error. I declare that the HORIZON system did not contribute to the errors in any way and formally withdraw all statements I made to the contrary.”
Then scrolling up still further. We can see Mr Dilley’s proposed suggestion. He says:
“1. I don’t think Mr Castleton will want quite as plainly to admit owing the [Post Office] money … We can try to get him to say that if you want, but I doubt he will. I wonder if we can change it to:
“I, Mr Lee Castleton … fully and unreservedly withdraw the untrue allegations I have made about the operation of the Horizon system. Previously I thought that discrepancies that arose at the Marine Drive Post Office whilst I was postmaster arose due to a malfunction of the Horizon system, but I now accept that I was mistaken and that the discrepancies were caused by human error. I declare that the Horizon System did not cause or contribute to the discrepancies in any way and I formally withdraw all statements I made to the contrary and undertake not to repeat them, and/or make any further allegations about the Horizon System and/or its functioning.”
You were sent that.
I can’t see any trace of you having replied to that or offered a view on any of the three formulations of the statement that it was proposed should come from the mouth of Mr Castleton.
Would you agree that this discloses Post Office’s motivation, an important motivation being to get a publicly declared clean bill of health out of the settlement?
Richard Morgan: Well, I can see what you’re arguing but I had no input –
Mr Beer: I’m sorry, you can see what I’m?
Richard Morgan: Arguing.
Mr Beer: I’m not arguing anything, I’m asking questions.
Richard Morgan: I can see what it says. I can’t give you evidence as to what the Post Office’s motivations were but I can see why you’re saying that that suggests that what they’re doing is to vindicate the Horizon System.
Mr Beer: Does this not disclose further evidence that it was revealed to you that they saw this as something of a test case to get a clean bill of health for Horizon?
Richard Morgan: It discloses to me that they don’t want Mr Castleton to say that the problems were caused by Horizon.
Mr Beer: But, of course, this ran directly contrary to the way that you wanted to run the case, which was Horizon’s irrelevant, this has got nothing to do with Horizon?
Richard Morgan: It ran directly – well no, it didn’t cut across what I was going to argue at all. It made no difference at all to what I was going to argue. As far as I was concerned, I had instructions to run a case based on the Amended Particulars of Claim and that was what I was going to do and, at this stage, 10 November, I suspect I was starting to work pretty hard on the primary documents.
So, as you’ll probably be aware, when one is prepping for a large trial, even though the amount at stake was small, there was a lot of paperwork that needed to be understood. I was focused on getting on with the trial preparation.
Mr Beer: Thank you, sir, might that be an appropriate moment for the afternoon break? It’s 2.00 now.
Sir Wyn Williams: Can I just ask – sorry, there was just one part of that document I had a question about for Mr Morgan. Can it go back up, it will only take a minute.
You see, Mr Morgan, that the paragraph in quotes which Mr Beer was asking you about, in the next paragraph, what’s written is as follows:
“The real question is whether we need the undertaking …”
Which I interpose to say I’m assuming that relates to the paragraph in inverted commas:
“… in clause 5 of the schedule. Richard [which I assume is you] thinks that by making a song and dance we highlight a sensitivity”, et cetera.
So it appears as if you were expressing reservations about having that sort of formula in any part of the Tomlin Order.
Richard Morgan: Mr Chairman, part of the problem with this is that you can see from the top left there’s a draft Tomlin Order 10 November attached as an attachment.
Sir Wyn Williams: Yes.
Richard Morgan: When I was provided with the bundle of supplemental documents it helpfully has the back sheet for the draft Tomlin Order but not the terms of the order itself. So I haven’t been able to refresh my recollection of what –
Sir Wyn Williams: Are you telling me, Mr Morgan, that – I might be assuming that clause 5 relates to the paragraph in inverted commas above but it may, in fact, not?
Richard Morgan: Well, I don’t know because there’s – there seems to be an undertaking and that doesn’t seem – I – look, I just can’t assist because I don’t have the document to read to see what’s being talked about, and –
Sir Wyn Williams: All right.
Richard Morgan: – I’m hesitant to commit myself to something that I haven’t read.
Sir Wyn Williams: No, I follow. I follow. Right. Thank you.
Yes, Mr Beer, we’ll have our afternoon break. How are we –
Mr Beer: 2.20, please.
Sir Wyn Williams: How are we looking generally for this afternoon?
Mr Beer: We’re looking good, sir.
Sir Wyn Williams: Fine. Thank you very much.
(2.03 pm)
(A short break)
(2.20 pm)
Mr Beer: Good afternoon, sir, can you see and hear me?
Sir Wyn Williams: Yes, I can. Thank you.
Mr Beer: Sir, can I start by picking up on a document that may assist both you and Mr Morgan to answer the questions that you asked him before we took the break and ask to be displayed POL00081826_018. I can’t ask for that to be displayed.
Essentially, sir, I’ll come back to this in the hope that, in the next half an hour, that document is on to the system, but it is the rest of the Tomlin Order obtained from a different source. It’s amongst documents that the Inquiry has recently been provided with, which is why it’s not on the display system at the moment.
Whilst that’s done behind the scenes –
Richard Morgan: Is paragraph 5 in the same terms as the –
Mr Beer: Yes, and no, so let’s look at the document when I can display it. Thank you.
You’ve told us that before you argued the case at trial, you didn’t think that this was a test case at all and it was essentially a case that turned on its own facts?
Richard Morgan: Yes.
Mr Beer: Can we look, please, at POL00070020. This is an attendance note of 22 January 2007 and you’ll see that it is described as “Hearing of judgment – Post Office Limited v Lee Castleton”, an attendance note of Mr Dilley. Then scroll down a little bit, please.
“Hearing of judgment – Post Office v Lee Castleton”. It sets out who’s present. Then there’s some argument about costs.
Richard Morgan: Yes.
Mr Beer: Then, over the page, please, more arguments about costs. Then scroll down to the penultimate paragraph:
“Thereafter returning to counsel’s chambers and having joint telephone conference with Mandy Talbot to update her on the outcome of the costs submissions. She was very pleased. Richard also offering to supply her with a separate note on how she could use the judgment and advising that … under the new procedure the subpostmasters don’t physically sign off the accounts that they supply every month, she should think about getting them to do this. She explained that is what the Legal Affairs team in the Post Office has advised them to do when they change the system but they were overridden by business concerns. RM suggesting that they at least electronically sign some certification on the accounts stating that they accept that they are true and accurate and represented a fair position on profit and loss stock and cash because if this case ever arose again, then it would make it much easier for the Post Office to rely on the Castleton precedent and get … judgment against subpostmasters and not incur such great costs next time.”
Was this is an offer by you to help the Post Office get maximum value out of this precedent?
Richard Morgan: Again, it’s a very long time after the event, but my – it’s no more than an impression of a recollection, is that after the judgment was given, we had a discussion about whether it was any use and you sort of see it picked up there, there was some exchange where she told me or somebody told me that the Post Office’s whole system had changed and that they were no longer going to have cash accounts or no longer going to have daily cash accounts and weekly accounts, and so on and so forth.
And my response was that that meant that Castleton was not going to be of any use unless they had the cash accounts that we’d relied on at trial to achieve the same accounting position and that was the note that, in due course, I produced and I think that’s somewhere in the bundles.
Mr Beer: Can we look at that, please, it’s WBON0000023. If we just scroll to the last page, please. One page up, sorry, that’s the back sheet. Can you scroll down.
We can see that it’s an undated advice written by you, you’ve helpfully told us in your witness statement by explaining that the chambers’ fee system shows that it was sent out on 22 January 2007.
Richard Morgan: Yes.
Mr Beer: So if we go back to the first page, please, you say:
“Following judgment … I have been asked to provide a short written advice on the key points that have emerged from my involvement in the case as a whole and the judgment in particular. I should emphasise that this Advice has been written as a short preliminary overview and should not be relied upon as providing a final and definitive consideration of all steps that should be taken in order to ensure that the Post Office derives maximum advantage from the judgment.”
Just stopping there, did you know beforehand that the Post Office wished to derive maximum advantage of the judgment, ie before judgment had been handed down?
Richard Morgan: No, but, there again, I didn’t even know that we’d won.
Mr Beer: I’m sorry?
Richard Morgan: There again, I didn’t even know that we’d won before the judgment was handed down.
Mr Beer: No, but were they not telling you that they regarded this as a case, that it was an important precedent or could be seen as a test case –
Richard Morgan: Not that –
Mr Beer: – and that it was a case which the Post Office wished to use to deter other postmasters from bringing claims?
Richard Morgan: Having seen the email that you took me to before the break, I can see that that was one of their objectives but it wasn’t the basis upon which the claim was run. Having won the case, this advice is given in order to provide a steer as to how it might be relied on if the same procedure is followed in the future.
Mr Beer: Reading on, paragraph 2, please. You say:
“The first point is that it is easier to sue a subpostmaster on an account produced by him than try to prove that a loss has arisen in the business. Trying to prove such a loss, if it is possible at all, is extremely difficult forensically and will inevitably be expensive and time-consuming.
“The second point is that the Post Office derives a significant advantage in litigation if the subpostmaster bears the burden of proof to show that the account sued on by the Post Office, such as the Cash Account (Final), is wrong, rather than the Post Office having to prove that the account sued on is right.
“This reversal of the burden of proof can only occur if the Post Office is suing on the subpostmaster’s own account, ie on a formal account produced by the subpostmaster and tendered by him to the Post Office as his confirmed statement of the trading that has occurred.”
Then over the page.
“As such, a Cash Account (Final) (or any other account produced by a subpostmaster) is only likely to be treated as a final account for a given period if it is (i) produced by the subpostmaster (ii) at least in circumstances where he is contractually required to produce and verify the figures as accurate, but preferably there he formally certifies the figures as such, and (iii) where the subpostmaster physically signs off the accounts as such, alternatively signs electronically.
“The third and final point is that if and when it is decided that a subpostmaster is to be suspended or removed from post, he should be required, in accordance with the terms of his contract, to produce and sign a final account to the date of his removal, whether or not the Post Office has conducted its own audit. The purpose of requiring this is simply to rely on the reversal of the burden of proof and remove the necessity (though not the desirability) of having to call the auditors to prove the loss.”
You say here that subpostmasters should be required to sign the cash accounts. Was that language reflective, as you understood it, of the Post Office’s attitude, as you had come to understand it, that they were happy to impose conditions on a postmaster that may have the effect of, for example here, reversing the burden of proof and thereby obtain a dominant position or a position of power over the subpostmasters?
Richard Morgan: No. This is almost a, sort of, reflection of my Chancery background. It’s more that the principal/agent relationship entitled the principal to rely on the accounts stated by his agent as being final and definitive and, in order to show that the account is that of the agent, it would be rather sensible to have it signed by the agent.
So I’m – this note is written as a Chancery practitioner giving advice as to the formal situation on which an account stated arises as between an agent and a principal, not the reflection of the position as between a subpostmaster and the Post Office, although, as reflected in the terms of the contract as then in existence between the Post Office and subpostmasters that had been relied on in the Castleton case, that seemed to arise as a matter of necessary implication, from what I can remember of the contract. But I haven’t reread the contract in the last 17/18 years.
Mr Beer: In relation to this advice, was it based on the assumption that the loss of which the Post Office complained was a genuine one –
Richard Morgan: Yes.
Mr Beer: – and not an artifact of the computer system?
Richard Morgan: Yes. Again, as a – as somebody practised in my field, I can’t conceive of people signing off on documents that aren’t true.
Mr Beer: What about somebody signing off on documents because they have to continue to do so to trade into the following week and they phone a helpline dozens and dozens of times and say, “These things I’m signing off, they’re not correct”.
Richard Morgan: Yes, I mean that’s something that seems to have emerged subsequently in the Post Office – sorry, in the case in front of Mr Justice Fraser. I mean, I haven’t followed that in any great detail but I can quite understand why people might say that it’s signed under duress, and so on and so forth.
When this matter came back to me on the Rule 9 Request, one of the things I did was go back and look and see whether Mr Castleton had himself had given an indication that the figures he’d signed off were inaccurate or that he’d signed off on them because he was under some duress or there was some other reason. And I just – I mean, I didn’t at the time, and I still I don’t, get any hint of that in the pleadings or the evidence.
I mean, there are all sorts of reasons why figures might be wrong, or so on and so forth. But, at no stage during the trial, so far as I can recall, did Mr Castleton say that his figures were wrong. Had he done so, the consequence would have been that the trial would have been adjourned, the matter would have been remitted to a master for an account to be taken and we would have gone through the same process and established what the actual loss was, by reference to amounts by way of cash and goods within the business, what had been taken out, what had been paid in, what had been transferred out, what had been transferred in. There would have been a process of verification of the account on the old account stated procedure.
So we would have got to an answer, it might not have been the same answer, but it – the whole process of the Amended Particulars of Claim was to establish what the actual real loss was.
Mr Beer: Just on that point, we’ll come back to the note in a moment, can we look, please, at LCAS0000197. This is a transcription of the recording of the opening, again. Can we just go to page 11, please, and look at the foot of the page. Thank you.
You’re, in this part of the opening, Mr Morgan, taking the judge through some week-end balances and doing it week by week, referring to accountant periods, and you’ve dealt with 52.
The judge asked, second box from the bottom:
“… I see. I don’t quite know what a trial balance is. Do I need to know that?”
You say: “Well, my Lord, if I may I’ll bring your Lordship back to the delights of the Post Office accounting system as I hope I make my opening more coherent. I’m afraid it is quite a technical trial in looking at how these figures are made up …
“And not that your Lordship needs any reinforcement but it’s taken me some number of weeks …
“To work out how all the figures go backwards and go forwards but I hope I’ll be able to give your Lordship …
“A rational and relatively simple explanation. Of course Mr Castleton is the expert and we’ll be hearing from in due course.
“Mr Castleton: could I, my Lord?”
The judge says: “Yes.
“Mr Castleton: My Lord sorry throughout this period the actual trial balance I’ll be the final balance for this week is actually produced on a Wednesday evening and at this point this is when the subpostmaster is allowed to address any issues throughout the week’s trading …
“If there are any shortfalls then he’s able to ring a helpline that’s run by the Post Office in order to explain any problems that he’s had over the former week and any balancing problems that have occurred prior to the Thursday morning. You’ll see that all those cash accounts are actually timed and dated on the followed morning which is a Thursday.
“I see.
“Because through …
“You’ll find that all of those losses have had phone calls and assurances from the Post Office themselves that they would look into the reason as to why those losses were occurring.
“Yes.
“So they were all reported.
“Yes.”
Then it stops.
That appears to be Mr Castleton, in the course of the opening, saying that, although the week-end accounts were signed off –
Richard Morgan: Yes.
Mr Beer: – all of the losses had phone calls made to the helpline with assurances from the Post Office that they would look into the reason why the losses were occurring. Then, in evidence, at POL00069279, this is a transcript of Mr Castleton’s evidence, and can we look at page 37, please, and look at E. This is you cross-examining Mr Castleton still. You asked:
“Do you also accept that when you produce the document at 2979 that was a draft report produced so as to enable you to check the figures before you put them into the final cash account?
“Answer: No, because (inaudible) final cash account. I am sorry, but that is not the case. The cash account generates itself. It is generated from the transaction (inaudible) Chesterfield.”
“Question: If you take up bundle 6B –
“Answer: Yes.
“Question: I suggest that in fact the cash account is generated by your machine at Marine Drive branch, it is not generated by Chesterfield?
“Answer: If you look at (inaudible) witness statement you will find that the series of checks that the computer does through Marine Drive Post Office branch through Chesterfield corresponds; it is not generated in-house. And you will also find me checking these figures now that check to check is not a generated or figure that we actually place into the computer, it is a check that has done daily on separate information that the computer then reproduces in the cash account.”
Then scrolling down, again at E, you asked:
“Did the cash accounts correspond to the physical evidence of the transactions you had undertaken?
“Answer: Not always, no. We need to differentiate between cash account and the daily transaction on the logs and also the stock … figures produced by the balanced snapshots.”
Then over the page, please. At C:
“Question: So you check all the figures in the final balance against fiscal records?
“Answer: Yes.
“Question: And only when you are happy with that do you proceed to print out to cash account final?
“Answer: And if there is anything I don’t agree with I make a phone call to helpline, which is what we repeatedly did.”
So, thinking back, given the intervention in the opening, on the evidence that was given there, wasn’t it the case that Mr Castleton was saying, “Yes, I signed the accounts that were produced for me by the Horizon System, not within my branch. I was signing that there was a discrepancy, a shortfall, between the cash and the stock which the system said I should have, and the cash and stock which I, in fact, had and I was reporting that at the time”. It’s not something that’s only emerged years later, is it?
Richard Morgan: Well, my impression of his evidence, and that may be a false impression and it’s the impression that the judge formed and it’s the impression that one gets from reading the Defence as well, is that the figures that were signed off by him were what was actually present and were a fair and true reflection of what had occurred.
Mr Beer: He was signing off that there was a discrepancy, that there was a shortfall –
Richard Morgan: Yes.
Mr Beer: – and contemporaneously reporting that it wasn’t his responsibility. He was reporting that back to the Post Office wasn’t he? That’s what he was saying.
Richard Morgan: But there was a discrepancy between what he’d got and what he ought to have –
Mr Beer: Yes.
Richard Morgan: – and that’s what a loss is.
Mr Beer: Even if it was generated by Horizon?
Richard Morgan: Well, that may be where we differ because, at the end of the day, what he actually has and the business that he’s done, if there’s a discrepancy between that and what he ought to have, then that’s a shortfall.
Mr Beer: Even if one of those is produced by a computer which he says is faulty?
Richard Morgan: Well, I’m – sorry, hang on. I’m not quite sure what you say is the bit that’s faulty.
Mr Beer: A document that I’m signing, which says I should have this amount of cash and stock, £1,000, I’ve in fact got £500 of cash and stock. I’ll sign that to say “The system says I should have £1,000, I’ve in fact got £500”. Sign that, true and accurate. I get on the phone and say “The bit of the account which says I should have £1,000 is wrong. It’s been created in the following ways”.
I mean, I’m not going to go through all of Mr Castleton’s calls to the helpline –
Richard Morgan: No, no.
Mr Beer: – where he repeatedly explained to them on the day that the event happened why the system was creating phantom figures. But that was his case, wasn’t it? It wasn’t only something that emerged years later before Mr Justice Fraser and it may be that it wasn’t very well articulated by Mr Castleton, being a litigant in person, but showing you the two things I have, the opening and the evidence, the evidence and the point were there, weren’t they?
Richard Morgan: I didn’t understand them to be there in that way at the time, nor did I understand them to be there on the basis of paragraph 3 of the amended Defence and Counterclaim at LCAS0000294.
Mr Beer: Lastly, could I ask you some questions on a discrete topic, namely the treatment of Anne Chambers and Mr Jenkins. Please can we look at POL00071438. This is an attendance note made by Mr Dilley in respect of a conversation with you on 11 August 2006.
It concerns the draft witness statements of Anne Chambers and Gareth Jenkins. If you just read the first couple of paragraphs to orientate yourself, then look at the third paragraph:
“In relation to Gareth Jenkins’ statement, we need to firstly say he holds a position with the job title of distinguished engineer. It might be that we decide to put all the information he is saying into the expert’s report given that it is really opinion evidence.”
So you have been provided with these two draft witness statements from Fujitsu employees. The advice that you’re recorded as having given there, would that reflect your view that, to the extent that Mr Jenkins’ witness statement contained opinion evidence, that couldn’t be given by him, it had to be given by an independent expert?
Richard Morgan: If it was truly opinion evidence, yes.
Mr Beer: Why would opinion evidence have to be given by an independent expert, rather than Mr Jenkins?
Richard Morgan: Well, technically, anybody can give any evidence they want in a civil trial but, ordinarily, it would be excluded if it was opinion evidence, unless it was given by an expert who was able to give an independent expert view.
Mr Beer: Why couldn’t Mr Jenkins give an expert view?
Richard Morgan: Because he’s not an independent expert.
Mr Beer: The decision was taken, in the event, not to call Mr Jenkins. Did you hold a view on whether Anne Chambers was giving, according to her, draft statement opinion evidence or evidence of fact?
Richard Morgan: At this distance in time, I can’t even remember what she was saying.
Mr Beer: Thank you very much, I understand.
Sir, those are the only questions that I ask. I understand there are two Core Participants who wish to ask questions. First, Mr Stein.
Sir Wyn Williams: Right.
Questioned by Mr Stein
Mr Stein: Mr Morgan, my name is Sam Stein. I ask question on behalf of a very large group of subpostmasters and mistresses. Can I take you within your statement, please, to page 30. If we can have that on the screen, please. I refer to page 30 of Mr Morgan’s statement, paragraph (e) to start off with. Thank you.
Mr Morgan, you’ve been asked some questions about this part of your statement, which is in reference to 12 June 2012, where you had a short consultation and you refer to it there as being “The matter is entitled simply Post Office”.
Richard Morgan: Yes.
Mr Stein: Now, you’ve been asked some questions about that. So moving on from 2012 to 20 March 2014. Now, at this point in your statement, you say this, that you were “contacted by Linklaters to advise Post Office Limited” and your records are showing three short telecons and you think, although you might be mistaken, that you also had a short in-person consultation with Christa Band of Linklaters and Paula Vennells of POL.
At that time, Paula Vennells of POL was the Chief Executive Officer; is that right?
Richard Morgan: Part of my difficulty with this is that I’m not sure that this is a true memory. I mean, what I’ve tried to do is I’ve tried to give as full and accurate an account as I can but then say I actually don’t think this is a true memory. The problem is I’ve seen Paula Vennells on TV, and I sort of feel that I was meant to meet her but I just can’t find any record of actually meeting her. And I’m sure, given the way my clerks like to make sure that everything is recorded, that, if there had been a meeting, I would have had it in there. But since I had some sort of feeling about it, I thought I should describe it.
Mr Stein: Right. Well, let’s see what you’re able to get to. Your statement does say that you also had a short in-person consultation with Christa Band and Paula Vennells, which appears to be a bit more than a vague daydream of a meeting, doesn’t it?
Richard Morgan: Well, I don’t know. What I’ve said is that I think, although I might well be mistaken, that I also had a short, in-person consultation.
Mr Stein: Okay.
Richard Morgan: And then what it also says is “But I’ve got no record of it. I’ve got no record of a room booking. I’ve got no record of a fee line”. I would have made a fee line for it if I’d met somebody and given them advice.
Mr Stein: Let’s move on to the remaining bits of (f), as you have it at page 30. You go on to say, and you’re emphasising really, that you don’t have a great recollection of this. You say:
“I have no specific recollection of what was happening beyond thinking that I was asked what could POL do about any arguments being raised in relation to the accuracy of the Horizon System, to which [your] answer was that they should follow the advice you had given in 2007 and keep a physical paper trail of accounts signed by the subpostmaster.”
Then you go on to talk about the fact, jumping then a little bit:
“… I should emphasise that this memory of a meeting and the identity of the participants may be a ‘false’ memory, possibly something I reconstructed having been told there would a meeting.”
Okay?
Richard Morgan: Yes.
Mr Stein: You again emphasise after that:
“… I am really not at all sure that a physical meeting ever took place …”
Again, a reference to the fee line.
Richard Morgan: Yes.
Mr Stein: So what we do know is this, as far as we can tell, that there’s some contact to you in 2014, March 2014, and, as best as you’re able to, this was a meeting that wasn’t terribly memorable, because you’re saying “Well, best I can do is that if they want anything from me they should look back at my earlier advice in 2007”.
Richard Morgan: Can I try and give the evidence –
Mr Stein: You can clarify it any way you like.
Richard Morgan: So it’s something I keep on going over in my mind, as to whether it took place or not. The phone calls definitely did take place. I think the first was did I remember what the Post Office case was and the second or third one was, you know, “What we’d like to talk about is how one goes about tidying this up”, or not – I don’t even know whether it was tidying it up. It was just – you know, and my entire point was that the one case that I did that actually involved the Horizon System relied upon physical accounts, a physical paper trail signed off by the subpostmaster.
And that is the core of what I was saying. In fact, that was probably all I was saying. I didn’t receive any papers, I didn’t receive any instructions. It was “We’d like to talk to you about Horizon”.
“Do you still keep a physical paper trail of accounts signed by the subpostmaster because that’s what I’d suggested you do”.
Mr Stein: Right. So we start with the date, the reference to that in March 2014. So working on that as being at least some contact to you, what I’m going to ask is – and see if I can find out whether particular points may have been raised with you, that actually might stand out, might be important.
Richard Morgan: Sure.
Mr Stein: I’m going to take you to a document, that was provided to our document provider and it is POL00006798 – and, Frankie, if you can go to page 13, internal pagination in the document, page 13.
Now, this document is written by a barrister called Simon Clarke and it is dated 15 July 2013, okay?
Richard Morgan: Mm-hm.
Mr Stein: Now, you can take that from me or I can take you to page 14 where it has that –
Richard Morgan: No.
Mr Stein: All right. Now, paragraph 38, page 13 internally within it, there’s a reference there to Mr Jenkins, okay?
Richard Morgan: Mm-hm.
Mr Stein: Now, this is a reference to the Fujitsu employee who you had some reference to already in your evidence and, going back in time to Mr Castleton’s case, had some involvement in the Castleton case; okay?
Richard Morgan: I don’t recall him.
Mr Stein: Well, you’ve just been asked a number of questions about Mr Jenkins, the Fujitsu expert who you were saying could not be used as an independent expert?
Richard Morgan: Oh, that’s Gareth Jenkins, is it?
Mr Stein: Yes.
Richard Morgan: Ah!
Mr Stein: Ah.
Richard Morgan: Right, okay.
Mr Stein: Right, so we’re talking about the same person.
Richard Morgan: Okay.
Mr Stein: Okay. Now, in this advice, Mr Clarke, who is a barrister working at a firm called Cartwright King, is setting out particular views that he’s come to with dealings with this Mr Jenkins. Now, you’ll see there at paragraph 38, second of the two – if I call them bullet points, second of the two points:
“Accordingly, Dr Jenkins’ credibility as an expert witness is fatally undermined; he should not be asked to provide expert evidence in any current or future prosecution.”
Okay? So the date of this opinion being given is 15 July 2013, and it’s quite a serious opinion being given of someone in Mr Jenkins’ position, an employee with strong knowledge about the Fujitsu Horizon system, okay? Now, you mentioned in your evidence earlier on that you’re not a criminal practitioner but you’re certainly a civil practitioner –
Richard Morgan: Yes.
Mr Stein: – and you’re certainly a civil practitioner who’s had dealings with, at least, we know, the Castleton case, you’ve been talking about, and we know also that the Post Office came back to you at an earlier point in 2012?
Richard Morgan: Yes.
Mr Stein: Okay. So by the time we get to 20 March 2014, this opinion is being given within, if you like, the Post Office by a legal advisor to the Post Office. Now, were you told, Mr Morgan, that there was a settled and serious opinion given about Mr Jenkins, the Fujitsu expert, who had a lot of knowledge about the Horizon System?
Richard Morgan: No.
Mr Stein: I –
Richard Morgan: I can make it completely clear that I received no instructions, I received no papers, I did receive two or three telephone calls, however many were recorded in my evidence, which I only recall because I checked them against my computer system in chambers. And I was only asked questions, I had no information tendered to me.
There was not a “Here’s some further information, provide some more advice”. It’s “If we ask you this, what would you say?”
Mr Stein: Two last questions.
Richard Morgan: Of course.
Mr Stein: Now, you and I had number of questions and you answered a number of questions when I first started a couple of minutes ago and I was asking you about what you recalled about this meeting, and, frankly, you’re saying really “I don’t recall very much”.
Richard Morgan: Yeah.
Mr Stein: If you’d been told at around this time in 2014 that “Regarding Mr Jenkins we’ve got real doubt about this guy. I mean, I don’t know what would be the succinct way you would put it, Mr Morgan, but there’s a real problem here”; that might be fight memorable, do you agree?
Richard Morgan: If I’d been told that, yes.
Mr Stein: Second question: did the Post Office ever come back to you as a senior civil practitioner with at least some knowledge of these systems and say, “Look, we’ve got this problem with this Fujitsu expert, what would that have done to all of our civil cases that we’ve dealt with, going back in time?” Did anybody come back to you and ask that question?
Richard Morgan: No.
Mr Stein: Just give me one moment.
Richard Morgan: Sure.
Mr Stein: Thank you, Mr Morgan.
Sir Wyn Williams: Who is next?
Mr Henry: Sir, I am. Henry.
Sir Wyn Williams: Over to you, Mr Henry.
Questioned by Mr Henry
Mr Henry: Mr Morgan, as a contentious Chancery and insolvency practitioner you will be familiar with the case of Gestmin v Credit Suisse, won’t you?
Richard Morgan: No.
Mr Henry: Surely you must be, the judgment of Mr Justice Leggatt, where he was discussing memory?
Richard Morgan: Oh, yes.
Mr Henry: Yes. Thank you. You will remember that in that –
Richard Morgan: Sorry, that wasn’t intended as a joke!
Mr Henry: Sorry?
Richard Morgan: That wasn’t intended as a joke, although it might have appeared as much.
Mr Henry: No, quite. You will remember that in the course of that judgment, he said that civil litigation, particularly in the preparation of witness statements, gives rise to powerful biases. You remember that?
Richard Morgan: I – look, I – let me be – also be perfectly honest. I do very, very few witness actions, so although I am familiar with the judgment and I am familiar with the overall thrust of it, I do not have specific passages in mind. But I’m quite content to accept that the preparation of witness statements is something that can give rise to evidence being fluffed, if I can put it like that – evidence being improved that shouldn’t be improved.
Mr Henry: Now, I don’t suggest that of you, Mr Morgan, but I do suggest that you have fallen victim to powerful and distorting biases. Let me explain why. Can you help us, please. So far as your witness statement is concerned, your recollection or reconstruction of your involvement in Post Office Limited v Castleton is that this was essentially a Shaw v Picton case, the case of agency?
Richard Morgan: It was from about the summer of 2006, yes.
Mr Henry: But you must accept, I mean you have read the judgment of His Honour Judge Havery Queen’s Counsel several times, haven’t you?
Richard Morgan: Yes.
Mr Henry: In fact, you read it because you read it before composing your statement in May of this year?
Richard Morgan: Yes, I needed to remind myself about what had gone on.
Mr Henry: Yes. Exactly. You can see, can you not, from that, that Mr Castleton’s case put the reliability of the Horizon System fairly and squarely in issue, didn’t it – didn’t he?
Richard Morgan: Mr Castleton sought to suggest that the losses were illusory and were caused by the Horizon System. At no stage prior to the trial did he articulate or identify how it was that those losses were being occasioned.
Mr Henry: But you must have read the Horizon System Helpdesk logs concerning his case and the complaints that he was making contemporaneously, Mr Morgan, surely?
Richard Morgan: I would have read them in the trial bundle, yes.
Mr Henry: Yes. You must also have – it’s clear from the judgment itself that, beginning at paragraph 12 and proceeding thereafter, 13, 14, 15, et cetera, he gave detailed accounts of what was going wrong with the system. It’s clear in the judgment?
Richard Morgan: He gave accounts of what he said was going wrong and that he phoned the Helpdesk and there was a complaint that the Helpdesk wasn’t helpful at all, yes.
Mr Henry: But, also, the nature of the glitches, the nature of the anomalies that were occurring, he was describing them –
Richard Morgan: Yes.
Mr Henry: – as it were, in real time?
Richard Morgan: Yes.
Mr Henry: Right. Also, how he would take balance snapshots, in other words he would take screengrabs of the screen, pictures of the screen, showing how, inexplicably, there were alterations in the figures presented by Horizon. That was also part of his case, wasn’t it?
Richard Morgan: Let me be honest with you here, I don’t recall him ever presenting evidence to that effect to the judge. I don’t recall that. I’m not saying he didn’t do it. I just don’t recall that.
Mr Henry: You remember when Mr Beer was reading out part of the transcript just a few moments ago – and I don’t necessarily suggest that you ought to have picked it up – but he was referring to balance snapshots.
Richard Morgan: Yes.
Mr Henry: Now, at paragraph 4 of the judgment, and the judgment is POL00021678 – and I don’t suggest that it is put up on screen but purely as a reference – there is the following, the learned judge stated:
“Losses apparently shown by the balance lists and Cash Accounts (Final) were illusory, not real. It was entirely the product of problems with the Horizon computer and accounting system. The apparent shortfalls were nothing more than accounting errors arising from the operation of the Horizon System.”
That’s what the learned judge said when he was recounting or encapsulating Mr Castleton’s case. You wouldn’t disagree with that?
Richard Morgan: Well, you’re reading from the judgment, so no.
Mr Henry: Yes. Now, the bias that I suggest is that that was not taken seriously, I don’t suggest by you, because you did ask questions. It is clear that you asked questions, including whether Fujitsu could, as it were, interfere with the system or, as it were, have access to the system without Mr Castleton’s knowledge, and you asked those questions.
But can you help us, please: to what extent were those serious concerns followed up by your team because, of course, you as counsel were leading your team, weren’t you?
Richard Morgan: I was instructed to appear at trial, yes. I was instructed to amend the pleadings, yes. I don’t know. I mean, I asked questions. I didn’t get answers.
Mr Henry: We know – and again, I don’t ask for it to be put up on screen – but we know from Mr Castleton’s pleadings, LCAS0000294 – Mr Beer has taken you to paragraph 5, paragraph 6, but also paragraph 7B – that Mr Castleton was vehemently disputing that these losses were real. They were not accurate, they were artifacts of the Horizon System. You don’t disagree with that, do you? That’s what he was saying?
Richard Morgan: Yeah. No, I agree.
Mr Henry: That demanded, obviously, the most serious scrutiny, did it not?
Richard Morgan: That’s what a trial is meant to achieve.
Mr Henry: But in the run-up to a trial – because of course it’s too late, sometimes or too often too late when it arises in a trial – but in the run-up to a trial, there ought to be full and frank disclosure, shouldn’t there?
Richard Morgan: There is disclosure in accordance with the requirements of the CPR, yes.
Mr Henry: Now, I’d like you to help me, please, because of course you – I don’t know if you were watching Mr Dilley’s evidence yesterday?
Richard Morgan: I saw part of it but not all of it.
Mr Henry: Have you read it subsequently?
Richard Morgan: No.
Mr Henry: No. You may not have been present when this was going on but the Post Office, he told us, was receiving 12,000 to 15,000 calls to the Horizon System Helpdesk per month, telephone calls from subpostmasters about defects and technical problems with the Horizon System, and Mr Dilley decided that he wouldn’t disclose these calls, neither generally as to volume nor specifically as to content, to Mr Castleton because, at one point, he thought that it might overwhelm Mr Castleton in a sort of benevolent and pastoral way and, on another occasion, because it was going to cost, in fact, £3,000 to collate them. Did you hear that evidence?
Richard Morgan: No, I didn’t.
Mr Henry: No. Now, having been informed of that evidence, may I ask you – and I mean no disrespect, Mr Morgan – were you involved in that decision?
Richard Morgan: No.
Mr Henry: No. Should you not have been consulted before such a decision was actioned by Mr Dilley?
Richard Morgan: Look, at the end of the day, the relationship between solicitors and counsel is a matter of instructions and action on instructions. I was not instructed by solicitors in relation to disclosure: simple as that.
Mr Henry: Would you like to have been instructed to give your view on that somewhat momentous decision by your instructing solicitor?
Richard Morgan: I don’t think counsel ever likes to be instructed on disclosure issues but, if one is instructed on disclosure issues, then one examines each individual document against the specific requirements of the disclosure order made by the court.
Mr Henry: Would you agree with the decision that Mr Dilley made?
Richard Morgan: I don’t know. I haven’t read the call logs.
Mr Henry: So may I take it, therefore, that – and this is your opportunity to give your considered view – that –
Richard Morgan: Well, it’s not my opportunity to give a considered view because I haven’t seen the call logs.
Mr Henry: Right. Well, let’s move on. Do you think you were being kept at a distance from disclosure decisions by those instructing you?
Richard Morgan: I have no idea because I don’t know what the disclosure decisions were or taken in what context. I – all I know is that Post Office Limited had instructed Bond Pearce and Mr Castleton had instructed his own solicitors, and, as is usual in litigation, solicitors had gone through the disclosure exercise.
If there were perceived to be deficiencies then there would be correspondence between them and, if necessary or appropriate, orders for specific disclosure or further disclosure. I was not involved in any of that at all.
Mr Henry: Thank you, Mr Morgan, but just returning to the questions that were put to you by Mr Beer Counsel to the Inquiry, you asked a lot of questions but it seems that answers came there none. Would that be your recollection now about disclosure?
Richard Morgan: About disclosure?
Mr Henry: Yes. The questions that you asked about the integrity of the system, about remote access –
Richard Morgan: Well, that’s not disclosure; that’s questions about what’s actually going on. Disclosure I take to be disclosure of documents. Disclosure is a disclosure process.
Disclosure of information about the case in relation to specific enquiries about Fujitsu, yes, I’ll accept that I asked a large number of questions. I sought to ensure that the original equipment was maintained and steps were taken to preserve the software but I didn’t get anything after that. Nobody came back to me and said, “Well, what shall we do now?”
Mr Henry: So I ask you, therefore, did that set any alarm bell or did that fly any red flag?
Richard Morgan: No, because, in the ordinary course of litigation, if there are disputes between the parties about particular procedural steps then those are raised in correspondence between solicitors and, if they’re not answered, then they’re taken before the court at the CMC or PTR.
Mr Henry: Right. Now, just dealing with that, you were saying that those were questions about the evidence in the case but, if you had got the answers, yes, they do have the ability to insert transactions without anybody knowing the fact that they can do that, that obviously would have been patently disclosable, would it not?
Richard Morgan: I certainly wouldn’t have been able to run a case contrary to it. Disclosable?
Mr Henry: You couldn’t run a case if that was in your knowledge. You would have had to have considered your position?
Richard Morgan: Yes, exactly.
Mr Henry: Exactly. So let me just ask you, please, now, it’s the time of trial, you’re able to give your opening or you’ve just given your opening, and we saw it – again, no need to put it on the screen, it’s been a long day – POL00070126. You saw the attendance note of Mandy Talbot and the issue about Falkirk, and it’s 6 December 2006, you’ve seen it, by all means, if you would like to see it again …
Richard Morgan: No, I’m quite happy. I can remember it.
Mr Henry: You can remember it. You are reported, forgive me, Mr Morgan:
“RM saying he was concerned about whether we have to give disclosure of this fact. He thought probably yes, but wanted to find out if the judge thought it was relevant.
“RM was prepared to put off the decision on this until after his opening. RM asked Mandy Talbot to get some definitive answers from Fujitsu. RM saying that we may finish in court by lunchtime tomorrow.”
Falkirk: that was the Callendar Square bug. If I recall your evidence correctly, you were not certain that your solicitors disclosed that to Mr Castleton?
Richard Morgan: Yes.
Mr Henry: It appears, does it not, that it arose in this way: that Mr Castleton was tentatively putting his case about a post office and then it was immediately understood and recognised by Mrs Chambers that that was the Falkirk branch, the Callendar Square, correct?
Richard Morgan: I think so. I –
Mr Henry: Yes, it’s in the judgment.
Richard Morgan: Fine.
Mr Henry: It’s in the judgment. It’s paragraph, I think, 23 of the judgment. So it arose, as it were, ex improviso, purely serendipitously and by chance that Mr Castleton asked that tentative question and then that was revealed. Correct?
Richard Morgan: Apparently so, yes.
Mr Henry: It’s hardly ideal, is it?
Richard Morgan: Trials are hardly ideal. No, you’re absolutely right. Things crop up that you have absolutely no idea about as counsel; somebody just doesn’t bother to tell you.
Mr Henry: Similarly, the Tivoli logs arose for the first time in the course of Mrs Chambers’ evidence, and she had to be re-called, didn’t she?
Richard Morgan: Mr Castleton asked for her to be re-called and she was re-called. I think somebody else was as well, weren’t they?
Mr Henry: Yes, Ruth Skinner or Simpson, forgive me.
Richard Morgan: I can’t remember but I seem to remember there were two.
Mr Henry: He tried to cross-examine her and you objected to the cross-examination.
Richard Morgan: Quite possibly, yes.
Mr Henry: Yes. Now, the position is that disclosure in this case was a dismal failure. That must be obvious now.
Richard Morgan: I can’t help you. I did not take part, nor was I instructed on the disclosure exercise.
Mr Henry: But when the trial is ongoing, and you must forgive my ignorance but, in the criminal courts when the trial begins, counsel is sole arbiter of disclosure, is that not the same in the civil courts?
Richard Morgan: No.
Mr Henry: No. I see. But the position is you would agree, an ex improviso revelation by a witness and also, for the very first time, logs referred to by a witness. Hardly satisfactory?
Richard Morgan: No, and that’s why they were disclosed.
Mr Henry: Right. The known error logs were not disclosed though.
Richard Morgan: I don’t know.
Mr Henry: Well, there’s a reference to a KEL in the attachment to Mr Dunks’ statement and Mr Dunks was a witness in the case. Perhaps the attachment, I don’t suggest that you deliberately fail to disclose it, but you must have read Mr Dunks’ statements and the attachments thereto?
Richard Morgan: I must have.
Mr Henry: Maybe “KEL” wasn’t explained but it means “Known Error Log”?
Richard Morgan: Fine. Presumably Mr Castleton’s solicitors would have read the same witness statement –
Mr Henry: Well, we don’t know –
Richard Morgan: – and would have been capable of writing a letter had they thought it appropriate to do so.
Mr Henry: By this time, of course, Mr Castleton is a litigant in person.
Richard Morgan: He became a litigant in person on 20 November, didn’t he? And witness statements were exchanged substantially before then.
Mr Henry: Mr Morgan, who has the obligation to make a disclosure of a Known Error Log?
Richard Morgan: The Post Office.
Mr Henry: The Post Office. So, please, without trying to shift the onus onto either Mr Castleton himself or his former solicitors, Messrs Rowe Cohen, it was clearly and obviously the Post Office’s and those they instructed, their duty to disclose that information, wasn’t it?
Richard Morgan: If it fell within the terms of standard disclosure, then yes, it did.
Mr Henry: Yes. How did this happen, do you think? These are my final questions: how did this happen, do you think? You surely by now, knowing everything you know, Mr Morgan, regard the decision in the Post Office Limited v Castleton, as a miserable miscarriage of justice?
Richard Morgan: I don’t know. I don’t know that it’s a miscarriage of justice. I’m not here to express a view on the rights and wrongs. Counsel instructed in a case is not there to express a view on the rights and wrongs. I was asked to prove a case that I did on the basis of documents signed by Mr Castleton, whose truth were not challenged by Mr Castleton.
Mr Henry: Mr Morgan, you know that the learned judge in the course of his ruling, his judgment, which you then wrote an advice note on 22 January 2007, for the benefit of those who instructed you, he found, paragraph 23 of the judgment:
“There is no evidence whatsoever of any problem with the system.”
At paragraph 11 he stated that:
“It was inescapable that the Horizon System was working properly in all material respects.”
Knowing what we know now, I ask you again: no disclosure of the Known Error Logs, no disclosure of remote access, no disclosure of the receipts and payments mismatch bug. Do you not now reflect that the decision of His Honour Judge Havery Queen’s Counsel was a dreadful miscarriage of justice?
Richard Morgan: I think you have to read the judgment in its entirety and see that he based his assessment on documents signed by Mr Castleton, as an agent, recording a debt due to the Post Office. And there was no difference between the amount that was shown in the documents signed by Mr Castleton and the amounts shown on the Horizon log.
Now, of course, if Mr Castleton signed false accounting documents, then I would accept that there was – that the error – or, sorry, that the judgment is wrong.
Mr Henry: That is precisely what Mr Beer was trying and, successfully, if I may say so, explore with you. Mr Morgan, I ask you for a third time. Is this not, again, the astigmatism, the bias that arises in this process, which is not meant to be adversarial, I assure you, but just knowing what we know now, about the Fraser judgments, the Common Issues judgment, about the oppressive nature of the contract upon which you relied, the Horizon IT judgment, which went through a litany of non-disclosure, other misfeasance, and bugs, errors and defects, I ask you for the third time, and I won’t ask you again: do you not reflect now, knowing what we know, that the decision of His Honour Judge Havery Queen’s Counsel was a dreadful miscarriage of justice?
Richard Morgan: I think that the decision of Mr Justice – His Honour Judge Havery was the correct judgment given when Mr Castleton did not say, “My figures were untrue”. Had he said, “My figures were untrue”, then we would not be in this position.
Sir Wyn Williams: Is that it, Mr Henry?
Mr Henry: Yes, sir. Thank you, sir.
Sir Wyn Williams: Thank you. Any other questions?
Further Questioned by Mr Beer
Mr Beer: No, there aren’t, sir, except that we’ve now tracked down that document that I said I would come back to.
Sir Wyn Williams: Yes, let’s have that up, please.
Mr Beer: It’s POL00081826_018. Thank you. If we go to page 17, please – that’s the wrong document.
Sir Wyn Williams: I’m beginning to wish I hadn’t asked that question.
Mr Beer: Just give us a couple of moments, sir. It was thought that the correct document had been uploaded whilst the last 45 minutes had occurred and it seems that that’s not the case.
Sir Wyn Williams: All right. Well, the reality is that the document will, in due course, surface and be put on the screen at some suitable moment and we will all be able to see what – was it clause 5 or Schedule 5 says.
Mr Beer: Maybe sir, if I can just read, as what some people will call a workaround. The email was the 10 November 2006, and at 1600 hours it enclosed the draft Tomlin Order. It included the proposed text amended by Mr Dilley, and said:
“I attach a draft consent order for your approval. The real question is whether we need the undertaking in clause 5 of the schedule. Richard thinks that by making a song and dance we highlight a sensitivity and, the less we talk about it, the less likely it is that Castleton will seek to raise it.”
Then clause – it’s a five-paragraph consent order, Tomlin Order, to which there is a schedule, and paragraph 5 of the schedule says:
“The defendant undertakes to the Claimant that he will neither repeat his allegations about the Horizon System nor make any further allegations about the Horizon System or its functioning and, in the event that the Defendant breaches this undertaking, he shall both: (i) submit to an injunction restraining him from talking further about the Horizon System; and (ii) pay to the Claimant liquidated damages in the amount of £25,000 being a genuine pre-estimate of (a) the Claimant’s costs of having to rebut such statements and (b) its loss of goodwill generally.”
So I think the question is, the Chairman asked you – you were asked, I think, for your view on that and it’s plain that, although the wording that Mr Dilley was proposing isn’t exactly the same as in the draft Tomlin Order, in particular because there are some consequential subparagraphs concerning injunctive relief and liquidated damages, you thought that, according to this record, that by making a song and dance, the Post Office highlighted a sensitivity: the less we talk about it, the better.
Richard Morgan: Yes. I would also have thought that the undertaking itself was unworkable and a complete waste of space, but I don’t know whether I’d have expressed it that clearly.
Mr Beer: And unenforceable?
Richard Morgan: And unenforceable. And an undertaking to a party, rather than to the court. So there we are.
Mr Beer: For a range of reasons?
Richard Morgan: For a range of reasons, I would have been extremely adverse to it.
Mr Beer: I think the question is: isn’t this other evidence, however, of what the Post Office’s real motivation was, ie to gag somebody from speaking or, alternatively, to require them to say something good about the Horizon System?
Richard Morgan: Regrettably, my experience of people trying to negotiate settlements is they ask for the moon when they’ve got no need for it. As I said, I was rather focused on trying to prepare for the trial, and this was just unnecessary noise in the background. I wasn’t focusing on what the parties’ terms necessarily were. With the benefit of hindsight, then I might have put more thought into what people’s motivations were, but as I keep on saying, I was focused on a debt recover claim.
Sir Wyn Williams: Well, Mr Morgan, you’ll be glad to know that ultimately the motivation of the Post Office in respect of various of its actions is not for you or Mr Beer, but it’s for me.
Mr Beer: Sir, I haven’t any further questions. Did you have any follow-up questions in relation to clause 5 of the Tomlin Order?
Sir Wyn Williams: No, that’s fine. Thank you very much.
Mr Henry: Sir, I do apologise. I’m a terrible one for having one thought or two on the stairs. There was one thing I forgot to put. Could I put it quickly? It won’t take more than a minute.
Sir Wyn Williams: I will hold you to 90 seconds, Mr Henry.
Mr Henry: I’m very grateful, sir.
Further Questioned by Mr Henry
Mr Henry: Mr Morgan, I’m so sorry. It just refers back to Mr Dilley and what he said yesterday. He said at page 124 of the transcript that he asked you, and counsel advised us not to disclose the BDO Stoy Hayward report because “he didn’t think the Post Office needed to – needed it to prove its case”.
Then he said again at 136:
“I believe that I discussed this report with counsel. I cannot now recollect, after the passage of time, all the details of this discussion. But counsel was made aware of it and he advised not to disclose it. I’m sure that if he had considered that there – that it should have been disclosed, he would have given me that steer.”
That’s what Mr Dilley says about that draft report. What do you have to say about that?
Richard Morgan: First of all, I don’t remember ever seeing the draft BDO report. Secondly, I remember asking for accountants to prepare a report to summarise the ins and outs of all the cash movements and stock movements, because that would have enabled me not to have to do it myself, and I was never provided with that.
Thirdly, in civil litigation, you don’t have to disclose any draft experts’ reports or indeed signed experts’ reports, even if they’re finalised. Until such time as they are exchanged, they are covered by privilege.
So had he asked me – and I don’t remember him asking me – I would have said, “You don’t need to disclose it.”
But in any event, I don’t think I even saw – I don’t remember even seeing a draft BDO report. Again –
Sir Wyn Williams: Well, that’s a comprehensive answer. So I think that provides an answer to your question, Mr Henry.
Mr Henry: It does, sir. Thank you so much.
The Witness: Can I also just say one thing? I have tremendous sympathy with what Mr Castleton has gone through, and his family. I can’t say anything more than that, but I quite understand why he’s upset by what’s gone on. I hope that goes some way towards it.
Sir Wyn Williams: Right. Thank you very much for coming to give evidence, Mr Morgan.
We’ll now adjourn until Tuesday. I think it’s Tuesday. Yes. It’s Mrs Chambers, is it?
Mr Beer: 10.00 am Tuesday. Anne Chambers.
Sir Wyn Williams: Fine. All right. Thank you all very much.
Mr Beer: Thank you.
(3.32 pm)
(The hearing adjourned until 10.00 am the following Tuesday)