24 November 2023 – Diane Matthews
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(10.00 am)
Announcement re Evidence of Lisa Allen
Ms Price: Good morning, sir. Can you see and hear us?
Sir Wyn Williams: Yes, thank you.
Ms Price: Sir, before we proceed to today’s evidence, there is a matter which you have asked me to address at the outset of today’s hearing. We were due to hear today from two witnesses: Diane Matthews and Lisa Allen. As you are aware, we will now be hearing from Ms Matthews only, following a decision you made late yesterday afternoon relating to Ms Allen’s evidence.
Earlier this week, Ms Allen, who is employed by Royal Mail, alerted the Inquiry Team to the existence of 90 documents relating to the investigation and prosecution of Suzanne Palmer held by Royal Mail. She was able to find these documents, as she has access, as an employee, to Royal Mail systems.
The Inquiry sought, and has now been provided with, these documents. It appears that a significant proportion of the documents have not been provided to the Inquiry previously. It is also evident that the documents are highly relevant both to Ms Palmer’s case and to Ms Allen’s involvement in it. In these circumstances, and mindful that these documents need to be disclosed to Core Participants so that they can consider them ahead of Ms Allen giving evidence, you concluded that it is not practicable to proceed with Ms Allen’s evidence today. It is right to note that this appears to be a different species of disclosure problem than the Inquiry has encountered previously.
The Inquiry Team is investigating, with the Post Office, how this problem has come about. At your request, the Inquiry Team communicated your decision about Ms Allen’s evidence to Core Participants by email yesterday afternoon, immediately after it was made. This has meant that unnecessary travel for Mrs Palmer, who was intending to intend today to hear Lisa Allen’s evidence, has been avoided.
Finally, sir, you expressed a wish that Ms Allen attend to give evidence on a replacement date before the break to minimise the impact on the timetable. I am able to confirm that Ms Allen has confirmed she is able to attend to give evidence on 20 December in place of today.
Sir Wyn Williams: Thank you very much, Ms Price.
In view of the very full explanation which you provided, I don’t propose to add anything, especially given that the Inquiry Team and the Post Office are engaged in seeking to ascertain what went wrong on this occasion. However, if Ms Gallafent does wish to say anything at this stage, I will afford her the opportunity to do so now.
Ms Gallafent: Sir, simply to say we are grateful to the Inquiry for acting upon this so promptly and in particular informing other Core Participants that Ms Allen wouldn’t be able to give evidence today in the circumstances, and meaning that Ms Allen – I’m so sorry, Ms Palmer – didn’t need to come today.
But we do apologise to Ms Palmer because, obviously, the expectation of coming and hearing from Ms Allen itself is a difficulty and problematic for any individual involved in these proceedings.
I can confirm that we in Post Office are continuing to look into how this particular issue arose but we agree with the analysis of Counsel to the Inquiry that it appears to be of a different sort to those previously encountered and we hope a one-off that can be easily remediable. I have nothing further to assist in terms of what may have happened but we will obviously write to the Inquiry as soon as we are in a position to assist in that respect. Thank you, sir.
Sir Wyn Williams: All right, thank you very much.
Over to you, Mr Beer.
Mr Beer: Thank you, sir, can I call Diane Matthews, please.
Diane Matthews
DIANE SARAH MATTHEWS (affirmed).
Questioned by Mr Beer
Mr Beer: Good morning, Ms Matthews. My name is Jason Beer and I ask questions on behalf of the Inquiry. Can you give us your full name, please?
Diane Matthews: Yes, it’s Diane Sarah Matthews.
Mr Beer: Thank you very much for giving evidence remotely today and for previously providing a witness statement to the Inquiry. You should have a copy of that witness statement in front of you; is that right?
Diane Matthews: I do, yes.
Mr Beer: It’s dated 1 November 2023 and, excluding the exhibit sheet, is 36 pages in length. Can you go to the 36th page, please?
Diane Matthews: Yes.
Mr Beer: Is that your signature?
Diane Matthews: It is, yes.
Mr Beer: Are the contents of the statement true to the best of your knowledge and belief?
Diane Matthews: Yes.
Mr Beer: Thank you. A copy of that witness statement is going to be uploaded to the Inquiry’s website. I’m going to ask you some questions about some parts of it; do you understand?
Diane Matthews: I do, yes.
Mr Beer: Thank you. Can we start with your professional background, please. I think you joined the Post Office in March 1986 as a counter clerk; is that right?
Diane Matthews: Yes.
Mr Beer: You left Royal Mail Group in 2018; is that right?
Diane Matthews: It is, yes.
Mr Beer: So 32 years’ service?
Diane Matthews: Yes.
Mr Beer: Looking into the divisions within that 32 years, I think you were a counter clerk for 13 years between 1986 and 1999; is that right?
Diane Matthews: Yes, various things within the branch office network, yeah.
Mr Beer: Between 1999 and 2003, you were seconded to work on the rollout of the Horizon system; is that right?
Diane Matthews: Yes.
Mr Beer: Between 2003 and 2004 you worked as an Assistant Branch Manager and then an Audit Manager; is that right?
Diane Matthews: Yes.
Mr Beer: That included conducting some audits yourself?
Diane Matthews: Yes, the audits I conducted were normally at Crown Offices, the larger ones.
Mr Beer: Then between 2004 and 2008 you worked in the Post Office Investigation Department, being promoted in 2007 to a Security Manager managing a team of Investigators; is that right?
Diane Matthews: Yes.
Mr Beer: In 2008, you moved to Royal Mail Group as an Investigator, where you stayed for 10 years until 2018 when you retired?
Diane Matthews: Yes.
Mr Beer: I’m principally interested, as you’ll know, in the four or so year period between 2004 and 2008, when you worked in the Post Office as an Investigator and then as a manager of other investigations.
But, before we look at that period, that four-year period, can we look back at earlier period. You tell us at paragraph 2 of your statement – there is no need to turn it up at the moment – when referring to your secondment to the Horizon rollout team between 1999 and 2003, that you had a role:
“… managing a team of 22 Horizon Field Support Officers in ensuring they were supported in managerial terms, for example, timetable, accommodation and performance.”
Diane Matthews: That’s correct, yes.
Mr Beer: Was your role, as that sentence might suggest, purely an administrative one, concerned with the management and logistics of the team, or did you have any substantive involvement in the rollout process itself?
Diane Matthews: Well, when I joined in 1999 I was part of a small group of people that did what was called live trial and it was migrating – it was only a small amount of post offices and I remember I went to Northern Ireland and Belfast to do that, and they were put onto the Horizon system and it was like a test.
And it was after that that it got paused and I stayed working within that function then to take over the administrative duties, in terms of pulling the team together and what that schedule would look like.
From that period, I didn’t attend offices doing the migration. My role was purely to look after the people that were out there in the field doing that role.
Mr Beer: Dealing with the first part first, then, when you were involved with offices themselves, this was live trials rather than rollout; is that right?
Diane Matthews: That’s correct.
Mr Beer: Did you receive the feedback that the branches that you were responsible for gave as to what was going on in the course of the live trial?
Diane Matthews: I wouldn’t say I received the feedback. I obviously knew when I was there, undertaking the role, that there was issues. What came further along as part of them issues, I wasn’t party to that detail, really. I knew from my role that the office migrated, there was network issues, that’s what I was told was the problem with it, was network issues, and the office carried on working.
It did have some problems with the functionality, in terms of it kept crashing, there was hardware problems, and then, after – I think I was there three days, and it was more a case of helping the counter clerks understand the workings, the balancing, the day-to-day duties that needed to be done. And then after that, it went to a much higher level than me to determine what them issues were and what was going to happen next.
Mr Beer: So in the course of the live trial, you were told about problems that included network issues. I think you’ve told us about problems with connectivity –
Diane Matthews: Yes.
Mr Beer: – with hardware, and did you say balancing, as well?
Diane Matthews: No, not with the balancing. I was there to assist some of the balancing, but when you say was told about that, I experienced that. I saw that firsthand because I was there when they were having issues with it. But, obviously, there was engineers on site for this particular part of the process, because it was right at the very beginning. So anything that needed to be addressed was addressed there and then.
Mr Beer: How long did this work last?
Diane Matthews: My role in it?
Mr Beer: Yes.
Diane Matthews: Yeah, um, I can remember I did two offices. I know one was in Belfast, I think the other one was probably in the UK, and it was only a very short period of time. I think I stayed four days at each office, and that probably took me from when I joined, probably to, it was over maybe a three-month period.
Mr Beer: I see. Then you became responsible for 22 HFSOs, the Field Support Officers?
Diane Matthews: That’s correct, yes.
Mr Beer: What did the Field Support Officers do?
Diane Matthews: They were there to oversee the day of migration, so they would liaise with the Auditors that would go in, perform an audit and they would then take over in terms of entering the cash and stock figures onto the Horizon system.
They would then stay for a period of – I think it was normally three days, and they would stay at the office and assist the subpostmaster and their staff with the transition from manual to computer-based ways of serving and balancing. They would then – if a Wednesday wasn’t part of them three days, they would then return and assist with one of the balancing days or the first balancing day.
Mr Beer: We have heard evidence about a series of problems, some of them significant, that were identified and evident during the testing and rollout phases. Were you aware at the time of such problems identified during the four or so year period that you undertook this role?
Diane Matthews: I was aware there was issues, yes.
Mr Beer: In terms of significance or scale of issues, can you help us with what your memory is of that?
Diane Matthews: Yeah, my recollections were that it was sufficient enough to delay the actual rollout at first. I think, when rollout did start there was also delays with certain offices. To be honest, I was led to believe they were more network issues and there was some problems with maybe a keyboard not working, but I do know – not in my area but I do know nationally that there was probably more substantial problems with getting offices onto the system.
Mr Beer: Did you gain any knowledge about difficulties in balancing using the new system?
Diane Matthews: I knew there were issues balancing, yes, but I think that was put down more to user issues. It wasn’t – I don’t think at first it was particularly user-friendly for someone that had never used any sort of computer-based equipment before and I think it was a massive transition for some people, and I knew that, therefore, there was problems balancing.
I also knew that there was problems balancing because of significant figures that were being generated, and –
Mr Beer: Sorry, significant figures being generated by what?
Diane Matthews: The system was just – I’m trying to remember an example. There was figures put in suspense accounts and the next week it would drop off, and it was like nobody had an answer as to why, and these were like put down as maybe people not using it right, maybe people – maybe the systems hadn’t been migrated correctly, but I didn’t really get into them issues because that’s not what my role was at the particular time.
Mr Beer: So trying to encapsulate what you’ve just said, in the course of this testing and then the rollout phase, the system was generating large discrepancies that were placed in a suspense account and then would disappear, and you say they put it down to either user error or the system; is that right?
Diane Matthews: Figures were on a balance – on a printout on balance day and nobody could identify where it had come from. So, therefore, that figure then got put into a suspense account and it dropped – it got dropped. Why that happened, whether it was a transaction that hadn’t been put in correctly, I wasn’t there, and I just know that one or two of my team reported issues up to Fujitsu because of that.
Therefore, my role in that was to provide that office with extra support. So my role was to then reschedule the HFSOs to obviously make sure that personnel could be there. So I wasn’t close to the detail of them problems. I just knew that I had to change some of what my scheduling was because the office needed more support because of it.
Mr Beer: Did you ever experience problems in using Horizon when you were acting as an Assistant Branch Manager?
Diane Matthews: No.
Mr Beer: Were you aware of others around you experiencing problems with Horizon when you were acting as an Assistant Branch Manager?
Diane Matthews: No.
Mr Beer: By the time that you finished your job as Assistant Branch Manager, if I’d asked you what’s your view as to the reliable and robustness of Horizon, what would you have said?
Diane Matthews: I’d have said it was reliable and robust because I never personally experienced any problems or knew of anybody in the Crown Office Network that I worked with that did.
Mr Beer: So what impact had these things that you’d been told by your HFSOs, about subpostmasters having problems with the system, had on your view on the reliability and robustness of Horizon, by, say, 2003/4?
Diane Matthews: It was explained that, with a project of this size and magnitude – we were told it was the biggest single computer install in the UK – that there was teething problems, that there were going to be issues and that the – obviously, they would monitor and work through them.
That’s how it was portrayed right at the very beginning and I just thought that, you know, it just stands to reason there’s going to be concerns, there’s going to be issues and that they were worked through and resolved.
Mr Beer: Who was passing you that message, the one that you’ve just relayed to us?
Diane Matthews: It was just part of the Horizon team. It was just – it probably came from quite high up. I can’t remember who was over the Horizon install project. But they were the messages that were cascaded down.
Mr Beer: Were they, in turn, cascaded down by your team to subpostmasters?
Diane Matthews: I don’t know.
Mr Beer: So the overall impression, by the time we get to 2004, that you walked away with, was that although there were problems with the system, this was to be expected in a system so large and complex and these were just teething problems?
Diane Matthews: At the very beginning, yes. By the time the end of the rollout was approaching, the migrations were getting much smoother, they’d probably been like that for the majority of the final phase. I mean, some of the problems were that there was no phone lines put in at an office.
It could be a simple explanation as to why there were delays. It wasn’t always to do with the actual system. It could have been something to do with some of the pre-work that needed to be done in order for the install to happen.
But by – you know, I didn’t experience many, if any, reports for about the last 12 months of install. By that, I’m not saying there wasn’t any but there certainly wasn’t any concerns, let’s say, that couldn’t be put down to user error or issues with problems with the electrics, et cetera.
Mr Beer: Can we turn, then, to the four-year period from 2004 to 2008 when you worked in the Investigations Department. You were a Security Manager and an Investigator and you carried out a number of investigations yourself; is that right?
Diane Matthews: Yes.
Mr Beer: In that four-year period, how many investigations do you think you undertook?
Diane Matthews: It probably wasn’t – it was probably about 20, but my first six months were purely assisting other people because I was bought in on a temporary turn to do pension docket fraud. And then, after that, I got taken on permanently – so that was probably towards the start of 2005 – and then, from my best recollection, it was around that time that I undertook the training.
So I’d actually been working within the team before I started training but it was purely as an administrative thing, looking at pension docket fraud.
Mr Beer: So in the four-year period, perhaps five investigations a year?
Diane Matthews: Yeah, the first probably 18 months, it probably wasn’t anywhere near that but, obviously, as I got more experienced, I was probably given more.
Mr Beer: When you were carrying out that investigation work, did you have an understanding that all departments and all divisions within the Post Office were subject to a legal duty to retain and record information that might be relevant to the Post Office’s function of bringing private prosecutions?
Diane Matthews: Yes.
Mr Beer: What were the processes within the Post Office to ensure that such information was retained and recorded?
Diane Matthews: When you say “processes”, what do you mean?
Mr Beer: You said that you knew that the Post Office was under a legal duty to ensure –
Diane Matthews: Yes.
Mr Beer: – that all parts of the organisation, all divisions and departments, retained and recorded information that was or might be relevant to the prosecution function –
Diane Matthews: Yes.
Mr Beer: – and I’m asking what processes were put in place to ensure that that retaining and recording duty could be carried out?
Diane Matthews: Well, we obviously had to follow PACE and CPIA and guidelines – or, you know, they were –
Mr Beer: That, Ms Matthews, is more about the reveal function –
Diane Matthews: Right, you’re –
Mr Beer: – by an Investigator to go and find the material and ensure that it’s revealed. I’m looking at the stage before then, an organisation that prosecutes people knows that it’s under a duty to retain and record information that might be relevant to the prosecution. How was that carried into effect?
Diane Matthews: I’m sort of struggling with the question a little bit. I mean, I can tell you what I did.
Mr Beer: So if I run a sweet shop and I don’t prosecute anyone, I might keep my books for a year and then I might throw them away.
Diane Matthews: Right, okay.
Mr Beer: I might not write down everything that I buy and sell because I think “Well, I’m not going to be prosecuting anyone, I needn’t do that”. If, however, I know that I might prosecute people, I might think to myself that I need this information, not just to know how many sweets I’ve sold or bought but because I’m going to be prosecuting people, and the information that I’m creating is – might be used as the basis to prosecute them.
Therefore, I’ve got these whole other duties, these legal duties, because I’m not just a seller of sweets; I’m a prosecutor too. I’ve got to do some different things in the running of my business to make sure that what I do is in compliance with the law and is fair.
Diane Matthews: So everything that I did, in terms of when I gathered evidence, we had – first of all, we had guidelines, we had casework guidelines, we had policies and procedures that we had to follow, that were accessible via database and whatever I did, in terms of an investigation, was documented.
So I either made a notebook entry or any evidence that I got was then retained, and it was disseminated onto different forms, depending on how that information was classified.
Mr Beer: So I’m again looking at the stage –
Diane Matthews: I don’t really think I’m answering your question here because I’m a bit lost in what it is. I understand what you’re saying but I don’t know, I can’t remember what procedures were in place for that.
Mr Beer: So was there, for example, a series of data stores that the Post Office had set up that could be accessed by you, where the information you obtained from them had been recorded in an evidentially secure fashion?
Diane Matthews: I don’t remember storing any evidence.
Mr Beer: Were there, for example, standing instructions to Auditors that you remember about the way that they could conduct their audits, because they weren’t just conducting an audit; if the audit showed a shortfall or a discrepancy, then the Auditor’s evidence might be translated into criminal prosecution evidence and the Auditors might be called as witnesses, and what they said to a suspect, to a postmaster, might be used in evidence against the postmaster.
So what I’m trying to establish is, as an Investigator, what did you know about the way that the rest of the business organised itself to ensure that it was ready to conduct prosecutions?
Diane Matthews: I don’t know. I can’t answer that.
Mr Beer: What processes, turning to you as an Investigator, then, existed to ensure that there was the sufficient collection and correlation of information relating to the operation of Horizon?
Diane Matthews: From my recollection, it was an online database that you could access and all relevant documents that you needed to refer to would be on there.
Mr Beer: So, as an Investigator, you could access some data that was created by Horizon; is that right?
Diane Matthews: No. I’m talking about operating processes.
Mr Beer: Okay. So, ie policies and procedures about the conduct of an Investigator?
Diane Matthews: Yes, I’ve never been able to access any historic Horizon data online.
Mr Beer: Okay. So what were the processes for obtaining access to Horizon data as an Investigator?
Diane Matthews: From my recollection, I would have to make a request to the Casework Team and they would –
Mr Beer: Who were the Casework Team? Were they part of the Security Department?
Diane Matthews: Yes, they were, yeah. They were a function of the Security and Investigations based in Croydon.
Mr Beer: How many of them were there?
Diane Matthews: No idea.
Mr Beer: So if you wanted some data from or about Horizon, you would contact the Casework Team?
Diane Matthews: Yes.
Mr Beer: What would operate on your mind in deciding whether to make such a request to the Casework Team?
Diane Matthews: If an investigation – if it was to do with some transactions that were in question or to look at if, during investigation interviews, that the person being interviewed had come up with some reasons why a loss had happened and, if they related to anything transactional or anything to do with maybe balancing, then you could always go and get the transactions and that would probably dictate if I would ask or not.
Mr Beer: Okay, so if there was a questionable transaction or if the suspect raised an issue, they would be the triggers for going off and getting this data?
Diane Matthews: Yeah, or it could be further down the line. You decided that you needed further information or you needed to clarify something, then you could request it. But, from my recollection, there was limits.
Mr Beer: Limits on what?
Diane Matthews: Limits on the number of – I think these were called ARQ requests –
Mr Beer: Yes?
Diane Matthews: – and for the business, there was limits on the number of ARQ requests that could be made in a month. After that quota was taken up, Post Office Limited had to pay for it and you had to have a really, really good reason why you needed it, in order to invoke the cost element of it.
Mr Beer: So did the limitation and then the cost penalty have an impact on the number of occasions that you requested ARQ data?
Diane Matthews: It didn’t have an impact on the number of occasions I requested it; it may have had an impact on the number of disks that I received.
Mr Beer: The number of?
Diane Matthews: Disks, ARQ – sorry, ARQs came on, like, CD disks. So I can’t recall any particular case or time when I didn’t receive them but I may have received them in the next month.
Mr Beer: Were there any processes within the Post Office Security team to ensure that there was proper recording and cross-dissemination of information about issues that had been raised as to the operation of Horizon, in prior investigations and prosecutions?
Diane Matthews: I don’t know. By the time I left, I hadn’t really heard of issues being raised with Horizon but, shortly after I left, I knew it was starting. So I don’t know what processes were for that.
Mr Beer: There wasn’t a central repository, a database, a share file, some other document where all Investigators within the Security team could feed in problems or issues that had either been raised by a suspect or had been established?
Diane Matthews: To do with Horizon?
Mr Beer: Yes.
Diane Matthews: Not while I was there, no. But like I say, I hard hardly heard of any issues regarding this before I left.
Mr Beer: If a suspect said that there is some error or bug or defect with Horizon that’s causing the loss, was there a central repository of information in the Post Office – putting aside the Security team for the moment – to which you would turn to say, “My suspect has suggested that there’s a problem with Horizon, what does the Post Office know about an error, bug or defect in the system”?
Diane Matthews: Not to my knowledge. I didn’t know of that.
Mr Beer: Which department or departments would you speak to to gather any information about that?
Diane Matthews: I never needed to, apart from on one occasion.
Mr Beer: That’s Mr Hughie Thomas’ case; is that right?
Diane Matthews: Yes. And, obviously, what I did is I raised it to Criminal Law Team and also the Casework Team were aware of it, as well as obviously my team leader.
Mr Beer: You tell us that – and it’s paragraph 41 of your statement, no needed to turn it up for the moment – that when you left in 2008, Mr Thomas’ case involving alleged faults with the Horizon system remained the only investigation that you led or had involvement in, in which such claims were made; is that right?
Diane Matthews: Yes.
Mr Beer: Did you discuss the claims made by Mr Thomas with the rest of the Investigation Team?
Diane Matthews: I can’t remember. I obviously knew that Steve Bradshaw – he was with me at the time, he obviously knew. A team leader would have known. I guess I would have told the rest of the team, it would have been a discussion point because I think it was the first time that claim had been made.
Mr Beer: To your knowledge, was that the first time that the Post Office had heard of an allegation of a fault with Horizon that was leading to errors or discrepancies in the accounts?
Diane Matthews: I have no knowledge or idea of what the Post Office knew. I only knew that was the first time it had been raised and brought to my attention.
Mr Beer: Who do you think you may have discussed it with, other than, obviously, Mr Bradshaw, your co-investigator?
Diane Matthews: Well, there would have been a few people. I mean, specifically about Mr Thomas’ case, there was involvement from Emlyn Hughes, the Area Manager. There would have been involvement from Paul Dawkins, my line manager at the time. I would imagine, but I can’t speak for him, that that would then have been raised up to John Scott.
Mr Beer: The Head of Security?
Diane Matthews: Yes.
Mr Beer: In relation to that sort of escalating series of individuals, did you ever any word back that, in fact, there have been allegations made about the operation of Horizon and it – the system – causing shortfalls and discrepancies, almost right from the beginning, from 2000?
Diane Matthews: I didn’t know of any other case, at that moment in time, where the integrity of the Horizon system had been brought into question. I obviously knew from my previous working history that there’d been issues right at the beginning but we were led to believe that they had been resolved.
Mr Beer: When you say you were “led to believe”, was that a sort of a corporate message; is that a fair way of describing it?
Diane Matthews: Yes.
Mr Beer: In paragraph 24 of your witness statement you set out the process followed by Security Team Investigators when conducting an investigation and, in paragraph 30 of your witness statement, you say:
“In the investigations I undertook, I followed the evidence trail.”
Yes?
(No audible answer)
Mr Beer: In paragraph 43 of your witness statement you say:
“[You] do not know if ARQ data was requested from Fujitsu as a matter of course regarding shortfalls identified which the subpostmaster or clerk attributed to the Horizon system. I was not involved in this process.”
Does it follow that it was your understanding that ARQ data was not requested as a matter of course when an Investigator or a prosecutor sought to rely on Horizon data in their investigation and their prosecution.
Diane Matthews: It’s difficult – well, I can’t answer that question because the only one I knew about was Mr Thomas, and I requested the ARQ data and then I left shortly after. So the majority of the issues were probably after my time but the one – the only one that I was aware of, certainly within my team, was Mr Thomas.
Mr Beer: I think what you’re saying, Ms Matthews, is that it’s only if the suspect raised a problem that the trigger would be to request Horizon ARQ data; is that right?
Diane Matthews: Yes, it is, yeah.
Mr Beer: So it wasn’t requested as a matter of course in every investigation or prosecution, in order to prove the loss?
Diane Matthews: That’s correct.
Mr Beer: How was the loss proved then?
Diane Matthews: By an audit going in and checking the cash and stock on hand.
Mr Beer: So half of that is walking into the branch and seeing how many stamps, giros and pound notes are there, yes?
Diane Matthews: Yes.
Mr Beer: But the other half of it is relying on what Horizon says should be there?
Diane Matthews: Yes.
Mr Beer: What evidence was obtained, if any, to establish that what Horizon said should be there was accurate or did you just take the balance sheet that Horizon printed out?
Diane Matthews: It was just taken, yes.
Mr Beer: So you didn’t peek behind that as a matter of course to see the process by which that account had been created by the system?
Diane Matthews: You wouldn’t doubt the integrity of the system because we were led to believe that wasn’t in question. So –
Mr Beer: Putting aside whether you were told that the system had integrity or was robust or not, I think it follows that you didn’t think that there was a need to prove the accuracy of the account that Horizon produced; it was sufficient if Horizon produced an account?
Diane Matthews: I think it was accepted that, if the cash and stock figures that were on hand were represented on the Horizon system, then you’d accept the figures that were printed off, yes.
Mr Beer: Moving on to your understanding of disclosure obligations, you tell us in your witness statement, as you’ve done today, that the Post Office Security Department was governed by the provisions of the Police and Criminal Evidence Act and the CPIA, and you tell us that you received training on, amongst other things, disclosing evidence.
I just want to explore, without looking at an individual case yet, your understanding of the disclosure obligations.
Can you confirm, please, from the perspective of a Security Manager, that you received training on the fundamental importance of disclosure to the criminal process?
Diane Matthews: Yes.
Mr Beer: Did you receive training on the nature of the statutory disclosure duties owed by an investigator and by a prosecutor?
Diane Matthews: Yes.
Mr Beer: What did you understand as to whether those duties could be delegated to a third party?
Diane Matthews: I’ve probably got slightly confused when I’ve written my witness statement. My understanding was it’s up to the Investigator to obtain, collate and disclose all documentation. However, I’ve probably misinterpreted the question and seen the disclosure as disclosure to the defence, which wasn’t part of my duty.
Mr Beer: Were you trained on something called the “three Rs”, does that ring a bell?
Diane Matthews: Is that – yeah, um, you’ve put me on the spot now but I do recall it. Is it –
Mr Beer: Retain, record and reveal?
Diane Matthews: Yes, yes.
Mr Beer: That was part of the training?
Diane Matthews: Yes.
Mr Beer: Was there training on how those maybe abstract or theoretical principles were translated into effect within the Post Office: ie how the business was going to retain; how the business was going to record; and how the business was going to reveal documents?
Diane Matthews: I don’t remember that. I don’t remember receiving specific training. That’s not to say I didn’t. I just can’t remember.
Mr Beer: Did you receive training about a CPIA Code requirement about reasonable lines of inquiry?
Diane Matthews: I can’t remember specifically.
Mr Beer: What did you understand the duty of an Investigator to be in terms of the pursuit of lines of inquiry?
Diane Matthews: That you had to follow all lines of inquiry to understand what’s gone on in a particular situation.
Mr Beer: Whether they pointed away or towards the suspect’s –
Diane Matthews: Absolutely, yes.
Mr Beer: – guilt, yes?
Diane Matthews: Yes.
Mr Beer: Was that translated into practice, again, that high level statement of a duty in operation in the Post Office, ie what must we do when a suspect says that it’s Horizon that’s causing discrepancies in their branch?
Diane Matthews: Well, again, I can only recall the one time I’ve had to deal with that and, obviously, I took it extremely seriously and made relevant decisions to try to find out whether the Horizon system was to blame, or causing issues, or had bugs and defects. It has to be checked.
Mr Beer: You tell us in your witness statement – it’s paragraphs 57 and 58, no need to turn them up – that you completed disclosure schedules to ensure that relevant unused material was scheduled and brought to the attention of reviewing lawyers and the Prosecution Support Office, yes?
Diane Matthews: Yes.
Mr Beer: When you say that you submitted the relevant documents for the purposes of disclosure, do you mean that, when you were the Investigating Officer in a case, you would collate the unused material that you had gathered and complete the relevant schedules of material yourself?
Diane Matthews: Yes.
Mr Beer: Would they include a schedule of non-sensitive material, a schedule of sensitive material and a Disclosure Officer’s report?
Diane Matthews: Yes.
Mr Beer: What processes would you undertake to ensure that a reviewing lawyer was aware of the existence of material that may assist the defence or may undermine the prosecution case?
Diane Matthews: I would ensure that they were aware of it but I don’t actually recall ever having anything like that.
Mr Beer: Never in your four years was there any material that might undermine a prosecution or help a defendant?
Diane Matthews: I don’t recall putting anything on a sensitive schedule. I always remember that everything was either used or unused and everything was on them two documents. I don’t ever remember having anything that was classified as “sensitive”.
Mr Beer: Putting aside the sensitive for the moment, whose decision was it whether material should be disclosed to the defence?
Diane Matthews: The Criminal Law Team.
Mr Beer: You tell us in paragraph 58 of your statement that you were not the Disclosure Officer in any cases.
Diane Matthews: Yeah. I think I have misinterpreted the question on that. I understand my duties as Disclosure Officer was to provide all the information to the Criminal Law Team. What I’ve read into that question was what then happened in order to disclose it to the defence.
Mr Beer: I see. If we just look at what you say in your witness statement, page 18 of your witness statement – it will come up on the screen for you – at the foot of the page.
We’re dealing here with Janet Skinner’s case and at 58 you say:
“I was not the Disclosure Officer in this case or any cases. The decision on what was disclosed was a legal matter and dealt with by the Prosecution … Team. I submitted all documents to them on the relevant paperwork and I played no further part in the dissemination of the evidence.”
If we go forwards to page 34, at paragraph 99, when we’re dealing with Hughie Thomas’ case, you say in 99:
“I was not the Disclosure Officer in this case. This was undertaken by the Prosecution Support Office.”
I think you just told me that you misunderstood the questions that led to those two paragraphs, 58 and 99. What had you misunderstood?
Diane Matthews: I’ve taken it as – when talking about disclosure, disclosure to the defence. Not disclosure to – from the outset, of the investigation. I thought it was discussing the disclosure to the defence lawyers.
Mr Beer: Had you received training on what the role and duties of a Disclosure Officer were?
Diane Matthews: I would have done at the time, but you’re asking me this question now, you know, about – I’ve misinterpreted a question.
Mr Beer: I’m going to show you in probably an hour’s time couple of disclosure schedules where you’re shown as the Disclosure Officer and you’ve signed the disclosure schedule saying you complied with your duties as Disclosure Officer. What did you understand your duties as Disclosure Officer were?
Diane Matthews: That I had to disclose all information that has been obtained as part of the investigation.
Mr Beer: You understood that as meaning disclosure to the Criminal Law Team and then you’re drawing a distinction between the actual provision of documents to the defendant, which was undertaken by the Prosecution Support Office; is that right?
Diane Matthews: I thought that was what the question was asking: who disclosed the information to the defence? That’s how I’ve misinterpreted the question. I understand my role as a Disclosure Officer was to obtain and disclose every piece of information that was gathered as part of the investigation.
Mr Beer: Okay, that can come down. Thank you.
Who or what was the Prosecution Support Office.
Diane Matthews: They were, from recollection, an administrative function within the Criminal Law Team.
Mr Beer: Were they lawyers?
Diane Matthews: I don’t know. I think – I know some were legal execs, but I don’t know what their legal training was.
Mr Beer: Were they based in one place or more than one place?
Diane Matthews: I think they were based in London, within the Criminal Law Team, but I couldn’t say 100 per cent.
Mr Beer: It was your understanding that they were the ones responsible for physically giving disclosure; is that right?
Diane Matthews: Yes. Them and, obviously, in line with the assigned lawyer.
Mr Beer: Sorry, can you say that again? Your voice dropped.
Diane Matthews: Sorry, yeah. The Prosecution Support Office, as well as the assigned lawyer to the case.
Mr Beer: Can we turn to paragraph 34 and 35 of your witness statement, please, which will come up on the screen. It’s page 11. At paragraph 34 you say:
“I have been asked what I understood by the bullet points on page 2 of the Casework Management [document].”
You had reviewed it:
“The first 3 bullet points … are regarding the documents required to be associated in any case file … all case files go in the first instance to the Prosecution Support Office.
“With regards to bullet point 4 … concerning failures in operational procedures and security, my recollections on this are anything you observed or encountered which played a part in a fraud being committed or loss in an office.”
Then you give some examples and say at the end of the paragraph:
“These are examples where the business would not want these details to become common knowledge.”
Can we just look at that document, please, POL00104777. We can see, if we just look at the foot of the page, it’s dated October 2002. Then look at the top of the page, “Casework management”, it’s an investigation policy, whose purpose is:
“… to ensure that adequate controls are in place to maintain standards throughout investigation processes.”
Then if we go to the points that you were referring to in your witness statement, which is on page 2, and if we look at the fifth bullet point, the one beginning “The issue of” – thank you, if that can just be highlighted:
“The issue of dealing with information concerning procedural failures is a difficult one. Some major procedural weaknesses, if they become public knowledge, may have an adverse effect on our Business. They may assist others to commit offences against our Business, undermine a prosecution case, bring our Business into disrepute or harm relations with major customers. Unless the offender states that he is aware that accounting weaknesses exist and he took advantage of them, it is important not to volunteer that option to the offender during interview. The usual duties of closure under the Criminal Procedure and Investigations Act 1996 still apply.”
Was it your understanding that, if your investigation identified a procedure failing or some other irregularity, that may undermine a case against a suspect or assist them in some way, that had to be brought to the attention of Legal Services?
Diane Matthews: Yes.
Mr Beer: If we just look at the bullet point above, please, bullet point 4:
“If, during the course of an enquiry, failures in security or operational procedures are identified which may or may not be directly connected with the offence/s under investigation, full detail must be included within the report to Legal Services. If necessary, any urgent remedial action can be notified to the appropriate operational manager verbally,” et cetera.
So, irrespective of what’s in that fifth bullet point, you knew that, if a procedural failure or some other irregularity that undermined a case against a suspect existed, that had to be brought to the attention of Legal Services; is that right?
Diane Matthews: Yes.
Mr Beer: Would that be in the confidential investigation report that was submitted to Legal Services?
Diane Matthews: Yes.
Mr Beer: Can you recall instances where, in the words of the policy, the business would not want the details to become public knowledge?
Diane Matthews: I can remember a couple of them, yes.
Mr Beer: Were they to do with physical security issues?
Diane Matthews: One was to do with an Alliance & Leicester issue in particular.
Mr Beer: Was that to do with the way that the system operated?
Diane Matthews: It was to do with the system allowing a customer to make multiple deposits of up to £20,000 at a time into the system, without any checks. So, in other words, one of the cases I had was £500,000 had been deposited during somebody’s lunch hour and the system allowed them to do it, and it was obviously a weakness where there was no checks.
Mr Beer: Did you understand what we’ve just read in the policy about not revealing procedural weaknesses to be, and only to be, about cases where future advantage might be taken of the weakness?
Diane Matthews: No. I didn’t see it like that.
Mr Beer: How did you see it?
Diane Matthews: I saw it as anything that might not only, not only allow people to take advantage but also could bring the company into question. So, again, we use Horizon. If I was aware that it was Horizon, that would be raised.
Mr Beer: Raised with who?
Diane Matthews: Through the Criminal Law Team but, if that was the case, it would probably also be raised to a much higher level –
Mr Beer: This policy is saying don’t reveal that to the suspect in the interview?
Diane Matthews: At that particular time, though, if it wasn’t an issue about Horizon, I wouldn’t reveal anything because I wouldn’t have anything to reveal at that time, because it would mean I would have to go and check the – you know, the situation that had been put in front of me.
Mr Beer: Can I turn to a different topic, the last of the general issues before we look at the case studies, and your understanding of the relationship between the instruction of an expert and the duties of disclosure.
Did you know that the instruction of an expert gave rise to distinct and particular disclosure obligations on the part of the prosecution?
Diane Matthews: No.
Mr Beer: Were you aware of a requirement, I’m not going to set out where it arises, that communications with an expert were subject to a particular duty to retain?
Diane Matthews: I don’t recall that.
Mr Beer: Does that mean that you wouldn’t have included communications with an expert on your schedules of unused material?
Diane Matthews: I would include everything that I had as part of the case on the schedules, in terms of it would go somewhere. But when you say about an expert, in order to get an expert witness statement, I wouldn’t personally do that.
Mr Beer: Who would personally do that?
Diane Matthews: From my best recollection, I would go to the Casework Manager and –
Mr Beer: Who was the Casework Manager; was it Mr Ward?
Diane Matthews: I think Graham Ward was one of them.
Mr Beer: We’re going to see, over the next couple of hours, your involvement in procuring evidence from Gareth Jenkins, in the case of Hughie Thomas, looking at a wide variety of communications, either involving you or in which you were a copyee, about the content of the evidence that he was going to give about revisions to his witness statement, about adding bits in and taking bits out. Would you have understood that those communications were disclosable to the defence –
Diane Matthews: Yes.
Mr Beer: – and that they should be listed in the Schedule of Unused Material?
Diane Matthews: Yes.
Mr Beer: When we look at the Schedule in due course, in Mr Thomas’ case, we can see that they were not listed. Looking at the matter generally, do you know why that was?
Diane Matthews: My only recollection of how that would have happened was because when – I would do my first disclosure of all the evidence I had. The statements would then form part of the evidence that was gathered after, that went to the Prosecution Support Office and would be added then.
I didn’t see the bundle again after I’d done my initial disclosure of all the information I’d got from the initial investigation. I wouldn’t do a supplementary one. It would be added as – you know, by the prosecution team and Criminal Law Team, as part of new evidence.
Mr Beer: Whose duty was it to conduct a rolling disclosure exercise by the completion of successive Schedules of Unused Material as the investigation proceeded?
Diane Matthews: I’m presuming it was the Prosecution Support Office and Criminal Law Team.
Mr Beer: You’re saying that you did one schedule and one schedule only when you submitted the papers, and that was it?
Diane Matthews: My best recollection of what I did at the time is that I did the initial scope of work, of which I then did disclosure on every document I had. These were supplementary things that I didn’t really have much involvement in, from my recollection and when that statement came –
Mr Beer: We’re going to see in a moment that you did have some involvement in them but, putting that to one side, did you not understand your duty as the Investigator and the Disclosure Officer to include the preparation and submission of supplemental Schedules of Unused Material as the investigation and prosecution proceeded?
Diane Matthews: I was led to believe that would be done by the department.
Mr Beer: Who led you to believe that it was to be done by the department?
Diane Matthews: Because that was my liaison with them in the Criminal Law Team and Prosecution Support Office.
Mr Beer: Okay, well, we’ll maybe see this in action when we look at specific cases. Just, lastly, generally, did you understand that you were under a duty to disclose to the defence drafts of witness statements, if they materially differed from the final signed version?
Diane Matthews: Yes.
Mr Beer: Can we look at Hughie Thomas’ case, then, please, and can we start, please, with POL00047748. These are the terms of reference with the criminal investigation into Mr Thomas. Can you see, if we just scroll down, please, “Investigator”: you’re shown as the Investigator, yes?
Diane Matthews: Yes.
Mr Beer: If we pan back out, just look at the whole of the page, is this a document that was completed at the beginning of the investigation?
Diane Matthews: I believe so but I don’t actually recall this document.
Mr Beer: Well, I was going to ask you what the purpose of the terms of reference document for a criminal investigation was.
Diane Matthews: I don’t recall. I can’t remember that document.
Mr Beer: Was it a document completed by the investigator?
Diane Matthews: I’m presuming so, yes, but I don’t ever remember seeing – or I don’t have any recollection of that document.
Mr Beer: If we just look, we can see the office name at the top, which is Mr Thomas’ office. It says, “Customer 1”, Emlyn Hughes, “Service and Contracts Manager”. What function did Mr Hughes perform?
Diane Matthews: He was the Area Manager for North Wales.
Mr Beer: So he’s described as “Customer 1”; what does that mean?
Diane Matthews: I’ve no idea what “Customer 1” means because I don’t recollect this form at all. But I knew who Emlyn Hughes was. He looked after the subpostmasters and their contracts. He wasn’t anything to do with the Security team.
Mr Beer: If we scroll down, please, to the big box at the bottom. Thank you. “Details of Incident”:
“Audit took place on 13 October 2005. Result of which was a loss of [£48,000-odd]. The majority of the loss was in cash.
“Subpostmaster, Mr Thomas, was arrested on suspicion of theft of Post Office funds.
“Cash Accounts do not show any loss/gains so there is also false accounting.
“Mr Thomas has blamed the loss on the Horizon system saying online banking transactions are producing nil totals when he has given cash out over the counter to customers.
“Mr Thomas insists that he only has access to the office while the only other user on the system is his wife.
“[He] has a buyer for the Post Office and expects to reimburse the Post Office with the proceeds of the sale.”
Then the line which says – three paragraphs from the top there, “Mr Thomas has blamed the loss on the Horizon system”, and then he gives an explanation, it’s “online banking that are producing nil totals when he has given cash … out to customers”, if we go over of the page, please, box 6:
“As a result of an initial scoping exercise … in this section the investigator has identified the initial activities to be undertaken in dealing with this incident.
“Objective: To collate information regarding the background for £48,000 loss at branch.
“Action: To interview the [subpostmaster] Mr Thomas and seek reasons for the audit loss at the branch. Gather facts surrounding problems at branch.
“Outcome anticipated: Obtain relevant information. Look to recover the audit loss of £48,000”, by 25 October 2005.
Can you help us why this does not include, given Mr Thomas had squarely blamed the loss on Horizon, any mention, as an investigative action, an investigation into the Horizon system.
Diane Matthews: I don’t recall this form. So I can’t add anything to it.
Mr Beer: I mean, that’s a pretty obvious line of inquiry, isn’t it, given what he had said –
Diane Matthews: Yes.
Mr Beer: – a suspect raising squarely the problem with Horizon and identifying what the issue was?
Diane Matthews: Yes.
Mr Beer: So that ought to have resulted in an investigative activity; is that right?
Diane Matthews: Yes.
Mr Beer: Can we move forwards then, please, to FUJ00155181. If we start at the back, we’re going to end up with this ARQ request. If we start at the back of page 23 of this document, please – and if we just scroll to the page above, please, the bottom of the page above, thank you – we see an email there from you to Mr Ward of 14 October 2005; can you see that?
Diane Matthews: Yes.
Mr Beer: Can you see that?
Diane Matthews: Yes.
Mr Beer: Thank you. You say:
“Graham,
“Just to clarify, the subpostmaster has not made any calls to HSH or NBSC …”
Do you now recall what those are?
Diane Matthews: Yes.
Mr Beer: Can you tell us what your recollection of HSH and NBSC is now?
Diane Matthews: HSH, I think, is the Horizon System Helpdesk and NBSC is the – I think it’s the National Support Centre.
Mr Beer: Network Banking Support Centre?
Diane Matthews: That’s it, yes.
Mr Beer: Can you now recall who each of those were operated by, HSH and NBSC?
Diane Matthews: Sorry? I didn’t hear that.
Mr Beer: Can you recall who operated each of those?
Diane Matthews: I can’t recall.
Mr Beer: You don’t now remember whether they were Post Office operated or Fujitsu operated?
Diane Matthews: Well, the Horizon – I think the Horizon System Helpline may have been Post Office but I wouldn’t – I can’t recall for sure.
Mr Beer: Okay, you say he has not made any calls to either of them:
“… prior to yesterday’s audit, and is now voicing his concerns over the nil transactions on card account/online banking transactions.
“I believe that there are at least 2 scenarios where a nil value [are] recorded. These are …”
Then you set them out:
“If a customer places a card into the PIN pad …”
Then the second one:
“If a customer places a POCA card into the PIN pad.”
Yes?
Diane Matthews: Yes.
Mr Beer: Over the page, please:
“Please can you check any other possibilities of nil values on these types of transactions with Fujitsu.
“Also as the subpostmaster is blaming the [Horizon] system on his losses, please could we check there are no problems with the Horizon kit at the branch.”
The branch is going to remain closed.
So you’re saying “I think that there are two scenarios where a nil value will be recorded on Horizon, but please can you, Mr Ward, go to Fujitsu to see whether there are any others”?
Diane Matthews: They were the only two scenarios at that time I could think of but I couldn’t 100 per cent say there was no others. Also, I note there to confirm the branch will remain closed. I recall, when I got there, the branch had actually reopened and then I asked for it to be closed because I wasn’t happy – if Horizon had been given as a reason for the losses, I didn’t think it was appropriate that we continue undertaking transactions on a system that may have issues.
Mr Beer: Okay. Can we scroll up, then, please to the top of page 22. Thank you.
Mr Ward, on the same day, a couple of hours later, emails Fujitsu, copying you in – can you see that –
Diane Matthews: Yes.
Mr Beer: – saying:
“The email below from one of our investigators says it all.
“Is there a check that can be made to ensure there are/were no serious errors on the system at this post office? We already have details of calls made to the Helpdesk (see spreadsheet below), which do not highlight anything obvious. Are there general error type reports that will tell you when there is a problem with the system, which the Post Office may not necessarily be aware of, particularly in relation to the highlighted paragraph. Have there been similar problems elsewhere? (I’ve heard of Tivoli event logs. Could these be relevant?)
“This case is in its early stages, but if it were to proceed to a prosecution, we’d likely need a statement which outlines how you can confirm that there were no operating errors in this office’s system. I haven’t submitted an ARQ yet but can do so if you feel it’s needed.”
Okay, so a general email from Mr Ward to Fujitsu asking whether there are or were any serious errors on the system at this post office but he hasn’t submitted an ARQ, yes?
Diane Matthews: Yes.
Mr Beer: Then if we go to page 19, please, foot of the page, please. You’re not copied in on these, but I just want to see what happens within Fujitsu first. There’s an internal email from Brian Pinder within Fujitsu, forwarding the chain we’ve just looked at:
“Obviously this has not come our way yet, but meanwhile any thoughts comments? I guess we just wait for an ARQ, but do we (Security) have anything in our arsenal, to go back to Graham with at all?”
Then scrolling up, Ms Lowther forwards it to Oddette Moronfolu:
“Could you advise us on this please.”
Then Ms Moronfolu forwards it to Richard Craig:
“Hi Ric,
“Can you have a look at this?
“They really need to know if there is anything else that could have caused the nil transactions.”
Then top of the page. He replies:
“The original email makes reference to an audit. To answer your question definitively, I’d need to know what data they are auditing that defines a ‘nil transaction’. Is it zero transaction values in the R or A messages? Or are they auditing data in some host database or log? This matters because the counter doesn’t send up an amount value in the R message for ‘Withdraw to limit’ but that may be represented as a zero value in a log or database field. The same might be true for Change PIN and Balance Enquiry.
“All banking transactions are approved online with the acquirer. The acquirer may decline for reasons other than an incorrect PIN … These other reasons might also cause a nil transaction.
“Nil transactions could also be caused by errors in PIN pad, counter, agents or host code depending on what constitutes a ‘nil transaction’. This cannot be determined without access to the appropriate system logs. I understand that it is not felt to be appropriate at this stage for those logs to be examined by development staff. I’d recommend however that counter logs our harvested now before potential evidence is lost.”
Mr Beer: I wonder whether we could stop there before we look at the rest of the chain later in October 2005 and, if it is convenient to you, sir, take a break until 11.35.
Sir Wyn Williams: Yes, of course.
Mr Beer: Thank you.
(11.21 am)
(A short break)
(11.35 am)
Mr Beer: Good morning, sir. Can you see and hear me and Ms Matthews, can you see and hear me?
Sir Wyn Williams: I can, yes.
The Witness: Yes, I can.
Mr Beer: Thank you very much, can we have back up FUJ00155181, please, and page 18, please, and look at the foot of the page, please. We’d looked at the very bottom email, if we just look at this one, Mr Pinder replies to Ms Moronfolu:
“Oddette
“Thanks for your input here and I note Richard’s reply but without wanting to cause any further unnecessary work (on our part) we have exhausted all reasonable avenues of enquiry on this.
“Graham’s initial last para states …
“‘This case is in its early stages, but if it were to proceed to a prosecution, we’d likely need a statement which outlines how you can confirm that there were no operating errors within this offices system. I haven’t submitted an ARQ yet but can do so if you feel it’s needed’.”
“Do we need to follow this up elsewhere or can we leave it at that, is there anything to go back to Graham with?”
Then up the page please:
“We have nothing to go back to Graham with unless a call is raised to investigate. Which Ric suggests happens sooner rather than later.”
Then:
“Thanks … let’s leave it at that.”
Then, please, if we go to page 15, and if we could just look at the foot of the page, please, we can see Penny Thomas from Fujitsu sending Mr Ward an email:
“As you know, nothing is ever straightforward! Here’s some feedback …”
Then she cuts in the internal Fujitsu email that we’d seen earlier and passes it on to the Post Office, concluding with:
“In other words, we need to check the system logs. How would you like to proceed?”
Then if we go to the top of the page, please, we can see that you’re now copied into this email. It seems that the email I’ve just looked at was forwarded to you or a reply by Mr Ward to Ms Thomas adding you in:
“Penny
“Thanks … but you’ve confused me!
“What is an R&A message?
“What is a host database? (I believe the nil transactions were identified on a transaction log.)
“I think it is best that the system logs are examined in the first instance (do you need an ARQ for this?), going back to 1 April 2005. Is it possible for you to run a report to show ‘nil’ values for the transaction examples described below, so we can see how often it has happened?”
This kind of email exchange that we’ve seen so far, Ms Matthews, is this essentially how investigations into Horizon were conducted, with email exchanges such as this?
Diane Matthews: I wasn’t aware of the majority of them emails. I wasn’t privy to them. From my recollection, I informed the Casework Manager what I needed and he was the liaison point into Fujitsu.
Mr Beer: It looks like, would you agree, that there was no established system?
Diane Matthews: From my end, the established system was: tell Casework what was required or ask them and they had whatever procedures were in place. But I think, probably back in 2005, there probably wasn’t any set procedures or parameters for that.
Mr Beer: I mean, to the outsider, it looks like everyone is flapping around a little, to be honest –
Diane Matthews: Yeah.
Mr Beer: – and the only theme that emerges is “Why don’t we wait and see whether a prosecution is commenced and then maybe make an ARQ request at that point?” I mean, is that an unfair characterisation?
Diane Matthews: I can’t really agree or disagree with that because that was not at a level that I was operating at. I certainly wasn’t privy to them conversations.
Mr Beer: Okay, well, Mr Ward seeks to move it on, if we go to page 14, please. You can see, he sends you an email on 25 October, so a day later, copying Mr Dawkins and Penny Thomas in, in relation to the branch there. I’m not going to try and pronounce it, given my tribunal; I’m going to call it the branch on Anglesey. He says:
“I’ve spoken with the Fujitsu Security team and have agreed the following course of action.
“Fujitsu will [investigate] a thorough analysis of the system … going back one month from the date of audit (if we need to go back further we will do). I do not see a need to remove hardware at this point to conduct any specialist examination of the [processes], particularly given the postmaster did not report any faults with the system to the HSH. I would suggest that a call is logged with the HSH … outlining the ‘alleged’ fault and asking them to send an engineer to the site to conduct a test of the equipment prior to the office being reopened. I’m sure they can also perform a few test transactions.”
Then if we go to page 12, please, this is an internal Fujitsu email, forwarding that email that we’ve just looked at, saying:
“Here’s a copy of Graham’s request concerning the [branch on Anglesey] outlet.
“The ‘thorough analysis’ I have agreed with Graham is the analysis of all nil transactions on card account/online banking transactions.”
Then the last paragraph:
“As you can see, I’ve also suggested that [Post Office] log a Helpdesk call and request that the system is checked for error.”
Then on to page 1, please. We can see the ARQ request that Mr Ward settled. You will see that it’s dated 24 October 2005. Then if we scroll down, please, “Information Requested”. So the date range is a month before the audit, 14 September 2005 to 13 October 2005, and the request is:
“Please conduct an analysis of all Helpdesk calls for the above period.
“Also please conduct a thorough examination of the system in general with a view to refuting the postmaster’s allegation that there is a fault with the ‘nil’ transactions on card account/online banking transactions.
“Please bear in mind we are investigating a substantial shortage in the accounts and should this proceed to prosecution we may be asking for a supporting witness statement.”
Do you get to see these ARQ requests before they are issued?
(No audible reply)
Mr Beer: Was that a no, sorry?
Diane Matthews: I don’t recall seeing any of these documents before.
Mr Beer: When you say “any of these documents”, plainly you saw the emails that I’ve drawn your attention to at the time?
Diane Matthews: Sorry. To clarify, I don’t recall seeing any of the ARQ documents before. These weren’t completed by me and I’ve not had sight of them.
Mr Beer: Did you have the facility to raise ARQ requests yourself or did they have to be raised by Mr Ward?
Diane Matthews: They were raised by Mr Ward or someone in the Casework Management Team.
Mr Beer: You’ll see that in his second paragraph he says:
“… please conduct a thorough examination … in general with a view to refuting the postmaster’s allegation that there is a fault …”
Diane Matthews: Yes.
Mr Beer: I think you would probably agree that that’s not really the open minded way that disclosure requests ought to be settled, is it?
Diane Matthews: I agree, and that’s not what my intention was for getting information because – because I’d got prior knowledge of Horizon in my previous role. If there was something wrong, it needed to be resolved. So it wasn’t a case from my mindset that I was looking to refute Mr Thomas’ allegations. I wanted to know what caused the shortage.
Mr Beer: Because you’ve told us in your witness statement that you would seek evidence with an open mind that might support the Post Office’s case but equally might assist the suspect, Mr Thomas?
Diane Matthews: Yes, and that was one of the reasons why I didn’t think it was appropriate to reopen the Post Office with the same equipment, because if it was the equipment, then all you’re doing is passing a potential problem on to somebody else that might experience the same situation and the same losses and outcomes, and, you know, I didn’t think that was appropriate.
Mr Beer: In any event, this request is raised on the 24 October 2005 and we’ve seen the emails that reflect, to some extent, the request that was made.
Can we turn to your investigation report, please, at POL00044861. So the ARQ requests that we were just looking at was 24 October, and I think we can see, if we go to page 7, this is signed off by you on 25 October, the next day, yes?
Diane Matthews: Yes. Can I just add, I’ve not had sight previously of this particular document. I don’t know if this was one that was forwarded to me this week that I’ve not had a chance to review, but the only one I’ve seen is the one that was for the discipline manager.
Mr Beer: Yes, that’s what this document is. This was sent to you with your original Rule 9 Request a couple of months ago.
Diane Matthews: Right. Okay.
Mr Beer: If we go back to page 1, please. You can see it’s “Personnel”, it’s the discipline one I’m asking about at the moment.
Diane Matthews: Right, okay.
Mr Beer: You’ll see that it relates to Noel Thomas, it sets out his service and then, bottom of the page:
“These papers refer to an audit shortage at [the post office] on Thursday, 13 October 2005.”
If we go forwards, please, to page 6, and four paragraphs in you say:
“Mr Thomas is convinced that the Horizon system is affecting his balance results, as the Online Banking summary contains several zero totals.”
Then you say:
“There are a number of legitimate reasons why a zero entry would be present on the summary.
“[1] A customer places their card into the PIN pad terminal and enters an incorrect PIN number.
“[2] A customer requests a withdrawal but no funds are present in their account.
“[3] A customer has previously entered an incorrect PIN on 3 separate occasions and the card provider blocks the transaction.
“[4] The card has been reported stolen and the card has been cancelled.
“[5] The transaction does not receive online authorisation from the card provider even with the correct PIN entered.
“If Mr Thomas has paid out funds in respect of the above transactions and a loss occurred then this is down to incompetence and not the failings of the Horizon system.”
Now, this was written by you, prior to the receipt of any of the ARQ data, wasn’t it? Indeed, it was written only a day after the request was made.
Diane Matthews: Yes.
Mr Beer: How did you determine that there were five reasons for nil transactions?
Diane Matthews: I was – I can’t remember exactly how I came to that assumption. I think it was just from my knowledge of the system.
Mr Beer: What enquiries, training or knowledge did you rely on to say that there were five reasons, legitimate reasons, for zero entries?
Diane Matthews: I can’t remember what prompted me to write that, in terms of getting information. I may have made some phone calls. I may have taken some advice. I can’t recall.
Mr Beer: Were you saying these were the only five reasons?
Diane Matthews: No.
Mr Beer: Well, if there were more than five reasons, potentially, why did you only list these five?
Diane Matthews: Because this document wasn’t to facilitate any criminal proceedings or make any legal decisions. This was just where the case was at the moment, to give to Mr Hughes – sorry, Mr – yeah, Emlyn Hughes – in respect of where I was with the case from a discipline or make decisions on Mr Thomas’ role as a subpostmaster.
Mr Beer: Well, I’d ask you to remember that answer for a little later today because what we’ll see is that what you set out here does become part of the prosecution case, that these are the five reasons for legitimate nil transactions.
Why didn’t you wait for the results of the ARQ data to come back?
Diane Matthews: Because it was the Post Office procedures to send an interim report to the conduct manager, normally within the week of the audit, or loss being occurred.
Mr Beer: But why are you listing legitimate reasons for zero entries being present in the audit, without receipt of the ARQ data?
Diane Matthews: I’m hypothesising, I think, as what they could be. I can’t answer that because I can’t remember.
Mr Beer: It’s written quite definitively, isn’t it? Not, “Amongst the reasons why a zero entry might be print are the following” or “Here is a non-exhaustive list”. You’re setting out the reasons, and there are five of them, for a legitimate zero entry being present, aren’t you?
Diane Matthews: I can’t tell you what I was writing at the time, I just know, probably from my experience on the counter and through the system, these were reasons I may have seen before, may have experienced before, or maybe I made a phone call. Any answer I give to that, I’m guessing, because I can’t remember what forced my decision making to write that. I can’t remember.
Mr Beer: Can we move forwards, please, to a couple of months later to look at the offender report prepared for criminal investigation and prosecution purposes, POL00044867.
If we look at page 3, please, we should, if we scroll down, see a date. It’s partially obscured but I’ve checked and that’s 12 December 2005; can you see that?
Diane Matthews: Yes.
Mr Beer: So this is your investigation report, and it’s a three-page report for the purposes of criminal investigation and prosecution of 12 December 2005. Can we go back to page 1, please. You say:
“The purpose of the report is to provide additional information on the nil transactions … for which Mr Thomas has stated is the reason for the audit shortage … Mr Thomas claimed that this loss had started some 12 months prior to the audit.
“As requested by the Criminal Law Team, I obtained and analysed 3 periods of Horizon data covering a twelve-month period. The periods are”, and then you set them out.
Can you see that?
Diane Matthews: Yes. I’ve not seen this document prior to now.
Mr Beer: Do you need time to read it? It’s three pages. Ms Matthews?
Diane Matthews: I’m happy for you to carry on. I’m just – you know, I haven’t had prior sight of it.
Mr Beer: Can you see that the document continues:
“Fujitsu had no concerns with the integrity of the data received from Gaerwen Post Office, similarly the Horizon System Helpdesk who monitor the working of the system have not been alerted to any hardware problems through their offsite monitoring or by any complaints raised by the … branch.
“I will summarise each week in detail.”
Then you set out summary of 18 November to 24 November and, over the page, 19 May to 25 May, and then the foot of the page, 14 September to 12 October 2005. Then on to page 3, please.
“In conclusion:
“No problems highlighted with the integrity of the data or the system.
“All nil online banking transactions examined have valid reasons for the transactions having no value attached to them.
“The majority of declined withdrawals with nil value are immediately followed by an authorised withdrawal for various amounts and are undertaken by the same clerk on the same terminal.
“The nil transactions are undertaken by both Mr Thomas and Mrs Thomas on … terminal 1 or 2.”
What qualifications did you have to analyse Horizon ARQ data?
Diane Matthews: I had no qualifications as such to do it.
Mr Beer: What training did you have to analyse ARQ data?
Diane Matthews: I can’t remember.
Mr Beer: Did you have any training?
Diane Matthews: I can’t remember any specific training, no.
Mr Beer: You reach a conclusion that every nil transaction has a valid reason for having no value attached to it.
Diane Matthews: (The witness nodded)
Mr Beer: How did you go about determining that there were no problems with the integrity of the data or the system and that all of the nil transactions had valid reasons for having no value?
Diane Matthews: I can’t remember. I remember getting the disk and opening it up and, again, looking for certain transactions and what happened next after the transactions. So you could – if I remember correctly, it may have been coded. So you’re looking for what happened before and after. I mean, I can’t really say with any surety what happened, what I did.
Mr Beer: Was it usual for investigators to carry out their own self-analysis of Horizon raw data?
Diane Matthews: This was the first one that I remember undertaking and I think –
Mr Beer: Did you speak to any other Investigators to say, “Look this is my first one, I’ve got reams and reams of ARQ data. What do I do with it? Do I analyse it and offer my own opinion on what it shows and doesn’t show?”
Diane Matthews: With this case, this was one of my first cases, so I was mentored quite closely with undertaking this one. So I can only presume that I wasn’t the only person involved in it.
Mr Beer: Can we move on, please, and look at what happened next in relation to Gareth Jenkins. Can we just look at what you say in your witness statement first, please, about Mr Jenkins. Firstly, page 31, paragraph 90, you say:
“From my recollection, I did not have any direct communication with Penny Thomas or Gareth Edwards …”
I think you mean Gareth Jenkins there, don’t you –
Diane Matthews: Sorry, yes.
Mr Beer: – rather than the Rugby International?
“… apart from to manage them as witnesses in the case, for example dates to avoid, dates required in court, etc.”
Having looked at emails now, do you now know that that’s incorrect, that you did have direct communications with both Penny Thomas and Gareth Jenkins?
Diane Matthews: Yes. However, I haven’t – as I explained earlier, I haven’t had time to go through, word by word, every document you sent me because of the time restraints. But I can see that I did have some liaison with them but I don’t recall it.
Mr Beer: Then page 33, please, at paragraph 97. You say:
“I have been asked to consider [some documents]. I recall meeting somebody at the post office to remove the equipment and presume from the documents this was Brian Pinder. I think Gareth Jenkins was a Fujitsu expert on Horizon and Penny Thomas was the contact for obtaining Horizon data. I have never met Gareth Thomas or Penny Thomas and my interaction with them was regarding their witness availability. All other requests were made via the Casework Management Team who would be the interface into all requests made to Fujitsu.”
Does that remain the case, that you had not – your recollection is that you’d not met Gareth Thomas – sorry –
Diane Matthews: I don’t recall –
Mr Beer: – I think you mean Gareth Jenkins there.
Diane Matthews: I’ve been calling him all sorts. I don’t remember him specifically.
Mr Beer: Then lastly, page 98 – sorry, paragraph 98, at the foot of the page:
“With regards to the request for a statement from Gareth Jenkins, I would have asked the Casework Team for a statement regarding the Fujitsu involvement and it would be the Casework Management Team who would go via their agreed channels and obtain this, with Gareth Jenkins offered by Fujitsu as their subject matter expert. I was not involved in this process apart from [asking] for a statement.”
Does that remain your recollection?
Diane Matthews: Yes.
Mr Beer: Can we look at some contemporaneous materials and the drafts of witness statements attached to emails, which indicate that both Graham Ward, the Casework Manager, and you, were involved in reviewing and drafting parts of Mr Jenkins’ witness statement. Can we start, please, with FUJ00152587. Can we go to page 4, please – in fact, maybe if we start at page 5., thank you.
Can we see that on 22 March, Mr Ward emails Brian Pinder –
Diane Matthews: Yes.
Mr Beer: – copying in Neneh Lowther and Penny Thomas:
“Brian
“I’ll get back to you once I have confirmed whether we need these statements or not …
“Can I also take this opportunity to clarify our requirements in respect of the Gaerwen statement. In this case the subpostmaster is blaming Horizon for his losses claiming that for various banking related transactions the counter desktop records amounts entered for payment but then shows ‘Nil’ when the transaction log is printed, and it is this that we need to refute.
“Various emails passed between myself and your team on this matter and the reply below …”
We have looked at those, the October ‘05 emails. He continues:
“Nil transactions could also be caused by errors in PIN pad, counter, agents or host code depending on what constitutes a ‘nil transaction’. This cannot be determined without access to the appropriate logs.
“Penny also sent with the respective ARQ data, additional spreadsheets which showed all ‘Nil’ transactions for the periods.
“We therefore require of the usual statement producing the Transaction and Event logs (Penny has sent me a draft and I have suggested one or two minor amendments). We will also need the above spreadsheets produced by whoever put them together, explaining the headings and under what circumstances ‘Nil’ transactions can occur. Finally, ‘to cover all the angles’ I would also like to produce the call logs during the entire period … so we can see whether the postmaster ever reported this alleged fault with the system … a statement similar to the Bill Mitchell statement … will be ideal.”
So this is the Post Office, through Mr Ward, asking Fujitsu, through Mr Pinder, for a witness statement fulfilling these functions, agreed?
Diane Matthews: Yes.
Mr Beer: Was there any formal process that you were aware of at this time by which such a request could be made?
Diane Matthews: No.
Mr Beer: Again, it was dealt with, person to person, by email; is that right?
Diane Matthews: It – I didn’t know how Graham did it, if I’m being honest. It was just I – a statement was needed and he was the liaison point in. I didn’t know whether he met them. I didn’t know whether it was via email. I didn’t know.
Mr Beer: Who was responsible for managing requests for witness statements from Fujitsu?
Diane Matthews: The Casework Manager.
Mr Beer: That’s Mr Ward?
Diane Matthews: Yes, or one of his team.
Mr Beer: Who had responsibility for assisting with any drafting, reviewing and finalising a statement?
Diane Matthews: I probably would have had some involvement in that. From my recollection, it also went to the Criminal Law Team.
Mr Beer: Was Mr Ward a manager of yours?
Diane Matthews: He wasn’t a direct manager of mine, no. He worked in, obviously, another function of the same team.
Mr Beer: Were there any reporting lines between you and Mr Ward?
Diane Matthews: No.
Mr Beer: What was the division of labour between Mr Ward and you in relation to obtaining witness statements from Fujitsu in Mr Thomas’ case, as far as you can remember?
Diane Matthews: As far as I remember, they did it.
Mr Beer: Who is the “they”?
Diane Matthews: The Casework Manager team and Fujitsu. I don’t recall much interaction with them at all.
Mr Beer: Can we go back to page 4, please, and then scroll down. If we just look at the bottom of that email from Ms Lowther to Mr Ward, and then scroll onto the next page:
“Graham,
“Please see the draft [witness statement] for the above re ‘Nil transactions’. Could you see if this meets your requirements.”
So this is 23 March, Ms Lowther forwarding an email or replying to Mr Ward’s email, and then if we go up the page, please, and scroll up, reply from Mr Ward:
“The layout is presumably unfinished, paragraph spacings, etc?
“As per my earlier email, and more importantly the 3 spreadsheets sent with ARQ data need to be produced as … exhibits.
“Also, the line which begins at the foot of the page … appears unfinished?”
Then this:
“And I’m concerned at the words ‘system failure’ which is also in an earlier line … ‘There has been some sort of system failure’ – What does this mean exactly and is there any indication of a system failure at this office during the period in question?”
Then if we go up, please, a page. Just scroll a little bit more, please, thank you. We’d better stop there, thank you.
Let’s look at the draft statement that was included and about which Mr Ward was concerned by the use of the words “system failure”, FUJ00122204. So it’s in the name of Mr Jenkins. If we scroll down, please, he introduces himself in the first paragraph and then he says:
“There are three main reasons why a zero value transaction may be generated as part of the banking system:
“1. The transaction has no financial effect (ie a Balance Enquiry or a PIN change]
“2. The transaction has been declined by the bank.
“3. There has been some sort of System Failure. Such failures are normal occurrences.”
That third paragraph that Mr Jenkins includes in this draft of his statement, can we call that the system failure reason, Ms Matthews, to summarise it rather than reading it out?
Diane Matthews: Okay, yes.
Mr Beer: That’s the thing that Mr Ward was concerned about, agreed?
Diane Matthews: Agreed, yes.
Mr Beer: Can we go, please, to the next email in the chain, FUJ00122203. If we scroll to the foot of the page, thank you, an email from Neneh Lowther to Mr Jenkins:
“Hi Gareth,
“I have updated your [witness statement] with the column headings”, et cetera.
Then scroll up – thank you, bit more – Mr Jenkins to Ms Lowther and Mr Pinder:
“Neneh,
“I’ve annotated it with Revisions.
“In particular, I don’t feel I can include the last two paras, which may make the statement useless.”
So remember that:
“I don’t feel I can include the last two paras, which may make the statement useless.”
Let’s look at the statement, please, FUJ00122204. Then go to page 3 and scroll a little bit. Can you see that there is a passage apparently highlighted, which consists of two paragraphs, which I think are the last two paragraphs that Mr Jenkins was referring to. Originally, it said:
“There is no reason to believe that the information in this statement is inaccurate because of the improper use of the computer. To the best of my knowledge and belief at all material times the computer was operating properly, or if not, any respect in which it was not operating properly, or was out of operation was not such as to effect the information held on it.
“Any records to which I refer in my statement form part of the records relating to the business of Fujitsu Services. [They] were compiled in the ordinary course of business from information supplied by persons who have or may reasonably be supposed to have personal knowledge of the matter dealt with in the information supplied, but are unlikely to have any recollection of the information or cannot be traced. As part of my duties, I have access to these records.”
Then Mr Jenkins has typed:
“I am not sure the yellow bit is true. Can this be deleted? All I’ve done is interpret the data in spreadsheets that you have emailed to me.”
So if we take into account the email that we just looked at and this attachment to it, would you agree that Mr Jenkins was saying, “I can’t include those two yellow paragraphs because I’m not sure they’re true, can they be taken out, please?”
Diane Matthews: That’s how it reads to me, yes.
Mr Beer: What impact do you think that had on the balance of what Mr Jenkins was saying, that he felt unable to say that there was no reason to believe that the information in the statement is inaccurate because of improper use of the computer?
Diane Matthews: I don’t know what he’s trying to say in that statement because it seems to contradict itself. So I don’t know because I’ve not seen that statement before.
Mr Beer: Looking at it now, do you think this is significant, that –
Diane Matthews: Yes –
Mr Beer: – the expert from Fujitsu is unwilling to sign a statement or have included in a signed statement a paragraph which says, “To the best of my knowledge and belief, the computer was at all material times operating properly”?
Diane Matthews: What concerns me is he’s written that and then put the caveat at the bottom “I’m not sure the yellow bit is true”.
Mr Beer: And “Can it be deleted please”?
Diane Matthews: That’s – I’ve not seen that before, and that’s –
Mr Beer: Is that very worrying?
Diane Matthews: It’s very concerning, yes. That takes away from the whole point of getting a statement.
Mr Beer: Do you recall seeing this draft of the statement, the 23 March 2006 draft?
Diane Matthews: I don’t recall having sight of that, no. That doesn’t look familiar to me and, if I’d have seen that, I would have raised concerns over it.
Mr Beer: What about the bit on page 1, if we go back to that, and scrolling down. Do you remember this part of it, where Mr Jenkins is saying one of the reasons, the three main reasons, why a zero value may be generated is that there has been some sort of system failure and that such failures are normal occurrences?
Diane Matthews: I don’t recall reading this statement.
Mr Beer: That would have been new information to you, wouldn’t it?
Diane Matthews: Yes.
Mr Beer: It would very significant information to you, wouldn’t it?
Diane Matthews: It would have been, as a system failure, yes.
Mr Beer: Taken together with the fact that Mr Jenkins wasn’t prepared to sign a statement which said, “To the best of my knowledge and belief, the computer was at all material times operating properly”, that would be very concerning?
Diane Matthews: It would be, yes.
Mr Beer: Can we go forwards a day, please, to 24 March 2006, FUJ00122217. Can we start, please, at page 2. This is when Fujitsu send what we’ve just looked at back into the Post Office. Top email:
“Hi, Graham,
“Please see attached [so this is Ms Lowther to Mr Ward] second draft for the above with the further explanation regarding the issues you raised. Please let me know of any amendments ASAP as we need to put this in the post to you by lunchtime …”
Then if we go to page 1, please, foot of the page, Mr Ward replies to Ms Lowther and you’re now copied in. Can you see that?
Diane Matthews: Yes.
Mr Beer: “Neneh, this statement needs more work. I’ve attached a suggested draft with a number of comments …”
So, to be clear, what’s happening here is the Post Office is going back to Fujitsu with its own draft of the witness statement:
“… (as mentioned previously I think the ‘system failure … normal occurrence’ line is potentially very damaging). It may be worth considering someone from our team taking a statement directly from Gareth (where is he based?)
“Whilst there is some urgency with this, it is more important to get it right and ensure we are not embarrassed at court, which we certainly could be if we produced a statement accepting ‘system failures are normal occurrences’.”
So, to be clear, what’s happening here, the Post Office Casework Manager is amending a draft witness statement from the Fujitsu expert – agreed –
Diane Matthews: Agreed.
Mr Beer: – and is expressing concern that the expert’s mention of system failures being a cause and system failures being a normal occurrence is damaging – damaging to the Post Office – and potentially embarrassing for it, agreed?
Diane Matthews: Agreed.
Mr Beer: If we go further up the page, thank you, Ms Lowther forwards that email and the new draft to Mr Jenkins:
“Please see the email below and the new draft statement.”
Let’s look at the statement as it then stood, ie after the Post Office had amended it. FUJ00122218. If we go to page 2, please, and scroll down, please. Thank you.
So the section between “Should be spreadsheets” and “declined by the Bank” is all Mr Jenkins, as in the original. Then the next sentence has been added in by Mr Ward in the brackets. I wonder whether this could be highlighted:
“(This is a really poor choice of words which seems to accept that failures in the system are normal and therefore may well support the postmaster’s claim that the system is to blame for the losses!!!!)”
Can you see that the two reasons that Mr Jenkins gave in his first draft of the witness statement are included, “transactions had no financial effect”, “transaction has been declined by the bank” – yes –
Diane Matthews: Yes.
Mr Beer: – and the third one, “system failure”, has been deleted?
Diane Matthews: Yes.
Mr Beer: So the Post Office is deleting passages from a witness statement suggesting that there may be a system fault causing the loss that the postmaster was pointing to, agreed?
Diane Matthews: Agreed.
Mr Beer: And the Post Office is suggesting that it be deleted because it may well support the postmaster’s claim, agreed?
Diane Matthews: Agreed.
Mr Beer: As an Investigator, would you regard it as appropriate or inappropriate to delete passages from an expert’s witness statement and set out your own view of events?
Diane Matthews: I think it’s – they’re an expert for a reason. That’s their opinion. I don’t know whether Mr Ward was looking at the terminology used or the actual basis behind it but, either way, it’s somebody’s statement and it has to be their words and it has to be true.
Mr Beer: Then if we go to page 3, please, and just pan out a little bit, please. You’ll see that the usual operation of the computer parts have been deleted from the statement, can you see that? Remember those two paragraphs that Mr Jenkins said that he was uncomfortable including have gone from the statement.
Diane Matthews: Yes.
Mr Beer: So Mr Jenkins had said, “I’m uncomfortable with these, can they be deleted”, and it looks as if Mr Ward has indeed deleted them.
At the time, you were being put on notice by Fujitsu that system failures were one of the three main causes of nil transactions, agreed?
Diane Matthews: From that statement, yes, but I don’t recall that. I can’t remember that. But it was always – you know, if somebody had raised it as an issue, then it’s always a possibility. That’s their belief as to what’s happened.
Mr Beer: Would you agree with Mr Ward that the system failure reason was simply a really poor choice of words by Mr Jenkins or was it, in fact, something much more fundamental than that? It was actually a witness saying, “There is a reason related to the system that may explain the loss of which we’re accusing this subpostmaster”?
Diane Matthews: I don’t know the context in which it was written. I can’t really comment on that.
Mr Beer: But, in any event, what we can see is the Post Office here expunging from the draft witness statement, the “it might be the system that’s at fault” reason for the nil transactions, and expunging from the witness statement the paragraphs which Mr Jenkins said he didn’t want included, saying that “I’ve no reason to believe that the system was other than working correctly”, agreed?
Diane Matthews: Yes.
Mr Beer: Can we move forwards, please, FUJ00122217.
We see on 28 March Mr Jenkins replying back to Ms Lowther and Mr Ward, you’re not included on this:
“I’ve added some further annotations to your annotations. Does this move us forward?”
Let’s look at the draft, please, it’s the one we were just looking at, FUJ00122218, and page 2. Scroll down, scroll down.
So, after the part in brackets, “This is a really poor choice of words”, written by Mr Ward, Mr Jenkins replies, and I wonder if this can be highlighted:
“Please can you suggest something better then? What we have here are genuine failures of the end-to-end system which are not part of normal operation, but are anticipated and the system is designed to cope with them. Such failures could be engineered as part of a malicious attack (but that doesn’t apply to those failures that appear in the evidence presented). In all cases the system is designed to identify such failures and handle them in a way that the customer, the postmaster, Post Office Limited and the FIs are all clear as to the status of the transaction and any necessary financial reconciliation takes place. I guess one option is to delete the paragraph since it is purely an introduction to the following more detailed description.”
Thank you. Can you recall receiving this updated statement from Mr Ward when it was sent to him?
That can come down, thank you.
Diane Matthews: I don’t recall, I don’t recall seeing it, no.
Mr Beer: Would it have been normal, given that you were the Investigator in the case, to have received the email that I’ve just shown you and Mr Jenkins’ draft updated statement?
Diane Matthews: It doesn’t appear to be, no. I would have expected to have seen it. My role in it was – obviously, I knew that Mr Jenkins was going to be asked to give a statement. I didn’t know the intricacies around or what took place.
Mr Beer: Can we move forwards, please, FUJ00152587. Just to check where we are, if we go to page 2. The email we’ve just looked at, Jenkins to Ward and Lowther. “I’ve added some further annotations … does this move us forward?”
Then if we go to page 1, please. That is sent on by Mr Ward to Mr Pinder, copied to Ms Lowther and Mr Jenkins, and he, Mr Ward, says:
“I do not understand why this statement, which was originally requested on 10 March is taking so long to be put together. I appreciate it is slightly unusual, but I do not understand the confusion as I thought I’d made our requirements clear.
“Unfortunately, Gareth’s annotations do not take us forward at all (and I’m sure this not Gareth’s fault). Gareth has indicated in the attachment below that the 3 spreadsheets produced by your team (which show the ‘NIL’ transactions …) were not produced by him, therefore as he quite rightly points out, he is not in a position to produce them in his statement. He also points out there are differences in the headings, which I wasn’t aware of.
“As already stated, we urgently need a statement producing these 3 additional spreadsheets, explaining in general terms, under what circumstances ‘nil’ transactions occur and in particular how the ‘nil’ transactions at Gaerwen occurred (as detailing on the spreadsheet). The same statement needs to included a paragraph which states that there is no evidence of a system error at Gaerwen (assuming this is the case) in relation to the ‘nil’ transactions at the office. We do not need to mention ‘system failures being normal occurrences’ if there is no evidence of such a problem at this office.
“As I’ve indicated on an earlier email, it may now be best if the investigator dealing with this case arranges to meet Gareth to take the statement in person … Can you confirm that you fully understand our requirements to ensure Gareth … is in a position to ‘tie up’ all these requirements in one statement?”
Were you the Investigator dealing with the case that Mr Ward is referring to there?
Diane Matthews: The Gaerwen one, yes.
Mr Beer: Did Mr Ward discuss with you what are described as the Post Office’s requirements for the contents of the witness statement?
Diane Matthews: I have no recollection of that, no.
Mr Beer: Can you otherwise recall the Post Office’s requirements in relation to the statement that the Post Office was requesting from Fujitsu in relation to nil transactions?
Diane Matthews: That – the parameters that I would expect in a statement would be to do with the ARQs and the obtaining of them.
Mr Beer: This is talking about the Post Office’s requirements for the content of a witness statement, isn’t it, not about the ARQ?
Diane Matthews: Yes, but I wasn’t aware of this.
Mr Beer: Can we look, please, at FUJ00155721. Can we see at the top of the page, an email exchange within Fujitsu:
“I have arranged for Diane to meet with Gareth at 11.00 on Thursday [the 4th] to record the statement. She has already had sight of the statement and comments which Gareth can provide so it shouldn’t take too long. Once she has done this I thought it would be nice to introduce her to the Security team, show her around the audit room to see how we do things and then perhaps a few minutes open forum to discuss all aspects of the prosecution service.
“She may also bring another member of the Investigation Team along which will all help to oil the wheels when requests come in.”
Did you attend a meeting with Mr Jenkins for the purposes of taking a witness statement from him?
Diane Matthews: I don’t recall any of that, no. I just don’t recall. I don’t recall meeting him.
Mr Beer: An email sent on Saturday, 1 April 2006, referring to Thursday, would be referring to the 6 April, just by looking at a calendar, okay?
Diane Matthews: Yeah.
Mr Beer: How many times in your four years as an Investigator did you attend Fujitsu’s offices?
Diane Matthews: I remember attending once and I thought it was to do with the hardware equipment at the office.
Mr Beer: Do you recall attending –
Diane Matthews: I can’t –
Mr Beer: – sorry – to speak with a Fujitsu employee face to face, to take a witness statement from them?
Diane Matthews: I can’t remember.
Mr Beer: Do you now recall attending and taking –
Diane Matthews: No.
Mr Beer: – a witness statement on 6 April 2006 –
Diane Matthews: (The witness shook her head)
Mr Beer: – with Mr Jenkins at Fujitsu’s office?
Diane Matthews: I can’t remember. I know I’ve been – I think it was in Reading, and I know I’ve been on one occasion. I seem to think it was to do with the equipment that was being checked because I asked for it to be checked, but I can’t recall.
Mr Beer: Can we look, please, at FUJ00122237. We can see a witness statement dated 6 April 2006 from Mr Jenkins. If we scroll down you can see what he says. Just read that slowly. Then go over the page, please, and then scroll down, and then scroll down, keep going. Just stopping there.
Then read carefully the last paragraph:
“There is no reason to believe that information in the statement is inaccurate … To the best of my knowledge and belief at all material times the computer was operating properly …”
Then over the page, that’s the end of it.
So having looked at the email correspondence, having looked at the comments in the email correspondence and the process of travelling drafts of Mr Jenkins’ witness statement and having looked at that last signed version of the witness statement, can you see that, firstly, Mr Jenkins originally said that an explanation for the nil transactions may be a Horizon system fault and that that has been taken out of his signed witness statement?
Diane Matthews: Yes.
Mr Beer: Secondly, he said that he was unprepared to sign a witness statement saying that, at all material times, the Horizon system was operating properly, but that has been added back in to his witness statement. Can you see that? It’s the last paragraph, we just read.
Diane Matthews: Yes. Sorry, yes.
Mr Beer: So the passage indicating that it might be a system fault has evaporated, hasn’t it?
Diane Matthews: Yes.
Mr Beer: And his unwillingness to sign a statement which says that the system was operating at all times properly has been overcome, hasn’t it?
Diane Matthews: It appears to be, yes.
Mr Beer: How has that come about?
Diane Matthews: I don’t know because I don’t remember. I don’t even remember taking that statement.
Mr Beer: Would you accept, on the basis of the documents that we’ve looked at, that it appears that the Post Office sought to harden up Mr Jenkins’ witness statement?
Diane Matthews: It appears that they go in self-preservation mode, by the sound of it.
Mr Beer: Sir, might that be an appropriate moment to break for lunch?
Sir Wyn Williams: Yes, certainly.
Mr Beer: I wonder whether we can take a slightly shorter lunch, given the earlier finishing time today, and reconvene at 1.30?
Sir Wyn Williams: Subject to any representations from the transcriber, yes.
Mr Beer: She’s saying fine, thank you.
Sir Wyn Williams: Fine. So 1.30, then.
Mr Beer: Thank you very much, sir.
(12.43 pm)
(The Short Adjournment)
(1.30 pm)
Mr Beer: Good afternoon, sir. Can you see and hear me?
Sir Wyn Williams: Yes, thank you.
Mr Beer: Ms Matthews, can you see and hear me?
Diane Matthews: Yes.
Mr Beer: Good afternoon.
We saw, before lunch, that Mr Thomas had said that the balances were affected by a series of Horizon generated zero lines, that Fujitsu were approached, and a witness with expertise had said that the system errors within Horizon were capable of generating zero lines and that, through an exchange of emails and other communications, that evidence was edited out of the final statement served by Mr Jenkins, agreed?
Diane Matthews: Yes.
Mr Beer: I want to turn to how the case was presented in court, then, please. Can we start, please, with POL00044885. Do you remember these kinds of documents, a summary of facts prepared in accordance with that rule of the Magistrates Court rules?
Diane Matthews: Yes.
Mr Beer: Can you remember what the purpose of the summary of facts were or was?
Diane Matthews: I believe it was just to give a synopsis of the case to the – I think it went to the prosecuting solicitor who was attending court. I’m not sure if it went to the defence. I don’t know.
Mr Beer: Who drew these up?
Diane Matthews: It would have been the Criminal Law Team.
Mr Beer: So, in this case, it would be Juliet McFarlane; is that right?
Diane Matthews: Yes.
Mr Beer: I think we can see from the foot of the page, if we keep scrolling, that this appears to have been saved in a member of the Criminal Law Team, Juliet McFarlane’s, work folders; can you see that?
Diane Matthews: Yes.
Mr Beer: Do you know whether this was served on the court?
Diane Matthews: I don’t know.
Mr Beer: In any event, can we go to page 2, please. At the foot of the page, the document has summarised what Mr Thomas had said interview, and then says this:
“There are a number of legitimate reasons why a zero entry might be presented on an online summary. These may be because:
“1. A customer enters an incorrect PIN number.
“2. A customer that is no funds in their account.
“3. An incorrect PIN number is entered on 3 separate occasions.
“4. The card has been stolen or cancelled.
“5. The transaction is unauthorised.
“Horizon data showing nil transactions have been analysed over a specified period between November 2004 and October 2005. Fujitsu had no concerns regarding the integrity of the data received from Gaerwen Post Office. Further the Horizon System Helpdesk had not been alerted to any hardware problems.”
Can you see that, at the foot of page 2 and the top of page 3 there, the so-called legitimate reasons why a zero entry might appear on an online summary is lifted from your report for the purposes of disciplinary proceedings, that we looked at this morning?
Diane Matthews: It looks the same, yes, but I wasn’t sure the Legal team actually got the discipline report. I’m not sure. But it does look the same, yes.
Mr Beer: You remember this morning I said to remember that?
Diane Matthews: Yes.
Mr Beer: That was for now. So they’ve lifted, in the document – we know that this is disclosed to defendants and presented to the court, that’s what the Magistrates Court rules say – your own summary of the five legitimate reasons for a zero entry appearing in an online summary?
Diane Matthews: Yes.
Mr Beer: What we don’t see is Mr Jenkins’ expression in the course of the early drafts of his witness statement, the fact that it may be a system error, do we?
Diane Matthews: No.
Mr Beer: Do you know how that’s come about?
Diane Matthews: I don’t have any dealings in the presentation of this document or in the drafting of it.
Mr Beer: We can take the document down, please. What was the process or practice of the communication of information, the like of which we’ve just seen in the emails just before lunch, from the Investigator to the Criminal Law Team?
Diane Matthews: Sorry, in respect of what?
Mr Beer: So we’ve seen that there were email exchanges, there were at least three iterations of a witness statement from Mr Jenkins; what was the process for disclosing/communicating that kind of information to the Criminal Law Team?
Diane Matthews: I would have presumed that, if them documents would have been available to me, I would have disclosed them to the prosecution lawyer – sorry, to the Criminal Law Team. However, I would have expected the Casework Team to have forwarded their documentation on to the Criminal Law Team for consideration.
Mr Beer: We’ve seen that, in some cases, you were in possession of the material, because you were a copyee on the email chains?
Diane Matthews: On one. I don’t even recall looking at that, but there were several more, and I would have expected the Casework Manager or the Management Team to have forwarded them on.
Mr Beer: Why would you expect Mr Ward to forward those to the Criminal Law Team when you were the Officer in the Case, essentially, the Investigator?
Diane Matthews: Because some of them I didn’t even have sight of.
Mr Beer: That’s why I’m asking what the process was. Was it the case that somebody like Mr Ward had a duty to fulfil disclosure obligations himself directly to the Criminal Law Team or would he provide material back to you?
Diane Matthews: I don’t know what the process was at that time. I don’t think there was any structured process when it came to dealing with Fujitsu because it was a new area. I certainly wasn’t aware of what any set procedure would have been, in regards to the communication between Fujitsu and the Casework Team, but I wouldn’t have expected there to be documents and statements that I was unaware of.
Mr Beer: I mean, this example we’re looking at does relate to Fujitsu but it need not relate to Fujitsu. Mr Ward or another member of the Casework Team could be having communications with any witness?
Diane Matthews: Yes.
Mr Beer: What was the process for ensuring that material created in the course of the investigation was collected together by the Disclosure Officer and passed to the prosecutor?
Diane Matthews: I don’t recall what the process was.
Mr Beer: Is that because there wasn’t one?
Diane Matthews: I don’t think there was. I can’t recall ever seeing one, whereby what the lines of communication laid down guidelines would be, with regards to the Casework Management Team.
Mr Beer: Does it follow that you can’t say that Mr Jenkins’ earlier drafts of statements dated 23 and 24 March 2006 were provided to the Criminal Law Team?
Diane Matthews: I don’t know.
Mr Beer: Irrespective of the means by which it occurred, do you accept that it was necessary for Mr Thomas and the court to be informed that one of the three main reasons for nil transactions were system faults?
Diane Matthews: Yes.
Mr Beer: Did you know that the law at the time required a prosecutor – including in that an Investigator – to retain, record and disclose final versions of witness statements where draft versions differed materially from the final version?
Diane Matthews: I presume I would have done, yes.
Mr Beer: So you were aware of the duty to record the existence of such draft statements on an Unused Material Schedule?
Diane Matthews: Yes.
Mr Beer: Can you help as to whether that occurred in this case or not?
Diane Matthews: I didn’t do it because I didn’t know of their existence but anything that happened after my documentation had gone into the Criminal Law Team – and it happened on a few other occasions, not with the case that we’re going to talk about today – then the material would be added by the Criminal Law Team onto the schedules, and then disclosed.
Mr Beer: We discussed earlier your initial analysis of the ARQ data, which you said you analysed to look for anomalies and patterns, and I asked you about what training and experience you had in analysing ARQ data to look for anomalies and patterns. Did you, when you were undertaking that work, record what you did?
Diane Matthews: It was a document, I think there was like a log, but I certainly made an entry in my notebook to say what I’d done.
Mr Beer: Would that be –
Diane Matthews: I can’t recall specific – sorry. I can’t recall specifically what I did but it would be recorded, what I did, and I don’t know whether I’d made it in my notebook or whether it was a Word document, in terms of what I received and how I did it. I can’t recall specifically. And, to be fair, I might be getting confused with some analysis work that I did in Royal Mail, so – where it was recorded on logs. So I can’t be specific.
Mr Beer: Was your analysis served as used evidence?
Diane Matthews: I can’t recall because I can’t recall if I did it.
Mr Beer: Does it follow –
Diane Matthews: I just can’t remember what happened in that moment in time, as to – the ARQ system was quite new when I asked for it. It wasn’t – and I’m not sure there was even a set procedure for what to do in the casework management processes.
Mr Beer: Does it follow that you can’t say that the record of your analysis and the results of your analysis was served as unused material as well?
Diane Matthews: I can’t – I don’t know what was served.
Mr Beer: Can we move on, then, to closer to the court appearance, and we’ve seen the witness statements taken from or provided by Mr Jenkins. Were you treating him in your own mind at this time as an expert witness?
Diane Matthews: I think I was just treating him as a witness to the case.
Mr Beer: So not as an expert?
Diane Matthews: It was never stressed to me he was an expert witness; he was just a witness in the case.
Mr Beer: What does a witness in the case mean?
Diane Matthews: He was somebody that would be able to give an account as to what had happened in a particular circumstance and –
Mr Beer: So a witness of fact, essentially?
Diane Matthews: Yes.
Mr Beer: Would you have treated him differently if you, in your mind, were treating him as an expert witness?
Diane Matthews: I don’t think so because, at that point, my role was one of an administrative to ensure he was aware of the court times, hearings, location, et cetera.
Mr Beer: But we’ve seen from the emails we looked at this morning that you were copied in to a draft statement and an arrangement was made for you to attend at 11.00 at Fujitsu’s premises to take a witness statement from him. If you did attend on 6 April 2006 and took a witness statement from him, you would need to know, in your own mind, whether you were treating him as an expert witness or not, wouldn’t you?
Diane Matthews: I don’t even recall taking a witness statement.
Mr Beer: I know that you said that this morning but assume that you did, for present purposes. Would you agree that you’d have to establish in your own mind how you were treating him, what his status was?
Diane Matthews: In my mind at the time, I think I just had him as a witness. I’m not sure it was specified to me that he was an SME.
Mr Beer: If he was treated by you as an expert, can you help us as to what differently you may have done?
Diane Matthews: I can’t because it didn’t – I didn’t do that, so I can’t offer what I would have done differently. Because I don’t recall how he was categorised at the time. Also, I’m not – at that time, as I explained earlier, I was being mentored in my role, because I was quite new. So, I mean, I think that email says to bring somebody else or mentions taking somebody else.
I don’t know whether I did, I don’t know whether I went. I can’t remember. But I know at that time the actions that were taken in relation to this case were checked and, you know, put through somebody else, whether that be the second officer or my line manager at the time.
Mr Beer: Who was your line manager at the time?
Diane Matthews: Paul Dawkins.
Mr Beer: Can we look at when the case is in court, by looking at FUJ00152616, and look at page 3 please – and scroll down, thank you.
This is an email, it’s dated 12 July 2006 – if we just scroll up a little bit we’ll catch it, there – from Mr Jenkins to you. He says:
“Diane,
“I discussed this with [somebody else] that the last two weeks in September was the best time to go away on holiday but since [something else] we’ll try and arrange some other time.”
So there’s some discussion about his holiday and leave arrangements. He says:
“I understand also that the trial is Caernarfon. Do you have any idea as to how much time will be involved and what exactly is required? I’ve never been to court in any capacity and my knowledge of such things is based on films and TV (which I’m sure are inaccurate!)”
Then can we see your reply at page 2, please – and scroll down – replied same day.
“Hi Gareth,
“Thanks for that.”
First couple of paragraphs are about practical arrangements, and then the third paragraph:
“All witnesses will have to be present on the 1st day unless the defence has agreed their statement and don’t wish to ask any questions about that evidence. It is pretty much as you see on the TV really but remember that you will have sight of your statement prior to taking the stand and can only be asked questions specifically about your statement.
“A lot can happen between now and 25 September as Mr Thomas’ defence are still asking a lot of questions so we will wait with anticipation.”
So Mr Jenkins was making it clear to you he’d never been to court?
Diane Matthews: Yes.
Mr Beer: He was asking for your help?
Diane Matthews: Yes.
Mr Beer: You told him that going to court is pretty much as you see on the television.
Diane Matthews: That’s what I put on the email, yes.
Mr Beer: Is that accurate, that what happens in court is like what happens on television?
Diane Matthews: Sometimes yes, sometimes no. But there was a conversation I had with Mr Ward, I think it was, about the fact that Fujitsu – by telephone – Fujitsu people haven’t been to court before, so, obviously, I don’t know whether other arrangements need to be put in place. I don’t know whether there was. Well, there clearly wasn’t.
Mr Beer: Looking back, maybe with the benefit of some reflection, do you considered this to be adequate advice –
Diane Matthews: No.
Mr Beer: – for a prosecution witness who had never give oral evidence in court?
Diane Matthews: No.
Mr Beer: Would you agree that the advice given bears no relation whatsoever to the sort of guidance and advice that ought to be provided to a witness?
Diane Matthews: Yes, that’s why I was in communication with the Casework Team.
Mr Beer: Do you think that your level of training and understanding was typical of other Investigators at that time?
Diane Matthews: I can’t speak for other Investigators. I was new at this time.
Mr Beer: Did you alert anyone else in the Post Office team as to this request for help or guidance by Mr Jenkins?
Diane Matthews: Only the Casework Management Team. I think I would have had a discussion with my mentor and my line manager.
Mr Beer: You tell him that you can only be asked questions specifically about your statement. Where did you learn that information from?
Diane Matthews: That’s what I was told to write.
Mr Beer: Told by whom?
Diane Matthews: That would have come from probably my team.
Mr Beer: What does that mean: “my team”?
Diane Matthews: Either the person mentoring me or my line manager.
Mr Beer: Did that line “You can only be asked questions specifically about your statement”, have anything to do with the fact that what had been expunged from Mr Jenkins’ statement was that the Horizon system may have errors that caused the creation of zero lines –
Diane Matthews: No.
Mr Beer: – ie “Don’t worry about that stuff that we’ve cut out”?
Diane Matthews: No.
Mr Beer: “You can’t be asked about it”?
Diane Matthews: No.
Mr Beer: That’s just a bit of casual advice, a bit like “Going to court is a bit like you see on the television”; is that right?
Diane Matthews: I’ve explained that’s what I was told to write.
Mr Beer: Can we move on, please. FUJ00152650. This is an email from you after the court appearance to a range of people, including Mr Jenkins and Penny Thomas, Andy Dunks, back in Fujitsu, dated 8 November 2006:
“Just to let you all know, Mr Thomas was sentenced to 9 months in jail on Monday. He was also ordered to pay costs and his finances are now subject to further investigation.
“Thank you for all your help with this case. Mr Thomas was not expecting a custodial sentence and although not a particularly lengthy sentence, it does send out the right message.”
You attach a link to a BBC article. What was the right message that was being sent out?
Diane Matthews: That was a cut and paste from the – what I was sent by the Communications Team to refer to.
Mr Beer: Who, within the Post Office, was responsible for drawing up that message?
Diane Matthews: That was the Communications Team. It’s like a media team where, I don’t know, the press, et cetera, would go to them for comment, and that’s what I was told to put.
Mr Beer: Why were you speaking with the media team, the Communications Team –
Diane Matthews: They spoke to me.
Mr Beer: – about the contents of an email being sent internally and to Fujitsu?
Diane Matthews: I think the case was quite high profile, I think it had been on the TV, and that’s when the media team, they got in touch with me, and this was the party line to be told. And that’s what I did; I cut and pasted it from their message.
Mr Beer: So you were just following orders?
Diane Matthews: Yes.
Mr Beer: Did you share the view that a custodial sentence sends out the right message to subpostmasters?
Diane Matthews: Not necessarily, no. My view on it was I was not expecting Mr Thomas to get a custodial sentence.
Mr Beer: Was there often messaging like this by the Post Office’s PR machine?
Diane Matthews: It wasn’t the only time I experienced it.
Mr Beer: You were saying you were told to say this, even though you didn’t think it personally yourself?
Diane Matthews: That was the message. I don’t think it really mattered, though. I don’t think I was even asked what my view on it was. It’s – this is just – this is the – this is the response from the Post Office.
Mr Beer: Can you help us why the communications department would be dictating your – the contents of an email to Fujitsu?
Diane Matthews: I would imagine it’s that we all give the same message. It’s a linear approach. I don’t know. I don’t know what their reasons were at the time but that’s what I was told to follow.
Mr Beer: Were you aware of a sense that it was important to the Post Office that this case should set a precedent to other subpostmasters who raised a problem with Horizon?
Diane Matthews: I don’t know if – my view on it at the time was – well, I don’t know what the reasons were at the time but I know now, and I probably knew when I was leaving, that there was some lengths that were being gone to to try and protect the system, let’s say.
Mr Beer: Who did you learn that from?
Diane Matthews: That was just my view, because I could see what was happening before I left.
Mr Beer: What could you see was happening before you left?
Diane Matthews: That people were raising concerns over the system.
Mr Beer: But what about the response to that? What could you see in relation to the response to that?
Diane Matthews: It seemed to be a denial that anything was wrong and it was like protect at all costs because, obviously, they’re invested.
Mr Beer: Can we turn to Janet Skinner. That can come down. Thank you.
In your witness statement, it’s paragraph 68, you tell us, Ms Matthews, that you were unhappy that Janet Skinner was charged with theft.
Diane Matthews: Yes.
Mr Beer: You did not think that she had stolen the money and that there was no evidence to prove that she had, yes?
Diane Matthews: From my recollection – and I have relied heavily on the documentation with this because I didn’t recall it at first – but I just don’t think I could get to the bottom of who had done what in the office.
I couldn’t prove or disprove Ms Skinner had or hadn’t, and the same with some of the witnesses, although, you know, the witnesses did give some accounts and, you know, on the balance of probabilities, I couldn’t determine who had done what.
Mr Beer: If we just look at your witness statement, please, at page 21, paragraph 68. It’s at the foot of the page, paragraph 68. This under the heading of “Janet Skinner”:
“My views in this case have not changed in [I think that’s ‘any’] respect. I was not convinced Ms Skinner had stolen the money and there was no evidence to prove she had. I was therefore unhappy with the theft charge and conveyed this at the time to the assisting lawyer.”
Yes?
Diane Matthews: Yes.
Mr Beer: So you didn’t think she had but, more importantly, there wasn’t any evidence to prove that she had committed the offence of theft, correct?
Diane Matthews: Right, yes.
Mr Beer: You interviewed Janet Skinner alongside Mr Bradshaw, didn’t you?
Diane Matthews: Yes.
Mr Beer: Did he, Mr Bradshaw, agree with you that, at that stage, there was no evidence of theft?
Diane Matthews: I don’t know. I don’t know what Mr Bradshaw thought at the time.
Mr Beer: Did you discuss it as co-investigators?
Diane Matthews: I would have done but I can’t remember what his views were.
Mr Beer: Did either of you say to Ms Skinner “We’ve dealt with people who have stolen money from the Post Office before but we know that you haven’t stolen the money”?
Diane Matthews: I don’t recall saying that.
Mr Beer: So she wouldn’t have known that you thought that she was innocent of theft?
Diane Matthews: No, because when I spoke to Ms Skinner, I did some follow-up statements after that and it was on the basis of everything put together that I didn’t think she’d stolen anything.
Mr Beer: I see. Did you communicate that view to Mr Bradshaw?
Diane Matthews: I can’t remember. I presume I did but, if you want me to say absolutely, I can’t remember. We had conversations about all of the cases regularly, so I presume I did but I can’t say for sure.
Mr Beer: When you reached this view, as you say, as a result of investigation, that Ms Skinner had not stolen the money or there was no evidence to prove that she had, did you communicate your view to Ms Skinner then?
Diane Matthews: No.
Mr Beer: You say that you spoke to or conveyed this to the assisting lawyer; who was the assisting lawyer?
Diane Matthews: I think it might have been Juliet McFarlane.
Mr Beer: What did – if it was Juliet McFarlane – she say?
Diane Matthews: I can’t remember but I remember, when I saw the charges, I said I didn’t really agree with them. But, again, it was a case of she’s the legal – legally trained person who makes the decision. I don’t make them decisions.
Mr Beer: Did you speak to your line manager about it?
Diane Matthews: He would have known.
Mr Beer: I’m sorry?
Diane Matthews: He would have known because that would have been the communication at the time. I’m not sure if it was still Mr Dawkins or not at that point. We had several managers.
Mr Beer: Presumably, if you think (a) that Ms Skinner had not stolen the money but (b), perhaps more importantly, there wasn’t any evidence to prove that she had, but the lawyer was pressing ahead with a theft charge, that would be quite a significant event, wouldn’t it?
Diane Matthews: I can only presume that she thought there was some evidence in there that warranted that charge.
Mr Beer: We haven’t seen any communications between you and the lawyer over this issue. Was this all done orally?
Diane Matthews: It was a phone call, when I got the – well, I’m trying to remember correctly. I think it was a phone call that I made to her when I received the charges.
Mr Beer: Was it just the one phone call?
Diane Matthews: Sorry, notification of the charges. I hadn’t received the actual summonses or anything. I think, yeah, I think it was just the one phone call, because as I’ve said, like I’m guessing I said something along the lines of – because I can’t remember exactly, that, you know, I couldn’t point the finger definitely at one person because there seemed to be a lot of people there and there was a lot of people had different opportunities and reasons. So, you know, Ms Skinner was adamant she hadn’t stolen it and never made any admissions to that, from my recollection, and I was shocked that the theft charge was there.
Mr Beer: So, presumably, when she was sent to prison, leaving behind her two teenage children, you thought that was monstrously unfair?
Diane Matthews: It’s never a good thing when people go to prison and I don’t take – it’s not something I take great pleasure in seeing.
Mr Beer: Might that contain a whiff of understatement. I wasn’t asking you whether –
Diane Matthews: I don’t know what your question is meaning to say, leaving her two children behind, because that’s very emotive and I don’t like to –
Mr Beer: No, it’s a matter of fact.
Diane Matthews: It is a matter –
Mr Beer: She left two teenage children behind whilst she went to prison.
Diane Matthews: Yes.
Mr Beer: It is emotive, you’re right, and I’m asking you what your reaction was when she was sent to prison, leaving her two teenage children behind. Please give me an answer.
Diane Matthews: It’s not a nice feeling and she – as far as I was aware, she went to prison for false accounting, not theft. But it’s never a good thing and I never like it and it’s, you know – I’m sorry it’s happened.
Mr Beer: Can we look, please, at POL00106906 and at page 51, please. If we just scroll down we can see the entirety of the document. It’s a letter from Ms Skinner’s Area Intervention Manager, Angela Bettison – and scroll up, please – dated 12 December 2005, to Ms Janet Skinner. It says:
“Dear Janet,
“We recently discussed the change in your remuneration to Traffic Related Pay, this will commence from 1 January 2006. The new contract is currently being drawn up and will be sent to Vicky Harrison (Contracts and Services Manager) to be signed off and you will of course receive a copy.
“This means that all of the hard work that you have put into the office in recent weeks will be paid in February’s remuneration.
“Thank you for your continued hard work and help running North Bransholme Post Office.”
This is some evidence – it’s a couple of months before the audit and interview – that Ms Skinner was a dedicated subpostmistress working well, wasn’t it?
Diane Matthews: I didn’t have anything to do with this letter so I don’t know, but it sounds like they were very grateful and supportive, yes.
Mr Beer: Would this be the kind of document that ought to be brought to a reviewing lawyer’s attention, so that he or she could consider whether a subpostmistress like this would be likely, very shortly thereafter, to commit crimes against the Post Office?
Diane Matthews: I don’t know. That would be for the Legal team. I don’t know whether they would take that into consideration or not. And I know Ms Skinner was highly thought of and was given responsibility for more than one office and she wouldn’t have been given that if she wasn’t considered to be a stand-up subpostmistress.
Mr Beer: Can we turn to disclosure of other information, please, and look at POL00044673. This is instructions and a brief to counsel in the case of the R v Janet Skinner. If we go to the last page, please – in fact it’s not the last page, it’s page 4, please – and scroll down. They’re dated December 2006, drawn up, it seems, by Ms McFarlane and Mr Taylor, the legal executive.
Now, I suspect you don’t have any role in the creation of these instructions and brief to counsel; is that right?
Diane Matthews: (Unclear), yes.
Mr Beer: If we go back to page 1, please, can we see that there’s a list of documents that the barrister was sent. If we scroll down a little bit more, items 9 and 10 are copies of minutes from you, dated 4 December 2006 and 24 November 2006. As we’re going to see, I think, they concern somebody called Wendy Lyell; do you remember Wendy Lyell?
Diane Matthews: I don’t remember without being prompted by the documents but I do recall there was something after – further on from the investigation interviews, yes.
Mr Beer: If we just scroll down under “Observations”:
“The defendant a former subpostmistress … The charges concern the theft of monies from the post office during the course of employment.”
Then over the page and scroll down, please. Last paragraph on the page:
“Counsel is requested to advise on evidence, and, in particular, whether he considers any additional evidence is required. Counsel’s attention is drawn to the enclosures at 9 and 10 above …”
They’re the two minutes that we’ve just looked at:
“… and is asked whether a theft charge is still appropriate in all the circumstances. Mrs Wisker is a temporary subpostmistress at North Bransholme who took over the office following Janet Skinner’s apprehension. These enquiries have not yet been completed in the case against Mrs Lyell. Whilst clearly the new information does not fare well with the prosecution case particularly as Mrs Lyell was a witness (now unused) this does not necessarily mean that Mrs Lyell is the only thief at the office. Counsel may in any event feel that the papers do reveal a very significant sophisticated method of false accounting on behalf of the Defendant in order to conceal a loss for which he raised little concern with her staff.”
Can we look at one of the minutes please that’s referred to as enclosure 9 and 10 POL00048272. If we scroll to the bottom please and just a bit more, please, we’ll see this is one of your two minutes that are referred to in those papers to counsel, dated 24 November 2006. Then scroll to the top, please. So it’s addressed to Juliet McFarlane:
“As discussed today on the telephone, I am forwarding the committal papers in respect of Janet Skinner.
I have contacted Joanne Wisker, temporary subpostmistress at North Bransholme office to ascertain the details surrounding the suspension of Wendy Lyell, who is a witness in the case against Ms Skinner. This following a loss at the branch of [£2,800-odd].
“Mrs Wisker, who also owns Chanterlands Avenue Post Office, was contacted by a member of staff as they were concerned over the movement of £2,000 between individual stock units. It appears Mrs Lyell contacted a colleague, Avril and said she had removed £2,000 out of her individual sealed stock unit pouch as she was concerned over running out of cash before the remittance into the branch was received. Mrs Lyell added that she would return the cash today, which was her next schedule day on duty.
“Mrs Wisker stated she arrived at the branch this morning and spoke with Mrs Lyell. It is unclear when the conversation between Mrs Lyell and Avril took place. However, when Mrs Wisker checked Avril’s stock unit, it shows a loss of £2,000.
“There was an issue over a bag of £2 coins, totalling £500 …”
The next paragraph:
“The situation at the present time is that Mrs Lyell has been suspended from her duties pending further checks being undertaken by Mrs Wisker.”
Then at the end:
“Mrs Wisker has a number of areas to check and verify information. She is to keep me informed throughout this process with any relevant finding which I will relay to yourself.”
So this is a formal means of communication of information relevant to the case against Mrs Skinner from you to the relevant lawyer; is that right?
(No audible answer)
Mr Beer: Sorry I missed your answer there?
Diane Matthews: Yes, sorry.
Mr Beer: Wendy Lyell was somebody who you had taken a witness statement from?
Diane Matthews: Yes.
Mr Beer: She was a lady that worked in Mrs Skinner’s branch –
Diane Matthews: Yes.
Mr Beer: – and she was subsequently arrested for theft?
Diane Matthews: Yes.
Mr Beer: Yes? Now, I think you were the Lead Investigator in this case by now. We’re now in late 2006.
Diane Matthews: Yes.
Mr Beer: Yes?
Diane Matthews: Yes, sorry. Can you not hear me? Yes.
Mr Beer: Did that also mean that you were the Disclosure Officer?
Diane Matthews: Yes, I disclosed things to the Criminal Law Team.
Mr Beer: Is that how you viewed the duties of a Disclosure Officer, to disclose things to the Criminal Law Team, rather than having a responsibility both to the defendant and to the court to give disclosure?
Diane Matthews: Yes.
Mr Beer: So who would have been responsible for ensuring that information of the kind that we see here was relayed to the defence?
Diane Matthews: That would be the Criminal Law Team.
Mr Beer: Who would be responsible for ensuring that material like this went onto an Unused Material Schedule?
Diane Matthews: That would be the Criminal Law Team and the Prosecution Support Office. So any additional material from what I’d already forwarded would be added to or an additional schedule would be done by them to present the cases to the defence.
Mr Beer: Can we look, please, at POL00048259. Can we see this is a “Schedule of Non-Sensitive Unused Material”, in the case of Janet Skinner. Then if we look at the foot of the page, we can see the date of the schedule, 16 November 2006. Can you see that?
(No audible response)
Mr Beer: Then if we go to the top, please, it states:
“The Disclosure Officer believes that the following material which does not form part of the prosecution case is NOT SENSITIVE.”
Then you signed that at the bottom, didn’t you?
Diane Matthews: Presumably, yes.
Mr Beer: If we scroll down, see under where it says, “GRO” that means General Restriction Order. We’ve blacked out your signature?
Diane Matthews: Yes.
Mr Beer: So were you responsible for typing documents like this up?
Diane Matthews: Yes.
Mr Beer: Did you, consistently with the answers you gave a moment ago, believe that this was just a means of communication of information to the lawyer as opposed to a declaration, essentially, to the defence and to the court?
Diane Matthews: No, I saw it as a declaration, but it always went to the Criminal Law Team because there were occasions where – I don’t know in this particular case, but I do recall times when they would move things around on schedules. So I may have put it as unused and they’d moved it onto the used.
So sometimes what I’d actually forwarded was not exactly the same as what was disclosed, maybe the other way as well. Maybe some things that I put as unused they would see as evidence.
Mr Beer: So you were responsible for typing these up. The reviewing lawyer would look at them and sometimes move things from used to unused, and from unused to used, or from non-sensitive to sensitive?
Diane Matthews: I don’t know about the sensitive part because I don’t recall too much being on them, if anything, but certainly between the used and unused, yes, because they obviously cast their legal eye upon it, of which I’m not legally trained, and they consider things differently.
Mr Beer: In any event, take it from me that the material relating to Wendy Lyell isn’t on this schedule?
Diane Matthews: Okay.
Mr Beer: Okay? I don’t want to run through it all, but it isn’t. Can we move forwards in time to see what happened, then POL00048292. This is a letter of 6 December from Juliet McFarlane to you and the Post Office Investigation Team; can you see that?
Diane Matthews: Yes.
Mr Beer: She says:
“The committal papers have been approved and served on the Defence Solicitors”, and she encloses a copy.
Then scroll down:
“I have noted the present position regarding Wendy Lyell and that police enquiries are continuing. This information will need to be disclosed to the defence in due course. Further attempts will need to be reviewed to see whether the charge of theft stands. Apprehension of Mrs Lyell is not in itself conclusive evidence that she alone was the thief. However this will depend on the evidence revealed in due course. I have also removed Wendy Lyell’s statement from the bundle, this can be placed on the unused.”
That’s an example of what you were just describing, yes?
Diane Matthews: Yes.
Mr Beer: Can we then see what happened when agent solicitors were instructed on the same day, 6 December, POL00048303. This is a letter from Juliet McFarlane to agency solicitors, Myer Wolff Solicitors in Kingston Upon Hull:
“I would first refer you to the minutes of 24 November 2006 and 4 December 2006 from the Officer Diane Matthews.”
We’ve looked at one of those:
“As I understand it Mrs Wisker is the temporary subpostmistress at North Bransholme. Police enquiries have not yet been completed. Whilst clearly the new information does not bear well with the prosecution case particularly as Ms Lyell is the witness, this does not necessarily mean that Ms Lyell is the only thief at the office. The papers in any event do reveal a very sophisticated method of false accounting on behalf of Ms Skinner in order to conceal a loss for which she raised little concern with her staff. Naturally the above information will need to be disclosed to the Defence (although the officers reports themselves are confidential).”
So this is a letter of 6 December in relation to a committal hearing we can see on the 12 December 2006. What Ms McFarlane is saying is that “We’re not going to reveal this information about Ms Lyell now, we’re going to reveal it in due course”; can you see that?
Diane Matthews: Yes.
Mr Beer: Were you aware of anything like a duty of candour when attending committal proceedings?
Diane Matthews: No.
Mr Beer: Were you trained on being open and transparent to a court at the point of committal hearings, ie to reveal information at the point of committal which tended to undermine the prosecution case?
Diane Matthews: No.
Mr Beer: In any event, so far as we can tell, there was no disclosure of the Lyell information at or before the point of committal.
Then can we turn to much later during the confiscation proceedings, again –
Diane Matthews: Can I just take a comment that I’ve not – I wasn’t aware of that letter. I wasn’t copied in. I don’t believe I’ve seen the letter to Myer Wolff. So I didn’t know that had been served. But I would have expected them documents to be served.
Mr Beer: Can we look, then, at what happened later during the confiscation proceedings, POL00048819. Can we see this is an email of mid-2007 from Juliet McFarlane to you and others. She says:
“Diane
“I am presently dealing with the Confiscation proceedings. The Defence would like to know whether Mrs Lyell was prosecuted (by the police?) and if so the details. Could you enquire and get back to me.”
Then POL00048829, your reply:
“No charges were brought against Ms Lyell by Humberside Police. [She] was interviewed but there was no evidence to support a prosecution.”
Then POL00048856, letter of 3 July 2007 to defence solicitors Max Gold Partnership. Second paragraph:
“With regards to your comments raised in paragraph 9 I am informed by the Investigation Officer that whilst Ms Lyell was interviewed by Humberside Police there was no evidence to support a prosecution.”
Okay, that can come down, thank you.
So we can see the revelation of some information in the course of the conference occasion proceedings against Janet Skinner.
Can you help us: was the material about the possible prosecution or the arrest of Wendy Lyell revealed to Janet Skinner or her Legal team before she was convicted.
Diane Matthews: I wouldn’t know. That should’ve been done by the prosecution office or Criminal Law Team.
Mr Beer: That was their responsibility, was it?
Diane Matthews: Yeah, I just would have expected them to have done that.
Mr Beer: What about you compiling a supplemental schedule of unused material?
Diane Matthews: That just wasn’t the way it worked.
Mr Beer: Yes, thank you very much. Those are the only questions I ask.
I’m going to look around the room to see whether there are any other questions.
Just one set of questions, sir, from Mr Stein.
Sir Wyn Williams: Yes.
Questioned by Mr Stein
Mr Stein: Good afternoon, my name is Sam Stein. I represent a very large group of subpostmasters and mistresses.
Can I take you, please, to your statement which is, it’s likely to be in front of the document handler, but it’s WITN08330100. So I’m going to refer you to page 35, paragraph 107. Ms Matthews, paragraph 107. Do you have that, page 35?
Diane Matthews: Yes.
Mr Stein: It’s the bottom of that page. What you say there is this:
“When I left POL in 2008, the issue of the Horizon system having bugs and its integrity were just starting to be raised.”
You go on to say:
“I did not become involved in this whilst in POL and where raised as mitigation in my investigation, I followed the process and raised the issues.”
Okay?
Diane Matthews: Yes.
Mr Stein: So the date that you have within your statement is potentially an important one for the Inquiry to reflect on. Now, you’ve said in your evidence this afternoon – at, I think, about 2.05 this afternoon – that the Post Office was denying that there were issues with the Horizon system. Your words were “That was denial at all costs”.
Now, can you help us just understand that a little bit more: who was sending out this message, this denial at all costs message?
Diane Matthews: I don’t know what person, but I just, as time was passing on with some more people blaming, rightly so, the Horizon system, and saying I’ve never heard the words “bugs and defects” until late, you know – well, as I was about to leave, but it seemed, when the questions were raised and that conversations that I can – I can’t recall who said them, but it was “It won’t be Horizon system, it’s not Fujitsu, it’s” – and it’s like it was a total denial.
And it’s just my interpretation that this was done because they were heavily invested in it. It had to work. Not just from – I don’t think just from a monetary point of view they were heavily invested. I think also from a reputational point of view they were heavily invested and I think the fallout to admit, at that point, they just didn’t want to face.
That was just my opinion, I knew it was talked about within the team, as in the greater team. I don’t have any firm comments made by individuals to back what I’ve just said up but my feeling at that time was that, when these issues were raised, they wanted them to be put to bed. That’s just my opinion.
Mr Stein: Now, the date, 2008, and the message that was being sent around by POL, that “denial at all costs” message, how close to the date of when you left in 2008 was this occurring: was that in the months or year before?
Diane Matthews: I’m sorry, I can’t give you a date. I just knew I was getting more and more unhappy working there because of certain things that were happening, and I made the decision to leave because of it.
Mr Stein: Those certain things that were happening, were they relevant to the purposes of the Inquiry, in other words regarding the Horizon system and its issues?
Diane Matthews: No, it was more a personal issue with the Head of Security at the time.
Mr Stein: Ms Matthews, when considering the question of the way that POL was denying these issues, can I just see if we can probe a little bit further. Your line manager was who at that time?
Diane Matthews: When I left, I think it was somebody called Julian Tubbs.
Mr Stein: Julian? Repeat that please?
Diane Matthews: Julian Tubbs, but he was only by line manager for a very short period of time. Prior to that it was Dave Pardoe.
Mr Stein: Now, those two individuals, Mr Tubbs and Mr Pardoe, do you think the message was being sent around – the message of denial at all costs was being sent around by those individuals; were they communicating that to you?
Diane Matthews: I don’t think I ever had a proper conversation with Mr Tubbs and it’s not my belief that Mr Pardoe made them assumptions.
Mr Stein: Ms Matthews, this particular issue, which is that that POL was denying and was trying to tell its staff members that there are no issues with the Horizon system, this has come up with now a number of witnesses before this Inquiry, and there appears to be a collective amnesia about this amongst individuals like yourself, in other words not able to recall who on earth was setting out this message.
Has word gone around, Ms Matthews, that you should keep schtum about this and keep it quiet?
Diane Matthews: No.
Mr Stein: It’s just a coincidence, is it, that you’re one of a number of witnesses that can’t seem to remember who sent out the message about keep quiet about the Horizon system? That’s just us coincidence, is it?
Diane Matthews: I think it’s quite unfair to say them things when you’re asking me about conversations from a long time ago and I’ve done my utmost to try to recall and be honest in this situation. It was a feeling amongst people that that’s what was happening.
It wasn’t a conversation where somebody dictated “This the line we’re going to take”, it wasn’t like that. But things were happening more often and – in terms of subpostmasters saying it was the system, and it was getting more and more frequent and that led you to believe is there something in it?
So I don’t – it wasn’t a message where, you know, we were all brought together or people were told, “This is what we’re going to do”. It wasn’t that sort of situation.
Mr Stein: Sir, no further questions.
Sir Wyn Williams: Thank you. Is that it, Mr Beer?
Mr Beer: Yes, it is, sir.
Sir Wyn Williams: Well, thank you very much, Ms Matthews, for giving your witness statement and for answering a good many questions today. I’m grateful to you.
The Witness: Thank you.
Mr Beer: Sir, we return now at 10.00 am on Tuesday with Mr Graham Brander.
Sir Wyn Williams: Yes, fine. Thank you.
Mr Beer: Thank you very much, sir.
(2.34 pm)
(The hearing adjourned until 10.00 am on Tuesday, 28 November 2023)