POL00070760
POL00070760
Filed on behalf of the: Claimant
Witness: COGLESBY
Statement: 1
Exhibits: coi
Date made: 06/12/2005
IN THE HIGH COURT OF JUSTICE Claim No: HQ05X02706
QUEENS BENCH DIVISION
BETWEEN:-
POST OFFICE LIMITED
Claimant/Part 20 Defendant
-and-
LEE CASTLETON
Defendant/Part 20 Claimant
WITNESS STATEMENT OF CATHERINE OGLESBY
I, CATHERINE OGLESBY of Darlington Area Office, Crown Street, Darlington, DL1
1AN WILL SAY AS FOLLOWS:
1. Iam currently a Retail Line Manager for the Post Office Limited (“the Post Office”)
with responsibility for [briefly list your responsibilities]. 1 have worked for the
Post office for [insert number] years.
2. I make this witness statement in support of the Post Office’s application for an
Order that:
(a) Time being extended until 16 November 2005 for the Claimant/Part 20
Defendant to file and served it Reply to Defence and Defence to Counterclaim;
and
(b) the Default Judgment on the Counterclaim entered against the Claimant/Part
20 Defendant be set aside.
3. I make this witness statement from facts within my own knowledge unless
otherwise stated. I have had the benefit of reading through my correspondence
and papers. References to page numbers in this witness statement are to page
numbers of Exhibit CO1 to this witness statement.
3A_1097382_1 1
POL00070760
POL00070760
Filed on behalf of the: Claimant
Witness: C OGLESBY
Statement: 1
Exhibits: co1
Date made: 06/12/2005
Background
4, Between approximately Christmas and New Year 2003, I was contacted by the
Defendant, Mr Lee Castleton, who was then the sub postmaster at the branch of
the Post Office at 14 South Marine Drive, Bridlington, YO15 3DB (“the Marine Drive
Branch”). Mr Castleton told me that on week 39 (the week ending 23 December
2003), he had been £1,100 short in his cash account. We discussed what might be
the usual explanation for this, for example the Giro Bank error or cheque deposits
going through as cash. I suggested that he contact Giro Bank and National
Savings to see if there were any problems. I also asked him he was able to make
good the sum of £1,100, because a Giro Bank error notice may take up to eight
weeks to arrive. (An error notice is a correction statement that is [automatically
or manually?] generated when the operator of the Horizon Computer system at
the branch makes an incorrect entry into the system when performing a customer
or balancing transaction. An error notice would explain whether there was any
legitimate reason for an error - is this correct?). Mr Castleton said that he could
make the amount good and we left things at that.
5. This had been the first time since Mr Castleton took over the Post Office in July
2003 that he had any major problems in balancing. Copies of the Cash Accounts
signed by Mr Castleton for the weeks ending 23 December 2003 (cash account
week 39), 30 December 2003 (cash account week 40), 7 January 2004 (cash
account week 41) and 14 January 2004 (cash account week 42) are at pages
Shortfalls in January 2004
6. In accordance with my normal visiting plan, I visited the Marine Drive Branch on
Friday 16 January 2004. At the time, no reason had come to light to explain the
loss of £1,100 [was this actually the error notice that you were eventually
to receive for £1,256.88 for Dorothy Constable, which was charged to the
late account]. The previous 3 weeks’ balances seemed to be fine.
7. On or around 21 January 2004 (cash account week 43) Mr Castleton contacted me
because his balance was over £4,000 short. A copy of the Cash Account he signed
for that week is at page . I again asked him to contact Giro Bank and National
Savings to see whether there were any problems. I also asked him whether the
cash was kept secure and who had access to it. Mr Castleton did not believe that
any of his staff could have taken the money. He stated that on this occasion, he
was unable to make good the shortfall. I advised him to contact the helpline to
get a hardship form [what is a hardship form?]. We also discussed at length
ways for him to double check all of the work leaving the office [by “work” do you
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Filed on behalf of the:
Witness:
Statement:
Exhibits:
Date made:
mean the horizon cash accounts?] and to perform a snapshot each evening to
check the cash [a snapshot is a print out of...].
8. I contacted Mr Castleton by telephone on or around 28 January 2004 (cash
account week 44). After he said he was a further £2,500 short, again, we had a
lengthy discussion to discuss all the daily workings. A copy of the Cash Account
for that week signed by Mr Castleton is at pages . I again bought up in the
conversation the possibility that somebody might be taking the cash, but Mr
Castleton discounted that possibility. I suggested that he carry out individual
stock unit balancing [please can you explain what this means as a Judge
may not be familiar with this term}. He did not wish to do this, as he felt that
Marine Drive Branch did not lend itself to doing this sort of balancing.
Shortfalls in February 2004
9. The next week ended 5 February 2005, (cash account week 45) the Marine Drive
Branch was only £25 short (pages ). However, the week after ending 11 February
2004 (cash account week 46) the Marine Drive Branch was £1,500 short (pages ).
By now, after just four weeks, the Marine Drive Branch was a total of £8,243.10
short, not counting the sum of £1,100 that Mr Castleton has made good to start
with. On or around [insert date] I asked Mr Castleton whether he had obtained a
Hardship Form. He said that he hadn’t and I advised him to obtain one. I
understand that he did, and he placed the sum of £8,243.10 into the suspense
account. Subpostmasters are contractually obliged to make good all losses and Mr
Castleton should not have been rolling them over each week. By this time, I was
very concerned and contacted the investigations team and asked them to carry out
an audit.
10. In cash account week 48 (the week ending 25 February 2004) the short fall for
that week alone was £3,509.18 (pages ). Mr Castleton informed me that he and
his assistant Chrissie [do we know her surname?] spent many hours double
checking the transaction logs to try to prove that it was the computer equipment
that was changing the figures. I asked him if he had found anything, but he had
not. However, he was convinced that since he had a processor changed about the
time the losses started occurring that it was the processor that was causing the
losses. I asked Mr Castleton to contact Fujitsu services (who were responsible for
designing, implementing and operating the Horizon system) to obtain a system
check. He did this and the system check came back fine. I asked Mr Castleton to
contact the Horizon system helpline (“HSH”) which he did [who did he send the
cash accounts to look at? Was it Horizon?]. 1 also asked Mr Castleton to
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POL00070760
POL00070760
Claimant
COGLESBY
1
col
06/12/2005
Filed on behalf of the:
Witness:
Statemer
Exhibit
Date made:
contact the Post Office’s Transaction Processing section to see whether there were
any error notices pending. An error notice is a correction statement that is a direct
result of an incorrect entry made the operator on the Horizon computer system
when performing a customer or balancing transaction.
11. On 27 February 2004, I visited the Marine Drive Branch and we went over the
figures again [can you remember which weeks you reviewed and precisely
what you did?]. Mr Castleton became distressed and angry and Chrissie [insert
surname] was also upset. I asked them what else I could do to help. We had
discussed all the usual possibilities. Mr Castleton and Chrissie [insert surname]
repeated that they had not taken the money and that it must be the Horizon
system. Mr Castleton stated that HSH had confirmed that the Horizon system was
working correctly, but he was not sure precisely what HSH had checked.
12. Mr Castleton thought that the two computer processors were not communicating
with each other and that when he remmed in the stock [what do you mean by
remmed in the stock? Does he have to manually type in the amount and
type and cost of the stock that he is selling and that he is supplied with?]
the Horizon system altered the figures. I suggested that he carry out an end of
day snapshot then remmed in, and then carried out a second snapshot, as this
would prove whether or not the Horizon system had changed anything. I advised
that if the two computer processors were not communicating, then work done on
the second machine would not show up on the summary sheets. However, all the
Pensions and Allowances reports and the Giro Bank receipts agreed with each
other, which to me suggested that there was no computer error.
Shortfalls in March 2004
13. In the week ending 3 March 2004 (cash account week 49), Mr Castleton
transferred the previous weeks balance to the suspense account. The suspense
account then totalled £11,752.78. In addition, the Marine Drive Branch Cash
Account showed a further shortage of £3,512.26 (pages ). Mr Castleton did not
make good this amount.
14, In the week ending 10 March 2004 (cash account week 50) the previous week's
shortage of £3,512.26 was rolled over and the shortage in the cash account
increased to £10,653.11 (pages ).
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POL00070760
POL00070760
Claimant
C OGLESBY
1
coi
06/12/2005
POL00070760
POL00070760
Filed on behalf of the: Claimant
Witness: C OGLESBY
Statement: 1
Exhibits: coi
Date made: 06/12/2005
15. In the week ending 17 March 2004 (cash account week 51), the Marine Drive
Branch showed a shortage in the cash account of £11,210.56 plus a shortage in
the suspense account of £11,752.78 (pages ).
Audit on 23 March 2004
16. On 23 March 2004, Helen Rose (nee Hollingworth) of the Post Office carried out an
audit of the Marine Drive Branch together with Chris Taylor. [What time did you
arrive on that day and when during that day did you confirm to Mr
Castleton that you were suspending him? Did you notice whether he
smelt of alcohol at that time? Helen Rose says that after lunch he came
back smelling heavily of alcohol. Did he appear to be drunk?)}. The audit
concluded that there was a total unauthorised shortfall of £25,758.75 (page ). In
addition, I understand that the audit identified serious control gaps, for example,
the safe was left open, safe keys were left in the safe door and not secured,
personal cheques on hand had been incorrectly treated, there had been a misuse
of monies, cash and stock was not secured during the lunch time period if [Mr
Castleton] was not on the premises, cash over £500 was not listed accurately
[what does this mean?], travellers cheques were not kept in the safe, foreign
currency was not held securely and the correct procedures for adjusting losses and
gains were not properly adhered to (page ).
17. [In the afternoon?] of 23 March, I took Mr Castleton into the back of the Marine
Drive Branch to speak to him. I told him that as a precautionary measure, and
with his permission, I would like to remove him and his staff from the Marine Drive
Branch and to operate the branch with a temporary post master to see how it
would balance. I wanted the temporary sub post master to retain the same
Horizon system that Mr Castleton and his team had been working with to try and
keep everything the same. Mr Castleton and his assistant Chrissie [insert
surname] were both angry. Mr Castleton said that he could not wait until the
temporary sub postmaster was “thousands short next week” and that “heads will
roll” for the distress that he had suffered.
18. On the same day, Lesley Joyce (the Post Office’s contract manager) wrote to Mr
Castleton to confirm that he was suspended as a precautionary measure pending
further investigations (page ).
Events following Mr Castleton’s suspension
19. I asked a very experienced post master, Mrs Ruth Simpson, from the First Lane
Post Office in Hull if she would run the Marine Drive Branch on a temporary basis.
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Date made:
Mrs Simpson agreed, but was only able to run the Marine Drive Branch for a few
weeks as she had other commitments. She opened the Marine Drive Branch on
the morning of Wednesday 24 March 2004 and balanced £2.14 short on that night.
She brought with her a part time assistant to help out on Mondays. On the close
of business on the first Monday (the week ending 31 March 2004), she was £100
short and explained that this was because her assistant had left something in the
stack [what does this mean?] and paid this amount twice. A copy of the Cash
Account for that week is at pages .
20. I telephone Mr Castleton to see what his reaction would be. He stated that Mrs
Simpson was only using one computer rather than two as he had done, so it was
not a true reflection of how he ran the Marine Drive Branch. He also stated that
Mrs Simpson had misbalance. I said that I would speak with Mrs Simpson
regarding his concerns. I contacted her and asked her to use both machines. She
stated that on a Monday she had two people working all day, so two machines
were used. The rest of the week she was on her own, but logged on to the system
with two usernames and had two machines running, she was serving customers
from both machines, remming in on both and putting the lottery cash on both.
21. On the week ending 7 April 2004 (cash account week 02), Mrs Simpson was
£19.38 over (pages ). We discussed how she was getting on every other day and
she would text me to confirm that she was okay. On her next balance for the
week ending 14 April 2004 (cash account week 03) she was £10.76 short (pages ).
22. On 16 April 2004, I visited the Marine Drive Branch and spoke to Mr Castleton
away from the counter. He was distressed. We discussed Mrs Simpson’‘s balancing
results. His assistant Chrissie [insert surname] wanted to know where the £100
shortage had gone in Mrs Simpson's first full week and I explained what she had
thought. Chrissie [insert surname] became aggressive and threatening. I said
that I felt the balance reflected any normal Sub-Post Office. Mr Castleton again
stated that it was the computer that was making the losses. I told Mr Castleton
that Mrs Simpson would be finishing on Wednesday 21 April 2004 due to other
commitments and said that I wanted more time and more balance results and
wanted another temporary Sub-Postmaster to take over. Mr Castleton said that he
did not wish to go back on the counter as things stood anyway.
23. On the week ending Wednesday 21 April 2004, (cash account week 04) there
was a surplus for the week of £0.02 (pages ). Mr Greg Booth took over as
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POL00070760
POL00070760
Claimant
C OGLESBY
1
cot
06/12/2005
POL00070760
POL00070760
Filed on behalf of the: Claimant
Witness: COGLESBY
‘Statement: 1
Exhibits: co1
Date made: 06/12/2005
temporary Sub-Postmaster on the same day. He completed his first week on
Wednesday 28 April 2004 and declared a gain of £14.76 (pages ).
24. On 23 April, Mr Franks (Mr Castleton’s father-in-law) contacted me [by
telephone?) to discuss the way in which Mr and Mrs Castleton had been treated.
I explained the situation and told him that the suspension was a precaution and
that I was hoping that by having a temporary Sub-Postmaster in the office, that
if there were any problems with the computer equipment, this would come to
light. Mr Franks demanded that Mr Castleton be reinstated immediately. I
referred him to the Post Office Head of Area, David Mellows-Facer and told him
that I could not agree to reinstate Mr Castleton at the time. I understand that Mr
Franks spoke with David Mellows-Facer and asked for a speedy conclusion to the
situation. David Mellows-Facer spoke to me and asked me whether Mr Castleton
could be interviewed as soon as possible.
25. On 26 April 2004, I wrote to Mr Castleton and stated that there was a shortage of
£25,758.75 and that he had reported large, unexplained losses over the
preceding 12 weeks. I asked him to explain the reasons why his contract should
not be terminated summarily (pages ).
26. On 28 April 2004, Mr Castleton replied and queried whether the losses existed or
whether they were “a figment of a computer’s imagination”. He asked me to send
to him various documents and information (pages ).
27.1 contacted the Transactions Processing Department again on 29 April 2004 to
see whether there were any outstanding error notices. There was an error for the
National Lottery that had yet to be investigated for £125. There had also been an
error for cheques that later cleared and did not generate an error notice. There
was also an error for an Easy Access Account that had been processed
incorrectly. I contacted Girobank to see whether there were any errors
outstanding with them. I asked them to look back to week 43. They looked back
as far as week 43 and came forward to week 02. There was a small error of
£1.43, but that would not be reported. Everything else was fine.
28. Mr Castleton telephoned me on 4 May 2004 and stated that he had found
£15,000 of the losses. I asked him where he had found the cash. He stated that
the suspense account had doubled the figures. When he had put the cash into the
suspense account, although the amount was showing in the suspense account, it
was also still showing as a loss in the cash account again the next week. Mr
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Filed on behalf of the: Claimant
C OGLESBY
1
co1
Date made: 06/12/2005
Castleton asked for the suspense account software to be checked. I again
contacted the NBSC to request this.
29. To see whether the suspense account was having any effect on the balance, I
contacted the temporary Sub-Postmaster, Greg Booth. I asked him how he was
balancing that week on his snapshots. He told me that he had a few pounds over.
I told Mr Booth what Mr Castleton had said about the suspense account. I asked
Mr Booth to put £100 into the shortages line on the suspense account. First he
ran a snapshot, then he placed the £100 into the account, then he ran a second
snapshot and a suspense account report. During this time, the second Horizon kit
was still being used by the assistant. The £100 was in the correct place and the
cash figure on the snapshot had changed by £100. This demonstrated that the
system worked correctly. I asked Mr Booth to balance with those amounts still in
the account. He should balance £100 over. I would then call him on the Friday 7
May and we would take the amount out, to see if the opposite occurred. Mr Booth
left me a message on my telephone later that evening to state that he had
balanced over, just as we had expected.
30. For the week ending 5 May 2004 (cash account week 06), the Marine Drive
branch declared a small gain of £103.11 (pages ).
31. On 6 May 2004, I wrote to Mr Castleton and sent to him a copy of an email from
Fujitsu and logs of calls to the Network Business Support Centre (“NBSC”) and
HSH (pages ). I also sent to him a copy of the Horizon System User Guide,
System Failure Sub-Sections 12 and 13 and a copy of the Audit Report (pages ).
The email from Andrew Price at the NBSC dated 20 April 2004 to me stated
“The PM sent cash account information to NBSC and it was looked at by
Andrew Wise, he was unable to find any errors. The only amount
questioned was a large amount on the cheques to processing centre which
Andrew was able to confirm was a cheque for the purchase of Premium
Bonds. The PM was advised there was nothing more we could do and we
suggested that he works on a manual system at the side of Horizon to see
if any problems were highlighted. Also, when doing the REMS the PM
should take a snapshot before and after to see if any problems were
occurring when doing a remittance. Andrew Wise and I both feel that the
Horizon system is working properly and we are unable to help the PM any
further.”
4A_1097382_1 8
32.
33.
34,
Filed on behalf of the:
Witness:
Statement:
Exhibits:
Date made:
The email from Julie Welsh, Service Delivery Manager HSH Fujitsu Services
stated:
“There is no evidence whatsoever of any system problem... please tell the
PM that we have investigated and the discrepancies are caused by the
difference between the transactions they have recorded on the system and
the cash they have declared, and are not being caused by the software or
hardware.” (page).
On 6 May 2004, I also contacted the Transaction Processing Department at
Chesterfield again to check whether there were any outstanding errors. Only the
easy access error was still showing. I also contacted Mr Castleton by telephone
and informed him that I had received his letter and was doing all I could to get
him the information he had requested. I said that I would probably not be able to
obtain everything that he had asked for.
[What happened when you contacted Greg Booth on Friday 7 May? When
he took the £100 out of the suspense account, did the opposite occur?].
Interview with Mr Castleton on 10 May 2004
35.
36.
On 10 May 2004, I interviewed Mr Castleton. Ms Lesley Joyce (Contract Manager)
and Mrs Christine Train our Assistant, was also present. A copy of the Minutes of
the interview meeting are at pages [ ]. At the interview, I explained that it
was his opportunity to give any explanation as to why his contract for services
should not be terminated. I summarised the events which lead to his suspension
on 23 March 2004 due to an unexplained shortage of £25,758.75. During the 12
weeks prior to this audit, the Marine Drive Branch had several large unexplained
losses. All the entries on the cash accounts were double checked [who double
checked them?], but the figure for cash on the system was not the same as the
Physical amount of cash at the Marine Drive Post Office. Mr Castleton stated that
the Horizon system was to blame.
I informed Mr Castleton that since he had been suspended, the same Horizon
system had remained in place and that there had not been any further
complaints about it from the Marine Drive branch and that the cash account
showed no large losses. The Horizon system did crash whilst Mrs Simpson was
running the branch, but when she rebooted it, this did not effect the balance.
When Mrs Simpson had finished, Mr Booth was appointed as a temporary Sub-
Postmaster, and again, he had no problems.
31A_1097382_1 9
POL00070760
POL00070760
Claimant
C OGLESBY
1
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06/12/2005
POL00070760
POL00070760
Filed on behalf of the: Claimant
: C OGLESBY
1
coi
Date made: 06/12/2005
37. Mr Castleton stated that he had not taken any money and that he trusted his
staff not to have taken anything. Mr Castleton said that he had asked for ten
pieces of information and I explained that I had only received his letter two
working days prior to the interview and that I was working on obtaining this.
38.1 checked that Mr Castleton understood how the cash account worked with
regards to balances and losses and gains and he confirmed he understood it. I
then went into detail with balances, error notices, losses etc and the evidence I
had with the snapshots and declared cash. I provided all of this information to Mr
Castleton, together with a list of the results of the balance.
39.1 referred Mr Castleton to some of the cash declarations which had been
manually altered or written on. Specifically I referred him to week 47 and also
the declaration on 12 February 2004 which had a figure of approximately £7,000
written onto the bottom of the cash declaration. [My copy of this cash
declaration doesn’t have this figure written on it. I attach a copy of it for
your ease of reference. Please can you confirm whether I should be
looking at something else]. Mr Castleton thought it was Chrissie’s [insert
surname] writing, but she was not sure. I said this was very important because
although the cash account for week 46 showed a loss of £8,243.10, the following
snapshots and declared cash did not evidence this. For example:
(a) The snapshot timed at 5.27p.m. on 13 February 2004 showed that the Marine
Drive branch needed £92,095.36 cash. The cash declaration shows that the
branch had cash of £99,128.40, a gain of £7,033.44.
(b) The snapshot at 14 February 2004 showed that the Marine Drive Branch
needed £95,896.59, but the cash declaration showed that it actually had
£102,706.10, a gain of £6,809.51.
(c) The snapshot of Monday 16 February 2004 showed that the Marine Drive
branch needed £77,958.28, but the cash declaration showed that it had
£84,909.54, a gain of £6,951.26.
(d) The snapshot dated Tuesday 17 February 2004 showed that the Marine Drive
branch needed £68,163.08, but the cash declaration showed that he actually
had £84,909.54, a gain of £6,776.77.
3A_1097382_1 10
Filed on behalf of the:
Witness:
Statement:
Exhibits:
Date made:
In other words, the Marine Drive branch and had more physical cash than it
actually declared.
40. Crucially, the cash account on Wednesday 18 February 2004 showed that the cash
is an exact match for the cash required on the balance. I asked Mr Castleton
where the surplus had gone. He had no explanation and stated that it was
something to do with Horizon. I gave Mr Castleton other examples where there
was shortages in subsequent weeks and that they did not match the snapshot in
the cash declaration.
41. I explained to Mr Castleton that the Horizon system is a double entry accounting
system and that everything I had checked worked through. The evidence does not
support Mr Castleton’s theory that the Horizon system went wrong when the
REMS were put through [what does this mean?].
Post interview
42. After the interview, I sent copies of the cash and suspense accounts to Elizabeth
Morgan and Davlynn Cumberland in Leeds who were two people very experienced
in dealing with the suspense accounts. Neither of them could see anything wrong
with the way that the computers were working.
43. On 14 May 2004, I wrote to Mr Castleton clarify the entries at the top of the final
balance, that he had queried and I sent him a copy of the interview notes (page ).
Mr Castleton’s dismissal
44. Mr Castleton did not provide any evidence of a computer problem. All the entries in
his cash accounts were double checked. The figure declared for cash on the system
did not match the physical amount of cash he had in his office. This showed that
there was an actual loss, rather than a computer problem.
45. Mr Castleton denied taking the cash, but he would not take my advice to try
individual balancing, or listen to my suggestion that a member of his staff might
be taking the money.
46. The Transaction Processing Department at Chesterfield and Girobank have stated
that they had no outstanding error notices to issue. Fujitsu Services had checked
the software and could not find any problems.
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47. Since Mr Castleton had been suspended, the temporary Sub-Postmasters had
worked with exactly the same Horizon kit and the balance had continued to be fine
each day. In the circumstances, I decided to summarily terminate Mr Castleton’s
contract for services, due to the large unexplained losses. I wrote to Mr Castleton
on 17 May 2004 to confirm that I had decided to summarily terminate his contract
for services (page ).
Events following Mr Castleton’s dismissal
48. On 23 May 2004, Mr Castleton wrote to me to confirm that he wished to appeal
against my decision (page ). He also stated that he was seeking further
information relating to the computer fault. On 1 June 2004 he wrote directly to
David Mellows-Facer for this information (page ). On 2 June 2004, David Mellows-
Facer replied to Mr Castleton (page ). I understand that Mr Castleton’s appeal was
dealt with by Mr John Jones, Area Development Manager, which upheld my
decision.
49. In the circumstances, I believed that my decision to dismiss Mr Castleton was
entirely justified and that there is a real prospect that the Post Office will succeed
if allowed to defend the Counterclaim.
1 believe that the facts stated in this Witness Statement are true.
Signed...
Catherine Oglesby
Dated...
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1A_1097382_1
POL00070760
POL00070760
Filed on behalf of the: Claimant
Witnes: C OGLESBY
Statemi 1
Exhibits cot
Date made: 06/12/2005
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
BETWEEN:
POST OFFICE LIMITED
-and-
LEE CASTLETON
WITNESS STATEMENT OF
CATHERINE OGLESBY
BOND PEARCE LLP
Ballard House
West Hoe Road
Plymouth PLL 3AE
Solicitors for the Claimant
13
Claim No. HQO5X02706
Claimant/Part 20
Defendant
Defendant/Part 20
Claimant