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?
)€ shen Dilley
From: Stephen Dilley
Sent: 14 November 2006 15:41
To: ‘M.Turner
Subject: RE: Post Office Limited -v- Lee Castleton
Without prejudice
Dear Mr Turner,
Thanks for your email of earlier today with suggested amended wording.
I note that you are seeking formal instructions on the original paragraph 2 and will await your
approval of the draft Tomlin order plus the draft wording of the letter Mr Castleton requires
hopefully later today and then deal with this in the round.
I look forward to hearing from you.
Yours sincerely,
Stephen Dilley
Solicitor
From: M.Turneg,
Sent: 14 Novem!
To: Stephen Dilley
Subject: RE: Post Office Limited -v- Lee Castleton
Without prejudice
Dear Mr Dilley
Thank you for your e-mail below with draft order.
Whilst I have not yet been able to discuss it with him, I think it almost certain that the form of wording you
suggest at paragraph 2 will not acceptable to my client. I envisage that he would prepared to provide a letter
in the following terms:
"I, Mr Lee Castleton, the former subpostmaster at Marine Drive Post Office, Bridlington, fully
and unreservedly withdraw the allegations I have made about the operation of the Horizon
system. I undertake not to repeat those allegations and/or make any further allegations about
the Horizon system and/or its functioning."
This provides your client with the formal confirmation that it requires.
I will revert to you later today on the form of wording for the reciprocal letter to be provided by your client.
14/11/2006
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Page 2 of 3
Regards,
‘Mark Turner
Solicitor
Commercial Group
Rowe Cohen Solicitors
mono Original Message-----
From: Stephen Dilley [mailto:
Sent: 10 November 2006 17:07
To: Mark Turner
Cc: Tom Beezer; alexander.goold:
Subject: Post Office Limited -v- Lee Castléton
Without prejudice
Dear Mr Turner,
I refer to our telephone conversation this afternoon.
1. I attach a draft consent order for your approval.
2. The wording of the letter from Mr Castleton to the Post Office referred to in
paragraph 4 of the Tomlin Order shall read:
“I, Mr Lee Castleton, the former subpostmaster at Marine Drive Post Office,
Bridlington, fully and unreservedly withdraw the untrue allegations I have made
about the operation of the Horizon system. Previously I thought that losses that
arose at the Marine Drive Post Office whilst I was subpostmaster arose due to a
malfunction of the Horizon system, but I now accept that I was mistaken and that
the losses were caused by human error. I declare that the Horizon system did not
cause or contribute to the losses in any way and I formally withdraw all statements
I made to the contrary and undertake not to repeat them, and/or make any further
allegations about the Horizon system and/or its functioning."
3. I suggest you provide us with a draft form of wording for us to consider for the
letter Mr Castleton seeks about no dishonesty allegation being made (as per para 3
of the Schedule to the Order)
4. As discussed:
(a) any settlement is not finalised until agreed in writing in the form of a signed
order;
(b) Our Counsel's deemed brief fee will not be incurred on Monday, strictly provided
that a final settlement order is agreed within the next few days. However, we have
previously agreed with Counsel that if settlement occurs before that time, Counsel
will be paid on an hourly basis for preparatory work done so far and any further
work. Therefore, it is preferable from a costs point of view if an order is finalised
14/11/2006
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Page 3 of 3
sooner rather than later; and
(c) We are ready, willing and able to exchange witness statements but given the
parties are now focusing on settlement, do not propose to send them to you today.
I look forward to hearing from you as soon as possible.
Stephen Dilley
Solicitor
for and.on hehalf.of Bond_P.
GRO
www.bondpearce.com
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14/11/2006
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St ‘len Dilley
From: Stephen Dilley
Sent: 14 November 2006 10:05
To: ‘mandy .talbot!.
Ce: andrew.winn,
Subject: FW: Post Office Limited -v- Lee Castleton
Dear Mandy,
Please see below. Are you content with that suggested wording of Castleton's letter? Its not
quite as strong as our wording, but if Castleton wants to enter the city, I didn't think he'd like
our suggested wording for the same reason that he prefers a Tomlin order to a judgment.
I look forward to hearing from you.
Kind regards.
Stephen Dilley
Solicitor
for and on behalf of Bond Pearce LLP
[maitto:M,Turnef_
From: M.Turner, _
Sent: 14 November 2006 09:30
To: Stephen Dilley
Subject: RE: Post Office Limited -v- Lee Castleton
Without prejudice
Dear Mr Dilley
Thank you for your e-mail below with draft order.
Whilst I have not yet been able to discuss it with him, I think it almost certain that the form of wording you
suggest at paragraph 2 will not acceptable to my client. I envisage that he would prepared to provide a letter
in the following terms:
"I, Mr Lee Castleton, the former subpostmaster at Marine Drive Post Office, Bridlington, fully
and unreservedly withdraw the allegations I have made about the operation of the Horizon
system. I undertake not to repeat those allegations and/or make any further allegations about
the Horizon system and/or its functioning."
This provides your client with the formal confirmation that it requires.
I will revert to you later today on the form of wording for the reciprocal letter to be provided by your client.
Regards,
Mark Turner
Solicitor
14/11/2006
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‘© Commercial Group
Rowe Lohen Solicitors
-----Original Message-----_..
From: Stephen Dilley [mailtoy
Sent: 10 November 2006 17:07
To: Mark Turner
Cc: Tom Beezer; alexander.goold
Subject: Post Office Limited -v-
Without prejudice
Dear Mr Turner,
I refer to our telephone conversation this afternoon.
1. I attach a draft consent order for your approval.
2. The wording of the letter from Mr Castleton to the Post Office referred to in
paragraph 4 of the Tomlin Order shall read:
"I, Mr Lee Castleton, the former subpostmaster at Marine Drive Post Office,
Bridlington, fully and unreservedly withdraw the untrue allegations I have made
about the operation of the Horizon system. Previously I thought that losses that
arose at the Marine Drive Post Office whilst I was subpostmaster arose due to a
malfunction of the Horizon system, but I now accept that I was mistaken and that
the losses were caused by human error. I declare that the Horizon system did not
cause or contribute to the losses in any way and I formally withdraw all statements
I made to the contrary and undertake not to repeat them, and/or make any further
allegations about the Horizon system and/or its functioning."
3. I suggest you provide us with a draft form of wording for us to consider for the
letter Mr Castleton seeks about no dishonesty allegation being made (as per para 3
of the Schedule to the Order)
4. As discussed:
(a) any settlement is not finalised until agreed in writing in the form of a signed
order;
(b) Our Counsel's deemed brief fee will not be incurred on Monday, strictly provided
that a final settlement order is agreed within the next few days. However, we have
previously agreed with Counsel that if settlement occurs before that time, Counsel
will be paid on an hourly basis for preparatory work done so far and any further
work. Therefore, it is preferable from a costs point of view if an order is finalised
sooner rather than later; and
(c) We are ready, willing and able to exchange witness statements but given the
parties are now focusing on settlement, do not propose to send them to you today.
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“ I look forward to hearing from you as soon as possible.
Stephen Dilley
Solicitor
The information in this e-mail and any attachments are confidential and may be legally
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Rowe Cohen
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This firm is regulated by the Law Society
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~
Date: 10 November 2006
Your ref: SJD3/FAC1/348035.134
Ou °° MDT.113969
Pleas. ..sk for: Mark Turner
Direct dial: mv
Direct fax :
E-mail:
ROWE COHEN
SOLICITORS
Bond Pearce
Solicitors
DX 8251
PLYMOUTH
Without prejudice except as to costs
Dear Sirs
Post Office Limited —v- Mr L Castleton
We refer to our conversation yesterday. We have now received via our counsel your client’s response to the
offer made by counsel to your counsel on 8 November.
Our client would be prepared to settle this claim on the following terms:
1. The terms of settlement are embodied in a Tomlin Order rather than a judgment, given that a judgment
may well impact on our client’s ability to re-enter the financial services sector in due course. An
obligation to pay set out in the Schedule to the Order would be readily convertible into a judgment by
your client pursuant to the liberty to apply as to implementation provision, if required.
2. The Defendant will pay the amount of the claim, £25,858.95, in full.
3. Interest will be payable from 23 March 2004 to date and continuing to pay at 1% above base rate
applicable during the period (or such other rate over base rate at which your client is able to borrow).
4, The Defendant will pay the Claimant’s costs to be assessed if not agreed (except as otherwise ordered):
4.1 on the standard basis to 26 January 2006 (i.e. to 21 days after the date of your client’s
purported Part 36 offer letter); and
42 on the indemnity basis from 26 January 2006 onwards
5. The Defendant will make a payment on account of costs of £30,000.
6. There be an exchange of letters as previously discussed, viz:
6.1 The Post Office sets out that there no allegation of dishonesty is or has been made against Mr
Castleton and that these proceedings were simply a claim for him to make good a shortfall in
the accounts of the Post Office’s branch at Marine Drive pursuant to his contractual
obligations;
6.2 Mr Castleton sets out that he withdraws his allegations in relation to the Horizon system.
7. Payment to be made within 21 days. The reason for this rather than the 14 days which we understand
that your counsel indicated to our counsel is that our client is in the process of arranging a re-mortgage
and it may be that funds will not be available within the 14 day period.
Quay House © Quay Street © Manchester 43.316 © Tel f
OX 14382 MCR-1 « Email lawi
Pareners 5. Cohen + Horch
KiSponon + § Room + AC « Rj. Mjer« Buss Sh Sucon Aurolates LE Swerng + AB Ovens # Maloy = Pango Consens Lowe i Horwich ( 5
This frm is regulated by the Law Seciety be ned
Also at London GAMARKTIABBEYICASTLETON(01106, EETER TQ. BOND PEARCE,
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‘In relation to the offer set out in your letter of 5 January 2006, we note that it does not strictly speaking
comply with the requirements of Part 36 since it was expressed as a lump sum settlement figure which was
incl’ ~ive of costs. Your client cannot therefore be certain that it will attract the costs consequences of a true
Par. _ offer (although we do recognise that the court has a discretion in this regard and that it can take it into
account).
The above proposal gives your client almost everything that it seeks. We hope that your client will view it as a
constructive attempt to bring these proceedings to a resolution at least further cost, bearing in mind the
proximity of trial and the costs which would necessarily be incurred over the coming weeks if it should
proceed,
We would invite you in light of this proposal to seek to agree with your client’s counsel that the first tranche
of his brief fee be delayed from next Monday to allow settlement discussions to proceed without further
substantial costs accruing.
Yours faithfully
Creel
ROWE COHEN
G:\MARKTBBEYICASTLETONIOI 106 LETTER TO BOND PEARCE
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Ballard House
10 November 2006 Bond Pegrce LLP
West Hée Road
Rowe Cohen a
Solicitors _
DX 14352 ur \ stephen.
MCR-1 ve ‘ f Direct:
\\ vi Our ref:
\ \ '$3D3/NIM1/348035.134
/ Your ref:
Dear Sirs ,
Post Office Limited v Mr L Castleton
yA
We refer to our unanswered fax dated 9 November. /
We enclose by way of service the witness statements’ Jand exhibits (where they have them) of the following
people:
Michael Johnson;
Gillian Hoyland;
Ken Crawley;
Wendy Smith;
Paul Williamson;
Andrew Wise;
Anne Chambers;
Andrew Dunks;
Cath Oglesby;
I. Elizabeth Morgan;
. Davlyn Cumberland;
. Helen Rose;
. Ruth Simpson;
. John Jones;
. Greg Booth (first staternent); and
. Greg Booth (second statement).
ONAN RWNE
onan a aaaead
AURWNEOS
Kindly acknowledge receipt.
The court has asked us fo produce a trial timetable. So that we can do so, please confirm which of our
witness statements yoy require to attend the trial to be cross examined. We anticipate that you will not
require all of the witnésses for examination, not least because 7 of them were not involved at the material
time and their evideyice relates to Post Office procedures. Obviously if we can reduce the number of
witnesses who havé to attend trial to give evidence, then this will save both parties and the court’s time
and costs.
We look forwarg to receiving your reply, together with your witness statements, as agreed, in today’s DX.
f
Yours faithfully
/
f
Bond Pearce LLP
Enclosures
Bond Pearce LLP, 3 Limited Liabilty Partnership. Registered in England and Wales number QC311430
Registered office: 3 Temple Quay Temple Back East Bristol BS1 6DZ. VAT number GB143 0262 07.
Aibtof members of Sond Pearce Is open for Inspection st the registered office, Regulated by the Law Society. www.bondpearce.com
1A_1234505_1
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bord Peace
Telephone attendance
Client: Royal Mail Group PLC Sub Postmaster Litigation
Matter: Mr Lee Castleton Matter no: 348035.134
Attending:
Name: Stephen Dilley Location: N/A Date: 10 November 2006
Start time: Units:
I had a telephone conversation with Richard Morgan. He confirmed he had put her offer to
them. They didn’t sound terribly impressed with this. There were two points arising:
1. What rate of interest did we want on the judgment debt for example would we
accept 1% over base.
2. What payment on account do we want if we get indemnity costs.
I said I would seek instructions from Mandy. Also agreeing with Richard that the Post Office
needed to move down from £186,000 on its costs position. Richard advising me to put our
witness statements in the DX even though they probably wouldn’t send theirs and that once
we had released them we should call them and ask them if they had sent theirs and if they
had not, we should tell them to hold ours to our order and we should consider making an
application. I told Richard I would also be interested to see what their experts report said as
that was due today.
12 minutes
1A_1234535_1
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Scepnen Dilley
From: Stephen Dilley
Sent: 10 November 2006 10:36
To: ‘Richard Morgan’
Subject: Marine Drive on 23 March 2004 P.O -v- Castleton
Dear Richard,
Please see email below from the auditor . Basically, she now believes from reviewing the events log that Marine
Drive didn't open at all on 23 March 2004.
Kind regards, Stephen
nooo Original Messag!
From: helen.rose!__
Sent: 10 November 2006 09:38
To: Stephen Dilley
Subject: Re: P.O -v- Castleton
Steven
Anything under user name ABC123 and Zaud99 would have been by the auditors either myself or Chris. So I
would say the office did not open at all on the 23rd, all transactions on the 23rd were completed between 14:39
and
17:19 and look to be related to completing the account ready for transfer.
I can only think that by 14:39 we had been told that the Postmaster was going to be suspended and from then on
we would access the Horizon. As you can see we would not have touched the Horizon prior to knowing of the
suspension as we would balance the office on our own system. P32. Once we
were told of a suspension and transfer then we would ensure that the Horizon and P32 were correct by removing
any amounts in the suspense account and posting total shortage to late account.
The temp postmaster took over and started serving in the morning of the 24th RSIO01.
Regards
Helen Rose
Security Analyst
Post Office Ltd
. tom GRO i To: <helen.rosei
i cc:
Subject: P.O -v- Castleton
09/11/2006 12:21
Helen,
I've tried sending this again without the product codes attached to see if you receive it.
Kind regards. Stephen
From: Stephen Dilley
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Cc: Tom Reezer
Subject: jitsu product codes.XLS
Importance: High
Dear Helen,
I refer to our telephone conversation yesterday.
I know you don't remember whether the branch opened on 23 March (but doubt it would do), and1 was
wondering whether the event log for that day (pdf copy attached) plus product codes (attached excel
spreadsheet) could assist? It may be that the events recorded were all audit related, but I was wondering if you
could confirm either way.
I look forward to hearing from you as soon as possible.
Kind regards.
Stephen Dilley
Solicitor
for and on behalf of Bond Pearce LLP
www.bondpearce.com
The information in this e-mail and any attachments are confidential and may be legally privileged and protected
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Bond Pearce LLP is a Limited Liability Partnership registered in England and Wales number 0C311430.
Registered Office: 3 Temple Quay, Temple Back East, Bristol, BS1 6DZ.
A list of Members is available from our registered office. Any reference to a Partner in relation to Bond Pearce LLP
means a Member of Bond Pearce LLP.
Bond Pearce LLP is regulated by the Law Society.
>>>> eCopy scanned document.pdf attachment was removed from this email
>>>> <<<<
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Stephen Dilley
From: Richard Morgan
Sent: 10 November 2006 15:10
To: Stephen Dilley
Subject: Slight amendment to para 2 of Schedule
Attachments: Draft Tomlin Order 10th November 2006.doc
INN LONDON WC2A 3SZ maitland
FAX! ILDE 326 CHAMBERS
rmorgarf GRO “Twww.maitlandchambers.com
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10/11/2006
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IN THE HIGH COURT OF JUSTICE Claim No: HQ05X02706
QUEEN’S BENCH DIVISION
Master
day the day of November 2006
BETWEEN:
POST OFFICE LIMITED
Claimant
-and-
LEE CASTLETON
Defendant
DRAFT/
TERMS OF ORDER
BY CONSENT
UPON APPLICATION by the Claimant and the Defendant by agreement in writing
AND UPON the Claimant and the Defendant having agreed to the terms of this Order
BY CONSENT IT IS ORDERED that:
1. The Counterclaim be dismissed.
2. All further proceedings on the Claimant’s claims herein against the Defendant be
stayed upon the terms set out in the attached Schedule signed by the parties,
except for the purpose of enforcing those terms, for which purposes the parties
V
have permission to apply. _y (2 et» A y~
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3. The Defendant do pay to the Claimant its costs to date of and occasioned by the
Claim and the Counterclaim, such costs to be assessed if not agreed:
a. On the standard basis up to and including 26 January 2006; and
db. On the indemnity basis from 26 January 2006 onwards.
4. The Defendant do by 4pm on [DAY AND DATE 21 DAYS LATER] make an
interim payment of £30,000 on account of the Claimant’s costs, such payment to
be without prejudice to the Claimant’s entitlement to apply subsequently for a
further payment on account of its costs.
5. For the purposes of CPR Part 47 these proceedings be treated as concluded and
pursuant to CPR Part 47.1 the Claimant’s costs are to be assessed immediately.
We consent to the making of an We consent to the making of an
Order in the above terms Order in the above terms
Solicitors for the Claimant Solicitors for the Defendant
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Schedule to Tomlin Order in Claim No: HQ05X02706
The Claimant and the Defendant agree the following terms in full and final settlement
of the claims made by the Claimant against the Defendant.
1, The Defendant do by 4pm on [DAY AND DATE 21 DAYS LATER] pay to the
Claimant the sum of £25,858.95.
2. The Defendant do pay interest of [INSERT] on the sum of £25,858.95 from 23
March 2004 until [DAY AND DATE 21 DAYS LATER] and on any outstanding
balance thereafter at the rate of 1% above the base rate of the Bank of England
applicable from time to time during that period.
3. The Claimant do within 14 days of the date of this Order send to the Defendant a
letter in the form attached hereto.
4. The Defendant do within 14 days of the date of this Order send to the Claimant a
letter in the form attached hereto.
5. The Defendant undertakes to the Claimant that he will neither repeat his
allegations about the Horizon system nor make any further allegations about the
Horizon system or its functioning, and in the event that the Defendant breaches
this undertaking he shall both (i) submit to an injunction restraining him from
talking further about the Horizon system and (ii) pay to the Claimant liquidated
damages in the amount of £25,000, being a genuine pre-estimate of (a) the
Claimant’s costs in having to rebut such statements and (b) its loss of goodwill
generally.
Signed. Signed.
Bond Pearce LLP Rowe Cohen
Solicitors for the Claimant Solicitors for the Defendant
Ballard House Quay House
West Hoe Road Quay Street
Plymouth PL1 3AE Manchester M3 3JE
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utephen Dilley
From: Stephen Dilley
Sent: 10 November 2006 16:00
To: ‘mandy.talbot: i
Ce: ‘Richard Morgan’, Tom Beezer
Subject: RE: Castleton's counter offer P.O -v- Castleton URGENT URGENT
Attachments: Draft Tomlin Order 10th November 2006.doc
ay
Draft Tomlin Order
10th Novemb...
Dear Mandy,
Thanks for your email.
1. I don't think Mr Castleton will want quite as plainly to admit owing the P.O money, for the same reason he
doesn't want a judgment being entered against him. We can try to get him to say that if you want, but I doubt he
will. I wonder if we can change it to:
"I, Mr Lee Castleton, the former postmaster at Marine Drive Post Office, Bridlington, fully and unreservedly
withdraw the untrue allegations I have made about the operation of the Horizon system. Previously I thought that
discrepancies that arose at the Marine Drive Post Office whilst I was subpostmaster arose due to a malfunction of
the Horizon system, but I now accept that I was mistaken and that the discrepancies were caused by human
error. I declare that the Horizon system did not cause or contribute to the discrepancies in any way and I formally
withdraw all statements I made to the contrary and undertake not to repeat them, and/or make any further
allegations about the Horizon system and/or its functioning."
2. I attach a draft consent order for your approval. The real question is whether we need the undertaking in
clause 5 of the schedule. Richard thinks that by making a song and dance we highlight a sensitivity and that the
less we talk about it, the less likely it is that Castleton will seek to raise it, because raising the issue in itself calls
into question his reasons for settling. Also,
(i) the loss figure is purely speculative
(ii) we wonder the P.O want to police it in any event; and
(iii) the letter along the above lines would probably discredit Castleton enough if he did give make further
allegations or give evidence in the Bajaj, Bilkhu or any other cases.
I look forward to hearing from you as soon as possible.
Kind regards.
Stephen Dilley
Solicitor
www.bondpearce.com
-Original Messag
From: mandy.talbot”
Sent: 10 November"20U6 14:50
To: Stephen Dilley
Subject: Re: Castleton's counter offer P.O -v- Castleton URGENT URGENT
Stephen
What do you think of the proposed form of wording. Do you think Castleton will accept it?
Regards
Mandy Talbot
Dispute Resolution
POL00081826_018
POL00081826_018
“ompany Secretary's Office
oyal Mail Legal Services
148 Old Street
London EC1V 9HQ
Keith K Baines
To: Mandy Talbot/e/POSTOFFICE@POSTOFFICE
10/11/2006 14:10 cc: Biddy Wyles/e/POSTOFFICE@POSTOFFICE, Clare
Wardle/e/POSTOFFICE@POSTOFFICE, John D
Cole/e/POSTOFFICE@POSTOFFICE, Marie
Cockett/e/POSTOFFICE@POSTOFFICE, Richard W
Barker/e/POSTOFFICE@POSTOFFICE, Rod
Ismay/e/POS CE,
stephen.dilley,
Subject: Re: offer P.O -v-
Castleton URGENT URGENT(Document link: Mandy
Talbot)
Mandy,
I think the draft says all that it needs to.
I have a few minor changes to suggest - revised text as follows:
"I Mr Lee Castleton the former postmaster at Marine Drive Post Office, Bridlington admit that a sum of money
was owed by me to Post Office Ltd as a result of errors which arose whilst I was the postmaster at the above
office. I had thought that this debt arose due to a malfunction of the HORIZON system but I now accept that I
was mistaken and that the debt arose out of human error. I declare that the HORIZON system did not contribute
to the errors in any way and formally withdraw all statements I made to the contrary."
and redlined against your draft...
"I Mr LLee Castleton the former postmaster at Marine Drive Post Office, Bridlington admit that a sum of money
was owed by me to Post Office Ltd as a result of errors which arose whilst I was the postmaster at the above
office. I had thoughthought that this debt arose due to a_ malfunction of the HORIZON system but I knownow
accept that I was mistaken and that the debt arose out of human error. I declare that the HORIZON system did
not contribute to the errors in any way and formally withdraw all statements I made to the contrary."
Regards,
Keith
Keith
Senior Contracts and Service Manager
Post Office Ltd
Operations
2nd Floor, Calthorpe House, 15-20 Phoenix Place, LONDON, WC1X ODA
Mandy Talbot
To: Richard W Barker/e/POSTOFFICE@POSTOFFICE,
10/11/2006 12:40 Keith K Baines/e/POSTOFFICE@POSTOFFICE, Rod
2
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Ismay/e/POSTOFFICE@POSTOFFICE, Marie
Cockett/e/POSTOFFICE@POSTOFFICE, John D
Cole/e/POSTOFFICE@POSTOFFICE
cc: Clare Wardle/e/POSTOFFICE@POSTOFFICE, Biddy
Wyles/e/POSTOFFICE@POSTOFFICE,
stephen.dilley: i
Subject: Castiét “Offer P.O -v- Castleton
URGENT URGENT
You will all be pleased to know that the solicitors acting for Castleton have substantially accepted our counter
proposal. I attach a copy of their letter.
Castleton is not prepared to have judgement entered against him because he claims it would prejudice his future
career prospects and so the claim will be settled by way of a Tomlin Order. This means that if anybody searched
the Court records all they would see is a record that the claim was resolved but the detail of the same is kept
private.
Castleton is prepared to make an open statement that POL can use as it chooses exonerating the HORIZON
system. I now need your assistance over the form of wording that POL would like to see in that statement.
I have prepared a short statement but would be very grateful for any improvements which you can suggest. We
need to have a settled form of words to go back to Castleton's solicitors as soon as possible. This settlement is
still without prejudice and does not formally conclude the action until it is signed so we must endeavour to get it
signed as soon as possible.
"I Mr L Castleton the former postmaster at Marine Drive Post Office admit that a sum of money was owed by me
to Post Office Ltd as a result of errors which arose whilst I was the postmaster at the above office. I had though
that this debt arose due to a malfunction of the HORIZON system but I know accept that I was mistaken and that
the debt arose out of human error. I declare that the HORIZON system did not contribute to the errors in any way
and formally withdraw all statements I made to the contrary."
Mandy Talbot
Dispute Resolution
Company Secretary's Office
Royal Mail Legal Services
148 Old Street
London EC1V 9HQ
>>>> ATTNSGSZ attachment was removed from this email <<<<
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Ref: SJD3/348035.134 Ref: MDT.113969
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Cc 05X02706
IN THE HIGH COURT OF JUSTICE
Ql BENCH ON
Master
day the day of November 2006
BETWEEN:
POST OFFICE LIMITED
Claimant
-and-
LEE CASTLETON
Defendant
DRAFT/
TERMS OF ORDER
BY CONSENT
Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PL1 3AE
Ref: SJD3/348035.134
Solicitors for the Claimant
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Page 1 of 1
Stephen Dilley
From: Richard Morgan [rmorgan’
Sent: 10 November 2006 15:08
To: Stephen Dilley
Subject: Draft Tomlin Order
Attachments: Draft Tomlin Order 10th November 2006.doc
7 STONE BUILDINGS LINCOLN'S INN LONDON_WC2A 3SZ maitland
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Stephen,
Please find attached my suggested revisions to the draft Terms of Order, for review. I have drafted a bit more
into clause 5 of the schedule in order to give it some teeth, but only by way of example, and I wonder whether
it is really necessary or appropriate? I say this because (i) the loss figure is purely speculative and (ii) I doubt
whether we want to police it in any event. Further, by making a song and dance we highlight a sensitivity.
The reality I suspect is that the less we talk about it, the less likely it is that Castleton will seek to raise it, since
raising the issue in itself calls into question his reasons for settling.
In the circumstances I would suggest that the whole of clause 5 of the schedule is omitted.
All the best,
Richard
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10/11/2006
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IN THE HIGH COURT OF JUSTICE Claim No: HQ05X02706
QUEEN’S BENCH DIVISION
Master
day the day of November 2006
BETWEEN:
POST OFFICE LIMITED
Claimant
-and-
LEE CASTLETON
Defendant
DRAFT/
TERMS OF ORDER
BY CONSENT
UPON APPLICATION by the Claimant and the Defendant by agreement in writing
AND UPON the Claimant and the Defendant having agreed to the terms of this Order
BY CONSENT IT IS ORDERED that:
1. The Counterclaim be dismissed.
2. All further proceedings on the Claimant’s claims herein against the Defendant be
stayed upon the terms set out in the attached Schedule signed by the parties,
except for the purpose of enforcing those terms, for which purposes the parties
have permission to apply.
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3. The Defendant do pay the Claimant’s costs to date of and occasioned by the Claim
and the Counterclaim, such costs to be assessed if not agreed:
a. On the standard basis up to and including 26 January 2006; and
b. On the indemnity basis from 26 January 2006 onwards.
4. The Defendant do by 4pm on [DAY AND DATE 21 DAYS LATER] make an
interim payment of £30,000 on account of the Claimant’s costs, such payment to
be without prejudice to the Claimant’s entitlement to apply subsequently for a
further payment on account of its costs.
5. For the purposes of CPR Part 47 these proceedings be treated as concluded and
pursuant to CPR Part 47.1 the Claimant’s costs are to be assessed immediately.
We consent to the making of an We consent to the making of an
Order in the above terms Order in the above terms
Solicitors for the Claimant Solicitors for the Defendant
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Schedule to Tomlin Order in Claim No: HQ05X02706
The Claimant and the Defendant agree the following terms in full and final settlement
of the claims made by the Claimant against the Defendant.
1. The Defendant do by 4pm on [DAY AND DATE 21 DAYS LATER] pay to the
Claimant the sum of £25,858.95.
2. The Defendant do pay interest on the sum of £25,858.95 from 23 March 2004
until the date of payment at the rate of 1% above the base rate of the Bank of
England applicable from time to time during that period.
3. The Claimant do within 14 days of the date of this Order send to the Defendant a
letter in the form attached hereto.
4. The Defendant do within 14 days of the date of this Order send to the Claimant a
letter in the form attached hereto.
5. The Defendant undertakes to the Claimant that he will neither repeat his
allegations about the Horizon system nor make any further allegations about the
Horizon system or its functioning,,and in the event that the Defendant breaches
this undertaking he shall both (i) submit to an injunction restraining him from
talking further about the Horizon system and (ii) pay to the Claimant liquidated
damages in the amount of £25,000, being a genuine pre-estimate of (a) the
Claimant’s costs in having to rebut such statements and (b) its loss of goodwill
generally.
Signed... Signed.
Bond Pearce LLP Rowe Cohen
Solicitors for the Claimant Solicitors for the Defendant
Ballard House Quay House
West Hoe Road Quay Street
Plymouth PL1 3AE Manchester M3 3JE
Ref: SJD3/348035.134 Ref: MDT.113969
POL00081826_018
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Claim No: HQ05X02706
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
Master
day the day of November 2006
BETWEEN:
POST OFFICE LIMITED
Claimant
-and-
LEE CASTLETON
Defendant
DRAFT/
TERMS OF ORDER
BY CONSENT
Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PL1 3AE
Ref: SJD3/348035.134
Solicitors for the Claimant
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Page 1 of 1
Stephen Dilley
From: Stephen Dilley
Sent: 10 November 2006 12:55
To: ‘Richard Morgan’
Ce: Tom Beezer
Subject: Draft tomlin order
Attachments: DOC_1234609.DOC
Dear Richard,
Here's a draft for you to review. Once approved, I'll send to Mandy for approval.
Kind regards.
Stephen Dilley
Solicitor
for and_on behalf of Bond Pearce LLP
10/11/2006
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IN THE HIGH COURT OF JUSTICE Claim Number: HQ05X02706
QUEEN’S BENCH DIVISION
BETWEEN:
POST OFFICE LIMITED
Claimant/Part 20 Defendant
-and-
LEE CASTLETON
Defendant/Part 20 Claimant
ORDER
UPON the parties having agreed terms of settlement
BY CONSENT
IT IS ORDERED THAT:-
1. All further proceedings herein be stayed upon the terms set out below and in Schedule 1 hereto
save for the purposes of enforcement or carrying into effect the said terms, with liberty to apply
for that purpose.
2. The Counterclaim be dismissed.
3. The Defendant do pay the Claimant's costs of the Claim and Counterclaim to be assessed, it not
agreed:
(a) on the standard basis up to and including 26 January 2006; and
(b) on the indemnity basis from 26 January 2006 onwards.
4. The Defendant do make an interim payment of £30,000 on account of the Claimant’s costs, such
payment to be made in full and without set off within 21 days of the date of this Order.
5. The costs assessment referred to in paragraph 3 above do take place immediately.
6. The Claimant to have liberty to apply for an additional interim payment on accounts of costs, if so
advised.
7. The trial listed to commence on 4 December 2006 be vacated.
Dated the day of November 2006
41A_1234609_4
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SCHEDULE 1
1. The Defendant do pay the Claimant the sum of £25,858.95 in full and final settlement of the Claim.
2. The Defendant do pay interest on the sum of £25,858.95 from 23 March 2004 until the date of
payment at the rate of 1% above the base rate of the Bank of England applicable from time to time
during that period.
3. The Claimant do within 14 days of the date of this Order send to the Defendant a letter in the form
attached hereto setting out that it neither makes nor has made out any allegation of dishonesty
against the Defendant.
4, The Defendant do within 14 days of the date of this Order send to the Claimant a letter in the form
attached hereto confirming that he fully and unreservedly withdraws any and all allegations in relation
to the Horizon system. The Defendant also undertakes to the Claimant and the Court that he will not
repeat his allegations about the Horizon system and/or make any further allegations about the
Horizon system.
5. Payment of the sums referred to in paragraphs 1 and 2 of this Schedule be made by the Defendant to
the Claimant in full and without set off within 21 days of the date of this Order.
Signed...
Rowe Cohen
Solicitors for the Claimant/ Solicitors for the Defendant/Part 20
Part 20 Defendant Claimant
Ballard House Quay House
West Hoe Road Quay Street
Plymouth PL1 3AE Manchester M3 3JE
Ref: SJD3/348035.134 Ref: MDT.113969
1A_1234609_1
1A_1234609_1
POL00081826_018
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Claim Number: HQO05X02706
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
BETWEEN:
POST OFFICE LIMITED
Claimant/Part 20 Defendant
-and-
LEE CASTLETON
Defendant/Part 20 Claimant
ORDER
Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PL1 3AE
Ref: SJD3/348035.134
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Page 1 of 2
Stephen Dilley
From: Stephen Dilley
Sent: 10 November 2006 10:23
To: ‘mandy.talbot
Ce: Tom Beezer
Subject: P.O's counterproposal to Mr Castleton
Attachments: LFORM_1153255.PDF
Dear Mandy,
Just to confirm Richard has put our without prejudice counter offer to Mr Castleton's barrister
ie:
1. Judgment against Mr Castleton for full amount of claim of £25,858.95 plus interest;
2. Payment of costs £186,000, or our costs to be assessed on an indemnity basis with a
substantial up front payment on account of an amount to be agreed.
3. Castleton resolves rent position directly with Dorothy Day (current subpostmistress);
4. P.O don't employ assistants in the P.O branches, so payment of Christine Train's is for Mr
Castleton and Dorothy Day to resolve i.e P.O is not going to get involved;
5. P.O to prepare letter in wording to be agreed that it doesn't allege dishonesty vs Mr
Castleton;
6. Castleton to prepare letter/statement in wording to be agreed that he withdraws all
allegations about Horizon; and
7. Payment of above sums within 14 days.
They are taking instructions but apparently didn't sound too impressed. I think costs may be a
sticking point at the moment. I anticipate the P.O's view is that the most important thing is to
get judgment for the full amount (to send out a clear message) and to negotiate the best
possible costs recovery in the circumstances in the knowledge however, that
(i) If we go to trial and win, a costs capping order may be made and costs reduced significantly
on assessment; and
(ii) (more significantly) in any event Castleton may not have sufficient funds to pay any costs
award made against him.
However, as I explained to Richard, we told them what the costs would be months ago, so they
shouldn't be surprised. Also, they turned down our ADR offer and could have saved costs by
settling earlier, so they've only got themselves to blame. Just a few points for you to consider:
(a) What rate of interest would the P.O want on the judgment debt - would the P.O be prepared
to accept 1% over base?
(b) If Castleton agrees to pay indemnity costs to be assessed, what payment on account would
the P.O seek pending the assessment? Should we say £100,000?
(c) On 17 January 2006, Rowe Cohen rejected the P.O's CPR Part 36 offer to accept payment of
£24,750 in full and final settlement of the claim and counterclaim, including interest and
costs. However as you know the Court rules allow Mr Castleton to accept that Part 36 offer now
provided either he agrees costs with us, or he gets the Court's permission (in which case the
Court would make an order as to costs). If Mr Castleton decides to do this, the P.O would at
least get more in relation to the claim than £22,350 (his opening offer). In that event, I would
also expect the Court to order Mr Castleton to pay the P.O's costs from around 17 January
onwards, to be assessed if not agreed. There would be argument whether this would be on the
standard or indemnity basis. Mr Castleton's lawyers have not raised this possibility (it may not
yet have occurred to them), but we should just be aware of it.
10/11/2006
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Page 2 of 2
(d) The difference between Castleton's proposal to pay £22,350 and the full amount of the
claim is just over £3,500. From now to trial, on a rough estimate I can see the P.O easily
incurring further costs of approximately £130,000 (Bond Pearce, expert and Counsel). Even if
the P.O wins and is awarded costs without a capping order, its costs would be assessed and on
assessment the P.O may be awarded 60% to 70% of its costs. This could mean that the
irrecoverable element of just those costs that are incurred between now and the end of
trial could easily be around £40,000. This would more than cancel out any "gain" of the extra
£3,500 the P.O might make if it gets judgment. Of course, balanced against this is that there
would be a significant commercial advantage to the P.O to having a reasoned judgment in its
favour: it would send out a clear message to other subpostmasters.
(e) Richard gets the impression (and it is only that) that Castleton will personally have to fund
any settlement. Accordingly, whether settlement is reached may well depend on what funds
Castleton can raise. Just a reminder about the asset check we previously did (copy attached)
showed that Mr and Mrs Castleton jointly own 14 South Marine Drive Bridlington and that they
purchased it for £218,000, in October 2003 with a Royal Bank of Scotland mortgage. Mr and
Mrs Castleton also own a motor vehicle, but the make and model are unknown. Given that Mr
and Mrs Castleton purchased the property with the assistance of a mortgage 2 and a half years
ago, there may not be a great deal of equity, but we do not have sufficient information to
determine this. If you want, I can have our agent make enquiries to as to how much the
building at Marine Drive would currently be worth, as it may have increased in value from
£218,000. In my experience, you only tend to get a rough figure from these sorts of enquiries,
but it might be helpful to have an indication because it would show the approximate minimum
equity and thus, what Castleton might at a minimum be able to afford to pay the P.O.
I will update you when we get Mr Castleton's response to the counter offer.
Kind regards.
Stephen Dilley
Solicitor
10/11/2006
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Memo
If you have any questions concerning this
memo please telephone the number below
To: SJD3 From: Helen Milne
Direct:I GRO I Date: 10 November 2006
Notification of payment memo
£273.60 from Rowe Cohen in respect of the following:
Bill Numbers(s):1019962 File Number: 348035.134
Office receipt chit has been raised by Credit Control. Payer has not been given a receipt.
Not yet paid disbursements to be addressed: Yes [] No
Helen Milne
Credit Control Assistant
4A,1172353.4
POL00081826_018
POL00081826_018
Date: 8 November 2006
Your ref: SJID3/FAC1/348035.134
Our ref: MDT.113969
lease ask for:
Direct dial:
Direct fax :
E-mail:
ROWE COHEN
SOLicirons
Bond Pearce
Solicitors
DX 8251
PLYMOUTH
Dear Sirs y
Post Office Limited —v- Mr L Castleton
With apologies for the delay in settlement, we enclose a cheque in respect of your photocopying invoice.
Yours faithfully
Ce GL
ROWE COHEN
Enc
Quay House © Quay Street © Manchester M3 3JE © Tel {”
DX 14352 MCR-I # Email law Website werw.rowecchen.com
Partners: S.E.Cohen # DJ. Horwich + IN: Lewis » FLV Hymanson + G2 Small « A Dennison + BT.Coghlan « JV.Dwok » A Farley # A Sacks # A Taylor « M.C. Woodall C )
ed!
Ry. Sprostan S.Room # A.Curwen * RJ. Myer * H. Burns # SPSutton Associates: LF Swerling + A.D. Owens + M, Molloy * PSampson Consultants: I, Rowe * MT: Horwich
This fr i eguloted by the Low Society
Also at London G\MARKT\ABBEY\CASTLETONOS!1pGLET EERE AOR PEARCE
Statement Bord, force
To: 30/09/06
Date: 13 October 2006
Our ref: Credit Control 361311
Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PL1 3AE
POL00081826_018
POL00081826_018
bund frarce
Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PL1 3AE
Rowe Cohen
Quay House fax: 1_____ GR
Quay Street DX 8251 Plymouth
Manchester
M3 3€ . creditcontrol@bondpearce.com Remittance
Date: 13 October 2006
Our ref: Credit Control
361311
Invoice date Invoice No Our Ref Your Ref Description Total (£) Invoice no Total (£)
27/06/06 1019962 348035.00134 Mr Lee Castleton 272.60 1019962 272.60
Total £272.60 Total 272.60
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Telephone attendance
Client: Royal Mail Group PLC Sub Postmaster Litigation
Matter: Mr Lee Castleton Matter no: 348035.134
Attending:
Name: Stephen Dilley Location: N/A Date: 10 November 2006
Start time: Units:
I had a telephone conversation with Richard Morgan and Mandy Talbot in relation to a fax
received from Rowe Cohen solicitors this afternoon with their counter proposal. All of us
agreeing that it was a really good result for the Post Office. Basically the real question is
whether we should go back on trying to increase the initial payment of account and Mandy
thinks not, that we should stick with £30,000. The other substantial point is as far as the
Post Office are concerned, the Tomlin Order point and Mandy is willing to agree to that and
Richard pointed out that the other side hadn‘t agreed to a confidentiality clause in it.
Agreeing with Mandy that we will draw up a Tomlin Order for her approval and that I will
stand down BDO Stoy Hayward from doing any further work. Richard suggesting that Mandy
prepares the wording of the letter to come from Castleton stating that he makes no
allegations about Horizon.
Time engaged: 24 minutes.
Thereafter I had a telephone conversation with Mark Turner of Rowe Cohen solicitors. I
explained that the telephone conversation was on a without prejudice basis and that the
discussions between counsel had so far also been on that basis as opposed to a without
prejudice save as to costs basis.
I stated that the Post Office was going to focus on settlement at the moment rather than the
trial. I said that any settlement would not be binding until agreed and recorded in a signed
Consent Order. He agreed. I said that the cost points in the Consent Order needed to be
dealt with in the man bit rather than in the schedule to the Order. He agreed.
I said that our counsel’s briefing would not be incurred on Monday strictly provided that a
final settlement is agreed within the next few days, but that counsel was going to be
charging on an hourly rate for all the work done so far.
I also said that we are ready to exchange Witness Statements but given that we are now
focusing on settlement, and did not propose to send them in the DX.
He was relieved that the briefing would not be deemed incurred on Monday. I said that in
principle we had the making of a settlement agreement. What I would do is prepare a
Tomlin Order and send it to my client for approval this afternoon and then send it to him. He
asked me to copy in his counsel as well and explained that he would be away from the office
on Monday.
Time engaged: 12 minutes.
4A_1234905_1
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I had a telephone conversation with Jeff Porter at BDO Stoy Hayward. Asking him not to do
any further work for the moment. Explaining that a settlement was being reached in
principle and was not finalised yet, but that we were working towards settling rather than
trial. I said that I thought the terms would be finalised in the middle of next week at which
point I would ask him to raise an invoice and submit it, but that it would need to fully explain
what they had been doing and how their time was broken down because this would need to
be dependable on a cost assessment. I also thanked him for his work.
Time engaged: 12 minutes.
I had a telephone conversation with Richard at 4.15pm in relation to the wording of the
Order he had e-mailed through to me as amended, especially paragraph 2 - did we want to
say we had liberty to enter judgement and he agreed with me that we probably didn’t for the
same reason that Mr Castleton wouldn’t consent to having judgement entered against him.
He also thinks that we should remove paragraph 5 of the schedule that he had added on.
Time engaged: 12 minutes.
1A_1234905_1
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Stephen Dilley
From: Stephen Dilley
Sent: 10 November 2006 11:42
To:
Ce: ‘Richard Morgan’; Tom Beezer; Thomas Bourne
Subject: Castleton's counter offer P.O -v- Castleton
Attachments: eCopy scanned document.pdf
Dear Mandy,
I refer to my earlier email.
I attach Mr Castleton's counter offer and am pleased to confirm this is more or less a total
collapse on their side. I will call you to discuss shortly. Just a few points really:
1. Castleton to pay debt of £25,858.95 in full plus interest at 1% above base for applicable
period
2. Castleton to pay costs on standard basis up to 26 January 2006 (21 days after the P.O's CPR
part 36 offer) and indemnity basis after that date.
3. They want a Tomlin Order rather than a judgment (which means the settlement terms are
more confidential. This is so that Castleton can re-enter the financial services sector). Given
that Castleton is to withdraw his allegations vs Horizon, you might not consider that this is a
sticking point, but we should discuss the implications.
4. He's offered costs to make initial payment on account of costs of £30,000. I think we should
go back with say £80,000 but settle at £50,000 for the initial payment.
5. It would still be neater and quicker to try to agree costs rather than get them assessed and I
think we should invite Castleton to make an offer on this, but this should not be a sticking
point.
I will contact you shortly.
Kind regards.
Stephen Dilley
Solicitor
for and.on behalt-of Bond Pearce LLP
Main office_ohone.
Fax: +i GRO
10/11/2006
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1O-NOV-2085 11:09 FROM ROWE COHEN SOLICITORS P1703
QUAY HOUSE, QUAY STREET, MANCHESTER, M2 3JE (DX 14352 MCR-1)
Telephone No: : GRO
Fax Nov :
ROWE COHEN
SOLICITORS
Fax
From: — Mark Tumer
To: ‘Stephen Dilley - Bond Pearce
Fax: [GRO Pages:
Phone: Date: 10/11/06
Re: The Post Office -v- Lee Castleton cc:
OC Urgent O For Review O Please Comment O Please Reply 0 Please Recycie
1@-NOV-2085 11:85 LITIGATION ” 38% P.QL
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1O-NOV-2885 11:89 FROM ROWE COHEN SOLICITORS
P8283
Date: 10 November 2006
Your ref: SJD3/FAC1/348035.134
Our ref: MDT.113969
Please ask for: = Mark Turner __
direct dial: G R (e) i
WE COHE.
SOLICITORS
Direct fax :
E-mail:
Bond Pearce
Solicitors
DX 8251
PLYMOUTH
Without prejudice except as to costs
Dear Sirs
Post Office Limited —v- Mr L Castieton
We refer to our conversation yesterday. We have now received via our counsel your client’s response to the
offer made by counsel to your counsel on 8 November.
Our client would be prepared to settle this claim on the following terms:
it The tenns of settlement are embodied in a Tomlin Order rather than a judgment, given that a judgment
may well impact on our client's ability to re-enter the financial services sector in due course. An
obligation to pay set out in the Schedule to the Order would be readily convertible into a judgment by
your client pursuant to the liberty to apply as to implementation provision, if required.
2. The Defendant will pay the amount of the claim, £25,858.95, in full.
3. Interest will be payable from 23 March 2004 to date and continuing to pay at 1% above base rate
applicable during the period (or such other rate over base rate at which your client is able to borrow).
4 The Defendant will pay the Claimant's costs to be assessed if not agreed (except as otherwise ordered):
4.1 on the standard basis to 26 January 2006 (i.e. to 21 days after the date of your client's
purported Part 36 offer letter); and
42 on the indemnity basis from 26 January 2006 onwards
5 The Defendant will make a payment on account of costs of £30,000.
6. There be an exchange of letters as previously discussed, viz:
61 The Post Office sets out that there no allegation of dishonesty is or has been made against Mr
Castleton and that these proceedings were simply a claim for him to make good a shortfall in
the accounts of the Post Office’s branch at Marine Drive pursuant to his contractual
obligations;
6.2 Mr Castleton sets out that he withdraws his allegations in relation to the Horizon system.
7. Payment to be made within 21 days. The reason for this rather than the 14 days which we understand
that your counsel indicated to our counsel is that our client is in the process of arranging a re-mortgage
and it may be that funds will not be available within the 14 day period.
Quay House + Quay Street # Manchester M2 3)E » Tel
OX 14352 MCR-I © Email land = Website www.rowecohencom
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10-NOU-2886° 11:a5 LITIGATION » eo te
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1@-NOV-2886 11:89 FROM ROWE COHEN SOLICITORS To fF
GRO) P.83-a3
In relation to the offer set out in your letter of 5 January 2006, we note that it does not strictly speaking
comply with the requirements of Part 36 since it was expressed as a lump sum settlement figure which was
inclusive of costs. Your client cannot therefore be certain that it will attract the costs consequences of a tue
Part 36 offer (although we do recognise that the court has a discretion in this regard and that it can take it into
account).
The above proposal gives your client almost everything that it seeks. We hope that your client will view it as a
constructive attempt to bring these proceedings to a resolution at least further cost, bearing in mind the
proximity of trial and the costs which would necessarily be incurred over the coming weeks if it should
proceed,
We would invite you in light of this proposal to seek to agree with your client’s counsel that the first tranche
of his brief fee be delayed from next Monday to allow settlement discussions to proceed without further
substantial costs accruing.
Yours faithfully
ROWE COHEN
(Q\SARSTUBBEVICASTLBTON01105 LATTER TO BOND PEARCE
18-NOU-2086 11:95 TOTAL P.@3
LITIGATION * 38% P.83
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Page 1 of 2
Stephen Dilley
From: Stephen Dilley
Sent:
To:
Ce: ‘alexander.goold =» = «sGRO }
Subject: Post Office Limited -v- Lee Castleton
Attachments: DOC_1234788.DOC
Without prejudice
Dear Mr Turner,
I refer to our telephone conversation this afternoon.
1. I attach a draft consent order for your approval.
2. The wording of the letter from Mr Castleton to the Post Office referred to in paragraph 4 of
the Tomlin Order shall read:
"I, Mr Lee Castleton, the former subpostmaster at Marine Drive Post Office, Bridlington, fully
and unreservedly withdraw the untrue allegations I have made about the operation of the
Horizon system. Previously I thought that losses that arose at the Marine Drive Post Office
whilst I was subpostmaster arose due to a malfunction of the Horizon system, but I now accept
that I was mistaken and that the losses were caused by human error. I declare that the Horizon
system did not cause or contribute to the losses in any way and I formally withdraw all
statements I made to the contrary and undertake not to repeat them, and/or make any further
allegations about the Horizon system and/or its functioning."
3. I suggest you provide us with a draft form of wording for us to consider for the letter Mr
Castleton seeks about no dishonesty allegation being made (as per para 3 of the Schedule to
the Order)
4. As discussed:
(a) any settlement is not finalised until agreed in writing in the form of a signed order;
(b) Our Counsel's deemed brief fee will not be incurred on Monday, strictly provided that a final
settlement order is agreed within the next few days. However, we have previously agreed with
Counsel that if settlement occurs before that time, Counsel will be paid on an hourly basis for
preparatory work done so far and any further work. Therefore, it is preferable from a costs
point of view if an order is finalised sooner rather than later; and
(c) We are ready, willing and able to exchange witness statements but given the parties are
now focusing on settlement, do not propose to send them to you today.
I look forward to hearing from you as soon as possible.
Stephen Dilley
Solicitor
10/11/2006
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Page 2 of 2
www.bondpearce.com
10/11/2006
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IN THE HIGH COURT OF JUSTICE Claim No: HQO5X02706
QUEEN'S BENCH DIVISION
Master
the day of November 2006
BETWEEN:
POST OFFICE LIMITED
Claimant/Part 20 Defendant
-and-
LEE CASTLETON
Defendant/Part 20 Claimant
DRAFT/
TERMS OF ORDER
BY CONSENT
UPON APPLICATION by the Claimant and the Defendant by agreement in writing
AND UPON the Claimant and the Defendant having agreed to the terms of this Order
BY CONSENT IT IS ORDERED that:
1. The Counterclaim be dismissed.
2. All further proceedings on the Claimant’s claims herein against the Defendant be
stayed upon the terms set out in the attached Schedule signed by the parties, except
for the purpose of enforcing those terms, for which purposes the parties have
permission to apply.
3. The Defendant do pay to the Claimant its costs to date of and occasioned by the Claim
and the Counterclaim, such costs to be assessed if not agreed:
a. On the standard basis up to and including 26 January 2006; and
b. On the indemnity basis from 26 January 2006 onwards.
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4. The Defendant do by 4pm on [DAY AND DATE 21 DAYS LATER] make an interim
payment of £30,000 on account of the Claimant’s costs, such payment to be without
prejudice to the Claimant’s entitlement to apply subsequently for a further payment on
account of its costs.
5. For the purposes of CPR Part 47 these proceedings be treated as concluded and
pursuant to CPR Part 47.1 the Claimant’s costs are to be assessed immediately.
We consent to the making of an We consent to the making of an
Order in the above terms Order in the above terms
Solicitors for the Claimant/ Solicitors for the Defendant/
Part 20 Defendant Part 20 Claimant
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Schedule to Tomlin Order in Claim No: HQO5X02706
The Claimant and the Defendant agree the following terms in full and final settlement of
the claims made by the Claimant against the Defendant.
1. The Defendant do by 4pm on [DAY AND DATE 21 DAYS LATER] pay to the Claimant the
sum of £25,858.95.
2. The Defendant do pay interest of [INSERT] on the sum of £25,858.95 from 23 March
2004 until [DAY AND DATE 21 DAYS LATER] and on any outstanding balance thereafter
at the rate of 1% above the base rate of the Bank of England applicable from time to
time during that period.
3. The Claimant do within 14 days of the date of this Order send to the Defendant a letter
in the form attached hereto.
4. The Defendant do within 14 days of the date of this Order send to the Claimant a letter
in the form attached hereto.
5. The Defendant undertakes to the Claimant that he will neither repeat his allegations
about the Horizon system nor make any further allegations about the Horizon system
or its functioning.
Signed... soe Signed...
Bond Pearce LLP Rowe Cohen
Solicitors for the Claimant/ Solicitors for the Defendant/
Part 20 Defendant Part 20 Claimant
Ballard House Quay House
West Hoe Road Quay Street
Plymouth PL1 3AE Manchester M3 3JE
Ref: SJD3/348035.134 Ref: MDT.113969
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Claim No: 105X02706
TH col FJ CE
UEEN’S BEN’ DIVI:
Master
daythe day of November 2006
BETWEEN:
POST OFFICE LIMITED
Claimant/Part 20 Defendant
-and-
LEE CASTLETON
Defendant/Part 20 Claimant
DRAFT/
TERMS OF ORDER
BY CONSENT
Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PL1 3AE
Ref: SJD3/348035.134
Solicitors for the Claimant/Part 20
Defendant
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Telephone attendance
Client: Royal Mail Group PLC Sub Postmaster Litigation
Matter: Mr Lee Castleton Matter no: 348035.134
Attending:
Name: Stephen Dilley Location: N/A Date: 10 November 2006
Start time: Units:
I had a telephone conversation with Mandy Talbot in relation to the draft Order that I had e-
mailed to her. Basically agreeing that in paragraph 5 of the schedule, we would delete the
words after the word functionality. Also agreeing with her that in relation to the e-mail that I
had sent to her about the wording of the letter from Mr Castleton, we would substituted the
word “losses” for the word “discrepancies”. Discussing with her the problems of enforcing
any Order at paragraph 5 that Richard had put in and the possible risk of going over the top
ie flagging it up as an issue for Castleton, Mandy agreeing.
Time engaged: 12 minutes.
4A_1235006_1
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Stephen Dilley
From: Stephen Dilley
Sent: 10 November 2006 14:36
To: Simon Richardson
Ce: Stephen Lister; Tom Beezer; Gareth Kagan; Andrew Tobey
Subject: Result - P.O -v- Castleton
Attachments: eCopy scanned document.pdf
Dear Simon,
By way of update I am pleased to confirm that Mr Castleton's case has collapsed 3 weeks
before trial. Under pressure from us, they have made a revised offer (copy attached) which is
in principle (subject to some tweaking) acceptable to the P.O. This is an excellent outcome for
the P.O because the deal is:
1. Castleton to pay debt of £25,858.95 in full plus interest at 1% above base for applicable
period;
2. Castleton to pay costs on standard basis up to 26 January 2006 (21 days after the P.O's CPR
part 36 offer) and indemnity basis after that date, with an initial on account payment of £30k.
This is a major win as the costs are considerable.
3. Castleton to withdraw all allegations about Horizon (letter to be agreed).
Mandy is delighted. I understand she's in Soton on Monday, so timing is great.
Kind regards.
Stephen Dilley
Solicitor
for and.on.behalf.of Bond Pearce LLP
DDI
10/11/2006
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Stephen Dilley
From: Stephen Dilley
Sent: 10 November 2006 13:04
To:
Ce:
Subject: P.O -v- Castleton
Dear Geoff,
I refer to my earlier voice mail message.
It appears as though we have the makings of an excellent settlement, in principle, with Mr
Castleton's solicitors. It is not signed up yet, but we anticipate that it will be within the next
few days. Please can I therefore ask BDO to cease all work on the matter for the time being.
Please could you also give me a Call to discuss? Assuming the settlement is formalised, I'd like
BDO to raise a bill for all work to date, but as the P.O's costs will be assessed, the bill will need
to include a full narrative and time breakdown so that we can defend it on an assessment.
Finally, please can I thank you and your team for all the work you have put into this, at short
notice. It is very much appreciated.
Kind regards.
Stephen Dilley
Solicitor
10/11/2006