POST OFFICE LIMITED
ADVICE
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POL00090437
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POST OFFICE LIMITED
ADVICE
Follow!
s judgment in Post Office ~v- Casticton 1 have been asked to
provide a short written advice on the key points that have emerged from my
involvement in the case as a whole and that judgment in particular. [ should
emphasise that this Advice has been written as 2 short preliminary overview and
should not be relied upon as providing a final and definitive consideration of all steps
that should be taken in order to ensure that the Post Office derives maximum
advantage from the judgment.
The first point is that it is easier to sue a sub-postmaster on an account produced by
hirn than try to prove that a I such a
has arisen in the business. Trying to prov
loss, if it is possible at all, is extremely difficult forensically and v
inevitably be
expensive and time-consuming.
The second point is that the Post Office derives a significant advantage in litigation if
the sub-postmaster bears the burden of proof to show that the account sued on by the
uther than the Post Office
Post Office, such as the Cash Account (Final), is wrong.
having to prove that the account sued on is right.
This reversal of the burden of proof can only occur if the Post Office is sui
sub-postmaster’s own account, ic. on a formal account produced by the sub-
postma:
rand tendered by him to the Post Office as his confirmed statement of the
ing that has occurred.
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As such. a Cash Account inal) (or any other account produced sub-postmaster}
tis @) produced by
2 fina
is only likely te be treated a count for 1 period
the sub-postmaster Gi} at least in circumsiances xd to
vontractuaily
produce and verify the figures as accurate. but preferably where he formally certifies
the
es as such, and (iii) where the sub-postmasier physically signs off the
accounts as such, alternatively signs electronically.
‘The third and final point is that if and when it is decided that a sub-postmaster is to be
suspended or removed from post, he should be required, in accordance with the terms.
whether
of his contract, to prod ma final aecount io the date of his remove
or not the Post Offic The purpose of requiring this is
S
simply to rely on the reversal of the burden of proof and remove the neces: though
not the desirability) of having to call the auditors to prove the loss.
I trust that this short Advice provides sufficient overview for present purposes, but J
should be happy to provide such further assistance as may be required.
RICHARD MORGAN
Maitland Chambers,
7 Stone Buildings.
Lincoin’s
London WO2A 3
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Neutral Citation Nuntber: EWHC 5 (OB)
IN THE HIGH COURT OF JUSTICE
Before :
HIS HONOUR JUDGE RICHARD HAVERY Q.C.
Between :
Past Office Limited Claimant
~and -
Lee Castleton Defendant
6; 11" January 2007.
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall
Judgment and that copies of this version as handed down may be treated
taken of this
futher
HIS HONOUR JUDGE RICHARD HAV
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RICHARD HAVERY 0.0.
IIS HONOUR SUC
ho on an accorant stated by one of 9
the defer
statement of the accou
Sac
at he was
fant Mr vastleton admits th
y, is admitted, Accor
ng. On that poir
, 729, Bayley
oney, and bo
is quite ch
incipal i
renders an account fron: time to time which contains a statement th:
i statement was
snicate to bim whether the mor
t the money is
made
he is bouad by that
tentionally and t i
say that the money had not been receive
reimbutsement in respect of chose sums for.
hevw that,
4, and never will be received, 2
ich he had ly given cx
And in Camille Ti serving Works (1925) 38 'P.
134, 143 Viscount Cave, mn
eve to be uncontrov
ik, Steamshiy Co
following remarks, wl
than one meaning. [f sornetimes means a
be co
of court; and whilst it is
arden.
own to have
e expression “account stated”....ias more
mm fo payment made by one party and admitted by the othe
stated in th ore than an admission of a debt out
no-doubt.cogent-exidence.against.the admitting party, and throws upon him. the by
ssion, be I
of proving that the is not due, it may, like any other admi
been made in extor.
2. ‘The accounts in this case are weekly acconats entitled Cas
Castleton as correct, of a post office at 14, South Marine Driv
he was appointed subp
ostmmaster in
Post Office, accounts of the transactions at the post office (which has be
Drive”) were prepared weeldy for the periods from “T day ta the following Wedn
accounts in question were accounts for weeks 42 to 51 of the year 2003/2004, whi
the weeks ending day ty 2004 to Wednesday 17" Mal
punt (inal) f
(22,963.34. In consequence Marine Drive was clased all day on 23 March 2004 for
the purpose of an audit, That audit showed a shortage of £25,758.75. Mr. Castleton was
‘om his duties on that day. An additional sam of £100.20 is claimed in x
National Lottery moneys. ‘The total claim is for the sum of th oO atnounts, viz.
The burden of proof on Mr, Castleton catt relate only to the figure of £22,963.34. In the eve
as will appear, the identity of the party on whom lies the burden of proof is not important in this
ation £6
3, The first signific:
‘hereafter significant £
stleto:
it that be me
ant discrepancy appeared in the accor
jes appeared in weeks 44, 46, 48, 49, 5G and 51. Mr.
of approximately £1100, appeared by we:
wwn pocket. ] atn satisfied on the evidence of Mrs, Catherine
nager, that he told her shortly b 2004 that a shortfall of
). Nevertheless, for
nts telied on by the claimant in week 43
pany:
gave evides
it g
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Post Office ¥, Castle
4 poroved dudganent
at has not bee
pants i
¢ reason th:
in the ac
ly reported short
on the part of Mr. Castleton.
y dishones:
shortfall in th
4, leton, admi a ap
ine Deive in the he ly Balance 1
, Signed off-and
that the }
ilusory not real. It was
system used.
5. There were two com mnputer ter inchided a
processor, a touch-sens et and a printer. The fad at yen
practice, in outline, was
other than on
also “by ya de vent, such as a tele
slip or a cheque. Some tran
‘Those ate transactions where a cx
bill_or_pays.a_bill_that_isbate:
transactions. The subpostmaster ia responsible for chec
tions of the day against the documentation. He prints out the c
transactior when satis that they tally with the documentation he
sealed bags or envelop y the la of the day to
ramps and other eash-type items from time to time in sealed bags and
bh held by reference to the denominations of actes and
orisible for producing 2 weekly balance. ‘Thete are in the
bank deposit or withdrawal,
ated payment system) transactions.
etic strip to bay a
S (av
a card cont:
--comcesponding-A.
king daily the co:
sare knowri as /
omer eth
edeubbere
document:
centres. Here
has to recor
coins. ‘The subpostmaster is also res
papess before me prin outs of weekly Final Balances for Matine Drive for the relevant weeks
*inal) signed by Mr. Castleton.
aily the arnount of «
6. ery week, after at 5.30 pm. on Wednesday and before opening at 9 am. on
Thursday, Ms atine Drive, as required by Post Office
procedures.
7 Ieis ace if the difference represented by the
payments equals the difference represented by the value of the stock at th
inus the value of the stock at the end of the previous week. If those two
capa there is a discrepancy. If the former difference is greater than the latier,
less than the lattes, there
i of the wee
differences abe £0
ra gains
oe
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Post Office v. Castleton
Se» the algebraic sur (ec. the swn taking into account the sign, positive or negative) of
7
the discrepancies for all relevant weeks up to and including week ;
at Ao + Sn
ly final balances produced by the Horizon system show both volume and value. Tam
concerned here only with value. The balances are set out in the following way. First, there is a list
ofthe stock, described.as-“Stock & MOP?.(cash, stamps, phone-cards, postal-ordets-and.so-on);
giving the value of each item and a total (As). These follows a list headed Receipts which begins
with an item “Balance brought forward”. The balance brought forward is the sum of the
previous week's Stock and MOP and the accumulated discrepancies as of the previous week, ie.
‘The wee!
Aol + Sut. Phe rest of the Receipts column is a list of the receipts (Ra) for the week in question.
1+ Sea, appears at the bottorn of the column. ‘That is
A total, which thus represents Ra + As
designated “Total receipts”. There follows a cohunn beaded Payments. That includes a list of
payments out to customers at the Post Office aad remittances to central offices of the Post
Office. Those payments ont and remittances are what I have designated Pe. In the same column.
are included also the “otal Stock and MOP” (As) and “Nett discrepanc
Pah Ao + Sa
calculated so as to give rise to the same total in the Payments cc
Receipts cohimn. There is thea a figure of “Balance carried forward” which is the algebraic sum
of the Stock and MOP figure and the Discrepascies figure fie. Ao + So). The logic of the system
wo,
ate totalled to give a “Total pay
ments” figure whic
vim as appears under the
4G.
1.
thas-requires thas eee re
Re + Ani + Sui = Pat An +
as it should, The entries (but not the balances and discrepancies calculated by the system) were
entered by Mr. Castleton or his assistant in all cases at Marine Drive while Mr. Castleton w
setts, that they are correct. The cortectness of the
subpostmasier. He accepts, and indeed 4s
arithmetic is net ia
Jaimant: to put
gy discxepancies, was allowed by the
spense account. That was done by entering the
hama of the Final
Mr. Castleton, being alarmed by the growi
coummlated discrepancies (deficits) into as
d discrepancy as a fictitions expense in’ the Payments
mulated discrepancy was 2
Ewo a
relevant accuttula:
Balance document. On each occasion
dis. the weekly documents. entitled “Cash.
Account (Final)” all of which were signed by Mr. Cas: . The Cash Accounts
(Final) showed the accumulated discrepancies appeating ‘inal Balance ptint-outs. They
spense account figures in a table headed “Authorised Cash Shortages”. The
Cash Accounts (Final, unlike the Final Balance documents, included the authorized cash
tock and MOP figures and in the figures cartied forward (entitled “balance di
ne utderlying logic of the two sets of document:
SELES
The figures in the weekly F
also showed the se
signed
shortages in the S
to Post Office” in the Cash Accounts (Final). T
ise the same, and cannot be faulted,
was otherw
Dastletor
appeal against a
fastleton cross-examined Mr. John Jones, who had heard Mr.
figures that Mr.
on of the claimant ta dismiss him, on some
purposes of the appeal. ‘Those figtires had heen extracted from the Cas
Jones had produced for the
n Accounts (Final). "The
12.
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HIS HONOUR JUDGE RICHARD HAVE Post Of
Aporoved Judem:
ton was the receipts for wee! fo
count Je:
he paymen dung I the sa
on hand (part of the S
id that the figure:
in ode
line of cross
to cash He td not
hortage of ca!
the Pin:
2 fignare
erence between the totals in
Te will be seen that that, phus the diminution in
wmulated discrepancy. Thi: flaw can be found
47 includes an autho:
des an authorized fictitic
nting an ¢
& MOP, equals the. in
stem. The payments fi
payment of £8,245.10. The payments figure ir
payment of @ 509.68. Those two payments, totalling {11,7 were debited to the sus;
and they appear as au shortages in the relevant Cash Accounts (Final),
Hises at the end of week Sf, namely £11,210.56, plus the amount in the
s the accounts show that t due from Mr. Castleton
the accuracy of his ont id the accounts and the
e accout
claimants. Sin
accepts
toa, of 8 the Horizon syste:
mputer and a Sgure produced by the. com
004 Mr. G Sasileton. (personally identified
aputer) a p tot lof zero, There were no s
. Yet the Final Balance printed ¢
£ postage staraps
computer print-out
former showed that at 1
\ had declared (enti
nt entries before 07
da &
Jenuary
red into the
14.
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tion that
2 th
(There w
at 17:06
axes Weer printout stating,
former
print-out r
that the figure of L1249.0%
ance on th
Castleton subnitted that
the te f the Final Balance
is ntly clear that the
the, .stock had heen dimir
xespectively / :
consistent with the
of the items. Second,
top of the Final Bal
Mr. Castleton
ck of stamps !
to the
are
r 42 that f
and £1103.60 whi
does not ex
unexplained. Third, the figure of about £7100 was the ctfall ‘that Mr. €
cutted before the previous Chustmas. Thus, whilst the entr
ot explained, I am satisfied that Mr. Castleton’s argument is misconc
fastleton relied was & difference oe
004
pinaly on which Mr.
Ati #35 on i March 2
The second
amounts of cheque:
showed receipt
lance there sas.aneu! nts in the Paya nats.
the
dispute that “Rem out Data Cen” means emitted out to Data ae
claimant which dealt with cheques, and that the entry could only re! UES
two tines twelve entries were, according to the record, made in to the computer, bat it is not
ed that any of ay em are relevant to the present point. This apparent anomaly w
y replied that the sales report had no input into the final bela ce,
obviously contect. But Mr. Castleton’ b
in the operation of the computer. I do not accept thai that
they bave been entered inte it. There
cheques, But in any case, the figure does not a
The error in the figure of (3533.30, if error
ing properly.
ission
Account (i
the Horizon system was aot
OP PULL she
ated. Me.
third anomaly. The vat of inputs
AV58 and again at 18:10:42 cash total £0.00 was de:
nat could not have happened. The same printout has the folowing
14° January 2004, 18:27:54 “Declare cash coral £81899.32"
ial balance ~ Office copy”; oa 18 y at O7
cash te total tal £82997 on the same day at 07:33:17 “Declare c otal £83328.32”. The las
mentioned figure appears in the Final Balance and in the ed Cash Account 4
Castleton said that the figure of £81899.32 was correct and enter
computer by himself or by one of his ass
of £0.00: “Tt would
inputted on the other s
4° January 2004
ton submitted that
da figure
© have it
> th
es an amour
and the Cash Accoun
HS HONOUR JUDG
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DHAVERY O.0. Pos 0
Ans
page of the stocktaking
exception. LE
total of Z
uld come to £81899.32, the
table below,
e point Mr. € ton
“Declare cash total
he computer. The
effect on the
on the declared
he record of mmputs ev
idence about th
care cash £0.00" which
tem was flawed.
42) are ba:
8 that
e heard no exy
print-out of #
have nc
evidence that the H
07:3
decluzed cash made at
are
fied face \
50-pence. pies
of £161 were substi
O in 50-peace pie
were implausible, There is print-out
shown as week 42, b
out of cash on band as of 1
z the first day of
32 on the sate day. ©
@ before apeni
ignres in
18. it was said that week 42 had shown a loss ¢
Mr.
19 The
USS Te
The evidence §
fabout £110!
in his witness statement
sting Train was i counter
SS Statemenh
£1100 ie ww bat we though
of coins. The cash was recounted but we attived at €
© to identify the source of the problem on the following
actly the same figure again.
morning. Ultimately,
were una’
Me. Castleton had to make good the £1100 loss or so in cash from bis own pocket to
over for the following week.
allow the system to balance and so enable
Jared at 18:
difference betweea the cash d.
nm 15% January
pieces. He told me that they would we 0 kilogr 1, if placed ina}
al
sight of 5 metres. Moreover, I would add that all of #
e em and more had apparently been used
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Post Office v. Castleton
‘ack of 50
#32 on the same day, 15” January, the value of the »
nas £78.50. Mr. Castleton told
sad an ample supply of 50p. pieces.
by the end of the day. A
coins was shawn as £84.50; at 17:3
evidence ¢
34 on 16" January it was show
me (though not by way «
should have
submitted that it was imphou sible that the stock of 20p. col
weight and height 1 accept
16
ver figure
sof the cash on hend at 1734 on the following day,
that the
that whe p print-o
s the stock of 20p.c
intermediate figure of £2654.60 cannot be ripbt
ain satisfied that the figure of
as it been put forward
having the value of (2624.1 am satisfied
iOS aS
entry into the
mistyping of the
26546 69 must be wrong, whatever the
computer. The error (and J
reason) does not affect the weekly accounts. Nor
oa system.
evidence of a fault in
ollection of the payment in of £1100, specifically
her rec
x abe et of coins, She was
Mrs. Train was crc
whether it involved 4 large a
gave ao definite answer. I am not satis
learly embacrassed by the questions and
8 pal aici in
s from
Castleton sought to adduce evidence of other complair
22. During the heari
fices about the Box sizon syster. I admitied in evidence the fact
subpostmasters of othe er post of
that there were a few such complaints, but I refused to admit evidence of the facts underlying
suck complaints, since that would have involved a trial within a trial. I heard evidence from
Derothy Dey, who was currently the temporary subpostmaster at Marine Drive, She had found
intermittear problems with the system. The most worrying and inconvenieat problem was that
debit aed credit cards would intermittently fail to register when swiped through the gateway
keyboard to pay for customers’ transactions. She f found a way round the problem, though it took
——-some-time-beforeitwas solved: Mrs.-E éd-that-she-had-aow-been-atMerine-De dve-post-othice.
for about 2% years and she was convin ced that the ptoblem was with the Horizon system. She
recalled that in her previous post office, a stall village post office, she experienced two
anomalies that she could aot explain. On one occasion she was several hundred pounds in
surplus “which never turned up” The same thing happened again, inexplicably. Surely, she said,
if she had missed inputting a Gyro payment or a National Savings and Investment payment
issed it soorier of later?
someone would have m
i)
ied
vidence from Anne Chambers, a system speci jabs t employed by Fulftsu, the company
otking knowledge of the Hosizon computer
» Theard
that provides the Horizon service. She has a
system used by the clairuant. She said that calls from pastmasters relating to potential system
problems ave initially taken and logged by the Horizon system Helpdesk. I accept evidence of
Castleton that 4 he contacted the Helpdesk over pte blerns with discrepancies in balancing
accounts at Marine Drive oa a number of occasions. If the helpdesks are unable to resolve the
problem, calls may be passéd to the System Support Centte, where Mrs. Chambers works. In this
case, her first involvement with Marine Drive was on 26° February 2004. Mrs. Chambers
ined the questions raised and conchided that there was no evidence whatsoever of any
problem with the system. She was unable to identify any s upon which the Horizon system
could have caused the losses. Mr. Castleton ctoss-examined her about co: ints from another
branch, which he did not identify. She immed titely recognized the branch with confidence as
being a branch at Callender Square in Palkick. ‘The pro! Diem at Callender Square had, she said,
arisen from an etror sie the Horton system, but there was na evidence of such a thin
Castieton’s branch. le witness, and
Laccept her evidence.
eXA
sat Mr.
d Mrs. Chambers to be a clear, Noowledgesste and reli
26.
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HIS HONOUR JUDGE RICHARD BAVERY 0.0. Pest Office v. Ox
Amuroved Jadgmest
nasiers at Marine Drive gave evidence before me. ‘They
y mpson took over Marine Dens
zch 2004 and remained in
porary subpostmaster fre
Castleton as subpost
1y Booth and Mrs. Day. Mts.
Successors to
were RK
position un
umistress on Tuesday 2
mp 21" April 2004
Wednesday 21" Apul 2004. Mr. Booth
until 28" May 2004. Mrs. Day, to w
subpostmistress from. about 29" May p
th the computers other than the usual trivial ! problems that one tesids to expe
n the touch-sensitive computer screen was dirty, it
tered via the keyboard. i ‘The se
ce I have tefersed above, b
son said that she hae 1 had no proble
erence with
chose
asions. In pardeular, w:
would not accept commands, and info:
did not freeze, nor was there any failure of commrunication berween the two terminals. She once
She did sot remember any of the
had to xe-b
equipment bemg-changed: These were-mo lacge’ discrep: tuning: her term of-offices The
sion having
pancy was £101.98. She moet it might A
repancy was {- i no
computers on 0
een
ation had to be «
ot the computer because the screen went bla
maxinum di
been paid out twice. TI The next est «
ve been duc to a p
38. Mr. Booth experter
duped © check the opexation
Ars. Day did aot give
ch were deliberately v
Mr. Castleton’s allegation:
ies at Matine Drive.
the Horizon syste BE vin ra
of having experienced
imant, bad worked for the Post Office
y Wise, of the Network Directorate of th
ad had a working Bnowiedge of the Horizon compater system. He wrote in his
z ction {apart from online banking such as
yy the clerk on to their cornputer has a
ce counterfoil, savings bank deposit [or]
positi
withdrawing of de: ing ch bh at the co )
casresponding physical document, such as TV licen
withdrawal slip or cheque. After explaining the matter in some detail, he wrote this
~~ Aecorclingty, fovanbe-seenr thar ifthe -clerk-or-snbposmmster mikes“ mistake wher
imputing [sic: inputting?) transaction details into their computer, there are a number of
points at which this can be picked up, because there are daily and weekly xeports that the
subpostmaster[s} have to produce at which stage they have to check and satisfy
themselves that the physical documents evidencing transactions (for example, che:
gixos, pensions and allowances) match what they have entered on the system. in addition
to that, there are various teams responsible for different sorts of paperwork produced by
the branch, including a giro bank team, cheques team and pension team. Por example, if
the clerk records an item incorrectly on the system, they should pick this up on either
their daily or weekly report. I However, if they fail to do so, this will be picked up at the
Processing Centre. If an item bas been wrongly recorded, an error notice would be
generated, although this can easily take up to 12 weeks or so. This will mean that ifa
transaction has been over or undet stated there will be either a claim error or a charge
etror respectively.
That evidence was not challenged, and I accept it
relating to the operations of Maxine Drive during the period m question,
ting £0 0 lottery moneys, were in evideace. One exror notice
otices totalling £292.
e audited figure. The
An ertor
Only three exror notices
apart from those mentioned below re’
was reversed and does not form part of the claim. The others ate charge
They are not separately claimed: I assume that they are included in thi
pase city of their number is consistent with the proper working of the Horizo!
ld conceivably be ignored by the ultimate interested
a fault in the Horizon system c!
ved to the branch as an error notice, but there is no reason fo suppose on
system.
It exists,
that account that such a fat
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OER JUNGE RICHARD HAVERY 0.0,
27. Helen Rose at the material time an auditor en
she catried out an audit at Marine Drive. That
checking the papenwork such as Gito d eposits and withdiawal re
Reposts. She found that the was skort of cash in the sum of £25,
acy of her audit. Moreover, it confirms that the sho. fall at the end of the previous accounts
week was real, [t has not been suggested that Mr. Castleton did not start with « clean sheet
28. is a claim for £100.20 as the nef recempts in Mr. Casileton’s shop at Ma
moneys pliced in the National Lottery after close of post office business at 5.30 pan, on 22"
March and during 23 March 2004 when 3 closed and the audit was caztied ¢ out
there. The tal was in the shop, which was open # at the matesial me. The claimant alleges that
£5 76-was teceived.at.those.times fo xy tickets, and that £75.80 was given. out to customers
by way of prize money. Th © no) ai practice was for those moneys to be taken into th
office accounts. That did not happen on this occasion since the post office was cl
claimant claims by paragraph 11 of the pa: im a farther adjustment to the account in
the sum of £100.20, Before considering the mertts of this claim, I shall describe the system.
28, ead evidence of Mr. Michael Johnson, whom Mr. Castleton did aot require to be called as
The £
ugely fom his evidence, At the lotter
inted by the terminal.
ines, He was employed by the claimant in the Lottery Exceptioas ‘fea
tion of the lottery system is derived
‘is
he shop the customer pays the shop clerk for a lottery ticket, which is p
Detail of the transaction are almost instantaneously downloaded to Camelot, which
National Lottery, The
transactions
the clerk on presentation of a win
_-details-are-also-entared-into- the- Horizon. system Lamelot-clectronically sends othe claimants
data centre details of the transa ery relevant retailer. The information is autonnatically
compated to the information re:
disctepancy,
ostmaster uses the shop Hil receipts to input the details of the lottery
ter terminal. Prizes up to a certain amount are paid out by
ing ticket (not necessasily purchased in the shop). Those
‘0 the Horizon com
3 for
ceived on the Horizon system from each branch. If there is a
an error notice will be issued urless {not this case) the matter is s dealt with directly
with the branch. Me. Johnsen exhibi from 4 spreadsheet taken fror the claimant's
Issued Berets Database for the Matine Drive branch. ‘They showed a lottery charge error
occurred on 23" March 2004 for £176, aa amount by which lottery online sales bad been
understated in the receipts section. The money represented money that was received b
branch in relation to the National but not entered by the branch ito
computer, In addition, a claim error aotice was issued for £75.80, That represented Lotter
pay ts that were understated by the Mazine D: Branch in the payments
‘ f the branch.
fer
resents a credit in favout ¢
2. The Cash Account (inal) fe
£2218,50 had been enters
from Camelot of lottery transactions at the shop fox
of £176, Those figures were
£176. Lam satisfied that that error arose becabse M
on the relevant i receipts into the Horizon system. Sir
Account (Final) as National Lottery prizes for that week was £
the figure should have been (5863.60, a discrepancy of re Me
explaining the mechanism, that the figure of £75.80 represeated National Lot
that were understated by the Matine De - brarich
i week as postin!
tery ticket rece $
ok toial ed £2394.5 0, a a discre epancy
Ma
Mrs. Simpson’s fn
as the amount of the Ic
d not enter 2: the amounts shown
igute entered in the Cast
0. According to Cs
clot,
then counsel to the clarm for
Jed by Mr. ¢
The defence ple
3
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Post Office ¥.
astletent
HIS HONOUR JUDGE RICHARD HAVERY 04
ed Judyment
, being mattess that occurred after
No admissions are made as to the fac
the defe:
tity
in paragraph
hem but the defer: dass 8
ani’s suspension, and the claimant is put to proof of
is denied, Having been suspended as set out in paragraph 2 above, the defendant
laimant’s temporary subpostmaste
Hab
bad no way of transacting those
had ity for the branch » nd/e or the chimant’s audit staff ha
balanced the accounts prio
addy a:
med respon
» her doing so.
that the lottery moneys and tetminal
eceipts were given to Mts. Simpson on noraing of 24° March. Although he wrote about
Mis. Simpson at some length in his witr fatement, he made no mention there of any
payment made to her ot of the handing over of aay documents to her. Mr. Castleton was cross
exatnined about the lottery. moneys:
In bis skeleton opening argument, Mr. Castleton sai
Moving on to consider the National Lottery, am I night in thinking that you sow
t that you received £176 02 23 March 2004 in respect to National Lottery sales
aid cut prizes of £ £75. “302
eiving the ‘The fact that repaid
A. Yes. Ir was ne
finaudible]
toa question of
s referring to in the above partly inaudible
Mis, Simpson. Mrs. Simps
The relevant
Tassume that it is payment to Mrs. Simpson that he w:
wansmerHedid 2 sot say. that he hiself had paid.the moneys
evidence about the subject of lottery moneys generally in her witness statement.
paragraph, paragraph 11, reads as follows:
SOD Rave.
‘There were two things at the Marine Drive branch that struck me as being steange at the
time. One related to the National Lottery cash. The National Lottery terminal. at the
Marine Drive branch is in the shop rather than behind the post office counter, As the
shop stayed open later than the post office counter, it would continue to sel! lottery
tickets, and this meant that before the opening of the post office business the next day,
would use the shop dil receipts'to input details of the lottery transactions into the
Horzon computer terminal. When l came inte the branch each morning, 1 would fied
the lottery cash shat the shop had received overnight left in a bag just under the post
office counter screen together with the lottery till receipt. 1 was therefore concerned that
¢ lottery cash was being left unattended, because it was not secure and a customer
could have taken it. On one occasion (1 cannot recall precisely when), the Jottery print-
out (showing about £50 worth of sales) was there but there was no lottery cash. I
2 to make this amount good from the shop, which he did. I
herefore asked Mr. Castlete
also asked for the lottery cas,
to be handed to me personally.
evidence of Mrs.
ccept
Although the post office at Marine Drive was closed all day on 23% Match, the shop was open.
The sum of (176 must have been paid in by customers, and the prize money paid out
customers, between 5.30 p. p.m. on 22 March, when the post office closed, and 7.30 p.m., wheri
the shop closed, and ‘during the opening hours of the shop on 23° March. Mz, Castleton did cot
pat to Mrs. Simpson that he paid her the lottery money. The nearest that he came to it was
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JUS HONOUR JUDGE RICHARD BAVERY 0.0. Post Office v. Castleton
Judgment
nowa in the Cash Account (Final) for we
). Mr. ¢
CLepanicy s
at Marine Dei
should have be
s, Simpson’s first week
on put to her th
through Mrs. paperwork and
ted
mpson’s
sss statement, Mrs. ‘Train wrote
in her witn
found the lottery sic in an envelope that had not been en:
“which created the error notices. There is also a summaty on which she wrote the avy
received from the shop on hee first [day] in post, Not having a lottery serial
dd out.
prize money already »
the bats
not acco’
herself she had tnade a mistake and dis «fort
This shoukd’ve been given back to Mr. Castleton or at least shown iv
gain-buvitavas.not,
6 as b
y the sense of the passage
T have added the word “day” which seems to be requited
examined as to
to
34. The lottery receipts in question were not in evidence. Mr. Castleton, when cx
their whereabouts, said chat they were in the post office. They were disclosed by seither part
the proceedings. During the course of the cross-examination of Mes, Simpson by Mr. Castleton,
the following exchange took place:
A. So have you got the actual lottery receipts?
QQ). They ate not in evidence, i'm afraid.
A. Right. Well ] would want ta see those before I made that (inaudible).
lence and
s after the end of the ev
ion of the lottery receipts and wanted
When Mrs. Sinypson was recalled for other reese:
submissieas, Mr. Castleton indicated that he was in posse
to put them to Mrs, Simpson is further cross-examination, On Mr. Morgan’
to allow him to do so.
s objection, ! refused
35. Mrs. Oglesby invited Mrs. Simpson to tan Marine Drive ona ternporaty basis to take the place.
of Mr. Castleton, She described Mrs.
was, and J found her to he a reliable witness. If Mrs. Simpson had had the lottery vou chers at the
material time aad entered them into the Hosizon system, the error notices would not have been
generated, I am satisfied that the reason why she did not enter them into the Horizon Tee is
that she did not have them, Moteover, if she had feceived the moneys, then given that she did
aot enter the transactions into the computer, the system ought to have shown a corresponding
gain of £100.20. Te did not. Tt showed a loss of £2.14. However, that evidence is by no means
conclusive since there could have been other cerors.
impson as a very experienced postmaster. I accept that she
36. Mr. Castleton was suspended from his postmastetship on 23° Match, His duty to account to the
claimant for the lottery moneys received oa 23" and 24" March in my judgement arises from his
admitted receipt of the moneys. That point is not pleaded: but nor is the defendant’s allegation
that the moneys have been accounted for by way of payment to Mrs. Simpson. I ami satisfied that
he claimant is entitled to restitution of those moneys.
858.95. 1 shall hear
There will thus be judgment on the claim against the defendant for £25
counsel and Me. Castleton on the question of interest.
determined by the claimant oa not I
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BIS BONOUR JUDGE
Ampoved Jadement
RICBARD HAVERY O.C.
imant
‘There is a counterclaim. for dama;
2s in the sum of £14,250 on the
wrongfully determined the defeadant’s contract as a subpostmaster following his suspersion.
uly 2003. The
I to accept full
act fo!
cont
at Ww, CoE
that the suby
£ hus sub-oft
‘The defendaat’s contract with the claim:
conttact provides, by section 1, clause
responsibility for the proper running
dependent on the sub-office being well managed and the work performed pro:
satisfaction of the claimant. Clause 8 provides that the terms of the appointment of the
pensation for loss of office. Clause 10
ch of
osimaster is re:
ce. Retention of his appointment is
erly to the
subpostinaster do not entitle the holder to be paid com
provides for summary determinati
condition by the subposimaster or non
ne claimant in case of bre:
s obligation; otherwise it may be
e, Section 12 clause 5
custody of cash, stock of al
y
« claimant, whether held by himself or by his
gh
ds caused by his
that the subpostmaster is held stricd
i losses caused throu
's, Clause 12 provides that the subpostmaster is respe
so for all losses
assistant
his own negligence, carelessness of error, and a
assistants. Deficiencies duc to such losses nuusi be made goad without delay. Clause 13 provides
that the financial responsibility of the subpostmaster does sot cease when he relinquishes. his
appointment and he will be required to make good any losses incurred during his term of office
which may subsequen :
ly come to light. Clause 15 provides that if a theft or bunglary is
committed of attempted at a sub-office.....the facts must be reported at once to the police and to
Chuse 16 provides that if a sab-postmaster con
ur
iders that any
x stolen he should make a report as quickly as possible
any such reports, and it is no part of
t on accidental 5.
the segional general manage:
stock items have bees accidentally lost o
to the Regional General Manager. Thete is no eviderice o'
the defendant’s case that stack was lost whether by the: y
provides that a subpostmaster will be required to make good any deficiency of cash or stock
5, clause 2,
which may resuitt from his assistatits’ actions. Section 22 clanse 3 provides that the subpostmaster
will be responsible for ensuring that transactions will be carried out accurately....and. that all
documentation is propetly completed and despatched at the due time.
I am satisfied that the substantial unexplained deficiencies incurred in weeks 42 to 51 and in
" March 2004 are seal deficiencies and as such are
futable evidence that Marine Drive was sot properly managed at the material time. I conclude
that the claimant was entitled under clause } ction 1 to determine Mr. Castleton’s contract
somunatily for non-petformance of his obligation ur clause § of that section, Mozeover, the
week 52 up to the close of business on 22
losses nmust have been. cansed by his own esrox or that of his assistants.
‘he counterclaim is dismissed.
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Mandy Talbot
{2007 14:04
Judgement due next week
Mandy Talbot
Dispute Resolution
Company Secretary's Office
Royal Mail Legal Services
148 Old St
xternal Email
Forwarded by
CElteton
cy
handed d
submi
off
444
Main
albot{y
Post Office
Stephen
London EC1V 9HQ
r GRO
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°stephen D
phen.Dil}
«mandy. calboi®
"Yon Beezer"
bear Mandy
ephone conversation on 9 Jar
ary.
en i for
January went wel
Ons ¢
the following re
ton didn't make any headw. with either of the witnesses
it rebounded guite badly on him as Anne Chambers
no I. probi at Marine Drive
2. was a good
became very cle
the relevance
to make.
100}, Mr Castleton tr
ts he had produced during
re-examine Ruth Simpson about 1
ourgse of the trial after her first cross mination. he c decided
that he was too late and would not let since we had not had the
opportunity to cross examine him and his witnesses about those receipts
(they are the receipts that he says were found behind the pest
fFice
counter which he saye Ruth Simpson ought to have put through the system.
4. the hearing also effective d that Mr Castleton 2 less
avenue for any application for permission to appeal
i think we should get judgment within the next week or two and f will
update you when I hear anything further in that regard.
Ki
nd regards.
Stephen Dilley
Solicitor
for and on behalf of Bond
Ma
Fax:
www. bonds
2.com
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Mandy Talbot To: mared.hugheg,
oe aqun ec: John D Co!
7 44:54 : Bajaj
Subj
t have been copied into your request for information from Fujitsu your e-mail to Graham Werd
Fujitsu charge for interpretation of data proviced.
Can you let me know what data we alreacy have in respect of Bajaj and Bilku if the request was in
respect of the laiter and what exactly we are now asking Fujitsu for.
is any of this data for the period after Bajaj was dismissed/ resigned? If so why are we applying for it?
Does itr period of the time of his specific compiaints or does it run across the whole
of the period of the complaints.
is the data being obtained for our own purposes or just to address a request from Bajaj for disclosure?
Regards
Mandy Talbot
Dispute Resolution
Company Secretary's Office
Roya! Mail Legal Services
148 Old Stres
London EC1V 8HQ
Royal Meil is a trading narne of Royal Mail Group plc. Registered in Sngiand and Wai
Registered number 4138203. Registered office at 148 Old Street, LONDON EC1V SHQ
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BRD LN GTN.
SORA
CASTLE
Mandy Talbot ~ "Stepr
13/01/2007 14:69 ce: John DC
OBION2007 34°59 Subject: Re: P.O -v- 68
Further to our recent telephone conver
oplication and g
ation please notify Castleton that v i
the two witnesses present. This is on condition that the cross examination takes
he Court grants the applicati
Regards
Mandy Talbot
Dispute Resolution
Company Secretary's Office
Roya! Mail Legal Services
448 Old Sireet
Londen EC1¥ SHQ
External Email: mandy.taibo!
“Stephen Dilley* I
1 ’Richard Morgan"
<martyn.mitchel
Subject: P.O -v- Castletor?
Dear Mardy,
frefer to my email of 3 January. Please could you call me when you're out of your meeting today?
Lattach a copy of my letter dated 4 January to Mr Castleton and his reply of today. He has said that
he will be 45 minutes with each witness and that he wants to out questions to them arising from the
Tivoli logs and that they are relevant to the “integrity of the systern and balances.” As I've said before,
{think that he would construe anything we gave to him as the crown jewells, irrespective of whether it
was truly relevant.
If we oppose his application on Thursday (on the grounds that the issues he raises ere
disproportionate) but he succeeds i.e the Court says he can examine 2 of our witnesses.
have to go back to Court a On the other hand, I have checked with Anne Chambers
Simoson and they could beth atlend Court this Thursday. The Court has sufficient time to
accommodate their re-exarnination. Therefore, on balance, I think we should recall them and fet Mr
Castleton ask any questions on Thursday (so at least he thinks he's had a fair shot, thereby reducing
the chances of him successfully getting permission to appeal if judgment is against him). Hopefully,
this would at least get it done and we will then get judgment on the day or shortly afterwards. Do you
agree? If so, Mil fine up the Court and witnesses.
and Ruth
I look forward to hear
m you
Kind regards.
Stephen Dilley
Solicitor
for and on behalf of Bond Peat
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>>>> eCopy scanned decument.pdf attachment was removed from this email <<<<
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Mandy Talbot To: John D Cold,
ce
30/04/2007 09:24 Subject! Post Office Limited -v- Lee Cas
For Your infermation.
Regards
Mandy Talbot
Dispute Resolution
Company Secreiary’s Office
Royal Mail Legal Services
148 Old Street
London EC1V SHQ
/ GRO
External Email: mandy talbot
cos Forwarded by Mandy Taibo’
To: <mandy.taiba.,
fore
Subject: Post Office Limited -v- Lee Castleton
Dear Mandy,
Please see below.
T have spoken with Mr Castleton’s advisors this afternoon. Mr Castleton is offering the
P.O @ voluntary charge over his 50% share of Marine Drive in full and final settlement of
the judgment debt. If the P.O does not accept it, he is apparently going to declare
himself bankrupt.
If Mr Castleton does declare himself bankrupt the P.O ought to be able to chose who the
trustee in bankruptcy is (as it is the biggest creditor) and I can make some
recommendations te you if that helps. After 1 year, the trustee should get a possession
order and sell the property and pay the expenses of the sale and of the bankruptcy
before making a distribution to the unsecured creditors. If Castleton makes himself
bankrupt before the P.O's charge is made absolute, the Court will probably decline to
make the charge absolute. The P.O would then rank alongside the other unsecured
creditors and prove in the pound, but I believe the P.O will be by far the biggest creditor.
Any trustee would also investigate what other assets Castleton has (if any) and try to
bring them into the bankruptcy pot too. Therefore, bankruptcy is not necessarily bad
news for the P.O.
The advantage of getting a charging order and Mr Castleton voluntarily selling the
property is that there aren't another layers of expenses on top (1.e trustees fees and the
other expenses of the bankruptcy) that come out of the property first.
I have asked Mr Castleton's advisors to give us more detail about his assets and
liabilities and to confirm the precise value of the mortgage (they think the mortgage is
for £300,000 and that the property is worth about £400,000 and therefore Mr Castleton's
share of the equity is at most about £40,000 if you take inte account the costs of sale).
They said they'd come back to me on Monday with more information. We can then
decide whether or not to accept his proposal.
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L will revert to you.
Kind regards.
Stephen Dilley
Solicitor
From: David Dowson {mailto: David:
Sent: 26 April 2007 08:58
To: Stephen Dilley
Subject: RE: Post Office Limited -v- Lee Castleton
Dear Sir
Thank you for your email 24 April
The offer of 100% of the net equity has been “indirectly” offered in previous correspondence:
and can now be confirmed as a formal offer in full and final settlement
This can be formalized by a voluntary charge being offered
Our client seems reluctant , for what ever reason , io sign the consent order
unless @ way forward can be found
Bankruptcy proceeding would appear to be in order in view of the net lability position
of £300000+ ( Gross Assets £40000 - Gross Liabilities £350000 }
An early response would be appreciated
Yours Faithfully
LLOYD DOWSON
From: Stephen Dilley! GRO }
Sent: 24 April 2007 19:40
Ta: David Dowson
Subject: RE: Post Office Limited -v- Lee Castleton
Dear Sir,
Thanks for your email of 23 April.
1, We have never previously received any offer of your client's 100% interest in the net
share of the property. Certainly we have been asking him directly (and via you) for
several months to give the P.O a voluntary charge on the property. Is that now being
offered? If it is, why would he need to instigate bankruptcy proceedings?
2, Please can you also reply te our 27 March ernail about casts so that we can take
instructions. For ease of reference, here is the relevant part of that email:
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"Firstly as a housekeeping paint, we sent Mr Castleton 3 copies of a consent order in
relation to costs as long ago as 22 February 2007. We wrote to him again abut this on
13 March, He said that we should revert to you. We emailed it to you on 20 March.
The consent order is simply to document the agreement that has already been reached
in relation to costs, following judgment being entered against Mr Castleton. Accordingly,
please confirm that you will ask Mr Castleton toe sign and return it to us as soon as
possible.”
We look forward to hearing from you as soon as possible. If you think it would be helpful
to discuss this, please contact our Mr Dilley on Tell GRO
Yours faithfully,
BOND PEARCE LLP
From: David DowsonI_ GRO
Sent: 24 April 2007 11:42
To: Stephen Dilley
Subject: RE: Post Office Limited -v- Lee Castleton
Dear Sir
Further to previous e-mails can you please confirm AGAP that the offer
of our clients 100% interest in the net share of the property in full & final
settlement is unacceptable
lf so he can instigate bankruptcy proceedings as advised
Yours Faithfully
LLOYB DOWSON
From: Stephen Dilley
Sent: 04 April 2007 12:59
Te: ‘David Dowson’
Subject: RE: Post Office Limited -v- Lee Castleton
Dear Sir,
Thanks for your email and for clarifying the position on the sale.
You have still not answered paragraph 1. of our 21 March email. Please can you now do
50.
We note the other points set out below, but disagree with your assertion about a
“preference” because by giving a charge Mr Castleton would be reacting to the P.O's
legitimate commercial pressure following the judgment it has against him (which is
allowed) rather than desiring to prefer the P.O over anyone else.
We look forward to hearing from you.
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Yours faithfully,
BOND PEARCE LLP
From: David Dowson
Sent: 04 April 2007 12:49
To: ‘Stephen Dilley’
Subject: RE: Post Office Limited -v- Lee Castleton
Oear Sir
We refer to your email dated 03/04
Please refer to our email dated 21/03 which we feel is self-explanatory
His income & expenditure declarations are clearly an erroneous combination of
his own personal situation that of his his wife's and his wife's company's position
He has a modest income of £85 per week which he contributes in its entirety to
the family expenses which are controlled and managed by his wife
Regarding giving voluntary charges on Lee's net half share of the property
We are concerned in view of the fact he is taking Insolvency advice that
this may fail into the area of fraudulent preference
There are other creditors in the wings I
The up to date position on the jointly owned property is that potential buyers
are being shown round
As previously confirmed we do not intend to run up any further professional
fees and now await the advice of the Inselvency Experts
Yours Faithfully
Lloyd Dowson
From: Stephen Dilley! GRO i
Sent: 03 April 2007 19:02
To: David Dowson
Subject: Post Office Limited -v- Lee Castleton
Dear Sir,
We refer to our unanswered emails of 27 and 28 March 2007. We wonder if you have
now had the opportunity to take instructions and look forward to hearing from you as
soon as possible,
Yours faithfully,
BOND PEARCE LLP
From: Stephen Dilley
Sent: 28 March 2007 17:41
Ta: ‘David Dowson’
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Subject: RE: Post Office Limited -v- Lee Castleton
Dear Sir,
Thanks for your ernail of earlier today.
We look forward to receiving your response as soon as possible to the remainder of our
27 March email.
In addition, please confirm whether a buyer has been found by RTA and if so, what stage
the discussions are at,
Yours faithfully,
BOND PEARCE LLP
From: David Dowsort GRO i
Sent: 28 March 2007 08:25
To: Stephen Dilley
Subject: RE: Post Office Limited -v- Lee Castleton
Dear Sir
Our clients total Income is the modest wage he draws from his Wife's Limited Company
This is a small contribution the family living expenses which are totally under the control
of his wife
His only asset is half the net worth in the property which is as previously explained being
marketed by RTA business sales agents
Yours Faithf
David Dowson
From: Stephen Dille
Sent: 27 March 2007 18:06
To: David Dowson
Subject: RE: Post Office Limited -v- Lee Castleton
Dear Sir,
Thanks for your for your email of 21 March
1. Firstly as a housekeeping point, we sent Mr Castleton 3 copies of a consent order in
relation to costs as long ago as 22 February 2007. We wrote to him again abut this on
13 March. He said that we should revert to you. We emailed it to you on 20 March.
The consent order is simply to document the agreement that has already been reached
in relation to costs, following judgment being entered against Mr Castleton, Accordingly,
please confirm that you will ask Mr Castleton to sign and return it to us as soon as
possible.
2. In his means questionnaire, Mr Castleton stated that his mortgage payments are
£2,016 per month plus other regular outgoings are £690 per month a total of £2,706 per
month, He also stated that he draw £65 each week from the business i.e, £368 per
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month, a difference of £2,338. Accordingly, we wrote to Mr Castleton on 13 March to ask
him te confirm on what capital or income you are managing to survive each month.
Please can you confirm what his outgoings are and how he Is able to pay them from his
income of £85 per week, This is so that we can take informed instructions on any offer
that you put forward.
3. On ? February, we wrote to Mr Castleton and asked him whether he was prepared to
agree:
(a) to give the Post Office a charge on the property voluntarily, so that, after payment of
the costs and expenses of sale and any other mortgagees, the net proceeds can be used
to help reduce the Judgment debt, interest and costs; and/or
{b)} that his solicitors dealing with the refinancing/sale simply provide us with an
irrevocable written undertaking to pay the net sale proceeds to the Post Office. We asked
hirn to supply us with contact details of any solicitors whom he has instructed to deal
with the sale,
When our Mr Dilley spoke to Mr Castleton again recently to seek his response, he said we
should speak to you. Accordingly, please can you let us know the answer. Please also
confirm the up to date position on the refinancing/sale.
If you think it would be helpful, please do not hesitate to contact our Mr Dilley on
telephone number} GRO } Please note that our Mr Dilley will be out
of the office on 29 and 30 March inclusive.
We lock forward to hearing from you as soon as possible.
Yours faithfully,
BOND PEARCE LLP
From: David Dowson [mailto:Davic GRO
Sent: 21 March 2007 09:21
To: Stephen Dilley
Subject: RE: Post Office Limited -v- Lee Castleton
Thank you for your E-MAIL 20th March
The personal information form: completed by our client appears to contain a combination of
His personal circumstances and that of his wife and HER Limited company
South Marine Drive Trading Ltd (Co 4829317)
in a mut shell the position is as follows
He owns 50% of the Property at 14 South Marine Drive Bridlington YO15 3DB
Which has a joint net equity of Approx £100000.
His only current source of income is £85 per week he receives from his wife's
company for part time assistance
He is no fit state to full time and needs time to review his long term future
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The Property is being offered for sale by RTA - £400000
Unless you are prepared tc accept a modest lump sum he has no alternative
but to follow the previous sourced insolvency advice and deciare himself bankrupt I
AS you are aware his has been unable to pay for professional advice in the
past and cannot do so going forward
tn view of his f
sclai plight we do not intend to get involved in any long term correspondence
Yours
Loyd Dowson & CO
From: Stephen Dilley! GRO
Sent: 20 March 2007 12:05
To: David Dowson
Subject: FW: Post Office Limited -v- Lee Castieton
Dear Sirs,
Mr Castleton has contacted us and said you did not receive a copy of our 15 March email,
so a further copy is set out below, with attachments.
Kindly acknowledge receipt.
Yours faithfully,
iN. AR:
From: Stephen Dilley
Sent: 15 March 2007 15:19
To: ‘David Dowson’
Subject: Post Office Limited -v- Lee Castleton
Dear Sirs,
Thanks for you fax,
We now attach a copy of the consent order and a copy of the completed means
questionnaire.
‘The consent order is to simply document the agreement which has already been reached
in writing in relation to costs.
We await hearing from you as a matter of urgency.
Yours faithfully,
BOND PEARCE LLP
From: Steshen Dilley
Sent: 15 March 2007 14:54
To: ‘David Dowson’
Subject: RE: CASTLETON v POST OFFICE LTD
Dear Sirs,
Thank you for your email of today.
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1. Please supply us with confirmation in writing from Mr Castleton to show that you are
indeed instructed to act upon his behalf and that he is content fer us to Haise with you.
2. We reject your completely groundless assertion that Mr Castleton has completed
anything under duress, Are you a firm of solicitors? You should consider the position
very carefully before making such allegations,
We await hearing from you,
Yours faithfully,
BOND PEARCE LLP
From: David Dowson {maflto:Davie.
Sent: 15 March 2007 14:28
To: Stephen Dilley
Subject: CASTLETON v POST OFFICE LTD.
Dear Sir
Our Client Mr Lee Castleton has passed us your letter dated 13/03/07
and has asked us to reply on his behalf
: please send us a further copy of the Consent ord em ret
to in your letter together with a copy of the means test questionnaire submitted by our
jent completed under duress and without professional assistance
appear to have mixed business and personai expenses on the same farm
a copy of which he failed to retain
Our initial assessment of his personal situation is that he has a modest arnount
of property wealth but very jittie prospect of any earnings in the near future
There is a reasonable chance of his net equity in the property being turned into
cash by his family refinancing the business from which at best he may be in
2 position to offer a modest lump sum in full and final settlement
He has been advised by an insolvency practitioner to declare himself bankrupt
advice upon which I cannot yet cormment out hope to be able to de so in the
near future
Your early reply would be appreciated
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Yours Faithii
OW Dowson
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Bond Pearce LLP is regulated by the Law y.
Lloyd Dowson
Medina House
2 Station Avenue
Bridlington
East Yorkshire
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Lloyd Dowson Limited
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Registered Auditors - 9043573, Registered in England. No. 3114610.
Lloyd Dowson Financial Services Limited
Authorised and Regulated by the Financial Services Authority.
Registered in England. No. 4572561
ei
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Keith K Baines
2204
caith K Baines/e/PC
Rod Ismay
22/01/2007 12:45
Thanks Mandy -
have had to do a ‘ot of work in supporting the a fence case here. Like you, my tean n faced a stack of
witness interviews and court attendances at one time sa the progress and conclusion here is great
news.
What can we do on a pro-active comms front here? We've watched the various inflammatory letters
in the Subpostmaster letters page and wanted te be able to assure branches and clients that they can
rely on the integrity of Horizon.
We've had some good articies in the Subpostmaster about NBSC, Online Service and Cash In Transit.
tam planning briefs on what P&BA does.
Any thoughts on cams following this case?
Thanks, Rod
Mandy Talbot
Mandy Talbot To:
22IOMZO07 14:36
ec: Boug Evan!
Subject: Castleton
This :s just to let you know that we have been completely successful in defending all the 2 alegations
Jucgement has been awarded in our favour for the original debt, the counterciaim fer £250,000 was
dismissed, he was ordered to pay our legal costs at the standard rate up to the date of a part 36 offer
in January 2006 and the last possible date he cauld have accepted f and the at the indernnity
rate. This was to reflect the fact thai
get him to agree to mediation. Interest
the costs we have paid up to the date of the
base lending rate plus 10°
of todays ¢:
igr
. He was ordered to make
Mr Castleton eppeared to be stunned by the result and did not apply for leave to app:
decision. There were journalists at Court and it is possible that this will be picked up &
Mandy Talbot
pute Resolutis
y's Office
London ECV SHO
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ved a sensible offer to settie and a number of atiempts to
as awarded at the normal rate on the award of damages and
ejected part 36 buf thereafter at the Bank of En
and
n interim payment of £50,000 within 28 days
inst the
e media.
Postine:[7GR6"~3 STD Phy eu Fax: I
GRO
External Emaii: mandy.talbof”
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Mandy Talbot
ASIP U2007 14:04
E: Fost Office Limited v Lee Casileten
Judgement due next week
Maridy Talbot
Dispute Resolution
Company Secretary's Office
Royal Mail Lega! Services
4148 Old Street
London EC
SHQ
Posiline}
External
Castleton
end Court
rl let
_fox and on behalf of Bond Pearce &
ii GRO H
GRO Hi
Subject: Post Office Limited v Lee Castleton
Thanks very much ste
Mandy 7
Dispute
&
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cmandy hal bo!
co? “Tom Beezex
i
Dear Mandy
I refex to our telephone conversation on 9 January.
The hearing or
Jan
ary went well reason
esses he
pr that
i. My Castieton didn't make any headway with ther of the w
recalled. in fact, it rebounded quite badly on him as Anne ©
able to explain again wt @ were no I.T problems at Mar
would he
2. Lt was a good opportunity our case
becan ands our pos
was seeki
> the judge again. 1b
on a
g to make.
of the lettexy 1
mine Ruth Simpson about i
course of the trial after her examination. The
that he was too late and would not let him, eince we had not had ch
opportunity to cross examine him and his ses about thos
€100), Mr Castleton tried to
bes he had produced during the
nt decided
receipts
ithey are the receipts that he says were found behind the pest office
counter which he says Ruth Simpson ought to have put through the system,
4, The hearing also
for any applic
ffectively ensured that Mr Cast
tion for permi to appeal.
had one less
think we should get judgment within the : k or teo and f will
update you when I hear anything further in that regard.
Stephen
Solicitor
fox_ang
Main office
Fax: +44
wwe
GRO H
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available from our regis
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Mandy Talbot
To. "Stephen Dille
08/01/2007 14:58 ‘
cur recent telephone conversation please notify Castleton that we will nol actively resist the
and get the two witnesses present. This is on condition that the cross examination takes
place that day if ‘the Court grants the application.
Regards
Mandy Talbot
Dispute Resolution
Company Secretary's Office
Roya! Mail Legal Services
148 Old Street
Londen ECTV SHQ
ichard Morgan"
Dear Mandy,
I refer to my email of 3 January. Please could you call me when you're out of your meeting today?
fattach a copy of my letter dated 4 January to Mr Castleton and his reply of today. He has said that
he will be 45 minutes each witness and thal he wants to out questions to them arising from the
Tivoli logs and that they are relevant to the “integrity of the system and balances.” As I've said before,
I think that he would construe anything we gave te him as the crown jewells, irrespective of whether it
was truly relevant.
if we oppose his application on Thursday (on the grounds that the issues he raises are irrelevant and
disproportionate) bu’ succeeds Le the Court says he can examine 2 of our witnesses, then we will
have to go back to Court again. On the other hand, { have checked with Anne Chambers and Ruth
Simpson and they could beth attend Court this Thursday. The Court has sufficient time to
accommodate their re-examination. Therefore, on balance, I think we shouid recall them and jet Mr
Castleton ask any questions on Thursday (se at least he thinks he's had a fair shot, thereby reducing
ihe chances of him successfully getting permission to appeal if judgment is against
his would at least get it done arid we will then get judgment on the day or shortly
agree? if so, lil ine up the Court and witnesses.
lisok forward to hearing from you.
Kind regards.
Stephen Dilley
Solicitor
for and on behalf of Bond Pearce LLP
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The information in this e-mail and any attachments are confidential and may be
legally privileged and protected by law. The intended recipient only is authorised to
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Any files attached to this e-mail will have been checked by us with virus detection
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opening any attachment. Bond Pearce LLP accepts no liability for any loss or
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Bond Pearce LLP is a Limited Liability Partnership registered in England and Wales
number OC311430.
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
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LLP is regulated by the Law Society.
>>>> eCopy scanned documentpdf attachment was removed from this email <<<<
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3 January 2007 Bond Pearce LLP
Ballard House
PRIVATE AND CONFIDENTIAL
Mr lc
i4 South Marine Drive
Dear Sir
Post Office Limited -v- Yourself
We refer to our unanswered lett
Mr Dilley on 2 January 2007,
telephone conversation with our
In our letter and in the telephone conve
tion, we asked you to confirm as a matter of urgency whether
aring on ii J
and if so, to state
was that you are applying for. You said that you needed to refine your ar:
bedy iocki the Tivol! events log. We d you to call our Mr Di
ition and have tried to call you, but you were engaged.
uments and that you had
y back today te
When we spoke to you on 2 January, we stated that if you told us what it was that you were applying for,
then, depending upon what that was, we might be able to try to agree it, thereby saving the time ang
costs of an attenda at a contested application on 11 January. However, until you tell us what it is you
are s Ing, We are not in a position to say.
ou de wish
cumstances, please confirm what exactly it is that you are applying for and wheth
to proceed with your application, in order that we can make appropriate travel arrangements.
We reserve the right to produce this fax to the Court at the appropriate time on the question of costs.
We look forward to hearing from you as soon as possibie, preferably by return.
thfully
Yours
Bond Pearce LLP
Registered in England and Wales number OC311930
et 6D2 ber
Regulated by the Law Society. www.bondpearce.com
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24 December 2006 Bond Pearce LLP
PRIVATE AND CONFIDENTIAL
Mr & Castleton
14 South Marine Drive
Bridlington
YO1S SDE
Dear Sir
Post Office Limited -v- Yourself
Thank you for today sending €
We enclose the Tivoli ev:
are advised that this contains ’
refe d to in her evidence at é fe @ fe prmatting is “slightly different from How }
iputer archive, the substance is.
Chambers would have seen it 5:
identical),
2 spoke to you on 20 December, you wi unaware as to whether or not you would proceed with
your application. In the circ mstances, whether you are inte:
to proceed and if so, what exa: Gg for and when that application has been
for hearing. In the event that yor do proceed with your application, we do need sufficient notice so that
travel arrangement be made
We await hearing from you.
Yours faithfully
Bond Pearce LLP
Enclosure
1 Events log
teed Liabiity Pestuershig, Ragisteres in Eaalaad a CB1I430.
gst Bristol BS 8
by the Law Society, www.bondpearce.com
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Mandy Talbot
04/01/2007
09:33
Dear John
vformation. I will report back on the 14 to jet you know the
1 ck the follawing e-mails for y
decision of the Court i Castleton proceeds with his application.
Regards
Company Secreta
y's Office
Royal Mail Legal Services
148 Old Street
London EC1V SHQ
Castleton
This has arisen because F did not supply us with the Tivoli logs as part of the disclosure. it now seams.
likely thet wewill be put to further trouble and expense if the Court permits Castleton’s application.
Regards
Mandy Talbot
Dispute Resolution
Company Secretary's Office
Royal Mail Legai Services
448 Old Street
Lendon EC1V SHO
fo: <mandy.taibot¢
< teh
Tom Beezer”
Update: P.O -v- Castieton
18:51
xmb:namiespace prefix = o ns = “urn:schemas-microsoft-com:office:office" />Dear Mandy,
I hope you've had a great Christmas and New Year.
Just to recap on where we'd got to befare you went away and to update you on the
current position:
1. Towards the end of the trial, during the latter part of Anne Chambers’ (Fujitsu)
evidence, she stated that in 2004 when she investigated, she looked at the Tivoli Events
logs. She said that these were not documents which Fujitsu had previously given to us
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and so they were not in the trial bundle, She said tt when she examined at the time
she saw “nothing out of the ordinary, only the event that gave rise to the one thing that
is irrelevant. (Presumably that is why they did not give us to thern eartier).
n 13 December 2006, the Court made an order of its own volition that any
application for Mr Castleton for a resumed hearing arising out of the late disclosure on
the part of the Post Office had to be made and served on the Post Office by Tuesday 19
December so that it could be heard by 21 December 2006 (copy attached). This
prompted an application by Mr Castleton allowing for a resumed hearing (application
notice attached).
3, After clase of business on Friday 1S Decernber 2006, Mr Castleton telephoned me to
ask Fujitsu to supply the document and I immediately e-mailed them and asked them to
do so,
4, On 19 December 2: His Hon, Judge Havery QC ordered that Mr Castleton should
initially state in writing his reasons for requiring a further hearing with reference in
particular to specific points and the recently disclosed docur that he wishes to rely
on and why they affect his or the Post Office’s c s the judge may think
that Mr Castleton is making something out of nothin
point Mr Castleton is trying to make, I explained to Mr Castleton what the position. we
at that stage i.e that Fujitsu had recovered the archive records for every Post Office in
the UK and then needed to extract the relevant information for Marine Drive and that
this was no mean feat. (Copy attached). I asked him to confirm whether he wants his
application to proceed, given that we had said that we would give him the information he
had requested. Mr Castleton stated that he has put Anne Chambers’ evidence to Mr
Brown (the Post Master in Falkirk) and he now has further points that he wants to make
from what Mr Brown has said. I said that the only points he could now make should
arise from the late disciosure of this document and nothing else. It is unclear to me what
he is saying, but l anticipate he's going to go off on another complete tangent.
5. Lattach a letter dated 20 December 2006 that Mr Castleton sent to the Court which
really restates the same irrelevant points he made during the Trial and in which he
concludes that the existence of the document adds more weight to his case.
6, On 21 December 2006 I sent the Tivoli Events Log to Mr Castleton, The court has
now ordered that if Mr Castleton wishes to pursue his application for a further hearing,
the Judge will hear both parties at 10.30.am on Thursday 11 January 2007, I have
reserved Richard for the hearing and 1 intend to attend.
7, I called Mr Castleton yesterday and wrote to him again today to ask him to clarify
what exactly it is he is seeking and whether he intends to proceed, My impression is
that he doesn't really know himself, but that however irrelevant the document is, he will
try and make as much as possible out of it.and that we will therefore end up in Court a
week on Thursday. I do want him Mr Castleton to have every opportunity to say his
piece, so that if the P.O gets judgment in its favour, this reduces the prospect of any
successful application for permission to appeal, On the other hand, his stance is
increasing further costs and I have made the point to him in correspondence so that at
the appropriate time, we can draw this to the Court's attention.
8, It is possible that if the judge dismisses Mr Castleton's application next Thursday,
that we will get judgment on the same day. Either way, I will keep you updated,
Kind regards.
Stephen Dilley
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Solicitor
fers can é if of. cued. weet
GRO
Main offic phone
om
is e-mail and any attachmenits are cor sal and may be legally
ss this
e-mail and any attachments. If you are not the intended recipient, please notify the
soon as possible and delete any copies. Unauthorised use, dissemination, ¢
publication or copying of this communication is prohibited.
ender as
ribution,
Any files attached to this e-mail will have been checked by us with virus detection software
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Bond Pearce LLP is a Limited Liability Partnership regi:
OC31 1430
stered Office: 3 Temple Quay, Temple Back East, Bristol, BS1 6DZ.
A list of Members is available from our registered office. Any reference to a Pariner in
relation to Bond Pearce LLP means a Member of Bond Pearce LLP. Bond Pearce LLP is
regulated by the Law Society. AFORM 1250070.PD' LETTER 1249645. 00( LETTER 1252170,D0C
ered in England and Wales number
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HQ 65X62706
In The High Court of Jusice
Gueen’s Beneh Division
Before WHI flavery QC Sitting as a Judge of The High Court
Between:
Post Office Ltd
And
Lee Castleton
ORDER
UPON the Court’s own motion
IT ES ORDERED THAT:
an on the amed hearing arising out of the
and served on the Claimant
in order to be heard by the end of term on 21
part of the Defendant for
i ure on the part of the ©)
by 4pm on Tuesday 19" Dec.
December .
Liberty to apply
‘en cut of time to
ure good
Note to Defendant : The
extend the time
reason to ex
erty to apply entitles you to apply
to apply for the resumed hearing but the court will
Dated : 13" December 2007
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Application Notice te eo Goer Of Sosred
[7° You shout prosiai shis information Foo listing Meapplieafion I QQ greens BEL Dey
I 1. How do you wists tc have your application dealt with io an ai
i hear} I Claim no.
I adats hearing? } II naadninaen aod
i SO) camotete alt questions betow I
&) at a telephone swoference? 71 Warrant no.
£8 appileabee)
i i
I 0) without a hearing? compicie Qe 5 and 6 beluw T — ”
i Claimant i aan a
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De a sn
{yf xo i Defendant(s) Z casio!
4 Led ors
1D Grotading set
4. Give dutes of any wial perivd a2 fixes! iat Guts I
el ee a MAE LY — a -
3. Lewei ob paige RCo PAVE E TS . i Dae iS EEE ie I
i L& Parties tobe served CA AT a
Note You must complete Pacts A and B, and Part © iFapplicabte Send any relevant tec and the completed application
to the court with any deaf ordes, witness statement or otter evidence; and sufT
respondent.
Part A
1 Toler your ff Lee ee ipek
Rall same, or Lowey KE CAST iho
name of
2 oe seetend tw aply for an ordee (a dra of which is attached) that Aino» fo A Reso a
se cecbing od TAQ Sy BU! 3& O2¢ OF THE KBE Digenoneed ont ric Pane of THlé
it possibie: eA Dond
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Neemstying
Stator 1 (We) wish f0 rely on: cick one box
provision
hue attached (witness statement Xaffidavig) I I my statementofease II
evidence in Part C in support of my application [w)
ery t0 the
proceedings, . .
yomst Signed Positioner [ tase is Pease
grovide an officeheld
address for “ Git . sem nee mee —
scsi uf {Salieitoos litigauertth if signing wm
documents Applicarey Ks Fen) Nahata nm orcompeny)
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FFapplieable
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pee Claim NoI #2 2S * ont
LONE) wish to rely on the following evidenve in support of this application:
ot THE ORORR mae BY 4d ST WAECY OC
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Statement of Truth
*(Lbclicve) *( The applicant botievtts) that the facts stated ia Part Care true
Positioner SO soc]
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HQ 05N02706
In The High Court of Jivice
Queen’s Bench Division
Before HHI Havery QC Sitting as a Judge of The High Court
Between:
Post Office Lid
fs orcrnmenaaavomtrmn RO RAS ar :
And ‘COURT OF a
Lee Caasleton 2 ee ! 5 ‘
zI 14 nec gos I, :
oe HB) Technotue& = IS fe
Consteactionfeurt [mt °
ORDER 7
i 2
UPON the Court's ows motion ¢ i
(TIS ORDERED THAT:
e
‘Any application on the part of the Defendant for & resumed hearing arising ‘
late Uisclosure on the pact of the Claimant mast bo made and served on "2
by 4 pos on T aesday 19" December in order to be heard by
December
Claimen’
y the end of ienm oF ae
Liberty to apely
me io
at the court will require good,
ne Hbexty to apply entitles you to apply ever out of th
Note to Defendant T :
: for the resumed hearing b
extend the Ume to apply I
reason to extend time I
i
'
i
: ;
i
Dated «13% December 2087
Pe. 9t 9B Y7" LO MOO WY HOdL
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é b Pel Ik
TECH AND CON CRT 19412788
HER MAJESTY’S SUPREME COURT GROUP
bauats SERVICE
MCs
iBond Pear:
Mr Lee Casi
hanting}
www hincourts ne rvign gow.
v
{
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t
182/08
By Fex only
in Sis
gifice v Castleton HQ05x027'
HJ Havery QC considered the Defendant's application dated 15" Dacember. The
Junge gave the following directions:
til Castioton should initially state in writing his reasons for requiring a futher hearing,
with reference In particular to the specific points in the recently ~disclosed documents
that he wishes to rely on, and why they affect his or the Claimant's case.
Those reasons should be delivered to the Court and served on the Claimant's solicitars
by § p.m on Thursday 21% December,
i sie will then consider whether there should be an oral hearing and give further
dit
I
t
vous faithfully
GRO
Sargn Landau
Clark to HKG Havery QC
( Casileton, Could vu clease use the conlact deka! S aS srioy
vied vou entact ggntact or write to the court
Lon this lear
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5 97:04 FRO MARD
19 December 2006 Bond Saarcw LLP
Ay Fax & Post Sallord House
¥ & West Mom Road
Pymourh PLS SAE
Mr Castleton
1 South Marina Drive
Bridlington
YOLS SDE
wbephar hy
Dienct: f
ur ef: °
SiO3/Saw3/36R095.136
Dear Sir
Post Office Limited -v- Yourself
fer to the teluphene conversation detween our Mr Dilley and yourself this atternaen.
Aftar close ef pusiness on Friday 15 December 2008, you wpked us to supply you with the document
referred to by Anne Chambers in her witness statement evidence. We immediately asked Fujitsu to supply
that document. In order te do that, Fujitsu have informed ue that they need to:
a Extract af of this sort of data from their arctiived fogs for ali of the Post Offices in- thea UK, which
apparently totals 8 gigabytes of Gata. They have informed us that they have now completed this
process.
2. They have to extract the relevant information for Marine Drive from amongot the archived date
retrieved for ail Post Offices. We understand that they are in the process of Uelrig that, but given
tha volume of date retrieved chat it is mot a quick task. Ww will be contacting them later today ta
seek an ide2 of the estimated tmescaie for this and will update yuu os soon ag we ave able.
Strictly speaking, we wonder whether the document falls within those categories of documents that ere
required to be disclosed pursuant to CPR 31.6 because it farms no part of the PO's case and Anne
Chamber's evidence to the Court was that when she examined at Une line 5! nw “nothing out of the
ordinary, only the event that gave rise to the one thing that és irrelevant,” We therefore serfously doubt
her anything turns upon this, However, we have already confirmed that we wil! not take that paint
and that we are willing To grovide you with the document as soon as i can be retrieved and thet Fujitsy
wre doing thelr utmost te retrinve it es Soon 55 possible. We therefore wonder whether you need to
trouble the court with an agnfication, particularly given the time ang costs that beth parties have already
incurred at the trial and would be grateful in the circumstances if you could please confirm to us and the
Court whethar you Je wish your application to proceed.
We look forward to hea:frig from you as soon as pessible,
R
Bond Pearce LLP :
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e
Fax sent by Fy
ax sent by TECH AND CON CRT 21732786 12
Fy:
SUPREME COURT GROUP
Const, Cour
2 MAGESTY’S
COURTS SERVICE
Mr ie Castleton Fax No: Gre
Maitland Chambers attention Danielle Fax No
i
won hincourts service. gav.ck
21012196
By Fax only
Depr Sirs
Ret Post office v Castleton HQO5X02706
;
HHU Havery QC considered The defendant's letter dated 20" December, enclosing
Band Pearce letter dated 19" December to him.
The Judge directed as follaws if Mr Castleton wishes fo pursue his application for 3
er hearing , the Judge will hear both parties at 19.30 on “Thursday
January 07, when the Judge w consider Defendant's application.
rah Landau
Clerk to HJ Havery QC
O
Nat!
een PREIA
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Mandy Talbot To: David X Smit
20/4 1/2006 14:07
ce
Subject:
lam very sorry to have io advise that Mr Castleton has now sacked his solicitors and has tolaily
refused to sign the Tomlin Order despite being actively involved in its negotiation last week. As no
order has been signed no settlement has been achieved and now I must advise that the trial wil
almost certainly take place.
As a litigant in person he is unlikely to agree to evidence being submitted by witness statement only
and is likely to demand their presence in Court. I am sorry to have to advise this aft ing convinced
that a highly desirabie settlernent was imminent last week. Castleton is apparently taking anti
depressants and this may be affecting his judgement. There is to be a case management conference
next week which will be another opportunity far our team to seek to persuade Castleton of the need for
a settlement. Our witness evidence is ready and the accountants report is now being finalised.
Castleton has supplied almost no evidence and as such is unlikely to be abie to challenge our case or
support a robust defence.
i will keep you updated with any further developments.
Regards
Mandy Taibat
Dispute Resolution
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“SS Graham C Ward
2 806 09:37
20/4
see below .. embarrassment all round !! , is there any chance someone from your team could
liaise direct with Brian to offer our apologies for the confusion ?
Regards
Graham
Mr L Castleton
a settle
From: Pinder Brian (mailto: Brian Pinde:
Sent: 20 Novernber 2006 07:56
To: Stephen Dilley
Ce: graham.c.ward:
Subject: R!
‘ost Office Limited -v- Mr L Castleton
Stephen
ase was now closed?
bam a litte confused I thou from the Horizon aspect, this c:
Regds Brian
From: Stephen Dilley __
Sent: 17 Novernber 2006 17:57
To: Chambers Anne ©; cath.eglesbt GRO.
helen.rosd “i, andrew.wi
in. honest GRO }
Dunks Andy;
ken.crawieyi_ Jan. hoyland GRO I michael.d.johnsont
liz. morgan yn.cumber land, GRO E ruth.simpsoni__ GRO. ~
wendy.n.siiit Paul. Williamson GRO i
Ce: Pinder 5ri GRO
i Jtony.h.kanel
martyn. mitchell
and Gentlemen,
2008, We are
ton’s solicitars and 1 wi
ust fo confirm th
ting on 4 Decer
with Me C
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uu faye nae
From: Stephen Dilley
Sent: 24 October 2006 11:09
Te: ‘Chambers Anne 0’
‘ken.crawley
‘michael.d jOnr
‘daviyn. cumberland” “GRO
Ce: ‘Pinder Brian’; Torr BeEeZzery ii
Subject: Trial Date: Post Office Limited -v- Mr L Castleton
Ladies and Gentlemen,
endy.n.smitht
ftony.h.kanef
There was been a procedural hearing at Court yesterday to review the timetable on this
case and set new directions.
The Master decided that, amongst other things, the trial must proceed in December
2006, Accordingly, it will commence an 4 December 2006 and will probably last 7 to 10
days. It will take place at the Royal Courts of Justice, Londen. As previously indicated,
please could everyone who has given a witness statement blank out two weeks in your
diaries starting on 4 December 2006 and keep these dates free for the time being. You
will not be required to attend for the whole of that time and we liaise with Mr Castleton's
solicitors:
1, to agree that as many of you as passible should not have to attend Court to give oral
evidence. (For example, I'm hoping to persuade them that most if not all of our
witnesses from P.O Chesterfield and P.O Leeds should not attend. If they agree, thi
help shorten the trial and save costs}; and
i
2. for those of you that are needed to attend, we have a timetable, so we can give you @
specific time for when ycu will be required to be there to keep the inconvenience to a
minimum.
Iwill keep you fully updated as and when I hear further, which is likely to be some time
after 10 November at the earliest.
In the meantime, if there are any particular dates from the 2 weeks commencing 4
December 2006 onwards when you definitely cannot attend Court, please let me know a:
soon as possible,
I look forward to hearing from you.
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Kind regards.
Yours sincerely
Stephen Dilley
Solicitor
-for_and.on_behalf_of Bond Pearce LLP
H GRO
Main office p'!
Fax: +44 (~
www. bend
‘The information in this e-mail and any attachments are confidential and may be legally
privileged and protected by law. The intended recipient only is authorised to access this
e-mail and any attachments. [f you are not the intended recipient, please notify the sender
soon as possible and delete any copies, Unauthorised use, dissemination, distribution,
publication or copying of this conimunication is prohibited.
Any files attached to this e-mail will have been checked by us with virus detection software
before transmission. You should carry out your own virus checks before opent
attachment. Bond Pearce LLP accepts no Hability for any loss or damage which r
caused by software viruses.
y be
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.
‘The information in this e-mail and any attachments are confidential and may be legally
protected by law. The intended recipient only is authorised to access this
e-mail and any attachments. If you are not the intended recipient, please notify the sender as
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publication or copying of this communication is prohibited.
Any files attached to this e-mail will have been checked by us with virus detection software
before transmission. You should carry out your own virus checks before opening any
attachment. Bond Pearce LLP accepts no liability for any loss or damage which may be
caused by software viruses.
Bond Pearce LLP is a Limited Liability Partnership registered in England and Wales number
OC311430.
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.
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Mandy Tatbot : Richard WY Barks mi Keith K
(2006 42:40 Baines
4/2006 12:40 Ismay
Cooke ohn D
Solel GRO
ce: Clare Wardia GRO iBiddy
Wylesi
stephen dileyl__
Subject’ Castleton’s counter
cifer P.O -v- Castiston URGENT URGENT.
You will aii be pleased
counter proposal, I
know that the solicitors acting for Castieion have substantially accepted our
ch a copy of their letter.
Castleton is not prepared to have judgement entered against him because he clairns it would prejudice
ulure ci f praspecis and so the claim will be settled by way of a Tomlin Order. This means that
if anybody searched the Cour ords all they would see is a record that the claim was resolved but
the detail of the same is kept orivate.
Castleton is prepared to make ar open staternent that POL can use as i
HORIZON system. I now need your assistance over the form of wording ¢
that statement.
yooses Exonerating the
at POL. wo! fo see in
i nave prepared a short statement but would be very grateful for any improvements which you can
suggest. We need to have a settied form of words to go back to Castieton’s solicitors as soon as
possible. ement is stii without prejudice and does not formally conciude 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 surn of money
owed by me to Past Office L a result of errors which erase whilst I was the postr
above 0} had though th; is debt arose due to a malfunction of the HORIZON system but!
crow accept that I was mistaken and that the debt arose out of human error. I declare that
HORIZON system did not contribute to the errors in any way and formally withdraw all statements i
made to the contrary.”
]
ed document.p:
Dispute Resolution
Company Secretary's Office
Royal Mail Legal Services
148 Ole Street
London EC4V SHQ
External Email: mandy.taibot
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SE-NOUM2IG5 11:99 FROM ROWE COMEN SOLICITORS
P8283
Date: 10 November 2006
Your ref: SIOWVFAC 1348035.
Our ref: MDT, 113969
Please ask for: Mark Tumer.. .
Direct dial: / I
pee /GRO a EOE conn
E-mail: : a
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:
in 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 epply as to implementation provision, if required.
2 ‘The Defendant will pay the arnount 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):
Al 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 fom 26 January 2006 onwards
3. 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 Sereet »
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ipwe « Kors « SP Suclon Assoctatan: LF Suering « AG Quace » 6, Polioy « REmpson Cameutannes I, Ronee BCT. Maem
eed
GSMARETABUEVCASTLETONTIA OAL EET TE AONE PEARCE
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. PB3/e
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 a3 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 de recognise that the court hag a diseretion in this regard and that it can take it into
account},
EENOUC2O85 11:09 FRO ROWE COMEN So. icrToRS ro
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 fo 4 resolution at least further cost, bearing im mind the
proximity of trial and the costs which would necessarily be incurred over the coming weeks if { should
proceed,
We would invite you ia light of this proposal te seek to agree with your client’s counsel that the first ranche
of his brief fee be delayed from next Monday to allow settlement discussions to proceed without further
substantial costs accruing,
Mouws faith falls.
GRO
eo wer meron
ROWE COHEN
GONARETARARYCASTLBTONUOI DE LOCTER 70 OND MEARE
1O-NERR 2005 14:85 Liviearion » . TOTAL, Pa
: al Pa
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ger
Mandy Talbot
OG/4 1/2006 10:40
Subject: Castle
ENT URGENT
I have received some very good news about this case but now need the business to make an urgent
decision upon its future conduct.
Our original claim against Castleton was in the region of 25K and he then entered a defence and
counter claim for 250K but of more concem brought the whoie validity of the HORIZON systern into
question. As a result we have expended a lot of legal costs to ensure that the defence to those
allegations is as perfect as possibie,
On Friday Castleton’s solicitors amended their defence/ counterclaim to reduce their counter claim to
11K.
Last night our barrister received a compromise offer from Castleton’s solicitors probably brought on by
the fact that they are obliged to serve their statements on Friday together with their accountants report.
We suspect that their accountants report has not supported their claim.
The bare offer is as folows
1, they offer the sum of £22,350 in settlement of our claim
2. our cosis on the standard basis.
3. they want us to agree to pay rent or get the temp ta pay rent for the continued occupancy of
Martine Drive
4, they want us to pay the wages of the assistant employed there
5, they want a letter from us stating that proceedings were issued purely to recover a debt and that
there was no allegation of dishonesty
We can respond in a number of ways.
Firstly I think that we can all agree that their demand at 3 anc 4 cannot be accepted because rent and
wages are a matter for Castleton to resolve with the current interim postmaster or possibly the
previous interim postmaster as I understand that there have been more than one of them.
Secondly as we have never pleaded that Castleton was dishonest
agreeing to this demand. We believe that he is seeking to go bac!
statement from us could be very valuable to him.
ere is no problem with
work in the city and as
us
such a
Thirdly the offer is defective in that it does not mention interest at all which we are entitled to on the
debt
Fourthly no offer has been made to give a declaration to the effect that he withdraws ail his allegations
about
the HORIZON system
Fifthly as we made a Part 36 offer to him in January of 2006 stating that if he would pay our full claim
we would not seek our costs which he rejected .he is now obliged to pay our costs on the indem
not the standard basis since that date. lf costs are awarcied on the standard basis then tradition
successful party would recover between 60 -65% of the costs expended. Any dispute is resolved in
favour of the paying party. Costs on the indem: basis means one recovers almosi ail of ones cosis
and any dispute is resolved in favour of the receiving party. So there is quite a difference between the
two,
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Sixthly ihe reason given for not paying the full amount of the claim is spurious as we have
demonstrated to them on a number of occasion thai there is no basis for their allegation that the
accounts were £3,509.18 short on week 49.
Seventhly the position in respect of costs is not as clear cut as it appears at first because the Courls
have an ability to cap the amount of costs awarded so as to make them proportionate to the size of the
claim. However they have to teke a number of factors into consideration not me: he size of the
claim but the conduct of the parties, ours has been impeccable, the imporiance of the issues to the
parties, proportionality of the costs incurred to the size of the cl: has however been emphasised in 4
recent Court of Appeal decision. Therefore there is a risk that by rejecting an offer of standard costs
that the Cour could decide to cap the costs at say 80K and then award only 60% of that. Costs to date
including the work in progress and the work which the accountants have done together with Counsel’.
fees come to approximately 140K.
However the trial is sti! a little while off and I think that we should aim for Castleton agreeing for
jucgement to be eniered against him in ihe full amount plus an agreement thai he will consent to the
payrnent of a fixed sum in respect of costs. As a trace off we can offer the letter confirming that the:
was no dishonesty and agree that we will not seek interest at an indemmity level. The benefit of havir:
@ jucigement against him in the full amount is that we wil be able to use this to demonstrate to the
network ihat des fons about HORIZON we were able to recover the full amount from
ft will be of tremendous postmasiers to think twice about their allegations.
Even if such a counter offer is r
trial date more costs are incur
communi iio our exte
‘ed we still have time to negotiale but as we move nearer to the
daily so it is very important thai we reach a decision and
nal soli this morning #f possible.
Please may I hear from you by e-mail or telephone as soon as possible
Regards
Maney Talbot
Dispute Ri tion
Company Secretary's Office
Royal Mail Lega! Services
148 Old Syeet
London ECTY¥ SHO:
eral Email: mandy. faiboi,
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Mandy Talbot To: Keith K Bained I
04/08/2006 12:48
oc:
Subiect: fon - Marine Drive - Briefing
oar week RANG lo.fole
The case has been set dowri for hearing in November of 2006 and despite the Defendant
to consider mediation on 2 number of occasions previously he is now proving
to pin down about agreeing a cate for mediation and this matter is likely to go straigh nt to trial.
Our agents need assistance on a number of points as detalied in the e-mail below. Legal Services
have aiready authorised them to make the minor amendments to the Particulars of Claim and to
dea of having the matter transferred te the jurisdiction of the Central London County
ep the cosis down. The Defendant h da Defence and Counter Claim for a
mm and so it not likely that roposal will be agreed.
i
@ integrity of the HORIZON system into dispute we are all aware that the claim
has to be prosecuted vigorously because the consequences of settling on any terrns would send out
an adverse message through the POL network which will in turn lead to many more chélienges. The
integrity of the system hes been raised in the postrnasters magazines and there at least two other
cases of which we are aware where proceedings will be issued depending upon the outcome of this
case,
The sums meniioned by our agerits by way of costs are iarge and were originally raised as a means of
demonstrating to the Defendants solicitors the potential financial cost to himself should he not win the
case. Castleton owns a house but no other assets of which we are aware against which we could
proceed, shouid he loose the claim and be ordered to meet out claim for costs
There is the possibility in light of the above that the Court couid impose an artificial limit on the level of
costs which POL could recover to reflect the inequality of financial resource between the parties.
Keith, Graham and Tony
I should be obliged if you could give me assistance wit
Fujitsu.
the enquiries made by Tom under the heading
Regarcs
Mandy Talbot
ion Team Leader
Company Secretary's Office
Royal Mail Lega! Services
148 Old Street
London EC1V SHQ
i GRO 1
mai: mandy.talboti
by Mandy T
Forwarde:
°Tom Beezer™ <mancy.taibo'
“Stephen Dilley’
Castleton
24/08/2006 16:38
Mandy
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As we discussed last week I am writing to update you on certain points that came out of
my discussions on the Castleton case with Richard Morgan of Maitiand Chambers.
Overview
Richard Morgan believed the case to be one with a good chance of success but he did
warn that was dependent upon the accountancy evidence stacking up in our favour {1
return to this below) and also upon an acceptance of the costs in taking this matter to
trial. We have di ed costs before, I also return to this point below.
A further point made by Richard Morgan was that we should endeavour to move the
main area of focus in the case away frorn the Horizon system if possible. Richard
suggested a method to do that would be to prove (if possible} the physical cash losses at
the Marine Drive branch by reference to all the other documentation created around the
transactions, not simply by reference to what was in fact recorded on the Horizon
system. So for example when a cheque is deposited there is (as I understand it) a
counterfoil filled out which is sent off daily by the sub-postmaster, with all cheques
eventually ending up at EDS. If the Horizon system was later found not to match the
physical remittances an error notice is generated. One of the issues in this case is that
there were few error notices generated suggesting that the physical remittances did
match the n inputs. Clearly, to atternpt to look into such matters in the level of
detail likely to be required will be costly and time consuming.
Amendment of the Particulars of Claim
Richard Morgan would like to make some few minor amendments to our particulars of
claim. Currently they are drafted to plead your claim on a breach of contract basis (/.e.
the sub-postmaster’s obligation to make good the losses as contained his contract).
Richard would like to go on to also include a plea that the sub-postrnaster is your agent
and therefore has a duty to account to you for all losses in any event. This is nota
major amendment and Castieton’s lawyers already acknowledge he is an agent. Any
consequential armendments will, therefore, be limited. The reason for the amendment is
to put the case at its strongest and I suggest that such an amendment be made. I would
be grateful for your view on this.
Fujitsu
In this matter Fujitsu are clearly going to play a role. I understand that Fujitsu are
currently looking at the matters raised in a fetter of 25 July 2006 from Castleton’s
lawyers (copy enclosed for ease of reference), One of the pivotal issues in this matter
will be the arithmetic used throughout and I would like to know the answer from Fujitsu
possible te the points raised by Castleton’s lawyers. Is there any pressure
you can bring to bear upon Fujitsu to cause them to answer this letter in the near future?
E would be most grateful if you would consider this.
One other point raised by Richard was the integrity of the Fujitsu product generally. Just
to confirm, I understand that Royal Mail/Post Office know of no issues with the Fujitsu
system and are confident that it operates correctly. Please discuss this with me if you
have a different view.
Which Court?
You may recall that Castleten's lawyers had this matter transferred frarn a local court to
the High Court in Londen. Richard is strongly of the view that it is possible a High Court
judge may take an adverse view that this matter is before him given that, initially at
least, it is a claim for between £25,000 - £27,000. Richard feels that we should write to
Castleton’s lawyers and suggest that given the nature of the claims the matter should be
transferred to the Central London County Court - Chancery Division. Richard has a high
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level of faith in the judges there. Even by making the suggestion we buy ourselves a
level of protection if the matter is ever raised by a High Court judge. At that point we
could then at least assert we had asked for the matter to be transferred to a more
appropriate forurn but Castleton’s lawyers refused. I would be grateful for your view on
this.
Length of Trial /Costs
With the likely number of witnesses that may be needed to cover all the various aspects
of the ness conducted at the Marine Drive Post Office together with the need for
expert witnesses, Richard considers that this matter will take between 7 to 10 days of
court time. The previous nate was 5 days. This will clearly have an impact on costs
going forward. I know that historically Stephen has produced for you a schedule of costs
that was shown to Castleton’s lawyers. That schedule totalled approximately £223,000
including VAT and disbursements. At the time that schedule was prepared it was f
be realistic but at the higher end of what the matter may cost (for the purposes of
demonstrating te Castleton’s lawyers what they may be facing}. Having reconsidered
the matter, and in the light of the complex nature of the evidence that will need to be
gathered (both of fact and expert) and the extended current estimate for the trial 1
believe the costs estimate to be certainly possible and perhaps even light. A better view
on this will be achievable in the course of the next few weeks as the nature of the
evidence Stephen is able to gather becomes clearer. [ will have Stephen update you on
this aspect of this matter in the near future,
Counsel also raised the issue of the possibility of costs capping ~ i.e. the court asserting
that costs only up to a certain level should be awarded. This could come up as an issue if
the judge takes a view on proportionality (i.e. costs verses level of claim). There are, of
course, argument that can be deployed to try to counter this issue ~ should it in fact
come up - but I thought it worth raising here.
As we discussed (and apologies for raising this matter again - I know you are aware of
this advice - but I raise it here for the sake of completeness), the costs of pursuing this
claim will significantly exceed what is at stake. Accordingly, even if you win, the P.O will
almost certainly not make a net gain as your costs will be assessed and possibly capped
and the irrecoverabie costs may well exceed the value of the monetary claim. In any
event, you may well find it difficult to enforce any judgment because of Mr Castieton's
asset position which is unclear. Accordingly the purpose of pursuing this clair now is
not to make a net financial recovery, but te defend the Horizon system and hopefully
send a clear message to other subpostmasters that the P.O will take a firm line and to
deter others from raising similar allegations.
Summary
The above, I believe, covers the main issues of substance that were discussed, I have
not sought to record all the detail of all the matters covered. Once you have had the
chance to consider the above I would grateful if you could give me a call or drop me an
email so we can move this matter forward as swiftly as possible.
Kind regards
Tom Seezer
For and on behalf of Bond Pearce LLP
39-49 Commercial Road
Southampton
S015 1GA
Firmwide number:
POL00090437
POL00090437
My direct fin
Southampton offi
DX: 38517 Southampton
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on to Bond Pearce LLP means a Member of Bond Pearce LLP. Bond Pearce LLP is
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25 July 2006
SIDB/FAC 1/348035.134
P.113966
Post Office Limited -v- Mr L Castleton
jon fogs losed by your client. We
eB a fa a eect tal By that, we understand that
d cut at Marin ve Post
closur
om
og for Week 42, Since
to thet week, although
ad weeks in whi
arried out
uumming exercise, we have
y below we se
ve the starting figures going into Week 42 are » undispu
an uncoritentiy ag Week 42,
parison: with the cash accounts for that
inal cash aecourt gener ted 2
rried over from Week 41 was £54,170.49. As nsequence, if can ‘be seen that, swcnthe
was received during Week 42. Howew in the
log for this week gives a figure for monies ‘ived of £125,013.90, an apparent difference of
monies leaving Marine. Drive Post Office during
discrepancy. tock carried over from: Week 41 was £92,374,74, If this is
6291.1 5, this leaves a figure of £83,916.41 in respect of payments made. Again, however,
tion of ail of the transact: showing in the tr: tion log gives a figure of £83,707.07
ave is not allocated in the Week 42 cash accounts.
shown as being paid out of Marine Drive
wuter system then seems during the end-of-week balancing i have offset this
against the £2,.893,24 figure, along with some further giro bank transactions, and produced
shortfall figure of £1,103.13. This is ef course the figure that our client was requis
It would further appear that there is £1,706.64 in unallocated ©:
un allocated vast
at apparent ca
good.
flan « N.oah 6 A. Eatag #8 apot #4 .Maota ra
werlig * AD Owens « ME Molloy © A Gesan Consultants: L Rows » MT Most ‘
Pent
OMAR ARE CY
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figure of £1,103.13. He
ions
Our client has not been able to reconstruct precisel; how Horizon arrived at the f
surmises that the systern has sought to offset the £1,706.64 and other unallocated giro bank transac
he £2,893.24 figure set out above. We would invite your client to undertake its own analysis of the
action logs and provide an explanation for haw that figure has been derived, in order that this discrepancy
can be explained and any possible flaw in our client’s methodology in carrying out the manual reconciliation
brought to light as quickly as possible.
‘fhis represents an analysis of the figures ai their most basic level. Mr Castletan’s findings seem on the face of
it te be entirely consistent with his assertion since this dispute first arose, namely thet the gure
the Horizon computer system are incorrect. At the very least, it g question marks about how
relies in essence on double-entry book-keeping can give rise to discrepancies
C
ur client then proceeded to review the Week 42 transaction log in more detail. 1t would appear that a number
of the transactions recorded are incomplete — only one half of a given transaction hes been
recorded by Horizon, with no corresponding entry. Ordinarily, one would exy see two “halves” of a
transaction. For exemple, a sale of £10 worth of stamps would show a £10 reduction in stock and a
ng £10 increase in cash. In a number of cases, the log shows apparent transactions with only one
2g 2g been te ecorded by Horizon, and ne corresponds to balance it.
in practice, this cannot happen. We understand from Mr Castleton that the Horizon
such a way that in order to complete a transaction on screen a valid method of payment must be selected. i AS
st process a transaction unless there had been a corresponding secand “half” (o
st “hal?”) to it,
ch, the system would n
the case of payin $, 8 corresponding
The chvious mference to be drawn is that, if the sysiem cannot be operated to only create half of a transaction,
x the apparently m sing “half”, Again, this is consistent with our client's supposition
Horizon is not record!
i transactions have not been filly recorded {or recorded at all) as a result of problems in communication
ea the two cornputer nodes used at Marine Drive Post Office.
Our client’s fir bellef ts that if half of a transaction were to be lost, the effect would only show in relation to
cash because Horizon looks for everything and the remainder is cash. If the first “half” of a transaction were
lost, it would show as having no effect on stock but would only be noticeable in terms of movement in the
also rather begs the question of whether whole transactions can be “lost” (Le. not recorded
possible to “Jose” halves of transactions,
cash figore. Th
ie that this is, of course, something that is going to have to be addressed in expert evidence. It will
reconciliation in relation to the other weeks in which losses
of the figures for
be necessary to undertake the sam
ly arose. However, at this stage, we would invite you to conduct your own anal
Week 42 and consider these anomalies with your client, and then provide an
G-4ARKTABREYICASTLETONOS0706 LBVEER 1 BOND BRARCE
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John D Cole
03/08/2006 14:
Mandy, Further to our discussion on the points you mace below, I confirm thi
(a) Fujitsu Services are entitled to charge for ‘ad-hoc’ requests for work as they arise. Regarding the
rate chargeable, this will degend on who undertakes the work, it is believed a figure in the region of
£2k - £7k is likely, this seems to be a reasonable amount.
{b) The payment for this activity will need to come from the ‘originating source’ that first in:
yourselves to challenge this action (this is likely to be a Retail ine manager or the Area in
office, but come from Keith Baines budget.
{c) The HNG-X contract arrangements continue with requests for inforrnation being paid on an ad-hoc
basis, this again is the best way to pay for these issues otherwise if the is a ‘fixed charge’ nature we
would have to pay for work whether or not it is undertaken
Regards.
John Cole
Contract Author
Post Office Limited
Calthorpe House
15-20 Phoenix Place
Oa
£ Mailjohad cold
Post Office Ltd
Registered in England and Wales number: 2154540
fered Office : 80-86 Old Street, LONDON ECIV SNN
Keith K Baines
Keith K Baines To: John D Co'el,
02/08/2006 14:02 :
oo.
Subject: RE: P.O -y- Castleton: Transaction logs - Marine Drive
~ Forwarded by
we TOPRICI
Mandy Talbot To: Keith K Baines”
02/08/2008 11:50 Wardle,
Subject: RE: P.O -v- Castleton: Transaction logs - Marine Drive
You both know mere about the entilement for Fujitsu to charge for this type of information than I do so
can you confirm that
a they are entiled to make a charge for its provison and if so at what rate
b Keith given that this information is essential to the case that you are prepared to authorise the
expenditure
© Does the new Horizon co
infor:
ict have any pro
son - F not de you think that i should?
ion for the charges they can make for the provision of
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Regards
Mandy Talbot
FICE on
Forwarded by Mandy
. Graham C Ward To: Mandy Talb Keith K
02/08/2006 07:44
ON,
Mandy / Keith
Piease see ihe response below from
wansaction fogs for CAP 42. In summary they can undertake the task which will take th
weeks .......... wilh @ cost between £2K & E7K.
As I already have the data on CD and there are only 3707 transactions and 1450 events (sounds a lot
but could have been considerably worse}, I suspect 3 weeks will be a worse case comipielion time
frame, assuming we give them the ‘nod’ quickly.
Please advise whether you'd ike Fulitsu to undertake this task and confirm PO Ltd is happy for Bria
Pinder to raise a CP.
Regards
Graham
Casework Manager
Post Office Lid Investigation Team
PO BOX 1, CROYDON, CRO 1WN
i@
19
fo)
hing we can undertake. However
time consuming a
ngactions avolved,
id tak
rv idea once
‘planned!
The next
k and leave, we
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(preferably 3 weeks if pos).
4. Finally costs; we would raise a CP for identify
all costings, howev esti an ine 2&7
but this is really We
would
receipt of the CP after impact.
i CP anyway, {at no cost}, to get the ball
astigate tk
t is not required we can
asily cancel it. At least
i
and
way we have a better idea of the costs and will have made a start in
finding a window to do the work, also the CP process could take a week to
complete.
Hope this is helpful
Kind Regarde Brian
nal Meseage--~
aham.c.wa
-----Ord
From:
28 July 2006 ¢8
To: Pinder Bria
Importance: High
Brian
figures on the complete:
It appears that the
nompared the transaction
es (just for an
de that Horizo’
saction.
cash account
olicitor's
logs with the
analysis) and
therefore
only vecording half the transaction. I've attach
castleton's solicitors which ou
cash accou
hat they do:
below
2: eCopy scanned document. pdf}
@ ‘test! case and that the inte ty of the Horizon syst
llenged, my own opinion is that this exercise should be comp
xpert' £rom Pujitsu, However it will obviously be ext ©
as all the figures recorded will need to be method
ly analysed. It is also important that ve complete th ly
ond formally to the points raised as scon as possible, therefore my
questio:
n exercise that Fuliteu could undertake, possibly by Gareth
y have a thorough unders ng of the figures
ysaction logs and the figures on an office cash
perhaps,
record
how soon could this exere performed and a
involved and if so how much ?
I would appreciate an early response
Regards
Casework Manager
POL00090437
POL00090437
Ltd Investigation Team
ON, CR9 1"N
GRO “I
i GRO.
GRO
If you are r
produce, copy or
< vi tk i
ail from y
eribute the
pleas:
in err
delete th
© system,
FEES ERRATA ERR ERENT EE CE RRA ee
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Dave Hulbert
wisd
<Brian. Pinder.
Mai Tatbou
Stephen,
One ofr s collating the incident logs now. I'll forward on as scon as these are available.
Regards
Dave
Head of System Operations
Operations Control
Post Office Lid
“Stephen Dilley" GRO i
“Stephen Dilley”
Lsandrew.wiset GRO
“Pinder Brian" <Gilan Pindei
Subject: URGENT: Post Office -v- Castleton - Mariné Brive branch
Dear Graham and Dave,
On Thursday of this week (18 May) we have to exchange with Mr Castleton’s solicitors all
infe relevant to the claim and counterclaim which either helps or hinders us.
l understand that you may have obtained all relevant NBSC and HSH cail logs. I already
have:
HSH call logs from 28 January 2004 to 24 April 2004
NBSC call logs from 19 January 2004 to 23 April 2004.
Please can you forward to me today those call logs from 1 December 2003 to 19/28
January 2004. January 2004 is more important than December 2003, because it is when
the losses really started accruing, but both would be ideal,
In case you do not have these call lags, I am copying this email to Andrew Wise and
Brian Pinder who may be able to assist.
I look forward to hearing from you as soon as possible.
Kind regards.
Stephen Dilley
Solicitor
for.and.on_behalf. of Band Pearce. JP
Main office phone: +44
POL00090437
POL00090437
Please note our new contact details from 8 May 2006 as set out above.
The information in this e-mail and any attachments are confidential and may be legally
privileged and protected by law. The intended recipient only is authorised to access this
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A list of Members is available from our registered office. Any reference to a Partner in
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regulated by the Law Society.
POL00090437
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Keith K Baines To: John D Cold.
co.
10/03/2006 14:10 Subject: Re: Horizon URGENT Private and Confidential
~ Forwarded by Keith K Baines/e/POSTOFFICE or: 10/05/2006 14:10
Graham C Ward To:
008 10:07 oo: 7
Subject: F
Mand! ; pve”
Firstly, appilogies for the delay in replying, I've just returned from annual leave. I did have a brief chat
with Dave on receipt of this e mail re: the call logs and he agreed that he would obtain them (in Excel
format) from the NBSC at Dearne.
Teo clarify, the cai logs that I can obtain from Fujitsu are those that relate to technical fauits with the
system (printer problems / monitor faults etc) and which are dealt with by the HSH (Horizon System
Heipdesk) only .... any calls that relate to procedural problems on Horizon are dealt with by our own
NBSC Helpline, details of which can be obtained by Dave. (The NBSC can aiso provide details of y
the HSH calls as well, but I don’t think they go into the sane depth as the details we receive from < fre Ss
Fujitsu) Oe
With regards to my Jedge of Horizon, I can obtain data as and when required being ihespoc
between PO Ltd and isu, but I do not have the working knowledge of the system to analyse data
and comment on whether Horizon was working correctly or not, or whether transactions have been
processed correctly and may have affected the office balance. I know Tony U has agreed te has
look at the Marine Drive data, but he is sti waiting to hear exactly what information needs analy:
cri
Fujitsu should be able to offer a technical perspective of the system working properly. I have searched
my records of previous statements received and have found one where Brian Pinder's predecessor Bill
Mitchel provided a staternent (see below) commenting on individual calls to the HSH and then
including a generai paragraph stating that "None of these calls would have had an effect on the
integrity of the data or the system...". Perhaps I should formally ask Fujitsu to provide a sirnilar type
statement in respect of Marine Drive & Torquay Road, what do you think 7
BM Shobnall Road SPSO 150405.c
if someone within PO Ltd can then provide a similar type statement in respect of NBSC procedural
calls, I think we will then have ail areas covered but this, as we discussed at the meeting needs to be
inated by one ‘expert’ , has someone been appolnied 7 ~ me AGS cy Sosy ex merits, KES fest
wih BR OQ Yveg ha da 7
Jus! to clarify my understanding of where we are al this moment in respect of all 3 cases
Marine Drive
With regards to Castleton, we have the transaction data and HSH call logs covering the 01/01/04 -
31/03/04, this does not inciude calls made to the NBSC.
Presumably Dave will have now obtained the NBSC cali logs for this period, or is there a further period
of HSH calls required 7.
in your e mail below, you mention the period 01/12/04 - 34/03/05, is this a new period of data / analysis
required ?
Torguay-Road
We nave the trans: doe! co cong Rog thi
4“ #19105 - agit 5 . E will keques; ata to cover the: S Nar 168/04 - 28/02/05 and
VU w ane “
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made to the HSH. Pig uumably
of real over the period. Ww Vier receiv fet you know and you
ify
2 need to ask for a siatement from ujiisu
for one af this point.
f / J
Ss thus far hy ah really helped answer the/questions posed in ea¢ A case, their
‘e beer ore! to say the least. yi Nee
on therefore is that PO Lid needs to cover off all questions relating to office
balancing & transaction details, Qve should have NBSC call records detailing any issues bought to
our attention) and that Ful should provide us with a general statement for each case (as per the
statement above from Bill Mitchell) detailing calls made to the HSH, If you agree then { will ask Brian
Pinder fo provide such a stat ¢ in respect of Marine Drive & Torquay Read covering the periods
detailed above.
No doubt we'll spez
soon.
Grahars
Casework Manage
Post Office Lid inves’
PO BOX 1, CRO
Mandy
Mandy Talhot
a 81654
fant
orizon ‘ORE we Ra
I write further to the meeting in Decernber 2006 which most of us attended to bring you up io date
with the current state of play.
i should be obliged if you could let me kno
business case for the appointment of an ir
and in particular to assist on civil claims?
pragress has been made with making a
yse date from Fujitsu for the benefit of POL
Ifthe case has been accepted hay ment? [fF not
when is this likely to occur?
any steps bean taken towards making an appo
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Keith K Baines To: John D Cold,
MANE ati ce:
12008 10:57 Subject: Re: Horizon’ URGENT Private and Confidential
30
Keith K Saine
Mandy Talbot
29/03/2006 19:00
Stephen.Dillel_
Subject: Re: Horizon URGENT Priv
and Confidential}
Graham
Yes we do need a formal
Castleton because proc
aboul the precise format.
tement fror F in a format suitable for use in a civil Court in the case of
edings have been issued.Stephen Dilley frorn Bond Pearce will be in touch
On the case of Bajaj and Bilkhu what is needed Is for them to interrogate their systern across all the
dates on which the respective postmasters claim thai there was something wrong and provide us with
a suitable written narrative which can be turned into statement at a later date. A copy of the detelied
letters of claim giving details of all the dates on which it is alleged there was a problem with the syste
was attached to my e-mail of 1.3.06.
Do we know what they ere likely to charge us for these reports?
Keith, Dave :
In the recent negotiations with Fujitsu was any price agreed with them for the provision of rep: in
civil cases? Have we made any progress with getting POL to authorise expenditure to train a person
who is capable of analysing the data produced by the branches and what is received from Fujitsu so
as to assist the business in dealing with this type of allegation in future? Have any persons been
nominated by the business and if so what is. ackgraund/ when are they likely fo be available to
begin these duties
Although we have successfully persuaded Castleton to agree ta having the judgment against the
business set aside this is by no means the end of the matter. The case will go te mediation and if that
is not successful a trial by the end of the year
Belaj and Bilku are threatening fo issue proceedings urgently. Alleged probierns with HORIZON has
been highlighted by Bajaj's articie in the postmaster. This matter is not going to go away but its impact
can be reduced by dealing with it pro actively and quickly.
{look forward to hearing from you.
Regards
'y Talbot
ot Team Leader
Company Secretary's Office
Legai Services
Royal Mail, Impact House, 2 Edridge Road, CROYDON, CR 1PJ
GRO : Hi
“External Email: mandy.telbot!
Graham C Ward
“yy Graham ¢ Ward To: Mandy Talbot/e/POSTOFFICE@POSTOFFICE
3/2006 14:23 ee
va 20
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la Subject Re: Horizon URGES ivate and Confidential
Ce i 3 Ci
Mandy
Would you like me to request a formai witness statement (as mentioned below final paragraph) from
Fujitsu in relation to the Marine Drive and Torquay Road cases.
Cheers
Graham
Graham C Ward
“eb Graham C Ward : Mandy Talbot
_ re Tony RUG een oneal Dave
oO 108 10:07 .
Hulbert Keith
Baines: GRO
Subject: Re: Horizon URGENT Private and Confidential
just relurned from annuai ‘eave. I did have a brief chat
gs and he agreed that he would obtain them (in Excel
tose that relate fo technical fauits with the
r faults etc) and which are dealt with by the HSH (Horizon System
relate to procedural problerns on Horizon are dealt with by our own
ip! f which can be obtained by Dave. (The NBSC can aiso provide brief details of
© HSH calls as well, but I don't think they go into the same depth as the details we receive from
Fujitsu)
system (printer
Helpdesk) only
Wiih regards to my knowledge of Horizon, I can obtain data as and when required being the SPOC
between PO Lid and Fujitsu, but I co not have the working knowledge of the system to arialyse data
and comment on whether Horizon was working correctly or not, or whether trensactions have been
processed correctly and may have affected the office balance. I know Tony U has agreed to have a
look at the Marine Drive datz, but he is still waiting to hear exactly what information needs analysing.
Fujitsu should be able te offer a technical perspective of the systern working properly. I have searched
my records of previous statements received and have found one where Brian Pinder's predecessor Bill
Mitchell provided a statement (see below) commenting on individual calls to the HSH and then
including a genera! paragraph stating that "None of these calls would have had an effect on the
integrity of the data on the system...". Perhaps I should formally ask Fujitsu to provide a similar type
statement in respect of Marine Drive & Torquay Road, what do you think ?
if someone within PO Ltd can then provide a similar type staternent in respect of NBSC procedural
calls, I think we will then have all areas covered but this, as we discussed at the meeting needs to be
coordinated by one ‘expert’ , has sarneone been appointed ?
Jus? to clarify my understanding of where we are ai this moment in respect of ail 3 cases.
Marine Drive
With regards to Castleton, we have the transaction data and HSH cai
31/03/04, this does not include calls made to the NBSC.
Presumably Dave will have now obtained the NBSC c:
Od «
gs covering the 61/0
logs for this period, or is there a further period
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I should be obliged if you could let me know in return whal progress has been made with making a
business case for the appaintment of an individual to analyse date from Fujitsu for the benefit of POL
anc in particular to assist on civil clains?
if the case has been accepted have any steps been taken towards making an appointment? If not
when is this Hkely to occur?
Castieton- formerly of Marine Drive Branch office
For the benefit of you whe are new te this matier, Castieton was a sub postmaster whose contract was
terminated and who was sued by POL for approximately 25K. His response was to assert that it was a
fantasy debt created by the HORIZON sysiem and as such he should not be asked to repay the sums.
Bue to an error judgement was entered against POL on his counterclaim for an unspecified sum of
money. I am pleased to report that he has now been persuaded to consent to that judgment being set
aside.
Evidence has been obtained from his retad line manager, auditor, area intervention manager and
appeais manager which is rebust in detailing with why his contract was terminated and the basis for 4.
The area which does remain to de clarified is his all
HORIZON and on which precise dates it went wrong, as the totality of his evidence se far is tha!
went wrong between December 04 and 23/03/05. Castleton has obtained an acco. s report in
support of his claim but ts findings are incorrect because it has assumed that the daily triai balances
of snap shots actually represent the ammount of cash which was in the office al any one time.
Graham has obtained access to the Fujitsu data for marine drive for December to March and also the
helpline logs. Graham can you confirm whether these are ail the calls logged from Marine Drive or
merely the ones jogged onto the HORIZON call desk? if so can you now arrange to obtain ail of them.
Dave Hulbert - # you were provided with these would it be possible te drill down inte the data to
discover what was done to try to assist the postmaster and whether or not this cured the alleged
problems? Would a member of your team be able to give a statement dealing with the number of calls,
the resolutions and if any approaches to Fujitsu were considered warranted and if not why not?
Graham has aise asked Fujitsu for their assistance with less than impressive results. { atlach as a
PDF docurnent a copy of the exchanges.
Tor ig has provided me with 2 useful draft statement which he created which attempts to explain
to the Court how the HORIZON system works. I appreciate that this will now need some work to bring
it up to date. Please could somebody from th side of the business volunteer to up dete
this document. This docusnent couid usefully a report from Fujitsu or the business with
the specific detail about the system and the particular office added onto the end.
{ should be obliged for your comments upon what we believe that Fujitsu should be able to provide by
way of evidence and what they ere obliged to pravide under the contract.
I would have thought that as a very minimum they should be able to say that they have run a check on
the whole network between 1/42/04 and 31/3/05 and can confirm that either there were no problems
affecting the whole syst detail the ones which did occur, cornment upon which areas they
affected and whether they would be likely to cause the problems complained of by Castleton.
l would have thought that Fujitsu should be able to check the system with particular reference to
Marine Orive between the dates above and possibly afterwards te confirm whether or not they have
found any evidence of the problems complained of by Castleton. Castleton's lawyers claim thai the
current postmistress is experiencing identical problems!
Do we think thai a site inspection by Fujitsu would have any merit as I recall being told of cases where
problems were caused by family members hacking in and abusing the systern or where rare
geographical conditions caused probierns?
Lasily de Fujitsu know enough about POL products and systems to comment on the data produced or
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would this be @ job thai can only be handled by someone within the business? If so who other than
Tony and Graham now have the knowledge to go through the data to determine whether there is
evidence of the system malfunctioning?
Are there any other matters we believe that Fulitsu could comment on that would assist us in
demonstrating the robustness of the system in the round and in the circumstances of this case?
The agents dealing with case need instructions from the business on how to preceed now thal the
judgement has been set aside on the following matters
@ should we try fo settle the claim
@ should we apply for further and better particulars of his evidence
® shouid we employ agents to investigate Castietons finances:
® should we offer mediation again
® expert evidence
on which ve given some preliminary comments.
Please may I have your commen:
Given the existence of the cases of Balai and Bilkhu together with the publicity given to HORIZON
problem in The Subpostmaster I think thal to seiile the clair now ,even on confidential terms, may
cause almast as much harm to the business as fighting and loosing the claim. The statement
evidence is good but this case will be won or lost on the quality of ihe internal and externai reports on
the data produced by and onthe robustness of the HORIZON systern.
j think that there is very littie to loose in making a formal application for further information about
precisely what Castleton thinks is wrong with the system and for details of the precise dates on which
he claims the problems arose. The difficuity with addressing his vague allegations is the fact that they
cover such a long period of time given the enormnous number of transactions which will have occurred
during that time and if we can narrow them dow: vill make any investigation much more cost
effective. He will also be asked for precise details of the elements which make up his counterclaim as
they are exire vague at present. The response te this should at the very least advise us as to the
potential maximum value of the counterciaim.
In all cases it is advisable to try te ascertain if the person has the capita! to meet a claim but in this
case it may give us an indication of how much additional resource he can afford to expend on #. He
appears to be financing the Higation privately anc we have already managed to cast doubt on the
assertions made by his accountants report thereby meking it more or less worthless. He was not
rded the cosis of the application to set judgement aside as the costs have been reserved to be
tter date. He will probably also have to amend his defence and counterclaim which will
all cost money and which may in total recommend a settlement to him,
I see no downside in offering mediation once mere as if accepted it may force Castleton to take a
more realistic view of his chances, whilst always looking good in the eyes of the Court and giving us
additional time to select and brief an expert witness.
Selection of an expert witness will be crucial in this case. Preliminary enquiries should begin as soon
as possible. The selection should demonstrate the importance that POL places on this matter so a
well known firm with a national reputation should be selected. The firm and expert must have 4 firm
grasp of technology. As this case may set the trend for future fligation firms should be invited to
tender on the basis that expertise picked up in this case will lead to future work coming their way. For
that reason it may be that a strong second tier firm may be preferable to one of the top four where
such repeat work would not be so financially attractive.
\ have seen and approved an agreement prepared by Fujitsu over the status of any information
divulged fo such an exp
Can any of you make specific recommendations as to suitable firms or fee earners?
Bajaj - current postmaster at Torquay Road
Mr Bajaj has been complaining about the HORIZON system since Xmas 2004 and has alleged that it
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has manufactured errors which have resulted in him to date paying 14K to POL which he claims was
not justified. He has resigned and withdrawn his resignation, written articles in the Subpostmaster
nviling fellow postmasters who have suffered to contact ypiained to the Board, his MP etc. His
allegations were not particularised to any degree until a letter before action with an accompanying
schedule was received ,a copy of which I attach.
Graham I know that you have made Fujitsu aware of this prob’ and have received some limited
comments from them cogies of which I attach. Looking at the schedule attached fo the letter before
action can you confirm whether you have (a) all the fault logs between Torquay Road and the
HORIZON helpline and the postmasters helplines between the earliest and latest of the dates referred
te (2) can you request copies of the transactional data between the two revised dates as I believe the
formation which you have is more limited.
Dave Hulbert would your team be able to produce a statement based on the logs similar to one
referred to in Casileton above.
unless the tear is able to identify any other suitable person will you be able to analyse
the trans: data to exph 2 SO called discrepancies and losses. Many of the items in the
schedule not result in ari actual loss at all and are probably part of the settling process which the
accountanis and solicitors do not appreciate.
Do we think that it would be sensible or useful for Fujitsu to arrange for an engineer to look at the
HORIZON equipment just to eliminate local anomalies?
New Case- Bikhu postmaster at Bowburn Post Office.
I attach the claim form together with supporting scheduie for Graharn to order the help desk logs and
transactional data.
{wil put our agents in touch wii
investigated this claim alreach
the relevant members of staff within POL who may have partially
Correspondence from Tolhust Fisher indicate that they have been contacted by another disgruntled
postmaster but they are not as yet instructed on his behalf,
Keith and Dave Hulbert have brought the case of Hughie Noe! Thomas to our attention as being yet
another discipline case where HORIZON is being blamed. Aiso that of Hogsworth Post Office
Skegness
All the above emph:
staff who can deal v
postmasters less incli
e the importance of identifying and appointing a suitably qualified member of
the investigation of these claims swiftly and robustly so as make other
ed to expend money on making claims in the future.
I look forward to hearing from you es soori as possible.
Regards
Mandy Talbot
Litigation Tearn Leader
Company Secretary's Office
Legal Services
Royal Mail, impact House, 2 Edridge Road, CROYDON, CR9 1Pd
H GRO I
External Email: mandy talib GRO
>>>> bajaj fujitsu.pdf attachiiant was TeiTiver
‘rom this email <<<<
>>>> bajel letter before action pdf attachment was removed from this email <<<<
>>>> Castleton fujitsu_pdf altachment y
removed from this email <<<<
>>>> Bilkju 1.pdf attachment was removed from this email <<<<
>>>> Bilkhu2.pdf attachment was removed from this email <<<<
>»>> BM Shobnail Road SPSO 150405 doc attachment was removed from this email <<<<
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of HSH calls required ?.
in your e mail below, you mention the period 07/12/04 - 34/03/05, Is this a new period of date / analysis
required ?
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pag GIGa, WrOt ovef sts
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Race
may °
wets, Seaeehs Meaay TEKS dni Oise Pe SS “gek OA
sdRIrod et agree S) modo ASA WKRan organge Ga fay
Bug AGH AOSD G Gy Hine HEEloSs Preddass
. Tony R Utting To: John 0 Coie!
02103/2008 11:39 ih Keane
a
*)
Subje:
John, as discussed the other day, I do bell
our team for a number of reasons.
ve that this is a job that could be usefully conducted within
Positive stuff
and examine Horizon transaction data as part of their
tion and prosecution work and are therefore familiar with not orily jooking at and
a, but can also prepare their own witness statements in support of the evidence they
analysing the
uncover.
Because we also hav ng tes with the Security and audit function within Fujitsu, we are also able
to take witness statements from therm in support of prosecution cases and could use the same [inks in
support of Civil matters (indeed, the standard statements that they currently provide to us in
prosecution cases were originally drafted with support from our team). I beleve our contract states
that they will provide support in this area.
Given that quite often the civil case follows on from the investigation case and we aiso conduct
financial investigations, we wouid be in a position to reduce other costs to the business by aiso doing
financial } tigations on these cases as weil and re’ g prosecution analysis in support, rather
than starting again from scratch (I would need to taik this aspect through with Mandy Talbot).
I believe that in order to have somebody availabie to do this at all times, we would need two bodies
undertaking this work. From my Job evaluation experience, I would suggest they would come out at
CM2 (or equivalent). These would cost in the region of £35k each(salary on max about £27k}. Given
the cost of such things as Forensic accountants etc. this would be money well spent. There will always
be occasions when outside expertise has to be called in, but I think the “in house” approach will work
in most cases.
We are in a position whereby, !f the business were to employ two stand alone analysis, there would be
ods of being too busy and periods of not having enough to do, which would affect the efficiency of
the litigation process. A better solution in my view would be to ulilise the existing investigator resource
and spread the work around the whole operational team (currently thirty) in order to level off the peaks
somewhat It would also increase the flexibility when people are on leave, sick etc and maintain the
numbers in what is a small but very specialised tearn which is nol easy to replace. WE would adapt
our Working time Mi to enable us to measure the resource used for this work fo ensure we utilise Iwo
FTEs.
The sting in the tail
ii needs to be understood that as the people running the system and its diagnostics, only Fujitsu can
provide evidence thai the system is working correctly. All we can do is look al transactions, identify the
dodgy ones and provide some idea of what has gone on and who dic it, so you might find that there
has to be a lot of input from Fujitsu on this from a witness statement and court attendance aspect.
l have spoken to Rod about this issue and as we are in the throes of a 20% reduction, uniess I am
able to keep two of the CM2 heads that! am being asked to lose, I will not be in @ position to
undertake this work. I have asked Rod to speak to Peter C. about this and see where we stand.
Hope this heins
Tony U
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John B Cole
John D Cole
O2OB/2006 08:36
Tony,
With regard to the provision: of an analyst to deal with Civii Litigation cases, could you confirm this is
appropriate to your department (if mot, who else you think might undertake the work). The steer from
the EC is that they are sympathetic to additional rescurce being provided (this is independant of
headcount restraints)
Finally, please could you specify the costs (pay and rations) for the Analyst (assuming it is in your
department), as this issue is now beco!
eply would be appreciated. Thanks John Cole
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Mandy Talbot To: Tony R Utting!
ian. herbert 4
Subject: Horizon URGENT Private and Confidential
l write further to the meeting in December 2005 which most of us attended to bring you up to date
with the current state of play.
what progress has been made with making a
3h to snalyse date from Fujitsu for the benefit of POL
and in particular to assist on civil claims?
if the case has been accepled have any steps been
when is this Hk:
ken towards making an appointment? if not
Castleton- formerly of Marine Drive Branch office
For the benefit of you whe are new to this matter, Castieton was a sub postmaster whose contract was
terminated and who was sued by POL for approximately 25K. His response was to assert that ilwas @
fantasy debt created by the HORIZON system and as such he should not bt ked to repay the sums
Due io an error judgement was entered against POL on his counterclaim for an unspecified sum of
money. I am pleased to report that he has now been persuaded to consent to that judgment being set
aside.
Evidence has been obtained from his retai
appeals manager which is robust in detallir:
The area which does remain to be clarifi
HORIZON and on which precise date:
weat wrong between Dece!
support of his claim bu
or snap shots actu
8 Manager, auditor, area intervention manager and
d and the basis for 1.
is his allegation thal there was something wrong wi
ent wrong, as the totality of his evidence so far is that It
iber C4 and 23/03/05. Castleton nas obtained an accountants report in
indings are incorrect because it has assumed that the daily trial balances
reoresent ihe amount of cash which was in the office at any one time.
Graham has obtained access to ihe Fujiisu data for marine drive for December to March and also the
helpline logs. Graham can you confirm whether these are all the calls logged from Marine Drive or
merely the ones logged onto the HORIZON call desk? If so can you now arrange to obtain all of them.
Dave Hulbert - if you were provided with these wouid # be possible to drill down into the data to
discover what was done to try to assist the postmaster and whether or not this cured the alleged
problems? Would a member of your team be able to give a statement dealing with the number of calis,
the resolutions and if any approaches to Fujitsu were considered warranted and if not why not?
Graham has also asked F
PDF document a copy of
iisu for their assistance with less than impressive results. I attach as a
e exchanges.
Tony Utting has provided me with a useful draft siatement which he created which attempts to explain
° the Court how the HORIZON system works. I appreciate thai this will now need some work to bring
i up to dale. Please could somebody from the technology side of the business volumeer to up date
this document. This document could usefully form the basis a report from Fujitsu or the business with
the specific detalii about the system and the particular office added onto the end
I should be obliged for your comments upon what we believe thai Fulitsu should be able to provide by
t
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way of evidence and whal they are obliged to provide under the contract.
I would have thought that as a very minimum they should be able
the whole network between 1/12/04 and 34/3/05 and can confirm that either there were no problems
affecting the whole system, detail the ones which did occur, comment upon which areas they
affected and whether they woulc be likely to cause the problems complained of by Castleton
say thal they have run @ check on
I would have thought that Fujitsu should be able to check the system with particular reference to
Marine Drive between the dates above and possibly afterwards to confirm whether or not they have
found any evi of the problems complained of by Castleton. Castleton's lawyers claim that the
current postmistress is experiencing identical problems!
o we think thal a site inspection by Fujitsu would have any merit as I recall being told of cases where
problems were caused members hacking in and abusing the system or where rare
geographicai conditions caused problems?
Lastly do Fujitsu know enough about POL products and systems to cormment on the data produced or
would this be a job that can only be hancied by someone within the business? If so who other than
Tony and Graham now have the knowledge to ge through the data to determine whether there is
evidence of i
Are there any other matters we believe that Fujitsu could comment on thai would assist us in
demonstrating the robustness of the system in the round and in the circumstances of this case?
The agents dealing with ca:
dgement has been set
e need instructions from the business on how to proceed now that the
i je on the following matters
® should we try to settle the
® should we apply for further and better particulars of his evidence
® should we employ agents to investigate Castieions finances
°
°
should we offer mediation again
expert evidence
on which I have giveri some preliminary comments.
Please may I have your comments?
Given the existence of the cases of Bajaj and Bilkhu together with the publicity given to HORIZON
problem in The Subpostmaster I think that to settle the clan now ,even on confidential terms, may
cause almost as much harm to the business as fighting and loosing the claim. The statement
evidence is good bul this case will be won or lost on the quality of the internal and external reports on
the data produced by end onthe robustness of the HORIZON system.
I think that there is very little to loose in making a formal application for further information about
precisely what Castietan thinks is wrong with the system and for details of the precise dates on which
he claims the problems arose. The culty with addressing his vague allegations is the fact that they
cover such a long period of time given the enormous number of trensactions which will have occurred
during that time and if we can narrow thern down i will make any investigation much more cost
effective. He wil also be asked for precise details of the elements which make up his counterciaim as
they are extremely vague at present. The response to this should at the very least advise us as to the
potential maximum value of the counterclaim,
in all cases it 's advisable to try to ascertain if the person has the capital to meet a claim but in this
@ i may give us an indication of how much additional resource he can afford to expend on it. He
appears to be financing the litigation privately and we have already managed to cast doubt on the
assertions made by his accountants report thereby making it more or less worthiess, He was not
awarded the costs of the application to set judgement aside as the costs have been reserved to be
deait with at a latter date. He will probably also have to amend his defence and counterclaim which will
all cost money and which may in total recommend a settlement to
I see no downside in offering mediation once more as if accepted it may force Castleton to take a
more realistic view of his chances, whilst always looking goad in the eyes of the Court and giving us
additional time to select and brief an expert witness.
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Selection of an expert witness will be crucial in this case. Preliminary enquiries should begin as soon
as possible. The selection should dernonstrate the importance that POL piaces on this matter so 4
well known firm with a national reputation should be selected. The firm and expert must have a firm
grasa of fechnolagy. As this case may set ihe trend for future Higation firms should be invited to
tender on the basis that expertise picked up in this case will lead to future work coming thelr way. For
that reason it may be that e strong second ter firm may be preferable to one of the top four where
such repeat work would not be so financially attractive.
I have seen and approved an agreement prepared by Fujlisu aver the status of any information
divulged te such an expert.
Can any of yeu make specific recommendations as to sultadle firms or fee earners?
Comnmetits from Gareth Jenkins:
However i ssamtoring of diia to
uid by anol!
nding error which shoul
J bo picked up eg ase
schamount. Also,
* Cheat boing oredited with
ay such error
cing Process:
table ie comment on this
Gareth fenbkias
Distinguished Engineer
Applications TDA
Past Office Acconnt
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Resporise
222008 I 4430-06
9O8 [200-0
approx J
i
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trop
what
syste
8 2004 a
<
¢ since Mr Castleton’s suspension and disnit
Vo comment hawever Steve Holbert should he able to assist here
(See GMoxrchad}
sph
caplanat
x be relevant
Brian Plater
Security Manager PO Account
Details of investivation by Ann Charabers
yatiet for faa weeks
.
.
action
. pred tag outlet g HS
Horizon system xt the outlet
ens and recespis balanced on the Cast:
Poxamined the mossagestor: « (his Rolus, amonust olhor Unags, all transuctiars cor
ron system, also the stock, stamp ash declarations eninred by
the Lf
cs rearded on the
score
omeved y from the sys
shor the clerk off the repurt. but this didn l cause a
ocess on Hf
aatded up all cash components of tan
tions for an decounding week plus the cash
ed foun
matched
Os WOE,
nd the ond of week
Tithe
cash folding dee.
identify a partiowk:
securred, I found thai ther: were varying and large chfforen betwee
S passihig top
Anne Chambers
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Pinder Brian
<Brisn Pindef
Grahan
f ais wilvised I inay have made a mistake in the name at answer to Q No 3, f think it should
read Bave Halfvrt?
O38. Ne coniment however Steve Holbert shoald be able ta assist here
<?xmlinaimespace prefix =o ns = “arnvchemas-microsafi-comefficesoffice’ >
Uf se apologies
Regds Brian
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Mandy Talbot To: Graham © W
25/14/2008 1848 ec: Nicholas Samus
PEIN ONS Subject: Re: Horiz6n faults - MARINE DRIVECLOR@eAY RO
Thanks Graham.
received a copy of the sare letter from them.
As you know I attended a meeting with Tony this m
for Bajaj and Castleton together with the transaction
ning and know that you hoid the disc from Fulitsu
The solicitors acting for POL in both cases and myself
discuss how best te draft the response to the fetter.
1ave a conference tall on Tuesday to
{ will leave Tony brief you about the other matters discussed in the meeting.
Regards
Mandy
Litigation Team Leader
Company Secretary's Office
Legal Services
Royal , impact House, 2 Edridge Road, CROYDON, CRO PU
Postlin ro Phone! GRO jracd GRO I, Mobi
External Email: mandy-talbot!
Graham C Ward
Graham © Ward
28/44/2005 0815
dy Talbot
holas Samuef
Subject: Re: Horizon fault
Mandy
I've received another letter from lan Herbert (Hugh James Sols) advising that the Sofs acting for Bajaj
y dated 21/11/05 or they will issue
{Torquay Rd) are giving us 14 days to respond to their
proceedings I have advised Tony U
Regards
Graham
Mandy Talbot
Mandy Talbot To: Graham C Wat
18/11/2008 10:16 ee:
ve i Subject: Re: Horizon fautte[j
Thanks for the update Graham.
Litigation Tearn Leader
Company Secretary's Office
Legal Services
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Royal Mail, impact House, 2 Edridge Road, CROYDON, CR 1PU
Positline: "} STD Phone Fax f
External Email: mandy talbott!
Graham C Ward
Graham © Ward To: Jennifer Rode:
4a ec: Tony RUking
18/ Tato
Subject: Ho
dust to inform you that the Evert & Transaction data for the specified period for the above office has
now been receive
As with the cas:
forward, I will retain th
Road, Tony Utting is looking info haw these matters will now be taken
ROM containing ihe data in the meantime.
Rege
Graham
COMMERC TAL
PRANGMISSTON O8
TAVRA NO
i
iPsu
il
hi:
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Brod fracce
48 November 2005 Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PLL 3AE
Mr N Samuel
Post Office Limited
Second Floor
Calthorpe House
15-20 Phoenix Pla
Our ref:
London SIDI/ABG1/348035, 134
WCIX ODG Your ref
URGENT
Dear Mr Samuel
Post Office Limited -v- Mr L Castleton
I refer to our telephone conversation today.
As discussed, I enclose a letter for you to send to Fujitsu, together with its enclosures. The letter is
currently just addressed to “Fujitsu Services”, Please could you address the ietter to the right person who
needs to deal with it at Fujitsu and explain that their report is required urgently. I have stated that the
Post Office will be responsible for their fees, so in any covering letter you send to them, I suggest that you
set out any agreed rate.
When you have sent the letter, please could you let me know who at Fujitsu will deal with it and when we
can expect their response.
} look forward to hearing from you as soon as possible.
Kind regards.
Yours sincerely
Stephen Dilley
Solicitor
for and on behalf of Bond Pearce LLP
Bond Pearse.
Registered office’
Allst of meri
1410808
Engiand and Wi
Bristol 85: 65
www.bondpearce.com
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Epona
band. frarce
1% November 2005 Bond Pearce LLP
Ballard House
West Hos Road
Plymouth PLL
Fujitsu Services
Direct: f
Ourres
SID3/ABG1/348035.134
Your ref:
URGENT
Dear Sirs,
Post Office Limited -v- Mr L Castleton
14 South Marine Drive, Bridlington, WY15 3DB ("the Marine Drive Post Office")
(1) Background
We act on behalf of the Post Office Limited (°PO”). From approximately 18 July 2003 to 23 March 2004, Mr
Castleton was a Sub Postmaster at the Marine Drive Post Office. He was strictly responsible for the safe
custody of cash and stock and was obliged to make good all losses caused through his own negligence,
carelessness or error and losses of any kind caused by his assistants.
Between 18 July 2003 and 25 March 2004, net losses of £27,115.83 occurred at the Sub Post Office. Mr
Castleton was suspended on 23 March 2004 and dismissed on 17 May 2004. The Post Office has now
issued a claim against him to try and recover these net losses. Mr Castleton has issued a Counterclaim
claiming wrongful termination of his contract.
(2) Mr Castleton‘s Defence
Mr Castleton’s case is that any shortfall is entirely the fault of problems with the Horizon computer and
accounting system at the Marine Drive Post Office and that the PO wrongfully terminated his Sub
Postmaster contract in respect of which has suffered loss not exceeding £250,000.
We attach copies of the following:
A. Without prejudice letter dated 30 September from Mr Castleton’s solicitors to Bond Pearce LLP.
B. Bentley Jennison’s Report dated 23 September and attachments;
C. White & Hoggard’s Report dated 18 August,
Bentley Jennison state that deficiencies have probably been brought forward despite the fact that they
have been entered onto the suspense account entry. They suspect this is because the Horizon system,
despite the suspense account entry, has failed to recognise the entry on the dally snapshots, They have
drawn this conclusion through looking at the discrepancy of £3,509.18 on Thursday 26 February 2004,
They then suggest that this double accounting could have continued over a number of weeks and that as
such, Mr Castleton’s Defence, “appears to hold potential merit based on the limited documentation” they
have so far reviewed. White & Hoggard reach a similar conclusion in their Report.
Mr Castleton believes that if he can obtain further documents, such as the daily snapshots, he will be able
to undertake a manual reconciliation of the cash account in order to substantiate his belief that the losses
@re not real but attributable to computer error. We attach an email from Fujitsu to Richard Benton at the
Post Office dated 5 May 2004 in which Fulitsu state “It is possible that they are nat accurately recording all
transactions on the systern” and that there was rio evidence whatsoever of any system problem.
gland and Wates number OC31
sto! BS1 SB). VAT rumber 27
egisered office, Regulated by the Lam Socety, www.bandpearce.com
Bond Pears Lip; a united Untlity Partnership. Registered in Eng
Regist Bristol Bridge House 138-441 Peccitt
f Bond Pearce is open for ie
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(3) Report
Please could you review Mr Castleton’s experts‘ Reports and prepare a formal Report dealing with the
following points (to the extent you are able}:
1. We need to explain to a Judge who will know nothing about Horizon exactly how it works. What
precisely happens when a customer goes into a Post Office to buy an item? How is this recorded? Is it
manually recorded into the Horizon system at the same time or later in the day? Is the cash register
linked to Horizon?
2. Precisely what steps Fujitsu took to exarnine the Horizon system at the Marine Drive Post Office in
2004 and what their conclusions were,
3. Whether there have been any similar or serious problems with the Horizon system at the Marine Drive
Post Office since Mr Castieton’s suspension and dismissal.
4. Whether you believe that the suggestion put forward by Mr Castieton‘s expert:
and your reasons, either way {if you are able to comment on this).
likely to be correct
§. If there have been human errors in recording the transactions, could an explanation be that:
{a) There was nothing wrong with Horizon, because it simply reflected the information entered on to
it; but
{b) If staff entered the wrong numbers into Horizon there may have been no real loss (even though
Horizon would show a loss), because there could be a human error in accurately recording
transactions.
If so, would that be a likely explanation?
6. Any other information that you believe may be relevant.
(4) Buty to the Court
AS a result of the instruction you may be asked to give evidence before the Court. Whilst the PO will be
lable to pay your fees, in preparing your Report and giving evidence, your over riding duty will be to help
the Court on the matters within your expertise.
You agree to meet the requirements of the Civil Procedure Rules Part 35 Practice Direction (copy enclosed)
and that your Report wi
i. Be addressed to the Court and not to the Post Office (but it should be sent to Mr Dilley of this firm).
2. Confirm that you understand your duty to the Court and that you have complied and will continue to
camply with that duty;
3. Contain a statement setting out the substance of all material facts and instructions (whether written or
oral} on the basis on which your Report is written. This staternent should summarize the facts and
instructions given te you which are material to the opinions expressed in the Report or upon which
these opinions are based and if any of the facts are within your own knowledge which they are;
4. Contain a chronology of the relevant events;
5. Contain a Statement of Truth in the following form:
“I confirm that insofar as the facts stated in my Report are within my own knowledge I have made
clear which they are and 1 believe them to be true and that the opinions I have expressed represent
my true and complete professianal opinion”.
6. You should not that proceedings for contempt of Court may be brought against you if you make a false
statement and Report verified by a Statement of Truth without an honest belief it was true;
7. Contain a deciaration that the Report has been prepared in accordance with the Code of Guidance on
Expert Evidence (enclosed).
8. Give details of your qualifications;
www.bondpearce.com P23s
4A2090832,2
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9, Give details of any literature or other material which you rely on in making the Report;
10, So who carried out any test or experiment which you use for the Report and whether or not the test or
experiment has been carried out under your supervision;
ii, Give the qualifications of the person who carried out any such test or experiment;
12. Where there is a range of opinion on the matters dealt with in the Report ~ sub-paragraph 11.1
summarises the range of opinion.
13, Give reasons for your own opinion.
14. Contain a summary of the conclusions reached including any qualifications to the same;
Given the fundamental importance of meeting these requirements, you should endeavour in your Report
to be not only accurate but complete. You should mention all matters which you regard as being material
to the opinions you express and draw the Court’s attention to any matter to which you are aware which
might adversely affect the validity of these opinions. This applies in relation to the factual matters to which
you refer and also to the opinions which you express.
You should not include in your Report anything that is suggested to you by anyone without forming your
own independent view,
If, on reading the Report of any other expert in this matter, or for any reason, you consider, at any stage,
that any existing report of yours requires correction or qualification you will irnmediately notify us in
writing of that fact.
(5) Duty to the Post Office
In performing all your duties for which the client will pay, you will owe a duty to the client to act with the
professional standards of skill, care and diligence adhered to by experienced and competent consultants
acting as expert witnesses.
You will fake reasonable care of any documents, materials or sarnples sent to you by the clients and shell
return them immediately (tegether with any copies taken} to the clients upon request.
In complying with your duties to the Court, you will not, without having first obtained prior written
approval of the client, divulge to any third party any information relating to the dispute.
You confirmed that you:
1. Are an independent party and not the client's employee or agent, other than at the material time
Fujitsu was responsible for looking after the Horizon system;
2. Know of no reason why you should not act as a witness for the Post Office in relation to the dispute;
3. Will advise us in writing immediately if any conflict between your interests and the Post Office's
interests should arise in relation to the dispute.
We would be grateful if you could treat this matter as urgent, because Mr Castleton’s solicitors have
applied for Judgment against the Post Office, so we will need to obtain your report quickly,
We look forward to hearing fromm you.
Yours faithfully
GRO
Sond Pearce LLP
www.bendpearce.com Pus
3A_1090832.2
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Date: 30 September 2005
Your ref DEG T/NIM1/348035, 134
Ow ref MDT. 113969
Please ask for:
Direct dial:
Direct fax ;
E-mail:
SOND PEARCE LLP
PLYMOUTH
Bond Pearce
Solicitors
DX 8251
PLYMOUTH
‘Without Prejudice
Dear Sirs
Our client: Mr L Castleton ~ Marine Drive Post Office, Bridlington
Your client: Post Office Limited
We refer to our recent without prejudice telephone discussions (Mark Turner/Denise Gammack).
As we mentioned when we spoke, we have instructed an expert accounting witness, Chris Hine of Bentley
Jennison, to review the documentation that your client has made available to date. His brief was to consider
certain of those documents in light of our client’s pleaded defence to the effect that the alleged shortfall is (at
least in part ~ and we cannot be any more specific than that given the incomplete disclosure which bas been
given) attributable to problems with the Horizon system.
In order to assist you and your client in understanding our client’s position, we are prepared to disclose to you
on a without prejudice basis the report which Mr Hine hes prepared. Since the report refers to a report
prepared by Andrew Richardson of White & Hoggard, a copy of his report together with supporting
documentation is also enclosed.
By way of explanation, Mr Richardson acts as auditor to the business owned by our client’s father in law. His
report was oblained directly by our client as a “second opinion” on the methodology that our client had used
in reviewing the available documentation. To avoid any question of partiality, we commissioned Bentley
Jennison to consider the same documentation as had been available to Mr Richardson, as well as his report,
and to comment on whether they agreed with its findings.
For the complete avoidance of doubt, both documents are made available to you and your client on an entirely
without prejudice basis. Whilst the substance of the Bentley Jennison report is likely to form the core of any
formal report prepared for use in court, we reserve the right to rely on a report which may differ in form to
that which we have presently disclosed.
As you will see, both Mr Richardson and Mr Hine concur with our client's position that there, at the very
least, discrepancies in the way in which the Horizon system appears to treat weekly balances, This simply
serves to reinforce what both we and our client have said from the outset, namely that the daily balance
snapshots which have not yet been disclosed will be of fundamental importance is analysing whether there is a
problem caused by the way in which the Horizon system operated during our client’s tenure as sub-postmaster
as Marine Drive Post Office.
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We look forward to hearing from you once you and your client have had an opportunity to review the
enclosures to this letter.
Enc
GIMARKTADBEYCASTLBTOMOGS05 LETTER TO BOND PEARCE
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Bentley Jenniso
Ourref — CH/PIB/C1024 Litigation Support
Yourrefi MDT.113969 26 Pall Mall
Manchester
Rowe Cohen
Quay House Facsimile
Quay Street Bemail m:
Manchester www.bentley-jen
M3 3JE
23 September 2005
Dear Sirs
‘The Post Office -y- Lee Castleton
Further to your letter of instruction dated 6 September 2005 in the above matter, I set out
below my thoughts on the papers provided for my review.
Thave reviewed the following documentation:
® Various correspondence between Rowe Cohen and Bond Pearce, between 8 February
and 3 August 2005
® Daily ‘snapshots’ for the Marine Drive Post Office, from Thursday 26 February 2004
to Wednesday 3 March 2004, representing week 49 of the accounting year
e Letter dated 18 August 2005 from Andrew Richardson, principal at accountants White
& Hoggard, to Mr Lee Castleton
* Copy of final audit, dated 25 March 2004, as carried out by Miss Helen Hollingworth
(and as attached to the letter dated 25 May 2005, from Bond Pearce to Rowe Cohen)
* Horizon Cash Account (Final) for Week 49
Statement of Claim, dated 9 June 2005
* Defence and Counterclaim, dated 15 Augnuat 2005
Offices at: Birmingham Bristol Cacdiff’ Harrogate Leeds London Milton Keynes Nottingham Stoke-on-Ts
A lit of Partners’ names is avelable for inepection as: 26 Rall Mall, Manchestes M2 YR.
Bentley Jennison is registered t0 carey on aodit work by the fnuticote of Chartered Accountants in England and Wales and
authorised and segolazed by the Finencial Services Authority for investment Business
A member of “HREE FAG INTERUTIONN? An Association of Independent Professional ftms in Burope
e Swindon Telford
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Rowe Cohen 23 Septernber 2005
Page 2 of 5
Daily snapshots for week 49
At Document 1 is a copy of the daily snapshot printed at the end of Thursday 26 February
2004, being Day One of the week, This shows a discrepancy of £3,509,18.
I note that this an identical amount to that recorded by the Horizon system as having been
deficient in week 48, as identified in the audit undertaken by Helen Hollingworth, the
schedule for which is set out at Document 2.
This schedule also shows that cumulative deficiencies of £8,243.10 were put into a suspense
account relating to weeks 43-46, although I note that no figure appears to be disclosed
specificaily for the following week, week 47.
The identical amounts of £3,509.18 point to two possible scenarios, either that (a) there has
been a deficiency suffered on day one of week 49 that exactly matches the sum of the
deficiency for the whole of week 48, or (b) the figure is the brought forward deficiency from
week 48. I consider it reasonable io assume that option (b) is the most likely scenario.
On Day Two of Week 49, being Friday 27 February 2004, an entry for £3,509,68 is shown as
“Loss a 2a in”, per Document 3.
Jam unable to explain the difference of 50 pence between the suspense account figure and the
daily snapshot deficiency, although I note that in White & Hoggard’s report they explain that
Mr Castleton informed them this was a manual entry following instructions from Horizon
technical support.
The £3,509.68 appears to represent the entry on the suspense account (Decument 4) for the
same amount, processed on 27 February 2004, which I would expect given the daily snapshot
entry.
Suspense account
A suspense account is generally used by accountants to ‘park’ transactions that have either
been erroneously posted and are pending correction, or which, as is the case here, are
iransactions that are either unreconciled or unexplainable.
From my experience, the impact of a suspense posting would allow a line to be drawn under
the cumulative deficiencies on the daily prints, effectively resetting the figure to zero, which
should be reflected as such on the end of day print.
However, it is evident that on the end of day print (Document 5) there is still a deficiency of
£3,509.18, notwithstanding the suspense account entry.
Bentley Jennison
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Rowe Cohen 23 September 2005
Page 3 of 5
This again leads to two possible scenarios, either that (a) following the suspense account
entry an identical shortage of £3,509.18 was again bome by the branch during the course of
the day, or {b) the Horizon system, despite the suspense account entry, has failed to recognise
the entry on the daily snapshot, leaving the figure of £3,509.18 unchanged.
Again, after considered reflection, it is more probable that scenario (b) has occurred.
For Days 3, 4, 5 and 6 (Saturday 28 February 2004 - Tuesday 2 March 2004), identical entries
occur in relation to the figure of £3,509.68, with a cumulative deficiency of £3,509.18 being
shown at the end of each day.
For the final day of week 49, Wednesday 3 March 2004, the entry of £3,509.68 again is
recorded, however the total deficiency now shows £3,512.26 (Doeument 6), an increase of
£3.08, and supported by the final Horizon Cash Account print (Document 7).
I note that in week 49 the cost of a first class stamp was 28 pence. The increase of £3.08
could, therefore, represent (and in line with Andrew Richardson’s opinion) a scenario
whereby a book of 12 first class stamps was sold, but only money for one single stamp was
taken (ie (12 x 0,28) ~ 0.28).
Having already concluded that the system should have no longer been recognising the
£3,509.18 (posted to suspense) on a daily basis, the only discrepancy for the week should, in
my opinion, have been the £3.08 deficiency apparently borne on Wednesday 3 March 2004.
The system has, therefore, appeared to overstate the deficiency for the week by the amount of
the deficiency in week 48, being £3,509.18,
‘The report of White & Hoggard essentially appears to reach the same conclusion, in that this
sum has been erroneously double counted.
Cumulative deficiencies
I would note that the Horizon system, from the documentation I have reviewed, appears to
record deficiencies on a cumulative basis, hence the running total of £8,243.10 up to the end
of week 46 being rolled into week 47’s suspense account and carried forward to week 49
(Document 4),
Based on this approach, the integrity of the system is heavily dependent upon weekly figures
being both accurate, and carried forward correctly.
In the isolated case of week 49 this appears not to have taken place, with the implication that
errors could, theoretically, have been double counted over a number of weeks,
Bentley Jennison
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Rowe Cohen 23 September 2005
Page 4 of 5
As such, Mr Castleton’s defence, that the root of the problem lies with the inaccurate figures
produced by Horizon, appears to hold potential merit based on the limited documentation I
have so far reviewed.
Clearly, however, I have only had sight of the daily snapshots for week 49, which although
appearing to indicate an error within the Horizon system for that short period, does not
necessarily mean that it has been replicated for other weeks. This can only be checked
through an analysis of the daily snapshots for all relevant periods,
Andrew Richardson's conclusion that “the balance of probabilities would suggest that it ix
quite likely that this has also happened in earlier periods” is, 1 suspect, a litte premature and
can only be proven following a more detailed review.
Equally, other issues aside from the discrete problems evident in Week 49 may be uncovered,
upon a more detailed inspection of relevant Horizon documentation.
Disclosure
The documentation I would ideally need sight of (further to that listed in your letter dated 11
April 2005, and presuming such papers were used in the normal course of business at the
branch) to gain a clearer picture of bow Horizon worked, and whether it was working as
intended, is as follows:
e Daily snapshots for the period preceding, during, and following the alleged
deficiencies bome under the management of Mr Castleton, which es suggested in copy
correspondence might be from weeks 39-52 inclusive, although for completeness (and
if considered cost effective) it may be appropriate to analyse the period from when
Horizon was first used in the branch to gauge the effectiveness of the system from
Day One
« Copy of the full audit report following the inspection made by Helen Hollingworth
and Chris Taylor, on 25 March 2004, to include a breakdown of the week 51 balance
of £11,210.56 (Document 2)
*® P&A reports produced for weeks 39-52, summarising sums paid to customers in
allowances through vouchers, and any vouchers supporting the reports
e Cash and stock count at the points in time when Mr Castleton began/left his post as
subpostmaster
» Events log produced by the Post Office centrally, summarising which individuals are
working on the Horizon system, and when the various reports were produced within
the branch - for weeks 39-52 inclusive
Bentley Jennison
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Rowe Cohen 23 September 2005
Page $ of 5
e Transaction log produced by the Post Office, which should summarise all financial
transactions undertaken by the branch - weeks 39-52 inclusive
* Any contemporaneous notes made by Mr Castleton in relation to the Horizon systern,
or by any other employees, or by anyone who may have been assisting Mr Castleton in
the initial period following his appointment as subpostmaster
I trust the contents of this letter are self-explanatory, but if you should require clarification on
any of the matters raised herein, please do not hesitate to contact me.
Yours faithfally
tt Chris Hine
National Litigation Support Partner
Ene.
Bentley Jennison
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Document 2
[To From: ce:
Cath Oglesby Helen Hollingworth
inspector
Date: 25" March 2004
Audit of Post Office ® Marine Drive branch, FAD 213337
An audit took place at Marine Drive Post Office on the 25" March 2004.
Helen Hollingworth led the audit and in attendance was Chris Taylor. The audit -
commenced at 8.00am and on our arrival the sub postmaster was very pleased to
see us. He explained problems he had been having at the office regarding
balancing, His problems with balancing started in week 43 with a mis-balance of
4230.97, He was adamant that no members of staff could be committing theft
and felt that the mis-balances were due to a computer’ problem. He bad been in
contact with the Retail Line Manager Cath Oglesby and the Horizon help line
regularly since the problems began. The following table gives further weeks
balance declarations on the cash account. .
48 = -3509.18
46 8243.10
AS -6730.01
44 8754.09
43 -4230.97
48 3809.18 This amount put into suspense week 49
46 -8243.10 This amount put into suspense week 47
48 6730.01 Rolled loss
44 8754.09
43. 4230.97
in week 47 £8243.10 was put info suspense. Although horizon had been
contacted and tbe Retail Line was aware of this figure, this was not authorised. In
week,49 £3509.68 was added to make the amount carried in the suspense
account total £11752.78. This was also not authorised:
week 51 balance ~ £11210.56
suspense account * ~£41752.78
expected audit result ~ £22583.34
difference at audit ~ £2795.44 (-£1769,00 tottery -£1026.41 cash)
audit result ~ £25758.75
On the completion of the audit the Retail Line Manager Cath Oglesby was
contacted, along with the Investigation team and the Audit Line Manager. The
sub postmaster was suspended pending enquiries and an interim postmaster was
put in charge at the office.
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Horizon User Guide fox instxuctions on hew to proceed
SU (Date «Product volume Valve * B/tva
RD cheques A
TOTNL
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Document 4
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TOTAL ° 8.00 9.90
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Cash Shortages A .
AA 27/02/04 Loss A to Table 2a Bs 3,509.68
4 3,509.68 8,243.30
‘TOTAL
Cash Shortages B
TOTAL
Sash Shortages
0 2.00 9.98
‘TOTAL
Cash Shortages
TOTAL ° 2.00 %.00
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TOTAL ° 2.06 8.00
Cash Surpluses pot yet adjusted A.
a 2.00 0.00
TOTAL
Cash Supluses not yet adjusted 8
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Document 6
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:
(erm EOE Lice code: 2133377 Week Nor 49 Week Ending: 03/03/2004 Date: 94/03/2004 Time: O7246
2003/2004 Week No Document 7
OFFICE NAME: Marine Drive
ADDRESS: 44 South Mastne Brive HORIZON °
; eit Cash Account (Final)
TELEPHONE:
Week Ended: 03/032004
OFFICE CODE: 49.3377
DATE STAMP:
‘TABLE 2 UNCLAIMED PAYMENTS TABLE 10{g) NUMBER OF TRANSACTIONS:
5o La Dee = S2
26 Liypaid Cheques A YQ rvvsceeed RH OertBeatos
27 ‘Unpaid Cheques 8 79 08 Chge
28 Unpaid Chores 78 NSISA Cant Goes Warr
29 82 Shak M Order
30 Vaxhers aL
31 ‘Shovtages fh REMS ete 33 Pervetiome by 98 18
32 Baga via Lossea 65. Paellors 208
33 POL Chq pension homes: 6é Infernal Dedapost
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35 ‘Mersion 83 Medium Cover
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‘TABLE 2fo) AUTHORISED CASH SHORTAGES , se BT rceevee ed Internationa dgredion
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‘Cash Drrtoges B a4
‘Cath Shortages C 47 ‘Disc illoe Packs
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e TABLE 3 UNCHARGED RECEIPTS: 33 TV.UHS Preaggsestion
80 3 Procrer Bay Beck
60 BJ vere 22 Home Shop Retoond >
61
62 52 ‘Standard Life SHP Apps
63 Proprctase 60 PCL Snarteerd Aepicatons
64 Cash Surpas A 61 DAML, Postd Apptations
68 ‘Cash Surpas B 62
65 Sapbsesih Resets 86
67 95
68 gpition, 190
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— White, & Hoggard I
Chavieved, Cartifeed, Aecourtianls
°
Registered to cary on
aut work and papubated for a
siatige of Savesinant Businass
activities by the Ausotiation of
Chartered Certified Kecountints
PRIVATE & CONFIDENTIAL Snail, White }
neat: Le A Oggian ca
Mr Lee Castleton .
Marine Drive Post Office Our Ref: AWR/GLAI/PO3 1
14 South Marine Drive Your Ref:
Bridlington:
East Yorkshire Date: 18" August 2005
YO1S 3DB
Dear Lee
You have asked me to produce a report on my findings following my examination of the
documents presented to me for Marine Drive Post Office in respect of the week ended 3° March
2004 and the apparent discrepancy claimed by the Post Office which I understand at 4" March
2004 amounted to £15,265.04.
U have therefore examined the daily balance printouts that you produced covering the period 26”
Fel 2004 to 4° March 2004 and also the report marked “Horizon Cash Account (Final)”
dated 4° March 2004 in relation to the week ended 3° March 2004,
My conclusions are as follows:
a) The Horizon Cash Account (Final) Report for weck 49 (week ended 3% March 2604)
produced on 4” March 2004 (time 07:46) indicates the following:
Table 2 (a) authorised cash shortages (A) 11,752.78
Discrepancies Table 3,512.26
Total 215,265.04
b} The Suspense Account summary attached to the report ~ office copy dated 3° March 2004
(time 17:38) produces the following under the heading “Cash Shortages A”
AA 27" February 2004 Loss A to Table 2a 3,509.68
Brought forward 8,243.10
Total £ 11,752.78
PRINCIPAL: Andrew W, Richardson F.C.C.A.
MANAGERS: Keith A. Rhodes F.C.C,A.
Burs Lestey A. Bichardson
d)
‘The difference between the above two reports is £3,512,26 (1 will refer to this figure later in
my observations).
‘The Horizon Cash Account (Final) Report for week n0.49 (weele ended 3% March 2004) dated
4" March 2004 (time 07:46) indicates the following:
Balance Due to Post Office 97,014.07
Less Stock (Table A} (9,036.41)
Less Cash (Table 5) (32,712.62)
Shortfall £ 15,265.04
‘Phe above entry at (d) above appears to me to comprise the following:
1. Discrepancies Table 3,512.26
2. AA 21" February 2004 Loss A to Table 2a 3,509.68
3. Brought forward from earlier periods 8,243.10
Total £ 15,265,04
{t follows, therefore, that we need to ascertain how each of the above apparent discrepancies
at paragraph (e) have arisen.
in order to attempt fo explain the apparent discrepancies I have prepared a detailed analysis of
the daily balance printouts covering the period 26" February 2004 (time 17:30) to 4° March
2004 (me 07.46). Ihave used the Horizon Cash Account (Final) Report for the analysis of
the movements on 4" March 2004, My conclusions are as follows:
1. Discrepancies Table - £3,512.26
This figure is not on the Suspense Account Summary dated 3° March 2004 but appears to
comprise part of the overall shortfall (see a and ¢ above). This figure appears to include the
“discrepancies in this account” summary on the “final balance” sheet dated 26" February
2004 but is recorded as £3,509. 18 increasing by £3.08 (which I believe is a book of stamps) to
£3 .26 on 3 March 2004. It is understood that the sum of £3,509.18 is a discrepancy
from an earlier period, I have seen ne evidence to reveal hew this discrepancy from the
earlier period has been arrived at,
2, AA 27" February 2004 Loss A to Table 2 a - £3,509.68
On the “final balance” sheet dated 26" February 2004 (time 17:30) there is an entry for “net
discrepancies” of £3,509.18 which equates to the “discrepancies in this account” entry ~ see g
I above.
On the “balance snapshot — office copy” sheet dated 27° February 2004 (time 17:31) there is
an entry “OTHER PAYMENTS” loss a - 2a amounting to £3,509.68. This entry is then
repeated daily.
and from my telephone conversation with you that this amount was input manually
structions from Horizon technical support which probably explains the difference of
SQp from the previously mentioned sum of £3,509.18.
If the sum of £3,509.68 is indeed the same entry as the sum of £3,509.18 recorded in g t
above, and i¢ seems highly likely that this is the case, there is a duplication in the apparent
shortfall.
POL00090437
POL00090437
POL00090437
POL00090437
it follows that a rational explanation is needed for this apparent double counting in the
Post Office records.
3. Brought forward from Earlier Period - £8,243.10
In addition to having na documentary evidence to support the discrepancy of £3,509.18,
which appears to be duplicated by the further entry of £3,509.68, there is no documentation to
support the discrepancies from earlier periods emounting to £8,243.10. It is therefore
absolutely essential to obtain documentary evidence supporting the discrepancies that
are claimed to have arisen in the earlier periods of £3,509.18 and £8,243.10,
kh) Conclusion
From the limited available evidence of one weeks transactions referred to above my
conclusion is that it is highly likely that the sum of £3,509.18 has been recorded twice
increasing the apparent discrepancy during the week ended 3" March 2004. On the
assumption that 1 am correct in this conclusion, and there seeris to be no rational explanation
for this amount appearing twice other than my conclusion, then there has to be doubt as to
whether or not the discrepancies brought forward from earlier periods of £3,509.18 and
28,243.10 can be substantiated. It is therefore absolute! perative that the Post Office
produce documentation to justify their claim for the earher periods in order to produce
evidence that the system is operating correctly, At the present time it would appear to me that
during the week ended 4" March 2004 an incomplete instruction to input a manual entry of
£3,509.18 Gneorrectly entered as £3,509.68) has created a double counting of this amount in
the calculations produced by the Post Office of shortfall. If this has happened for the one
week where we have documentary evidence then the balance of probabilities would suggest
that it is quite likely that this has also happened in earlier periods and has to cast doubt on the
osedibility of the claim made by the Post office which therefore needs to be examined in some
further detail with the benefit of supporting documentation.
{hope that the above report is of some assistance.
Kind regards
Yours sincerely
Andrew w Ricnarasorr-~
ptonwood Drive, BARNSLEY, S7 OTB 5
Jostlines I . ‘external
mall: richard.p.bentoni GRO 1
---~ Forwarded by Richarue7 SENtonyey POSTOFFICE on 05/05/2004 13:44 --~--
Welsh Julle
<Julfe. Welsh¢ To: "richard. p. bento:
mail)"
<richard.p.bentor
"ee?
05/05/2004 12:32 Subject:
Richard,
I have had a chat with Anne, she used the message store viewing to
investigate this. If you want coples of extracts for the particular
incorrect declarations please submit an ad hoc request requesting this
Information. Hope this helps, see below:
POL00090437
POL00090437
NO TRANSACTION DATE AND TIME WAS PROVIDED FOR THIS ACTION USING CURRENT
DATE
AND TIME By Anne Chambers at 26-feb-2004 15:16:00 Category 94 - Advice and
guidance given I have checked various things on the system. All the
internal
reconciliation checks are ok. Cheques are being handled correctly (except
for 10th Feb when the clerk forgot to cut off the report - but this didn’t
cause a discrepancy). Cash declarations look ok, they usually use drawer id
11. Occasionally they have used a different drawer id, this can lead to
amounts apparently doubling on the cash flow report, and should be avoided.
But again it will not cause a discrepancy, Checking the cash transactions
on
the system against the declarations shows that they are not working
particularly accurately (I.e. at the end of the day the cash they declare
in
the drawer is tens, hundreds or thousands of pounds astray from what has
been recorded on the system). It Is possible that they are not accurately
recording al} transactions on the system. There is no evidence whatsoever
of
any system problem. I've mentioned this outlet to Julle Welsh (Customer
Services) who will try to get POL to follow it up, but in the meantime
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.
Julle Welsh
Service Delivery Manager HSH
Business Service Management, Post Office Account
FUJITSU SERVICES
Lovelace Road
Bracknell
Berks
RG12 8SN
Tel:
file://C:\Documents% 20and%20Settings\administrator\Local%2...
01/02/2005
wy ey ewe
POL00090437
POL00090437
band. fearce
18 November 2005 Bond Pearce LLP
Ballard House
West Hoe Road
Plymouth PLA SAE
Mr N Samuel
Post Office Limited
Second Floor
Calthorpe House
15-20 Phoenix Place Our ret:
London A/ABG1/348035,134
WCLX ODG Your ref:
URGENT
Dear Mr Samuel
Post Office Limited -v- Mr L Castleton
l refer to our telephone conversation today.
As discussed, I enclose a jetter for you to send to Fujitsu, together with its enclosures. The fetter is
currently just addressed to “Fujitsu Services”, Please could you address the letter to the right person who
needs to deal with it at Fujitsu and explain that their report is required urgently. I have stated that the
Post Office will be responsible for their fees, so in any covering fetter you send to them, I suggest that you
set out any agreed rate.
When you have sent the letter, please could you let me know who at Fujitsu will deal with it and when we
can expect their response.
I lock forward to hearing from you as soon as possible.
Kind regards.
Yours §'
GRO
Solicitor
for and on behaif of Bond Pearce LLP
erely..
1430,
£43 5292 07,
1 Law Society. www bondpearce.com
, & Limited Uability Partnership.
Bristol Bdge House is
re z omnes
3 of Sond Pearce is ope for inspection at the registered office. Reguisted by &
POL00090437
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PRACTICE DIRECTION ~ EXPERTS AND ASSESSORS - This Practice Direction... Page 1 of 4
ae dc Department for
Constitutional Affairs
Justice, rights and democracy Civil Procedure
Rules
What's Updates & Current Statutory Consultation Commentaries Contact Search
New? Zips Versions Instruments
Index
Rules. & Practice Directions eL.RSC Schedule2-CCR Pre-Action Protecals Glossary Forms Courts
See also Part 35
PRACTICE DIRECTION - EXPERTS AND
ASSESSORS
THIS PRACTICE DIRECTION SUPPLEMENTS CPR
PART 35
Contents of this Practice Direction
EXPERT EVIDENCE - GENERAL
REQUIREMENTS
FORM AND CONTENT OF EXPERT'S
REPORTS
INFORMATION
INSTRUCTIONS
QUESTIONS TO EXPERTS
SINGLE EXPERT
ORDERS
ASSESSORS
ANNEX
Part 35 is intended to limit the use of oral expert evidence to that which is reasonably required.
In addition, where possible, matters requiring expert evidence should be dealt with by a single
expert. Permission of the court is always required either to call an expert or to put an expert’s
report in evidence. There is annexed to this Practice Direction a protocol for the instruction of
experts to give evidence in civil claims. Experts and those instructing them are expected to have
regard to the guidance contained in the protocol.
EXPERT EVIDENCE ~ GENERAL REQUIREMENTS
4.4 It is the duty of an expert to help the court on matters within his own
expertise: rule 35.3(1). This duty is paramount and overrides any obligation
to the person from whorn the expert has received instructions or by whom he
is paid: rule 35,3(2).
actice_directions/pd_part35.htm 18/11/2005
POL00090437
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PRACTICE DIRECTION ~ EXPERTS AND ASSESSORS - This Practice Direction ... Page 2 of 4
1.2 Expert evidence should be the independent product of the expert uninfiuenced
by the pressures of litigation.
4.3. An expert should assist the court by providing objective, unbiased opinion on
matters within his expertise, and should not assume the role of an advocate,
4.4 An expert should consider all material facts, including those which might
detract from his opinion,
1.5 An expert should make it clear:
{a) when a question or issue falls outside his expertise; and
{b) when he is not able to reach a definite opinion, for example because he
has insufficient information.
1.6 If, after producing a report, an expert changes his view on any material
rnatter, such change of view should be cornmunicated to all the parties
without delay, and when appropriate to the court.
FORM AND CONTENT OF EXPERT'S REPORTS
2.1 An expert's report should be addressed to the court and not to the party from
whom the expert has received his instructions.
2.2 An expert's report must:
(1) give details of the expert's qualifications;
(2
give details of any literature or other material which the expert has relled
on in making the report;
(3) contain a staternent setting out the substance of all facts and instructions
given to the expert which are material to the opinions expressed in the
report or upon which those opinions are based;
(4) make clear which of the facts stated in the report are within the expert’s
own knowledge;
(8) say who carried out any examination, measurement, test or experiment
which the expert has used for the report, give the qualifications of that
person, and say whether or not the test or experiment has been carried
out under the expert's supervision;
{8} where there is a range of opinion on the matters dealt with In the repert -
{a} summarise the range of opinion, and
(b) give reasons for his own opinion;
7
contain a summary of the conclusions reached;
&
if the expert is nat able to give his opinion without qualification, state the
qualification; and
&
contain a statement that the expert understands his duty to the court, and
has complied and will continue to comply with that duty.
a.gov.uk/civil/procrules_fin/contents/practice_directions/pd_part3S.htm — 18/11/2005
POL00090437
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5 - This Practice Direction... Page 2 01+
PRACTICE DIRECTION — EXPERTS AND ASSESSORS - This Practi
tas
- it of truth as wel
23° An expert's report must be verified by x ragraph 28) and (9) above.
containing the statements required in pi
, follows:
24° The form of the Statement of truth is as fol! thin my own
ted in my report are withir e
7 ts stated in my eve them to be true,
T Confirm that insofar ag the fateh they are and I believe the compiete
se atte opens thee se eset
Professional Opinion ences of verifying
_ sequen: ogre
25 Attenti 's drawn to rut 32.14 which sets out ior honest belief in its truth,
: a documens containing sree statement without a
mene : actice
. Part 22 and the pra
(For information about statements of truth see
direction which Supplements it.) iy
INFORMATION
cas
arty with access to information which
3 Under Rule avine cour may nen ene serve on that one ceae
document which tests, experiments and aan served
Sufficient details of all the feces ee to enable she Barty on wor and an
roman ny to “ootein 3 soba interpretation of tl
assessment of its Significance. hs
INSTR UCTIONS
oy
(3) will not be protected by
4 The instructions referred to ix’ paragraph 228) el of the expert on the (or
18 instructi feferred to But cross-examinat s the court permits it (
Orivilege (sea rule 35.10(4> >. GTI not be allowed unles: to it), Before it gives
contents of his instructions Var =» instructions consents sonable grounds to
unless the party Who gave tire atisfied that there are rea: f the instructions
v€ Court must Pe ahs report of the substance o!
the Statement
Permission t re he cross-
idk ‘ lf allow the
consider thar tt is so satisfied, it wi .
cou ae do so.
is inaccurate or incomplete . OF ees in the interests of justice to
examination where it appes mss ae
QUESTIONS TO EXPERTS
een;
B rt (see rule
ifying the expert's repo fer
. _ e of clarifying « . 28 days a
54 Questions Baked for the pew - ng, to the expert mee ‘above as to
receipe ould experts er wrt (see paragraphs 1.2
verification),
t to an expert, a
“ten question or questions direct
rty sends q wre we
ther party ¢
5.2 Where a par Bd, at the same time, be sent to the o'
COPY Of the questions shou am , :
Parties,
F
chargecl by
i wecting the expert must pay any fees.
Parties Stream. “
9 Ques. “ation: tc under 6. This does not affect ar
s put under rule 35.6. This does not ai
-
5.3. The party or : m
the party who is ultimately to bear the exp
expert for answer
decision of the COU aS tom
costs,
18/1]
tome i irections/pd_part35.htm
eli ‘ atents/practice_directions/pd_y
no Hn dea.gov.ul/eiviliprocrules_ fin/ecy x
POL00090437
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PRACTICE DIRECTION ~ EXPERTS AND ASSESSORS - This Practice Direction... Page 4 of 4
tle,
SINGLE EXPERT
& Where the court has directed that the evidence on a particular issue is to be
given by one expert only (rule 35.7) but there are a number of disciplines
relevant to that Issue, a leading expert in the dominant discipline should be
identified as the single expert. He should prepare the general part of the
report and be responsible for annexing or Incorporating the contents of any
reports from experts in other disciplines.
hy
ORDERS
SA Where an order requires an act to be done by an expert, or otherwise affects
an expert, the party instructing that expert must serve a copy of the order on
the expert instructed by him. In the case of a jointly instructed expert, the
claimant must serve the order.
te
ASSESSORS
7.4 An assessor may be appointed to assist the court under rule 35.15. Not less
than 21 days before making any such appointment, the court will notify each
party in writing of the name of the proposed assessor, of the matter in respect
of which the assistance of the assessor will be sought and of the qualifications
of the assessor to give that assistance.
7.2 Where any person has been proposed fer appointment as an assessor,
objection to him, either personally or in respect of his qualification, may be
taken by any party.
7.3 Any such objection must be made in writing and filed with the court within 7
days of receipt of the notification referred to in paragraph 6.1 and will be
taken inte account by the court In deciding whether or not to make the
appointment (section 63(5) of the County Courts Act 1984),
7.4 Copies of any report prepared by the assessor will be sent to each of the
parties but the assessor will not give oral evidence or be open to cross-
examination or questioning.
ANNEX
Protocol for the Instruction of Experts to give Evidence in Civil
Claims
Civil Matte
Page DCA Homepage CPR Homepage Search
© Crown Copyright 2001
‘civil/procrules_fin/contents/practice_directions/pd_part3S.htm — 18/11/2005
POL00090437
POL00090437
Keith K Baines
005 17:46
> FW: Mr L Castleton - Marine Drive Post Offi
Bridlington
Pinder Brian
<Brian.Pind
Subject: 8
26/10/2008 16:24 Bridlington
Iwill
an Ad-Hoc or ARQ
ngton
he then Retail
ne t hich
believe are betw
Jan 2004 wk40/04 ~ March 2004 wk §
raham
be the period
@ do you
Nod.
Walk. West Bars, CHESTER,
the named recipi
contents of
contact the se:
POL00090437
POL00090437
th.k.bained, GRO :
robson
do t and fou
detailed require ough
period is
Please advise whet.
detail the pe
westigation Team
ON, CRO LYN
GRO
er Brian
POL00090437
POL00090437
gvaham.c
«Penny. Thomad.
Castleton
Marine D:
received
i awa
further.
24 October 2605 13:12
nh Mik; Forrest Hilary; Pinder Brian
win Dave
Mr L Castleton - Marine Drive Post Office, Bridlington
Please see below. My understanding is that
Hilary/Brian
Mik, Please
produced.
ak on wh
ether the requ
Prom: GRO }
To: cari.marxd
ce: gary
jennifer. robson
keith.k
nest GRO
e Post Office, Bridlington
F ask you to lock at the attached email string relating to an ongoing
9 case y of losses against a SPMR (ag per title of email).
Please have a look at the email from Stephen lley {solicitor work on
behalf of POL) and his next steps section in particular, as this indicates
what we need from Fujitsu i.e clear evidence that the losses in question
weren't created by the system.
you provided som:
ent case (Smallbridge} about the system creat repancies and
would be worth having your view on whether thie provides useful supporting
evidence, icularly countering the Experts’ Reports (referred i
Stephen Dilley's email).
I've also copied below a respons:
ditt $
ago relating to
If you ca
a response
ion
on whether to proceed with this case or not.
idence required, then please state this.
week is required as we need to make a
deci
POL00090437
POL00090437
Regards
Dave
Discrepancies in Stock, Cast llowing equipment
malfunction
unknown and can not occur without a Corresponding la
process by the PM or Post Office staff:
axe virtual
attention to
1) Tf a transaction goes
disk and replicated within counters or
to the Mir Disk in the case of Single Counter Outlet 5 transactio
will then be visible to Post Office st. 2 tr ion log.
tten to the
2) Should there be a failure which resui
transaction infor ion being wri
always result in events reported by
visible
in incomplete or damag:
essage store, ¢} is wil
ter to the centre and/or
vequest that the PM report the matter to Horizon Help
jenerally takes a conservative view and will complete
finds.
3) The
from failure which mi
ing procedures for the recove
he PM by doct
4) Post Masters were required
which time any major losses or gains would becom
notwithstanding that the vast majority of Post o
he end of each working day by producing daily offi
1 declarations (Mandatory). These will demonstra’
> discrepanci é ancies the
Pre $80 to produce w h accounts at
ately apparent;
will make a che
ce summaries and daily
te whether there ar:
n it is expected that
9
na] re are di
ch
Bo} Master should account for them then, or yx, on NBSC to agsi
ia resolving the problem.
xful tool
orts for the 35 prev:
In suwmary, the system is very robust. In our experience it very seldom
looses transactions unless equipment is physically removed from site; if it
does loose transactions Post Office procedures should quickly identify
wed through with help desk assistance
discrepancies and they should be foll
Reports of discrepancies dating back for more than 7
provide a definitive answer.
Service Manager, Operations Contro.
8 ice Ltd
GRO
POL00090437
POL00090437
dave .hulbe:
arded by Dave Huibe
Jennifer
To: Dave
sc: Mandy
ice, Bridlington
low p @ on the cas
now need ot advise
D. smi
uss the requireme:
below.
Can you would be the
dat
fo.
manager
ist Floor ®
» No 1 Futu
e Walk, West
GRO
email and any attachments are confidential an
s) only. If
close, reproduce,
you have received this
$49
ntended fox
at you must
Fs
quacy of the evidence whic
being challenged and A
oss. Jf the
serious ramific:
Hori
tions for tl
igation Team
POL00090437
POL00090437
Services
ct House, 2 Edridge Ro
GRO
mandy. talbott.
by Mandy Tal
"Stephen Dilley"
ost Office, Bridii
18/10
Marine D:
Dear Ms Woodward
o Denise's email of 29 Septenib:
he firm and i
ous papers and thought
has now 1
th this ma
would be help
to set out
m
view of the
this point
Summary
The Pest
er error,
shortfal
yes", then
hout a g
that you may well :
ise, it appear
partic
evidence
s contract?
Ie outset,
ll of the decume:
able to demonstrate
the return of the
that the only way to verify t
ogglesby on 10 May 2
are not real. He he
use he believ
napshots and we:
ence to the daily
balances ie to manually cross c
snapshots.
POL00090437
POL00090437
om Mr Castleton‘'s
and attachments; and
chat
th.
bably been brought
entered onto the suspense
use the Horiz at
has failed to re
mm this conclusi
on the daily
at the
ert
on the
it g, b if they have, they can
mation available and th. is what the
do out within the Post Office
t management informatior
has been closed down".
ne actual
report would ha
typed document.
He says that ¢
ument rather than a
A Reports
i) P
Cash and stock cow ‘ox when Mx ¢
ped being a Post Office Sub-Postmaster.
trading and when
The ©
log for weeks 29 to 52.
(vii) Transaction log
our email to Denise of 26 September, you state
e any further
its case on the
le to produce relevant
documents that could either help or hinder ite case. The outcome could well
be that of recovering £27,000, the Post Of
Castleton a significant sum for wrongful termina
Next Steps
&* we should obtain
ew that it
you will probably have to:
@ claim be st:
POL00090437
POL00090437
until 3 November 2005 to enable the parties to
y to settle.
Once you } e reviewed this 4 could you contact me to discuss
tegy. It may be that : prejudice meeting or mediation
would be useful. Th: would be to run the claim to trial
annot produce the documents you need because at that stage,
Ll have incurred significant costs and the stakes will be
Z look forward to hearing from you as soon as possible.
pondpearce .com
mail and
protec
e-mail
y attachm ave confider and may
y law. The intended recipient only is
any attachments. If you are not the
nder ag soon as possible and delete
distribution, pubi
and
Any files attached to this e-mail will have been checked by us with vir
detection software before transmiseio: 2 should carry out your o}
checks before opening any attachment. Bond Pearce LLP accepts no liabili
for any loss or damage which may be caused by software viruses.
Bord Pearce LLP ited Liability
and
Wales number 0C31143
Registered Office: B
BS1 6Bd.
A list of Members is lable from our
a Partner in relation to Bond Pearce I
Bond Pearce LLP ie regulated by
MULTIMEDIA_1077082.TIF)
Partnership regi in England
°
istol Bridge House, 138-141 Redeli
ff Street, Brists
OCONEE OIG IG SEIS ICIS RAEI IESE AIOE SIGE SEA SR a I IO ae a
This email and any attachments are com
addressee 1 If you are not the name C
disclose, repro , copy or distribute th of this comnaunication.
Lf you have received this in error, please contact the sender and th
delete this email from your system.
FOE OIOO HOSEN IGE RGSS UI IGE IUCR ROGIER IO AR IOI RI IR AI Setar fee
and intended for the
you must not use,
nt was removed from this email <<<<
LESSEE ISSIR HE SESS IESE ORI OR EOS IDI ICCC ISI ERR RIA
This email and any
addressee only. If you are not t
Gisclose, reproduce, copy or distribute
If you have received this in error, plea
delete this email from your system.
tial and intended for the
you must not use,
of this communication.
2 contact the sender and then
a ct
©
2
POL00090437
POL00090437
FOI NOOO OCI IG IOI IFO IOICIOS EA OIC RIOR OOIE ARS A IIR ASO Fee
IESG IGS SIGI EI IOI IOSIE I RUSE IGOR IGIOR ICIS IODR RASC IGE GEE
This email and any attachments ave confidential and intended
addressee only. If you named recipient, you must not use,
disclose, reproduce, copy or distribute the contents of i i
tf you have receiv in errer, please contact the
delete this email from your system.
JOGO IIS IESISIOC IGE JOIC IC TOC IEI IOS AGI ICONIC AI IR SOARS OE IOR a AOE aE Ra
f the
POL00090437
POL00090437
Keith K Baines To: Nicholas Samuel
2EMO/260S 12:29 Subject: RE: FW: Mr L Casileton - Marine Drive Post Office, Bridlington
~~ Fonwerded by Keith
Jennifer Robson
26/10/2005 12:31
I can now confirm that the analysis is required for January to March O4 please.
Mary thanks
Jennifer
Debt Recovery Section manager
Post Office Lid
Finance
ist Floo Lf Future Walk, West Bars, CHESTERFIELD, S49 1PF _
Posiline]_ GRO I STD Phone:{ jobilet
This email and any at .
the named recipient you must not usé, disclose, repr roduce, copy ordi tribute the contents or ‘his
communication.
lf you have received this is error please contact the sender and then delete this email from your
sysiem.
External Email: jennifer. robgort
Pinder Brian “Brian, Pindert
Pinder Brian
sx ARQ with the respecti
await an A
ncies started to appear
4 wk 52/04.
in which the discre:
- March
Bould iod of analysis we x Zo you think?
Recovery Section
Past Office Led
POL00090437
POL00090437
<Brian. Pind
Penny
keith. k. baines'
er. robso
Subject: RE: FW:
tleton
ne Drive Fost
dlington
ham
ere is some urgency I wi
om Post Ofice either throu
s and I un
bo do
await conformation of detailed requirement
- Hoc or ARQ.
Whilst I am happy
on Team is involved wit re ie no
against the Postmaster.
alysis of the HSH x
commenting on any sp
POL00090437
POL00090437
system by the
she in due course. A
Lthough a report outlining the action
T£ an ARQ is required
ness statement will not
taken would be
advise whet
the period you
ou feel an ARO is
like analysed)
ed / Jennifer -
vestigation Tear
PO BOX 1, CROYDON, CRO 18N
Pinder
<Brian
GRO
leton
Marine Drive igton
°
Graham
Carl Marx, and I believe you may
xuctiol om you on thie before
comment on whi
POL00090437
POL00090437
Look at the autach dem
look at the e
and his next
below a response you provided
Lbridge) ak
ng discrepan
s provides useful supr
Reports {
Tf you
. response
decision
on whether to proceed with this case or aot.
ved, then
seek is required a
Regards
Dave
crepancies
malfunction
are virtuall and can not hout a Corresponding lack of
attention to process by the PM or Post Office staff:
, Cash or Trans ions foll
g equipment
goes to compl
within $ seconds to all of the neighbouring co
the case of Single Counter Outlets. This
to Post Office staff through
208 OK
hould there be a failure which results ia incomplete or damaged
ion information b te the message store, t
it in events peported By the counter to the centre
he Horizon Syste
nas a lot of guidan
needed to recover
M by documenting procedures
ure which mitigate against any losses
or the recov:
asters were required Pre S80 to produce week
time any losses or gains would become
anding the vast majority of Post offices
d of each working day by producing daily office summ
arations (Mandatory) . ese will demonstrate whether there
discrepancies, if there are discrepancies then it is expected that
Post Master should account for them then, or raise calls on NBSC
POL00090437
POL00090437
in resolving the problem.
wa
) The PM h a powerful tool this will allow
int
production of reports for the 35 p:
nm Our exper.
is physically
ould
of discrepancies dating back for mores
definitive ansy
Operations Control
i GRO
GRO Pexternal Email:
Srt/e/POSTOFFICE on 24/
Jennifer Robson
@ we consulted on
recent
need ¢
to discuss
an you advise who would be the contact from your domain. Please note the
date for provision of info. Can you get back to me by early next week
please.
Many thanks
Jen
Debt Recovery Section manager
Fost Office Ltd
Finance
and any attachments
s) only. If you ar recipis
produce, copy or ¢ ribute the contents o:
ceived this is error please contact the sender and then
your system
ernal Email: jenni
- Forwarded by Jena
POL00090437
POL00090437
Mandy
is required to
not up to the job
TRY
Drive Pos
Ms Woodward
Dear
email of 29
refer to D
this matter. I have
ld be helpful to set out
iam deali
thought it %
£27,115.83 plus interest
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POL00090437
costs in respect
responsible £
or error. However, the real issue is whether there has been any real
shortfall, ox whether this shortfall has really been generated by computer
rroy, To win, the Post Office must show that re has been a real
of net losses. Clearly, Mr Castleton is contractually
any losses that the Post Office makes caused by negligence
he ariswer i
the
Post Office cannot show
there was a real shortfall and loses its claim
c has dismissed him without a reason, then unless his contact say
cherwise, it appears that you me have to take Mr Castleton's
wrongful
termination claim se
£250, 000 t those 1
to analyse any evidence
full copy of his contrac
that he has suffered loss for up to
been particularieed and 3 will need
na support of them. Please could you supply me a
3. From the outset,
stently been that if you
return to him all of c lesby on 1¢ May 2004
then he will be able to demonstrate that the losses are not real. He has
peatedly sought the return of the daily snapshots, because he believes
that the only way to verify the accuracy of the weekly snapshots and weekly
balances is to manually cross check them by reference to the daily
ote.
snape.
Experts! Reports
prejudice letter dated 20 September from Mr Castleton's
Bond Pearce;
fo) White & Hoggard's
Bentley Jennison state ye probably been brought
forward despite the fact that they have been entered onto the suspense
account entry. They suapect because the Horizon system, despite
susp: account entry, has failed to recognise the entry on the daily
snapshot. They have drawn this conclusion through leoking at the
discrepancy
of £3,509.18 om Thursday 26 February 2004. They then suggest that this
double accounting could have continued over a number of wee. and that as
lLeton's Defence, “appears to hold potential merit based on the
& Hoggard
o
documentation” they have so far reviewed. whit
similar conclusion in their report.
You may think the expert has got it wrong, but even if they have, they can
only form their view on the information available and this is what
Court
will have to do when the
laim gets to trial.
Purther disclosure
Bentley Jennison seek:
2 A fu
list of all the transactions carried out
says that it is mot good enough that management
ble simply because the "month end has been cl
the Post Office
ation is not
(ii) The actual aud.
report prepared
ave been a manuscr
Mrs Ogglesby. He says that the
pt writing document rather than a
actual report would
typed document .
A Reports for weeks 39-52.
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ounts for when Mr Castlet
ice Sub-Postmaster.
a began trading and when he
weeks 39 to 52.
fail to Denise of 26 September, you
le to produce any further caperwork. However,
fice to prove its case on the balance of probabil
nature of Mr Castleton's Defence, I suspect that the Court will draw
adverse
inferences against the Post Office if it is umable to produce relevant
document s could either help or hinder its case. The outcome could well
be that i d of recovering £27,006, the Post Office ends up paying to Mr
Castleton a significant sum for wrongful termin n of his
Bo von
expert and Mr Castleton have
view ne documents to prove the claim is
true, or take an early is unlikely to succeed and that in
order
to extricate yourselves from proceedings, you will probably have to make a
payment to Mr Castleton. The Court has ordered that the claim be stayed
3 November 2005 to enable the pa
rties to try to settle.
once you have reviewed this email, please could you cont
strategy. It may be that an early without prejudice meeting
aeap would be useful. The worst move would be to run the ¢
find you cannet produce the documents you need because
parties will have incurred significant costs and the
that much higher.
ico you as soon as possible.
Kind
Stephen Dilley
Solicitor
Bond Pear,
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