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Filed on behalf of the: Clalmant/Part 2
Defendant
Witness: COGLESBY
Statement: 2
Exhibits: co2
Date made: 17/10/2006
IN THE HIGH COURT OF JUSTICE Claim No: HQ05X02706
QUEENS BENCH DIVISION
BETWEEN:-
POST OFFICE LIMITED
Claimant/Part 20 Defendant
-and-
LEE CASTLETON
Defendant/Part 20 Claimant
SECOND WITNESS STATEMENT OF CATHERINE OGLESBY
I, CATHERINE OGLESBY o!
0} WILL SAY AS FOLLOW:
1. Since April 2005, I have been a Sales Account Manager for the Post ‘Office Limited
(the Post Office) with responsibility for ensuring that 24 directly managed post
office branches achieve their sales targets. Before that, I was a Retail Line
Manager (RLM) for approximately 8 years. As an RLM, I was responsible for
ensuring that subpostmasters in 85 sub post offices properly carried out their
duties to maintain service standards (for example, in relation to waiting times and
office appearance) and reach sales targets. I have worked for the Post office for
23 years.
2. I make this witness statement from facts within my own knowledge unless
otherwise stated, I have had the benefit of reading through my correspondence
and papers. References to Page numbers in this witness statement are to page
numbers of Exhibit CO2 to this witness statement.
Post Office branch a’
3. Thave been asked to give a brief overview of the layout off GRO
mu"GRO I (the Marine Drive branch), and describe how the business
works, for the benefit of the Court. At pages 1483 alPfkea SF entries which
show that Mr Lee Castleton and Mrs Lisa Marie Castleton have been the registered
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Proprietors of the freehold since 17 October 2003 and that they bought the
freehold on 18 July 2003. At page 4 is‘a rough plan I have drawn from memory
of the interior of the Marine Drive branch. The ground floor of the freehold
contains a rectangular shaped shop and from the entranceway, the Post Office
counter is in the far left hand corner of the shop. The shop counter and National
Lottery till are on the right as you enter the shop. There is living accommodation
above the shop for Mr Castleton and his wife.
4. From 18 July 2003 to 23 March 2004 Mr Castleton was subpostmaster of the
Marine Drive branch. His contract for services was in the standard format used for
subposttnasters at the time and a copy of that contract together with the signed
page is at pages 5-129 (the Contact).
2L-£37- 200
1 5. Section 1, paragraph 3 of the Contract provides that the subpostmaster must
: provide and maintain at his own expense, reasonable office accommodation
required by the Post Officer and pay, also at his own-expense, any assistants he
may need to carry on Post Office business. At the material time, Mr Castleton
retained Christine Train as his assistant to work behind the Post Office counter and
‘T believe that she had worked t' the’ Matine Drivé branch for many years. 1
cannot now recall whether at the material time, anyone else worked behind the
Post Office counter. Mrs Castleton’s wife, Lisa, worked in the shop.
6. There are 2 Post Office counter Positions at the Marine Drive branch, each with its
own computer terminal, barcode scanner and Printer. Before the opening of
business each day, the subpostmaster and any assistant logs on to their
computer. They must record all transactions they perform on their computers,
They can record transactions either by using their touch sensitive screen or
keyboard. The computer system in the branches is called Horizon. Horizon is in
effect, a sophisticated computerised calculator.
7. So far as I recall, every transaction recorded by the subpostmaster and his
assistant on to their computer has one or sometimes more corresponding
physical documents, apart from stock transactions. For example, when a
customer pays their TV license, the subpostmaster will retain the TV licence
counter foil. If that customer paid for their licence by cheque, the subpostmaster
will also have the cheque. .
8. As far as I remember, at the end of each day, the subpostmaster prints from their
computer various reports. The procedure is slightly different for different
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Products, but broadly speaking, they then compare these reports against the
physical documents they have (such as cheques or licence counterfoils) to ensure
they match. If they do not match, 1 think that they may be able to reverse
certain transactions whose details they had entered on the system erroneously.
They then send the reports and accompanying documents off to be processed.
When these are processed, if the covering report printed out from the branch's
computer does not match the accompanying physical documents, an error notice
is generated. An error notice is a correction statement. Its creation would help
explain whether there was any legitimate reason for an error having been made
(for example, because subpostmaster or his assistant made an incorrect entry
into the computer when recording a transaction).
At the material time, the subpostmaster also had to balance the physical cash and
stock against the cash and stock shown on the computers on a weekly basis and
Produce a Cash Account. The Cash Account contained information such as cash
and stock in hand at the end of that week, receipts, payments, the balance due to
the Post Office and whether there were any discrepancies such as a’ surplus or
shortfall. The subpostmaster had to sign the Cash Account and of course should
not have dorie So unless it was accurate,
December 2003
10.
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Between approximately Christmas 2003 and the New Year, I was contacted by
telephone by Mr Castleton who told me that on week 39 (the week ending 23
December 2003), he had been £1,100 short in his Cash Account. We discussed
what might be a usual explanation for this, for example the Giro Bank error or
cheque deposits going through as cash. I suggested that he contact Giro Bank and
National Savings to see if there were any problems. I also asked him to make
good the sum of £1,100, because a Giro Bank error notice may take up to 8 weeks
to arrive. Mr Castleton said that he could make the amount good and we left
things at that.
This had been the first time since Mr Castleton took over the Post Office in July
2003 that he had any major problems in balancing the physical cash and stock
against the cash and stock shown on the computers. Copies of the Cash Accounts
signed by Mr Castleton for the weeks ending 23 December 2003 (Cash Account
week 39), 30 December 2003 (Cash Account week 40), 7 January 2004 (Cash
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Account week 41) and 14 January 2004 (Cash Account week 42) are at pages 197-
235. - 2603
164, P2558
Shortfalls in January 2004
12. In accordance with my normal visiting plan, I visited the Marine Drive branch on
Friday 16 January 2004. At the time, no reason had come to light to explain the
loss of £1,100. The previous 3 weeks’ balances seemed to be fine.
W8, PLM -234y
13. Referring back to the summary of events that I prepared at the time (pages 130-
134), Iam reminded that on or around 21 January 2004 (Cash Account week 43)
Mr Castleton contacted me because his balance of the physical cash and stock
against the cash and stock shown on their computers was over. £4,000 short. A
copy of the Cash Account he signed for wee’ ak E8965 F480 2450. 1 again
asked him to contact Giro Bank and National Savings to see whether there were
any problems. I also asked him whether the cash was kept secure and who had
access to it. Mr Castleton did not believe that any of his staff could have taken the
money. He stated that on this occasion, he was unable to make good the shortfall.
I advised him to contact the helpline to get a hardship form. (A subpostmaster is
contractually obliged to make good any shortfalls without delay. However if a
subpostmaster cannot immediately make goods the shortfalls, he may complete
and submit a hardship form setting out details of his earnings and other relevant
information to seek the Post Office’s permission to make good the shortfalls by
instalment payments rather than immediately).
14. We also discussed at length ways for him to double check all of the Paperwork
feaving the Marine Drive branch (for example, the giro paying in slips, pension and
allowance dockets and certain types of cheques) and to perform a balance
snapshot each evening to check the cash. (Effectively, a balance snapshot is just
a facility to allow the subpostmaster to quickly check transactions through the
week, It is a report that contains what the computer records should be the total
cash in stock figure, not what cash the branch actually does have. It looks at the
previous week's declared cash in stock and adjusts items as they are sold thereby
showing the amount the branch would need to achieve a perfect balance.
However, if for example someone forgets to enter an item that a customer has
purchased, then the balance snapshot figure will be inaccurate, by showing less
cash than is actually in the till. If on the other hand, the customer is given too
much change or is overpaid (for example, a pension), the balance snapshot will
show more money than is actually present in the till). If the figures in the
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Paperwork leaving the branch did not come close to the balance snapshot, this
ought to alert the subpostmaster that something was wrong.
I contacted Mr Castleton by telephone on or around 28 January 2004 (Cash
Account week 44). After he said he was a further £2,500 short, again, we had a
lengthy discussion to discuss all the daily workings. A copy of the Cash Account
tor thet week signed by Mr Castleton if 3t! gee Be Rey brought up in the
conversation the possibility that somebody might be taking the cash, but Mr
Castleton discounted that possibility. 1 suggested that he carry out individual
stock unit balancing, Small post offices such as the Marine Drive branch which has
2 cashier positions run a shared stock system: All the cash and stock is contained
on i balance sheet. However, with individual stock balancing, each computer has
its own separate stock and cash balance. Mr Castleton did not wish to do this, as
he felt that Marine Drive branch did not lend itself to doing this sort of balancing. I
was surprised that Mr Castleton did not take up my suggestion because although
there is some work involved setting up individual stock balancing, it would have
enabled us to identify whether the losses were caused by any individual cashier,
Shortfalls in February 2004 ©
16,
The next week ended 5 February 2005, (Cash Account week 45) the Marine Drive
branch was £25 over. (A copy of the Cash Account signed by Mr Castleton is pages
67 Seay owever, the week after ending 41 February 2004 (Cash Account week
46) the Marine Drive branch was £1,500 short (A copy of the Cash Account signed
by Mr Castleton is at paged Bee SiaK" “by 2868 after just 4 weeks, the Marine
Drive branch was a total of £8,243.10 short, not counting the sum of £1,100 that
Mr Castleton had made good to start with. I visited the Marine Drive branch
around this time at which time I would have looked at the latest Cash Accounts. I
asked Mr Castleton whether he had obtained a Hardship Form. He said that he
hadn’t and I told him to get one. I understand that he did, and he made a book
entry which transferred the sum of £8,243.10 into the Suspense Account.
Subpostmasters are contractually obliged to make good all losses without delay
and Mr Castleton should not have been rolling them over each week, The purpose
of having a Suspense Account was simply so that a shortfall that a subpostmaster
does not immediately made good could be temporarily moved to the Suspense
Account rather than being left in the Cash Account, By this time, I was very
concerned and contacted the investigations team. The investigations team
investigate cases of fraud where dishonesty has been involved. Given that Mr
Castleton had kept me informed of the losses, this was not a case which they
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18.
19.
20.
would investigate. I also completed an audit request so that the audit team would
Carry out an audit.
In Cash Account week 48 (the week ending 25 February 2004) the short fall for
that week alone was £3,509.18._ (A copy of the Cash Account signed by Mr
Castleton is at B% = Bae Castleton informed me that he and his
assistant Mrs Christine Train spent many hours double checking the transaction
logs to try to prove that it was the computer equipment that was changing the
figures. I asked him if he had found anything, but he had not. However, he was
convinced that since he had a processor changed about the time the losses started
occurring that it was the processor that was causing thé losses, I asked Mr
Castleton to contact Fujitsu services (who were responsible for designing,
implementing and operating the Horizon system) to obtain a system check. He did
this and the system check came back fine. I asked Mr Castleton to contact the
Horizon system helpline (HSH) which he did and I understand that he sent Cash
Accounts to the National Business Support Centre (NBSC) to review. 1 also asked
Mr Castleton to contact the Post Office's Transaction Processing section to see
whether there were any error notices pending. So far as I was aware, there was I
“Rothinig'Ufttoward with thé computer system. >
On 27 February 2004, I again visited the Marine Drive branch. Again we discussed
the losses shown in the various Cash Account figures. Mr Castleton became
distressed and angry and Mrs Train was also upset. I asked them what else I
could do to help, given that we had previously discussed all the usual ways that a
subpostmaster could incur shortfalls. Mr Castleton and Mrs Train repeated that
they had not taken the money and that it must be the Horizon system. Mr
Castleton stated that HSH had confirmed that the Horizon system was working
correctly, but he was not sure precisely what HSH had checked.
Mr Castleton thought that the 2 computer processors were not. communicating
with each other. I advised that if the 2 computer processors were not
communicating, then work done on the second machine would not show up on the
summary sheets. However, all the Pensions and Allowances reports and the Giro
Bank receipts agreed with the information from the computer, which to me
suggested that there was no computer error.
Mr Castleton also thought that when he “remmed in” the stock, the Horizon system
altered the figures. (When stock or cash (“a remittance”) is delivered to a branch,
the subpostmaster is obliged to physically check that the stock and cash matches
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the accompanying list of stock which the Post Office say is being delivered. The
subpostmaster enters the details of the remittance into the branch’s computer,
which is called “remming in”). To Prove whether or not the Horizon system had
changed anything, I suggested that at the end of the day after close of business
he:
a firstly print out an end of day snapshot;
b. remmed in; and then
c print out a second snapshot.
Shortfalls in March 2004
21, At some point in or around March 2004 I looked at the Cash Accounts for that
month and noted that:
{a) In the week ending 3 March 2004 (Cash Account week 49), Mr Castleton
transferred the previous weeks balance to the Suspense Account. The
Suspense Account then totalled £11,752.78. In addition, the Marine Drive
branch signed Cash Account showed a further shortage of £3,512.26 (pages
305-316). Mr Castleton did not make good this amount. CF peut -2114
(b) In the week ending 10 March 2004 (Cash Account week 50) the previous
week's shortage of £3,512.26 was rolled over and the shortage in the signed
Cash Account increased to £10,653,11 (pages 317-328). 184 . e 2731 - 2736
WBA, p27Uq - ZISY
(c) In the week ending 17 March 2004 (Cash Account week 51), the Marine Drive
branch showed a shortage in the Cash Account of £11,210,56 plus the
shortage in the Suspense Account of £11,752.78 (pages 329-344),
Audit on 23 March 2004
22. On 23 March 2004, Helen Rose (nee Hollingworth) of the Post Office carried out an
audit of the Marine Drive branch together with Chris Taylor. This was the first date
that the audit could take place due to the other work commitments of the audit
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team. The audit concluded that there was a total unauthorised shortfall at that
75 .
stage of £25,758.75 (page 135). 183, 379
23. I arrived at the Marine Drive branch in the afternoon of 23 March 2004 and took
“Mr Castleton into the back room to speak to him. 1 told him that as a
Precautionary measure, and with his permission, I would like to remove him and
his staff from the Marine Drive branch and to operate the branch with a temporary
subpostmaster to see how it would balance. I wanted the temporary
subpostmaster to retain the same Horizon system that Mr Castleton and his team
had been working with to try and keep everything the same. Mr Castleton and his
assistant Mrs Train were both angry. Mr Castleton said that he could not wait until
the temporary subpostmaster was “thousands short next week” and that “heads
will roll” for the distress that he had suffered.
24. On the same day, Lesley Joyce (the Post Office’s contract manager) wrote to Mr
Castleton to confirm that he was suspended as a precautionary measure pending
further investigations (page 137). 2, 207
Events following Mr Castleton‘s suspension —
25. I asked a very experienced post master, Mrs Ruth Simpson, from the First Lane
Post Office in Hull if she would run the Marine Drive branch on a temporary basis.
Mrs Simpson agreed, but was only able to run the Marine Drive branch for a few
weeks as she had other commitments. She opened the Marine Drive branch on
the morning of Wednesday 24 March 2004 and balanced £2.14 short on that night.
(A copy of the Cash Account dated 24 March 2004 at Wades(344 32 380). ° She
brought with her a part time assistant to help out on Mondays. On the close of
business on the first Monday (the week ending 31 March 2004), she was £100
short and explained that she thought that this was because her assistant had left
something in the stack and erroneously paid this amount twice. (The stack is an
‘on screen list of transactions for the individual customer that is being served at the
time. Each time a new customer is served, the stack should be cleared so that it
starts from zero). A copy of the Cash Account for that week is at pages 351-356.
Wy pepe - 2774
26. I telephoned Mr Castleton to see what his reaction would be. He stated that Mrs
Simpson was only using 1 computer rather than 2 as he had done, so it was not a
true reflection of how he ran the Marine Drive branch. He also stated that Mrs
Simpson had misbalanced (i.e there was a shortfall of £100). I said that I would
speak with Mrs Simpson regarding his concerns. 1 contacted her and asked her to
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28.
use both machines. She stated that on a Monday she had 2 people working all
day, so 2 machines were used. The rest of the week she was on her own, but
logged on to the system with 2 usernames and had 2 machines running, she was
serving customers from both machines, remming in on both and putting the.lottery
Cash on both.
On the week ending 7 April 2004 (Cash Account week 02), Mrs Simpson was
£19.38 over (paged 3fy3es), “Wd Sizcussea how she was getting on every other
day and she would text me to confirm that she was okay. On her next balance for
the week ending 14 April 2004 (Cash Account week 03) she was £10.76 short
(pages 363-368).
84, P2786 -27%)
. On 16 April 2004, I visited the Marine Drive branch and spoke to Mr Castleton
away from the counter, since the retail shop and the Post Office counter were still
open. He was distressed. We discussed Mrs Simpson‘s balancing results. Mrs
Train wanted to know where the £100 shortage had gone in Mrs Simpson’s first
full week and I explained what she had thought. Mrs Train became aggressive and
threatening. I said that I felt the balance reflected any normal Sub-Post Office. Mr
Castleton again stated that it was the computer that was making the losses. I told
Mr Castleton that Mrs Simpson would be finishing on Wednesday 21 April 2004
due to other commitments and said that I wanted more time and more balance
results and wanted another temporary subpostmaster to take over. Mr Castleton
said that he did not wish to go back on the counter as things stood anyway.
29. On the week ending Wednesday 21 April 2004, (Cash Account week 04) there was
30.
4 P2747 374
@ surplus for the week of £0.00 pages “sbbl3745." Me Greg Booth took over as
temporary Sub-Postmaster on the same day. He completed his first week on
Wednesday 28 April 2004 and declared a gain of £14.76 (pages 375-380).
PAF I Pe7iy POY
On 23 April, Mr Franks (Mr Castleton’s father-in-law) contacted me by telephone
to discuss the way in which Mr and Mrs Castleton had been treated. I explained
the situation and told him that the suspension was a precaution and that I was
. hoping that by having a temporary Sub-Postmaster in the office, that if there were
1A
any problems with the computer equipment, this would come to light. Mr Franks
demanded that Mr Castleton be reinstated immediately. I referred him to the Post
Office Head of Area, David Mellows-Facer and told him that I could not agree to
reinstate Mr Castleton at the time. I understand that Mr Franks spoke with David
Mellows-Facer and asked for a speedy conclusion to the situation. David Mellows-
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31.
Facer spoke to me and asked me whether Mr Castleton could be interviewed as
soon as possible.
On 26 April 2004, 1 wrote to Mr Castleton and stated I was considering the
. Summary termination of the Contract on the grounds that the audit of the Marine
32.
33.
Drive branch,,on 23 March _2005 showed that there was a total shortage of
£25,758.75 (pads 158-139)' I said that Mr Castleton had reported large,
unexplained fosses over the preceding 12 weeks. I stated that he was unable to
make good the losses and therefore the decision was made to suspend him due to
the obvious risk to Post Office funds. I explained that there are a number of
obligations set out within the Contract, one of which is that the appointment is
dependant upon the branch being well managed and the work performed to the
satisfaction of the Post Office (section 1, paragraph 5). 1 also referred him to
section 12, paragraph 12 of the Contract (page 60). This provides that:
82 , pia
“the Subpostmaster is responsible for all losses caused by his own
negligence, carelessness or error and also for losses of all kinds caused by
“his Assistants. Deficiencies due to such losses must be made good without
delay.” - .
Fer, Plo?
T also explained that Section 1, paragraph 40 of the Contract (page 21) provides
that it can be determined at any time in case of a breach of condition by the
subpostmaster or non-performance of his obligation, or non-provision of Post
Office services. I asked him to explain the reasons why his contract should not be
terminated summarily and that he could do this by requesting a personal interview
or submitting a response to the charge(s).
On 28 April 2004, Mr Castleton replied and queried whether the losses existed or
whether they were “a figment of a computer's imagination”. He asked me to send
to him various documents and information (pages 140-143).
Ter Pp d82- 383
I contacted the Transactions Processing Department again on 29 April 2004 to see
whether there were any outstanding error notices. There was an error for the
National Lottery that had yet to be investigated for £125. There had also been an
error for cheques that later cleared and did not generate an error notice. There
was also an error for an Easy Access Account that had been processed incorrectly,
I contacted Giro bank to see whether there were any errors outstanding with
them. I asked them to look back to week 43, They looked back as far as week 43
and came forward to week 02. There was a small Giro bank error of £1.43, but
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that would not be reported because it was such a small error, Everything else was
fine.
34. Mr Castleton telephoned me on 4 May 2004 and stated that he had found £15,000
of the losses. I assumed he had done this by going back over the hard copies of
the accounts that he had. I asked him where he had found the cash. He stated
that the Suspense Account had doubled the figures. When he had put the cash
into the Suspense Account, although the amount was showing in the Suspense
Account, it was also still showing as a loss in the Cash Account again the next
week. Mr Castleton asked for the Suspense Account software to be checked. I
again contacted the NBSC to request this.
35. To test whether the Suspense Account was having any effect on the balance, 1
contacted the temporary Sub-Postmaster, Greg Booth on or around 5 May 2004. I
asked him how he was balancing that week on his snapshots. He told me that he
had a few pounds over. 1 told Mr Booth what Mr Castleton had said about the
Suspense Account. I asked Mr Booth to put £100 into the shortages Jine on the
Suspense Account. First he ran an office snapshot {packs 387-388},° then he
placed the £100 into the account, then, he ran a second snapshot (paces £80 350h°
and a Suspense Account report (ages 3d1e 402), During this time, the same
Horizon kit was still being used by the assistant. The £100 was in the correct place
and the cash figure on the snapshot had changed by £100. This demonstrated that
the system worked correctly. I asked Mr Booth to balance with those amounts still
in the account. He should balance £100 over. I would then call into the Marine
Drive branch on 7 May 2004 and we would take the amount out, to see if the
opposite occurred. Mr Booth left me a message on my telephone later that
evening to state that he had balanced over, just as we had expected.
36. For the week ending 5 May 2004 (Cash Account week 06), the Marine Drive
branch declared a small gain of £103.11 (pages 381-386). he , p2 HOU - ARG
37. On 6 May 2004, a letter was written on my behalf to Mr Castleton and sent to him 5 s
@ copy of an email from Fujitsu and logs of calls to the NBSC and HSH (pages 144-7 pt
154). [also sent to him a copy of the Horizon System User Guide, System Failure 19'S in e
. NRE abetSooe Sea
Sub-Sections 12 and 13 and a copy of' the Audi éport (pages 155-171). The - Ley
email from Andrew Price at the NBSC dated 20 April 2004 to me stated: :
wor
“The PM sent Cash Account information to NBSC and it was looked at by
Andrew Wise, he was unable to find any errors. The only amount questioned
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39.
40.
was a large amount on the cheques to processing centre which Andrew was
able to confirm was a cheque for the purchase of Premium Bonds. The PM
was advised there was nothing more we could do and we suggested that he
works on a manual system at the side of Horizon to see if any problems
were highlighted. Also, when doing the REMS the PM should take a snapshot
before and after to see if any problems were occurring when doing a
remittance. Andrew Wise and I both feel that the Horizon system is working
properly and we are unable to help the PM any further.”
The email from Julie Welsh, Service Delivery Manager HSH Fujitsu Services stated:
“There is no evidence whatsoever of any system problem... please tell the PM
that we have investigated and the discrepancies are caused by the
difference between the transactions they have recorded on the system and
the cash they have declared, and are not being caused by the software or
hardware.” (page 176). TE p3ae
On 6 May 2004, I also contacted the Transaction Processing Department at
Chesterfield again to check whether there were any outstanding errors. Only the
easy access error was still showing. I also contacted Mr Castleton by telephone
and informed him that I had received his letter and was doing all I could to get
him the information he had requested. I said that 1 would probably not be able to
obtain everything that he had asked for.
On 7 May 2004, I visited Greg pooh at at thi Marine drive branch, as arranged.
First he ran an office snapshdt{eagee 5 393- 3 4), then he removed By je £100 from
the Suspense Account and rap 2, second snapeher - (peGee Fae =396) and a
Suspense account répork pab8 2388), Again, the cash figure in the snapshot and
the Suspense Account had changed by £100 which demonstrated that the system
worked correctly.
interview with Mr Castleton on 10 May 2004
41.
On 10 May 2004, I interviewed Mr Castleton. Ms Lesley Joyce (Contract Manager)
and Mrs Tree were also P Present. A copy of the Minutes of the interview meeting
are at pages 11977. fr8 I At tHe’ interview, I explained that it was his opportunity to
give any explanation as to why his contract for services should not be terminated.
I summarised the events which lead to his suspension on 23 March 2004 due to an
unexplained shortage at that time of £25,758.75. During the 12 weeks prior to
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43.
44,
this audit, the Marine Drive branch had several large unexplained losses. The
figure for cash on the system was not the same as the physical amount of cash at
the Marine Drive branch. Mr Castleton stated that the Horizon system was to
blame. °
I informed Mr Castleton that since he had been suspended, the same Horizon
system had remained in place and that there had not been any further complaints
about it from the Marine Drive branch and that the Cash Account showed no large
losses. The Horizon system did crash whilst Mrs Simpson was running the branch,
but when she rebooted it, this did not effect the balance. When Mrs Simpson had
finished, Mr Booth was appointed as a temporary subpostmaster, and again, he
had no problems.
Mr Castleton stated that he had not taken any money and that he trusted his staff
not to have taken anything. Mr Castleton said that he had asked for 10 pieces of
information and I explained that I had only received his letter 2 working days prior
to the interview and that I was working on obtaining this.
I checked that Mr Castleton understood how the Cash Account worked with
regards to balances and losses and gains and he confirmed he understood it. I
then went into detail with balances, error notices, losses etc and the evidence I
45.
had with the snapshots and declared cash. I Provided all of this information to Mr
Castleton, together with a list of the results of the balance, .
At the end of each day the subpostmaster is supposed to count their cash, type
the details into their computer stating the quantity of each denomination they
have and then print a cash declaration to declare the quantity of cash in the tills
overnight. (This is called the overnight cash declaration or ONCH). I referred Mr
Castleton to some of the cash declarations which had been manually altered or
written on. Specifically I referred him to week 47 (the week ending 18 February
2004) and also the declaration on 13 February 2004 which had a figure of
approximately £7,000 written onto the bottom of the cash declaration. Mr
Castleton thought it was Mrs Train's writing, but she was not sure. I said this was
very important because although the Cash Account for week 46 (the week ending
11 February 2004) showed a loss of £8,243.10, the snapshots and declared cash
immediately following week 46 did not match. For example:
Wo p2qs S
(a) The balance snapshot timed at 5.27p.m on 13 February 2004 (page 187)
showed that the Marine Drive branch should have needed £92,095.36 cash in
4A_1107486_7 13
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46.
47.
3A.2107486_7 14
its till to achieve a perfect balance. However, the cash declaration timed at
5.30pm that day shows that the branch had cash of £99,128.40 (page 191),
being £7,033.44 more than Horizon thought it had. Bd p2 6995
(b) The balance snapshot timed at 11.59am 14 February 2004 showed that the
Marine Drive branch should have needed £95,896.59 in its till to achieve a
perfect balance’ pAge A B9}> Hor the cash declaration timed at 12.00pm that
day showed that it actually had £102,706.10 (page 191), being £6,809,51
more than Horizon thought it had.
eq p26
(c) The balance snapshot timed at 5.37pm of Monday 16 f ebruasy, 2004 showed
that the Marine Drive branch should have needed 175%. .28 In its till to
achieve a perfect balance (page 192), but the cash declaration timed at
5.36pm that day showed that it had £84,909.54 (page 196), being £6,951.26
more than Horizon thought it had. 26 4b
4 4
(d) The balance snapshot timed at 5.29pm dated Tuesday 17 February 2004
showed that the Marine Drive branch needed £68,163.08 to achieve a perfect
Ae per Nae I .
balan page l19: ), but the cash declaration also timed at 5.29pm that day
showed that it actually had £74,939.85 (page 196), being £6,776.77 more
than Horizon thought it had.
bo, p 2644
In other words, according to the cash declarations, the Marine Drive branch had
more cash than it required to balance.
Crucially, the Cash Account on Wednesday 18 February 2004 showed that the
cash is an exact match for the cash required on the balance. I asked Mr Castleton
where the surplus had gone. He had no explanation and stated that it was
something to do with Horizon. I gave Mr Castleton other examples where there
were shortages in subsequent weeks and that they did not match the snapshot in
the cash declaration.
I explained to Mr Castleton that the Horizon system is a double entry accounting
system and that everything I had checked worked through. The evidence does not
support Mr Castleton’s theory that the Horizon system went wrong when he
entered the stock remittances on to the system.
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Post interview
48.
49,
After the interview, I sent copies of the cash and Suspense Accounts to Elizabeth
Morgan and Daviyn Cumberland in Leeds who were two people very experienced
in dealing with the Suspense Accounts. Neither of them could see anything wrong
with the way that the computers were working.
On 14 May 2004, I wrote to Mr Castleton to clarify the entries at the top of the
final balance that he had queried and to explain why the 2 final balances he had
mentioned did not look similar (page 180). I also sent him a copy of the
interview notes. . Pp 34ytt
TO?
Mr Castleton‘s dismissal
50.
51.
52.
53.
3A_1107486_7 45 -
Mr Castleton did not provide any evidence of a computer problem. All the entries
in his Cash Accounts were double checked. The figure declared for cash on the
system did not match the physical amount of cash he had in his office. This
" showed that there was an actual loss, rather than a computer problem. The audit
had revealed that the Marine Drive branch was short of £25,758.75 cash, which,
coupled with a lottery charge error that occurred on 23 March 2006 for £176 that
has not been repaid and a lottery claim error (a credit) that occurred in the cash
account week ended 24 March 2004 for £75.80, made a total deficiency of
£25,858.95.
Mr Castleton denied taking the cash, but he would not take my advice to try
individual balancing, or listen to my suggestion that a member of his staff might
be taking the money.
The Transaction Processing Department at Chesterfield and Girobank have stated
that they had no outstanding error notices to issue. Fujitsu Services had checked
the software and could not find any problems.
Since Mr Castleton had been suspended, the temporary subpostmasters had
worked with exactly the same Horizon kit and the balance had continued to be
fine each day within expected parameters. Mr Castleton had not given any
credible explanation for the unauthorised shortfalls. In the circumstances, I
decided to terminate summarily Mr Castleton’s Contract. I wrote to Mr Castleton
on 17 May 2004 to confirm that I had decided to terminate summarily the
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Contract effective from 23 March 2004, the date of his suspension (pages 181-
182).
Events following Mr Castleton‘s dismissal
54. On 23 May 2004, Mr Castleton wrote to me to confirm that he wished to appeal
against my decisioh’ page 18 }. He also stated that he was seeking further
information relating to the computer fault. On 4 June 2004 he wrote directly to
David Mellows-Facer for this informatio Pade 184). On 2 June 2004, David
Mellows-Facer replied to Mr castldan Piss 182185), Mr Castleton’s appeal was
dealt with by Mr John Jones, Area Development Manager, which upheld my
decision.
55. In the circumstances, I believed (and still believe) that my decision to dismiss Mr
Castleton was entirely justified.
T believe that the facts stated in this Witness Statement are true.
~~ CATHERINE OGLESB
4A_1107486_7 16 _
363
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4A_1107486_7
Filed on behalf of the: Cialmant/Part 20
Defendant
COGLESBY
2
Witness:
‘Statement:
Exhibits:
Date made:
Claim No. HQO5X02706
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
BETWEEN:
POST OFFICE LIMITED
-and -
LEE CASTLETON
SECOND WITNESS STATEMENT OF
CATHERINE OGLESBY
BOND PEARCE LLP
Ref: S3D3.348035.134
Solicitors for the Claimant/Part 20
Defendant
17
co2
17/10/2006
Claimant/ Part 20
Defendant
Defendant/Part 20
Claimant
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Filed on behalf of the: —_Clalmant/Part 20
Defendant
Witness: C OGLESBY
Statement: 2
Exhibits: co 2
Date made: 17/10/2006
IN THE HIGH COURT OF JUSTICE Claim No: HQ05X02706
QUEENS BENCH DIVISION
BETWEEN:-
POST OFFICE LIMITED
Claimant/Part 20 Defendant
-and-
LEE CASTLETON
Defendant/Part 20 Claimant
SECOND WITNESS STATEMENT OF CATHERINE OGLESBY
This is the Exhibit CO2 referred to in the Second witness statement of Catherine
Oglesby dated I October 2006,
1A.1107486_7 18 365