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Message
From: Ben Beabey ia
Sent: 10/05/2019
To: Harris, Josh [/O=WWH/OU=BRISTOL/< ‘ecipients/cn=jharris]
ce: Ben Beabey /
Subject: DRAFT EMAIL RE BALLYNAFEIGH
Attachments: Bundlefromclient.pdf
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HI Josh
Please see my draft email below that I’d like you to consider and check I have summarised the position accurately; in
particular I have recounted what the local advice says about preserving the ability to pursue the balance at a later
date. I anticipate Rod sending this either to Ben Foat or internally to a non-lawyer executive at POL hence the need for
it to explain things in lay terms.
V'd also like to know, if you can get this information quickly today so we can get this off to Rod asap:
1. When was the PMR’s contract terminated?
2. Have you got copies of any Judgment and the charging Order from the local Northern Irish agents? You'll see I
note below that they have told you that at no stage did Mr McCartan even dispute the debt process, let alone
raise Horizon but please can you double check that is correct.
Thanks
Ben
Dear xxxx
This matter requires instructions.
1. The Issue requiring instructions.
¢ Northern Irish branch: Ballynafeigh 168704 - former PMR Peter Damian McCartan
--POL's charging order over his property at;
« “This former PMR is not a Group Litigation claimant.
He now wants to sell his property; this requires POL’s consent to remove the charging
order but there is not sufficient equity to pay off the full debt including interest.
e There is sufficient equity from the proposed property sale to pay off the original loss
(c£45k) plus approx £8k interest.
2. Factual background based on file documentation extracted from POL’s Agent
Debt team by DAC Breachcroft
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The former PMR, Mr McCartan was in post from 18.04.2002 until 03.01.2013 when he was
suspended due to and audit on that date indicating branch accounting deficiencies of
£45,555
POL’s Agent Debt team engaged in correspondence with the PMR seeking repayment by
demand letters in 2013 and then again in 2015. A copy of what DACBeachcroft have on
file from Agent Debt is attached; it is not certain if this is the complete POL file.
A report from the audit visit in 2013 notes that when asked about the loss amount, the
PMR said problems with accounting arose when “the new pinpads went in and they were
telling him to pay out double and he wasn’t clearing his Horizon screen and settling the
screen after every transaction and he later said he had underpaid a customer by £1000".
On 9 June 2015, a report was sent from Simon Hutchinson of POL Security to Dawn
Colclough, Helen Dickinson and Michelle Stevens headed “Case Closure
Ballynafeigh”. This report recounted that:
- The PMR was interviewed under caution on 18.01.2013 and that the PMR “denied theft,
however he admitted inflating the cash figures to disguise the loss as he was fearful of
losing his job" it also notes that the PMR “claims the losses were caused when the new
pinpads were installed and he had not followed the POCA ‘withdrawal limit’ process
correctly”; it also notes that the PMR “admitted it was deceitful to disguise the loss”.
- There was a second interview under caution on 22/11/2013 with the PMR accompanied
by his NFSP representative. This report records that: “At the termination of this final
interview and after the tape recording has been switched off, Damian McCartan asked
his NFSP representative if he should mention Horizon now, and was advised not
to”.
- POL delayed putting any proscution file to the Public Prosecution Service “pending a
report from specialists to address the Horizon issues and as the Horizon issue remains
unresolved, and it may be a further six to nine months before a specialist report will be
available, the time period involved in this may well become a matter of adverse
comment in relation to Mr McCartan’s human rights. The Post Office Northern Ireland
Legal representative is in no doubtthat Damian McCartan’s defence team will raise an
issue in that regard”.
- That “Damian McCartan’s unresolved Horizon issue was not identified, nor did it go to
mediation, but I believe we can surmise that he was going to blame Horizon on the
identified loss”. The report goes on to refer to potential Human Rights arguments
around delays in bringing criminal cases to court.
This 2015 report was in response to an email from Dawn Colclough to Simon Hutchinson
of 09.06.2915 in which she has said that ....“7 have received the case closure for
Ballynafeigh and I will now need to pursue Mr McCartan for repayment of the debt. Are
there any issues I need to be aware of in advance of this? What is the unresolved Horizon
issue as I was not aware this case was in the mediation scheme? The report also refers to
Human Rights issues, can you please expand on the details”.
The subsequent civil recovery activity
DAC Beachcroft have confirmed that in due course local legal agents were instructed in
Northern Ireland to pursue Mr McCartan for the branch losses as a debt by way of civil
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recovery; this legal action resulted in a Judgment debt order and a legal charge being
placed over Mr McCartan’s property, in 2015.
e The original debt due to POL was £44,839.18. Together with costs, interest etc. the total
sum now due to POL would amounts to just over £69K.
e However, as there will be a shortfall in the available equity on the property sale available
to POL after other prior charges are also paid off and as POL will not be paid the total debt
due (including costs & interest) in full, Mr McCartan’s solicitors require POL’s consent to
proceed with the sale transaction.
e The amount which will be paid over to POL if the sale proceeds will be approximately £53K
(the original debt + around £8K in interest).
e POL’s local Northern Irish lawyers have stressed that if this amount is accepted from the
property sale, this will not be in full and final settlement of the Judgment and the ability to
recover the balance due will be available should POL wish to pursue Mr McCartan at a later
date.
4. Instructions required
e Because the sale of the property cannot proceed without POL’s consent; and that consent
at this time would depend on POL agreeing to accept a sum less than the total due of the
debt plus interest (ie accepting c£53k payment now as against an original debt of c£45k
plus interest bringing the current total due to c£69k), POL has to decide:
o Does it permit the property sale to go ahead and accept the lower amount of c£53k
now from the sale proceeds which will pay off the original debt plus c£8k
interest? That will leave the balance due as unsecured debt still owed by Mr
McCartan; or
o Does it refuse to permit the sale to go ahead unless the total debt and total interest
(c£69k) is somehow repaid by Mr McCartan both from the property sale proceeds
available to POL plus any other assets he may have.
5. Options and Horizon considerations
e The local Northern Irish POL lawyers strongly recommend accepting the sum available
now from the current proposed sale of the property even though that is less than the total
of the debt plus all interest accrued; they put it like this: In the circumstances I don’t
think we have any choice; the security over the property was always going te be the only
way to get money out of this guy and if that’s all that there is left then we might have to
take what is there. To refuse would be to possibly frustrate the sale and then we're back
to square one. ......and...... Because we wilf not be recovering our full £69k however they
need our consent to release the security. Based on the above figures are we happy to
consent? I would be happy to recommend that we do on the basis that we would be
recovering the full sum due plus an additional £5 - £8k in interest which will offset the
client's cost. I don’t see the merit in objecting as it will simply disrupt the sale and we're
then back to square one.
e However, in proceeding (in any respect) POL must be alive to how in 2013 and again in
2015 both Mr McCartan and POL did have “Horizon issues” in mind; these appear from
the paperwork we have seen not to have been developed either by Mr McCartan in
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defending the claimed loss in the civil legal process that led to the charge or in any
mediation with POL at the time of his suspension.
e The local Northern Irish POL lawyers have specifically confirmed to DAC Beachcroft that
when pursuing Mr McCartan for the debt and in obtaining a Judgment against him and in
registering that as a charge against his property, at no stage has Mr McCartan even
disputed the debt; he has not objected to or defended the civil recovery process; he has
not raised any argument around Horizon nor does he now object to payment being made
from the property sale proceeds to POL in order to remove the charge and to allow the
property sale to proceed.
« That said, POL must recognise that there is a legal risk that in due course, particularly
when the Horizon trial is ongoing, that Mr McCartan may revisit his own suspension and
the basis on which POL has secured this debt recovery and questions around his own use
of Horizon from 2013. An adverse outcome of the Horizon trial against POL is lilkely to
increase that risk although the merits of any such future claim from Mr McCartan cannot
now reasonably be assessed without second guessing his potential complaint and
investigating unilterally whatever more detailed analysis might be available.
« If the business is minded to accept a payment now from the property sale, then:
o It can accept the most equity from the proposed property sale as is available to POL
(that will cover the original loss debt plus c£8k interest which should pay off POL’s
own legals costs in having pursued this matter to date);
o It will mean the charge in POL’s favour on the property is to be discharged;
o It can complete the above in a manner which nonetheless preserve’s POL’s right to
pursue Mr McCartan personally for the balance of the sums due in unpaid interest;
o However....the above steps must only be taken in the full understanding that there
is an uncertain legal risk that, in the future, Mr McCartan may seek to rely on
historic Horizon issues to open up the original losses and debt recovery and to look
to recover from POL whatever sums are now to be paid out to POL to discharge this
charge on his property sale.
o If Mr McCartan does open up those Horizon arguments afresh, then it will become
apparent that both he and POL were aware of some disputed issues around Horizon
being raised or potentially to be raised by Mr McCartan, albeit it (based on what we
have seen) in a limited way, in 2013 when he was under investigation by POL for
the loss.
« Alternatively, the business can refuse to accept part payment of the total debt and all
interest accured which in turn will necessarily frustrate the sale (assuming Mr McCartan
has no assets elsewhere to pay off all the accrued interest from his own funds) and POL
will receive nothing by way of payment now and will have await any future sale and
consider the financial position at that stage.
Ben Beabey
Senior Legal Counsel, Dispute Resolution and Brand
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