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Claim No. HQ16X01238
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION.
IN GROUP LITIGATION BETWEEN:
ALAN BATES & OTHERS
Claimants
“ve
POST OFFICE LIMITED
Defendant
draft/ GENERIC DEFENCE
INTRODUCTION
1. This Generic Defence responds to the Generic Particulars of Claim (“GPoC”). Except
where otherwise indicated:
(1) _ references to paragraph numbers are to paragraphs of the GPoC;
(2) the Defendant (“Post Office”) adopts the headings and abbreviations used in the
GPoC, without making any admissions of any matters implied or connoted thereby;
(3) where matters are noted, Post Office makes no admission and reserves its rights in
relation thereto.
The generic nature of the GPoC
2. Many of the allegations in the GPoC are at a level of generality which omits important
details, treats different situations as if they were the same and leads to obscurity. Many of
these allegations cannot meaningfully be addressed, not least because their true nature and
extent cannot be properly understood until the Claimants identify the particular actions or
omissions relied on and the context in which and time at which they are said to have
occurred. In this Generic Defence, Post Office responds to the general thrust of such
generic allegations without prejudice to its right to admit, deny and/or advance a positive
case in response to allegations by particular Claimants pleaded with proper particulars.
3. At the pleaded level of generality of the GPoC, Post Office cannot anticipate all possible
claims that Claimants may be seeking to advance. Nor can Post Office set out all factual
and legal defences that it may prove appropriate to advance in all possible cases. In this
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Generic Defence, it identifies the defences that it considers may usefully be identified at
this level of generality, without prejudice to its ability to identify further or other matters
and defences as may be appropriate for such individual claims as may be pleaded.
In this Generic Defence, Post Office cannot cover all the variations in its operating
practices and procedures or in the operation of Horizon that have occurred in the 18 years
since Horizon was first introduced. Indeed, until individual claims are properly pleaded,
Post Office cannot determine which particular practices, procedures or operations are
relevant to those claims. Accordingly, Post Office generally refers to the current practices,
procedures and operations.
Similarly, Post Office cannot cover all the variations made to the contracts relied upon by
the Claimants and so it refers to the versions of those contracts served with the GPoC
Many of the allegations in the GPoC refer to “the Claimants” as having certain obligations,
being required to do certain things, taking certain steps and/or suffering certain
consequences in circumstances where the allegation appear to relate only to
Subpostmasters and not to the other classes of person referred to in the GPoC, namely
Assistants (including Managers), Crown Office employees and directors or guarantors of
franchisees (“Franchisees”). In this Generic Defence, Post Office responds accordingly,
without pointing out in every case that the allegation must be limited to Subpostmasters.
SUMMARY OF THE GENERIC DEFENCE
A summary of the Generic Defence is provided with this Defence [TO BE DRAFTED
ONCE THIS DEFENCE IS SETTLED). As can be seen from that summary: [TO BE
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HAVE A DUTY TO ACCOUNT TO POST OFFICE, POST OFFICE IS
ENTITLED TO TERMINATE THEIR RIGHT TO ACT AS ITS AGENT IF IT
CHOOSES, [CHECK THE OTHER TERMS THAT THE CLAIMANTS
ALLEGE TO BE UNUSUAL].
THE CLAIMANTS’ ARE SEEKING TO REWRITE THE CONTRACTS BY
IMPERMISSIBLY IMPLYING A BEWILDERING ARRAY OF TERMS AND
ASSERTING DUTIES OF CARE IN TORT AND EQUITY WHICH ARE
INCONSISTENT WITH THE EXPRESS TERMS AND WHICH POST OFFICE
WOULD OBVIOUSLY NEVER HAVE AGREED. THEY ARE ALSO
SEEKING TO IMPLY TERMS COVERING MATTERS WHICH ARE
OUTSIDE THE SCOPE OF POSTMASTER CONTRACTS (SUCH AS POST
OFFICE’S RIGHT TO BRING PRIVATE PROSECUTIONS) FOR WHICH
THE ONLY REMEDIES ARE IN TORT (E.G. MALICIOUS PROSECUTION).
HORIZON IS A ROBUST SYSTEM WITH NUMEROUS SECURITY
FEATURES AND ALTHOUGH NO SYSTEM CAN EVER BE PERFECT ITY
HAS RIGOROUS CONTROLS AND OTHER SYTEMS DESIGNED TO
DETECT, CORRECT AND REMEDY ERRORS AND THESE WORK WELL
IN PRACTICE. IN PRE-ACTION CORRESPONDENCE, THE CLAIMANTS’
SOLICITORS HAVE CONFOIRMED THAT THEY DO NOT ALLEGE THAT
THERE IS A SYSTEMIC FLAW IN HORIZON.
POST OFFICE COULD NOT MANIPULATE BRANCH DATA TO CREATE
FALSE SHORTFALLS WITHOUT SUBPOSTMASTERS;’ KNOWLEDGE
[AND CONSENT?] AND IT WOULD BE ABSURD TO SUGGESTION THAT
ANY POST OFFICE STAFF WOULD SEEK TO DO SO. CERTAIN SENIOR
EMPLOYEES (?) OF FUJISTU HAVE PRIVILEGED ACCESS RIGHTS
WHICH COULD ENABLE THEM TO MANIPULATE DATA TO CREATE
FALSE SHORTFALLS, THIS WOULD BE EXTRAORDINARILY DIFFICULT
THING TO DO AND IT WOULD BE EVEN MORE ABSURD TO SUGGEST
THAT THEY WOULKD SEEK TO DO SO.
THE CLAIMANTS CASE THAT SHORTFALLS CANNOT EFFECTIVELY BE
DISPUTED BY POSTMASTERS AND THE RELEVANT FACTS ARE NOT
PROPERLY REVIEWED AND CONSIDERED WHEN DISPUTES ARISE IS
WRONG.
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As to paragraph 1, paragraphs [XX] above are repeated.
As to paragraph 2, the Schedules of Information provided to date provide little assistance
in understanding the claims that the Claimants propose to bring.
As to paragraph 3:
(1) Post Office has provided voluntary information and disclosure to the Claimants on a
generous basis. It is denied (if it be alleged) that the matters to which the Claimants
refer provide any justification for a failure properly to plead their generic case or for
advancing and seeking disclosure in relation to speculative claims or contentions for
which there is no proper basis.
(2) Post Office will address the alleged asymmetry of information in responding to
specific allegations. However, the Claimants overlook an important asymmetry of
information going the other way. At all material times, Subpostmasters and/or their
Assistants (but not Post Office) have had first-hand knowledge of the transactions
taking place in their branches. This asymmetry of information is material to the
construction of the parties’ agreements, to the issues of fact between them and to the
application of the burden of proof.
GPoC INTRODUCTION & KEY FACTS
The Parties
Defendant
As to paragraph 4, it is admitted and averred (1) that Post Office operates its business
through a network of around 11,600 branches in the UK, (2) that it offers products and
services to the public via this network, including the services referred to, and (3) that it
specifies procedures and standards governing how branches are to operate its business on
its behalf. Where those branches are managed by Post Office itself (“Crown Office
branches”), they are directly managed by Post Office and so are under its control.
However, where those branches are operated by Subpostmasters or Franchisees (“agency
branches” and “franchise branches” respectively), they are under the control of the
relevant Subpostmasters or Franchisees.
As to paragraph 5:
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Post Office's products and services include products and services provided by other
business and organisations (known as "Post Office clients"). For example, Post
Office provides the physical location at which a person may deposit cash into a bank
account but it does not provide the underlying banking service (this would be
provided by a bank).
As one would expect, Post Office determines the products and services which it
offers to the public though this is sometimes driven by other factors, such as
regulatory changes and the requirements of Post Office clients. Post Office requires
some minimum products and services to be offered by its branches. However, it
does not require or indeed permit all Post Office branches to offer all its products
and services.
Some new products or services, such as ATMs and National Lottery terminals, were
introduced in agency and franchise branches only where the relevant Subpostmasters
and Franchisees specifically consented to their introduction. [CORRECT?]
No admissions are made as to the “increased ... complexity” of any particular
product or service. Post Office notes that the GPoC does not allege that any such
increased complexity is material to any Claimant’s case. Post Office reserves the
right to address these matters further in the event that the Claimants plead that they
are material in some way, which would involve the Claimants identifying the product
or service concerned, the nature of the complexity relied on, the claims affected and
how they are affected.
Save as aforesaid, paragraph 5 is admitted.
Types of branch
Paragraph 6 is admitted. These branches are also called agency branches and
Subpostmasters invariably operate their own retail businesses from the same premises. In
their conduct of Post Office’s business, Subpostmasters act as Post Office’s agent, which
involves doing the following things on its behalf:
(1)
2)
entering into transactions with Post Office customers;
effecting and/or processing transactions with Post Office clients such as Royal Mail
(postal services), various UK government departments (various services such as
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benefit payments and passports), and various financial institutions (banking services
and insurance products;
(3) operating equipment belonging to Post Office, ranging from IT equipment (e.g. a
Lottery terminal used to sell Camelot lottery products) to basic equipment such as
scales for weighing mail and safes in which cash is stored;
(4) holding and dealing [as bailees?] with stock (including cheques, vouchers and other
items) belonging to Post Office; and
(5) holding and dealing [as trustees?] with cash belonging to Post Office.
As to paragraph 7:
(1) Franchisees are not always (and are not required to be) limited companies.
(2) Post Office is unable to admit or deny whether most of the limited companies that
are parties to Franchise Agreements were set up for the purpose of contracting with
Post Office. Many were not (e.g. WH Smith, McColls, the Co-operative Group, and
Lakemore, [CHECK THIS. MIGHT THE FRANCHISE AGREEMENTS BE
CHAINS?)
(3) Notall individuals working in Crown Office branches are employed by Post Office:
for example, some are agency staff.
(4) Save as aforesaid, paragraph 7 is admitted.
Subpostmaster Claimants and Contracts
Paragraph 8 is admitted as regards the Claimants (i.e. the claimants in action No.
HQ16X01238).
As to paragraph 9:
(1) _ Post Office contracts with Subpostmasters on standard form contracts.
(2) As well as being expressed not to be contracts of employment, these contracts are
not contracts of employment, as the Claimants themselves admit.
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The contracts are contracts of agency. As one would expect with contracts
governing the conduct by an agent of the principal’s business, they reserve to Post
Office the right to control certain aspects of its business (e.g. the products and
services Subpostmasters may offer on Post Office’s behalf and the procedures and
standards in accordance with which Subpostmasters are to conduct Post Office’s
business and to account to Post Office for the transactions and for the cash and
stock they have dealt with on its behalf). In relation to matters such as these, Post
Office has the power to give instructions that Subpostmasters are obliged to follow.
However, Post Office would not characterise its contracts with Subpostmasters as
“reserve[ing] to the Defendant a high degree of power, discretion and control”. Post
Office is unsure what is meant by this vague expression, and it does not know what
particular powers, discretions and controls the Claimants have in mind.
Save as aforesaid, paragraph 9 is admitted.
As to the contracts pleaded in paragraph 10 (“the Subpostmaster Contracts”):
i)
2)
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SPMC: Paragraph 10.1 is admitted. Like the GPoC, this Generic Defence refers
only to the version of the SPMC served with the GPoC. Post Office believes that
130 [CHECK] Claimants were engaged on the terms of the SPMC.
Temporary SPMC: Save that the word “purported” is inapposite, paragraph 10.2 is
admitted. [WERE ANY CLAIMANTS ENGAGED ON THE TEMPORARY
Community Subpostmaster Agreement:
(a) The first sentence of paragraph 10.3 is admitted. Post Office believes that 6
[CHECK] Claimants were engaged on the terms of Community Subpostmaster
Agreement.
(b) As to the second sentence, Post Office believes that all or at least some of the
Claimants who were engaged on the terms of these agreements have retained a
copy of their contracts. Further, in their Response to a Request for Further
Information dated 16 May 2017 (“Part 18 Response”), the Claimants state
that it is not their case that none of them (}) has or (ii) has ever had a copy of
the Community Sub-Postmaster Agreement, from which Post Office infers
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that at least some of these Claimants in fact have a copy of that agreement. In
any event, Post Office provided a copy to the Claimants on 10 April 2017
(©) As to the third sentence, the Claimants should not proceed on an assumption
as to the material content of any contract on which they intend to rely but
must plead a positive case.
(4) NTC:
(a) The first sentence of paragraph 10.4 is admitted. Post Office believes that 32
[CHECK] Claimants were engaged on the terms of main branch NTC, and
that 19 [CHECK] Claimants were engaged on the terms of the local branch
NTC.
(b) The second sentence is noted.
(©) As to the third sentence, Post Office believes that all or at least some of the
Claimants who were engaged on the terms of these agreements have retained a
copy of their contracts. Further, in their Part 18 Response, Post Office infers
that at least some of these Claimants in fact have a copy of that contract. In
any event, Post Office provided a copy to the Claimants on 10 April 2017
(d) As to the fourth sentence, the Claimants should not proceed on an assumption
as to the material content of any contract on which they intend to rely but
must plead a positive case.
(5) Paragraph 10.5 is noted. Post Office will respond to any claim based on any other
contract if and when such a claim is properly pleaded.
For the avoidance of doubt, Post Office pleads back in relation to the SPMC, the
‘Temporary SPMC, the NTC and the Franchise Agreement attached to the GPoC without
prejudice to its right to rely in individual cases on the terms of such agreements as they
stood at the time(s) relevant to the particular claims made by particular Claimants.
As to paragraph 11:
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(1) Regarding paragraph 11.1, Post Office believes that 2 [CHECK] Claimants were
employed in Crown Office branches and that both or one of them will have retained
a copy of their employment contract. Further, from their Part 18 Response, Post
Office infers that at least one of these Claimants in fact has a copy of that contract.
(2) Regarding paragraph 11.2, Post Office believes that 5 [CHECK] Claimants assert
that they were employed by Subpostmasters as their Assistants (a term which in this
Generic Defence includes persons whom Subpostmasters employed to manage their
branches). Post Office notes that it had no contractual or other relationship with
these individuals and that the Claimants have not disclosed the basis or terms upon
which they were employed by the relevant Subpostmasters [CHECK THE
(3) Regarding paragraph 11.3, Post Office believes that [HOW MANY?I Claimants
assert that they were directors of Franchisees and that [HOW MANY] were
guarantors of Franchisees. The relevant Franchisees contracted with Post Office on
the terms of the Franchise Agreements [CORRECT?]. Post Office notes that Post
Office had no contractual or other relationship with the Claimants who are merely
alleged to have been directors [DO ANY CLAIMANTS FALL INTO THAT
and that the Claimants have not disclosed the basis or terms
upon which they acted as directors of the relevant Franchisees [CHECK THE
bes]
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(4) Save as aforesaid, Post Office is unable to admit or deny paragraph 11.
A.2 Horizon
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Paragraph 12 is admitted. Until 2010, Horizon was a distributed system in which
transactions were undertaken within branches, whose terminals transmitted transaction
data to a central Post Office data centre and also to Post Office clients. Once Horizon
Online was introduced in 2010, transactions were effected through real time exchanges of
data from branches to a central Post Office data centre, and transaction data was also
transmitted to Post Office clients. Save where otherwise indicated, Post Office uses the
term “Horizon” to refer both to the pre-2010 version of Horizon and to Horizon Online
as the context may require, without prejudice to its ability to plead more fully as to
Horizon’s features and operations as may be relevant to any individual claim (should such a
claim raise any specific issues in that regard).
As to paragraph 13, the vast majority of Subpostmasters and their Assistants who have
worked in agency branches since the introduction of Horizon in those branches would
have been users of Horizon. Save as aforesaid, paragraph 13 is not admitted.
As to paragraph 14 (which appears to relate simply to Claimants who were
Subpostmasters):
(1) Itis admitted that, if and to the extent that any Claimant Subpostmasters worked in a
Post Office branch prior to the introduction of Horizon to that branch and
continued working in that branch thereafter, the introduction significantly changed
how they were required to work in that branch. Save as aforesaid, paragraph 14.1 is
denied.
(2) Paragraphs 14.2 and 14.3 fail to identify any of the limitations apparently relied on.
However, the introduction of Horizon increased, rather than limited, the ability of
Subpostmasters to access, identify, obtain and reconcile transaction records and to
investigate shortfalls. [Before the introduction of Horizon, Subpostmasters had
access to several separate hand-written ledgers to particular products or services.
These ledgers had various limitations, including that it was not possible to know how
much cash should be in the branch without first reconciling all the ledgers together,
was a time-consuming process. After the introduction of Horizon, Subpostmasters
had the ability at any time to obtain a "Balance Snapshot" that showed them how
much cash should be in a branch, making it much easier to identify any shortfalls.
Subpostmasters also had the ability to obtain an extensive range of other reports and
information from Horizon, as pleaded further in paragraph [XX] below]. [DO WE
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Paragraph 15 is embarrassing for lack of particularity. In the absence of any indication as
to the actual changes the Claimants intend to rely on and as to the effect(s) each such
change is alleged to have had, Post Office cannot plead to this paragraph.
Post Office notes that, on the Claimants’ pleaded case, any changes in the Claimants’ ability
to access records and investigate shortfalls caused by the introduction of Horizon or by
subsequent changes to Horizon or to products and services offered has no apparent
relevance to any of the breach of contract or other claims advanced in the GPoC. As
regards such changes, paragraph [XX](3) above is repeated, mutatis mutandis.
The first sentence of paragraph 16 is admitted. As to the second sentence, Post Office’s
use of the terms “Horizon” and “Horizon Online” similarly does not include training,
The operation of Horizon
As to paragraph 17:
(1) Save for the “others” referred to, whom the Claimants do not identify, the first
sentence is admitted. The process for transferring transaction data from branch to
Post Office's central data centre, and the controls that ensure the accuracy of that
data transfer, are described at paragraph [XX-40] below.
(2) Regarding the second sentence:
@_ WOULD IT HELP TO GIVE AN INDICATION OF THE SORTS OF
HARD COPY DOCUMENTS AVAILABLE IN BRANCHES?I
(b) On the introduction of Horizon, transaction data was freely available to
Subpostmasters for 42 days from the date of the relevant transaction. Since
the introduction of Horizon Online, such data has been freely available for 62
PLURAL OR GO WITH NORMAL (INCORRECT) USAGE®I
(©) While such transaction data is available, Subpostmasters can search for,
identify, organise and analyse data by means of wide range of reports, including
a transaction log report which identifies each and every transaction undertaken
in the relevant branch in the entire period. This report can be focused in a
variety of ways if desired, including by reference to date ranges, transaction
types, stock items, value ranges and even particular users or terminals
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(d) Thus, [in addition to the paper records available in branches] [SEE
COMMENT ON SUB-PARA (1) ABOVE], Horizon provides
Subpostmasters with powerful tools for searching, checking and reviewing all
aspects of the transactions undertaken in the branches for which they were
responsible.
Transaction Corrections
Paragraph 18 refers to transaction corrections. One of the safeguards against errors by
Subpostmasters (or their staff) is a process by which Post Office proposes corrections to a
branch's accounts (“Transaction Corrections”). These are typically generated in the
following way:
(1) Post Office checks Horizon transaction data (i.e. data as keyed into branch terminals)
against data taken from separate sources. For example, Post Office client banks
provide their own records of transactions carried out in Post Office branches
(transmitted directly from the chip and pin devices used in branches), allowing Post
Office to compare these to the transaction data on Horizon.
(2) Where there is a discrepancy between the two sets of data, Post Office reviews the
available data with a view to determining whether the branch staff have probably
made an error that requires correction (and it may contact the Subpostmaster for
further information to assist in that determination). Where this is the case, Post
Office will generate a Transaction Correction notification which is sent to the
relevant branch via Horizon. For example, where a cheque deposit into a bank
account is keyed in on Horizon as a £100 credit but the true amount of the cheque is
£90, a Transaction Correction with a value of £10 debit is generated.
(3) A Transaction Correction notification includes (i) a description of the transaction to
be corrected, (ii) the contact details of an employee of Post Office who will provide
further detail if required, (iii) typically, the outline reason for or nature of the
correction, and (iv) sometimes, evidence justifying the proposed correction.
(4) A Transaction Correction notification sent by Post Office to a branch is a proposal,
not an instruction, and it does not take effect unless and until accepted by the
Subpostmaster concerned. On receiving a Transaction Correction notification, the
Subpostmaster can either accept the correction or dispute it.
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As to
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On the Horizon screen, there are two ways for a Subpostmaster to accept a
Transaction Correction. He or she may “accept” the Transaction Correction: this
immediately increases or decreases the cash or stock position (as appropriate) in the
branch's accounts as recorded on Horizon. Alternatively, he or she may “settle
centrally” the Transaction Correction: this causes the value of the Transaction
Correction to be transferred to his or her personal account with Post Office. Unless
a dispute is lodged with Post Office (see below), Post Office assumes that the
Subpostmaster accepts the validity of the Transaction Correction that has been
settled centrally and will in due course pay or collect any money due to or from the
Subpostmaster. This process is addressed in [page ref] of the operating manual
entitled “Branch Trading: balancing and dispatch of documents” (“The Branch
Trading Manual”).
If the Subpostmaster wishes to query or dispute the Transaction Correction, he or she
should contact the person identified in the Transaction Correction notification. This
process is identified in [page tef] of the Branch Trading Manual. If, having discussed
the matter and reviewed any further information provided by the person identified,
the Subpostmaster wishes to dispute the proposed Transaction Correction, he or she
will settle it centrally and lodge a dispute with the Post Office by contacting the
Helpline. This process transfers the value of the Transaction Correction to the
Subpostmaster’s personal account with Post Office and causes a block to be placed
of the value transferred to the personal account whilst the dispute is resolved (see
paragraph [XX = 34(4)] below).
paragraph 18:
The first sentence is denied. Post Office does not require that the Transaction
Correction be accepted unless proven by the Subpostmaster not to be correct.
Save for the reference to “limited” reports (as to which see paragraph [XX] above),
the second sentence is admitted. However:
(a) every Transaction Correction comes with contact details for a person at Post
Office who can provide more information and a Subpostmaster can in any
event contact the Helpline referred to below to obtain more information;
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(b) depending on the subject matter of the Transaction Correction, the
Subpostmaster may hold corresponding paper records in his or her branch
which he or she can and should check; and
(©) _ not all Transaction Corrections require further information (for example, a
Transaction Correction could be generated for a missing cheque and the
cheque might be found in the branch).
In paragraph 19, the Claimants combine many allegations together. Post Office separates
out and addresses those allegations in paragraphs [XX] below. In the interests of clarity
and consistency, in this Generic Defence Post Office uses the following defined terms:
()
2)
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4)
6)
©
A “discrepancy” refers to any difference between (i) the actual cash and stock
position of a branch and (ii) the cash and stock position shown on Horizon as
derived from transactions input via the branch’s terminals.
A “gain” refers to an event that causes a positive discrepancy (i.e. the situation
where the branch has more cash and/or stock than the derived figures for cash
and/or stock on Horizon). For example, a Subpostmaster carrying out a bank
account withdrawal of £100 for a customer, entering that withdrawal into Horizon
but providing only £90 in cash to the customer would generate a gain of £10.
A “loss” refers to an event that causes a negative discrepancy (i.e. the situation
where the branch has less cash and/or stock than the derived figures for cash and/or
stock on Horizon). For example, a Subpostmaster carrying out a bank account
withdrawal of £100 for a customer, entering that withdrawal into Horizon but
providing £110 in cash to the customer would generate a loss of £10.
A “shortfall” refers to negative net discrepancy at the end of a trading period (i.e.
the amount by which losses (if any) exceed gains (if any) in the period).
A “net gain” refers to positive net discrepancy at the end of a trading period (i.e.
the amount by which gains (if any) exceed losses (if any) in the period).
A “Horizon-generated shortfall” refers to a shortfall that is attributable to errors
and/or bugs in Horizon.
Branch Trading Statements, making good and disputing shortfalls
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As to the first sentence of paragraph 19, it is denied that the matters addressed in
paragraphs 19.1 to 19.3 “accentuated the importance of the accuracy of Horizon”.
Paragraph 19 addresses requirements whose purpose is to ensure the proper discharge of
the Subpostmaster’s contractual and common law duties to account to Post Office for the
transactions they entered into on its behalf and for the cash and stock it has entrusted to
their care. Such requirements are to the mutual benefit of Subpostmasters and Post Office
in that (amongst other things) they ensure the early identification and correction of any
errors and defaults relating to the transactions carried out and/or to the cash and stock
held in the branches for which the Subpostmasters are responsible.
‘These requirements ate as follows:
(1) Subpostmasters are required to perform a regular “balancing process”, which
involves counting all stock and cash at their branches, comparing it with the cash and
stock indicated on Horizon and producing (and confirming) an account of the
transactions undertaken since the last balancing process and of the cash and stock
held. Initially, Subpostmasters were required to do this weekly, but since 2005, they
have been required to do so at the end of each “Branch Trading Period” (Post
Office-specified periods of 4 or 5 weeks, of which there are 12 in the year and which,
for convenience, are referred to herein as “trading periods”).
(2) Where this process discloses a shortfall and the Subpostmaster accepts liability for
the shortfall, he or she is required to make it good (1) by adding cash ot a cheque
from his or her own personal funds to the branch or (2) by settling it centrally. This
election is made on the Horizon terminal in branch. By "settling centrally", an entry
is added to the branch accounts which offsets the value of the shortfall, thereby
bringing the derived cash figure on Horizon in line with the actual cash on hand
figure. The value of the shortfall is transferred to the Subpostmaster's personal
account with Post Office. Arrangements can then be made to pay off the shortfall.
(3) I Where the Subpostmaster disputes liability for the shortfall, he or she is required to
settle the shortfall centrally (thereby bringing the branch accounts into balance) and
to raise a dispute by calling the Helpline. Raising a dispute causes a block to be
placed on the value of the shortfall that has been transferred to the Subpostmastet's
personal account with Post Office. The blocked value is not (and is not treated as) a
debt due to Post Office.
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‘These processes are addressed in [page ref] of the Branch Trading Manual [CHECK
AMEND THIS WORDING). Equivalent processes ate followed where the
Subpostmaster accepts or disputes a net gain, with the relevant transactions being the
removal of cash from the branch or the creation of a credit on the Subpostmaster's’
personal account with Post Office.
Having followed these processes, Subpostmasters are required to produce and sign a
statement setting out the quantities and values of the various receipt and payment
transactions that have been carried out in the branch during the relevant period and
the cash and stock held in the branch at the end of the trading period (called a “Cash
Account” until 2005 and a “Branch Trading Statement” from 2005). Branch
Trading Statements contain the following statement by the Subpostmaster: “I confirm
that the content of this balancing and trading statement is an accurate reflection of the cash and stock
on hand at this branch”.
A branch cannot enter (or “roll over” into) a new Branch Trading Period without
the Subpostmaster declaring to Post Office the completion of the Branch Trading
Statement as aforesaid. However, although Subpostmasters are required to produce
Branch Trading Statements at the end of each trading period, if they do not do this,
their branches can continue to trade within the previous trading period. However,
Post Office does not allow branches to do this indefinitely.
Branch Trading Statements
As to paragraph 19.1, subject as set out in paragraphs [XX] above:
(1)
ce)
The first and second sentences are admitted.
The third and fourth sentences are denied. Paragraphs [XX] above are repeated as
regards the comparison between the derived figures for cash and stock shown on
Horizon and the actual cash and stock as counted by the Subpostmaster; paragraph
[XX] above is repeated as regards bringing Horizon’s figures into balance with the
cash and stock as counted; and paragraph [XX] above is repeated as regards the
ability to continue trading without entering a new trading period.
Making good
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Paragraph 19.2 appears to be intended to allege that, whenever there is a shortfall between
Horizon’s figures and the cash and stock counted by the Subpostmaster: (1) unless some
special arrangement is made, the Subpostmaster is required to make good the difference;
and (2) if he or she does so by settling centrally, the amount of the shortfall is treated as a
debt due to Post Office. These allegations are specifically denied. As explained in
paragraph [XX] above (and in particular paragraph (XXp, Post Office’s procedures provide
Subpostmasters with the opportunity to dispute liability for shortfalls.
Disputing shortfalls
As to paragraph 19.3:
()
C2)
8)
4)
It is admitted that there is no “option within Horizon” to dispute a shortfall, in the
sense that the process of raising and resolving a dispute does not take place through
the Horizon system. The process for disputing a shortfall requires the dispute to be
lodged by calling the Helpline.
It is specifically denied that Subpostmasters are unable to carry out effective
investigations into the disputed amounts. So is the allegation that there were
unspecified “limitations” on Subpostmasters’ ability to access, identify and reconcile
transactions in Horizon and that Horizon had no “adequate report-writing feature”,
as to which paragraph [XX] above is repeated. As indicated in that paragraph,
Horizon provides Subpostmasters with powerful tools for searching, checking and
reviewing the transactions undertaken in the branches for which they are responsible.
There are provisions in Post Office’s Operating Manual as to the process for
disputing discrepancies (see, for example, [page tef] of the Branch Trading Manual)
and it is denied that these provisions give insufficient guidance regarding that
process. In any event, the process involves calling the Helpline and, if further
guidance is needed, it is available directly from the Helpline.
As to the last sentence of paragraph 19.3, it is denied that Post Office fails to carry
out any, or any fair or adequate investigations into disputed amounts. Where a
shortfall is disputed then the Claimants' first point of contact would be with the
Helpline. In the case of a Transaction Correction, the dispute would first be raised
with the individual within Post Office who issued the Transaction Correction and
then (if necessary) with the Helpline. Disputes are generally resolved at this stage, by
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Post Office and Subpostmaster reaching a common understanding of the position.
However, if this does not happen, the dispute can be escalated. The steps in the
escalation process, and the Post Office teams involved, have changed over time and
the specific escalation route can differ depending on the nature of each issue raised.
However, in broad terms.
(@) After it is raised with the Helpline, the issue is generally escalated to mote
experienced and senior personnel within the Helpline staff (or the team issuing
the disputed Transaction Correction) for further investigation.
(b) _ Following this, the matter would be referred to a senior person responsible for
investigating branch matters, a member of what is currently called the Support
Service Resolution Team. This team undertakes a further investigation into the
disputed amount, seeks to identify the reason for it arising and communicates
with the Subpostmaster concerned.
(©) _ If following the above investigation Post Office believes that the
Subpostmaster is liable for the shortfall or Transaction Correction but the
Subpostmaster does not accept that liability, the matter would be raised with
his or her line manager. This would then be dealt with as a contractual
management issue, and discussions would be held with the Subpostmaster
about why he or she was not meeting what Post Office believes to be his or
her contractual obligations to make good a shortfall (or accept the Transaction
Correction). This role is currently undertaken by Post Office staff known as
Contract Advisors.
(d) _ Following these discussions, Post Office can sometimes decide to terminate
the Subpostmaster's contract in accordance with its terms. In such cases, the
Subpostmaster is provided with the opportunity to seek further investigations
into the disputed amount via an appeal mechanism (for example, see section 18
of the SPMC [WHAT ABOUT THE NTC AND THE TEMPORARY
SPMC?).
(©) _ If the appeal mechanism is not followed or if the Subpostmaster is dissatisfied
with the outcome of their appeal, he or she is able to raise any concerns with
Post Office's senior management team.
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A3. Fujitsu
35. As to paragraph 20, Post Office has provided to the Claimants a copy of its contract with
Fujitsu dated 31 March 2016 (“the 2016 Fujitsu Contract”). The Claimants have not
identified any reasons for thinking that any other agreements between Post Office and
Fujitsu are required for them properly to plead their generic claims. Nor have the
Claimants identified any respects in which the redactions to the 2016 Fujitsu Contract have
prejudiced their ability to plead their case on the relationship between Post Office and
Fujitsu. The redactions were made in order to preserve commercially sensitive information
and/or because the redacted content was irrelevant to the issues in this case. Save as
aforesaid, paragraph 20 is admitted.
36, As to paragraph 21; [TO BE REVISITED ONCE WE HAVE RECEIVED THE
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2) Paragraph 21.2 is admitted.
(3) As to paragraph 21.3, Fujitsu’s role includes identifying and remedying coding errors
and bugs in Horizon as pleaded in paragraph [XX] above. However, it is not its role
to change the transaction or accounting data on Horizon or to identify and remedy
coding errors in bugs in a manner that adversely affects such data. [TO DISCUSS =
(4) As to paragraph 21.4, it is admitted that until 17 June 2014 Fujitsu provided a
telephone advice service to Post Office in relation to technical problems with the
Horizon system or equipment. This service was mainly used by Post Office staff
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(such as staff working on the Helpline referred to in paragraph [XX] below), but
sometimes Fujitsu staff would have direct contact with third parties such as
Subpostmasters in order to obtain a better understanding of the problem on which it
was asked to advise [CORRECT SUMMARY?]. However, from 17 June 2014, this
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Bugs, errors or defects in Horizon
37. As to paragraph 22:
(1) If and to the extent that the Claimants wish to assert that any of the shortfalls for
make the allegation in the GPoC. It further notes that, in paragraph 20 of their
solicitors’ letter to Post Office’s solicitors dated 27 October 2016, the Claimants
21
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(2) It is denied that Post Office has unreasonably or otherwise failed to provide
“obviously relevant disclosure” in relation bugs, errors or defects in Horizon. There
has been no order or application for disclosure and, in the premises set out above,
there appears to be no basis for providing such disclosure.
Paragraph 23 is embarrassing for its lack of particularity, in that (amongst other things) it
does not identify the errors, bugs or defects the Claimants rely on or how “large” their
number was or the period in which they are said to have occurred and nor does it identify
the transaction data that Fujitsu is alleged to have rebuilt, how “frequent” was the need to
rebuild it or the extent of the “risk of error” which is said to have been introduced. In the
premises, Post Office cannot plead to the first three sentences of this paragraph. However:
(1) AILIT systems experience software coding errors or bugs which require fixes to be
developed and implemented. Horizon is no exception. For a system of Horizon’s
scale, Post Office would characterise the number of errors or bugs in Horizon
requiring fixes as relatively low [CORRECT?]. In any event, as is noted in paragraph
[XX] below, there are robust measures in place for their detection, correction and
remediation.
(2) AILIT systems involving the transmission of data over the internet experience data or
data packet errors during transmission and they routinely have protective measures in
place to prevent such errors creating any difference between the data transmitted and
the data received and retained by the recipient. Horizon has robust controls making
it extremely unlikely that transaction data input in a branch would be corrupted when
being transferred to, and stored in, Post Office's data centre in a manner that would
not be detected and remedied.
(3) Like all IT systems, Horizon has backups to guard against any loss of data due to
local hardware failure. Where hardware fails, the data on that hardware is recovered
from the backup. Post Office does not recognise the term “rebuild” and it does not
accept that there is a “frequent” need to recover data from backups.
(4) — It is admitted that Fujitsu maintain a “Known Error Log”. This is not used by Post
Office and nor is it in Post Office’s control. To the best of Post Office’s
information and belief, the Known Error Log is a knowledge base document used by
22
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Fujitsu which explains how to deal with, or work around, minor issues that can
sometimes arise in Horizon for which (often because of their triviality) system-wide
fixes have not been developed and implemented. It is not a record of software
coding errors or bugs for which system-wide fixes have been developed and
implemented. To the best of Post Office’s knowledge and belief, there is no issues
in the Known Error Log that could affect the accuracy of a branch's accounts or the
ion and storage of transaction data, [THIS PARA SHOULD BE
39. In paragraph 24, the Claimants combine many allegations together. Post Office separates
out and addresses those allegations in paragraphs [XX] below. [EACH OF PARAS 40-43
secure transmi:
40. As to paragraph 24.1, it is a truism that errors or bugs in an IT system and data or data
packet errors have the potential to create errors in the data held in that system. Horizon is
no exception. However, Horizon has at all material times included technical features and
control measures to reduce to an extremely low level the risk an error in the transmission,
replication and storage of the transaction record data. These have varied from time to time
and they currently include the following:
(1) Horizon creates, transmits and stores transaction data in the form of “baskets”. A
basket is a complete transactional session between a customer and Post Office and
may include one, several or many individual transactions taking place within the same
session (for example (1) a cash deposit, (2) a purchase of stamps and (3) the payment
of a utility bill). Horizon will not accept a basket of transactions that does not net to
zeto (i.e. the value of any sales is set off by the value of any payment made or
received). This reduces greatly the risk of any error in the data within any given
basket.
(2) Ifa basket of transactions fails properly to complete its transmission to the central
database (because, for example, of a power loss), the system rejects any partial
transmission and request the full basket from the branch terminal. This reduces
greatly the possibility of baskets of transactions failing to be recorded.
23
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(3) Atthe point of a basket being accepted by Horizon, it is assigned a unique sequential
number (a “JSN”) that allows it to be identified relative to the other baskets
transmitted by that branch. This reduces greatly the risk of recording duplicate
baskets or there being a missing basket.
(4) Each basket is also given a digital signature, i.e. a unique code calculated by using
industry standard cryptography. If the data in the basket were to change after the
digital signature was generated, this would be apparent upon checking the digital
signature.
(5) Initial data integrity checks are undertaken when baskets are received at the Post
Office data centre from a branch. Baskets are then copied from the central database
to the Audit Store where a digital seal is then applied (the “Audit Store Seal”). If
the baskets and/or the data within the baskets were altered after the application of
the Audit Store Seal, this would be apparent when the baskets were extracted from
the Audit Store.
(6) Horizon and the above controls are themselves subject to various audits and checks
including audits carried out by third parties.
Further as to paragraph 24.1, in addition to the technical controls referred to above, there
are several operational procedures and practices conducted by Post Office and
Subpostmasters that serve to increase the reliability of the data stored in the central
database as an accurate record of the transactions effected on branch terminals. These
currently include the following:
(1) For many transaction types, Post Office compares its own transaction record against
the corresponding records held by Post Office clients. If an error in Horizon were
to result in the corruption of transaction data, this should be revealed by the
comparison.
(2) There are detailed procedures in place to address the risk of data loss resulting from
interrupted sessions, power outages or telecommunications failures in branches.
‘These are set out [WHERE AND IN WHICH MANUAL ARE THESE SHOWN?
and Horizon guides the system user through the recovery process (which include
completing any transactions that are cut short). These procedures should prevent
24
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43,
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any data errors arising from interrupted sessions, power outages and
telecommunications failures.
(3) The display of the transactions being effected on-screen at the branch terminal
allows the user of the system to identify any inconsistency between the information
shown on the screen and the transaction that the user has keyed into the system. If,
for example, a hypothetical bug in the terminal were to cause a key-strike on number
5 to be recorded as an input of number 6, this would be detected rapidly by system
users (given the large number of system users and the huge number of transactions
effected on Horizon).
(4) The accounting and record-keeping obligations placed on Subpostmasters reduce the
risk of any errors going undetected. For example, there is an obligation for each
branch to produce a cash declaration every day, which increases the likelihood of
promptly detecting any overstatement or understatement of the cash position on
Horizon. If a Subpostmaster detects that an error has been made at an early stage, its
cause is more likely to be identified.
(5) Fujitsu operates industry standard processes for developing and updating Horizon
and for investigating and resolving any identified potential system errors.
As to paragraph 24.2, Post Office admits that, like all other IT systems, Horizon is not a
perfect system which has never had any errors or bugs. However, as indicated in paragraph
[XX] above, it has robust systems in place to identify them, fix them and correct their
consequences (if any).
As to paragraph 24.3:
(1) I There have been occasions on which bugs or errors in Horizon have resulted in
discrepancies and thus shortfalls in some branch accounts, as outlined in Schedule 6
of the Letter of Response. Without prejudice to the burden of proof, none of the
branches affected are branches for which the Claimants were responsible
(2) On each occasion, both the bugs or errors and the resulting discrepancies in the
relevant branch accounts were corrected. Post Office took steps to ensure that it
had identified all branches affected by the bugs or errors and that no Subpostmaster
was ultimately held responsible for any resultant shortfalls. (Where the bugs or
2s
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errors resulted in net gains, however, Post Office typically allows Subpostmasters to
retain them.)
As to paragraph 24.4:
(1) Paragraph [XX] above is repeated.
(2) Paragraphs 4.1 to 4.5 of Schedule 6 to the Letter of Response relate to the so-called
Suspense Account Bug. Without prejudice to the burden of proof, none of the
branches affected by the Suspense Account Bug are branches for which the
Claimants were responsible.
(3) I None of the Subpostmasters whose branches were affected by the Suspense Account
Bug was ultimately held responsible for the shortfalls that it generated. The
Claimants are therefore wrong to understand Post Office as having admitted that it
“recovered such alleged shortfalls from Subpostmasters”. Where Subpostmasters in
the affected branches had made good or settled centrally shortfalls that were later
corrected, those Subpostmasters received a payment or credit to the value of the
shortfall.
Remote editing of branch transaction data
Paragraph 25 appears to be concerned with the deletion or editing of transaction data input
by or on behalf of Subpostmasters without the consent of the relevant Subpostmaster.
Accordingly, Post Office assumes that it is not concerned with transactions such as
Transaction Corrections which are sent to branches but must be accepted by or on behalf
of the Subpostmaster before forming part of his or her branch account. As to the
circumstances in which such transaction data can be altered without the consent of the
Subpostmaster: [TO BE REVIEWED BY POST OFFICE TECHNICAL PEOPLE,
(1) Neither Post Office nor Fujitsu has the ability to log on remotely to a Horizon
terminal in a branch so as to conduct transactions.
(2) A Post Office employee with “global user” authorisation can, when physically
present at a branch, use a terminal within the branch to add a transaction into the
branch’s accounts. The purpose of “Global User” authorization is to allow access to
26
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3)
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6)
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the systems for during training and/or audits. Any transactions effected by a Global
User are recorded against a Global User ID and are readily identifiable as such.
Fujitsu (and not Post Office) has the ability to inject transactions into branch
accounts (since the introduction of Horizon Online in 2010, transactions of this sort
have been called “Balancing Transactions”). These transactions do not involve
any removal or amendment of the transactions entered at the branch. Their intended
purpose is to allow Fujitsu to correct errors or bugs in Horizon by introducing a new
transaction to cancel out the effect of an error or bug on a branch’s transaction data.
They may only be conducted by a small number of specialists at Fujitsu and only
then used in accordance with specific authorisation requirements. They are rarely
used. To the best of Post Office’s information and belief, only one Balancing
Transaction has ever been effected, and this was not in a branch operated by a
Claimant. A Balancing Transaction is (READILY? identifiable as such. [ISTT
‘There are a small number of Fujitsu specialists who have certain privileged user
access rights which they could in theory use to amend or delete the transaction data
for a branch. The intended purpose of privileged user rights is system support, not
the alteration of branch transaction data. To have abused those rights so as to alter
branch transaction data and conceal that this has happened would be an
extraordinarily difficult thing to do, involving complex steps (including the writing of
sophisticated computer programmes and circumvention of sophisticated control
measures) which would require months of planning and an exceptional level of
POST OFFICE (AND IF SO, WHO WERE THOSE PEOPLE®)), Post Oitice has
never consented to the use of privileged user rights to alter branch data and, to the
best of its information and belief, these rights have never been used for this purpose.
Post Office cannot conceive of a reason why any Fujitsu personnel would have
sought to add, inject, amend or delete any transactions in any branch accounts so as
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47.
48.
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49.
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to create a false shortfall. Post Office would never consent to any of them making
changes to branch accounts to generate false shortfalls, it would for all practical
purposes be impossible for any of them to generate significant shortfalls without
detection and, even if they were able to do so, they would be unable to take the
benefit of such shortfalls for themselves.
As to paragraph 26, the statements referred to therein are admitted. These statements were
made in [WHAT YEARS?]. The Post Office representatives who were responsible for the
making of these statements believed that they were true.
As to paragraph 27, it is admitted that there was a highly theoretical possibility that certain
Fujitsu personnel could abuse their privileged user rights so as to delete or edit branch
transaction data as described in paragraph [XX] above.
Paragraph 28 is noted. The alleged inferences are inappropriate and each of them is
denied. Post Office made the above statements in the context of complaints made during
a mediation scheme it set up to investigate and address concerns about Horizon. Some of
those complaints raised questions, in several different formulations and contexts, about
whether transaction data had been edited by Post Office or Fujitsu. These investigations
revealed no evidence of transaction data having been so edited. For example, there was an
unfounded claim by a particular Subpostmaster that he had in August 2008 observed a
Fujitsu worker passing transactions directly into the Horizon system and altering the
recorded foreign currency holdings of branches. This was alleged to have taken place in a
basement of Fujitsu’s premises in Bracknell. Post Office ascertained that no remote access
or altering of branch data had been possible from that location, which only housed a test
environment for Horizon.
Helpline
Paragraph 29 is admitted. Calls to the Helpline are handled in accordance with the
(1) Helpline operators categorise the caller’s query using an online system (now called
“Dynamics”, previously called “Remedy”) and then provide advice by reference to
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the Post Office “Knowledge Base”, an online resource which contains numerous
articles and other guidance documents on various matters (but is not scripted).
(2) If the Knowledge Base does not contain sufficient information to allow the operator
to address the query, the next step is for the query to be escalated to a second tier of
more experienced staff.
(3) If the second-tier adviser cannot respond in a satisfactory way to the query, he or she
will seek assistance from the relevant Post Office product team. For example, if an
issue relates to a lottery product, assistance would be sought from the team at Post
Office who manage the operational processes for that product. For issues relating to
the technical operation of Horizon (e.g. a broken printer), the matter could be
referred to Post Office's IT support partner, which was originally Fujitsu and is now
a company called Atos.
(4) If, after these steps, a satisfactory response has not been given, Post Office will
consider whether to organise a visit to the branch and/or further training for the
Subpostmaster and/or Assistant(s) concerned.
(5) Post Office is willing and able to provide further assistance to Subpostmasters whose
problems are not addressed adequately through the Helpline. It is for any Claimant
who asserts that inadequate assistance was provided to identify, amongst other
things, the steps that he or she took to obtain further advice, assistance and/or
training.
Paragraph 30 makes allegations to which Post Office cannot meaningfully respond at the
pleaded level of generality. Post Office will respond to properly particularised claims if and
when they are made by particular Claimants, but the general thrust of the allegations is
denied. Further:
(1) I The Helpline’s hours of operation have changed over time to meet demand and
there have been periods where the Helpline was more difficult to contact than in
other periods. It currently operates from 8am to 8pm on weekdays other than
Wednesdays (the usual day for branch balancing processes), 8am to 9pm on
Wednesdays, 8am to 6pm on Saturdays and 9am to 5pm on Sundays and most bank
holidays.
(2) Helpline operators do not give script-based responses.
29
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AS
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Helpline operators are not instructed to provide misleading information or advice
and they would have had no reason to do so.
Whether it is appropriate to advise a Subpostmaster that a discrepancy should sort
itself out depends on the context. For example, the branch could be awaiting a
Transaction Correction that should correct an issue.
Helpline operators are not instructed to encourage a Subpostmaster to produce and
confirm a Branch Trading Statement which the Subpostmaster did not believe to be
true and Post Office cannot conceive of a situation in which they would do so.
Helpline operators are not instructed (and are not in a position) to review and advise
callers as to the experience of and the incidence of particular problems suffered by all
users of Horizon or of the Helpline or as to the incidence of such problems suffered
by all such users. Post Office cannot conceive of a situation in which Helpline
operators would do these things, or would have the knowledge to be able to make
such statements.
Post Office notes that, in the GPoC, the Claimants have not indicated whether and,
if so, how each of the matters alleged in paragraphs 30.1 to 30.7 is alleged to have
caused any Claimants any loss.
Investigations
Post Office cannot meaningfully respond to the allegations in paragraph 31 for the
following reasons:
()
2)
3)
The paragraph makes allegations said to apply generally across “investigations, audits
or similar enquiry” in circumstances where investigations are fundamentally different
processes (involving different Post Office personnel, procedures and guidance) from
audits and where the use of the term “similar enquiry” is embarrassing for vagueness
and (depending on what it is intended to mean) may be misleading.
The reference to “investigators” is misplaced and/or so ambiguous as to make the
allegations incapable of meaningful response.
The information and instructions that are alleged to have been provided to
“investigators” are expressed at such a high a level of generality that it is impossible
30
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to assert a generic case as to what “investigators” were told and/or otherwise knew
in any potentially relevant period.
(4) Post Office will, as appropriate, respond to any particularised allegations as to
specific enquiries, audits and investigations if and when such allegations are made by
particular Claimants.
52. Without prejudice to the foregoing:
(1) The people undertaking Post Office’s various audits, enquiries and investigations are
experienced individuals with a good knowledge of the operation of Horizon and of
the experience of Horizon users.
(2) The nature of their instructions varies depending on whether they are undertaking an
audit, enquiry or investigation and the reasons why they are doing so. For example:
(a) An audit is a process conducted by the field support team within Post Office.
The people undertaking audits are not called investigators. An audit is typically
ordered where Post Office is concerned that a branch is failing properly to
account to Post Office. The purpose of an audit is principally to check the
level of cash and stock in a branch; it is generally not to determine the root
cause of any shortfalls.
(b) Fora wide variety of purposes (including the purposes referred to in paragraph
[XX = 34] above, Post Office can make a wide variety of enquiries into a
branch’s operations without undertaking an audit. The people undertaking
such enquiries are not called investigators.
(©) _ Post Office has a security team whose main role is to investigate (and/or to
assist the police to investigate) suspected criminal offences. Persons in the
security team sent to branches to carry out such investigations are often called
investigators. In many instances, their enquiries focus on suspected criminal
offences by Subpostmasters and Assistants (such as rendering false accounts),
which may or may not require them to determine the root cause of a shortfall.
(3) None of these "investigators" were instructed to disregard possible problems with
Horizon as a possible cause of shortfalls, nor was information withheld from them
about bugs or errors in Horizon or the alleged remote alteration of data.
31
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53.
54.
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(4) The alleged “organisational culture or practice” is specifically denied.
(5) Save as aforesaid, the general thrust of paragraph 31 is denied.
Terminations
Paragraph 32 makes allegations to which Post Office cannot meaningfully respond at the
pleaded level of generality. For example, the paragraph overlooks the critical distinctions
between summary termination of appointments, termination of appointments on notice
and suspension of appointments. However:
(1) Post Office has terminated Subpostmasters’ appointments summarily where it was of
the view that they have acted dishonestly in relation to their functions (e.g. by falsely
accounting to Post Office with a view to concealing a shortfall from it) and where it
was of the view that they were otherwise in material, irremediable and/or repudiatory
breach of their obligations;
(2) Post Office has suspended Subpostmasters when it has suspected them of acting as
set out in sub-paragraph [(1)] above; and
(3) Post Office has terminated Subpostmasters on notice where it did not wish continue
its relationship of principal and agent with them; but
(4) Post Office has not terminated Subpostmasters summarily or suspended them
merely because they have challenged shortfalls or have alleged inadequacies in the
Horizon system or difficulties in interrogating data.
Regarding the importance of dishonesty in the conduct of its business, Post Office notes
that:
(1) Clause 19.1 of the SPMC provides that dishonesty is viewed most seriously and any
Subpostmaster involved in an act of dishonesty against Post Office Ltd renders
himself liable to summary termination of his contract.
(2) Clause 3.1.2 of the NTC provides that: “The Operator shall ... act honestly at all times in
the operation of the Branch. Any failure by the Operator to comply with this clause 3.1.2 shall be
deemed to be a material breach of the Agreement which cannot be remedied”.
32
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As to paragraph 33, Post Office will respond to properly particularised claims of wrongful
termination or suspension if and when they are made.
Context and Effect on Claimants
In Section A.7 of the GPoC, the Claimants set out what they contend to be relevant
contextual matters, and these are addressed in paragraphs [XX] below. However, they
overlook the importance of false accounting to and its effect on Post Office.
Subpostmasters are obliged (a) each working day to count the cash in their branches and
make “cash declarations” to Post Office and (b) at the end of each trading period to
make Branch Trading Statements to Post Office confirming the transactions undertaken
and cash and stock held in their branches. Unless it undertakes an audit, these accounts are
Post Office's only information about the amount of cash and stock actually held in the
branch. In all cases in which a Claimant Subpostmaster makes a false cash declaration or a
false Branch Trading Statement (i.e. a cash declaration or Branch Trading Statement he or
she does not believe to be true):
(1) Where a shortfall is subsequently uncovered at a branch, the fact of this false
accounting invariably makes it impossible or alternatively excessively difficult for
Post Office to identify or assist in the identification of the likely cause(s) of the
shortfall. Post Office is unable to place reliance on the declarations and the branch’s
accounts in seeking to identify the date(s) on which the discrepancy (or
discrepancies) giving rise to the shortfall are likely to have arisen or the cause(s) of
the shortfall.
(2) As regards any enquiries it might make into the cause(s) of a shortfall, Post Office
cannot reasonably be expected and is not obliged to devote significant resources to
investigating factual circumstances that were, as a result of false accounting,
impossible or excessively difficult properly to investigate.
(3) Asis noted above, false accounting or other similar conduct by a Subpostmaster
represents a material, irremediable and repudiatory breach of his or her contractual
obligations entitling Post Office to terminate the Subpostmaster’s appointment
summarily, Further, where Post Office suspects that a Subpostmaster is guilty of
such conduct, it is contractually entitled to suspend the Subpostmaster’s
appointment.
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(4) In relation to any issue arising in these proceedings as to the true state of account in
the relevant branch, the Court should make all presumptions of fact against that
Subpostmaster as are consistent with the other facts as proven or admitted.
Paragraph 34 appears to address a situation where a balancing process has been undertaken
at the end of a trading period and this process has disclosed a shortfall in the cash or stock
held at the branch which is disputed by the relevant Subpostmaster. It appears to be the
Claimants’ case that, in this situation, some Claimants felt that they had no choice but (a) to
sign off Branch Trading Statements disclosing the shortfall, to accept liability for the
shortfall and to make it good by paying or crediting the relevant amount to Post Office or
(b) to sign off incorrect Branch Trading Statements which misrepresented the cash and
stock held at the branch and thereby concealed the shortfall from Post Office. Post Office
will respond to properly particularised allegations of that sort if and when they are made by
particular Claimants. However:
(1) Itis denied that Subpostmasters had no choice but to proceed by in this way or that
it was reasonable for them to feel that they had no such choice. As indicated in
paragraphs [XX] above, Post Office’s procedures provided Subpostmasters with the
opportunity to dispute liability for shortfalls and render accurate accounts whilst any
disputed shortfall was resolved.
(2) It would never have been reasonable for a Subpostmaster sign off a Branch Trading
Statement — and thus to confirm to Post Office that the cash and stock recorded by
Horizon as being held at his or her branch it was correct — in circumstances where he
or she did not believe that it was true. Amongst other things, in that situation the
Subpostmaster would have:
(a) deceived Post Office as to the true level of cash and/or stock at his or her
branch, as to the true transactions undertaken at the branch in the relevant
trading period, and to the true state of his or her branch account;
(b) made it impossible or at least extremely difficult for anyone to identify when or
how the shortfall arose; and
(©) committed (i) a material, irremediable and repudiatory breach of the contract
pursuant to which the Subpostmaster was appointed (including, amongst other
things, section 12.3 of the SPMC and/or clause 3.6 of the NTC and/or clause
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58.
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12 of the Franchise Agreement), and (ii) a fundamental breach of the fiduciary
duties the Subpostmaster owed Post Office as its agent.
As is pleaded further in paragraphs. [XX] below, all Subpostmasters who signed
Branch Trading Statements in that situation may not reopen the accounts that they
signed off. Alternatively, they may not now challenge, seek to avoid or seek any
relief in relation to the payment(s) made to Post Office in accordance with those
accounts (including in making good shortfalls), without pleading and proving such
accounts to be mistaken.
‘The principles referred to in sub-paragraphs [XX] applies to false cash declarations
made by the Subpostmaster to Post Office, mutatis mutandis.
Regarding paragraph 35:
(1)
2)
2)
@)
6)
©
As to paragraph 35.1, paragraph [XX] above is repeated.
As to paragraph 35.2, the Horizon system did not allow a Subpostmaster to roll his
or her branch over into a new trading period until he or she had signed off and
submitted to Post Office a branch account for the previous trading period. [ANDY
As to paragraph 35.3, Subpostmasters were contractually required to use the Horizon
system but that system did not require them to roll over into a new trading period:
that requirement was contractual, being contained in {FHEIR' CONTRACTS OR
Paragraph 35.4 and 35.5 are denied and paragraphs [XX] above are repeated.
As to paragraph 35.6, at this generic level, Post Office cannot admit or deny what
any Claimants may have hoped. However, Post Office denies (if it be alleged) that it
advised or encouraged Claimants to believe that it was appropriate to sign off
incorrect Branch Trading Statements and thereby deceive Post Office.
As to paragraph 35.7, at this generic level, Post Office cannot admit or deny any
Claimant’s individual financial circumstances. However, Post Office denies (if it be
35
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59.
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alleged) that a desire to ensure that a Subpostmaster’s appointment is not terminated
justifies rendering false accounts to and deceiving Post Office.
(7) Subparagraph 35.8 is denied and paragraph [XX] below is repeated.
As to paragraph 36:
(1) I The act of intentionally submitting false accounts is, of itself, a dishonest act.
(2) In some circumstances (for example where a Subpostmaster refuses to give any
explanation for possible root cause of a shortfall in his or her branch), it is an
appropriate inference that, where the Subpostmaster has deliberately rendered false
accounts, he or she has done so in order to cover up some dishonest conduct (such
as theft).
(3) It is denied that it was unfair, flawed or irrational to infer dishonesty from the
submission of false accounts. The natural inference from an agent’s decision to
render false accounts to his principal is that the agent wishes to deceive his principal
and conceal a shortfall in his accounts. Rendering false accounts is a breach of the
fundamental duty of loyalty owed by an agent to his principal.
Paragraph 37 is denied. In particular:
(1) Post Office did not exert illegitimate pressure on Claimants.
(2) Post Office did not exert “unfair” pressure on Claimants (whatever that means).
(3) — Itis not clear to Post Office what it is alleged to have done that constitutes economic
duress exerted or unconscionable dealing by Post Office, but in any event (a) Post
Office denies that it exerted economic duress on Claimants and (b) Post Office
denies that it is guilty of unconscionable dealing with Claimants.
(4) Post Office denies that it was in material breach of contract.
(5) Post Office denies it wrongfully failed to disclose material facts.
(6) Post Office does not understand and cannot address the relevance of the legal
concepts pleaded in paragraph 37 to any cause of action asserted by the Claimants.
However, it denies that these legal concepts can be invoked so as to justify false
accounting of the sort described in paragraphs [XX] above.
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A.8 The Defendant’s Suspense Accounts
61.
62.
As to paragraph 38:
(1)
2)
2)
Post Office operates suspense accounts relating to all its dealings with Post Office
clients. A typical situation in which an amount is credited to a suspense account
would be as follows:
(a) Aclient, such as a bank, makes a payment to Post Office that exceeds the
payment that Post Office considers to be due.
(b) Post Office does not reach agreement with the client as to the amount due and
the client does not accept repayment of what Post Office considers to be the
overpayment.
Where amounts are held in suspense accounts and not resolved within 3 years, these
amounts are credited to Post Office’s profit and loss account. [CAN WE/SHOULD
The operation of suspense accounts in this way reflects ordinary business practice.
As to paragraph 39: [REDRAPT AFTER DELOITTE REVIEW INTO THIS}
)
2)
The Claimants have not pleaded any “shortfalls wrongly attributed to the Claimants”
and the causes of such shortfalls. In these circumstances, Post Office does not
speculate as to how any such shortfalls could in principle have arisen and how, if at
all, such shortfalls (or, more accurately, the losses giving rise to such shortfalls) might
relate to any overpayments by Post Office clients that resulted in a credit in a
suspense account. In the absence of proper particulars, there is no case to which
Post Office can meaningfully respond.
However, at no material time did Post Office profit from any amount held in a
suspense accounts that it knew or believed to have been overpaid to it as a result of
an error (or errors) that also led to a shortfall in any branch accounts. Where Post
Office identified, through reconciling its own transaction records against those of
Post Office clients, that its records required correction, it would correct those
records both (a) as between itself and the Post Office client and (b) as between itself
and the relevant Subpostmaster(s), by issuing Transaction Corrections that would,
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63.
BA
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once accepted at the relevant branch(es), remove any wrongly attributed shortfalls.
Post Office adopted the same approach in relation to net gains (CONFIRM).
(3) For the avoidance of doubt, Post Office denies (if it be alleged), that any of the bugs.
and/or errors set out in Schedule 6 of the Letter of Response resulted in credits to
suspense accounts that correlated to any wrongly attributed shortfalls and from
which Post Office ultimately benefited (by moving amounts held in suspense
accounts to the profit and loss account). [CAN WE SAFELY PLEAD THIS? TT
@)__ [THIS SECTION IS WEAK. ON THE CURRENT STATE OF OUR
INSTRUCTIONS, IS THERE ANYTHING ELSE WE CAN SAFELY SAY
THAT IS HELPFUL TO OUR CASE?I
CONTRACT TERMS - SUBPOSTMASTERS
As to paragraph 40, Post Office will also rely at any trial on the full contractual terms in
force at the material time(s) between Post Office and the relevant Claimant (if any). These
terms varied from time to time, as already noted.
Factual Matrix
Post Office asserts that the following matters are important aspects of factual matrix
against which the various Subpostmaster Contracts relied on by the Claimants should be
construed:
(1) I Subpostmasters typically stood to benefit from the relationship with Post Office in at
least two respects: first, by obtaining remuneration in accordance with their
Subpostmaster Contracts and, second, as a result of offering Post Office services in
the Subpostmasters’ premises, enjoying increased footfall and revenue for the retail
businesses Subpostmasters typically operated alongside the Post Office business.
(2) Subpostmasters contracted with Post Office on a business to business basis and in
the expectation of profiting from the business relationship as noted above.
(3) I Subpostmasters were under no obligation and no pressure to contract with Post
Office on the terms that it offered.
38
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65.
66.
67.
i)
6)
©
(1)
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Post Office was unable to monitor at first hand the transactions undertaken in
branches on its behalf, in relation to which it was liable to the relevant
counterparties. These transactions and the manner in which they were carried out
were the responsibility of the relevant Subpostmasters.
Post Office was unable to monitor at first hand the custody and use of its property
(principally, cash and stock) in branches. Again, these matters were the responsibility
of the relevant Subpostmasters.
Post Office accordingly needed to have trust in the honesty, diligence and
competence of the persons who operated branches on its behalf and as its agents. It
would obviously not have been willing to allow persons in whom it did not feel safe
to repose such trust to continue doing so.
Given the variety of transactions and processes required for the operation of a Post
Office branch, it would be impracticable for all of the parties’ rights and obligations
to be set out in a single contractual document. Post Office obviously had to rely
upon manuals and other documents containing instructions.
Paragraph 41 is admitted.
If and insofar as it is understood, paragraph 42 is denied. At the time of contracting, each
of Post Office and the Subpostmaster was free to contract or not contract with the other
and each of them took an unconstrained and self-interested commercial decision in that
regard.
As to paragraph 43:
(1)
C2)
Post Office is unable to admit or deny what steps Subpostmasters took to put
themselves in a position to discharge their obligations to Post Office. Whether and
to what extent to any of the steps referred to in paragraphs 43.1 to 43.7 were taken in
any case and, if they were taken, whether and to what they were expensive or long
term, will be a matter for each Claimant to plead and prove.
Post Office also incurred long term and expensive commitments in respect of the
Subpostmaster relationship, including by providing valuable cash, stock and
equipment to Subpostmasters on an unsecured basis.
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68.
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(3) It was for the Subpostmaster to assess the commercial risk and reward involved in
contracting with Post Office, taking into account (amongst other things) each party’s
contractual rights of termination.
As to paragraph 44, the operation of the relationship between a Subpostmaster and Post
Office required communication and cooperation.
Regarding paragraph 45:
(1) The SPMC, Temporary SPMC and NTC all stated expressly that Subpostmasters
were not employees of Post Office. Subpostmasters were not employees of Post
Office and Post Office notes that the Claimants accept this in paragraph 45, as they
have in correspondence.
(2) Regarding paragraph 45.1, paragraphs [XX] below are repeated.
(3) Paragraphs 45.2 and 45.3 appears to be based on a misconception as to what
constitutes personal service. The various Subpostmaster Contracts were in no way
contracts for personal services and the provisions referred to in paragraphs 45.2 and
45.3 did not require personal service. On the contrary, most of them made it clear
that Subpostmasters were entitled to employ third parties to run their branches. For
example:
(a) _ the holiday substitution allowance and sick absence allowance provisions in
sections 4 and 7 of the SPMC expressly provided that they only applied where
Subpostmasters chose personally to work in their branches for at least 18
(b) Section 3 of the SPMC expressly provided that Subpostmasters were not
obliged to render personal service and that they were entitled to make suitable
arrangements to employ a third party to run the relevant branch. That they
were required to notify Post Office when a third party was running the branch
and to give Post Office the name of the third party does not mean that they
were required to perform a personal service.
(© WHAT IS THE ‘EVIDENCE OF INCAPACITY FOR WORK’ CLAUSE
REPERRRED TO IN PARA 45.3? HAVE THEY GOT THE REFERENCE
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70. Paragraph 46 is noted. If the Claimants wish to assert any additional facts as aspects of the
factual matrix, Post Office will respond if and when they are pleaded as such.
B.2 Written Terms
Overview
71. As to paragraph 47, at a generic level, it is admitted that the written terms of the
Subpostmaster Contracts reserved to it a degree of control over aspects of the business
conducted by Subpostmasters on its behalf. It is denied these terms imposed “very few
express obligations” on it. Post Office will respond to any particular allegations made
about particular terms if and when they are made.
72. As to paragraph 48:
(1) Post Office’s practice at all material times has been to provide prospective
Subpostmasters with a copy of the written terms of the agreement with Post Office
and to require them to sign a document recording their agreement to those terms.
(2) If any Subpostmaster alleges that he did not obtain a copy of the written terms of his
agreement, Post Office will respond to that allegation if and when it is properly
pleaded.
(3) The allegation that Post Office did not a draw a Claimant’s attention to “onerous or
unusual terms” is unparticularised and cannot properly be pleaded to in this Generic
Defence. Without prejudice to that contention, it is denied that any of the terms
alleged by the Claimants to be onerous and unusual were such: as indicated below,
they were the sort of terms that would be expected. It is further denied that Post
Office was under any obligation to draw a Claimant’s attention to any such terms.
73. As to paragraph 49:
(1) I The written Subpostmasters Contracts are to be construed as a whole and in light of
the relevant matrix of fact pleaded in paragraph [XX] above.
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74.
75.
76.
2)
1)
(4)
6)
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It is denied that those contracts are to be construed presumptively against Post
Office. Further, the Claimants have not identified any ambiguity in the written terms
that they contend should be resolved in accordance with the contra proferentem
principle, which is a principle of last resort.
It is denied that the contracts are “relational contracts” in the sense alleged by the
Claimants and, even if they were classified as such, it is denied that this should affect
their construction. They should not be construed “in the context of” the alleged
implied terms and any term that it is alleged should be implied must (amongst other
things) be consistent with the express terms properly construed.
It is denied that the terms identified by the Claimants are unenforceable and
paragraph [XX] is repeated.
It is denied that the Unfair Contract Terms Act 1977 affects any of those terms.
Each and every allegation in paragraph 50 is denied. The only agreements between the
parties as to termination of the Subpostmaster Contracts are the agreements expressly
provided for in those contracts. Further, the Claimant’s attempt to invoke Autoclenz v
Belcher in order to rewrite those terms is unfounded (see paragraph [XX] below).
As to the contractual terms referred to in paragraphs 51 ef seq., Post Office will refer to all
the relevant terms of the relevant contracts for their full meaning and true effect.
Rates, Instructions and Standards
As to paragraph 51:
(1)
2)
The terms of the SPMC, the Temporary SPMC and the NTC pleaded therein are
admitted and averred [CHECK].
It is admitted that, in accordance with those terms, Subpostmasters were required to
comply with (and were required to procure compliance by their Assistants with) the
rules, instructions and standards set out in the documents to which the terms
referred and as were notified to Subpostmasters in accordance with such terms. As
indicated in paragraph [XX] above, in relation to business such as Post Office’s,
requirements of this sort would be expected.
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77.
78.
79.
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(3) It is denied that paragraph 51 is an accurate characterization of these rules,
instructions and standards, and it is denied (if it be alleged) that the contractual
standard of performance required by the SPMC, the Temporary SPMC and the NTC
was Post Office’s “discretionary satisfaction”.
(4) If the Claimants wish to rely upon alleged failings in any rules, instructions or
standards or in the meaning and effect of the terms incorporating the same, they
should provide proper particulars of these allegations. Post Office will respond if
and when they do so.
Classes of Business
As to paragraph 52, the terms of the SPMC, the Temporary SPMC and the NTC pleaded
therein are admitted and averred [CHECK]. In relation to business such as Post Office’s,
terms of this sort would be expected. They reflected the fact that, as Subpostmasters were
Post Office agents offering products and services to customers on Post Office’s behalf,
Post Office must be entitled to change those products and services from time to time. If
the Claimants wish to rely upon alleged failings in any changes that Post Office made to
any products and services or in the notice given therefor they should provide proper
particulars of these allegations. Post Office will respond if and when they do so.
Agency
As to paragraph 53:
(1) The terms of the SPMC, the Temporary SPMC and the NTC pleaded therein are
admitted and averred [CHECK].
(2) In accordance with those terms, Post Office appointed Subpostmasters and
Subpostmasters accepted appointment as agents of Post Office. Such appointments
were true, not purported. The legal relationship between Post Office and
Subpostmasters was that of principal and agent.
Post Office notes that, as its agents:
(1) Subpostmasters owed fiduciary duties to Post Office, including an overriding duty to
act in Post Office’s interests in relation to the functions they undertook on Post
Office’s behalf (which functions included holding and dealing with Post Office cash
and stock, effecting and recording Post Office transactions, generating liabilities for
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Post Office, maintaining proper and accurate records and preparing and rendering
accounts).
(2) I Subpostmaster owed a duty to account to Post Office.
Accounts and Liabilities for Lass
As to paragraph 54, the terms of the SPMC, the Temporary SPMC and the NTC pleaded
therein are admitted and averred [CHECK]. Clause 3.7.4 of the NTC also provided that:
“The Operator shall ... immediately produce all Post Office Cash and Stock for inspection whenever
requested by Post Office Ltd’. These terms imposed on Subpostmasters responsibility for
losses at their branches. In circumstances where Subpostmasters were in control of and
they and/or their employees had first-hand knowledge of the transactions effected on Post
Office’s behalf and cash and stock belonging to Post Office held at their branches, this
would be expected. It is denied that Post Office applied them wrongly.
Post Office notes that the Claimants’ case set out in paragraph 55 applies only to section
12.12 of the SPMC. More generally, as regards losses disclosed in a Subpostmaster’s
accounts, Post Office notes the following principles, each applies to Subpostmasters:
(2) Where an agent renders an account to his or her principal, he is bound by that
account unless and to the extent that he discharges the burden of demonstrating that
(3) Where an agent deliberately renders a false account to his or her principal, in relation
to the matters covered by the account the Court should make all presumptions of
fact against that Subpostmaster as are consistent with the other facts as proven or
admitted.
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82.
83.
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AAs to section 12.12 of the SPMC: [AGAIN, THIS PARA REQUIRES FURTHER
(1) Section 12.12 should be construed in accordance with the principles set out in
paragraph [XX - 81] above.
(2) On the true construction of section 12.12, Subpostmasters are responsible for all
losses (as defined in paragraph [XX = 29] above) disclosed in their branch accounts
save for (a) losses which were not caused by any negligence on their part, by any
carelessness on their part or by any error on their part or (b) losses which were not
caused by any act or omission (“act”) on the part of their Assistants.
(3) I Subpostmasters who allege that they are not liable any losses disclosed in their
branch accounts bear the burden of proving that such losses were not caused by any
of the things referred to in sub-paragraph (3) above.
(4) Regarding paragraph 55.1, no admissions are made as to what is meant by the term
“real loss”, but Post Office notes that, in section 12.12, the concept of a “loss” is not
tied to or dependent on economic detriment to Post Office.
(5) Paragraph 55.2 is denied.
(© Paragraph 55.3 is denied.
(7) Paragraph 55.4 is denied.
Assistants
As to paragraph 56:
(1) The terms of the SPMC, the Temporary SPMC and the NTC pleaded therein are
admitted and averred [CHECK].
(2) These terms provided (and did not merely purport to provide) that Subpostmasters
were liable for the acts of their Assistants. Having been appointed as agents of Post
Office to conduct its business on its behalf from their branches, Subpostmasters
were responsible for the conduct of the business at those branches. If
Subpostmasters employed Assistants for that purpose (giving those Assistants at least
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84.
85.
86.
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some control over and/or custody of Post Office transactions, cash and stock), one
would expect these Subpostmasters to be responsible for their acts.
(3) I Under the SPMC and the NTC, Post Office agreed to provide initial training to
Assistants and/or to provide to Subpostmasters training materials that were adequate
for the provision of initial training of Assistants.
(4) Nevertheless, the terms pleaded in paragraph 56 made it clear that the Subpostmaster
was ultimately responsible for providing or procuring the provision of such training
as was necessary to enable the Assistant assist the Subpostmaster in discharging his
or her obligations to Post Office. Accordingly, where a Subpostmaster considered
that for any reason an Assistant was not, without further training, able properly to
discharge his or her functions in relation to Post Office business, the Subpostmaster
‘was required to: (a) notify Post Office that the Assistant was not so able; (b) where
further training could resolve the situation, provide or procure the provision of such
training, as appropriate; and (c) where further training could not resolve the situation
(and/or had failed to do so), to cease to engage the Assistant on Post Office
business.
Helpline
Paragraphs 57 is admitted.
Paragraph 58 is admitted. However, the effect of the implied terms pleaded in paragraph
[Xx] below was to require Post Office to render such cooperation or assistance to
Subpostmasters as was necessary to the discharge of their obligations as Subpostmasters.
If and to the extent that a competent and diligent Subpostmaster could not discharge his or
her obligations without guidance from Post Office, Post Office was required to provide
such guidance as was necessary.
Alccess to Branch Accounts and Records
Paragraph 59 is admitted. The terms of the SPMC, Temporary SPMC and NTC pleaded
therein are admitted and averred. In an agency relationship of this sort, such terms would
be expected. They reflected Post Office’s common law rights as principal and the
Subpostmaster’s common law duties as agent.
Suspension
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87. As to paragraph 60:
(1) The terms of the SPMC and the NTC pleaded therein are admitted and averred
(2) These terms provided for Post Office to have the right (and not merely a purported
right) to suspend Subpostmasters in the circumstances provided for therein. In
circumstances where Subpostmasters conducted Post Office’s business on its behalf,
entered into and/or effected transactions and incurred liabilities with third parties in
its name and on its behalf, and dealt with Post Office cash and stock for this
purpose, one would expect Post Office to have the right to suspend Subpostmasters
in circumstances where it no longer felt that it could safely trust the Subpostmaster
to discharge his obligations.
(3) Regarding the Temporary SPMC, paragraph 60.2 is admitted. [TO DISCUSS =
Termination - Notice
88. As to paragraph 61:
(1) The terms of the SPMC, the Temporary SPMC and the NTC pleaded therein are
admitted and averred [CHECK].
(2) These terms permitted (and did not merely purport to permit) Post Office:
(a) to terminate its contracts with Subpostmasters summarily for cause; and
(b) _ to terminate those contracts on notice without cause (ic. at will).
Post Office was in an agency relationship with Subpostmasters pursuant to which
Subpostmasters were running part of Post Office’s business on its behalf, entering
into and/or effecting transactions and incurring liabilities with third parties in its
name and on its behalf, and dealing with Post Office cash and stock for this purpose.
One would expect the contracts governing this relationship to contain provisions
47
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89.
90.
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91.
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conferring on Post Office (i) a right to terminate that relationship immediately where
the Subpostmaster had committed significant breaches of their contracts and (ii) a
right to terminate the relationship on notice where for whatever reason Post Office
no longer wished to maintain that relationship with that Subpostmaster.
(3) The provisions for summary termination contained in these contracts did not
exclude either party’s common law right to terminate the contracts for repudiatory
breach. Further, the provisions for termination at will on giving notice were matched
by equivalent provisions entitling the Subpostmaster to resign at will on giving the
same notice (see section 1.10 of the SPMC, clause 2.4 of the Temporary SPMC and
clause 2.16.1 of the NTC).
Termination — Compensation for loss of office
As to paragraph 62 and 62.1 to 62.3, the terms of the SPMC, the Temporary SPMC and
the NTC pleaded therein are admitted and averred [CHECK]. On their true construction,
these terms provided that Subpostmasters did not have a contractual right to compensation
for the lawful termination of their contracts. Such terms did not affect a Subpostmastet’s
right to damages for wrongful termination in circumstances where (1) Post Office had
summarily terminated the contract where it had no right to do so or (2) Post Office had
given insufficient notice of termination (i.e. it had not given the period of notice specified
in his or her contract).
Termination — Subsequent appointments
As to paragraphs 62.4 to 62.7, the terms of the SPMC, the Temporary SPMC and the NTC
pleaded therein are admitted and averred [CHECK]. ‘These terms expressly preserved (and
did not merely purport to preserve) Post Office’s commercial freedom to decide who to
appoint as its agent with authority to conduct its business on its behalf and to hold and
deal with its cash and stock for that purpose and the location from where such person
should conduct that business. One would expect such terms in a contract of this sort.
Relational Contract and Implied Terms
Relational Contract
Paragraph 63 is denied. Further:
48
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92.
93.
(1)
2)
3)
@)
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Itis denied that the Subpostmaster Contracts are “relational contracts” in the sense
alleged by the Claimants. Without prejudice to the generality of that contention, Post
Office notes that the relevant contracts were terminable on notice without cause.
It is denied that the classification of these contracts as “relational contracts” would
affect their construction or effects. There are no special rules or principles of
construction that apply to such contracts.
Whether or not the relevant contracts can be called “relational contracts”, the
implied term at paragraph 63 should not be implied because it is neither so obvious
as to go without saying nor necessary to the business efficacy of the agreements.
Further, the implication of such broad and general obligations would contradict the
express terms of the contracts.
Post Office will address Yam Seng Pte Ltd v International Trade Corpn [2013]
EWHC 11 and related case law in due course as and when appropriate.
Implied terms
Post Office avers that each of the Subpostmaster Contracts on which the Claimants rely
contained the following implied terms (implied as being so obvious as to go without saying
and/or necessary to the business efficacy of the agreements):
(1)
2)
Each party would refrain from taking steps that would inhibit or prevent the other
party from complying with its obligations under or by virtue of the contract (the
“Stirling v Maitland Term”).
Each party would provide the other with such cooperation as was necessary to the
performance of that other’s obligations under or by virtue of the contract (the
“Necessary Cooperation Term”).
Save as set out in paragraph [XX] above, paragraph 64 is denied. Further:
(1)
Paragraph [XX] above is repeated. The Claimants’ reliance on the alleged status of
the Subpostmaster Contracts as “relational contracts” as the basis for implying terms
is wrong in law. Save for terms implied at law (which category is not asserted by the
Claimants), no term is to be implied unless it is so obvious as to go without saying
and/or is necessary to the business efficacy of the agreement,
49
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94,
B4
95.
2)
3)
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The numerous additional terms alleged by the Claimants in paragraphs 64.1 to 64.19
are neither necessary to the business efficacy of the said contracts and agreements
nor so obvious as to go without saying. Many of them would obviously have been
rejected by Post Office had they been proposed and/or are unreasonable and/or
make no commercial sense. Further, many of them either address matters that are
already governed by the terms of the said contracts and agreements (including the
Stirling v Maitland Term and the Cooperation Term) and/or contradict those terms.
For the avoidance of doubt, it is specifically denied (if it be alleged) that any of the
alleged implied terms:
(a) _ fettered or governed Post Office’s contractual or common law rights to
terminate the relevant Subpostmaster Contracts, whether summarily for cause
or on notice without cause;
(b) _ fettered or governed Post Office’s right to assert claims, rights and liabilities
against Subpostmasters or any other party which it believed to be valid or to
enforce or otherwise vindicate such claims, rights and liabilities; or
(©) _ fettered or governed Post Office’s right to bring a private prosecution against
Subpostmasters or any other party [CAN THIS BE DESCRIBED AS A
Paragraph 65 is noted. The matters pleaded in that paragraph do not support the
Claimants’ case on the implied terms they allege.
Onerous and Unusual Terms
Paragraph 66 is denied. Specifically:
(t)
2)
Itis denied that any of the terms identified in section B.2 of the GPoC was onerous
or unusual in the relevant business context and, in particular, in the context of the
appointment of an agent. As noted in paragraphs [XX] above, one would expect
Subpostmaster Contracts to contain terms of this sort.
It is denied that the principle in Interfoto Picture Library Limited v Stilletto
Visual Programmes Limited [1989] QB 433 has any application to the identified
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96.
B.6.
97.
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terms. These terms formed part of written contracts entered into in a business to
business context and in the anticipation of a commercial relationship.
(3) Ifand to the extent that any Claimant may contend that he did not obtain or have
access to a copy of his or her written agreement and/or was unaware of or did not
have access to its terms before agreeing to them, that is a matter for him or her to
plead and prove.
Unfair Contract Terms
Paragraphs 67 and 68 are denied. Specifically:
(1) None of the terms identified in section B.2 of the GPoC would entitle Post Office
(a) to render a contractual performance substantially different from that which was
reasonably expected of it or (b) to render no performance at all in respect of the
whole or any part of its contractual obligations. Accordingly, section 3(2) of the
Unfair Contract Terms Act 1977 (“UCTA”) does not apply.
(2) Itis noted that the Claimants have not explained how or in what respects the
identified terms are alleged to entitle Post Office to render a contractual performance
substantially different or to render no performance at all. Post Office reserves its
rights to plead further to properly particularised allegations if and when they are
made.
(3) If (contrary to Post Office’s primary case) and to the extent that any of the identified
terms do in any respect(s) fall within section 3(2) of UCTA, Post Office will say that
they are fair and reasonable and so may be relied upon.
‘The True Agreement
Paragraphs 69 is denied. Specifically, it is denied that the dicta in Autoclenz v Belcher
[2011] UKSC 41 at [35] have any application to the present case. Without prejudice to the
generality of that denial, Subpostmasters are not (and are not alleged to be) employees, and
the Subpostmaster Contracts are “ordinary contracts’ and/or “commercial contracts? that fall
within the principles set out in Autoclenz at [20] to [21]. Further, it is not alleged that any
of the terms of those contracts were not actually relied upon by Post Office and/or were
inserted into the written contracts for the sake of form only. Post Office will address
Autoclenz in due course as and when appropriate.
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98. Paragraph 70 is denied. Further
(1) Post Office notes that under the NTC, the specified notice period was 6 months, not
3,
(2) Itis denied that termination of a Subpostmaster's appointment on notice would
cause a Subpostmaster's goodwill and other investments to be forfeited. A
Subpostmaster could not assign the benefit of his or her Subpostmaster’s contract
and this was not a saleable asset whether or not he or she was still appointed.
Further, an ex-Subpostmaster could sell his business (including any investment
therein) to a new buyer and the new buyer could apply to be a Subpostmaster in the
usual way.
(3) Post Office and Subpostmasters both intended that the parties’ agreements be as set
out in the written terms. If Claimants allege that they intended some other terms to
govern their relationship with Post Office, it is for them to plead and prove such
intention and the grounds on which they allege that it was shared by Post Office,
providing particulars of the alleged terms and when and how it is said those terms
were agreed. They have not done so.
99. Paragraph 71 is denied. Further:
(1) Post Office notes that, on the Claimants’ own case, there was no “true agreement”
between the parties that Post Office would be entitled to terminate the
Subpostmaster Contracts without cause on giving the 12 months’ notice of
termination that the Claimants apparently seek.
(2) It is denied that the principle in Autoclenz (even if applicable) would permit the
Claimants to rewrite the termination provisions in the Subpostmaster Contracts in
the way that they apparently seek. These are the sort of provisions one would expect
to see in such contracts. The principle in Autoclenz is exceptional, and it cannot be
used to circumvent the rules on construction and the implication of terms as the
Claimants seek to do.
C. CONTRACTUAL TERMS —- OTHERS
C.1. Crown Office Employees
Inplied Terms
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100.
101.
C.2
102.
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As to paragraph 72:
(1) The implied term alleged in paragraph 72.2 is admitted.
(2) Without knowing which “discretions” are referred to in paragraph 72.2, Post Office
is unable to admit or deny the implied term alleged in that paragraph
As to paragraph 73, the Claimants have not identified the particular discretions on which
the implied terms in paragraph 72 are said to have operated or the terms governing those
discretions. Post Office reserves its right to plead back in relation to such discretions if
and when the Claimants identify them with proper particulars. For the avoidance of doubt,
however, it is denied (if it be alleged) that such implied terms applied to Post Office’s
contractual or common law rights to terminate the relevant Claimants’ employments,
whether summarily for cause or on notice without cause.
Assistants
Rights of Third Parties
Paragraph 74 is denied. Section 1(b) of the Contracts (Rights of Third Parties) Act 1991
does not apply as alleged. Specifically:
(1) On the true construction of the SPMC, clause 15.7.1 did not purport to confer a
benefit on the Subpostmaster’s Assistants (including Managers) but was intended to
confer a benefit on the Subpostmaster and/or Post Office (through enabling him or
her better to train his or her Assistants and so properly to discharge his or her
obligations to Post Office).
(2) On the true constructions of the NTC, clauses 2.3 to 2.7 did not purport to confer a
benefit on the Subpostmaster’s Assistants but were intended to confer benefits on
the Subpostmaster and/or Post Office (through enabling the Subpostmaster better
to discharge his or her obligations through the Assistants and/or through providing
Post Office with a direct means of imparting knowledge to Assistants that may assist
in the discharge of Post Office business).
(3) The unexplained allegation that the alleged implied terms purported to benefit the
Subpostmaster’s Assistants is unparticularised and is not understood. Even on the
Claimants’ case, such terms were intended to confer benefits on Subpostmasters.
The allegation is denied.
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103.
104,
105.
106.
107.
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(4) Subparagraph 74(d) is not a proper plea and Post Office cannot meaningfully plead
to it.
Franchise Agreements
As to paragraph 75:
(1) It is admitted that, where a corporate Franchisee was appointed, Post Office required
a personal guarantee from its shareholders and/or directors. Save as aforesaid, the
first sentence is denied.
(2) Regarding the second sentence, paragraphs [XX] are repeated, mutatis mutandis.
Express Obligations of the Defendant
Paragraphs 76 and 77 are admitted. Post Office will rely on all the relevant terms of the
Franchise Agreement for their true meaning and full effect.
Relational Contracts
Paragraph 78 is denied. Paragraphs [XX] above are repeated, mutatis mutandis, in relation to
the allegation that the Franchise Agreement is a relational contract.
Implied terms
Paragraph 79 is denied. Paragraphs [XX] above are repeated, mutatis mutandis, in relation to
the implication of terms into the Franchise Agreement.
CONCURRENT DUTY IN TORT
As to paragraph 80, it is denied that Post Office assumed a tortious responsibility to the
Claimants. Further:
Subpostmasters and Crown employees
(1) Subparagraphs 80.1 and 80.2 are inadequately particularised. Insofar as they are
understood, they are denied.
Assistants
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(2) Each and every allegation in subparagraphs 80.3 and 80.4 is denied. Without
prejudice to the generality of this denial:
(a) Assistants were under the control, supervision and guidance of the
Subpostmasters who employed them, not Post Office, and they were in a
proximate relationship with these Subpostmasters, not Post Office. Unlike
Post Office, such Subpostmasters were in a position to assess their
competence and to determine whether they needed training (or further
training). Unlike Post Office, such Subpostmasters were ultimately responsible
for providing the training they needed.
(b) Post Office did not contemplate or reasonably foresee that the training
assistance it provided to Subpostmasters as described in paragraph [XX] above
was liable to expose Assistants to the risk of suspension or termination of their
employment or claims for civil recovery or prosecution.
(©) _ If Post Office understands the Claimants’ case correctly, they allege that Post
Office owed Assistants a duty of care (i) in relation to any acts by which Post
Office might seek to vindicate its rights by imposing liability on Assistants and
any others persons, and (ii) in relation to any acts by which Post Office might
seek to vindicate its rights by imposing “potential liability” on any such persons
(whatever that means), and (iii) in relation to any acts by Post Office “exposing
[Assistants] to the risk” of either (i) or (ii) (whatever that means).
(d) It would be would be unfair, unjust and unreasonable to impose on Post
Office duties of care of these extraordinary scopes. The imposition of such
duties of care would be inconsistent with the contractual relationships between
Post Office and Subpostmasters on the one hand and Subpostmasters and
their Assistants on the other. If and to the extent that an Assistant suffered a
legal wrong, his or her recourse was against the Subpostmaster who employed
him or her (including recourse by way of defence to any relevant claim brought
by that Subpostmaster).
Directors or guarantors of Franchisees
(3) Paragraph 80.5 is denied and sub-paragraph [(2)] is repeated, mutatis mutandis.
E. AGENCY
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108.
109.
110.
111.
112.
113.
114.
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Paragraph 81 is admitted (save for its reference to paragraph 52.1, which appears to be an
error). [CHECK]
Paragraph 82 is denied. Specifically:
(1) I The Subpostmaster Contracts made clear that Subpostmasters were agents of Post
Office, and they owed Post Office the contractual, fiduciary and other duties that
accompany that status. They were under a duty to account to Post Office, not the
other way around.
(2) Post Office did not agree to act as an agent of any of the Claimant Subpostmasters
for any purposes. Nor did it agree to act as an agent of any Claimants who were
Subpostmasters Assistants or Franchisee directors or guarantors. Post Office notes
that no such agreement is alleged by the Claimants.
(3) Post Office did not hold or deal with cash or other assets on behalf of Claimants,
and it did not effect transactions on their behalf or commit them to transactions with
third parties. Post Office did not undertake any of the characteristic roles of an
agent and did not agree to be subject to any of the characteristic duties of an agent.
Paragraph 83 is denied.
Paragraph 84 is denied. Post Office was not an agent and was under no such duties.
FIDUCIARY DUTIES
Paragraphs 85 is denied. The Horizon accounting system was operated on Post Office’s
behalf. As between Post Office and its Subpostmasters, the rights and obligations in
relation to the accounting system were contractual and/or arose from the status of Post
Office as principal and of Subpostmasters and Franchisees as its agents. As between Post
Office and Subpostmaster Assistants and Franchisee directors, there were no rights and
obligations.
As to paragraph 86, it is admitted in general terms that Post Office provided information to
Subpostmasters. However, the contexts in which they did so were so various and the
allegations made in paragraph 86 are so generic that Post Office cannot meaningfully plead
to them.
Paragraph 87 is denied.
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115.
116.
117.
118.
119.
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Paragraph 88 is denied and paragraphs [XX] above are repeated.
Paragraph 89 is denied. Further, Post Office notes that if (which is denied) it did owe the
duties alleged in paragraph 84, those duties would not be characterised as fiduciary duties.
GENERIC BREACHES OF CONTRACT / TORT / FIDUCIARY DUTY
Regarding the generic allegations of breach set out in section G of the GPoC:
)
C2)
2)
‘These allegations are so general that it is in many cases impossible for Post Office to
provide meaningful responses. Amongst other things, they overlook critical
differences between Subpostmasters on the one hand and Subpostmaster Assistants,
Franchisee directors or guarantors and Crown employees on the other. Moreover,
the facts relevant to various of the allegations of breach will have changed
substantially over the relevant period.
As these allegations turn on matters of fact and degree that would need to be pleaded
and proved in individual cases, Post Office can only address these breaches in the
most general of terms.
In relation to any particular claims that may be asserted by any particular claimants,
in appropriate cases Post Office will assert the generic defences referred to in Section
N below.
Paragraphs 90 and 91 are denied.
The general thrust of paragraph 92 is denied:
)
C2)
Post Office provided adequate training and training materials to Subpostmasters,
both initially on their appointment and thereafter (including in response to requests
for training). Such training varied from time to time and from case to case but with
the benefit of such training and the other assistance and support available to
Subpostmasters, a reasonably competent and diligent Subpostmaster was able
properly to discharge his or her obligations to Post Office.
‘The Operating Manuals referred to varied from time to time and from case to case
but they were sufficient to enable compliance by a reasonably competent and diligent
Subpostmaster.
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120.
121.
122.
123.
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(3) If and to the extent that any Subpostmaster considered himself or herself unable
properly to discharge the obligations to Post Office, it was incumbent on him or her
to contact Post Office and seek further training and/or make use of the assistance
offered by the Helpline.
Paragraph 93 is denied and paragraph [XX] below is repeated. With the benefit of the
Helpline and the training and other assistance and support available to Subpostmasters, a
reasonably competent and diligent Subpostmaster would have been able properly to
discharge his or her obligations to Post Office.
As to paragraph 94:
(1) Post Office does not know the transaction types to which the allegation in paragraph
94.1 relates. It reserves its right to plead to proper particulars of the allegation if and
when they are provided.
(2) Transaction data relating to the preceding 42 days or 62 days after the introduction
of Horizon online) was made generally available to Subpostmasters. If further data
was necessary in order to enable a Subpostmaster to respond to a Transaction
Correction, such data was generally provided.
(3) Post Office provided more extensive transaction data where this was necessary. The
Claimants have not identified any circumstances in which more extensive data was
requested, was denied and would, if provided, have protected any Claimant
Subpostmasters from any alleged prejudice.
@) __ Subparagraph 94.5 is admitted [I$ THIS CORRECT? WERE EVEN PERSONAL
HOW COULD HE EVER GET TO THE BOTTOM OF A SHORTFALL?
COULD IT BE SAID THAT HE OR SHE HAD ALL THE DATA HE
Paragraph 95 is so vague that Post Office cannot plead to it, other than to repeat
paragraphs [XX - INCLUDE THE PARA WHERE WE SAY NO SYSTEMIC FLAW
ETC] above.
As to paragraph 96, Post Office denies that it was under a duty to do all the things alleged
therein. Further:
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124.
125.
126.
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(1) Regarding paragraph 96.1, taking into account the matters pleaded in paragraph [XX
ASYMMETRY OF INFORMATION PARA] above, Post Office notes that if an
explanation was required for any shortfall, in many cases it would be for the relevant
Subpostmaster to provide it. Post Office further notes that, in cases where a
Subpostmaster was guilty of false accounting as described in paragraphs [Xx] above,
it would often be impossible for anyone to do so.
(2) Paragraph 96.2 is denied. Post Office provided such cooperation as was necessary
and reasonable in the circumstances.
(3) Regarding paragraph 96.3, Post Office did not withhold from Subpostmasters
information that would have exonerated them from liability for shortfalls in respect
of which Post Office determined that they were liable. [CONFIRM].
(4) Regarding 96.4, it is denied that, when determining whether a Subpostmaster was or
was not liable for a shortfall, Post Office did not give a reasonable and fair
consideration to that question. It is also denied that Post Office was required to
“investigate” the matters referred to in that paragraph. Post Office notes that, in
cases where a Subpostmaster was guilty of false accounting as described in
paragraphs [XX] above, it would often be impossible to “investigate” those matters.
As to paragraph 97, paragraph [XX] above is repeated. Post Office did not demand
payment other than in accordance with the applicable Subpostmaster Contracts.
As to paragraph 98, paragraph [Xx] above is repeated. The alleged duty of investigation is
denied, as is the allegation that compliance with this duty was a precondition for exercising
Post Office’s rights under the Subpostmaster Contracts, whether to seek recovery of
shortfalls from Subpostmasters, to suspend their appointments or to terminate their
appointments. Further, Post Office notes that the contractual terms regarding suspension
and termination pleaded in paragraph 60 expressly provided for the circumstances in which
those rights applied (the right of suspension applied in cases of mere suspicion).
Paragraph 99 is so vague that Post Office cannot plead to it. However:
(1) As to the allegation that Post Office applied unspecified “pressure” to cause a
Claimant to resign, Post Office notes that the alleged pressure is neither explained
nor alleged to be illegitimate. Post Office further notes that, under the
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Subpostmaster Contracts, Post Office was entitled to terminate those agreements at
will, on giving the same notice that Subpostmasters gave on resigning.
(2) As to paragraph 99.1, paragraphs [XX] above are repeated.
(3) As to paragraph 99.2, paragraphs [XX = INCLUDE OUR “REAL LOSS DENIAL
(4) Paragraph 99.3 is denied. Post Office complied with its duty of Necessary
Cooperation in carrying out reasonable enquiries, taking into account all material
circumstances. Where a Subpostmaster failed to provide cooperation to Post Office
and/or had failed to retain key records and/or had made false cash declarations
and/or was guilty of false accounting and/or had otherwise acted dishonesty, this
could have had an impact on the nature and extent of the cooperation required of
Post Office.
(5) It is denied that Post Office’s allocation of the burden of proof was wrong as alleged
at subparagraph 99.4, It was in accordance with the agreements and was reasonable
and appropriate in the circumstances, taking into account all material circumstances
and, in particular, the cooperation that Post Office was able to obtain from the
relevant Subpostmaster and/or his or her Assistants.
(6) As to paragraph 99.5, it is denied that Post Office was required to establish
“causative fault” by a Subpostmasters before it could form the conclusion that
responsibility for shortfalls at their branches rested with them. Paragraphs [XX]
above are repeated.
(7) _ As to paragraph 99.6, Post Office denies that, when it formed the conclusion that
responsibility for shortfalls rested with Subpostmasters, it relied on flawed or
unreasonable inferences.
127. As to paragraph 100, it is admitted that, in some instances, Post Office pursued civil
and/or criminal proceedings in relation to shortfalls. As to the reference to paragraph 99,
paragraph [XX] above is repeated.
128. As to paragraph 101:
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(1) Post Office notes that the alleged conduct is not linked to any alleged duty pleaded
to have been owed by Post Office to any Claimant. [CHECK THIS — CAN IT BE
(2) As the Claimants admit in paragraph 62.4 et seq., the Subpostmaster Contracts
expressly provided that Post Office was entitled to decide for itself (and by reference
to its own interests) whom to appoint as a new Subpostmaster and the premises
from which he or she should operate. It was subject to no obligations or constraints
in that regard.
(3) In any event it is denied that, having regard to its own interests, Post Office acted
unreasonably in relation to the appointment of new Subpostmasters.
129, Paragraph 102 is denied and paragraphs [XX] above are repeated. Post Office had no duty
to disclose the matters set out in those paragraphs.
130, As to paragraph 103, paragraphs [XX] above are repeated.
131. Post Office cannot meaningfully plead to paragraph 104. For example, Post Office does
not know: (1) which, if any, breaches are alleged to have been in bad faith or the basis of
such allegation; (2) which, if any, of Post Office’s contractual discretions are alleged to have
been exercised arbitrarily, capriciously or unreasonably or the basis of such allegation; (3)
which, if any, steps taken by Post Office are alleged to have been in breach of an implied
duty of trust and confidence or the basis of such allegation; (4) which, if any, steps by Post
Office are said to have been taken without reasonable care and skill or the basis for such
allegation; or (5) what, if anything paragraph 104.5 is referring to. However, Post Office
denies that it breached the Subpostmaster Contracts to which Claimants were party.
132. Paragraph 105 is noted. Save as set out above and below, Post Office was not subject to
the pleaded duties and did not make the alleged misstatements or misrepresentations.
H. ACTIONABLE MISREPRESENTATION AND DECEIT
133, Paragraphs 106 and 107 are noted. In relation to the “indicative” allegations of deceit,
negligent misstatement, and misrepresentation set out in section H of the GPoC, paragraph
above is repeated, mutatis mutandis. Post Office cannot meaningfully respond to
“indicative” allegations of this sort. The facts relevant to the making of a representation to
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134,
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a Claimant, to the truth or falsity of the representation, and to the Claimant’s reliance on
the representation will differ from one case to another.
Representations
Save as set out below, paragraph 108 is denied:
(1) Paragraph 108.1 is denied [CORRECT?]. The fact of a shortfall was apparent on the
face of the accounts submitted by a Subpostmaster to Post Office. It was a matter
which Post Office was entitled to have a view on and to discuss with Subpostmasters
without making an actionable representation as alleged. Further, Post Office notes
the matters pleaded in paragraphs [XX] above.
(2) Paragraph 108.2 is denied [CORRECT?]. Shortfalls were addressed in accordance
with the parties’ obligations, including the Subpostmasters’ obligation to account to
Post Office, not on the basis of representations made by Post Office to Claimants.
(3) Paragraph 108.3 is denied [CORRECT?]. Post Office did not advise Subpostmasters
on the true construction of the Subpostmaster Contracts. It was entitled to adopt a
position as to the meaning and effects of its contracts without making an actionable
CASE ON BURDEN OF PROOF?I below is repeated.
(4) _ If Post Office understands the Claimants’ case correctly, paragraph 108.4 relates to
statements that some Helpline operators are alleged to have said to some Claimants
when they called the Helpline with particular problems. Post Office cannot
meaningfully plead to this case without knowing when and by whom the call was
made and what problem that was raised. However, paragraph [XX = PARA
WHERE WE SAY THEY WEREN'T INSTRUCTED TO LIE AND WERE,
NOIT IN A POSITION TO SPEAK FOR THE WHOLE HELPLINE ETCI
above is repeated. Further, it is denied (as appears to be alleged) that Helpline
operators would ever have told Claimants that no-one had ever experienced
difficulties with Horizon or that no-one had ever encountered discrepancies or
consequent shortfalls.
(5) Paragraph 108.5 s denied. [AREIWE/CONFIDENTENOUGH TO SAV THAT?)
Further and in any event, if and to the extent that a Claimant wishes to suggest that a
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shortfall was a Horizon-generated shortfall, that would have to be distinctly alleged
and proved by that Claimant.
(6) Paragraph 108.6 is denied. [EORRECT? SHOUD WE ADD ANYTHING? OR
SHOULD WE BE MORE EQUIVOCAL GIVEN THE VAST ARRAY OF
UNPARTICULARISED CASES?
(7) To the limited extent set out in paragraph [XX] above, paragraph 108.7 is admitted.
135. ‘The GPoC does not allege that the representatives alleged in paragraph 108 were made to
any Claimants. For the avoidance of any doubt, as Post Office largely denies making the
alleged representations, it also denies making them to any Claimants. However, it makes
no admission that the limited representation admitted in paragraph [XX(7)] above was
made to any Claimant. (CORRECT.
Reliance
136. In the absence of any details, Post Office cannot plead to the allegation of reliance made in
109. However, if (which as set out above is largely denied and is otherwise not admitted)
any of the representations alleged in paragraph 108 were made to any particular Claimants,
they would have been made in different contexts, for different purposes and at different
times. For example, in relation to the only representation which is admitted (that alleged in
paragraph 108.7), Post Office notes that the representation was were made in I WHAT
YEARS], long after the vast majority of the claims asserted by the Claimants had arisen.
H.2 Falsity
137. Regarding paragraph 110, Post Office’s general case is as set out in paragraphs [KX —
H.3 Lack of due care
138. The allegations in paragraph 111 are made at a very high level of generality. Post Office
can only respond at the same level of generality. Any individual claim will turn on the
particular facts pleaded.
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139. The general thrust of paragraph 111 is denied. Specifically:
(1) Post Office considered every shortfall and challenge to the same on their facts.
(2) It is denied that Post Office acted without due care in considering that, absent
evidence to the contrary effect, it was extremely unlikely that any particular shortfall
had been caused by a bug or error in Horizon.
(3) Post Office was right to attach substantial importance to the safeguards and other
material factors pleaded at paragraphs [...] above.
(4) It was reasonable for Post Office to draw adverse inferences from a Subpostmastet’s
failure properly to account and/or decision to falsify accounts or make false cash
declarations and/or failure to prepare or retain proper accounting records and/or
failure to cooperate with Post Office’s investigations and/or procure cooperation
from his or her Assistants. [SHOULD WE OMIT THE REFERENCE TO
(5) It is denied that Post Office’s erroneous statements regarding the remote editing of
branch data was negligent. The persons responsible for the making of the
representations were not aware that Fujitsu privileged user rights could in theory be
use to edit or delete such data. [CAN WE SAFELY SAY THIS? ALSO, WHAT
H.4 Negligent Misstatement
140. As regards any representations that Post Office made to any particular Claimants (as to
which, see paragraphs [XX] above) paragraphs 112 and 113 are denied. Without prejudice
to the generality of this denial, if and to the extent that Post Office made any of the
representations alleged in paragraph 108 to any particular Claimants, it is specifically denied
that it made them in circumstances importing a duty of care owed to those particular
Claimants. Further, as to the “agreements” alleged in paragraph 113.2, paragraph [XX]
below is repeated. [IT IS DIFFICULT TO PLEAD THAT WE WOULD NOT HAVE
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APPRECIATED THAT CS WOULD RELY ON OUR STATEMENTS IN RELATION
TO SHORTFALLS AND HORIZON: A POINT TO DISCUSS
H.5 Misrepresentation Act 1967
141. Paragraph 114 is denied. Specifically:
(1) Save as expressly admitted above, it is denied that Post Office made any
misrepresentations.
(2) Save for the settlement agreements that a few Claimant Subpostmasters
(CORRECT? CAN WE SAY HOW MANY?I entered into with Post Office in or
about [CAN WE SAY WHEN?] (“the Subpostmaster Settlement Agreements”),
it is denied (if it be alleged) that any Claimants entered into any contracts with Post
Office by which they contractually bound themselves to accept responsibility for any
shortfalls or to pay any shortfalls or by which they contractually bound themselves to
(3) As for the Subpostmaster Settlement Agreements, it is denied that the Claimants
relied upon any alleged misrepresentation by Post Office in entering into those
agreements. The parties to those agreements entered into commercial compromises
in good faith and:
(a) Bach of the agreements provided that [CHECK THE MATERIAL
(b) Post Office relied on these provisions [AND REPRESENTATIONS?] in
entering into the agreements.
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(©) The Subpostmaster parties to those agreements are estopped from claiming
that they entered into the agreements in reliance on any non-fraudulent
misrepresentations by Post Office and/or that by reason of such
representations they are entitled to rescind them and/or to claim any losses
suffered as a result of entering into them. Moreover, those parties have settled
and may not now bring any claims against Post Office in relation to the
matters covered by the relevant agreements.
(4) I Further and in any event, if any Claimant has entered into any contract in reliance on
any misrepresentation made by Post Office, Post Office reserves the right to contend
that it had reasonable grounds to believe and did believe that the facts represented
were true.
H.6 Deceit
142, Each and every allegation in paragraph 115 is denied. ‘The Claimants have no proper basis
to make allegations in deceit. Without prejudice to the generality of this denial:
(1) _ Itis denied that Post Office knew or was reckless as to the matters listed in
paragraph 115.1. Post Office considered the shortfalls that it attributed to
Subpostmasters to be properly attributed to them and their responsibility.
(2) Paragraph 115.2 is not understood.
(3) It is denied that Post Office knew or should have known (which is not an allegation
of knowledge) that it bore the (unparticularised) contractual burden. In these very
proceedings Post Office denies that it bears the burden of showing the
Subpostmaster’s account to be mistaken and/or showing that a shortfall was caused
by an Assistant or was caused by a Subpostmaster’s error, negligence or carelessness.
Paragraph 115.3 is denied.
(4) Paragraph 115.4 is denied and paragraph [XX = PARA SAYING HELPLINE
OPERATORS NEVER SAID YOU ARE NOT THE ONLY ONE ETC] above is
repeated.
(5) As to paragraph 115.5, whenever it concluded that a particular shortfall was
attributable to a particular Subpostmaster, Post Office believed that this was the case.
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143,
144,
145.
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It would not have reached that conclusion in circumstances where it knew that, or
was reckless as to whether, the shortfall was a Horizon-generated shortfall.
(6) Subparagraph 115.6 is denied and paragraphs [XX] above are repeated.
(7) Subparagraph 115.7 is denied and paragraphs [XX] above are repeated.
(8) I Subparagraph 115.8 is denied and paragraphs [XX] above are repeated.
Reliance
As to paragraph 116:
(1) Regarding paragraph (i, it is denied that any of the alleged representations by Post
Office can have been material to any decision to accept a Transaction Correction. It
was incumbent on a Subpostmaster to accept or dispute Transaction Correction as
he or she considered appropriate taking into account information that was known to
him and/or her or could be obtained from Post Office, the relevant Assistants or any
other relevant third party. The Subpostmaster is bound by his account in relation to
any contention that a Transaction Correction was erroneous.
(2) Paragraph (ii) is not understood.
(3) As to paragraph (iii), as is pleaded in paragraph [XX], it is not open to the Claimants
who entered into Subpostmaster Settlement Agreements to allege that they entered
into these agreements by reason on any non-fraudulent representation by Post
Office.
(4) Point (iv) is not understood.
HARRASSMEN’
Paragraphs 117 and 118 are noted. In relation to the “indicative” acts set out in section I
of the GPoC, paragraph [XX — 115] above is repeated, mutatis mutandis, Post Office cannot
meaningfully respond to “indicative” allegations of this sort.
Paragraph 119 is denied. Specifically:
(1) Post Office has not engaged in acts which amount to harassment.
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146.
147.
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(2) Post Office was entitled to make demands for payment, to propose Transaction
Corrections, seek admissions of liability for shortfalls, threaten civil and/or criminal
proceedings and pursue such proceedings without being guilty of harassment.
(3) Post Office does not know what is the “pressure” referred to in paragraph 119.2 but
avers that the matters of which the Claimants complain in paragraph 119 (i) are the
ordinary incidents of commercial life and, in particular, an agent’s operation of a
substantial business enterprise on behalf of its principal or (ii), in the case of criminal
proceedings, resulted from the Claimant’s own wrongdoing and/or Post Office’s
reasonable suspicion of such wrongdoing.
(4) Post Office acted in accordance with its own good faith assessment of its rights and
obligations without knowing or believing that its conduct amounted to harassment.
DURESS & UNCONSCIONABLE DEALIN!
Paragraphs 120 is noted.
Post Office cannot meaningfully respond to generic allegations of the sort made in
paragraph 212. However:
(1) Paragraphs [XX —THE PARAS DEALING WITH ACUTE IMBALANCE,
ERRORS AND BUGS} above are repeated.
(2) Post Office was entitled to assert its rights as it understood them to be and to hold
Subpostmasters to their contracts and to their duties as its agents.
(3) Post Office can neither admit nor deny the general allegations as to the Claimants’
own knowledge and situations in paragraphs 121.4, 121.5 and 121.8. It will respond
if and when particular allegations are made by particular Claimants.
(4) Post Office does know what pressure it is alleged to have applied to any Claimant
but it specifically denies having taking unconscionable advantage of the Claimants
and/or having put the Claimants in a position in which they acted under economic
duress.
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148.
149.
150.
151.
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(6) The concepts of economic duress and unconscionable dealings have no application
THIS?]. Further or alternatively, it is denied (if it be alleged) that the Claimants may
use the doctrines of economic duress or unconscionable dealings so as to justify,
avoid the consequences of or blame Post Office for any false accounting for which
they may be responsible.
Paragraph 122 is denied. Further, (2) the “transactions” that the Claimants seek to rescind
on the basis of duress and/or unconscionable dealing are not properly identified and it is
not clear to Post Office that there are any transactions which the Claimants can claim to
rescind; and (2) the Claimants are not entitled to and cannot claim damages for economic
duress or unconscionable dealing. [LEGAL RESEARCH QUERY = IS RESTITTUION
MALICIOUS PROSECUTION
Paragraphs 123 and 124 are noted. For the avoidance of doubt, Post Office will deny all
claims for malicious prosecution, which it will contend are made without any proper basis.
Post Office also notes that some Claimants seek to claim malicious prosecution in relations
to proceedings that were determined in Post Office’s favour. Such claims are manifestly
demurrable. Post Office reserves its right to apply to strike out the claims for malicious
prosecution. [WE DO NOT NEED TO SAY THIS. WOULD IT BE WISER TO KEEP
UNJUST ENRICHMENT
Paragraph 125 is noted.
Post Office cannot meaningfully respond to generic allegations of the sort made referred to
in paragraphs 126 and 127. However, the Claimants’ entitlement to claim in unjust
enrichment is denied. The matters relied upon in support of that claimed entitlement are
denied as pleaded in the relevant parts of this Generic Defence, above.
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152. Further, in appropriate cases, Post Office will rely upon the following defences:
(1) Post Office will rely upon its right in equity to treat accounts stated by
Subpostmaster Claimants as final. [NEED TO GET TERMINOLOGY
(2) Post Office will assert that it would be inequitable in all the circumstances to allow a
Subpostmaster Claimant to re-open the accounts that they have rendered to Post
Office. [NEED TO GET TERMINOLOGY STRAIGHT]
(3) Post Office will rely on the defence of change of position in circumstances where
(for example) Post Office resolved its transactions with third parties in reliance on
such accounts as were rendered by Subpostmaster Claimants and those Claimants
failed within any reasonable period to seek to reopen and/or to surcharge or falsify
those accounts. [NEED TO GET TERMINOLOGY STRAIGHT]
(4) [TO DISCUSS: INSTEAD OF (1) AND 2) ABOVE, WOULD IT BE BETTER
TO REFER TO A SUITABLE PARA IN SECTION N BELOW SUMMARISING
OUR CASE ON BURDEN OF PROOF AND BINDING ACCOUNTS ETC?
M. LOSS AND DAMAGE
153. As to paragraph 128:
(1) The Claimants must each properly particularise any loss and damage that they claim
to have suffered.
(2) The Claimants must each properly particularise that such loss and damage resulted
from specific breaches of contract or other legal wrongs on Post Office’s part.
(3) Once these matters are properly particularised, Post Office reserves the right
(amongst other things) (a) to deny in any or all cases that the alleged loss and damage
was suffered by the relevant Claimant; (b) to deny that such loss and damage was the
result of the alleged breaches of contract or other legal wrongs; (c) to assert that all
or some of such loss and damage is irrecoverable as a result of failures to mitigate;
and (d) to assert all or some of such loss and damage is too remote.
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154. Paragraph 129 is noted. In relation to the “indicative” types of loss and damage set out in
section M of the GPoC, paragraph [KX = 115] above is repeated, mutatis mutandis, It is not
possible meaningfully to respond to the pleaded heads of loss for the following reasons:
(1) I The Claimants have not identified the particular breaches or legal wrongs which is
said to give rise to liability for the pleaded losses. It may be that the Claimants are in
some instances seeking losses that are not available for particular breaches or wrongs
as a matter of law (for example, ([OWAIN, LET'S GIVE SOME EXAMPLES).
(2) The Claimants have failed to identify the causal connection between the alleged
breaches and the alleged losses.
(3) I The types of loss are pleaded at a very high level of generality. It may be that liability
for some of the types of loss covered by each heading are irrecoverable in law ot for
reasons of remoteness (for example, [OWAIN, LET'S GIVE SOME EXAMPLES).
(4) Issues such as causation in fact, remoteness and quantification of loss cannot
meaningfully be addressed in the absence of pleaded facts of individual claims.
155. In the premises, Post Office pleads back to section M of the GPoC in general terms,
subject to the points made in paragraphs [XX 153 and 154] above, and without prejudice to
its right to address such particularised allegations of loss as may be brought against it
(including by raising such affirmative allegations and defences as are available in fact and
law).
M.1 Financial loss
156. As to paragraph 130, Post Office admits that, where a Claimant has paid the amount of a
shortfall to Post Office which was not in fact due, the relevant Claimant may have a claim
to restitution of the payment. However, it denies such Claimant would have any claim for
consequential damages (i.c. a claim for damages in respect of any unspecified losses
suffered as a result of making the said payments).
157. As to paragraph 131:
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158.
(1)
2)
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The claim for loss of business investment and consequential losses appears to be
based on the premise that, but for the breaches for which Post Office is alleged to be
liable, the Claimants’ appointments as Subpostmasters would have continued
indefinitely. However, Post Office will rely upon its express right to terminate the
Subpostmaster Contracts without cause on notice and upon the principle of
minimum legal obligation. [LEGAL RESEARCH = WOULKD THE PRINCIPLE
By reason of that right and this principle, the only losses that a Subpostmaster may
claim in relation to the termination of his or her appointment (including by
resignation) would be the losses he or she would not have suffered if Post Office had
given the contractual notice of termination (namely, 3 months’ notice under the
SPMC, 6 months’ notice under the NTC and 7 days’ notice under the Temporary
SPMC). In all or most cases, the Subpostmaster would be entitled to no more than
the net profits he or she would have earned during this notice period. Where Post
Office in fact terminated the Subpostmaster’s appointment on giving this notice, or
the Subpostmaster resigned on giving this notice, the Claimant would be entitled to
nothing.
Further and in any event, as regards the allegation that Claimants have suffered losses
of their business investments, paragraph [XX ="THE PARA WHERE WE SAY
above is
repeated.
As to paragraph 132, where Post Office suspended or terminated a Subpostmastet’s
appointment without notice, it had the express right to do so under the applicable
Subpostmaster Contracts. As regards the right to suspend, Post Office notes that, in many
cases of suspension, temporary Subpostmasters are appointed to run the relevant branch,
and that these temporary Subpostmasters typically pay fees to the suspended
Subpostmasters for the right to do so. In any claim brought by any Claimant,
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159.
M.2
160.
161.
M.3
162.
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As to paragraph 133, paragraph [XX = 157] is repeated. [OWAIN: CAN WE SAY
Stigma and/or reputational damage
As to paragraph 134 (OWATNE INSERT 'A(GENERAL PLEAON THE
As to paragraph 135:
(1) It is denied that the claimed loss is attributable to any breach or other legal wrong on
the part of Post Office.
(2) It is denied that Post Office suspending or terminating a Subpostmaster (or requiring
the exclusion of an Assistant) created the impression of dishonesty on their part.
Post Office was entitled to take those steps in the absence of dishonesty (and, as
regards termination, without any cause).
(3) Where Post Office believes or suspects that a Subpostmaster or Assistant has
behaved dishonestly, it does not publicise this fact. The Claimants are required to
explain how any stigma or reputational damage is attributable to any step taken by
Post Office.
Distress and related ill-health
As to paragraph 136:
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163.
164.
165.
M6
166.
M7
167.
168.
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Bankruptcy
It is admitted that some Claimants entered into bankruptcy processes. [CHALLENGE
Post Office denies that is liable for any of the pleaded losses. [FURTHER RESEARCH
Prosecutions
Paragraphs 138 and 139 are admitted as very general statements of fact relating to some
Claimants. As the Claimants have elected not to plead particulars of (and are thus not
currently proceeding with) their claims for malicious prosecution, denies that is liable for
any of the pleaded losses.
Exemplary Damages
The claim in paragraph 140 is specifically denied. [DENY ENTITLED TO
of deliberate and/or cynical disregard of the Claimants’ rights have been pleaded. Post
Office denies that it acted so as to justify any claim for exemplary damages.
Interest
Paragraph 141 is noted.
GENERIC DEFENCES
As against the claims brought by the various Claimants, Post Office anticipates that it will
raise some ot all of the following points or defences,
Burden of proof and associated points
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169.
170.
171.
172.
N.2
173.
N3
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If and insofar as Claimants are alleging that Post Office attributed to them to or sought to
or did recover from them shortfalls in branch accounts for which they were not liable, they
bear the burden of proving those allegations.
If and insofar as Claimants are alleging that branch accounts that they have rendered to
Post Office are incorrect, they bear the burden of proving those allegations.
If and insofar as Claimants have rendered false accounts to Post Office as described in
paragraph [XX] above, the Court should make all presumptions of fact against that
Subpostmaster as are consistent with the other facts as proven or admitted.
The Claimants should not be permitted to reopen any accounts that they have rendered to
Post Office in circumstances where in would be inequitable to do so, either because (1)
they have rendered false accounts as described in paragraph [XX] above and they should
not be permitted to benefit from their own wrong, and/or (2) Post Office has suffered
detriment or prejudice as a result of the accounts they have rendered, and/or (3) they have
are guilty of excessive or inordinate delay in seeking to reopen their accounts, and/or (4) it
would be otherwise inequitable to permit them to reopen their accounts.
False accounting and failure to maintain records
Post Office will rely, in appropriate cases, contend:
(1) _ that adverse inferences should be drawn from any false accounts rendered to Post
Office or any other failure to maintain proper accounts or to keep proper accounting
records as were required from time to time under the relevant Subpostmaster
Contracts and/or the relevant manuals and/or instructions;
(2) _ that if (which is denied) it otherwise owed any Claimant a duty to investigate to
identify the root cause(s) of any discrepancy or shortfall, such duty was discharged by
such false accounts and/or failures; and
(3) in rendering false accounts and failing to maintain and keep proper accounts and
records as aforesaid, the Subpostmasters responsible committed breaches of their
Subpostmaster Contracts entitling Post Office to terminate them summarily, both
pursuant to the terms of the contracts and at common law.
Estoppels and similar defences
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174.
175.
176.
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In appropriate cases, Post Office will rely upon some or all of the following estoppels
and/or similar defences:
(1) Post Office may assert an estoppel to prevent a Subpostmaster denying the truth of
cash declarations that he made to Post Office and/or the truth of accounts that he
rendered to Post Office.
(2) Post Office may assert that a Subpostmaster may not re-open and/or surcharge or
falsify the account between himself and Post Office where, by reason of delay,
concealment or otherwise, it would now be inequitable for the account to be re-
opened or amended. [NEED ‘TO GET TERMINOLOGY STRAIGHT]
(3) Post Office may assert that a Subpostmaster may not re-open and/or surcharge or
falsify the account between himself and Post Office where the parties reached a
compromise as to the amount(s) due and/or the terms of payment and/or it is
otherwise appropriate to treat the account between the parties as being settled.
Limitation
Post Office will where appropriate rely upon the expiry of the applicable limitation periods
as barring the Claimants’ claims. In particular, Post Office will rely upon:
(1) I The six-year limitation periods in relation to claims in tort and contract under
sections 2 and 5 of the Limitation Act 1980 and in respect of all unjust enrichment
claims and in respect of all similar equitable claims.
(2) The three-year limitation period in relation to claims for personal injury under
section 11 of the Limitation Act 1980.
Set off
Against any amounts for which Post Office may be found liable to any Claimant, Post
Office will set off in law and/or equity such amounts as are due from such Claimant to
Post Office, including the amounts for which such Claimant is found to be liable to Post
Office on the Counterclaims referred to below.
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N.5 Abuse of process
177. Where Claimants have been involved in other proceedings with Post Office in relation to
the matters of which they seek to complain herein which have been brought to judgment,
their claims are barred by res judicata and/or issue estoppel and it is an abuse of the
process for them to seek to reopen the judgment and/or to bring claims that they could
and should have brought in the course of these other proceedings. [CHECK THE
178. The claims of Claimants who are parties to Subpostmaster Settlement Agreements are
barred by those agreements and it is an abuse of the process for such Claimants to assert
179.
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180. Save as aforesaid, the GPoC is denied.
181. The Claimants are not entitled to the relief sought or any relief.
GENERIC COUNTERCLAIM
182. The Generic Defence is repeated.
183.
184. Where Post Office has not to date recovered those shortfalls from Subpostmasters in full,
it will claim the amounts of such shortfalls or the unrecovered portion thereof as debts in
accordance with its contractual rights as pleaded at paragraphs [...] above. [DO WE JUST
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185. Post Office relies upon the following terms in relation to the payment of shortfalls after the
termination of the relevant agreements:
1) Clause 12.13 of the SPMC, providing as follows: [...]-
2) Clause 6.5 of the Temporary SPMC, providing as follows: [...]-
3) — Clause 4.3 of the NTC, providing as follows: [...].
~ 2
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=
189. Post Office will claim interest on all amounts found to be due to it in accordance with s.
35A of the Senior Courts Act 1981 at such rates and for such periods as the Court shall
think fit
AND POST OFFICE CLAIMS:
(1) EXX]
2) [XX]
@) [XX]
(4) — Interest thereon
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Anthony de Garr Robinson QC
Owain Draper
statement of truth]
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