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Witness Name: John Jones
Statement No.: WITN 08560100
Dated: 17th May 2023
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF JOHN JONES
1, John Jones, will say as follows:
4. I have been asked to provide a Rule 9 Witness Statement addressing the
questions set out in the Annex to the Rule 9 Request sent to me on 21st April
2023.
B round
2. I was employed by the Post Office Ltd (“POL”) from April 1982 to April 2019.
3. I have held a number of different roles during my time working for POL. A brief
history of my career is as follows:
a. Between April 1982 and 1988, I was a counter clerk.
b. Between 1988 and 1990, I was a Visiting Officer in South Manchester.
c. Between 1990 and 1994, I was a Branch Manager in East Manchester.
d. Between 1994 and 2002, I was a Retail Network Manager.
e. Between 2002 and 2006, I was an Area Development Manager working on
the Network Reinvention Programme.
f. Between 2006 and 2009, I was a Senior Account Manager for national
multiple partners.
g. Between 2009 and 2010, I was a Project Manager in directly managed
branches.
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h. Between 2010 and 2011, I was a Flagship Manager of a directly managed
branch in Leeds.
i. Between 2011 and 2013, I was an Area Manager of directly managed
branches in the North West.
j. Between 2013 and 2015, I was an Area Manager of directly managed
branches in the North East.
k. Between 2015 and 2019, I was an Area Manager of directly managed and
branches operated by WH Smith in the east of England and east of
Scotland.
I. Between January and April 2019, I was a Regional Manager of the east of
England.
4. I became an Appeals Manager in July 2003 after having passed the Appeals
Manager course which was run by Post Office Legal Services. I remained an
Appeals Manager until I left the Post Office in 2019.
5. The role of an Appeals Manager is not a permanent role. The role is conducted
by senior managers who sit as part of an appeals panel in addition to their
day-to-day role.
6. Appeals are allocated by the HR Service Centre. The allocation process and the
way in which an appeal is conducted is intended to ensure that appeals are an
independent rehearing of a case. The appeal process in general is case specific
and as the vast majority of appeals are related to Post Office Ltd employees they
are tailored to the nature of the appeal in question. The process entails, pre
appeal enquiries to establish an understanding of the nature of the case, the
appeal interview, post appeal enquiries for points raised and additional enquiries
specific to the case, conclusion and summing up, the decision and finally any
recommendations as necessary.
7. During my career I was allocated and heard only three appeals brought by
subpostmasters, only one of these was related to the Horizon System, which was
the case of Mr Castleton at Marine Drive branch. All of the appeals that I
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conducted were completed according to the way in which I had been trained and
followed the same format which can be summarised in the following stages:
i. The completion of pre-appeal enquiries to fully establish all relevant
aspects of the case.
ii. IThe appeal hearing.
iii, IThe completion of post-appeal enquiries to follow up on any points
raised by the appellant’s case.
iv. Acase overview and reasons for my decision.
v. The decision.
vi. I Recommendations as necessary.
The Appeal Process in the case of Lee Castleton
8. In answering the questions about Mr Castleton’s appeal, I have been referred to
the agent case summary at POL00071234; this is a case file that was submitted
to myself in respect of Mr Castleton’s appeal by Lesley Joyce, Contracts
Manager.
9. In June 2004, I was allocated the appeal brought by Mr Lee Castleton, the
subpostmaster at Marine Drive. My understanding of the case upon receipt of the
appeals file was that Mr Castleton had experienced a series of large accounting
discrepancies, transaction related issues and he believed the Horizon computer
system was the sole cause of the discrepancies that he had incurred.
10.Upon receipt of the appeal file, I followed a process to ensure I have all the
relevant details, documentation and full understanding of a case prior to inviting
the appellant to an appeals interview. The pre appeal enquiries involved
contacting the Transaction Correction Team in Chesterfield to ascertain if there
were outstanding error notices or error notices in the pipeline that could explain
the discrepancies, visiting the Marine Drive branch on two occasions to perform
extensive analysis of the branches accounting documentation that was available
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11.
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to me in order to establish arithmetical correctness of the customer transactions
and analyse the cash usage patterns. I physically checked the Horizon accounts
of the interim subpostmaster to ascertain and confirm that there were no
discrepancies of the nature Mr Castleton had incurred. I contacted Cath Oglesby
Retail Network Manager who had dismissed Mr Castleton to discuss the case
and the documentation I had been provided with from Lesley Joyce.
The case was most unusual as I had never seen or heard of an instance where a
subpostmaster or POL employee was making a claim that discrepancies were as
a result of the Horizon system, nor have I heard of one since.
12. It was also unusual in that Mr Castleton appeared to dismiss out of hand that the
discrepancies could be anything other than being caused by Horizon and failed to
follow the advice on creating single stock units by his experienced Retail Line
Manager, Cath Oglesby, which is a standard practice in such cases to identify
and eliminate discrepancies as well as highlighting any potential embezzlement.
13. The appeals process followed is as I recall is detailed in points 14 to 19.
Pre-A ing Enauiri
14.Before the appeal hearing took place, I conducted a number of enquiries. It was
necessary to conduct these as part of an independent rehearing of the case. In
conducting these enquiries, I was trying to find the logical cause of the
discrepancies, including ensuring that there were no outstanding transactional
corrections in the pipeline that could explain the discrepancies as these can take
up to eight weeks to come through the system.
15.1 contacted the transactional account team at Chesterfield to understand the level
of error notices that the branch had incurred, and to ascertain if any error notices
were in the pipeline. The purpose of this was to look at the wider picture and see
if there were any error notices in the pipeline that could explain the discrepancies.
I was advised that there was nothing in the pipeline for the Marine Drive branch.
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16.1 contacted the decision manager who was Cath Oglesby to go through the
documentation I had received. This allowed me to ensure that I had a thorough
understanding of the case and the associated paperwork and to understand the
rationale for the decision to terminate Mr Castleton’s contract.
17.Due to the nature of the case, I visited the Marine Drive branch on two occasions
on the 28th June and 30th June 2004 to examine the branch’s account
documentation, cash declarations, the under copies that were available and to
evaluate the transactional volumes that were being processed by the branch. As
the documentation was in reasonable order I was able to undertake a number of
tasks to manually analyse the information available to me in order to try and find
a logical explanation for the discrepancies that had been incurred. This included
checking the arithmetical correctness of all the transactions on the under copies
and correlating these to the entries on the Horizon balances. I was able to
recreate the branches accounts from the documents available as well as analyse
the daily cash movements and required cash usage. I spent time at the Marine
Drive branch recreating the daily and weekly accounts on a manual basis as I
had no other data to work with. In 2004 I had no knowledge of Fujitsu generated
Horizon branch reports, hence why I undertook the analysis manually.
18.A physical check of the Marine Drive Horizon balances in the period following Mr
Castleton’s suspension was undertaken to ascertain the balance position. This
was essential in order to ascertain how the branch accounts were being recorded
and to highlight if there were ongoing discrepancies in the accounts following Mr
Castleton’s suspension. There were no discrepancies of the nature that Mr
Castleton experienced occurring at the branch since Mr Castleton’s suspension
in March 2004.
19.1 checked with the National Business Support Centre (NBSC) and the Horizon
System Helpline (HSH) to confirm if the checks on the Horizon integrity had been
completed and to check the phone calls to ascertain if the branch had ever had to
close. The Horizon System Helpline confirmed that the checks previously
requested did not raise any issues on the integrity of the system. The National
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Business Support Centre confirmed that there were no reported calls of the
branch closing.
The Appeal Hearing
20.Mr Castleton was invited to the appeal hearing at which he was supported by
Julie Langham, whom I believe to be a representative of the National Federation
of Subpostmasters. The National Federation of Subpostmasters supports their
members at such hearings and may make representations that they deem
appropriate.
21.As far as I can recall, Mr Castleton submitted no actual specific evidence at the
appeal hearing, the core of his submission as I recall centred on blaming the
Horizon system and the data telephone lines for causing the cash discrepancies.
22.1 do not recall any other submissions or mitigation made by Mr Castleton or Julie
Langham, other than the requests by Mr Castleton to recheck the Horizon
accounts from weeks 45 to 50 of the 2003/2004 financial year.
23.A note of the hearing was taken by Paula Carmichael, secretary to the regional
manager, Mr David Mellows Facer.
P Enquiti
24. Following the appeal hearing, I conducted a number of further enquiries. It was
essential to undertake further enquiries to ensure every possible aspect relating
to this case was explored as thoroughly as it possibly could be, given the
information that I was able to access as part of the case. In 2004 I was unaware
of what Fujitsu generated Horizon reports were available. All appeals are an
independent rehearing of a case then I considered my post appeal enquiries
necessary and appropriate to the case.
25.1 made contact with the Transactional Account Team again at Chesterfield to
ascertain if there were any outstanding error notices that had come to light.
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Transaction corrections can often take six to eight weeks to come through the
processing pipeline therefore it was prudent to revisit the Transaction Correction
Team in Chesterfield to ensure there were no corrections that might explain any
of the discrepancies. I was advised that there was nothing in the pipeline.
26.A check was made with the Marine Drive branch to ascertain if any discrepancies
had been incurred over the intervening period, to ascertain if they were
experiencing issues similar to those Mr Castleton experienced. No discrepancies
of the nature that Mr Castleton had previously experienced were evident despite
two separate interim subpostmasters operating the Marine Drive branch. I had
previously physically checked the Horizon accounts of the interim subpostmaster
on the 28th June 2004 and was advised that there were still no discrepancies
occurring, through a phone call to the branch.
27.Additionally due to the unusual nature of the case and the points raised by Mr
Castleton and following discussions with colleagues I sought a second opinion on
the case from an independent experienced Post Office Area Manager, Anita
Turner on the points Mr Castleton had raised in respect of the Horizon system
balances between weeks 45 and 50 of the 2003/2004 financial year. The results
of the findings were communicated to Mr Castleton on the 8th July 2004 to advise
him of the findings of the analysis and confirm that the Horizon accounts for
weeks 45 to 50 were deemed to be performing correctly. I received no response
from Mr Castleton following my communication so I proceeded to sum up and
consider all aspects of the case before arriving at my decision. In 2006 I was
made aware that Mr Castleton had written to me, however he addressed all his
correspondence to an address in Darlington and not to my address which was
contained in all my communications to Mr Castleton, this was Calthorpe House in
London. I do not recall ever receiving this correspondence.
28.1 have been asked if I consider that these further enquiries were adequate in
determining the cause of the shortfalls experienced by Mr Castleton. The further
enquiries were necessary as part of my appeal hearing and the process to
support my decision making process. Given the documentation at my disposal
and the enquiries I was able to conduct, I have never been able to determine the
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cause of the shortfalls experienced by Mr Castleton. It was not possible to
determine from the information at my disposal if the discrepancies were caused
by the Horizon system. However, my enquiries verified that all the customer
transactions over the periods in question were performed correctly and accurately
at the Marine Drive branch.
29.1 have been asked whether I requested any Horizon data from Fujitsu, such as
ARQ logs. I had no authority to access Fujitsu. I am unfamiliar with the term ARQ
log or what details it can show. At the time of the appeal in 2004 I was unaware of
what Fujitsu generated Horizon reports that were available, which is why I
conducted manual analysis of the paperwork as part of my pre appeal enquiries.
30.At the time of the appeal I was unaware of what Horizon reports were available.
31
In later years, I believe due to Horizon operating on a different platform after
2012, managers in the Network were able to request Credence reports from the
Central Security Team based in Chesterfield. A Credence report shows the
customer transaction sessions from the Horizon transactions at a branch as well
as balancing and high level cash declarations.
.Had I been aware of Credence reports and had they been available at the time of
the appeal in 2004, I believe they still would not have highlighted any issues with
the Horizon system; it would have only provided me with the data that I was able
to verify and check manually from the Horizon under copies that I undertook in
manually recreating the branch accounts.
32.1 have been referred to a statement I made at page 9 of POLO0071227-001 that
“Mr Castleton has however failed to provide any evidence nor show any from
(sic) of trend within the branch accounts that would indicate that there was a
problem with the computer system.” Mr Castleton could have followed the advice
of his Retail Network Manager to create individual stocks, one he has sole
access to and one his assistant had sole access to. Once this change had been
implemented Mr Castleton could have conducted daily or multiple balance
snapshots and frequent multiple cash declarations on these stock units to
ascertain when discrepancies were being incurred. If there is or was an issue
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then the multiple daily cash declarations would or could have highlighted such
discrepancies when they started to occur which would have enabled his Retail
Network Manager to take these to the Horizon System Helpline for analysis and
verification.
The Appeal Decision
33.Having given careful consideration to all elements of the case and the
documentation I was available to evaluate I concluded that the original decision
to dismiss Mr Castleton was a sound one.
34.As I recall, the following factors were taken into consideration as part of my
decision:
a. The lack of taking any action as advised by his Retail Network Manager to
create single stocks to identify if there was embezzlement taking place at
the branch as well as performing frequent balance and cash declarations
to identify daily or inter daily balance positions.
b. All the customer transactions performed at the branch over the period that
the discrepancies were being incurred, were performed accurately and
correctly.
c. I was able to establish that there were no error notices being or to be
issued, which presented a picture that it was only the cash that was the
discrepancy when the balances were performed.
d. The cash movement analysis that I undertook indicated that excess cash
was on hand, greater than was needed to fulfil the transactions.
e. There was no evidence provided by Mr Castleton from Horizon snapshots
and cash declarations that supported his claim that Horizon was at fault.
f. Mr Castleton as I recall was extremely evasive at the appeal hearing on
answering questions about the correctness of customer transactions, why
the interim Postmasters had not encountered discrepancies and why he
had discounted embezzlement out of hand and failed to implement the
advice of his Retail Network Manager.
g. A further check after the appeal hearing was conducted with our
Transactional Account team to verify the ongoing situation at Marine Drive,
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and it was established that there were no corrections in the pipeline that
could explain the discrepancies.
h. The case was submitted to an independent Area Manager, Anita Turner for
a review of the case and the points made by Mr Castleton at his appeal on
the Horizon accounts between weeks 45 and 50. The result of this
analysis concurred that the Horizon accounts were operating correctly.
i. In the period following Mr Castleton’s suspension the accounts for the
Marine Drive branch were physically examined by myself on the 28th June
2004 and although there were a number of interim Postmasters who had
temporarily run the Marine Drive branch, there were no discrepancies of
the nature that Mr Castleton incurred, happening at the Marine Drive
branch.
j. If there was an issue with Horizon then one would have assumed that the
discrepancies incurred by Mr Castleton would have continued.
35.1 concluded after carefully considering all the factors and evidence available to
me at the time, that the decision taken to terminate the contract of Mr Castleton
was sound and in the circumstances with no other mitigating evidence to support
his claims, the correct one given the evidence available to me at that time.
36.1 do not recall making any recommendations on the specifics of the case, the only
recommendations I made were regarding the unusual cash acceptance practices
from a local business, which was a concern. I was advised by the interim
subpostmaster that a local business was leaving, on the shop’s retail counter
large quantities of cash amounting to many thousands of pounds in a plastic bag
with a blank inpayment slip. The interim subpostmaster was expected to count
the cash and process the banking transaction. As this practice was outside all of
our banking acceptance guidelines I stopped the practice immediately and
requested that the customer must comply with the terms of their banking contract.
Additionally requested checks be made with the customer to confirm that all the
cash they had left in the shop had been correctly accounted to them.
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37.1 have had no further involvement in Mr Castleton’s case, following the
communication of my appeal decision until proceedings were commenced
against him by POL.
38.In terms of the support that would have been available to Mr Castleton, as he
was a Postmaster and would not have been able to access any of the welfare
support available to Post Office employees. I am unsure what support was
available from the National Federation of Subpostmasters or if any was
requested by Mr Castleton to his Retail Network Manager. I do not recall Mr
Castleton raising any welfare issue to myself as part of the process.
Post Office Limited -v- Lee Castleton
39.1 believe Post Office Legal Services contacted me in 2006 and asked me to
provide a witness statement. I had not been involved in any other proceedings
against subpostmasters involving the Horizon IT system before this case.
40.My understanding of the case was that this was a private case brought by Mr
Castleton against the Post Office on the integrity of the Horizon system, hence
why it was taking place at the Royal Courts of Justice.
41.1 have been referred to the following document at POLO0069976 and asked
about the individuals I had contact with during the drafting of my witness
statement and the nature of any discussions I had with them. I believe that the
witness statement was drafted for me, emailed to me to check and amended prior
to it being signed. I do not recall any conversations with anybody regarding the
case.
42. In relation to any discussions I had with counsel and POL's legal representatives
about my role as a witness, this was very limited to checking my witness
statement at the Post Office counsel's office in Lincoln Inn Fields, London. I do
recall that it was a very quick meeting and there were no other discussions about
the case. At no time was I advised about the nature of the case or of any of the
claims and certainly not any counterclaims, nor what was expected of me.
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43. Prior to the commencement of the case I believe I was advised that there would
be a delay as Mr Castleton would be representing himself.
44.1 have been referred to the document at LCAS0000945 To the best of my
knowledge, I have not seen this correspondence before.
45.1 have been referred to the draft report at POLO0069955 To the best of my
knowledge I have not seen this report before, nor have had any correspondence
with its author. This document was sent to me as part of the file for the Horizon
Inquiry on the 20th April 2023. Having analysed this document and based on my
current knowledge of Credence reports it is clear that the author had been
provided with detailed Fujitsu Horizon reports as there is both terminology and
copied extracts contained within the reports, these are detailed below.
a. 6.2.2 of the report details transaction codes, these are Fujitsu codes in
Horizon.
b. 7.1.5 of the report details Horizon user identity codes which are contained
in a Credence report.
c. 8.7.4 and 8.12.5 appear to be the extracts from a Credence report
provided by Fujitsu.
46.1 was not aware of the draft report and my evidence on the 12th December 2006
was based on my witness statement and the manual analysis I had undertaken.
47.1 have been asked if I provided information that was incorrect at paragraph 12 of
my witness statement at LCAS0000113. I cannot explain this error, I certainly did
not provide information that was knowingly incorrect at paragraph 12 of my
witness statement. All the figures enclosed were taken from my manual analysis
of the accounts derived from the under copies and accounts at the branch and
transposed onto my own spreadsheet to attempt to understand what was
happening with the daily and weekly accounts at Marine Drive as part of my pre
appeal enquiries. I have noted that in the draft report POL00069955 at point 22-1
(b) and 6.4.3 that the independent expert analysis identified that Mr Castleton’s
daily cash declarations might not have been accurate, if that is correct that would
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potentially negate my analysis. At point 2.2.1(e) of the same report, it finds that
the branch was operating with far too much cash than the branch needed, this
concurs with my overall analysis.
48.1 was not involved in the disclosure process during the proceedings. I attended
the Royal Courts of Justice on the 12th December 2006, gave my evidence and
left the court, no follow up meetings or discussions ever took place with regards
to the case.
49.1 have been asked for any observations I had concerning any of those involved in
the litigation. I had only knowledge of Cath Oglesby Retail Network Manager
attending court and did not have any discussions with anybody else that I can
recall on the 12th December 2006.
50.1 have been asked whether I think that anything should have been done
differently in relation to how the proceedings were conducted. With hindsight,
having read Mr Justice Fraser's two reports into the Contracts and Horizon trials
at some point during 2021, it was stated that there is a Fujitsu report that sits
underneath the basic Credence report that could identify potential issues with the
operating system. Surely it would have been possible in 2006 to run this type of
report for the Marine Drive branch to either confirm or refute the issues that Mr
Castleton claimed was occurring in 2004.
I in other civil and criminal
51.1 was not involved in any other civil or criminal cases that are being investigated
by the Inquiry. The Employment Tribunal cases brought by Post Office Ltd
employees that I was involved in as both an appeals manager and a conduct
code manager did not involve the Horizon system, nor its accounts.
Concern: rizon IT. m
52.1 have been asked whether I had, or was aware of, any concerns regarding the
robustness of the Horizon IT system during my time working for POL. During my
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career with the Post Office I have, since the introduction of Horizon in 1999, been
closely involved in the day-to-day performance and management of a wide
spectrum of the Post Office Network, from agency branches operated by sole
Postmasters to the National Multiple Companies that operate Post Office
Branches and more recently from 2010 onwards the Directly Managed Branches.
53.At no point have I seen, nor has it been brought to my attention that ! can recall,
any issues that Horizon system is causing with the branch accounts. It is fair to
say that the National Multiple Companies such as WH Smith, Martin McColl, The
Coops, Tesco, Asda, Spar etc who operate over 2500 branches and the Directly
Managed Branches who operated circa 300 of the largest branches in the country
do have experienced support structures and rigorous branch controls in place to
manage their branches and investigate losses as well as gains that do occur in
the day to day operation of their Post Office branches.
I believe the content of this statement to be true.
Date
Index to First Witness Statement of John Jones
No. URN Document Description Control Number
1. POL00071234 I Agent Case Summary: Appeal POLO067797
against summary termination of
contract, Mr Lee Castleton dated
07/06/2004
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POLO0071227
Collection of key documents in
relation to suspension of Mr Lee
Castleton as Subpostmaster dated
23/03/2004
POL0067790
POL00069976
Castleton: Email trail between
Stephen Dilley and others concerning
witness requirements and updates
dated 28/11/2006
POLO066539
LCAS0000945
Letter from Rowe Cohen to Bond
Pearce enclosing the report from their
expert accounting witness on a
without prejudice basis (includes
enclosures) dated 30/09/2005
VIS00011185
POLO0069955
Draft Expert Report by Geoffrey W
Porter from BDO Stoy HaywardLLP
in the case of Post Office v Lee
Castleton dated 29/11/2006
POLO066518
LCAS0000113
Second witness statement of John
Jones in HQ05X02706 dated
05/10/2006
VIS00010353
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