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Wednesday, December 12, 2018

A former Subpostmaster writes: "This was systematic abuse... I lost my business and lost my family"

Bal's Post Office in 2003
What follows is cribbed (with permission) from the blog of Balvinder Gill. You can read the original post here. Bal is a claimant in the group litigation.

Bal's story is shocking. Every time I think I am inured to the personal experience of people who are claimants in this case, I come across something which stops me short.

Bal has an HND in Maths and Computer Science and before he took on a Post Office helped run his father's convenience store as a teenager and into his twenties. Bal also worked for Cahoot bank in Coventry before he moved to Oxford. He took over the Cowley Road Post Office on 3 Dec 2003.

This is Bal's tale, as told on his blog:

"I am currently entangled in a longstanding dispute with The UK Post Office (Post Office Ltd) as part of a group litigation with 500 odd other sub-postmasters who have all suffered the same or similar plight.

This chapter was the biggest contributing factor to my breakdowns and decade of mental instability.

It was only through knowing more about the litigation and learning of the many cases of others who had suffered a similar peril that I can now rationalise what happened.

My memories of what happened were quite blurred as this all occurred in 2003 when I was 24 and had just got married and moved to Oxford. As part of my recovery from mental illness, I think the subconscious may have also intentionally suppressed this as “You don’t need this right now!” kind of action. There has certainly been a lot of accepting and letting go as part of my recovery so this could have also been released without too much thought, hence the difficulty revisiting it initially.

The trial has however, brought everything back. I have a good memory now and certainly in a quiet moment of stillness can picture things quite vividly.

My family ran a convenience store in Coventry. We suffered hardship before (when Sainsbury’s opened near our corner shop we lost about 50% of our business), but we adjusted and then grew the business considerably after a period of consolidation.

In the Summer of 2003, I sat with my father most evenings in our flat above the shop browsing through Dalton’s Weekly looking for a new business venture.

'An unrecoverable disaster'

It was the run up to my wedding, and having worked with him on developing the retail businesses since I was a child he was more than happy to support me and fund a new venture that would help set my new life up in Oxford.

I was desperate to leave Coventry at this time as we lived in a rough council estate and I think my time there had just passed.

So we had found a Post Office in Oxford which was advertised with an attractive remuneration (a salary!) of £50k. I made some enquiries as it was on my dad’s business bucket list to run a Post Office. It seemed like a symbol of some status for a first generation immigrant Asian shopkeeper and we proceeded to explore the opportunity in more detail.

I had a reasonably good academic record and was good with maths, business and computers generally. The business plan was a doddle as it was simply projecting the remuneration over the 12 months adding the nominal retail business sales and taking out the fixed costs. There would have been and were no wages required for staff as we planned to keep it family run. The interview was promptly organised and we were treated very well. We had substantial money to invest and both sides were happy with the arrangement.
Bal's Post Office in 2004 after his parents' investment

What happened next is nothing short of an unrecoverable disaster for us. The postmaster who was running the Post Office was frantically calling saying “I need to get out sooner rather than later and if you don’t complete sooner then the deal is off.”

The alarm bells should have rang but the Post Office asked us to save the day and take over during the busy Christmas period which we were told would normally never happen. With a quick fire 1.5 days of stamp and coin counting training we were in!

We opened and similarly to the stories I have heard from other claimants everything was very rush rush…. It was sign this, now do this and then this and we just kind of followed through. It was ridiculously busy, queues around the corner on the street everyday and we did not know where to look or what to do.

There was a trainer with us for a few days from opening but they always left around mid afternoon. I rang the area manager numerous times for support and he sent somebody the week after Xmas (OMG!!) and there were errors upon errors upon errors and things which I knew just could not be right.

'Walking round like a zombie'

The trainer came and made some adjustments on his laptop, called someone and then said you are £100k in surplus we are going to move that into a suspense account. This is after trading for only 20 days approximately.

Did that mean transactions had not been put through as I never had any customers come back and say there was an issue and was dealing with large amounts for banking or had someone just decided to be really charitable?

I was mind boggled but accepted as I really did need the help and he managed to zero the balance that night and I felt like everything had been resolved. I think we were a few pence over by his reckoning.

He left us again and I vividly remember two power outages, including one where I had to close for the rest of the day. There were issues with screens crashing on Horizon where I would start on one terminal and have to move to the other. Also the system would fail when doing the dreaded Wednesday balance and get stuck on the roll over screen.

Over the next few months I constantly called the helpline and area manager to say that I just cannot get this right it does not make any sense. At one point, I shut down all other tills ignored the queues and just worked of on my own of one terminal for a whole week and very slowly to check each transaction to make sure that there can be no errors. Still this week ending balance made no sense at all!

The area manager during his phone calls asked me if I was interested in taking on a second Post Office. We were still in the honeymoon period and I expected that they would assist me to get this right and must have confidence in me to be offering me a second post office. There were errors but there was no issue and I did not think for a second that they were going to turn on me in a given moment. I was also offered a third post office for which in both cases I just copied and pasted over the business plan and sent it to them and they set everything up.

I was getting more and more stressed each week working all the hours possible and hoping the numbers would start coming correct… they never did! I was receiving transaction corrections at an alarming rate on a weekly basis and I remember walking round like a zombie for months with all the life drained out of me thinking "when is this going to end? Why can this not be right as I am doing everything I possibly can!?"

'This has never happened to anyone else'

On 13 May 2004 (I will never forget this day!), I turned up in the morning and was met by auditors who told me I cannot enter the office and they need to check everything. I called the area manager and he said there is a debt. Then he told me: “Get your dad to pay it as he has plenty of money.”

What happened that day was the destruction of my family and the beginning of an internal war which broke us for more than a decade.

I was told that there was a £60k shortfall and that I cannot enter the Post Office and they were calling investigators. I was then taken to the back of the office and interrogated by them under some kind of pseudo-police interview.

I was alone and they made a tape recording and repeatedly asked “did you take the money?”

I was in an exhausted state of shock and could hardly stand up. I just kept saying that I did not take any money from here as I know I did not.

I then returned home and broke down. But my family said "you must have done something wrong - how has this happened?!"

The argument that then followed broke our family up. I left the house the same day with my wife. I needed answers as I could not understand how considering I had been open and honest about problems that I was having that they could suddenly just turn on me. I did not talk to my parents again for the next 12 months and amongst the wider family and local community I was labelled as a fraudster who had failed his family.

I waited frantically to know what had happened and hoped that maybe the £100k surplus which was put into a suspense account would be some how connected and they would let me know that everything is now OK and you can resume, we have put everything right.
Balvinder Gill

I never at that time suspected Horizon could produce losses as I was told very specifically that it does not make mistakes and that this has never happened to anyone else. I felt like a complete failure and my whole life fell apart around me. I was 24 and this was a lot to take onto my shoulders.

I then received a statement saying I had been terminated and with no reason and no criminal charges. The bill had increased and I was now facing £108,000 with no way of disputing or questioning these transactions as I was now on the outside. I was told I am not allowed near the Post Office which I had purchased for £67,000 and that I need to make good this amount as soon as possible.

There was a temporary subpostmaster in charge who had been appointed by Post Office and he took all the profits to keep the Post Office open. I was penniless and broke and could not work out - was I criminal? Incompetent? Or been somehow bled out?

The next couple of years were very difficult as I was earning £13k – £16k a year at minimum wage and was told I need to pay around £500 each month against the debt. If I did not then they would take action, meaning prosecution and debt recovery. I took payday loans, racked up more debt and when my first child was born they were taking 40% of my income and I remember not having enough money to even fuel my car to get to work.

At one point the fuel ran out and I just left the car there and walked the remaining 6 miles. This was one of the hardest periods of my life.

Within less than 6 months I had the pain of £108,000 debt, lost my business and lost my family in addition to the damage to my reputation. I do attribute this trauma to be an overbearing contributor to my mental health battles since.

My father had still been given the Post Office back despite all that had happened and had made a match funding agreement with them and felt he was doing a duty to recover the business from the damage his son had caused, the failed businessman!

These issues had divided my family, we no longer were a family. Later he and my mother received a similar fate and my mother was actually criminally prosecuted. They sold everything to fund a legal case and she was spared jail, literally with the judge's last word.

This was systematic abuse and there are many stories that have now surfaced of suicide, false imprisonment and of people that have suffered much more than me. My mother being one of them… that is another story I will share some time soon.

This trial does not get the coverage it deserves in the UK and if any of my followers are still around as I have not wrote for over a year I would be really grateful if you could share the stories so people across the world know how badly a UK government-subsidised business have treated people here."

After being "terminated" by the Post Office Bal's marriage broke up and he has been sectioned twice. Bal says he was pursued by the Post Office for the £60K discrepancy for a decade after he was sacked. He was declared bankrupt in 2014.

I am delighted to say that Bal is recovering well, working as an entrepreneur and is extremely open about mental health and how it can affect people. Please do read his blog "Fighting My Demons" for more.

Bal says some very nice things about my reporting of the group litigation in his original blog post which I have excised from the text above, but I am grateful to him for his kind words, and for allowing me to repost his recollections.

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If you experienced something similar to Bal please contact me using the message form which is in the right hand nav bar of this website. Alternatively, if your experience of dealing with the Post Office is entirely benign and you want to tell me about that, please get in touch. I am also after guest blog posts from any political, legal or forensic accountant types who may have a view on this group litigation. Please message me.

I have asked the Post Office for a response to Bal's story. They told me it wouldn’t be right to comment on individual cases outside of court hearings.

Tuesday, December 11, 2018

A former Subpostmaster writes: "The Post Office has lost already"

As the first Post Office Trial (round one: common issues) was drawing to a close earlier this month, I asked people with a professional interest to get in touch with a view to publishing their thoughts and/or stories.*
Tim McCormack
The following guest post is from Tim McCormack, who ran two different Post Offices over 12 years between 2004 and 2016 in Loch Ness and then Duns in the Scottish Borders. I think it is fair to call him a trenchant critic of the Post Office.

Before becoming a Subpostmaster, Tim was a computer programmer who became a Senior Business Analyst in the City of London, advising investment banks on credit risk technology. He finished his City career working for Citibank where he was in charge of credit risk technology for 22 countries in Central and Eastern Europe, Middle East and Africa. 

He currently owns a small newsagents in the Borders town of Coldstream and runs a blog called Problems with POL. This is what Tim has to say on the conclusion of the common issues trial:

"The closing submissions have been put to the court and in January,  Mr Justice Fraser will issue his decision on the claims put before him in this the Common Issues trial.

There are three possible outcomes:

a) Mr Green QC for the claimants wins all his points.
b) Mr Cavender QC for the defendants scores a complete victory.
c) Both parties have some of their claims decided in their favour.

Perhaps the most likely outcome is the latter and no-one but the judge has any idea of which points will be settled in whose favour.  We will know soon enough, and on decision day conclusions can be drawn. 

In the meantime though, it is my opinion, that one of the major consequences of this trial, regardless of Mr Justice Fraser’s decision, can be highlighted.

Much of this trial has revolved around the contract that binds the subpostmaster to the Post Office.  The claimants propose that there are multiple inferred clauses in this contract - ie. they are not specifically written into the contract but they can be inferred from the wording and in some respects the type of relationship that is thought to exist between Post Office Ltd [POL] and the Subpostmaster. 

The Post Office in reply, rejects these claims in total, saying that the contract as it stands is correct and not open to the interpretation of the claimants.

As a layman, I first became interested in contract law in the late 70s early 80s as a result of a TV Series known as The Paper Chase which followed the fortunes of a young contract law student at Harvard University.  It is an intriguing subject and covers many different areas but the most widely known and discussed are contractual disputes that end up in court, riveting courtroom drama backdrops for multiple movies and TV Series such as Suits.   

Interpretation and inference of the written word (and sometimes spoken) is the name of the game as two parties disagree fundamentally over what was implied at the time of signing.

No contract is perfect.  No matter how detailed, it can never possibly cover all eventualities and the law accepts this to be the case.

A contract is a written agreement which encompasses the oral and written negotiations and agreements of the parties. Provided that the necessary factors, such as offer and acceptance, consideration and intention to be contractually bound, are all present, a contract will be formed.

Whilst the words, whether written or spoken, which the parties use in formulating the agreement are the express terms of the contract, it is important to bear in mind that these may not constitute the whole agreement. The parties to a contract cannot possibly contemplate every contingency and eventuality that may arise over the course of a contractual relationship. 

The result is that gaps are inevitably left in the express contractual terms. For this reason, the Courts are prepared to imply terms into a contract, either as a matter of custom, by statute or by common law.  Read more about that here.

Consequences

The decision of the judge, after all the trials are over, will of course have consequences for both sides.  I could not speculate on those consequences should the judge decide partly in favour of both parties involved.  However the consequence of the claimants winning all their points has already been noted by Mr Cavender QC representing Post Office Ltd.

He said in his opening submission:
“If Cs [the claimants] were right in the broad thrust of their case, this would represent an existential threat to Post Office’s ability to continue to carry on its business throughout the UK in the way it presently does.”
That conclusion, while probably correct, has no bearing on the decision making process of the court.
What Cavender QC perhaps does not appreciate, nor Post Office Ltd for that matter, is the consequences of their case being completely successful. I would submit for the reasons below, that outcome also represents an existential threat to Post Office’s ability to continue to carry on its business throughout the UK in the way it presently does.

Mr Cavender has already argued the point that commercially astute business men and women that seek to operate a Post Office would, in the normal course of events, scrutinise the contract offered and perhaps seek legal advice on whether or not to accept the terms and conditions it contains.  

The way the Post Office operates at present, incorporates the fact that every year subpostmasters come and go, selling on their business, retire or as is becoming more and more common just handing the keys back because they have had enough of dealing with Post Office Ltd.   

This is referred to as ‘Network Churn’ and about 800 offices change hands each year.  This means that 800 aspiring commercially astute business men and women are sought every year by Post Office Ltd to take on the contract at the centre of this trial. If they were so astute then I am sure they would also consider the arguments put forward by Mr Cavender on POL’s behalf during the course of this trial in order that win all the issues at hand.

The outcome of this trial is the decision made by the Judge and that becomes case law against which future similar cases may be compared.  If POL win the day then there is unlikely to be any similar cases brought against them given their chance of success would be limited.  

I would also add that changes to the way Post Office Ltd operate will certainly result from what has been said in court already.  Contracts will be delivered to aspiring subpostmasters BEFORE they take office and these will be signed and accepted.   

Not only that but POL representatives will have to draw the attention of all new subpostmasters to the relevant clauses regarding losses and they will have to distinguish between Horizon errors and Branch losses.   According to Mr Cavender they will also have to accept that the onus is on them to prove that the loss was not caused by themselves or their assistants before POL acknowledge that perhaps Horizon was to blame.  

Recommend a friend

Already we are seeing the impact of this trial.  A new team has been set up to investigate discrepancies where the subpostmaster refuses to accept responsibility but in saying that POL still revert to suspending the subpostmaster while these investigations are carried out.  In POL land you are guilty until proven innocent.  Hardly the way to encourage new subpostmasters to join the network and I would consider anybody providing advice and encouragement to these candidates to sign the contract to be well aware of the problems that they may face in the future.  Who would recommend a post office contract to a friend these days?

And therein lies the rub.  Win or lose, business as normal for Post Office Ltd will be a thing of the past.  Losing may in a way be the preferred option, as from the ashes rises the Phoenix that will be the new Post Office network that places a higher premium on the service of its subpostmasters that it does at present.  Win and Post Office Ltd would have to be extremely careful of accepting anybody who then applies to run a Post Office knowing what has been revealed in this trial.

Should POL win hands down, should they then be allowed to change all that is wrong in the way they do business at present without recognizing that this has only come about as a result of the trial and ultimately the rejection of the claims by the JFSA?  I think not. Any changes that are made must be a recognition of bad practice in the past and those responsible should be held accountable and certainly not left in charge to correct their own mistakes.

I contend that win or lose, Post Office Ltd has lost already.  The cost of fighting the claims of the JFSA group can no longer be expressed solely in financial terms. 

Finally, the possibility that POL will win all the points is implausible.  We will have to wait for the decision of the Judge to find out but it is worth pointing out that no matter his personal feelings about how Post Office Ltd operates with regard to the treatment of SPMRs his decision(s) are bound by the legal interpretation of the facts presented to him in court.  As a layman I cannot express any opinion on the outcome only hope that justice is on the side of the claimants."

If you want to read more of Tim's work, go to Problems with POL.

*Please note: These comment/opinion pieces are being sought to stimulate debate. The views articulated will not necessarily be held by me. They may express views I completely disagree with. Also, I cannot check every detail of every submission is true, though I will take reasonable steps to satisfy myself the words written represent the honestly held opinion of the contributor.

If you would like to make a contribution to this blog, just send me a message using the message form which is in the right hand nav bar of every page of this website. You don't need to run a blog (or a Post Office) in order to be considered. It could be the first time you have contacted a journalist. If you are worried about recriminations, you can remain anonymous.

Thanks.

Thursday, December 6, 2018

Day 15 write up: Not even the end of the beginning

Part of my route to work for the last five week, Inner Temple, Lawyerland
Fifteen days doesn't sound like much, but I feel like I've been through the wringer. Trying to synthesise and process the volumes of information which have come out of this trial is going to take weeks. I will give you a quick summary of what happened today and then take you to the next stage, which in many ways is more interesting.

Day 15 was, like day 14; the methodical demolishing of the edifice which the JFSA, Freeths and Patrick Green QC have built up over the past month or so. Mr Cavender QC cut a knowledgeable, urbane and assured presence. I sensed he was in his comfort zone - delighted to take the court step by step through the apparent flaws in the JFSA's claim, but equally happy to think on his feet and spar with the judge as the situation required. He was convincing as he pursued the same argument as yesterday. Which is:

The Post Office has the right to do as its contract suggests. There is nothing in the contract which is obscure, hidden or designed to spring traps on Subpostmasters. It is all there in black and white. If you didn't get that contract or didn't ask for it or didn't read it before lumping your life savings/nest egg/pension fund into that deal, well...

... who goes into business, who risks almost everything without asking for their contract or taking legal advice or both?

You can complain after the event to the high heavens, but in business-to-business agent/principal situations you look at everything before you put pen to paper.

The law assumes you are going to do due diligence and the law assumes due diligence involves reading the contract.

Event Horizon 

This is where thing get weird, though, because if you run the above sentiment alongside the position stated yesterday - that the Post Office is entitled to believe that Horizon's figures are correct because it is generally reliable - you have a recipe for disaster.

A possible unexpected side effect of the Post Office's hardball position on the contract is the warning signals it sends out to existing Subpostmasters. If, contractually, you and your business and your entire family's livelihood are at the whim of a computer system you have no control over, you're f***ed.

Having seen the performances of the procession of employees called to the witness box on behalf of the Post Office there is no way I would let them near my business in a million years. Yet they are authorised to take life-changing decisions with no implications for them, even if they get those decisions catastrophically wrong.

I said in a previous piece: if you are a Subpostmaster and you read the factual information that now exists on the record about the NFSP and you still believe they are looking out for your interests, you are fool (they unfortunately refused to advance a counter argument to that, but I am all ears if there is one).

To the above I would add: if you consider taking on a branch Post Office, and read the factual information that now exists in the public domain about the risks of doing so - you are taking one hell of a gamble, with very little obvious upside. Apart from, er... what was it.... oh yes - footfall, of course.

Respect my Authorities

So how do we get to a judgment? From what I have been able to ascertain, each QC delivers a binder of case law (called the Authorities) to the judge, directing his Lordship to the specific passages in the judgments which each party thinks has a bearing on the law with regard to this case.

Contract law is a well-developed area and there are lots of judgments covering many different business relationships at the Court of Appeal and the Supreme Court which are binding on the High Court.

The judge then asks which judgments the QCs want him to consider at and how they want him to interpret them. The judge may also have his own view on what he thinks important, and he will occasionally mention this - or more likely challenge the QCs on their interpretation of the case law he is presented with. In this way, the judge is not only given the measure of the case, but what both parties say are the parameters in which he should make his judgment.

This trial has generated vast tranches of data. Off the top of my head:

Claim and particulars of claim
Generic Defence
Common Issues and pleadings
Opening statements x 2
Witness statements x 20
Documentation put to witnesses (thousands of pages)
Daily transcripts (ie oral evidence and cross-examination) x15
Closing submissions x 2
Claimant statements 500+
The Authorities

The closing submissions alone are 200+ pages each. The Authorities can be between 20 and 200 pages, the claimant witness statements are vast. Some of the documentation are Post Office manuals which are more than 100 pages long.

The judge doesn't necessarily have to go through every word on every document, but he certainly has to take note of the important ones, and I would say that's probably at least 2000 pages of relevant technical data, spoken and written personal testimony and nuanced legal argument, much of which he will have to read more than once.

His job is to funnel all that information into his decisions on the 23 Common Issues. It is a big task. I have already uploaded a version of the Common Issues which has a lot of pleading references attached. The judge asked for a clean version. He got that last week. I was issued with it on Monday. Have a read. This afternoon he rather sensibly asked the QCs to give him two more versions of the Common Issues in which each QC states the judgment they wish him to make on each issue.

What next?

At the end of the trial there was quite a bit of what Mr Cavender called "housekeeping". Various documents and bits and bobs were requested and/or ordered. The Post Office found its own encryption of Liz Stockdale's interview impossible to crack, which is great for them as it might have corroborated her witness statement in the same way Louise Dar's lately-discovered interview transcript corroborated hers. The judge has ordered a witness statement from the Post Office on why it has not proved possible to crack their own encryption keys. The judge also asked for a proper flow chart on the process of dealing with a) a Transaction Correction and b) a shortfall when submitting branch accounts.

All this takes us up to Christmas. The judge has ordered a Case Management Conference [CMC] on 31 January 2019 for the third trial and put the parties on notice they can expect a draft judgment under embargo from 14 January 2019 onwards, which gives us a two week window during which the public judgment will be handed down.

The CMC is to decide the date, terms of reference, agree a quantam expert (likely a forensic accountant) and number of claimants to be tried in what will most likely become known as the breach trial.

The judge has a duty to expedite proceedings, but the lawyers obviously want things to last as long as possible as it means more money for them. At one point the judge lost his patience and said he didn't wish to be abrupt or look like he was trying to steamroller the parties, but if it was not possible to try the cases of all six of the Lead Claimants in October 2019 he would schedule a trial for every judicial period thereafter in order to get to a resolution in the case starting in Spring 2020.

On hearing this I (temporarily, m'lud) lost patience with the judicial process. If the only way to steamroller the parties into doing something positive is promise them five weeks in court three times a year until one of them folds then you have a problem.

So - we'll get our first judgment in this epic saga in six or seven weeks, then we'll get a confirmed date and structure of the third trial, then on 11 March 2019 the second Horizon trial starts.

I personally think someone needs to take this process by the scruff of the neck and boot it into the world of politics, media and public affairs or the legal action will continue ad infinitum until one party runs out of money, and I suspect that party will be the JFSA.

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This is the last post I am contractually obligated to write by the terms of the Kickstarter I set up way back in August but I did continue to raise money in the hope I would be able to cover this group litigation on an ongoing basis.

I am delighted to tell you that thanks to the continuing generosity of everyone who pushed the Kickstarter way beyond my wildest expectations and the remarkable success of the paypal tip jar experiment on the www.PostOfficeTrial.com website, I have enough money to cover most of the upcoming Horizon trial, next month's judgment and the case management conference on 31 Jan.

I will continue to work in my own time to develop this website as a resource. There is a lot of indexing and general tidying up to do. I am also very much in the market for guest bloggers. If you have a professional or personal interest in this trial and you want to write something about it please do get in touch. You can be anonymous if you are worried about recriminations! I am particularly keen to get the Post Office and NFSP view (they have both refused formal requests to write something) and I'd also like to hear from serving Subpostmasters.

Secret emailers will continue to get occasional emails and anyone who makes a contribution during this quiet period will be added to the list. Don't forget you can also sign up for free emails on the website (which get you whatever i post on the blog automatically) and read through this blog and the documentation it links to whenever you want!

Thanks again for your support. 

Day 15 - live tweets

Day 15 of the Post Office trial - 229 live tweets compiled below for your easy reading pleasure. You can also read them here on thread reader or read the originals here on twitter:



All these tweets are notes and paraphrases. No direct quotes unless they are in direct quotes.

for background on this trial please go to postofficetrial.com
We are in Court 26 of the High Court Rolls Building. Mr David Cavender, QC for the Post Office. 

He is on day 2 of his closing argument. 

We are talking about explicit, agreed and implied terms.

With reference to the Authorities.

Mr Cavender [DC] brings up how helpful or unhelpful the Post Office has been during this litigation. 
He points out just how much information has been handed over.

J intervenes to say it would be surprising if he were to be drawn by DC to solicitors correspondence...
DC says My Learned Friend (Claimants’ QC Mr Patrick Green) [MLF] has been critical and suggested they might be playing games - he wishes to counteract that suggestion. If the Claimants wanted more granular detail from the Post Office, they could have appealed it and they didn’t.

We are going to Yam Seng again, which Patrick Green spent hours on on Monday. I am guessing DC is going to tell the judge it means something completely different to Mr Green’s dissection.
DC says Yam Seng contract was a short contract prepared without the “benefit” of lawyers. It was only designed to last 2 years. Here is the ruling btw: bailii.org/ew/cases/EWHC/…

DC in any contract there is trust and good faith (corrects himself to say mutual trust and “faith”)
DC quotes 151 of Yam Seng: "in so far as English law may be less willing than some other legal systems to interpret the duty of good faith as requiring openness of the kind described by Bingham LJ in the Interfoto case as "playing fair’”...

…. "coming clean" or "putting one's cards face upwards on the table", this should be seen as a difference of opinion, which may reflect different cultural norms, about what constitutes good faith and fair dealing...

in some contractual contexts rather than a refusal to recognise that good faith and fair dealing are required."
Oh sorry it was 131: "Under English law a duty of good faith is implied by law as an incident of certain categories of contract, for...

… example contracts of employment and contracts between partners or others whose relationship is characterised as a fiduciary one. I doubt that English law has reached the stage, however, where it is ready to recognise a requirement….

of good faith as a duty implied by law, even as a default rule, into all commercial contracts. Nevertheless, there seems to me to be no difficulty, following the established methodology of...
...English law for the implication of terms in fact, in implying such a duty in any ordinary commercial contract based on the presumed intention of the parties."

DC is now highlighted 141 of Yam Seng: "What good faith requires is sensitive to context. That includes the core value of honesty. In any situation it is dishonest to deceive another person by making a statement of ...

fact intending that other person to rely on it while knowing the statement to be untrue. Frequently, however, the requirements of honesty go further. For example, if A gives information to B knowing that B is likely to rely on the information and ...

… A believes the information to be true at the time it is given but afterwards discovers that the information was, or has since become, false, it may be dishonest for A to keep silent and not to disclose the true position to B. ...

….Another example of conduct falling short of a lie which may, depending on the context, be dishonest is deliberately avoiding giving an answer, or giving an answer which is evasive, in response to a request for information."

J flags up 144 which DC seemed keen to gloss over: "Although its requirements are sensitive to context, the test of good faith is objective in the sense that it depends not on either party's perception of whether particular ...

….conduct is improper but on whether in the particular context the conduct would be regarded as commercially unacceptable by reasonable and honest people."
DC would rather the J would look at 149:” a further consequence of the fact that the duty is based on the parties' presumed intention is that it is open to the parties to modify the scope of the duty by the express terms of their contract and, in …"

“… principle at least, to exclude it altogether. I say "in principle at least" because in practice it is hardly conceivable that contracting parties would attempt expressly to exclude the core requirement to act honestly."
DC the proper approach should be whether you are dealing with a relational contract in principle, implied terms and then whether the Marks and Spencer test applied. [The M&S test is case law, not anything to do with underwear etc.]

Here is the M&S test: allenovery.com/publications/e…
DC making the point that the implied terms which the JFSA want to insert into the SPM contract are too wide and onerous and that is specifically prohibited in case law.
Judge and DC about the necessity for honesty within implied terms in Yam Seng (153 - 164 in disputed as to whether they are one set of implied terms or two)

DC says people rely on Yam Seng more than the ratio of the case and the language of the decisions permits. [JFSA very reliant on Yam Seng]

We are on to another judgment which DC went to by a reference number in a bundle without saying its name so I don’t know what DC is reading from.
Ah. It’s the marvellously-named: Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Kent:

smab.co.uk/wp-content/upl…

The above action was on no contract at all and Yam Seng was on a “home made” contract. “A million miles” away from this case.
DC saying that therefore the JFSA’s attempts to rely on it are weak.
We are in Monday morning territory here when we listened to some very dense legal argument. Important no doubt, but interminable to the lay person. and ultimately not worth tweeting about. I’m going to upload all the transcripts for the legal nerds to get excited about...

… but these are the opposite of dramatic developments.
DC has shifted position from his opening. At the beginning of the trial, he was contesting the existence of relational contracts as a thing. Now he accepts they are, but submits their terms are narrow and weak.

As in - what constitutes a relational contract is pretty vague and the duties/powers in confers are weaker than others would have you believe.
DC remarks we should move on.
J suggests it might wake everyone up.
The next Authority is is Geys, which DC says should be pronounced “Geeze”.

J asks if this is DC's way of reminding him that he was involved in the case
"was I?” says DC, drily.
Judge says he’s been keeping count of the number of times the QC have told him they have been...

… involved in authoritative cases, but gave up when they both went into double figures.
In the time it took for me to tell you that we’ve moved onto another Authority. This one involving mid-Sussex hospital.
J what does intrinsic mean? Fact or law?
DC not sure how it is being used here.
J me neither

They decide “instrinsic” is an unhelpful word.

DC cites 3 authorities who are disapproving of or not approving of implying good faith into species of contract as a category. DC says proper approach is to look through M&S, which post-dates Yam Seng and is the Supreme Court authority.
Just because implied terms..

… are coming in through the relational contracts route, it doesn’t mean they have any more authority.

DC very keen to say the SPMC is NOT a good faith contract.
DC says JFSA is trying to reorder the SPMC by entering a whole array of implied terms which - and notes there are judgements which have stopped this sort of attempt from being successful in the past.
DC "in this case we have a biz to biz relationship and to say it’s more like something else isn’t really the point. To say there are certain elements which have an employment feel to them doesn’t really stand up.” It’s only employment contracts which have implied terms of good...

… faith. Not ones *like* it.
DC hammering home that SPMC is a commercial relationship from which both sides seek to profit.

And there are authorities which make it quite clear that there is no good faith, it is down to the letter of the contract.
J asks what commercial intersts SPMs have
DC footfall in their branch and the growing of their business.
J okay
DC A relational contract is only one where you are tied in. So the courts may come to your aid by implying terms. If you are tied in and other parties use it cynically to make things uncommercial, then the courts can help...

J you’re saying the reason for it is a contract of a particular duration where a party does not have the possibility to extract themselves.
DC and because after a while - things change, but the contract stays the same
J relational contracts are obviously a developing field. as part of reading for this trial [goes to another authority] on p92 it mentions an Australian article, but read it and tell me whether you think I should read it, avoid reading it or read parts of it. It is mentioned...

… in a courts of appeal authority.
QCs no objection
J okay both of you put in a note to me within 14 days. 2 sides of A4 max.

Court rises. That was hard work.
Okay we are back. We are back on Yam Seng. After this DC has promised to demolish the implied terms the JFSA have set up.
The Authorities have been put away.

DC says the 21 implied terms in the claimants written opening do not pass the M&S test and do not work as implied terms anyway, and JFSA has not shown how anything in them has been used in the past in other context.
They are just printed out and it is not shown how or why they could or should pass the necessity test to put them in the contract.
DC points his lordship to the work the post office has done on explaining why none of the JFSA’s implied terms should be applied.

DC says there are specific implied terms wrt suspension and termination which he will get to shortly
Now DC is on to agency and accounting. We say the issues between the two parties are primarily issues of law. We go to 12 and 13 Common Issues.
Common Issue 12: "Was the extent and effect of the agency of Subpostmasters to Post Office such that the principles of agency alleged at Defence 91 and 93(2) and (3) applied as Post Office contends?"

Common Issues 13: "13. Did Subpostmasters bear the burden of proving that any Branch Trading Statement account they signed and/or returned to Post Office was incorrect?"
The judge has to decide on the Common Issues. There are 23 of them.

DC we say SPMs are agents, there are certain rules which apply and we would of course say they apply here.
DC - There is nothing in the JFSA’s case that suggests that normal accounting responsibilities are different in this case.
J- this might be a minor point. Branch trading statements are identified in terms in Common Issues and referred to in your pleadings. I don’t think I’ve seen one yet. Could I have one per lead claimant?
DC you have Dar and Stockdale (he is giving him the references)
DC and Stubbs...

J these aren’t signed, though, are they?
J in later periods were they just returned rather than signed and returned…?
DC locates a signed branch trading statement from Dar
DC has asked for no findings about false accounting in this trial, but his closing sets out what they think about false accounting and what they may rely on in later trials.

DC 12 and 13 is not about facts its about law.
We have moved on to accounting. and the question is do the normal principles of accounting apply to SPMs and the JFSA has made no case worthy of its name to say there isn’t.

DC we say the SPM is not signing off accounts s/he is disputing (contemporaneously). And therefore not bound by that which is in dispute.
DC the JFSA says this isn’t agency, it’s “hollowed out” agency. This doesn’t exist as a term in law. It’s quite extreme to say it’s hollowed out but also you have to account for fiduciary duties wrt to cash and stock.
J says disputing of a TC occured before the end of a branch trading period in a notional example.
DC that can be done.
J I’m not exploring a scenario where an SPM settles to cash in one trading period and then tries to dispute it in the next trading period.

J I want to know what happens in the same branch trading period
DC you can hold a TC to the end of of a branch trading perdod, but then you’ve got to do something about it because you can’t roll over with an outstanding TC
DC they can all be dsiputed

J well some of the evidence heard at court is that by settling and raising a dispute initiates debt recovery
DC well that would be breach of contract
DC when you get a TC they’re either disputed or they’re not - they’re still outside
J when you say outside do you mean outside the accounts? Because they’re still part of them
DC yes but when you rollover, when you dispute or pay them they’re set to one side.
J wants a flow chart from both sides agreed on what the steps are when producing a branch trading statement. Not just a rehash of an already published document. One for TCs and one for shortfalls.
Oh we are back to Common Issues 12 and 13.

DC an SPM can say parts of their accounts are mistaken, but they have to particularise. They can’t just say oh all my accounts are wrong.
DC has just raised the Castleton judgement. Notes the judge found against him, satisfied that "I am satisfied that the substantial unexplained deficiencies incurred in weeks 42 to 51 and in week 52 up to the close of business on...

…. 22nd March 2004 are real deficiencies and as such are irrefutable evidence that Marine Drive was not properly managed at the material time. I conclude that the claimant was entitled under clause 10 of section 1 to determine...

… Mr. Castleton's contract summarily for non-performance of his obligation under clause 5 of that section. Moreover, the losses must have been caused by his own error or that of his assistants."
DC it is admitted that SPMs are agents - what is in dispute is the legal consequences of that.
Says that JFSA reliance on Garnett Grain is misplaced as this is to do with whether someone was an agent or not.

This is about an oral or implicit indication of whether someone was an undisclosed principle. But here [ie in this case] we have an express written contract. Very different.
DC re contract - are the terms so onerous as to be unenforceable and to what extent does the PO have to draw them to the SPM. Our contention is they are not and we don’t.

The legal bar of onerous is “almost a penalty” and there is nothing in the contract which states as much.
SPM contract is standard commercial terms in a business to business relationship - contracts were given in advance, certainly summary of standard terms were. This is a case where it is a commercial agreement and parties were making a serious choice and they knew they were.
J that doesn’t get round onerous

DC but the bar is almost a penalty
J but your argument they knew what they were getting into so no terms need to be drawn to them fails
DC my lord I accept that.
DC saying legal effect of signing summary of standard terms is that they are bound by the SPMC. Even if you don’t get the SPMC you can ask for it, you know what’s likely to be in it and there weren’t any surprises when they did see it.

DC part of my learned friend’s case was that these claimants had just walked in off the street and decided to become an SPM. In fact they made serious decision to change their careers, did their research and were serious people. The idea they were mugged by the terms of...
… the contract just does not bear scrutiny.

We have risen for lunch. Back at 2pm. #postofficetrial

Last three hours of #postofficetrial (Common Issues) about to start. I just had the world’s most disgusting mince pie for lunch. I had to take it back. The pastry wasn’t cooked. I won’t miss this place.
First one of the season too. Portent for a miserable christmas, probably.

Ah. Judge [J] is here. Mr David Cavender QC [DC] for the Post Office is on his feet. I think he is going to go through the Lead Claimants now...
Starting with Mr Bates.
DC goes through what Bates signed - says whether or not he got the contract through the post doesn’t matter. He could have asked for it and he signed up to it.
DC - Bates signed a note saying he agrees to be bound

J not sure that adds much other than evidential support
DC agreed but it reflects his knowledge that he has a contract.
J as I understand the PO practice was that copy of the SPMC would be kept in the branch and the incoming SPMR could/should/would familiarise themselves with it as part of their due diligence AND at some stage they would get it through the post after being approved...

… as an SPMR
DC accepts
J but you had the opportunity before even becoming an SPMR to see the incumbent’s contract
DC goes into Bates’ evidence. wants to test it again.
DC he is a details man, he notices when things are missing. He claims he didn’t notice that his SPMC wasn’t there. You should not accept that evidence.
J that is ignoring the evidence of other documents were in that pack
DC that evidence is incredible. The two page document...

… he claims he thought was his contract “conditions of appointment” - which was put in in error. Don’t know how that happened…

J don’t know how it happened?
DC well…
J it must have come from the PO…
DC yes of course.
[DC has just said the evidence is he definitely got his contract and we heard from a witness that his department definitely did send them out then admits that Mr Bates receives a document in error from the Post Office. So they do make mistakes, but his argument is that….

… whilst they do make mistakes, he wouldn’t have made this one. Judge didn’t pick him up on that - just think it’s an odd tack]

DC says his case is that he got his contract here and yet Mr Bates case is that he didn’t. I say his evidence on this is incredible.
DC points to a letter where Mr Bates talks about the contract being huge and voluminous. He must have had that contract….

[he’s making a very convincing case here - the letter that Mr Bates wrote was before he claims to have got the contract, yet he refers in detail to elements of the “contract” which DC says must be the SPMC]

J says that doesn’t mean he had it in March the year before
DC no - we say he is constructing a case
J well then this goes back to the credibility of the witness which you are saying you don’t want me to make findings on
DC yes but this not about false accounting - it’s a straightforward point

J so are you saying it’s just one way - you only want me to make findings on the credibility of the JFSA witnesses not the PO ones?
DC no quite the opposite
J rather than hold you to oral submissions on what might prove to be a careful distinction...

… I would like you to write to me to tell me in as careful terms as possible how you would like me to treat the credibility of these witnesses. Because it is very unusual to be asking a judge not to make findings on evidence in this trial.
DC it is, and it is down partly to the way this trial has been conducted, without wishing to rub salt into any existing wounds…

J wants DC to put it in writing exactly how you want me to treat the evidence.
DC Mr Bates is a very nice man I am sure, but he has constructed a narrative whereby he has come to believe what he says is true - a) that a two page documents was his SPMC and b) that he didn’t have his SPMC when he plainly must have had sight of it.
DC if we just turn to Yam Seng
J I don’t need to go to Yam Seng to be reminded that memory can be subjective
DC and faulty

DC Mrs Stubbs - a particular odd and sad situation which doesn’t have any parallels. There is very little dispute on the facts of this. Just when the contract date began.
DC Mr Sabir he has the same routine as Mr Bates in terms of contractual position...

… he was sent a summary of terms that would apply and then signed, then sent SPMC. We have his signature on that….

His evidence was that he didn’t get his contract for either of his two branches. PO witness say he was advised to get legal advice. We say his evidence that he didn’t get his contract is not reliable.
DC says that Mr Sabir's understanding of oral English was selective.
J maybe it was the change in language you were using
DC possibly

J are you inviting me to impugn him or is that an observation on that basis?
DC the former
DC onto Mr Abdulla. Saying during oral evidence he was clearly deciding not to remember things that weren’t in his interest. He said that two different people were the same people. He says he thought he was doing the right thing by putting in an undated cheque...
[some discussion about whether this should be admissable]

DC concludes Mr Abdulla’s evidence on the contract (that he didn’t get it) was untrue.
DC onto Mrs Stockdale and Mrs Dar who were on NTC. They must certainly have got their contracts.
J well this is perhaps a reflection of an internal change of policy within the PO given there are internal documents which suggest some SPMs were not aware of their contract.
DC yes but the NTC was a complete blank piece of paper - so everything was changed.

DC now talking about all LC. These people were not naive, they were buying a business. they had access to legal advice if they wanted it, they had not just walked in off the street. They knew what they were doing.
DC now moves on to suspensions. Common Issue 14: "14. On a proper construction of the SPMC and NTC, in what circumstances and/or on what basis was Post Office entitled to suspend pursuant to SPMC Section 19, clause 4 and Part 2, paragraph 15.1 NTC?"

… not to suspend Claimants: a. arbitrarily, irrationally or capriciously; b. without reasonable and proper cause; and/or c. in circumstances where the Defendant was itself in material breach of duty"
DC is now looking at PO closing submission: In addition to the implied term alleged at para 64.13, the lead Cs now contend in their IPOCs226 that, on their proper constructions, the express contractual terms dealing with suspension were limited in the following ways...

... (1) Post Office could not suspend on a “knee jerk” basis and (2) Post Office could not suspend without first giving “fair consideration to all relevant circumstances and to whether or not to suspend the Claimant even if the threshold for doing so was established”.

DC we say that the terms of the contract rule.

Unsurprisingly.

DC in para 429 we indicate it might at most be implied if your lordship thought it might be appropriate…

J it’s difficult to see how PO would argue the right to suspend “irrationally”
DC yes at most the decision to suspend should be reasonably based on the contract grounds
DC starting point on matter of suspension is not one of construction. They start as if there are no words.
DC let’s say you're on an audit. £8K is missing. You have to have the right to suspend. You can’t have an implied term to prevent you from doing so. You need to protect against theft or further incompetence

J what is meant by the “interests of PO” - commercial, public, all interests
DC legitimate interests as a business
J writes that down
PO coming out extremely strongly on JFSA’s arguments that there are implied terms in the SPMC on suspension. Some examples follow:
"there are no contractual words referring to Post Office’s own conduct, let alone to any “material breach” on its part. As a matter of ...

… the commercial sense of the agreement, it is difficult to see why Post Office should lose the power to suspend merely because it is itself in breach of contract, given that such breach could be entirely irrelevant to the circumstances of the intended suspension."
Cs observe that, in employment contracts, an employer’s right to suspend his employee should not be exercised on unreasonable grounds...

They then argue that the same should apply here. That is wrong for at least three reasons.
First, Cs cannot just extrapolate at will from employment law to these contracts. These are business-to-business relationships. The businesses with which Post Office contracts are sometimes individuals, and those individuals are sometimes small-...

…. businesspeople running single branches. On the other hand, thousands of branches are run by large corporates or individuals who run multiple branches: {Day7/156} to p.157. These contractual relationships simply cannot be reclassified as quasi-employment relationships."

" Second, even in employment contracts it is necessary to construe the relevant term on suspension, to consider whether any restriction on its exercise should be implied (and if so, what)."
Third, Cs observe, correctly, that in the employment context, restrictions on the right to suspend can be linked back to the application of an implied term of trust and confidence:...

In another case cited by Cs, Gogay v Hertfordshire County Council,231 Hale LJ said that the question was whether the decision to suspend met the “severe” test set by that implied term, which required “conduct...such as to destroy or seriously damage the relationship”.
It is also worth re-emphasising that Cs’ case is not merely that the power to suspend must be exercised reasonably. They in fact argue for the implication of a multi-headed term which includes both unwarranted specific provisos...

… (for example, the stipulation that Post Office cannot itself be in material breach of any duty as at the time the suspension decision is taken) and...

… (similarly unwarranted) requirements of extraordinary breadth, such as that Post Office must give “fair consideration to all relevant circumstances and to whether or not to suspend...
... the Claimant even if the threshold for doing so was established” (in which neither...

… “fair consideration” nor “relevant circumstances” is given any further definition). There is no shred of support for a term of this kind, either in the words of the relevant clauses, or in any authority."
And on termination: "Furthermore, at least in the absence of any clear criteria against which to measure the appropriateness of any proposed notice period on the facts of any given case, a…

… requirement to give “conscientious” consideration would be both vague and potentially onerous to Post Office and would give relatively little comfort to any prospective SPM, whilst undermining legal certainty on both sides."
and "The curiously specific stipulation that termination should not follow “reasonable correspondence” (again, whatever that might mean) is even odder. ...

… There is no limitation on the circumstances which could lead Post Office (or, indeed, the SPM) to decide to terminate on notice. The idea that a stipulation of this kind is so obvious that it would have gone without saying can plainly not be sustained."

[the PO is sticking to its guns. the obvious conclusion from all this is that any potential SPM would have to be insane to go anywhere near one. I do worry the effect this trial might have on the value of existing, functioning branches. why would anyone take one on?]

[that’s immaterial to the vast majority of the claimants, of course]

[this point did come out in evidence from both sides over the course of the trial. Mr Abdulla (claimant) said if he had seen the contract he would be mad to sign it and Elaine Ridge [PO] said if she’d shown it to him he would have run a mile]

[I don’t know whether its a specific part of the claimants case that they had no idea how heavy the SPM contract is/was, but the evidence is pretty clear that most of the SPMs never found out and were never told about the level of risk they were taking on]

[whose fault that is is moot]

Sorry I’m musing aloud because the judge has risen. He’s back now...

Mr David Cavender QC for the PO is on his feet [DC] again. We are looking again at the authorities. This time it’s Autoclenz. 
DC if they lose on construction and implied terms, Autoclenz is their fallback...

JFSA arguing contract as agreed was not the actual contract in fact. 
DC says this is unorthodox, to say the least.
DC draws our attention to 32: "Aikens LJ stressed at paras 90 to 92 the importance of identifying what were the actual legal obligations of the parties. He expressly agreed with Smith LJ's analysis of the legal position in Szilagyi and in paras 47 to 53 in this case….

… In addition, he correctly warned against focusing on the "true intentions" or "true expectations" of the parties because of the risk of concentrating too much on what were the private intentions of the parties. He added:
“What...

… the parties privately intended or expected (either before or after the contract was agreed) may be evidence of what, objectively discerned, was actually agreed between the parties: see Lord Hoffmann's speech in the Chartbrook case at [64] to [65]. ..

… But ultimately what matters is only what was agreed, either as set out in the writ
ten terms or, if it is alleged those terms are not accurate, what is proved to be their actual agreement at the time the contract was concluded. I accept, ...

… of course, that the agreement may not be express; it may be implied. But the court or tribunal's task is still to ascertain what was agreed."
I agree."
DC saying that the PO termination clause of 3 or 6 months is not a sham as referred to in Autoclenz. The JFSA just don’t like it.

DC now onto unfair contract terms. From the PO’s closing: "Cs contend that all the terms identified in Common Issue 5 are unenforceable except in so far as they satisfy the requirement of reasonableness pursuant to ss. 3(2) and 17 UCTA. ...

… They further contend that these terms do not satisfy that requirement. Both contentions are utterly without any basis in reasonable argument."
DC is listing the authorities which he says supports the PO’s view.

In the closing: "Post Office’s business is the provision of services to customers, not the engagement of SPMs. The SPM, as agent to Post Office, is conducting transactions on its ...

… behalf and so enabling Post Office to conduct its business with customers. The contract with the SPM facilitates Post Office’s conduct of its business, rather than itself representing the conduct of that business."

"In Opening, Cs did not engage with these authorities at all. Instead, they assert that Post office’s position is “somewhat ambitious” and then that it is “obviously wrong” ...

… Despite the escalating rhetoric, they do not explain why they say Post Office’s position is wrong. The closest they come is to say that the “appointment of Subpostmasters is an integral part of the Defendant’s business”"

"But, whether or not it is integral, the appointment of Subpostmasters is no more Post Office’s business than retaining bankers is a bank’s business."
"Post Office’s business is the sale of its products and services. As Ms Van Den Bogerd puts it, Post Office “acts as a ‘shop front’ for the general public to access a range of products and services...

… from government benefit payments to postal and banking
No entitlement to render a substantially different contractual performance
INCORPORATION AND VALIDITY
services."

oops - ignore INCORPORATION AND VALIDITY - that was a copy and paste over the page heading… sorry

"Post Office offers these services through both Crown Office branches, which are run by Post Office employees, and Agency branches, run by SPMs."

"There is no distinction that can be drawn in Cs’ favour between Post Office and the banks in the authorities – and they have not even tried to draw one."

"But Cs’ evidence, taken at its highest, comes nowhere near saying that. Cs’ assertions about pre-contractual discussions are that ...

… the ‘mood music’ was comforting, that Post Office hoped each relationship with a SPM would be cooperative and mutually profitable. As became clear, this was what the Lead Cs meant when they referred to an expectation of partnership"

"Those are not, on any view, pre-contractual representations specifically contradicting any of the contractual terms Cs are complaining about. What Cs are really saying is that there is a mismatch ...

between what they hoped and thought the contract would say, and what it actually says. But that is not a legitimate argument."

We’re getting near the end of Mr Cavender’s argument so I’ll just take you to the summaries on the contract at the end of the written closing: "Post Office is much the larger business, but the SPMs were not consumers, or small suppliers, pressurised into contracting on ...

… draconian terms. They were independent business owners. They could have simply provided their customers with an independent retail offering. Instead, they made the free decision to add a Post Office branch to whatever other retail business they wanted to run. ...

… Their bargaining power might have been significant, if Post Office wanted, or was legally required, to operate a branch in a given locality and there was a shortage of capable applicants for the SPM position. Conversely, their bargaining power might have been weak,...

… if Post Office was ambivalent about locating a branch in a given area and/or if there were many suitable applicants for the position. Either way, while the fact that the terms were (colloquially speaking)...

… largely in standard form was a function of Post Office’s greater size and commercial heft, the decision as to whether to accept the content of the contracts was made by the SPMs as independent-minded, informed businesspeople, with complete freedom of choice."

Mr Cavender is essentially reading these paragraphs out in court anyway.
Final point: "More broadly, and in anticipation of the kind of arguments that might be made on this point by Cs, it is worth re-emphasising that “the court assesses the issue of reasonableness at the time when the contract is made...

… , and not by reference to what has happened during the course of the contract with the benefit of hindsight”: (Shared Network Services Ltd v Nextira One UK Ltd,416 per Flaux J, at para 19).”

And there you have it.
DC has finished.
J has questions. Or does he?
J does. Mr Green (JFSA QC) as far as notice was concerned that an outoging SPM could be forced to stay in post longer than they wanted until the PO was ready to effect the transfer

DC no it doesn’t - he stayed out of his own commercial interest to do so.
DC thre’s no suggestion there’s some variation of contract or to his contractual rights. Didn’t have to.
J but notwithstanding unhappiness about it would be cooperative about the transfer date.

J it seems to me on the evidence that the amount that was presented on branch transfer day could not possibly be read in one day. Am I being unfair if I come to that conclusion. I appreciate you are saying it doesn’t matter
DC well that and you can take a view on how...

… they are presented how important they are. They are reference documents when you need to check on detail. They’re very much down the road in terms of contractual relevance.
DC not sure contractually my Lord you get very much from them. The allegations here very much aren’t breach.

J no but it still comes down to the mechanism of contractual formation
DC yes in many contracts you have lots of documentation
but in the contract we are only talking about a few terms. 12.12 4.1. and termination - the fact there might be extra documentation…

J yes but the evidence is they were made to sign lots of documents in a rush which they couldn’t possibly read
DC at the end of the day I’m not quite sure where this takes you because if I’m right we are only disputing the terms and conditions as signed. This is not a public inquiry into the SPMC and all its details...

… and this is all post-contract on the claimants case anyway. Not sure what contractual relevance it has.
J well it’s part of joining the PO for an SPM and the PO has an involvement on that day so it would be odd to ignore it.
J wants date of each contract formed of each lead claimant by Monday 4.30pm - one page.
JFSA QC on his feet to answer DC
JFSA QC Patrick Green [PG] working backwards.

PG says actually the docs they signed on handover day massively important - neither of the docs received before transfer day HOW SPMs were expected to account.
PG says you only learn the reality of your obligation once you are already committed to becoming an SPM.
PG now onto NTC - and how it refers to a wider manual…

PG now onto outgoing SPMs and whether they were forced to stay on. Mr Sabir says he was “told he had to stay in post"
PG point of correction in Autoclenz - they weren’t employees, they were LImBY (?) workers
PG Lord Clark expressly rejected sham doctrine as being the right approach.
PG MLF conflates operating network with serving customers and operating a branch. They do both. And wrt to UCTA - there was a contractual obligation on Mr Bates re lottery terminal...

… which was taken away from him.

PG hands up a list of other points from earlier and the “three pieces of homework we were set” which they have done on time.
PG explaining “hollowed out” agency point as "MLF found it hard to understand"
J reminding QCs for dates to be agree

J notes for the benefit of the court "the resolution of this case is not going to depend on who has the last word.”
DC says “despite that, my Lord, may I…?” and makes an administrative point.
DC he is marking the previously referred to homework as bad, but...

J says this is what I asked him for. But he will read all the points DC wants him to read.
DC says the locked audio interview of Liz Stockdale cannot be unlocked despite judge’s order. J wants a...

… witness statement as to why it cannot be unlocked on his desk by Monday 4.30pm. This was quite an important piece of evidence.
J has just asked for all 23 Common Issues with a short answer to each of them as to how each side WANTS him to rule on them.
All this admin means we will go up to Christmas so there will be no ruling before then.

J will reserve judgement he will produce it as quickly as he can but it is a lengthy job. He will try to do it some time in January.
J also sets date for CMC...
on trial 3 at 31 Jan 2019.

Also wants them to think about appointing a single joint expert on matters of quantam. Wants them to address their minds to who that is going to be. "I had thought it might be a forensic accountant"
Some confusion as to date of 3rd trial. Judge thinks he has ordered it, but no one else thinks he has. He’s pretty sure he has, but no one knows the date. This is being checked.
DC so what is this trial going to be about

J the resolving of ALL outstanding issues with the LCs - how many of the LCs you will have to decide.
DC raises issues of limitation
DC there are no pleadings worthy of the name which we could take to trial. could the claimants actually raise what their case is…? affects disclosure etc
J the steps for R3 are what? And I am not going to tolerate a war of attrition bogging everyone down with roudns and rounds of pleadings

J there will be pleadings, appointment and report of joint expert, evidence of fact - those are the three headline points
DC yes but Horizon trial to cater for that complicates things...
DC also raises issue of disclosure.
DC confirms Horizon experts reports (first round) are in.
J insofar as there were such a gap that could be addressed by the experts engaged on Horizon - a supplementary report

J looking at the outline of that it’s not impossible to achieve
DC it’s tight but its’ doable - not so sure for six
J thats’ what you have to decide
DC well it may be for the court
J ultimately yes, if you can’t agree
DC yes but we can’t just pick and choose our favourite cases
DC it should be for the court to decide after we make our case

J Mr C the agreement of the Common Issues, a process started by me - there was a lot of push back from the PO. The PO didn’t want a trial at all this year.
DC it is a complex case, we don’t agree on everything and I have been involved in a huge amount of litigation and this is no different
J okay in Jan this is going to be how many, ideally all 6 and if you can’t agree it is going be decided by me

Judge has just announced a 4th trial if the parties can’t agree to do all six and he says it will be a rolling programme of trials until it is done.
DC says next trial will be 2 or 3
J 2 - 4 then

JFSA QC we think for it to be most useful in resolving the grid as a whole is 6
JFSA QC but I don’t think we can do 6
J well choose a number smaller then. I don’t want to be abrupt or steamroller you, but I have to get through this litigation. So you are saying 3 to 6. DC is saying 2-4
J There’s an overlap there.

J my regret is that the CMC is not
… going to be before 31 Jan.
I’ve carved out a date for the starting on this on 14 Jan…. which creates a window.

[looks like judgment will appear in latter half of January. he may get it out earlier to the parties so they can prepare for the CMC

.. but it will be under embargo.]
So at a guess? Burns Night.

Judge wishes everyone a happy Christmas and rises. 

#postofficetrial round 1 is finished.

Okay just had a few chats to try to make sense of how a judge can apologise for "steamrollering" into making things happen whilst in the same breath threatening to hold a trial every judicial term until the issues are resolved.
It seemed to me to be an admission of the limitations of the judicial process. Both sets of lawyers have an interest in this going on forever. And if neither side gives in it will go until the money runs out or the judge directs towards a resolution.

Which he can only do if every issue (and potentially every single unique variant in each claimant's case) has been tried.

So this shitshow will continue until there is political intervention. But government doesn't want to touch it. so they won't until they are persuaded by public opinion.

Anyway sorry, what i meant to say was after speaking to people who know more about this than I don burns night is a pretty good guess. 

I'll make sure I'm around to go to the case management hearing on 31 Jan
I'll get these tweets unrolled and on www.postofficetrial.comand a write up soonest. Thanks for reading. It's been a "fun" five weeks.

Wednesday, December 5, 2018

Day 14 write-up: What the Post Office did next

Claimant Gita Lawrence, who couldn't help laughing out loud in court
when the Post Office QC mentioned the negotiating skills of the NFSP. 
I was dreading today. I thought it was going to be like the first day of the JFSA QC's closing argument (see Day 12 and the JFSA closing written submission) which was full of opaque exchanges about the meaning of certain sentences and words within the context of complex case law.

Today, by comparison, was much more straightforward. Even the case law references were pretty easy to follow. The Post Office's position can be summarised thus:

1. The JFSA case is a badly constructed attempt to claim many different things in the hope they'll get some through the gate.

2. Evidence with regard to Horizon or the Lead Claimants' circumstances should not even be commented on by the judge, let alone be the subject of any ruling - they will be dealt with at future trials.

3.  The claimants' suggestion that there are 21 implied terms in the Subpostmaster contract that need to be inserted does not pass the bar of sufficient necessity.

4. The Authorities (case law) on which the judge should rely are very high level. Apply the law to the claimants' case and it evaporates.

You can read the Post Office's written closing submission here. Mr Cavender was cogent. He sought to undermine the JFSA's case by saying it amounted to "an attack on freedom of contract and of certainty of law."

He also pointed out that this case was very unusual, and suggested it was less like a trial and more "akin to a public inquiry into the Subpostmaster contract", which in his mind presents "a real risk of this court being led inadvertently into error."

Because this isn't about claimants airing grievances or Post Office staff revealing themselves as the sort of people you wouldn't want anywhere near your business, it's about the law, and contract law, as Mr Cavender would have it, is very clear.

The Subpostmaster is an agent. They submit accounts to the principal. They can dispute what they want if they disagree with sections of their account, and the Post Office has a duty of necessary co-operation to find out what might be wrong (diminished if false accounting has taken place).

He was dismissive of the JFSA's attempts to paint the relationship as some strange quasi-employment relationship.

He was dismissive of the JFSA attempts to appeal to "commercial common sense" and cites the case law which Mr Cavender says is the leading Authority on this - Arnold v Britton:

"commercial common sense is not to be invoked retrospectively. The mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language. Commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made.”

It led Mr Cavender to make a statement which passed without comment. If it had been said anywhere outside a courtroom it would have caused uproar:
"my learned friend's case
 appears to be: "The approach of the court should start and finish
 with common sense."
 Clearly that is not the right approach, and
 of course it is not the approach your Lordship will
 doubtless take."
Clearly! Who needs common sense when you have the law?

Mr Cavender was dismissive of any claims about the lack of awareness that prospective Subpostmasters might have had about the nature of the contract they entered into and the risks to them it entailed, again citing Arnold:

"The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case , that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. And, again save perhaps in a very unusual case, the parties must have been specifically focussing on the issue covered by the provision when agreeing the wording of that provision.”

Mr Cavender made the point that the Arnold judgment was about ordinary people leasing holiday chalets,  and it went against them. He suggested that Subpostmasters were in a better position than the lessees in Arnold because their "they do have a trade union-type organisation negotiating for them".

This reference to the NFSP caused what I would describe as an involuntary explosion of sardonic exhalation from two claimants (Gita and Preeth) who had come along to watch today's proceedings. They clearly couldn't quite believe Mr Cavender had the nerve to suggest the NFSP was either competent or had the interests of Subpostmasters as its primary concern.

But Mr Cavender was unbowed. He said that aside from the 560-odd claimants, there were 11,500 people or businesses who were operating under the terms of the Subpostmaster contract (in its various iterations) who found it worked perfectly well for them.

He was especially scathing about the JFSA attempt to insert 21 implied terms into the contract without identifying the necessity for doing so.

He also said that even if the contract was in some respects "relational", it was not a good faith contract.

The argument was simple. This is business, baby. And the law is the law.

Disclosure dat closure

There was an interesting exchange between the judge and Mr Cavender on disclosure. Lawyers and investigators have long complained that the Post Office have consistently refused to disclose the information they need to build a picture of what really happened in any given instance where there is a grievance, dispute or allegation of a crime. Mr Cavender sought to make the Post Office's lack of disclosure a good reason for the judge to ignore what it had disclosed. He suggested that any evidence on the effectiveness or otherwise of the Post Office helpline or training should be completely disregarded.

The judge seemed interested in this argument:

MR CAVENDER: Your Lordship will recall the court also had a view
 giving early disclosure would properly be required
 anyway in relation to Horizon and Post Office does not
 resist that.  Such approach was entirely for good reason just by way of background.  But the overwhelming focus
 was on the documents that might be relevant to the
 Common Issues. 
So to give two examples at the hearing
 on 22 February the court rightly rejected a request for
 broader disclosure in relation to Helpline on the basis
 of the operation of the Helpline "does not arise in the Common Issues at all" and that is referring to paragraph 61 of the defence.
 
At the same hearing the court ordered only limited
 disclosure in relation to certain policy and process
 documents relating to shortfalls, pointing out the requests seemed to be aimed at fundamentally Horizon
 issues, see.
  So the upshot of the approach taken to disclosure is the Post Office has not conducted searches for documents
 that would enable the parties and the court to properly explore all the irrelevant post-contractual material and
 breach that the claimants want to put in issue at this
 trial nor has Post Office extracted documents from custodians other than the 62 that were largely chosen by
 the claimants.
            
So to give concrete examples, we do have records of TCs that were issued to these six branches.  We do not
 have the underlying documents as to how that TC was
 decided upon, the evidence underlying it, the transaction data, internal communications relating to
  the decision-making process; the kind of thing that
 would go to whether the TC was rightly made, mistaken or how the mistake came about.
 
We have no disclosure or evidence from the Helpline operators; nothing with which to meet the suggestion
 a particular operator said something wrong on
 a particular date in 2002 or 2010.
  
We have no disclosure showing how enquiries and disputes were then escalated and addressed by the
       Helpline.  Your Lordship will recall a reference to
 classification of calls as "low priority".  No evidence as to what that means because it doesn't fall within the Common Issues, and the relevant documents would not be
 caught by the disclosure that was ordered.
    
MR JUSTICE FRASER:  When you say "we have no disclosure",
 what you really mean is the claimants have no
 disclosure.  Because they are all your documents, aren't they?
    
MR CAVENDER:  My Lord, yes, "there has been no disclosure"
 is probably the correct way of putting it.  By "we" I mean the court and the parties really.  We have --
    
MR JUSTICE FRASER:  The court and the claimants, because
 Post Office has got it.  Because it is all Post Office
 documents.
    
MR CAVENDER:  We haven't searched for it --
    
MR JUSTICE FRASER:  I am just being precise about it.
    
MR CAVENDER:  Yes, my Lord, you are right.  We have not
 given disclosure covering investigations into
 shortfalls, emails and other documents from within the
 FSC for example, we heard something about.   
Any
 documents of that kind that are in the bundles have been caught incidentally through disclosure orders aimed at
 something else by luck or because one of the selected
 disclosure (inaudible) happened to have it within the
 exchanges; potluck and not a proper approach on which to examine what happened.
   
Your Lordship will recall my efforts to piece
 together from a few documents here and there what investigations had in fact been done into Mrs Stubbs'
 problems, and you will recall there was quite a lot done. 
She said: well, I thought you were doing nothing
 and I put to her a whole slew of documents that happened to be in the bundles by accident or mistake that showed
 in fact we were going back to Fujitsu, we were asking
 questions.   
If you are going to form a view, my Lord, on
 any of that, you need the full documentary record, you
 need evidence led on it and tested, not it be done in
 this sort of casual half-hearted way.
    
MR JUSTICE FRASER:  If the documents you were putting to Mrs Stubbs were only there by accident or mistake, there
 was nothing to stop you producing a document, was there, which showed the conclusion or upshot of the
 investigation which she had been promised?  If such
 a document existed.
    
MR CAVENDER:  My Lord, that is true in relation to all of
 the six, in relation to every TC and every dispute.
   
MR JUSTICE FRASER:  No, no, I am asking a focused question
 on the investigation in relation to Mrs Stubbs.
   
MR CAVENDER:  My Lord, yes.  But that hasn't been done.
 That is not our understanding of what this trial was
 about or the disclosure sought or the issues to be
 determined.  I am giving that example for saying where
 I thought I ought to correct that impression with that
 witness.  I was able to by luck with a number of documents.   
But it is not the full documentary record at
 all, clearly not, and we didn't have evidence from the
 people that were doing the investigations, et cetera, so
 your Lordship could then opine and see whether it was
 good, bad or indifferent. 
You are asked to do so on a very casual basis on a partial -- not partial, without the full documentary record at all. And it would be
 wrong to do so, in my submission.
 

What's he building in there?

Mr Cavender then moved onto construction, particularly the construction of Section 12:12 of the Subpostmaster contract.

Here he set out the Post Office case. Section 12:12 of the contract states:

"The Subpostmaster is responsible for all losses caused through his own negligence, carelessness or error, and also for losses of all kinds caused by his Assistants. Deficiencies due to such losses must be made good without delay."

He argued that deficiencies refer to discrepancies between the stated accounts (on the Horizon screen) and therefore can only happen in branch, so they can only be the responsibility of the Subpostmaster. He also noted that according to 12:12, the Subpostmaster is responsible for ALL losses caused by his assistants, and argued that the initial burden of proof lies with Subpostmaster first to prove that the loss - the deficiency - was not caused by an assistant, and next that it wasn't by his own negligence, carelessness or error.

This meant, he said, that Section 12:12 did not apply to Horizon errors (should they exist), because they were nothing to do with what happened in branch.

He said through the process of necessary co-operation, if a Subpostmaster were to dispute a Horizon version of accounts, then the "burden" would be on the Post Office to investigate. However, said Mr Cavender, the Post Office is entitled to ignore any possible Horizon error, because the system is generally reliable. The burden of proof then returns to the Subpostmaster to prove that Horizon is the cause of the error.

This might sound like a nonsense, but it might also be legally tight. I doubt Mr Cavender would express the Post Office's position in these terms had he not thought he was on safe territory. Unless the Horizon trial proves the system cannot be seen as generally reliable, he may well, legally, have a case.

------------------------

It's the last day of the Common Issues trial tomorrow, but it won't be the last activity you see of this blog. I have been sent a large number of documents and I still haven't uploaded those I do have. I need to index everything I've written, and I am hoping to publish a number of guest posts over the next few weeks whilst we are waiting for a judgment.

I have repeatedly asked the Post Office to give their perspective on this trial, either via interview or blog post, but so far they have declined. The NFSP declined to respond to my comment piece.

But if you are interested in the trial and you want to give me your hot take, I would be most grateful if you would get in touch. I am looking for claimants, Subpostmasters, Post Office employees, lawyers, fraud investigators, NFSP officials, union officials, academics, forensic accountants, politicians, IT experts - anyone who might be willing to write a 500 - 1000 word blog post, ideally on the record.

If you want to remain anonymous, that's fine, but I will need to be satisfied you are who you say you are and your reasons for remaining anonymous (eg you don't want to get sacked!)