Thursday 15 November 2018

Day 6 write-up: The Post Office speaks!

It is a massive shame it has taken so much taxpayers cash to get here.

It is borderline pathetic that the only reason we are here is because of a campaign by a few committed individuals and ten million-plus quid which has been chucked at a bunch of undoubtedly talented lawyers.

What we saw in the witness box today was two ordinary joes from the Post Office talking relatively freely about the way their organisation operates.

You can read the blow-by-blow tweets from Day 6 here.

The first witness was Nick Beal, Head of Agents’ Development and Renumeration at Post Office, the second was Paul Williams, Restrictions Advisor for the Post Office.

I have been told (and I don't set any store by this) that one of the problems with the Post Office is the people who are there stay there. As a result, very little fresh blood comes in at any level, and the way things are done, remains the way things are always done.

Mr Beal started his employment at the Post Office as a counter clerk in 1987. Mr Williams started his employment with the Post Office, also as a counter clerk, in 1979. Now - don't get me wrong, there is nothing wrong with being a lifer. Terry Wogan, at his Radio 2 leaving lunch said "the British have a tendency to confuse longevity with merit". It was a joke.

Mr Beal and Mr Williams cross-examination was conducted by the dashing Patrick Green QC, and it  offered up extremely useful insights into the way the Post Office operates.

Over the course of 5 hours today Mr Green made several points. I'm going to pick out three and I'd like to deal with the first two together. This is what I felt was the broad thrust of Mr Green's arguments:

a) The contract Subpostmasters have with the Post Office is weird. It is a sort-of freelance, sort-of employment, sort-of agent, friends-with-benefits kind of deal, which is all touchy-feely-buying-into-the-family-kind-of-vibe at the outset.

b)  The obligations of the Subpostmasters under the various documents they are given before they sign up to the job, as they take over the job and as they try to keep on top of the job are many, varied, confusing and all legally enforceable.

Both Mr Beal and Mr Williams were candid on this - there is a lot of fluffy bumf around for potential Subpostmasters when they are looking to sign up (let's call it the "courtship" phase), and there is a lot of quite serious stuff that some of them may or may not get to see (once they get into the "operational" phase) but when things are going well, both the Post Office and their agents work hard to do the right thing by each other.

Mr Williams was particularly impressive - he said he was certain potential Subpostmasters would get their full 114-page Subpostmaster contracts at least on the day they joined as Subpostmasters, and likely before they'd committed to joining the organisation. He said he introduced better recruitment and HR standards as the Post Office was "teased away" from being a government department to a limited company, and he was certain his department always helped potential and newly signed Subpostmasters when they needed assistance.

He was confident in his department and he was very clear that Alan Bates, who is the man behind this group litigation, would have got his contract (Mr Bates denies it).

By the time Mr Bates was hired, says Mr Williams, it was standard practice to send the contract out with the usual stuff and, being a 114 page document, it was not the sort of thing you would miss from a pack you are sending out. Although Mr Williams didn't personally send Mr Bates his contract, he was sure his staff would have sent him his contract.

Mr Green, for the claimants, probed and pushed with both Mr Beal and Mr Williams and there were times Mr Beal didn't know or couldn't remember why things were like they were. There were also times Mr Williams was quite candid in saying things could have been better. I get the feeling that Mr Green was saying: "it's a bit confusing and disorientating when you look at all these terms and contracts for everyone - and you guys are the experts!"

He landed some blows, but not many. Both Mr Williams and Mr Beal came across as people who wanted to do the right thing at all times.

Now onto Mr Green's third point:

The National Federation of Subpostmasters, once an actual trade union, now described as an independent organisation, is anything but. It is wholly in the pocket and pay of the Post Office and it is contractually obliged not to do or say anything which could do anything "materially detrimental to the Post Office".

Mr Green cited the NFSP's grant funding agreement, which did away with membership subs and made the NFSP dependent on the Post Office for its existence. The strings are not hidden. This is from the Grant Funding agreement posted on the NFSP website.

5.3  The NFSP shall not engage in the following activities or behaviours:
  1. 5.3.1  undertaking any public activity which may prevent POL from implementing any of its initiatives, policies or strategies;
  2. 5.3.2  undertaking or inducing a third party to undertake media or political campaigns against POL;
  3. 5.3.3  organising or inducing a third party to organise public demonstrations, protests or petitions against POL;
  4. 5.3.4  organising or inducing a third party to organise boycotts of POL's business;
  5. 5.3.5  funding or inducing any third party litigation against POL; and
  6. 5.3.6  other activities or behaviour the effect of which may be materially detrimental to POL.

In court today Patrick Green reminded Nick Beal that the Post Office has described the claimants' litigation (in its skeleton argument) as an "existential threat" to the Post Office's business mode.

He asked: "does this action fall under the terms of [the NFSPs] Grant agreement?"

Mr Beal said he didn't know

Mr Green asked "so the NFSP cannot support this litigation because of the terms of your Grant?”

Mr Beal did not know.

Mr Green carried on in this mode for some time. Eventually the judge, Mr Justice Fraser said (and I paraphrase).:

"Mr Green, whether your point is that the NFSP are contractually prevented from supporting this litigation, or because they’re being paid too much money by the Post Office to not support it, you’ve made your point."

I've made my own comments on this issue in a separate blog post.


There were a couple of procedural moments of interest. In the morning session, Mr Patrick Green, QC for the claimants, mentioned in passing he had been disclosed some important documents by the Post Office the previous evening. The judge stopped proceedings to query this.

Just before lunch, the judge asked about this situation again. He asked Mr Green when his legal team requested the documents, what they were, how many they were and when they were disclosed.

Mr Green said it was 350 pages worth of documents, disclosing 45 different email chains.

The judge bridled (he has given numerous warnings to both parties about the methods they are employing to conduct this litigation).  In what I would describe as a very firm manner, Mr Justice Fraser said he was not prepared to deal with a case of this importance in which obviously necessary documentation was being disclosed so late. It was not acceptable.

He then ordered a witness statement from the Post Office solicitors to be given to him by 4pm tomorrow explaining why it took so long to disclose the documents. I expect Womble Bond Dickinson can adequately explain the delay and look forward to putting their explanation to the judge, in the witness statement.

And the end of the day the judge moved on to the dread reality of a third trial in this case. He is pushing for it to happen before the summer. Both the claimants and the defence QCs want it after summer because they want to go into a "mediation phase" after the Horizon trial (confirmed as beginning on March 11 for 5 weeks). Now I don't specifically know what this mediation phase involves (ie who will be mediating what and on what grounds) but the QCs seemed to think the amount of time required to make it successful could push the third trial into September next year.

The judge was not taken by this and noted 5 June as a good date for the third trial. He suggested this trial might be on the individual circumstances of a few ("less than six, possibly just two") claimants, not necessarily even those who are lead claimants in the current trial. The judge suggested this would allow markedly less prep time that the Common Issues trial (the current one) and the Horizon trial (March 2019). The less prep time, the more mediation time.

The QCs weren't keen. This idea of mediation and its timing (after two trials...?) is new to me so I will try to find out more.


That's me done for the next three days. There is no court sitting tomorrow, and I have managed to find gainful employment elsewhere. If you like these blog posts and emails, please consider chucking something into the paypal tip jar at

I'll be back at 10.30am on Monday morning.

Common Issues trial transcript: Day 6

This is the unperfect transcript of the sixth day of the Common Issues trial in the Bates and others v Post Office group litigation. The hearing below took place on Thu 15th November 2018 in court 26 of the High Court's Rolls Building. The claimants' QC is Mr Patrick Green and the defendant's QC is Mr David Cavender. The managing judge is Mr Justice Fraser.

Day 6 witnesses

Nick Beal, Head of Agents’ Development and Renumeration, Post Office Ltd (witness statement here).
Paul Williams, Restrictions Advisor, Post Office Ltd (witness statement here).

For my write-up of the day, click here.

Day 1 transcript - Wed 7 November - Opening arguments
Day 2 transcript - Thu 8 November - Claimants: Alan Bates, Pam Stubbs part 1
Day 3 transcript - Mon 12 November - Pam Stubbs part 2, Mohammad Sabir
Day 4 transcript - Tue 13 November - Naushad Abdulla, Liz Stockdale
Day 5 transcript - Wed 14 November - Louise Dar
Day 6 transcript - Thu 15 November - Post Office: Nick Beal, Paul Williams
Day 7 transcript - Mon 19 November - Sarah Rimmer, John Breeden, AvdB part 1
Day 8 transcript - Tue 20 November - AvdB part 2
Day 9 transcript - Wed 21 November - AvdB part 3, Timothy Dance, Helen Dickinson, Michael Shields part 1
Day 10 transcript - Thu 22 November - Michael Shields part 2, Elaine Ridge, David Longbottom, Michael Webb
Day 11 transcript - Mon 26 November - Michael Haworth, Andrew Carpenter, Brian Trotter
Day 12 transcript - Mon 3 December - Claimants' closing argument: Patrick Green QC - part 1
Day 13 transcript - Tue 4 December - Claimants' closing argument: Patrick Green QC - part 2
Day 14 transcript - Wed 5 December - Post Office closing argument: David Cavender QC - part 1
Day 15 transcript - Thu 6 December - Post Office closing argument: David Cavender QC - part 2

Day 6 full transcript:

                                     Thursday, 15 November 2018
   (10.30 am)
   MR CAVENDER:  Good morning, my Lord.  Before I call Mr Beal,
       Mr Draper has three points of housekeeping to deal with
   MR JUSTICE FRASER:  All right.
   MR DRAPER:  As Mr Cavender says, they are three relatively
       short points, hopefully, my Lord.
           The first is the Excel spreadsheet at {E1/56/1}.  We
       referred to this during Mr Bates' cross-examination.  It
       is a document in relation to the mediation that shows
       the number of subpostmasters with complaints about
       the contract.
   MR JUSTICE FRASER:  Is this the one that I asked for?
   MR DRAPER:  It is.  It's a document that shows that 62 of
       those involved in the scheme had complaints about the
   MR DRAPER:  The issue explored in cross-examination was what
       that meant.
   MR DRAPER:  All this spreadsheet does is give you the
   MR JUSTICE FRASER:  And are you going to give that to me?
   MR DRAPER:  I will hand that up.  We have had it redacted to
       remove the details of -- (Handed) -- participants in
       the scheme, my Lord, who are not claimants in these
   MR JUSTICE FRASER:  So everyone listed on here is
       a claimant, are they?
   MR DRAPER:  Everyone whose details haven't been removed.
           I have just given you, there, my Lord, tab 1 of the
       spreadsheet.  There are also tabs 2 and 3 but those
       don't contain any relevant information at this point.
   MR JUSTICE FRASER:  Thank you very much.
   MR DRAPER:  The second point concerns an email chain which
       is at {E2/9/1}.
   MR DRAPER:  Your Lordship drew our attention to that email
       chain and the fact that much of it had been redacted.
       You asked that we consider it --
   MR JUSTICE FRASER:  Well, I actually asked that counsel
       review whether or not it was privileged and then you
       could tell me what the basis was.
   MR DRAPER:  That is right, we have done so, and the basis is
       legal advice and potentially also litigation privilege.
       The emails that have been removed, to give you a little
       bit of detail, are emails between Post Office employees
       and lawyers for the seeking and obtaining of legal
       advice in relation to a potential claim against
       Mrs Stubbs.
   MR JUSTICE FRASER:  So it's both legal professional
       privilege and litigation privilege.
   MR DRAPER:  That is right, my Lord.
   MR JUSTICE FRASER:  Thank you very much.
   MR DRAPER:  The third and final point is a small amendment
       to the individual Defence in Mrs Stubbs' claim.
   MR JUSTICE FRASER:  A proposed amendment?
   MR DRAPER:  A proposed amendment that is agreed between the
       parties, my Lord.  If I could take you to the Defence,
       it is at {B5.2/3/1}, and if you can be taken to
       {B5.2/3/8}.  This is paragraph 12(6), you see
       subparagraph (6), concerning the Serv 135 that we
       contend would have been provided to Mrs Stubbs.
   MR JUSTICE FRASER:  Just give me a second.  Let me read it.
   MR DRAPER:  You have just been handed, my Lord, the proposed
   MR JUSTICE FRASER:  Which are to paragraph 12(6).
   MR DRAPER:  That is right.
   MR JUSTICE FRASER:  Is that what's on page {B5.2/3/8}?
   MR DRAPER:  12(6) is on page 8, yes, and we have just handed
       you, my Lord, an extract to save everyone having
       a 60-page proposed amended document at this stage.
   MR JUSTICE FRASER:  But it is to delete that it was
       Mr Williams and just say it was the manager, is that
   MR DRAPER:  That is right.  All of the changes are the same,
       they are to that effect, and it was simply an error on
       the part of the pleading.
   MR JUSTICE FRASER:  And that is agreed, is it?
   MR GREEN:  My Lord, yes.
   MR JUSTICE FRASER:  Or, rather, not opposed.
   MR GREEN:  Not opposed.
   MR JUSTICE FRASER:  Right.  Well, you can have permission
       for that amendment.
           I think the best thing, just in terms of the
       logistics for the Opus bundle, is if pages 8 -- because
       this goes on, I think, into subparagraph (c) which will
       be over the page, is that right, on page 9?
   MR DRAPER:  That is right.
   MR JUSTICE FRASER:  So if pages 8 and 9, instead of doing
       the extract, if you just extract the two pages so they
       are the same, make the amendments on that page, and then
       have that uploaded, then you will only need to change
       those two pages.  And then obviously the title will
       change, that will now be the Amended Defence.  Or is it
       a Re-amended --
   MR DRAPER:  In order to save any references or notes on the
       document.  I'm grateful.
   MR JUSTICE FRASER:  Does that seem sensible?
   MR DRAPER:  Assuming it is technically possible, yes.
   MR JUSTICE FRASER:  It is technically possible.
   MR DRAPER:  Then we will do that.
   MR JUSTICE FRASER:  Thank you very much.  I will hang on to
       that for the moment.  But I think in terms of the bundle
       that is probably the easiest way to do it.
           Mr Cavender.
   MR CAVENDER:  Can I call Mr Beal, please.
   MR JUSTICE FRASER:  Yes, you can.
                MR NICHOLAS PETER BEAL (affirmed)
               Examination-in-chief by MR CAVENDER
   MR JUSTICE FRASER:  Do have a seat, Mr Beal.
   A.  Thank you.
   MR CAVENDER:  Mr Beal, in front of you there should be
       a witness statement that you have made in this action,
       is that right? {C2/2/1}
   A.  Yes.
   Q.  If you look through that, it's a witness statement of
       11 pages, and on the final page there is a signature, do
       you see that? {C2/2/11}
   A.  I do.
   Q.  Is that your signature?
   A.  Yes, it is.
   Q.  And are the contents of this statement true?
   A.  They are.
   MR CAVENDER:  My Lord, with your leave, can I ask a couple
       of questions in chief.
           If you go to paragraph 48 of that witness statement
       {C2/2/10}, you refer in the third line to a helpline and
       you say:
           "Their 24-hour helpline gives advice on matters such
       as contract issues in relation to the staff employed by
           Do you see that?
   A.  I do.
   Q.  Can you please put a bit more detail on the bones of
       that and explain precisely what helplines are available?
   A.  I will.  The NFSP, the National Federation of
       Subpostmasters, they have a number of helplines that
       they make available to their members.  Members can ring
       the organisation directly at their headquarters in
       Shoreham.  In addition to that, they provide services
       through a number of third parties for support to
       subpostmasters for things like counselling, business
       advice, finance support, et cetera.
           Some of those helplines are 24 hours, such as the
       counselling one which postmasters can ring if they have
       challenges around trauma or robberies and things like
       that and they want counselling support.  There is
       a business helpline which is also 24 hours for business
       advice, and other helplines may not be 24 hours, they
       may just be business hours.
   MR JUSTICE FRASER:  And they are run by the NFSP?
   A.  They contract with third parties to provide those
       helplines on behalf of their members.
   MR CAVENDER:  Thank you very much.  Wait there, you will be
       asked some questions.
                  Cross-examination by MR GREEN
   MR GREEN:  Good morning, Mr Beal.
   A.  Good morning.
   Q.  You have your witness statement in front of you.  Have
       a look at paragraph 3, please, on {C2/2/1}.
   A.  Yes.
   Q.  You say there:
           "Where below I speak about practices in place before
       I started working on Post Office's network policies in
       2010, this knowledge is based on my own personal
       experience, discussions with other long serving
       colleagues over many years and various documents I have
       seen over time."
           Can I just begin by just clarifying the first of
       those elements which is your own personal experience.
       I think you helpfully set out your experience at
       paragraph 9 on {C2/2/2}.
   A.  Yes.
   Q.  Obviously prior to the events in paragraph 9, you have
       obviously mentioned your first role was a counter clerk
       at a Post Office branch from 1987 to 1990?
   A.  Yes.
   Q.  And in paragraph 9 you explain that between 1990 and
       1996 you had various managerial roles, including
       managing or being assistant manager in a number of Crown
       or directly managed branches?
   A.  Yes.
   Q.  And those who work in those branches are actually
       employees of Post Office?
   A.  That is correct.
   Q.  It is right to say, isn't it, that during the period
       1990 to 1996 everyone was working on a predominantly
       paper-based system?
   A.  Not in Crown Offices, no.
   Q.  What were you working on there?  Did you have --
   A.  Yes, we had a system called Echo Plus which was a second
       version of a previous system called Echo, and that was
       a system which provided balancing and accounting for
       Crown Offices.
   Q.  And did you maintain paper records alongside it?
   A.  There would have been paper records, yes.
   Q.  That contrasted, didn't it, with agency branches at that
       time who were working on a paper-based system but using,
       if they wished to, their own computer programmes
       themselves to keep their own records, is that fair?
   A.  That is correct, except for one thing which I refer to
       in my statement, which is the automation project in the
       Thames Valley.
   Q.  I will come to that, I am just laying the landscape out.
   MR JUSTICE FRASER:  That was a pilot, wasn't it?
   A.  It was, yes.
   MR GREEN:  While we are on it, do you want to explain what
       happened with that.
   A.  With the pilot?
   Q.  Yes.
   A.  Yes.  There was a designated regional area called the
       Thames Valley, obviously that was all branches in
       a particular area around that, and in the late 1980s,
       early 1990s, we piloted in all Post Offices in that
       region an IT system which automated I think it was three
       transactions, one related to National Savings, one
       related to tax discs, and one I think related to
       Girobank, and that provided the ability for those
       branches to undertake those transactions in an automated
       way.  They continued, though, to balance their accounts
       in the same way as they were already doing.
   MR JUSTICE FRASER:  As they were already doing?
   A.  Yes.
   MR GREEN:  On a paper-based basis.
   A.  On a paper-based basis, or with the help of the systems
       that they procured personally that you referred to.
   Q.  Then if we move forward to paragraph 10 of your witness
       statement, please {C2/2/2}:
           "Between 1996 and 2001 I held a service development
       manager role.  In this role, I was involved in the
       analysis and design of changes to operational procedures
       in advance of the roll out of the Horizon system."
           Can I take that in stages, just to clarify exactly
       what was involved.  The Horizon system obviously wasn't
       introduced until after you began that role?
   A.  Yes.
   Q.  That is right.  And when did it start -- when were the
       first installations of Horizon, as far as you can
   A.  As far as I can recall, it would have been around 2000.
       That wasn't an area that I was personally involved in,
       the actual installation of the equipment.
   Q.  I understand.  I am just trying to place it in the time
       you were working on the procedures.
   A.  Sure.
   Q.  You say you were involved in the analysis and design of
       changes to operational procedures.  Were those changes
       to internal Post Office operational procedures, or were
       they changes to procedures being used by agents, or were
       they a mixture of two?
   A.  I think you would ultimately say they were a mixture of
       the two, but what it was particularly related to was the
       way products were transacted between the branch and the
       customer.  So, for example, in a -- in the old way
       everything was written on bits of paper, and there were
       bits of paper that we would be sending off to the
       various clients.  We have heard a lot about things like
       that in the last week or so from some of the other
       witnesses.  Our ambition at that point was to remove
       paper as far as we possibly could from all the
       transactions that we undertook in the Post Office.  So
       my role was looking at those individual products and how
       we would automate them.
   Q.  Did your role extend into considering the actual
       on-screen procedures that agents would have to do when
       they came to balancing or transaction corrections?
   A.  No.
   Q.  Or were you more product facing?
   A.  Product facing.
   Q.  Did you have any input into the screen layouts or
       anything in relation to those products, or was it just
       what they would actually be doing vis-a-vis the
   A.  I believe that both those things are the same, actually.
       The screen layouts are relevant to how one would
       interact with the customer, so yes.
   MR JUSTICE FRASER:  So yes, you did?
   A.  Yes.
   MR JUSTICE FRASER:  What does "product facing" mean?
   A.  So a product could be something like selling a stamp --
   MR JUSTICE FRASER:  I understand what a product is.  What
       does "product facing" mean?
   A.  Work related to products rather than back office.  So in
       terms of -- the question you asked about the back office
       procedures, or you didn't ask a question about back
       office procedures, but the accounting processes I would
       describe as non-product facing in this context.
   MR GREEN:  So you are distinguishing between transactions in
       which an agent or their assistant is serving a customer
       and the back office functions of reconciliation,
       transaction corrections and all those aspects?
   A.  Yes.
   Q.  So those back office functions weren't part of the remit
       that you were considering --
   A.  No.
   Q.  -- at that time.
           Then we see at paragraph 11 of your witness
       statement {C2/2/2} you are appointed head of operational
       finance and planning in 2001?
   A.  Yes.
   Q.  What did that involve?
   A.  That was very much a headquarters role rather than being
       branch-focused.  I had a team who were responsible for
       supporting -- at that time we had a regional structure,
       and each of those regions had a finance team supporting
       them, and my responsibility was the management of that
       finance team, and the -- all the management information
       reporting related to the financial performance of the
       regions of the Post Office.
   Q.  Ms Van Den Bogerd in her witness statement at
       paragraph 25 on page {C2/1/6} -- do you see
       paragraph 25?
   A.  Yes.
   Q.  So you come into that role in 2001.
   A.  Yes.
   Q.  And Ms Van Den Bogerd explains in her witness statement,
       second line, right-hand side:
           "In practice, however, Post Office has typically not
       been profitable overall.  It made a profit last year
       (2016/17) of £13 million but this was the first time it
       had made a profit in 16 years."
           That is correct, isn't it?
   A.  That is what that says, yes.
   Q.  Do you agree with it?
   A.  I do, yes.
   Q.  That was the backdrop against which you were doing your
       job in that role, wasn't it?  Post Office was making
       losses and you were trying to improve performance?
   A.  That is correct, yes.
   Q.  One of the issues that Post Office would face with
       subpostmasters was recovery of losses after termination
       of their appointment.  Did that fall within your role or
       was that someone else's --
   A.  That didn't fall within my role.
   Q.  What did fall within your role?
   A.  The regional structure of employees which managed the
       network of Post Offices, which included the agency
       branches as well as directly managed branches, that team
       of people, which would have included
       Angela Van Den Bogerd, probably, as an area manager
       I think she would have been at that time, that team of
       people who were responsible for managing the network,
       the reporting of their finances, so their staff costs,
       their running costs, et cetera, would have been part of
       the accounts, effectively, that I would have been
       responsible and my team would have been responsible for
       managing.  Internal.
   Q.  Your own financial performance of those teams?
   A.  Yes, that is correct.
   Q.  Just in terms of the change that was effected when
       Horizon was introduced, is it fair to say that was quite
       a big change for subpostmistresses and subpostmasters
       who had been working on a paper-based system before
   A.  Yes, I would say that was fair.
   Q.  Just to identify how it worked, the broad situation that
       was established, can we please look at {C2/1/14},
       paragraph 53 of Angela Van Den Bogerd's statement.  She
       has been looking at the difference in client products
       and how clients want them presented above at 52, and at
       53, in the third line on the right-hand side, the
       sentence begins:
           "This requires the IT systems ..."
           Do you see that?
   A.  Yes, I do.
   Q.  "This requires the IT systems in branch to tie into and
       communicate with clients' IT systems."
           Is that fair according to your understanding of what
       is going on?
   A.  Yes, it is.
   Q.  After the introduction of Horizon?
   A.  Yes.
   Q.  And she says:
           "I am not a technical expert on IT systems but
       I understand from discussions with colleagues over the
       years that clients ..."
           Namely, Camelot and so forth.
           "... set parameters for how those IT systems
       interact, the nature and format of data transferred and
       security requirements."
           Does that accord with your understanding?
   A.  Yes, it does.
   Q.  If we can just go forward, please, to paragraph 65.5 on
       page 18 {C2/1/18}, but can you just look at 65.4 first
       to give you context.  This is under a heading at the top
       you will see -- I am going backwards, I apologise.  The
       heading is:
           "By joining Post Office network, subpostmasters get
       access to wide range of benefits that would be very
       difficult for them to procure independently.  The key
       benefits are as follows ..."
           And it's obviously the brand, which you would agree
       is a very trusted brand and is held in high esteem by
       the public?
   A.  Yes.
   Q.  And if we come down to 65.4:
           "Post Office provides the cash and stock needed to
       conduct transactions."
   A.  Yes.
   Q.  That is correct?
   A.  Yes.
   Q.  So subpostmistresses and subpostmasters are operating,
       effectively, with Post Office money and Post Office
   A.  Yes.
   Q.  She says:
           "I doubt many subpostmasters would have the
       financial means to fund the working capital for
       a Post Office branch."
   MR JUSTICE FRASER:  Where are you reading?
   MR GREEN:  65.4 at the end, my Lord.  I'm still on the same
           Do you see that?
   A.  I do.
   Q.  That is a fair observation?
   A.  I would agree with that.
   Q.  At 65.5, just returning to IT point, she says:
           "Post Office provides the equipment, including IT
       equipment, needed to conduct customer transactions and
       maintain branch accounts, including safes, mail scales,
       Horizon, printers, bar code scanners and chip and pin
       machines.  It also provides the back-end IT
       infrastructure that connects each branch with
       Post Office's clients."
           That is a fair description of the system as you
       understand it, Horizon?
   A.  Yes, it is a fair description.
   Q.  Lastly in relation to that, look at page 24 {C2/1/24}.
       Let me just, to be fair to you, give you the context.
       Paragraph 79 is about the accounting system and its
       design separating the subpostmistress' or
       subpostmaster's branch accounts from the client side of
       the accounts:
           "... with the only connection back to the branch
       accounts being transaction corrections and transaction
       acknowledgements over which the subpostmaster exercises
           This is context, you don't need to comment on this,
       I just want to be fair to you so you understand what is
           And she says:
           "This means a diligent subpostmaster can keep
       perfectly accurate accounts."
           Then look at paragraph 80, she says:
           "The alternative, that Post Office has to effect all
       customer transactions for the branch accounts to be
       accurate and then, as a necessary consequence, provide
       subpostmasters with access to all client data, would be
       completely unworkable."
           So that is what she is saying in paragraph 80.
   A.  Yes.
   Q.  I would like to direct your attention to paragraph 80.2.
       She says that providing access to all client data:
           "... would undermine one of the key benefits of the
       subpostmaster relationship - that Post Office handles
       this on behalf of the subpostmaster."
           You would agree with that?  That is a fair
   A.  Yes, I would.
   Q.  We mentioned a moment ago that Post Office is a trusted
       brand and it is an organisation with a good reputation.
   A.  (Witness nods)
   Q.  Have you enjoyed working there?
   A.  I have, thank you.
   Q.  You are still happy there?
   A.  Very happy.
   Q.  It's an organisation you are proud to work for?
   A.  I am indeed, yes.
   Q.  You would always expect, from your experience,
       Post Office to behave well and fairly with people?
   A.  I believe it does, yes.
   Q.  And that is what other people's expectations would be
   A.  I should imagine so, yes.
   Q.  Can I ask you, please, to look at bundle {E1/12/1}.
       This is a double-sided booklet.  This is the induction
       booklet, and this actual one is the one that Mr Bates
       received, but I am giving it as an example from the
       early days of around the introduction of Horizon.
           If we can look on page 3, please {E1/12/3}, you can
       see at the top little paragraph in the corner underneath
       "Introduction" the second sentence that begins on the
       third line:
           "As a newly appointed subpostmaster, it is important
       that you quickly feel part of Post Office Counters
           And that is very much the tone of the relationship
       that Post Office aims to have with subpostmasters and
       subpostmistresses, isn't it?
   A.  In the sense of them --
   Q.  It's only a general point.
   A.  Yes, it's a general --
   Q.  There is no --
   MR JUSTICE FRASER:  Mr Green, you have to let the witness
   MR GREEN:  I am so sorry.
   MR JUSTICE FRASER:  Go on, Mr Beal.
   A.  It's a general description of how we wish to engage with
       our postmasters, yes, I would agree with that.
   MR GREEN:  Have a look at the purpose of the booklet.  The
       second bullet point:
           "Help you familiarise yourself with Post Office
       Counters Limited, our structure, the products and
       services we offer, our mission and objectives, how we
       work and what we expect from you."
   A.  Yes.
   Q.  Then:
           "Provide information on the support you can expect."
   A.  Yes, it says that.
   Q.  And:
           "Give you general information on the training you
       will receive."
           And you would agree none of this would be very
       surprising to a subpostmaster on his appointment or her
       appointment, would it?  This is just what you naturally
   A.  Yes.  I mean obviously I can't comment on how
       a subpostmaster might feel, but it would appear to me it
       sets a certain expectation of how -- what they might
       expect from engaging with the Post Office.
   Q.  There is nothing surprising about these expectations at
   A.  No.
   Q.  At the bottom it says, three lines up from the bottom:
           "As Post Office Counters' success depends on your
       success, please do not hesitate to make use of the
       support and expertise on offer."
   A.  It says that, yes.
   Q.  If we just move forward to {E1/12/5}, there is some
       green text under "Mission Statement", and the third
       paragraph of that says:
           "We care for all our employees, subpostmasters and
       other agents and we cherish our place in every
           From your experience of working in Post Office, is
       that a fair summary of how Post Office aims to behave?
   A.  Yes, absolutely.
   Q.  Can we now go forward, please, to page {E1/12/10}.  Just
       look at "Training" on the right-hand side, please.
   A.  This is page 17, do you mean?
   Q.  Internal page 17, that is right.  It's bundle page 10 at
       the top of the screen.  I'm sorry to have confused you.
   A.  I don't see anything at the top of the screen but I'll
       take your word for it.
   MR JUSTICE FRASER:  It is at the top of my screen.  But you
       are right, it is internal pages 16 and 17.  Is that what
       is on your screen?
   A.  Yes, it is.
   MR GREEN:  Look at page 17 for a moment, please.
       "Training".  It says:
           "Training for new subpostmasters is usually
       delivered by an agency trainer.  The duration and
       content of the training varies from office to office to
       meet your particular needs."
   A.  Yes.
   Q.  Nothing surprising about that?
   A.  No.
   Q.  And then it says:
           "However, as a basic guide the training available is
       outlined below."
           And then under "On-site Training" it says, second
           "It covers a full range of transactions, accounting
       procedures, security and customer care issues."
           Then immediately below that:
           "The duration of the training varies from office to
       office and is tailored to individual requirements."
           Which is basically repeating what was said above.
           And finally, "Ongoing Training":
           "Further training is provided at timely intervals as
       necessary.  This will be assessed by your retail network
           None of that is controversial or surprising in any
       way, is it, Mr Beal?
   A.  No.
   Q.  That is the sort of thing that an incoming subpostmaster
       might reasonably expect from Post Office, isn't it?
   A.  We provide this book to them, so yes.
   Q.  Yes.  Can we just look at Opus reference {E1/12/11}
       which, Mr Beal, on your screen will be page 19.  There
       it says "Other Training Issues":
           "In addition to transaction processing your training
       will fully cover:
           "Pay, contract and terms of appointment.
           "Managing stock and cash."
           And look at the bottom:
           "Dealing with problems."
   A.  I can see that, yes.
   Q.  There is nothing surprising about that either, is there?
   A.  No.
   Q.  We are nearly there, if that is any consolation.
           {E1/12/12}, which is internal page 20, "Support".
       If you come down to "Customer/Subpostmaster Helpline":
           "A Helpline exists to enable Post Office Counters to
       provide an excellent service at all outlets by:
           "Providing speedy, accurate information and support
       to staff, agents, clients and the public on all
       Post Office Counters enquiries and services.
           "Handling complaints in an efficient and unbiased
           That is what you at Post Office would expect to
       happen, that is what subpostmasters would expect to
       happen, yes?
   A.  Yes.
   Q.  And then rather consistent with what you have been
       saying, on {E1/12/13}, "Communications":
           "As a new subpostmaster you have entered into
       a contract with Post Office Counters Limited which
       states what we as a business expect from you but also
       what you can expect in return."
   A.  (Witness nods)
   Q.  Just while we are on that point, at least at this time,
       if we go back, please, to {E1/12/10}, internal page 16,
       the contract is referenced there, and it says:
           "As a new subpostmaster, you have entered into
       a contract with the Post Office Counters Limited which
       states what we as a business expect from you but also
       what you can expect in return."
           Then it says:
           "You will have received the full contract (on your
       day of appointment at the latest) which is a very 'live'
       working document for both you and Post Office Counters
       Limited.  You should read and understand it in its
           That reflected the practice at the time that if
       a subpostmaster or subpostmistress had not been provided
       with a copy of the full contract before the day of the
       appointment they would be provided with it then, would
   A.  I wasn't involved in that area so I can't say.
   Q.  I understand.
   MR JUSTICE FRASER:  You weren't involved in the contractual
       formation side?
   A.  No.  Not at that point.  This is from the early 1990s,
       I believe, is it, this document?  I think.
   MR GREEN:  From late --
   A.  Late 1980/early 1990s.
   Q.  It is still in play.  Mr Bates --
   A.  Yes, sure.  But at the time of this document being
       written that was not my role.  I wasn't involved in
       the contracts area at all at that point.
   MR JUSTICE FRASER:  So did you become involved in
       the contracts area at a later date?
   A.  Yes.
   MR JUSTICE FRASER:  Do you just want to tell me what that
       date is.
   A.  Really when I took over the role in 2010 of managing the
       relationship with the National Federation of
       Subpostmasters, through that role I would have engaged
       on contractual matters with them.  The actual
       responsibility for the design of the contracts became
       a part of my job about 18 months later, and since that
       period of time through various organisational changes in
       Post Office that responsibility has been in and out of
       my role.  And it currently is within my role.
   MR JUSTICE FRASER:  So when I look at paragraph 19 of your
       witness statement {C2/2/4}, where you say each of
       the three claimants entered into the subpostmasters
       contract, that is information that you got from other
       people, is that right?
   A.  Yes, that is correct.
   MR GREEN:  Can I ask who you got it from?
   A.  It would have been part of the discussion that would
       have been taking place when I was preparing this witness
       statement clarifying which claimants were on which
   Q.  You may not know the answer to this because it is
       a question that relates to what happened to the contract
       during the -- when Horizon was introduced.
   A.  Yes.
   Q.  But are you aware of any changes to the express terms of
       the standard or modified subpostmasters contracts when
       Horizon was brought in?
   A.  No.
   Q.  No.  So although it was probably quite an important
       change on the ground, the actual written contract terms
       in that respect stayed the same?
   A.  I can't say that because I wasn't involved but I believe
       that was probably true, yes.
   MR JUSTICE FRASER:  You believe they stayed the same.
   A.  Yes.
   MR GREEN:  Can we deal briefly with the contracts
       themselves, please, just to identify what the
       differences were.  You broadly dealt with the SPMC
       contracts generally as a whole, and I think if we look
       at paragraph 33 of your witness statement {C2/2/6}, just
       to get a high level picture.
           At paragraph 33 you say:
           "Post Office changed the suite of standard contracts
       for the purposes of the NT programme."
           That is network transformation?
   A.  Yes.
   Q.  "Despite the changes, the core principles of the agent
       being responsible for running the branch, employing
       assistants and completing the accounts and liability for
       losses remained the same."
           So that was the intention, was it, in moving across
       to the NTC contracts?
   A.  Of retaining those core principles?
   Q.  Yes.
   A.  The intention to retain those core principles?
   Q.  Yes.
   A.  Yes.
   Q.  As far as -- you actually helped negotiate the change
       I think with the NFSP, the Federation?
   A.  I did, yes.
   Q.  So you were quite familiar with those negotiations and
       what changes were being effected?
   A.  Yes.  All I would say to that, though, is what -- what
       we did not do is compare the traditional contracts with
       the new contracts.  That wasn't the negotiation.  The
       negotiation was: here is a drafted set of new contracts
       and discuss those new contracts.
   Q.  On the footing that the core principles were essentially
       staying the same?
   A.  Yes.
   Q.  Can we look, please, at paragraph 16 of your witness
       statement {C2/2/3}.  You explain there:
           "For each model, there is a standard contract.  If
       a subpostmaster requested a change to the standard
       contract offered, the request would not be acceptable to
       Post Office."
   A.  Correct.
   Q.  So there was no scope for negotiation on the standard
       terms.  But on conditions of appointment, that would be
       something that would be discussed?
   A.  Yes, such things as opening hours, the format of the
       branch, whether there were any changes that needed to be
       made to the branch.  Obviously that was all individual
       to the specific branches.
   Q.  Understood.  The lead claimants -- did you have a good
       knowledge of the standard SPMC and modified SPMC or ...
   A.  I'm not sure how one would define "good".  I was
       obviously aware of those contracts and still -- we still
       have branches on those contracts now.  So in terms of
       some of the discussions I had with the NFSP, then
       familiarity with those contracts is important, yes.
   Q.  I am grateful.  What were the differences between the
       standard and modified?
   A.  I would say there are -- remuneration particularly was
       a significant difference in that within the traditional
       contracts, the remuneration was broadly a combination of
       fixed and variable remuneration, so remuneration which
       was fixed meant that it was -- everyone was paid or is
       paid monthly, but a fixed amount would have been spread
       across a twelve-month period.  The variable remuneration
       was dictated by the transactions that postmasters
       undertook in their branches.
           In the network transformation contracts, all of the
       remuneration is dictated by the transactions that they
       undertake in their branches.  So there is no fixed
       element of remuneration so that is a first significant
       difference.  The second one would have been related to
       some of the allowances in the original contracts in
       the traditional contracts, particularly holiday
       substitution, sick substitution.  Those allowances do
       not exist in the network transformation contracts.
   Q.  I was actually trying to ask about the standard and
       modified SPMC --
   A.  Oh, the differences about those two contracts?
   Q.  Yes.
   A.  I'm sorry.  Those contracts, again the main difference
       would have been remuneration.  So the traditional
       contracts, at the time of introducing the modified
       sub-Post Office contract in the late 1980s the
       remuneration for the standard sub-Post Office contract
       would have been broadly fixed on a twelve monthly basis.
       In the case of the modified contract which was used for
       branches which were converted from our directly managed
       Crown Offices at the time, or some of those conversions,
       it moved to a remuneration structure which had a fixed
       element, but also an element that varied on the basis of
       the transactions that were undertaken in those branches.
       That was the main difference between those two contract
   Q.  Were there any differences in relation to termination or
   A.  Not that I am aware of, no.
   Q.  Have a look, please, at bundle {D2.1/3/85}.  This is
       section 18 of the standard SPMC, "Non-Observance of
       Rules: Appeals Procedure", and you will see there at
       paragraph 1:
           "Although there may be instances where civil and
       criminal proceedings are contemplated in which it would
       serve no useful purpose to call for a written
       explanation, in all other instances and without
       prejudice to any subsequent proceedings any
       subpostmaster will be afforded an opportunity of giving
       a written explanation of allegations of non-compliance
       or non-observance of the rules which are made against
           Do you see that?
   A.  Yes.
   Q.  And then 2:
           "At the discretion of the retail network manager
       which will not normally be withheld, the subpostmaster
       may, if he wishes, meet the retail network manager to
       discuss the allegations.  He may be accompanied by
       a friend while doing so."
           Yes?  And that has to be a person working for either
       a subpostmaster, sub-Post Office assistant or
       a Post Office employee.  Or it could be the local NFSP
           If we look at -- if we go to paragraph 5
           "If the subpostmaster wishes to appeal against
       a decision to summarily terminate his contract for
       services, he may do so either in writing or by personal
       interview and will be allowed ten working days from the
       date of termination letter to make application, to
       a member of Post Office Counters Limited 'Appeals
       Authority' whose decision will be final.  There is no
       formal appeal against three months' notice of contract
       termination or against termination with pay in lieu of
       notice.  Appeals on all other issues ... are heard by
       the regional general manager whose decision is final."
           Can we compare that -- you see that, there is no
       provision for an appeal there -- against three months'
       notice of termination or termination with pay in lieu of
       notice, do you see that?
   A.  Yes, that is a distinction between their right to have
       an appeal against another part -- another form of
       termination, I think that is what this is saying.
   Q.  Yes.  So at the top it says:
           "If the subpostmaster wishes to appeal against
       a decision to summarily terminate he may do so in
           So that's summarily, yes?
   A.  Summarily terminate, yes.
   Q.  Yes, and the distinction is then drawn in the sentence
       I have just put to you:
           "This is no formal appeal against three months'
       notice of contract termination or against termination
       with pay in lieu of notice."
           Yes?  And as far as you are aware, that was the same
       in the modified, was it?
   A.  I don't -- I don't know without reading the modified
   Q.  Shall we look at {D2.1/2/45}.  So just to cut to the
       chase, because time is obviously limited, Mr Beal, look
       at paragraph 5, "Appeals":
           "If the subpostmaster is dissatisfied with the
       result of his representation he may appeal to the
       regional manager whose decision shall be final except in
       the case of an appeal about remuneration ..."
           So that one doesn't exclude an appeal in relation to
       summary termination, does it, on the face of it?
   A.  The previous one didn't exclude an appeal under summary
       termination, it included appeal.
   Q.  I'm so sorry, on termination with notice.  I am
       misspeaking, it's entirely my fault.
   A.  It doesn't make that distinction, no.
   MR JUSTICE FRASER:  It allows an appeal against termination
       with notice and the other one didn't.
   A.  That is correct, yes.
   MR GREEN:  Could we now please look at {F3/14/1}.  You are
       presumably familiar with the "Corrective Action
       (Contract Application Guidelines)".
   A.  I am not, no.
   Q.  Ah.  I was asking -- I was going to ask you about them
       because they were guidelines about the application of
       the contracts.  Let me just show you --
   MR JUSTICE FRASER:  Did you know they existed?
   A.  I am sure somewhere deep in my history I would have seen
       this document in some shape or form.  So I couldn't say
       I have never seen it but it is not a document I am
       familiar with or I use on a day-to-day basis.
   MR JUSTICE FRASER:  I will take that as a yes, you did know
       it existed.
   A.  I would know there was a set of documents that
       the contracts managers would have for managing
       contracts, yes.
   MR JUSTICE FRASER:  All right.
   MR GREEN:  I am grateful.  Have a look please, at {F3/14/4},
       "Termination of Contract by Three Months {Notice}".
           Second paragraph:
           "In some cases there will be come a time when,
       despite warnings, no improvement has resulted and it
       will need to be determined whether the contract should
       be terminated.  Given that there is no appeal against
       such action, any decision must be taken after serious
       consideration of all circumstances in the case."
           On its face, at {F3/14/1}, this document appears to
       relate to subpostmasters generally, is that fair?
   A.  Yes.
   Q.  And that --
   A.  Although of course subpostmasters generally will all be
       on specific contracts.  So depending upon the specific
       contract that the subpostmaster was on, obviously as we
       have seen the termination clauses are slightly
   Q.  Yes.  But the reason I asked you about this is your
       evidence was that you would have to be broadly familiar
       with the contents of the standard and modified
   A.  Uh-huh.
   Q.  Because it was the backdrop to the negotiations with
       NTC, and also there are still some subpostmasters on
       those contracts, yes?
   A.  Uh-huh.
   Q.  You didn't know about the difference in the appeal
   A.  That is correct, yes.
   Q.  And this document, whoever authored this, doesn't
   A.  Whoever authored it doesn't know?
   Q.  Apparently not.  It is not reflected there, is it?
   A.  Yes, it is -- well, I don't know --
   Q.  The difference --
   A.  -- because I have not seen the whole document.
   MR JUSTICE FRASER:  Please don't speak over each other.
           Go ahead, Mr Beal.
   A.  I have not seen the whole document so I can't say what
       else there is in the document.  If you go back to the
       previous page that you were showing me.  {F3/14/4}
           So this starts off with a paragraph which refers to
       saying it must not be used to give three months' notice
       as a means to avoid the summary termination.  I would
       believe that that was, in fact it says it, and its
       associated appeals provisions.  So that is direction to
       the contracts manager saying you can't just give three
       months to avoid them having an appeal.
           So that is clearly indicating to me that this
       document is covering the subpostmaster's contract that
       has that distinguishing element of an appeal for three
       month -- sorry, an appeal for summary termination but
       not for three months.  So that would be what I would
       expect this document to be used for.
           It seems to me it also covers the other option
       because if there isn't -- if -- in the other contract
       they can appeal.  The three months' differential between
       having the right to appeal or not having the right to
       appeal is irrelevant, I think.
   MR GREEN:  Mr Beal, I want to be fair to you because it is
       the first time you have looked at this and it is
       obviously within a big body of documents that you would
       expect to exist, but you didn't specifically know about
       this one.
           So let me show you the third paragraph on that page,
       do you see that:
           "If there is a decision to end the contract because
       there is little or no likelihood of the subpostmaster
       reaching and sustaining the standard, a letter should be
       sent giving three months' notice of termination in
       accordance with paragraph 10 of section 1 of the
       contract.  The wording of this letter is very important.
       No reason for the termination should be given.  The
       letter should include the words 'in accordance with the
       terms of your contract'."
           Then at the bottom:
           "If the corrective actions described earlier in this
       section have been carried out, the subpostmaster should
       be clearly aware of the reason.  In cases where you are
       challenged and pressed hard for a reason, you may use
       the expression 'Post Office Network has lost confidence
       in you'."
           So this is clearly, on this page, dealing with
       terminations on notice as well as summary terminations,
       isn't it?
   A.  It is dealing with termination on notice, that is
       the heading of the document, "Termination of Contract by
       Three Months".
   Q.  Yes.  And it's in that context that there is
       a difference between the standard and modified appeals,
       isn't it?
   A.  Yes, that appears to be the case from the two contracts
       you have shown me.
   Q.  And you would accept that the second paragraph, last
       line, beginning:
           "Given that there is no appeal against such
       action ... any decision must be taken after serious
       consideration ..."
           That appears to apply to all terminations, doesn't
       it?  It certainly doesn't highlight the distinction
       between the standard and modified, does it?
   A.  Sorry, I am not sure I understand --
   MR JUSTICE FRASER:  I think what Mr Green is saying is that
       given the two contracts have different approaches to the
       appeals, where there is an appeal under one but there
       isn't under the other, that distinction is not reflected
       in the last sentence of paragraph 2 which simply says
       there is no appeal against such action.
   A.  There is an appeal in both contracts.  There is a subtle
       difference in one which is that if -- in
       the subpostmasters contract, if there is termination
       with three months' notice there is no appeal.  Both
       contracts allow an appeal.
   MR JUSTICE FRASER:  Mr Green, it's up to you whether you
       want to pursue it.  I can read the documents.
   MR GREEN:  My Lord.
           Let's just look at one other difference in case you
       can comment on it.  Look at {D2.1/2/55}, please.  That
       is -- this is in the modified SPMC.
   A.  Yes.
   Q.  And there it says:
           "In the event of Post Office Counters deciding to
       close or resite the office, other than at a time of
       summary termination or resignation by the subpostmaster
       in order to avoid summary termination, a compensatory
       payment will be made to the outgoing subpostmaster which
       will be calculated on the same basis as the introductory
       payments but on the level of remuneration at the time of
       closure or resiting."
   A.  Yes.
   Q.  And introductory payments were made on the basis of --
       by reference to the annual remuneration of the
       subpostmaster -- sub-Post Office?
   A.  That is correct.
   Q.  And that is nowhere found in the standard SPMC, is it?
   A.  That is correct.
   Q.  Mr Beal, can we now turn to deal with differences
       between the SPMC and the NTC.  To be fair to you, this
       is closer to your patch, as it were, because you were
       negotiating the acceptability of the NTC with the NFSP
       according to your statement.
   A.  That is correct.
   Q.  And the NFSP -- the Federation, if I can call them that
       because it is a slight tongue twister, NFSP -- the
       Federation is, as you explain in your witness statement,
       an independent organisation that supports
   A.  Yes.
   Q.  So it is to the Federation that subpostmasters can look
       to look after their interests in negotiating with you?
   A.  (Witness nods)
   Q.  If we can just go back to paragraph 33 of your witness
       statement {C2/2/6}, paragraph 33, we've looked at this
           "Post Office changed the suite of standard contracts
       for the purpose of the NT programme.  Despite the
       changes, the core principles of the agent being
       responsible for running the branch, employing assistants
       and completing the accounts and liability for losses
       remained the same."
           That is right?
   A.  Yes.
   Q.  You were aware that the provision in the old contracts,
       the SPMC and the modified SPMC, made subpostmasters
       liable where losses were due to their carelessness,
       error or fault in some way?
   A.  Yes.
   Q.  And that was one of the core principles that was carried
       through into the NTC contracts, wasn't it?
   A.  Liability for losses, yes.
   Q.  Yes.  In fact, just to direct your attention to it, you
       specifically mention the core principles extending to
       liability for losses in paragraph 33 of your witness
   A.  I do.
   Q.  In the last line.
           So in the negotiations as between you and the
       Federation, as far as you were concerned the effect of
       the provision was going to stay the same although the
       wording was different.  It's a language change, not
       a change of substance, is that fair?
   A.  I think that is fair, yes.
   Q.  Can we look, please -- before we do, can I ask you -- we
       will bring it up {E5/137/49}.  This is in the NTC
       contract.  If you look at 16.1:
           "Following the commencement date the agreement will
       continue until ...
           "16.1.1 Either party gives to the other not less
       than 6 months' written notice (unless otherwise
       agreed ... in writing) which cannot be given so as to
       expire before the first anniversary of the start
       date ..."
   A.  Yes.
   Q.  So that was a material change in favour of
   A.  Yes.  Well -- yes.
   Q.  At least in express terms?
   A.  Yes.
   Q.  We will come on to how it works in practice in a moment,
       but at least on the face of the express terms --
   A.  Yes.
   Q.  -- that was a change in favour of subpostmasters and
       subpostmistresses whose contracts said three months'
       notice on either side.
           In what other ways was the NTC better for
       subpostmistresses or subpostmasters?
   A.  In my opinion, the contract itself is a part of
       a broader change programme that the business is
       undertaking.  So the network transformation programme
       which started in around 2010/2011, which the Government
       obviously provided funding for, that programme comes
       with -- came with, and in some cases there are still
       some branches within it -- a huge amount of investment
       in those branches to change the format of the branches,
       to improve profitability of those branches for
       a subpostmaster.  That investment enabled them to in
       many cases refresh their stores after not being able to
       do that for many, many years.  It allowed the operation
       within the branch to change so that they could
       potentially utilise their staff more efficiently and
       therefore save money and therefore increase their
       ability to sell retail products and services as well.
           This contract was a part of that overall
       transformation programme, so there were particular
       benefits in postmasters moving to a new contract such as
   MR JUSTICE FRASER:  I think you were asked in what ways was
       the NTC, in other words, the contract itself, better for
   A.  That contract was a result of that programme.  So by
       taking on this contract, which also gave them -- within
       the contract, as you know from the conditions of change,
       the conditions of appointment, we provide investment.
       It also meant that -- I believe there was clarity of
       language in the contract for postmasters as well.  And
       it gave them much more emphasis and focus on running
       their branches and Post Offices as a business.
   MR GREEN:  Let's look here.  You see under "Termination",
       16.1 is the provision we have just looked at.  16.2 sets
       out provisions to terminate on written notice in certain
       circumstances, do you see that?
   A.  Yes.
   Q.  Go over the page, please {E5/137/50}.  We can see all of
       the provisions there, including at 16.2.15:
           "Fails to properly account for any money due to, or
       stock of, Post Office Limited or the clients ..."
   A.  Yes.
   Q.  And 16.3, there is a right of termination.
   MR JUSTICE FRASER:  Mr Green, are you just doing
       a walk-through of the whole document?
   MR GREEN:  I was just about -- it's those words I just said
       at the beginning of the question, my Lord.
           It is right, isn't it, that the right of appeal in
       the NTC contract was completely removed?
   A.  That is correct.
   Q.  Mr Beal, can I ask you a couple of points about
       the definition of what is in the contract itself, just
       your understanding.  Can we look, please, at {D2.1/3/7}.
       If we look at the top of that page, this is in the
       standard SPMC.  Paragraph 13:
           "Sections 1-23 contain the general terms of
       a subpostmasters' appointment."
           Do you see that?
   A.  Yes.
   Q.  Then:
           "Post Office Counters Limited issues the
       subpostmaster with rules and Postal Instructions
       [capital P, capital I] which deal with the various
       classes of Post Office business to be transacted at his
           And then 14, just to give you fair context:
           "The rules provided for the instruction and guidance
       of subpostmasters must be kept up-to-date.  They must be
       carefully studied and applied.  No breach of rules will
       be excused on the grounds of ignorance."
           Can you just tell his Lordship what the word "rules"
       includes or excludes?  What it means?
   A.  Of course this is from the contract from -- this is a
       1994 contract, isn't it, so I didn't write this contract
       and I can't be absolute --
   MR JUSTICE FRASER:  I don't think you are being accused of
       writing it --
   A.  No.
   MR JUSTICE FRASER:  -- so I wouldn't worry.
   A.  But my experience would be that within a branch there is
       a number of -- prior to Horizon, which was obviously
       when this contract was written, there are a number of
       documents that exist within the branch that the
       postmaster has access to that define the instructions
       and requirements that they have to do and follow, et
       cetera, whether it is for a product or whether it is for
       accounting, that form together the means by which they
       operate their Post Office on behalf of the Post Office.
   MR GREEN:  Do you have any idea whether those things
       are -- because you have some subpostmasters still on
       these contracts?
   A.  Yes.
   Q.  And in the bundle obviously we have a 2006 SPMC standard
       and modified?
   A.  Yes.
   Q.  So this didn't just -- this wasn't just pre-Horizon, all
           Do you know whether, in all this documentation which
       told subpostmasters what to do, the word "rule" was used
       where it was one of these things to be included in the
   A.  I don't know that.
   Q.  Then can you tell us about Postal Instructions, with
       a capital P, capital I.  Is that a thing?
   A.  It was when I started in the Post Office.  It consisted
       of a number of binders of information which were in
       the Post Offices and they were updated on a regular
       basis, and that update would require the manager or the
       postmaster within the branch to make changes to that
   Q.  Going back to the old school model, were they actually
       called postal instructions in the old days?
   A.  I believe they were, yes.
   Q.  And is it fair to say that in these contracts we see
       quite a lot of legacy language --
   A.  Uh-huh.
   Q.  ... that possibly hasn't been fully updated to reflect
       the titles and things of more modern documents, is that
   A.  I would say that the postal instructions still exist but
       in a different form to what they existed at that time.
       So, for example, on Horizon, there are instructions on
       Horizon relating to how transactions are undertaken,
       this is the Horizon help.  I would believe that all
       those things relate to the rules and instructions that
       are referenced in the contracts.
   Q.  Were you aware -- let's take it in stages.  Look,
       please, at {E5/137/32}, which is in the NTC contract.
       Part 2, paragraph 1.1.  You will see there:
           "The operator agrees to operate the branch on behalf
       of Post Office Limited in accordance with the terms of
       the agreement (including, for the avoidance of doubt,
       the manual)."
           You were involved in negotiation of this.  Do you
       know what the manual was?
   A.  The manual is listed in the -- in the previous section
       of the contract.  If you turn to that for me --
   Q.  Certainly.  So if we go to {E5/137/30}.
   A.  -- it is one of the terms in it.
   Q.  I was really asking if you could remember what sort of
       thing without looking, but it's fine.
   A.  Sorry.  I wanted to be clear that it was referenced in
       the contract.
   Q.  No, I'm not challenging that.
   A.  It is defined in section 5, I think.  But it typically
       includes things like the Horizon manuals, the operating
       instructions, et cetera.
   Q.  Just following it through.  So we looked at -- just to
       see how it works, we have come from -- well, at the
       beginning of the NTC there is the preface, isn't there?
   A.  Yes.
   Q.  And let's look at {E5/137/3}.  There you see the manual
       is defined in the standard conditions, yes?
   A.  Yes.
   Q.  Then we are going to go to the standard conditions,
       which are {E5/137/30}.  There the manual is defined as:
           "The manuals and other documents referred to in
       part 5 of these standard conditions."
   A.  Yes.
   Q.  So we go forward then to {E5/137/64}.  This is the
       definition of the manual, this list of documents.
           The Horizon online administration and equipment
       operations manuals is I think over 500 pages, is that
       about right?
   A.  It's a large document, yes.
   Q.  And some of the others were quite big too, is that fair?
   A.  That is fair.
   Q.  I think you nodded.  That doesn't come out on the
   A.  Sorry.  Yes, it's fair.
   Q.  Not your fault, Mr Beal.  It's fine.
           Then we look at Branch Focus, halfway down?
   A.  Yes.
   Q.  And just look at the bottom line.  The manual includes:
           "Any other instructions to operators or updates to
       such instructions issued by Post Office Limited from
       time to time."
   A.  Yes.
   Q.  That could include individual instructions, could it, to
       a subpostmaster, or not?  Do you have a feel for the
       answer to that?
   A.  "Individual instructions", I'm not sure what you mean by
   Q.  If someone wrote to a subpostmaster and gave them
       an instruction to do a particular thing.
   A.  If it related to their contract or related to operating
       their branch?
   Q.  Yes.
   A.  Then I would expect that to be part of this, yes.
   MR JUSTICE FRASER:  Can I just ask you about 1.2.  This
       obviously just relates to your experience and if you
       don't have any, then tell me.
           That says that you can either give the operator a
       copy of the manual on DVD or CD ROM or whatever, or give
       the operator instructions how to get hold of the manual.
       Do you know -- and obviously the online manual is
       identified in the eighth bullet point of 1.1, but that
       is an online guide.
   A.  For Horizon, yes.
   MR JUSTICE FRASER:  For Horizon.  So some of them would be
       electronic.  Do you know how many it would be in hard
       copy and how many electronic?
   A.  Sorry, I don't know that.
   MR JUSTICE FRASER:  You don't.
   A.  No.
   MR JUSTICE FRASER:  Right.  Mr Green.
   MR GREEN:  I am most grateful, my Lord.
           Just while we are there, can we go back to
       {E5/137/51}, please.  Do you remember we were looking at
       paragraph 16 which made for provisions for -- 16.1 made
       provisions for termination.  16 is headed "Termination".
           If you look at 16.5:
           "The operator shall promptly notify Post Office
       Limited in writing of any circumstances which would give
       Post Office Limited a right to suspend or terminate the
           Yes?  And that would, on the face of it, include any
       of the matters set out in 16.2 which we see at
       {E5/137/49}, and over the page all the way down at
       {E5/137/50}.  That is right, isn't it?
   A.  Yes, I think so.
   Q.  Can we remember discussing -- did you know that 16.5 was
       new or did you think it was part of the old contracts?
   A.  I don't remember.  I have no memory of that.
   Q.  Was it discussed with the Federation at all?
   A.  I don't remember.
   Q.  Self-reporting obligation?
   A.  I don't remember.
   Q.  One of the items listed when we were looking at the
       definition of the manual was Branch Focus.  Do you
       remember I highlighted that to you?
   A.  Yes.
   Q.  Can we look, please, at {F4/132/1}.  This is a Branch
       Focus document.  It is weekly.  That is right, isn't it?
       It comes out every week?
   A.  Yes.  I don't think we send a paper copy anymore,
   Q.  Ah --
   A.  So this is an issue from 2013, I think, looking at the
       date on it.
   Q.  How is it sent out now?
   A.  It is accessible online.
   Q.  It's accessible online.  I understand.
   A.  That is my belief.
   Q.  I am just asking what you -- it is not Mastermind, you
       don't have to know --
   A.  I know that, I appreciate that.  I just wanted to
       clarify that we certainly make it available
       electronically and I believe we have stopped issuing
       paper copies now.
   Q.  So we can see what is in that particular issue that
           Just to clarify, could we look at page 17 of that
       document {F4/132/17}, "Getting Ready for Summer".  Can
       we just try to understand --
   MR JUSTICE FRASER:  40 million people going overseas in
       2013.  That is an enormous number.  Maybe I lead
       a sheltered life.
   A.  I can't comment on that, obviously.  Maybe that is not
       individuals but repeats, perhaps.
   MR JUSTICE FRASER:  That is a lot, though.
   A.  It is a lot, yes.
   MR GREEN:  Would sections like this be -- are these
       contractual instructions or ...
   A.  I would need to read it.
   Q.  Quite.  Can I give you an example.  Shall we go forward,
       please, to page {F4/132/18}.  Let's look at -- under
       "Sizzlers continue", there is a black heading "On Demand
           "To make customers aware we will be advertising our
       great rates in the press and you can help promote these
       great deals in your branch by using your Deal of the Day
           So where it says:
           "To make customers aware we will be advertising our
       great rates ... and you can help promote these great
       deals ..."
           Is that an obligation to try to help, contractually?
   A.  I wouldn't -- let me just think, if I may ... (Pause)
           I would suggest it was in the sense of the contract
       expecting branches to reach certain standards and to
       undertake promotional activity on behalf of the
       Post Office related to its products and services.  Then
       this is a promotion that we are providing to them for
       them to sell that product and increase the sales in that
       product which obviously is in both parties' interests.
       So in that respect I would say it was, yes.
   Q.  So --
   A.  But I would say if they failed to do this, that would
       not be a matter that we would then take up with them
       necessarily contractually.  We would not necessarily
       even be aware of it, of course, because it would be
       activity happening in their branch or not.
   Q.  Let's look under "Pre Order":
           "... should be used in branches where demand will be
       low.  To help your branch be the most competitive on
       rates please don't let customers know about next week's
       offer until it is live in branch next Wednesday.  This
       will stop competitors in your area becoming aware of the
       promotion and offering better rates."
           So is that a contractual instruction?  Might it be
       or are you not sure?
   A.  I would say this was contractual, yes, because it has
       provided instruction to them about how they undertake
       activity within their branch, yes.
   Q.  So to --
   A.  And it is part of Branch Focus, of course, which is
       referenced in the contract, isn't it?
   Q.  So if an old lady came into a Post Office and asked the
       subpostmistress on Tuesday afternoon "I am thinking of
       buying some foreign currency, my sister and I are going
       off on a holiday of a lifetime for a week.  Should I get
       it today?"  If the subpostmistress knew that the next
       day's rates would be lower, would it be a breach for her
       to say "I would wait, because rates might get better",
       or is that on the border?
   A.  Technically I think that would be a breach.
   Q.  And that would then potentially be a breach that she
       would have to self-report, or not?  Or would she only
       have to self-report it if she did it more than once?
   A.  I would need to check the words but, as I said, I don't
       believe that is a breach that would result in a matter
       that would lead to termination.
   MR JUSTICE FRASER:  That is not what you are being asked.
   A.  I appreciate that, but that is why I would need to read
       the list of things that were self-reporting.  If I may
       do that, I could answer the question.
   MR GREEN:  Would you like to be shown that?
   A.  Yes, please.
   Q.  Go back, please, to {E5/137/50}.
   A.  Can I see the previous page?
   Q.  Yes, please do.  Start perhaps at 16.2 {E5/137/49}.
   A.  So this talks about material breach, and I wouldn't
       consider that to be a material breach.
   MR JUSTICE FRASER:  You would or you wouldn't?
   A.  I would not.  The precise example you gave to me of
       a postmaster serving a -- I think you said old lady, if
       I have got that correct, and in the circumstance of what
       you just described I would not consider that a material
   MR GREEN:  So the seriousness of the breach would depend on
       who they were serving.
   A.  And also you said it was the day before.
   Q.  Yes.
   A.  And what the particular breach would have related to.
   Q.  Say it was quite a substantial sum they were going to
       buy in foreign currency --
   A.  It's not so much about the sum here, I think it is the
       issue itself, which is that we are obviously through
       that instruction giving branches advice and instruction
       in order to avoid a competitor hearing about our offer
       and then taking action to reduce their rates in order to
       compete with us --
   Q.  So --
   MR JUSTICE FRASER:  Have you finished your answer?
   A.  I wanted just to add to that that in this circumstance,
       from the way you have described it to me, and obviously
       it is a hypothetical situation so I don't know --
       neither of us knows whether or not that subpostmaster
       knows the customer.  But in the general assessment
       I have made of what you are saying, I wouldn't consider
       that to be a material breach.
   MR GREEN:  Thank you, Mr Beal.  My Lord, would that be
       a convenient moment for the break?
           Mr Beal, I don't know if you have been here before
       today, you might have been but I am going to tell you
       anyway.  We are going to have a short break, you are in
       the middle of being cross-examined, giving your
       evidence, that means you can't talk to anyone about
       the case.  Please don't feel you have to sit in
       the witness box, by all means leave the court, but be
       back in ten minutes.
           I will come back in at 12.05 pm.
   (11.56 am)
                         (A short break)
   (12.06 pm)
   MR GREEN:  Mr Beal, can we look, please, at paragraph 37 of
       your witness statement {C2/2/7}.  You deal there with
   A.  Yes.
   Q.  And you explain:
           "From time to time, Post Office has varied the terms
       of its standard contracts to reflect operational
       changes, changes in the regulatory requirements and in
       response to shifts in market conditions.  Both the
       subpostmasters contract and NT contracts contain terms
       permitting Post Office to amend the contractual terms by
       giving notice.  This is necessary to allow Post Office
       to implement changes across the branch network in
       a consistent and efficient way."
   A.  Yes.
   Q.  If you look at paragraph 38, please.  You say there:
           "To the best of my knowledge, below is a list of the
       variations that have been applied since 2002 to the
       subpostmasters contract, the modified contract, the
       community contract (collectively, the traditional
       contracts) ..."
   A.  Yes.
   Q.  If we go over the page to {C2/2/8}, you will see a list
       there of numbered paragraphs where you set out those
       twelve numbered paragraphs.
           What was the source of your knowledge on this?
       Where did you get that information from?
   A.  That was a list that was provided in the -- whilst I was
       preparing my witness statement.
   Q.  Was it provided to you by colleagues at Post Office or
       by somebody else?
   A.  I have actually had it from both sources.  So the
       original list was provided to me by -- by the legal team
       that --
   Q.  I don't want to go further than that.  That is fine.
           If we have a look, please, at {H/2/1}.  This is
       a letter of response to a letter of claim in 2016 by
       Bond Dickinson, now Womble Bond Dickinson, who are
       solicitors to the Post Office.
           If we look at page  {H/2/93}, at paragraph 2.4 we
       can see a very similar list to the list that you set out
       in your witness statement.
           Is it possible to show the witness statement
       paragraph 38.1? {C2/2/8}
   MR JUSTICE FRASER:  The witness has that in front of him in
       hard copy.
   A.  I can read it, yes.
   MR GREEN:  Can you see the first paragraph:
           "On 4 November 2002, postmasters [in the letter, and
       'subpostmasters' in your statement], were notified of
       a number of variations to the postmaster contract."
           And they're listed, and you call them the
       traditional contracts because you defined them.
           "The variations were in response to the change of
       business name from Post Office ..."
           And you said:
           "... due to the change of business name ..."
           Then in your list there is an additional one at 38.2
       on 1 April 2002.  Then your third one looks quite
           They are broadly the same list, aren't they?
   A.  Yes.  I am -- I haven't had time to read every single
       one but I understand what you are saying.
   Q.  Of course.  I don't want to be unfair to you.
           If you look at 38.9 in your witness statement for
       a moment, please {C2/2/8}.  Look at 38.9, you can see
       that date of 31 July 2006.  Then there is a gap of nine
       years and three months-odd to 38.10, October 2015.  Do
       you see that?
   A.  Yes.
   Q.  Just thinking now, are you aware of any material
       variations during that period that you can think of?
   A.  Not that I can recall, no.
   Q.  Have a look at {F4/64/1}.  That document is "Branch
       Standards - Q and A" which appears to anticipate or
       contemplate the introduction of:
           "... specific financial consequences for
       subpostmasters who do not meet the expected level of
       performance for some branch standards.  The amendment to
       the subpostmaster contract which introduces the
       financial consequences is also included with the
       information that will be sent with the booklet."
           Then if we look at the fourth bullet point, do you
       see that:
           "If branches fail to complete cash declarations,
       including those relating to ATMs, and performance
       doesn't improve following remote intervention, a member
       of the network support field team will visit the branch
       to conduct further training which will be at the cost of
       the subpostmaster."
           Do you remember this being introduced?
   A.  When is this document from?
   Q.  This document is -- do you see at the top 5 March 2010?
   A.  Okay.  I don't remember this specific document, no.
   Q.  Can you remember the introduction of financial penalties
       for subpostmasters who didn't conform with branch
   A.  I can't, no.
   Q.  Have a look, please, at {F4/65/1}.  This is a letter
       to -- a standard form letter to subpostmasters:
           "I am pleased to send you the Post Office branch
       standards booklet.  This is a summary of some of the
       contractual instructions we have sent to you in the past
       which are set out in operational instructions such as
       Operational Focus."
           Now, just taking that in stages, the booklet being
       sent is a summary of contractual instructions which had
       previously been sent which are operational instructions
       such as Operational Focus.
           Now, is Operational Focus the successor to Branch
       Focus or is that a separate --
   A.  I don't know, sorry.
   Q.  If we go over the page, please, to {F4/65/2}:
           "Starting on 1 June, we will pass on to you the cost
       of any visits to your branch to ensure that compliance
       training has been completed.  We will also pass on the
       cost of any further training if you are not carrying out
       your overnight cash or ATM declarations properly,
       including the cost of visiting your branch to deliver
       the training.  We will also pass on to you the charges
       we have to pay for missing MVL discs.  The details of
       how these measures could affect you are shown in the
       'Conformance with branch standards' booklet included
       with this letter."
           Pausing there, can we go back to {F4/65/1}.  Is that
       the same document but differently named to what we see
       in the first line, "Post Office branch standards
   A.  Sorry, the ...
   Q.  I will show you both pages to be fair to you.  Look at
       the second page {F4/65/2}.  There are four paragraphs
       there.  At the bottom of the first paragraph, bottom
       line, the title is "Conformance with branch standards
       booklet", and that is the one that sets out the details
       of how these financial penalties can affect
   A.  Yes.
   Q.  Can you go back to page {F4/65/1}, would it be your
       understanding that's the document referred to by
       slightly different words in the first line, or could it
       be different or --
   A.  May I ask a couple of questions?  When was this document
       from?  There is no date on it.
   MR JUSTICE FRASER:  I'm not sure the date of the document
       really is necessary for you to answer the question,
       Mr Beal.
   A.  Okay, sorry.  I think it probably is the same document
       but actually, if that is the second page of this letter,
       and it came with a document to the person that received
       it, I would imagine that would be very clear.  But as
       I'm not seeing the total of all of that, I ...
   MR GREEN:  Let's go forward to {F4/60/1}, please.  This
       document is entitled "Branch Standards", do you see
   A.  Yes.
   Q.  If we go back to {F4/65/1}, "Post Office branch
       standards booklet", do you see that?
   A.  Yes.
   Q.  If this was sent with that letter you can see how the
       title "Branch Standards" might suggest, would you
       accept, that that is the booklet they are referring to
       in the first line?
   A.  If that was with this letter, yes.
   Q.  Then if we look at {F4/59/1}, there is then a document
       which also has a heading "Branch Standards" across the
       middle, but instead of just "Getting it right every
       time" and the picture of a gentleman with his arms
       apart, it has "Conformance with branch standards", do
       you see at the bottom?
   A.  Yes.
   Q.  If we go over the page to {F4/59/2}, it says:
           "As you know, Post Office Limited from time to time
       issues instructions to subpostmasters under the
       subpostmaster contract about how to operate
       a Post Office branch properly.  These instructions are
       set out in various documents, including operational
       instructions and in Operational Focus."
           Can you just explain to the court what is the
       difference between operational instructions, with small
       O, small I, and Operational Focus, capital O, capital F?
   A.  I don't know in the context of this.  Operational Focus
       is obviously I think one of the paper-based, probably,
       at the time, documents that we issued to branches.
       I don't know what the reference to operational
       instructions is in this document.
   Q.  Then the next sentence reads:
           "For ease of reference, these instructions are
       referred to as branch standards."
           Small B, small S.  Is that all of the instructions,
       do you know, or is that some of them?
   A.  I don't know.
   Q.  If we go over to {F4/59/3}, at the top of the page:
           "The further measures that Post Office Limited will
       introduce for non-compliance with these branch standards
       are as follows ..."
           And item 1 is "Compliance training", do you see
   A.  Yes.
   Q.  If you look at the bottom paragraph of section 1, it
           "Post Office Limited may require the subpostmaster
       to pay Post Office Limited's reasonable costs and
       expenses of carrying out these steps, including (but not
       limited to) the costs and expense of travel, staff time
       and overnight accommodation where required."
   A.  (Witness nods)
   Q.  So Post Office could require the subpostmaster to pay in
       circumstances where the compliance training at
       paragraph 1 had not been properly completed by relevant
       deadlines, is that a fair reading of paragraph 1?
   A.  To pay reasonable costs, yes.
   Q.  Some of these Post Offices are in quite rural areas,
       aren't they?
   A.  Some Post Offices, absolutely.
   Q.  Can I just ask you one more question about -- one more
       series of questions about postal instructions.  Can we
       look, please, at {E2/45/1}.
           This is a letter to Pam Stubbs, who is one of
       the lead claimants, and it is dated 15 February 2010.
       Do you see that?
   A.  Yes.
   Q.  Top right.
   A.  Yes, I can see that.
   Q.  Under "Request for Payment".  Then if you look, you see
       her address on the top left: "Mrs Pamela Joan Stubbs,
       Post Office Portakabin, Bearwood Road".  And then you
       can see the outstanding debt at 12 February 2010.
   A.  Yes.
   Q.  At the bottom there it says in bold and underlined:
           "Transactions due for payment this period,
           And then it says:
           "Total account balance: 17,670.65."
           Yes?  Which is adding in a previous subtotal of
   A.  Yes.
   Q.  Then it says:
           "Please settle this account by 25 February 2010 in
       one of the following ways: posting a cheque ... in
       the enclosed prepaid envelope.
           "Or if you wish to pay by debit/credit card, ring
       this department on the number shown."
           Is that a postal instruction or -- what is that?
   A.  It's a request for payment issued by the agent's debt
       department in the Post Office.
   Q.  So that reflects what Post Office regards as a debt due
       and owing from Pamela Stubbs?
   A.  Yes.
   Q.  I understand that it is a request for payment.
   A.  Yes.
   Q.  But you wouldn't say that is an instruction, that is not
       a postal instruction she has to comply with?  Or is it?
   A.  Well, I think it is something she has to comply with
       because it is a consequence of action she's -- you know,
       a debt that has been caused as a result of her running
       her Post Office.  I don't know how, obviously.  I can't
       tell that from this document.  So it is -- it is
       an instruction to her in the context of her contractual
   Q.  Look at {E2/44/1}, please.  This is from the day before,
       from Mr Kellett.  I appreciate you don't know the facts
       of her case, this is the day before the statement of
       account was calculated and four days before the letter
       we have just been looking at:
           "Dear Mrs Stubbs.  I can confirm that this matter is
       being investigated so we have put the request for
       payment on hold until a conclusion is reached."
           That in itself is not an instruction to her, would
       you agree?  That is just informing her what he has done.
   A.  Yes.  It appears to be that way.
   Q.  Okay.  So let's look at a letter that she then receives
       on 11 March, {E2/47/1}.  Do you see that?  So the
       chronology, Mr Beal, is 11 February we've put it on
       hold, 15 February automatically generated request which
       we have dealt with.
           And then just to ask you about this letter.  This is
       11 March 2010:
           "Dear Mrs Stubbs.  Please see attached request for
       payment for the specific amount shown which has been
       'settled centrally' at your Post Office and despite
       previous reminders is still outstanding."
           Then it says:
           "Failure to meet the repayment terms by
       21 March 2010 will lead us (with approval from your
       contract manager) to deduct this outstanding debt from
       your future remuneration payment."
           So is this one a postal instruction to her or was
       this -- what is this?
   A.  It is a further request for payment.
   MR JUSTICE FRASER:  Is it a postal instruction or not?
   A.  I would say it was -- I'm sorry, I am not trying to
       avoid the answer.  I am answering the question.  Let me,
       if I may, explain.  It is an instruction to her to make
       the payment and it has arisen as a result of the
       activity that she undertook in her branch that caused
       the various debts to occur, and therefore in the context
       of -- it's in the context of her contract.  I don't know
       whether you would call that a postal instruction or not.
       So I don't know.
   MR GREEN:  Thank you very much.
           Moving on, can we just look back, please, at the
       issue of the change from the SPMC to the NTC.  Could you
       kindly be shown paragraph 36 of your witness statement
       on {C2/2/7}.  We have touched on this already so I won't
       go into too much detail but just to clarify.  As we
       mentioned earlier this morning, you were involved with
       negotiations with the Federation.
   A.  Yes.
   Q.  We touched on the fact that you have described them as
       the independent organisation supporting the
       subpostmasters.  So they were negotiating for the
   A.  Yes.
   Q.  And you were negotiating against them, as it were?
   A.  As it were, yes.
   Q.  Hopefully in a reasonably sensible way.  You say there:
           "The Federation were broadly supportive of the NT
       programme and the new NT contracts."
   A.  I do, yes.
   Q.  The introduction to that is the first line of
       paragraph 36:
           "When Post Office was preparing the Locals and Mains
       contracts ..."
           Those are the two types of NT contracts, aren't
   A.  That is correct.
   Q.  What is the difference between those two types?
   A.  Broadly speaking, the Mains contract is intended for
       branches which are quite large, they would have more
       than one serving position and usually those serving
       positions are dedicated entirely to the provision of
       Post Office services.  They may also have a serving
       position that is integrated into the retail, if that
       branch has retail which most Mains branches would have.
       That allows the postmaster in a Mains Post Office to
       operate and provide Post Office services in a flexible
       way, either through the dedicated positions, which would
       normally happen in the core opening hours of, say, 9 to
       5.30.  And then outside of those opening hours, if their
       retail was open outside of those opening hours they
       could provide the Post Office services or can provide
       the Post Office services through the position that was
       integrated into their retail till point.
           The Locals Post Office, Post Office local, tends to
       be the much smaller Post Offices.  Generally speaking,
       they only have one counter position and that counter
       position is integrated into the retail that the branch
       is also offering.  So if you visualise that, you walk
       into, say, a small Post Office that is, say,
       a newsagent, you would be served at the same point as
       you would buy your newspaper by the Post Office services
       that you were providing.  On separate tills but
       nevertheless at the same serving position.
           That is the main difference in terms of format.  So
       in summary large: Mains; small: Locals.
           Broadly the contracts are the same but there are one
       or two key differences.  The remuneration structure
       between the Mains Post Offices and the local
       Post Offices is different, and because of the size of
       the Mains Post Offices often the requirement around the
       provision of space, et cetera, is also different.
   Q.  Can I just show you {B5.1/3/38}, please.  You see this
       is a pleading, just to give you the context.  This is
       Post Office's case in defending the individual claim of
       Mr Bates, do you see that?
   A.  Yes, I understand that.
   Q.  If you look at paragraph 65, it is pleading to certain
       alleged implied terms that the claimants, the
       subpostmasters, are saying: there were certain implied
       obligations in our contract.  And there is a dispute
       between --
   A.  I understand that.
   Q.  You probably have the background to this dispute.
   A.  I do.
   Q.  Just by way of context, you probably realise that some
       of the factual allegations made by the claimants are
       that Horizon was not very helpful, they had problems
       with shortfalls.  You understood all that?
   A.  I understand that, yes.
   Q.  The factual premises upon which the claimants --
   A.  Yes.
   Q.  And it is in that context that we look at this
       paragraph, 65(2):
           "Pursuant to section 1, clause 18 of the SPMC,
       Post Office had (a) a power to change the contract and
       its operational instructions with the agreement of the
       NFSP and (b) a power to change the contract and its
       operational instructions without the agreement of the
   A.  That is correct.
   Q.  So Post Office did them both.
           Then it says:
           "It's admitted that the contract contained
       an implied term that Post Office would not exercise the
       power referred to in (b) (ie the power to make changes
       which were not agreed by the NFSP) dishonestly or in
       an arbitrary, capricious or irrational manner."
           So the point about that is that Post Office is
       agreeing that where it makes changes to the contract
       that it discusses with the NFSP, that is one situation.
       And where it makes contract changes or operational
       instruction changes without discussing it with the NFSP,
       that is a second situation.  Do you see the difference?
   A.  No, I don't see that.  That is not what it says,
       actually.  Sorry.  It says "without the agreement of the
       NFSP".  Not discussing, agreement.
   Q.  You are quite right.  I was just trying to get --
   A.  Sure.  I think they are important differences though --
   Q.  You are quite right.
   A.  -- because we, generally speaking, always discuss every
       change we make with the NFSP.  Sometimes we reach
       agreement and sometimes we don't.
   Q.  And that is important because they are the independent
       supporters --
   A.  Absolutely.
   Q.  -- of the subpostmasters.
   A.  It is important we discuss it with them, yes.
   Q.  But you then go on to make the point about the
       difference between discussion and agreement?
   A.  Yes.  Because the point I am making is that to the best
       of my knowledge, all changes we make we discuss with the
       NFSP.  Not all of those changes will they agree to.  So
       nevertheless, we may still make those changes even
       though we don't necessarily agree, but we would still
       have discussed them with them.
   Q.  The question I want to ask you about this is: it's
       necessary to identify those two different sorts of
       changes, changes made when you agree --
   A.  Yes.
   Q.  -- the change with the NFSP?
   A.  Yes.
   Q.  And changes made when you don't agree?
   A.  Yes.
   Q.  Can we just go back to {B5.1/3/38}.  I just want you to
       see exactly what is being said here before I ask you the
       question, to be fair to you.
           It says there -- it distinguishes situation (a) is
       with the agreement of the Federation, yes?
   A.  Yes.
   Q.  And situation (b) is a power to change the contract
       without the agreement of the Federation?
   A.  Yes.
   Q.  And the admission by Post Office that it won't exercise
       its power to make a change dishonestly or arbitrarily or
       capriciously is confined to the situation where there
       has been no agreement with the NFSP, in that paragraph.
   A.  In that paragraph.  Yes, that is what that says.
   Q.  Does that conform with your expectations about how that
       would go?
   A.  In practice, you mean?  In terms of would we make
       changes --
   Q.  Would you ever expect -- would anyone ever expect?
       Would Post Office expect, would subpostmasters expect
       changes --
   A.  That we would make changes?  No, of course they --
   MR JUSTICE FRASER:  Sorry, just for the transcript.
       Mr Green didn't get a chance to finish, and then you
       didn't get a chance to answer.  So do you want to do it
   MR GREEN:  Let's take it in stages --
   MR JUSTICE FRASER:  No, you just need to finish that
       question and then we just need to record the answer.
   MR GREEN:  Would subpostmasters, or the Post Office for that
       matter, ever expect Post Office to exercise its power to
       make changes to the contract or operational instructions
   A.  No.
   Q.  Arbitrarily?
   A.  No.
   Q.  Capriciously?
   A.  No.
   Q.  It is completely far-fetched, isn't it?
   A.  And we don't do that.
   Q.  No, of course, and no-one would ever expect you --
   A.  And I don't think the NFSP would agree to it anyway,
       which is the point here, isn't it?
   Q.  No, it's not --
   A.  Well, it is in terms of the reality, in practice.
   Q.  I am just -- you have pointed out, let's be very precise
       here, you have pointed out that some changes are made
       with their agreement?
   A.  Yes.
   Q.  And some changes are made without their agreement?
   A.  Yes, that is correct.
   Q.  And I am asking you specifically -- in case I have not
       been clear, I am asking you specifically: changes made
       to a contract or operational procedures without the
       NFSP's agreement, you wouldn't expect to make those
       changes dishonestly, would you?
   A.  Without their agreement?  That is what the clause is --
       that is what the admitted liability is.
   Q.  So you agree with that?
   A.  Yes, I agree.
   Q.  What about with their agreement?
   A.  I would not expect to make changes of any of the nature
       you described, dishonest, capricious, et cetera.
   Q.  The distinction is irrelevant.
   A.  I think the distinction is technical, would be my view.
   Q.  Yes, it is not realistic about what people expect, is
   A.  It is not realistic about what we do, no.
   Q.  But my question is quite specific --
   A.  About what people expect?  No, it is not realistic.
   Q.  Post Office wouldn't expect it?
   A.  I agree.
   Q.  And the subpostmasters would not expect it?
           You are nodding?
   A.  I agree, yes.
   Q.  I am most grateful.
           The relevance of the NFSP having been broadly
       supportive, as you describe in paragraph 36, is that
       that tends to suggest they were broadly happy with the
       NTC, is that fair?
   A.  That is fair.
   Q.  And that is on the basis of what you described earlier,
       that the core principles on various things, and we
       mentioned losses specifically, stayed the same?
   A.  Yes.
   Q.  Can I ask you, please, to look at {C2/1/21}.  Just to
       give you context, this is the witness statement of
       Angela Van Den Bogerd.  I just want to ask you to look,
       please, about halfway down paragraph 69.  If you look
       just slightly to the right of middle, you will see
       "Having appointed ..."
   A.  Yes, I see that.
   MR JUSTICE FRASER:  Which paragraph?
   MR GREEN:  69, my Lord:
           "Having appointed, spoken to and worked with
       subpostmasters for many years, I understand that when
       they are considering joining Post Office they make
       an assessment about whether the additional cost of
       running a branch (principally set-up costs, labour costs
       and the reduction in retail floorspace) and the risks
       (principally in the form of liabilities for shortfalls
       if mistakes are made by them or their employees) are
       outweighed by their Post Office remuneration and the
       potential for increased profit in their retail
           That is a fair summary of what they are thinking
       about when they enter the contracts, isn't it?
   A.  Yes, I would say so.
   Q.  And I think the effect of your evidence, but correct me
       if I have got it wrong, the effect of your evidence is
       that that broad picture basically stayed the same under
       the NTC because the core principles stayed the same too,
       is that fair?
   A.  It is.  But of course under NTC we did change
       remuneration structures.
   Q.  I understand that.
   A.  So there were some changes.
   Q.  There were of course some changes.  I am just talking
       about the broad --
   A.  Broad principles.
   Q.  When you are thinking: do I want to enter into the
       contract with the Post Office?  That is a pretty fair
       summary of what they are weighing up in their minds?
   A.  Yes.
   Q.  You explain in your witness statement the role of the
       NFSP, you set that out on page 9 {C2/2/10} at
       paragraphs 44 onwards.  You explain it was set up in
       1897 and it is an independent members' organisation
       supporting subpostmasters.  You say that is a fair
       description of their status?
   A.  Yes.
   Q.  And I think they were originally a trade union at one
   A.  They were listed as a trade union, yes.
   Q.  They were registered I think as a trade union --
   A.  That is correct.
   Q.  -- and then de-registered, was it about 2012/2013?
   A.  Yes, around that time.
   Q.  We have covered the discussions and consultation at
       paragraph 44.
           Then paragraph 45:
           "The NFSP is independent of Post Office."
           "In 2015, the structure ... changed to a trade
       association that was to be funded by Post Office
       pursuant to a 15-year grant arrangement."
   A.  Yes.
   Q.  "A copy of the grant agreement is available on NFSP's
       website.  The long-term nature of the grant agreement
       was designed to underline the NFSP's independence from
       Post Office."
           Ms Van Den Bogerd at {C2/1/29}, paragraph 98,
       comments that the NFSP has publicly supported
       Post Office's view that Horizon is robust.  Do you see
   A.  Yes.
   Q.  So the NFSP has been broadly supportive of the NTC
       changes, contract, and supportive of Horizon being
   A.  Yes.
   Q.  And can you be shown please the defendant's written
       opening at page 6.  Sorry, Mr Beal, I don't have the
       reference ... {A/2/6}.  If you look at paragraph 13 and
       go just over halfway down in the middle, to the left of
       the middle, you see:
           "The SPMs now raising issues are a very small
       proportion of the SPMs in the existing network and
       an even smaller proportion of those loyal and successful
       SPMs who have been in post over the last 18 years
       (during which time Horizon has been operating).
       Furthermore, it should be noted that the National
       Federation of Subpostmasters, which is the organisation
       which represents SPMs and their interests nationwide,
       does not support this action and does not endorse the
       factual premises of the claims."
           Do you see that?
   A.  Yes.
   Q.  Are you aware whether the NFSP supports the factual
       premises of the claims?
   A.  I have never seen them -- sorry, what ... it says they
       do not endorse.
   Q.  Endorse.
   A.  So they have stated, and I think there were references
       to various statements on the previous document.  But
       also I recall their head at the time participating in
       the select committee that was reviewing Horizon, and he
       spoke at that, and I believe those are the sorts of
       things he spoke about at that select committee that is
       the basis for that statement.
   MR JUSTICE FRASER:  I'm not particularly interested.
       I don't want to sound rude, Mr Green.  Everyone comes to
       this court with a clean slate, whatever the NFSP's view
       is one way or the other.
   MR GREEN:  My Lord, I am just going to ... if your Lordship
       would bear with me I will make it good.
           You are aware at least that, as we discussed
       earlier, one of the factual premises of the claim is
       that the Helpline was very unsatisfactory for
       subpostmasters.  Are you aware of the NFSP's position in
       relation to that?  Do they think that is a frivolous and
       unfounded complaint by subpostmasters or is it one they
       would agree with?
   A.  I don't know what their position is precisely on that.
       I have not discussed that matter with them.  Not lately,
   Q.  Have you ever?
   A.  Well, the -- the subject of the way that postmasters are
       supported is a frequent topic of conversation we have
       with the NFSP, and the Helpline would have come up in
       those discussions, yes.
   Q.  Can we look, please, at {G/91/1}.  This is a purchase
       order from the NFSP to Post Office.  It says:
           "In accordance with the above purchase order, we
       request payment of Post Office Limited's £250,000
       contribution toward NFSP's union activities in support
       of network transformation."
           That is addressed to you personally, isn't it?
   A.  Yes.
   Q.  So Post Office in 2012 was paying substantial sums to
       the NFSP for its support in relation to network
   A.  It was paying sums to the NFSP for the incurring of
       costs that the NFSP had in support of network
       transformation.  That is what this refers to.  This
       isn't a purchase order, this is a request for payment.
       A purchase order would have been something the
       Post Office would have generated.
   Q.  Let's look at {G/92/1}, please.  This refers to the
       purchase order which -- these are all amongst several
       hundred emails we received last night so I apologise if
       I haven't found all the right ones before
       cross-examining you this morning.
   MR JUSTICE FRASER:  You received them last night?
   MR GREEN:  My Lord, yes.  I think they were first requested
       23 October.
   MR JUSTICE FRASER:  We will have a word about that later.
   MR GREEN:  If we look on {G/92/1}:
           "Contribution towards NFSP's union activities in
       support of network transformation --"
           So that is what this related to, isn't it?
   A.  It related to the activities that they undertook in
       support of network transformation, yes.
   Q.  Yes.  If we go now to {G/94/2}, this is an exchange --
       if you look halfway down, you should be able to see
       Sharon Merryweather to Susan Barton and Nick Beal, and
       that is you, isn't it?
   A.  Yes, it is.
   Q.  It is dated 2 August 2013 and it says:
           "Dear Sue and Nick, to facilitate the best use of
       time during our conference call this afternoon I would
       like to lay out a framework for a potential agreement as
           "1.  26 months compensation for compulsory
       exiters ..."
           Can we pause there.  You mentioned in your statement
       that subpostmistresses and subpostmasters have the
       option to convert to NTC but there were -- in some cases
       the option was convert to NTC or leave the network?
   A.  They were given both options, yes.
   Q.  But what they weren't given the option to do was stay on
       the old contract they had agreed to?
   A.  Initially prior to the dates of this document they were.
       But as part of the renegotiation of the terms of the
       network transformation, which is what this document
       refers to, that option to stay as they were was ceased.
   Q.  And the 26 months compensation for compulsory exiters,
       you've got:
           "Best year since 2010, potential community offices
       named/comfort, fund to help with outrider leases/recent
       purchases, appeal process in exceptional cases."
           That is what was being discussed.
   A.  That is one of the items, yes.
   Q.  It is fair to say -- I won't take you through it all,
       but we have lots of documents about it -- there is
       a long-standing agreement, isn't there, that has been
       in place for many, many years between the NFSP and
       Post Office in relation to compensation payments payable
       to subpostmasters whose offices are closed and their
       appointment terminated, whereby they get of the order of
       26 months?  I can show you some documents --
   A.  I know, I think, what you are referring to.  The
       discretionary fund agreement I think you are referring
       to, aren't you?
   Q.  Yes.
   A.  That is an approach that we have -- an agreement we have
       had with the NFSP since 1989.  It relates to the closure
       and termination of contracts where the Post Office does
       not wish to continue to provide services in that
       location, which is -- but that is an important
       clarification that I need to make because -- and that
       is very clearly articulated in the document, I'm not
       making -- that is not new.  But it is important to
       understand that that arrangement for compensation that
       you are referring to relates to where the Post Office
       does not wish to continue to provide services in
       a location.  Rather than just generally a Post Office is
       closed or terminated because of, say, a breach of
       contract for example.
   Q.  That is rather my point; that if the Post Office
       closed -- terminated for breach of contract, then
       Post Office doesn't pay, is that right?
   A.  That is correct.
   Q.  And also under the scheme, the discretionary fund
       scheme, there is an exclusion, isn't there, for people
       who, for example, resign to avoid a termination?
   A.  That is correct.
   Q.  Where they would otherwise fall in the scheme and get
       their 26 months, if they resign to avoid termination,
       they don't?
   A.  No, that is not quite correct.  If they resigned for any
       reason, they wouldn't be entitled to compensation
       because the Post Office, generally speaking, would wish
       to continue to provide services from that location.  So
       if somebody simply resigned from their contract and said
       "I no longer wish to run a Post Office", for whatever
       reason, but we wish to continue to provide the service
       at that location, the discretionary fund would not apply
       to them.
   Q.  We will have a quick look at that after lunch.  Let's
       just finish this document before lunch, so we have five
       minutes left.  Number 2:
           "1 year of full salary plus agreed extra years for
       voluntary switchers to PO Local model."
           Then it sets out the sort of sums there.  Do you see
   A.  Yes.
   Q.  Then if we look at number 3:
           "Lump sums to all Post Office
       agents/operators/subpostmasters.  1,400 ..."
           And so forth:
           "These payments could be paid as upfront payments
       for switchers."
           Then number 4 on the same list:
           "POL and NFSP to sign a 15 year contract for the
       NFSP to represent all Post Office operators.  This will
       include: financial agreement, 500K payment for 2013-14,
       1.25 million payment for 2014-15, 1.25 million payment
       for 2015-16 and 2.5 million payment 2017 onwards to
           Do you see that?
   A.  Yes.
   Q.  It says:
           "This process allows for the drop off of our present
       membership fee and facilitates the change from check off
       towards POL charging a fee from all agents which is
       passed directly to the NFSP.
           "Memorandum of Understanding to be worked on with
       rights and responsibilities on both sides.  If necessary
       NFSP will drop union badge to sign contract.
           "Please note - a signed agreement with the blood of
       both myself and Paula is necessary on the future of the
       NFSP before any agreement is granted on either NT and
       other points."
           Do you see that?
   A.  Yes.
   Q.  So the Federation was negotiating for its own survival,
       wasn't it, as well as for subpostmasters?
   A.  This is referring to what became the grant agreement.
       So they were negotiating for that grant agreement
       effectively here, yes.
   Q.  So they were negotiating for money for themselves as
       a Federation in the context of a drop off of present
       membership at the same time as negotiating aspects of
       the transformation process?
   A.  They were negotiating for the grant agreement, and also
       what came with that was free membership for all
       postmasters of the NFSP.  So that would have benefited
       all postmasters.  Because at that time, if you wished to
       be a member of the NFSP, there was a subscription
       payment.  That does not exist anymore.  So where it
       refers to ... I will just read the document ... so where
       it talks about "facilitate the change from check off
       towards POL charging a fee", that is what that relates
       to, although we do not charge a fee.  So that element of
       this never -- was something we never --
   Q.  It may have been my fault, Mr Beal.  That wasn't quite
       what I was asking.
   MR JUSTICE FRASER:  Can you just concentrate on the
       question, Mr Beal.
   MR GREEN:  Look at the line at the bottom beginning:
           "Please note ..."
           Do you see that?
   A.  Yes.
   Q.  It says:
           "Please note - a signed agreement with the blood of
       both myself and Paula ..."
           That is Paula Vennells the CEO of Post Office?
   A.  Yes.
   Q.  "... is necessary on the future of the NFSP before any
       agreement is granted on either NT and other points."
           That is what it says, isn't it?
   A.  That is what it says, yes.
   Q.  You would accept, wouldn't you, that those matters were
       linked in those negotiations, weren't they?
   A.  Yes, they were.  That was -- that is correct.
   Q.  That is clear from there.
   A.  And many other document, yes.
   Q.  And that is not necessarily what you expect, is it, if
       you were a subpostmaster from an independent union?
   A.  I am not a subpostmaster, so I don't have a view on
       that.  But what I would say is that sitting around this
       was the NFSP undertook a consultation with their
       members, they held a special conference with their
       members related to the terms of network transformation,
       and the fact that they were negotiating with Post Office
       before a change in the conditions of their relationship
       with the Post Office with regard to the grant agreement
       was commonly understood at that time.
   Q.  Pausing there, is it fair to say then, as far as you
       know, the Federation presented a change to the NTC
       contract in a way consistent with the way you have
       broadly described the understanding on which it was
   A.  I believe they presented to their members the totality
       of all of what we discussed in terms of network
       transformation, along with -- along with -- the future
       for their organisation with regard to the grant
   Q.  Let's just pause there for a second.  My question is
       very specific: is it right, as far as you understand,
       that the Federation presented the change to the NTC
       contract broadly in the way that you have described in
       your evidence this morning?  No change to the core
       principles?  The provisions meaning broadly the same?
   A.  Yes.
   MR GREEN:  Thank you very much.  My Lord, is that
       a convenient moment?
   MR JUSTICE FRASER:  Have you finished with this document?
   MR GREEN:  With this document, yes, my Lord.
   MR JUSTICE FRASER:  Mr Beal, under item 4, those bullet
       points --
   A.  Yes.
   MR JUSTICE FRASER:  It appears to be obvious, but I just
       want to check it.  The 500K payment in 2013 rising to
       2.5 payment from 2017 onwards, those are payments going
       from the Post Office?
   A.  Yes, they are.
   MR JUSTICE FRASER:  Thank you.
   A.  Those are not payments that were made though, because
       this was a laying out of a negotiating position, if
       I can put it like that.
   MR JUSTICE FRASER:  Thank you very much.  We are going to
       have a break now, and there is just one point I am going
       to deal with immediately, which is probably going to
       take about five minutes.  If I were you, I would take
       the opportunity I am giving you to leave the witness
       box.  You can sit there for the five minutes if you want
       but you don't have to, and it's going to eat into the
       time that you have for lunch.  So, by all means, feel
       free to leave.
           Mr Green, en passant during that cross-examination
       you referred to disclosure which you received last
   MR GREEN:  I don't know exactly what time but after court
       yesterday.  We were looking through it last night,
       my Lord.  I can get the exact time.
   MR JUSTICE FRASER:  No, I don't need the exact time.  But it
       came yesterday, did it?  Just describe briefly to me
       quantity and type.  You said emails.  (Pause).
   MR GREEN:  350 pages of emails I think in 45 chains
   MR JUSTICE FRASER:  Okay.  Mr Cavender, do you know anything
       about this?
   MR CAVENDER:  My Lord, I have taken instructions.  This
       disclosure was (inaudible) forward in model C.  We first
       got a very broad request on 23 October.  On 30 October
       we proposed model C categories and search items, search
       terms, for this category of documents that had been
       asked for.  On 31 October Freeths responded with their
       suggested search terms.  We have undertaken disclosure.
       There were quite a lot of documents to review, and we
       gave disclosure on ... on 5 November we looked through
       an email account of Angela Van Den Bogerd and we also
       had to look at Mr Beal's email accounts as well to
       obviously harness all the documents, review them and
       disclose them.  So there has been co-operation.  We have
       done it.  It was a late request really and they were
       provided, as my learned friend says, last night
       I believe.
   MR JUSTICE FRASER:  It was a late request on 30 October?  Is
       that what you mean?
   MR CAVENDER:  It fell out of a 23 October request but the
       actual request was 31 October, with the actual search
       terms that were suggested to harness this category of
   MR JUSTICE FRASER:  I am going to tell you what I am going
       to do about this: disclosure of that quantity of
       material the evening before calling your witness -- I'm
       not criticising anyone at the Bar for it -- is simply
       unacceptably late within the context of the timetable of
       this trial.  I would like a witness statement, please,
       from one of your solicitors some time tomorrow -- you
       can pitch for me what time that might be -- simply
       explaining the circumstances by which it has taken that
       period of time to provide the documents.
           I am simply not prepared to deal with any large
       case, but particularly a case of this importance, with
       material like this coming out at that sort of a time,
       which includes documents which are obviously necessary
       ones which Mr Green had to put to Mr Beal.  And, if the
       boot was on the other foot, I would be taking a directly
       and equivalently stern attitude with the claimants.  So
       what time tomorrow would you like the witness statement
       to be ...
   MR CAVENDER:  Can I take instructions, my Lord?
   MR JUSTICE FRASER:  Yes, please do.
   MR CAVENDER:  4 o'clock tomorrow.
   MR JUSTICE FRASER:  4 o'clock tomorrow.  Mr Draper, if you
       could add as a paragraph, please, to the order which you
       will be drawing up in relation to your amendment from
       this morning just one identifying that I have ordered
       a witness statement by 4 o'clock tomorrow, to explain
       all the circumstances concerning the disclosure of the
       material which was provided on 14 November.  I don't
       propose to say anything more about it for the moment.
           So 2.05 pm.  Thank you very much.
   (1.05 pm)
                     (The short adjournment)
   (2.05 pm)
   MR GREEN:  Mr Beal, it's right, isn't it, that the NTC
       contract itself in the form it was eventually produced
       included a reference to the National Federation of
   A.  It did, yes.
   Q.  Could you be shown, please, {E5/137/32}.  At 1.3 at the
       bottom of the page, do you see that?
   A.  Yes.
   Q.  "The National Federation of Subpostmasters (the NFSP) is
       an independent members' organisation supporting
       operators of Post Office branches across the UK and is
       solely acknowledged by Post Office Limited as
       a represented body of operators.  The NFSP is the only
       body with which Post Office Limited will seek to
       discuss --"
   MR JUSTICE FRASER:  We've gone over on to the next page, I
   MR GREEN:  Next page, please.
           I'm sorry, Mr Beal, I read on:
           "... solely acknowledged by Post Office Limited as
       a representative body of operators.  The NFSP is the
       only body with which Post Office Limited will seek to
       discuss and consult on matters affecting operators,
       subject to any legal, regulatory or political
       obligations.  Such discussions will take place within
       the existing and developing relationship framework."
   A.  (Witness nods)
   Q.  You appreciate, don't you, that there is a difference
       between the grant of money by Post Office to the NFSP
       and the terms on which that grant is made?  The
       difference between the fact of the grant being made and
       that being known and the terms upon which the grant is
       made being known.
   A.  Yes, I think I understand what you mean.
   Q.  Do you understand the difference?  You can say to people
       Post Office is making a grant to the NFSP, they then
       know the facts, but they haven't seen the detail of the
       agreement, have they?
   A.  I understand what you mean.
   Q.  It is an important distinction.
           Could you be shown, please, {G/74/1}.  This is
       a Freedom of Information request.  I am going to have to
       go -- apologies to the Opus operator -- between G/74 and
       G/75 to follow this through.
           But the request is made, do you see halfway down the
           "Dear Post Office Limited.  Would you please supply
       me with a copy of the grant funding agreement that you
       have signed with the company NFSP Limited."
           Do you see that?
   A.  Yes, I do.
   Q.  What in fact happened was NFSP became a limited company,
       didn't it?
   A.  They did, yes.
   Q.  If we go to {G/75/1}, there is a response on the same
       day from Post Office and that explains that:
           "... you should expect a reply by 10 June ..."
           Do you see that?
   A.  I do.
   Q.  And they are giving it their attention.
           Was this Freedom of Information request ever
       discussed with you, to your knowledge?
   A.  It probably would have been, yes.  Yes.  It's very
       likely, yes.
   Q.  It's likely it would have been because you are the NFSP
       person --
   A.  Absolutely right, yes.
   Q.  I think, in fairness to you, later on there is an email
       with your name --
   A.  Very possibly, yes.
   Q.  If we go on to {G/76/1}, we can see that is the
       appointed date, yes, that we saw in the previous, that's
       10 June, do you see that?
   A.  Uh-huh.
   Q.  And there is a letter, second paragraph:
           "We do hold information falling within the terms of
       your request; however we need more time to consider your
           "I wish to advise you that the following exemption
       applies to the information that you have requested:
           "Section 43(2) [of the Freedom of Information Act]
       Commercial Interests.
           "By virtue of section 10(3), where public
       authorities have to consider the balance of the public
       interest in relation to a request, they do not have to
       comply with the request until such time as is reasonable
       in the circumstances."
           What is then said is:
           "You should expect a reply from us to be sent by
       8 July ..."
           That is right, isn't it?  Do you see?
   A.  That is what it says, yes.
   Q.  And presumably you and your colleagues were giving
       careful consideration to whether that was the right
   A.  Yes, I imagine so.  As I said, I don't recall precisely
       but we get a lot of Freedom of Information requests,
       so ...
   Q.  I understand.
           Go back, please, to {G/74/3}.  Halfway down,
       Mr Baker -- sorry, I should probably, in fairness to
       you, Mr Beal, in case there is anything you want to
       point out, explain the structure of this document.
       There is one document that records all the dates.
   A.  Which document are you referring to?
   Q.  This document we are in --
   A.  Okay.
   Q.  -- is part of a long document which I took you to where
       the request was originally made.
   A.  Yes.
   Q.  And then Post Office often replies with a PDF letter --
   A.  I understand.
   Q.  So I'm having to step out and then step back to it.
   A.  I understand.
   Q.  So Mr Baker replies on 11 June, do you see that?
   A.  Yes.
   Q.  2016.  He says:
           "Dear Mr Humphreys.  Thank you for your response.
       The Post Office is a public body ..."
   MR JUSTICE FRASER:  He makes two points.  He says the
       exemption doesn't apply, and Post Office has admitted it
       is given a grant, but it is in the public interest to
       know what the purpose of the grant is?
   MR GREEN:  Do you see that?
   MR JUSTICE FRASER:  Just to save time.
   MR GREEN:  I am grateful.
           Did you form a view about whether it was in
       the public interest for the terms of the grant to be
       provided to him?
   A.  It's difficult to remember the precise dates and
       sequence of events that this is referring to, so --
   MR JUSTICE FRASER:  I don't think you are being asked about
   A.  No, but it is important, your Lordship, because what we
       would have always intended, and ultimately was the case,
       was that the grant agreement was published.  And it is
       published and available publicly on the NFSP's website.
           So at the time of receiving a number of Freedom of
       Information requests related to the release of that
       document, we would have been considering those requests
       in the context of knowing that we were going to issue
       that document.
   MR JUSTICE FRASER:  I don't understand that.  But let's
       maybe save some time.
           As at June 2016 you haven't put it on the website,
       one assumes, because otherwise Mr Baker wouldn't have
       been asking for this?
   A.  That sounds correct yes.
   MR JUSTICE FRASER:  Right.  Were you involved in
       the decision-making process about whether to agree to
       the Freedom of Information request, seek more time or
       apply an exemption, or was that decided by other people?
   A.  I was involved.
   MR JUSTICE FRASER:  You were involved.
           Okay, right.  Mr Green, back to you.
   MR GREEN:  I'm most grateful.
           It is right that so far the only exemption that has
       been put forward is the section 43(2) commercial
       interests exemption?
   A.  That appears to be the case, yes.
   Q.  And there is no suggestion that you have already decided
       you will publish it in the future at this stage, is
   A.  It doesn't appear to have been on that, no.
   Q.  So just going forward, if we may.  If we can forward,
       please, between the two documents.  If you look now at
           "Dear Mr Humphreys.  I responded to your ... email
       of 10 June and you have not reacted to my response that
       challenged the basis of your initial inclination to
       refuse the information ..."
           And immediately below that we can see:
           "Dear Mr Baker.  Post Office have not yet made
       a decision in respect of the information you are seeking
       and are currently considering the public interest as it
       applies to the commercial interests exemption."
           So no thought at this stage has been given to the
       "we've already decided to publish it" point, has it?
   A.  No, I disagree.  No expression of that thought is made
       in this response.  That is not the same as saying no
       thought has been given to that because that would have
       been what we were discussing internally at the time.
   Q.  Well, if it is true, which I am going to suggest to you
       it is not -- let me take it in stages.
           Firstly, I am suggesting to you it is not true that
       at that time you had in mind the exemption on the basis
       that you had already decided you would publish it?
   A.  I disagree with that.  It was -- it is true.
   Q.  So why did you not tell Mr Baker that?
   A.  I don't know.
   Q.  Okay.  Let's go forward, please, to {G/74/5}:
           "Dear Mr Humphreys.  Thank you for your email ...
           "You have completely ignored the points I raised in
       my email to you dated 11 ... I challenged your position
       on relying on section 43(2) ... and you have failed to
       refute this challenge."
           Then at the bottom lines there, he says:
           "You leave me no choice but to take this matter up
       directly with the Information Commissioner as you are
       not complying with the terms or the spirit of the
       Freedom of Information Act."
           Do you see that?
   A.  I do.
   Q.  At {G/77/1} we have the letter of 11 July and that is
       when this idea of you'd already decided to publish it is
       first expressed in your correspondence, isn't it?  Third
           "I can confirm that Post Office does hold the
       information ... however under section 22 ..."
           A different section now:
           "... of the FOIA concerning information intended for
       future publication, we are not required to provide
       information in response to a request if that information
       is intended for publication at a future date."
           Do you see that?
   A.  I do, yes.
   Q.  Then the Post Office professes interest in promoting
       transparency in the paragraph under "Public Interest".
           Now, you'd moved your ground on to that exception
       because you realised that the commercial contracts one
       wouldn't work, hadn't you?
   A.  No.
   Q.  Let's go back to {G/74/6} and, put shortly, Mr Baker, in
       colloquial parlance, calls you out on that.  He says,
       second line of that second paragraph:
           "Now you have changed your mind and have introduced
       another reason which you should have given on 20 June."
           Do you see that?
           "You are now relying on section 22."
           There is some confusion about whether there is more
       than one version.  At the bottom he says:
           "I would also like to request an internal review of
       your decision ..."
           That is on 12 July.
   A.  Yes.  Could I read all this, please?
   Q.  Please do.
   MR JUSTICE FRASER:  Mr Green, it might just save time if you
       tell me what date this document was made publicly
   MR GREEN:  My Lord, it's the punchline to this course of
       correspondence.  But your Lordship will see that on --
   MR JUSTICE FRASER:  I won't see unless I scroll forward in
       the electronic bundle.  Just give me the date.
   MR GREEN:  12 December at the end of that year -- sorry,
       20 December 2016.
   MR JUSTICE FRASER:  I didn't mean to steal your punchline.
       However, the reason I have asked for the date is I think
       this point probably, in terms of the issues in this
       case -- I have the relevance of it.  Unless there is any
       more headline evidence you want to get out of this
       witness it seems to me you might potentially have ...
   MR GREEN:  My Lord, I am afraid it just goes one stage
       further after this.
   MR JUSTICE FRASER:  All right.
   MR GREEN:  So can I just put this to you Mr Beal, that
       Post Office is not exactly enthusiastic in wanting to
       provide the grant agreement, is that fair?
   A.  No, I don't believe it is fair.  I believe it was always
       our intention to have that document published.
   Q.  Mr Baker repeatedly asked you for the date on which that
       decision had been taken, didn't he?  Look at {G/74/8}.
       And although he did get -- well, let me give you
       a chance to read it.  It's at the bottom:
           "As you are claiming a section 22 exemption on
       publishing something that you intend to publish in the
       future, you are by virtue of that exemption required to
       disclose the date on which the decision was taken to
       eventually publish that agreement.  Would you please let
       me know what that date was."
   A.  That is what Mr Baker is asking.
   Q.  And you never told him?
   A.  Pardon?
   Q.  You never told him?
   A.  No, we didn't, because I do not believe there was
       a specific date where we took that decision.
           Mr Baker was asking a number of questions.  He
       refers to the fact the Post Office has implied there are
       two funding schemes.  That is incorrect, there has never
       been more than one funding scheme related to the grant
   MR JUSTICE FRASER:  Hold on a second.  Mr Beal, you have
       actually just glided away from the important part of
       that question.
   A.  Sorry, I didn't mean to.
   MR JUSTICE FRASER:  You just said:
           "I do not believe there was a specific date where we
       took that decision."
           In simple English, how can that be right?
   A.  I believe from when we originally began to discuss with
       the NFSP the possibility of a grant agreement, and that
       would have been in 2012/2013 -- earlier emails in fact
       that we saw made reference to that -- that in those
       discussions we would have always had the intention to
       publish that document.
           Therefore what I mean by saying "no specific date"
       is that the decision to publish the document, or have
       the intention, rather, maybe, to publish the document,
       would have been made two or three years before this
           If I may, your Lordship, there is a document in my
       bundle which is the Memorandum of Understanding between
       the Post Office and the National Federation of
   MR CAVENDER:  That is at {G/80/1}.
   A.  If I could be shown that document, please?
   MR JUSTICE FRASER:  I have that reference.  I will give the
       floor back to Mr Green.
           Mr Green, do bear in mind what -- you have to
       remember what the actual issues are in this case.
   MR GREEN:  My Lord, I have them well in mind.
   MR JUSTICE FRASER:  I am being fairly tolerant at the
   MR GREEN:  This comes to an end quickly.  It is quite
           So the date was not provided, you agreed that to
       Mr Baker.
   A.  Yes.
   Q.  His Lordship has covered that point.
           Then the funding agreement is eventually provided on
       20 December 2016 at tab {G/72/1}.  Do you see that?
   A.  I do.
   Q.  Bond Dickinson.  Grant framework agreement.  It's
       dated -- on the front it says 2015.  Can you remember
       what date it was entered into?
   A.  I believe it may have been around July, perhaps.
   Q.  It's 21 July.  Good memory, Mr Beal.  You are obviously
       a details man.
   A.  I try.
   Q.  Can we just look quickly, please, at {G/72/10}, "General
       Conditions of the Grant".  Do you see 5.2:
           "For the avoidance of doubt, it is hereby
       acknowledged that NFSP may (subject to clause 5.3 ..."
           Which I will show you in a moment:
           "... and then the obligation of confidentiality
       which are contained in this agreement ...)
           "Represent individual Post Office operators.
           "Discuss and comment on initiatives ...
           "Publicly comment on the same.
           "State and explain its opinion on the same, even if
       not in support of POL; and
           "Lobby relevant stakeholders ..."
           Do you see that?
   A.  Yes.
   Q.  However, 5.3 says:
           "The NFSP shall not engage in the following
       activities or behaviours ..."
           Look at 5.3.6:
           "Other activities or behaviour, the effect of which
       may be materially detrimental to Post Office Limited."
   A.  Yes, I see that.
   Q.  This litigation, this claim by the claimants has been
       described in the written opening for Post Office as
       posing an existential threat to Post Office's ability to
       conduct its business as it presently does.  Would you
       say that falls within 5.3.6?
   A.  I don't know, I -- no, I don't know.
   Q.  Look at 5.7, please:
           "The NFSP shall (and shall use best endeavours to
       ensure that all personnel of the NFSP shall) ..."
           Then 5.7.2 {G/72/11}:
           "Not take any action or engage in any commercial
       activities which brings, or is likely to bring, POL's
       name or reputation into disrepute."
           Do you see that?
   A.  Uh-huh.  I do.
   Q.  This litigation could affect Post Office's reputation,
       couldn't it?
   A.  Yes, it could.
   Q.  So the NFSP cannot support this litigation because of
       your -- the terms of your grant, can it?
   A.  I don't know.  I wouldn't have a comment on that.
   Q.  Let's look at what happens if they breach the agreement
       on {G/72/17}.  The funding is clawed back, do you
       remember that?
   A.  I remember a clawback clause, yes.
   Q.  And if the NFSP actually does anything which could
       create a clawback there is a self-reporting obligation
       at 17.3, isn't there?
   A.  Yes.
   Q.  It's similar to the self-reporting obligation we saw at
       16.5 of the NTC, isn't it?
   A.  I wouldn't say it was similar.  It is not related to
       that --
   Q.  Lastly --
   MR JUSTICE FRASER:  That is not really a question.
   MR GREEN:  I withdraw that, Mr Beal.
           {G/72/20}, 23 deals with confidentiality.  There are
       two different provisions.  23.1, which is about making
       statements about the agreement or the relationship, so
       an agreed announcement that there is a funding agreement
       has to be agreed by both parties, do you see that?
   A.  Yes.
   Q.  Then 23.2:
           "Subject to POL's rights set out in clauses 23.3 and
       24 [which relate to Freedom of Information requests],
       the parties shall keep confidential the contents of this
       agreement.  The parties shall also keep confidential all
       confidential information obtained in the course of this
       agreement and shall not disclose such information to any
       person ... but this clause 23.2 shall not extend to
       information which ..."
           So there are two parts to 23.2.  There is the first
       sentence, which is keep confidential the content of the
       agreement.  And then there is the second sentence
       relating to all confidential information obtained in the
       course of this agreement.
           So the intention when this was signed in July 2015
       was that it should remain secret, at that stage, wasn't
   A.  No, it was not.  As I have said before, it has been our
       intention to publish this document from when we were
       producing the document.
   Q.  But you signed the agreement, and you specifically
       included at the time of putting your signature to it
       provisions which make it extremely confidential.
   A.  But subsequent to that we published the document, and we
       agreed prior to this that we would do that.  So I would
       suggest that this is referring to confidential
       information rather than the agreement.  I understand the
       point you are making, but I absolutely am saying that we
       intended to publish this document.  And if you refer to
       the document I asked to be brought up earlier I believe
       it makes reference to that.
   Q.  Let's look at 23.2.  I am just asking now a specific,
       focused question on publishing the terms of the
       agreement, in particular the limitations on the way the
       NFSP was allowed to act.
           In relation to that, do you accept that 23.2
       provides for those terms to be kept confidential?
   A.  It does that.  But as I have said several times, and
       I repeat now, it was always our intention to publish
       this document.
   MR JUSTICE FRASER:  I am going to short-circuit this because
       it is taking quite a long time and I think the two of
       you are going in circles, if I may.
           That first sentence says the parties to this
       agreement have agreed to keep its contents confidential.
       And I have your evidence that notwithstanding that
       sentence, you say it was always the intention of the
       parties to publish the agreement.  Is that your
   A.  That is my evidence.
   MR JUSTICE FRASER:  That is your evidence, right.
           Can we go, please, to {G/80/1}, which is the
       document reference Mr Cavender gave me.  I think it is
       actually page {G/80/2} that we need to go.
           There is the reference to the Memorandum of
       Understanding.  Do you see that?
   A.  At the bottom.
   MR JUSTICE FRASER:  Yes.  There's a hyperlink.  It doesn't
       actually work on the Opus system because we are on
       an internal server.
           Can we go back to the previous page, please,
       {G/80/1}.  This is a document from August 2016, do you
       see that?
   A.  Yes.  This wasn't the document I was referring to.
   MR JUSTICE FRASER:  That is the reference Mr Cavender gave
       me so that is why I am taking you to it.  30 August
       2016, there is a letter to Mr Baker, a couple of months
       after he started the Freedom of Information.
           And on page {G/80/2} there is a reference in
       the letter to the Memorandum of Understanding which is
       said to be from 2013.
           Then there is a sentence:
           "This has been published on the NFSP website ..."
           Do you see that?
   A.  I do.
   MR JUSTICE FRASER:  And it can be found by pursuing that
   A.  Yes.
   MR JUSTICE FRASER:  Do you know when it was published on the
   A.  No, I don't, I am afraid.  Sorry.
   MR JUSTICE FRASER:  Right.  Because, and it's an obvious
       point but out of fairness to you, that sentence could be
       interpreted to mean the memorandum has been on since
       2013, or it could be interpreted to mean the memorandum
       is now available on the website but it doesn't say when
       it has been put up there.
   A.  No, it doesn't.
   MR JUSTICE FRASER:  Do you have any recollection of when
       that was put on the website?
   A.  No, I don't.
   MR CAVENDER:  My Lord, you might want to go to -- as it says
       in the last line you were reading from, at point 10.  If
       you go to page 4 of this document.
   MR JUSTICE FRASER:  Does that have the date?
   MR CAVENDER:  It's {G/82/4}, that is the MoU.  Point 10.
   MR JUSTICE FRASER:  That doesn't say when it was put on
       website, does it, I don't think?
   MR CAVENDER:  No, but it declares the intention.  It makes
       clear what -- it adds to what it says in the letter
       about what the anticipation of the parties are.
   MR JUSTICE FRASER:  I did expect the letter accurately to
       summarise what the MoU said.  But the relevant point is,
       isn't it -- well, if there is another document that
       shows the date it was put on the website I'm sure
       someone will draw my attention to it.
           Now, Mr Green, it is important to retain focus on
       the issues in this case.  And as I said to you, I think
       it might have been before 1 o'clock, everyone comes here
       with a clean slate whether or not the NFSP support them
       or not, whether or not they are contractually prohibited
       from supporting them, or whether or not they have been
       paid too much money to contemplate supporting them.  So
       I think you have developed this point quite
       comprehensively, if I may say so, and it is probably
       time to move on to the next item.
   MR GREEN:  Two last things in relation to the NFSP, very
       briefly.  Please look at tab {G/93/6}.  This is a chain
       of emails which is eventually copied into you.
   A.  Yes.
   Q.  Just go for a moment to {G/93/1}.
   A.  Yes.
   Q.  Do you see it's copied into you?
   A.  Yes.  Sorry, I thought I had acknowledged that.
   Q.  Please go back to {G/93/6}.
   MR JUSTICE FRASER:  There doesn't appear to be one.
   MR GREEN:  I think there may have been a different
       format ... So if we go to the previous page, they print
       out differently -- sorry, my Lord.  Please look at the
       bottom of {G/93/4}, it's from Sharon Merryweather on
       30 April 2012.  Do you see that?
   A.  I do.
   Q.  "Hi Tracy --"
   MR JUSTICE FRASER:  Hold on a second.  Just give me the date
       and time of the email, if you would.
   MR GREEN:  It's 30 April 2012, 15.47, at the bottom of the
   MR JUSTICE FRASER:  Right.  Do we have the right page on the
       common screen, please?
   MR GREEN:  We have the right page for the beginning of the
       email.  If we now go page {G/93/5}, the request is:
           "Could you get someone from the team to call
       Sarah Barnett, the SPM of the attached office ..."
           Which is Stithians PO in the subject line in
       the previous page:
           "... fairly urgently on her mobile, please.  The
       number is ..."
           And the number is given.
           "She has been trying to make contact via the
       Hell-line but has not had a response.  It is crucial
       they make sure they are not speaking to a member of
       staff, and if she is busy could they leave a name and
       number so she can call them back, please."
           So this is because an SPM is wanting some help from
       the Helpline, I am going to suggest to you, and is
       turning to the NFSP because they can't get the help they
       want.  Do you remember this email chain?
   A.  No, I don't remember this email chain.
   Q.  Let's go forward, please, and I think it should be
       {G/93/3}.  Sorry, {G/93/4}.  Middle of the page.  Sharon
       is back again:
           "Hi Tracy.  Just had another chat to Sarah Barnett."
           This 3 May.
           "She did receive a call from a Susan Ellis who did
       her best, but her reply was that they were waiting for
       new scripts to read to people in her situation who did
       not register their wish to sell before 1 April but now
       want to.  Sarah originally did her survey and said she
       wished to stay as she was.  Her situation has changed
       and she now wants to sell the office.  She has had
       agents in to value it but they are loathe to market it
       unless they have some idea of what will be happening in
       the future.  Clearly Sarah wants to get on with things
       and is stuck now.
           "The thing I believe influences the situation is
       that she is the last shop in the village ..."
           Then on the right-hand side of that line:
           "I am hoping this will make the decision much easier
       and that someone will be able to provide Sarah with
       something in writing urgently to the effect that
       the office, even upon sale or transfer, will remain
       a traditional office."
           That shows, doesn't it, Mr Beal, that what was being
       asked about was an SPM who wanted to sell her office,
       who was wanting confirmation of its future status from
       Post Office, and had been seeking urgent help in that
       regard in April from the Helpline, yes?  That is what it
       appears to show, doesn't it?
   A.  It shows that in -- there is a context here which is
       related to network transformation.
   Q.  Of course.
   A.  So that is the context of that.
   Q.  We understand the context but that's what this shows --
   A.  Yes, that is correct.
   Q.  The reference to the "Hell-line", which we saw over the
       page -- let's not beat about the bush, Mr Beal, that is
       how the NFSP saw the Helpline provided by Post Office,
       isn't it?
   A.  I didn't write that email and I don't recall seeing that
       email, so however it was expressed by somebody who is
       a personal secretary to the general secretary, or
       personal assistant, rather, to the general secretary
       I can't really comment on.  I would say that L and P are
       very close on the keyboard.  Maybe it was a typo.
   Q.  It has a dash between "Hell" and "line".
   MR JUSTICE FRASER:  That is really a point for me.
   MR GREEN:  I am grateful.
           Then looking on the page we were just looking at, so
       I think that is {G/93/4}, you can see there the
       reference in the -- under "Hi Tracy", you can see the
       reference there to "waiting for new scripts to read to
       people in her situation", on the Helpline, can't you?
   A.  I do, yes.
   Q.  That is because scripts were provided to people on the
       Helpline in order to give them some standard wording to
       answer certain enquiries?
   A.  Scripts were provided in order for them to be able to
       answer the questions that were being asked of them.
       That would be in order to make sure the answers they
       were providing were consistent.
   MR JUSTICE FRASER:  Were they scripts provided by the
       Post Office --
   A.  Yes.
   MR JUSTICE FRASER:  -- to the NFSP Helpline?
   A.  No, this is the Post Office Helpline we are referring to
   MR GREEN:  To cut a long story short, if we go to {G/93/1},
       almost exactly two months from 30 April when
       Sarah Barnett has got frustrated with the Helpline
       problem and sought help from the NFSP, the email is
       forwarded to you.  June 29.
   A.  That is correct.
   Q.  "Can I get an update."
   A.  Not on that issue, though, is it?  I think it is
       a different branch.  The forwarding of the email to me
       refers to the branch Glenfield.  I don't think that is
       the branch that -- there were three branches being
       referred to in this email, I think.
   Q.  Do you know whether you had got any answer?  To be fair
       to you, let's go to --
   A.  So if you look at the bottom of this page it refers to
       a branch called Stithians, which I believe is the branch
       that was the original request, whereas the email that's
       been forwarded to me related to Glenfield.
   Q.  Let me show you what answer was given in relation to
       Stithians.  It is {G/93/2} on my paper copy.  It is in
       the middle:
           "The subpostmaster originally completed the branch
       estates survey opting to stay as they are.  However they
       subsequently advised that they now wish to sell.  Again
       I can advise that first visits are scheduled to be
       completed at all branches by end of September 2012.  I
       refer to my comments above (a) in that the SPM can
       resign and leave the PO in the prescribed three months
       time frame; BUT should she choose this option she would
       not receive a termination payment."
           So the position is you can either await, as you say
       at 1(b), the progression of a preference to leave the
       network.  Or, if you resign earlier, then you lose the
       right to a termination payment.
   MR JUSTICE FRASER:  That is a point the witness accepted
       this morning, I think.
   MR GREEN:  My Lord, yes.  But this is in the context of
       someone trying to get clarity simply on --
   MR JUSTICE FRASER:  I understand.  But that point you just
       put to him, I don't think it is a controversial point.
   MR GREEN:  My Lord, I am grateful.
   MR JUSTICE FRASER:  We had better just check.  It seems to
       match what you told me this morning, or my understanding
       of it, which is that if somebody resigned and gave their
       notice of three months that they wouldn't receive
       a termination payment.
   A.  Your understanding is correct.
   MR JUSTICE FRASER:  Thank you.
           Mr Green.
   MR GREEN:  One last point in relation to what the
       subpostmasters were trained to expect in relation to
       shortfalls.  Can we just look at {F3/221/7}, please.  Do
       you see "Note to Trainers"?  This is in the jigsaw
       balance training notes:
           "The final balance will not be exact, expect it to
       be around £5 either way (loss/gain) ..."
           Do you see that?
   A.  I do.
   Q.  Would it surprise you to find other places in training
       manuals where a loss or gain of 10p is given as
       an example?
   A.  Would it surprise me?
   Q.  Yes, to see other training manuals with losses such as
   A.  No, that wouldn't surprise me.
   Q.  Did you, in the course of your time at Post Office, see
       any documents which highlighted any responsibility for
       losses, which a subpostmaster couldn't explain or
       identify as coming from their own branch, of the order
       of £1,000 or more?
   A.  I -- I can't recall.  I haven't ever -- I would never
       say that I have seen every document the postmasters are
       provided with, so ...
   Q.  Because there are lots, aren't there?
   A.  There are.
   MR GREEN:  I am most grateful.
   MR JUSTICE FRASER:  Mr Cavender.
                  Re-examination by MR CAVENDER
   MR CAVENDER:  Three or four small points, if I may.
           Firstly, generally, you were asked questions about
       your dealings with the NFSP relating to the NTC
       contract.  You were asked quite a lot of questions about
       that.  Can you tell me roughly over what period of time
       those negotiations or consultations took place?
   A.  I started in the role to which I -- which involves the
       relationship with the NFSP in April 2010, I think, if my
       memory is correct.  At that point we would not have been
       discussing the detail of the contracts.  We had started
       to run the pilots for the models so we probably started
       discussing the contracts relating to NTC from early
       2011, perhaps, through to the implementation of the
   Q.  Do you know when the contract was agreed and cleared for
       release within Post Office?
   A.  I don't have a specific, absolute date for that, no.
   Q.  In terms of the process with the NFSP, was it
       a situation where there were drafts provided to them so
       they were able to see what you are suggesting?
   A.  Yes.
   Q.  And is it right that they would have had opportunities
       to take legal advice, if they had wanted to, on it?
   A.  Absolutely.  And they confirmed to me that they have and
       were doing that.
   Q.  Have they got legal advice, to your knowledge?
   A.  They certainly have, yes.
   Q.  In terms of the emails you were taken to, particularly
       the 2 August 2013 email {G/94/2}.  If you look at the
       date of this, this is August 2013, and this is in
       relation to -- am I right -- negotiations for what
       became the grant agreement?
   A.  That is part of this, yes.
   Q.  Now, this I think you said became agreed, and it is
       {G/72/1}, I think you said in July 2015?
   A.  That is when it was signed, yes.
   Q.  Signed off.  So if we can go back to {G/94/2} at the
       time of August 2013 had the NTC contract started to be
   A.  Yes.
   Q.  Because it was suggested to you, and we can go to
       {Day6/91:5}, please, of today's transcript for this.  It
           "Please note - a signed agreement with the blood of
       both myself and Paula is necessary on the future of the
       NFSP before any agreement is granted on either NT and
       other points."
           When it says "agreement" there, what is it referring
   A.  It is referring to in November 2013, so just after
       the August date that we saw that email -- I think it was
       August, wasn't it -- referring to, which was when the
       revised terms for network transformation were announced
       from the Government, and leading up to that, the NFSP
       themselves had a special members conference to which
       those terms were presented.  And if you refer back to
       that email, if you could for one moment, please.
   Q.  {G/94/2}
   A.  You will see item 1, item 2, both refer to those revised
       terms.  So you will recall that in my witness statement
       I think I made reference to the terms changing from 18
       months to 26 months.  This period was when that was
       being renegotiated.  And hence item 1, 26 months
           So this email was at that time when we were leading
       up to those revised terms being negotiated and agreed
       and ultimately communicated.
   Q.  So these are the revised terms, so that I am clear, of
       the grant agreement?
   A.  No, of network transformation.  So network
       transformation started in 2011.  So the first
       communications -- after having had pilots, the first
       communications to postmasters took place in
       November 2011.  Between 2011 -- November 2011
       and November 2013, a number of conversions of branches
       from the traditional contracts to Mains and Locals took
       place.  Through that period of time, we renegotiated the
       terms for postmasters in network transformation.  So
       that, for example, the leavers payment of 18 months
       became 26 months.
   Q.  So when you are talking about the terms of the network
       transformation programme, you are talking about how it
       was going to be implemented?
   A.  Yes.
   Q.  And I understand from your earlier answer that at this
       stage the terms of the NTC contract --
   A.  Yes.
   Q.  -- had already been agreed.
   A.  I believe so, yes.
   Q.  In relation to discretionary payments, if we can go to
       the transcript at {Day6/89:15} today, please.  When you
           "No, that is not quite correct.  If they resigned
       for any reason, they wouldn't be entitled to
       compensation because the Post Office, generally
       speaking, would wish to continue to provide services
       from that location.  So if somebody simply resigned from
       their contract and said 'I no longer wish to run
       a Post Office', for whatever reason, but we wish to
       continue to provide the service at that location, the
       discretionary fund would not apply to them."
           Do you see that?
   A.  I do.
   Q.  In relation to a situation where the Post Office wants
       to give three months' notice but wants to continue to
       provide services at that location, to your understanding
       would they be entitled to any discretionary payment?
   A.  No.
   Q.  Finally in relation to the Freedom of Information
       request, in case we haven't quite got that yet.  It's
       {Day6/105:8} of the transcript today.  My learned friend
       suggested to you that you weren't telling the truth when
       you said, in answer to the request, that you had it in
       mind that you were going to publish the information but
       you didn't say in the letter to that particular
       applicant.  Do you remember that?
   A.  I do.
   Q.  In relation to that can we go, please, to {G/80/2}.  Was
       that passage at the bottom of the page on the screen
       what had you in mind when answering my learned friend's
   A.  What I had in mind was a document that came up which
       I think made a reference to our intention to publish it
       in 2014.  And I believe that this document here that we
       are looking at now was -- the words in here were written
       as a result of the existence of that.  So this refers to
       the MOU.  You brought it up at one point.
   Q.  Yes, {G/82/4}, please.
   A.  Paragraph 10.
   Q.  Is that what you are referring to?
   A.  Yes.
   Q.  It was also suggested to you at {Day6/114:7} of the
       transcript today, please, that it was the intention in
       July 2015 that this agreement should remain secret.
   A.  I can see that, yes.
   Q.  How do you react to that, given the document I have just
       shown about the intention from 2013?
   A.  It clearly was not our intention to keep it secret.
       Those documents pre-dated July 2015.
   MR CAVENDER:  I have no further questions, my Lord.
                 Questions from MR JUSTICE FRASER
   MR JUSTICE FRASER:  I have some questions.  If you could
       look in your witness statement, please, at {C2/2/6},
       paragraph 33.
   A.  Yes.
   MR JUSTICE FRASER:  It's just to be clear in my own mind,
       and I'm not going to take you to the actual clauses
       because actually that is a matter for me.  But your
       understanding and recollection is that the way in which
       a subpostmaster had contractual responsibility for
       losses was the same whether it was an SPMC or whether it
       was an NTC, is that correct?
   A.  Yes, that is correct.
   MR JUSTICE FRASER:  Were you aware before these proceedings
       that the actual drafting of the clauses was different?
   A.  It wasn't something that was front of mind but I would
       have seen that because, as I said, I had a general
       familiarisation with the SPMC and obviously with the NTC
       as well.
   MR JUSTICE FRASER:  And when you were asked questions about
       this by Mr Green you said the core principles remained
       the same across the two contracts --
   A.  Yes.
   MR JUSTICE FRASER:  -- effectively.  How would you express
       the core principle in respect of responsibility for
   A.  That any losses that were caused by the postmaster or
       their assistants through negligence or error, or that
       kind of reason, would be their responsibility.
   MR JUSTICE FRASER:  All right.
           A different point.  If you could go to {F3/14/4},
       you were asked certain questions about the first two
       paragraphs in particular of this.  You remember these
       are the guidelines?
   A.  I do, yes.
   MR JUSTICE FRASER:  The part of this page that I am
       interested in is actually the next paragraph, and in
       particular the second half of the next paragraph where,
       when it's talking about a termination letter, it says:
           "The wording of this letter is very important."
           Then in block capitals:
           "No reason for the termination should be given but
       the letter should include the words 'in accordance with
       the terms of your contract'."
           Is there any reason that you can think of, in terms
       of a policy reason or any other reason, why
       a subpostmaster receiving a letter of termination should
       receive a document that doesn't give the reason for that
   A.  May I just read the paragraph, please?
   MR JUSTICE FRASER:  Of course you can.  In fact read the
       whole page.  (Pause)
   A.  No immediate reason springs to mind.
           Then just finally back on to your witness statement,
       it's two pages on from the passage that I took you to,
       so that would be {C2/2/8}.  That is a long list of
       variations.  It actually starts I think on the previous
       page, if you just go back to {C2/2/7}.  Do you see there
       you deal with some variations in paragraph 38, and then
       there is a long list of them that runs on --
   A.  Yes.
   MR JUSTICE FRASER:  And the point that was being put to you
       was that they were remarkably similar to certain
       variations that were given in a solicitors' letter.
   A.  Yes.
   MR JUSTICE FRASER:  I have just two questions for you about
       that.  Do you know why there is a nine-year gap between
       the entry at 38.9, if you could go on the common screen
       to the next page, please {C2/2/8}, why it appears on the
       face of your evidence that there were no variations for
       nine years.
   A.  I don't know why.
   MR JUSTICE FRASER:  You don't know.
   A.  No.
   MR JUSTICE FRASER:  All right.  Back to {C2/2/7} again.  You
       said a list of the variations that have been applied
       since 2002.  Why did you choose the date 2002?
   A.  That was around when Horizon was brought in.
   MR JUSTICE FRASER:  So you chose the year that you thought
       Horizon was brought in.
   A.  I believe that is when most branches converted to
       Horizon, yes.  I could be wrong on that but I believe
       that was when they ...
   MR JUSTICE FRASER:  But that is why you chose 2002.
   A.  That is why I chose it, yes.
   MR JUSTICE FRASER:  Any questions from either of you arising
       out of those questions?  No.
           Thank you very much for coming.  You are now free to
   A.  Thank you.
                      (The witness withdrew)
   MR JUSTICE FRASER:  There are two documents which I would
       like, please.  I am just going to say what they are.
       One is publicly available, but you may as well get it as
       me try to get it, and the other isn't.
           In the document at {G/74/3}, which is one of these
       Freedom of Information requests, there is reference to,
       in the final line of the ultimate substantive paragraph:
           "... Cabinet Office guidance on the use of Public
       Authority grants."
           I would like a copy of that, please.
           The other document, or documents, relates to the
       date that this MoU was published on the website.  The
       letter says it was published on the NFSP website,
       I don't think it was put on the Post Office website.
       I am minded to make an order for disclosure, because
       I imagine the Post Office was involved in the decision
       as to when it should be put on the website, and that
       will tell me what the date is.  But if you just think
       about that between yourselves we can revert to that in
       due course.  I am not going to make an order
       off-the-cuff without giving Mr Cavender an opportunity
       to address it, and it might be that no order is
           Right, it's 3 o'clock.  Mr Cavender, you have
       another witness, I think?
   MR CAVENDER:  Can I call Mr Williams, please.
                   MR PAUL WILLIAMS (affirmed)
               Examination-in-chief by MR CAVENDER
   MR JUSTICE FRASER:  Do have a seat, Mr Williams.
   MR CAVENDER:  In front of you there is a bundle.  There
       should be a statement you have made in there.  Can you
       find that?  {C2/9/1}
   A.  I have found it.
   Q.  It is a witness statement you have prepared in this
       action, is that right?
   A.  It is, yes.
   Q.  If you go through it, it extends to ten pages.  Could
       you go to the final tenth page, please.
   A.  Yes.
   Q.  Is that your signature?
   A.  It is, yes.
   Q.  Are the contents of this statement true?
   A.  Yes, they are.
   MR CAVENDER:  Wait there, please.  You will be asked some
                  Cross-examination by MR GREEN
   MR GREEN:  Mr Williams, the role that you have now is
       enforcing contractual restrictions, I think you say --
   A.  Yes, it is.
   Q.  -- at paragraph 5 of your witness statement?
   A.  Yes.
   Q.  {C2/9/1}  At paragraph 6 you explain -- you describe the
       process for appointing subpostmasters from around the
       time the standard subpostmaster contract was introduced
       until around 1999.  What is the significance of that
   A.  Around 1999 I stopped running a team which performed
       agency recruitments.  In 1993 I started running a team
       that did that.  So I think it was just in the course --
   Q.  So it's the time you know about?
   A.  It is, yes.
   Q.  From your personal knowledge?
   A.  My direct experience, yes.
   Q.  You were the agency recruitment manager, if we look
       at -- for North Wales, if we look at the top of page 2
   A.  And in North West England, yes.
   Q.  That was the location within which Mr Bates' branch was
   A.  That is the patch which we did the administration work
   Q.  His Post Office was on your patch?
   A.  That is correct, yes.
   Q.  You give an account of your background, paragraphs 8 to
           Then at paragraph 11 you say:
           "In March 1999, I became an HR adviser and have
       since worked in various other roles all related to
       subpostmaster activities since then."
           Please tell the court what becoming an HR adviser
   A.  In 1999 the Post Office, under one of its periodic
       reorganisations, having looked after agents' issues for
       a while I became an HR adviser which effectively meant
       I ran the team that provided advice to the field -- our
       field teams looking after agents and employees.  And
       that role lasted until the end of 1999.  So essentially
       I would -- if someone in the field had a problem they
       would talk to one of my team or to me and we would try
       to provide suitable advice in line with our policies.
   Q.  At paragraph 12 you explain that what has happened since
       the time you began, in terms of the structure of the
       Post Office's teams on the ground, as it were --
   A.  Yes.
   Q.  -- is that 31 districts have become seven regions, and
       that is then consolidated into three large territories.
       And then in early 2000 all of the agency recruitment
       teams were centralised into one team?
   A.  On reflection, I think that is inaccurate.
   Q.  Is it North and South?
   A.  No, actually what happened, the agency recruitment teams
       were centralised into a single function in the summer of
       1999.  The territories, which was what I acted as an HR
       adviser to, they dissolved in 2000, so effectively we
       have been a single national structure ever since.
   Q.  So your HR responsibility from 2000 was within a sort of
       national team, or did you have --
   A.  From 2000 I ceased to be an HR adviser and moved into
       a subpostmasters' contractual policy role.
   Q.  Understood.  So you know a little bit about contracts
       and why they are as they are?
   A.  I have had quite a lot of experience of them.  Yes,
       I have.
   Q.  Quite a lot.
   A.  (Witness nods)
   Q.  You rolled your eyes slightly.  Is that because they are
       quite long documents or it's quite a burdensome --
   A.  I have been doing it a long time, and they are long
       documents, but one gets reasonably familiar with them.
   Q.  Especially if you are the specialist?
   A.  Especially if you are, yes.
   Q.  I understand.
           Can we look just at some documents which relate to
       Mr Bates' appointment.  He submitted a business plan in
       the usual way, yes?
   A.  Yes.
   Q.  You didn't deal directly with his appointment?
   A.  No.  My team dealt with it.
   Q.  You didn't have any direct input into the decisions?
   A.  No.
   Q.  No.  Can I just look at the contractual documents then.
       I will confine my questions -- I am just working out
       what it is fair to ask you, Mr Williams.
           Look at {D1.1/1/1}.  This is the letter he sent on
       30 March 1998.  Do you see that date?
   A.  Yes.
   Q.  Immediately under that date, do you see "Our Ref", and
       it doesn't say "A Bates" or anything like that, it just
       says "NEWAPP1".
   A.  Yes.
   Q.  I suggest to you that is because it is a standard
       template letter?
   A.  It is, yes.
   Q.  Obviously it is addressed to Mr Bates:
           "I am delighted to inform you that your
       application ... has been successful."
           Second paragraph:
           "The transfer ... will take place on a mutually
       convenient date ..."
           Third paragraph:
           "The present subpostmaster has been notified ..."
           Then can you just look, please, at the fourth
       paragraph which begins:
           "Please find enclosed with this letter ..."
           Do you see that?
   A.  Yes.
   Q.  If you need it any nearer or anything ...
   A.  It's fine, thank you.
   Q.  "Please find enclosed with this letter two copies of
       a list of the main conditions attached to your
       appointment.  Would you kindly confirm your acceptance
       of these conditions by signing one copy and returning it
       in the envelope provided to the agency recruitment
       manager.  Please do not hesitate to ring if you need
       further information about your appointment."
           Just pausing there.  If we look over the page, there
       is a three-page document at {D1.1/1/2}, beginning there.
       And then there is a two-page document at {D1.1/1/5}.  Do
       you see those two?
   A.  Yes.
   Q.  At the top of this it says "Your Copy" on {D1.1/1/2}.
   A.  Yes.
   Q.  And this is headed "Mr Alan Bates" in the shaded box,
       "Conditions of Appointment".  And "Conditions of
       Appointment" were a well-understood term to you at the
       time, weren't they?
   A.  Yes, they were.
   Q.  And it basically set out the remuneration in
       paragraph 1.
           Can I just direct you to the third paragraph under
       number 1:
           "However, in order to reflect the uncertainty and
       risk to Post Office Counters Limited in making
       an appointment to fill this vacancy, the remuneration
       paid for the first twelve-month period will be
       75 per cent of the payment as above."
           Do you see that?
   A.  Yes.
   Q.  What is the uncertainty and risk to Post Office at that
   A.  Okay, this was a nationally set policy position.  As and
       when we put any postmaster into a branch there is
       obviously a risk that they might not perform correctly,
       they might actually disincentivise our customers, might
       drive down business rather than make a success of it.
       So at that stage the business had a policy that that
       would be considered as part of the first twelve months'
   Q.  So that effectively reduced the viability, as it were,
       of that first year?
   A.  For offices above a certain remuneration level, yes.
   Q.  So that meant that the incoming subpostmaster would have
       to be looking a little bit more long-term, wouldn't
       they, to recover their costs and investment?
   A.  That is not unfair.
   MR JUSTICE FRASER:  I wonder if you could just keep your
       voice up a little bit.
   A.  Pardon?
   MR JUSTICE FRASER:  Could you just keep your voice up
       a little bit.
   A.  I'm sorry.  I thought I was shouting.
   MR JUSTICE FRASER:  You can never speak too loudly in a room
       as big as this.
   MR GREEN:  If we look on the next page at {D1.1/1/3}, do you
       see 4.5, "National Lottery".
   A.  Yes.
   Q.  "A National Lottery playstation must be installed in
       a prominent position within the shop trading area."
           Do you see that?
   A.  Yes, I do.
   Q.  So that was a specific obligation on Mr Bates.
   A.  For that branch, yes, it was.
   Q.  For that branch.  And he would have factored that into
       his decision whether to sign this document or not?
   A.  I would assume so.  I would hope so.
   Q.  He has the cost, but on the other hand he has the
       National Lottery receipts --
   A.  Potential benefits, yes.
   Q.  Potential benefits.  So he has to make a decision on
       that, hasn't he?  And he would be expecting to have the
       benefits to offset the costs?
   A.  That is not unfair.
   Q.  And 4.7:
           "We will provide all training necessary for
           Do you see that?
   A.  Yes.
   Q.  Then if we go over the page, please {D1.1/1/4}, there is
       a provision for the Welsh Language Act.  That wasn't
       specific to Mr Bates as an individual, was it?  That was
       for all subpostmasters in Welsh Post Offices?
   A.  Yes, we -- the Post Office had created a scheme in
       response to the 1993 Act and we took special care to
       make sure new postmasters in Wales were made aware of
       those provisions and responsibilities.
   Q.  So just look at the bottom.  He says there:
           "I fully understand and accept these conditions and
       agree to avail myself of the pre-appointment
       introductory training."
           Do you see that?
   A.  Yes.
   Q.  Then if we just move to {D1.1/1/5}, this is the two-page
   A.  Yes.
   Q.  It broadly includes most of what has gone before --
   A.  Yes.
   Q.  -- apart from remuneration and training and opening
   A.  This is very much the office specific conditions of
       appointment.  And as you can see, there is no footer,
       there is nothing to suggest it is part of our standard
       offer of appointment letter.
   Q.  Well, just taking it in stages -- I'm sorry if I have
       interrupted you, but I am just going to suggest this is
       normally an internal document that Post Office keep,
       isn't it?
   A.  I would consider this -- the most probable explanation,
       I think there are perhaps two, is that it is either the
       document that was sent to us, to my team, to prepare the
       offer of appointment letter, or it could perhaps have
       been provided to Mr Bates by Mr Jones at or before
       interview.  I really can't tell for sure.
   Q.  So if we go over the page to {D1.1/1/6}, if it was
       provided before interview it says there "Personal
           "It is expected that you will render personal
       service at the Post Office in order to ensure a high
       professional and accurate standard of POCL work and to
       focus on initiatives to grow volume."
           Do you see that?
           The reality is that Post Office preferred
       subpostmasters to provide personal service, didn't they?
   A.  I wouldn't say preferred, I think it was something that
       was often the case and the whole substitution allowance
       scheme reflects some benefits to those who do, but I'm
       not convinced that I would say it was preferred.
   Q.  Let me put it differently to you.  The substitution
       allowance was a benefit available to subpostmasters only
       if they agreed to provide at least 18 hours?
   A.  I would say that it was a benefit available if they had
       chosen to provide at least 18 hours.
   Q.  Yes.  And it was a contractual benefit?
   A.  It was, yes.
   Q.  Therefore they had to contractually agree to provide
       18 hours?
   A.  They had to certify that they would provide at least
       18 hours to benefit from that benefit -- to qualify for
       that benefit, yes.
   Q.  Is it fair to say there is some sensitivity within the
       Post Office in relation to how close subpostmasters are
       to being employees?  Very careful not to use the word
       "employee" ever accidentally.  Is that fair?
   A.  I think that is perfectly fair.  There were employment
       tribunals in the 1990s and early 2000s.  We sincerely
       believe they are not employees because of the range of
       liberty they have, compared to a paid employee such as
       myself, and so clearly language is important so we try
       not to use inappropriate terms.
   Q.  Let me take you, if I may, quickly, to {F3/14/14}.  This
       is in the managing agent's contracts application
       guidelines.  And do you see, this is "Terms to be
       Avoided".  This is within the handling of an appeal
           "Terms to be avoided: Dismiss.  Employee.
           Do you see?
   A.  Yes.
   Q.  That reflects what you fairly accepted earlier, which is
       there is some sensitivity about not accidentally using
       the word "employee"?
   A.  I think that is fair, yes.
   Q.  You are aware also, are you not, that personal service
       is one of the key tests for an employment relationship?
   A.  It is one of the tests, I believe, yes.
   Q.  You well understand that?
   A.  Yes.
   Q.  You were an HR adviser, you went to an employment
       tribunal about this issue.  So it is something you are
       very clear about.
   A.  (witness nodding)
   Q.  Can we look at --
   MR JUSTICE FRASER:  I think we will have a break.  You are
       moving to the next point?
   MR GREEN:  It is actually the end of this but it will take
       a few minutes.
   MR JUSTICE FRASER:  Right, then we will take a ten-minute
       break for the shorthand writers.
           Mr Williams, you know the score, but I am going to
       bore everybody senseless by reminding you: you are in
       the middle of giving your evidence, don't talk to anyone
       about the case, but don't stay in the witness box,
       stretch your legs, and be back in ten minutes.
   (3.20 pm)
                         (A short break)
   (3.30 pm)
   MR GREEN:  Mr Williams, I was asking you about the employee
       agent issue and you very fairly accepted there was some
       sort of sensitivity about that.
           Can I ask you, please, to look again at {D1.1/1/6}.
       This is the second page of the two-page document.  You
       may not know the answer but I just want to put again,
       suggest to you, that this is actually an internal record
       that is always made for subpostmasters of them agreeing
       to provide some personal service where they do.
   A.  No, I wouldn't accept that.
   Q.  Is that possible?
   A.  I wouldn't accept that.  It looks to me as if this is
       something that Mr Jones has prepared by way of a set of
       proposed conditions for the branch.  When we dealt with
       cases in those days, the interaction was generally some
       telephone stuff but there were lots of bits of paper
       going back and forth.  Some of those bits of paper would
       be in the form of pro formas that we would provide to
       the retail network manager who was performing the
       interview, sometimes they would send bits of paper back
       to us with their conditions.  Sometimes they would be
       well presented, sometimes not so well presented.  But
       that was not what I would describe as one of
       the standard documents used in the process at the time.
       Something of this type may well have come in, in many
       cases, into my team, but it was not one of the standard
       pro formas we would use.
   MR JUSTICE FRASER:  But it is something prepared at the
       Post Office end, not at Mr Bates' end?
   A.  Clearly.  It is prepared by someone in the Post Office.
   MR GREEN:  Can I ask you to look at {D1.4/2/1}.  This is in
       relation to a different branch.  This is Elaine Ridge
       who is going to give evidence.  I am just going to put
       it to you that if you look at paragraph 3, we see there:
           "The incoming publish postmaster will [underlined
       and in bold] provide on average not less than 18 hours
       personal service each week."
           Do you see that?
   A.  Yes.
   Q.  And up above, the heading in the box at the top of the
       page is "Conditions of Appointment ..."
   A.  Yes.
   Q.  Those are contractual normally, aren't they, the
   A.  I would accept that a conditions of appointment document
       that we would produce would be contractual --
   Q.  Not normally.  Have a look -- sorry.
   A.  What I would say is this looks like an internal document
       to notify the recruitment team of what has been agreed.
       This is obviously prepared somewhat later than the time
       I was an agency recruit manager, and we can see that
       because where it talks about conditions of appointment
       there is a standard set of codes.  So following the
       creation of a national agency recruitment team,
       a document was produced which effectively was a pick
       list of conditions of appointment.
   MR JUSTICE FRASER:  You are being asked about this document
   A.  Sorry.
   MR JUSTICE FRASER:  Do you want to put the question again,
       Mr Green.
   A.  Please.
   MR GREEN:  This represents what has actually been agreed and
       it is Post Office's internal note, isn't it?
   A.  It is an internal document which reflects what has been
       agreed at the interview, yes.
   Q.  And because the substitution allowance is contractual,
       and it depends on whether the postmaster agrees to
       provide, at minimum, at least 18 hours of personal
       service, that is why a record is made at number 3,
       isn't it?
   A.  We need to keep a record so that we can set up the
       systems to make that payment if and when a claim is
       made, yes.
   Q.  And that is common practice, isn't it?
   A.  Yes.
   Q.  To keep a record of whether such agreement has been
       reached or not?
   A.  Yes.
   Q.  Just by way of example, look at {E3/61/1}.  It's
       a slightly different layout but it still has "agreed" in
       bold and italic.  And again at number 3, "will" has been
       circled there.
   A.  Yes.
   Q.  So it seems to be a common approach.
           Then please look at {F2/33/2} this is an "Agency
       Changes Communique" in 2002.
   A.  Yes.
   Q.  Is this something you would have been involved in on the
       policy side?
   A.  It was certainly around the stage where I was involved
       in such documents, yes.
   Q.  Have a look, please, at the bottom of the page,
       "Personal Service", do you see that:
           "Subpostmasters are agents and not employees of
       the Post Office and it is important that we continue to
       take an arm's length approach to the management of
       individual subpostmasters.  One of the strongest legal
       tests of this arm's length approach has been that
       a subpostmaster is not obliged to render personal
       service within his Post Office branch."
   A.  I would agree.
   Q.  So just as a matter of fact, it does seem that
       an internal record of an agreement to render personal
       service appears to be being kept?
   A.  Yes.
   Q.  And it also -- we can see certainly from what was sent
       to Mr Bates that the reference to personal service is
       not included on what is sent to and signed by him?
   A.  That is correct, yes.  So it does not form a condition
       of his appointment.
   Q.  At least not one that is recorded in what he signs?
   A.  It is not expressly set as a condition with that
       postmaster no.
   Q.  But it is recorded internally that he has agreed to it?
   A.  It is recorded internally that he has told us that he
       will be rendering at least 18 hours a week service, yes.
   Q.  Is the reason for recording him having agreed to it
       internally, but not normally sending that to him in what
       he signs, so that there is no reference to personal
       service in the actual signed conditions of agreement?
   A.  Clearly the answer must be a qualified yes, and the
       qualification is that it is my view that we did not make
       the appointments dependent upon that person rendering
       personal service, we made the appointments on the basis
       of the agreed conditions of appointments, and we
       recorded in our internal documents that personal service
       had been -- he had told us, he or she had told us that
       they would render personal service, and we made those
       records so that we were then able to discharge the duty
       under the contract to provide holiday substitution
       allowance as and when it was claimed.
   Q.  Let's move on.  Can we have a look -- just moving back
       for a moment to the letter that enclosed Mr Bates'
       conditions of appointment {D1.1/1/1}.  (Pause)
           Just on this letter, Mr Williams, is there
       a particular reason for not enclosing a copy of the
       standard subpostmasters agreement with this letter?
   A.  We would have enclosed a copy of the standard
       subpostmasters agreement with the letter.
   Q.  Sorry?
   A.  We would have enclosed a copy.
   Q.  Let's just probe that for a second.  What the letter
       says is:
           "Please find enclosed with this letter two copies of
       a list of the main conditions attached to your
           It doesn't say "and 100 pages-odd of SPMC", standard
       subpostmasters agreement, does it?
   A.  I would accept it doesn't say that, yes.
   Q.  The reason for that, this being a template letter, is
       that the practice at the time was to send through the
       conditions of employment at this stage to see whether he
       would agree to those?
   A.  I would.
   Q.  Is that fair?
   A.  Recognising that the conditions of appointment
       themselves form part of the template letter.
   Q.  It says that, doesn't it?
   A.  It does on the next page, yes.  It is a shared footer,
       isn't it?
   Q.  Yes.  You see that?
   A.  Yes.
   Q.  If we look very kindly at your witness statement --
   MR JUSTICE FRASER:  I don't understand the "shared footer"
       expression, I am sorry.
   MR GREEN:  My Lord, there is a footer at the bottom of page
       {D1.1/1/1} which appears to be the same across those
   MR JUSTICE FRASER:  Is this the number 2436?
   MR GREEN:  No, it's the "KW:G" -- just above "People" --
   A.  I have it.
   MR GREEN:  "KW:G/Recruit/Newapp1.doc".  And just so
       your Lordship has the footer point clearly, that goes
       all the way through on {D1.1/1/2} and following, but
       when we get to {D1.1/1/5} there is no footer.
   MR GREEN:  So back to {D1.1/1/1}, Mr Williams, what in fact
       is normally sent with this letter is two copies of the
       main conditions, one to be signed and one to be
   A.  And the conditions which form part of the same document,
       the next two pages, include item 6 after -- so look at
       the conditions of appointment.
   Q.  It says there:
           "You will be bound by the terms of the standard
       subpostmasters contract, a copy of which is enclosed."
   A.  Yes.
   MR JUSTICE FRASER:  Where are you looking?
   MR GREEN:  I'm so sorry, {D1.1/1/4}.
   A.  My Lord, the point I was making about the footer, you
       will see that the footer, the "KW:G/Recruit/Newapp1.doc"
       is there too.  So in terms of a standard form letter,
       the facing page which was signed by Mr Jones and the
       conditions of appointment section is all part of one
       document into which we would drop the branch specific
       conditions of appointment.
   Q.  Just looking at paragraph 23 of your witness statement
       {C2/9/4}, you say:
           "When the SPMC was introduced, subpostmasters were
       written to individually and provided with a copy of the
       'new' contract.  The practice of keeping a copy of the
       SPMC in branch and it being passed from outgoing
       subpostmaster to incoming subpostmaster was carried over
       from the old way of working.  I recall that around this
       time it was very rare for Post Office to be opening
       completely new branches and so the vast majority of its
       new subpostmasters were taking over existing branches
       (even if they were slightly moving location) which meant
       a copy of the SPMC was nearly always available for
       an incoming subpostmaster from an existing branch."
           That informs why sometimes we respectfully say, in
       Mr Alan Bates' case, the contract was not sent under
       cover of this letter.  That is the background to it,
       isn't it?
   A.  No.  My view is that at the time the letter to Mr Bates
       was produced our customer practice, our process, the
       process we operated every week, every day of every week,
       was to insert a copy of the contract with the offer of
   Q.  And had that been clear for years?
   A.  That had been the position in my -- in my area.  I think
       as we refer to it in the statement, that we started to
       do this probably around 1995/1996.
   Q.  Let's just get two short points clear, if we may.  Look
       at {D1.1/2/1}, that is the acknowledgement of
       appointment document.
   A.  Yes.
   Q.  And the date of appointment is the date of branch
       transfer, isn't it?
   A.  Yes, it is.
   Q.  At that point Mr Bates is agreeing:
           "... to be bound by the terms of my contract ..."
   A.  Yes.
   Q.  "... personal declaration signed ... and ... the rules
       contained in the Book of Rules and the instructions
       contained in those Postal Instructions issued to me."
           Can I just ask you, please, bearing in mind that
       date is 8 May and the date of the letter we were looking
       at is 30 March 1998, at {E1/12/1} this is a copy of the
       induction booklet which Mr Bates was sent.  Do you
       remember that?
   A.  Yes.
   Q.  You will see if we go forward, please, to {E1/12/10},
       under "Contract", do you see the second paragraph:
           "You will have received the full contract (on your
       day of appointment at the latest) ..."
           Do you see that?
   A.  Yes.
   Q.  This is a glossy brochure produced by Post Office to
       explain what happens, isn't it?
   A.  Yes, it is.
   Q.  It is not a sort of throw-away line by someone admitting
       that the process is not normally followed, by which it
       is sent out every time upfront.  This is Post Office's
       own glossy brochure.  And it specifically says there
       that people may only receive their full contract on the
       day of appointment.
   A.  That is possible, yes.
   Q.  Why would that be satisfactory?
   A.  Sorry?
   Q.  Why would it be satisfactory for them to get it only on
       the day of appointment?  Or would it be satisfactory?
   A.  Clearly at the time I led the team in North Wales and
       North West we believed that it wasn't satisfactory, so
       we were one of the early adopters, I think, of sending
       contracts out with the offer of appointment.
   Q.  Because others didn't?
   A.  I'm not sure that all did, no, sir.
   Q.  Pausing there.  If you are confident about being
       an early adopter of it, it does imply that you know that
       others didn't do it?
   A.  I am confident that not everyone started doing it at the
       same time, and in all honesty I'm not sure whether all
       of the seven regions were doing it prior to the
       establishment of the single national team.
   Q.  And remind us, the single national team was 2000?
   A.  It would be the summer of 1999.
   Q.  The summer of 1999.  So Mr Bates is appointed a bit
       before that?
   A.  In my patch, yes.
   Q.  In your patch.  You have very fairly accepted the
       practice varied region to region.
   A.  (witness nodding)
   Q.  Mr Bates is confident he didn't receive it.  And you
       weren't the person actually tasked with sending it out
       to him, were you?
   A.  I was the leader of the team.  The ladies that did it
       worked for me.
   Q.  But you didn't actually do it yourself?
   A.  No, I didn't do it myself.
   Q.  And you can fairly accept it is possible he wasn't sent
   A.  I must accept that as I have no recollection of putting
       it in the envelope myself that it is possible.  I would
       also say that in my time there we took a tremendous
       pride in doing the job properly and that had -- I cannot
       recall any occasion on which someone said "I thought you
       were sending me a contract and I haven't had it", so ...
   MR JUSTICE FRASER:  So you are relying on the fact that
       people didn't contact you to say they hadn't had it.
   A.  I am, sir, yes.
   MR JUSTICE FRASER:  All right.
   MR GREEN:  Look at {D1.1/2/1}, please.  I think you've got
       a perhaps more direct knowledge of some of the earlier
       periods in your patch than perhaps Mr Beal would have
       had.  It says "Book Of Rules" there in capitals.
   A.  Yes.
   Q.  Is that legacy wording from the olden days, as it were?
   A.  I would say that "Book Of Rules" is legacy wording, yes.
       I would agree with that.
   Q.  There wasn't actually a book of rules with that title?
   A.  No.  As we had been teased out of the Post Office
       Corporation into Royal Mail and Post Office Limited
       there were a huge set of rules which are called postal
       instructions, the subsets of which were placed, some
       would be in sorting offices for postal workers, some
       would be in motor vehicle centres, and some would be in
       Post Offices.
   Q.  What were they called later on?  Different names?
   A.  The postal instructions to my recollection effectively
       became obsolete and were replaced by the counter
       operations manual.
   Q.  Because if we look -- we can see in a case of much later
       lead claimants.  If you look for example at Mr Sabir at
       {D1.3/4/1}, do you see that?
   A.  Yes.
   Q.  What has happened is a font change or typographical
       change, "book of rules" is no longer in capitals and
       "postal instructions" is no longer in capitals.
       Originally postal instructions was an actual thing,
       wasn't it?
   A.  It was, yes.
   Q.  Can you remember roughly, when did that stop being
       a thing?
   A.  The postal instructions model to my recollection started
       to fade out after about 1992 -- it must have been about
       1993, and we replaced them with the counter operations
       manual which were the set of instructions around
       performing transactions and carrying out accounting
   Q.  Let's look very quickly at {D1.5/3/1}.  The typesetting
       is a bit different but it still says:
           "... the terms of my agreement and by the rules
       contained in the book of rules and the instructions
       contained in those postal instructions issued to me."
   A.  Yes.
   Q.  So we still have the same language in 2014?
   A.  Yes, that would appear to be the case.
   A.  That would appear to be the case, my Lord, sorry.
   MR GREEN:  You were involved in contracts policy from 2000
   A.  About 2000.  Since 2000 I've been in various aspects of
       it, yes.
   Q.  What thought was given to trying to make the language of
       the documents subpostmasters were sent clear and
       relevant at that stage, if any?
   A.  I think we have always striven to do that, but clearly
       I would accept that we have failed to make the
       adjustments to this to make it as clear as it could be.
   Q.  That is very fair, Mr Williams.  The question I wanted
       to ask you about these documents is these are documents
       signed on branch transfer day on the date of
   A.  Yes, they are.
   Q.  And by that stage subpostmasters are already committed,
       aren't they?
   A.  They are, yes.
   Q.  So they are contractually committed and they are opening
       a branch.  So they pretty much have to sign whatever
       they are given at that point for the branch to open?
   A.  That is not an unfair statement.
   Q.  It's not unfair.  And that is certainly how they would
       feel about it?
   A.  I don't know what a postmaster feels.
   Q.  Okay.  But in your time at contracts policy, were you
       aware of any discussions about the purpose of getting
       all these other documents signed on the date of the
       branch transfer?  I'm not talking about transfer of cash
       and stock, because obviously they have to sign off that,
       I accept that, because that is something we can't know
       about until the day and there has to be an audit.  So
       apart from that, other documents?
   A.  Clearly if a postmaster is taking on -- because this
       would be associated with the appendix A and B or
       ARS 110, however it is numbered, which is a record of
       the items that were transferred over on the day.  So
       clearly knowing which rules and instructions were there
       and making sure that we had a full set of them for the
       postmaster to use is quite an important thing to do on
       the day of transfer.  We needed to give them the tools
       to do the job.
   Q.  One of the documents that they are asked to sign on that
       day is at {E1/9/1} which is Serv 135 which we have heard
       quite a lot about.  Is that right?
   A.  Yes.
   Q.  Go over the page to {E1/9/2}, we see Mr Bates signed it
       on 8 May 1998?
   A.  Yes.
   Q.  Can we go back again, I'm sorry {E1/9/1}.  Just looking
       at the top, it says:
           "Dear subpostmaster.  Recent findings by the audit
       teams have raised doubts in my mind as to how conversant
       subpostmasters are with certain very important
       Post Office regulations.  As a means of protecting the
       investment made by yourself and Post Office Counters
       Limited in the business I would like to draw your
       attention to the following extracts from your Contract."
           Now, let's just unpack that.  The first point is
       this is being presented to them on branch transfer day
       and signed on that day?
   A.  Yes.
   Q.  And so by now they have already contracted?
   A.  Yes.
   Q.  And they are committed.  They've bought a lease or a
       freehold interest or something?
   A.  I presume so, yes.
   Q.  Were you aware of the findings of the audit teams that
       led to doubts being raised about how well these terms
       were understood?
   A.  My name is on the bottom.  It was, as I recall,
       a document that was put together with some of our heads
       of retail network and once or twice postmasters would
       say "I didn't know I couldn't borrow money to pay the
       cash and carry", which is kind of a classic misuse of
       the cash balance.  So we wanted to make sure that having
       provided postmasters with the contract in advance of the
       appointment, I am quite sure that any RM carrying out
       an interview would raise the issue of not making --
       misusing our cash and the responsibility for losses.
       But we wanted to make sure in a kind of a classic: tell
       them, tell them again and tell them what you've told
       them, that this was drawn specifically to their
   Q.  This document tells us that you told them on branch
       transfer day, doesn't it?
   A.  This document does, yes.
   Q.  Itself?
   A.  Itself, yes.
   Q.  And it also tells us that this is a standard document,
   A.  It was standard in our patch.
   Q.  It lives for very many years on, doesn't it?
   A.  It was adopted subsequently, yes.
   Q.  Yes, so your ...
   A.  Our child has legs.
   Q.  Yes.  And you didn't write this just for Mr Bates' case,
       did you, you had been using it for a while before that?
   A.  Since -- I think since soon after the North Wales and
       North West region came into being in June 1993.
   Q.  So from that time, Post Office had been aware that
       findings by audit teams had raised doubts about how well
       subpostmasters understood the terms.
   A.  That is what it says, yes.
   Q.  At that stage you weren't in contracts policy --
   A.  No.
   Q.  -- and able to change the overall way things were done?
   A.  No.
   Q.  When Mr Bates was appointed, it was still the
       pre-Horizon predominantly paper-based system?
   A.  Yes.  Yes, it was.
   Q.  And on {E1/9/1} we can see references to losses there,
       do you see, at the bottom at 12?
   A.  Yes.
   Q.  "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."
           You heard Mr Beal give his evidence, didn't you?
   A.  Yes.
   Q.  About what he understood they were responsible for?
   A.  Yes.
   Q.  It's basically losses caused by negligence of them or
       their assistants, isn't it?  Negligence or error?
   A.  It says:
           "... negligence, carelessness or error, and also for
       losses of all kinds caused by his assistants."
   Q.  It wasn't your understanding that a loss that was
       nothing to do with any fault by the subpostmaster or
       their assistant, if it was Post Office's fault,
       for example, that caused a loss, but the assistant
       happened to be somehow involved but without any fault,
       the subpostmaster would still be responsible, was it?
   A.  Clearly there is a -- it's logical that if neither -- if
       the sub -- if neither the postmaster or his assistant
       were at fault, and we were at fault, it would be
       an issue that --
   Q.  Yes, so it's effectively --
   MR JUSTICE FRASER:  Mr Green, you have just overspoken the
       witness as he was finishing.
           Go on, Mr Williams.
   A.  Sorry, I was just trying to say that --
   MR JUSTICE FRASER:  You said on the transcript:
           "... it's logical that if ... neither the postmaster
       or his assistant were at fault, and we were at fault, it
       would be an issue that ..."
   A.  We would have to take responsibility for.
   MR JUSTICE FRASER:  Mr Green.  That is in any case
       a question about subjective understanding anyway.
   MR GREEN:  My Lord, I understand.
           At paragraph 20 of your witness statement {C2/9/4}
       you explain:
           "It was my team's responsibility to produce an offer
       of appointment letter for the successful applicant which
       would include any 'conditions of appointment' ..."
           Which is what we were looking at earlier?
   A.  Yes.
   Q.  "The task of drafting it was done by the regional agency
       recruitment teams to try to ensure a degree of
           So that is a standard letter point.
           If we look at paragraph 26, you define the
       conditions of appointment in paragraph 20.  If we look
       at paragraph 26 you say {C2/9/5}:
           "Sometimes complying with the COA in the offer of
       appointment would be more expensive than the incoming
       subpostmaster expected and so they may try to negotiate
       a lower price for the business from the outgoing
       subpostmaster.  In rare occasions this could cause the
       appointment to collapse or at least delay the transfer
       of the branch of the incoming subpostmaster."
           Pausing there.  It is right, isn't it, that
       typically subpostmasters would get some agreement to
       have a property interest?
   A.  That is correct.
   Q.  Because they needed that to apply?
   A.  Yes.
   Q.  But that agreement would be conditional on not having
       materially worse terms than they had understood they
       were going to be getting?
   A.  Generally, because we were not party to those
       agreements.  Those agreements would be drawn up by the
       business transfer agent or the estates agent or whoever
       was involved in the sale of the property.
   Q.  Of course.  This is your understanding of what they were
   A.  But generally it would be something along these lines,
   Q.  And they would have a clause which would cater for the
       problem you have identified in 26?
   A.  It can do, yes.
   Q.  In relation to losses and gains, if we may, could you
       look very kindly at {F3/8/1}.  Just to orientate you in
       time, Mr Williams, if we go over to the next page
       {F3/8/2}, we will see this is a document dated
       20 November 1998?
   A.  Yes.
   Q.  The next page {F3/8/3} is the index page.  You can see
       introduction and purpose is described as being on
       page 3.
           If we go over the page to {F3/8/4}, that is in fact
       where it's found, do you see that?
   A.  Uh-huh.
   Q.  Internal page 4.  It says:
           "This policy document has been developed under the
       auspices of the Counters Risk Management Committee ..."
           Were you aware of that committee in the late 1990s
       at all?
   A.  No, I wasn't.
   Q.  You are not obliged to know.  I am just asking if you
           "... in order to provide clear and consistent
       guidelines about financial losses within the agency
           Can you go down to the large paragraph which is --
       it begins "From a purely contractual perspective ..."
       Do you see that?
   A.  Yes.
   Q.  "From a purely contractual perspective a subpostmaster
       or other agent is responsible for all losses caused
       through his own negligence, carelessness or error."
           Do you see that?
   A.  Yes.
   Q.  "He is also responsible for all kinds of losses caused
       by the actions of any assistants, managers or relief
       subpostmaster employed by him."
           Do you see that?
   A.  Yes.
   Q.  That is contractually correct, isn't it?
   A.  As I understand it, yes.
   Q.  If you look at {F3/8/14}, at 3.1:
           "The subpostmaster is required to make good all
       losses however they occur."
           Did you receive this guidance ever?  Were you aware
       of it?
   A.  I was vaguely aware of it.  Responsibility for
       implementing the losses and gains policy would -- wasn't
       something that lay within my ambit.
   Q.  I understand.  I won't take that further with you,
       Mr Williams.
           You deal in your witness statement with the death in
       service policy?
   A.  Yes.
   Q.  And taking it briefly, there were various versions of
       that over time, weren't there?
   A.  As I recall it, there was a general policy around family
       transfers about moving the branch from one member of
       a family to another.  There was particular reference to
       circumstances in which a postmaster had died, died in
       service.  I think there was an instruction in 1993,
       sub-rem 9 of 1993, which set out the specific policy we
       should adopt -- or it gave some guidance on how to deal
       with such a situation.
   Q.  Let's just look at Mrs Stubbs' case.  Can we see
       {C1/2/25}, please.  If we look at paragraphs 109, 110,
       she says there that so far as she can recall, that was
       the first time Post Office had drawn her attention to
       the specific wording of the clause imposing liability
       for branch account shortfalls.  That is because, she
       said, that the day after her husband died someone
       visited her from Post Office and she agreed to carry on
       and sign something that day.  Did you have anything to
       do with that?
   A.  No.  I believe that Mrs Stubbs' case happened in about
       the August of 1999.
   Q.  That is when she took over, yes.
   A.  By which stage, as I say, the national recruitment
       structure -- agency recruitment structure was in place
       and I was focusing as HR adviser in the northern
       territory at that stage, so I wasn't directly involved
       in this case at all.
   MR JUSTICE FRASER:  The northern territory.
   A.  Yes.
   MR JUSTICE FRASER:  I know what you mean.  Because
       Mrs Stubbs is in the southern territory, I think.
   A.  Yes.  To be honest, my Lord, the territories were around
       for such a short time I can't quite remember what they
       were called.
   MR JUSTICE FRASER:  I know what you mean anyway, and where
       you were based and where that Post Office was.  You
       wouldn't expect to be involved with her case, would you?
   A.  No.
   MR GREEN:  Can I ask you just to look, notwithstanding you
       weren't involved in her case, at what appears to be
       a standard form letter sent to her.  {D1.2/1/1}
   A.  Yes.
   Q.  23 September 1999, the following month:
           "I am delighted to inform you that your application
       for subpostmastership ... has been successful.
           "The transfer of the office will take place normally
       on the half day closure when a member of Post Office ...
       staff will attend ...
           "Please find enclosed with this letter two copies of
       the list of the main conditions attached to your
           Et cetera.
           And over the page {D1.2/1/2}:
           "May I take this opportunity of welcoming you to the
       ranks of our local subpostmasters and of wishing you
       every success in this venture.  Post Office ... will
       endeavour to support you through every stage of your
           That was a standard letter, I think, wasn't it?
   A.  It appears to be.  There are certainly some standard
   Q.  Yes.  If you look at the bottom we have
       "KW:T/HR_Recruitment_Agents/Recruit Letters/New
       appointment letter.doc".
   A.  Yes, that does look like a standard letter.
   Q.  If we go to Mr Bates' letter at the very beginning at
       {E1/1/1}, this is a letter earlier in the process in
       the late 1990s with "Our Ref: ARS 7", do you see that?
   A.  Yes.
   Q.  We haven't got the second page of it, but that also
       looks like a standard letter as well, doesn't it?
   A.  Yes.
   Q.  If we look at the footer at the bottom,
   A.  Yes.
   Q.  Was "KW" a resource available to different areas, online
       resource or ...
   A.  My recollection ...
   Q.  You're doing your best.  We understand it's a long time
   A.  My recollection of footers from 20 years ago is that
       I think that "KW" would be an individual, and that the
       resource would be the T drive, the ":T/Typists/General".
       That to me looks like it's pulled a letter down from
       that T drive and populated it.
   Q.  In relation to the ... can we look please at {F4/5/1}.
       This is a "Balancing with Horizon" document.  Does that
       look at all familiar to you or not?
   A.  I never balanced with Horizon but I have been in
       branches and seen this or similar documents.
   Q.  There are lots of similar documents.
   A.  There's a number of them, yes.
   Q.  I won't take that further if you don't know about it.
           Mr Williams, overall your evidence is largely about
       what should or would have happened, isn't it?
   A.  It is my recollection of the processes which we deployed
       twenty years ago, my Lord.  I believe that we --
       I have no clear recollection of the letters in hand of
       the incidents, but in terms of the way in which my team
       generally ran I believe we were reasonably -- I think we
       took reasonable care to provide documents to applicants
       at the right time, I think we took reasonable care to
       ensure that our letters included documents such as the
       subpostmasters contract.  And whilst I must accept that
       we were dependent upon them telling us if there was
       an error, if anyone ever asked for anything we were
       there to try and resolve any issues and make sure that
       we dealt with people efficiently and effectively.
   Q.  Mr Williams, one final thing.  One of the suggestions
       that has been put is that subpostmasters could have
       obtained information about their terms on which they
       were going to be engaged by Post Office, incoming
       subpostmasters, from the previous subpostmaster, the
       outgoing one.
           You are aware of the confidentiality provisions in
       the SPMC agreements, aren't you?
   A.  Do you mean ...
   Q.  There's the Official Secrets Act, there's ...
   A.  The Official Secrets Acts which talks about -- there is
       a copy in there, isn't there, of things that one learns
       in the course of performing your duties.
   Q.  Yes.
   A.  So I would suggest that that is related to the
       performance of Post Office duties rather than the
       agreement itself.
   Q.  So pausing there, if someone had had problems with
       Post Office in the performance of their duties -- let's
       say someone thought Horizon didn't work very well and
       felt that perhaps they were being forced to pay monies
       which they didn't really agree they were liable for,
       that is information they have learned in the course of
       their duties, is it?  Or is it not?
   A.  No, because -- remembering as well that the P13, the
       Official Secrets Act form has changed, and it is now
       I think rather more focused upon the requirements of the
       Postal Services Act 2000.  Clearly you have a duty to
       protect customer and client confidentiality and that is
       the way in which I have always believed the P13 to
   Q.  It may not be fair to put it in that way to you, but
       what about from this perspective: would you have
       regarded a subpostmaster, who is an outgoing
       subpostmaster, as authorised on behalf of Post Office to
       convey information on Post Office's behalf to
       an incoming subpostmaster?
   A.  On behalf of Post Office, no.  I would accept, however,
       that they were a party to a contract and they had every
       right to talk about their view of that side of the
       contract to whomsoever they chose.
   MR JUSTICE FRASER:  That's really a point for me, isn't it,
       Mr Green.
   MR GREEN:  My Lord, because it was canvassed extensively in
   MR JUSTICE FRASER:  I know it is a point, but it is really
       a point for me.
   MR GREEN:  Bear with me for one second ... (Pause)
           You heard Mr Beal's evidence in relation to the
       induction booklet and that what was expressed there was
       perfectly reasonable, no one would be surprised by what
       was in it and that is what people would have expected.
   A.  Yes, it seems a perfect statement -- a perfectly
       reasonable statement of --
   Q.  What both sides would expect?
   A.  -- of the aspirations of both sides, yes.
   Q.  I think I have to formally put to you in relation to
       Mrs Stubbs' case, finally, that the death in service
       policy that you described wasn't actually followed in
       her case.  But that is not -- is that something you
       can ...
   A.  I have to say I don't know because from the evidence
       that is in the bundles, there is not a lot of evidence
       of what actually happened in terms of document --
       contemporaneous documentary evidence that would suggest
       to me what actually happened.
           A death in service policy, if we're talking about in
       a situation where someone, where a postmaster is
       seriously ill, we would often try to make contact with
       the family if we thought that perhaps a death was
       possible.  And it looks to me as if, from Mrs Stubbs'
       statement, that Colin was in touch with her, and that
       a conversation did happen, and that we did try to deal
       with her sympathetically.  I think what is unclear to
       me, without any evidence, is how effectively we
       delivered that sympathetic treatment.
   Q.  To be fair, Mrs Stubbs didn't say Mr Woodbridge was
       unsympathetic at all.  The only point is, her evidence
       is that he came on the day, she agreed to take over the
       Post Office on terms which were ... the only terms that
       were discussed and disagreed with were about opening
       hours, and that was about a month before the letter
       saying her application had been successful.  If there is
       no application, and you have been quite fair in your
       other answers, would you accept it is perfectly possible
       that she just took over the next day?
   A.  I think it is possible, particularly if she had been
       completing the accounts for some time, that there was
       a fairly off-the-cuff transfer on a temporary basis.  In
       the absence of any other information -- I would then
       have expected that to have been followed up by a more
       formal process, even if that was quite a truncated
       formal process.  There is no evidence I can see that
       that happened, but there is no evidence that I can see
       that said that didn't happen.  The fact we don't have
       the papers leaves us -- leaves me unable to comment
       meaningfully, I am afraid.
   MR GREEN:  I am grateful.  No further questions.
   MR JUSTICE FRASER:  Mr Cavender.
                  Re-examination by MR CAVENDER
   MR CAVENDER:  Two short points, Mr Williams.  Firstly,
       can I take you back to the personal service point.  If
       you go to the transcript today at {Day6/151:18}, it was
       put to you by my learned friend Mr Green that -- if you
       remember, you were shown an internal Post Office
       document recording certain things, and it was put to
           "And because the substitution allowance is
       contractual, and it depends on whether the postmaster
       agrees to provide, at minimum, at least 18 hours of
       personal service, that is why a record is made at number
       3, isn't it?"
           You say:
           "We need to keep a record so that we can set up the
       systems to make that payment if and when a claim is
       made, yes."
           Then go to page 148, please, to see what you say
       there, because you returned to the same point there.
       You were asked:
           "But it is recorded internally that he has agreed to
           And you say:
           "It is recorded internally that he has told us that
       he will be rendering at least 18 hours a week service,
           Do you see that?
   A.  Yes.
   Q.  Can we put up {E3/61/1}.  This is an example of one of
       these things.  So I am clear then in the answers I have
       just read, is it your view that during this interview
       that Post Office and the subpostmaster agreed that the
       postmaster was to provide 18 hours?  That is one
       possibility.  Another possibility is that the postmaster
       had represented that he intended to provide 18 hours
       service?  Which of those two?
   A.  I would say the latter.  I would say that it was
       a situation where we would ask the question whether they
       were or were not agreeing to provide the 18 hours a week
       personal service and we would then make a record.
   MR JUSTICE FRASER:  That could potentially go down as the
       definition of a leading question, I think.
   MR CAVENDER:  I am not sure, my Lord.  I gave him two
       alternatives and asked which one he preferred.
   MR JUSTICE FRASER:  I am quite sure.  But keep going with
       your re-examination.
   MR CAVENDER:  I am obliged.  To test it from a slightly
       different angle, would you regard it as a breach of
       contract if, having ticked the box "will" on the form
       and in fact the postmaster does not provide 18 hours,
       would that be a breach of his contract?
   A.  No, because a postmaster might -- his or her personal
       circumstances might change from the point at which they
       were appointed.  All it would do is it would render them
       no longer -- they would lose the qualification to the
       holiday substitution allowance.
   Q.  If we look at the document on the screen here, assume
       for a moment -- and my learned friend's point, as
       I understand it, is this records a contractual
       agreement, yes?  Imagine a world in which someone has
       put a ring around "will not"; would it be your
       understanding that was a contractual agreement to not
       provide service?
   A.  No, that would be -- in my view, that would be that
       postmaster telling us that they were not going to
       perform less than -- not less than 18 hours service and
       clearly, if their circumstances subsequently changed and
       they were ready and willing to certify to us that they
       were providing the 18 hours, they would meet the
       qualifying criteria for the allowance.
   Q.  Thank you very much.  Moving on, you gave evidence you
       were pretty clear that a copy of the SPMC would have
       been included with the appointment letter.  Can you put
       up {D1.1/1/4} please.  You said that by reference to
       this document.  What is it in this document -- it was
       put to you that the fact of including the SPMC wasn't
       mentioned in the cover letter, do you remember?
   A.  Yes.
   Q.  What is it about the page on the screen now that makes
       you think that the SPMC was enclosed?
   A.  Because at point 6 it says "was enclosed".  My team
       prepared those letters and put the packs of documents
       together to pass to the retail network manager to sign.
       It is what we did.
   Q.  In terms of sending this letter out then, do you know
       how many pages roughly the SPMC, the old --
   A.  It's about 114.
   Q.  So if your team was sending out the letter with the SPMC
       included, what degree of obviousness do you think there
       would be if it wasn't included?
   A.  I think it would be self-evident.  In putting together
       a pack of appointment documents, it would be, with the
       inclusion of the contract, a fairly weighty item.  So
       I find it -- that is why I am so confident that it left
       my team with the documents enclosed.  Because --
   Q.  In terms of the skills of your team generally, how
       reliable did you regard them in respect of being able to
       spot the kind of error we are talking about, ie not
       putting the contract in?
   A.  I was very confident in them.  The person who prepared
       that letter had been doing recruitment issues for, at
       that stage, at least ten years.  We had worked together
       since 1993.  I had tremendous confidence in my team.
   Q.  Did you ever have any complaints about the skill levels
       of your team or their efficiency?
   A.  No.
   MR CAVENDER:  Thank you very much.  I have no further
       questions, my Lord.
                 Questions from MR JUSTICE FRASER
   MR JUSTICE FRASER:  I have two questions for you,
       Mr Williams.  In one of your answers or series of
       answers which you were giving to Mr Green towards the
       end of your cross-examination about Mrs Stubbs and you
       used an expression on two or three occasions from about
       page {Day6/179:24} onwards, you said:
           "It is unclear to me, without any evidence, how
       effectively we delivered that treatment."
           And you also said it was unclear to you and there
       was no evidence in one direction and no evidence in
       the other.  When you use that expression "evidence", are
       you including her witness statement?  Or do you mean
       contemporaneous documents?
   A.  I mean contemporaneous documents, my Lord.
   MR JUSTICE FRASER:  Thank you very much.  That is what
       I thought, but I just wanted to check it with you.
           Then the other question is at page {Day6/163:6} of
       the transcript, if that could be called up, please.
       These questions were effectively concluding questions,
       having been taken through the iteration of all of the
       different ways in which the terms were referred to.  You
       remember book of rules used to be capitals.  It used to
       exist, I believe?  Or it may have existed.
   A.  It may have existed a long time ago, my Lord.
   MR JUSTICE FRASER:  Postal Instructions, capital P, capital
       I, certainly used to exist.
   A.  Absolutely, sir.
   MR JUSTICE FRASER:  You gave that evidence and I think you
       said, perfectly fairly, at the bottom of page
           "I think we have always striven to do that ..."
           This was in terms of the language of the documents:
           "... but clearly I would accept we failed to make
       adjustments to this to make it as clear as it could be."
           And that was in the context of different wording
       being used and different descriptors being used.
   A.  In the description of the E1/9/2, the form that people
       signed (inaudible) to appointment, yes, sir.
   MR JUSTICE FRASER:  One of my jobs in this trial, certainly
       so far as the six lead claimants is concerned, is to
       work out what the terms were that were agreed in each of
       the six cases, and I think in one of your other answers
       you used the expression "lots of bits of paper" to refer
       to the different documents that one would need to look
       at for what terms, what conditions, et cetera,
       et cetera.  Were you ever involved in any discussions to
       simplify or codify everything all into one single
   A.  Not that I can recall.  The subpostmasters contract as
       it was has been replaced by the network transformation
       contracts that we talked about earlier and, in terms of
       the key conditions of an appointment, the conditions of
       appointment document and subpostmasters contract, to my
       mind, have always encompassed the most important
       conditions.  The rules and operational instructions
       book, or whatever we call them today, have been focused
       upon procedures and processes to serve customers, to
       account for those transactions and, to some extent,
       security matters, my Lord.
   MR JUSTICE FRASER:  So the answer to the question: were you
       ever involved in any discussions to simplify or codify
       everything into one single document is no, you weren't?
   A.  No, sir.
   MR JUSTICE FRASER:  Thank you very much.  Anything arising
       out of that, gentlemen?  No?  Thank you very much for
       coming.  You have now finished giving your evidence.
                      (The witness withdrew)
                      Procedural Discussion
   MR JUSTICE FRASER:  Timetable please, Mr Green.
   MR GREEN:  My Lord, yes, we are on track.  We have --
   MR JUSTICE FRASER:  Mrs Rimmer, Mr Breeden,
       Ms Van Den Bogerd.
   MR GREEN:  What is anticipated, if I manage to get through
       Mrs Rimmer and Mr Breeden in reasonable time, I will
       start Ms Van Den Bogerd.  She is on Tuesday.
       Your Lordship may have --
   MR JUSTICE FRASER:  That is one of the things I want to tell
       you.  I was supposed to spend the entire afternoon at
       the Ministry of Justice at a meeting.  That meeting is
       still happening.  I have just either been given approval
       and/or decided I am not going.  So you have the whole of
   MR GREEN:  I hope to be able to finish either at the end of
       Tuesday or early on Wednesday.
   MR JUSTICE FRASER:  I think you should aim to finish with
       that witness by the end of Tuesday.
   MR GREEN:  My Lord, yes, she covers an enormous --
   MR JUSTICE FRASER:  I know, but that still leaves you seven
       witnesses in the next two days, which is going to be
       quite hard going.
   MR GREEN:  My Lord, yes.  We have analysed fairly carefully
       the scope of the challenges which we need to make to
       those.  So I am quite confident about --
   MR JUSTICE FRASER:  They are going to be a bit brisker, are
       they --
   MR GREEN:  Much brisker.
   MR JUSTICE FRASER:  -- than today?
   MR GREEN:  A lot of those are very small points focussed on
       short witness statements.
   MR JUSTICE FRASER:  We can keep that under review.
   MR GREEN:  Yes.
   MR JUSTICE FRASER:  But you have the whole of Tuesday.
   MR GREEN:  I am very grateful for that.
   MR JUSTICE FRASER:  I imagine it won't arise, but we will
       have a hard start on Monday 26 with Mr Haworth
       regardless of progress on Thursday 22.  Does that suit?
   MR GREEN:  My Lord, yes.
   MR JUSTICE FRASER:  So that is timetable.  Is there anything
       either of you two want to raise or would like to raise?
   MR GREEN:  My Lord, the only thing is -- I think it is
       actually my learned friend and I'm not sure it arises
       until the end of the week -- the progress on the bundles
       your Lordship asked for.
   MR JUSTICE FRASER:  That is one of the points I am going to
       ask.  I did indicate there was no screaming rush.
   MR CAVENDER:  My Lord, progress has been made and we found
       rather more than originally may have been expected.  But
       we won't, I think, get every single document.  In terms
       of -- ready by Monday, if that is satisfactory, my Lord.
   MR JUSTICE FRASER:  On the basis that I am going to be
       sitting in here on Monday, let's say if whoever is doing
       it aims for the end of Monday --
   MR CAVENDER:  I am obliged.
   MR JUSTICE FRASER:  -- that might give them a slightly less
       fraught weekend.
           Now, round three of the litigation.  I have
       threatened to raise it on more than one occasion and
       I am raising it now.  At the last CMC/interlocutory
       spat, or maybe it was the penultimate one, I said I was
       going to deal with tranche three in the summer of 2019
       and each of you suggested that might not be a sensible
       thing to do.  I remain of the view that that is what
       I am going to do.  I'm not going to make an order about
       it now, but do either of you have any observations which
       you want to make now?
   MR GREEN:  My Lord, just for present purposes, in the
       development of the court's thinking, as it were,
       your Lordship will remember that the Horizon trial, we
       had sought to have the Horizon trial, I think both
       parties suggested possibly a date a little bit later,
       April/May, for the Horizon trial and your Lordship made
       the observation -- we can give you the transcript
       reference if it is helpful?
   MR JUSTICE FRASER:  No, it isn't.
   MR GREEN:  Your Lordship didn't feel that the mediation we
       intended to have between this trial and the Horizon
       trial would be likely to be as effective until we had
       had the Horizon trial.
   MR JUSTICE FRASER:  I wouldn't put it in quite those terms.
       I am -- or I was then of the view that there was a whole
       raft of issues that needed properly resolving by me for
       any of the parties to reach any sort of effective
       progress and that includes, for obvious reasons,
       Horizon.  That trial starts in March.  What date in
   MR GREEN:  I think it is 11 March.
   MR JUSTICE FRASER:  And it is down for four or five weeks.
   MR GREEN:  Five weeks.
   MR JUSTICE FRASER:  You then want to have a mediation.
   MR GREEN:  My Lord, yes.
   MR JUSTICE FRASER:  You are able to mediate at any time.
   MR GREEN:  My Lord yes.  But just in terms of experience,
       certainly in chambers, of group action mediations, it is
       not something that is an insignificant commitment.
   MR JUSTICE FRASER:  I'm not suggesting it is insignificant,
       I am just looking at progress of the group litigation.
       That is my only aim.
   MR GREEN:  Indeed.  My Lord, I think I can say fairly on
       behalf of my learned friend and myself that we are both
       of the view that it is worth planning to have
       a mediation after the outcome of the Horizon trial and
       making structured plans to do that.  And that may
       significantly advance the progress of the litigation.
   MR JUSTICE FRASER:  I'm sure it might.  However, it is fine
       to plan that but that has to be done in parallel with
       planning the litigation.
   MR GREEN:  Of course, my Lord.
   MR JUSTICE FRASER:  As I said to you last time, even if the
       parties jointly are suggesting I don't touch any of the
       lead claims or test claims or any other claims in this
       case in 2019 from the Horizon trial until late 2019, you
       are going to have a very difficult job persuading me.
       Because that means, from the court's point of view of
       progressing litigation, nothing is going to happen for
       over half a year.
   MR GREEN:  My Lord, I understand that.  My learned friend
       and I anticipate the possibility that we may face such
       an uphill struggle.  All I wanted to do at this stage of
       development of the thinking on it was --
   MR JUSTICE FRASER:  Reiterate your stance from last time.
   MR GREEN:  Slightly elaborate on it.
   MR JUSTICE FRASER:  Go on then.
   MR GREEN:  I already have.  Just in terms --
   MR JUSTICE FRASER:  That is no more elaboration than I had
       last time.  I know you want to do a mediation because
       you told me last time.  You are just telling me it is
       going to be complicated and difficult.
   MR GREEN:  But, my Lord, I have taken the trouble of
       discussing it with people who have been involved in
       similar schemes in some depth to see how big a point
       that is.  So I am reiterating it on that basis.
   MR JUSTICE FRASER:  Let's look at it from the other end of
       the telescope.  It really depends what round three of
       the trial is going to involve, doesn't it?
   MR GREEN:  My Lord, that is one of our other concerns which
       we have discussed.  I am answering --
   MR JUSTICE FRASER:  That's fine.  I will hear from
       Mr Cavender in a minute if he disagrees with what you
       are saying.
   MR GREEN:  One of the things we have discussed, it is
       certainly right that, after the outcome of this trial,
       we will definitely have a much clearer idea about what
       the content of round three could most usefully and
       cost-effectively be.  So there are two points.  One is
       the wish to have a mediation, and I wholly accept that
       that can go on in parallel.  The other is the
       proportionality point in terms of trying to make
       whatever round three is as effective an exercise as
       possible, both from the perspective of the use of the
       court's time and the use of the parties' resources.  So
       that is a point that my learned friend and I both
       separately arrived at but don't disagree about.
   MR JUSTICE FRASER:  Whenever round three happens, whether it
       is going to be in June of 2019 or later, there are three
       alternatives, it seems to me, and if I have missed some
       of them out, you will tell me, and it might be you will
       tell me next week or the week after.
   MR GREEN:  Indeed.
   MR JUSTICE FRASER:  There is either another group of
       issues --
   MR GREEN:  Indeed.
   MR JUSTICE FRASER:  -- or final resolution of some of the
       lead claims.
   MR GREEN:  Indeed.
   MR JUSTICE FRASER:  Or final resolution of some test claims.
   MR GREEN:  Indeed.
   MR JUSTICE FRASER:  The difference between those last two we
       don't need to debate for the moment, but there obviously
       is a slight difference.  I have revisited the pleadings
       and it seems to me that, though technically possible,
       the groups of issues point, if by then we have cleared
       out all of the Common Issues and all of the Horizon
       issues, the most sensible thing is to fully try a small
       number, and by "small number" I imagine fewer than six,
       it might even only just be two.  You could even choose
       one each.  They might not even be any of the six that
       are here for this trial.  But they need to be tried out
       or tried to conclusion, because it is difficult to
       isolate groups of issues that would remain other than
       the ones we have identified.
           So that is my thinking.  If it were two lead claims
       or test claims, the workload for preparing for those
       would not necessarily be as burdensome as it is for this
       and for the Horizon trial because it is actually just
       going to be those two specific people's experiences.
   MR GREEN:  My Lord, yes.  That is something we would very
       much like --
   MR JUSTICE FRASER:  To think about.
   MR GREEN:  -- to think about, if we may.  I think both of us
       are completely open to that as a possibility.
       I don't think there is any fixed view at all to the
       contrary and indeed it is a self-evidently sensible
       proposal.  May we try and discuss it further and see --
   MR JUSTICE FRASER:  By all means.  I think the important
       thing now is just for me to identify my thinking in
       terms of dates.  Otherwise you are never going to find
       out when that tranche will be, if it is this side of the
       long vacation.  And the period of time that jumps out at
       me at the moment is the one that begins in the second
       half of what is effectively the summer term, so that is
       5 June onwards, for I would have thought, if it is the
       second of the alternatives I have suggested, two or
       three weeks.  Because I don't think to try out fully two
       of them would take any longer than that.  You also need
       to think, I think, about whether you would need any sort
       of accountancy evidence and, if you were to need
       accountancy evidence simply to deal with loss and
       quantum, whether it is suitable for a single joint
       expert, which would probably narrow down the amount of
       issues quite considerably.  Those are just structured
       thoughts and expectations.  We probably don't need to
       talk about it anymore.
   MR GREEN:  My Lord, no.
   MR JUSTICE FRASER:  You probably don't want me to talk about
       it anymore.  We will come back to it in due course.
       Yes, Mr Cavender?
   MR CAVENDER:  My Lord, yes.  You want to hear my position
       later when we have the other discussion, presumably?
   MR JUSTICE FRASER:  It is completely up to you.  You can
       make any useful observations now if you have any.
   MR CAVENDER:  I always have useful observations,
       the question is whether you want to hear them now or
   MR JUSTICE FRASER:  Would you like to tell me any of them
       now or shall we leave them for later?
   MR CAVENDER:  Leave them for later.
   MR JUSTICE FRASER:  All right, we will leave them for later.
       Build the sense of suspense.
   MR CAVENDER:  Exactly.
   MR JUSTICE FRASER:  Thank you all very much for this week.
       I will see you on Monday at 10.30 am.
   (4.45 pm)
         (The court adjourned until 10.30 am on Monday,
                        19 November 2018)

   Housekeeping .........................................1
   MR NICHOLAS PETER BEAL (affirmed) ....................5
       Examination-in-chief by MR CAVENDER ..............5
       Cross-examination by MR GREEN ....................7
       Re-examination by MR CAVENDER ..................125
       Questions from MR JUSTICE FRASER ...............131
   MR PAUL WILLIAMS (affirmed) ........................136
       Examination-in-chief by MR CAVENDER ............136
       Cross-examination by MR GREEN ..................136
       Re-examination by MR CAVENDER ..................180
       Questions from MR JUSTICE FRASER ...............185
   Procedural Discussion ..............................188

Day 1 transcript - Wed 7 November - Opening arguments
Day 2 transcript - Thu 8 November - Claimants: Alan Bates, Pam Stubbs part 1
Day 3 transcript - Mon 12 November - Pam Stubbs part 2, Mohammad Sabir
Day 4 transcript - Tue 13 November - Naushad Abdulla, Liz Stockdale
Day 5 transcript - Wed 14 November - Louise Dar
Day 6 transcript - Thu 15 November - Post Office: Nick Beal, Paul Williams
Day 7 transcript - Mon 19 November - Sarah Rimmer, John Breeden, AvdB part 1
Day 8 transcript - Tue 20 November - AvdB part 2
Day 9 transcript - Wed 21 November - AvdB part 3, Timothy Dance, Helen Dickinson, Michael Shields part 1
Day 10 transcript - Thu 22 November - Michael Shields part 2, Elaine Ridge, David Longbottom, Michael Webb
Day 11 transcript - Mon 26 November - Michael Haworth, Andrew Carpenter, Brian Trotter