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).
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 6 full transcript:
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 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
quickly.
MR JUSTICE FRASER: All right.
Housekeeping
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
contract.
MR JUSTICE FRASER: Yes.
MR DRAPER: The issue explored in cross-examination was what
that meant.
MR JUSTICE FRASER: Yes.
MR DRAPER: All this spreadsheet does is give you the
number.
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
proceedings.
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 JUSTICE FRASER: Yes.
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.
(Pause)
MR DRAPER: You have just been handed, my Lord, the proposed
amendments.
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
right?
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
subpostmasters."
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
remember?
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
customer?
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
that?
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
stock?
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
paragraph.
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
control."
This is context, you don't need to comment on this,
I just want to be fair to you so you understand what is
said.
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
description?
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
too?
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
Limited."
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
finish.
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."
Yes?
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
expect?
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
all?
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."
Yes?
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
community."
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."
Yes?
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
line:
"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
manager."
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."
Yes?
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
manner."
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."
Yes?
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
entirety."
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
they?
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
contracts.
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 JUSTICE FRASER: Right.
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
types.
Q. Were there any differences in relation to termination or
appeals?
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
him."
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
representative.
If we look at -- if we go to paragraph 5
{D2.1/3/86}:
"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
writing."
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
contract.
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
different.
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
contracts?
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
procedures?
A. That is correct, yes.
Q. And this document, whoever authored this, doesn't
either?
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."
Yes?
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
subpostmasters?
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
already:
"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
statement.
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 ..."
Yes?
A. Yes.
Q. So that was a material change in favour of
subpostmasters?
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
this.
MR JUSTICE FRASER: I think you were asked in what ways was
the NTC, in other words, the contract itself, better for
them.
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
sub-office."
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
this.
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
obligations?
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
document.
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
fair?
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
transcript.
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."
Yes?
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
that.
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
agreement."
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,
though.
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
week.
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
Branches":
"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
cards."
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
breach.
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 JUSTICE FRASER: Yes.
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
variations.
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."
Yes?
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.
Then:
"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
similar.
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
standards?
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
booklet"?
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
subpostmasters?
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
that?
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
that?
A. Yes.
Q. If you look at the bottom paragraph of section 1, it
says:
"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."
Yes?
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,
8,636.86."
And then it says:
"Total account balance: 17,670.65."
Yes? Which is adding in a previous subtotal of
9,033.
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
liability.
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
subpostmasters?
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
they?
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
NFSP."
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
again?
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
dishonestly?
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
it?
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
offering."
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
point?
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."
Then:
"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
that?
A. Yes.
Q. So the NFSP has been broadly supportive of the NTC
changes, contract, and supportive of Horizon being
robust?
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,
no.
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
transformation?
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
follows:
"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.
Yes.
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
that?
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
2028."
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
negotiated?
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
agreement.
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
night.
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
approximately.
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
documents.
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
Subpostmasters?
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
think.
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."
Yes?
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
page:
"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
request.
"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
approach?
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
that.
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
there?
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
{G/74/4}:
"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
paragraph:
"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
available.
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
agreement.
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
point.
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
Subpostmasters.
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
moment.
MR GREEN: This comes to an end quickly. It is quite
important.
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
it?
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
evidence?
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
link.
A. Yes.
MR JUSTICE FRASER: Do you know when it was published on the
website?
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.
Apologies.
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
page.
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
here.
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
10p?
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
programme.
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.
Sorry.
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
used?
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
says:
"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
to?
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
compensation.
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
say:
"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
questions?
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
losses?
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
termination?
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.
MR JUSTICE FRASER: Right.
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
go.
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
necessary.
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
questions.
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
period?
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
{C2/9/2}.
A. And in North West England, yes.
Q. That was the location within which Mr Bates' branch was
located?
A. That is the patch which we did the administration work
for.
Q. His Post Office was on your patch?
A. That is correct, yes.
Q. You give an account of your background, paragraphs 8 to
10.
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
involved.
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
stage?
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'
remuneration.
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
yourself."
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
document.
A. Yes.
Q. It broadly includes most of what has gone before --
A. Yes.
Q. -- apart from remuneration and training and opening
hours?
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
Service":
"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
process:
"Terms to be avoided: Dismiss. Employee.
Employment."
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
conditions?
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
though.
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
appointment."
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
documents.
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 JUSTICE FRASER: Yes.
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
returned.
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
appointment.
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
it?
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
processes.
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.
MR JUSTICE FRASER: Sorry?
A. That would appear to be the case, my Lord, sorry.
MR GREEN: You were involved in contracts policy from 2000
onwards?
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
appointment?
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
attention.
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,
presumably?
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."
Yes.
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
consistency."
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
doing?
A. But generally it would be something along these lines,
yes.
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
did.
"... in order to provide clear and consistent
guidelines about financial losses within the agency
network."
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
appointment."
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
appointment."
That was a standard letter, I think, wasn't it?
A. It appears to be. There are certainly some standard
paragraphs.
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,
"KW:T/Typists/General/ARS7A3.doc".
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
ago.
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
operate.
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
cross-examination-
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
you:
"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
it?"
And you say:
"It is recorded internally that he has told us that
he will be rendering at least 18 hours a week service,
yes."
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
{Day6/163:6}:
"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
document.
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
Tuesday.
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
March?
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
later.
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)
INDEX
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
(10.30 am)
MR CAVENDER: Good morning, my Lord. Before I call Mr Beal,
Mr Draper has three points of housekeeping to deal with
quickly.
MR JUSTICE FRASER: All right.
Housekeeping
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
contract.
MR JUSTICE FRASER: Yes.
MR DRAPER: The issue explored in cross-examination was what
that meant.
MR JUSTICE FRASER: Yes.
MR DRAPER: All this spreadsheet does is give you the
number.
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
proceedings.
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 JUSTICE FRASER: Yes.
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.
(Pause)
MR DRAPER: You have just been handed, my Lord, the proposed
amendments.
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
right?
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
subpostmasters."
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
remember?
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
customer?
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
that?
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
stock?
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
paragraph.
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
control."
This is context, you don't need to comment on this,
I just want to be fair to you so you understand what is
said.
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
description?
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
too?
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
Limited."
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
finish.
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."
Yes?
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
expect?
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
all?
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."
Yes?
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
community."
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."
Yes?
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
line:
"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
manager."
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."
Yes?
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
manner."
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."
Yes?
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
entirety."
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
they?
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
contracts.
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 JUSTICE FRASER: Right.
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
types.
Q. Were there any differences in relation to termination or
appeals?
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
him."
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
representative.
If we look at -- if we go to paragraph 5
{D2.1/3/86}:
"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
writing."
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
contract.
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
different.
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
contracts?
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
procedures?
A. That is correct, yes.
Q. And this document, whoever authored this, doesn't
either?
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."
Yes?
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
subpostmasters?
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
already:
"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
statement.
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 ..."
Yes?
A. Yes.
Q. So that was a material change in favour of
subpostmasters?
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
this.
MR JUSTICE FRASER: I think you were asked in what ways was
the NTC, in other words, the contract itself, better for
them.
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
sub-office."
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
this.
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
obligations?
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
document.
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
fair?
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
transcript.
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."
Yes?
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
that.
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
agreement."
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,
though.
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
week.
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
Branches":
"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
cards."
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
breach.
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 JUSTICE FRASER: Yes.
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
variations.
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."
Yes?
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.
Then:
"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
similar.
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
standards?
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
booklet"?
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
subpostmasters?
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
that?
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
that?
A. Yes.
Q. If you look at the bottom paragraph of section 1, it
says:
"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."
Yes?
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,
8,636.86."
And then it says:
"Total account balance: 17,670.65."
Yes? Which is adding in a previous subtotal of
9,033.
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
liability.
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
subpostmasters?
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
they?
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
NFSP."
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
again?
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
dishonestly?
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
it?
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
offering."
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
point?
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."
Then:
"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
that?
A. Yes.
Q. So the NFSP has been broadly supportive of the NTC
changes, contract, and supportive of Horizon being
robust?
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,
no.
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
transformation?
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
follows:
"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.
Yes.
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
that?
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
2028."
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
negotiated?
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
agreement.
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
night.
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
approximately.
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
documents.
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
Subpostmasters?
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
think.
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."
Yes?
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
page:
"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
request.
"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
approach?
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
that.
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
there?
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
{G/74/4}:
"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
paragraph:
"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
available.
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
agreement.
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
point.
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
Subpostmasters.
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
moment.
MR GREEN: This comes to an end quickly. It is quite
important.
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
it?
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
evidence?
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
link.
A. Yes.
MR JUSTICE FRASER: Do you know when it was published on the
website?
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.
Apologies.
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
page.
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
here.
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
10p?
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
programme.
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.
Sorry.
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
used?
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
says:
"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
to?
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
compensation.
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
say:
"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
questions?
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
losses?
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
termination?
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.
MR JUSTICE FRASER: Right.
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
go.
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
necessary.
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
questions.
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
period?
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
{C2/9/2}.
A. And in North West England, yes.
Q. That was the location within which Mr Bates' branch was
located?
A. That is the patch which we did the administration work
for.
Q. His Post Office was on your patch?
A. That is correct, yes.
Q. You give an account of your background, paragraphs 8 to
10.
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
involved.
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
stage?
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'
remuneration.
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
yourself."
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
document.
A. Yes.
Q. It broadly includes most of what has gone before --
A. Yes.
Q. -- apart from remuneration and training and opening
hours?
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
Service":
"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
process:
"Terms to be avoided: Dismiss. Employee.
Employment."
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
conditions?
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
though.
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
appointment."
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
documents.
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 JUSTICE FRASER: Yes.
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
returned.
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
appointment.
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
it?
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
processes.
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.
MR JUSTICE FRASER: Sorry?
A. That would appear to be the case, my Lord, sorry.
MR GREEN: You were involved in contracts policy from 2000
onwards?
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
appointment?
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
attention.
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,
presumably?
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."
Yes.
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
consistency."
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
doing?
A. But generally it would be something along these lines,
yes.
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
did.
"... in order to provide clear and consistent
guidelines about financial losses within the agency
network."
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
appointment."
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
appointment."
That was a standard letter, I think, wasn't it?
A. It appears to be. There are certainly some standard
paragraphs.
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,
"KW:T/Typists/General/ARS7A3.doc".
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
ago.
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
operate.
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
cross-examination-
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
you:
"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
it?"
And you say:
"It is recorded internally that he has told us that
he will be rendering at least 18 hours a week service,
yes."
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
{Day6/163:6}:
"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
document.
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
Tuesday.
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
March?
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
later.
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)
INDEX
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
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