Thursday 25 March 2021

Day 4 transcript: Court of Appeal - 42 Subpostmaster Appellants

 This is the unperfected transcript from Court 4:

           1                                        Thursday, 25 March 2021

           2   (10.30 am)

           3   LORD JUSTICE HOLROYDE:  Mr Stein.

           4                     Submissions by MR STEIN

           5   MR STEIN:  My Lord, yesterday, I was asked two questions

           6       concerning Ms Lock's position.  One was regarding monies

           7       received.  May I say that Ms Lock and Mr Orrett are

           8       still looking into that matter.

           9   LORD JUSTICE HOLROYDE:  Yes.

          10   MR STEIN:  The second question concerned calls to the

          11       helpline and as you will recall, it was some time ago,

          12       I am afraid, for Ms Lock, and she cannot recall details

          13       of calls.

          14   LORD JUSTICE HOLROYDE:  No.  All right, thank you very much.

          15   MR STEIN:  One last matter, that I have been asked to make

          16       clear and I do, I referred yesterday, forgive me for

          17       turning sideways, I referred yesterday to the generic

          18       disclosure extracts to an extract which appears at 780

          19       and concerned A O48.  I have been asked to make clear

          20       and I'm happy to do so, that that is an appeal from the

          21       Magistrates' Court to the Crown Court that has not yet

          22       been decided in terms of the decision made by the

          23       Post Office.

          24   LORD JUSTICE HOLROYDE:  Right, thank you.

          25           I don't think -- nothing was said yesterday which


           1       could identify that page to case to anyone who doesn't

           2       know all the ciphers already.

           3   MR STEIN:  Yes, my Lord.

           4   LORD JUSTICE HOLROYDE:  Right.

           5   MR STEIN:  My Lord, we turn then, this morning, to

           6       Stanley Fell, aged 69 now.  My Lord has a speaking note

           7       that we have provided to the court and to the

           8       Post Office and my learned friends, of course.

           9           That largely sets out our submissions.  Can I flesh

          10       it out, as far as that would assist the court overall?

          11   LORD JUSTICE HOLROYDE:  Yes.

          12   MR STEIN:  My Lord has heard on a number of occasions that

          13       I have referred in our opening submissions, general

          14       submissions and individual submissions yesterday, to the

          15       generic evidence review.  Whilst not going back into

          16       that again, I pray in aid the remarks made by those

          17       individuals over so long a period of time, because they

          18       demonstrate the position that Mr Fell was in, as were so

          19       many others.  "I don't know what is going on, I can't

          20       explain the losses, I don't understand what is happening

          21       with the Horizon system, it is a mystery", people

          22       panicking, people clearly making decisions they wouldn't

          23       have done in other circumstances, contrary to positive

          24       good character.

          25           That is one of the fundamental reasons why I have


           1       repeatedly referred to that review, as it provides

           2       supporting evidence to the points decided by

           3       Mr Justice Fraser, that these individuals, the

           4       sub-postmasters, were in a position whereby, without the

           5       information being provided during the course of their

           6       duties that there were problems with Horizon, with the

           7       unequal business relationship with Horizon, they were

           8       left in circumstances whereby they didn't know what to

           9       do.  Decision making was poor, they fell into error.

          10           So we have many cases within this litigation whereby

          11       people were false accounting, essentially, because of

          12       the problems that they were in.  So that is a background

          13       matter that I do ask you to consider.

          14           One fact we haven't looked at in any detail, decided

          15       by Mr Justice Fraser, again emphasis on the problem that

          16       was confronted by SPMs.  If you wish to go to it, it is

          17       within the judgments of Mr Justice Fraser, number 3.  It

          18       happens to be at page 404 of the bundle.  The paragraph

          19       number within the judgment is 1117.  It just provides

          20       evidence on the difficulties that the postmasters were

          21       in, versus the Post Office.  Suspended postmasters were

          22       not paid for their period of suspension, but in order to

          23       keep their branches open, had to pay temporary SPMs to

          24       run them.  Even if reinstated, they had no right to be

          25       paid for remuneration for their period of suspension.


           1           I mention that only, yet again, to provide emphasis

           2       on the unequal business, bargaining, contract, that

           3       these individuals were in.

           4           So with that background overall submission, as

           5       my Lord, you know, Mr Fell was a third generation Fell

           6       working for the Post Office and he took, undertook, the

           7       contract at the Newton Bergoland Post Office, a small

           8       village, from 1976, until his suspension in 2006.

           9           There had been no problems, no difficulties until

          10       after Horizon was installed.  My Lord, as so many others

          11       who present their appeals before this court, Mr Fell was

          12       a highly regarded member of the local community.  The

          13       character references that were supplied on his behalf

          14       before the court, on his conviction by his own plea,

          15       spoke incredibly highly of him as both a mainstay of the

          16       community, a real support for those who were infirm or

          17       of age.

          18           We submit that Mr Fell falls into the category of

          19       individuals, where, though there were unexplained

          20       losses, I will explain that in a little bit more detail

          21       in a moment, whereby his prosecution was at a time, as

          22       all other appellants, whereby there was no system of

          23       disclosure, or no system of disclosure that could

          24       properly be described as such, established in order to

          25       prosecute any individual.  Without repeating all of the


           1       arguments therefore, we suggest that he falls within the

           2       overall categories of abuse in terms of abuse 2, limb 2.

           3       It is an affront to justice he is prosecuted in these

           4       terms and as regards limb 1, which as, my Lord, you are

           5       aware, this is not a conceded case by the Post Office,

           6       and we say that the denial of a proper system of

           7       disclosure had an effect in his particular case.

           8           My Lord, we have set out a legal framework within

           9       the speaking note.  I have referred at earlier times

          10       within these appeals to the fact that, even in

          11       circumstances where there is a plea of guilty, the

          12       overall position in law is that, if there is material

          13       that could lead or might lead within the terms of the

          14       CPIA to an application to stay proceedings, that

          15       material must be disclosed and an individual in any such

          16       circumstances might well find themselves in a situation

          17       whereby they can apply for a stay of proceedings.

          18   MR JUSTICE PICKEN:  Can I just ask you, is your primary

          19       purpose in addressing Mr Felstead abuse ground limb 1 or

          20       is it limb 1 and 2 -- I anticipate it is limb 2 as well

          21       but is your primary focus limb 1?

          22   MR STEIN:  My Lord, if I were to say one is more preferable

          23       than the other, then it might undermine an argument.

          24       What we say is he is entitled to both.  The overall

          25       abuse is the affront to justice level of abuse, that he


           1       was in that position, and I don't need to argue any

           2       further, we have dealt with those arguments over the

           3       last days, so for these purposes, perhaps the best

           4       answer I can provide is that I am mainly addressing for

           5       these purposes, limb 1.

           6   MR JUSTICE PICKEN:  That is fine.

           7   MR STEIN:  I don't want to undermine that by suggesting that

           8       one is preferable to the other.

           9   LORD JUSTICE HOLROYDE:  Logically, I suppose, the starting

          10       point is raised by the respondents in argument, "Is this

          11       really a Horizon case at all"; that is the logical

          12       starting point.

          13   MR STEIN:  Exactly.  The respondents argue that here is

          14       a gentleman that on the visit by Ms Bailey on an audit,

          15       after an important point, after essentially, Mr Fell had

          16       called attention to his own Post Office by making

          17       repeated remarks and complaints about the numbers not

          18       matching up, the Post Office decided, via Ms Bailey, to

          19       visit and then he made the point that I am sure will be

          20       made by Mr Altman, then he made admissions from that

          21       point onwards and those admissions, to complete the

          22       point no doubt being made by Mr Altman later on, were

          23       then carried through into the basis of plea and through

          24       a voluntary interview process.

          25           So I don't want to steal Mr Altman's thunder but


           1       that is, essentially, no doubt going to be the

           2       respondent's points.

           3           So we have dealt with the fact that it was at a time

           4       whereby there was no or no adequate system of

           5       disclosure.  We have asked the court to take note of the

           6       fact that, despite what is going to be said, that this

           7       is not a Horizon case, this was a case whereby in the

           8       statement of Penelope Thomas, dated 2 March 2007, that

           9       that contained the standard declaration that everything

          10       is okay with the system -- my paraphrase, not the exact

          11       wording.

          12           There is no evidence, and there was no evidence that

          13       Mr Fell was living the high life.  There was no

          14       lifestyle evidence.  There was no evidence before the

          15       court or at this stage, or at any stage, that there was

          16       unexplained sums of money, either in actual cash terms,

          17       if you like, or going into bank accounts.  So no other,

          18       outside of the case, if you like, supporting evidence of

          19       particular types of cars or similar.

          20           In terms of disclosure, this was at a time whereby,

          21       whilst there had been, perhaps, some questions raised

          22       regarding Horizon, it is at an early time.  We are not

          23       into 2010s, we are not into the period of time beyond

          24       that, whereby the general discussion about the

          25       reliability of Horizon was there.  This is a slightly


           1       earlier time for Mr Fell.  It provides a point in

           2       support because it means that he wouldn't necessarily

           3       have known that here is an answer to his particular

           4       issues.

           5           Now, we know from the CCRC review of this particular

           6       case, set out at paragraph 15 of our speaking note at

           7       page four, that the CCRC took into account at a later

           8       stage -- again, no doubt, a point going to be made by my

           9       learned friend -- that Mr Fell explained that he had

          10       been using shop money to balance unexplained Horizon

          11       losses.  So this is a Post Office, it is the typical

          12       rural Post Office, that frankly, I grew up with as well,

          13       that has the grocery shop and Post Office next door to

          14       it, all in one business, so what was being said there

          15       and accepted by the CCRC in terms of the referral, is

          16       that there were two parts of it and that Mr Fell had

          17       explained then.

          18           That, of course, will be shown by my learned friend

          19       or said by my learned friend that that is later on --

          20       that will be a point that will be raised.  I will attack

          21       that in a moment but can I then look at the facts in

          22       support.

          23           The Horizon system was installed in 2001.  Mr Fell

          24       did not find this a natural transition.  He found the

          25       course difficult and required support thereafter.  He


           1       had assistance, therefore, in running the system and it

           2       wasn't easy.  Can I take you then now, please, to bundle

           3       E, page 98.  We are going to look at a point that

           4       concerns discrepancies.  To understand this point, we

           5       need to bear in mind that one part of Mr Fell's case

           6       concerns the fact that to support the grocery business,

           7       it had entered into a contract with a supplier called

           8       First Choice, that required a certain amount of stock

           9       being turned over per month, if I've got that right.

          10       That was explained by him as being, therefore, the

          11       reason why there was, as he put it at that time, the

          12       money being taken from the Post Office.

          13           So it is important to remember that point and the

          14       description of the timing of that was set out by him in

          15       the basis of plea as being towards the end of 2004,

          16       beginning of 2005.  So if we hold those dates in mind,

          17       end of 2004 and beginning of 2005, that is the First

          18       Choice contract and now, if we can, please, turn to

          19       page 98, bundle E.

          20           As we will see when we look at paragraph 2.1, the

          21       description there is the shortfall that was identified

          22       during the audit.  The second point at 2.2:

          23           "Both parties recognise that the appellant [as

          24       I call him, obviously, for these purposes -- the

          25       applicant at that stage] had reported and made good


           1       discrepancies on four occasions between late 2005

           2       and December 2006, aggregating to £1,110 and some

           3       change."

           4           I think 87p.

           5           It is an important point.  The reason why it is

           6       important is that the respondents are going to say that

           7       the only description made by Mr Fell of both sides of

           8       the business having difficulties, in other words, having

           9       to use money from one side to pay for Horizon and the

          10       other side to pay for the grocery business, the only

          11       time that that comes up in the respondent's submissions

          12       is going to be post, in other words after conviction,

          13       when matters then go to be considered at a later stage.

          14           What we have here though, is important.  This is

          15       after the First Choice contract comes into play, this is

          16       what, on the face of it, appears to be Mr Fell making

          17       good discrepancies on four occasions, between dates that

          18       are after the contract comes into play.  As far as we

          19       know, this is not material that was available to the

          20       legal team instructed on behalf of Mr Fell.  Now, that

          21       could come from two different sources.  It could have

          22       come from, as an example, Mr Fell saying to his legal

          23       team "Just so you know, what has been happening is that

          24       I have been balancing out what appear to be these

          25       discrepancies on four occasions from my own pocket,


           1       essentially the other side of the business."  That is

           2       one source.  The other source, by way of disclosure,

           3       would have been from the Post Office, in setting out

           4       back accounting whereby that had been made out.

           5           It is difficult to know at what stage this was

           6       known.  The point we make is that Mr Fell, like so many

           7       others, working in this unequal contract term situation

           8       with the Post Office, is not necessarily going to know

           9       what is in his own interest to tell his own lawyers at

          10       any particular time.  Confused, frightened, not knowing

          11       what is relevant.  This evidence provides an insight

          12       into what may well have been going on, we suggest,

          13       within the Post Office, in other words, that this was at

          14       a time whereby it is the first iteration of Horizon, the

          15       worst iteration of Horizon, as found by

          16       Mr Justice Fraser, slightly worse than Horizon 2; it was

          17       at a time whereby there were bugs, it is at a time

          18       whereby the respondents accept that bugs could cause

          19       significant unexplained losses to individuals.

          20   LORD JUSTICE HOLROYDE:  I just want to -- sorry to interrupt

          21       you, Mr Stein, I just want to make sure I've got the

          22       dates right.  At paragraph 2.2, on page 98, it seems to

          23       have been common ground that the making good of the

          24       discrepancies disappeared between late 05

          25       and December 06, but the indictment period is 1 June to


           1       24 October 2006.

           2   MR STEIN:  I am aware of that.  I have looked at that myself

           3       and considered whether that quite can be right, because

           4       it is a December point, after the suspension would have

           5       come into play.

           6   LORD JUSTICE HOLROYDE:  It has to go to the oral disclosure

           7       evidence, and if those dates are right, then I suppose

           8       the immediate question would be, should the 195-8304 on

           9       the indictment be plus or minus the 1110.87 in

          10       paragraph 2.2.

          11   MR STEIN:  It does go to that and it goes to the next point

          12       I wish to make.  One of the difficulties we have got

          13       with Mr Fell's case that I have had to concede at

          14       an earlier hearing is we don't have the Horizon material

          15       available.  This is not a case, whereby as I understand,

          16       later on today, you will be hearing from an expert in

          17       relation to an analysis of Horizon.  That could not be

          18       done in Mr Fell's case.  So we have now no way of

          19       backtracking into it to consider, actually, what was

          20       happening.  Which has led in my mind to a rather

          21       interesting circular problem which is that, now before

          22       this court, we are left in a position whereby this court

          23       is prevented, through the many years of denials of

          24       problems in the Horizon system and the ignoring of that

          25       by the Post Office, we are now left at an appeal level


           1       with an inability to reconstruct what was happening at

           2       the time.  The very fact of the delays in recognising

           3       that Horizon had faults and the denial of it, actually

           4       now causes us a problem in looking at what, in different

           5       circumstances, might have been an appeal maybe a year or

           6       two later, if that had been available to Mr Fell, where

           7       material might have existed that we could have got to

           8       the bottom of this.

           9           So a knock-on effect, in other words, of not saying

          10       there is a problem with Horizon, in denying that for so

          11       many years, has meant that this court and ourselves on

          12       his behalf, cannot look into these issues.

          13           One further point arising out of this particular

          14       document that may assist this court, it perhaps is of

          15       the same type as I have explained before, that Mr Fell

          16       found the training difficult, that this was not easy for

          17       him, when starting off with Horizon.  Page 102, bundle

          18       E, please.

          19           Paragraph 5.7 -- sorry, it is page 102.

          20           Paragraph 5.7:

          21           "The applicant complains that when he called the

          22       helpline, which he said he did frequently, he was often

          23       kept hanging for long time periods and he describes the

          24       advice eventually given as impossible to understand."

          25           Again, you will see why I have been referring to the


           1       generic review.  This is not an uncommon problem.  He

           2       states that the advice given "sometimes contradicted

           3       advice given by other helpline operatives and [he] was

           4       frequently reminded that if he was unable to balance,

           5       his contract was at risk."

           6           Again, a comment made by others and also referred to

           7       in the High Court proceedings.  What evidence is there

           8       that supports the frequency of contact?  5.8 please,

           9       page 103.

          10           We see there -- forgive me one moment, I am just

          11       checking a date.

          12           We see there that in relation to Mr Fell, that the

          13       appellant, applicant described here, made 721 calls to

          14       the NBSC helpline from October 2000 to October 2016,

          15       averaging 2.3 per week.  It states that the NBSC call

          16       logs indicate that helpline staff showed a willingness

          17       to assist the applicant and it is reasonable to assume

          18       that the advice given was satisfactory, as the applicant

          19       did not make complaints about the helpline.

          20           It then refers to the fact that there was no

          21       evidence of helpline staff, just an absence of evidence

          22       point, telling the applicant that his contract may be

          23       terminated if he failed to find a solution to his

          24       problems.

          25           But 5.9 assists us a little further:


           1           "Due to the limited nature of the helpline logs, it

           2       is difficult to assess whether or not the advice given

           3       satisfactorily addressed the applicant's problems.  We

           4       cannot find evidence of helpline staff advising the

           5       applicant that his contract would be terminated if he

           6       was unable to resolve errors."

           7           Although it is reasonable to assume that comments

           8       such as those may not be shown in the notes typed out by

           9       the operatives.

          10   LORD JUSTICE HOLROYDE:  In other walks of life, Mr Stein, it

          11       often seems impossible to make a banal telephone call

          12       without being told it is being recorded for training

          13       purposes.  Do we know whether any of these helpline

          14       calls were recorded for training purposes or otherwise?

          15   MR STEIN:  I will look into that or I could turn to Ms Carey

          16       (Inaudible).

          17           Yes, it is going to be checked, my Lord.

          18   LORD JUSTICE HOLROYDE:  Very kind, thank you.

          19   MR STEIN:  What we do know is that tends to support the fact

          20       that Mr Fell was one of the individuals who found the

          21       working of the system difficult, that he made repeated

          22       calls during that time, over 100 a year, to the

          23       helpline.

          24           Lastly, regarding the evidence that we have brought

          25       before the court, we have added a particular note that


           1       I now cannot find, which is set out behind the speaking

           2       note bundle that we provided.  It is an email from

           3       Mr Warmington, who conducted the post conviction stage

           4       review in relation to Mr Fell.

           5   LORD JUSTICE HOLROYDE:  Yes.  We saw the reference to that

           6       in the speaking note.  Do you actually have a copy of it

           7       anywhere?

           8   MR STEIN:  My Lord, you should.  It is at the last page, we

           9       hope, of the bundle that we provided with the speaking

          10       note.

          11           So ...

          12   LORD JUSTICE HOLROYDE:  Thank you.

          13   MR STEIN:  The point that was made there is that it was down

          14       as Mr Fell himself complaining to POL about the shortage

          15       of cash.  This is made by Mr Warmington in that review:

          16           "He presumably didn't have enough cash to keep his

          17       branch open and running is a pretty solid indicator that

          18       he didn't know if he was running at a deficit."

          19           What we suggest, therefore, are that there are

          20       a number of indicators here that tend to show Mr Fell

          21       had problems with running Horizon.  There are questions

          22       regarding what was going on with Horizon, whether it was

          23       causing losses that he had to make up.  We cannot now

          24       answer because the material doesn't exist.

          25           He, like so many others, found himself in a very


           1       difficult position.  We cannot expect people suddenly

           2       thrust into a problem with the Post Office to

           3       necessarily act logically and provide even his own legal

           4       team, sometimes, with information that may help them,

           5       particularly in the absence of disclosure.

           6           So I revert back to my opening submissions.  There

           7       is some evidence here on which we suggest, if the

           8       Post Office had been open and plain and accepted

           9       problems with Horizon, that would have led Mr Fell and,

          10       in particular, his legal team, to ask the questions:

          11       what was going on within this Post Office?  Were there

          12       problems?  Were there bugs?  What were the difficulties

          13       encountered by Mr Fell?  And they could have asked those

          14       questions both of the Post Office and also of Mr Fell.

          15           When, on this side of the court, we are discussing

          16       matters with our clients, it would help, essentially, if

          17       we had some idea of the nature of the problems and we

          18       all know that sometimes our clients are not able to help

          19       us unless you put them on the right path through

          20       material that you get from the prosecution and here,

          21       there was a non-starter in relation to that.

          22           So in no way do we criticise, blame or say there is

          23       any fault from his legal team.  They saw an individual

          24       who appeared to be accepting from the word go, fault,

          25       they gave him proper advice and he accepted that advice


           1       and that led to the plea of guilty.

           2   THE CLERK OF THE COURT:  My Lord, may I make a final

           3       announcement to ask that lady to turn her camera off.

           4   LORD JUSTICE HOLROYDE:  Yes, a lady has appeared visible on

           5       screen.  Somebody has not got a camera turned off.  I am

           6       afraid we don't know who it is but whoever it is has,

           7       I think, a bright green item or possibly garment in

           8       front of her.

           9           I think she may just have identified herself.  Would

          10       you be kind enough to turn off the camera, madam.  Thank

          11       you very much.

          12   THE CLERK OF THE COURT:  Thank you, my Lord.

          13   LORD JUSTICE HOLROYDE:  Thank you Mr Mariani.

          14   MR JUSTICE PICKEN:  Mr Stein, can I just ask a question.

          15       Could you go to the Second Sight report which you have

          16       taken us to, page 100.

          17   MR STEIN:  Yes, my Lord.

          18   MR JUSTICE PICKEN:  And at 4.9, and then go to the top of

          19       page 101, the same paragraph:

          20           "The Post Office notes that the applicant pleaded

          21       guilty to false accounting in court and a letter from

          22       his legal representatives states that he had always

          23       accepted that he was guilty of false accounting by way

          24       of creating false records to disguise the monetary loss

          25       caused as a result of his taking funds to keep his post


           1       office afloat."

           2           Have we actually got that letter, do you know?

           3   LORD JUSTICE HOLROYDE:  We have.

           4   MR JUSTICE PICKEN:  It is the letter at page 79, is it?

           5       Which I think must be (Inaudible).

           6   MR STEIN:  Yes, my Lord.

           7   LORD JUSTICE HOLROYDE:  Before the plea.

           8   MR JUSTICE PICKEN:  Thank you very much.

           9           But your submission, presumably, is that that puts

          10       Mr Fell in a similar category to others, where the false

          11       accounting is being done to make up for errors that he

          12       otherwise cannot understand because of Horizon?

          13   MR STEIN:  Yes.  It does, my Lord, yes.

          14   MR JUSTICE PICKEN:  Thank you.

          15   MR STEIN:  My Lord, those are our submissions.  I have been

          16       slightly shorter than I expected.  I hope that assists

          17       the court in other ways.

          18   LORD JUSTICE HOLROYDE:  Yes, thank you, Mr Stein.

          19           Mr Altman.

          20                     Submissions by MR ALTMAN

          21   MR ALTMAN:  The first point I am going to make is I thought

          22       I heard Mr Stein say he didn't have access to the call

          23       logs.  He does.  They were disclosed in tranche 1,

          24       20 August last year, and so it has been open to Mr Stein

          25       to check through the logs to see the nature of the calls


           1       Mr Fell made to that helpline.

           2           The second point and the central one which my Lord,

           3       Lord Justice Holroyde, identified at the beginning and

           4       one which has been clear throughout, is the question,

           5       what makes this a case which depended on the reliability

           6       of Horizon data?  And what I respectfully submit is the

           7       court has heard lots of argument from Mr Stein about all

           8       of the problems suffered by other sub-postmasters and

           9       including some that Mr Fell said after the event in

          10       2014, during the course of the mediation process.

          11       Unsupported, I have to add, by Mr Fell's own evidence

          12       before the courts by way of (Inaudible) but be that as

          13       it may, what we have not heard from Mr Stein is why this

          14       is such a case, why it falls within the same category as

          15       all the other cases the court has been dealing with over

          16       the past couple of days.

          17           Can I begin where, in a sense, Mr Stein himself did

          18       with the plea.

          19           The court knows and I am in the court's hands

          20       whether the court wants to go back to the authorities

          21       but the court is pretty well aware of the authorities on

          22       the issue of the plea and the nature of the plea that

          23       the court is dealing with in this case.  The section 4

          24       of the statement of reasons, and for the court's

          25       reference, it is bundle A, tab 1 at page 53, sets out


           1       the relevant authorities.  You will remember the case of

           2       Bhatti and you will remember the case of Kelly v

           3       Connolly, dealing with that, which is in fact in your

           4       bundle.  If the court wishes me to take them to it, I am

           5       very happy to.  It's tab 15 of bundle B.

           6           So it is the case of Kelly v Connolly in 2003 at

           7       page 227.  And the relevant part is to be found at

           8       page 259 and my Lord, perhaps it is as well to have

           9       these principles in mind, as the court will, because

          10       they cut through all of the cases that the court has to

          11       deal with today.

          12           On page 259 at (b), you will find the case of Bhatti

          13       referred to, an unreported case of 2000, which contains

          14       an extensive summary and analysis of the relevant

          15       authorities and the facts are there set out.  Then the

          16       court said, Lord Justice Potter said at paragraphs 30 to

          17       33:

          18           "However, when the appeal is in respect of

          19       a conviction following a plea of guilty, the

          20       considerations which apply are very different and the

          21       circumstances in which it may be appropriate or proper

          22       to allow the appeal are of necessity very limited.  That

          23       is because the safety of the conviction depends not on

          24       some legal error or perceived role or irregularity which

          25       has arisen in the course of the adversarial process of


           1       the trial, thereby leading to a verdict of guilty, which

           2       might otherwise have been not guilty, it rests upon the

           3       question of whether and in what circumstances the court

           4       should look behind the plea of guilty (which represents

           5       a voluntary recognition of guilt) and later on, an

           6       examination of the reasons or motives of the defendant

           7       in deciding so to plead.  That, in turn, requires the

           8       court to reach a decision based not upon objective

           9       matters of record, namely the procedures adopted and

          10       decisions reached openly in the course of the trial, but

          11       on the subjective recollections and subsequent account

          12       of the appellant and/or his advisers as to the reasons

          13       for his plea."

          14           The citation continues into the next page, which

          15       I invite the court to read.  At page 263 --

          16   MR JUSTICE PICKEN:  Specifically at paragraph 31, fourth

          17       line down, "Similarly, whereby a reason of some act of

          18       deception or non-disclosure on the part of prosecution".

          19   MR ALTMAN:  Yes, I don't doubt that but that question in

          20       this case, as well as the others, is going to depend on

          21       whether disclosure in relation to issues with Horizon

          22       was necessary under the test, under the 1996 Act.  That

          23       depended on the question of whether it is a Horizon

          24       reliability case.  That is why, as it were, all roads go

          25       back to that one question.  Paragraph 127 on page 263:


           1           "Ultimately, however, the test is of the safety of

           2       the conviction.  For the reasons expressed in Bhatti,

           3       the scope of the finding that an unequivocal and

           4       intentional plea of guilty can lead to an unsafe

           5       conviction, must be exceptional and rare.  However,

           6       undue pressure or errors of law or unfairness in the

           7       trial process may all be of such important causative

           8       impact on the decision to plead guilty, that the

           9       conviction which follows such a plea can, in

          10       an appropriate case, be described as unsafe.  In our

          11       judgment, such as this case.  A question of fact in each

          12       case."

          13           So those are the important decisions, but there are

          14       two others to which reference has been made.  The cases

          15       of Early and Togher.  And perhaps it's worth, while we

          16       have bundle B before us, to go to tab 14 in the case of

          17       Early, Vice President, Lord Justice Rose and it goes to

          18       paragraph 10, under the heading "Court's approach".  And

          19       if I invite the court just over halfway down, where you

          20       will find the words at the beginning of the line "Are

          21       involved", and the passage continues:

          22           "We approach the question of safety of these

          23       convictions following pleas of guilty in accordance with

          24       ...(Reading to the words)... as approved in Togher,

          25       namely a conviction is generally unsafe if a defendant


           1       has been denied a fair trial.  We bear in mind in

           2       particular, three observations by Lord Woolf in Togher.

           3       First at paragraph 30, if it would be right to stop

           4       a prosecution on the basis that it was an abuse of

           5       process, this court would be most unlikely to conclude

           6       that if there was a conviction, despite this fact, the

           7       conviction shouldn't have been set aside."

           8           Secondly, at paragraph 33:

           9           "In circumstances where it had been said that the

          10       proceedings constituted an abuse of process are

          11       ...(Reading to the words)... to the situation where it

          12       would be inconsistent with the due administration of

          13       justice to allow the pleas of guilty to stand."

          14           And thirdly, at paragraph 59:

          15           "Freely entered pleas of guilty will not be

          16       interfered with by this court unless the prosecution's

          17       misconduct is of a category which justifies it.  A plea

          18       of guilty is binding unless the defendant was ignorant

          19       of evidence going to ...(Reading to the words)... of

          20       material which goes merely to credibility of prosecution

          21       witness, does not justify reopening a plea of guilty."

          22           Those are the principles on which the court is being

          23       invited to act.

          24           It is those principles, indeed, which the CCRC sets

          25       out in its statement of reasons.  Now, in this case, if


           1       the respondent is correct that this was not a Horizon

           2       case, and I will come to why it isn't in a short while,

           3       then as I have already said in passing, there was no

           4       obligation to disclose material going to Horizon

           5       reliability under the well known principles within the

           6       act.

           7           If that is right, non-disclosure cannot give rise to

           8       an abuse of process, whether limb 1 or limb 2.

           9       A secondary point has been advanced during the course of

          10       argument over the past couple of days and it may be one

          11       to which Mr Millington refers to later.  At paragraph 6

          12       of the respondent's notice, as the court has before it,

          13       bundle A, tab 4; bundle A, tab 4, page 1148.

          14       Paragraph 6 has been alluded to more than once.  What we

          15       said there was the respondent also accepts the

          16       applicable law set out by the CCRC at paragraphs 94 to

          17       108 of the statement of reasons.  The respondent doesn't

          18       seem to draw any distinction between appellants who were

          19       convicted following the trial and those who pleaded

          20       guilty at any stage in the proceedings.

          21           It has been suggested that the respondent's stance

          22       in relation to these three opposed cases is inconsistent

          23       with that statement.  With respect, it is not because it

          24       ignores the all important preceding statement in

          25       paragraph 6, which adopts the applicable law on abuse of


           1       process.  So the concession there is that the court is

           2       not being asked to make any distinction in any cases

           3       which were reliant on Horizon data, insofar as whether

           4       conviction was after a trial or following a plea.

           5           The point is that if it is accepted that in cases

           6       where Horizon reliability was relevant, there should be

           7       disclosure from the outset to enable an abuse argument

           8       to be advised.  Failure to do so deprives the appellants

           9       of the opportunity to advance an abuse submission, and

          10       that means that the plea is tainted, and this is why in

          11       any case where Horizon reliability was essential, the

          12       Post Office has conceded these appeals, albeit on limb 1

          13       in all but these three opposed cases and on limb 2, as

          14       the court well knows, in four.

          15           However, in this case, and indeed as with the other

          16       two opposed cases, our submission is that Horizon

          17       reliability was not essential as such, since the test

          18       for disclosure was not satisfied and there was no abuse

          19       argument advanced on the basis of material

          20       non-disclosure.  There is, we say with respect, nothing

          21       to initiate the plea.  As such, the guilty plea in this

          22       particular case, and indeed the other two, which we will

          23       come to, are not undermined and remain important.  In

          24       fact, direct evidence of guilt, in support of the safety

          25       of the convictions.


           1           In his speaking note which the court received

           2       yesterday, Mr Stein's speaking note, reference is made

           3       to Mr Fell's position, which is said to justify the

           4       stance on Mr Fell's admissions.  He then sets out in

           5       that document what the CCRC relied upon.  It included

           6       information that Mr Fell took Post Office money to repay

           7       unexplained losses, among other points.  Can I invite

           8       the court's attention to the statement of reasons, in

           9       the first bundle, bundle A, at page 66.

          10           One will find at page 66, this part of the principal

          11       reference, subparagraph 7, which relates to a ciphered

          12       case but the court can write in that that is the case of

          13       (Inaudible).

          14   LORD JUSTICE HOLROYDE:  Yes.

          15   MR ALTMAN:  And what is said there is that:

          16           "In this case, the shortfall was discovered when

          17       a Post Office manager visited the branch because the

          18       cash on hand figures appeared to be too high.  In

          19       a prepared statement which he provided to investigators,

          20       the applicant explains that he had used Post Office

          21       money to keep his shop afloat.  He later pleaded guilty

          22       to false accounting but denied theft.  Although this

          23       applicant admitted taking Post Office money to pay

          24       bills, in relation to the shop, the CCRC considered that

          25       it is significant that he also explained that he had


           1       been using the shop income to pay unexplained Horizon

           2       losses which were occurring.  He then had taken money

           3       back when he couldn't cover the shop bills."

           4           Now, we can only speculate as to where that came

           5       from.  It clearly came from Mr Fell, and if it did, it

           6       was (Inaudible) applications at the CCRC.  But when we

           7       come to look in a moment at what Mr Fell actually said,

           8       and did, at the relevant time, one will see that that

           9       was never claimed in the period up to and including his

          10       basis of plea and, indeed, at the plea itself.

          11           So we invite the court to be cautious.  The court

          12       has not heard, for whatever reason, evidence from

          13       Mr Fell to support that claim and, therefore, it is

          14       nothing more than an assertion which is unsupported by

          15       Mr Fell's evidence.

          16           We note that Mr Stein agrees, and it was agreed at

          17       the time of the mediation process, that Mr Fell had made

          18       good four shortfalls on the occasions mentioned in the

          19       paragraph that Mr Stein took the court to and Mr Stein

          20       relies upon an email from Mr Warmington, Mr Warmington

          21       being one of the partners of Second Sight, in an email

          22       dated 2013, where Mr Warmington himself, also not

          23       a witness before the court, gives -- one cannot even

          24       really call this an expert opinion but an opinion about

          25       Mr Fell's responsibility for taking the money.  The


           1       relevance and the permissibility of it are unclear and

           2       certainly, also in light of the document to which

           3       Mr Stein took the court, the case review report at the

           4       back of the bundle, in the mediation process, a year

           5       later, 2014, when -- Second Sight views about the fact

           6       that there were no cash deposits to be found which was

           7       said by Second Sight not to be very unusual.  Because of

           8       course, Mr Fell's case was he was robbing Peter to pay

           9       Paul, in other words, he was taking Post Office cash

          10       from the shop till rather than it going through the bank

          11       account.  So according to Second Sight, it was not

          12       completely unusual not to see cash deposits, so

          13       Second Sight didn't conclude there was anything in that

          14       particular point that was being made during the course

          15       of the mediation.

          16           So what are the facts that were before the court?

          17       Mr Fell entered his plea on the basis of a plea document

          18       and the court has that behind tab 26 at bundle E.

          19           "I, Stanley Fell, am currently charged with a single

          20       offence of false accounting."

          21           In brackets we see there the indicted date,

          22       1 June 06 to 25 October 06:

          23           "I will plead guilty to this offence on the

          24       following basis.  Towards the end of 2004/the beginning

          25       of 2005 ..."


           1           This is before the shortfalls which were made good

           2       even arose:

           3           " ... I entered into a contract with a wholesaler by

           4       the name of First Choice Limited.  First Choice Limited

           5       were to supply the stock to my stock which is contained

           6       within the Post Office premises.  In entering into such

           7       an agreement, I hoped to turn around the poor sales that

           8       the shop had experienced in the recent past.  Initially,

           9       the new contract led to a modest improvement but this

          10       trend quickly reversed, due to one particular term in

          11       the contract which stipulated that I must spend

          12       a minimum of £2,000 on stock every week.  It soon became

          13       obvious that I simply didn't have the time (Inaudible)

          14       to meet the stipulated term and I began to borrow [is

          15       the word used] Post Office funds in order to meet the

          16       shortfall and keep the shop afloat."

          17           Pausing there, this is not an unexplained shortfall,

          18       it is an explained shortfall:

          19           "This took place over roughly the same period as set

          20       out in the charge and I admit that I acted dishonestly

          21       in falsifying the monthly (Inaudible) statement."

          22           Then over the page:

          23           "I wish to confirm to the court that at no time did

          24       I intend to permanently deprive the Post Office of the

          25       monies in question.  It was always my intention to pay


           1       back that which I had borrowed, as I now have.  I didn't

           2       intend to steal the money."

           3           And it is signed, as we can see, by him, and

           4       counsel, his solicitors, dated 27 July 07.

           5           We make the following submissions, of which there

           6       are nine in essence.

           7           First, and my Lord, I will, in the same spirit as

           8       everyone has done, I will tidy up my speaking notes

           9       and --

          10   LORD JUSTICE HOLROYDE:  Thank you very much.

          11   MR ALTMAN:  First, the appellant made no claim and never

          12       did, up to and including his pleas, covering up that

          13       Horizon generated shortfall, rather than one created by

          14       his own actions in taking money from Post Office to prop

          15       up his retail business.  In the basis of plea, which we

          16       have just seen, he made no claim whatsoever to having

          17       borrowed money from the Post Office -- this is the

          18       important part -- to repay what he had made good in the

          19       past.

          20           Can I say, if that had been his case, then perhaps

          21       a different approach might have been taken towards it,

          22       but he never said it, it was never his case.  But what

          23       he had done was to repay what he had made good in the

          24       past.  There is another reason why it cannot have been

          25       and I'll come to that in a short while.  This was all


           1       about a bad financial deal that he had got himself into,

           2       which required him, for liquidity purposes, to take the

           3       money and cover up for it.

           4           Indeed, when one looks, for example, at certain

           5       things which had been said on Mr Fell's behalf, not just

           6       today, not just in Mr Stein's speaking note but also in

           7       the original grounds, they included claims by Mr Fell --

           8       and this is to be found, my Lord -- we don't need to

           9       look at it but the original grounds are in the very

          10       first tab in the bundle, but I will give the court the

          11       reference.  It is paragraph 13(v), letters A to F and

          12       they include a series of claims made on Mr Fell's

          13       behalf, unsupported by evidence, relying on the draft

          14       Second Sight report which is in tab 28, a year after

          15       Mr Warmington's email, but representations included

          16       then, that he didn't commit false accounting because he

          17       says he informed the Post Office of the shortages on

          18       several occasions.

          19           He did but that was never part and never underlay

          20       his plea of guilty.  It was never part of his case.

          21       Secondly, he went this far, that there was no evidence

          22       he had taken money from Post Office which, as we know,

          23       is in contradistinction to his own accounts, including

          24       his own unequivocal plea and the basis of it.

          25           The importance of the final case which you will


           1       recall, which is in the final tab of bundle E, if you

           2       could please go back to that.  Tab 29, page 99.  You

           3       will see the dates.  It is 5 December.  The one before,

           4       in tab 28, was dated 3 November and headed "Draft", and

           5       this is the final.  If one goes to the paragraph

           6       Mr Stein invited attention to at 2.2.  Both parties

           7       recognise Mr Stein, in his document yesterday, called

           8       this agreed -- it was agreed but this is how

           9       Second Sight describe it:

          10           "Both parties recognise that the applicant had

          11       reported and made good discrepancies on four occasions

          12       between late 2005 and December 2006, aggregating to

          13       £1,110.87."

          14           In order to come to this agreement, clearly these

          15       figures hadn't changed and these were the only shortages

          16       that had ever been reported and these were agreed by

          17       Mr Fell and the Post Office, totaling a little over

          18       £1,000.

          19           If the money Mr Fell -- this is point 9, I have

          20       probably skated over point 2, so I know my Lord likes

          21       counting the points, so forgive me.

          22   LORD JUSTICE HOLROYDE:  I have stopped that at 1.

          23   MR ALTMAN:  That is very unkind -- there was more than one

          24       point there.

          25   LORD JUSTICE HOLROYDE:  I understand.


           1   MR ALTMAN:  If the money Mr Fell falsely claimed, pleaded

           2       guilty to and repaid, which is £19,000-odd, equated or

           3       approximated to what he had admitted he removed from the

           4       Post Office, then the four discrepancies he made good

           5       during the period of late 2005 to December 2006, he came

           6       (Inaudible) your Lordship's point on the indictment page

           7       which are narrower, cannot explain the scale of losses.

           8       That is his point.  If his case really is "I was making

           9       the discrepancies", £19,000, even deducting the thousand

          10       leaving 18,000, cannot account for those four

          11       discrepancies.

          12           We know, moving on, that the appellant also made

          13       a series of comments during the course of the

          14       investigation, which is cable of bearing an adverse

          15       interpretation.  If one goes -- and if the court finds

          16       it helpful, perhaps, rather than going to the actual

          17       document, if you find it necessary, if we go within the

          18       bundle, please, to the case summary which we prepared to

          19       assist the court at tab 3, at page 16.

          20           These are the comments which were made by Mr Fell

          21       during the course of the early days and the importance

          22       of this is even before he was ever charged or

          23       interviewed, he made adverse comments, comments against

          24       interest, paragraph 4, second line down:

          25           "If I was to give you a cheque for the shortage,


           1       would that be the end of it?"

           2           That was on 23 October.  Paragraph 7, three days

           3       later, towards the bottom of that page, during the

           4       conversation, Mr Fell said to Ms Bailey, the

           5       investigator, that he had been very stupid and he hadn't

           6       intended to take money from the Post Office but

           7       circumstances had led him to it and the circumstances,

           8       we suggest, are the ones he was to tell about later, his

           9       financial mismanagement.

          10           Over the page at the top, 17:

          11           "Several times he told her that it had been

          12       a foolish thing to do.  He also told her that he thought

          13       he would have been found out a while back."

          14           "Found out a while back" does not sound in its terms

          15       that he had problems with Horizon or was simply covering

          16       shortfalls which had been made good in the past, or

          17       repaid out of Post Office funds.  He told her he thought

          18       he would have been found out a while back, that a person

          19       who had visited him then had not checked the cash

          20       against the balance snapshot, as she had.

          21           So in other words, somebody who had performed

          22       (Inaudible) in the past had not done competently and had

          23       missed what Mr Fell had been doing.  Paragraph 9,

          24       7 November 2006, last line.  In relation to --

          25       7 November is a copy of emails that Ms Bailey produced


           1       and in which she noted these comments but also on

           2       26 October, in the last one of this calendar month, he

           3       had said he had not "taken any more money for quite

           4       a while".

           5           Then, my Lord, can I invite attention to the

           6       prepared statement of 25 November, so a month after both

           7       the initial conduct.  Tab 14, and I am not going to go

           8       through it all but I just invite attention to page 40

           9       and 41, which -- 40 and 41, third paragraph:

          10           "The burden of my actions became so unbearable that

          11       on 11 November, I planned to end my life."

          12           Penultimately on that page:

          13           "I wish to offer the Post Office and my family

          14       an unreserved apology for my financial negligence but

          15       wish to reaffirm without prejudice that at no time have

          16       I sought to steal or defraud the Post Office of any

          17       stock or cash whilst in my custody.  It has always been

          18       my intention to repay the money to the Post Office."

          19           So I emphasise, just looking at what we looked at so

          20       far, prior to charge, Mr Fell admitted taking money but

          21       his own defence was "I always intended to pay it back",

          22       and therefore, his defence was lack of intention

          23       permanently to deprive.

          24           His defence evidence, tab 22, page 75:

          25           "The nature of the accused's defence is that he used


           1       the Post Office monies to keep the adjoining shop,

           2       afloat having suffered a decline in the trade at the

           3       Post Office and having mismanaged the stocking of the

           4       shop, resulting in financial difficulties in meeting the

           5       overheads of the business.  He always intended to repay

           6       the monies."

           7           That is dated 7 June.  No word there again, I have

           8       to emphasise, about making good shortages in the past as

           9       his reason for borrowing the money.

          10           Then as my Lord, Mr Justice Picken commented

          11       earlier, there is the solicitor's letter, which was

          12       revealed during the course of the mediation.  At tab 24,

          13       6 July -- I think I said earlier that he pleaded the

          14       next day and he was certainly sentenced on 27 July, but

          15       the letter reads:

          16           "Dear Stanley, I wish to confirm that you appeared

          17       at Leceister Crown Court on 29 June for a plea and case

          18       management hearing.  As you will recall, a full

          19       conference took place with myself, your barrister, Peter

          20       Hampton, and Michael Rudkin from the Federation [Michael

          21       Rudkin was involved in the early days at the branch

          22       itself, when the auditors went in] and you again

          23       received full advice regarding your plea.  Peter

          24       Hamilton liaised with the prosecution on the basis of

          25       ...(Reading to the words)... loss of £19,582.  The


           1       prosecution confirmed a guilty plea to an alternative

           2       count of false accounting was an acceptable resolution.

           3       You have always accepted that you were guilty of false

           4       accounting by way of creating false cash records to

           5       disguise the monetary loss to the Post Office caused, as

           6       a result of you taking funds to keep your shop afloat."

           7           If ever there was going to be a document which

           8       revealed Mr Fell's case was anything different, it was

           9       going to be this privileged letter which I leave to

          10       later.  There was no hint here of what Mr Fell did or

          11       conceded he did, was based on his having previously made

          12       good unexplained shortfalls.

          13           So a few, please, final submissions from me.  I am

          14       not going to number them this time but if this had been

          15       a case -- if this had been a case where reliability of

          16       Horizon data was essential, which is the premise of the

          17       CCRC's references, then the appellant's case would

          18       amount, at the very least, to a first category of abuse

          19       of process, based on failures of investigation of the

          20       disclosure of Horizon.  That much we have always

          21       accepted.  But we submit this is not such a case.

          22       Because it isn't, material that should have been

          23       disclosed in cases which were dependent on the

          24       reliability of Horizon data was not disclosable under

          25       the 1996 Act.  In a case like this, where we submit,


           1       self-evidently, the reliability of Horizon data was not

           2       essential.

           3           If the argument is that it was incumbent on the

           4       Post Office, in any event, to disclose the fact of those

           5       four discrepancies at the time, or as Mr Stein himself

           6       recognises, Mr Fell knew about them and could easily

           7       have instructed his team about the fact of them.  But

           8       the fact that on the face of it, Mr Fell never did, is,

           9       we submit, some recognition that in Mr Fell's mind,

          10       those four incidents, those four discrepancies, had

          11       absolutely nothing to do with the reasons why he removed

          12       that cash from the Post Office, which is entirely

          13       consistent with his case, which was it was to fund his

          14       shop, having made bad supply arrangements.

          15           So our submission is that the arguments which

          16       certainly appears in Mr Stein's preliminary grounds,

          17       that Horizon was central to this case, was obviously --

          18       we don't need to go to it perhaps, but this is page 7 of

          19       the bundle, behind tab 1, central to his case is

          20       "Initially he borrowed money from the general shop to

          21       make up, as he was contractually bound to do, shortfalls

          22       that were highlighted by Horizon", is just not supported

          23       by any of the evidence before this court.  It was not

          24       his case, it was never advanced and, although this case

          25       appeared in the draft and then the final case review


           1       reports, prepared by Second Sight, in the final two tabs

           2       of bundle E, from what he was then saying, only the

           3       final report makes clear that the total sum he ever had

           4       to make good, as agreed, was a little over £1,000.  And

           5       as I have said, that cannot explain his removal from the

           6       Post Office of over £19,000.

           7           Of course, your Lordship is right that the figure in

           8       the indictment on false accounting was the total of

           9       £19,000, and didn't take account of the extent of the

          10       £1,100, and again, without being over-technical, the

          11       financial sum is not itself a material (Inaudible) but

          12       nonetheless, it is part and parcel and clearly there is

          13       a balance there of £18,000 which is not unexplained, it

          14       is all totally explained.

          15           So what we submit, if this had nothing to do with

          16       him paying himself money that he had taken from his

          17       business to make good the shortfall, which had it been

          18       his case, would have been crucial to reveal at the time,

          19       and indeed in litigation, then it was his personal

          20       (Inaudible) this was never and is not a case which was

          21       dependent on Horizon data.

          22           So it is for these reasons that this appellant's

          23       case, both, we submit, that the CCRC's central reason

          24       for raising the reference can apply and his case is not,

          25       arguably, unsafe, either on grounds of first or second


           1       category abuse of process.

           2           Those are my submissions, my Lord.

           3   LORD JUSTICE HOLROYDE:  Thank you, Mr Altman.  There is

           4       a small point I would like your help with, please.

           5           If we go to tab 16, which is the statement of

           6       Ms Bailey, on page 53, the first page of that statement,

           7       just by the second hole-punch, she said:

           8           "She arrived, introduced herself to Mr Fell, told

           9       him the reason for my visit and that I needed to check

          10       the cash that was not matching up with what the Horizon

          11       computer system was showing."

          12           Can you just explain to me what that means in

          13       practical terms.

          14   MR ALTMAN:  What it means is, in these kinds of cases, and I

          15       strongly suspect it was the same (Inaudible), is that

          16       when sub-postmasters falsely account, it means that they

          17       are showing they have more cash than they actually do.

          18       But the problem is, it is a self-defeating exercise

          19       because they find themselves making declarations which

          20       are untrue in terms of the cash on hand, as it is

          21       called, and because of that, the cash on hand which

          22       postmasters are declaring, goes back to a central office

          23       and that will trigger cash allowance being actually

          24       remitted into the branch to recover the cash that they

          25       need.


           1           I suspect what Ms Bailey is saying there is that the

           2       figures that were being reported back and the amounts of

           3       cash that he was calling in just didn't match or were

           4       outwith what was understood that the branch would

           5       require, so that might have triggered the audit.

           6   LORD JUSTICE HOLROYDE:  So is this Mr Warmington's

           7       (Inaudible) that altering the figures of the cash in

           8       hand has the result of further delivery of cash was

           9       made?

          10   MR ALTMAN:  Mr Warmington's point, if I could just pick up

          11       the email, Mr Warmington's point is he is complaining to

          12       Post Office about the shortage of cash.  Well, yes,

          13       I suppose it is and considering he didn't have enough

          14       cash to keep his branch open and running, is a pretty

          15       solid indicator that he was running a deficit.  If that

          16       is what your Lordship is asking, that seems to be what

          17       Mr Warmington was saying but in our submission, that was

          18       a typical symptom of a sub-postmaster overdeclaring cash

          19       that they actually had.  In other words, they didn't

          20       have a cash (Inaudible) branch because they were not

          21       declaring it and the cash actually wasn't there, it was

          22       attending to it.  If one declared cash on hand of, let's

          23       say, £20,000, but that was all false, then in order to

          24       carry on running the branch, the postmaster needed to

          25       get more cash in and that was a typical symptom of false


           1       accounting.

           2   MR JUSTICE PICKEN:  Mr Altman, I think this point has been

           3       made clear already, but if you go to the attachment to

           4       that witness statement at page 59, which is Jane

           5       Bailey's internal report to John Longman, under the

           6       heading of 23 October, she says:

           7           "I was asked to visit Newton Bergoland by

           8       ...(Reading to the words)... due to concerns over the

           9       amount of cash in the branch and the amount of REMs

          10       being requested."

          11   MR ALTMAN:  That confirms the reason why.

          12   MR JUSTICE PICKEN:  Exactly.  That is Mr Warmington's --

          13   MR ALTMAN:  It seems so, yes.

          14   LORD JUSTICE HOLROYDE:  It seems inevitable that this came

          15       to light very quickly.

          16   MR ALTMAN:  I don't know how that is, my Lord, and

          17       I wouldn't like to say, that that would inevitably come

          18       to light very quickly because it depends on the

          19       processes here in the central offices where these sorts

          20       of things are dealt with.  I don't know.

          21   LORD JUSTICE HOLROYDE:  All right, thank you very much.

          22           Thank you very much, Mr Altman.

          23           Mr Stein, do you want to reply.




           1                 Submissions in reply by MR STEIN

           2   MR STEIN:  Yes, my Lord, briefly.

           3           The point has just been made.  Can I take you

           4       please, to page 36.  I recognise immediately there is

           5       an element of this that cuts both ways but can I take

           6       you to the bundle, page 36 and the interview of Mr Fell.

           7           Helpfully here, his position is set out to the

           8       right-hand side -- have I given the wrong numbering?

           9       Should it have been -- I've got two numbers on this

          10       page.  It is 44 and 36, the interview of Mr Fell.

          11   LORD JUSTICE HOLROYDE:  This is his prepared statement?

          12   MR STEIN:  That's right, being dealt with within the

          13       interview, and obviously, he provides his name and age

          14       and details, and sets out therefore, within the prepared

          15       statement, an interview:

          16           "May I state from the outset without prejudice that

          17       at no time have I ought to steal or defraud from Post

          18       Office Limited any stock or cash whilst in my custody."

          19           Then he explains that when he was appointed the

          20       sub-postmaster in 76, and then goes on to refer on

          21       23 October 05:

          22           "Ms Bailey, community business development manager,

          23       entered the premises to investigate [this is the point]

          24       a complaint that I, Stanley Fell, had made to

          25       Post Office Limited cash management centre about the


           1       lack of funds I had at my disposal to finance the

           2       running of the Newton Bergoland Post Office."

           3           Now, we have heard from my learned friend

           4       Mr Altman -- I am not sure I remember which point -- but

           5       the position that has been set out by, therefore,

           6       Mr Fell, is that he is the person bringing this to the

           7       attention of the Post Office, and that is the point that

           8       is being made at a later stage.

           9           Now, the oddity, therefore, that is being considered

          10       is, well, here is a man that, in theory, on the basis of

          11       the prosecution case, on the basis indeed, as my learned

          12       friend Mr Altman, as I anticipated, set out: well that

          13       is what Mr Fell said.  He has taken the money and he is

          14       also telling the Post Office that he has taken the money

          15       by alerting them to that is what happened.  We

          16       recognise, because frankly, we are not unrealistic, that

          17       we have to ask this court to accept that the points that

          18       are in favour of Mr Fell, which are that the background

          19       to this is unsatisfactory, the unexplained losses that

          20       he had to make up, we learn nothing from the respondents

          21       about that, as to whether that was Mr Fell's fault.  He

          22       couldn't use the system, his assistants were not doing

          23       it right ...

          24           We have nothing about that, all we have is evidence

          25       in the background to the time whereby the audit was


           1       made, that there were unexplained transactions in which

           2       he had to make up the losses.

           3           That evidence was not available to his legal team

           4       and the oddity is, I agree with Mr Altman, that's not

           5       an oddity, agreeing with Mr Altman, but the oddity is,

           6       in agreement with the way my learned friend set out the

           7       respondent's facts, his own legal team were not made

           8       aware of that.

           9           That is why I have prayed in aid so many times the

          10       reference to the generic review.  People were in a very

          11       difficult position.  He wasn't aware of the nature of

          12       the difficulties and how they could build up.  It is to

          13       that that any legal team acting on his behalf, when

          14       instructed and either by him or by through disclosure

          15       from the Post Office, they would have been able to start

          16       making their inquiries and say: what on earth was going

          17       on here, what was going on in the accounts.  Sums of

          18       money being mentioned by my learned friend Mr Altman,

          19       well, £1,000 is not similar to 19,000 -- when the

          20       computer system has an unexplained loss, or

          21       a difficulty, so that the sub-postmaster has to make it

          22       up, the computer system doesn't decide: well, I will

          23       make a small loss or a big loss, it doesn't know.  Or

          24       itself, it's a number.  It could be £5 or it could be

          25       5,000, or more, so there's no thinking involved in the


           1       Horizon system.  So the numbers not matching, £1,000

           2       being only one 19th of £19,000, makes no difference.

           3           The fact is there were problems before and in the

           4       period after the First Choice contract was made and,

           5       therefore, there were problems in the accounting system

           6       in this particular Post Office and we ask the court to

           7       accept that against the lack of disclosure of problems

           8       with Horizon that was ongoing at this time, by the

           9       Post Office, their fault, not Mr Fell's, their fault

          10       entirely, there wasn't an ability for Mr Fell or his

          11       legal team to put this into perspective and to ask the

          12       right questions.

          13   MR JUSTICE PICKEN:  Mr Stein, do you say this a case where,

          14       actually -- I know you say it is a limb 1.

          15   MR STEIN:  Yes.

          16   MR JUSTICE PICKEN:  But if it is not a limb 1 because the

          17       duty of disclosure didn't arise, for the reasons you

          18       have explained, because the reliability of Horizon was

          19       not put into play by your client, then nonetheless,

          20       limb 2 comes to the rescue.

          21   MR STEIN:  I do.  I do and, my Lord, forgive me putting it

          22       this way, you beat me to it because, we say, and case

          23       law supports this, in the position that Mr Fell was in,

          24       the abusive nature of the acts by the Post Office

          25       throughout this period were an affront to justice, all


           1       the arguments we have been hearing over the last few

           2       days.  And the case law supports that disclosure that is

           3       necessary to assist with an application to stay is also

           4       subject to disclosure rules and should have been

           5       provided.  We know that didn't happen.  He was entitled

           6       via his legal team to make that application.

           7           I know that in front of a judge, a judge might say:

           8       hang on, Mr Stein, look at what Mr Fell said and that

           9       might go to a point that weakens such an application but

          10       nevertheless, against the substantial nature of the

          11       abuse that has been identified in relation to the

          12       Post Office, and bearing in mind that this is not

          13       a case, whilst of course serious, not a case of the

          14       height of seriousness of the type that so many times

          15       this court is considering, it is not at the level of

          16       a murder or similar, we are looking and are entitled to

          17       look into the relative position on the scale of cases,

          18       not the highest or the worst or the most serious of its

          19       type, as against the abuse which has been perpetrated.

          20           On that balancing, those balancing factors, and with

          21       enough evidence, the unexplained disclosures in the

          22       background, we suggest that the fault, if you like, for

          23       the problems with disclosure, there is enough here to

          24       take Mr Fell's case home, we suggest, within both limbs

          25       but certainly as an affront to justice.


           1   MRS JUSTICE FARBEY:  Can I just clarify, you are not saying

           2       that anyone who was prosecuted by the Post Office in

           3       a certain period has been subjected to limb 2 abuse?

           4       Does that mean we were (Inaudible), we were not

           5       analysing the facts of each case, or are you saying

           6       there that, for instance, the 729 calls to the helpline,

           7       the -- well, the features of his case, leaving aside

           8       limb 1 abuse, where you say that -- and concentrating

           9       on, as Mr Busch put it, the relationship between the

          10       court and the prosecutor and features getting into

          11       limb 2, that he did -- he had made 729 calls, he had

          12       tried at least to pay some money back, what --

          13   MR STEIN:  Unexplained losses, he is in the same position as

          14       other sub-postmasters, not knowing what is going on, the

          15       lack of disclosure about any bugs in the system more

          16       generally, he is in the same contractual position which

          17       is an unequal contract, without question, with the

          18       Post Office, as argued by the Post Office through the

          19       civil litigation proceedings.  So that we suggest that

          20       all of those features allow him to, and ourselves on his

          21       behalf, to put him within the categories of both abuse

          22       of process limbs but if we are considering the question

          23       of limb 2, then limb 2, affront to justice, because

          24       whilst the point being made, as I anticipated, by

          25       Mr Altman, is, it is nothing to do, he says --


           1   MRS JUSTICE FARBEY:  He says they are explained losses, not

           2       unexplained losses.

           3   MR STEIN:  Exactly, as I anticipated earlier, that Mr Fell

           4       makes certain remarks.  What we are left with,

           5       therefore, on behalf of Mr Fell, are indications that

           6       should have allowed his legal team, if the truth had

           7       been known overall about the problems with Horizon, to

           8       look into this and consider: where were the problems

           9       with your accounting.

          10           Without that, either then or now, because we cannot

          11       go back now in time, to look at his position, we cannot

          12       instruct a Mr Henderson or similar to look into this

          13       position, because time has gone by, through which we

          14       have an ability to look into this.  We cannot

          15       reconstruct his position.  And the point we are saying

          16       is that there are indications that mean that there

          17       should have been an investigation into that.  The point

          18       made by Mr Altman is Mr Fell didn't say it.  All we say

          19       on his behalf --

          20   MRS JUSTICE FARBEY:  I am not sure that is available.  He

          21       also says "and he did say other positive things".

          22   MR STEIN:  It is a double barrel.  It is, first of all, he

          23       didn't say it and secondly, he said other things.

          24           But he didn't also say about the unexplained

          25       repayments and what we say, therefore, is that Mr Fell


           1       can be excused in his position.  And we also, I have

           2       reminded the court, as indeed my learned friend

           3       Mr Altman did, Mr Fell, after the audits and after the

           4       procedures fell into place, so that he was then under,

           5       essentially, investigation, let's be plain about this,

           6       he didn't react well.  He found it very difficult.  And

           7       he tried to take his own life.

           8   LORD JUSTICE HOLROYDE:  Thank you very much, Mr Stein.

           9   MR STEIN:  My Lord, can I assist any further?

          10   LORD JUSTICE HOLROYDE:  No, thank you very much.

          11           Right, then Mr Moloney, do we turn to the case of

          12       Wendy Cousins?

          13   MR MOLONEY:  If it pleases my Lords and my Lady, yes.

          14                    Submissions by MR MOLONEY

          15   MR MOLONEY:  Sorry, my Lords for that slight delay.

          16           My Lords and my Lady, we have furnished the court

          17       with a very short speaking note.  It is only really as

          18       a aide-memoire in due course because of course, my Lords

          19       and my Lady have indicated that you have read all the

          20       skeleton arguments in the case but we thought, you

          21       having done that, we would be able to take our

          22       submissions relatively briefly.

          23   LORD JUSTICE HOLROYDE:  Thank you.

          24   MR MOLONEY:  In this speaking note, the circumstances of the

          25       appellant (Inaudible).


           1   LORD JUSTICE HOLROYDE:  Can I just pause you a moment.  We

           2       have again got a contemporaneous --

           3   MR MOLONEY:  That is Mr Henderson, my Lord.

           4   LORD JUSTICE HOLROYDE:  Thank you very much.

           5   MR MOLONEY:  My Lords, just perhaps at this junction,

           6       my Lords having noticed Mr Henderson, it may be useful

           7       if I were to say to the court that Ms Johnson and I have

           8       discussed a possible way in which this appeal might

           9       proceed and see whether or not this accords with

          10       my Lords and my Lady.  (Inaudible) I introduce this now,

          11       I then proceed to call Mr Henderson, and call

          12       Mr Henderson in a way that accords with the way that

          13       my Lords and my Lady would wish to call him, in that we

          14       thought it may be an appropriate way would be for me to

          15       introduce him and tender him for cross-examination and

          16       then any questions the court may have of him and then

          17       move to final submissions after Mr Henderson's evidence.

          18   LORD JUSTICE HOLROYDE:  Yes, that sounds very sensible.

          19       Thank you very much, my Lord.

          20   MR MOLONEY:  My Lords, paragraphs 1 to 3 of the speaking

          21       note, we set out the circumstances of the appellant's

          22       pleas to theft and the disposal of her case.  We

          23       emphasise that in this case, my Lords and my Lady, the

          24       appellant raised the reliability of Horizon and indeed,

          25       whether or not the Post Office could prove any loss in


           1       relation to these theft counts, in a defence statement

           2       and proceeded to defend these charges until,

           3       essentially, almost the door of the court, when there

           4       was an agreed basis of plea between Post Office Limited

           5       and the appellant.  The terms of which my Lords and my

           6       Lady will be aware of.

           7           It is common ground between the parties, my Lords

           8       and my Lady, that this appeal turns on whether Horizon

           9       generated evidence that was essential to the prosecution

          10       of the appellant.  It has to.  Independently of the

          11       Horizon issue, the appellant has identified in her

          12       skeleton argument a number of features of unreliability

          13       of the case against her.  We have set those out at

          14       page 2 of our speaking note.  They are explained more

          15       fully in paragraphs 9 to 50 of the skeleton argument and

          16       the individual factors which are set out herein are also

          17       reproduced at paragraph 53 of our skeleton argument.

          18       But essentially, no evidence that she had stolen the

          19       pouch, as we say and lots of other factors there set out

          20       within A to H.

          21           We concede that those features are insufficient on

          22       their own to render her convictions unsafe but we rely

          23       on them as adding weight to her appeal, should the court

          24       decide that, in fact, Horizon was in issue in this case.

          25           If the court decides that Horizon was in issue in


           1       this case, was essential to the case, I should use the

           2       right terms, then we say that her convictions are unsafe

           3       on ground 1.

           4           We set out at paragraph 9 of our speaking note, the

           5       factors which we pray in aid in support of those, but we

           6       think it is best not to rehearse them before

           7       Mr Henderson, as it were, before he gives his evidence,

           8       and just simply to call Mr Henderson at this juncture to

           9       be questioned as to the contents of his report.

          10   MR JUSTICE PICKEN:  Before you do that, can I ask you, do

          11       you rely on ground 2 if you fail on ground 1?

          12   MR MOLONEY:  We don't think we can, my Lord.  The way in

          13       which our submissions proceeded before this court on

          14       Monday and yesterday were that the ground 2 abuse

          15       essentially turns on whether or not Horizon was

          16       essential to the case, because, in those circumstances,

          17       in short form, the respondent should not have been

          18       prosecuting these cases because of its attitudinal

          19       resistance to the unreliability of Horizon.  And so that

          20       is the focus of our submissions on ground 2, and so --

          21       but it follows my Lord, I should make this clear, but in

          22       her case, if we succeed on ground 1, we would say that

          23       we inevitably succeed on ground 2.

          24   MR JUSTICE PICKEN:  I understand that.

          25   MR MOLONEY:  Thank you, my Lord.


           1   LORD JUSTICE HOLROYDE:  Let Mr Henderson then make his oath

           2       or affirmation.

           3   MR MOLONEY:  Thank you.

           4                     MR IAN HENDERSON (sworn)

           5                Examination-in-chief by MR MOLONEY

           6   LORD JUSTICE HOLROYDE:  Thank you, Mr Henderson.

           7   MR MOLONEY:  Mr Henderson, would you give the court your

           8       full name, please.

           9   A.  My name is Ian Rutherford Henderson.

          10   MR MOLONEY:  Would the court require me to go through

          11       Mr Henderson's expertise or may I take that as read --

          12   LORD JUSTICE HOLROYDE:  Ms Johnson helpfully indicated it is

          13       not necessary and, of course, we have Mr Henderson's

          14       report, so we will take that as read.

          15   MR MOLONEY:  I am grateful for that indication, my Lord.

          16           Mr Henderson, may I ask you, do you adopt the

          17       contents of your report?

          18   A.  Yes, I do.

          19   MR MOLONEY:  May I simply tender Mr Henderson for

          20       cross-examination then, my Lord?

          21   LORD JUSTICE HOLROYDE:  Yes.

          22                 Cross-examination by MS JOHNSON

          23   MS JOHNSON:  Mr Henderson, can you hear me okay?

          24   A.  You are a little faint but I am wearing headphones, so

          25       I will do my best.


           1   Q.  Mr Henderson, we have the report that you have prepared

           2       in the case of Wendy Cousins before us and I hope you

           3       have that too.

           4   A.  Yes, I do.

           5   Q.  And without going through any of the preamble, we remind

           6       ourselves that you, along with Mr Warmington, are

           7       directors of Second Sight.

           8   A.  That's correct.

           9   Q.  And as you have set out in your report -- my Lords and

          10       my Lady, tab 2, page 31 -- you were the coauthor of the

          11       interim report into the Horizon system, dated July 2013,

          12       briefing report part 1, July 2014 and briefing report

          13       part 2, the following year, April 2015; is that right?

          14   A.  That's correct.

          15   Q.  And your remit was wide, I believe, not just involved

          16       with the Horizon computer system but various other

          17       aspects, such as operational processes and so on and so

          18       forth?

          19   A.  That's correct.

          20   Q.  So for those years you were effectively living and

          21       breathing Horizon and all its variables?

          22   A.  Correct.

          23   Q.  Now, in your report, and can I invite you, please, to go

          24       to page 35, you say at paragraph 17:

          25           "This matter relates to cash payments associated


           1       with pensions and allowances [P&A] vouchers, often

           2       described as foils, dockets or green giros."

           3           And I am sure you will accept that your report,

           4       I can take you to other paragraphs if necessary, but

           5       your report is predicated upon the basis that

           6       Mrs Cousins' case involved pension and allowance

           7       vouchers; that is right, isn't it?

           8   A.  I didn't quite hear the last -- pension and allowance --

           9       what word did you use after that?

          10   Q.  Vouchers.

          11   A.  Vouchers.

          12           That is the term I found most frequently used by

          13       Post Office and as I said in my report, I therefore

          14       adopted that term, even though, as I think the court is

          15       aware, we are primarily talking about what is known

          16       colloquially as green giros or giro cheques, in terms of

          17       this particular prosecution.

          18   Q.  Yes, and you were using pension and allowance vouchers

          19       and green giros, effectively, as synonymous?

          20   A.  I was reflecting the way that in my research, I had

          21       found Post Office had dealt with this matter without

          22       making a clear distinction between what is clearly

          23       different methods of payment and different documents.

          24       There does seem to be general sort of confusion between

          25       what is a green giro, which is a term not generally used


           1       by Post Office, and some of the other documents that are

           2       used to facilitate payments by the Department of Work

           3       and Pensions.

           4   Q.  Mr Henderson, I am going to suggest that is not right at

           5       all, because if we look at your report, you have

           6       extensively quoted from a paper prepared by Post Office

           7       to assist you in your Second Sight reporting, haven't

           8       you?  It is your footnote (Inaudible).

           9   A.  Yes, footnote 1, I have referred extensively.

          10   Q.  Yes.  And if we go to page 38, please.  This is you

          11       quoting the Post Office information.  You start at the

          12       top of the page by saying this:

          13           "Post Office has previously stated the following:

          14       benefit payment methods.  There are various methods by

          15       which benefits can be received by customers."

          16           Then the first one is set out there, and it is

          17       pension and allowance books.  Do you have that?

          18   A.  Yes, I do.

          19   Q.  And I am not going to go through it all but it is P&A

          20       books provided by DWP to customers entitled to benefits

          21       and then you repeat what the Post Office informed you as

          22       to the way in which that method operated; all right?

          23   A.  Yes.

          24   Q.  And then if you go to page 40, please, Mr Henderson,

          25       again quoting Post Office's own information, we see


           1       paragraph 9, an entirely separate section headed "Green

           2       giros."  Have you got that?

           3   A.  Yes, I have.

           4   Q.  And customers who lose their POCA card or customers who

           5       are on temporary benefits may be sent green giros by the

           6       DWP.  These are cheques, also known as DWP cheques,

           7       which set out the payment amount and can be cashed in

           8       the usual way.

           9           So Mr Henderson, would you accept first of all, that

          10       insofar as Post Office is concerned, these are two

          11       separate methods by which benefits can be received by

          12       customers?

          13   A.  I accept that but I also note at the foot of page 40,

          14       where it says "Overclaims occurred with P&A books and

          15       green giros", and bearing in mind this prosecution was

          16       dealing both with overclaims and reintroductions, that

          17       topic, as far as it related to the Department of Work

          18       and Pensions, potentially related both to P&A books and

          19       green giros, although I accept that Ms Cousins was

          20       prosecuted only in respect of green giros.

          21   Q.  Yes, and the reason why this may be significant is,

          22       first of all, I am sure you would accept, that there are

          23       different methods whereby the customer receives these

          24       two forms of benefit.  In a pension allowance they would

          25       receive a book with a series of vouchers within that


           1       book, and when they come to cash those, the book is

           2       scanned by the postmaster -- I am sure you would accept

           3       that?

           4   A.  Yes, subject to the comment that it is actually more

           5       complicated than that.  When I looked into this, I found

           6       that there were at least 10 different sources of

           7       allowance from different organisations, including for

           8       example, the Ministry of Defence, the Royal Air Force,

           9       and so on, all of which had slightly different systems.

          10   Q.  Yes, I completely agree, Mr Henderson, a pension

          11       allowance book encompasses a wide spectrum of benefits

          12       but the difference, or one of the differences, and I am

          13       just going to go through a handful with you, whereas

          14       pension allowance vouchers come in a book, green giros

          15       are sent to the customer a single green giro at a time,

          16       so they are not, as it were, torn out of a book; do you

          17       accept that?

          18   A.  I do and that is also my understanding.

          19   Q.  And then pension and allowances, as you have indicated

          20       on page 35, your paragraph 19, (inaudible) vouchers,

          21       once they have been cashed at the Post Office, are sent

          22       to a processing centre in Lisahally, which I think is in

          23       Northern Ireland?

          24   A.  That my understanding.

          25   Q.  Yes.  Whereas, Mr Henderson, the green giros are not


           1       sent to Lisahally, they are sent to the Alliance &

           2       Leicester and then it became Santander, in Bootle, in

           3       Liverpool.  Would you accept that?

           4   A.  Well, again, I think it is slightly more complicated

           5       than that, because there was a predecessor organisation

           6       which was Giro Bank, which is where the term giro was

           7       originally derived from, as I understand it, so the

           8       predecessor organisation was Giro Bank.  It then became

           9       Alliance & Leicester and as you will see in my report,

          10       Post Office have used the term Santander to refer

          11       collectively to the processing of green giros.

          12   Q.  Yes, but at the time with which this court is concerned,

          13       would you accept that the green giros were sent to

          14       Alliance & Leicester in Bootle; would you accept that,

          15       Mr Henderson?

          16   A.  That is my understanding, subject to, you know, checking

          17       particular dates and so on, but in general, I would

          18       accept that.

          19   Q.  Well, thank you, and we have a slight difficulty because

          20       we cannot hand you documents but I have shown Mr Moloney

          21       one of the green giros involved in this case -- both

          22       my Lords and my Lady, it is not the one in the bundle,

          23       because that is the print and that is rather poor but

          24       another one which we have, and you will have seen it

          25       makes it clear it went to Bootle.


           1   MR MOLONEY:  I can confirm that, my Lords and my Lady.

           2   MS JOHNSON:  I am most grateful to my learned friend.

           3           The reason why this may be relevant, Mr Henderson,

           4       is this.  Your report is predicated on all the cheques

           5       going to Lisahally and you make criticism as to the

           6       checking regime conducted there, don't you?

           7   A.  Well not just Lisahally and if I can just sort of step

           8       back a moment, when I prepared my report, I started by

           9       conducting a review of the relevant documents, the

          10       relevant sort of evidence and I quoted extensively from

          11       Post Office documents.

          12           My expectation at the time was that we would follow

          13       the procedure described in the order of the court

          14       from November last year, where the respondents would

          15       serve expert evidence and then would engage

          16       constructively in preparing an agreed joint memorandum

          17       and, as you know, that didn't happen.

          18           So a number of the issues that I have raised in my

          19       report, I hesitate to say that they were speculative but

          20       they were designed to establish a dialogue with your

          21       expert, so that we could provide a clearer explanation

          22       for what is clearly a rather complex matter.

          23   Q.  Yes but of course you, as I indicated a little earlier,

          24       you have been immersed in this subject for many years,

          25       haven't you, Mr Henderson?


           1   A.  My first involvement was through the initial mediation

           2       scheme which considered 150 applicants, former

           3       postmasters.  We analysed those cases and out of the 150

           4       applicants, only 13 related to pensions and allowances.

           5       Unfortunately, I don't have a breakdown of what

           6       proportion of those were green giros, as opposed to

           7       pension book issues, but I suspect the majority may well

           8       have been green giros, but that was a relatively small

           9       proportion of the overall work that I performed.

          10   Q.  Yes.  So does it come to this, that you are still not

          11       entirely clear as to the specific checking regimes

          12       involved with Green giros?

          13   A.  Well, in my report, and I have raised this on a slightly

          14       speculative basis, I am expressing opinions in terms of,

          15       well, what was the reconciliation between Alliance &

          16       Leicester or Santander and Post Office.  We know that

          17       they had a client relationship.  We also know that there

          18       were relatively infrequent reconciliations.  We also

          19       know that there were relatively infrequent transaction

          20       corrections being issued as a result of errors being

          21       detected.

          22           I am speculating that the description that has been

          23       provided by Post Office in terms of how the overall

          24       system operated was perhaps -- it didn't necessarily

          25       operate in the way that it was meant to operate.  But


           1       I raised that more in the expectation that I would be

           2       able to have a dialogue with your expert and reach

           3       an agreed position in terms of providing the court with

           4       a joint memorandum.

           5   Q.  I see.  So if I was to suggest that green giros were

           6       checked more frequently than pension allowance vouchers,

           7       you couldn't say one way or the other; is that what it

           8       amounts to?

           9   A.  That is my position.

          10   Q.  Thank you.

          11           Can I turn to a different topic, and if we go to

          12       your report, please, at page 48.

          13   A.  Yes.

          14   Q.  And here we are dealing with what aspects of Horizon may

          15       have been again in this particular case and in

          16       paragraph 28, you set out a number of headings there,

          17       and just so that the court understands, these are

          18       headings which you culled from the schedules which were

          19       placed before the court in Ms Cousins' proceedings?

          20   A.  That's correct.

          21   Q.  We don't need to look at the schedules but if we could

          22       please go through them, just to understand what we are

          23       really dealing with.  28(a), the first Horizon matter on

          24       those schedules, (Inaudible), and I think that refers to

          25       counter position; is that correct?


           1   A.  Yes and I don't know if this is of assistance but one of

           2       the witness statements of the Post Office investigator,

           3       which is at tab 32, actually sets this out in quite

           4       a lot of detail.  It is page 180 and 181 of the bundle,

           5       so I would hope that the description is not

           6       controversial.

           7   Q.  The description is not controversial, but I just want to

           8       appreciate, through you, what it amounts to.

           9           So ID is the counter position and I think you can

          10       confirm that there was only one counter at this relevant

          11       branch?

          12   A.  That's correct.

          13   Q.  "User", second element, that is the ID of the person

          14       entering the transaction, and having read the papers,

          15       you will appreciate that Mrs Cousins and her some time

          16       assistant shared the same user ID?

          17   A.  And in fact, it may have been slightly more than that.

          18       One of the issues raised at one point was whether

          19       Ms Cousins' husband or indeed son, ever worked in the

          20       business.  But what is clear is that the same user ID

          21       was used by everybody, the same user ID and indeed

          22       password, so that electronically, it is not possible to

          23       link that entry or any of those entries to an individual

          24       person.

          25   Q.  Yes, well we perhaps don't need to worry about the


           1       husband for the moment.

           2           So that's user. F is shop unit and again, you can

           3       confirm there was only one shop unit at this branch?

           4   A.  That's correct.

           5   Q.  Then we have the giro number and giro date which

           6       emanates from the DWP.  And then we have week number,

           7       encashment date, day and time, so those are all, as it

           8       were, mechanical features setting out the accounting

           9       week number.  The date, for example --

          10   A.  Can I just step back to the columns that are headed

          11       "Giro number and giro date", which, on page 279 of

          12       tab 48, the first page of this schedule, are blank in

          13       terms of the first 18 items.

          14           Now, what that indicates was that that entry is

          15       derived from not just DWP but, actually, the giro cheque

          16       itself and in circumstances when the giro cheque has

          17       gone missing, it is not possible to know the relevant

          18       giro number and the giro date and all of the other

          19       information on that schedule, with the exception of the

          20       last two columns, is derived exclusively from the

          21       Horizon system, rather than from directly, DWP.

          22   Q.  Where the giros were retrieved, we would have the giro

          23       date and giro number, wouldn't we?

          24   A.  Correct.

          25   Q.  And those matters I have just asked you about, week


           1       number and encashment date, day and time, those are

           2       mechanical features of Horizon which would pertain to

           3       all Post Office business, wouldn't it?

           4   A.  That is correct.

           5   Q.  It is Thursday, 25 March.  It wouldn't just apply to

           6       this, it would apply to any relevant transaction on that

           7       day?

           8   A.  That is my understanding.

           9   Q.  Yes.

          10           And then we have "Session ID", that is the recorded

          11       session number of the transaction, "Mode", which is

          12       simply "Serve customer; "Product number", I think you

          13       can confirm that when Mrs Cousins was engaged with this,

          14       she would look at her Horizon screen and there would be

          15       a particular icon which said "Green giro", and she would

          16       press that green giro icon?

          17   A.  That's correct but can I just backtrack to the session

          18       ID and highlight the point that the session ID is not

          19       a unique session number.  In other words, multiple

          20       transactions may have the same session ID and if you

          21       look in that first batch of 18 transactions, you will

          22       quite readily see that that happens.  There are two

          23       transactions that end 40-1, and there are three

          24       transactions that end 689-1, even though they clearly

          25       relate to different customers.  At different times.


           1   Q.  Then, let's just finish this list, if we could.  The

           2       quantity -- that is the amount of cheques entered, and

           3       sale value.

           4           So what Mrs Cousins does is she presses the green

           5       giro, having done her checks to ensure it was a valid

           6       green giro and then she would manually enter the amount

           7       which is to be handed over to the customer?

           8   A.  That's correct.

           9   Q.  Yes.  Now, insofar as the processes or procedures are

          10       concerned, we have been through what happens when the

          11       customer presents the giro and what Mrs Cousins does.

          12       And then you will have read her interview, and I could

          13       take you to it if needs be, but I am sure you could

          14       confirm that Mrs Cousins said that every Wednesday,

          15       which was the end of the accounting week, after she had

          16       closed at 5.30, she would reconcile.

          17           What that means, if we can visualise it, is that she

          18       would print out her summary of green giros cashed, let's

          19       say, 10 green giros cashed that week and she would

          20       compare that with the physical green giros, which

          21       I think she said she pinned on the wall and they would

          22       match.  Horizon says you have paid out 10 and here are

          23       10 green giros; yes?

          24   A.  Ms Johnson, sorry, can we just step back.

          25           I may have misheard you but did you cover the last


           1       two columns on the schedule at tab 48?  The columns that

           2       are headed "Name and status" or are you going to cover

           3       those later?

           4   Q.  Well, name and status, that just deals with the author

           5       of those schedules, doesn't it, Lisa Allen?

           6   A.  I think it is a bit more than that.  When Ms Allen

           7       prepared this schedule, as you are aware, Horizon does

           8       not have the facility to record the name of the

           9       beneficiary, in other words the person either presenting

          10       the cheque or the beneficiary of that cheque, so the

          11       name was entered by the investigator, the Post Office

          12       investigator, when she did this work.  But, as I hope

          13       you will agree, the procedure used to do that was deeply

          14       flawed and at one level could be regarded more as

          15       a guess than anything more definitive.  I just want to

          16       sort of make that point absolutely clear, that there is

          17       an element of doubt as to the accuracy and, indeed,

          18       completeness of the entries in the name column, within

          19       this schedule -- this very important schedule.

          20   Q.  Well, you might not be surprised that I don't agree that

          21       it is deeply flawed but perhaps a more important point

          22       is that is not dependent on Horizon, is it?

          23   A.  No, this is dependent on the work done by the

          24       investigator.  The last two columns were not derived

          25       from Horizon.  I agree with that.


           1   Q.  Yes.  So can we just go back to Horizon, because I was

           2       asking you about the weekly reconciliation process, and

           3       I suggested to you that if everything is going according

           4       to plan, you have your 10 giros paid out, according to

           5       the Horizon printout, which you would then be able to

           6       compare with 10 physical giros you have pinned on your

           7       wall; that is right, isn't it?

           8   A.  That is my understanding, yes.

           9   Q.  So if any duplicate transaction had crept in, that would

          10       become immediately apparent to the post mistress at that

          11       point, wouldn't it?

          12   A.  Well, bear in mind we are talking about both overclaims

          13       and reintroductions.  An overclaim is where there is not

          14       a corresponding voucher or giro sort of cheque and

          15       a reintroduction is I think what you are describing,

          16       where perhaps a genuine giro cheque has not been sent to

          17       the processing centre and has been held over for

          18       a period of time and then resubmitted.

          19   Q.  Yes, but whether overclaim or reintroduction, that would

          20       be apparent when the post mistress did her weekly

          21       reconciliation exercise, wouldn't it?

          22   A.  That is my understanding.

          23   Q.  Yes, not least because of the formula I put to you, but

          24       also, if something had crept in, suggesting that 11

          25       giros had been paid out, rather than 10, that would be


           1       reflected in the till as well, wouldn't it?  Because you

           2       would have (Inaudible)?

           3   A.  Yes.  This is, again, one of the features that

           4       differentiates this case from some of the others that

           5       this court has considered.  The overclaim or

           6       reintroduction results in a surplus of cash rather than

           7       a shortage of cash.

           8   Q.  Yes.  And your words speculated, I suggest, that

           9       a phantom transaction bug may have been responsible for

          10       this (Inaudible)?

          11   A.  Yes.  I have said that the new evidence of bugs, errors

          12       and defects, including phantom transactions, may well be

          13       an explanation for the surpluses that were found at this

          14       branch or at least contributed to the surplus at this

          15       branch, because on both occasions that the Post Office

          16       investigator performed an audit, and I am aware that in

          17       your skeleton arguments you refer to the accounts

          18       balancing, in fact that is not correct.

          19           If you look at the witness statement of the various

          20       investigators, on the two occasions that an audit was

          21       conducted, on one occasion -- and I am referring to

          22       tab 24, which is one of the reports of Ms Allen,

          23       page 151, a third of the way down that page, the outcome

          24       of the audit, and I am quoting, "was a surplus of

          25       £4.10", and then on 151 -- sorry, 153, about halfway


           1       down, the conclusion was, "This taken into consideration

           2       would make the outcome a surplus of £32.91."

           3           Again, I accept that those are not the level of size

           4       of surplus that I would necessarily expect for either

           5       an overclaim or a reintroduction but I just wanted to

           6       get that point on the record, that when the audit --

           7       when both audits were conducted, rather than finding

           8       a shortfall, they did in fact confirm that there was

           9       a surplus on both occasions.

          10   Q.  But on both occasions, extremely small amounts; yes?

          11   A.  I would agree small amounts, yes.

          12   Q.  And in fact, Mrs Cousins pleaded to an amount over

          13       £13,000, so nothing approaching that level.

          14   A.  Bear in mind that was £13,000 over something like 18

          15       months.

          16           If you look at the weekly cash declarations which

          17       are in the bundle as well, I think, you will see that

          18       the turnover of this branch was in excess of £50,000

          19       every week.  In some cases it was as high as £100,000.

          20           So very substantial transactions were taking place.

          21       I would argue that bearing in mind the volume and the

          22       value of transactions, it would be relatively easy for

          23       an overclaim or a reintroduction to occur and the

          24       associated surplus to be lost in the overall sort of mix

          25       of evidence.


           1           In fact, this was very much the position adopted by

           2       Post Office.  When they first looked at the results of

           3       the possible problems, they concluded, and I am quoting

           4       from another document that is not in the bundle,

           5       I think, which was an email from the finance centre

           6       known as P and BA, regarding the missing giro pouches,

           7       and I am quoting, "Hertford Heath had numerous giros

           8       missing, £12,000 total this year, not consecutive weeks,

           9       not frequent enough to notify security and

          10       an investigation but approximately one per month."

          11           In other words, it appeared to be the position that

          12       this was pretty close to falling within the category of

          13       business as usual, rather than an exceptional fraud

          14       event.

          15   Q.  Well, Mr Henderson, I don't want to get diverted into

          16       (Inaudible) that are not going to be essential to this

          17       point but that is not how things developed.  We know

          18       that Giro Bank contacted the Post Office because of the

          19       quantity of giros that had not been received by them.

          20       And there followed, it has to be said, (Inaudible)

          21       taking place which led to this confusion.  That can

          22       hardly be described as business as usual, can it?

          23   A.  I would agree.

          24   Q.  Can we just go back, finally, to Horizon.

          25           You have speculated, haven't you, that some phantom


           1       transaction bug may be responsible.  You have no

           2       evidence for that, do you?

           3   A.  Well, we have the evidence from the GLO trials and the

           4       findings of Mr Justice Fraser, that bugs, errors and

           5       defects, including phantom transactions, occurred.

           6           We have got the evidence of Post Office engineers,

           7       the Romec engineers of phantom transactions.  If you

           8       look at page 279, tab 48, and, in particular, the first

           9       section, where there are 18 of those(?) cheque

          10       transactions sort of listed, none of which are supported

          11       by giro number or giro date, I would speculate,

          12       I accept, that it would be entirely consistent with

          13       a Horizon bug error defect, including a phantom

          14       transaction, that if such a phantom transaction

          15       occurred, it would be, in effect, identical to any one

          16       of those 18 entries.

          17           That is my concern about the potential impact of

          18       what is now known -- and I think it is accepted as new

          19       evidence -- of bugs, errors and defects.

          20   Q.  The phantom transaction bug, as found by

          21       Mr Justice Fraser, was operative in 2001, wasn't it?

          22   A.  That is my understanding.  But bear in mind bugs, errors

          23       and defects can manifest themselves in many different

          24       ways and at this stage removed, we are looking at

          25       a potentially unreliable technology and, yes, it is


           1       speculation.

           2           Who knows whether such bugs, errors and defects

           3       could have had the consequence that I have highlighted.

           4   Q.  But let's take it at its absolute highest, Mr Henderson.

           5       There was some unknown bug operative here; that would

           6       have been immediately apparent to Mrs Cousins, each week

           7       when she had to reconcile that the printout along with

           8       the giros in the pouch and that was sent off via the

           9       postman the following day.  It would become apparent

          10       immediately, wouldn't it?

          11   A.  Not necessarily, and the reason why I say that is I mean

          12       I have listened to the testimony of well over 100

          13       sub-postmasters.  A very frequent event was a problem

          14       occurring and when they raised that problem with the

          15       help desk, the help desk would say, "Well, don't worry,

          16       it will sort itself out next week or the week after".

          17       That was a very frequent response from the sort of

          18       Post Office to problems.

          19           So I am speculating but I could envisage a situation

          20       where, if Ms Cousins found that there was a transaction

          21       listed by Horizon that was not supported by one of the

          22       giro cheques, she might feel, "Well, don't worry about

          23       it, it is going to reverse itself or be resolved next

          24       week".  That was what many sub-postmasters were told

          25       quite frequently.


           1   Q.  There is no evidence from the calls made by this

           2       sub-postmistresses to that effect?

           3   A.  There may well be no calls but that may have been in her

           4       mind at the time, that an apparent discrepancy would

           5       resolve itself automatically, perhaps the following

           6       week.

           7   Q.  But the difference here is not only, as I have

           8       suggested, would any Horizon problems be apparent but,

           9       more significantly than that, this type of overpayment

          10       reintroduction fraud depends on other features, such as

          11       the giro cheques, the evidence of the customers and the

          12       pattern.

          13           You have your criticisms of that, which we

          14       appreciate, but those were all features of this case,

          15       weren't they?

          16   A.  I am sorry, can you repeat that?

          17   Q.  Appreciating as we do, having read in your report that

          18       you have criticisms as to the way the investigation was

          19       conducted, but nevertheless it depended on the physical

          20       giros and the copies thereof, the customers who said

          21       "I never went in and cashed two in one go", and the

          22       pattern that that demonstrated.  Those were all features

          23       of this prosecution, weren't they?

          24   A.  They were, but at the same time, and referring back to

          25       page 279, the first 18 items, the first 18 entries on


           1       that schedule are not supported by physical vouchers or

           2       green giros.  They are supported exclusively, or almost

           3       exclusively, by information derived from Horizon.

           4           What I am saying is I am quite concerned about the

           5       reliability of a prosecution that is relying on, in

           6       effect, a single source of evidence in relation to those

           7       items.  A combination of that, together with the flaws

           8       in the identification of beneficiaries, causes me

           9       further concern.

          10   Q.  Finally, as you have set out in your report, of course,

          11       this type of fraud, overclaim and reintroduction fraud,

          12       happened before Horizon was installed anywhere in the

          13       country, wasn't it?

          14   A.  It certainly -- yes, I think that is correct.  That is

          15       not something I have addressed but Post Office in their

          16       evidence certainly refers to both overclaims and

          17       reintroductions as not necessarily being a new type of

          18       fraud.

          19   MS JOHNSON:  Thank you.

          20   LORD JUSTICE HOLROYDE:  Yes, thank you.

          21           Mr Moloney.

          22                   Re-examination by MR MOLONEY

          23   MR MOLONEY:  Thank you very much, my Lord.

          24           Mr Henderson, in your experience, does Post Office

          25       or does it not use P&A as a generic term to incorporate


           1       green giro?

           2   A.  The research that I did showed that P&A, or P&A

           3       vouchers, was often used as an overarching term to

           4       include all elements of ultimately payments on behalf of

           5       the Department of Work and Pensions.

           6   Q.  It was put to you, well, you were asked, would you be

           7       able to disagree with the proposition that green giros

           8       were checked more frequently than P&A, do you remember

           9       that?

          10   A.  I remember that being put and I think my response is

          11       I do not know, because I was then unable to have that

          12       dialogue with an expert from the respondent.

          13   Q.  Have you ever seen any evidence from Post Office Limited

          14       or anywhere else that green giros were checked more

          15       frequently than P&A?

          16   A.  I think I would have to answer that, you know, the

          17       absence of evidence is not evidence of that proposition.

          18       So the short answer is I don't know.

          19   Q.  The reconciliation process described by Ms Johnson,

          20       outlined to you, does that in your opinion preclude

          21       Horizon having impacted the figures used for this

          22       prosecution.

          23   A.  I am not sure we really got to the bottom of the

          24       reconciliation, what was meant to have occurred.  What

          25       is unclear is how frequently that reconciliation process


           1       happened, and (Inaudible) with that.  I am speculating

           2       that the detailed reconciliation between entries

           3       generated by Horizon and transactions received or

           4       processed by the Department of Work and Pensions was not

           5       as frequent as it perhaps should have been.

           6           I mean we were told that the so-called rota checks

           7       were so infrequent that individual branches would only

           8       be checked as infrequently as once per year, which seems

           9       extraordinary.

          10   Q.  If may be that my question wasn't clear and that you

          11       thought I was asking about reconciliation between

          12       Post Office and DWP to Giro Bank.  I was asking you

          13       about the questions Ms Johnson asked you about

          14       Ms Cousins' process of reconciliation each week.

          15   A.  Which was the matching of the printout from Horizon with

          16       the physical giro cheques in her possession.

          17   Q.  That's it, Mr Henderson.  So I will ask you that

          18       question again, if I may, and ask you, does that

          19       reconciliation process, as described by Ms Cousins in

          20       interview and repeated before the court this morning by

          21       Ms Johnson, does that preclude Horizon of having

          22       impacted the figures used for this prosecution or not?

          23   A.  I think the answer that I gave was that Horizon was well

          24       known for producing evidence or transactions that

          25       resolved themselves, maybe the following week or


           1       sometimes later.  What I don't know is whether that

           2       occurred with Ms Cousins or how she reacted to it, but

           3       I am certainly aware from many interviews with

           4       sub-postmasters that that was generally a frequent

           5       experience of many of them.

           6   Q.  Could this court be sure, in your opinion, or not, that

           7       each of the transactions in the schedule at tab 49 were

           8       unaffected by Horizon?

           9   A.  I think the short answer is no.

          10           The new evidence about bugs, errors and defects,

          11       bearing in mind in particular the schedules where

          12       transactions are not supported by physical giro cheques,

          13       I have concern about the reliability of Horizon evidence

          14       in those circumstances.

          15   Q.  Now, I may be in danger of asking you a question as to

          16       the ultimate issue in this case by asking this question

          17       and I will stop if I am asked to, but the court may be

          18       assisted by your opinion in any event.

          19           Was Horizon data in your opinion essential to the

          20       prosecution of Ms Cousins' case or not?

          21   A.  I believe it was essential for the reasons I have

          22       outlined.

          23   Q.  And what, just if I may seek the indulgence of court,

          24       for you just to reiterate what those reasons were,

          25       please, Mr Henderson?


           1   A.  The reasons are, I think, self-evident from the schedule

           2       produced by the Post Office investigator, that almost

           3       all of the entries, with the exception of giro number

           4       and giro date, were derived from what is now accepted to

           5       be an unreliable computer system, in other words

           6       Horizon.

           7   MR MOLONEY:  Those are all the questions I had, my Lords and

           8       my Lady, unless the court has any questions.

           9   LORD JUSTICE HOLROYDE:  Mr Henderson, there is one matter

          10       I would just like to have your help with, to clarify my

          11       own understanding.

          12           As I understand it, one suggested way of

          13       a sub-postmistress getting money from a Post Office

          14       involved receiving a giro cheque from a customer, paying

          15       out to that customer and then not remitting the giro

          16       cheque to Bootle bank, but holding it back and putting

          17       it through the system a second time the following week

          18       in order to pay herself some money.

          19           Have I correctly understood the mechanism of that

          20       suggestion?

          21   A.  Yes, that seems to be a combination of, in the first

          22       instance, an overclaim, where a payment is made to

          23       a customer but without the associated document, the giro

          24       cheque, being submitted to what I think Ms Johnson

          25       described as Bootle, the Alliance & Leicester processing


           1       centre; and then the second week, or subsequently, that

           2       retained document, the giro cheque, being presented

           3       a second time, the cash being withdrawn by the

           4       sub-postmaster and it is only on that second occasion

           5       that the document, the giro cheque, would be sent off in

           6       the weekly bundle to Alliance & Leicester or Santander.

           7   LORD JUSTICE HOLROYDE:  Thank you.  That is what I wanted to

           8       clarify.  Thank you very much.

           9           Unless anybody has any questions arising out of

          10       that?

          11   MR MOLONEY:  No, thank you, my Lord.

          12   LORD JUSTICE HOLROYDE:  Well, Mr Henderson, thank you.  That

          13       completes your evidence.  You are of course perfectly

          14       welcome to continue to observe and listen remotely if

          15       you wish to do so.

          16   A.  Thank you very much, my Lords, my Lady.

          17   LORD JUSTICE HOLROYDE:  Mr Moloney, is that a convenient

          18       point for to us break?

          19   MR MOLONEY:  It is, my Lord.  I have less than 10 minutes'

          20       submissions to conclude this appeal.

          21   LORD JUSTICE HOLROYDE:  Thank you.

          22           Just looking ahead, in does look reasonably clear --

          23       famous last words -- that we will finish the hearing

          24       this afternoon.  That being so, could I give a gentle

          25       reminder that we await the figures for the prosecution.


           1   MR ALTMAN:  Those are in train.  Ms Carey is in command and

           2       she can tell your Lordship where we are -- she is always

           3       in command, I have to say, together with Ms Johnson.

           4   LORD JUSTICE HOLROYDE:  All right, thank you very much.

           5       2.00, please.

           6   (12.58 pm)

           7                    (The Luncheon Adjournment)

           8   (2.00 pm)

           9   LORD JUSTICE HOLROYDE:  Yes, Mr Moloney.

          10              Submissions by MR MOLONEY (continued)

          11   MR MOLONEY:  My Lord, we respectfully submit in conclusion

          12       that the court should decide that Horizon data was

          13       essential to the prosecution of Mrs Cousins, for the

          14       following four reasons which I will take very briefly.

          15           Firstly, the procedures for processing P&A vouchers

          16       were flawed.  There was no evidence that they were any

          17       better or that there were any more frequent checks in

          18       respect of green giros and whilst Mr Henderson was ready

          19       and willing to accept that that may be the case, there

          20       was no expert evidence to support that assertion before

          21       the court.  His readiness may in fact be consistent with

          22       the view taken of him by the Honourable

          23       Mr Justice Fraser in the GLO proceedings, where it was

          24       found that the common issues, judgments at page 472,

          25       that he was a careful and honest witness and we say that


           1       that was reflected in his evidence before the court

           2       today.

           3           The second reason is that the reality of those

           4       procedural flaws, as far as dealing with the P&A

           5       vouchers was concerned, was borne out by the fact that

           6       reliance had to be placed by Lisa Allen in the schedule

           7       behind tab 49 on similar amounts being attributable to

           8       the same person.  In fact, the same amounts being

           9       attributable to the same person.  That was the

          10       underlying rationale for a central aspect of the case

          11       and that underlying rationale is, as my Lords and my

          12       Lady have seen in the skeleton argument from the

          13       respondents in this case, now expressly conceded to be

          14       erroneous.

          15           That concession reinforces the potential for

          16       duplicates to have been due to Horizon malfunction

          17       within that schedule.  That is our third reason, and our

          18       final reason is that that becomes all the more relevant

          19       in the context of the numerous other evidential failings

          20       reflected in our skeleton argument, set out in our

          21       skeleton argument, and then reflected in the basis of

          22       plea agreed between the appellant and the respondent at

          23       trial, where it was accepted that she was away for one

          24       of the transactions, overseas, and that there were other

          25       evidential flaws, as far as a number of the counts were


           1       concerned.

           2           In all the circumstances therefore, we respectfully

           3       ask the court to quash the convictions of the appellant.

           4   LORD JUSTICE HOLROYDE:  Thank you very much, Mr Moloney.

           5           Yes, Ms Johnson.

           6                    Submissions by MS JOHNSON

           7   MS JOHNSON:  My Lords and my Lady, in our submission the

           8       appellant has not demonstrated that Horizon reliability

           9       is essential to this case.  Before I develop that any

          10       further, it is critical to understand the nature of the

          11       fraud in this case and may I invite the court to the

          12       opening note, which was presented in the case.  You will

          13       find that behind tab 6 in our case summary and can we

          14       pick it up, please, at the bottom of the first page,

          15       (Inaudible).  I am going to take a little time on this,

          16       because this is the bed rock of the case and

          17       an important plank of our argument that Horizon

          18       reliability was not essential.

          19           Paragraph 4, the thefts involved these giros.  The

          20       procedure for paying customers who presented a green

          21       giro at the Post Office branch is explained as follows,

          22       in counsel's opening note and over the page:

          23           "Green giros are a method of payment used by the

          24       Department for Work and Pensions.  Giros are sent out by

          25       post to customers and each giro has a date on it showing


           1       the earliest date when it can be cashed.  When a cheque

           2       is presented at a counter for payment, the clerk must

           3       check it is a valid claim.  Cheques are valid for

           4       a month.  The clerk checks that the words and numbers on

           5       the cheque agree and ...(Reading to the words)... proof

           6       of identity, if necessary.  The cheque must be signed on

           7       the reverse by the payee, the agent.  The clerk date

           8       stamps the giro on the front and then enters the amount

           9       into the office computer system by touching a green giro

          10       icon on the screen and then the screen shows the amount

          11       to be paid to the customer, the cash is handed over and

          12       the transaction is completed.  The giro is retained by

          13       the clerk in their stock."

          14           It then goes on to explain the Post Office's

          15       accounting week ran from Thursday to Wednesday, and

          16       again, we have heard from Mr Henderson, this is critical

          17       in our submission, the process at the end of each

          18       accounting week, that the SPM checked the actual green

          19       giros physically present as against the Horizon summary

          20       entered into the system.  It should be the same.  Once

          21       the cheque was made, summary to be placed at the front

          22       of the bundle, ID (Inaudible) completed and then the

          23       bundle is tied up ready to be sent off the following

          24       morning.

          25           As the court is aware, there are two forms of fraud


           1       at play in this case, overpaying and reintroduction.

           2       Again, it is important to fully appreciate the nature of

           3       those frauds.  Turning to paragraph 8, please, as stated

           4       in the opening note, Chesterfield data showed there were

           5       a number of weeks where giro transactions were being

           6       performed (Inaudible) but they had received no giros at

           7       all.  I underline that because that is important.  This

           8       is not one or two giros missing; each week when this

           9       fraud was perpetrated, no giros and again, we submit

          10       that is important when one considers the impact or

          11       non-impact of Horizon.

          12           They wanted these missing pouches to be investigated

          13       and, of course, the truth was the giros were not

          14       missing.  Their dispatch was simply being delayed until

          15       Mrs Cousins could recash them fraudulently and my Lords

          16       and my Lady, that is important because in our

          17       submission, both in their effective grounds of appeal

          18       and indeed, repeated in their speaking note, the

          19       appellant has misunderstood the nature of the Crown's

          20       case.  By way of example, if you have Mr Moloney's

          21       speaking note in front of you, at page 2, 7(n), the

          22       whole case rested on an asserted modus operandi whereby

          23       the appellant stole the vouchers and reintroduced giros

          24       within them.

          25           That not right, as is made clear in the opening


           1       note.  They were simply not dispatched.  There was

           2       nothing sent to be stolen, as is made clear in the

           3       opening note I have just reminded you of.

           4           Then paragraph 9 of the summary, page 95, the

           5       prosecution's case was that Mrs Cousins had committed

           6       the theft by making some overclaims and many

           7       reintroductions and then only noticed in slightly later

           8       claims that the claim for a giro had never existed.

           9       Elsewhere it has been described as occurring in a branch

          10       with false payment on Horizon that doesn't remit the

          11       associated giro.  Then the example is given there.  Over

          12       the page and, importantly, at paragraph 10,

          13       reintroductions, and that is really the focus of this,

          14       were explained.  A more sophisticated tactic is by the

          15       reintroduction of the legitimately cashed giro.  Having

          16       correctly performed the giro transactions through

          17       Horizon, the clerk retains the giro, rather than

          18       dispatching it and then recashes it in another week.

          19           The giro was date stamped when the reintroduction

          20       takes place, and that is important.

          21           It is then sent off with a summary and because it

          22       appears on the summary and it is date stamped in the

          23       appropriate week, it has a legitimate appearance, even

          24       though the genuine transaction has taken place in

          25       an earlier week.  If a genuine mistake had occurred


           1       where a cheque was cashed in one week but not accounted

           2       for until the next, it would be expected that the

           3       Horizon accounts would show a loss for the first week

           4       and again in the second.  This is because in the first

           5       week, cash would have been given out but there would be

           6       no document to account for the payment, thus producing

           7       a loss.  In week 2, there would be a payment document

           8       but no money would have been given out, thus producing

           9       a gain.

          10           So, in effect, there are two sides of the same coin.

          11           It is important to understand the nature of the

          12       fraud, when one considers the role of Horizon within it.

          13       This is self-evidently not a case involving a Horizon

          14       generated shortfall, which a postmaster had to make

          15       good; this is not a case in which the amount of cash or

          16       stock held at a branch did not match what Horizon

          17       recorded should be present.  This case is dependent on

          18       the physical giros, importantly with a signature and

          19       with date stamp, the evidence of the customers as to

          20       their usual habits and how they would not shore up giros

          21       and go in and cash a number in one go.  Moreover, their

          22       evidence as to their regular day of the week and, from

          23       those strands of evidence, the patterns that allowed the

          24       prosecution to make out its case.

          25           Now, in our submission, the appellant has tried to


           1       shoehorn this case into a Horizon matrix by, as

           2       Mr Henderson did, arguing that Horizon processes or

           3       Horizon capability was flawed.  But we would urge the

           4       court to look at that with some care, because the design

           5       of Horizon, the structure of Horizon, are wholly

           6       different questions to the reliability of Horizon.

           7           Those shortcomings, such as Horizon didn't allow

           8       them to identify the individual customer, they were all

           9       known at the time of these proceedings.  They have

          10       nothing whatsoever to do with the two judgments with

          11       which this court is concerned.

          12           When one actually analyses the element of Horizon

          13       that is in play in this case, and in parenthesis, save

          14       perhaps for a robbery or a burglary, almost any case

          15       involving the Post Office is going to involve Horizon in

          16       some small measure.  That is not the question.  The

          17       question is, first of all, what was the measure and was

          18       reliability essential?

          19           As you heard from Mr Henderson, the Horizon elements

          20       were purely mechanical.

          21           Prosecution counsel, in his opening note, described

          22       it in this instance as a glorified cash till and with

          23       respect, we would suggest that is an accurate

          24       description.

          25           Accounting week number, date, day of the week, the


           1       time, those are all mechanical features that one would

           2       expect in any form of mechanism such as this, and do not

           3       have any bearing on the (Inaudible) Horizon reliability

           4       was essential.

           5           We place great reliance on the system, the system

           6       which I have intimated with Mr Henderson, that according

           7       to Mrs Cousins -- and perhaps it is so important because

           8       in our submission, this evidence, Mrs Cousins' own

           9       evidence demonstrates Horizon reliability was not

          10       essential.  Let's just remind ourselves of what she

          11       said.  May I invite you to go behind tab 23, where you

          12       will find her interview.

          13           And picking it up at page 124, please, in the middle

          14       of that page, Mrs Cousins is explaining the system:

          15           "Most of them are the customers I know.  I take the

          16       giro, enter it on to Horizon, date stamp it, pay the

          17       customer out and pin it to the board I have full of

          18       green giros.  That is where it stays all week until

          19       Wednesday night, when I do the books up and they are put

          20       into their envelopes.

          21           "So are the giros only done up once a week?

          22           "Yes, that is after I close on Wednesday night, when

          23       I do all the books.

          24           "So you close at 5.30 on Wednesday night, you print

          25       off your final giros and then what do you do with them?


           1           "I put them into the green pouch.  I take two copies

           2       off the Horizon system.  One I keep in my weeklies, one

           3       I put in the folder with the green giros, the green giro

           4       docket, Q 6301, in there and then it is handed to the

           5       postman Thursday morning."

           6           Finally, if you go, please, to page 130 of the

           7       interview, two-thirds down the page, Mrs Cousins says:

           8           "I can say with my hand on heart, definitely I have

           9       never held back on any giros in this office.  I do them

          10       up religiously every Wednesday and I have done since

          11       I started here.  I do them up, I check them."

          12           At the top of the following page:

          13           "I personally do them up every Wednesday."

          14           So in our submission, that again is critical

          15       evidence, first of all, given those elements of the case

          16       that I directly outlined, that this is not a Horizon

          17       essential case.  The taking in of this (inaudible), even

          18       forgetting the speculative phantom transaction bug

          19       posited by Mr Henderson, remembering the fact it was

          20       only operative in 2001, putting all of that aside, let's

          21       say there was some unknown bug, it would make itself

          22       manifest at this point and that is, in our submission,

          23       critical; critical, given all Mrs Cousins has said.

          24           There is no evidence that you have the records of

          25       the call(?) log, no evidence whatsoever on that, or


           1       indeed (Inaudible) that she ever suffered any problems

           2       doing this exercise.

           3           Now, criticism has been made as to certain elements

           4       of the Crown's case but they are not elements that it's

           5       dependent upon Horizon reliability.  You might suggest

           6       that Horizon could have been designed as a better system

           7       in the first place but that is really not for comment.

           8       They are not dependent on Horizon reliability and

           9       importantly, all these criticisms were available at the

          10       time.  None of the evidence that has come out of the two

          11       judgments affect what was available at that time of

          12       these proceedings.

          13           In his perfected grounds, Mr Moloney made certain

          14       non-Horizon points and I want to deal with them very

          15       quickly, if I may, because as you will have seen from

          16       our response, we characterise that as really a question

          17       of evidential sufficiency, almost akin to a half time

          18       submission, and various non-Horizon questions have been

          19       raised.  First of all, a suggestion that someone other

          20       than Mrs Cousins may have been involved in the

          21       reintroduction.  An assistant was mooted, but that

          22       ignores the evidence that I have just taken you to from

          23       Mrs Cousins' interview.  It was her job.  It ignores the

          24       statement of her assistant, which is in the bundle.

          25       I am not going to take you to it but she was clear that


           1       she only worked three mornings a week and had nothing

           2       whatsoever to do with that Wednesday evening

           3       reconciliation.

           4           Fujitsu logs were acquired by the prosecution in

           5       this case, to ensure that they could be clear as to the

           6       times of when transactions were done and importantly,

           7       the proposed plea document, about which I will come on

           8       to in a moment, expressly disavows any suggestion that

           9       it was Mrs Cousins' assistant.  So we would submit, one,

          10       that has nothing to do with Horizon, all of that

          11       material was available at the time.

          12           Again, in his grounds, Mr Moloney relies upon the

          13       collection sheets and you will have seen a selection of

          14       them in the bundles.  Perhaps we could just look at one

          15       by way of example.  It is a short point.  Let me just

          16       take the first one, which is behind tab 7, please.  This

          17       is an example of the collection sheet that was written

          18       up by the postman when he came on the Thursday morning

          19       to collect the various special items.  This is just one

          20       example and we will see here that a number of priority

          21       items and then other items, you will see -- it is rather

          22       faint, but it says giro vouchers and there is one

          23       reported here, 26 October 2005, purportedly collected at

          24       5.30.  The point is made: well isn't that evidence that

          25       the pouch was properly put together by Mrs Cousins and


           1       handed over to the policeman?

           2           Two points arise.  First of all, all of this was

           3       available at the time, but, secondly and more

           4       importantly, as is made clear in Lisa Allen's witness

           5       statement, again, which was available at the time, these

           6       collection sheets identified giro pouches but as the

           7       investigator made clear, that would mean green giros or

           8       giro deposits and withdrawals which is a wholly separate

           9       series of documents which has nothing to do with this

          10       case.

          11           So one cannot safely infer from these documents that

          12       the pouch was indeed handed over and subsequently

          13       stolen.  As I have already said, of course, it was never

          14       the Crown's case that they were stolen, but they just

          15       did not (Inaudible).

          16           So in our submission, all of that evidence

          17       demonstrates that this case fundamentally did not depend

          18       on Horizon reliability.  It is for that reason that we

          19       rely on Mrs Cousins' plea, because if it is not

          20       a Horizon case, it is therefore not an abuse, the

          21       questions of disclosure do not arise and nothing in the

          22       fresh evidence viciates pleas of guilty and it is

          23       important, in our submission, to remind ourselves what

          24       Mrs Cousins pleaded to.

          25           Can I just take you, please, to page 102, which is