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





           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


                                             2





           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.


                                             3





           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


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           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


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           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


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           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


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           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


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           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


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           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,


 10




           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


                                            11





           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


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           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


                                            13





           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:


                                            14





           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


                                            15





           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


                                            16





           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


                                            17





           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


                                            18





           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


                                            19





           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


                                            20





           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


                                            21





           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:


                                            22





           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


                                            23





           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


                                            24





           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


                                            25





           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.


                                            26





           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


                                            27





           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


                                            28





           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 ..."


                                            29





           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


                                            30





           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


                                            31





           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


                                            32





           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.


                                            33





           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,


                                            34





           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


                                            35





           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


                                            36





           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


                                            37





           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,


                                            38





           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


                                            39





           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


                                            40





           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.


                                            41





           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


                                            42





           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.


          24


          25


                                            43





           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


                                            44





           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


                                            45





           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


                                            46





           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


                                            47





           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.


                                            48





           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 --


                                            49





           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


                                            50






           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).


                                            51





           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


                                            52





           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


                                            53





           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.


                                            54





           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.


                                            55





           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


                                            56





           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


                                            57





           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


                                            58





           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


                                            59





           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


                                            60






           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.


                                            61





           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?


                                            62





           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


                                            63





           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?


                                            64





           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


                                            65





           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


                                            66





           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.


                                            67





           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


                                            68





           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.


                                            69





           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


                                            70




           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


                                            71





           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.


                                            72





           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


                                            73





           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


                                            74





           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.


                                            75





           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


                                            76





           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


                                            77





           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


                                            78





           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


                                            79





           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?


                                            80







           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


                                            81





           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.


                                            82





           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


                                            83





           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


                                            84





           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


                                            85





           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


                                            86





           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


                                            87





           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


                                            88





           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


                                            89





           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


                                            90




           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?


                                            91





           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


                                            92





           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


                                            93





           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


                                            94





           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


                                            95





           1       again a case summary which we provided to the court,


           2       where her proposed pleas are set out.  It is page 102,


           3       paragraph 32.


           4           Now, the first point, 29 April 2009, a proposed plea


           5       document was sent to the prosecution, so this is not


           6       door of the court stuff, this is something that has been


           7       carefully crafted by those representing Mrs Cousins.


           8           Pausing there, I note there is no argument that they


           9       had insufficient material, properly to advise her or


          10       that this wasn't anything other than a careful,


          11       considered plea.


          12           In italics it says "It is proposed that guilty pleas


          13       are entered on the following counts", and gives the


          14       value, and then, 2:


          15           "There are arguments in respect of counts 1, 3, 5,


          16       10, and 17, that at least one of the suspect


          17       transactions that comprise each count may have been


          18       a legitimate transaction."


          19           Then in respect of 7, "The defendant was on


          20       holiday."


          21           Pausing there, that is a carefully distinguished


          22       basis of plea proposed on Mrs Cousins part.


          23       Furthermore, she doesn't just enter those pleas on the


          24       indictment.  As we can see from paragraph 4, a schedule


          25       of matters to be taken into consideration, containing 23


                                            96





           1       further charges, have been prepared and those are


           2       accepted.  So in the circumstances of this case, as we


           3       would submit, a non-Horizon case, we pray in aid not


           4       just the pleas of guilty but the way in which that was


           5       crafted and the offences to be taken into consideration.


           6           Mention has been made in his speaking note and


           7       a moment ago, of the respondent accepting that some of


           8       the investigation was flawed.  That is perhaps putting


           9       it a little high.  What we say in our skeleton argument,


          10       I only have it (Inaudible), we can find it in due


          11       course, but it is page 89, paragraph 9 at the top.  We


          12       say this:


          13           "It is accepted that there were flaws in the


          14       original investigation and obvious examples are the


          15       working assumption that a giro in a particular sum was


          16       always attributed to the same customer."


          17           And then:


          18           "Importantly, however, the flaws in the


          19       investigation were known to the defence at the time of


          20       the original proceedings and they are not related to


          21       Horizon reliability."


          22           So that conception is to be understood properly.


          23   LORD JUSTICE HOLROYDE:  Sorry to interrupt, but why was it


          24       an overstatement to say that the prosecution admitted to


          25       some flaws in the investigation?  I appreciate the


                                            97





           1       limitation you put upon it but why do you say Mr Moloney


           2       was overstating it?


           3   MS JOHNSON:  I just wanted to make it clear, as we did in


           4       our document, that we accept that working assumption as


           5       on at least one occasion, potentially being proved to be


           6       possibly wrong but it is not Horizon dependent.


           7           So forgive me if I have done Mr Moloney


           8       a disservice, he is the last person I would wish to do


           9       disservice to, but I just simply want to put it into its


          10       proper context, my Lord.


          11   LORD JUSTICE HOLROYDE:  Okay.


          12   MS JOHNSON:  Can I conclude by saying this.  In our


          13       submission, the CCRC's reasons do not apply in this case


          14       in the way in which I have sought to explain to this


          15       court.  It is not a question of whether the data, the


          16       Horizon data was essential, which is how it is put in


          17       the grounds, it is whether Horizon reliability is


          18       essential.


          19           In our submission, it was not and, therefore, we


          20       submit that these convictions are not unsafe on either


          21       ground 1 or ground 2.


          22   LORD JUSTICE HOLROYDE:  Can I just ask you, Ms Johnson,


          23       about page 102.  We were invited to look at the basis of


          24       plea.


          25   MS JOHNSON:  Yes.


                                            98





           1   LORD JUSTICE HOLROYDE:  In fact, I don't think we have got


           2       a copy of the indictment in this file.


           3   MS JOHNSON:  No, I think my Lord is right, yes.


           4   LORD JUSTICE HOLROYDE:  I don't quite understand


           5       paragraph 2, but perhaps that is not important.


           6           What do you say about paragraph 3, and the reliance


           7       you place on (Inaudible)?


           8   MS JOHNSON:  In respect of the holiday?


           9   LORD JUSTICE HOLROYDE:  Yes.


          10   MS JOHNSON:  Well, my Lord, insofar as that is concerned,


          11       that relates to a single count, count 7.


          12           Now, I need to check this, and maybe I can come back


          13       to it but I think there was some information as to the


          14       relevant dates.  If I may be permitted, I would like to


          15       just check that, and perhaps Mr Moloney and I can submit


          16       something together in relation to that because I know he


          17       (Inaudible), but insofar as pattern is concerned, of


          18       course, it is described as a proposed basis of plea.  We


          19       know that she pleaded to these counts and the


          20       prosecution did not require a trial on the other counts.


          21       I don't want to be too technical but whether it is


          22       properly described as an accepted basis of plea, we do


          23       not know one way or the other.  So I take my Lord's


          24       point, that on the face of it, that may seem to disrupt


          25       the pattern.  If it does disrupt the pattern, it begs


                                            99





           1       the question, does that bring to bear Horizon


           2       reliability in any event?


           3           I think beyond that, subject to one point I want to


           4       check, I cannot go.


           5   MR JUSTICE PICKEN:  I don't know whether this provides any


           6       assistance, it probably doesn't, but divider 1, the


           7       provisional grounds of appeal at page 11, lists the


           8       various counts by date and nature of -- count 7, which


           9       is the relevant one, an overpaying rather than


          10       a reintroduction.  Does that help at all?  I am not sure


          11       it does but I just wonder.


          12   MS JOHNSON:  Well, thank you, my Lord, it was not the point


          13       I was struggling to remember.  Of course, earlier, I did


          14       describe the overpayment reintroductions as effectively


          15       two sides of the same coin, so beyond that, I don't want


          16       to fall into speculation, unlike others.


          17   MR JUSTICE PICKEN:  Thank you.


          18   LORD JUSTICE HOLROYDE:  Mr Moloney, any reply?


          19                Submissions in reply by MR MOLONEY


          20   MR MOLONEY:  Please, my Lord, only briefly.


          21           My Lord, we made clear at the outset of our


          22       submissions that unless this case was one where Horizon


          23       data was essential, then the safety of conviction cannot


          24       be effectively challenged.  In that context, where the


          25       respondent concedes, in cases where guilty pleas have


                                           100





           1       been entered in other of the cases that have been before


           2       my Lords and my Lady this week, then we say that the


           3       facts of the guilty pleas is only important if my Lords


           4       and my Lady decide that Horizon was not essential to


           5       this case, for all the reasons that my Lords and my Lady


           6       have heard.


           7           If my Lords and my Lady decide that Horizon wasn't


           8       essential, the guilty pleas don't matter because


           9       my Lords and my Lady will refuse the appeal.  If


          10       my Lords and my Lady decide that it is engaged, and


          11       Horizon was essential, then the guilty pleas make no


          12       difference either, we respectfully say.


          13           We do express a degree of surprise that it is now


          14       suggested without any evidence that this may not be


          15       an agreed basis of plea and that the Crown may not have


          16       conceded that, in fact, the appellant was away at the


          17       time.  That is something, when the respondent criticises


          18       the appellant for not calling evidence about the


          19       circumstances of the basis of plea and whether or not


          20       the defence counsel advised and so on and so on, to


          21       raise at this stage that it may not be agreed and they


          22       may not have conceded that -- my Lord?


          23   MR JUSTICE PICKEN:  Only this, the same document to your


          24       provisional grounds of appeal, page 13, paragraph 46,


          25       explains that various counts, including count 7, were


                                           101





           1       left to lie on the file.


           2   MR MOLONEY:  Yes.


           3   MR JUSTICE PICKEN:  Therefore, it must have been accepted.


           4   MR MOLONEY:  It must have been, my Lord.


           5           Perhaps there is a semantic distinction to be drawn


           6       between being not disputed and accepted, and therefore,


           7       there not being an issue of fact, necessarily, before


           8       the court but that really couldn't concern this court at


           9       this stage, in my respectful submission.


          10   MR JUSTICE PICKEN:  Just on count 7, I am so sorry to go on


          11       about this, paragraph 41, I notice, of your provisional


          12       grounds of appeal, explains that the Post Office


          13       indicted the defendant on count 7, notwithstanding the


          14       collection sheet on 26 October 2005 showed a giro


          15       (Inaudible) cash that the preceding week had been


          16       collected."


          17   MR MOLONEY:  Yes.


          18   MR JUSTICE PICKEN:  So it is possible, I suppose, that that


          19       was just collection rather than your client having to do


          20       anything on that given day.


          21   MR MOLONEY:  Indeed, my Lord, and we take issue with the


          22       point as well, that we are unable to prove now, that the


          23       contents of that pouch were green giros, as opposed to


          24       any other types of vouchers.  We respectfully say that


          25       evidence should be put before the court, that they were


                                           102





           1       not green giros, if this court is to place any weight on


           2       that.


           3           But we say that we haven't misunderstood this case,


           4       we haven't misunderstood the opening note, and we


           5       haven't overstated that which is conceded by the


           6       respondent in this case.


           7           We set it out very clearly in our speaking note


           8       which was given to the court this morning at


           9       paragraph 9(i):


          10           "There was no evidence which safely pointed to how


          11       or by whom the reintroductions had been made, nor even


          12       whether reintroductions had in fact occurred."


          13           This is the crucial part:


          14           "It is of note that reliance was placed by Lisa


          15       Allen on identical sums being recorded on the Horizon


          16       system.  Those sums were then linked to the individuals


          17       because of the sum involved.  There was nothing further


          18       to confirm that a sum had actually been introduced.


          19           "The basis of that analysis has been fundamentally


          20       and objectively undermined by the discovery examples of


          21       payments being established as being to a different


          22       person rather than a person assumed by Post Office


          23       Limited."


          24           And we have that within our skeleton argument, the


          25       example uncovered by Hal(?) & Co Solicitors, which is


                                           103





           1       set out therein.  We say the respondent now concedes


           2       that that underlying analysis was therefore erroneous.


           3       That is what we have said about that and it has to be


           4       conceded that that underlying analysis of whether or not


           5       it was the same person, because it was the same amount,


           6       is erroneous, has objectively been established as being


           7       erroneous, so that when my learned friend relies on --


           8       essentially, he says this is not simply an Horizon


           9       issue, this is something that involved the evidence of


          10       customers as to their routine, as to when they cashed


          11       these giros, then of course, that absolutely links into


          12       the fundamental analysis underlying this schedule which


          13       allows Ms Allen to attribute the amount to the person


          14       based on the statement.  And so, therefore, of course,


          15       the evidence of the customers that my learned friend


          16       relies on is fundamentally undermined by the concession


          17       that the respondent makes as to that process underlying


          18       the Lisa Allen schedule.


          19           Then to say this has nothing whatsoever to do with


          20       the issue before the court, we say is an overstatement,


          21       my Lord, of the true position.  And it is unrealistic.


          22       And simply to say that all the Horizon elements were


          23       mechanical in all these cases, in all the other cases


          24       that have been before the court this week, the operation


          25       of Horizon was mechanical, in the same way that it was


                                           104





           1       in this case.


           2           As far as the system is concerned, that Mrs Cousins


           3       used, Mr Henderson was very clear that the system


           4       employed by Mrs Cousins did not preclude the possibility


           5       of Horizon impacting on the figures which were produced


           6       in the schedule.


           7           My learned friend makes reference, and with some


           8       justification, to the phantom transaction log not


           9       applying at the time of this, but of course -- the


          10       phantom transaction bug rather, not applying at the time


          11       of this, but of course, that was the phantom transaction


          12       bug, not all phantom transaction bugs, if I can use


          13       that.  And it is essentially consistent with the


          14       approach taken by the respondent, which is to say that


          15       bug did not apply at that time, therefore it is not


          16       relevant to this case.


          17           What was obvious from the terms of the judgment of


          18       the Honourable Mr Justice Fraser was one could not


          19       exclude other bugs being operative during the course of


          20       the indictment period for each of the appellants that


          21       are now before the court.


          22           Ultimately, the expert evidence before this court


          23       from Mr Henderson was that there was nothing before this


          24       court to say that the court can rely on each and every


          25       one of those entries to say that they were actual


                                           105





           1       transactions.  And that is because of the inherent


           2       unreliability of the Horizon software, upon which this


           3       case was based, which is essentially epitomised in the


           4       schedule behind tab 49 which has been shown to be


           5       unreliable by the absence of Mrs Cousins from the


           6       jurisdiction in respect of one count, by the fact that


           7       it was shown in relation to another that it was


           8       a different person than the person attributed to that


           9       giro payment by Ms Allen and in other ways which were


          10       ultimately conceded within the basis of plea, which we


          11       say was accepted by the respondent in this case.


          12           Inevitably, we say as far as that guilty plea is


          13       concerned, my Lords and my Lady have seen what the


          14       respondents have described as a pragmatic approach in


          15       respect of their actions, taken by all of these


          16       appellants in this week, when faced with custodial


          17       sentences.  And this is no reason to distinguish the


          18       pragmatic approach taken by Mrs Cousins in this case


          19       from any of the other appellants before the court, if in


          20       fact, Horizon was an essential part of the prosecution.


          21           The fact that all of this evidence was available at


          22       the time, we respectfully say is of no import because


          23       what was not available at the time was a reliable


          24       evidence base, not just from the sub-postmasters which


          25       we say was a reliable evidence base in any event but


                                           106





           1       a reliable evidence base beyond that which shows that


           2       Horizon was inherently unreliable as an underpinning of


           3       each of these cases.


           4           We say that the analysis of the respondents ignores,


           5       when saying that this isn't relevant because it was


           6       available at the time, ignores the fact that Mrs Cousins


           7       was out of the country.  It relies on a Fujitsu


           8       printout, as Ms Johnson states, and Fujitsu printouts


           9       inevitably being produced by that very Horizon software,


          10       had potential to be unreliable and so in those


          11       circumstances, we respectfully say that, given the


          12       contents of tab 49 and their genesis, then this case was


          13       based on Horizon evidence, Horizon evidence was


          14       essential to this prosecution.


          15           Unless I can assist my Lords and my Lady further,


          16       those are my submissions.


          17   LORD JUSTICE HOLROYDE:  Thank you very much.


          18   MR MOLONEY:  Thank you, my Lord.


          19   LORD JUSTICE HOLROYDE:  Now, Mr Millington.


          20                   Submissions by Mr Millington


          21   MR MILLINGTON:  Appellant number 42, my Lords and my Lady,


          22       I am going to read head on, the principal contentions


          23       that have been made against this appeal succeeding but


          24       perhaps before I do, I didn't join in the submissions in


          25       relation to limb 2, as my Lords and my Lady know but


                                           107





           1       both limbs were pleaded in the grounds of appeal,


           2       paragraphs 58 and 59 refer, and if I fail to persuade


           3       the court in relation to limb 1, I want to preserve


           4       limb 2 as what might be described as a safety net.


           5           The respondents contend that the Post Office


           6       fulfilled its disclosure obligations in her case.  When


           7       the court comes to consider the merits of that


           8       contention, I invite the court to do so against


           9       a background of systematic failure by the Post Office to


          10       discharge its disclosure and investigative obligations


          11       over the course of somewhere between 10 and 20 years.


          12           Insofar as the Post Office may have given the


          13       slightest thought to its disclosure obligations, the


          14       evidence suggests that if it had done so, it would have


          15       deliberately disregarded them.


          16           It is said that this is not a Horizon case, whatever


          17       that may mean.  In this case, the Post Office served


          18       evidence from a Horizon witness, her name, Penelope


          19       Thomas and my Lords and my Lady have a copy of the full


          20       witness statement that she made.  She was served as


          21       a Horizon witness and no doubt the Post Office relied


          22       upon her evidence.  It is fanciful to suggest that this


          23       is not a Horizon case.  She was served as a Fujitsu


          24       security analyst in order to support the suggestion that


          25       there had been thefts or losses of stock.  And that


                                           108





           1       witness offered a guarantee of reliability for that


           2       data.


           3           Had the defendant, as she was then, maintained the


           4       not guilty plea, or pleas that had been offered, and


           5       decided to have her trial, and had one of the lines of


           6       defence to which the respondent had been alerted in the


           7       defence statement, namely that the losses may be


           8       attributable to computer error, had she pursued that


           9       particular line through her counsel, no doubt that would


          10       have been met by the evidence from this witness, who


          11       guaranteed the reliability of the data that had been


          12       produced in support of the prosecution case.


          13           The failure to provide the facts which suggested


          14       potential unreliability of the data is what was abusive.


          15       The serving of that statement, that witness statement,


          16       with that guarantee of reliability, called for


          17       disclosure, because otherwise the prosecution would


          18       potentially be relying upon a misrepresentation as to


          19       the true picture, or at least depriving the defendant of


          20       the opportunity to explore the question of the


          21       reliability of the data.  It was, in effect, withdrawing


          22       that line of defence altogether.


          23           That is the mischief that viciates the guilty plea


          24       that was tendered and the authority that I rely on is


          25       the authority in the case of Early, and in particular,


                                           109





           1       the judgment of Lord Justice Rose at page 295, in which,


           2       in that well known passage, he lays out the court's


           3       approach.  That passage deals specifically with those


           4       who have tendered pleas of guilty at an early stage.


           5           So what I say, essentially, in response to what


           6       I anticipate to be the respondent's contention, is of


           7       course, this was a Horizon case.  The Post Office made


           8       it a Horizon case by serving the evidence of the Horizon


           9       analyst.  They did so to support their case that there


          10       were thefts or losses.  But they did so in fundamental


          11       breach of their disclosure responsibilities by failing


          12       to declare anything at all of the history of


          13       unreliability of which they knew.  That is what makes it


          14       abusive and that is my response to the respondent's


          15       contention.


          16           I am going to just look at Penelope Thomas and her


          17       evidence in a little bit more detail, if I may.  Her


          18       statement runs to many pages and it is all about the


          19       Horizon system, which begins after the very first of


          20       those pages.  I have to say that, for the most part, it


          21       reads to me like techno babble.


          22   MR JUSTICE PICKEN:  Just to check, I was looking for the


          23       statement in the bundle but it is behind your grounds of


          24       appeal, divider 1, page 21?


          25   MR MILLINGTON:  Yes.


                                           110






           1   MR JUSTICE PICKEN:  Thank you.


           2   MR MILLINGTON:  It is not all together easy reading.  But


           3       the message in the statement is absolutely plain:


           4           "The integrity of data retrieved for audit purposes


           5       is guaranteed at all times from the point of gathering,


           6       storage and retrieval to subsequent dispatch to the


           7       requester."


           8           There is reference to the ARQ data on the next page


           9       of the statement, in paragraph 3 which is said to


          10       support the extracted data.  But for the purposes of the


          11       case brought against the appellant here, it doesn't


          12       appear that there was any such support for the data or


          13       the audit and I have seen no evidence anywhere in the


          14       papers concerning this appellant, that there was any


          15       investigation or access to the ARQ data.  So this appeal


          16       looks very much like most of the others.


          17   MR JUSTICE PICKEN:  But as I understand it, the likely


          18       reason for that is because a point was not raised by


          19       your client, questioning the reliability of Horizon.


          20   MR MILLINGTON:  Can I deal with that, my Lord, head on.


          21           The way that individual SPMs, managers of


          22       Post Offices, reacted to what may well have been


          23       shortfalls or supposed shortfalls in stock, in this


          24       particular instance, it is said to have been mainly


          25       cash, it varied.  It varied between individuals and the


                                           111





           1       court may be attracted to favour in some way, those who


           2       reacted by looking to the Post Office for help, phoning


           3       the helpline and that sort of thing and maybe that would


           4       be a more commendable way of reacting, but there are


           5       others, and many of them have had their appeals allowed


           6       in this court, who took a different route, and the route


           7       that they took was to protect themselves by


           8       falsification of accounts or cover up, or lies, but it


           9       is a sad and somewhat ironic fact that from the


          10       perspective of the individual, it didn't really matter


          11       whether you took the route of looking to the Post Office


          12       for help, or taking your own dishonest course of action


          13       to try and cover up shortfalls.  The conclusion was the


          14       same.  Conviction for a serious offence of dishonesty,


          15       and the likelihood of a sentence of imprisonment.


          16           The appellant that I represent took the route of


          17       cover up, false accounting and lies.


          18           But the ultimate outcome for her was no different


          19       than the outcome for those who looked to the Post Office


          20       for help and support.


          21   MRS JUSTICE FARBEY:  Can I ask a question about -- I think


          22       page 23 (Inaudible), page 65, which is going back to


          23       Penelope Thomas's statements and the passage that you


          24       cited -- I think page 23 -- and you read out the


          25       integrity of data (inaudible) purposes guaranteed at all


                                           112





           1       times.  You may not be the right person to ask about


           2       this but I had understood it to mean the integrity of


           3       those agreeing(?) for audit purposes is guaranteed at


           4       all times from the point of gathering, et cetera,


           5       et cetera, and that that related to the reliability of


           6       the procedures recorded on (Inaudible) on that page.  So


           7       we see, for instance, the first paragraph, final


           8       sentence:


           9           "Records of all transactions ...(Reading to the


          10       words)... archive media."


          11           So I had thought that, by the time you get down to


          12       the paragraph you cited, Ms Thomas had been talking


          13       about all the archive media.  I am not going to try and


          14       explain it, but I did read that as meaning the integrity


          15       of data retrieval or the integrity of Horizon data is


          16       guaranteed for all purposes.


          17   MR MILLINGTON:  I wouldn't begin, my Lady, to suggest that


          18       you haven't read it in the correct way.  My point is


          19       that the message that goes out from this statement,


          20       perhaps a little ambiguously, appears to be a message of


          21       complete reliability of this system.  Precisely what was


          22       meant by that, I would respectfully suggest, may be


          23       subject to interpretation and I am certainly not the


          24       person to ask what it means.  But if, as a rather idiot


          25       lawyer, I happened upon those words in a statement and


                                           113





           1       I was about to advise my client about her plea, who was


           2       suggesting there may be some dreadful error in the


           3       accounting system, I don't think I would be very


           4       confident in those instructions and I might be inclined


           5       to say to her in robust terms: you can forget that,


           6       madam.


           7   MR JUSTICE PICKEN:  Just on my Lady's point, if you look at


           8       paragraph 26 which is the last paragraph of the


           9       statement, it reads to me at least, as being what might


          10       be described as a standard type of statement required


          11       when what is sought to be done is reliance placed on


          12       a computer system.


          13   MR MILLINGTON:  Yes.  This woman was faced with an audit at


          14       the branch.  This seems to give the gold standard seal


          15       of approval to what had taken place.  There is not


          16       a hint in any of this that anyone might be a little bit


          17       more concerned about the question of audit.


          18   MR JUSTICE PICKEN:  But in fairness, the previous paragraph


          19       also talks about there being no reason to believe it has


          20       been improperly used, the system.


          21   MR MILLINGTON:  Yes, it is of some importance, I would


          22       suggest, that the defence statement put the respondent


          23       on notice but it may well be suggested by the defendant


          24       that there's is some sort of computer error here.  And


          25       it may be the court will think there is no reason to


                                           114





           1       think that she should have been shut out from exploring


           2       that possibility through her counsel.  But I rather


           3       suspect had she done so, the line that would have been


           4       taken was this was an excellent and totally reliable


           5       system of accounting.


           6   MR JUSTICE PICKEN:  You said the defence statement, that is


           7       pretty much at the back of the bundle.


           8   MR MILLINGTON:  Paragraph 125 is the one that deals with


           9       this.


          10   MR JUSTICE PICKEN:  Quite.


          11   MR MILLINGTON:  My Lord, it is a fair point that the


          12       respondent makes.  The focus of the defence statement


          13       was upon various aspects, some of which she has


          14       subsequently resiled from, such as the denial that she


          15       was responsible for the creation of the transfers into


          16       the GG stock account, so the focus, perhaps, of the case


          17       was not going to be so much on that aspect but that


          18       doesn't mean that it relieves the prosecution from their


          19       obligations -- as were called for here, I respectfully


          20       submit -- to tell her that maybe this particular system


          21       is not quite as reliable as you may think.


          22           So that is the force of the Penelope Thomas witness


          23       statement, and I would respectfully submit that it is


          24       reasonable for me to submit that the message to be taken


          25       from this as a whole is that this is a reliable system,


                                           115





           1       Horizon.  That was always the position of the


           2       Post Office, because if I go back and rejoin my


           3       submissions document, which I think is what we call the


           4       speaking document, which is not an expression, I'm


           5       afraid, I have ever heard of before, but then I come


           6       from a long way away and we tend to be a bit less


           7       familiar with the latest up-to date developments.


           8   LORD JUSTICE HOLROYDE:  The distant midlands?


           9   MR MILLINGTON:  Well, I'm afraid so.  We have not been hit,


          10       fortunately, yet, by the speaking document and I can


          11       imagine one of my colleagues up there might want to say


          12       in response "We have the oral tradition".


          13           But that is by the by.


          14           The first bit of bad press for the Post Office and


          15       its IT system appeared in a publication called


          16       a computer weekly, in May of 2009.  I picked that up


          17       from the CCRC statement of reasons.  And I Googled it


          18       because I was interested to see what the response of the


          19       Post Office had been to that publication and not really


          20       to my surprise, I read that the response was that


          21       Horizon was an extremely robust system.  Because that


          22       was their attitude towards their system, things carried


          23       on much the same as before.  And there were more and


          24       more prosecutions, one has to say, sadly, more and more


          25       misery was caused and there was more and more disregard


                                           116





           1       for disclosure obligations and it is within all of that


           2       that Ms Hussain appears at the West Bromwich branch


           3       in November, about six months later.


           4           At that time it was said that she had stolen mostly


           5       cash to the tune of just over £100,000.  The respondents


           6       say that the evidence that they were able to rely on


           7       showed that she had behaved deceitfully on a number of


           8       occasions and I concede that she did.  They say that she


           9       told lies and I concede that she did.  She transferred


          10       mythical amounts of stock into an account that had


          11       nothing in it, she says in order to falsely account for


          12       the apparent very large shortfall.


          13           But what happened to all of this cash?  Just over


          14       £100,000 apparently, although she was allowed to plead


          15       guilty to a lesser amount.  All of this accumulated in


          16       the course of about three or four months.  And


          17       in October time, and I think the people in authority


          18       arrived to do the audit in early November, I think


          19       13 November, but in October time, she was issuing some


          20       cheques.  She issued one for just over £8,000, which was


          21       dishonoured through lack of funds.  And she issued


          22       another for £1,437.40 in favour of the firm of


          23       solicitors who were acting for the sub-postmistress from


          24       whom she was attempting to negotiate the purchase of the


          25       leasehold interest in the branch.  But that too was


                                           117





           1       dishonoured through lack of funds and with all due


           2       respect to the submissions made on behalf of the


           3       respondent, that does not entirely support the


           4       proposition that this woman was flush with lots of cash.


           5       When she was interviewed by a probation officer after


           6       the event, she sought to recall a story that all of this


           7       cash had gone to fund medical expenses for her mother in


           8       Pakistan, which, when investigated, was discovered to be


           9       a pack of lies but it was offered in order to curry


          10       sympathy with the sentencing judge.


          11           But she is not the only one who told a similar lie


          12       to explain what had happened to the money that had been


          13       stolen.  One appellant, entirely meritorious in the view


          14       of the respondents, Margery Williams, did very much the


          15       same thing and in her appeal, I believe I heard over the


          16       CVP platform that that lady had told the lie that the


          17       money had been used to pay off a loan.


          18           One of the submissions that was made by Ms O'Reilly


          19       appealed to me, and I would like to adopt it.  It was


          20       this.  It was the effect of the pressure that was put


          21       upon the appellant as a result of the failures of


          22       disclosure and the failures to engage in the proper


          23       investigation.  And the pressure arises in this way, as


          24       I understand it.  If the foundation of the case against


          25       you is that we have a completely reliable IT system


                                           118





           1       which can demonstrate that there is a loss of £100,000


           2       in a period of three months in 2009, unless you can come


           3       up with something else, you are sunk.


           4           So defendants and, later as they were to become,


           5       appellants, offered alternative explanations or pleaded


           6       guilty to false accounting or theft because,


           7       essentially, that was what they were left with, when the


           8       reality was there was nothing to explain.  But try


           9       telling that to the jury.


          10           That may well be what happened here, in the case of


          11       this appellant.  Who can say to be sure?  But what I do


          12       say is, it doesn't make this conviction any safer than


          13       any of the others.


          14           So the essence of how I want to finish is all of the


          15       things that the respondents rely on by way of


          16       circumstantial evidence making this strong case, don't


          17       in fact make this particular conviction any more safe


          18       than any of the others.  And the fact that the


          19       Post Office didn't think it important to alert anyone


          20       they had prosecuted to the reality of the problems that


          21       had been encountered with their gold standard,


          22       infallible system, called Legacy Horizon, in my case, is


          23       what makes this conviction unsafe because it is so


          24       abusive.


          25           They called it Legacy Horizon, but I suspect that it


                                           119





           1       is for the future to consider what sort of legacy has


           2       been left by this IT system.


           3   LORD JUSTICE HOLROYDE:  Thank you.  Yes, Mr Altman.


           4                     Submissions by MR ALTMAN


           5   MR ALTMAN:  There was a strong and compelling circumstantial


           6       basis accepted against this appellant, as evidenced by


           7       all the facts in combination and that case was supported


           8       by her unequivocal plea of guilty and it has been


           9       further supported, albeit not by evidence, but by


          10       Mr Millington's acceptance on her behalf that she not


          11       only created the phantom stock unit, the GG stock unit,


          12       but also made the five transfers from two other stock


          13       units into it, between 16 October 2009 and


          14       5 November 2009, over a period of about three weeks.


          15           Our contention in this case is that there is no


          16       abuse of process as argued by the CCRC and not even some


          17       non-specific limb 2 safety matters, because this was not


          18       a case in which reliability of Horizon data was


          19       essential.


          20           The mere fact that Penny Thomas was asked to and did


          21       serve exhibits by way of ARQ data, no more makes this


          22       case a Horizon reliability one than does the absence of


          23       the service of ARQ data make the case a Horizon


          24       reliability one or not.  In other words, it is


          25       completely neutral, it makes no difference.  It is


                                           120





           1       an irony that the fact that in that case, ARQ data was


           2       served, is being used to suggest that her case is


           3       entirely safe.  The audit data which was being served


           4       was the ARQ data about which Mr Justice Fraser had much


           5       to say -- it may not have been the unfiltered best


           6       evidence but it was clearly ARQ data and the witness


           7       statements produce -- the two exhibits, PT01 and PT02


           8       which are clearly two sets of data, and then must have


           9       been served as part of the case.


          10           I anticipate because that is why Mr Millington


          11       relies on it.


          12           So her case now is that she created the GG stock


          13       unit and she made all five transfers, although, as we


          14       know, denying responsibility for doing so in her defence


          15       statement, that has subsequently changed.


          16           The Horizon record, and I am going to invite the


          17       court to look at what the actual Horizon record means in


          18       this case, is to be found behind divider 13 at page 92.


          19           There you will see -- I should have said -- and


          20       there you will see where the paper clip is, there you


          21       will see:


          22           "16 October 2009, at 8.35 in the morning, SU [stock


          23       unit] created, individual SU GG created".


          24           That is the record of the creation of the GG stock


          25       unit.  Is Horizon reliable about that?  Yes.  Why?


                                           121





           1       Because the appellant admits she did it.


           2           If we turn, please, to tab 17, there we will find


           3       another exhibit which comes from Horizon.  What that


           4       shows is, in the top half of the document, because the


           5       document is divided in half, we have the transfers that


           6       she made from the BB stock unit to the phantom GG unit,


           7       respectively on 16 October and the 17th but you will see


           8       the figures in the right-hand side, £25,500, £48,500 and


           9       it's notable that the larger of those figures, she used


          10       Ruhila Mahmood(?), one of the assistants within the


          11       branch, her user ID, to make the larger of all of these


          12       transfers.


          13           They totaled 74,000 from the BB to the GG unit.


          14       Then you have three transfers below, the first of which


          15       happens to be the 5 November one of £1,500, and then you


          16       have the -- it is hard to read but the next date should


          17       be 20 October, and the one beneath that, 29 October, of


          18       6,000 and another £1,500 respectively.  Totaling £9,000


          19       made from the BC stock unit to the GG phantom stock


          20       unit, totaling, I think, £18,000.


          21   MR JUSTICE PICKEN:  What did you say you think the first of


          22       those dates is?


          23   MR ALTMAN:  When you say the first, do you mean the second?


          24   MR JUSTICE PICKEN:  The second.


          25   MR ALTMAN:  It is 5 November.


                                           122





           1   MR JUSTICE PICKEN:  Just in reverse order?


           2   MR ALTMAN:  Yes.


           3           So those are the records, and we know that those


           4       Horizon records are entirely accurate because the


           5       appellant accepts creating the unit and making the


           6       transfers.  They were made in the space of three weeks,


           7       between the dates I have given.  The appellant's case


           8       before she pleaded guilty appears from the defence


           9       statement to have been an acceptance that the GG stock


          10       unit had been created, albeit not by her, and that the


          11       five transfers had been made, albeit not by her.  And


          12       the defence statement, we don't need to look at it, for


          13       now at least, but it is behind tab 47 at page 203.


          14           I tell a lie, perhaps we ought to -- perhaps we


          15       could go behind 37, because there is another passage


          16       which I want to take the court to.  It is on page 205,


          17       out on a page at the back bundle.  While you have it


          18       open, let's just look.  1.3 on page 205, the defendant


          19       further denies she was responsible for creating the


          20       stock in this, denies that she made the five stock unit


          21       transfers in the sum of 83,000, and further denies that


          22       she was responsible for the stock unit transfer using


          23       Ruhila Mahmood's user ID and further denies that she


          24       told Ruhila Mahmood that she had undertaken this


          25       transaction.


                                           123





           1           Then 1.5:


           2           "The defendant maintains that any deficits may be


           3       due to accounting errors or if other counter staff may


           4       be responsible for these losses/thefts."


           5           Because she is not giving evidence before the court,


           6       I am not criticising her for it but I am stating the


           7       fact, we do not know what she meant in her defence


           8       statement but if the suggestion is that the assertion


           9       that any deficits might be due to accounting errors was


          10       an assertion that the appellant didn't accept what the


          11       Horizon records show, then that is clearly no longer the


          12       case.


          13           That is because the admissions now made on her


          14       behalf provide ample evidence, not only to support but


          15       also to confirm the evidence from the Horizon record,


          16       showing both that the stock unit was her doing, using


          17       her user ID, and that she was responsible for all five


          18       transfers made into that stock unit.  What that means is


          19       that the transfers were not accounting errors.


          20           The CCRC's findings of abuse of process or its


          21       reasons, is where, in the context of the evidence in the


          22       case in question, the reliability of Horizon data was


          23       essential to the prosecution and conviction of the


          24       Post Office applicant.  And this is, as the court well


          25       knows, the fundamental premise of the CCRC's reasons and


                                           124





           1       in determining whether the appellant's conviction was


           2       unsafe, as an abuse of process, in light of that basic


           3       premise.  Her belated admission in her grounds and


           4       through her counsel, to having previously advanced


           5       a false case about her responsibility for creating units


           6       and making the transfers, is, we submit, highly


           7       material.


           8           The CCRC's reasons on non-disclosure and poor


           9       investigation are necessarily contingent on the


          10       reliability of Horizon data.  That is because the


          11       failure of disclosure on the full and accurate position


          12       on Horizon was not material, where the reliability of


          13       Horizon data was not essential in the context of the


          14       evidence in the case.  And we submit it wasn't here.


          15           We also note that what Mr Millington adds, if not in


          16       the speaking document before the court, in other


          17       submissions, it is asserted that she, the appellant,


          18       deserves the same protection against what Mr Millington


          19       calls lamentable failures of disclosure, as a defendant


          20       who fought the case and lost.  We respectfully disagree.


          21           It was immaterial because it wasn't an Horizon case


          22       and, therefore, there was no requirement under the 1996


          23       Act to disclose those issues.  Her plea, as supported


          24       now by her acceptance of what she did, shows those


          25       records to have been reliable.


                                           125





           1           Now, she made a witness statement and the witness


           2       statement is before the court, although it is not


           3       advanced as fresh evidence, but I am going to suggest


           4       a look at what she had to say de bene esse, as it were,


           5       about why she pleaded as she did.  Mr Millington,


           6       himself, in his speaking note, advances another reason


           7       and that reason being in his paragraph 4, is that she


           8       pleaded guilty on the erroneous assumption that full and


           9       proper disclosure had been made concerning the


          10       reliability and legitimacy of Legacy Horizon and the


          11       data it created.  In that statement, if the court wants


          12       to have it before them, or simply to remind the court


          13       where it will be found, it is divider 2, at page 39.,


          14       about six paragraphs down, on page 39, line 32.


          15       8 November:


          16           "My solicitor at the time said the case was very


          17       strong against me, as my user name and password was used


          18       daily and that the best thing to do was to plead


          19       guilty."


          20           Then, on the opposite page, third paragraph down:


          21           "My lawyer said, if I pleaded guilty, the case


          22       against my brother would be dropped.  I felt under


          23       pressure to plead, as I was older than my brother.  The


          24       Post Office dropped the case against my brother and


          25       discontinued the case as soon as I pleaded guilty."


                                           126





           1           Then the next paragraph:


           2           "I pleaded guilty because the Horizon system was


           3       against me.  I couldn't prove my innocence, as my lawyer


           4       said the computer doesn't lie.  I felt I had no choice


           5       but to plead guilty, even though I was innocent and did


           6       nothing wrong."


           7           Well, in relation to those points, first of all, her


           8       solicitor was right, because she did use her user ID and


           9       password to make the transfers.  So when the solicitor


          10       told her it was the right thing to do, she clearly


          11       accepted the advice, knowing full well that she was


          12       responsible for the five transfers.


          13           Second, the solicitor said the case would be dropped


          14       against her brother.  It is not suggested that the


          15       Post Office put her under any pressure, the pressure was


          16       placed upon her, perhaps, in terms of what she


          17       understood would happen but the fact is, the case was


          18       dropped against her brother and, thirdly, when the


          19       solicitor told her that the computer didn't lie, in this


          20       case it was right, because the Horizon record didn't


          21       lie.  It showed that she had created the GG unit and


          22       that she had made those five transfers.


          23           Can I now go into just some of the facts, and I am


          24       afraid some of it is a little technical, so I will help


          25       as much as I can.  But her case now, and this is really


                                           127





           1       what the dispute descends to, is did she do as she did


           2       to cover up a shortfall equating to £33,000, or did she


           3       do it because she was stealing the money, wherever it


           4       (Inaudible)?


           5           First of all, the one point that was made by


           6       Mr Millington in his grounds was that she was liable to


           7       Post Office under the sub-postmaster contract.  She


           8       wasn't.  She was a manager.  Mrs Dubberth(?) was the


           9       sub-postmaster and it was from Mrs Dubberth from whom


          10       she was seeking to buy the leasehold of the branch


          11       premises.


          12           What we submit is that the facts, on the basis of


          13       which she pleaded guilty to theft, provided a strong


          14       circumstantial case of a woman who created a


          15       sophisticated scheme to take cash from the branch, the


          16       premises of which she was in the process of buying at


          17       the same time as her brother, albeit unsuccessfully, was


          18       buying a home.  During the audit on 13 November of 2009,


          19       the appellant sought to explain the shortfall by saying


          20       that she had lost a cheque, not that she had suffered


          21       a Horizon generated shortfall.  It was for that reason


          22       she wrote a cheque, not for the first time, on a work


          23       colleague's cheque book for £85,000, having told the


          24       colleague that a customer had come in to purchase


          25       an £85,000 broke bond but that she had been unable to


                                           128





           1       put the customer's cheque through because she had lost


           2       the cheque.  The work colleague is Manshinder Kaur(?),


           3       whose statement is behind divider 21.


           4           The cheque, written out by the appellant, was later


           5       found during the course of the audit.  And I am going to


           6       invite the court to look at this.  It is behind


           7       divider 9, tab 9, and you will see it is a cheque made


           8       out to Post Office Limited in the sum of £85,000 but it


           9       is on the account of a Mr B S Hayer(?), who was the


          10       husband of Manshinder Kaur, the work colleague.  The


          11       date of the cheque appears to be 2 August 09 and it


          12       appears as though the 9 in September has been changed to


          13       an 8.  Page 79.


          14   LORD JUSTICE HOLROYDE:  Sorry, what appears?


          15   MR ALTMAN:  Page 79, my Lord, the cheque, you will see the


          16       date.


          17   LORD JUSTICE HOLROYDE:  Yes.


          18   MR ALTMAN:  It appears, potentially, to have been


          19       2 September 09 might have been changed to 2 August 09.


          20   MR JUSTICE PICKEN:  The date 8, with the 8 of the 85?


          21   MR ALTMAN:  Yes, I am talking about the date.  Whether it


          22       was August or September, perhaps, whether that matters,


          23       I will come to in a moment.


          24           Attached to that cheque, when the auditors were in


          25       the branch on 13 November, was the document behind


                                           129





           1       tab 10.


           2           You will see on the first page, page 80:


           3           "To put in system, sent application, growth bond."


           4           And then over the page:


           5           "Cheque to put in system, growth bond."


           6           Later in December, the next month, the appellant


           7       admitted to Ruhila Mahmood, another work colleague,


           8       responsibility for making the transaction on 17 October,


           9       the largest one which I was inviting the court's


          10       attention to earlier, the one for £48,500, telling her


          11       colleague that she had done so because she had lost the


          12       cheque and that if she had not transferred the funds,


          13       there would have been a shortage in the accounts.


          14           That is a very different account to the unexplained


          15       shortfall case now apparently advanced on her behalf.


          16       Whether or not that is true, we suggest this is


          17       an explained shortfall case; not an unexplained one but


          18       an explained one.  The appellant's case now is that she


          19       created the phantom stock unit to cover up a shortfall


          20       or shortfalls.  It is notable that the defence statement


          21       never included the assertion that she was covering for


          22       any unexplained shortfall, however caused, despite


          23       asserting that accounting errors might have caused the


          24       deficits.  Notwithstanding that the separate count of


          25       money laundering, the £1,500 against the appellant was


                                           130





           1       ordered to lie on the file, in considering the


           2       submission that Mr Millington makes in one of the


           3       documents, that there was no corroborative or direct


           4       evidence that she stole the money, and that there was no


           5       proof of actual loss, as opposed to an Horizon generated


           6       shortage, the evidence surrounding the payment of £1,500


           7       made on 29 October, at 1726, 5.26, from BC stock unit to


           8       the phantom stock unit under her user identity, is, we


           9       submit, noteworthy.


          10   LORD JUSTICE HOLROYDE:  Well, forgive me if this is not


          11       another good point to interrupt but I have been meaning


          12       to ask this at some stage and it is perhaps now


          13       highlighted.  The documents you took us to at page 96,


          14       the Horizon record of the transfers, these are transfers


          15       of balances from one account to another.


          16   MR ALTMAN:  Yes.


          17   LORD JUSTICE HOLROYDE:  Did the Horizon records also show


          18       cash going out of the GG --


          19   MR ALTMAN:  No, that is the whole point of the phantom unit.


          20       It doesn't exist.  The person who makes the stock unit


          21       makes it so that it doesn't exist, as it were,


          22       officially on the system, in the sense that the person


          23       who created the phantom stock unit is the person who


          24       knows about it.  There can be two reasons why a phantom


          25       stock unit is created.  One could be to cover up


                                           131





           1       unexplained shortfalls because if they don't exist in


           2       the system, the money just disappears into the ether but


           3       the other alternative explanation is because the money


           4       is being siphoned off without anybody knowing about it


           5       and that is how phantom stock unit words.


           6   MR JUSTICE PICKEN:  Sorry, so the first scenario is, as it


           7       were, to balance the books?


           8   MR ALTMAN:  Yes.  What the phantom stock unit doesn't do is


           9       it doesn't exist within the branch accounts.  In other


          10       words, you will not see it.  In other words, if there is


          11       a shortfall, you can hide that shortfall in a phantom


          12       account that is not seen, in a sort of overarching


          13       sense.  But the real point of a phantom stock unit, the


          14       important point, is it can serve one of two purposes.


          15       It can either be used to cover a shortfall, which is the


          16       appellant's case before the court or it can be used to


          17       cover the theft.


          18   MR JUSTICE PICKEN:  So it can either be -- the former I


          19       understand; the second is the ability to access the


          20       cash?


          21   MR ALTMAN:  Yes, so the whole point is it is taking time to


          22       conceal.


          23   LORD JUSTICE HOLROYDE:  Sorry to (Inaudible) but when you


          24       say it doesn't show up in the accounts, one glance at


          25       page 96 it shows it has gone from BB to GG.


                                           132





           1   MR ALTMAN:  My Lord, this is the record that was created


           2       during the audit.


           3   LORD JUSTICE HOLROYDE:  All right, (Inaudible).


           4   MR ALTMAN:  True, but people will create phantom accounts in


           5       the hope that they are discovered.  Sometimes they are


           6       and this is a situation in which it was, but unless


           7       an audit goes through a branch and in this case is


           8       discovered, it will not be discovered.  I am not


           9       pretending for a second that it is foolproof but some


          10       postmasters have done this in the past.  I am not saying


          11       it is novel.  The real point is what its possible use


          12       is.


          13   MR JUSTICE PICKEN:  At first blush, you are saying the


          14       phantom thing will make it not discoverable, it has to


          15       be looked for by --


          16   MR ALTMAN:  It has to be looked for.  Yes, exactly.


          17           That is why you have the other record I took you to,


          18       because then, obviously, the auditors went in on


          19       13 November, looked back and found the actual record


          20       showing its creation.


          21           So much so, my Lord, in fact, if you look at the


          22       statement -- I don't invite you to now, but the


          23       sub-postmistress herself, when the auditors went in and


          24       said "I didn't even know we had a GG stock unit", as did


          25       some of the assistants within the branch, they didn't


                                           133





           1       even know it existed.


           2   LORD JUSTICE HOLROYDE:  I understand anyone doing an audit,


           3       seeing £28,500 going out, might be expected to follow


           4       through --


           5   MR ALTMAN:  And also, you heard the criticism yesterday that


           6       routine audits were not done.  You also heard criticism


           7       that audits were once in a blue moon, as it were.


           8           That probably was the advantage of doing something


           9       like this, in the hope of getting away with it for as


          10       long as one had to.


          11   LORD JUSTICE HOLROYDE:  Thank you.


          12   MR ALTMAN:  So coming back to the point, you will remember,


          13       as your Lordship may still have open page 96, the very


          14       last of those transactions from BC to GG stock units,


          15       which happens to be on 29 October, you will see was for


          16       £1,500.  It took place, you can just about make out the


          17       time, 17.26, and banking evidence from the brother's


          18       bank account Shahmir(?) Hussain, who also worked in the


          19       branch, shows that on the very next day, the 30th,


          20       £1,500 in cash was deposited into his account at the


          21       Long Acre branch of Lloyds TSB in Birmingham.  And if we


          22       look, please, behind tab 16, there you will see the


          23       printout showing on the 30th, that deposit of £1,500 in


          24       cash going into the brother's account.


          25           In her defence statement, to be fair, the appellant


                                           134





           1       denied giving the cash to the brother.


           2           There is the other issue of the growth bond because


           3       as I heard from (Inaudible) already invited attention


           4       to, on the day of the audit, her reason for inviting her


           5       work colleague to allow her to write a cheque for


           6       £85,000 on her cheque book in the cousin's name, was to


           7       cover a lost cheque in relation to a growth bond, as we


           8       have just seen.  What is known about a growth bond?  On


           9       13 August, of that same year, so a couple of months


          10       before, the appellant conducted the growth bond


          11       transaction before reversing it out of the system.  What


          12       that means is cancelling it.  She cancelled it and


          13       I hope the court will have seen the case summary.  All


          14       of this is set out in the case summary, but she


          15       cancelled the transaction two hours and 10 minutes after


          16       it was made.  The next day, 14 August, she entered the


          17       cheque, the customer's cheque, for a little over £50,000


          18       into Horizon and cash to the same value was shown as


          19       paid out.


          20           So pausing there, the customer goes into the branch


          21       on the 13th, she wants to buy a growth bond.  She


          22       presents the cheque for the growth bond that she wants.


          23       The record shows that the transaction was paid but it is


          24       then reversed, in other words, cancelled within a couple


          25       of hours, the customer having left, and the very next


                                           135





           1       day, rather than the cheque being held on to, it is


           2       actually inputted into the system and cash to the same


           3       value is shown as being paid out.


           4           Entering the cheque was a deliberate physical,


           5       manual act with no explanation.  The effect of entering


           6       the cheque on to the system is to increase the stock


           7       value.  The stock is the cheque in this instance, whose


           8       value is about £50,000, and so Horizon shows that the


           9       stock value represented by the cheque has increased by


          10       £50,000.  Because Horizon, working on the double entry


          11       bookkeeping system, thinks the cash to the same value


          12       has therefore been paid out, the cash value decreases by


          13       the same amount, £50,000, in the account.


          14           If the appellant did not remove that cash when she


          15       came to balance Horizon, her accounts would show


          16       a £50,000 surplus that would require explanation.


          17           It would need to be declared as what is known as


          18       a positive discrepancy.


          19           However, the records show, and this is in the case


          20       summary at, I think paragraph 18 and onwards, the


          21       records show there was no cash surplus in the account at


          22       the relevant time.  If that is right, and it appears to


          23       be right because the court may remember going forwards


          24       to 6 October, when the appellant chatted to


          25       a Mr Fitzgerald at the Bank of Ireland, when the


                                           136





           1       customer returned to the branch, wanting to know where


           2       her growth bond was, the appellant agreed that it made


           3       her account go up and she said, therefore, the money was


           4       in the safe all of that time -- in other words, the cash


           5       had been removed, so again, the record was correct.


           6       There was no surplus because the cash was removed.  What


           7       that means is, from 14 August onwards, she removed the


           8       customer's cash, represented by that cheque, and


           9       retained it without more for that period of time, until


          10       the customer herself came in on 6 October, an elderly


          11       lady, because she hadn't received her growth bond.


          12           In the meantime, the appellant did nothing to


          13       rectify the position.


          14           Why did the customer know that something was wrong?


          15       That was because the cheque which had been put through


          16       the system on the 14th had been debited from the


          17       customer's account on the 16th.  She decided in due


          18       time, having spoken to the Bank of Ireland which


          19       facilitates growth bonds, or did at the time, she


          20       decided to confront the appellant and this she did on


          21       6 October of that year.


          22   MR JUSTICE PICKEN:  In very simple terms, the cheque was


          23       debited so the customer knew -- we know the names, knew


          24       that the money had left her and the question is, where


          25       it then went and you --


                                           137





           1   MR ALTMAN:  The money left the customer's account,


           2       16 August.  For whatever reason, it took time for her to


           3       realise that she hadn't got the growth bond and in due


           4       course she made contact with the Bank of Ireland which


           5       facilitated the growth bond systems and that ended up


           6       with the customer going back to the branch on 6 October


           7       to deal with the appellant.  At the same time, having


           8       made an arrangement for the Bank of Ireland,


           9       Mr Fitzgerald in Kilkenny, to speak to the appellant and


          10       what we have is a transcript of that call while the


          11       customer was standing there, which you will find behind


          12       tab 11.  You will see the date is 6 October but we shall


          13       start, perhaps, on the second page, page 83, towards the


          14       bottom. NH is the appellant; PF, Mr Fitzgerald, from the


          15       bank.


          16           Now, she says, the lady --


          17   MR JUSTICE PICKEN:  Sorry, this is actually some Post Office


          18       investigator?


          19   MR ALTMAN:  No.  No.  What happened was --


          20   MR JUSTICE PICKEN:  Oh I see, sorry, I am misunderstanding.


          21       Do you see the italicised bit at the beginning "This is


          22       how he extracted the transcript ..."


          23           Sorry, my fault.


          24   MR ALTMAN:  Yes, transcription of the recording.


          25   MR JUSTICE PICKEN:  My fault.


                                           138





           1   MR ALTMAN:  On the bottom of page 83, towards the bottom,


           2       half a dozen lines up:


           3           "Now the lady, obviously what happened was when she


           4       opened the growth bond, she provided a cheque for


           5       £50,000."


           6           This is the appellant speaking:


           7           "Now when the lady actually opened the growth bond,


           8       we opened it for her, we gave her a receipt to let


           9       [something inaudible] find.  I actually remember this


          10       lady because we'd done a lot of growth bonds.  Still


          11       remember it specific because it was a large amount."


          12           And so she accepts that she felt that she dealt with


          13       the customer:


          14           "Now what happened was, when she actually opened the


          15       account, that was fine, she had sent in her form but she


          16       had done it wrong.  So, obviously, I took her permission


          17       and said: shall I fill it in for you?  And she said:


          18       yeah, that is fine.  So I filled in the form for the


          19       lady, who processed this and gave her a receipt and


          20       said: you have just got to wait for the Post Office to


          21       actually send you whatever they had to send and that


          22       was -- "


          23           It was unclear exactly what the appellant was


          24       referring to.  It clearly wasn't going to be a growth


          25       bond.  And then when we look at the next page, page 85


                                           139





           1       at the top:


           2           "So what I did was on that, what do you call it, on


           3       that system, I reversed the application."


           4           I think the reason she gave was because she claims


           5       that the form had been incorrectly completed:


           6           "So what I did was I reversed the application,


           7       I read the application, and what happened was, because


           8       I was on my stock unit BC and the stock unit that this


           9       was done on was FF, I have got all the reversal slips we


          10       put on the -- come there, we actually put everything on


          11       there to say but when the lady comes back, we have got


          12       to explain to her how, like many occasions, we have done


          13       so.


          14           "So what they have done is they put the reversal


          15       slips, the branch copy, but what happened was that the


          16       girl using that stock unit, she processed it, her


          17       cheque, so at the end of the day, it made my till go up


          18       £50,000."


          19           That was the point I was making earlier, pushing the


          20       cheque through made the stock increase in the way


          21       I suggested.  So she continues:


          22           "I couldn't understand why.  When I had a look in my


          23       paperwork, she put the cheque through because it was


          24       done on her system it had taken her cheque book with.


          25       After she had taken her cheque, I took her cheque but


                                           140





           1       automatically, when I did it again, I reversed it but


           2       the cheque was sent off to EDS."


           3           Which I think is a reference to the clearing house.


           4           So we have still got the lady who has explained to


           5       the lady we have still got her application here, waiting


           6       for her to come and ...(Reading to the words)... We've


           7       got her money as well in the 40-minute safe with the


           8       application form."


           9           And she is asked the question:


          10           "Hold on, so you actually had everything in the


          11       safe?


          12           "Yeah."


          13           So the suggestion is, as I indicated, that the


          14       cheque had been put through.  She says in this phone


          15       call, "it was my assistant", she put the cheque through


          16       removed the cash and according to what she said in this


          17       phone call, put it in the safe.


          18           The records actually show that it was the appellant,


          19       her user identity, no one else's, that entered the


          20       cheque on to the system.  So what she was telling


          21       Mr Fitzgerald was not true.  Whereas she was blaming


          22       an assistant for putting the cheque through, in fact it


          23       was her.


          24   LORD JUSTICE HOLROYDE:  What is the aim of this whole


          25       account, Mr Altman, does the lady get her bond,


                                           141





           1       a different issue of the bond?


           2   MR ALTMAN:  I am coming to the punchline, if you will just


           3       give me a few moments.


           4   LORD JUSTICE HOLROYDE:  Ah.


           5   MR ALTMAN:  For your reference, that little history that


           6       I just went through is paragraph 18 of the case summary,


           7       the bundle at page 55.  In concluding it was her ID that


           8       was used and no one else's, to make the transaction.


           9           Because, on 6 October, the customer had clearly lost


          10       interest over all of those weeks, the appellants agreed,


          11       at the suggestion of Mr Fitzgerald, to pay a sum of


          12       about £70 by way of interest to the customer, to make


          13       sure she had not lost out in by the delay in getting


          14       what she had bargained for on 13 August.


          15           Now, to answer your Lordship's question, when the


          16       transaction was put through Horizon again on 6 October,


          17       when all this was going on, the system showed that


          18       transaction had been settled to cash.  The system has


          19       different ways of showing method of payment, for


          20       example, credit card, cheque, cash.  The system showed


          21       that on 6 October, the transaction was settled to cash.


          22           So the suggestion is that on the 6th, the customer


          23       left the branch with her growth bond, or at least


          24       content that she had got her growth bond, but what is


          25       equally clear is that she didn't give the appellant


                                           142





           1       another £50,000, other by way of cash or a cheque for


           2       the bond, because she had paid for it with a cheque


           3       drawn on her building society back on 13 August.


           4           She had done that two months before.


           5           So if there was no cash to pay for it, in the


           6       system, it would have created a shortfall of £50,000,


           7       unless, as the appellant told the Bank of Ireland, she


           8       held the £50,000 in cash in the safe and used it against


           9       the bond on 6 October.  In other words, put back the


          10       cash that she had held on to for all of those weeks.  In


          11       that case, the branch would balance and there would be


          12       no shortfall.


          13           If that is what happened, then the growth bond


          14       cannot explain -- this is what I am driving at -- if


          15       that is what happened, then the £50,000 growth bond


          16       simply cannot explain any shortfall that required


          17       covering up and certainly not a shortage of £83,000.


          18           If, however, she had used the cash, then any


          19       shortfall it created in the accounts was of her own


          20       making and not due to any Horizon generated shortfall,


          21       as is now claimed.


          22   MR JUSTICE PICKEN:  That is, in a nutshell, because we are


          23       talking about real money?


          24   MR ALTMAN:  Yes.


          25   MR JUSTICE PICKEN:  The lady's money, the £50,000?


                                           143





           1   MR ALTMAN:  Yes, we are talking about absolute --


           2   MR JUSTICE PICKEN:  We are not here talking, you say, about


           3       system monies or system faults, this is real money that


           4       has come in and it has only been in briefly, as it were,


           5       and then it has popped out.


           6   MR ALTMAN:  Yes, and the whole point though, is it links,


           7       this growth bond and how, having dealt with the matters


           8       at the point of audit on 13 November, it all links


           9       circumstantially because her whole account to everybody


          10       around her on the 13th, when the auditors walked in, was


          11       "I lost a cheque in relation to a growth bond", although


          12       she put the amount of that growth bond at £85,000, hence


          13       the amount on the cheque.  It is not -- without


          14       interest -- the amount she was suggesting represented


          15       the loss of the growth bond cheque was a couple of


          16       thousand pounds different to the amount that she had


          17       been guilty to, in other words, the sum total, five


          18       transfers linked to the GG unit.  The other point, the


          19       cheque which was written on Mr Hayer's cheque book, the


          20       one that I showed the court for £85,000, that is why she


          21       dated it when she did, 2 August of 09.  Or 2 September.


          22       Maybe she couldn't remember the date but it relates back


          23       to this transaction in relation to which these things


          24       were done.


          25   MR JUSTICE PICKEN:  When do we think, in fact, that cheque


                                           144





           1       was written?


           2   MR ALTMAN:  Forgive me, my Lord?


           3   MR JUSTICE PICKEN:  Sorry, when do we think that cheque was


           4       actually written?


           5   MR ALTMAN:  The £85,000 one?


           6   MR JUSTICE PICKEN:  Yes, in October?


           7   MR ALTMAN:  No, it was actually written on 13 November --


           8   MR JUSTICE PICKEN:  Sorry, November, yes, that's right.


           9   MR ALTMAN:  -- because when one looks at the statement of


          10       Manshinder Kaur, she says it, "She came to me, she says


          11       'I have lost the cheque book, I'm in trouble," in


          12       effect.  "Give me your cheque book and I want to write


          13       a cheque."


          14   MR JUSTICE PICKEN:  The one thing that was not done was


          15       written on the date it (inaudible), whether in its


          16       original form or an altered form.


          17   MR ALTMAN:  No.


          18   MR JUSTICE PICKEN:  Yes.


          19   MR ALTMAN:  Let's not forget the notes that accompanied the


          20       cheque which the auditors found, for a growth bond to


          21       put through the system.


          22           So we suggest that you can wrap it around, as


          23       Mr Millington suggests, that there is no relevance to


          24       any of this.  It is highly relevant because one can join


          25       the dots, as it were, between all of these currencies.


                                           145





           1           They are not the only dots to be drawn, the banking


           2       evidence, something to which Mr Millington has already


           3       adverted.


           4   MR JUSTICE PICKEN:  Sorry, again, to interrupt but leave


           5       aside the extra 33,000 or whatever that she pleaded


           6       guilty to, you are saying the 50,000 or so is hard


           7       money?


           8   MR ALTMAN:  Yes.


           9   MR JUSTICE PICKEN:  And clearly hard money rather than some


          10       fictional or some possible fictional.


          11   MR ALTMAN:  As I hope I have demonstrated, yes.


          12   MR JUSTICE PICKEN:  Yes.


          13   MR ALTMAN:  My Lord, can we go in the bundle, please, to


          14       tab 7.  This is a few pages from the brother's account.


          15       We really only need go to the final page, page 77.  If


          16       one looks, you seem familiar with, paid out and paid in


          17       columns.  On 14 August, you have a deposit in


          18       Perry Barr, that's the name of a branch in Birmingham.


          19       The paid in was £8,000 on the 14th and paid out on the


          20       19th, an unpaid cheque of £8,000.


          21           If you keep, please, a finger in tab 7 and flick


          22       over --


          23   MR JUSTICE PICKEN:  You said August, do you mean October?


          24   MR ALTMAN:  I do.


          25   MR JUSTICE PICKEN:  It may be that you said October.


                                           146





           1   LORD JUSTICE HOLROYDE:  He said August.


           2   MR ALTMAN:  I am sure you are right but, keeping a finger in


           3       page 77, go over to page 93, behind tab 14, and there


           4       you will find a cheque written on the same account,


           5       Mr Hayer.  It is dated 13 October, because it wasn't the


           6       first time the appellant had asked her colleague to


           7       supply her with a cheque but, interestingly, it is


           8       written to Shandir(?) Hussain, the brother, who was in


           9       the process of buying, or trying to buy, a property at


          10       the time and, as you can see, the stamp, with which some


          11       people may be familiar, "refer to drawer" and if we look


          12       over into tab 15, you see a letter from the bank


          13       effectively saying unable to pay the cheque because of


          14       insufficient clear funds.


          15           Mr and Mrs Hayer, or Mr Hayer and Mrs Kaur, who are


          16       the addressees of this letter, didn't have the funds to


          17       justify a cheque for that amount which the appellant


          18       sought to be paid and therefore the cheque was bounced.


          19           Then, if we go back to tab 7, page 67, on 20 October


          20       you will see an amount of £8,565, being paid out, to


          21       Wilding Solicitors.  They were the solicitors who were


          22       transacting on the brother's behalf, they


          23       were conveyancers who handling his property purchase.


          24           If you go, please, behind divider 28, this is


          25       a letter, it is dated 27 January 2010, in relation to


                                           147





           1       an inquiry but the main paragraph shows:


           2           "We confirm that on 22 October 09, there was


           3       credited to our client account a cheque for £8,565, paid


           4       in respect of a deposit of the purchase of the property


           5       at an address in Birmingham.  The client in this matter


           6       was Mr Shandir Hussain, who instructed us (Inaudible)


           7       the purchase of this property in April of 2009.  A


           8       mortgage offer was made in connection with the purchase


           9       and subsequently withdrawn and the matter didn't


          10       proceed."


          11           What we suggest overall, and when one looks at all


          12       of this evidence, is that the appellant's dealings with


          13       the growth bond in August and October 2009 for hard


          14       cash, as it were, her requests to work colleagues, the


          15       ability to use them, as it were, to write cheques, the


          16       returned payment into her brother's account of a cheque


          17       for £8,000 and, it is suggested, the £1,500 cash deposit


          18       into the brother's bank account the very day after the


          19       transaction made by her into the GG account showed the


          20       very same sum being transferred into GG, all during the


          21       very same period when the appellant was making those


          22       transfers into that phantom stock unit is strong


          23       circumstantial evidence consistent with an urgent need


          24       for cash and liquidity by the appellant and/or her


          25       brother and with the theft to which she ultimately


                                           148





           1       pleaded guilty.


           2           During this period, as has already been accepted,


           3       she was attempting to buy the branch premises.  Now, the


           4       purchase was due for completion on 20 October 2009.


           5           Sorry, my Lords, I am just going to try and find


           6       a statement I want to take my Lord to.  It is


           7       divider 20, page 114.


           8           This the statement of the postmistress, Baljinder


           9       Nader(?), and it is really the final paragraph on 116,


          10       because the point is made by Mr Millington that she


          11       managed to bounce a cheque of £1,437 and that is not


          12       consistent with somebody who has her hand in the till;


          13       but one has to read a little more carefully what


          14       Mrs Nader had to say.  She said:


          15           "I confirm that I was in the process of transferring


          16       West Bromwich Post Office over to Neelam Hussain on


          17       27 October ..."


          18           So all this is happening at the very time we are


          19       seeing all of those transactions.


          20           "... for a purchase price of £175,000, leasehold.


          21       The sale was not completed because the lease assignment


          22       had been delayed because of a bounced cheque that my


          23       solicitors had received from Neelam for £1,437.50, drawn


          24       on her mother's account, Ms Golam(?)."


          25           Sure enough the sale was delayed but what Mrs Nader


                                           149





           1       doesn't say is when that cheque was in fact written and


           2       bounced.  So we don't know from her and how relevant it


           3       is to the period that we are examining.


           4           So, my Lord, for these reasons it is submitted that,


           5       in addition to the direct evidence of her unequivocal


           6       plea, the case for theft was circumstantially strong.


           7       This was simply not a case, despite Mr Millington's


           8       suggestions -- the mere fact of the service of a


           9       statement from Fujitsu made it so -- in which the


          10       reliability of Horizon evidence was essential at the


          11       time and in particular it is now shown not to have been


          12       a Horizon case in light of the admissions now made by


          13       and on behalf of Ms Hussain by Mr Millington.


          14           As such, there is nothing to viciate her plea which,


          15       as I say, remains strong direct evidence of her guilt,


          16       in addition to what we submit is a compelling


          17       circumstantial case.


          18           That is all I need to say.


          19   LORD JUSTICE HOLROYDE:  Thank you very much, Mr Altman.


          20           Mr Millington.


          21              Submissions in reply by MR MILLINGTON


          22   MR MILLINGTON:  Three very short responses.


          23           If it is accepted, as it seems to be, that


          24       an explanation for the creation of the GG account was to


          25       cover unexplained losses, then that called for


                                           150





           1       disclosure, because of the background evidence of the


           2       system creating unexplained losses.


           3           Secondly, in relation to the growth bond, it hasn't


           4       been suggested in the past that that was direct evidence


           5       of the theft of hard cash.  The submission in the


           6       document was that it was circumstantial evidence, the


           7       potential theft of cash, but of course if there was


           8       an unexplained loss, so to speak, in the accounting


           9       system which was the result of the creation of the loss


          10       by the Horizon system itself, then that would swallow up


          11       the amount that was shown on the cheque, in the same way


          12       that an overdraft would swallow up the payment into the


          13       account of a cheque of that or some lesser account.


          14   MR JUSTICE PICKEN:  But how does it explain the cashing bit?


          15   MR MILLINGTON:  My Lord?


          16   MR JUSTICE PICKEN:  How does it explain the reversal of the


          17       transaction half an hour later and the cashing of --


          18   MR MILLINGTON:  My Lord, the only explanation that I can


          19       offer, which is the explanation we have offered in our


          20       documents, is that this whole transaction from beginning


          21       to end was an attempt to show and account for all losses


          22       in the system.


          23   MR JUSTICE PICKEN:  But, for that, the money then would have


          24       to be cashed and paid back in, but it wasn't.


          25   MR MILLINGTON:  Well, she as saying that there was a surplus


                                           151





           1       shown after payment of the cheque, which there plainly


           2       wasn't, and that lie must have been a lie told, we would


           3       submit, to account for the loss that she knew about.


           4       That is the only way that I can put that.


           5   MR JUSTICE PICKEN:  Right.


           6   MR MILLINGTON:  Finally this.  In relation to payment into


           7       the brother's account of £1,500 or thereabouts, that was


           8       denied.  It formed a specific count of money laundering


           9       and the prosecution did not proceed in relation to that


          10       count which was ordered to lie on the court file, and it


          11       was the subject of a denial by her that she was


          12       responsible for that transaction.


          13           Finally, to conclude, I have seen a schedule of


          14       appellants, which was amended I think as a result of the


          15       service of our submission documents, to the extent that


          16       she served an additional sentence of nine months'


          17       imprisonment as a default sentence.


          18           This case, we submit is all about unexplained


          19       losses.  It was a case that was subject to the ordinary


          20       rules of disclosure and in that the respondent fell


          21       dramatically short.


          22           Those are my submissions.


          23   LORD JUSTICE HOLROYDE:  Thank you very much indeed,


          24       Mr Millington.


          25           I think at 4.17 on Day 4, we have concluded a case


                                           152





           1       which was given four-day hearing estimate, which is in


           2       itself a small triumph for all concerned.


           3           Either Mr Altman or Ms Carey, the outstanding


           4       inquiry?


           5   THE CLERK OF THE COURT:  It has been received and sent to


           6       the judges.


           7   LORD JUSTICE HOLROYDE:  I gather it has been sent to us


           8       electronically.  Thank you very much for that.  Does


           9       anybody want to say.


          10           Does anybody want to say anything about what has


          11       been sent.


          12   MS CAREY:  It has been sent to all juniors and agreed by


          13       them and I will forward the final version out to the


          14       (Inaudible).


          15   LORD JUSTICE HOLROYDE:  There we are, those in the front


          16       row, it has been dealt with behind you so that is the


          17       end of that then.  Our thanks to everyone who assisted


          18       with that.


          19           Is there anything else that remains outstanding or


          20       that might have been overlooked?


          21   MR MOLONEY:  Not for our part, my Lord.  No -- we,


          22       obviously, perhaps I should have said this, that we ask


          23       the court to admit the evidence of Mr Henderson.  We


          24       have sent the form W but the court has to make that


          25       decision.


                                           153





           1   LORD JUSTICE HOLROYDE:  The form W is there.  I think we


           2       have all understood that that is the application.


           3   MR MOLONEY:  Thank you, my Lord.


           4   LORD JUSTICE HOLROYDE:  Mr Altman, anything we have


           5       overlooked?


           6   MR ALTMAN:  Those behind me tell me no, so it must be no.


           7   LORD JUSTICE HOLROYDE:  Can I just spell out what follows.


           8           We of course are acutely conscious that there are


           9       many people who are very anxious to know the outcome of


          10       these appeals as soon as possible but we regret that it


          11       simply is not practicable for us to proceed immediately


          12       to judgment in these 42 cases.  There are very important


          13       matters, important in relation to the individuals but


          14       also important matters of principle, have been raised in


          15       the submissions and the court needs some time to think


          16       about it.


          17           We have indicated to counsel, but it may not be


          18       known to everyone who is attending remotely, that the


          19       date on which we will be in a position to give our


          20       decisions is Friday, 23 April.  That will be in this


          21       building at 10.00 am.  We do need, please, at least one


          22       counsel from each team to attend either in person or


          23       remotely to deal with any consequential matters which


          24       may arise.


          25           No appellant of course is required to attend but


                                           154





           1       they are all perfectly entitled to do so, again, either


           2       in person or remotely, but subject of course to the


           3       present constraints of social distancing and any


           4       technical difficulties that may arise in access.


           5           What we will do on 23 April is that we will hand


           6       down a written judgment, inevitably it will be of some


           7       length, too long sensibly for us to read the whole thing


           8       out, but we will give a brief oral summary.  We do not


           9       propose to circulate any draft for assistance with


          10       corrections, or anything like that.  So that will be


          11       handed down and orally summarised on Friday, 23 April.


          12           Before finishing, I am conscious that 23 April will


          13       be devoted to the giving of our decisions and the


          14       handing down of judgments, we would like to take the


          15       opportunity to record our gratitude to really three


          16       groups of people.


          17           First of all, we repeat the thanks we expressed


          18       yesterday to all counsel.  Today's submissions have


          19       maintained the high standard of the preceding three


          20       days.  It may not always be obvious to those who are not


          21       daily involved in this system, but the submissions of


          22       counsel are genuinely of the greatest assistance to the


          23       court in coming to a just conclusion in the case in


          24       which we are considering.


          25           I am sure other counsel will forgive us if we just


                                           155





           1       mention Mr Baker, Queen's Counsel, to offer our


           2       congratulations, Mr Baker, on your very recent receipt


           3       of your letters patent as one of Her Majesty's counsel.


           4       It is a cruel irony that your first case after receiving


           5       your letters patent is one in which you have been


           6       condemned to almost complete silence, but greater


           7       demands will be made of our oral advocacy skills in


           8       future.


           9   MR BAKER:  I fear so, but thank you.


          10   LORD JUSTICE HOLROYDE:  Congratulations to you.


          11           Secondly, sitting behind counsel there are many who


          12       have helped in preparation, presentation of cases.  We


          13       extend our thanks to them.  There are not many times


          14       when this court deals with 42 cases simultaneously.


          15       There has been a mass of documentation.  The paper


          16       documents and electronic copy documents provided to us


          17       have been admirably prepared and greatly assisted the


          18       court.


          19           The third group we want to thank are those in the


          20       Criminal Appeal Office in this courtroom, and to all


          21       those behind the scenes in this building who have been


          22       involved in the complex arrangements for a hearing which


          23       has been spread over two courtrooms and has involved


          24       a good many people attending remotely.


          25           Just finally, as to that group, we would not want to


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           1       end the proceedings without mentioning this.  We don't


           2       know precisely which appellants have been listening


           3       remotely -- for us, it is just a screen with icons of


           4       muted cameras and microphones on it -- but we do of


           5       course know three appellants who have not listened in:


           6       Julian Wilson, Peter Holmes and Dawn O'Connell.


           7       Whatever may be the outcome of their respective appeals,


           8       they have not lived to see it.  We extend our


           9       condolences and our sympathy to all those bereaved by


          10       the deaths of those three appellants.


          11           Thank you very much.  We will rise.


          12   (4.25 pm)


          13                     (The hearing concluded)


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          25


                                           157





           1                              INDEX


           2


           3   Submissions by MR STEIN ..............................1


           4   Submissions by MR ALTMAN ............................19


           5   Submissions in reply by MR STEIN ....................44


           6   Submissions by MR MOLONEY ...........................51


           7   MR IAN HENDERSON (sworn) ............................55


           8          Examination-in-chief by MR MOLONEY ...........55


           9          Cross-examination by MS JOHNSON ..............55


          10          Re-examination by MR MOLONEY .................77


          11   Submissions by MR MOLONEY ...........................83

                         (continued)

          12

               Submissions by MS JOHNSON ...........................85

          13

               Submissions in reply by MR MOLONEY .................100

          14

               Submissions by Mr Millington .......................107

          15

               Submissions by MR ALTMAN ...........................120

          16

               Submissions in reply by ............................150

          17             MR MILLINGTON


          18


          19


          20


          21


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          25


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