1 Friday, 22 September 2023 2 (9.30 am) 3 MR BLAKE: Good morning, sir. Can you see and hear 4 me? 5 Good morning, sir. 6 SIR WYN WILLIAMS: Good morning. 7 MR BLAKE: We have Ms Page asking questions this 8 morning. 9 SIR WYN WILLIAMS: Yes. 10 MR BLAKE: Thank you. 11 STEPHEN DILLEY (continued) 12 Questioned by MS PAGE (continued) 13 MS PAGE: Good morning, Mr Dilley. 14 A. Good morning. 15 Q. The strategy of focusing on the old case of 16 Picton, it was something of a legal sleight of 17 hand; would you accept that? 18 A. No. 19 Q. You ostensibly focused the claim on the signed 20 cash accounts but, meanwhile, you called 21 witnesses to say that Horizon was working 22 correctly? 23 A. We called witnesses, as far as I recall, that 24 covered cash accounts and their experiences with 25 the Horizon computer system. 1 1 Q. Well, let's look at the judgment. It's at 2 POL00004325. If we look at page 5, please, the 3 end of paragraph 11. What we get is a sentence 4 that begins "Since"; do you see that? 5 A. Yes. 6 Q. "Since Mr Castleton accepts the accuracy of his 7 entries in the accounts and the correctness of 8 the arithmetic, and since the logic of the 9 system is correct, the conclusion is inescapable 10 that the Horizon System was working properly in 11 all material respects, and that the shortfall of 12 £22,963.34 is real, not illusory." 13 He then goes on to say: 14 "I shall nevertheless consider the points 15 made by Mr Castleton in relation to the 16 reliability of the Horizon System." 17 He proceeds to raise them and then dismiss 18 them, in effect. 19 A. Yes. 20 Q. So the result of calling your witnesses was that 21 the judge found that the Horizon System was 22 working properly? 23 A. At Mr Castleton's branch, he was satisfied from 24 the witnesses of fact that they had not been 25 able to -- Anne Chambers in particular, that her 2 1 investigation hadn't uncovered an issue with the 2 Horizon System at his branch. 3 Q. Indeed, that was something that eventually was 4 more or less pleaded. If we can just take that 5 document down and look at the Reply and Defence 6 to Counterclaim, my reference for that is 7 LCAS0000190. This is the Re-amended Reply and 8 Defence to Counterclaim with a statement of 9 truth signed by you, Mr Dilley, yes? 10 A. I can't see the statement of truth but if I've 11 signed it then I shall accept that I have. 12 Q. Yes, it's on page 3. I don't think we need to 13 necessarily go to it. 14 A. Okay. 15 Q. But if we can scroll down -- well, you can 16 certainly see it, if you like. 17 A. Yes, I have signed that. 18 Q. There we are. Then on page 1, if we go down to 19 paragraph 3, please, we can see it says: 20 "With respect to paragraphs 5 and 6 of the 21 Defence, Fujitsu Services have looked at the 22 Claimant's computer system and have confirmed 23 that the losses recorded by the Defendant were 24 caused by a difference between the physical 25 transactions that actually occurred and were 3 1 recorded on the system by the Defendant or his 2 assistant as taking place and the cash in hand 3 that was declared by the Defendant relating to 4 those transactions, and accordingly those losses 5 were not caused by the Claimant's system's 6 software or hardware." 7 So we have that there and that is said to be 8 from Fujitsu Services having looked at the 9 claimant's computer system. What evidence did 10 you base that on? 11 A. My recollection is we had -- insofar as the 12 computer system was concerned, we had two 13 witnesses from Fujitsu, Anne Chambers and Andy 14 Dunks. There was also a gentleman called Andrew 15 Wise, who worked for the Post Office. 16 Q. Who was Post Office? 17 A. He was, yeah. So they were witnesses who were 18 able to talk to the system. 19 Q. Do you say that Anne Chambers and/or Andrew 20 Dunks looked at the claimant's computer system 21 and confirmed that the losses recorded by the 22 defendant were caused by, et cetera; do you say 23 that's what they said? 24 A. It's 17-odd years ago and so I would have to be, 25 you know -- I can't recall everything that they 4 1 said now, but what is before the Inquiry today 2 is our note of what was said at the trial. So 3 the Inquiry has that information. 4 Q. This was really the sleight of hand at work, 5 wasn't it, Mr Dilley? 6 A. Not at all. 7 Q. This case was not about signed cash accounts, 8 was it? It was about saying that the Horizon 9 System worked and making Mr Castleton an example 10 wasn't it? 11 A. No. 12 Q. Putting his head on a spike, so to speak? 13 A. Not at all. 14 Q. Let's turn to the subject of disclosure. You 15 spoke about the distinction between disclosure 16 of the Fujitsu product generally and disclosure 17 of issues at the Marine Drive branch. Going 18 back to the start of matters, following the 19 conference with counsel -- and I took you to the 20 note of that yesterday, remember the conference 21 which wasn't held with Post Office and then 22 Mr Beezer wrote a letter about it afterwards? 23 A. Mm-hm. 24 Q. In that letter, if we go to POL00071081, at 25 page 1, if we scroll down a little, at the 5 1 bottom there: 2 "One other point raised by Richard was the 3 integrity of the Fujitsu product generally. 4 Just to confirm, I understand that Royal 5 Mail/Post Office know of no issues with the 6 Fujitsu system and are confident that it 7 operates correctly. Please discuss this with me 8 information you have a different", and I think 9 it's going to say "view". 10 A. Mm-hm. 11 Q. At the start there Mr Morgan, anyway, felt it 12 was important to look at the integrity of the 13 system as a whole? 14 A. Mm-hm. 15 Q. Yes? 16 A. Mm-hm. 17 Q. Did you disagree with that? 18 A. No, not -- 19 Q. So you didn't think -- 20 A. Not at Mr Castleton's branch and that's why we 21 went to see Fujitsu, why we've gone to see them 22 in June. We've gone through the points put in 23 Mr Castleton's Part 18 response followed by -- 24 Q. Yes, hold on just a minute. I'm trying to get 25 to one specific point here, which is that 6 1 Richard -- Morgan, obviously -- said that he 2 raised the issue of the integrity of the Fujitsu 3 product generally and he seems to have 4 considered that to be something that needed to 5 be looked into. Did you disagree with that? 6 A. I would have wanted to have been told by Post 7 Office if it didn't consider the Fujitsu system 8 to be robust. But when I had -- whenever I had 9 conversations with them, as the evidence that 10 I've put in and the attachments amply 11 demonstrate, the message we got was that Post 12 Office were confident in their system. 13 Q. I see. Well, then let's look at some more 14 specific matters. The Tivoli event log, which 15 had not been disclosed before trial but which 16 Ms Chambers referred to in her evidence, that, 17 in effect -- not intentionally but that, in 18 effect, revealed a failure of disclosure, didn't 19 it, in the sense that something which she 20 referred into evidence had not been previously 21 disclosed and she obviously felt the need to 22 refer to it and it had not previously been 23 disclosed? So, in that sense, there was 24 a failure of disclosure; is that fair? 25 A. I'm thoughtful about the Tivoli event logs. You 7 1 have to disclose something in civil litigation 2 that could help your case, that could harm your 3 case -- when those disclosure rules were in 4 place, they've changed now -- or your opponent's 5 case. The Tivoli event logs didn't help Post 6 Office's case nor did they harm it, nor did they 7 help Mr Castleton's case. So, for the sake of 8 argument, we disclosed them, but -- and I was 9 content to do so to avoid the argument, but 10 actually, they became a non-issue. 11 Q. All right, so you don't accept that that was 12 a failure, despite her referring to them in her 13 evidence? 14 A. I would have preferred to have had them earlier 15 and disclosed them earlier but I don't know. 16 I don't think that was a disclosure failing. 17 Q. Let's also then just consider the message store. 18 That's something which in this Inquiry we've 19 become used to. It's a very large set of data, 20 isn't it, that encompasses all the transactions 21 that take place in all the branches but 22 certainly, in this case, in Mr Castleton's 23 branch, yes? 24 A. I have no reason to doubt what you're saying. 25 Q. All right. Well, if you -- if we look at your 8 1 witness statement, you deal with this at 2 paragraph 335. It's WITN04660100, 3 paragraph 335, which I think is on page 149. 4 Ah, yes, so 335 starts earlier in the document 5 but what we're looking at here is you quoting 6 from a covering letter which came subsequent to 7 the original disclosure because you wanted to 8 make sure that Mr Castleton had certain items 9 which hadn't been in the original disclosure; is 10 that a fair summary? 11 A. Yes, and on the 22nd -- prior to 22 November, 12 we'd been providing Mr Castleton's solicitors 13 with disclosure, both in May and afterwards, but 14 we put a name on it, on 22 November, and I think 15 I said to Fujitsu "What is it, you know, is it 16 a device? How would you describe it?" And they 17 said it was best described as the message store, 18 and it's at that point in time we put a name to 19 it. 20 Q. Yes, I see. So what you said in your letter 21 was: 22 "The message store audit trail referred to 23 as document 1 contains details of everything 24 that is recorded at the counter by Horizon. It 25 is located at Fujitsu. The message store itself 9 1 is of considerable size and we believe that the 2 Post Office has obtained from Fujitsu and 3 disclosed everything from the message store that 4 falls to be disclosed pursuant to CPR 31.6. 5 However, if you seek any further information 6 from it, please contact Brian Pinder of Fujitsu 7 Services to make an appointment directly (and 8 copy us in). Mr Pinder is at Lovelace Road 9 [et cetera]. He has stated that you would need 10 to specify precisely what information that you 11 require from the message store as it can take 12 some time (hours to days) to retrieve from the 13 servers, although this would greatly depend upon 14 the information required." 15 Then you talk about the court ordering of 16 inspection. 17 A. Mm-hm. 18 Q. In effect, what you said was you can look at the 19 message store but it's going to be nigh on 20 impossible for you to get anything useful out of 21 it? 22 A. I also say we believe that the Post Office has 23 obtained from Fujitsu and disclosed everything 24 from the message store that falls to be 25 disclosed but we didn't have any objection to 10 1 Mr Castleton looking at it. 2 Q. All right. Let's go back a bit in and talk 3 about the letter that Lee Castleton's solicitors 4 wrote about week 42. We touched on it 5 yesterday. This is the letter where 6 Mr Castleton had gone through the transactions 7 for week 42 and he had said that he felt that 8 there were missing transactions, yes? 9 You originally wrote to Penny Thomas at 10 Fujitsu -- 11 A. I did. 12 Q. -- and you eventually got back a response from 13 Gareth Jenkins and Anne Chambers, yes? 14 A. (The witness nodded) 15 Q. So if we could have a look at that it's 16 WBON0000027. We can see at the top there that 17 it's -- the author is Gareth Jenkins but, in 18 fact, he does refer to Ms Chambers in that first 19 introductory paragraph there; do you see that? 20 A. Yes. 21 Q. It says the two of them have undertaken 22 an analysis of all transactions that took place 23 in cash accounts week 42, and this was in 24 September 2006. 25 A. (The witness nodded) 11 1 Q. If we go down to "Analysis undertaken", it's 2 pretty dense reading but I would like to put on 3 record what they said: 4 "The initial set of data obtained was the 5 extract from the Transaction Log that was 6 submitted to Post Office Limited as supported 7 supporting evidence (ARQ 421). 8 "Subsequently a complete extract of audit 9 data for the period concerned was obtained. 10 This included non-transactional data (including 11 opening figures) and the electronic Cash Account 12 information (which was subsequently submitted to 13 Post Office's back end systems) and represents 14 the same information as was printed on the paper 15 Cash Account which Mr Castleton signed at the 16 time to indicate that it was correct." 17 So, just pausing there, in order to do this 18 work they had obtained a complete extract of 19 audit data for the period concerned, yes? 20 A. Yes. 21 Q. That was not disclosed, was it? 22 A. Well, we disclosed all of the transaction logs 23 and the event logs -- 24 Q. Yes, that's covered in the paragraph above, 25 which says that "We initially looked at the 12 1 extract from the Transaction Log"? 2 A. What I don't now recall discussing with them 3 is -- I don't recall going through this document 4 with Fujitsu. 5 Q. Let's carry on -- 6 A. I can see, you know, the cash account 7 information which they referred to in that 8 paragraph, second paragraph under "Analysis 9 undertaken", for example. The cash accounts had 10 been provided by way of recollection -- 11 Q. Yes, certainly the cash accounts but not this 12 complete extract of audit data, yes? 13 A. Well, we did disclose, didn't we, the existence 14 of the message store -- 15 Q. You did. 16 A. -- and we produced everything from it that we 17 thought was disclosable. 18 Q. Let's go down to the next paragraph, and it 19 says: 20 "The figures examined have been compared 21 with both the electronic Cash Account 22 information retrieved and also copies of the 23 paper cash accounts for week 42 (and also weeks 24 41 and 43) held by Post Office Limited ... 25 "This check identified a transaction missing 13 1 from the ARQ 421 data for a value of 92p on 2 12 January. This transaction did not included 3 its Start Time (a known fault that occasionally 4 happens) and so the ARQ extraction process 5 ignored it. However it would not have been 6 ignored by the accounting functions at the 7 counter and a report would have been generated 8 that night as part of the overnight checks. 9 "Unfortunately, this report is not audited 10 and so is not available for examination. 11 However we do not believe that this report is 12 material to the case." 13 This was a report in relation to a known 14 fault in the system? 15 A. Mm-hm. 16 Q. This was not investigated or disclosed, was it? 17 A. Well, I'm told in that document that the report 18 is not available for examination and that it's 19 not material to the case. 20 Q. This is coming from Fujitsu marking their own 21 homework, isn't it? 22 A. Well, they know you have to disclose documents 23 that are relevant to the case. 24 Q. How do they know that? 25 A. Because I'd written to them on 22 November 2005, 14 1 I'd explained all the details of the case, what 2 it was about, what was going on. They knew that 3 there was a civil claim. They knew the points 4 Mr Castleton was putting and I went to see them, 5 and I went through the points that Mr Castleton 6 was putting to them. They were well aware that 7 civil litigation was going on, and -- 8 Q. Did you -- 9 A. Sorry. 10 Q. Did you explain to Anne Chambers, after 11 receiving this report, her disclosure 12 obligations? 13 A. I don't recall. 14 Q. No. Well, let's go down to the next paragraph. 15 "Having done that, a copy of the Reference 16 Data in use at all branches at that time was 17 obtained that defines how each transaction at 18 the Branch maps onto the various lines of the 19 Cash Account. This Reference Data was then used 20 to summarise all the transactions according to 21 where on the Cash Account Report they would 22 appear, thus enabling the Cash Account Table 23 totals to be reconstructed." 24 A. Mm-hm. 25 Q. So, in order to analyse week 42's transactions, 15 1 the people at Fujitsu obtained a complete 2 extract of the audit data and a copy of the 3 reference data in use at branches. Neither of 4 those were produced and disclosed to 5 Mr Castleton, were they? 6 A. I don't have anything to add to what I've 7 already said on this. 8 Q. So Mr Castleton's attempt to analyse week 42 was 9 clearly not going to work, was it? Because he 10 didn't have the same information that the people 11 at Fujitsu had used to do that analysis, did he? 12 A. Well, there is actually one further point. 13 I spoke to Mr Turner, who was Mr Castleton's 14 solicitor then at Rowe Cohen Solicitors, on the 15 phone and I told him about this analysis that 16 had been done. We had a phone call and he said 17 to me -- 18 Q. We'll come to that phone note, actually before 19 we start talking about it. Let's do that. 20 SIR WYN WILLIAMS: Hang on a minute. This is 21 becoming, if I may say so, a detailed 22 re-examination of one particular point -- 23 a detailed re-examination in this Inquiry of one 24 particular point and, Ms Page, with a little 25 latitude either way, your time slot was 16 1 40 minutes, which is significantly -- you have 2 had longer than that already. So I think we 3 need to confine this, if we may. 4 But, as I see it, Mr Dilley, there seems 5 little doubt that some, at least, of these 6 documents were not disclosed. Your answer to 7 that is you didn't think they were disclosable. 8 I may or may not, depending on where this all 9 takes me, have to make up my mind about that, 10 but that's the reality of this, isn't it? 11 A. Yeah, and Mr Castleton's -- I put this to 12 Mr Castleton's solicitors -- 13 SIR WYN WILLIAMS: No doubt in due course, I will be 14 shown the relevant document if I need to be but 15 it doesn't have to be in cross-examination. 16 A. Mr Castleton's solicitors told me then that it 17 wasn't this week that they were concerned about, 18 and had -- 19 SIR WYN WILLIAMS: Are you actually telling me that 20 you can remember particular conversations with 21 Mr Castleton's solicitors now? 22 A. I've got an attendance note that shows I spoke 23 to Mr Castleton's solicitor about this and, 24 notwithstanding that they'd written to us in 25 June about week 42 and we'd commissioned this 17 1 work -- 2 SIR WYN WILLIAMS: Are you saying that -- 3 A. They then said it was week 49 that was the 4 issue. 5 SIR WYN WILLIAMS: Are you saying that you explained 6 to Mr Castleton's solicitors exactly what work 7 Mr Jenkins and Ms Chambers had done and he said 8 "Oh, well, fair enough but you don't need to 9 disclose that" or something along those lines? 10 A. I don't recall the fine details -- that level of 11 detail of the conversation but I did explain 12 that we had looked at it, that they'd been 13 through it and that they were satisfied with it. 14 And that's when -- and I did take him through 15 that, and that's when he said it was week 49, 16 and I was left thinking "Well, what was the 17 point of all that then?" 18 SIR WYN WILLIAMS: Well, let me be clear about you 19 say you're saying, that Mr Jenkins, who hadn't 20 made a witness statement, as far as I'm aware -- 21 A. No. 22 SIR WYN WILLIAMS: -- together with Ms Chambers, who 23 certainly had made a witness statement, though 24 I'm not sure of the chronology of whether it had 25 been served by the time of this conversation, 18 1 you told them that they had carried out 2 an investigation and they were satisfied, in 3 effect, that, as a result of it, that no 4 information had come to light which assisted 5 Mr Castleton's case; is that it, the summary? 6 A. It is, save that I can't remember whether I told 7 him it was Mr Jenkins and Mrs Chambers that had 8 done that, but I would have said it was Fujitsu. 9 MS PAGE: Would it assist to bring up the note, sir? 10 SIR WYN WILLIAMS: Yes, but then I think, as I've 11 said, Ms Page, you will have to persuade me that 12 you've got any time left after we've done that. 13 MS PAGE: It's POL00069604. If we look at it, it 14 says, in paragraph 1: 15 "I referred him to his letter ..." 16 That's the letter where they raised the 17 issue of cash accounts for weeks 41 and 42, 18 yeah, and you deal with the fact that you say 19 that the figures don't stack up. I don't 20 propose to read through it all. Presumably this 21 is something that you've read, yes? 22 SIR WYN WILLIAMS: Sorry, Ms Page, are you 23 addressing me or the witness then? 24 MS PAGE: Sorry, I was talking to Mr Dilley. 25 You've read this, haven't you? 19 1 SIR WYN WILLIAMS: Fine, thanks. 2 THE WITNESS: Sorry, this attendance note? 3 MS PAGE: Yes. 4 A. Mm-hm. 5 Q. Where do you say that you explained to Mr Turner 6 that there had been an analysis done by Fujitsu 7 of the cash accounts? 8 A. I would have done so at the time. But it is not 9 recorded in this note. 10 Q. I see. So you say that, although you didn't 11 record it in this note, you told him that and 12 you can remember that from 2006? 13 A. My memory of that is distant but I would have 14 said that to him because it was not me that had 15 done the analysis. 16 Q. Are you prepared to take it from me that there 17 is an email which shows that the report we were 18 just looking at from Ms Chambers and Mr Jenkins 19 was not disclosed -- 20 A. Yes. 21 Q. -- and that is the only phone note that I've 22 found which deals with week 1 and your 23 discussions about that with Mr Turner? 24 A. Yes. 25 MS PAGE: Well, sir, my point on that is finished. 20 1 I do have other material. I know that there is 2 a lot of underestimation on the part of counsel 3 as to how long it will take to deal with matters 4 but I do have quite a lot more material. 5 I crave your indulgence. 6 SIR WYN WILLIAMS: Well, I think, actually -- and 7 this a general remark, which applies not just to 8 you, Ms Page, but to everyone who asks 9 questions, including me, for that matter -- the 10 written material is there to be read and 11 digested by me and, as a generalisation, let me 12 just put it like that, after-the-event 13 elaborations of the written material, especially 14 when they're after the event by very many years, 15 don't tend to impress me, wherever they come 16 from, compared with what was written 17 contemporaneously, all right? 18 MS PAGE: Would it make matters easier if I were to 19 put something in writing with the other 20 documents I wish to take Mr Dilley to? 21 SIR WYN WILLIAMS: When your team comes to address 22 me, no doubt you will address me orally and in 23 writing and at length about your best points, if 24 I can put it in that way, Ms Page, and I'm sure 25 that you will refer to these issues, if you 21 1 think them important. That, again, goes for 2 every other recognised legal representative and, 3 for that matter, Counsel to the Inquiry. 4 The plain fact is that, if we were to seek 5 to investigate every point which every 6 recognised legal representative thought 7 important in oral evidence, there would be a 8 very, very, very long Inquiry and that is to be 9 avoided. 10 MS PAGE: I do understand that, sir. This is 11 an important witness for Mr Castleton -- 12 SIR WYN WILLIAMS: I understand that. 13 MS PAGE: -- and there are quite a number of other 14 matters I'd like to have put. If I may, I'll 15 put them in writing, sir. 16 SIR WYN WILLIAMS: Yes. I think, in order to 17 preserve the reasonable progress of the Inquiry, 18 if you put those in writing to me, and I think 19 it appropriate to seek Mr Dilley's further 20 answers in the light of that, either in writing 21 or orally, then I will consider that, but don't 22 think we can just go open-ended today, so to 23 speak. 24 MS PAGE: Thank you, sir. 25 SIR WYN WILLIAMS: So let's have the next set of 22 1 questions coming from Ms Dobbin, I think. 2 Questioned by MS DOBBIN. 3 MS DOBBIN: Thank you, sir. 4 Mr Dilley, my name Clair Dobbin. 5 I represent Gareth Jenkins. I want to ask you 6 about three topics, if I may. The first topic 7 is the meeting that took place at Fujitsu on 8 6 June 2006 and I'm going to ask if we can 9 please bring up POL00071427. Mr Dilley, this is 10 a document that you've seen before, it's just 11 that the reference number is different. 12 A. Thank you. 13 Q. In terms of what was discussed at that meeting, 14 I think we can see, if we look at the first 15 page, we looked at number 1 yesterday but if we 16 look at 2, there is some discussion about 17 Horizon worked, yes? That's at paragraph 2. 18 A. Mm-hm. 19 Q. I think we can tell, if we go over the page, 20 that that was a fairly high level discussion, 21 correct? 22 A. Yes. 23 Q. If we carry on, we can then see that there is 24 discussion of the specific topics that had been 25 referred to in Mr Castleton's Part 20 reply, 23 1 correct? 2 A. Mm-hm. 3 Q. If we look -- perhaps if we take, for example, 4 the first topic "non-communication between the 5 PCs" and we look at the note, we can see, for 6 example, that it was suggested that the 7 transaction logs could be retrieved, yes? 8 A. Yes. 9 Q. Again, I'm not going to go through every one of 10 these, Mr Dilley, but if we just go thorough, 11 for example, and look at screen freezing, which 12 was dealt with on the next page, yes? 13 A. Mm-hm. 14 Q. If we look at the final paragraph at that 15 section, do you say the one that reads: 16 "At the end of the session it is all 17 communicated ..." 18 A. Mm-hm. 19 Q. Again, we see reference to it being possible, 20 though it might be difficult, to look at the 21 recovery session in the audit trails, correct? 22 A. Mm-hm. 23 Q. Again, if we just go over the page, we can see 24 that the discussion ended with the sixth of the 25 topics "balance snapshots", yes? 24 1 A. Mm-hm. 2 Q. Then the discussion moved on, didn't it, to the 3 investigation that had been carried out by 4 Mrs Anne Chambers the year before, yes? 5 A. Mm-hm. 6 Q. We have already seen, I think, that she was able 7 to say at the conference that, in terms of the 8 analysis she had carried out, she couldn't see 9 a systems reason to explain the discrepancy; is 10 that right? 11 A. That's right. 12 Q. All right. What that looks like, Mr Dilley, or 13 how it appears, is that that was a discussion, 14 essentially, about how the component parts of 15 Horizon worked in relation to those topics that 16 Mr Castleton had set out in his Part 20 reply; 17 do you agree? 18 A. Mm-hm. 19 Q. And suggestion as to some of the other material 20 that could be looked at in relation to that; is 21 that right? 22 A. Yes. 23 Q. Presumably, that was the first post or the first 24 consideration of the issues that you would 25 consider in further detail as part of the 25 1 process of taking witness statements from those 2 people who you thought you might call in the 3 trial process? 4 A. Not entirely. We'd written to Fujitsu on -- as 5 I've mentioned, on 22 November, and told them 6 what was happening but, at that time, we didn't 7 have Mr Castleton's Part 20 -- Part 18 response, 8 so his allegations were even vaguer at that 9 point in time and we'd asked them to produce 10 an expert report that we never got. 11 Q. Yes. So this was your first meeting, wasn't it? 12 A. This was the first physical meeting that we -- 13 that I'd had with him. 14 Q. So can we just be clear about the letter that 15 you're referring to. That was the letter that 16 had been sent in November 2005 the previous 17 year? 18 A. Sorry, 2005, via Mr Samuel. That's the letter 19 I'm referring to. 20 Q. Yes. 21 A. Yeah. 22 Q. You'd heard nothing from Fujitsu since then, 23 correct? 24 A. I hadn't and I turned the page on our 25 correspondence file before I came to give 26 1 evidence, and I just can't see any response from 2 him. 3 Q. Yes, so again, just returning to the point, this 4 was the first meeting that you had with those 5 individuals who might be able to help you in 6 this case, correct? 7 A. Yes. 8 Q. You expected, following on from that meeting, 9 that there would then be the iterative process 10 of taking witness statements from them, yes? 11 A. Yes, but I'd flagged that in advance, as well, 12 to Brian Pinder of Fujitsu, that we would want 13 to take a statement. 14 Q. Quite so. I think it's right then that, based 15 on your understanding of the meeting, you 16 drafted a witness statement from Mr Jenkins, 17 correct? 18 A. Yes. 19 Q. We have a version of that witness statement and 20 perhaps we can call it up, it's at FUJ00122284. 21 I think you have been provided with this 22 Mr Dilley, haven't you? 23 A. I have but I don't recall seeing these 24 annotations at the time, and I certainly have 25 checked our correspondence file to see whether 27 1 we were provided it and I couldn't see it on 2 there. That doesn't mean that we weren't but 3 I just can't remember seeing these responses, 4 and I think that I did not. 5 Q. It's quite an important document, isn't it? 6 A. Yeah. 7 Q. Can we just look at it and see why it's 8 important. So if we look at page 1 of the 9 document, we can see, can't we, that he sets out 10 how he's made his annotations, correct? 11 A. Mm-hm. 12 Q. He says that he's highlighted parts of it that 13 he wanted to emphasise? 14 A. Mm-hm. 15 Q. Yes? 16 A. Mm-hm. 17 Q. Now, I don't have time to go through every 18 single comment that he made -- 19 A. No. 20 Q. -- and I'm going to pick it up at paragraph 16, 21 but if there's anything that you want me to draw 22 to attention, then please do say. 23 A. Mm-hm. 24 Q. So if we look at paragraph 16, so first of all 25 you had drafted for Mr Jenkins your 28 1 understanding of how double accounting worked, 2 yes? 3 A. Yes, and he's saying that's what -- that's not 4 what he meant. 5 Q. Exactly, and I think you had understood that 6 there was a physical document that was the 7 analogue of every Horizon transaction, correct? 8 A. Correct. 9 Q. What he was setting out was that you had gotten 10 that pretty much fundamentally wrong, yes? 11 A. Yeah, he was saying double-entry accounting 12 means something else. But I don't think he's 13 saying that there wasn't a corresponding 14 physical document for a transaction. 15 Q. Absolutely. These goes on I think at the end of 16 that part of his comment to explain to you, for 17 example, that POL would have some of the 18 physical documentation in terms of 19 a reconciliation process, correct? 20 A. Correct. 21 Q. If we go over the page, please, and it's right 22 to say that you had asked Mr Jenkins a series of 23 questions in this witness statement as well, 24 hadn't you? 25 A. Mm-hm, correct. 29 1 Q. You asked him whether or not there was any data 2 to show whether or not the computer terminals 3 didn't communicate with each other, and he 4 explained to you about the EOD check that was 5 made at the end of the day, didn't he? 6 A. Mm-hm. 7 Q. He went on to explain to you that the audit 8 trail would have information about that and that 9 that was something he could check for you, 10 correct? 11 A. Mm-hm. 12 Q. He also explained that it wasn't in the data 13 that he had looked at as yet, correct? 14 A. Mm-hm. That's right. 15 Q. If we go on again to look at paragraph 17, you 16 had asked him another question about what the 17 postmaster would see; do you see that? 18 A. Yes. 19 Q. Again, he said to you, didn't he, he would need 20 to investigate that further -- 21 A. Yes. 22 Q. -- but he could give you a rough idea, correct? 23 A. Correct. 24 Q. Again, if we could look at paragraph 19. I just 25 want to draw your attention to this paragraph. 30 1 You had asked about what was the transaction log 2 and he explained to you -- 3 A. What that was. 4 Q. -- what that was. He had already said, hadn't 5 he, at the meeting that that was something that 6 could be obtained? 7 A. And we did disclose transaction logs, yes. 8 Q. Yes, I'm quite sure you did but I think the 9 point is that at a very early stage he was 10 pointing to the availability of these materials; 11 correct? 12 A. Mm-hm. 13 Q. Again, if we go over the page, please, to 14 paragraph 23. This is consideration of ONCH 15 and, again, if we look at the very final part of 16 that paragraph that starts "I think there may be 17 some confusion here", Mr Jenkins was trying to 18 clarify to you, wasn't he, what he understood 19 Mr Castleton's case or what, in fact, 20 Mr Castleton was saying, correct? 21 A. Yes, correct. 22 Q. Again, on paragraph 26 -- and this is still on 23 ONCH, thank you -- again, we can see he's 24 highlighted again an explanation that he was 25 giving to you about the final report, correct? 31 1 A. Yes. 2 Q. If we follow his words, he, in fact, tells you 3 that the way that you had put it was too strong? 4 A. He did. 5 Q. I'm going to move on, if I may, to paragraph 35, 6 which was the section on balance snapshots? 7 A. Mm-hm. 8 Q. You had set out and referred, I think, to some 9 of the documents in respect of this? 10 A. Mm-hm. 11 Q. We can see that from 36(a): 12 "Gareth this is document 3." 13 What he said underneath that was: 14 "I will need to carry out a more detailed 15 analysis to explain exactly what is going on 16 here." 17 Yes? 18 A. Mm-hm. 19 Q. Again, at the very final paragraph in that, on 20 that page, he referred again to the fact that he 21 hadn't examined the detail of the documents. 22 A. Yes. 23 Q. He was saying to you, I think in fact, that the 24 documents you had referred to weren't, in fact, 25 complete; is that correct? 32 1 A. Yeah. 2 Q. Then if I may, Mr Dilley, if we go over the page 3 to paragraph 38, what you had drafted for 4 Mr Jenkins was the statement: 5 "There are no grounds for believing that the 6 problems Mr Castleton says he experienced with 7 his computer would have caused either 8 theoretical or real losses." 9 A. Yes. 10 Q. Then there was the reference to the 11 reconciliation of paperwork, which he had 12 already corrected. 13 A. Yes. 14 Q. We can see that what Mr Jenkins said was: 15 "Not sure I can agree to this without 16 looking more closely at what has gone on." 17 A. Correct. 18 Q. It's for all of those reasons, isn't it, that 19 that was an important document? 20 A. It was an important document and it's a much 21 more measured document than the information 22 provided to me in the physical meeting that we 23 had. 24 Q. That document couldn't fairly be described, 25 could it, as Mr Jenkins having an answer for 33 1 everything, could it? 2 A. That document couldn't, no. 3 Q. That's how you characterised his approach, 4 didn't you, in your witness statement? 5 A. Yes, in the June meeting when we met 6 Mr Jenkins -- and my recollection of this is 7 distant -- he was very bullish, very confident, 8 very knowledgeable about the system, and you 9 have to listen to the words and the language 10 people use and the way they say it. And I left 11 that meeting with the sense that Fujitsu -- as 12 a whole, not just Mr Jenkins, but him in 13 particular -- were really confident about the 14 operation of the system at that branch. 15 Q. So there's two things about that, Mr Dilley. 16 First, it may be that your memory of the meeting 17 is faulty, given that it happened so long ago. 18 A. That may be. However, I record quite close to 19 the meeting that that was my memory of it. 20 Q. Well, the second point is that it may be that 21 your understanding of what was being discussed 22 at the meeting was incomplete because, as I've 23 already said, this was the first meeting, the 24 first point in the process whereby the evidence 25 and your understanding would be developed by the 34 1 process of taking witness statements? 2 A. It's fair to say that this document shows that 3 there was a bigger picture but I left the June 4 meeting with a very clear impression from 5 Fujitsu, really clear, and I recorded that at 6 the time. It's in emails, it's in my evidence, 7 that that's the impression I got. 8 Q. You accept, don't you, that the way you 9 characterised Mr Jenkins' evidence -- or, sorry, 10 Mr Jenkins' approach in your witness statement 11 at paragraph 179, whereby you said he had 12 an answer for everything, you accept, having 13 seen this document, that that can't stand as 14 a general observation? 15 A. I believe -- I don't actually. At the meeting, 16 at the meeting, he had an answer for all the 17 allegations and that's what I mean at 18 paragraph 179. I'm not talking about at 19 paragraph 179 this document. 20 Q. Yes. 21 A. So my observation of -- my understanding of what 22 he was telling me at that meeting, was really 23 strong. 24 Q. Right. So, notwithstanding the fact that we 25 know that at the meeting reference was made to 35 1 the further material that could be looked at in 2 respect of what Mr Castleton was saying, first 3 of all, you still maintain, do you, that that 4 was the impression given to you? 5 A. Yes. 6 Q. Then, second, my question was actually this: as 7 a matter of general observation about 8 Mr Jenkins' approach, do you accept that what 9 you said at paragraph 179 can't stand, looked at 10 in light of his witness statement and the 11 comments he made, Mr Dilley? 12 A. My -- what I accept is that my paragraph 179 in 13 which I use the words "Mr Jenkins had an answer 14 for each of the allegations" refers directly to 15 his approach at that meeting. This draft 16 statement is much more measured than how he was 17 at that meeting. 18 Q. Notwithstanding that you had asked Mr Jenkins 19 a number of questions and that he was in 20 a position, obviously, to help you with how 21 Horizon worked, why is it that you're saying 22 you're not sure if you saw this statement or ... 23 A. I don't remember everything from this case quite 24 clearly but I do have a reasonably good memory. 25 I can't remember seeing this. That doesn't mean 36 1 to say that I didn't. I've gone this week and 2 turned the page of our correspondence file, page 3 by page, to see whether I got an email from 4 Mr Pinder or Mr Jenkins attaching this and 5 I couldn't find one there. So do I 100 per cent 6 rule out that I didn't see this? No. But do 7 I believe I saw this? No. 8 Q. Why wouldn't you have pursued it and wanted to 9 check what Mr Jenkins had said, particularly in 10 response to your questions? 11 A. This ultimately moved on. In August 2006, 12 I spent a lot of time driving around physically 13 meeting witnesses, interviewing them, taking 14 notes of meetings and developing witness 15 statements of fact. Counsel became -- once he 16 saw how the draft witness statements of fact 17 were shaping up, he became happier with the 18 case. I sent to him the draft statement I've 19 written for Mr Jenkins and there were two points 20 that counsel had on that. One was that, because 21 we'd got these witness statements of fact, we 22 felt that we no longer needed it; and the second 23 was that Mr Jenkins' evidence was really opinion 24 evidence. And we were alive -- and counsel was 25 alive to that and I was alive to that. 37 1 Sorry -- 2 Q. No, I didn't mean to interrupt you, I apologise, 3 Mr Dilley. 4 So really is what you're saying that, 5 because you had decided that you would instruct 6 an expert, what Mr Jenkins said in response to 7 your questions or any comments that he had made 8 on that witness statement really went by the 9 wayside? 10 A. Yes. 11 Q. I don't think you spoke to Mr Jenkins to explain 12 to him why you didn't want a witness statement 13 from him? 14 A. I don't recall speaking to him to say that, no. 15 Q. Could we please bring up FUJ00154733. 16 Mr Dilley, you may have come to realise -- 17 I don't know if this is a Fujitsu thing, whereby 18 people set out emails they've been sent in the 19 body of an email, and then reply to them. If 20 you're familiar with this, you might be able to 21 tell that what Mr -- this is an email from 22 Mr Jenkins but he set out in the body of it 23 an email that was sent to him from Mr Pinder; do 24 you follow -- 25 A. Mm-hm. 38 1 Q. -- how it's set out? So we can see Mr Pinder 2 said to him: 3 "Just been chasing Stephen up re your 4 attendance and any matters still outstanding for 5 us [I think that's Post Office Account] as 6 follows ..." 7 Then he says "(my words)": 8 "He states that although you would probably 9 make a good witness, it is for evidential 10 reasons that you cannot be called. To do with 11 evidence of 'opinion', 'expert' evidence and 12 'real' evidence, etc, etc, (complicated legal 13 issues nothing to do with personalities)." 14 A. Mm-hm. 15 Q. We can see how Mr Jenkins replies: 16 "Fine (I won't try and understand what this 17 means!)" 18 I think we can tell from that, can't we, 19 that you must have given Mr Pinder 20 an explanation which he then tried to pass on to 21 Mr Jenkins, correct? 22 A. Mm-hm. 23 Q. So you never had that conversation with him, 24 whereby you explained the differences between 25 the type of evidence that witnesses could give? 39 1 A. Not as far as I recall. 2 MS DOBBIN: Yes. Thank you, Mr Dilley. Thank you, 3 sir. 4 Questioned by SIR WYN WILLIAMS 5 SIR WYN WILLIAMS: Thank you, Ms Dobbin. 6 Just one more question from me, Mr Dilley, 7 and it follows this issue about the distinction 8 between expert evidence and factual evidence, 9 which you mention on a number of occasions. 10 Ms Chambers has told me at the Inquiry and 11 also written that she felt that she was being 12 treated as an expert evidence (sic). I simply 13 want to ask you this: at any stage before she 14 gave evidence, did you explain to her the 15 difference between a witness of fact and 16 a witness of opinion? 17 A. That may be answered by the attendance note -- 18 may possibly be answered by the attendance note 19 of the meeting we had at counsel's chambers with 20 four witnesses -- I think it was in September 21 2006 -- of whom Anne Chambers was one. It may 22 not be answered by that note. I can't recall. 23 SIR WYN WILLIAMS: All right, well, we will -- 24 A. But if we'd have -- 25 SIR WYN WILLIAMS: Hang on -- 40 1 A. But, irrespective of whether it is or is not 2 answered at that statement, I don't have 3 a direct recollection on the point. But I think 4 it's entirely possible that it's something that 5 we or counsel would have said, that "You're here 6 to make statements of fact and not opinion". 7 I think in terms of Anne Chambers' feelings, 8 she -- we did regard her as being knowledgeable 9 in her subject, yes, but she was asked to give 10 evidence of fact and what she had found at 11 Mr Castleton's branch and then, latterly, the 12 Callendar Square branch. 13 SIR WYN WILLIAMS: I appreciate that, in practice, 14 the distinction between fact and opinion may 15 blur. I'm used to that, obviously. I was more 16 interested in my question in determining what 17 you may have said to her about what would happen 18 if she was asked questions which required her to 19 offer an opinion. 20 A. Yeah, I can't recall specifics at this distance, 21 I'm sorry. 22 SIR WYN WILLIAMS: That's all right. Thank you. 23 Is that it Mr Blake? 24 MR BLAKE: It is, sir. Sir, if it assists, just for 25 the transcript, for any parties' submissions in 41 1 due course, the reference to that meeting on the 2 11 September 2006 at counsel's chambers is 3 POL00069622. 4 SIR WYN WILLIAMS: Thank you very much. 5 MR BLAKE: Thank you. 6 SIR WYN WILLIAMS: Thank you, Mr Dilley, for your 7 very detailed witness statement and obviously 8 your detailed evidence. I'm sorry that I caused 9 you to return this morning but what has occurred 10 this morning convinced me that if I'd gone on as 11 I was urged to do, by some at least, my 12 concentration powers would have waned so I'm 13 sorry you were inconvenienced but sometimes, as 14 you know only too well from your professional 15 experience, these things happen. 16 All right Mr Blake, where do we go now? 17 MR BLAKE: Thank you, sir. Can we take a 15-minute 18 break, please? 19 SIR WYN WILLIAMS: Yes, certainly. 20 MR BLAKE: Thank you very much. 21 (10.31 am) 22 (A short break) 23 (10.49 am) 24 MR BEER: Good morning sir, can you see and hear me? 25 SIR WYN WILLIAMS: Yes, I can, thank you. 42 1 MR BEER: May I call Richard Morgan, please. 2 SIR WYN WILLIAMS: Yes. 3 RICHARD HUGO LYNDON MORGAN KC (sworn) 4 Questioned by MR BEER 5 MR BEER: Thank you Mr Morgan, please do sit down. 6 As you know, I'm Jason Beer, I ask questions on 7 behalf of the Inquiry. Can you give us your 8 full name, please? 9 A. Richard Hugo Lyndon Morgan. 10 Q. Thank you for coming to give your evidence to 11 the Inquiry today and for the provision of 12 a witness statement previously. We're very 13 grateful to you for the assistance that you are 14 giving to this investigation. You should have 15 in front of you a hard copy of that witness 16 statement? 17 A. I do. 18 Q. It's in your name and dated 19 May 2023. 19 A. It is. 20 Q. If you turn to the last page of it, which is, 21 I think, page 31, is that your signature? 22 A. It is. 23 Q. I think before I ask you whether it's true to 24 the best of your knowledge and belief, there are 25 five corrections or amendments that you would 43 1 wish to make? 2 A. There are. 3 Q. Can we go through those, please. I think the 4 first is on paragraph 3 on page 1; is that 5 correct? 6 A. Yes, just as a matter of completeness I also 7 corresponded with Linklaters and obtained 8 confirmation from them that there was no 9 privilege maintained. 10 Q. So in the first sentence there where you say: 11 "... correspondence I have had with members 12 of the legal team for the Inquiry and my 13 original instructing Solicitors (Bond Pearce are 14 now known as Womble Bond Dickinson) ..." 15 You would add in "and also Linklaters"? 16 A. Yes. 17 Q. Thank you. Then on page 18, please. 18 A. Yes, paragraph 56. 19 Q. Paragraph 56. Thank you. What is the amendment 20 or addition you wish to make to 56? 21 A. So, having seen further documentation since 22 I produced this, I now see, although I didn't 23 remember at the time, that there was no expert 24 evidence called at trial by either side. 25 Q. Thank you very much. You do say there, again, 44 1 a review of the transcript of the hearing would 2 confirm the position one way or the other and 3 you've now seen a transcript or a note of the 4 transcript? 5 A. I've seen a transcript of one day of the hearing 6 and a note of the opening -- of the morning of 7 the opening. 8 Q. Thank you. I think the third correction or 9 addition is page 21, paragraph 63. 10 A. Yes. So in that paragraph I talk about the 11 settlement discussions that were conducted 12 between Bond Pearce and Mr Castleton. I now see 13 that I was actually copied in on emails which 14 recorded that Post Office was seeking 15 an undertaking from Mr Castleton. I don't 16 remember seeing those emails -- sorry, I don't 17 remember those emails from the time. 18 Now, having seen them, I see that I did see 19 the undertaking. I don't recall being asked or 20 advising in relation to the undertaking but 21 I did -- I definitely did see those emails. 22 Q. Thank you very much. At page 22, paragraph 65. 23 A. Yes, having now seen the transcript of one day 24 of the hearing, it reminds me, or it records 25 that Mr Castleton did ask for a break at least 45 1 on that afternoon to take some medication and 2 I asked the judge for an adjournment and 3 an adjournment was granted. 4 Q. So that relates to the last couple of sentences: 5 "I do not recall him ever saying to me 6 personally that he did need a break or that he 7 could not go on." 8 A. Yes, so now, having seen the transcript, it 9 reminds me that he must have asked me. 10 Q. Thank you. Then page 25, paragraph 77? 11 A. Yes, there's a typo in the last sentence. It 12 should say, "I just do not think that person was 13 me". 14 Q. So delete the first "was"? 15 A. Yes. 16 Q. Thank you, with those amendments, are the 17 contents of that witness statement true to the 18 best of your knowledge and belief? 19 A. They are true, yes, to the best of my knowledge, 20 information and belief. 21 Q. Can I start with your career qualifications and 22 experience. You're a barrister having been 23 called to the Bar in 1988; is that right? 24 A. Yes. 25 Q. You were appointed Queen's Counsel, as it then 46 1 was, in 2011 -- 2 A. Yes. 3 Q. -- which is after most but not all of the events 4 that we're going to look at, correct? 5 A. Yes. 6 Q. I think, at all times relevant to the questions 7 that I'm going to ask you, you practised in 8 Chancery commercial and insolvency law. 9 A. Yes. 10 Q. You tell us that, before the Lee Castleton case, 11 you'd been instructed by Tom Beezer of Bond 12 Pearce? 13 A. Yes. 14 Q. But you believed this was your first 15 instruction, the Castleton case, is that right, 16 on behalf of the Post Office? 17 A. Yes. 18 Q. As it turned out, it was to be the first in 19 a line of cases in which you were instructed by 20 the Post Office after judgment was obtained 21 against Mr Castleton. I think that's right? 22 A. I think that's putting it a bit high. I was 23 approached on a number of subsequent occasions 24 where an initial preliminary approach was made. 25 I think there was only one case where 47 1 I apparently produced a Defence and Counterclaim 2 but, otherwise, none of the other sets of 3 instructions ever led to anything substantive. 4 Q. They're set out just so we've got them, I think, 5 on page 29 of your witness statement. 6 A. Yes, that's it. That's all I can see from my 7 chambers records anyway. 8 Q. Just slow down a moment. It takes a little 9 while for the document to be displayed and, 10 therefore, for people who aren't in the room who 11 are following to see it. So paragraph 91, you 12 say: 13 "According to my Chambers' fee system, 14 I received the followed other sets of 15 instructions on behalf of [the Post Office]." 16 In 2007, a case called Aslam, where you gave 17 some advice by telephone; later in 2007 a case 18 called Bilkhu, where you had a telephone 19 conference and settled a Defence and 20 Counterclaim. 21 A. Well, I settled a draft Particulars of Defence 22 and Counterclaim. I don't have a record of ever 23 settling the final version. 24 Q. In 2011, you received instructions in Scott 25 Darlington and had a consultation in October and 48 1 December that year? 2 A. Yes. 3 Q. Then, over the page, please. You received 4 instructions from the Post Office in a case 5 called Prosser, and you gave some preliminary 6 advice but then that wasn't followed up with 7 instructions? 8 A. No. 9 Q. June 2012, a short telephone consultation. 10 We're going to look at that in a moment. 11 A. I'm not sure, was that a telephone -- I'm not 12 sure whether that was a telephone conference or 13 in person. 14 Q. Sorry, it was in person, quite right. Can we 15 look at that please? 16 A. Of course. 17 Q. It's POL00006484. You'll see it's a Bond Pearce 18 attendance note of a conference at your 19 chambers, Maitland Chambers, on Tuesday, 12 June 20 2012. We can see that you are recorded as 21 having been present, along with Daniel Margolin. 22 Was he then a junior barrister from your 23 chambers? 24 A. Yes, he was. 25 Q. A solicitor from Bond Pearce, Gavin Matthews? 49 1 A. I don't remember him. 2 Q. You don't remember him? 3 A. No. I don't remember either Susan Crichton or 4 Hugh Flemington either. 5 Q. If I can jog your memory at all I will try. 6 Susan Crichton, an in-house solicitor at the 7 Post Office, at that time I believe she was Post 8 Office's general counsel; does that ring any 9 bells? 10 A. No. 11 Q. Hugh Flemington, also an in-house solicitor at 12 the Post Office. 13 A. Yes. 14 Q. If we just read through the attendance note: 15 "It was recognised that an impasse had been 16 reached in relation to the Horizon litigation 17 which [the Post Office] is seeking to address. 18 The question is what is the best way of breaking 19 that impasse." 20 Do you remember that, at this time, the 21 litigation that is being referred to was 22 a potential group action on behalf of a large 23 number of subpostmasters against the Post 24 Office, arising from action taken against them 25 by the Post Office on the basis they said of 50 1 faulty Horizon data? 2 A. No, I don't. I received a copy of this document 3 in the supplemental bundle last week or the week 4 before. I went back and checked my chambers' 5 records as to what was shown in relation to this 6 con. I don't seem to have received any formal 7 instructions in relation to it, there's no 8 record of the papers being delivered before the 9 con occurred. 10 I seem to think, although I don't know why, 11 that Daniel Margolin was going to be instructed 12 to produce a written opinion in relation to 13 something but, aside from that, that's -- what 14 is shown in this attendance note, that's the 15 limit of my recollection, I'm afraid. I'm sorry 16 I just don't have any recollection. 17 Q. So you can't remember now the litigation which 18 is referred to in that first -- 19 A. No. 20 Q. -- bullet point. If we just scroll down to see 21 whether there's anything else that jogs your 22 memory. Do you see at the end of the third 23 bullet point, it says: 24 "... Access Legal will start to pursue all 25 the civil cases they're currently sitting on." 51 1 Do you remember a firm of solicitors called 2 Shoosmiths, who -- 3 A. I know the name. 4 Q. You know the name of the firm of solicitors? 5 A. Yes. 6 Q. Do you remember the firm of solicitors 7 Shoosmiths, who were acting, I think, then on 8 behalf of five clients where they had delivered 9 letters of claim and said that there were 10 another 85-odd clients who they were consulting 11 on in relation to potential claims, and Access 12 Legal was the part of Shoosmiths, the branding 13 part of Shoosmiths, that was bringing the claim 14 or threatening to bring the claims? 15 A. I have no recollection of that at all. As 16 I say, from my chambers system it looks like 17 there was a con booked, they turned up for 18 30 minutes. My impression of all of the 19 occasions on which the Post Office contacted me 20 after Castleton was they wanted to see whether 21 there was any expertise that I could bring to 22 bear on their approach or their litigation that 23 might assist. And they -- on each occasion, 24 I gave them pretty much the same answer. 25 Q. Let's look at what is recorded then. So we've 52 1 read the first bullet point. The second bullet 2 point: 3 "The proposal to instruct an independent 4 expert to prepare a report on the Horizon System 5 is the highest risk response to the issue." 6 Does that appear to be you setting out or 7 framing the issue for discussion, namely whether 8 an independent expert should be instructed to 9 report on the Horizon System? 10 A. Look, I'm afraid I genuinely I don't know 11 because I've got no recollection and I don't 12 think I got instructions. So whether this note 13 is recording what I was being told or whether 14 it's recording a conversation, I just don't 15 know. 16 Q. It continues: 17 "What will it achieve? It will not be able 18 to address any of the civil/criminal cases dealt 19 with under 'Old Horizon'. Will it seek to 20 review particular cases? If so, which ones?" 21 Would that have been your view at the time? 22 A. It seems a sensible expression of what it would 23 achieve. 24 Q. So a series of hypothetical questions or 25 questions are set out: what will it achieve; 53 1 will it be able to address the civil or criminal 2 cases dealt with under "Old Horizon"; and will 3 it be able to review particular cases? Would 4 you agree that this note appears to record you 5 questioning, for these three reasons, the wisdom 6 of instructing an expert to produce a report? 7 A. Yes, it's quite possible, but as I -- it's quite 8 possible but I just have no specific 9 recollection of this meeting. 10 Q. Can we turn to the third bullet point: 11 "Whatever the findings of the expert report 12 it will not resolve the problem. [The Post 13 Office] will be 'damned if they do and damned if 14 they don't'. If the findings are that there are 15 no issues with Horizon people will see that as 16 a 'whitewash' whereas if the findings are 17 negative that will open the floodgates to 18 damages claims by [subpostmasters] who were 19 imprisoned for false accounting and Access Legal 20 will start to pursue all the civil cases they 21 are currently sitting on." 22 Again, do you think this paragraph records 23 advice that you were giving? 24 A. No, and the reason for that answer is I was just 25 not intimately involved in prosecutions or other 54 1 civil claims. 2 Q. You may not have been intimately involved. It 3 may have been that people arrived at your 4 chambers and asked you for a view on things, 5 over the course of half an hour. Why doesn't 6 this read as if it's you giving the advice? 7 A. I don't know. I mean, it does -- if you look at 8 the bottom of that page, there is something 9 that's attributed directly to me. I mean, my 10 problem, Mr Beer, is that I just have no 11 recollection of this at all. The document says 12 what it says. You can attribute to me the high 13 level answers if you want to but I just don't 14 remember saying it. 15 Q. That third paragraph that we're looking at, do 16 you now see any significant issue with the view 17 that is recorded there? 18 A. I agree that, whatever the findings of the 19 expert report, it won't resolve the problem. 20 I agree that the Post Office would be damned if 21 they did and damned if they didn't. If it was 22 a clean bill of health, then it would be 23 a whitewash and, if it was negative, then 24 obviously it would invite claims. 25 I'm not sure about what the false accounting 55 1 allegations are to do with because I'm not 2 a criminal lawyer and I don't deal with those 3 cases. 4 Q. If an independent expert said that there were 5 problems with the integrity of Horizon, that 6 might indeed open the way to damages claims -- 7 A. Absolutely. 8 Q. -- by subpostmasters, who had been convicted of 9 criminal offences of false accounting on the 10 basis of Horizon data? 11 A. Mr Beer, I don't know because I wouldn't know 12 the basis upon which convictions were obtained. 13 Q. Again, just looking at that paragraph, do you 14 see any significant issues or problems with the 15 advice that's being given there? 16 A. I'm not sure that that's necessarily a fair 17 question because I'm not sure that I'm giving 18 the advice. I'm also not in a position to give 19 any advice in relation to the criminal law 20 aspects. 21 Q. What would have happened if they had started to 22 discuss the impact of an independent report that 23 showed that there were problems with Horizon 24 data and that had consequences for the pursuit 25 of civil claims that some solicitors were 56 1 sitting on in a conference that you were giving? 2 Would you have said, "Stop, that's nothing to do 3 with me" -- 4 A. Well -- 5 Q. "-- I'm not a criminal law expert"? 6 A. I think, if the question is read back, you'll 7 find that you asked me about in the consequences 8 of civil claims? 9 Q. Yes. 10 A. Then you've asked the -- you've added to it what 11 would the consequences be in relation to 12 criminal claims. I don't advise on criminal law 13 and I would almost certainly have said, "I can't 14 give you advice in relation to the criminal 15 prosecutions". 16 Q. I'm not asking you about advice on criminal 17 prosecutions and this isn't anything to do with 18 criminal prosecutions, this third bullet point. 19 It's about civil claims arising from people who 20 have been imprisoned, perhaps wrongfully. 21 A. Again, my answer would be the same, that I would 22 feel decidedly uncomfortable and would almost 23 certainly say that I'm unable to advise on civil 24 claims advising from criminal prosecutions. 25 It's just not an area of law in which 57 1 I practise. 2 Q. Would you regard it as appropriate in commercial 3 litigation involving a private corporation to 4 advise that a step should not be taken because 5 it might increase the number of claims brought 6 against the private corporation? 7 A. Yes. 8 Q. Would your view be that any different 9 considerations apply if the putative defendant 10 is a public authority or a public corporation? 11 A. Potentially, yes. 12 Q. What are those different considerations that 13 apply if the putative defendant is a public 14 authority or a public corporation? 15 A. Well, one might want to think about what the 16 public law duties are of that public 17 corporation, but I was being asked to advise 18 a private company. 19 Q. Is that how you viewed the Post Office? 20 A. Post Office Limited. 21 Q. You didn't see them as a public corporation? 22 A. I didn't see them as a public corporation, no. 23 Q. Where the Government holds a single share in the 24 company on behalf of the public? 25 A. I didn't see them as a public corporation 58 1 governed by administrative law. 2 Q. So, in any advice that you gave on this 3 occasion, you would have been approaching this 4 as a commercial Chancery litigator? 5 A. Yes. 6 Q. Therefore, it would be appropriate to advise 7 such a party that they should not take a step, 8 such as commissioning an expert report, even if 9 it revealed that Horizon data was unreliable 10 because that might open the Post Office to more 11 damages claims? 12 A. Yes, I think so -- I think I would. I might be 13 wrong in that, but ... 14 Q. Can we read on. It is said that: 15 "[Post Office] will always have this 16 problem -- some people will never trust 17 computers and will always believe that they have 18 an inherent problem." 19 Was that view that you held at the time? 20 A. I think it's likely that it would have been 21 a view that I held at that time, yes. 22 Q. It continued: 23 "A less risky approach is to agree to take 24 the relevant MPs privately through particular 25 cases in which they are interested." 59 1 Is that, given the limitations that you have 2 expressed already on the type of role that you 3 would perform, advice that you would give or 4 would have given? 5 A. That's likely, yes. The problem with all of 6 this is that my information or the information 7 provided to me never extended to identifying 8 specific problems. It was a generic "There's 9 a problem with". I never felt that any 10 individual was ever going to answer everybody's 11 concerns in a generic sense and so, if there 12 were particular cases, then it was appropriate 13 to examine those particular cases on 14 an item-by-item basis. 15 Q. That's a different point to "Don't instruct 16 an expert because the expert might uncover 17 problems with Horizon and you will thereby face 18 more claims", isn't it, which seems to be the 19 effect of the third bullet point? 20 A. It does seem to be the effect of the third 21 bullet point but I'm not sure that that's quite 22 what it's getting at. With any computer system 23 there can be problems. There can be screen 24 freezes, there can be loss of data, and so on 25 and so forth, in a -- any hypothetical system. 60 1 And I'm not -- I'm just giving an example. 2 Some of those problems might be quite 3 innocuous, some of them quite cause no loss of 4 data, no changes, whatever. But if you get 5 a report that comes back and says "Well, you get 6 screen freezes or there are power cuts", then 7 all that does is set a hare running. The only 8 way to look at a problem like this, in my 9 opinion, sitting here now, is to look at 10 specific examples and work out what went wrong, 11 and that's seems to be what I might be 12 articulating in the pre-penultimate paragraph: 13 "A less risky approach is to agree to take 14 the relevant MPs privately through particular 15 cases in which they are interested." 16 So work through specific examples and see if 17 there's a problem. 18 Q. But without the involvement of an independent 19 expert? 20 A. Well, there could be an independent expert. 21 Q. The note continues: 22 "[The Post Office] needs to engage with its 23 stakeholders by perhaps sending out 24 a questionnaire about Horizon to 25 [subpostmasters] getting their views and seeking 61 1 to address the more sensible ones. This is more 2 a PR exercise." 3 Is that advice that you gave? 4 A. I don't know. 5 Q. Would you understand a PR exercise to be 6 something that is done to look good to the 7 outside world -- 8 A. Yes. 9 Q. -- and to placate the subpostmasters? 10 A. Yes. 11 Q. Would you regard that as appropriate advice to 12 give to a private corporation? 13 A. No -- well, a private corporation wants to keep 14 its customer base happy but a private 15 corporation also wants to find out if there are 16 problems with its systems. Now, if there are 17 problems with their -- with your systems and the 18 stakeholders express and articulate what those 19 problems are in a way that's identifiable, then, 20 of course, you should engage with them. 21 Q. The last bullet point records that you're: 22 "... happy to discuss possible approaches 23 and merits of each with the Board of [the Post 24 Office] at any time." 25 A. Yes. 62 1 Q. That certainly suggests that no decision was 2 reached in the course of this consultation, if 3 nothing else? 4 A. Let me be frank, Mr Beer. From what I can 5 remember, which is close to nothing, as assisted 6 by my chambers records, some people turned up in 7 chambers and we had a preliminary discussion 8 about the possibility of being instructed, so 9 the suggestion that this represents concluded, 10 considered advice, I think, is putting it 11 a little high. I don't -- 12 Q. Nobody suggested that, other than you. 13 A. Yeah. But the way you're suggesting that this 14 is a record of a definitive piece of advice, 15 given after a consideration, I think is perhaps 16 a little unfair. 17 Q. We're working with what you and your instructing 18 solicitors have given to us? 19 A. Ah, those are not my -- those are my former 20 instructing solicitors. 21 Q. Can we turn to the Lee Castleton case. 22 A. Of course. 23 Q. Can we turn up paragraph -- 24 A. Sorry, I should also say that, so far as I'm 25 aware, I've provided no documents to the 63 1 Inquiry. I didn't have any. So, insofar as 2 that question suggested that I had provided 3 documents to the Inquiry, it's based on a false 4 premise. 5 Q. No, it was based on the correct premise that 6 you've given no documents to the Inquiry. 7 That's why we're working with just -- 8 A. So it's just the documents that my former 9 instructing solicitors have provided? 10 Q. Correct. Can we turn to paragraph 25 of your 11 witness statement on page 7, please. 12 A. Yes. 13 Q. If we just read paragraph 25 together, you say: 14 "Nevertheless, at a very high level, the 15 issue in the case [the Castleton case] was 16 whether there was a discrepancy of around 17 £25,000 between (i) the cash and stock 18 Mr Castleton held at the end of the period when 19 taken together with cash sent back to the Post 20 Office and all other receipts received by the 21 Post Office from the branch and (ii) the cash 22 and stock Mr Castleton was given at the start 23 together with the cash and stock that he 24 received whilst trading. If those cash and 25 stock numbers could be established by reference 64 1 to primary documents, then it was possible to 2 prove what the correct figure [before] the 3 closing balance should be forensically without 4 reference to the Horizon System, and hence 5 whether there was a real, as opposed to 6 illusory, discrepancy." 7 Just taking some parts of that in the second 8 line "cash and stock Mr Castleton held at the 9 end of the period"; was it your belief that 10 evidence could be ascertained of those figures 11 by counting and by documents other than 12 documents produced by Horizon? 13 A. Yes. 14 Q. Reading on: 15 "... when taken together with cash sent back 16 to the Post Office and all other receipts 17 received by the Post Office from the branch ..." 18 Again, was it your belief that those facts 19 and matters could be established by counting or 20 by documents other than documents produced by 21 Horizon or does that, in part, depend on 22 documents generated by Horizon? 23 A. My difficulty at this remove in time is that 24 I can't remember the format of the documents and 25 I think also there may be a mismatch between the 65 1 way the question is asked and the documents that 2 we're referring to. There were documents that 3 were printouts and those documents were vouched 4 by Mr Castleton on a regular basis, either daily 5 or weekly. I am unclear in my own mind whether 6 those were documents produced by Horizon that 7 Mr Castleton then verified or whether they were 8 documents produced by Mr Castleton that 9 Mr Castleton then signed off on. 10 Q. That's a very important distinction, given the 11 legal case that you were to run at trial? 12 A. I'm not sure that it was because a verification 13 of a statement of account by an agent carries 14 the same implication as the document actually 15 being produced by the agent, or at least that 16 would have been my submission, I suspect, at 17 trial. 18 Q. Reading on under the second part of the sentence 19 (ii): 20 "... the cash and stock that Mr Castleton 21 was given at the start ..." 22 As far as you can remember, was that 23 a matter that could be ascertained without 24 reference to the data produced by the Horizon 25 System. 66 1 A. Yes, I think so, because I think -- and it's 2 something that I picked up rereading the 3 transcript -- I think there was a form P242, or 4 something like that, that was signed by the 5 outgoing and the incoming subpostmasters at the 6 changeover of the accounting periods. 7 Q. Exactly, and then completing the rest of (ii): 8 "... together with the cash and stock that 9 he received whilst trading." 10 That would have depended, in part, on 11 records generated by Horizon, wouldn't it? 12 A. That goes back to the point about -- 13 Q. What you can remember? 14 A. Yes, and whether it was a record generated by 15 Mr Castleton or generated by Horizon that he 16 then verified. 17 Q. You carry on: 18 "If those cash and stock numbers could be 19 established by reference to primary documents 20 ..." 21 Sitting here now, can you remember whether 22 those cash and stock numbers could all be 23 established by reference to primary documents, 24 ie other than documents produced by Horizon? 25 A. So, again, we're going to differ about what 67 1 a document produced by Horizon is. If 2 Mr Castleton has signed off on a document and 3 said, "This is what had happened", then I would 4 call that Mr Castleton's document rather than 5 Horizon's document. There is also a problem 6 that, in my own mind, I have this period of two 7 to three weeks prior to the trial where I had 8 volumes and volumes of documents that I went 9 through and reconciled painfully by myself, but 10 I can't remember what the documents were, only 11 that I did undertake the exercise. 12 And, in my own mind, those are what I would 13 call primary documents, so they were documents 14 on which there was a manuscript verification by 15 Mr Castleton saying that, effectively, these 16 figures are true. 17 Q. You say words to that effect in paragraph 26, if 18 we continue reading. 19 A. Yes, sure. 20 Q. "I think that some of the primary documentation 21 prepared by Mr Castleton must have been provided 22 to me at some point early on and I notice that 23 he signed off on daily and/or weekly figures 24 (I cannot remember exactly what documentation 25 was produced, I only have some recollection that 68 1 there was a body of accounting documentation, 2 and there were some manuscript documents). It 3 therefore seemed to me that the deficiency could 4 be proved by simply adding up all the manuscript 5 figures produced, and all the calculations 6 signed off, by Mr Castleton and without 7 reference to any records produced only by 8 a computer." 9 Are you there saying that there was 10 a manuscript record for each transaction, 11 effectively a handwritten mirror or shadow of 12 what was on Horizon? 13 A. No, and if I've given that impression, I'm 14 sorry. 15 Q. If we go further on, to paragraph 27, you say in 16 the second line: 17 "... I recalled that there was a line of 18 authorities in relation to accounts stated and 19 settled accounts. When I researched that line 20 of authorities, I realised there was authority 21 for the argument that if Mr Castleton was 22 tendering his own figures to [the Post Office], 23 he was vouching their accuracy. I therefore 24 advised that we should realign our pleaded case 25 to take this point and we should try to 69 1 establish the true trading position by reference 2 to Mr Castleton's own documents (by which I mean 3 documents produced and/or verified by 4 Mr Castleton, rather than printouts from 5 Horizon)." 6 What if the printouts from Horizon were the 7 documents verified by Mr Castleton? 8 A. Well, then he was verifying their truth or 9 accuracy as that particular date. 10 Q. What if he was saying at the same time as 11 verifying them, "These are not accurate but 12 I have got to verify them, otherwise I can't 13 continue trading into the next trading period"? 14 A. Well, there you're asking me a hypothetical 15 question. 16 Q. Do you not recall the evidence about the calls, 17 the many calls, he made to the helpline? 18 A. I do recall those. I also recall his evidence 19 that each and every one of his records of 20 transactions at the end of the week were 21 accurate. 22 Q. In that they recorded discrepancies and 23 shortfalls? 24 A. In that they recorded the actual figures for the 25 branch for that particular week. 70 1 Q. And he was simultaneously phoning in to the 2 helpline and saying that "The figures shown on 3 these trading statements aren't the product of 4 transactions conducted by me"? 5 A. His evidence at trial was that he had checked 6 all the figures and they were true and accurate. 7 I put to him, quite aggressively at one point, 8 that, in fact, he was making up the figures, for 9 instance for cash that he had received, and he 10 maintained his position throughout, as he was 11 perfectly entitled to do, that his accounts were 12 true and accurate. 13 Now, of course, because of the way the case 14 was pleaded, if his accounts were not true and 15 accurate, then the entire matter would have gone 16 off for a formal account to find out what the 17 actual trading position had been throughout that 18 period. But that turned out not to be necessary 19 because his sworn evidence at trial was that the 20 accounts were true and accurate. 21 Q. Over the page, please, to paragraph 29, and 22 scroll down a little bit, the last four or five 23 lines, you say: 24 "Instead, I needed physical records of cash 25 and stock in, cash and stock out, and 71 1 a calculation at the end of the day for what 2 should be left after it had all been taken into 3 account. If that was done, then it seemed to me 4 that the operation of the Horizon System was 5 irrelevant." 6 That essentially developed into your 7 principal case strategy; is that right? 8 A. Yes. 9 Q. I just want to look at the reasons why you 10 developed that case strategy. Can we go back, 11 please, to page 6 and the opening paragraph 12 of -- the opening part of paragraph 22. You 13 say: 14 "It seemed obvious to me that trying to 15 prove forensically that an entire computer 16 network operated properly was going to be a very 17 difficult, if not impossible, exercise, and it 18 also seemed that Mr Castleton had not identified 19 any mechanism by which errors were allegedly 20 being generated." 21 Then if we could look also at page 9, at 22 paragraph 29, about halfway through, about seven 23 or eight lines in, you say: 24 "... trying to recreate an entire hardware 25 and software system to replicate what was in 72 1 pace at the time of the relevant events would 2 probably be extremely difficult, if not 3 impossible, and that I didn't see how I could 4 prove that there were actual losses by reference 5 simply to what a computer printout said." 6 Then page 10, please, paragraph 33, about 7 eight lines in: 8 "I think that I thought that even if the 9 network could be reconstituted, I could not 10 prove that it was impervious to external 11 modifications (by which I mean hacking, 12 unauthorised alteration, etc). I was generally 13 concerned that if I was going to have to prove 14 the case by reference to Horizon logs, I wanted 15 to know whether there were possible ways that 16 the system could be manipulated and I wanted to 17 understand whether there was a context in which 18 any other, and if so how many, incidents had 19 been reported. I don't recall ever being told 20 that there were incidents or weaknesses and the 21 issue seemed to fall away ..." 22 Then, lastly on this topic, page 13, please, 23 paragraph 43: 24 "I thought it was difficult to prove a loss 25 only by reference to the Horizon IT System 73 1 because in oral argument at trial I would be 2 able to do no more than point to a computer 3 printout and say that the printout showed that 4 there was a loss. To my mind that did not prove 5 a loss, it only proved what the sum of the 6 figures produced by a machine showed when 7 a calculation was undertaken and what figure was 8 produced as a result of that calculation." 9 I referred you to four extracts from your 10 witness statement saying roughly the same thing, 11 but amplifying in places the reasons. When you 12 gave that advice to the Post Office did anyone 13 say, "No, hold on, this is easy. We have people 14 with expertise, either in our organisation or in 15 Fujitsu, who can prove the integrity of the 16 Horizon System and the data that it produces"? 17 A. May I unbundle the question slightly? I am not 18 sure that I ever gave advice in strident terms 19 that I couldn't prove it in that way. I think 20 the advice that I gave is that there was a nice, 21 clean cut way thorough to the proof of the loss, 22 by going by way of accounts stated or an agent's 23 running account. 24 I think that a lot of what I've said there 25 is my own internal thought process about how 74 1 difficult it was going to be to prove the case 2 if all I had was a piece of paper produced by 3 a computer. Yes, there are provisions within 4 the Civil Evidence Act that would have had 5 enabled me to rely on it but it wasn't a very 6 satisfactory way to go about formal proof of 7 a loss. 8 Sorry, can I -- 9 Q. If we just go back to paragraph 33 on page 10, 10 please. 11 A. Sorry, can I just write something down because 12 I'd like to go back on something? 13 Q. Yes, of course. 14 A. Sorry, paragraph 33 on page 10? Yes. 15 Q. The second half of the paragraph, where you say: 16 "I think I thought that even if the network 17 could be reconstituted, I could not prove that 18 it was impervious", et cetera. 19 A. Yes. 20 Q. You give essentially three questions that ought 21 to arise, would this be right, if you're seeking 22 to prove, in legal proceedings, a loss based on 23 data produced by computer. There may be 24 external modifications made to the system, the 25 system may have been manipulated, and what about 75 1 other incidents that have occurred and may have 2 been reported? 3 A. Basically, yes. 4 Q. We now know, through the judgments of Mr Fraser 5 in the Bates litigation and, in particular, his 6 Horizon Issues judgment, that there were, even 7 by this time, a large number of bugs, errors or 8 defects which afflicted the integrity of Horizon 9 System and which either did or were capable of 10 causing discrepancies and shortfalls in the 11 financial and accounting records produced by 12 Horizon. 13 When you advised the Post Office of this 14 legal approach, "Let's not seek to prove the 15 integrity of the data that Horizon produces; 16 let's rely on the accounts that Mr Castleton has 17 vouchsafed", did anyone from the Post Office say 18 words to the effect of "Well, that's a relief 19 because, in fact, we've got some bugs, errors or 20 defects in the system"? 21 A. Absolutely not. And I think, by way of 22 clarification of your question, I don't think 23 I ever put it as "Let's avoid using the Horizon 24 System as a means of proving the case", it was 25 "This is a nice, straightforward way of proving 76 1 the loss". 2 So I wasn't comparing and contrasting the 3 two positions. I think what happened -- I think 4 what happened, sitting here now -- is that 5 I recognised that there were going to be 6 problems proving the case in one way and 7 I suggested that an agent's account was a better 8 way of dealing with it or that that was the way 9 to prove the case. 10 I'm not sure that at the time I said or gave 11 advice to Post Office that they shouldn't use 12 Horizon because of the difficulties but they 13 should use the agent's account. I just simply 14 said, "You should use the agent's account 15 route". 16 Q. When you put it in that more simplified form, 17 did anyone say, "Well, that's good because we 18 may have some real issues in being able to 19 evidence and/or prove that the Post Office has 20 suffered a genuine loss here, as opposed to it 21 being an artifact of the system"? 22 A. No, they didn't. In fact, at all times, there'd 23 been a -- well, professed to me, had been a high 24 degree of confidence that Horizon was a sound 25 system. 77 1 Q. So nobody said "Your nice legal point, 2 Mr Morgan, is of, therefore, real practical help 3 to us because otherwise we may be in real 4 difficulties in proof"? 5 A. No. 6 Q. So your evidence is that you came up with a nice 7 legal point because not of any actual knowledge 8 about problems with Horizon but because you 9 presumed there would be such problems or at 10 least it would be difficult to show that there 11 weren't such problems? 12 A. Yes. It's just too -- it's a £25,000 claim and 13 a computer system like Horizon struck me, back 14 in 2006, as being a huge beast with all sorts of 15 things that were going on, not the least of 16 which would be upgrades to software, dropping 17 out of dial-up networks, or ISDN or ADSL or 18 whatever was being used at the time. So why 19 have a difficult case when you can have an easy 20 case? 21 Q. Did anyone say, "Well, hold on, in criminal 22 proceedings, Mr Morgan, we don't do it that way. 23 We have to prove the integrity of the Horizon 24 System and we do that by calling evidence to 25 show the integrity and accuracy of the data that 78 1 Horizon produces"? 2 A. No, I don't remember anybody ever talking me 3 through what was going on. I don't even 4 remember people telling me about criminal 5 proceedings, if I'm right. I can't recall any 6 occasion in which anybody ever talked about how 7 they did things in criminal trials or even the 8 existence of criminal trials. 9 Q. Would you agree that the Post Office should not 10 have proceeded with a civil claim, had they been 11 genuinely concerned that the loss alleged was 12 not a genuine loss or an actual loss to them? 13 A. Sorry, so you're asking me a hypothetical 14 question. I'm -- 15 Q. Yes, that sometimes happens. 16 A. I'm sorry. 17 Q. And I realised I was asking it, so there's 18 probably no need to tell me. 19 A. Thank you, Mr Beer. I think from an ethical 20 position I would have been in some difficulty if 21 I thought that I was being asked to run a case 22 that my lay client had no belief in the 23 integrity of the underlying claim. So -- 24 Q. So had that been put to you, what would you have 25 advised? 79 1 A. "I can't continue to act". I'd have withdrawn., 2 I think. 3 Q. It would have -- 4 A. Depending on quite how it came out but I would 5 have been decidedly unhappy. 6 Q. It would therefore have altered your advice that 7 the Post Office should simply rely on the signed 8 cash accounts of Mr Castleton? 9 A. I think I'd have told them they'd have to 10 discontinue if they didn't think there had been 11 a genuine loss. 12 Q. So if you had found out before the trial that 13 data produced by Horizon, that formed the basis 14 of signed cash accounts, was unreliable or may 15 have been unreliable, what would your advice 16 have been to the Post Office? 17 A. I would have wanted to look quite carefully at 18 what was being said by Mr Castleton and, indeed, 19 the note that I took earlier, when I said "Can 20 I just write something down", was in fact 21 something that came back to mind. 22 So the pleadings in this case were quite 23 unusual, in that the accuracy of Mr Castleton's 24 signed figures was positively averred by him in 25 the pleadings. Do you have the Defence, by any 80 1 chance? 2 Q. We do. We've got the amended Defence. 3 A. Yes, that's what I was thinking of. 4 Q. LCAS0000294. 5 A. Thank you. 6 Q. If we flip to the next page, you'll see the 7 substance of the amended Defence and 8 Counterclaim. 9 A. Yeah, that's not the relevant paragraph. If you 10 go over to the -- 11 Q. Next page? You might be thinking of 6. 12 A. No, sorry. Could you go back up the page, 13 please? Yeah, it's paragraph 3. 14 Q. What's the point you're making on the basis of 15 paragraph 3? 16 A. He's admitting that he's producing these 17 accounts. 18 Q. Then if we look at paragraph 7A: 19 "The said Cash Account ... for week 51 is 20 not an account stated behind which the Defendant 21 is not entitled to go ..." 22 Then some reasons are set out. 23 A. Yes. 24 Q. "It does not constitute an absolute 25 acknowledgement ... 81 1 "All of the accounting in it was done by the 2 Defendant and not the Claimant ... 3 "The Claimant does not allege that the 4 account was approved by it ... 5 "The Claimant does not allege that the 6 account was entered by it as agreed in its books 7 nor recognised by it in some way as correct." 8 A. Yes. 9 Q. I think you've got to read 7A with 3? 10 A. Quite possibly, but the fact of the matter is 11 that there was no dispute as between the parties 12 that the documents upon which the claimant was 13 relying in the case were documents produced and 14 verified by Mr Castleton personally. 15 Q. So you developed this strategy at essentially 16 an abstract or academic level -- 17 A. Yes. 18 Q. -- not because of anything you'd been told about 19 the practical difficulties of proving the 20 accuracy of data produced by Horizon? 21 A. That's correct. 22 Q. Can we look, please, at WITN04660100. It's 23 Mr Dilley's witness statement from whom we've 24 just heard and he was one of your instructing 25 solicitors. Can we just look at page 34, 82 1 please, and look at paragraph 67. Just scroll 2 up so you can get the date, thank you. 3 Conference on the 11 September at your 4 chambers. He says in 67: 5 "At that point in time, we were considering 6 and developing case strategy. I can see from 7 the note we believed we had a difficulty proving 8 the loss. From memory, this was not because 9 those instructing us had any doubt that there 10 was a loss; it was rather a question of how it 11 could be demonstrated. From my note and distant 12 recollection, I believe it was in part because 13 Ms Oglesby had told us that a subpostmaster 14 could change data inputted into Horizon after 15 the event. One idea counsel had was that we 16 should take the starting position (by way of 17 an opening audit) and the ending position 18 (a closing audit) and see what the difference 19 was. An alternative was to rely on the 20 admission in the cash accounts that Mr Castleton 21 had signed." 22 A. Mm. 23 Q. This evidence seems to suggest that the nice 24 legal point, as I have been calling it, was 25 a consequence of a difficulty or a belief in 83 1 a difficulty in proving the loss; can you see 2 that? 3 A. Yeah. Yes, I can. 4 Q. Was that something that was made clear to you, 5 "Never mind your nice legal point, Mr Morgan, 6 there is, in fact, a difficulty in proving 7 losses using Horizon"? 8 A. I don't remember that forming any part of my 9 thought process. Sorry, I don't remember 10 a specific fact of anybody saying subpostmasters 11 could change the data inputted into Horizon was 12 part of the consideration. I think in my 13 witness statement I'd already said that I was 14 concerned about whether data could be changed. 15 Q. But you've pitched that at a theoretical -- 16 A. Yes. 17 Q. -- any computer system can have data change -- 18 A. Yes. 19 Q. -- approach? 20 A. Rather than "Oh, this is what somebody is going 21 to say in this case". 22 Q. Yes. 23 A. Also, I mean, Mr Dilley says what he says but 24 why would a subpostmaster change the data to 25 show that he owed money to the Post Office? But 84 1 there we are. Anyway, there we are. That's 2 what he says. 3 Q. So you say that, in fact, you developed this 4 point at the abstract or academic level, not 5 because of the kind of thing that's recorded 6 here, that there was actually a difficulty in 7 proving the loss on this system? 8 A. As I sit here now, Mr Beer, yes, that's my 9 recollection. I don't have any recollection of 10 developing it as a responsive strategy. My 11 recollection, correct or incorrect, perfect or 12 imperfect, is that this was a high level 13 theoretical issue. 14 Q. Can we look, please, at POL00071081. This is 15 an email dated 21 August 2006 and you are 16 neither a sender nor a recipient but it refers 17 to your view or something that you are said to 18 have said. If we just look under "Overview". 19 A. Yes. 20 Q. So this is Mr Beezer writing to Ms Talbot, 21 copying Mr Dilley in: 22 "Richard Morgan believed the case to be one 23 with a good chance of success but he did warn 24 that was dependent upon the accountancy evidence 25 stacking up in our favour (I return to this 85 1 below) and also upon acceptance of the costs in 2 taking this matter to trial. We have discussed 3 costs before. I also return to this point 4 below. 5 "A further point made by Richard Morgan was 6 that we should endeavour to move the main area 7 of focus in the case away from the Horizon 8 system if possible. Richard suggested a method 9 to do that would be to prove (if possible) the 10 physical cash losses at the Marine Drive branch 11 by reference to all the other documentation 12 created around the transactions, not simply by 13 reference to what was in fact recorded on the 14 Horizon system. So for example when a cheque is 15 deposited there is (as I understand it) 16 a counterfoil filled out which is sent off daily 17 by the subpostmaster, with all cheques 18 eventually ending up at EDS. If the Horizon 19 system was later found not to match the physical 20 remittances an error notice is generated. One 21 of the issues in this case is that there were 22 few error notices generated suggesting that the 23 physical remittances did match the Horizon 24 inputs. Clearly, to attempt to look into such 25 matters in the level of detail likely to be 86 1 required will be costly and time consuming." 2 Then if we just look at the foot of the 3 page, please: 4 "One other point raised by Richard was the 5 integrity of the Fujitsu product generally. 6 Just to confirm, I understand that Royal 7 Mail/Post Office know of no issues with the 8 Fujitsu system and are confident that it 9 operates correctly. Please discuss this with me 10 if you have a different view." 11 If we just go back to the end of the third 12 paragraph, please, on page 1. Just scroll up 13 a little bit. Thank you. So the paragraph 14 beginning "A further point": 15 "... we should endeavour to move the main 16 area of focus ... away from [Horizon] if 17 possible." 18 Then at the end of the paragraph: 19 "One of the issues in this case is that 20 there were few error notices generated 21 suggesting that the physical remittances did 22 match the Horizon inputs." 23 On the Post Office's case, ie that 24 Mr Horizon (sic) had made genuine losses -- 25 A. Sorry, Mr Castleton had made genuine losses. 87 1 Q. Yes, Mr Castleton had made genuine losses, would 2 that absence of error notices suggest 3 an unreliability of the Horizon reporting, as 4 you understood it? 5 A. No. 6 Q. Why not? 7 A. Because the absence of error notices, according 8 to this note, suggests that the physical 9 remittances did match the Horizon inputs. 10 Q. Isn't that a problem on the case, that there was 11 a match between the actual cash and the inputs? 12 A. Not that I understand. Sorry, I'm trying to 13 reconstruct what was going on a long time ago -- 14 Q. I understand. 15 A. -- and this isn't my note and I don't know how 16 it all works, but I thought the fact was that 17 the Horizon inputs did match up with what 18 Mr Castleton was signing off and that did, at 19 the end of the day, show that there was a loss. 20 And so the fact that there were few error 21 notices suggested that the figures produced by 22 Horizon and the figures produced by Mr Castleton 23 were the same and did show a loss. But, you 24 know, that's by the by, isn't it? 25 Q. Can I attempt to move things on -- 88 1 A. Of course. 2 Q. -- and look at some evidence of what was and was 3 not disclosed to you about any bugs, errors or 4 defects in Horizon and the data produced by it. 5 We've looked already -- no need to turn it up -- 6 at paragraph 33 of your statement, where you say 7 you don't recall ever being told about any 8 incidents or weaknesses with Horizon. 9 A. Can I just clarify that slightly? I then go on 10 to say that other -- there were occasions when 11 screens had frozen or whatever but nothing ever 12 specific and nothing in relation to Marine 13 Drive. 14 Q. Can we look, please, at POL00072741. This is 15 an attendance note of 16 August 2006 of 16 a conference held between you and your 17 instructing solicitors that day. If you just 18 scroll down a little bit, you can see the 19 context. You discuss next key dates and then 20 you, on the first page, run through the 21 particulars of claim with you outlining some 22 passages and then your clients or solicitors 23 referring to some answers or comments upon them. 24 Then if we go over the page, please, the 25 same is done on the Defence and then on page 3 89 1 the Reply to the Defence. The same on page 4. 2 Then if we go to page 5, it appears that you 3 started to discuss the witness evidence. Can 4 you see under the heading of "John Jones"? 5 A. Yes. 6 Q. Then if we scroll down -- no, we've got it 7 there, thank you. Do you see under the third 8 paragraph under the heading "John Jones", 9 there's a passage with an asterisk and "RM", 10 which I think, in context, refers to you? 11 A. Yes. 12 Q. You're recorded as saying: 13 "... we need to know what sort of security 14 or protection Marine Drive had on its dial-up 15 Internet. Was it password protected?" 16 Then this: 17 "Can Fujitsu get in and change the raw data 18 after Castleton inputted this?" 19 A. Mm-hm. 20 Q. So you were, would you agree, asking some 21 difficult but reasonable questions of the Post 22 Office here and, in particular, can Fujitsu get 23 in and change data after Mr Castleton has 24 inputted it? 25 A. Yes. 90 1 Q. Would you agree that that's a question that any 2 person presenting evidence originating from 3 a computer, and which they rely on to prove 4 a loss, would have to ask in court proceedings? 5 A. I'm going to give you a one-word answer, which 6 is no. I'm going to go on to explain because in 7 civil litigation it's an adversarial system and 8 each side depends -- or each side's arguments 9 are responsive to those made by the other side. 10 So at the end of the day, it would depend how 11 Mr Castleton articulate his case as to why he 12 said errors were being created by Horizon. 13 But before I went anywhere near taking 14 a case forward on the basis of a single category 15 of evidence, I wanted to understand what the 16 weaknesses might be and what landmines might lie 17 in my path to the trial. 18 So, at this stage, I'm trying to flesh out 19 where could this all go wrong for me. 20 Q. Did you ever get an answer back to that 21 question? 22 A. Not that I recall, no. 23 Q. No, and I can say there doesn't appear to be one 24 recorded in the papers, so far as I can see. 25 A. Yes. 91 1 Q. That's obviously not definitive. 2 You asked whether Fujitsu could change 3 data -- 4 A. Yes. 5 Q. -- essentially. We now know that Fujitsu could 6 amend data and that, for a period of time, there 7 was an unaudited and unauditable method of them 8 doing so. Would you expect that information to 9 have been revealed to you in answer to your 10 direct question? 11 A. I think I'd have liked to have known it. 12 Q. What would you have done if you'd been told 13 Fujitsu can get access to the system to change 14 data and there's not a method of auditing when 15 and in what circumstances they've done so? 16 A. I think I would have wanted to take a good hard 17 look around the secondhand motor vehicle I was 18 being sold as the Post Office's case and kicked 19 the tires rather more carefully, to use 20 a metaphor. 21 I think I would have felt decidedly 22 uncomfortable at the very least and would have 23 changed the dynamic of the enquiries that I was 24 making and the advice I was giving, I think. 25 And that's, again, an answer to a hypothetical 92 1 question. But on the fortunately very few 2 occasions when litigants have revealed extremely 3 adverse information, it rather alters the 4 dynamic between counsel and lawyers. 5 MR BEER: With that striking metaphor in our minds, 6 I wonder whether we could take the lunch break. 7 As you know, sir, we're breaking early at 11.55 8 today and coming back at 12.55. 9 SIR WYN WILLIAMS: Yes, that's fine, Mr Beer. 10 12.55. 11 THE WITNESS: Would you be kind enough to give me 12 the usual warning, just so that it's on the 13 record? 14 SIR WYN WILLIAMS: I will. I think that you are 15 well aware that you should not speak to anyone 16 about the evidence which you have given and 17 which you may give this afternoon, but I should 18 tell you that you shouldn't discuss your 19 evidence with anyone, and I think that's 20 a sufficient warning for someone who is King's 21 Counsel. 22 THE WITNESS: Thank you. 23 MR BEER: Sir, 12.55. Thank you. 24 (11.56 am) 25 (The Short Adjournment) 93 1 (12.55 pm) 2 MR BEER: Good afternoon, sir, can you see and hear 3 me? 4 SIR WYN WILLIAMS: Yes, I can. 5 MR BEER: Thank you very much. 6 Mr Morgan can we just go back to the 7 document we were looking at shortly before lunch 8 to ask one supplemental set of questions on it. 9 It's POL00072741. 10 If you remember, I was asking you questions 11 about what evidence was and wasn't disclosed to 12 you about bugs, errors or defects -- 13 A. Yes. 14 Q. -- and difficulties with producing data from 15 Horizon, and the extent to which this informed 16 or didn't inform the nice legal point that you 17 developed. We had looked at the questions that 18 you had asked on page 5 about can Fujitsu get in 19 and change the raw data. 20 Can we look at page 6, please. If we look 21 at the foot of the page, please, three 22 paragraphs from the bottom, this is in the 23 context of some other case, and you say: 24 "I would like also to know if it is 25 a genuine one-off and I would like to know if 94 1 the number of allegations and the number of 2 paper cases that have occurred. Other than the 3 Bajaj and Bilkhu cases how many other 4 allegations have been made and how many have 5 come to trial and the outcomes of those. These 6 need to be of a particular issue of persistent 7 shortfalls allegedly attributable to the 8 computer system." 9 First of all, I take it that, in line with 10 the evidence you've given previously, you don't 11 remember asking questions of that sort at this 12 remove of time? 13 A. I've got no specific recollection, no. I'm just 14 trying to think about what -- so I think there 15 must have been mention in my instructions about 16 Bajaj and Bilkhu but I can't remember -- 17 Q. What would your interest have been -- 18 A. -- what was said. 19 Q. I'm sorry, I spoke over you. 20 A. That's all right. 21 Q. What would your interest in discovering 22 allegations concerning persistent shortfalls 23 attributable to the computer system have been? 24 A. Well, obviously I'd want to know if there was 25 some deficiency in the Horizon System that was 95 1 causing artificial losses. If there was 2 a problem in there, I wanted to know about it 3 sooner rather than later. The last thing one 4 wants to do is to get to three or four weeks 5 before trial and find that there's been some 6 finding somewhere else that there is a real 7 problem. It's all about risk management and 8 understanding the profile of the evidence. 9 Q. Where it refers to how many other cases have 10 come to trial and the outcome of those, would 11 you have been interested in both criminal and 12 civil cases, ie it didn't matter where the 13 allegation had been made of a persistent 14 shortfall attributable to the computer system? 15 A. I'd like to say yes, I'm not sure that I was 16 necessarily sufficiently alive to the fact that 17 the Post Office was prosecuting people to have 18 that degree of sophistication in my question. 19 I think it would have just been, at that time, 20 the open question, you know, what other cases 21 are there and are they showing there's 22 a problem? 23 Without understanding what the allegation is 24 in each individual case and what the outcome is, 25 one is not going to know whether that's going to 96 1 impact on the evidence that's going to be given 2 in the specific trial in relation to which I was 3 being instructed but I certainly wanted to 4 understand the overall terrain within which the 5 dispute was going to occur. 6 Q. So you would cast the question and, therefore, 7 the net relatively widely at that stage? 8 A. Yes, I'm trying to find out what's going on. 9 I'm saying what -- you know, without being so 10 crude as to say "Give me full and frank 11 disclosure", I want to know are there any 12 unexploded landmines that I'm going to step on 13 if I go down a particular course? Is there 14 anything that's going to come out that I should 15 know about now? Generally, with sophisticated 16 firms of solicitors, they know that that's what 17 you're asking them when you say, "What's out 18 there?" 19 I think I would have assumed that with 20 Mr Beezer and Mr Dilley. 21 Q. Did you ever get an answer to this question. 22 We've asked about the Fujitsu having access 23 question; did you get an answer to this 24 question? 25 A. I think in relation to this question, and it's 97 1 only because of documentation that I've read 2 recently, I think that the Bilkhu case hadn't 3 even been issued. I hesitate to ask 4 a question -- I think I'm right in that and 5 I don't think I ever got an answer in relation 6 to Bajaj. 7 Q. But what about the wider question? 8 A. I didn't get an answer in relation to that, no 9 at least I -- sorry. That sounds very definite. 10 I do not recall now an answer to that then. 11 Q. Can we look, please, at FUJ00155767. It's 12 an email exchange which you're included on. 13 It's just over a month before trial and, if we 14 just go to the foot of the page, please, there's 15 an email from Mr Dilley of 31 October to Brian 16 Pinder and you're on the copy list; can you see 17 that? 18 A. Yes, I can. 19 Q. If we just read through it together: 20 "One of the witnesses in the Castleton case 21 is Greg Booth who was the temporary 22 subpostmaster at Marine Drive branch from 23 21 April to 28 May 2004. [He is now at 24 Newbury]. 25 "Greg spoke to me last week and reported 98 1 that his computer froze ... whilst he was 2 serving a customer and was partway through 3 a transaction. The transaction had not been 4 settled. It related to a postage label. When 5 he logged back in again, the computer had lost 6 the transaction of £1.27. The computer did not 7 prompt him to try to recover it. Greg is away 8 this week, but I will be contacting him upon his 9 return to obtain a supplemental witness 10 statement about this point. Prior to then 11 Greg's evidence was that he had never known the 12 system to lose a transaction. In this 13 particular case, Greg was up £1.27 because he 14 had taken money from a customer. However, 15 I anticipate the reverse would have happened if 16 he had been paying money out. 17 "Although this is for a small amount the 18 principle on the face of it seems concerning 19 because it suggests that the Horizon System can 20 (albeit rarely) lose transactions. Castleton's 21 solicitors will try to exploit any weakness and 22 we must be prepared for a possible attack on 23 this point. Our counsel has requested that 24 Fujitsu review the Newbury Post Office's Horizon 25 data for those days period to see if you can 99 1 tell whether the system froze and lost the 2 transaction and what the explanation may be. 3 "We have to serve witness statements very 4 shortly. I will have to prepare a supplemental 5 witness statement ..." 6 Now, Mr Booth, I think you'll recall was -- 7 Gregory Booth, was one of three subpostmasters 8 that operated the Marine Drive branch 9 immediately after Mr Castleton had been 10 suspended and was ultimately dismissed, and his 11 evidence was, can you help with this, adduced at 12 trial to seek to demonstrate that those who 13 operated the Marine Drive branch after 14 Mr Castleton left did so without difficulties 15 being caused by the Horizon System. 16 A. I don't remember now but I'll take your word for 17 it that that is an accurate reflection of the 18 record. 19 Q. In due course -- we needn't turn it up -- the 20 judge referred to Mr Booth's evidence, it's 21 paragraph 24 of he's judgment, saying: 22 "Mr Booth experienced no significant 23 discrepancies other than two which were 24 deliberately induced to check the operation of 25 the Horizon System having regard to 100 1 Mr Castleton's allegations." 2 At the foot of the previous page, your 3 solicitor says: 4 "Although this for a small amount the 5 principle on the face of it seems concerning 6 because it suggests that Horizon can (albeit 7 rarely) lose transactions." 8 Would your view be the same, irrespective of 9 the amount -- 10 A. Yes -- 11 Q. -- it's the principle? 12 A. Sorry, I didn't mean to overspeak. Yes, and 13 without wishing to try to look too wise after 14 the event, that's why I'm asking for Fujitsu to 15 have a look at it and explain it. 16 Q. It seems that, even before you received this 17 email, you had spoken to or communicated in some 18 way with Mr Dilley because he says, "Our counsel 19 has suggested that Fujitsu review"? 20 A. Yes, that would be what this email suggests. 21 Q. So if matters like this had been drawn to your 22 attention, this was a small sum of money, but 23 revealed a principal issue of concern, would you 24 have treated the other revelations in a similar 25 way? 101 1 A. I would hope so, yes. 2 Q. Can we look on, thirdly, please, at POL00070126. 3 This is telephone attendance note on Mandy 4 Talbot by SJD3, who is Mr Dilley, and you; can 5 you see that? 6 A. Yes. 7 Q. "MT [Mandy Talbot] saying that today's news 8 about problems with the Horizon System at the 9 Falkirk branch had come as a bolt from the blue, 10 that she had known nothing about it and that 11 Fujitsu did not give any indication. Could we 12 get a Fujitsu witness to give evidence? 13 "[Richard Morgan] saying that we need 14 a Fujitsu witness to identify why this was 15 a problem, but Lee Castleton's was not. Was 16 there a latent defect or a software problem from 17 a subsequent update or a hardware problem 18 specific to that branch? 19 "[Richard Morgan] saying he was concerning 20 about whether we have to give disclosure of this 21 fact. He thought probably yes, but wanted to 22 find out if the judge thought it was relevant. 23 [Richard Morgan] was prepared to put off 24 a decision on this until after his opening. 25 [Richard Morgan] asked [Mandy Talbot] to get 102 1 some definitive answers from Fujitsu. [Richard 2 Morgan] saying that we may finish in court by 3 lunchtime tomorrow." 4 You're recorded as saying that you needed 5 a Fujitsu witness identifying why this was 6 a problem but that Mr Castleton's was not. 7 A. Yes. 8 Q. Did you assume that the problem did not afflict 9 Mr Castleton's branch? 10 A. That's a very simple question with quite 11 a complicated answer. I made no assumptions 12 about what was going on at Mr Castleton's 13 branch. I made no assumptions about what was 14 going on at any other branch. By this stage, 15 I was -- I think the case had started on -- was 16 it the 4th and this is the 6th, so this is the 17 Wednesday. I can't quite remember. So the 18 trial had started. I was -- 19 Q. I don't think that chronology is exactly right. 20 A. Isn't it? I can't remember. But the issues 21 were the accounts stated point and Mr 22 Castleton's case was that -- it was called 23 the -- the Horizon System was causing problems 24 but he didn't say how or why. I didn't know 25 what the issue was with -- what's the name of 103 1 the branch? The Falkirk branch. 2 Q. Falkirk, yes. 3 A. I wanted to know what was going on. 4 Mr Castleton was wanting to call some other 5 subpostmasters about issues that were going on 6 in their branches and the question was whether 7 it was relevant to the Castleton trial that 8 other subpostmasters had had problems and, if 9 so, what those problems were. 10 As I recall it, and this is reconstructed 11 from what is said or what appears in the 12 transcripts and the notes of the hearing that 13 were provided to me, the judge ruled on that and 14 said that, although the witness evidence was 15 admissible to show that there were errors or 16 there were problems that had occurred in other 17 branches, there wasn't going to be a trial of 18 the other issues within the Castleton trial. 19 So it all happened in a very compressed time 20 frame, as far as I can recall, and there was 21 a ruling on the admissibility or relevance of 22 issues in other branches that meant that this 23 went back onto the backburner. That's my 24 recollection. 25 Q. So just on the chronology, yes -- 104 1 A. Yes, thanks. 2 Q. -- this the morning of the opening. 3 A. Yes, thanks. So the case -- 4 Q. The trial opened on Wednesday, 6 December? 5 A. Yes, I think there were two pre-reading days, 6 I think. I thought the first day of the trial 7 was Monday, the 4th. 8 Q. Let's put it a different way. I think we can 9 agree that this was the day on which you opened 10 the case. 11 A. Fine, thank you. Sorry, I don't wish to argue 12 with you. That's just my recollection. 13 Q. The judgment that you're referring to, I think 14 if we look at POL00021678, this is a copy of the 15 judgment -- 16 A. Yes. 17 Q. -- and -- 18 A. Ah, yes. This remains me of this where I've 19 reconstructed what happened from. I can't 20 remember the precise order. Again, if we had 21 the benefit of the transcripts, we'd see exactly 22 what had happened. 23 Q. I think if you turn to page 8, please, and look 24 at paragraph 22: 25 "During the hearing, Mr Castleton sought to 105 1 adduce evidence of other complaints from 2 subpostmasters of other post offices about the 3 Horizon system. I admitted ... the fact that 4 there were a few such complaints, but I refused 5 to admit evidence of the fact underlying such 6 complaints, since that would have involved 7 a trial within a trial." 8 A. Yes. 9 Q. Essentially, was that your submission on behalf 10 of the Post Office? 11 A. I -- again, I'm afraid I genuinely can't 12 remember. I suspect it may have been, though. 13 I think that's. 14 Q. But it was permissible to say there had been 15 a few complaints but what those complaints were 16 or the facts of them underlying them was not 17 admissible? 18 A. I'm not sure that I would have put it exactly 19 like that, but that's the way it's recorded. 20 Q. In the event, did you give disclosure of the 21 facts concerning the Callendar Square or Falkirk 22 bug? 23 A. I don't recall giving disclosure. Sorry, 24 I don't recall my solicitors giving disclosure 25 is the accurate answer. 106 1 Q. Thank you. Yes, that can come down, thank you. 2 Can we turn, please, to the way that the 3 case was put on accounts stated and settled 4 accounts and just go back to paragraph 27 of 5 your witness statement, please, on page 8. You 6 say in the second line: 7 "... I recalled that there was a line of 8 authorities in relation to accounts stated and 9 settled accounts ... I realised that there was 10 authority for the argument that if Mr Castleton 11 was tendering his own figures to [the Post 12 Office], he was vouching their accuracy. 13 I therefore advised that we should realign our 14 pleaded case to take this point and we should 15 try to establish the true trading position by 16 reference to Mr Castleton's own documents ..." 17 Then paragraph 92, please, on page 31 of the 18 witness statement. You have been asked whether 19 there were any other matters you would like to 20 bring to the attention of the Chair and you say 21 you've seen various books articles and comments 22 that make reference to the Post Office v 23 Castleton case: 24 "The general assumption in those materials 25 seems to be that, in some way, the operation of 107 1 the Horizon IT System was an issue in the case 2 that led to judgment being given in favour of 3 [the Post Office]. However, a review of the 4 pleadings, the witness statements and the 5 judgment should provide enough information to 6 confirm that the case in fact turned on 7 Mr Castleton's own signed books, records and 8 accounts produced by him as the agent of [the 9 Post Office]." 10 That matches what Mr Dilley told us 11 repeatedly yesterday. He said the Post Office 12 succeeded in its claim, in spite of the computer 13 system; it succeeded in its claim on the basis 14 of physical accounting records. 15 Can we just look at the pleadings, please, 16 starting with LCAS0000190. This is the 17 Re-amended Reply and Defence to Counterclaim and 18 we can see, if we go to page 3 and scroll down, 19 it's settled by you; can you see that? 20 A. Yes. 21 Q. If we go back to page 1, please, and look at 22 paragraph 3. It's pleaded: 23 "With respect to paragraphs 5 and 6 of the 24 Defence, Fujitsu Services have looked at the 25 Claimant's computer system and have confirmed 108 1 that the losses recorded by the Defendant were 2 caused by a difference between the physical 3 transactions that actually occurred and were 4 recorded on the system by the Defendant or his 5 assistant as taking place and the cash in hand 6 that was declared by the Defendant relating to 7 those transactions, and accordingly those losses 8 were not caused by the Claimant's system's 9 software or hardware." 10 We ought to look, I think, at just what 11 paragraphs 5 and 6 of the Defence had said, 12 LCAS0000294. If we go to page 3, paragraphs 5 13 and 6, Mr Castleton had pleaded: 14 "The Defendant repeatedly sought assistance 15 from his managers within the Claimant company 16 during the period over which the apparent 17 shortfall accumulated. No assistance was 18 forthcoming. The Defendant avers that any 19 apparent shortfall is entirely the product of 20 problems with the Horizon computer and 21 accounting system used by the Claimant. 22 "The Defendant further avers that, he will 23 be able to demonstrate through a manual 24 reconciliation of the figures contained within 25 the daily balance snapshot documents created by 109 1 the Defendant during the course of his tenure as 2 subpostmaster at the Marine Drive branch Post 3 Office, which were remove from the post office 4 on the Defendant's suspension, that the apparent 5 shortfalls are in fact nothing more than 6 accounting errors arising from the operation of 7 the Horizon system." 8 So Mr Castleton's case was that the 9 shortfalls were entirely a product of the 10 Horizon System, yes? 11 A. That's what he says. 12 Q. In the Reply and Defence to Counterclaim, you 13 pleaded that that was denied, that the losses 14 were not caused by the claimant's system's 15 software or hardware? 16 A. Yes. 17 Q. Can you help us on what material that was based? 18 A. My instructions. 19 Q. Where were those instructions obtained from? 20 A. My instructing solicitors. 21 Q. By what means? 22 A. Well, at this distance in time, I can't recall 23 but ... 24 Q. But you recall what was pleaded: that Fujitsu 25 had -- we'd better get the wording exactly 110 1 right. 2 A. Yes. 3 Q. LCAS0000190, paragraph 3: 4 "... Fujitsu Services have looked at the 5 Claimant's computer system", et cetera. 6 A. Yes. 7 Q. Again, and appreciating the distance of time, 8 can you recall anything more than "That was 9 based on my instructions, which came from my 10 solicitor"? 11 A. No. 12 Q. Can we look, please, at POL00069801. If we look 13 at the foot of the page, just scroll up a little 14 bit, just a tiny about more, there's an email 15 from you to Mr Dilley of 8 November. 16 A. Yes. 17 Q. Then if you scroll up to the top of the page, 18 you'll see he says: 19 "I thought it would be easiest [solicitors 20 often say this] to reply in blue below next to 21 your original email." 22 A. And, of course, we have the benefit of a black 23 and white copy. 24 Q. Exactly so. So it is doubtless easiest for 25 them. If we scroll down, please. I think we 111 1 can see from the typescript where you're 2 speaking and he's replying? 3 A. Yes, I think my points end with question marks 4 and then the text after that is -- 5 Q. Exactly, and I think in original they would be 6 blue. 7 A. Yes. 8 Q. "At what time of day was Castleton suspended? 9 "Who arranged for the temporary 10 subpostmaster to take over?" 11 Scroll down please: 12 "Was the sub post office shut ... 13 "When was the P242 signed ... 14 "Did the branch trade", et cetera. 15 There's a very wide range of issues upon 16 which you're seeking instructions there but not 17 the one that I'm asking about. 18 A. Yes. 19 Q. Again, can you recall how that information had 20 been provided -- 21 A. No. 22 Q. -- namely that Fujitsu had examined the system? 23 A. No. 24 Q. In any event, quite aside from the nice legal 25 point, the reliability of the product of 112 1 Horizon, at at least this branch, was an issue 2 or potentially an issue in the trial? 3 A. Potentially an issue, yes. Although, if you go 4 back to the defence, you'll have seen that the 5 averment was that Mr Castleton would be able to 6 establish from the primary figures that they 7 were artificial errors rather than real -- 8 sorry, artificial deficiencies rather than real 9 deficiencies. So his case was based upon the 10 written figures rather than the product of 11 Horizon. 12 Q. But, in any event, would you agree that 13 disclosure had to be given by the Post Office in 14 relation to the question of, if it possessed 15 such documents, whether such losses were caused 16 by Horizon, irrespective of your legal point? 17 A. One would have to look very carefully at the 18 scope of the disclosure obligation and the 19 information that was being sought. Now, at this 20 stage, Mr Castleton was represented by 21 solicitors and they no doubt explored disclosure 22 issues with my instructing solicitors but 23 disclosure was not an issue with which I was 24 involved or upon which I was instructed, as far 25 as I remember, anyway. 113 1 Q. Can we, lastly, on this subtopic look, please, 2 at LCAS0000197. This is a typed copy of 3 a recording of, amongst other things, I think 4 your opening of the case on 6 December 2006. If 5 we could turn, please, to pages 14 and then 15, 6 please, starting at 14. 7 A. Do we know who the author of this document was? 8 Q. I believe, from the designation, it's 9 Mr Castleton's solicitors, ie LCAS means Lee 10 Castleton, so the Unique Reference Number 11 I called out. But I can check that if we take 12 break or when we take a break in the afternoon. 13 You look quizzical. 14 A. I just didn't understand Mr Castleton to have 15 solicitors instructed and it's normally -- 16 Q. No, no, no, now. 17 A. Oh, right. 18 Q. He's got solicitors in this Inquiry -- 19 A. Ah, I see. 20 Q. -- who have obtained a copy of the recording and 21 have had it transcribed. 22 A. I see. Not by an official transcriber, though. 23 Q. Is there a point on that? 24 A. No, it's just normally I would trust Smith 25 Bernal as being an authorised transcriber, 114 1 whereas I just don't know what this document -- 2 I have no idea. It's just a piece of paper that 3 purports to record what is stated and I just 4 wondered what the provenance of the document 5 was, that's all. 6 Q. Shall we look at the piece of paper? 7 A. Mm, by all means. 8 Q. Page 14. In fact to give you some context we 9 should start at 13. Just under "I'm grateful" 10 23.38, you are -- 11 A. I'm sorry. I'm not sure I'm there. Oh, I've 12 got it, thank you. 13 Q. You're recorded as saying: 14 "No, no, of course. For the assistance 15 perhaps of Mr Castleton what I was trying to do 16 for the Court is." 17 The judge said: 18 "Is give me background. 19 "You: A very general background as gentler 20 introduction at this stage as I can. Then 21 I propose to address your Lordship very briefly 22 on one point of view that arises on the burden 23 of proof. 24 "Judge: Yes. 25 "And then even if I'm right on that issue of 115 1 burden of proof it might be of assistance to the 2 court and to Mr Castleton if I complete 3 a comprehensive opening so the Court has 4 presented to it in as neutral a way as possible. 5 "Answer: Yes. 6 "The primary documents. 7 "Yes. 8 "There will come a point at which I will 9 make some submissions as to my primary case ... 10 "But I hope that will be of help to 11 Mr Castleton to relieve him of any burdening of 12 opening the case. 13 "Yes, quite. 14 "And also provide a balanced view of the 15 primary documents before I make some submissions 16 as to why we're bound to win, otherwise wouldn't 17 be here but [hopefully] that's of assistance 18 [for] Mr Castleton." 19 Then over the page, judge says: 20 "The biggest issue in this case seems to be 21 whether the computer is working properly, isn't 22 it? 23 You say: 24 "Well, that's how Mr Castleton would like to 25 portray it. 116 1 "Judge: Yes. 2 "You: And it's a matter your Lordship may 3 have to consider. 4 "Yes. 5 "But I'd invite your Lordship to listen to 6 my opening and understand ... 7 "The facts. Much like a pocket calculator 8 a computer is only a tool that reflects the 9 information that's entered on to it ... 10 "And the way the system is meant to work is 11 that Mr Castleton is meant to check the 12 underlying physical transactions against what's 13 shown on the printout." 14 He says: 15 "I see. Well, I'll leave it to you to 16 explain that in due course." 17 Then you say: 18 "And your Lordship in fact touches the core 19 of this question the core of this trial ... and 20 that is is this a trial about an account product 21 produced by an agent ... 22 "Which is verified by him or is this a trial 23 which is a rampage through how a computer system 24 works and whether this is whether Mr Castleton 25 can say that the computer has anything to do 117 1 with this trial at all. 2 "Judge: When you say it's an account ..." 3 Then there's an unclear passage: 4 "... which it may well be but it's still 5 open to Mr Castleton to say that the account is 6 wrong ..." 7 You say: 8 "It's still open to Mr Castleton to say the 9 account is wrong in certain limited respects. 10 "Judge: If the computer's wrong, if it can 11 be shown that the computer's wrong." 12 You say: "If he could show the computer were 13 wrong. 14 "Yes." 15 You say: 16 "... in my respectful submission he could 17 only do that by producing physical evidence as 18 to why it was wrong ... 19 "And that is going to be the nub of the 20 dispute." 21 So this is the first time we see the 22 strategy of relying upon the vouchsafing of the 23 physical cash account being deployed at the 24 trial, I think. 25 A. Being deployed at the trial, yes. It was 118 1 deployed in the amended statement of Particulars 2 of Claim. 3 Q. Yes, yes. I meant orally -- 4 A. Yes. 5 Q. -- at opening. So was the trial about whether 6 the Horizon-produced documents included accurate 7 cash accounts? 8 A. No. Well, not as far as I understood it. The 9 trial, or the claim, was based upon 10 Mr Castleton's signed statements of account. 11 Q. Where had those documents all come from? 12 A. Mr Castleton. 13 Q. No, no, where had the documents that he had 14 signed, where had they come from? 15 A. I don't know. 16 Q. What had produced them: a computer? 17 A. Thinking back all these years, some of them may 18 have been produced by a computer, some of them 19 may have been produced by one of those sort of 20 typing calculators, some of them may have been 21 produced purely in manuscript. I think the 22 lists of amounts of cash by denomination were 23 manuscript documents. 24 Q. But the end -- I'm so sorry. The end of week 25 cash accounts -- 119 1 A. Yes. 2 Q. -- which were a principal document that you 3 relied upon as the agent's account -- 4 A. Yes. 5 Q. -- they were produced by Horizon, weren't they? 6 A. They may well have been, yes. 7 Q. They -- 8 A. I -- sorry, I'm not trying to be difficult, 9 I genuinely can't remember. I think they were 10 printed documents and I think they were signed 11 off by Mr Castleton. 12 Q. Can we turn to a different subtopic, please, and 13 look at some tactical issues. Can we go back to 14 paragraph 52 of your witness statement, please, 15 which is on page 16, and scroll down. Thank 16 you. You say: 17 "I have no idea what the tactical position 18 of [the Post Office] was in this litigation or 19 what reasoning was behind it." 20 Yes? 21 A. Yes. 22 Q. You say that you: 23 "... advised explicitly that the costs were 24 going to be out of all proportion to the amount 25 at stake, but [you] continued to be instructed 120 1 to progress the matter to trial." 2 You even advised that: 3 "... a drop hands settlement should be 4 attempted, but that does not seem to have been 5 taken up." 6 Yes? 7 A. Yes. 8 Q. So you had no idea at all of what the Post 9 Office's tactics were in this litigation, why it 10 was continuing to fight it, why it was 11 continuing to spend money on it? 12 A. I thought it was commercial madness. 13 Q. And you used that word -- 14 A. I might well have done, yes. 15 Q. -- in an email -- 16 A. I tend be quite blunt about my views. 17 Q. -- yes, about stopping this madness? 18 A. Yes. 19 Q. I just want to see whether things were revealed 20 to you about why your client was pursuing this 21 madness. 22 A. Sure. 23 Q. POL00069490. This is a telephone attendance 24 note of a conversation between Mr Dilley and you 25 on 10 October 2006. 121 1 A. Yes. 2 Q. If you just read the first three paragraphs to 3 yourself to get some context, rather than diving 4 straight in. 5 A. Yes. 6 Q. In the fourth paragraph, it records that you 7 think you thought: 8 "... we should play some brinkmanship and 9 press for a December trial. If they disclose 10 an experts report that harms us as they are 11 [going to be] so late, we can always ask the 12 court to vacate the trial. However at the 13 moment, they have not disclosed an experts 14 report and he thinks we can go to trial without 15 one. However, he wants us to get client 16 approval for this strategy." 17 On the issue of brinkmanship, what do you 18 understand you to have meant in this context? 19 A. Yes, so this was a question that was posed to me 20 at the outset and I have thought about it. 21 I don't have a direct recollection now of what 22 was being said but I can reconstruct what 23 I would have been thinking, if that would be of 24 help. 25 Q. Yes, please. 122 1 A. So you have what is, by High Court standards, 2 a tiny piece of commercial litigation going to 3 trial. You have some generalised allegations 4 that haven't been particularised and you have 5 some directions for exchange of evidence and 6 exchange of expert evidence. 7 It is quite clear that the longer this case 8 drags on, the more of a gaping wound the costs 9 are going to become. They're already wholly 10 disproportionate to the amount at stake and 11 something has got to force the issue, either 12 to -- that will either result in the case 13 becoming clear, the evidence, the expert 14 evidence articulating what it is that the 15 defendant is pointing at, or it needs to be go 16 to trial. What you can't do is just let it roll 17 on and on and on. 18 So press for the December trial, see if that 19 provokes the service of the evidence that's 20 going to be used by way of defence. If it does 21 actually provide a defence, then we might need 22 to seek an adjournment. If it doesn't, then you 23 just go to trial. 24 Q. Thank you. Can we turn forward to POL00072432. 25 This is an attendance note on 16 October, so six 123 1 days after the conversation we've just looked 2 at. It's not an attendance note upon you; it's 3 Mr Dilley on Mandy Talbot. 4 A. Yes. 5 Q. If you just read the first couple of paragraphs 6 to yourself to get some context. Then if we 7 look at paragraph 3: 8 "Counsel was much happier with the case now 9 we had all these witness statements and thought 10 they were really thorough and we didn't really 11 need expert evidence ... Counsel therefore wants 12 to play some brinkmanship with the other side, 13 ie push for a December trial, but preserving our 14 ability to get that adjourned if they serve 15 a late report we need to deal with. I said that 16 we could prepare for a December Trial if 17 necessary and I was happy to do so, but I was 18 concerned to make sure that we could reply to 19 any expert report served by [Mr] Castleton. 20 I also thought that our counsel was effectively 21 trying to ambush the other side because he 22 thinks that when we serve these fifteen witness 23 statements on them, they will be knocked reeling 24 a bit. Mandy appreciates the tactics of this. 25 She said that the only thing was with a December 124 1 trial is that the Post Office get very busy 2 before Christmas generally. She will speak to 3 her colleagues and come back to me on counsel's 4 tactical ideas." 5 There's a subsequent email, no need to -- 6 sorry, subsequent telephone attendance note 7 saying that the Post Office are happy enough to 8 follow counsel's advice and go for the December 9 trial, purely as a tactic. That's POL00069453. 10 The type of brinkmanship spoken of here is 11 of a slightly different flavour, isn't it? Was 12 it part of your strategy to ambush Mr Castleton? 13 A. No, not at all. We'd had a CMC, I think, in 14 September or October of this year. 15 Q. Of that year? 16 A. That year. 17 Q. It was a pre-trial review, not a -- 18 A. I'm grateful -- where Mr Castleton was 19 represented by counsel and we had both said that 20 this case was not suitable for the High Court, 21 and we had invited the master to adjourn it off 22 to Central London County Court. And the master 23 had declined to do that. He wanted to hold it 24 to a trial date in October to December 2006. 25 So it was a court driven direction for 125 1 a hearing and the hearing had been fixed, and 2 there had been directions down to the hearing. 3 It's hardly an ambush when everybody has been 4 told about it by the master giving the 5 directions. And I felt we should hold it 6 because, otherwise, not only were we going to be 7 staying in the High Court and not getting the 8 advantage of the earlier hearing date that the 9 master was keen to achieve when he kept us in 10 the High Court, but we wouldn't be getting the 11 evidence that he'd directed be served. 12 So I don't think -- I mean, with respect to 13 Mr Dilley, I don't think he's correct to 14 describe it as an ambush. 15 Q. Thank you. Can we move, please, to page 15 of 16 your witness statement at paragraph 49. 17 Page 15, please, paragraph 49. You say: 18 "I have absolutely no idea why or by whom 19 the Castleton case was considered a test case -- 20 although I note that Mandy Talbot apparently 21 said it had 'almost become a test case in spite 22 of itself' [in an] attendance note of ... 23 11 September 2006 ... As far as I was concerned, 24 it was a single case to be decided on its own 25 facts, as with every other case. I did not 126 1 adjust the issues to run it as a 'test case', 2 nor was I asked to run it as a test case for 3 anything (I was only ever instructed to been 4 a claim to recover amounts owing). The case was 5 not presented to the court as a test case, and 6 in my view the judgment does not read as if the 7 judge treated it as a 'test case' of anything." 8 So reading that together, it was your view 9 that this was not a test case in any sense of 10 that word, or those words, for the Post Office? 11 A. Yes. It was a single one-off case. 12 Q. Can we look, please, at POL00069622, which is 13 the attendance note you referred to there. This 14 is a six-page attendance note of a conference 15 held with you, two solicitors from Bond Pearce 16 and a number of the witnesses that the Post 17 Office was going to use at Mr Castleton's trial. 18 A. Yes. 19 Q. It's at your chambers. If we just go to page 5, 20 please, and look at the end of the document. 21 Thank you. "Meeting with Mandy Talbot": 22 "Tom [that's Tom Beezer, I think] explained 23 that the big issue in this case was proving the 24 loss. Horizon is like a big calculator and it 25 can be changed after the event (Tom went on to 127 1 explain why)." 2 Just thinking back to the answer you gave 3 about the issue of whether you got an answer to 4 the reasonable question you asked -- can the 5 system be changed after the event -- presumably 6 you don't now recall receiving this explanation 7 nor indeed what the explanation was? 8 A. No. 9 Q. Again, thinking back, do you think this played 10 any part in the strategy of deploying a nice 11 legal point that there were actual real 12 difficulties on the ground in proving a loss? 13 A. No, I don't think I do recall this playing any 14 part because I just think the sequencing is 15 wrong. I think I'd already taken the decision 16 by that stage, that it needed to be by way of 17 settled account or accounts stated. 18 I thought -- look, it's such a long time ago but 19 my feeling at this remove is that that decision 20 or my advice was given in August and that it 21 then, sort of, rolled forward. 22 Q. At the foot of the page: 23 "Mandy Talbot said that the difficulty is 24 this has almost become a test case in spite of 25 itself. The Post Office other solicitors' cases 128 1 are waiting and watching on this." 2 Then it turns to consider settlement. 3 Did you know of any reason why 4 Mr Castleton's case might be singled out as 5 a test case, instead of other cases involving 6 allegations that there were issues with the 7 Horizon System? 8 A. Not -- I don't remember knowing any at the time, 9 no. I don't know any now and I don't remember 10 knowing any at the time. 11 Q. Would you expect a client who viewed their case 12 to be a test case to ordinarily inform you of 13 that fact so that you would have knowledge of it 14 when conducting the litigation? 15 A. In my professional experience, the only occasion 16 on which a client has told me that a case is 17 a test case is when it's been a Government 18 department and Government departments then ask 19 for particular arguments to be run in particular 20 ways so as to achieve a result that is useful 21 for other cases. And I have not been lead 22 counsel instructed on those cases; I've been 23 acting as junior to the Treasury devil. 24 So I've seen it happen, I've seen it happen 25 for Government departments, I've never 129 1 experienced it for a commercial client and the 2 considerations are rather different. 3 Q. Do you now recall what you made of being given 4 this information? 5 A. Given what information? 6 Q. What's recorded at the foot of the page. 7 A. No. Should I? 8 Q. What effect would that information have on you? 9 A. I don't think it would have any effect at all 10 because I don't think there was anything I could 11 do. I had a case. My obligation was to run it 12 to the best of my ability, in accordance with my 13 instructions. But my instructions weren't "Run 14 it in this way so that we get a precedent to 15 achieve X or Y or Z". My instructions were 16 "There is a debt of £25,500-odd owing by 17 Mr Castleton on the basis of what's shown 18 through his branch, please take the claim to 19 trial". 20 It wasn't -- a Government department would 21 say, "Please take the case to trial and achieve 22 this result on the basis of these arguments". 23 That was -- my discretion as to how the case was 24 put at trial was never circumscribed. 25 Q. I see. So you weren't given instructions to try 130 1 to establish a legal point? 2 A. Yes, that's right. 3 Q. You weren't given instructions to try to 4 establish the integrity of the Horizon System, 5 either (a) insofar as it worked in the Marine 6 Drive branch or more generally? 7 A. Exactly. And, indeed, had I been asked to do 8 that, I think I would have given them a pretty 9 succinct answer as to why I wasn't going to do 10 that and how I couldn't do that, particularly 11 not on the basis of the evidence that I had. 12 Q. Well, also, such an approach would be 13 inconsistent with your primary strategy of 14 proving the case on the account? 15 A. Yes. 16 Q. So I am asking you what became of this. You've 17 got somebody saying to you here, an important 18 person within the Post Office, "This has become 19 a test case". 20 A. Well, she -- sorry, or -- 21 Q. Almost -- 22 A. There was a conversation in a conference in 23 September 2006 at which Mandy Talbot was 24 present. Mr Lister or Mr Beezer, or whoever it 25 was, took an attendance note and recorded 131 1 something that may or may not have been said 2 within that conference. I don't remember her 3 using those words but, there again, I don't 4 really remember the meeting at all. And "almost 5 become a test case in spite of itself", if those 6 were the words used by Mandy Talbot, they 7 don't -- if I was cross-examining, I wouldn't be 8 putting it to the witness that Mandy Talbot was 9 saying that it should be run as a test case. 10 It's more of an observation by an individual 11 as to what she thought was happening to the case 12 but there we are. I mean, I just can't assist 13 you as to what she thought she was saying, why 14 somebody has seen fit to take a note of it or 15 what it means, but it certainly didn't impact 16 upon what I was doing. 17 Q. Can we therefore look to some other documents to 18 see whether they provide some help. 19 A. Of course. 20 Q. POL00072741. This is an attendance note of 21 a telephone conference between you, Tom Beezer, 22 Stephen Dilley and Adrian Bratt on 16 August 23 2006. You discussed the pleadings on page 1 24 and, if we go over to page -- 25 A. Sorry, can we just -- yeah, so you can see here 132 1 that we're already discussing pleading it as 2 an account by an agent. 3 Q. Yes. 4 A. Yes. 5 Q. If we go over to page 2, please, you discuss the 6 defence and then the discussion ranges a bit 7 more broadly than that, if we go to the foot of 8 that page. You're recorded as saying, this is 9 two paragraphs from the bottom: 10 "... this would be better off in the 11 Chancery/Commercial list of Central London 12 County Court. We should write to the other side 13 and explain issues of proportionate use of High 14 Court time and effectively use our letter as 15 a shield to the judge." 16 Mr Dilley: 17 "This would have settled without the 18 computer/Horizon issue and the subsequent 19 subpostmaster's bloggers website." 20 A. Yes. 21 Q. What did you understand or what do you 22 understand that to refer to: the case would have 23 settled but for the computer/Horizon issue? 24 A. That Mr Dilley thought there was something that 25 was stopping the case settling and that -- well, 133 1 interpreting it now, that Mr Castleton was being 2 led to believe that his losses were illusory by 3 the fact that other people were saying that 4 there was something going on. 5 Q. Was there any suggestion made to you at this 6 time that it was important to the Post Office to 7 vindicate the reputation of Horizon? 8 A. No and, as I've just been saying, that didn't 9 form part of my strategy nor was it communicated 10 to me, nor could I have run it, had it been -- 11 had I been told to do it on the basis of the 12 material that I had. 13 Q. Can we look, please, at POL00069794. This is 14 a telephone attendance note of a conversation 15 with you on 9 November 2006, made by Mr Dilley 16 and the conversation was with Mr Dilley. If we 17 can look, please, at the second paragraph from 18 the bottom, that's Mr Dilley: 19 "I said that ultimately, the Post Office 20 driver had been getting a judgment against 21 Mr Castleton to show that the computer system 22 wasn't wrong and deter other subpostmasters from 23 bringing a claim. I therefore thought the most 24 important thing for them was getting judgment 25 for the full amount, and that we wanted as much 134 1 costs recovery as possible, but given that I had 2 previously told the Post Office that 3 Mr Castleton's asset position was unclear, 4 I think that if there is going to be any 5 movement at all in our negotiating position it 6 is going to be on costs." 7 So what this note records you as having been 8 told, a month or so out from trial, was that the 9 driver for the Post Office had been to get 10 a judgment against Mr Castleton to show its 11 computer system wasn't wrong and to deter other 12 subpostmasters from bringing a claim. That's 13 not about recovering the money, is it? 14 A. No, I agree. 15 Q. It wasn't about the sums involved in either the 16 claim or the counterclaim? 17 A. Yeah, I can see that. 18 Q. And you were being told, according to this note, 19 it was to get a judgment to show the integrity 20 of a computer system and about deterrents? 21 A. Yeah, I can see that. 22 Q. Had that been expressed to you previously? 23 I mean, looking back at some of the things that 24 we have earlier looked at, the earlier 25 attendance notes, when you were saying it's 135 1 "madness" to continue to litigate this claim, 2 and they said, "No, it's important for us to 3 continue it". Do you think, thinking back, that 4 that's what they regarded this case as about, 5 the Post Office? 6 A. I genuinely don't think so. I mean, I hadn't 7 focused on this at all and it certainly hadn't 8 formed any part of my thought process in 9 preparing for this hearing. I didn't recall 10 this as being information conveyed to me. I'm 11 quite surprised to see it there now. 12 I don't recall it at the time and had 13 I focused on that, I think my response would 14 have been that I couldn't -- I simply couldn't 15 prove that the system wasn't wrong. It just 16 wasn't an achievable objective. 17 Q. Can we look next then at POL00069775. You'll 18 see from page 1 that you're copied into this 19 email chain here. 20 A. Yes. 21 Q. If we start at the back of the chain, please, on 22 page 3. 23 If you just look slightly above that please, 24 Frankie. 25 You'll see that the chain starts off with 136 1 something you're not copied in on: an email from 2 Mandy Talbot to a range of people within the 3 Post Office and to Mr Dilley, 10 November 2006: 4 "... solicitors ... have substantially 5 accepted our counter offer. 6 "Castleton is not prepared to have judgment 7 ... against him ..." 8 Scroll down, please: 9 "Castleton is prepared to make an open 10 statement that [the Post Office] can use as it 11 chooses exonerating the HORIZON System. I now 12 [seek] your assistance ..." 13 Then skipping a paragraph: 14 "I, Mr L Castleton ... admit that a sum of 15 money was owed by me to Post Office Limited as 16 a result of errors which arose whilst I was the 17 postmaster at the above office. I had thought 18 that this debt arose due to a malfunction of the 19 HORIZON System but I [now] accept that I was 20 mistaken and that the debt arose out of human 21 error. I declare that the HORIZON System did 22 not contribute to the errors in any way and 23 formally withdraw all statements I made to the 24 contrary." 25 Then scrolling up, please. Mr Baines, on 137 1 the same day, says: 2 "Mandy, 3 "I think the draft says all that it needs 4 to. 5 "... a few minor changes ... revised text as 6 follows: 7 "'I, Mr Lee Castleton ... admit that a sum 8 of money was owed by me to Post Office Limited 9 as a result of errors which arose whilst I was 10 the postmaster at the above office. I had 11 thought that this debt arose due to 12 a malfunction of the HORIZON system but I now 13 accept that I was mistaken and that the debt 14 arose out of human error. I declare that the 15 HORIZON system did not contribute to the errors 16 in any way and formally withdraw all statements 17 I made to the contrary." 18 Then scrolling up still further. We can see 19 Mr Dilley's proposed suggestion. He says: 20 "1. I don't think Mr Castleton will want 21 quite as plainly to admit owing the [Post 22 Office] money ... We can try to get him to say 23 that if you want, but I doubt he will. I wonder 24 if we can change it to: 25 "I, Mr Lee Castleton ... fully and 138 1 unreservedly withdraw the untrue allegations 2 I have made about the operation of the Horizon 3 system. Previously I thought that discrepancies 4 that arose at the Marine Drive Post Office 5 whilst I was postmaster arose due to 6 a malfunction of the Horizon system, but I now 7 accept that I was mistaken and that the 8 discrepancies were caused by human error. 9 I declare that the Horizon System did not cause 10 or contribute to the discrepancies in any way 11 and I formally withdraw all statements I made to 12 the contrary and undertake not to repeat them, 13 and/or make any further allegations about the 14 Horizon System and/or its functioning." 15 You were sent that. 16 I can't see any trace of you having replied 17 to that or offered a view on any of the three 18 formulations of the statement that it was 19 proposed should come from the mouth of 20 Mr Castleton. 21 Would you agree that this discloses Post 22 Office's motivation, an important motivation 23 being to get a publicly declared clean bill of 24 health out of the settlement? 25 A. Well, I can see what you're arguing but I had no 139 1 input -- 2 Q. I'm sorry, you can see what I'm? 3 A. Arguing. 4 Q. I'm not arguing anything, I'm asking questions. 5 A. I can see what it says. I can't give you 6 evidence as to what the Post Office's 7 motivations were but I can see why you're saying 8 that that suggests that what they're doing is to 9 vindicate the Horizon System. 10 Q. Does this not disclose further evidence that it 11 was revealed to you that they saw this as 12 something of a test case to get a clean bill of 13 health for Horizon? 14 A. It discloses to me that they don't want 15 Mr Castleton to say that the problems were 16 caused by Horizon. 17 Q. But, of course, this ran directly contrary to 18 the way that you wanted to run the case, which 19 was Horizon's irrelevant, this has got nothing 20 to do with Horizon? 21 A. It ran directly -- well no, it didn't cut across 22 what I was going to argue at all. It made no 23 difference at all to what I was going to argue. 24 As far as I was concerned, I had instructions to 25 run a case based on the Amended Particulars of 140 1 Claim and that was what I was going to do and, 2 at this stage, 10 November, I suspect I was 3 starting to work pretty hard on the primary 4 documents. 5 So, as you'll probably be aware, when one is 6 prepping for a large trial, even though the 7 amount at stake was small, there was a lot of 8 paperwork that needed to be understood. I was 9 focused on getting on with the trial 10 preparation. 11 MR BEER: Thank you, sir, might that be 12 an appropriate moment for the afternoon break? 13 It's 2.00 now. 14 SIR WYN WILLIAMS: Can I just ask -- sorry, there 15 was just one part of that document I had 16 a question about for Mr Morgan. Can it go back 17 up, it will only take a minute. 18 You see, Mr Morgan, that the paragraph in 19 quotes which Mr Beer was asking you about, in 20 the next paragraph, what's written is as 21 follows: 22 "The real question is whether we need the 23 undertaking ..." 24 Which I interpose to say I'm assuming that 25 relates to the paragraph in inverted commas: 141 1 "... in clause 5 of the schedule. Richard 2 [which I assume is you] thinks that by making 3 a song and dance we highlight a sensitivity", 4 et cetera. 5 So it appears as if you were expressing 6 reservations about having that sort of formula 7 in any part of the Tomlin Order. 8 A. Mr Chairman, part of the problem with this is 9 that you can see from the top left there's 10 a draft Tomlin Order 10 November attached as 11 an attachment. 12 SIR WYN WILLIAMS: Yes. 13 A. When I was provided with the bundle of 14 supplemental documents it helpfully has the back 15 sheet for the draft Tomlin Order but not the 16 terms of the order itself. So I haven't been 17 able to refresh my recollection of what -- 18 SIR WYN WILLIAMS: Are you telling me, Mr Morgan, 19 that -- I might be assuming that clause 5 20 relates to the paragraph in inverted commas 21 above but it may, in fact, not? 22 A. Well, I don't know because there's -- there 23 seems to be an undertaking and that doesn't 24 seem -- I -- look, I just can't assist because 25 I don't have the document to read to see what's 142 1 being talked about, and -- 2 SIR WYN WILLIAMS: All right. 3 A. -- I'm hesitant to commit myself to something 4 that I haven't read. 5 SIR WYN WILLIAMS: No, I follow. I follow. Right. 6 Thank you. 7 Yes, Mr Beer, we'll have our afternoon 8 break. How are we -- 9 MR BEER: 2.20, please. 10 SIR WYN WILLIAMS: How are we looking generally for 11 this afternoon? 12 MR BEER: We're looking good, sir. 13 SIR WYN WILLIAMS: Fine. Thank you very much. 14 (2.03 pm) 15 (A short break) 16 (2.20 pm) 17 MR BEER: Good afternoon, sir, can you see and hear 18 me? 19 SIR WYN WILLIAMS: Yes, I can. Thank you. 20 MR BEER: Sir, can I start by picking up on 21 a document that may assist both you and 22 Mr Morgan to answer the questions that you asked 23 him before we took the break and ask to be 24 displayed POL00081826_018. I can't ask for that 25 to be displayed. 143 1 Essentially, sir, I'll come back to this in 2 the hope that, in the next half an hour, that 3 document is on to the system, but it is the rest 4 of the Tomlin Order obtained from a different 5 source. It's amongst documents that the Inquiry 6 has recently been provided with, which is why 7 it's not on the display system at the moment. 8 Whilst that's done behind the scenes -- 9 A. Is paragraph 5 in the same terms as the -- 10 Q. Yes, and no, so let's look at the document when 11 I can display it. Thank you. 12 You've told us that before you argued the 13 case at trial, you didn't think that this was 14 a test case at all and it was essentially a case 15 that turned on its own facts? 16 A. Yes. 17 Q. Can we look, please, at POL00070020. This is 18 an attendance note of 22 January 2007 and you'll 19 see that it is described as "Hearing of 20 judgment -- Post Office Limited v Lee 21 Castleton", an attendance note of Mr Dilley. 22 Then scroll down a little bit, please. 23 "Hearing of judgment -- Post Office v Lee 24 Castleton". It sets out who's present. Then 25 there's some argument about costs. 144 1 A. Yes. 2 Q. Then, over the page, please, more arguments 3 about costs. Then scroll down to the 4 penultimate paragraph: 5 "Thereafter returning to counsel's chambers 6 and having joint telephone conference with Mandy 7 Talbot to update her on the outcome of the costs 8 submissions. She was very pleased. Richard 9 also offering to supply her with a separate note 10 on how she could use the judgment and advising 11 that ... under the new procedure the 12 subpostmasters don't physically sign off the 13 accounts that they supply every month, she 14 should think about getting them to do this. She 15 explained that is what the Legal Affairs team in 16 the Post Office has advised them to do when they 17 change the system but they were overridden by 18 business concerns. RM suggesting that they at 19 least electronically sign some certification on 20 the accounts stating that they accept that they 21 are true and accurate and represented a fair 22 position on profit and loss stock and cash 23 because if this case ever arose again, then it 24 would make it much easier for the Post Office to 25 rely on the Castleton precedent and get ... 145 1 judgment against subpostmasters and not incur 2 such great costs next time." 3 Was this is an offer by you to help the Post 4 Office get maximum value out of this precedent? 5 A. Again, it's a very long time after the event, 6 but my -- it's no more than an impression of 7 a recollection, is that after the judgment was 8 given, we had a discussion about whether it was 9 any use and you sort of see it picked up there, 10 there was some exchange where she told me or 11 somebody told me that the Post Office's whole 12 system had changed and that they were no longer 13 going to have cash accounts or no longer going 14 to have daily cash accounts and weekly accounts, 15 and so on and so forth. 16 And my response was that that meant that 17 Castleton was not going to be of any use unless 18 they had the cash accounts that we'd relied on 19 at trial to achieve the same accounting position 20 and that was the note that, in due course, 21 I produced and I think that's somewhere in the 22 bundles. 23 Q. Can we look at that, please, it's WBON0000023. 24 If we just scroll to the last page, please. One 25 page up, sorry, that's the back sheet. Can you 146 1 scroll down. 2 We can see that it's an undated advice 3 written by you, you've helpfully told us in your 4 witness statement by explaining that the 5 chambers' fee system shows that it was sent out 6 on 22 January 2007. 7 A. Yes. 8 Q. So if we go back to the first page, please, you 9 say: 10 "Following judgment ... I have been asked to 11 provide a short written advice on the key points 12 that have emerged from my involvement in the 13 case as a whole and the judgment in particular. 14 I should emphasise that this Advice has been 15 written as a short preliminary overview and 16 should not be relied upon as providing a final 17 and definitive consideration of all steps that 18 should be taken in order to ensure that the Post 19 Office derives maximum advantage from the 20 judgment." 21 Just stopping there, did you know beforehand 22 that the Post Office wished to derive maximum 23 advantage of the judgment, ie before judgment 24 had been handed down? 25 A. No, but, there again, I didn't even know that 147 1 we'd won. 2 Q. I'm sorry? 3 A. There again, I didn't even know that we'd won 4 before the judgment was handed down. 5 Q. No, but were they not telling you that they 6 regarded this as a case, that it was 7 an important precedent or could be seen as 8 a test case -- 9 A. Not that -- 10 Q. -- and that it was a case which the Post Office 11 wished to use to deter other postmasters from 12 bringing claims? 13 A. Having seen the email that you took me to before 14 the break, I can see that that was one of their 15 objectives but it wasn't the basis upon which 16 the claim was run. Having won the case, this 17 advice is given in order to provide a steer as 18 to how it might be relied on if the same 19 procedure is followed in the future. 20 Q. Reading on, paragraph 2, please. You say: 21 "The first point is that it is easier to sue 22 a subpostmaster on an account produced by him 23 than try to prove that a loss has arisen in the 24 business. Trying to prove such a loss, if it is 25 possible at all, is extremely difficult 148 1 forensically and will inevitably be expensive 2 and time-consuming. 3 "The second point is that the Post Office 4 derives a significant advantage in litigation if 5 the subpostmaster bears the burden of proof to 6 show that the account sued on by the Post 7 Office, such as the Cash Account (Final), is 8 wrong, rather than the Post Office having to 9 prove that the account sued on is right. 10 "This reversal of the burden of proof can 11 only occur if the Post Office is suing on the 12 subpostmaster's own account, ie on a formal 13 account produced by the subpostmaster and 14 tendered by him to the Post Office as his 15 confirmed statement of the trading that has 16 occurred." 17 Then over the page. 18 "As such, a Cash Account (Final) (or any 19 other account produced by a subpostmaster) is 20 only likely to be treated as a final account for 21 a given period if it is (i) produced by the 22 subpostmaster (ii) at least in circumstances 23 where he is contractually required to produce 24 and verify the figures as accurate, but 25 preferably there he formally certifies the 149 1 figures as such, and (iii) where the 2 subpostmaster physically signs off the accounts 3 as such, alternatively signs electronically. 4 "The third and final point is that if and 5 when it is decided that a subpostmaster is to be 6 suspended or removed from post, he should be 7 required, in accordance with the terms of his 8 contract, to produce and sign a final account to 9 the date of his removal, whether or not the Post 10 Office has conducted its own audit. The purpose 11 of requiring this is simply to rely on the 12 reversal of the burden of proof and remove the 13 necessity (though not the desirability) of 14 having to call the auditors to prove the loss." 15 You say here that subpostmasters should be 16 required to sign the cash accounts. Was that 17 language reflective, as you understood it, of 18 the Post Office's attitude, as you had come to 19 understand it, that they were happy to impose 20 conditions on a postmaster that may have the 21 effect of, for example here, reversing the 22 burden of proof and thereby obtain a dominant 23 position or a position of power over the 24 subpostmasters? 25 A. No. This is almost a, sort of, reflection of my 150 1 Chancery background. It's more that the 2 principal/agent relationship entitled the 3 principal to rely on the accounts stated by his 4 agent as being final and definitive and, in 5 order to show that the account is that of the 6 agent, it would be rather sensible to have it 7 signed by the agent. 8 So I'm -- this note is written as a Chancery 9 practitioner giving advice as to the formal 10 situation on which an account stated arises as 11 between an agent and a principal, not the 12 reflection of the position as between 13 a subpostmaster and the Post Office, although, 14 as reflected in the terms of the contract as 15 then in existence between the Post Office and 16 subpostmasters that had been relied on in the 17 Castleton case, that seemed to arise as a matter 18 of necessary implication, from what I can 19 remember of the contract. But I haven't reread 20 the contract in the last 17/18 years. 21 Q. In relation to this advice, was it based on the 22 assumption that the loss of which the Post 23 Office complained was a genuine one -- 24 A. Yes. 25 Q. -- and not an artifact of the computer system? 151 1 A. Yes. Again, as a -- as somebody practised in my 2 field, I can't conceive of people signing off on 3 documents that aren't true. 4 Q. What about somebody signing off on documents 5 because they have to continue to do so to trade 6 into the following week and they phone 7 a helpline dozens and dozens of times and say, 8 "These things I'm signing off, they're not 9 correct". 10 A. Yes, I mean that's something that seems to have 11 emerged subsequently in the Post Office -- 12 sorry, in the case in front of Mr Justice 13 Fraser. I mean, I haven't followed that in any 14 great detail but I can quite understand why 15 people might say that it's signed under duress, 16 and so on and so forth. 17 When this matter came back to me on the 18 Rule 9 Request, one of the things I did was go 19 back and look and see whether Mr Castleton had 20 himself had given an indication that the figures 21 he'd signed off were inaccurate or that he'd 22 signed off on them because he was under some 23 duress or there was some other reason. And 24 I just -- I mean, I didn't at the time, and 25 I still I don't, get any hint of that in the 152 1 pleadings or the evidence. 2 I mean, there are all sorts of reasons why 3 figures might be wrong, or so on and so forth. 4 But, at no stage during the trial, so far as 5 I can recall, did Mr Castleton say that his 6 figures were wrong. Had he done so, the 7 consequence would have been that the trial would 8 have been adjourned, the matter would have been 9 remitted to a master for an account to be taken 10 and we would have gone through the same process 11 and established what the actual loss was, by 12 reference to amounts by way of cash and goods 13 within the business, what had been taken out, 14 what had been paid in, what had been transferred 15 out, what had been transferred in. There would 16 have been a process of verification of the 17 account on the old account stated procedure. 18 So we would have got to an answer, it might 19 not have been the same answer, but it -- the 20 whole process of the Amended Particulars of 21 Claim was to establish what the actual real loss 22 was. 23 Q. Just on that point, we'll come back to the note 24 in a moment, can we look, please, at 25 LCAS0000197. This is a transcription of the 153 1 recording of the opening, again. Can we just go 2 to page 11, please, and look at the foot of the 3 page. Thank you. 4 You're, in this part of the opening, 5 Mr Morgan, taking the judge through some 6 week-end balances and doing it week by week, 7 referring to accountant periods, and you've 8 dealt with 52. 9 The judge asked, second box from the bottom: 10 "... I see. I don't quite know what a trial 11 balance is. Do I need to know that?" 12 You say: "Well, my Lord, if I may I'll bring 13 your Lordship back to the delights of the Post 14 Office accounting system as I hope I make my 15 opening more coherent. I'm afraid it is quite 16 a technical trial in looking at how these 17 figures are made up ... 18 "And not that your Lordship needs any 19 reinforcement but it's taken me some number of 20 weeks ... 21 "To work out how all the figures go 22 backwards and go forwards but I hope I'll be 23 able to give your Lordship ... 24 "A rational and relatively simple 25 explanation. Of course Mr Castleton is the 154 1 expert and we'll be hearing from in due course. 2 "Mr Castleton: could I, my Lord?" 3 The judge says: "Yes. 4 "Mr Castleton: My Lord sorry throughout this 5 period the actual trial balance I'll be the 6 final balance for this week is actually produced 7 on a Wednesday evening and at this point this is 8 when the subpostmaster is allowed to address any 9 issues throughout the week's trading ... 10 "If there are any shortfalls then he's able 11 to ring a helpline that's run by the Post Office 12 in order to explain any problems that he's had 13 over the former week and any balancing problems 14 that have occurred prior to the Thursday 15 morning. You'll see that all those cash 16 accounts are actually timed and dated on the 17 followed morning which is a Thursday. 18 "I see. 19 "Because through ... 20 "You'll find that all of those losses have 21 had phone calls and assurances from the Post 22 Office themselves that they would look into the 23 reason as to why those losses were occurring. 24 "Yes. 25 "So they were all reported. 155 1 "Yes." 2 Then it stops. 3 That appears to be Mr Castleton, in the 4 course of the opening, saying that, although the 5 week-end accounts were signed off -- 6 A. Yes. 7 Q. -- all of the losses had phone calls made to the 8 helpline with assurances from the Post Office 9 that they would look into the reason why the 10 losses were occurring. Then, in evidence, at 11 POL00069279, this is a transcript of 12 Mr Castleton's evidence, and can we look at 13 page 37, please, and look at E. This is you 14 cross-examining Mr Castleton still. You asked: 15 "Do you also accept that when you produce 16 the document at 2979 that was a draft report 17 produced so as to enable you to check the 18 figures before you put them into the final cash 19 account? 20 "Answer: No, because (inaudible) final cash 21 account. I am sorry, but that is not the case. 22 The cash account generates itself. It is 23 generated from the transaction (inaudible) 24 Chesterfield." 25 "Question: If you take up bundle 6B -- 156 1 "Answer: Yes. 2 "Question: I suggest that in fact the cash 3 account is generated by your machine at Marine 4 Drive branch, it is not generated by 5 Chesterfield? 6 "Answer: If you look at (inaudible) witness 7 statement you will find that the series of 8 checks that the computer does through Marine 9 Drive Post Office branch through Chesterfield 10 corresponds; it is not generated in-house. And 11 you will also find me checking these figures now 12 that check to check is not a generated or figure 13 that we actually place into the computer, it is 14 a check that has done daily on separate 15 information that the computer then reproduces in 16 the cash account." 17 Then scrolling down, again at E, you asked: 18 "Did the cash accounts correspond to the 19 physical evidence of the transactions you had 20 undertaken? 21 "Answer: Not always, no. We need to 22 differentiate between cash account and the daily 23 transaction on the logs and also the stock ... 24 figures produced by the balanced snapshots." 25 Then over the page, please. At C: 157 1 "Question: So you check all the figures in 2 the final balance against fiscal records? 3 "Answer: Yes. 4 "Question: And only when you are happy with 5 that do you proceed to print out to cash account 6 final? 7 "Answer: And if there is anything I don't 8 agree with I make a phone call to helpline, 9 which is what we repeatedly did." 10 So, thinking back, given the intervention in 11 the opening, on the evidence that was given 12 there, wasn't it the case that Mr Castleton was 13 saying, "Yes, I signed the accounts that were 14 produced for me by the Horizon System, not 15 within my branch. I was signing that there was 16 a discrepancy, a shortfall, between the cash and 17 the stock which the system said I should have, 18 and the cash and stock which I, in fact, had and 19 I was reporting that at the time". It's not 20 something that's only emerged years later, is 21 it? 22 A. Well, my impression of his evidence, and that 23 may be a false impression and it's the 24 impression that the judge formed and it's the 25 impression that one gets from reading the 158 1 Defence as well, is that the figures that were 2 signed off by him were what was actually present 3 and were a fair and true reflection of what had 4 occurred. 5 Q. He was signing off that there was a discrepancy, 6 that there was a shortfall -- 7 A. Yes. 8 Q. -- and contemporaneously reporting that it 9 wasn't his responsibility. He was reporting 10 that back to the Post Office wasn't he? That's 11 what he was saying. 12 A. But there was a discrepancy between what he'd 13 got and what he ought to have -- 14 Q. Yes. 15 A. -- and that's what a loss is. 16 Q. Even if it was generated by Horizon? 17 A. Well, that may be where we differ because, at 18 the end of the day, what he actually has and the 19 business that he's done, if there's 20 a discrepancy between that and what he ought to 21 have, then that's a shortfall. 22 Q. Even if one of those is produced by a computer 23 which he says is faulty? 24 A. Well, I'm -- sorry, hang on. I'm not quite sure 25 what you say is the bit that's faulty. 159 1 Q. A document that I'm signing, which says I should 2 have this amount of cash and stock, £1,000, I've 3 in fact got £500 of cash and stock. I'll sign 4 that to say "The system says I should have 5 £1,000, I've in fact got £500". Sign that, true 6 and accurate. I get on the phone and say "The 7 bit of the account which says I should have 8 £1,000 is wrong. It's been created in the 9 following ways". 10 I mean, I'm not going to go through all of 11 Mr Castleton's calls to the helpline -- 12 A. No, no. 13 Q. -- where he repeatedly explained to them on the 14 day that the event happened why the system was 15 creating phantom figures. But that was his 16 case, wasn't it? It wasn't only something that 17 emerged years later before Mr Justice Fraser and 18 it may be that it wasn't very well articulated 19 by Mr Castleton, being a litigant in person, but 20 showing you the two things I have, the opening 21 and the evidence, the evidence and the point 22 were there, weren't they? 23 A. I didn't understand them to be there in that way 24 at the time, nor did I understand them to be 25 there on the basis of paragraph 3 of the amended 160 1 Defence and Counterclaim at LCAS0000294. 2 Q. Lastly, could I ask you some questions on 3 a discrete topic, namely the treatment of Anne 4 Chambers and Mr Jenkins. Please can we look at 5 POL00071438. This is an attendance note made by 6 Mr Dilley in respect of a conversation with you 7 on 11 August 2006. 8 It concerns the draft witness statements of 9 Anne Chambers and Gareth Jenkins. If you just 10 read the first couple of paragraphs to orientate 11 yourself, then look at the third paragraph: 12 "In relation to Gareth Jenkins' statement, 13 we need to firstly say he holds a position with 14 the job title of distinguished engineer. It 15 might be that we decide to put all the 16 information he is saying into the expert's 17 report given that it is really opinion 18 evidence." 19 So you have been provided with these two 20 draft witness statements from Fujitsu employees. 21 The advice that you're recorded as having given 22 there, would that reflect your view that, to the 23 extent that Mr Jenkins' witness statement 24 contained opinion evidence, that couldn't be 25 given by him, it had to be given by 161 1 an independent expert? 2 A. If it was truly opinion evidence, yes. 3 Q. Why would opinion evidence have to be given by 4 an independent expert, rather than Mr Jenkins? 5 A. Well, technically, anybody can give any evidence 6 they want in a civil trial but, ordinarily, it 7 would be excluded if it was opinion evidence, 8 unless it was given by an expert who was able to 9 give an independent expert view. 10 Q. Why couldn't Mr Jenkins give an expert view? 11 A. Because he's not an independent expert. 12 Q. The decision was taken, in the event, not to 13 call Mr Jenkins. Did you hold a view on whether 14 Anne Chambers was giving, according to her, 15 draft statement opinion evidence or evidence of 16 fact? 17 A. At this distance in time, I can't even remember 18 what she was saying. 19 MR BEER: Thank you very much, I understand. 20 Sir, those are the only questions that 21 I ask. I understand there are two Core 22 Participants who wish to ask questions. First, 23 Mr Stein. 24 SIR WYN WILLIAMS: Right. 25 Questioned by MR STEIN 162 1 MR STEIN: Mr Morgan, my name is Sam Stein. I ask 2 question on behalf of a very large group of 3 subpostmasters and mistresses. Can I take you 4 within your statement, please, to page 30. If 5 we can have that on the screen, please. I refer 6 to page 30 of Mr Morgan's statement, paragraph 7 (e) to start off with. Thank you. 8 Mr Morgan, you've been asked some questions 9 about this part of your statement, which is in 10 reference to 12 June 2012, where you had a short 11 consultation and you refer to it there as being 12 "The matter is entitled simply Post Office". 13 A. Yes. 14 Q. Now, you've been asked some questions about 15 that. So moving on from 2012 to 20 March 2014. 16 Now, at this point in your statement, you say 17 this, that you were "contacted by Linklaters to 18 advise Post Office Limited" and your records are 19 showing three short telecons and you think, 20 although you might be mistaken, that you also 21 had a short in-person consultation with Christa 22 Band of Linklaters and Paula Vennells of POL. 23 At that time, Paula Vennells of POL was the 24 Chief Executive Officer; is that right? 25 A. Part of my difficulty with this is that I'm not 163 1 sure that this is a true memory. I mean, what 2 I've tried to do is I've tried to give as full 3 and accurate an account as I can but then say 4 I actually don't think this is a true memory. 5 The problem is I've seen Paula Vennells on TV, 6 and I sort of feel that I was meant to meet her 7 but I just can't find any record of actually 8 meeting her. And I'm sure, given the way my 9 clerks like to make sure that everything is 10 recorded, that, if there had been a meeting, 11 I would have had it in there. But since I had 12 some sort of feeling about it, I thought 13 I should describe it. 14 Q. Right. Well, let's see what you're able to get 15 to. Your statement does say that you also had 16 a short in-person consultation with Christa Band 17 and Paula Vennells, which appears to be a bit 18 more than a vague daydream of a meeting, doesn't 19 it? 20 A. Well, I don't know. What I've said is that 21 I think, although I might well be mistaken, that 22 I also had a short, in-person consultation. 23 Q. Okay. 24 A. And then what it also says is "But I've got no 25 record of it. I've got no record of a room 164 1 booking. I've got no record of a fee line". 2 I would have made a fee line for it if I'd met 3 somebody and given them advice. 4 Q. Let's move on to the remaining bits of (f), as 5 you have it at page 30. You go on to say, and 6 you're emphasising really, that you don't have 7 a great recollection of this. You say: 8 "I have no specific recollection of what was 9 happening beyond thinking that I was asked what 10 could POL do about any arguments being raised in 11 relation to the accuracy of the Horizon System, 12 to which [your] answer was that they should 13 follow the advice you had given in 2007 and keep 14 a physical paper trail of accounts signed by the 15 subpostmaster." 16 Then you go on to talk about the fact, 17 jumping then a little bit: 18 "... I should emphasise that this memory of 19 a meeting and the identity of the participants 20 may be a 'false' memory, possibly something 21 I reconstructed having been told there would 22 a meeting." 23 Okay? 24 A. Yes. 25 Q. You again emphasise after that: 165 1 "... I am really not at all sure that 2 a physical meeting ever took place ..." 3 Again, a reference to the fee line. 4 A. Yes. 5 Q. So what we do know is this, as far as we can 6 tell, that there's some contact to you in 2014, 7 March 2014, and, as best as you're able to, this 8 was a meeting that wasn't terribly memorable, 9 because you're saying "Well, best I can do is 10 that if they want anything from me they should 11 look back at my earlier advice in 2007". 12 A. Can I try and give the evidence -- 13 Q. You can clarify it any way you like. 14 A. So it's something I keep on going over in my 15 mind, as to whether it took place or not. The 16 phone calls definitely did take place. I think 17 the first was did I remember what the Post 18 Office case was and the second or third one was, 19 you know, "What we'd like to talk about is how 20 one goes about tidying this up", or not -- 21 I don't even know whether it was tidying it up. 22 It was just -- you know, and my entire point was 23 that the one case that I did that actually 24 involved the Horizon System relied upon physical 25 accounts, a physical paper trail signed off by 166 1 the subpostmaster. 2 And that is the core of what I was saying. 3 In fact, that was probably all I was saying. 4 I didn't receive any papers, I didn't receive 5 any instructions. It was "We'd like to talk to 6 you about Horizon". 7 "Do you still keep a physical paper trail of 8 accounts signed by the subpostmaster because 9 that's what I'd suggested you do". 10 Q. Right. So we start with the date, the reference 11 to that in March 2014. So working on that as 12 being at least some contact to you, what I'm 13 going to ask is -- and see if I can find out 14 whether particular points may have been raised 15 with you, that actually might stand out, might 16 be important. 17 A. Sure. 18 Q. I'm going to take you to a document, that was 19 provided to our document provider and it is 20 POL00006798 -- and, Frankie, if you can go to 21 page 13, internal pagination in the document, 22 page 13. 23 Now, this document is written by a barrister 24 called Simon Clarke and it is dated 15 July 25 2013, okay? 167 1 A. Mm-hm. 2 Q. Now, you can take that from me or I can take you 3 to page 14 where it has that -- 4 A. No. 5 Q. All right. Now, paragraph 38, page 13 6 internally within it, there's a reference there 7 to Mr Jenkins, okay? 8 A. Mm-hm. 9 Q. Now, this is a reference to the Fujitsu employee 10 who you had some reference to already in your 11 evidence and, going back in time to 12 Mr Castleton's case, had some involvement in the 13 Castleton case; okay? 14 A. I don't recall him. 15 Q. Well, you've just been asked a number of 16 questions about Mr Jenkins, the Fujitsu expert 17 who you were saying could not be used as 18 an independent expert? 19 A. Oh, that's Gareth Jenkins, is it? 20 Q. Yes. 21 A. Ah! 22 Q. Ah. 23 A. Right, okay. 24 Q. Right, so we're talking about the same person. 25 A. Okay. 168 1 Q. Okay. Now, in this advice, Mr Clarke, who is 2 a barrister working at a firm called Cartwright 3 King, is setting out particular views that he's 4 come to with dealings with this Mr Jenkins. 5 Now, you'll see there at paragraph 38, second of 6 the two -- if I call them bullet points, second 7 of the two points: 8 "Accordingly, Dr Jenkins' credibility as 9 an expert witness is fatally undermined; he 10 should not be asked to provide expert evidence 11 in any current or future prosecution." 12 Okay? So the date of this opinion being 13 given is 15 July 2013, and it's quite a serious 14 opinion being given of someone in Mr Jenkins' 15 position, an employee with strong knowledge 16 about the Fujitsu Horizon system, okay? Now, 17 you mentioned in your evidence earlier on that 18 you're not a criminal practitioner but you're 19 certainly a civil practitioner -- 20 A. Yes. 21 Q. -- and you're certainly a civil practitioner 22 who's had dealings with, at least, we know, the 23 Castleton case, you've been talking about, and 24 we know also that the Post Office came back to 25 you at an earlier point in 2012? 169 1 A. Yes. 2 Q. Okay. So by the time we get to 20 March 2014, 3 this opinion is being given within, if you like, 4 the Post Office by a legal advisor to the Post 5 Office. Now, were you told, Mr Morgan, that 6 there was a settled and serious opinion given 7 about Mr Jenkins, the Fujitsu expert, who had 8 a lot of knowledge about the Horizon System? 9 A. No. 10 Q. I -- 11 A. I can make it completely clear that I received 12 no instructions, I received no papers, I did 13 receive two or three telephone calls, however 14 many were recorded in my evidence, which I only 15 recall because I checked them against my 16 computer system in chambers. And I was only 17 asked questions, I had no information tendered 18 to me. 19 There was not a "Here's some further 20 information, provide some more advice". It's 21 "If we ask you this, what would you say?" 22 Q. Two last questions. 23 A. Of course. 24 Q. Now, you and I had number of questions and you 25 answered a number of questions when I first 170 1 started a couple of minutes ago and I was asking 2 you about what you recalled about this meeting, 3 and, frankly, you're saying really "I don't 4 recall very much". 5 A. Yeah. 6 Q. If you'd been told at around this time in 2014 7 that "Regarding Mr Jenkins we've got real doubt 8 about this guy. I mean, I don't know what would 9 be the succinct way you would put it, Mr Morgan, 10 but there's a real problem here"; that might be 11 fight memorable, do you agree? 12 A. If I'd been told that, yes. 13 Q. Second question: did the Post Office ever come 14 back to you as a senior civil practitioner with 15 at least some knowledge of these systems and 16 say, "Look, we've got this problem with this 17 Fujitsu expert, what would that have done to all 18 of our civil cases that we've dealt with, going 19 back in time?" Did anybody come back to you and 20 ask that question? 21 A. No. 22 Q. Just give me one moment. 23 A. Sure. 24 MR STEIN: Thank you, Mr Morgan. 25 SIR WYN WILLIAMS: Who is next? 171 1 MR HENRY: Sir, I am. Henry. 2 SIR WYN WILLIAMS: Over to you, Mr Henry. 3 Questioned by MR HENRY 4 MR HENRY: Mr Morgan, as a contentious Chancery and 5 insolvency practitioner you will be familiar 6 with the case of Gestmin v Credit Suisse, won't 7 you? 8 A. No. 9 Q. Surely you must be, the judgment of Mr Justice 10 Leggatt, where he was discussing memory? 11 A. Oh, yes. 12 Q. Yes. Thank you. You will remember that in 13 that -- 14 A. Sorry, that wasn't intended as a joke! 15 Q. Sorry? 16 A. That wasn't intended as a joke, although it 17 might have appeared as much. 18 Q. No, quite. You will remember that in the course 19 of that judgment, he said that civil litigation, 20 particularly in the preparation of witness 21 statements, gives rise to powerful biases. You 22 remember that? 23 A. I -- look, I -- let me be -- also be perfectly 24 honest. I do very, very few witness actions, so 25 although I am familiar with the judgment and 172 1 I am familiar with the overall thrust of it, 2 I do not have specific passages in mind. But 3 I'm quite content to accept that the preparation 4 of witness statements is something that can give 5 rise to evidence being fluffed, if I can put it 6 like that -- evidence being improved that 7 shouldn't be improved. 8 Q. Now, I don't suggest that of you, Mr Morgan, but 9 I do suggest that you have fallen victim to 10 powerful and distorting biases. Let me explain 11 why. Can you help us, please. So far as your 12 witness statement is concerned, your 13 recollection or reconstruction of your 14 involvement in Post Office Limited v Castleton 15 is that this was essentially a Shaw v Picton 16 case, the case of agency? 17 A. It was from about the summer of 2006, yes. 18 Q. But you must accept, I mean you have read the 19 judgment of His Honour Judge Havery Queen's 20 Counsel several times, haven't you? 21 A. Yes. 22 Q. In fact, you read it because you read it before 23 composing your statement in May of this year? 24 A. Yes, I needed to remind myself about what had 25 gone on. 173 1 Q. Yes. Exactly. You can see, can you not, from 2 that, that Mr Castleton's case put the 3 reliability of the Horizon System fairly and 4 squarely in issue, didn't it -- didn't he? 5 A. Mr Castleton sought to suggest that the losses 6 were illusory and were caused by the Horizon 7 System. At no stage prior to the trial did he 8 articulate or identify how it was that those 9 losses were being occasioned. 10 Q. But you must have read the Horizon System 11 Helpdesk logs concerning his case and the 12 complaints that he was making contemporaneously, 13 Mr Morgan, surely? 14 A. I would have read them in the trial bundle, yes. 15 Q. Yes. You must also have -- it's clear from the 16 judgment itself that, beginning at paragraph 12 17 and proceeding thereafter, 13, 14, 15, 18 et cetera, he gave detailed accounts of what was 19 going wrong with the system. It's clear in the 20 judgment? 21 A. He gave accounts of what he said was going wrong 22 and that he phoned the Helpdesk and there was 23 a complaint that the Helpdesk wasn't helpful at 24 all, yes. 25 Q. But, also, the nature of the glitches, the 174 1 nature of the anomalies that were occurring, he 2 was describing them -- 3 A. Yes. 4 Q. -- as it were, in real time? 5 A. Yes. 6 Q. Right. Also, how he would take balance 7 snapshots, in other words he would take 8 screengrabs of the screen, pictures of the 9 screen, showing how, inexplicably, there were 10 alterations in the figures presented by Horizon. 11 That was also part of his case, wasn't it? 12 A. Let me be honest with you here, I don't recall 13 him ever presenting evidence to that effect to 14 the judge. I don't recall that. I'm not saying 15 he didn't do it. I just don't recall that. 16 Q. You remember when Mr Beer was reading out part 17 of the transcript just a few moments ago -- and 18 I don't necessarily suggest that you ought to 19 have picked it up -- but he was referring to 20 balance snapshots. 21 A. Yes. 22 Q. Now, at paragraph 4 of the judgment, and the 23 judgment is POL00021678 -- and I don't suggest 24 that it is put up on screen but purely as 25 a reference -- there is the following, the 175 1 learned judge stated: 2 "Losses apparently shown by the balance 3 lists and Cash Accounts (Final) were illusory, 4 not real. It was entirely the product of 5 problems with the Horizon computer and 6 accounting system. The apparent shortfalls were 7 nothing more than accounting errors arising from 8 the operation of the Horizon System." 9 That's what the learned judge said when he 10 was recounting or encapsulating Mr Castleton's 11 case. You wouldn't disagree with that? 12 A. Well, you're reading from the judgment, so no. 13 Q. Yes. Now, the bias that I suggest is that that 14 was not taken seriously, I don't suggest by you, 15 because you did ask questions. It is clear that 16 you asked questions, including whether Fujitsu 17 could, as it were, interfere with the system or, 18 as it were, have access to the system without 19 Mr Castleton's knowledge, and you asked those 20 questions. 21 But can you help us, please: to what extent 22 were those serious concerns followed up by your 23 team because, of course, you as counsel were 24 leading your team, weren't you? 25 A. I was instructed to appear at trial, yes. I was 176 1 instructed to amend the pleadings, yes. I don't 2 know. I mean, I asked questions. I didn't get 3 answers. 4 Q. We know -- and again, I don't ask for it to be 5 put up on screen -- but we know from 6 Mr Castleton's pleadings, LCAS0000294 -- Mr Beer 7 has taken you to paragraph 5, paragraph 6, but 8 also paragraph 7B -- that Mr Castleton was 9 vehemently disputing that these losses were 10 real. They were not accurate, they were 11 artifacts of the Horizon System. You don't 12 disagree with that, do you? That's what he was 13 saying? 14 A. Yeah. No, I agree. 15 Q. That demanded, obviously, the most serious 16 scrutiny, did it not? 17 A. That's what a trial is meant to achieve. 18 Q. But in the run-up to a trial -- because of 19 course it's too late, sometimes or too often too 20 late when it arises in a trial -- but in the 21 run-up to a trial, there ought to be full and 22 frank disclosure, shouldn't there? 23 A. There is disclosure in accordance with the 24 requirements of the CPR, yes. 25 Q. Now, I'd like you to help me, please, because of 177 1 course you -- I don't know if you were watching 2 Mr Dilley's evidence yesterday? 3 A. I saw part of it but not all of it. 4 Q. Have you read it subsequently? 5 A. No. 6 Q. No. You may not have been present when this was 7 going on but the Post Office, he told us, was 8 receiving 12,000 to 15,000 calls to the Horizon 9 System Helpdesk per month, telephone calls from 10 subpostmasters about defects and technical 11 problems with the Horizon System, and Mr Dilley 12 decided that he wouldn't disclose these calls, 13 neither generally as to volume nor specifically 14 as to content, to Mr Castleton because, at one 15 point, he thought that it might overwhelm 16 Mr Castleton in a sort of benevolent and 17 pastoral way and, on another occasion, because 18 it was going to cost, in fact, £3,000 to collate 19 them. Did you hear that evidence? 20 A. No, I didn't. 21 Q. No. Now, having been informed of that evidence, 22 may I ask you -- and I mean no disrespect, 23 Mr Morgan -- were you involved in that decision? 24 A. No. 25 Q. No. Should you not have been consulted before 178 1 such a decision was actioned by Mr Dilley? 2 A. Look, at the end of the day, the relationship 3 between solicitors and counsel is a matter of 4 instructions and action on instructions. I was 5 not instructed by solicitors in relation to 6 disclosure: simple as that. 7 Q. Would you like to have been instructed to give 8 your view on that somewhat momentous decision by 9 your instructing solicitor? 10 A. I don't think counsel ever likes to be 11 instructed on disclosure issues but, if one is 12 instructed on disclosure issues, then one 13 examines each individual document against the 14 specific requirements of the disclosure order 15 made by the court. 16 Q. Would you agree with the decision that Mr Dilley 17 made? 18 A. I don't know. I haven't read the call logs. 19 Q. So may I take it, therefore, that -- and this is 20 your opportunity to give your considered view -- 21 that -- 22 A. Well, it's not my opportunity to give 23 a considered view because I haven't seen the 24 call logs. 25 Q. Right. Well, let's move on. Do you think you 179 1 were being kept at a distance from disclosure 2 decisions by those instructing you? 3 A. I have no idea because I don't know what the 4 disclosure decisions were or taken in what 5 context. I -- all I know is that Post Office 6 Limited had instructed Bond Pearce and 7 Mr Castleton had instructed his own solicitors, 8 and, as is usual in litigation, solicitors had 9 gone through the disclosure exercise. 10 If there were perceived to be deficiencies 11 then there would be correspondence between them 12 and, if necessary or appropriate, orders for 13 specific disclosure or further disclosure. 14 I was not involved in any of that at all. 15 Q. Thank you, Mr Morgan, but just returning to the 16 questions that were put to you by Mr Beer 17 Counsel to the Inquiry, you asked a lot of 18 questions but it seems that answers came there 19 none. Would that be your recollection now about 20 disclosure? 21 A. About disclosure? 22 Q. Yes. The questions that you asked about the 23 integrity of the system, about remote access -- 24 A. Well, that's not disclosure; that's questions 25 about what's actually going on. Disclosure 180 1 I take to be disclosure of documents. 2 Disclosure is a disclosure process. 3 Disclosure of information about the case in 4 relation to specific enquiries about Fujitsu, 5 yes, I'll accept that I asked a large number of 6 questions. I sought to ensure that the original 7 equipment was maintained and steps were taken to 8 preserve the software but I didn't get anything 9 after that. Nobody came back to me and said, 10 "Well, what shall we do now?" 11 Q. So I ask you, therefore, did that set any alarm 12 bell or did that fly any red flag? 13 A. No, because, in the ordinary course of 14 litigation, if there are disputes between the 15 parties about particular procedural steps then 16 those are raised in correspondence between 17 solicitors and, if they're not answered, then 18 they're taken before the court at the CMC or 19 PTR. 20 Q. Right. Now, just dealing with that, you were 21 saying that those were questions about the 22 evidence in the case but, if you had got the 23 answers, yes, they do have the ability to insert 24 transactions without anybody knowing the fact 25 that they can do that, that obviously would have 181 1 been patently disclosable, would it not? 2 A. I certainly wouldn't have been able to run 3 a case contrary to it. Disclosable? 4 Q. You couldn't run a case if that was in your 5 knowledge. You would have had to have 6 considered your position? 7 A. Yes, exactly. 8 Q. Exactly. So let me just ask you, please, now, 9 it's the time of trial, you're able to give your 10 opening or you've just given your opening, and 11 we saw it -- again, no need to put it on the 12 screen, it's been a long day -- POL00070126. 13 You saw the attendance note of Mandy Talbot and 14 the issue about Falkirk, and it's 6 December 15 2006, you've seen it, by all means, if you would 16 like to see it again ... 17 A. No, I'm quite happy. I can remember it. 18 Q. You can remember it. You are reported, forgive 19 me, Mr Morgan: 20 "RM saying he was concerned about whether we 21 have to give disclosure of this fact. He 22 thought probably yes, but wanted to find out if 23 the judge thought it was relevant. 24 "RM was prepared to put off the decision on 25 this until after his opening. RM asked Mandy 182 1 Talbot to get some definitive answers from 2 Fujitsu. RM saying that we may finish in court 3 by lunchtime tomorrow." 4 Falkirk: that was the Callendar Square bug. 5 If I recall your evidence correctly, you were 6 not certain that your solicitors disclosed that 7 to Mr Castleton? 8 A. Yes. 9 Q. It appears, does it not, that it arose in this 10 way: that Mr Castleton was tentatively putting 11 his case about a post office and then it was 12 immediately understood and recognised by 13 Mrs Chambers that that was the Falkirk branch, 14 the Callendar Square, correct? 15 A. I think so. I -- 16 Q. Yes, it's in the judgment. 17 A. Fine. 18 Q. It's in the judgment. It's paragraph, I think, 19 23 of the judgment. So it arose, as it were, 20 ex improviso, purely serendipitously and by 21 chance that Mr Castleton asked that tentative 22 question and then that was revealed. Correct? 23 A. Apparently so, yes. 24 Q. It's hardly ideal, is it? 25 A. Trials are hardly ideal. No, you're absolutely 183 1 right. Things crop up that you have absolutely 2 no idea about as counsel; somebody just doesn't 3 bother to tell you. 4 Q. Similarly, the Tivoli logs arose for the first 5 time in the course of Mrs Chambers' evidence, 6 and she had to be re-called, didn't she? 7 A. Mr Castleton asked for her to be re-called and 8 she was re-called. I think somebody else was as 9 well, weren't they? 10 Q. Yes, Ruth Skinner or Simpson, forgive me. 11 A. I can't remember but I seem to remember there 12 were two. 13 Q. He tried to cross-examine her and you objected 14 to the cross-examination. 15 A. Quite possibly, yes. 16 Q. Yes. Now, the position is that disclosure in 17 this case was a dismal failure. That must be 18 obvious now. 19 A. I can't help you. I did not take part, nor was 20 I instructed on the disclosure exercise. 21 Q. But when the trial is ongoing, and you must 22 forgive my ignorance but, in the criminal courts 23 when the trial begins, counsel is sole arbiter 24 of disclosure, is that not the same in the civil 25 courts? 184 1 A. No. 2 Q. No. I see. But the position is you would 3 agree, an ex improviso revelation by a witness 4 and also, for the very first time, logs referred 5 to by a witness. Hardly satisfactory? 6 A. No, and that's why they were disclosed. 7 Q. Right. The known error logs were not disclosed 8 though. 9 A. I don't know. 10 Q. Well, there's a reference to a KEL in the 11 attachment to Mr Dunks' statement and Mr Dunks 12 was a witness in the case. Perhaps the 13 attachment, I don't suggest that you 14 deliberately fail to disclose it, but you must 15 have read Mr Dunks' statements and the 16 attachments thereto? 17 A. I must have. 18 Q. Maybe "KEL" wasn't explained but it means "Known 19 Error Log"? 20 A. Fine. Presumably Mr Castleton's solicitors 21 would have read the same witness statement -- 22 Q. Well, we don't know -- 23 A. -- and would have been capable of writing 24 a letter had they thought it appropriate to do 25 so. 185 1 Q. By this time, of course, Mr Castleton is 2 a litigant in person. 3 A. He became a litigant in person on 20 November, 4 didn't he? And witness statements were 5 exchanged substantially before then. 6 Q. Mr Morgan, who has the obligation to make 7 a disclosure of a Known Error Log? 8 A. The Post Office. 9 Q. The Post Office. So, please, without trying to 10 shift the onus onto either Mr Castleton himself 11 or his former solicitors, Messrs Rowe Cohen, it 12 was clearly and obviously the Post Office's and 13 those they instructed, their duty to disclose 14 that information, wasn't it? 15 A. If it fell within the terms of standard 16 disclosure, then yes, it did. 17 Q. Yes. How did this happen, do you think? These 18 are my final questions: how did this happen, do 19 you think? You surely by now, knowing 20 everything you know, Mr Morgan, regard the 21 decision in the Post Office Limited v Castleton, 22 as a miserable miscarriage of justice? 23 A. I don't know. I don't know that it's 24 a miscarriage of justice. I'm not here to 25 express a view on the rights and wrongs. 186 1 Counsel instructed in a case is not there to 2 express a view on the rights and wrongs. I was 3 asked to prove a case that I did on the basis of 4 documents signed by Mr Castleton, whose truth 5 were not challenged by Mr Castleton. 6 Q. Mr Morgan, you know that the learned judge in 7 the course of his ruling, his judgment, which 8 you then wrote an advice note on 22 January 9 2007, for the benefit of those who instructed 10 you, he found, paragraph 23 of the judgment: 11 "There is no evidence whatsoever of any 12 problem with the system." 13 At paragraph 11 he stated that: 14 "It was inescapable that the Horizon System 15 was working properly in all material respects." 16 Knowing what we know now, I ask you again: 17 no disclosure of the Known Error Logs, no 18 disclosure of remote access, no disclosure of 19 the receipts and payments mismatch bug. Do you 20 not now reflect that the decision of His Honour 21 Judge Havery Queen's Counsel was a dreadful 22 miscarriage of justice? 23 A. I think you have to read the judgment in its 24 entirety and see that he based his assessment on 25 documents signed by Mr Castleton, as an agent, 187 1 recording a debt due to the Post Office. And 2 there was no difference between the amount that 3 was shown in the documents signed by 4 Mr Castleton and the amounts shown on the 5 Horizon log. 6 Now, of course, if Mr Castleton signed false 7 accounting documents, then I would accept that 8 there was -- that the error -- or, sorry, that 9 the judgment is wrong. 10 Q. That is precisely what Mr Beer was trying and, 11 successfully, if I may say so, explore with you. 12 Mr Morgan, I ask you for a third time. Is this 13 not, again, the astigmatism, the bias that 14 arises in this process, which is not meant to be 15 adversarial, I assure you, but just knowing what 16 we know now, about the Fraser judgments, the 17 Common Issues judgment, about the oppressive 18 nature of the contract upon which you relied, 19 the Horizon IT judgment, which went through 20 a litany of non-disclosure, other misfeasance, 21 and bugs, errors and defects, I ask you for the 22 third time, and I won't ask you again: do you 23 not reflect now, knowing what we know, that the 24 decision of His Honour Judge Havery Queen's 25 Counsel was a dreadful miscarriage of justice? 188 1 A. I think that the decision of Mr Justice -- His 2 Honour Judge Havery was the correct judgment 3 given when Mr Castleton did not say, "My figures 4 were untrue". Had he said, "My figures were 5 untrue", then we would not be in this position. 6 SIR WYN WILLIAMS: Is that it, Mr Henry? 7 MR HENRY: Yes, sir. Thank you, sir. 8 SIR WYN WILLIAMS: Thank you. Any other questions? 9 Further questioned by MR BEER 10 MR BEER: No, there aren't, sir, except that we've 11 now tracked down that document that I said 12 I would come back to. 13 SIR WYN WILLIAMS: Yes, let's have that up, please. 14 MR BEER: It's POL00081826_018. Thank you. If we 15 go to page 17, please -- that's the wrong 16 document. 17 SIR WYN WILLIAMS: I'm beginning to wish I hadn't 18 asked that question. 19 MR BEER: Just give us a couple of moments, sir. It 20 was thought that the correct document had been 21 uploaded whilst the last 45 minutes had occurred 22 and it seems that that's not the case. 23 SIR WYN WILLIAMS: All right. Well, the reality is 24 that the document will, in due course, surface 25 and be put on the screen at some suitable moment 189 1 and we will all be able to see what -- was it 2 clause 5 or Schedule 5 says. 3 MR BEER: Maybe sir, if I can just read, as what 4 some people will call a workaround. The email 5 was the 10 November 2006, and at 1600 hours it 6 enclosed the draft Tomlin Order. It included 7 the proposed text amended by Mr Dilley, and 8 said: 9 "I attach a draft consent order for your 10 approval. The real question is whether we need 11 the undertaking in clause 5 of the schedule. 12 Richard thinks that by making a song and dance 13 we highlight a sensitivity and, the less we talk 14 about it, the less likely it is that Castleton 15 will seek to raise it." 16 Then clause -- it's a five-paragraph consent 17 order, Tomlin Order, to which there is 18 a schedule, and paragraph 5 of the schedule 19 says: 20 "The defendant undertakes to the Claimant 21 that he will neither repeat his allegations 22 about the Horizon System nor make any further 23 allegations about the Horizon System or its 24 functioning and, in the event that the Defendant 25 breaches this undertaking, he shall both: (i) 190 1 submit to an injunction restraining him from 2 talking further about the Horizon System; and 3 (ii) pay to the Claimant liquidated damages in 4 the amount of £25,000 being a genuine 5 pre-estimate of (a) the Claimant's costs of 6 having to rebut such statements and (b) its loss 7 of goodwill generally." 8 So I think the question is, the Chairman 9 asked you -- you were asked, I think, for your 10 view on that and it's plain that, although the 11 wording that Mr Dilley was proposing isn't 12 exactly the same as in the draft Tomlin Order, 13 in particular because there are some 14 consequential subparagraphs concerning 15 injunctive relief and liquidated damages, you 16 thought that, according to this record, that by 17 making a song and dance, the Post Office 18 highlighted a sensitivity: the less we talk 19 about it, the better. 20 A. Yes. I would also have thought that the 21 undertaking itself was unworkable and a complete 22 waste of space, but I don't know whether I'd 23 have expressed it that clearly. 24 Q. And unenforceable? 25 A. And unenforceable. And an undertaking to 191 1 a party, rather than to the court. So there we 2 are. 3 Q. For a range of reasons? 4 A. For a range of reasons, I would have been 5 extremely adverse to it. 6 Q. I think the question is: isn't this other 7 evidence, however, of what the Post Office's 8 real motivation was, ie to gag somebody from 9 speaking or, alternatively, to require them to 10 say something good about the Horizon System? 11 A. Regrettably, my experience of people trying to 12 negotiate settlements is they ask for the moon 13 when they've got no need for it. As I said, 14 I was rather focused on trying to prepare for 15 the trial, and this was just unnecessary noise 16 in the background. I wasn't focusing on what 17 the parties' terms necessarily were. With the 18 benefit of hindsight, then I might have put more 19 thought into what people's motivations were, but 20 as I keep on saying, I was focused on a debt 21 recover claim. 22 SIR WYN WILLIAMS: Well, Mr Morgan, you'll be glad 23 to know that ultimately the motivation of the 24 Post Office in respect of various of its actions 25 is not for you or Mr Beer, but it's for me. 192 1 MR BEER: Sir, I haven't any further questions. Did 2 you have any follow-up questions in relation to 3 clause 5 of the Tomlin Order? 4 SIR WYN WILLIAMS: No, that's fine. Thank you very 5 much. 6 MR HENRY: Sir, I do apologise. I'm a terrible one 7 for having one thought or two on the stairs. 8 There was one thing I forgot to put. Could 9 I put it quickly? It won't take more than 10 a minute. 11 SIR WYN WILLIAMS: I will hold you to 90 seconds, 12 Mr Henry. 13 MR HENRY: I'm very grateful, sir. 14 Further questioned by MR HENRY 15 MR HENRY: Mr Morgan, I'm so sorry. It just refers 16 back to Mr Dilley and what he said yesterday. 17 He said at page 124 of the transcript that he 18 asked you, and counsel advised us not to 19 disclose the BDO Stoy Hayward report because "he 20 didn't think the Post Office needed to -- needed 21 it to prove its case". 22 Then he said again at 136: 23 "I believe that I discussed this report with 24 counsel. I cannot now recollect, after the 25 passage of time, all the details of this 193 1 discussion. But counsel was made aware of it 2 and he advised not to disclose it. I'm sure 3 that if he had considered that there -- that it 4 should have been disclosed, he would have given 5 me that steer." 6 That's what Mr Dilley says about that draft 7 report. What do you have to say about that? 8 A. First of all, I don't remember ever seeing the 9 draft BDO report. Secondly, I remember asking 10 for accountants to prepare a report to summarise 11 the ins and outs of all the cash movements and 12 stock movements, because that would have enabled 13 me not to have to do it myself, and I was never 14 provided with that. 15 Thirdly, in civil litigation, you don't have 16 to disclose any draft experts' reports or indeed 17 signed experts' reports, even if they're 18 finalised. Until such time as they are 19 exchanged, they are covered by privilege. 20 So had he asked me -- and I don't remember 21 him asking me -- I would have said, "You don't 22 need to disclose it." 23 But in any event, I don't think I even 24 saw -- I don't remember even seeing a draft BDO 25 report. Again -- 194 1 SIR WYN WILLIAMS: Well, that's a comprehensive 2 answer. So I think that provides an answer to 3 your question, Mr Henry. 4 MR HENRY: It does, sir. Thank you so much. 5 THE WITNESS: Can I also just say one thing? I have 6 tremendous sympathy with what Mr Castleton has 7 gone through, and his family. I can't say 8 anything more than that, but I quite understand 9 why he's upset by what's gone on. I hope that 10 goes some way towards it. 11 SIR WYN WILLIAMS: Right. Thank you very much for 12 coming to give evidence, Mr Morgan. 13 We'll now adjourn until Tuesday. I think 14 it's Tuesday. Yes. It's Mrs Chambers, is it? 15 MR BEER: 10.00 am Tuesday. Anne Chambers. 16 SIR WYN WILLIAMS: Fine. All right. Thank you all 17 very much. 18 MR BEER: Thank you. 19 (3.32 pm) 20 (The hearing adjourned until 10.00 am 21 the following Tuesday) 22 23 24 25 195 1 I N D E X 2 STEPHEN DILLEY (continued) ....................1 3 Questioned by MS PAGE (continued) .............1 4 Questioned by MS DOBBIN. .....................23 5 Questioned by SIR WYN WILLIAMS ...............40 6 RICHARD HUGO LYNDON MORGAN KC (sworn) ........43 7 Questioned by MR BEER ........................43 8 Questioned by MR STEIN ......................163 9 Questioned by MR HENRY ......................172 10 Further questioned by MR BEER ...............189 11 Further questioned by MR HENRY ..............193 12 13 14 15 16 17 18 19 20 21 22 23 24 25 196