1 Tuesday, 17 October 2023 2 (10.00 am) 3 MR BEER: Good morning, sir, can you see and hear 4 me? 5 SIR WYN WILLIAMS: Yes, I can, thank you. 6 MR BEER: Thank you very much, can I call 7 Mr Breeden, please. 8 JOHN ANDREW BREEDEN (sworn) 9 Questioned by MR BEER 10 MR BEER: Good morning, Mr Breeden, my name is Jason 11 Beer and I ask questions on behalf of the 12 Inquiry. Can you tell us your name, please? 13 A. Yes, it's John Andrew Breeden. 14 Q. Thank you. Thank you very much for the 15 provision of a witness statement in this case 16 and for coming to the Inquiry today to assist us 17 in our investigation. You should have in front 18 of you a hard copy of that witness statement, 19 dated 15 May 2023 and running to 51 pages. Can 20 you look at the last page, please, page 51? 21 A. Yes. 22 Q. Is that your signature? 23 A. It is. 24 Q. Are the contents of that statement true to the 25 best of your knowledge and belief? 1 1 A. They are. 2 Q. For the purposes of the transcript only, the URN 3 is WITN06700100. 4 Can I start please with some questions about 5 your career, your background and experience? 6 A. Yes. 7 Q. I think you have a long history as an employee 8 of the Post Office running between 1997 to 2019; 9 is that right? 10 A. That's correct. 11 Q. So a 22-year employment history? 12 A. Yes. 13 Q. Okay, and that's in a variety of roles 14 including -- and I'm just going to list them to 15 start with -- Head of Management Process for 16 Scotland and Northern Ireland? 17 A. Correct. 18 Q. Head of Planning for the North Territory? 19 A. Yes. 20 Q. Operations Manager and Area Service Manager in 21 the Central Area? 22 A. I think the Operations Manager and the Area 23 Service Manager are two separate roles. 24 Q. Yes, I meant them as two separate roles but 25 they're both in the Central Area; is that right? 2 1 A. The Operations Manager for the National 2 Multiples Team covered the whole country. 3 Q. Thank you. The Area Service Manager in the 4 Central Area? 5 A. Central Area, yeah. 6 Q. Would you agree that your wide-ranging 7 experience brought you into contact with many 8 aspects of the Post Office as an organisation, 9 from those working on the counter to more senior 10 management? 11 A. Yes. 12 Q. I think specifically from April 2005 you became 13 responsible for the management of subpostmaster 14 contracts; is that right? 15 A. I thought it was 2006. 16 Q. Let's have a look. 17 A. Sorry, April 2005 to August. It's the different 18 job titles. 19 Q. Yes, so paragraph 2.4 on page 2. 20 A. Yes, yes. 21 Q. So that's the date that, from then on, I'm 22 particularly interested in: management of 23 subpostmaster contracts? 24 A. Yes. 25 Q. Is that right? 3 1 A. Yes. 2 Q. I think you were responsible for the Central 3 Area of the country then? 4 A. That's correct, yes. 5 Q. Where did that area run from and to, what sort 6 of area are we looking at? 7 A. It was the whole of Wales and really across from 8 probably Liverpool to the Wash, and then from 9 South Wales across -- above London into Norfolk, 10 I think, or into the Wash area. I can't 11 remember exactly. 12 Q. Then from September 2006 you became National 13 Contracts Manager; is that right? 14 A. Yes, that's for the North Area. 15 Q. That was for the North Area. So what function 16 did the National Contracts Manager for the North 17 Area perform? 18 A. He was responsible for a team of Contracts 19 Advisers, who were responsible for the 20 deployment of the subpostmasters contract, and 21 yeah, anything that occurred, really, 22 contractually within the live time of 23 a subpostmaster with the business. So from them 24 drawing in -- we were involved in the 25 appointment of subpostmasters through to their 4 1 leaving, however that occurred. 2 Q. You explain that in your statement. It's the 3 entire postmaster journey, from before the 4 moment that they sign their contract until the 5 termination of their employment, however that 6 may have arisen? 7 A. Well, the termination of the contract of how 8 the -- it would have arisen, yes. 9 Q. How frequently would you come into contact with 10 subpostmasters in that role? 11 A. Not terribly frequently. 12 Q. Because you were a manager? 13 A. Correct. 14 Q. How frequently would the Contracts Advisers come 15 into contact with subpostmasters? 16 A. Possibly daily. 17 Q. In a daily basis? 18 A. Yes. 19 Q. Thank you. Were there any other 20 responsibilities of a National Contracts 21 Manager? 22 A. We were involved in the appointment of temporary 23 subpostmasters and the actual appeals process as 24 well, which was part of the contract. 25 Q. Thank you. Anything else? 5 1 A. The development of processes and policies that 2 impacted on our role, the policies and processes 3 usually were owned by a different team and we 4 were there to deploy them. 5 Q. You said you were involved in the development of 6 those policies and processes? 7 A. Yeah, what used to happen is whoever was the 8 owner of the policies would get the teams 9 involved usually that were responsible for 10 deploying them and we would have an input into 11 them to see how they would work on the ground. 12 Q. Okay, thank you. When you made this witness 13 statement to the Inquiry, the 51-page document 14 that you have just looked at, were you open and 15 transparent in relation to all of the answers 16 that you gave to the questions that you were 17 asked? 18 A. I believe so. 19 Q. I think it's right that you made a witness 20 statement in what we call the GLO or the Group 21 Litigation proceedings? 22 A. I did. 23 Q. That's dated 24 August 2018. You made two, in 24 fact, didn't you? 25 A. I can't honestly remember. 6 1 Q. Okay. I'll give the reference for the first 2 one, which is the most substantial one, 3 POL00026886. There's no need to display that 4 for the moment. You gave evidence in the High 5 Court? 6 A. I did. 7 Q. I think you probably know that the trial judge, 8 Mr Justice Fraser, was critical of your 9 evidence? 10 A. Yes. 11 Q. If we can look at that, please, POL00022936. We 12 can see that this is his Common Issues judgment, 13 the trial judge Mr Justice Fraser. If we just 14 expand it a little bit -- 15 A. Thank you. 16 Q. -- so we can see the whole of the page. Thank 17 you. 18 We'll see it's dated 15 March 2019 and it's 19 "Judgment (No 3) 'Common Issues'", which we 20 don't look at very often in the Inquiry. I just 21 want to turn to the part that relates to you and 22 it's page 127 of the judgment. Can you see that 23 there's a heading "Mr John Breeden" above 24 paragraph 395. 25 A. Yes. 7 1 Q. In paragraph 395, he sets out your background. 2 I'm not going to read that. Then in 396 he says 3 that: 4 "[Your] witness statement covered two main 5 areas. These were selection and appointment of 6 [subpostmasters] (the beginning of their 7 relationship with the Post Office); and 8 suspension and termination (the end)." 9 Then if we look at 397, please: 10 "He [that's you] accepted that compulsory 11 recording of interviews with applicants 12 commenced on 31 March 2008. He had misstated 13 the date in his statement as 2006, but explained 14 he had done this from memory without checking 15 the documents. He also stated [that's you]: 16 'Both the subpostmaster (ie the SPMC) and NT 17 contracts contain important provisions governing 18 how these contracts may be brought to an end. 19 Prior to accepting his appointment, 20 a subpostmaster has the opportunity to review 21 his contract'. That very general statement is 22 correct only so far as the NTC is concerned. On 23 the evidence that I have accepted from the Lead 24 Claimants, it is not even remotely accurate or 25 correct for at least some who contracted on the 8 1 SPMC, and those affected could be a large 2 number. Mr Breeden is a senior person within 3 the Post Office and must have known that this 4 general statement was not wholly correct. This 5 is an example, I consider, of PR-driven 6 evidence." 7 We're going to come back a little later this 8 morning to what the SPMC contract was and what 9 the NT contract was but, if we skip over 398 and 10 399, and if we go to his next essential finding, 11 which is paragraph 400: 12 "Initially he [that's you] said that there 13 was no material difference in the SPMC and NTC 14 terms, the latter was just more explicit. That 15 is simply not correct, and I do not accept that 16 Mr Breeden could believe it was. At one point 17 in this evidence the following exchange took 18 place: 19 "'Q: is it fair to say that Post Office 20 doesn't tend to focus on the precise words of 21 a contract, you know what your interpretation is 22 and that is what everyone is working to? 23 "'A: That is the way would operate, yes.' 24 "401. This is obviously a very different 25 approach to the interpretation and application 9 1 of contract terms than is conventional under 2 English law. The words of a contract are 3 extremely important. Here, there are SPMs under 4 both the SPMC and the NTC. Mr Breeden's 5 evidence makes it clear that the Post Office 6 does not trouble itself with the particular 7 words." 8 Then if we skip paragraph 402 to 406 and 9 pick up at 407: 10 "Mr Breeden also explained that the Support 11 Services Resolution Team within the Post Office 12 would be able to interrogate the accounts that 13 came from any particular branch. He also said 14 that his understanding was that this team could 15 investigate shortfalls that a [subpostmaster] 16 maintained had been caused by software issues, 17 such as defects or bugs, and this could be done 18 by comparing data from the branch with data in 19 what he called 'secondary records' held by 20 Fujitsu which would be between the Post Office 21 and its clients." 22 Then this, paragraph 408: 23 "As with the other more senior members of 24 the Post Office Group of witnesses, Mr Breeden 25 is articulate, intelligent and also acutely 10 1 aware of how much the reputation of the Post 2 Office hinges on these proceedings. His 3 evidence was presented in terms obviously 4 designed to put the best possible gloss for the 5 Post Office on matters, and some of his 6 statements simply did not stand scrutiny. The 7 one I have explained above, that SPMs had the 8 chance to review their contracts before 9 appointment, was expressly preceded by 10 a statement that made clear he was referred both 11 to the SPMC and the NTC. Such evidence is in my 12 judgment inaccurate, and inaccurate factual 13 evidence is not helpful. When faced with the 14 actual documents, he would agree with Mr Green's 15 [that's council for the claimants] points to the 16 contrary, but one reason why the factual part of 17 the Common Issues trial became so protracted is 18 because of this approach by the Post Office 19 generally. Agreement to even obvious points 20 would be reached, eventually, but getting there 21 took much longer, and a great deal more effort, 22 than it ever ought to have done. His evidence 23 was again given through a PR prism." 24 I'm not going to ask you whether you agree 25 or disagree with these adverse findings from the 11 1 judge because that's nothing to the point at the 2 moment. But the issue I'd like your help with 3 is this: when you made your Inquiry witness 4 statement, did you bear in mind these findings 5 of the judge, that you had given evidence by 6 putting the best possible gloss on matters for 7 the Post Office and that you had given evidence, 8 as he put it, "through a public relations 9 prism"? 10 A. Well, what, making my current statement? 11 Q. Yes. 12 A. No. 13 Q. Why not? 14 A. I didn't feel that was something I wanted to 15 take into account. I have read this document, 16 I read this document after the hearing the judge 17 produced, read it, accepted what he said, 18 because that was the only thing I could do. But 19 I didn't take -- I didn't think of a PR prism or 20 whatever the last comment was that this 21 statement should be presented through that. 22 Q. So have you tried in your current Inquiry 23 witness statement, the 51-page statement, to be 24 open and transparent and give an unvarnished 25 account in relation to all matters? 12 1 A. I have tried to be as accurate as I possibly 2 can, taking into account that it is a number of 3 years since I worked for Post Office Limited, 4 and didn't take these comments into account. 5 So, yes. 6 Q. Accuracy is one thing. I'm asking about 7 openness and transparency. Have you tried to 8 give an unvarnished account? 9 A. I've tried to be as open as I possibly can. 10 Q. Can we look, please, at POL00006671. Thank you. 11 If we just expand the top part. You can see 12 that this is printed on Womble Bond Dickinson 13 paper and it's described as "Personal 14 attendance", ie an attendance note, on you, of 15 19 January 2018. It's with -- you can see the 16 name Lucy Bremner in those second set of 17 tramlines and another lady called Victoria 18 Brooks; can you see that? 19 A. Yes. 20 Q. Do you remember attending the London offices of 21 Womble Bond Dickinson -- 22 A. Yes. 23 Q. -- at the beginning of that year, for the 24 purposes of, I think, giving what they described 25 as a proof of evidence, so a pre-witness 13 1 statement document, eventually for the purposes 2 of giving a witness statement in the Group 3 Litigation? 4 A. I remember attending. I couldn't tell you 5 exactly the date or when it was. 6 Q. You'll see that it isn't, in fact, an attendance 7 note as lawyers would understand it, it's 8 a record of a typed up version of a recording of 9 your meeting. Do you remember the recording was 10 recorded? 11 A. Yes. 12 Q. If we just scroll down please, just stop there. 13 The paragraph beginning "You are the most 14 organised person we have met", and just above 15 that you can see there's some introductory 16 exchanges between you and Ms Brooks, and in the 17 passage that's highlighted it says: 18 "You are the most organised person we have 19 met because so far we will support and humour 20 them so that is quite good to see that you have 21 so sorry I did not give you a minute to sort 22 yourself out but we have got wifi and everything 23 that you can connect to if you want. So as you 24 know the meeting is being recorded." 25 Yes? 14 1 A. Yes. 2 Q. So I think that's a typed up recording of her 3 saying this meeting is recorded. This is, 4 indeed, a very long document. It's 64 pages of 5 single spaced recording of everything that 6 everyone said in the meeting. She continues: 7 "The purpose of the meeting is to obtain 8 a proof of evidence from you. That is really 9 just a document that records what you say to us 10 today. We want to know all of the good and all 11 of the bad because we want to know about any 12 weaknesses in Post Office's case as well as any 13 good points so that we can advise them properly 14 on what their position is. So I will be asking 15 you what you think the weakness was in this if 16 any that sort of question." 17 You say: 18 "And can that come back and haunt me at 19 a later date?" 20 She answers your question about being 21 haunted: 22 "It is only an internal document so that is 23 the difference between a proof of evidence and 24 a witness statement. It is just for us to use 25 internally. So what we will do is what you say 15 1 if it does not come out in a logical way then we 2 may reorganise it so it is all done by topic but 3 we will not be changing it or removing anything. 4 With a witness statement we might remove things 5 that we did not want to say or polish it or you 6 know probe a bit further and that is a document 7 that will be shared with the other side so 8 because this one is just internal it should not 9 come back to haunt you." 10 In the light of those exchanges there, that 11 the lawyer was telling you that they wanted to 12 know all of the good and all of the bad, that 13 they wanted to know about any weaknesses in the 14 Post Office's case and you receiving reassurance 15 that what you said couldn't come back to haunt 16 you at a later stage, did you feel able to speak 17 freely and openly in this interview with Womble 18 Bond Dickinson? 19 A. From the best of my recollection, yes. 20 Q. Did you feel able to speak openly to these two 21 Womble Bond Dickinson solicitors because you 22 believed that what you said would not come out 23 in the future? 24 A. I just tried to be as honest as I could at the 25 time. 16 1 Q. Was that because you thought that this was, at 2 least initially, being said behind closed doors? 3 A. I thought that, yes. 4 Q. I'm going to take you to some passages in what 5 you say here and I hope that it isn't too 6 haunting for you. Can we look, please, at 7 page 59. It'll come up on the screen, please. 8 A. Okay. 9 Q. We can pick it up third paragraph. You say: 10 "But it is exceptionally frustrating at the 11 moment massively frustrating and I would think 12 I do not even know how many people know this is 13 going on because we only tell good news. We do 14 not tell bad news that is the impression we 15 get." 16 A. Yeah. 17 Q. At this date, the beginning of January 2018, was 18 it the case that the Post Office only told good 19 news? 20 A. I'm trying to think of the context in which that 21 comment was actually made. 22 Q. If you want to look back at the bottom of 23 page 58, if we go back a page, please, and 24 scroll down to the bottom half of the page, and 25 maybe if you just read to yourself the bottom 17 1 three paragraphs. 2 Yes, then over the page, please. 3 A. Sorry could you just repeat your question to me? 4 Q. Yes, was it the case in January 2018, the 5 beginning of January 2018, when you were 6 speaking here, that the Post Office only told 7 good news? 8 A. I think there was a -- my view and recollection 9 from now is, yes, there was a -- there was more 10 emphasis put on the good and not on the things 11 that perhaps weren't as good. 12 Q. You say here "We do not tell bad news". For how 13 long had that been the position? 14 A. For quite a number of years, I think. 15 Q. When you say there "we only tell good news we do 16 not tell bad news", what kind of issues were you 17 referring to? Who was the "telling" to, to the 18 subpostmaster community or to the public or 19 both? 20 A. Or perhaps even internally. I'm struggling to 21 recollect the sort of context of that particular 22 comment. But -- 23 Q. The context was the previous page? 24 A. Yeah -- where we don't tell bad news. 25 Q. Yes. 18 1 A. I think there was a desire to, yes, publicise 2 good news and not perhaps be as balanced in 3 the -- both internally and externally. 4 Q. Was that a new thing, come the beginning of 5 2018, or had it persisted for some time? 6 A. In my view, that had been going on for a while. 7 Q. By "a while" how long do you mean? 8 A. A number of years. I mean to say the only real 9 sort of example that springs to mind that I can 10 share with you is that, when sort of issues 11 started arising with Horizon and different 12 events were happening externally, my 13 recollection is that we would get some sort of 14 communication internally about how robust the 15 system was, how many transactions it did, and 16 there was almost a sort of, you know -- the 17 system is accurate and 100 per cent right, which 18 is, you know, what I believed at the time 19 because I had no other grounds to doubt it. 20 Q. Just stopping there, that's not focusing, from 21 your perspective, on the good news and not 22 telling the bad news. That's just telling the 23 only news -- 24 A. Right. 25 Q. -- that Horizon is accurate, if that's all you 19 1 knew, isn't it? This tends to speak to the 2 suppression of bad news stories, doesn't it? 3 A. Well, I guess a lot of the work that I was 4 involved in was not good news, you know, dealing 5 with sort of contractual matters wasn't 6 something that was a good news story. So the 7 Post Office would never sort of say how many 8 sort of issues there'd been or how many 9 suspensions there'd been, I don't think. 10 Q. So this that we read here includes, in your 11 view, issues relating to the operation of the 12 Horizon system? 13 A. I'm thinking it could do. I mean to say, in 14 looking at the sort of previous paragraphs, the 15 line looks as if it was also about the sort of 16 viability of the sort of branches, because they 17 talked about -- can we just go back? 18 Q. Yes, back to page 58, please, and just look at 19 the bottom. The bad things that I noticed in 20 the previous paragraphs were three paragraphs 21 from the bottom: 22 "I think the only thing you need to just add 23 into all of that is the complexity and I think 24 when we explain to a new subpostmaster during 25 the NT sort of stuff none of them knew what they 20 1 were getting involved in from a complexity point 2 of view." 3 A. Yeah, and I think I'm trying to make the point 4 that, you know, for the level of complexity in 5 running a Post Office was not straight -- was 6 not low and, if you take, sort of like, the 7 local model, which was included within the 8 retail counter, there was an expectation that 9 staff would move between the retail and the Post 10 Office Counter and I think that was, at times, 11 unrealistic. But that wasn't something that you 12 would do a -- be promoting when you were trying 13 to encourage people to take the model on. 14 Q. At this time, by January 2018, had you formed 15 the view that the Post Office as an organisation 16 was focused on its brand image, rather than 17 doing the right thing by subpostmasters? 18 A. I think the Post Office was always focused on 19 its brand image because it had a very, very 20 strong brand. That was part of the reason 21 I joined the Post Office many years ago. 22 Q. There was a second part to my question, namely 23 at the expense of or over and above doing the 24 right thing by subpostmasters? 25 A. I think perhaps knowing what I know now, yes, 21 1 that might be a true statement. 2 Q. Where did that culture come from, in your view? 3 A. I think it was just -- was just part of the DNA 4 of the business. 5 Q. Who was responsible for establishing the DNA of 6 the business? 7 A. In my view, it came from the top. 8 Q. Thank you. That can come down. 9 Can I turn to the first issue, then the 10 appointment of subpostmasters and contractual 11 issues. 12 A. Yeah. 13 Q. You deal with that in your witness statement -- 14 A. Yes. 15 Q. -- at paragraphs 13 to 36. If we just turn 16 those up, please, that's page 5 of the witness 17 statement, WITN06700100 -- page 5, please, 18 scroll down. 19 There's a whole subchapter of your statement 20 here, "Appointment of Subpostmasters", and if we 21 just scroll on, paragraph 13 over the page, all 22 through 15, over the page, 17, over the page, 23 and then over the page again, and again, and 24 again, and again, and again, and again, right up 25 to page 16. 22 1 Then at paragraph 37, we can just see it at 2 the foot of the page there, you turn to deal 3 with the "Contractual Liability of 4 Subpostmasters for Shortfalls". 5 A. Yes. 6 Q. That's on pages 16, 17 and 18, if we just scroll 7 through and see those. So they're the two 8 topics that you're addressing here: appointment 9 of subpostmasters; and then contractual issues, 10 what's in their contract. You do not say in any 11 of those paragraphs, in any of those 13 pages, 12 nor anywhere else in the 51-page witness 13 statement, anything about the inherent 14 unfairness and undue risks for subpostmasters in 15 their contracts, do you? 16 A. No. 17 Q. Can we look, please, at POL00006671. It's the 18 recording of the attendance at Womble Bond 19 Dickinson again, and can we go to page 38, 20 please. Top of the page: 21 "You know and some sort of spotty little 22 oink [sic] like me coming in working four hours 23 a night and he knows it is just sort of to keep 24 the grant going and stuff like that but he could 25 lose me money that I am liable for. There are 23 1 a lot of tensions in my head, you know." 2 The solicitor says: 3 "Yeah there is that is really interesting 4 actually." 5 You say: 6 "I wouldn't do it. Having said I will say 7 I wouldn't [I think that next word should be 8 'sign'] I wouldn't [sign] one of my contracts 9 because I think there is too much weighted 10 against you. You are on the hook to do 11 everything. But that doesn't absolve people 12 from you know, staying there and say the 13 contract is unfair. You should have read it 14 before you signed it you know. I think I would 15 be very cautious about it." 16 Do you agree with me that that should read 17 "I wouldn't sign one of my contracts", rather 18 than "sell"? 19 A. I think it's more likely to say "sign", yes. 20 Q. Yes. Why wouldn't you sign a Post Office 21 contract? 22 A. Because I just thought the terms of them weren't 23 something I personally would want to get into. 24 Q. Because they were unfair? 25 A. Because I thought they were not something 24 1 I would want to get into. 2 Q. Because you thought they were unfair? 3 A. From my -- 4 Q. Well -- 5 A. From my perspective, I wouldn't have signed it 6 because I just thought they were weighted 7 against the subpostmaster. 8 Q. Why was there too much weighted against the 9 subpostmaster? 10 A. It just felt to me that there was a lot of 11 clauses in there that were things that could -- 12 you know, you could lose your contract for and 13 there wasn't a great deal that -- going for 14 the -- that POL were doing. 15 Q. I missed that last answer. There wasn't a good 16 deal going for -- 17 A. There wasn't a great deal coming from Post 18 Office Limited. So the obligations were all on 19 the subpostmaster. 20 Q. Was that a commonly held view amongst senior 21 managers of your level? 22 A. I really don't know. That was my view. 23 Q. You were responsible for the team or a team that 24 asked subpostmasters to sign these contracts? 25 A. Yes. 25 1 Q. Was the view that you held one that was commonly 2 understood amongst senior managers in the Post 3 Office, namely that there was an imbalance of 4 obligations that the contract was weighted 5 against subpostmasters? 6 A. I honestly don't know. I can only tell you what 7 my view was at the time. 8 Q. If we go to page 58, please. Just to confirm 9 that the words you spoke earlier on page 38 had 10 the meaning that I thought that they did, just 11 at the foot of the page there: 12 "It does not grab the hearts and the minds 13 of people. Mostly people walking down the 14 street does it." 15 The solicitor says: 16 "It is very interesting to hear your views 17 on that." 18 Then the next answer, you say: 19 "And like I say I would not sign 20 a contract." 21 Yes? 22 A. Yes. 23 Q. Was that a view that you held from at least 24 2005, April 2005, onwards? 25 A. No, I think that's a view that I -- probably 26 1 came with more time passing, in the latter part 2 of my career with the Post Office. 3 Q. But, even though you held that view, you were 4 responsible for years and years for a team that 5 enabled subpostmasters to sign these contracts 6 and then enforced them against subpostmasters? 7 A. Yeah, I think the sort of turning point was the 8 contracts related to Network Transformation. 9 Q. Is that 2011? 10 A. Yeah, I think that's when the programme started. 11 But the contracts did evolve, because they 12 started with pilot contracts and then there was 13 a number of iterations. There were many 14 contracts. 15 Q. You've been quite forthright and open in this 16 interview with the solicitors here -- 17 A. Yeah. 18 Q. -- saying, "I've got national responsibilities 19 for contracts with subpostmasters, I wouldn't 20 sign one". Why didn't you tell us that in your 21 witness statement? 22 A. I don't know. 23 Q. I asked you at the beginning a couple of times 24 whether you were open and transparent -- 25 A. Yes, yes. 27 1 Q. -- in making your witness statement and you said 2 yes, you tried to be? 3 A. I don't recall anything in the Rule 9 letter 4 that perhaps would have elicited that sort of 5 comment. I might be wrong. 6 Q. Despite speaking for 16 pages about the terms 7 and conditions of postmaster contracts, you 8 didn't think it was relevant to say "I held down 9 a job for a number of years at a national level 10 and I formed the view that the contracts we were 11 asking the subpostmasters to sign were 12 inherently unfair". Did we need to ask you the 13 question: did you think the contracts were fair 14 or not, Mr Breeden? 15 A. Yes, perhaps. I mean to say, I don't know. 16 Q. Can we turn to page 5 of this document, please. 17 Just forgive me a moment. In the middle 18 paragraph the one starting "Firstly I am 19 probably not terribly attractive", which is 20 presently at the foot of the page here, if we 21 just scroll down a little bit, thank you. 22 About six lines up from the bottom of that 23 paragraph, a sentence begins -- and it's you 24 speaking, and you say: 25 "I thought this business always had very 28 1 good values and morals and stuff like that. 2 I think at the moment some of those are 3 sometimes just tested a little bit further than 4 probably I feel 100% comfortable with. I think 5 there is a point where you know if my personal 6 values and stuff like that did not particularly 7 weigh then I could not work in a place that you 8 know it does not matter how much money they are 9 paying me but where their actions are very 10 diverse to what I believe is the right thing to 11 do that is when I would sort of struggle." 12 The values and morals to which you refer 13 there, that were being tested further than you 14 felt comfortable with, what were they? 15 A. That was the likes of openness, trustworthy, 16 honesty. 17 Q. How were your values and morals being tested by 18 the Post Office? 19 A. I just thought some of the actions that were 20 being -- were going on at that particular time, 21 and that had no doubt happened earlier, were 22 just starting to push the boundaries on some of 23 these areas. 24 Q. Which issues were pushing the boundaries of 25 moralities and values? 29 1 A. Well, I think the way -- well, as you know, 2 I had issues with the contract -- 3 Q. Just stopping there, sorry, this is, again, 4 a reference back to the nature of the 5 subpostmaster contract, in part? 6 A. Well, I would say, you know, if you're -- sorry, 7 I thought you were asking me what things were 8 sort of pushing the -- my concerns. 9 Q. Yes. 10 A. I think one of them would have been the 11 subpostmasters contract. I think another one 12 would have been perhaps the sort of Horizon 13 activities that were going on. 14 Q. Just stopping there, sorry, to break it down. 15 What were you referring to in particular, then, 16 in your mind where the Post Office's values and 17 morals were not in accordance with your own, so 18 far as Horizon was concerned? 19 A. Well, I mean to say, you know, we were 20 constantly being told that Horizon was okay, it 21 was fit for purpose and what it did was the 22 right thing, which, you know, is clearly not the 23 case -- 24 Q. You didn't know that by then? 25 A. No, I didn't know that by then but I guess it 30 1 sort of just -- you just start wondering, don't 2 you, what's going on? 3 Q. This seems to have something different in mind. 4 This seems to, if I may say, be a statement that 5 you realised, if it referred to Horizon, that 6 you weren't being told the whole truth or that 7 the truth wasn't being told publicly? 8 A. I mean to say, I can't recall exactly what that 9 was relating to but I just felt that, at that 10 time, that some of the things that were going on 11 were -- I was struggling with. 12 Q. Can you try and help us a little more, please, 13 because, on the account you've given in your 14 witness statement, you believed, right up until 15 after the Horizon Issues judgment in 2019, that 16 Horizon had integrity and there were no material 17 bugs, errors and defects? 18 A. Mm-hm. 19 Q. If this, in part, refers to Horizon and you're 20 speaking here in January 2018, what was in your 21 mind? 22 A. Well, at that point in 2018, Horizon, in my 23 mind, was accurate but I think what's going on 24 in your head is there's -- there must be 25 something going on that we've perhaps not been 31 1 told about. I don't know. Perhaps I was just 2 over thinking it at the time but I just -- 3 because my job so reliant on that piece of 4 equipment being accurate and, you know, from 5 that point of view, you start thinking the 6 what-ifs, I suppose, without any grounds to 7 think them on, but perhaps that's the way I was 8 thinking there. 9 Q. Mr Breeden, this is referring to reality here. 10 You say that there are things that test you 11 further than you feel comfortable with. 12 A. Yeah. 13 Q. You're referring there to something that 14 actually happened -- 15 A. Yeah. 16 Q. -- not imagining meaning things -- 17 A. No. 18 Q. -- not over thinking things. 19 A. No. 20 Q. What were the things that were happening that 21 tested your values and morals more than you felt 22 comfortable with? 23 A. Well, the only other thing that -- because, you 24 know, to clarify, I did not know there was any 25 issues with Horizon at that point. It would be 32 1 the rollout of different programmes that were 2 going on in the business because I think, at 3 that stage, we'd be coming to the end of the 4 change programme and how that was perhaps being 5 completed, because they were clearly the harder 6 parts of the programme to complete, the tail 7 end. 8 Q. In what way did the rollout of different 9 programmes test your values and morals -- 10 A. Well -- 11 Q. -- more than you felt comfortable with? 12 A. I think at times we were, as a team, put under 13 a bit of pressure to make appointments, to allow 14 individual branches to be resolved and converted 15 under the programme. 16 Q. So we should read this part of this paragraph as 17 referring to three things: firstly, the unfair 18 postmaster contract; secondly, Horizon; and, 19 thirdly, the rolling out of new programmes? 20 A. Yes, but, like I say, at that point, I didn't 21 know there was any problem with Horizon. 22 Q. We're going to come back to knowledge of 23 problems with Horizon a little later today. Can 24 I turn to a new topic. That can come down, 25 please. 33 1 At page 30 of your witness statement, 2 please, at paragraph 92. You say: 3 "In all the roles I had from 2006 I was 4 responsible for deploying the processes related 5 to suspensions, terminations ... The preparation 6 of the policies and processes to be followed was 7 undertaken by a Policy Team, usually with input 8 from those who deployed the policies and 9 processes." 10 So that's similar to what you said earlier 11 today? 12 A. Yeah. 13 Q. Do I understand from this that you had, and your 14 team had, a role in the development and then 15 signing-off of policies concerning suspensions, 16 terminations and the appeals processes? 17 A. We had a role in the development. We had input 18 into the development but the sign-off was 19 undertaken by whoever owned the policy. 20 Q. I see, but then you had a role in implementing 21 them, ie carrying them into effect? 22 A. Yes. 23 Q. Now, we've heard evidence that there were two 24 different types of contracts between the Post 25 Office, on the one hand, and subpostmasters, on 34 1 the other. The first was the subpostmaster 2 contract, the SPMC, yes? 3 A. (The witness nodded) 4 Q. Which was modified in 2006 and became known as 5 the Modified SPMC, correct? 6 A. Well, I think there was a modification -- there 7 were two separate contracts but you could still 8 be appointed on the first one you mentioned 9 after 2006. 10 Q. Then the second species of contract was the 11 Network Transformation Contract, the NTC? 12 A. Yeah. 13 Q. That became used after the Network 14 Transformation Programme, the NTP, was initiated 15 in 2011; does that sound right? 16 A. Yeah, there was -- after 2011, there was 17 still -- I think when the programme started 18 there wasn't sufficient funding to transform the 19 whole estate, it was only about half of it. So 20 there was still offices that would continue on 21 the -- what I would call the traditional 22 subpostmaster contract. 23 Q. So the SPMC was issued, would this be right, 24 between the years 1994 and 2011, in the modified 25 form after 2006, but new contracts were issued 35 1 as the Network Transformation contract after 2 2011? 3 A. I don't think that is correct, no. 4 Q. Can you tell me then what you think is correct? 5 A. What I believe is correct is the SPSMR, 6 subpostmaster contract, was available from the 7 date in the 1990s -- 8 Q. '94 -- 9 A. -- that you mentioned but that could still be 10 issued into beyond 2011 because there was still 11 branches that weren't suitable, for want of 12 a better word, to go onto the Network 13 Transformation Programme. So, if there was any 14 change in those offices, they would continue. 15 What used to happen, just not to digress, but is 16 that when a vacancy arose in the network, the 17 Network Transformation Programme would model 18 that to see what type of branch, whether it 19 would be one under the Network Transformation 20 Programme or not or whether it would retain 21 initially as a traditional contract. 22 The modified contract -- I'm struggling to 23 remember this but was not used wide scale across 24 the network. There was -- I can't remember how 25 many there were but they were issued in, 36 1 I think, more specific situations, perhaps where 2 there'd been a Crown Office that had converted. 3 Q. I understand. Let's look at a couple of species 4 or versions of the contract. Can we start, 5 please, with POL00000246. If we just go to 6 page 3 please, and scroll down. We can see 7 a list of amendments. The last one is 2006, and 8 we can see the date of the document at the 9 bottom right -- bottom left, July 2006; can you 10 see that? 11 A. Yes, yes. 12 Q. If we can go to page 71, please. It's 13 paragraph 12, this is within section 8 of the 14 contract under the heading "Losses". 15 A. Yes. 16 Q. "The subpostmaster is responsible for all losses 17 caused through his own negligence, carelessness 18 or error, and also for losses of all kinds 19 caused by his Assistants. Deficiencies due to 20 such losses must be made good without delay." 21 A. Yes. 22 Q. "13. The financial responsibility of the 23 subpostmaster does not cease when he 24 relinquishes his appointment and he will be 25 required to make good any losses incurred during 37 1 his term of office which may subsequently come 2 to light." 3 Is this, the provision in paragraph 12, 4 amongst those which you considered to be unfair 5 and, therefore, you personally wouldn't have 6 signed it? 7 A. I personally wouldn't sign that, no. 8 Q. Was that because the contractual provision was 9 a slanted foundation stone for establishing 10 liability against a subpostmaster? 11 A. I'm not sure what you're saying there. 12 Q. You tell us then why you would include this as 13 amongst the clauses in the contract that you 14 would regard as unfair and therefore not sign? 15 A. It just felt to me personally it was very wide 16 reaching. 17 Q. Why was it wide reaching? 18 A. Because of the fact that it -- the terms 19 "negligence, carelessness or error". 20 Q. I'm sorry? 21 A. Because of the way the first sentence is worded. 22 You know, "thorough negligence, carelessness or 23 error". 24 Q. What about the sentence or the part of the 25 sentence which fixes the subpostmaster for all 38 1 losses of all kinds caused by their assistants, 2 whether they're responsible for or caused by 3 negligence, carelessness or error? 4 A. Mm. It just seems a very catch-all sort of 5 statement that I wouldn't have felt comfortable 6 with. 7 Q. Was it your view that, nonetheless, 8 subpostmasters wouldn't have contractual 9 liability for shortfalls if they were caused by 10 bugs, errors and defects in the Horizon system 11 not being their negligence, carelessness or 12 error? 13 A. Well, if it's caused by not negligence, 14 carelessness or error, I suspect it wouldn't be, 15 no. 16 Q. Can I look then at what subpostmasters were told 17 when the Post Office sought to recover money 18 from them, when it was sending letters before 19 claim to them and when it was considering 20 suspending them and bringing proceedings against 21 them. I just want to look at three example 22 letters if I may. Can we start with 23 LCAS0001117. You'll see this is a letter to 24 Mr Lee Castleton, dated 18 August 2004. 25 A. Mm-hm. 39 1 Q. It's in respect of his branch, the Marine Drive 2 Post Office and, if we scroll down to the 3 bottom, we can see who it's sent by. 4 A. Yes. 5 Q. An "Agents Debt" -- is that team 3 -- "Former 6 Subpostmasters Accounts"? 7 A. Yeah, I would imagine that's team 3. 8 Q. In Chesterfield? 9 A. Yes. 10 Q. Then just scroll back up to look at the terms of 11 the letter: 12 "I am writing to you in respect of number of 13 errors that have come to light in the accounts 14 ... 15 "The sum of £27,000 is due to Post Office 16 ... 17 "I have attached a copy of our statement of 18 errors ..." 19 Then this: 20 "Since you are contractually obliged to make 21 good any losses incurred during your term of 22 office for up to six years ... it would be 23 appreciated if you could afford a cheque, made 24 payable to Post Office, for the amount to the 25 address below within 21 days ..." 40 1 Can we look, please, at POL00004671. We can 2 see this is a letter dated 2010, March 2010, in 3 the top right. It's a reminder letter to Pamela 4 Stubbs at an office in Wokingham. Then at the 5 foot of the page, please, "Current Agents' Debt 6 Team Leader", this was sent buy. If we scroll 7 up, please: 8 "Dear Mrs ... Stubbs 9 "I am writing to you in respect of the 10 recovery of outstanding debts in the accounts 11 ... According to our records the sum of 12 [£17,000-odd] is overdue for payment. 13 "Since you are contractually obliged to make 14 good any losses incurred during your term of 15 office, please call the debt recovery team on 16 the number quoted to so this will this amount 17 via credit/debit card. 18 "Alternatively forward a cheque ... 19 "Failure to meet these repayment terms may 20 lead us to deduct the outstanding debt from your 21 future remuneration ..." 22 Then, lastly, POL00044903. A little later 23 in 2010, a letter to Allison Henderson, at the 24 Worstead Post Office branch. Foot of the page 25 please, "Former Agents Debt", a team in 41 1 Chesterfield. Then up, please: 2 "I am writing to you in respect of the 3 recovery of deficiencies founding in the 4 accounts at the above Post Office whilst you 5 were subpostmaster. 6 "The sum of [just under £12,000] is due to 7 Post Office to clear the account ... 8 "Since you are contractually obliged to make 9 good any losses incurred during your term of 10 office", et cetera. 11 Do you agree this standard form of wording 12 that we've seen in each of the three letters, 13 "you are contractually obliged to make good any 14 losses during your term of office", materially 15 misstates the contractual obligations of 16 a subpostmaster? 17 A. Misstated? 18 Q. Yes, it doesn't include the fact that the loss 19 needs to be due to their negligence -- 20 A. It's not using -- 21 Q. -- et cetera -- 22 A. -- yeah, the same terminology as is in the 23 contract. 24 Q. It therefore misstates the obligation. It says, 25 "You are contractually obliged to make good any 42 1 losses". 2 A. Yes. 3 Q. That's just wrong, isn't it? 4 A. Yes, if they weren't made through carelessness, 5 error. 6 Q. That's an important qualification. Even though 7 you regarded it yourself as still unfair, it's 8 not as wide as any losses whatsoever, is it? 9 A. No. 10 Q. Would you regard that as just a matter of 11 terminology? 12 A. I think that is a matter of terminology, yes. 13 Q. Or would it represent the fact of a belief in 14 senior management at this time that 15 subpostmasters were liable for all losses, 16 irrespective of the cause of them? 17 A. Yes, I think it would. 18 Q. Was that a commonly prevailing view: 19 subpostmasters are liable for all losses? 20 A. I think, as a generalisation, yes. 21 Q. Is that, therefore, an example of what the judge 22 described as the Post Office not really caring 23 much about what the actual terms of the contract 24 say and instead relying on its own belief as to 25 what it thought the position was? 43 1 A. I think that's potentially correct, yes. 2 Q. How did that come about, that state of mind? 3 A. I think it was there all the time. 4 Q. Do you agree that that is poor behaviour by the 5 Post Office, telling subpostmaster that they've 6 got to pay up, under their contract, thousands 7 or tens of thousands of pounds because, under 8 their contract, they're liable to make good any 9 losses when the contract didn't say that at all? 10 A. With hindsight, yes. 11 Q. Why does it take hindsight to realise that? 12 A. I suppose you just get caught in the way things 13 take place in a business, don't you? 14 Q. So because the culture, the ethos, the morals of 15 the business have developed in a certain way, 16 you don't have regard to the true position 17 according to contractual documents or the law. 18 A. What, me personally or the Post Office? 19 Q. Yes, no, the Post Office. 20 A. Yeah, I think -- well, I think there was a view 21 that if you mentioned the contract, you know, 22 things would happen. 23 Q. Okay. So the mere mention of the contract -- 24 A. Yeah, I think it's almost used as a little bit, 25 perhaps, of a stick to get things done because 44 1 I was very conscious that, in my time there, 2 that, particularly when sort of developing 3 stuff, that the appropriate interventions had 4 taken place before something was referred to my 5 team and it was a matter that was a contractual 6 matter, because that wasn't the case in all 7 instances. 8 Q. Thank you. Can we turn back to your witness 9 statement, please, and look at page 17, 10 paragraph 41. If we can just highlight 41, 11 please, page 17. That's it. You say: 12 "Where a loss had been incurred and the 13 reason for the loss was known and a compensating 14 error was expected to be issued, losses could be 15 held in the suspense account. The subpostmaster 16 would have to have investigated the loss and 17 know when it occurred, ie a date, and have 18 evidence of the error. Authority to hold the 19 amount in the suspense account would be given by 20 the Agent Debt Team. This facility was only 21 available where there was a known error." 22 A. Yeah. 23 Q. Was the suspense account, on your understanding 24 of it, only to be a safe haven for sums which 25 were the product of an error that had already 45 1 been established, therefore? 2 A. That was my understanding of suspense, yeah, 3 that you had to have authority to put something 4 into the suspense account. 5 Q. Authority might be a different issue. 6 A. Okay. 7 Q. I'm asking, at the moment, whether the suspense 8 was a place, an account to put sums which were 9 the product of an error that had already been 10 established, ie where the reason was known -- 11 A. Yes. 12 Q. -- and the postmaster had evidence of the 13 error -- 14 A. Yes. 15 Q. -- which are the two things you mention here? 16 A. Yeah. 17 Q. Is that right? 18 A. Yes, I think so. 19 Q. Not to place sums which were in dispute and 20 an investigation was necessary in order to 21 establish the cause of the loss? 22 A. I think you probably -- if you were disputing 23 something, it could have been put in suspense as 24 well. 25 Q. Even if the cause of the error was not known and 46 1 the subpostmaster had no evidence in relation to 2 the cause of the error? 3 A. I think it would be highly unlikely then. 4 Q. I'm sorry? 5 A. I think it would be unlikely. 6 Q. That he would be allowed or she would be allowed 7 to put it in response? 8 A. I don't think they would be given authority to 9 do that. 10 Q. The judge -- and I'm not going to go through his 11 many findings that established this -- held in 12 his Common Issues judgment that it was almost 13 impossible for postmasters fully to investigate 14 the causes of discrepancies or shortfalls in 15 their branches due to their limited access to 16 back office and computing information and data. 17 How would a subpostmaster establish the 18 reason for the loss and produce evidence of it 19 in those circumstances? 20 A. Just by looking through the printouts from 21 Horizon. 22 Q. How would they establish that the cause of 23 a loss was the system and not them either 24 miskeying a sum, their staff miskeying a sum or 25 them or their staff not taking money or stock? 47 1 A. I don't know how they would do that. 2 Q. It's an impossibility, isn't it? 3 A. I think it is. 4 Q. On the data that they had available to them, 5 they couldn't do it? 6 A. I wouldn't have thought so. 7 Q. Yet, if they wanted to place a sum in suspense, 8 they had to do it? 9 A. Yes. 10 Q. Was this another example of unfairness, as you 11 saw it, requiring subpostmasters to undertake 12 the impossible? 13 A. As you put it like that, it wasn't one that 14 perhaps was at the forefront of my mind at the 15 time but, as you put it like that, yes. 16 MR BEER: Sir, I wonder whether we could take the 17 morning break now. I was going to propose that 18 we took lunch between 12.30 and 1.30 today, if 19 that's acceptable to you, for a range of reasons 20 and, therefore, that would make the morning 21 break now convenient until 11.25. 22 SIR WYN WILLIAMS: Yes, that's fine. 23 Could I just ask you, in the first instance, 24 Mr Beer, or Mr Breeden, these provisions that we 25 are now talking about relating to the use of the 48 1 suspense account, were they written into the 2 contract or were they independent of the 3 contract or subject to some kind of instruction, 4 or what? 5 MR BEER: Sir, I'm not going to give evidence. Let 6 Mr Breeden answer it and, even if I thought 7 I knew the answer, I would "phone a friend" 8 first to make sure that what I thought was 9 correct. 10 SIR WYN WILLIAMS: It's just something that struck 11 me as you were quite correctly pointing out the 12 difference between the contractual provisions 13 and the letters. It then made me wonder how 14 these provisions about the use of the suspense 15 account were regulated. 16 If you know the answer, Mr Breeden, would 17 you tell me? If you don't, Mr Beer will "phone 18 a friend". 19 A. Could I "phone a friend" as well? 20 SIR WYN WILLIAMS: I think at some stage, I'd just 21 like to know the answer, that's all. 22 A. The suspense account, it wasn't a term in the 23 contract. So I would imagine that it was 24 subject to what I'm going to term as like office 25 instructions -- 49 1 SIR WYN WILLIAMS: Right, I follow. 2 A. -- and by contact of the sort of expert domain 3 within Post Office Limited. So, you know, if 4 an error had occurred, they would no doubt ring 5 Chesterfield or, if they had in issue, and 6 that's where it would probably get advice from. 7 SIR WYN WILLIAMS: All right. Thank you. 8 MR BEER: Sir, I should say that accords with my 9 initial view, before seeking confirmation of it, 10 that, in the iterations of the contract we've 11 got, the operation of the suspense account is 12 not a term of the contract. We've got over 13 a dozen, I think, policies and instructions that 14 address the operation of the suspense account -- 15 SIR WYN WILLIAMS: Yes. 16 MR BEER: -- and we can look at those and maybe 17 summarise those for you in due course. 18 SIR WYN WILLIAMS: Thank you very much. 19 Do you need an extra few minutes now, as 20 a result of my intervention? 21 MR BEER: 11.30, please, sir. 22 SIR WYN WILLIAMS: That's fine. 23 MR BEER: Thank you. 24 (11.13 am) 25 (A short break) 50 1 (11.30 am) 2 MR BEER: Good morning, sir, can you see and hear 3 me? 4 SIR WYN WILLIAMS: Yes, I can, thank you. 5 MR BEER: Thank you very much. Mr Breeden, can we 6 continue by looking at a real-world example of 7 some of the issues we have just been speaking 8 about by looking at POL00021163. This is 9 an email thread from 2009 involving you, and 10 I should read it all. It will take a little 11 while to run through it, just so you've got 12 complete context before I ask you some questions 13 about it. 14 Can we go to page 5, please, and look at the 15 foot of the page, please. If we just scroll 16 down a little bit further, we'll see who Karen 17 was -- just onto page 6 -- a Contract Manager, 18 North Central. Was that somebody you had 19 responsibility for in 2009? 20 A. Yes. 21 Q. Yes, thank you. So if we scroll back up, 22 please, to the bottom of page 4, we can see the 23 chain starts with her email to Gary Blackburn. 24 We'll find out in a moment that he was part of 25 the service delivery branch and his job title 51 1 was "Live Service and Business Continuity 2 Manager", Mr Blackburn. What would a Live 3 Service and Business Continuity Manager do, can 4 you recall? 5 A. I couldn't honestly hazard a guess. 6 Q. Right, okay. Karen Arnold says: 7 "Gary. 8 "Further to our conversation last week 9 regarding the losses at Hogsthorpe ..." 10 You can see the subject title of the email 11 is "Hogsthorpe" and then there's a FAD code, 12 yes? 13 A. Yes. 14 Q. "... the [subpostmaster], David Hedges (who 15 likes to be known as Tom) has contacted the NBSC 16 to establish what the BAU ..." 17 "Business as usual", I think that means? 18 A. Yes. 19 Q. "... BAU/correct process is for suspending 20 a session of Smartpost. Tom tells me that the 21 NBSC said it was okay to use either of the 22 methods he describes, as a reminder I have 23 copied information below in respect of what he 24 described to me last week." 25 Over the page. Again, there's the cut-in 52 1 passage which Tom, Mr Hedges, had described. 2 "Tom said that he does a lot of postage and 3 customers come in and leave their items of mail 4 and a blank cheque, so they don't have to wait. 5 He then processes the items in between serving 6 other customers. Previously he would have 7 several items on the sales stack, items for 8 which labels had been printed and if a customer 9 came in he would suspend the session, from the 10 Smartpost screen and serve other customers 11 before going back and swapping back into the 12 suspended session. This would take him straight 13 back to the Smartpost screen, but when he 14 initially suspended the session it would take 15 a long time, as it also did when he swapped to 16 go back into the suspended session. Around the 17 time the losses started he changed how he 18 suspended the session. Items in the sales stack 19 and in Smartpost, when a customer came in he 20 started going back to serve customer, suspending 21 the session from there, would serve other 22 customers and then swap to go back into the 23 suspended session, by doing it this way it took 24 him back to the serve customer screen and both 25 the suspending of the session and returning back 53 1 into the suspended session was far quicker this 2 way, than how he did it previously." 3 Then Karen Arnold continues: 4 "Tom unless spoke to the 'Horizon Helpdesk' 5 yesterday about this and also the losses which 6 he believes have started since he changed his 7 procedures [a reference number is given]. 8 I understand from Tom that a visit has now been 9 arranged for today to swap the central 10 processor. Once this swap out has been 11 completed, can you tell me whether any 12 investigation is carried out with the old 13 processor. 14 "As I mentioned last week, if losses 15 continue then I could end up with a conduct 16 case." 17 Just stopping there, what would you 18 understand a "conduct case" to mean? 19 A. Certainly, as a minimum, getting the 20 subpostmaster to have a conversation with Karen 21 to find out what we're doing with the losses, 22 ultimately could end up as a suspension. 23 Q. So it's going down a track of misconduct 24 potentially -- 25 A. Yes. 54 1 Q. -- which could end up in suspension and 2 dismissal? 3 A. Yes. 4 Q. Thank you. Carrying on: 5 "If this does happen then the 6 [subpostmaster] will have the opportunity of 7 attending an interview, in which I am sure he 8 will raise what he believes is an issue with 9 Smartpost suspended sessions contributing to 10 losses at the branch. At this point it well 11 have to be investigated, I therefore feel it 12 will be beneficial to do this now and would 13 appreciate your help with this. 14 "Regards 15 "Karen." 16 So you understand I think, the issue being 17 raised here, is this a fair summary: 18 a subpostmaster suspending sessions whilst in 19 Smartpost -- 20 A. Yes. 21 Q. -- changing the manner in which he suspended the 22 sessions and alleging that that change was 23 causing losses to show? 24 A. Yeah. I understand -- you know, I have read the 25 text and see -- 55 1 Q. Yes. 2 A. I'm not familiar with all the suspended 3 sessions, I can't remember all those sort of 4 things. 5 Q. No, that's not necessary for the moment but 6 I think we can understand what's happening here: 7 a subpostmaster saying, "I'm using the system 8 and it is creating losses which are not true 9 losses, it's the way the system operating", and 10 your Contracts Adviser is saying, "This could 11 end up, if they swap out the old processor and 12 put in a new one and the losses continue, in 13 a conduct or misconduct case", okay, and she's 14 saying, "Can we investigate it now, not halfway 15 through conduct case". 16 A. Yeah. 17 Q. Yes, or when we're into a conduct case. "Can we 18 investigate what the cause of the losses 19 actually is now, rather than as part of 20 a conduct case", yes? 21 A. Yes. That's my interpretation. 22 Q. Yes, thank you. Then if we go back to page 4, 23 please, and scroll down. Thank you. Just up 24 a bit, sorry, a bit more, please, to see Gary's 25 reply. That's it. Mr Blackburn replies: 56 1 "Karen 2 "Fujitsu would not check a replaced 3 processor automatically but I don't believe that 4 would add any value in this instance. 5 "As we discussed last week the most likely 6 explanation was/is user error but given the 7 calls into NBSC and HSD we should assume this is 8 not the root cause at this time. 9 However kicking off any other type of 10 investigation is dependent on transactional 11 evidence of Smartpost suspend creating 12 discrepancies? Does Tom have any? I assume he 13 believes that Horizon is committing each mail 14 item/costs each time that he goes into suspend 15 and therefore on multiple occasions? 16 "If Tom has specific information such as 17 transaction time and values, please send this 18 across and I will get Fujitsu to investigate 19 immediately. If has no evidence then I'm afraid 20 there is nothing for Fujitsu to investigate." 21 Then back to page 3, please, Karen's reply: 22 "Gary 23 I am not sure why Fujitsu would be changing 24 the processor if they didn't think there was 25 a problem. 57 1 "Having spoken to Tom today, once the new 2 processor is installed he is going to do a BP 3 rollover ..." 4 Can you remember what BP rollovers were? 5 A. I can't remember what "BP" is now. Branch -- 6 no, sorry, it's gone. BP? 7 Q. Was it to do with balancing? 8 A. Yes, is it the rollover to the next period? 9 I think? I can't remember what "BP" stands for, 10 just off the top of my head. 11 Q. Okay. 12 "... and then keep a tally manually of every 13 Smartpost item to check against Horizon. This 14 however won't help with anything that has gone 15 previously." 16 So he, the subpostmaster, once the new 17 processor is in, says he is going to keep 18 a manual tally, handwritten tally, of every 19 Smartpost item to check against Horizon but 20 that's not going to help with the past. You can 21 see that you're now copied in to this email 22 chain, can you see that at the top? 23 A. Yes. 24 Q. Then if we go to the foot of page 2, please. 25 Mr Blackburn replies: 58 1 "Fujitsu have always had a preventative 2 maintenance policy and therefore sometimes will 3 swap out kit without actually finding a fault, 4 also it generally helps with customer perception 5 of the service they have received. 6 "I accept in this instance that this policy 7 could work against us, but are you suggesting 8 that if after swapping the processor, and all 9 discrepancies cease that Tom will claim that is 10 clear proof of Horizon creating discrepancies? 11 I strongly suggest that Tom obtains the 12 necessary evidence now, if it is available. 13 "I am not trying to be obstructive but at 14 present we have nothing to work on." 15 Then to the bottom of page 2, please -- 16 sorry, bottom of page 1. You sent an email, can 17 you see this, on 3 July? 18 A. Yes. 19 Q. "Gary 20 "I have read the recent emails on the above 21 and considered the information I am concerned if 22 we swap the processor now and the errors stop 23 this could lead to (i) a claim that Horizon has 24 problems in its accuracy and fuel some of the 25 recent press articles and (ii) the 59 1 [subpostmaster] will claim that all previous 2 errors are down to Horizon and we have no way to 3 disprove this if everything is resolved when the 4 new processor is installed. 5 "Point (i) above would also concern me as 6 I have no doubt that this individual is not the 7 only one that uses Smartpost in this way so we 8 could end up with other claims in respect of 9 this issue where we have insisted that the 10 [subpostmaster] makes the loss good." 11 Then over the page: 12 "I would prefer a more staged approach be 13 taken to this issue where we try to identify the 14 problem by a method that will eliminate 15 potentially different scenarios -- I am not sure 16 how easy or difficult this would be to do but if 17 this [subpostmaster] was for example removing 18 money from the till and he stopped doing this 19 when the processor is removed we have not proved 20 it was the processor that was at fault all we 21 have stopped is money going missing. 22 "I think we need to think this one through 23 carefully and the [subpostmaster] should be 24 providing evidence to support his claims which 25 can be investigated or we change pieces of 60 1 equipment. 2 "If you wish to discuss please give me 3 a ring." 4 Just go back to the foot of page 1, please. 5 Thank you. You say that you're concerned that, 6 if the processor is changed and the errors stop, 7 this could lead to a claim that Horizon has 8 problems in its accuracy and fuel some of the 9 recent press articles. Is that a written 10 expression of what you described earlier, 11 a desire on the part of the Post Office to 12 protect the Post Office brand and Horizon in 13 particular? 14 A. I guess it could be, yes. I didn't really think 15 of it in that light until you've mentioned it. 16 Q. Were you operating on a presumption here that 17 the alleged debt was owed until it was disproved 18 by the subpostmaster? 19 A. I think I was working on the presumption that we 20 needed to understand what had happened in the 21 office and take an approach which perhaps 22 eliminated things as we went through and didn't 23 cause us more problems than they solved. 24 Q. You understood, I think, in the context of this 25 exchange, that Mr Hedges may have been suspended 61 1 in connection with the conduct case, arising 2 from the losses that he believed were caused by 3 the system? 4 A. Yes. That's ultimately where it could have 5 gone. 6 Q. Even more ultimately, Mr Hedges could have been 7 dismissed at the conclusion of that conduct 8 case? 9 A. That is one of the possible outcomes of 10 a conduct case, depending on the -- what 11 investigations come to light. 12 Q. He could have been required to repay the 13 losses -- 14 A. Correct. 15 Q. -- and could conceivably have been subject to 16 a prosecution? 17 A. That is a possibility but not something that was 18 in my remit. 19 Q. Given the information that you had been given 20 about the problem that Mr Hedges alleged, why 21 would you not wish to investigate whether in 22 fact the processor was reliable or not? 23 A. Well, I think that's what I was trying to say 24 there in the point that I make, is that I think 25 we needed to take a staged approach of which 62 1 checking the processor might be one of those 2 stages. 3 Q. Why would you be concerned that swapping the 4 processor, might lead to the errors stopping? 5 A. Well, swap -- the -- swapping the processor 6 doesn't necessarily mean that if the errors 7 stopped it was down to the processor, I think 8 was my train -- will have been my train of 9 thought there. 10 Q. That he could have been stealing the money and 11 had then stopped stealing the money at the point 12 of the change of the processor? 13 A. Well, that something else could have been going 14 on that wasn't down to the processor. 15 Q. Was him stealing the money one of those other 16 things that could have been going on, in your 17 mind? 18 A. I -- you know, this is back in 2009, so I can't 19 clearly remember what my mind was thinking at 20 the time but I would imagine that's one of the 21 options that would have been going through my 22 mind. 23 Q. Just go over the page, please. In this 24 continuation of your email, in the third line, 25 you say: 63 1 "... if this subpostmaster was for example 2 removing money from the till and he stopped 3 doing this when the processor is removed we have 4 not proved it was the processor that was at 5 fault all we have stopped is money going 6 missing." 7 A. Yes -- 8 Q. It seems to be that -- 9 A. -- so it was clearly in my mind at the time. 10 Q. You refer here to the "recent press articles". 11 A. Yes. 12 Q. What were the recent press articles? 13 A. Crikey, I honestly don't recall, back in 2009, 14 what the press articles were. I know -- I think 15 it was computing magazine had done several 16 articles around -- 17 Q. Computer Weekly? 18 A. I can't remember the title of it. But they'd 19 done articles on Horizon, and -- I'm sorry, 20 I just can't remember which article I'm 21 referring to there. 22 Q. Wouldn't the existence of articles complaining 23 of other faults with Horizon be more of a reason 24 to investigate the alleged fault fully rather 25 than less of a reason? 64 1 A. Yeah, I don't think I'm suggesting we don't 2 investigate it fully but I was suggesting we 3 take a more staged approach to the 4 investigation. 5 Q. What were those stages? 6 A. Well, I think it was trying to -- what probably 7 was going through my mind at the time was trying 8 to eliminate different sources that could have 9 created the problem, of which one would be no 10 doubt the processor. 11 Q. How could the subpostmaster produce evidence 12 that Horizon was the cause of the alleged loss? 13 A. I honestly don't know. 14 Q. Just go back to the foot of the first page, 15 please. 16 A. I think it was in the text a little bit earlier, 17 there was comment about the subpostmaster 18 providing evidence. 19 Q. What evidence did you think he could provide? 20 A. I wasn't sure. 21 Q. I mean, it seems, again, that your decision 22 making is coloured by the possibility of 23 undermining the belief in the integrity of 24 Horizon; would you agree? 25 A. I'm not sure, I'm not sure it was. But I was 65 1 trying to just be more constructive in the way 2 we -- or methodical in the way we investigated 3 it. 4 Q. So what did you think would happen -- 5 A. Hopefully -- 6 Q. -- as a result of your email? 7 A. Hopefully we'd get to the bottom of whatever was 8 causing the problem. 9 Q. How? If the subpostmaster couldn't produce 10 evidence that Horizon was at fault, all he could 11 say is that "I know that when I used the 12 Smartpost system in this way, in this sequence, 13 it causes losses on my account which are not 14 true losses". 15 A. Yeah. I didn't know whether something could be 16 printed at that point in the -- from Horizon. 17 Q. What was the route for a link between you and 18 your team, who were responsible for making 19 decisions and giving advice about issues such as 20 this, and those responsible for the intricacies 21 of the operation of the Horizon system? 22 A. What, you mean how we got information? 23 Q. Yes. 24 A. By the likes of people like Gary Blackburn. The 25 teams that were responsible for the Horizon 66 1 equipment. 2 Q. I'm thinking of how, if you didn't know 3 a subpostmaster could prove that what he was 4 saying was true or that what he was saying could 5 be tested, to whom would you turn to say, "We've 6 got a subpostmaster who alleges the following. 7 He alleges that when he uses Smartpost and 8 presses the screen in this sequence, losses that 9 are phantom losses are created" -- 10 A. Yeah. 11 Q. -- "please tell me what questions I need to ask 12 him. Please tell me what data the system will 13 produce to prove or disprove that which he 14 says?" Who would you turn to? 15 A. I'd be looking towards the experts on Horizon. 16 Q. Who were they? 17 A. Well, I can't remember what you term 18 Mr Blackburn's job as but I think there was 19 a team based up in the Rotherham area that were 20 sort of -- would sort of link the conduit. 21 Q. I mean, his job title is on page 4. 22 A. Yeah, I find job titles a little confusing. 23 Q. Well, on that I think we can at least agree. 24 Page 4 in the middle, please, and scroll down, 25 please. "Live Service and Business Continuity 67 1 Manager" in Barnsley? 2 A. Yeah. 3 Q. That doesn't tell you what he does and whether 4 he knows anything about Horizon, correct? 5 A. No, it doesn't tell me anything. 6 Q. But who, broadening it out from these narrow 7 circumstances, would you and your team turn to 8 for technical advice, where you'd got a case 9 just like this: postmaster says X, Y and Z; we 10 need to test whether X, Y and Z are true, does 11 Horizon operate in this way? Is it conceivable 12 that the subpostmaster is correct? What data is 13 produced by Horizon? What back office data is 14 kept by Post Office and Fujitsu to help us 15 navigate our way through these allegations? 16 A. I do believe that Gary Blackburn, this has his 17 continuity -- Horizon continuity, business 18 system continuity, and he had a team of people 19 in Barnsley or Rotherham that dealt with this 20 and would be, in my view, what you would class 21 as the expert domain. 22 Q. So you would expect Mr Blackburn to be able to 23 say, "Look, we can investigate this as follows: 24 by going back to Fujitsu or by the data that 25 we've already got to see whether what Tom says 68 1 is true or not"? 2 A. I would be expecting somebody with -- whether it 3 was Mr Blackburn, but Mr Blackburn to know how 4 it could be investigated. 5 Q. Thank you. That can come down. 6 Can we turn paragraph 90 of your witness 7 statement, which is on page 29. It's at the 8 foot of the page. You say: 9 "I have reflected on whether I noticed any 10 increase in subpostmaster losses or an increase 11 in the number of write-offs agreed following the 12 introduction of Horizon. I do not recall 13 an increase in losses following the introduction 14 of Horizon, but once the reliability of the 15 system began to be questioned I recall that 16 there were more cases where Horizon was blamed 17 for the loss, and that this was cited as a way 18 to challenge debts. I don't recall that there 19 was an increase in write offs by my team." 20 The Inquiry has seen evidence -- I'll give 21 the reference, it's NFSP00000515 at page 15 -- 22 that suggests that, by March 2001, there was 23 about £10 million in suspense accounts, as 24 opposed to about £2 million 18 months before. 25 So in an 18-month period, the amount in suspense 69 1 accounts had increased from £2 million to 2 £10 million, covering the period of the 3 introduction of Horizon. 4 Is it your evidence that you were not aware 5 of such an increase in claimed discrepancies or 6 losses after the introduction of Horizon? 7 A. I wasn't aware of those -- the figures that 8 you've just quoted. 9 Q. Were you aware of an increased use, without 10 reference to the figures, in the use of the 11 suspense account after the introduction of 12 Horizon? 13 A. No. 14 Q. You say here: 15 "Once the reliability of the system began to 16 be questioned I recall there were more cases 17 where Horizon was blamed for the loss, and that 18 this was cited as a way to challenge debts." 19 What period are you referring to there, 20 "once the reliability of the system began to be 21 questioned"? 22 A. I think this was after the JSFA -- and I can't 23 remember when they -- that body was created. 24 But that started to pick up momentum. So I'm 25 not sure exactly the time period on this. I'm 70 1 sort of hesitating around 2011/2012, but I don't 2 know with any certainty. 3 Q. You say, "this was cited as a way to challenge 4 debt". Cited by whom? 5 A. By the postmaster. 6 Q. The way that sentence reads suggests that you 7 believe it wasn't a genuine belief that Horizon 8 was to blame for the debt. What you're saying 9 here -- 10 A. On the part of the claimant, you mean? 11 Q. Yes. 12 A. Well, at that time I had no grounds on which to 13 believe that Horizon was -- there was an issue 14 with Horizon. 15 Q. So what we should read this sentence as meaning 16 is that you believed that subpostmasters were 17 falsely claiming that Horizon was responsible, 18 and they were doing so because of publicity and 19 that this was just a mechanism or a vehicle for 20 explaining way debts? 21 A. I don't think that's probably what was going 22 through my mind when I wrote that sentence. 23 Q. Tell us what it means, then. 24 A. Well, I can understand exactly why you've taken 25 that interpretation. 71 1 Q. If my interpretation is incorrect, what is the 2 correct interpretation? 3 A. Well, I -- all I was trying to say, in what 4 perhaps is not a very well worded sentence, was 5 that the instances started to increase for 6 Horizon being sort of blamed for losses. 7 Whether that was -- I didn't want to indicate 8 that the subpostmaster was doing -- not telling 9 the truth. That wasn't the purpose of what 10 I was trying to say. 11 Q. It's the use of your words "this was cited as 12 a way to challenge debts". 13 A. Yes, and I understand what you're picking up on 14 there. 15 Q. Well, I'm picking up on it because the words are 16 there in black and white. 17 A. Yeah, I know and what I'm saying that perhaps 18 it's not the best worded sentence I've ever put 19 together. 20 Q. Isn't it revelatory of your true belief, and 21 those around you's beliefs also, that this is 22 just subpostmasters jumping on a bandwagon: 23 there's been some publicity about Horizon having 24 faults and subpostmasters were being 25 opportunists in blaming the system for their 72 1 debts? 2 A. I don't think I'd have used the term 3 "bandwagon", but -- 4 Q. Well, some other similar expression. 5 A. Yeah, okay. I mean to say, at that time, yes, 6 perhaps that was the way, you know, I would be 7 thinking. 8 Q. Can we turn, please, to paragraph 103.2 of your 9 witness statement, which is on page 32. 10 I should read paragraph 102 first. You're 11 dealing here with the suspension and termination 12 process. 13 A. Okay. 14 Q. You say: 15 "When a shortage was identified at an audit, 16 the lead auditor would telephone the Contracts 17 Adviser to discuss the audit findings. The 18 Contracts Adviser would speak to the 19 subpostmaster to discuss the reasons for the 20 shortage and might also, where appropriate, have 21 contacted other teams. The Contract Adviser 22 would gather as much information as possible. 23 "Factors considered ..." 24 I think this is factors considered in 25 whether to suspend. 73 1 A. Yes. 2 Q. "... would include the following (this is not 3 a definitive list) ..." 4 It's the second one, 103.2: 5 "Source of risk, ie subpostmaster or the 6 staff employed at the branch ..." 7 A. Yeah. 8 Q. The Inquiry has heard a good deal of evidence 9 where the support desks, including the third 10 line of support, the SSC, could not identify the 11 source of discrepancies and has heard evidence 12 that subpostmasters would not know themselves 13 the cause of discrepancies. In circumstances 14 where the cause of a discrepancy, a shortfall, 15 was not known, what would be considered to be 16 the source of the risk? 17 A. Well, it couldn't be identified if it wasn't 18 known. 19 Q. How would the source be attributed as between 20 the subpostmaster and staff employed at their 21 branch? 22 A. Well, the subpostmaster was ultimately 23 responsible for the actions of their staff. 24 Q. This tends to suggest, this paragraph, that 25 there was a distinction drawn between whether 74 1 the source of the risk was the subpostmaster, 2 him or herself on the one hand, and his staff on 3 the other, correct? 4 A. Yes. 5 Q. In a case where the cause of the loss could not 6 established, was it just assumed to be the 7 subpostmaster's fault? 8 A. Well, initially, it would have to be, yes. 9 Q. Well, initially and for always? 10 A. Well, subject to any -- if the -- it if it ended 11 up as suspension there would be investigations 12 to try to establish what had gone on. 13 Q. If there was an investigation that tried to 14 establish what had gone on with the 15 subpostmaster saying, "I'm not responsible for 16 that loss, it's a system-generated loss", and he 17 could produce no evidence of that, what course 18 would the investigation then take? 19 A. I would imagine we'd look to the expert domain 20 to try to see if there was an issue. 21 Q. Can we turn to the debt recovery process, 22 please, and you refer at paragraph 19 of your 23 witness statement -- and there's no need to 24 display it at the moment -- to your role, which 25 was to consider what was being proposed -- this 75 1 is on the policy front -- from a contractual 2 perspective and suggest improvements to existing 3 working practices. 4 So this is your involvement in the 5 development of policy, so far as debt recovery 6 is concerned. 7 If we go forward to paragraph 47, please, 8 which is on page 19, you say: 9 "I did author one document, Operators in 10 Service Debt [and you give the reference]. My 11 recollection is that the reason I took on the 12 role of author of this particular iteration of 13 the Postmasters' In Service Debt policy was 14 because the previous owner and author were no 15 longer with [Post Office] and the document 16 needed to be update to reflect working 17 practices." 18 Can we look, please, at POL00088579. We can 19 see that the title of the document is at the top 20 of the page. We can see authorship is given to 21 you. 22 A. Mm-hm. 23 Q. If we scroll down, we can see the first 24 iteration of the policy seems to be version 1 in 25 September 2013; can you see that? 76 1 A. Yes. 2 Q. We're now dealing, I think, with a February 2019 3 version -- 4 A. Yeah. 5 Q. -- so in the year that you left? 6 A. Yes. 7 Q. If we go to page 5, please, and scroll down, and 8 scroll down. 9 Does this set out the decision-making levels 10 and repayment process for subpostmasters in 11 debt? 12 A. Yeah, that's -- 6.4.6, I believe is the people 13 who had the authority to agree repayment plans 14 over these different terms. 15 Q. Was it part of the policy that negligence or 16 carelessness on the part of the subpostmaster 17 had to be established before they could be said 18 to owe a debt? 19 A. No, I don't think that is in the policy. 20 Q. It's not, no. 21 A. No. 22 Q. Why is that? 23 A. Very poor excuse but I don't think it was ever 24 in the policy and, basically, the work I did on 25 this was to update the policy to reflect the 77 1 actual working practices that were going on at 2 the time because the previous policy had been 3 superseded in different areas. 4 Q. So, by that answer, do I understand you to mean 5 that, although the subpostmaster contract meant 6 that a debt was only owed if negligence or 7 carelessness on the part of the subpostmaster 8 could be established, that was never, in fact, 9 translated through to the debt recovery process? 10 A. I don't believe those words are in that process 11 but, like I say, I don't believe they were ever 12 in the -- in the iteration that I amended 13 either. 14 Q. So is that again because of the prevailing 15 beliefs and norms in the Post Office, that all 16 loss was the responsibility of the 17 subpostmaster -- 18 A. Yes. 19 Q. -- and, again, because the mention of the 20 existence of the contract was thought to create 21 belief in the subpostmaster that all debt was 22 his responsibility? 23 A. Yes. 24 Q. Was that one of the things that you felt 25 challenging in an ethical or moral way -- 78 1 A. I think -- 2 Q. -- to trade off a mistaken belief? 3 A. I think so. 4 Q. How far did that trading extend, trading off 5 that belief? Was it only in relation to debt 6 recovery or did it extend to conduct 7 investigations, suspensions and terminations? 8 A. I think probably more at the fore in debt 9 recovery. 10 Q. Can you explain why you think the belief was 11 more at the fore with debt recovery? 12 A. Well, I think the terminology was that, you 13 know, the contract was never sort of quoted as 14 it is written. It was always paraphrased as 15 "the subpostmaster is responsible for the debt". 16 Q. Was that in the knowledge, though, that that's 17 not, in fact, what the contract said? 18 A. Well, I think some people had that knowledge; 19 others probably didn't. 20 Q. As the head of the team with a national 21 responsibility for your area of the country, you 22 had that belief and that knowledge? 23 A. I knew the wording of the contract, yes. 24 Q. What prevented you from speaking up to say, 25 "Hold on, hold on, we've got hundreds if not 79 1 thousands of subpostmasters on contracts here 2 that have, as a trigger for their liability, 3 a certain word. We're trading off -- we're 4 taking enforcement action, we're bringing debt 5 proceedings on the basis of a mistaken belief, 6 knowingly, that they may have misunderstood, 7 they may not have known the true position"? 8 What prevented you from speaking up? 9 A. I don't really know. I think some of the -- my 10 views sort developed over time where perhaps 11 I just got more concerned about this or more 12 worried about it. It wasn't -- I don't know 13 what stopped me speaking up; I'll be quite 14 honest with you. 15 Q. What do you think would have happened if you'd 16 spoken up? 17 A. Probably not a lot. 18 Q. Why do you think not a lot would have happened? 19 A. Well, I guess it wouldn't be the sort of things 20 people would want to hear. 21 Q. Why wouldn't they want to hear it? 22 A. Because it was going against the sort of 23 practice that had been going on for a while or 24 a good number of years. 25 Q. Were postmasters advised to take legal advice 80 1 before entering into either the subpostmaster 2 contract or the NT contract? 3 A. I don't think so but I can't now honestly 4 remember. 5 Q. Can we look, please, at POL00021748. This is 6 a series of questions that Second Sight -- and 7 you remember what Second Sight was -- posed to 8 the Post Office and the attribution of them in 9 the right-hand column of the questions to 10 various experts within the Post Office business. 11 Could we turn to page 14 and 15, please. 12 Can you see the heading is "The contract between 13 the Post Office and Subpostmasters"? 14 A. Yes. 15 Q. Second Sight asked: 16 "Please provide full details of the 17 following: 18 "the measures Post Office takes in order to 19 reduce the risk that incoming subpostmasters, 20 who take over an existing branch and its staff, 21 may be inheriting employees who have been found 22 to be, or are suspected of having been, 23 incompetent or dishonest. In this context, was 24 there, or is there now, any competency and 25 integrity verification, performance appraisal, 81 1 or formal disciplinary/warning process whereby 2 snout going subpostmasters and Post Office's own 3 Line Managers could warn incoming Subpostmasters 4 where questions had been raised?" 5 What was the answer to that? 6 A. I know when we were talking about the contract 7 in an application interview, the postmaster 8 was -- it was explained to the postmaster about 9 if they had -- if they take on staff, the staff 10 were their employees. If there was an existing 11 branch they were moving into and there were 12 staff already there, they were perhaps changing 13 the terms of, or something like that, that they 14 should take advice on TUPE, the Transfer of 15 Engagement legislation. 16 The staff were -- I mean to say, you know, 17 I don't think that it was ever said you should 18 talk to the -- you know, what we suggested you 19 talk to the outgoing postmaster about, in 20 respect of the staff. 21 Q. Can we go over the page to page 15, please, and 22 read 12.4: 23 "We understand that the Post Office does not 24 recommend that its would-be Subpostmasters take 25 legal advice ... prior to entering into that 82 1 contract." 2 That's the standard contract. 3 A. Yeah. 4 Q. "This appears to be contrary to best practice 5 procedures. For example, the British Franchise 6 Association recommends that independent legal 7 advice should always be taken prior to signing 8 a franchise agreement. Please provide full 9 details as to why Post Office does not comply 10 with this best practice recommendation?" 11 You regarded the contract as unfair. 12 A. Well, yes, weighted in one direction, yeah. 13 Q. Did that play a part in not including, as part 14 of the onboarding process, suggestions to 15 subpostmasters that they take legal advice about 16 its terms? 17 A. What, my view of the contract? 18 Q. Yes. 19 A. No. 20 Q. What were the reasons, then, that what was 21 described by Second Sight as best practice was 22 not followed? 23 A. I honestly couldn't tell you. I mean to say, 24 the onboarding process was very similar for 25 many, many years, that Post Office Limited used 83 1 to use. I don't know why there wasn't anything 2 explicitly mentioned as part of that process, 3 when somebody is appointed, that you take legal 4 advice on the contract. I know it was 5 an obligation under Network Transformation that 6 the appointed individual had to, or the 7 appointed entity had to, sign the contract. 8 I know that was a requirement. 9 Q. Can we turn, please, to POL00085836. This is 10 a two-page email -- if we read from the foot of 11 the page, please -- from Angela van den Bogerd, 12 who was the Head of Network Services at this 13 time. On 1 May 2012, she says to Craig Tuthill, 14 who, I think, was the National Services Support 15 Manager: 16 "Craig 17 "I met with Simon Baker today -- he's been 18 asked by Alice Perkins to find a way of 19 demonstrating that the Horizon system is robust 20 ..." 21 Just stopping there. Would that sentence 22 fit in with the sort of ethos and beliefs of the 23 organisation that you described earlier, that 24 the imperative was always to approve that 25 Horizon was robust, rather than having an open 84 1 mind as to whether it was or it wasn't? 2 A. The organisation told us it was robust. 3 Q. Continuing: 4 "... and not subject to 'glitches' as 5 claimed by the JFSA former [subpostmasters]. 6 An MP is spearheading their campaign and in 7 particular the Hamilton (2003) case. The MP is 8 to visit it model office in a week or so and 9 Simon would like us to provide an easy to 10 understand walk through document of our 11 appointments and training approach -- this is 12 where you come in, no doubt ably supported by 13 John [I think that's you] and/or Lin and Sue." 14 A. Mm-hm. 15 Q. Then over the page: 16 "I attach a note [and we're going to look at 17 that in a moment] that I provided to Sue a few 18 weeks back so she could explain to Alice what 19 our approach is. Would you use this as your 20 starting point, amending and updating as you see 21 fit. Would you also embed the supporting 22 documents -- eg the training offer document Sue 23 recently pulled together. 24 "The claims from the JFSA former agents 25 include that they were not aware of their 85 1 contractual obligations in terms of making good 2 losses. What we need to do is detail the points 3 at which they were advised of this -- in the 4 Contracts Advisers interview script; the 5 declaration that they make on transfer and the 6 SPSO contract they signed; I'll send you what 7 information I have", et cetera, et cetera. 8 Then if we go back to the first page, 9 please. Mr Tuthill says: 10 "To see the updated document with input for 11 Sue and John." 12 At the moment, I can't see any evidence that 13 you, who are a copy-ee to this email, provided 14 any additional input. But let's look at the 15 document that was attached. 16 A. Okay. 17 Q. That's POL00085875. Can we go forwards, please, 18 to page 4. Do you understand this is something 19 that was shown to subpostmasters? 20 A. I honestly don't recollect this document at all 21 and when you say "shown to subpostmasters", 22 where? 23 Q. At the point at which they are either about to 24 be recruited or have been recruited? 25 A. I wasn't aware that was the case. I don't 86 1 remember this document at all and, I mean to 2 say, I think it's entitled "Cash Management"? 3 Q. Yes. 4 A. So if it's -- I am not sure. 5 Q. If we go back to page 1, just so you can look at 6 it. 7 A. Yeah. Are you -- is it the thought that this 8 was part of the application process? 9 Q. That's what I'm asking -- that's what I'm trying 10 to investigate. 11 A. Well, I don't think it was because, as part of 12 the application process, as part of the 13 interview, the subpostmaster would be introduced 14 to a number of terms from the contract, okay, 15 and I think there was a checklist that was used 16 by Contract Advisers to go through that 17 information. That document there or this 18 document here, I do not recall at all. I don't 19 think that was part of it. 20 Q. If you go over the page? 21 A. Go back to page 4 -- 22 Q. If we just go back to page 1, so you can see 23 a bit more context, in fairness to you. 24 A. Okay. 25 Q. Sorry, the next page. Thank you. Just have 87 1 a look. I mean, the question/hypothetical at 2 the top, that's sort of a lecture on why cash 3 management is important -- 4 A. Yeah. 5 Q. -- isn't it? 6 A. Well, I think -- I mean to say, cash management 7 was always important, primarily because, 8 obviously, there was a cost of funding the 9 network with cash and, also, you know, there was 10 a potential risk, if you're holding excess cash 11 and anything was -- you know, if the office was 12 to be attacked. And I know there was 13 a requirement to, you know, daily declare your 14 cash holdings because I think that helped decide 15 how much cash the branch would need, for cash 16 deliveries and things like that. 17 Q. You would say, I think, summarising, that this 18 document is not really addressed at the issue 19 that I'm asking about, which is informing 20 subpostmasters of their liabilities and 21 responsibilities, contractual obligations under 22 the subpostmaster contract. This is addressed 23 to a different issue? 24 A. This is not -- I feel 100 per cent certain this 25 was not part of the application process when we 88 1 were interviewing an applicant for a vacancy in 2 the network. 3 Q. Was the term of the contract that I drew your 4 attention to earlier, with the trigger for 5 liability of negligence and carelessness, 6 et cetera, specifically drawn to subpostmasters' 7 attention, to say that's the fulcrum upon which 8 your reliability turns? 9 A. At the application interview, when they were 10 going through the contractual clauses, there 11 was -- that would be one of the clauses that is 12 explained to them, and I think the terminology 13 that we'd been using today, "careless, error or 14 negligence", was actually in the text. 15 Certainly, when we sent out with -- I think it 16 was the interview to -- the invite to interview, 17 there was a written document that went out with 18 that letter that went through different clauses 19 of the contract that we'd brought to applicants' 20 attention. 21 MR BEER: Thank you. 22 Sir, on that note, can we break now until 23 1.30, please? 24 SIR WYN WILLIAMS: Yes, yes, that's fine. 25 MR BEER: Thank you very much, sir. 89 1 (12.29 pm) 2 (The Short Adjournment) 3 (1.30 pm) 4 MR BEER: Good afternoon, sir, can you see and hear 5 me? 6 SIR WYN WILLIAMS: Yes, I can, thank you. 7 MR BEER: Thank you very much. 8 Good afternoon, Mr Breeden. 9 A. Good afternoon. 10 Q. Can we turn, please, to POL00006671. This is 11 your attendance at the Womble Bond Dickinson 12 offices on the 19 January 2018 again. Can we 13 turn to page 35, please. You'll see at the top 14 of the page the solicitor is asking you to 15 address any weaknesses in Horizon. You ask, 16 second paragraph: 17 "What, weaknesses in the Horizon system?" 18 She says, "Yeah". 19 You say: 20 "I have got two things I probably would say 21 about that from a personal perspective. 22 Firstly, I don't think the training that we 23 provide, have been providing of late is 24 adequate." 25 She says: 90 1 "... from when ..." 2 You say, "Well ..." 3 She says: 4 "Has it ever been adequate?" 5 Then you say: 6 "Well I think it went through, the problem 7 is, and I don't know when it changed, and that's 8 not me avoiding the bullet, but I don't know 9 when it changed, but it seemed to go down to 10 a couple of days which was predominantly sales 11 focused." 12 What were your concerns about the adequacy 13 of the training in relation to Horizon? 14 A. I think it will have been around the fact that 15 how you can help -- can train newly appointed 16 subpostmasters or subpostmasters, any 17 subpostmaster, into how to interrogate, if there 18 is -- if they have a discrepancy or something 19 like that, what steps they could take -- what 20 they could look at, how they could do that, and 21 the sort of perhaps tips/help/assistance, in 22 that sort of area. 23 Q. Okay, that's, in fact, what you go on to say. 24 You say here that it was sales focused or 25 predominantly sales focused. By that, do you 91 1 mean it was concentrating on training 2 subpostmasters to sell product? 3 A. Yeah, I -- it was sort of like upselling of 4 products, you know, as opposed to perhaps 5 selling a First Class stamp, could you sell 6 a Special Delivery service, dependent on the 7 questions that you should ask and the responses 8 that you were getting. But my sort of 9 simplistic belief was that if you have 10 confidence in how to manipulate the sales tool, 11 the equipment, Horizon, that I think the 12 sales -- you've got to have that first to be 13 able to do the selling. Yeah? If you 14 understand where I'm trying to go. 15 Q. Yes, and she summarises your answer: 16 "You think they should be given tips on 17 functionality that does exist?" 18 You say: 19 "Tips on what to check for because you don't 20 have to give service as a postmaster but you've 21 got to have some elements of control and I don't 22 know whether we give enough on how to, what to 23 look for. You know." 24 She says: 25 "... So do you think that they are provided 92 1 with enough information by Horizon to do that 2 investigation if they needed to and they knew 3 how to do it, or do you think that something 4 else should be provided?" 5 You say: 6 "I probably don't know Horizon well enough." 7 Did you know Horizon well enough to be 8 confident in your judgements in cases where 9 a subpostmaster was blaming Horizon for 10 discrepancies and shortfalls? 11 A. No. My knowledge of -- I have used Horizon on 12 counters and stuff like that but, I mean to say, 13 the number of times that occurred in the 14 duration of my time with the Post Office was not 15 many, so I would be very much reliant on people 16 who are experts in Horizon telling me that's 17 things were okay. 18 Q. Were you one of those managers that helped out 19 at Christmastime? Was that your interaction 20 with -- 21 A. And -- 22 Q. -- Horizon? 23 A. Yeah, sorry, apologies for interrupting. Yes, 24 I helped out at Christmas and when there was 25 industrial action. 93 1 Q. Did you yourself receive any training on 2 Horizon? 3 A. Yes. 4 Q. How long did that last? 5 A. I think it was about three hours. 6 Q. You go on, if we scroll down the page, please: 7 "But I don't think we perhaps give them 8 enough small screwdrivers and spanners in their 9 training pack to sort of say, you know, the 10 checks that I would suggest you do is, you can't 11 make [them] do it, you know, otherwise we're 12 going to start blurring the lines between 13 employed and employees and you say, every month 14 you must do this, because that's why the 15 contract is so high level I guess, to maintain 16 control. But what I think it would be good to 17 do is give people a pointer of the things that 18 are there to do, so you know perhaps do you 19 count the cash every so often, you know or check 20 this or check that." 21 You're asked: 22 "... do you think those weaknesses that 23 you've identified really in the training ... is 24 there another one?" 25 At that point there, dealing with the first 94 1 issue, were you really saying that 2 subpostmasters weren't told enough about how 3 Horizon worked and the data that was available 4 to be recovered or harvested from it to be able, 5 if they did come across a discrepancy, to assist 6 those investigating, to pinpoint it? 7 A. That, I think, is where I was going, yes. 8 I mean to say, it's one thing pressing the keys 9 and doing a transaction but, when there is 10 an issue that needs to be resolved, how do you 11 go about doing that? What, you know -- and 12 I just don't think there was enough training on 13 that side of Horizon; it was everything about 14 this is how you do a transaction, as opposed 15 to -- I'm sure the training would include 16 balancing and stuff like that but what -- the 17 nuts and bolts of, you know, the steps to take 18 when there was a discrepancy just wasn't 19 included, from my knowledge. 20 Q. So it was training, in your view, into how to 21 work Horizon when it did work -- 22 A. Yeah. 23 Q. -- rather than training about things that might 24 be done by a subpostmaster, at their end, when 25 it didn't work? 95 1 A. Yes, I mean to say, if I reflect on the training 2 I got, it was very much "This is how you do 3 a transaction", and stuff like that. Now, 4 I appreciate I was not being trained to be 5 a subpostmaster but I was being trained to use 6 the kit and I guess that the office manager 7 where I went would help out if there was 8 a discrepancy but there was never anything that 9 I recall in my training that tells you what to 10 do if you had an issue. 11 Q. To your knowledge, was that connected to the 12 nature of the contract, ie a contract which was 13 interpreted as meaning all losses are the 14 responsibility of subpostmasters, so it didn't 15 really matter whether we trained them or not or 16 if the system is not working because it's not 17 really relevant? 18 A. I don't think I ever made that link, I'll be 19 quite honest with you but, you know, the 20 contract did say they had -- as a subpostmaster, 21 you had to make -- maintain control of the 22 office, irrespective of whether you were there 23 or not, and I just wonder whether they should 24 have been given more tools on how to do that. 25 Q. You were asked "is there another [thing]?" and 96 1 you continue at the foot of the page: 2 "Yeah, the other thing that sort of spooks 3 me and I don't know how they do this and it only 4 relates to something that happened, well, there 5 were occurrences last but the people were able, 6 staff were able, to put bogus transactions 7 through for the want of a better word, and then 8 cream money off. There was some incidents with 9 Parcelforce products and we are talking about 10 not a couple of quid here, these are thousands 11 of pounds people have been able to manipulate 12 the system to do. So it's almost like, it's 13 almost like if you are a computer guy/guyess, 14 present company accepted, there is a danger that 15 if you're pretty good with a laptop or 16 a computer I don't know how much you can look at 17 and what you can do with Horizon and that, 18 I don't know how well it's bolted down to be 19 honest and that's just observations that, you 20 know, how can you put a bogus transaction 21 through, it just doesn't make sense to me that. 22 The system shouldn't allow that to happen so 23 that's how they can draw money out." 24 The solicitor says: 25 "... That's helpful." 97 1 You said: 2 "It's not if it goes to court." 3 Why did you think what you said was not 4 helpful if the case went to court? 5 A. I briefly recount the sort of -- this idea of 6 bogus transactions because I remember that there 7 was a couple of instances which were very 8 sizeable sums where something had gone wrong. 9 I can't remember the products, I'm afraid. 10 I guess -- all I could -- can think, I'm 11 thinking about there, is, you know, with the 12 business saying that Horizon is accurate, 13 et cetera, something like this would not look 14 good. 15 Q. So, although this is a flaw of a different kind 16 you're referring to here, in that it is not what 17 the subpostmasters were alleging -- it's 18 a system design or operation error that allows 19 money to be taken -- you thought it was 20 unhelpful to the Post Office's case, if the 21 Group Litigation went to court? 22 A. Yes, I guess that's what I was thinking. 23 Q. You continue to explain what the issue was, 24 fifth paragraph in: 25 "Yeah, one of the branches that was involved 98 1 is, I think it's called Kibworth Beauchamp, it's 2 in Leicester somewhere, and a couple of staff 3 took the postmaster there for about £35,000 on 4 these Parcelforce transactions. There's another 5 two branches in Keith's area where the sum of 6 money is far greater. Helen Dickinson from the 7 Security team was the person who was looking 8 into that." 9 The solicitor says that she's seeing Helen 10 "next week" and you continue: 11 "But you know, what I can't understand is 12 how you can do that, you know, I can understand 13 if I was working in a shop, you know, I've got 14 to scan stuff, but I wouldn't have thought but 15 actually I can make scans up. I can false 16 account in some way. It just seemed a bit too 17 ... it seems, unless I'm missing something very 18 fundamental." 19 Can you tell us more about this branch, one 20 of the branches involved, at Kibworth Beauchamp. 21 A. No, I mean to say, I accept what's written there 22 but I can't remember anything more about that 23 particular case. 24 Q. You refer to these as "bogus transactions". 25 What did you understand to have been bogus? 99 1 A. Well, in so much as I don't think there was 2 a customer that bought £35,000 worth of 3 Parcelforce transactions. 4 Q. Where did you get your information from? 5 A. What, the information that I referred to here? 6 I presume there was some case papers that I was 7 copied into or some sort of notification because 8 I would imagine the Security team were looking 9 at it. 10 Q. What was your understanding of how the staff 11 member or members had manipulated the system? 12 A. I don't think I did ever understand it. I don't 13 think I had it explained to me. 14 Q. If there were concerns that Horizon was lacking 15 in security or could be manipulated for the 16 purposes of fraud, in this way, was that ever 17 discussed with Fujitsu, to your knowledge? 18 A. Not to my knowledge, no. 19 Q. Had you heard by this time, January 2018, of 20 phantom transactions or ghost transactions being 21 said to be responsible for discrepancies? 22 A. I don't recall those terms. 23 Q. You don't recall that language? 24 A. No. 25 Q. If we scroll down, please, about three 100 1 paragraphs from the bottom where we are now, you 2 say: 3 "But there's clearly a way of falsifying the 4 numbers because otherwise we would not have 5 people telling me that there's £40,000 missing, 6 I've falsified the cash declarations." 7 Who was telling you that they had falsified 8 the cash declarations? 9 A. I mean to say, in this context, I honestly don't 10 know, don't know, but there was instances where 11 cash declarations didn't reflect the cash on 12 hand in the branch. 13 Q. So was this a subpostmaster admitting that they 14 had stolen £40,000? Is that what you're 15 referring to here? 16 A. I honestly can't remember. 17 Q. Was this a case of somebody who was truly 18 dishonest, admitting that they were falsifying 19 cash declarations to take £40,000? Can you give 20 us some context to what you're referring to 21 here, please? 22 A. I really am struggling to give you some context, 23 I'm afraid, to actually understand where I am in 24 making that comment. 25 Q. You then turn to a different issue, which is the 101 1 recruitment of subpostmasters. If we can turn, 2 please, to page 43. If we go to the bottom of 3 the page, please, last line. You say, last 4 paragraph: 5 "[There is an] interview to assess the 6 individual's ability to run to be a postmaster 7 so there is a number of criteria that ... are 8 assessed ... If they achieve the passmark, which 9 is 60, they are then offered the appointment. 10 Once they get to that stage they are then issued 11 with a copy of the contract they then have to 12 sign ..." 13 Over the page: 14 "... It comes back signed, correctly and 15 hopefully all the supporting [documents] come 16 back signed properly because that is where the 17 guarantor [documents] would go ..." 18 You are asked: 19 "So your team does the interviewing. What 20 is your role ... Do they ever discuss it with 21 you ... 22 You say: 23 "Light touch in so much as when time allows 24 I sometimes read some of the assessments, you 25 know, because they are meant to put the 102 1 rationale in there and I know when Lin Norbury 2 was about we used to sort of spend one day 3 a month just picking some ... rationales at 4 random just to see what there are supporting 5 reasons for." 6 Then scroll down, please. Stop there, 7 please. Three paragraphs from the bottom, on 8 the page we're looking at. You say: 9 "You know is there anything that we can 10 learn because all it feels like at the moment it 11 feels like we are on a massive hamster wheel in 12 so much as we have got programmes out there that 13 have got targets to do something. All they want 14 to do is push as many people through as long as 15 they are alive they are happy." 16 The solicitor says: 17 "You are not the first person to say that 18 ..." 19 Was the recruitment imperative to push 20 people through, irrespective of the quality of 21 the applicant? 22 A. We felt under pressure to push people through 23 and we used to get a degree of questioning if we 24 were to fail an applicant. 25 Q. The phrase, quite memorable there, "as long as 103 1 they are alive they are happy", who is the 2 "they" in that? Your managers? 3 A. Well, whoever we've -- whichever programme is -- 4 we're appointing on behalf of. I think because 5 there were several sort of tensions in the 6 system, in so much as with something like 7 Network Change, if my memory serves me right 8 here, you could have had a subpostmaster who was 9 hoping to leave the network with compensation 10 but that was dependent on a new postmaster being 11 appointed, and there was a -- perhaps the best 12 word is a run rate of how many offices that were 13 to be converted in a set period of time. 14 So I guess that my team, me, if we're not 15 appointing people, we are putting a little bit 16 of a spanner in the works. 17 Q. You continue: 18 "But the problem is they do not have to deal 19 with the consequences of the rubbish at the 20 other end." 21 Was the imperative to recruit irrespective 22 of merit later used as a justification for the 23 number of subpostmasters being investigated, 24 suspended and terminated? 25 A. Can you just repeat that one for me? 104 1 Q. Yes, was the imperative to recruit -- 2 A. Right yes. 3 Q. -- so long as they're alive, the bosses are 4 happy, later used as a justification for the 5 number of subpostmasters being investigated, 6 suspended and terminated? 7 A. I don't think it was ever recognised as a reason 8 for that, no. 9 Q. "The reason why we've got number of 10 subpostmasters being investigated suspended and 11 terminated is because of our poor recruitment 12 approach"; that wasn't ever vocalised? 13 A. I think -- I seem to recall some time back there 14 was some sort of work done by perhaps the 15 Security team or somebody like that, but I think 16 it was earlier than 2018, about whether we were 17 doing the right number of checks and things like 18 that, when we go through the application 19 process. 20 Q. If we can move on, please, to the issue of the 21 support that subpostmasters were provided with. 22 This is page 50, please, top paragraph. You 23 say: 24 "... the theory is the appointment is done, 25 the branch goes live. So the Contracts Adviser 105 1 will have seen whoever they've interviewed and 2 if we make a blank statement that said everyone 3 is interviewed they have touched a Contracts 4 Adviser somewhere along the line. When that 5 branch goes live if there are any issues those 6 subpostmasters should go in through the NBSC and 7 that should really be dealt with there. 8 Anything that comes back out to us should be of 9 a contractual nature. That is where it goes 10 wrong because we do not have the teams. There 11 is two things we do not have. I am not 12 convinced the knowledge on the NBSC is good 13 enough to deal with everything that crops up or 14 it not be in their knowledge base." 15 Just stopping there, in what respect was the 16 knowledge in the NBSC, in your view, not good 17 enough? 18 A. I think a comment like that can only be -- I've 19 made that on the basis that things were being 20 referred to ourselves, "Oh, you need to speak to 21 the Contract Adviser about that issue", or 22 something like that, when they weren't 23 appropriate to come through to the Contract 24 Adviser. 25 Q. What was the NBSC in your view supposed to do? 106 1 What was its function? 2 A. Well, they were the first -- my understanding is 3 they're the first point of contact for the 4 subpostmaster. They had this Knowledge Base of 5 how to deal with queries that were arising and 6 then if there was something not on the Knowledge 7 Base they should be referring that to the 8 appropriate team. So, if it was a debt issue 9 that wasn't on the Knowledge Base, it should 10 have gone to the debt team. 11 Q. So in what respect was their knowledge not 12 sufficient in the NBSC? 13 A. Well, I don't think it was covering all the 14 things that were arising in the Network. 15 Q. What was the consequences of that? 16 A. There was more referrals coming across to, 17 probably, my team that weren't appropriate to my 18 team. 19 Q. You continue: 20 "Secondly most other teams that you would 21 think should be the first point of to deal with 22 some sort of intervention activity do not want 23 to talk to subpostmasters so they make it 24 a contractual issue by referring it to us." 25 Who were the teams that did not want to 107 1 speak to subpostmasters, ie the "most other 2 teams"? 3 A. Well, I think there's an example in there of the 4 Property team, that didn't want to speak to 5 subpostmasters. Very few people wanted to speak 6 to subpostmasters. 7 Q. Why? 8 A. I don't know. I think there was something about 9 us having "contract" in our name that thought 10 that, "oh, well, you know, the subpostmaster 11 will respond to you, he won't respond to us", 12 which is rubbish because, to be honest, if 13 everything was running really smooth, we should 14 have been out of work, apart from appointing 15 people. 16 Q. At the paragraph on the foot of the page here, 17 about five lines in, you say: 18 "... They were almost like little NBSCs and 19 I have no doubt varying in quality and ability 20 so when you take that out you lose a massive 21 level of knowledge and I think there is a desire 22 not to want to contact offices because if you 23 think about every NT office that was converted 24 must have had the appropriate asbestos report in 25 place for them to do the work so why is it 108 1 an issue now." 2 Then you say this: 3 "But nobody wants to deal with 4 non-conformance or the difficult stuff. That is 5 the problem and that is the reason why we get so 6 slumped." 7 Why did people not want to deal with 8 non-conformance issues? 9 A. Well, I think it was (1) a resourcing issue and, 10 "If I can move the problem on to somebody else, 11 it's the best thing I can do". Why is this -- 12 I think the way the business had sort of 13 stripped some of its support out to the Network 14 as well, didn't help. I don't think they ever 15 really replaced that properly. 16 Q. You say that "that is the reason why we get so 17 slumped". What do you mean by "so slumped"? 18 A. Just so much work. 19 Q. In the Contracts team? 20 A. Yeah. 21 Q. Would the Contracts team deal with things 22 through the prism of suspension and termination? 23 Were they the levers that they had to pull or 24 debt recovery? 25 A. Well, the Contracts team was responsible for 109 1 appointments, dealing with any contractual 2 issues that occurred in the life-cycle of 3 a postmaster. 4 Q. But did they have any greater knowledge of the 5 way Horizon operated than, say, you? 6 A. I would imagine some of the Contracts team did, 7 yes. 8 Q. But as a system, as a process, were they trained 9 up in it or are you referring to some members of 10 the team having a bit more knowledge than you? 11 A. Some members of the team had more knowledge than 12 me. We had training on Horizon but these were 13 only sort of quite short sessions. 14 Q. How much of a problem, in your working life, is 15 what you're describing on this page here: other 16 people within the Post Office not wishing to 17 deal with subpostmasters and referring the issue 18 to the Contracts team? 19 A. How much of a problem was it? 20 Q. Yeah. 21 A. It was a time consuming problem, yes. 22 Q. A daily issue? 23 A. Oh, I would think so, yeah. 24 Q. If we can go forward to page 57, please. You're 25 here dealing with JFSA and the group action and 110 1 you say, at the top of the page: 2 "Well I guess the group action on the back 3 of Second Sight this action is really in my view 4 is just Second Sight part two just a different 5 horse that is running as Freeths this time as 6 opposed to somebody else but I do not think 7 Second Sight put it to bed." 8 The solicitor: 9 "No they did not." 10 You: 11 "So as a consequence of that you have got 12 an open and seeping wound out there and a lot of 13 postmasters who have seen or heard that some 14 people have gone through a mediation. Some have 15 got something out of it but nobody has made 16 a fortune out of this and a lot have got nothing 17 out of it and I will be quite honest with the 18 mediation ... I was involved in it was 19 an absolute nightmare." 20 You say it was Joy Taylor mediation and you 21 give some other details. We'll skip on beyond 22 those. 23 Go to the foot of this page here. You 24 continue, fourth paragraph that's being shown: 25 "I did not have any involvement in that 111 1 case. There are a number of people that were 2 picked. I imagine probably most of the people 3 were ex-Appeals Managers or something like that. 4 But she had brought along some guy that was 5 really you know I was expecting loads of 6 questions around Horizon that was the last thing 7 he wanted to know things like the training 8 history of the Security Manager and all this 9 sort of carry on and you are thinking I do not 10 know where this is all going. It was weird it 11 was really weird so I do not know whether I had 12 a good or a bad experience on mediation I will 13 be quite honest with you." 14 You continue: 15 "I think because we did not kill it there 16 and then and it should have been killed there 17 and then and we are now in part two and if this 18 does not kill it we will end up with part three. 19 You know you guys have got a job for life if 20 this does not get killed off I will be quite 21 honest with you." 22 Was Second Sight seen within Post Office 23 senior management as an exercise in killing off 24 challenges to Horizon integrity? 25 A. I don't know. I can't answer that question. 112 1 Q. Was it seen by you as an exercise in killing off 2 challenges to Horizon's integrity? 3 A. Again, I don't think it was, no. 4 Q. Why do you refer to it in that way here? 5 A. Why I've used that term, I don't know. I think 6 it was probably where my head was at that time, 7 was that, you know, whatever Second Sight were 8 doing, I was expecting that to sort of finish 9 whatever -- come to a conclusion that stopped 10 whatever was going on but, clearly, that didn't, 11 then the mediation and these things, and it 12 continued. 13 Q. "Kill it there and then" or "kill it off" is 14 a reference to killing the challenge off, isn't 15 it? 16 A. I don't think it's killing the challenge off, 17 it's actually concluding whatever the challenge 18 was. 19 Q. Why didn't you say that, that Second Sight 20 should have been an opportunity to openly 21 investigate whether there was a problem with 22 Horizon and come to a proper -- an objective 23 conclusion rather than it was meant to kill it 24 off? 25 A. If I could answer that question I would but 113 1 I don't know why I've used that terminology. 2 Q. Well, is it because it reflects the truth? It 3 was seen -- Second Sight -- as it was supposed 4 to be an exercise in killing off the challenges 5 to Horizon? 6 A. That's not my recollection but I can't remember. 7 Q. Was that what the Group Litigation was intended 8 to be for, again to kill off the challenges to 9 Horizon? It was another opportunity for the 10 Post Office? Is that how it was seen? 11 A. I think that was seen as a way of stopping this, 12 yes. 13 Q. Were you involved in any discussions about 14 commissioning an independent review or 15 an independent expert assessment on whether, in 16 fact, there were problems with the integrity of 17 Horizon or the data that it produced? 18 A. Not that I recall. 19 Q. Were you aware of -- I was going to call it 20 an investigation but I won't -- an exercise 21 conducted by Rod Ismay in 2010? 22 A. Only in so much as I think there's a document 23 that I was sent as part of my Rule 9 letter, and 24 I think -- did he conclude with some sort of 25 report? 114 1 Q. Yes, he did. He wrote a Report in August 2010. 2 A. Yes, identifying some improvements that could be 3 made. 4 Q. Did you play any part in the discussion which 5 led to the initiation of his report or the 6 conduct of it? 7 A. Not that I recall. 8 Q. Were you aware of any other discussions about 9 commissioning expert evidence or independent 10 investigation into the integrity of Horizon? 11 A. I don't think so. 12 Q. Had you got concerns in the integrity of the 13 data that Horizon produced? 14 A. At that time, no. Well, I had nothing to base 15 any concerns on. I was continually being told 16 that Horizon was producing accurate figures and 17 that it was, like I say, doing so many 18 transactions a day, a week, a year, and there's 19 no issues, and that was a communication that was 20 coming across the build -- the business. 21 I wasn't advised by any of my superiors that we 22 have an issue that -- 23 Q. Did you ever consider that there was a pattern 24 emerging of subpostmasters challenging Horizon 25 and the data that it produces and that that 115 1 might be a reason to explore whether or not 2 there was anything in the concerns that they 3 were raising? 4 A. Well, you could see more subpostmasters 5 mentioning issues with Horizon but it wasn't my 6 place to investigate Horizon. 7 Q. You tell us in your witness statement -- no need 8 to turn it up, it's paragraph 149 -- you say: 9 "From the start of Horizon being called into 10 question and with the establishment of the JFSA, 11 the Post Office continued to advise all staff of 12 the robustness of the Horizon system and how 13 many transactions were completed by the system. 14 I had no reason to doubt whether this 15 information was correct." 16 A. Yeah. 17 Q. Who was telling you that? 18 A. The Corporate Communications Team. What tended 19 to happen -- if my memory is holding up here -- 20 is that, if something had been on TV about 21 Horizon or something in the media, then 22 a communication would be sent out advising all 23 staff of that -- the wording wasn't as I've got 24 it in my statement but it was very similar. 25 Q. You say that that included how many transactions 116 1 were completed by the system? 2 A. Yes, I'm sure -- 3 Q. Do I understand -- I'm sorry, go on. 4 A. I'm sure it -- I can't remember exactly the 5 phrasing but I'm sure it said it either did so 6 many transactions a week or so many a year, or 7 something like that. 8 Q. What did you understand that to be communicating 9 to you? What was the point, that it did lots of 10 transactions? 11 A. Well, there was -- what I took from that is it 12 did all these transactions and there was no 13 issues identified from that. 14 Q. How frequently were these communications? 15 A. Well, like I say, I think they sort of coincided 16 with sort of what I will call -- term as 17 significant events occurring, either something 18 in the media, some publication somewhere, 19 perhaps, you know, the start of GLO, JFSA. 20 Q. You tell us in your statement that you were 21 responsible for deploying processes relating to 22 suspensions and terminations and the appeal 23 process? 24 A. Yes. 25 Q. That was in all of the roles, I think, that you 117 1 had from 2006 onwards; is that right? 2 A. Yes. 3 Q. You, I think, updated an Operating Level 4 Agreement which included a process relating to 5 appeal? 6 A. Yes, yes. 7 Q. What resources and support did Appeals Managers 8 have available to them to conduct their own 9 investigations? 10 A. They -- any Appeals Manager would have gone 11 through training and they would have been -- 12 when asked to do their first appeal, they would 13 have been buddied up with an experienced Appeals 14 Manager so they could discuss -- well, perhaps 15 watch the experienced Appeals Manager go through 16 the process and then they turn the tables round 17 at a later date, and they were able to ask 18 questions. My line manager at the time was sort 19 of acting as a -- was the sort of point of 20 contact for any queries that they had. 21 Q. What resources did they have to conduct their 22 own investigations into the factual accuracy or 23 otherwise of what the subpostmaster was saying? 24 A. When you say "resources", I'm not sure what you 25 mean. 118 1 Q. Yes, did they have -- I'll take it in stages. 2 Did they have within their remit at the appeals 3 stage a brief to carry out investigations into 4 the factual accuracy of matters raised by the 5 subpostmaster on appeal? 6 A. Yeah, because what they would have got -- as 7 an Appeals Manager, you get all the case papers 8 that the manager who made the decision had, so 9 they would have sent all of those over but you 10 could make -- you would go through all of that 11 and you could make subsequent investigations. 12 Q. What staff, if any, did they have, an Appeals 13 Manager -- 14 A. None. 15 Q. -- to conduct those investigations? 16 A. They were on their own. 17 Q. They were on their own? 18 A. Yeah. 19 Q. Did, as a matter of fact, Appeals Managers, at 20 the appeals stage, conduct investigations of 21 their own into the underlying facts? 22 A. I mean to say, I find that probably difficult to 23 answer. Having been an Appeals Manager, I know 24 I did but I can't talk for other Appeals 25 Managers. 119 1 Q. You had an overarching national responsible for 2 Appeals Managers for your area of the country? 3 A. For the -- yeah, for the -- my responsibility 4 was for the allocation of appeals. The actual 5 Appeals Managers were managed in their own line 6 but I think it was my line manager at the time 7 acting as their -- sort of a go-to person if 8 they've got any issues. 9 Q. In your interview, you say that when conducting 10 appeals you felt at times as if you were marking 11 your own homework. What did you mean by that? 12 A. I don't know. 13 Q. To what -- 14 A. Which contact -- in what context -- where has 15 that come up? 16 Q. It's on, I think, page 34. 17 A. What, of the interview with Womble Bond 18 Dickinson? 19 Q. Yes, POL00006671. I think it's page 34. 20 I can't immediately see. 21 A. I mean to say, just whilst you're just looking 22 there, I would never have done any -- I know 23 I was an Appeals Manager and trained as 24 an Appeals Manager but the number of appeals 25 I did when I started managing the team, we were 120 1 taken out of the appeals sort of arena, so to 2 avoid managing your homework. Because one of 3 the criteria for an Appeals Manager was they 4 could not have any prior knowledge of the case 5 or anything like that. So it's got to be 6 something that's totally new to you and I think 7 it was decided, even though I only managed half 8 the country and technically could do an appeal 9 in the south, that probably didn't look good -- 10 didn't look the right thing to do. 11 Q. So, irrespective -- in particular as I can't 12 find the passage -- your evidence is that you 13 didn't hear appeals in relation to your own 14 area; is that right? 15 A. Absolutely. Well, the overlying criteria was 16 that, if you had any -- an Appeals Manager could 17 not have any prior knowledge of the case. 18 Q. And -- 19 A. So it can't have touched them in any way, 20 irrespective either/or. 21 Q. Does that mean that you only heard appeals out 22 of your area? 23 A. That would -- for me that would, yes. 24 Q. What about the other appeal managers? 25 A. Well, the other Appeals Managers wouldn't have 121 1 Contract Advisers working to them, but they -- 2 the criteria that would apply is they had no 3 knowledge of the case. I think there was some 4 additional criteria put in when the field team 5 started to manage the auditors. 6 Q. I see. 7 A. I'm struggling to remember but it meant that, if 8 the field team leader or the manager that 9 covered that team was an Appeals Manager, they 10 couldn't be involved in anything that their team 11 would have been involved in. 12 Q. Was there any sense that you picked up from 13 senior managers, either at your level or above 14 your level, that overturning a decision would be 15 frowned on? 16 A. I can only talk personally from that point of 17 view and I think it was frowned on when you 18 overturned a decision. 19 Q. That document can come down, thank you. 20 In what way was it frowned upon? 21 A. Well, I just I don't think people always viewed 22 the appeal process as something that -- one of 23 the results could be that you overturned the 24 decision. 25 Q. Who are the people you're referring to who held 122 1 that view? 2 A. Well, I think it was just, you know, people 3 would say stuff to you that "I think you've got 4 it wrong". Yeah. 5 Q. Why was it frowned upon? 6 A. Well, I guess they -- person who did the initial 7 work or -- believed they got everything right. 8 Q. Was it the original decision maker, then, who 9 was frowning upon the -- those appellate 10 authorities that overturned appeals or was it 11 those more senior in the business who thought 12 that it wasn't the job of Appeals Managers to 13 allow appeals? 14 A. I think there's probably examples of each. 15 I couldn't quote you any. 16 Q. Did that mean that there was a background 17 pressure on Appeals Managers not to overturn 18 lower decisions? 19 A. I don't think so but -- well, I never 20 experienced that personally, as an Appeals 21 Manager. 22 Q. How was this frowning upon expressed to you, 23 then? 24 A. Well, I only say I -- you know, people -- I -- 25 comments were made, "I don't understand how 123 1 you've overturned that decision, we made the 2 right decision in the first place". 3 Q. That's just somebody honestly disagreeing with 4 the result though, isn't it? 5 A. Well, probably, yes. 6 Q. That's not somebody frowning upon the fact that 7 an appeal has been allowed? 8 A. Well, not that the -- the appeal -- the right to 9 appeal was part of the contractual term. 10 Q. Yes, I'm talking about the result, not 11 exercising a right to an appeal. 12 A. Yes, but I think when people say you've made the 13 wrong decision, they're frowning upon what 14 you've done. 15 MR BEER: Sir, that, given the time we intend to 16 break today, would be an appropriate moment to 17 have the afternoon break. I realise it's 18 relatively early. I wonder if we could say 19 until 2.35. 20 SIR WYN WILLIAMS: Yes, of course. 21 MR BEER: Thank you very much. 22 (2.17 pm) 23 (A short break) 24 (2.34 pm) 25 MR BEER: Good afternoon, sir, can you continue to 124 1 see and hear me? 2 SIR WYN WILLIAMS: Yes, I can. 3 MR BEER: Thank you very much can I just pick up on 4 the reference I couldn't find earlier, please, 5 POL00006671. 6 It wasn't on page 34 at all; it was on 7 pages 9 and 10 so can we look at page 9, please. 8 The foot of the page, please, about four lines 9 from the bottom, you say: 10 "... and that was almost sort of like 11 I would say customer practice and at that time 12 you know the Contract Adviser was very much more 13 able to make the decisions on precautionary 14 suspension and to make the decisions on 15 termination and I guess we had the I suppose our 16 safety net was everybody could go to appeal. 17 Unless you resigned to avoid termination every 18 subpostmaster had the ability to appeal the 19 decision. You would still get the same 20 accusations when you went to appeal. You are 21 marking your own homework anyhow aren't you and 22 as an Appeals Manager of which I have been 23 an Appeals Manager you did get frowned upon if 24 you overturned the decision I will be honest 25 with you because I do not think well I am not 125 1 saying that was not meant to happen but clearly 2 it meant that something had gone wrong in the 3 way the case had been assessed." 4 The reference on the top of the page there 5 "You are marking your own homework anyhow", what 6 did you mean by that? 7 A. I'm thinking that -- because it was a POL 8 employee that was looking at another POL 9 employee's work. 10 Q. I see. So it's not literally marking your own 11 homework, in that you as the Appeals Manager are 12 not reviewing a decision that you yourself made? 13 A. Oh, no, no, as an Appeals Manager, I wouldn't be 14 reviewing any decision I made. It would be -- 15 the Appeals Manager has got to be a separate 16 person, another person. 17 Q. You said that you wouldn't be hearing an appeal 18 against the decision that one of your Contracts 19 Advisers had made? 20 A. Correct, yes. 21 Q. It was only off area, in your case? 22 A. Yes. 23 Q. But you would be marking your own homework, in 24 that there was an institutional independence, it 25 was one Post Office employee marking the 126 1 homework of another Post Office employee? 2 A. Yes, it was an internal process. 3 Q. I've got it. Then you continue: 4 "... you did get frowned upon if you 5 overturned the decision ... I am not saying that 6 was not meant to happen but clearly it meant 7 something had gone wrong in the way the case had 8 been assessed." 9 A. Yes. 10 Q. Just to clear up what you were saying before the 11 break, you felt that allowing appeals was 12 frowned upon both by those whose decisions that 13 you were overturning -- 14 A. Yes. 15 Q. -- and by other managers within the Post Office? 16 A. Yes, that's my perception. 17 Q. Thank you. Just dealing with suspension. Can 18 we go forward to page 12, please -- sorry, 19 page 11, and just over halfway down, thank you. 20 It's three lines from the bottom here. You are 21 asked the question: 22 "When the decision is made to suspend how 23 does the subpostmaster get hold about that?" 24 You say: 25 "[Contracts Adviser] tells them ..." 127 1 Yes? 2 A. Yes. 3 Q. "... on the phone? 4 "Yes. 5 "... has that changed? 6 "No ... the [Contracts Adviser] should 7 suspend somebody unless we give somebody -- ask 8 them to do it for us but the only people that 9 should be suspending is the [Contracts 10 Adviser]." 11 So the Contracts Adviser makes the decision 12 and normally communicates that by phone? 13 A. And then it would be followed up in writing. 14 Q. Then you go on to say that. Yes, the solicitor 15 says: 16 "So the [Contracts Adviser] makes the 17 decision and normally communicates that by 18 phone." 19 You say: 20 "Yes I make the decision and they make 21 a recommendation." 22 What does that refer to? 23 A. I think it was in 2014 -- I know it's in my 24 statement. Prior to that, the Contracts Adviser 25 could decide whether to suspend or not and also 128 1 make the decision at the end of a conduct case. 2 After 2014, I had to ratify the decision to 3 suspend and also the decision on the conduct 4 case or my counterpart in the South. 5 Q. Got it. The solicitor then asked you about 6 communication of the decision and, at the foot 7 of the page, you would say: 8 "And I would be careful of which auditor you 9 ask to do. I think some are more experienced 10 probably than others or something like that and 11 it is a more interesting conversation to have 12 face to face than over the phone. But by that 13 time the [Contracts Adviser] might have spoken 14 to them already or they know that the auditor is 15 talking to them somehow. 16 "... does [it end up] with a letter? 17 "Yes." 18 Then you explain that. Then four paragraphs 19 on, the one beginning "Well I guess", you say: 20 "Well I guess during the period of 21 suspension, what you're trying to do is gather 22 the information to find out what's happened." 23 Do I take it from that that, before 24 suspension, there hadn't been an attempt to find 25 out the information about what has happened? 129 1 A. No, there would have been some facts on which to 2 suspend. We wouldn't suspend without some 3 facts. 4 Q. Was an unexplained loss sufficient to suspend. 5 A. If there was a risk, yes. 6 Q. A risk of what? 7 A. Well, perhaps there was a refusal to repay or, 8 you know, it was a situation you couldn't really 9 afford to have continuing. If there was 10 an unexplained loss. 11 Q. You continue: 12 "So I suppose the ultimate is the decision 13 on what we do at the end of it. If something 14 comes to light that says you've missed something 15 or it's a bit of a no-brainer, then that is 16 a point where you probably look to have we made 17 the right decision. So when we do 18 non-suspension, let's go back there a little 19 bit, part of my thinking when talking to ..." 20 Is that the Contracts Adviser? 21 A. I'm assuming it is. I don't know what "CO" is 22 if not. 23 Q. "... would be, where are we going to go with 24 this one. If we bring them out where's it going 25 to end up? If you're going to bring them out 130 1 and then you're going to put them back in, 2 what's the point of bringing them out? Clearly, 3 you don't think the risk is that great. If 4 you're going to bring them out because we've got 5 to stop them operating until we train them 6 better because all you're going to do is create 7 a problem well you could end up with 8 a reinstatement there. So you're trying to 9 think in making the decision of suspend or not 10 where you're going to end up with that case. 11 Because I don't see a point just putting a load 12 of cost in the system, messing somebody's 13 business about for a period of however many 14 weeks it takes us to do. Having we'll just put 15 them back in the status quo." 16 Then a little further on, four paragraphs 17 in, you say: 18 "In pre-Second Sight, you wouldn't have had 19 a non-suspension situation. It was either 20 suspension or not." 21 Question: "It was suspension or everything 22 was fine? 23 "Yeah." 24 Then you say: 25 "So, you know, you didn't have the 131 1 non-suspension element to do." 2 What are you referring to as the change 3 there, post-Second Sight? 4 A. I don't know. The -- unfortunately. I think -- 5 I don't know. I am struggling with this one 6 I'll be quite honest with you. I think when -- 7 after 2014, any situation where there was 8 an audit loss referred to a Contract Adviser, 9 they would come to me to make a decision and the 10 decision would be either suspend or non-suspend. 11 If it was non-suspend, which was perfectly fine, 12 depending on the situation of the case, there 13 may be some remedial work that needs to be done 14 with the subpostmaster to help resolve whatever 15 the problem is. 16 So non-suspension -- I'm -- I don't -- I'm 17 struggling, I'll be quite honest with you. 18 Q. Who was supposed to carry out investigatory work 19 to enable the Contracts Adviser to make the 20 decision as to whether or not to suspend? 21 A. Well, on the day of the -- if we take an audit 22 scenario, on the day of the audit, you get 23 a call from an auditor to say there is a loss 24 of, and whatever the circumstances were. That 25 would go through to the Contracts Adviser, the 132 1 Contracts Adviser would take details, would 2 speak to the subpostmasters to see what they'd 3 done, what had happened, if they've got any 4 recollection of anything, and they could, at 5 that point, refer to any other teams within the 6 business that they thought was appropriate to 7 do. 8 Q. The "they" there -- 9 A. The Contracts Adviser, sorry. Speed was of the 10 essence because, clearly, you had a team of 11 auditors stood around in a post office, a shop 12 that was, if it was a standalone post office, 13 which I recognise there wasn't that many 14 about -- by 2014 would have been closed but the 15 post office was closed to the public, and so we 16 would really need to resolve that situation as 17 quickly as possible. 18 Q. So there was a time pressure? 19 A. Yes, there was. 20 Q. It had to be resolved there and then on the day? 21 A. Yes. 22 Q. We've heard from auditors who have told us that 23 they did not consider it their function to carry 24 out any investigation, other than establishing 25 whether there was a loss or not. Would that 133 1 sound right to you? 2 A. Well -- 3 Q. Ie if the postmaster said "I know there's 4 a loss, I've been saying for the last two months 5 every other week to NBSC, to the Horizon 6 Helpdesk, that there's a loss, it's me that 7 reported the loss, it's me that caused you, the 8 auditors, to be here. I've been on the phone 9 day and night", they would say "All we need to 10 do is establish that there's a loss"? 11 A. Well, I think -- 12 Q. They'd call the Contract Adviser and say there's 13 a loss. The Contracts Adviser would say, 14 "Suspend him"; is that how it went? 15 A. I don't think it was as cold as that, I would 16 say -- 17 Q. A little warmer? 18 A. Yeah, well, the Contracts Adviser would not just 19 suspend, they would check out the facts with the 20 subpostmaster and usually any other team, so if 21 it had been raised with the helpline or 22 whatever, I would have thought there would have 23 been a call to the helpline to see what's been 24 raised and stuff like that. 25 Q. Yes and so let's take an example of 134 1 a subpostmaster who had, over the course of 2 a two-month period been regularly calling the 3 NBSC and had been referred to the Horizon 4 Helpdesk, had spoken to the Horizon Helpdesk and 5 had been referred to the NBSC, had gone back to 6 the NBSC and had been referred to the Horizon 7 Helpdesk, had gone to the Horizon Helpdesk and 8 been referred back to the NBSC, who'd gone to 9 the Horizon Helpdesk and been referred to the 10 NBSC, who'd gone to the Horizon Helpdesk and 11 been referred back to the NBSC, neither of them 12 accepting responsibility for investigating the 13 complaint which he had and, instead, referring 14 it to each other, what would the Contracts 15 Adviser do on the day with the auditors in the 16 branch having to make a decision on suspension? 17 A. I mean to say, I -- I don't recall a situation 18 ever arising like that but I think we would look 19 at that quite sympathetically but I'd also want 20 to understand what sort of cash was involved, 21 and, you know, is it -- 22 Q. £25,000 in this example. It had built up 23 gradually over a six or seven-week period? 24 A. Yeah, but we don't know how it's disappearing at 25 the moment, yeah? 135 1 Q. Yes. 2 A. So sometimes, you know, my -- 3 Q. Well, the subpostmaster is saying it hasn't 4 disappeared; the system is creating the loss. 5 A. Right. But there's nothing factual apart from 6 the subpostmaster -- 7 Q. Yes, he can tell you the dates on which the 8 happened, he can tell you the amounts by which 9 it can happen, and there are records in both the 10 Helpdesk and the NBSC -- 11 A. Of the call. 12 Q. -- of him calling in saying "I've just balanced, 13 it's showing a phantom transaction, it's double 14 the amount, say, of the amount that should be 15 cash in the safe. I don't know how that's 16 arisen. I've checked and rechecked my figures. 17 I stayed up late on Wednesday night going 18 through everything that's available to me to try 19 to get them to balance and I can't". 20 What does the Contracts Adviser do when they 21 get the call from the auditor who says, "Mr X is 22 showing a £25,000 loss"? 23 A. And he also gets the information about this 24 toing and froing? 25 Q. Yes, the auditors say, "It's not our job to 136 1 investigate the toing and froing". 2 A. Yeah, okay, I think my first port of call, if 3 I was the Contracts Adviser, would be to the 4 toing and froing people because, if something 5 has been made so explicit and nobody really 6 wants to take responsibility, it seems a bit 7 harsh to suspend the subpostmaster until that's 8 been investigated. 9 Q. So in that example, admittedly perhaps 10 an extreme one, the fact that there had been 11 contemporaneous complaints by the subpostmaster 12 over a period of time as to balancing issues 13 would be a relevant factor or should have been 14 a relevant factor to take into account on the 15 suspension decision? 16 A. I would hope any Contracts Adviser would take 17 that into account. 18 Q. Thank you. Can we turn to the last topic for my 19 questions, please, and turn up POL00107696. 20 Thank you. 21 This is an email exchange and you can see 22 from the first page there that it ends up with 23 you on 20 December 2011? 24 A. Yeah. 25 Q. But can we get some context by going to the last 137 1 page, which is page 4. This is the foot of 2 an email, just to see who it's signed off by, 3 Emily Springford, a lawyer, a Post Office 4 lawyer, yes? 5 A. Yes. 6 Q. If we go back to page 2, please, and the foot of 7 page 2., we can see the beginning of 8 Ms Springford's email, and you can see on a copy 9 list there you're not included originally? 10 A. Yeah. 11 Q. Angela van den Bogerd, amongst others, Susan 12 Crichton and Mr Scott, from whom we've heard. 13 Is there anyone there who was your manager? 14 A. Err ... 2011. There was a time I reported 15 directly to Angela van den Bogerd but I can't 16 remember when that was. I have never reported 17 to any of the other people that are mentioned. 18 Q. So there's a possibility that, at this time, she 19 was your report? 20 A. Yes, I just can't remember when I reported -- 21 because line management changed quite 22 frequently. 23 Q. Ms Springford says: 24 "As you are aware, [the Post Office] has 25 received 4 letters of claim from former 138 1 subpostmasters, making a number of allegations 2 about the training they received, the support 3 available to them in using the Horizon system 4 and the Horizon system itself." 5 Those are all three topics that you yourself 6 had concerns about, I think it's fair to say; is 7 that right? 8 A. Yes. 9 Q. "There is a possibility that these letters of 10 claim will be followed up with court 11 proceedings, in which [the Post Office] will 12 have a duty to disclose to the claimants all 13 documents relevant to the claims, even if they 14 might adversely affect [the Post Office's] 15 defence. This obligation extends to soft copy 16 documents [then there's a description given] as 17 well as hard copy documents and manuscript 18 notes. 19 "Please ensure this communication reaches 20 everyone in your department who has access to, 21 or is in position to create, documents relating 22 to the issues arising in the claim (as set at 23 more fully below). I have started a list of 24 teams which we believe may hold relevant 25 documents." 139 1 That's attached, okay? 2 Then there's a section on document 3 preservation and document creation. I'm not 4 going to read the bit about document creation 5 for the moment, we'll deal with that elsewhere, 6 but "Document preservation": 7 "[The Post Office] must take immediate steps 8 to preserve all documents which might 9 potentially be relevant to these claims. 10 'Relevant' documents are those which contain the 11 information about the issues below ..." 12 Amongst those is recruitment, training and 13 support given to subpostmasters: 14 "Please note no historic time limit applies 15 ... 16 "Could each of you please inform the members 17 of your teams who hold or create documents ... 18 that they should not delete or destroy any 19 documents in these categories until further 20 notice. 21 "It is important you keep a note of any 22 routine document destruction policies that you 23 suspend within your department, and the dates on 24 which they are suspended, together with a note 25 of any other steps you take to ensure your 140 1 department complies with the above 2 requirements." 3 Then if we go up, please, to page 2 in the 4 middle and keep going, please, and a bit more. 5 Thank you. 6 Ms Springford emails you directly two months 7 later in December. We were previously on 8 20 October, we're now on 15 December 2011. The 9 others on the list there, can you help us as to 10 the roles they performed at that time? 11 A. Alison Bolsover would have been in the debt area 12 in Chesterfield; sue Richardson, I think, was 13 responsible at some point for the training team; 14 graham Padget, I'm struggling with; Sarah Rimmer 15 was certainly based in the HRSC at Bolton at 16 I think will have been dealing with application 17 cases or subpostmasters remuneration; 18 Dave Hulbert, I don't know, I think he was 19 something to do with IT. 20 Q. Okay. Ms Springford says: 21 "Please see the [message] below: [it] should 22 have reached you via your team leaders but in 23 the interests of certainty I have included it 24 here." 25 So previously people who might have been 141 1 your team leader, including Angela van den 2 Bogerd, have been asked to pass the message on 3 but she is now sending it on directly to you 4 anyway, in case it hadn't: 5 "I understand you kindly helped Alison to 6 complete the attached table, showing the sources 7 of documents which may be relevant. Many of 8 these appear to relate to individual branches. 9 Our solicitors have asked where we keep 10 documents relating to general policy surrounding 11 the issues below (branch accounting, 12 recruitment, training, Horizon issues and so on) 13 ... 14 "Could you each please update the table to 15 make clear where such documents are held? If 16 they are sent to Iron Mountain after a period of 17 time, please could you indicate at what stage 18 they are sent there and how they would be 19 described ..." 20 Then scroll up, please, on to the foot of 21 page 1. You reply directly to Ms Springford and 22 say you've updated the table, just a couple of 23 points in relation to the email of the 24 20 October, that's the original one at the foot 25 which we read under "Document preservation": 142 1 "do we want to include on the list of 2 relevant documents performance and conduct ... 3 papers?" 4 Then: 5 "do we want to suspend the Iron Mountain 6 destruction policy of destroying files after 7 7 years (I think we have discussed this and said 8 no to this question in the past)." 9 The original email said that there was 10 a duty to preserve documents and that teams 11 should ensure that, in relation to documents 12 that they hold or create, they are not destroyed 13 or deleted until further notice and any routine 14 destruction policies that need to be suspended, 15 a note should be kept of that fact. You're here 16 saying that we've discussed whether to suspend 17 destruction in the past and have said no -- 18 A. Yes. 19 Q. -- to the suspension of a destruction policy. 20 Can you remember in what context that was? 21 A. No, I really can't. 22 Q. Was it in the context of the threatened claims 23 by the JFSA? 24 A. I would be guessing, I don't know. 25 Q. Can you think of any other context in which the 143 1 destruction of files may have been mentioned, in 2 particular a decision not to suspend 3 a destruction policy? 4 A. No. 5 Q. Can you help as to why you would not suspend 6 destruction in the light of threatened claims? 7 A. Well, I guess you would suspend destruction, if 8 you needed to retrieve documentation. 9 Q. So you would suspend -- 10 A. Yes. 11 Q. -- destruction? 12 A. You wouldn't stop them. 13 Q. So why are you asking the question, "Do we want 14 to suspend"? 15 A. I think just for clarity. I don't know whether 16 this was -- I am really sort of guessing here. 17 I'm not talking from any sort of knowledge. 18 Now, whether there'd been some sort of change of 19 who reported to me or -- but there was 20 a contract admin team that I think looked after 21 all of the branch files for every branch in the 22 network, that originally were kept across the 23 network. They all came together in Leeds. 24 Whether I had then responsibility, I don't know. 25 I'm struggling with that question, I'm afraid. 144 1 Q. Just for completeness, to see what her answer to 2 you was, a reply to you next day, on your 3 specific questions, and then the second bullet 4 point: 5 "no, in relation to files relating to 6 individual branches." 7 Which I think in context means no, we're not 8 going to suspend destruction of individual 9 files: 10 "However, if there are boxes at [Iron 11 Mountain] containing general policy documents, 12 we would like to recall those now if that is 13 feasible, as mentioned below." 14 Can you assist any further as to why it 15 seems that a decision was taken not to suspend 16 the destruction of individual branch files in 17 the context of threatened litigation? 18 A. No, I can't. 19 Q. Was the advice given there carried into effect, 20 to your knowledge? 21 A. I know the suspension of -- destruction of 22 branch files at Iron Mountain was suspended, but 23 when that happened, I cannot -- I can't tell you 24 whether it's 2011, 2013, or when it was. I mean 25 to say, as a little bit of background, hopefully 145 1 not digging myself into a bigger hole here, but 2 the branch files, we did a lot of work on making 3 sure we had files for every branch and, where we 4 couldn't find anything, we made sure we had 5 notes of which ones we couldn't file. 6 So a lot of work and time went into trying 7 to get the branch files in some sort of order 8 and so -- and I don't know if that was as 9 a consequence of the Second Sight stuff or 10 anything like that. But, you know, we were 11 quite particular about these and wouldn't want 12 something destroyed that we'd spent a lot of 13 time on, if it was going to be material to 14 something. 15 MR BEER: Mr Breeden. Thank you very much, they're 16 the only questions I ask. 17 Sir, I believe there are some questions on 18 behalf of one subpostmaster team, Mr Stein. 19 SIR WYN WILLIAMS: Certainly. Over to you, 20 Mr Stein. 21 Questioned by MR STEIN 22 MR STEIN: Thank you, sir. 23 Mr Breeden, my name is Sam Stein. I ask 24 questions on behalf of the solicitors Howe+Co 25 and we represent a very large number of 146 1 subpostmasters and mistresses. In your 2 statement, Mr Breeden, you say, and I'm 3 referring to and I'll just briefly read out, 4 paragraph 146.6 at page 45. It doesn't need to 5 go on the screen. You say this: 6 "Other than what I have gleaned from the 7 information provided in the supporting 8 documents, I have no recollection of the cases 9 relating to Peter Holmes ..." 10 Then you go on and refer to a number of 11 other individuals. 12 A. Yeah. 13 Q. Sitting to my left in the Inquiry room is 14 Mrs Marion Holmes, who is the widow of 15 Mr Holmes. Mr Holmes himself died in 2015. 16 That was a number of years before his name was 17 cleared in the Court of Appeal in the High Court 18 in London. 19 Now, I'm going to take you, please, to 20 a document which is POL00054555. At the top of 21 the page, you'll see, Mr Breeden, that that is 22 an email from you -- 23 A. Yes. 24 Q. -- to Andrew Daley -- 25 A. Yeah. 147 1 Q. -- and then copied to others, Robert Daily -- 2 spelt differently to Andrew Daley -- and also 3 Andrew Carpenter. Now, this appears to be 4 directed mainly to Andrew Daley, and it says: 5 "Andrew, 6 "Thanks for your email below. 7 "In respect of this case where the SPMR was 8 precautionary suspended on 18 September 2008 9 when a loss of £46,049.16 was identified. The 10 outcome of the contractual case was that the 11 SPMR was reinstated with a warning ..." 12 Then if we scroll further down the page, 13 please, roughly to the middle of that. We see 14 at the end of this message: 15 "The only one thing I am not sure of is 16 whether the assistant was debarred in this 17 case -- could you arrange for this to happen if 18 the form has not been completed." 19 So, let's piece this together. The 20 assistant that has been identified, in fact he 21 was the office manager, was Mr Holmes. If we 22 scroll further down on this particular email 23 chain we'll see it relates to -- there we go, 24 top right-hand corner, subject matter, "Regina 25 v Peter Anthony Holmes," and it concerns the 148 1 Jesmond Post Office. 2 A. Right. 3 Q. Now, just help us a little bit more in 4 understanding what was going on at this stage. 5 Clearly, you did have some involvement with the 6 matter that related to Mr Holmes? 7 A. Well, only because of what you're telling me 8 here. I can't -- I couldn't -- I don't recall 9 the case, because it goes back to 2010. 10 Q. We see this email, if you go back to the top, 11 you're asking this question: 12 "The only thing I am not sure of is whether 13 the assistant was debarred in this case ..." 14 A. Yes. 15 Q. Help us understand what you were doing here. 16 Mr Holmes was not directly employed by the Post 17 Office? 18 A. No. 19 Q. He was an employee at this particular Post 20 Office branch. What was happening regarding his 21 debarment here, Mr Breeden? 22 A. Well, there was a department register that if 23 somebody had been undertaking some inappropriate 24 activity, would mean that they would not be 25 picked up as an employee for Royal Mail or the 149 1 Post Office. 2 Q. I see. So this was making sure that in this 3 particular case, that Mr Holmes, who'd worked at 4 this particular Post Office branch for many, 5 many years, was never going to be employed by 6 the Post Office again or working within a Post 7 Office branch; is that right? 8 A. That's correct, yeah. The process is related to 9 the debarment process -- the debarment lists 10 were very -- I think haphazard is the best way 11 to describe them. 12 Q. The Post Office branch was in Jesmond, Newcastle 13 upon Tyne? 14 A. Yes. 15 Q. Mr Holmes had worked in that area for many years 16 as a beat police officer, also ran a hotel in 17 that area for many, many years. As a result of 18 his conviction, he suffered severe depression, 19 he found it very difficult to deal with matters 20 in his life. He couldn't even find occasional 21 or voluntary employment within voluntary 22 services because he would have had to disclose 23 his conviction. He was eventually cleared at 24 the Criminal Court of Appeal many, many years 25 later in 2021. Have you got anything to say to 150 1 his widow, who sits in this Inquiry? 2 A. Well, naturally, I'm very sorry for your loss 3 but, as I said in my statement, I do not recall 4 this case and we dealt with this matter 5 contractually with the subpostmaster. I was not 6 aware that -- or I had nothing to do with taking 7 this individual to court. 8 Q. Now, since your email that related to the 9 debarment of Mr Holmes, obviously many years 10 have gone by. The matter went to the High 11 Court, where Mrs Holmes took part in the 12 proceedings representing her husband as part of 13 the 555 Litigants. You said earlier in your 14 evidence that you believe the High Court 15 litigation was at least partly taken by the Post 16 Office in order to try to -- this is my 17 paraphrase of what you said -- in order to try 18 and get rid of these issues, stamp it out. Why 19 did you say that, Mr Breeden? Where did you get 20 that idea from, that the litigation was taken on 21 against the 555 people and stamped out? 22 A. This is the -- 23 Q. The High Court litigation. 24 A. That I was involved in, yes? 25 Q. Yes. 151 1 A. In 2018? 2 Q. Yes. At the High Court. 3 A. Well, I think that's the perception I had, 4 that -- 5 Q. From where, Mr Breeden? 6 A. From the business, from Post Office Limited. 7 Q. Who within the business, Mr Breeden? 8 A. The people that were communicating with us. 9 Q. Who were they? Name them. 10 A. Well, there was a number of sort of people in 11 the Legal Services team at the time that were 12 sort of briefing us on this. 13 Q. They were what? 14 A. Explaining what was going on. 15 Q. The impression that they were trying to stamp 16 out the 555 -- one them is sitting here to my 17 left, Mrs Holmes -- from who did you get that 18 impression, Mr Breeden? 19 A. That's the perception I picked up from within 20 Post Office Limited when I was there. 21 MR STEIN: Excuse me, sir, for one moment. 22 Sir, thank you. Those are my questions. 23 SIR WYN WILLIAMS: Thank you. Does anybody else 24 have any questions? 25 MR BEER: No, sir, they don't. 152 1 SIR WYN WILLIAMS: Well, thank you, Mr Breeden, for 2 your witness statement, and for coming to give 3 evidence. 4 I think that brings the hearing to 5 a conclusion, does it not, Mr Beer? 6 MR BEER: Yes, it does, and we're back at 10.00 am 7 tomorrow with Alan Lusher. 8 SIR WYN WILLIAMS: Thank you. 9 MR BEER: Sorry, 12.00 tomorrow, with Alan Lusher. 10 SIR WYN WILLIAMS: 12.00, because of a personal 11 commitment I have. 12 Mr Stein, on one occasion, at least, I've 13 seen Mrs Holmes before, so convey my best wishes 14 to her, will you? 15 Thank you very much, everyone. 16 MR BEER: Thank you, sir. 17 THE WITNESS: Thank you. 18 (3.10 pm) 19 (The hearing adjourned until 20 the following day at 12.00 noon) 21 22 23 24 25 153 I N D E X JOHN ANDREW BREEDEN (sworn) ...................1 Questioned by MR BEER .........................1 Questioned by MR STEIN ......................146 154