1 Friday, 10 May 2024 2 (9.44 am) 3 SIR WYN WILLIAMS: Before you start, Mr Beer, I've been 4 asked to advertise In Your Own Words, and it's 5 particularly addressed to members of the public who may 6 not yet have participated in it. We started the project 7 or, to be more precise, the Secretariat started the 8 project -- I don't want to claim any credit for this -- 9 in March and there's been a good deal of response to it. 10 But I'd like more response and I simply want to tell you 11 that, in the premises now, we have what we might call 12 a collection box, where those people who visit the 13 Inquiry and who wish to participate in telling me about 14 their experiences, can fill in the questionnaire and 15 deposit it in the collection box, and that might be 16 an easy way of people to participate if they are at the 17 Inquiry. 18 Obviously, if they're not at the Inquiry, I would 19 still encourage them to use all the other available 20 means of participating but, if you happen to be at the 21 Inquiry and you haven't yet done it, I'd be grateful if 22 you'd fill in the collection box, so to speak. 23 Mr Beer. 24 MR BEER: Thank you very much, sir. May I re-call Rod 25 Ismay. 1 1 RODERICK MARK ISMAY (re-sworn) 2 Questioned by MR BEER 3 SIR WYN WILLIAMS: Mr Beer, I think it may be appropriate, 4 given what you have told me about the various possible 5 lines of questioning, if I give Mr Ismay the warning 6 about self-incrimination. 7 MR BEER: Sir, yes. 8 SIR WYN WILLIAMS: You may have heard me give this warning 9 to other witnesses but let me give it to you. It's not 10 really a warning, Mr Ismay, it's a direction about how 11 we might proceed. 12 Under our law, a witness at a public inquiry has the 13 right to decline to answer a question put to him by any 14 lawyer who is asking questions, and the right to decline 15 answering a question arises if there is a risk that the 16 answer to that question would incriminate the witness. 17 We call it, in shorthand form, the privilege against 18 self-incrimination. 19 I have decided that fairness demands that I remind 20 you of that privilege before you resume your evidence. 21 However, it will be for you to make it clear to me that, 22 in respect of any question put to you, it is your wish 23 to rely upon the privilege against self-incrimination. 24 If, therefore, any questions are put to you by any of 25 the lawyers who ask questions or, for that matter, by 2 1 me, which you do not wish to answer on the grounds that 2 the answers might incriminate you, you must tell me 3 immediately after the question is put. At that point, 4 I will consider your objection to answering the question 5 and, thereafter, rule upon whether your objection should 6 be upheld. 7 Are you represented by a lawyer here today? 8 THE WITNESS: Yes. 9 SIR WYN WILLIAMS: Right, well, that being the case, if any 10 doubt arises in your mind as to whether you should 11 invoke the privilege and you wish to be assisted by your 12 lawyer, then, in all probability, I will permit you to 13 do that before we go any further. But, again, you must 14 tell me that you wish to consult with your lawyer so 15 that I can consider whether that's appropriate in the 16 circumstances. 17 Do you understand all that, Mr Ismay? 18 THE WITNESS: I understand, yes, thank you. 19 SIR WYN WILLIAMS: Thank you very much. Mr Beer? 20 MR BEER: Thank you, sir. 21 Good morning, Mr Ismay. 22 A. Good morning, Mr Beer. 23 Q. As you know, I ask questions on behalf of the Inquiry. 24 You last gave evidence before the Inquiry on 11 and 25 12 May 2023, nearly a year ago to the day. You've 3 1 kindly since provided a second witness statement, dated 2 10 April 2024, which is 48 pages long. It should be in 3 front of you in a hard copy. Can we turn to that, 4 please. Its URN is WITN04630200 and if you turn to 5 the -- 6 A. It says "0100" on it. 7 Q. That's the wrong witness statement, then. 8 A. Oh, that's the first witness statement. Oh, right, 9 okay, I've got you. "0200", yes. 10 Q. If you turn to the 48th page, please, you should see 11 a signature? 12 A. Yeah. 13 Q. Is that your signature? 14 A. That I see my signature, yes. 15 Q. Are the contents true to the best of your knowledge and 16 belief? 17 A. Yes, they are. 18 Q. Thank you very much. That can be put to one side. 19 I'm going to start, Mr Ismay, with what might be 20 a significant topic, deal with that and then deal with 21 issues chronologically. 22 The first topic is the extent to which the Post 23 Office was aware, in July 2013, of the three bugs 24 referred to in the Second Sight Interim Report, okay? 25 I think you know that the Second Sight Interim Report of 4 1 8 July 2013 referred to three bugs in Horizon: the 2 receipts and payments mismatch bug; the suspense account 3 bug; and the Callendar Square or Falkirk bug. Correct? 4 A. I can certainly remember through all the documents the 5 first two of those bugs you've mentioned. I remember 6 the name of the third one from the other matters. 7 I couldn't recall that those three items were in Second 8 Sight's report but I've come across all three of them 9 mentioned in the documents, yes. 10 Q. Okay. In fairness, the third bug wasn't named as the 11 Callendar Square or Falkirk bug in the report; it was 12 referred to as a third bug? 13 A. Right, okay. I'm familiar with lots of correspondence 14 that refers to the two bugs and talks about a 62 and 15 a 14, which are the first two of the matters that you 16 mentioned there. 17 Q. Yes, but, in any event, you know that the Second Sight 18 Report referred directly to the first two: the receipts 19 and payments mismatch bug and the local suspense account 20 bug? 21 A. Yes. 22 Q. Thank you. I want to look at some material, please, 23 exchanged shortly before the publication of the report 24 about knowledge within the Post Office of those bugs. 25 Can we start with POL00060572 and it will come up on the 5 1 screen for you. This is an email of 30 June, you can 2 see at the top, from Jarnail Singh, and then underneath 3 the date the "To" list: Hugh Flemington, Alwen Lyons, 4 Mark Davies, Rodric Williams and Lesley Sewell. You're 5 not a copyee on this, yes? 6 A. Yes, I see that. 7 Q. This is a week before the Second Sight Report. He says: 8 "Further to our conversations and emails on Friday 9 afternoon, I would like to confirm the following ..." 10 He says he thinks it's unhelpful to reference to 11 "Bug 14" because it suggests there'd been 13 previous 12 problems. 13 Then if we go down to number 5, please: 14 "Simon Clarke, prosecution counsel, and Martin Smith 15 [of Cartwright King] spoke to Gareth Jenkins on Friday, 16 28 June. He told them that he had only volunteered 17 information about two bugs present in the system to 18 Second Sight. He also told them that those bugs would 19 not have affected the integrity of the data being used 20 in [a case] the Samra prosecution. If I may speculate 21 here a little here, Gareth Jenkins only told Second 22 Sight of two bugs, the Post Office only knew of two 23 bugs. It seems, therefore, unlikely that they would 24 find any other bugs without Gareth Jenkins knowing about 25 it due to the mechanics of the system reporting and the 6 1 checks and balances already built into the system. It 2 looks likely that Second Sight's Report will focus on 3 these two bugs." 4 Do you agree, just reading this now -- I know you 5 weren't a copyee on the distribution list -- that 6 Mr Singh is implying that the Post Office knew about the 7 first two bugs as a result of Mr Jenkins informing 8 Second Sight about them? 9 A. I don't know. Show me -- show me that part of it. 10 Q. Paragraph 5, the one I've just read. 11 A. Oh, right. Well, he's certainly saying that Gareth 12 Jenkins has told Second Sight of the two bugs. 13 Q. Yes. What about more broadly? Can you recall at the 14 time of the weeks before, in the run-up to the 15 publication of the Second Sight Report, was information 16 coming out like this, that Second Sight were going to 17 refer to two bugs? 18 A. I don't know. 19 Q. You can't remember? 20 A. I can't remember and I don't know whether that was 21 coming out. My recollection or involvement in it was 22 various spot reviews and some questions wanting some 23 kind of subject matter expert input that myself and my 24 team would have come forward with. I can't remember 25 conversations about these two bugs. 7 1 Q. Okay, that can come down. What about when the Interim 2 Report was published on the 8 July? Do you recall that 3 the approach that the Post Office took to the Second 4 Sight Report was that it was revelatory of the two bugs? 5 A. No, I can't recall how it did respond to it. I can't 6 recall a sense of saying something was revelatory or 7 not. I don't know how the Post Office did respond to 8 the Second Sight Interim Report at that time. 9 Q. Do you not remember being involved in a process -- 10 A. Yeah -- 11 Q. -- which -- 12 A. -- I remember being -- 13 Q. -- just let me finish -- being involved in a process in 14 the run-up to the publication of the report which sought 15 to discover "What did we know about the bugs and how 16 high within the organisation did such knowledge go?" 17 A. No, I -- I don't recall going through that. I know 18 there's lots of evidence that you've sent me with many 19 different dates on it, I think going back earlier than 20 that, where there was internal knowledge of the receipts 21 and payments mismatch item, and in terms of what do 22 I remember knowing at the time about that, I think 23 there's some documents that you've shown me, and you've 24 given me so many documents I can't remember what 25 document has got what date in it that I've read out of 8 1 the sort of couple of thousand pages that I've been 2 looking at in the last couple of weeks. So I don't feel 3 that I can say what I remember happened then, but I do 4 know that I was involved in lots of work that would be 5 sort of subject matter expert contribution to things to 6 do with the various discussions that were going on to 7 help Second Sight prior to that date. 8 Q. I'm just talking about on publication day and after 9 publication day. Can you recall whether the Post 10 Office's public-facing position was "These two bugs 11 they've referred to, we've known about those for ages 12 and we dealt with them appropriately at the time", or, 13 "This Second Sight Report is revelatory of the bugs to 14 us"? 15 A. No, I can't recall whether the Post Office response was 16 either of those but I would think, in my mind, if I was 17 kind of looking at these at the time, that I would have 18 thought "Yes, I was aware that that receipts and 19 payments mismatch bug was identified some time earlier 20 and I'd understood that it had been fixed some time 21 earlier, as some of the other evidence shows", but, I'm 22 sorry, as regards the specific time of the date of -- 23 the date in 2013 that you're talking about, I can't 24 remember what was going on that day, no, sorry. 25 Q. Okay, let's look at the receipts and payments mismatch 9 1 bug -- 2 A. Right. 3 Q. -- then and turn to your knowledge of it and your 4 involvement with it in the years before July 2013. 5 A. Yeah. 6 Q. Can we start, please, with POL00028838. This is 7 a document with which we are very familiar and I'm 8 therefore not going to take the Inquiry through it. Can 9 I ask you some limited questions about it. Can you see 10 the group of attendees on the first page there? 11 A. Yes, I can, yes. 12 Q. This is a group of people who either had met when this 13 document was written or were to meet when this document 14 was written for the purposes of a meeting in early 15 October 2010, and it's about the receipts and payments 16 mismatch bug. Okay? 17 Can you see on there Andrew Winn, Andy Winn? 18 A. Yes, I can. 19 Q. Was he one of your team? 20 A. Yes. 21 Q. Did he report to you? 22 A. He didn't directly report to me, but he was a member of 23 my team, yes. Yes. 24 Q. How many grades of management were there between him and 25 you? 10 1 A. One. 2 Q. He said, when he gave evidence to the Inquiry, that he 3 reported back to you about this meeting concerning the 4 receipts and payments mismatch bug. Is he correct in 5 what he said there? 6 A. I don't know. I don't know whether he reported back to 7 me straight after that meeting but I know in some of the 8 other evidence documents there's things, I think, in the 9 middle of October where I attended something to do with 10 this. I don't know what conversations Andy came to me 11 before that but Andy was somebody who generally would -- 12 with a concern for matters, and his very role was to 13 resolve challenges and sort of issues and experiences 14 that subpostmasters got. 15 His Relationship Manager role was very much about 16 that and he would often come to me with things that he 17 looking at and trying to resolve, to the benefit of 18 a subpostmaster, so we would speak a lot. I can't 19 remember whether he came to me on this specific item or 20 not. I'm sorry. 21 Q. If we look at page 3, please. Can you see that there 22 are three proposals there -- 23 A. Yes. 24 Q. -- as solutions -- 25 A. Yeah. 11 1 Q. -- to the existence of the bug, yes? 2 A. Yeah. 3 Q. Solution One, Two and Three, which have kindly been 4 highlighted. 5 A. Yeah. 6 Q. Do you agree the choice between those solutions, 7 ie which one to take, was a very significant decision to 8 take? 9 A. Yes, that would be very significant. My understanding 10 had always been that there was no scope to have what 11 you'd call direct entry to Horizon and I would not want 12 there to have been the possibility to have direct entry 13 to Horizon. So the range of options that we've got 14 there, there's clearly one that is a very unpalatable 15 one. 16 Q. So just before we get on to the unpalatable option, 17 number 1, my questions at the moment are focused on just 18 choosing between Solutions one, two and three was 19 a significant choice? 20 A. Well, yes, yes, there is a significant -- yeah, yeah. 21 Q. And the kind of thing that Mr Winn ought to have come 22 back to you on? 23 A. Yes, and he may well have. I'm sorry that I can't 24 remember it but I think -- I expect that Andy would 25 have -- yeah, have wanted to seek and share such 12 1 a topic. I can't remember whether he did but I know 2 that in his care he would have wanted to. 3 Q. Okay, now you said -- I think you volunteered -- that 4 one of the choices was unpalatable because it revealed 5 the possibility of a form of remote access, in which 6 branch accounts could be altered remotely, essentially, 7 yes? 8 A. Yeah. 9 Q. I think you said it was your understanding, so it would 10 have been your understanding in October 2010, that that 11 wasn't a possibility? 12 A. That's correct, yeah. 13 Q. So, if you had been told about Solution One by Mr Winn, 14 that would have been news to you, that there was a form 15 of remote access by Fujitsu in which they could tamper 16 with branch accounts and change data in them without 17 a subpostmaster's knowledge; that would have been news 18 to you? 19 A. That would have been news to me, yes, yeah. I think 20 that would have -- so let's say, linked to some other 21 evidence that's in there, and one of the things that 22 I challenged about changes to a report later on, there 23 were a number of misunderstandings that, for example, 24 transaction corrections, which my team would issue to 25 branches, there were situations where people within Post 13 1 Office would sometimes say, "Well, doesn't a transaction 2 correction directly influence a -- the branch 3 accounts?", which it did not. 4 But there were misunderstandings about some other 5 things and, therefore, you know, there had been that 6 thing that I think is in the Zebra report, a suggestion 7 of Products and Branch Accounting having direct access 8 to a branch's accounts, which it did not because we just 9 issued TCs for a branch to accept. There were some 10 misunderstandings of what the teams did. 11 So I think there's a later document on this one 12 where I've written an email that's in the pack, where 13 I've used some wording like "We would not want this kind 14 of functionality to exist and we would not want" -- and 15 I think the word is something like -- 16 Q. I'm going to come to that, don't worry, Mr Ismay. 17 A. Yeah. 18 Q. Just focusing on this document at the moment -- 19 A. So I don't know whether that functionality actually 20 existed. Fujitsu were saying, "Do you want us to write 21 a manual entry to the system?" I don't know whether 22 they actually had the functionality built to do it or 23 not. 24 Q. Would you agree that this document makes clear, firstly, 25 that Fujitsu could tamper with branch accounts remotely 14 1 and, secondly, they'd be able to do so without the 2 branch being able to see it? 3 A. Well, it's certainly setting out that -- yes, but, as 4 say, whether they'd got the functionality to or not, 5 I don't know, or whether they were thinking they could 6 build something to give them the functionality, I don't 7 know. 8 Q. This doesn't speak about it conditionally -- 9 A. No. 10 Q. -- "If Fujitsu have this facility, then they could do 11 this"? 12 A. No -- 13 Q. This speaks as if they could do it? 14 A. Yeah, this don't speak to the conditionality, the other 15 document that you've said you're going to come to later 16 on does have an element of conditionality and that 17 conditionality would have come out of sort of 18 correspondence and discussions and things that IT had 19 said to me about the system. 20 Q. So if Mr Winn had either shown you this document or told 21 you about Solution One, by October 2010 you had 22 knowledge, would you agree, of a form of remote access 23 by Fujitsu which could change branch data without 24 knowledge or agreement of a subpostmaster? 25 A. Yeah, this document, if I've seen this, would have 15 1 alerted me to say that Fujitsu -- 2 Q. Thank you. 3 A. Yeah, yeah. 4 Q. Can we move on, then, please. POL00055410. 5 If we scroll down, please, you're not included on 6 this chain. It's an email from Mr Simpson to Rob 7 Wilson, you remember him as being a senior lawyer within 8 Post Office? 9 A. Yes, yes. 10 Q. Thank you. He says: 11 "I am forwarding you the attachments above in 12 relation to a series of incidents, identified by Fujitsu 13 this week, whereby it appears that when posting 14 discrepancies to the local suspense, these amounts 15 simply disappear at branch level and a balance is shown. 16 "The above includes Fujitsu's initial analysis and 17 proposed solution/s, whilst the other documents the 18 outputs from various meetings held this week. My 19 concern is around the proposed solution/s, one or more 20 of which may have repercussions in any future 21 prosecution cases and on the integrity of the Horizon 22 Online system." 23 If we scroll up, please, we can see that was 24 forwarded to two other lawyers, who I think you would 25 have probably known: Juliet McFarlane and Jarnail Singh? 16 1 A. Well, I recognise the names now from the documents, yes. 2 Jarnail, I knew his name from when I was there. I don't 3 recall Juliet's name but yes, yeah. 4 Q. One of the documents, the first one, the receipts and 5 payments note, that's the document I've just shown you, 6 okay? Can you see the attachments there? 7 A. Right, that was the document we were just -- 8 Q. That was the document we've just looked at. 9 A. Yeah. 10 Q. The other one is a document called "Loss Discrepancies" 11 and was a report prepared by Mr Gareth Jenkins about the 12 receipts and payments mismatch bug. 13 A. Right. 14 Q. Did any of this is three people, Rob Wilson, Juliet 15 McFarlane or Jarnail Singh, get in touch with you around 16 this time, 8 October 2010, after they received this 17 email about the bug and the implications for the 18 integrity of the Horizon system and prosecutions? 19 A. I can't remember any of them coming to me at that time. 20 Q. Given that one of your team, Andrew Winn, had been in 21 the meeting. 22 A. Yeah, yeah. 23 Q. None of them, so far as you recall, got in touch with 24 you? 25 A. I can't recall them getting in touch. I'm sorry if they 17 1 did but I can't recall them. 2 Q. We saw on the last occasion that you gave evidence that 3 you were quite extensively involved in administering and 4 in making decisions about disclosure in the Seema Misra 5 case, about whether an expert would have access to the 6 premises in order to view documents or conduct tests; do 7 you remember that? 8 A. I remember that topic. I wasn't involved in issues of 9 disclosure. What I got, and the questions they asked me 10 for were that Andrew Winn had come to me with a message 11 thirdhand from somebody else who said that somebody 12 wanted to come and do a visit to Chesterfield. The 13 question in the previous witness session was along the 14 lines of why was I, you know, not happy about that, 15 because that was the narrative that Andy Winn had used, 16 and I replied that there were so many reviews going on 17 in the Product and Branch Accounting Team, for business 18 efficiency, Royal Mail separation, loads of things going 19 on, I wasn't excited about the prospect of another visit 20 coming in and -- 21 Q. Who's a defence expert -- 22 A. Yeah -- 23 Q. -- who was proposed to come in? 24 A. Yeah, so I wasn't -- so I don't think that I stopped 25 another expert coming in. I wasn't happy about the 18 1 prospect of somebody else coming in, and that was the 2 question before, but as we had extensive dialogue on 3 that before, I think, if the -- if the Post Office 4 lawyers had agreed with another party, that that review 5 should happen, then that visit needed to happen. 6 But, no, I did not get -- and I don't recall, 7 I don't think anybody came to me to say, from the Legal 8 Team, "This visit needs to happen". I got a thirdhand 9 message that came via Andy from somebody else, which 10 didn't excite me at the idea of another review, as 11 I say, when we'd got, pre-privatisation, lots of reviews 12 going on. So I don't think that I blocked a visit and 13 I don't think that I was involved in disclosure either. 14 Disclosure wasn't for me to be doing disclosure. 15 Q. Okay. You had had some involvement in the Seema Misra 16 case, to the extent you've just described? 17 A. Yeah, I don't think I'd got any involvement other than 18 that third-hand message that somebody wanted to make 19 a visit. 20 Q. I'm just asking at the moment, given that Andy Winn was 21 one of your staff -- 22 A. Yeah, yeah. 23 Q. -- and had been present at that meeting, the early 24 October meeting -- 25 A. Yeah. 19 1 Q. -- and, given that you had had some involvement in the 2 Seema Misra case, did any of these three come to you 3 when they received documents about Seema Misra, or 4 potentially about Seema Misra's case, and the receipts 5 and payments mismatch bug? 6 A. Right. So I can't remember them coming to me and, given 7 the quality of (unclear) documents I'm sure if they had 8 they would have emailed me and you would have found such 9 an email but I can't remember them coming to me. 10 Q. Can we look, please, at POL00055418. This, again, after 11 4.00 on the Friday, before the trial starts on the 12 Monday. It's from Mandy Talbot, do you remember her? 13 A. Yes, I remember Mandy Talbot, yes. 14 Q. What do you remember as her role and function? 15 A. She was some sort of, I don't know, Head of Legal. She 16 was either a Post Office or Royal Mail senior lead on 17 some aspect of legal activity. I can't remember whether 18 it was criminal or civil, but, yeah. 19 Q. We can see it's an email at 4.09 on that Friday 20 afternoon to Mr Singh, and copied to Mike Granville and 21 to you. What function did Mike Granville perform at 22 this time, October 2010? 23 A. I don't know at that exact date but my recollection of 24 Mike's role was that he'd got a stakeholder relations 25 role, which would have worked with, what do you call it, 20 1 BIS or one -- one of the Government departments that 2 would be the shareholder, I think, for Post Office. So 3 I think Mike's role was in regulatory relations and 4 links with that department. 5 Q. We know from other evidence that, shortly after this 6 email is sent, Mr Singh either prints out, or somebody 7 using Mr Singh's log-in details prints out, the 8 attachments to the email we've just looked at, do you 9 understand -- 10 A. Yeah, right. 11 Q. -- detailing the receipts and payments mismatch bug? 12 A. Right. 13 Q. So shortly after this. This email says: 14 "Mike and Rod [ie the pair of you as copyees] are 15 also very interested in any developments at the trial 16 next week which impact on Horizon. You promised to let 17 me know if anything unfortunate occurred in respect of 18 Horizon. Please can you copy Rod and Mike into any 19 messages. Incidentally I assume that you have briefed 20 external relations. Can you let us know who you have 21 briefed because Mike and Rod may wish to have input into 22 any story relating to Horizon. They may give you a call 23 on [a number] for an update. Incidentally Postmasters 24 for Justice met with the Minister this week and were 25 accompanied by Issy Hogg and the lady from Shoosmiths." 21 1 You see there it says "You promised to let me know 2 if anything unfortunate occurred in respect of Horizon", 3 following "You being very interested in developments at 4 trial next week which may impact on Horizon"; were you 5 very interested in developments at the trial of Seema 6 Misra? 7 A. I think that this follows on probably a couple of months 8 after the report that has become known as the Ismay 9 Report, and there's other -- 10 Q. The 2 August 2010 report? 11 A. Yes, so this is like -- what is this, two or three 12 months after that? So probably, in light of having 13 compiled that report, I probably did have a kind of 14 a focus on, well, are there some other things being said 15 here? 16 Q. Why does that follow, that you'd written a report that 17 you told us last time -- 18 A. Yeah. 19 Q. -- consistently with your instructions from David 20 Smith -- 21 A. Yeah. 22 Q. -- was to present one side of the coin on Horizon's 23 integrity. Why would you be concerned with whether 24 there existed another side of the coin? 25 A. Right, so there were several things and some other 22 1 examples I didn't see where I've been asked to input to 2 other articles, responses to articles. So the number of 3 times that people were approaching me for input, I'd 4 have probably wanted to be abreast of what was happening 5 because I seem to have been approached for all sorts of 6 things. 7 In respect of that report, I would like to just 8 clarify, I -- and in my witness statement, I didn't say 9 that I was asked to do a one-sided report. Under 10 intensive questioning, I did respond that it could look 11 like a one-sided report but, to be clear, my 12 recollection wasn't that Dave asked me to produce 13 a one-sided report, my recollection -- 14 Q. We've got a recording of what you said on the last 15 occasion -- 16 A. But my -- 17 Q. -- which has been transcribed, you having given evidence 18 on oath; are you changing your evidence? 19 A. No, I'm not changing my evidence but what I'm saying is, 20 in my evidence, I said that I was approached for the 21 reasons -- for assurance, given that Dave had evidently 22 seen questions being asked about Horizon and would have 23 been saying "Well, why does the organisation feel that 24 Horizon would? What are the reasons for assurance?" 25 And I acknowledged in that previous attendance that it 23 1 could be seen to have looked one-sided because it did 2 look one-sided, but I wasn't asked to produce 3 a one-sided report; I was asked for the reasons for 4 assurance, given that Dave was a new Managing Director, 5 which -- 6 Q. Okay, we're getting a bit distracted. I'm asking you 7 why, three months after then -- sorry, two months after 8 then, you had a continuing interest on any developments 9 that might impact on Horizon? 10 A. Well, I think just because I was so often being 11 approached for things about it. 12 Q. Were you seen as something like the go-to guy on 13 defending Horizon? 14 A. No, I think I was seen as a subject matter expert about 15 branch accounts and processes and was approached 16 regularly for that. Just in the way that, through the 17 Second Sight process, I or my team were the subject 18 matter experts on things and so were approached 19 regularly with questions. 20 Q. Were you not very interested, in fact, to see whether 21 anything came out at the trial that undermined your 22 one-sided -- your myopic report? 23 A. I don't think so. 24 Q. Did Mr Singh, in fact, get in contact with you in the 25 course of the Misra trial? 24 1 A. I don't think he did, and that goes back the things 2 about having that third-hand message before it about 3 somebody coming to Chesterfield. I don't recall any 4 other approaches, no, I don't recall that. 5 Q. This is moving on beyond the third-hand message. This 6 is an email to Mr Singh and to you, essentially hooking 7 you up and telling Mr Singh that he should get in 8 contact with you if anything unfortunate occurred in 9 respect of Horizon. 10 Did he get in contact with you about the receipts 11 and payments mismatch bug that had been discovered on 12 this -- so far as the documents show, so far as he was 13 concerned -- Friday afternoon. 14 A. I don't think so and I can't remember him approaching me 15 on it, no. 16 Q. Did you have an interest in the Misra trial to see 17 whether anything about the receipts and payments 18 mismatch bug came out? 19 A. No. No, and when -- I think when the Misra trial was 20 proceeding, it was a name that sort of came out of the 21 blue to me as a case name. So it wasn't something that 22 I was looking at. I know -- I think one of my team was 23 invited -- 24 Q. Just to stop you there. When did it come out of the 25 blue? 25 1 A. Well, I don't know, but the case with the request about 2 "Can somebody come to Chesterfield", the third-hand 3 thing, came out of the blue, and the date that that 4 happened was on whatever the correspondence was that 5 we've had from Andy Winn in the previous packs. So ... 6 Q. Would you agree that, if this is right, you maintained 7 a continuing interest in Horizon and, in particular, 8 an interest in the Seema Misra trial? 9 A. I think because I was approached so often, as I say, as 10 a subject matter expert on stuff, I was probably 11 interested in Horizon. I don't think that I was -- and 12 this isn't -- this is no disrespect to the individuals 13 in that case because the outcome of all the cases is 14 awful -- but I don't think I was kind of looking at that 15 specific case for any reason, no. 16 Q. In the third line, it says: 17 "Can you let us know, [Mr Singh], who you've 18 briefed, because Mike and Rod may wish to that have 19 input into any story relating to Horizon." 20 Was that correct: that, at the point of the Misra 21 trial, you wanted to have input into stories relating to 22 Horizon? 23 A. I don't know at that exact date but, clearly, there's 24 a number of things where I've had an input into either 25 complaints or responses to articles in the press, which 26 1 we've seen elsewhere and that you might come on to in 2 some other items. So I have -- and other evidence shows 3 that I have had some input into some responses to 4 articles. I can't remember at this particular date 5 whether I wanted to. 6 Q. Were you seen at this period of time as somebody who 7 should have their hand on the Post Office tiller, 8 guiding what was said and not said about the Horizon 9 system? 10 A. No, I don't think so. 11 Q. Why would you want to have input into stories relating 12 to Horizon? 13 A. Well, I was seen with the Product and Branch Accounting 14 back office finance role as often having a subject 15 matter expert view on things to do with Horizon. 16 Q. Can we move forward, please, to November 2010, the 17 following month, and look at POL00294684. Can we see 18 that Antonio Jamasb was emailing you, amongst a group of 19 other people, the proposed attendees, an invitation to 20 a meeting on 15 July (sic)? 21 A. Yeah. 22 Q. The subject was to be the "Receipts and Payments 23 resolution". Can you see that under "Subject"? 24 A. Yes. 25 Q. Thank you. 27 1 A. I can see the bit to resolve discrepancies generated by 2 branches and I can see the attachments called receipts 3 and payments, yeah. 4 Q. If you just look at the subject line, which is 5 highlighted about five in -- 6 A. Oh, sorry. 7 Q. -- "Receipts and Payments resolution" -- 8 A. I've gone further down, sorry. Yeah. 9 Q. If we just go over the page and scroll down, the message 10 concludes in the penultimate paragraph: 11 "We are looking for you as senior stakeholders to 12 agree [an] approach as a way forward." 13 A. Yeah. 14 Q. Go back to the first page, please. Those proposed 15 attendees, would you agree that they are, you included, 16 senior stakeholders? 17 A. They are all part of the management, not directors. 18 Many of them aren't reports to directors but they're 19 probably Senior Managers in different parts of the 20 organisation, yes. 21 Q. So a fair description of senior stakeholders in this 22 issue? 23 A. Yeah, yeah. 24 Q. Thank you. It says, as you said: 25 "The aim of the meeting is to discuss a working 28 1 group proposal: to resolve discrepancies generate by 2 branches following a specific process during the 3 completion of the trading statement." 4 Then, if we go over the page, please, we'll see 5 a series of solutions set out, One, Two, and Three, 6 which I think you'll recognise. 7 A. Yes, they were in the previous document, weren't they? 8 Q. Yes, they were in the October 2010, the month before, 9 document -- 10 A. Yeah. 11 Q. -- for the meeting at which Andy Winn had been present, 12 yes? 13 A. Yeah. 14 Q. You'll see that Solution One is presented in exactly the 15 same way, yes? 16 A. Okay. 17 Q. Yes? 18 A. It looks like it. 19 Q. So, by this time, if Andy Winn hadn't drawn your 20 attention to that record of the meeting or told you 21 about Solution One, you were, at this time, would you 22 agree, fixed with knowledge that Fujitsu could tamper 23 with branch accounts remotely and that they could do so 24 without the branch being able to see it. 25 A. Yeah, yeah, it looks that I was specifically being 29 1 approached there, yeah. 2 Q. Those facts, do you agree, blew a hole through your 3 Ismay Report of 2 August 2010, in which you said there 4 were no backdoors in the Horizon system? 5 A. That is -- yeah, that -- yeah -- 6 Q. Yes, so what did you do about it? 7 A. Well, I didn't issue a new report. 8 Q. Why not? 9 A. Because I hadn't been asked to and, as I've put in the 10 comments at the end of it, we didn't have a terms of 11 reference for it. I was asked to, at short notice, to 12 produce reasons for assurance for the system and it was 13 a one-off report. 14 Q. You knew you had new information that showed that 15 a part, a significant part, of your August 2010 report 16 was wrong, didn't you? 17 A. Yes, I can see this does show that part of that report 18 was wrong -- 19 Q. A significant part of the report was wrong. The "there 20 are no backdoors in Horizon" part was just wrong, wasn't 21 it? 22 A. Yeah, yeah. 23 Q. So why didn't you do anything about it? 24 A. Well, because, evidently, lots of people were aware of 25 it from this and I wasn't tasked with doing an ongoing 30 1 updated report. I was -- my -- as you can see from the 2 annual appraisal document that we've got in this pack, 3 you can see the number of things that I was involved in, 4 of which this was a very small part of a wide range of 5 things and, so, in hindsight -- absolutely, in 6 hindsight -- I wish I'd done something to respond to 7 this but, at the time, with loads of competing 8 pressures, sadly this one didn't lead me to do what, in 9 hindsight, I would wish I would have done to have 10 responded to it. 11 But I was doing many, many -- and I know this 12 doesn't -- this won't satisfy subpostmasters impacted by 13 all of this -- but I'd got loads and loads of different 14 competing priorities, pre-privatisation going on and 15 efficiency reviews in my team, and so, sadly, I didn't 16 do something on the back of this. I wish I had but 17 I didn't. And I was exceedingly busy with loads of 18 other competing priorities. 19 Q. Or was it that you were happy for your myopic report to 20 stand, that said there were no backdoors into the 21 Horizon system? 22 A. No, I think I'd moved on from that report and I wouldn't 23 have called it a myopic one. I realise, looking at it, 24 it does look like that but it wasn't intended to be. 25 Q. There are no records that we've got, I think, of the 31 1 decision that was made at this 15 November 2010 meeting. 2 A. Right. 3 Q. Do you know which solution was adopted? 4 A. No, but I know that there was a letter that, in the end, 5 I was asked to sign that went out to affected branches. 6 I don't know whether it was this -- if I get me numbers 7 right, and forgive me if I get me numbers right, but 8 I think this was the one that we're talking about that 9 was affecting 62 branches. 10 Q. Yes. 11 A. There was an issue that affected 14 branches. I know 12 I did sign a letter that went out to affected branches 13 to explain how, whichever of those issues was 14 resolved -- and I don't know if it was this one or the 15 other one, or whether I might even have been involved in 16 a letter to both -- both situations. But I'm surprised 17 that's not appeared as a document somewhere, that 18 letter. 19 Q. That can come down. Thank you. 20 Can we look at what else you were doing in November 21 2010, and look at POL00120561. This is an email from 22 Mr Granville, who, at the footer, gives his job title as 23 Head of Regulation Strategy -- 24 A. Right. 25 Q. -- if we just go up to the top, so the same month, about 32 1 a fortnight after that meeting -- to, amongst other 2 people, you and Paula Vennells. The subject is an 3 "Update on JFSA and Horizon issues and urgent response 4 needed for [the Department of Business, Innovation and 5 Skills]". There's an attachment, which is a response to 6 the Department of Business, Innovation and Skills for 7 them to reply to JFSA, and Mr Granville says he's: 8 "... sending this note around to provide an update 9 on the issues related to JFSA and to ensure concurrence 10 with the line that I am taking back to [Business, 11 Innovation and Skills]." 12 By way of "Background", this is just by way of 13 context for you: 14 "You will all be aware of the allegations that the 15 JFSA has been making about the integrity of the Horizon 16 system and the associated processes that [the Post 17 Office] uses in terminating contracts. There have also 18 been various legal cases relating to individual 19 subpostmasters being prosecuted for theft/false 20 accounting where the JFSA have had some kind of 21 involvement (the most recent being Ms Misra, West 22 Byfleet, where the ex-subpostmaster was recently found 23 guilty of theft). As you are [also] aware Channel 4 24 were also looking at the subject in the summer -- 25 although nothing has yet come of this. 33 1 "Our approach throughout has been to robustly defend 2 the integrity of the Horizon system." 3 So that's the background. Then Mr Granville says: 4 "However [The Department of Business, Innovation and 5 Skills] continue to be interested in this issue. They 6 have had a succession of MPs writing in to the Minister 7 on behalf of constituent subpostmasters referencing the 8 JFSA's allegations and the JFSA have also written 9 directly to the Minister on several occasions. As 10 a result of this pressure, back in September, Ed Davey 11 agreed to a meeting with the JFSA and whilst at the 12 meeting the Minister listened and didn't commit to any 13 actions [the Department of Business, Innovation and 14 skills] thereby maintain an 'involvement' in this 15 issue." 16 Then this: 17 "As a result of this and to follow up the 18 [Department of Business, Innovation and Skills] meeting 19 with the JFSA, Mike Whitehead recently met with Rod 20 Ismay, Lynn Hobbs and myself and went through some of 21 the points that JFSA raised at the meeting with BIS plus 22 a few more of the recent MP letters that have been 23 received on the subject." 24 Is that right, that you recently met with officials 25 from the Department and went through points raised by 34 1 the JFSA about Horizon? 2 A. I can't remember meeting with Mike Whitehead and BIS but 3 I've got a lot of respect for Mike Granville and, if he 4 said that I did, then no doubt that I did but I can't 5 recall the meeting. 6 Q. Do you remember discussing the Seema Misra case with 7 officials at BIS? 8 A. No. 9 Q. How was the Seema Misra case viewed by Post Office at 10 this time, after she had been convicted and sent to 11 prison? 12 A. I don't know. 13 Q. Was it not seen as a great victory which vindicated the 14 robustness of Horizon? 15 A. I don't know. I know that in some of the other evidence 16 documents there's been some things that, rightly, in 17 other hearings, people have said, "Oh, I wish I hadn't 18 said that". There's been various congratulatory emails 19 went around after it, I think, but I don't know how it 20 was judged now. 21 Q. Remember those answers for about 20 minutes' time, 22 Mr Ismay. 23 Can we scroll down under "Response", second 24 paragraph under "Response": 25 "However, the key point I'd like to draw to 35 1 everyone's attention is that BIS are looking for general 2 lines to go back to the JFSA. BIS accept [the Post 3 Office's] assurances about the integrity of the system 4 ..." 5 Just stopping there. Was that your state of 6 understanding at the time: that the Government was 7 accepting assurances given to it by the Post Office 8 about the integrity of Horizon? 9 A. I don't know what the Government was accepting at that 10 time. I did a report that I understood was for internal 11 purposes to Dave Smith. I can't remember meeting with 12 BIS but I certainly don't know what the Government's 13 perspective was on it. Evidently, there were senior 14 people who were meeting with these departments but 15 I can't recall meeting with them and I was surprised, 16 and I apologise if I did receive Dave's email with these 17 five points in or nine points prior to the report that 18 I compiled, that's got called the Ismay Report, but 19 I don't remember those narratives and those people that 20 were being talked about there. 21 I produced what I -- my recollection was, as 22 an internal report for a new Managing Director, and 23 I don't recall something that -- which is in the 24 documents that -- either in the Rule 9 or Rule 10 has 25 been shared with me that does refer to, I think, some 36 1 ministers. But I didn't think I was party to that and 2 I don't recall that. 3 Q. He continues: 4 "[The Government does not] want to intervene in that 5 area but they do have some concerns about some of the 6 ways in which our disciplinary processes might be 7 perceived. 8 "To take this issue forward, a suggested approach is 9 to be robust on our current system and procedures -- but 10 also to make reference to some work being undertaken 11 ..." 12 Then, at the foot of the page he says: 13 "In the attached document the relevant extract looks 14 like this ..." 15 Then if we go over the page, please, to the bold 16 system, he has essentially cut in to the email something 17 from the attachment, ie the proposed text to go back to 18 the Government with; can you see that? 19 A. Yes, I can see that, yes. 20 Q. So what he's essentially saying to you, amongst others, 21 is, "Is it okay if we say this to the Government?", yes? 22 A. Yeah, yeah. 23 Q. "The Horizon system and accompanying contractual 24 processes remain fully robust. Their integrity and 25 sound basis have been demonstrated over many years, and 37 1 they have underpinned the provision of effective and 2 sustainable service to Post Office customers. [Post 3 Office] refutes the unsubstantiated allegations made by 4 the JFSA." 5 Would it be fair to describe that as the usual line: 6 that Post Office say that the system is fully robust? 7 A. I think so, yeah. 8 Q. Then if we scroll down, please. Postscript: 9 "I have just had Mike Whitehead on to me saying that 10 Ed Davey is coming under 'extreme pressure' to respond 11 to cases that he has received. I will send to Mike the 12 extract of the information in the attached document on 13 the three specific cases referred to us by BIS but 14 I know he will come back to us asking for something on 15 the 'way forward' ..." 16 If we can look, please, at the document that's 17 attached, relating to the three specific cases, can we 18 look at page 7, please, of this. He addresses here the 19 Mrs Misra case; can you see that? 20 A. Yes. Yes, I can. 21 Q. If we just scan through it, please, and then if we keep 22 scanning, and keep scanning. Then, second paragraph 23 from the bottom: 24 "The case has now been before the courts, and 25 Mrs Misra was found guilty after a full jury trial ... 38 1 been sentenced to 15 months [imprisonment, I think that 2 is] by the judge taking all due regard to judicial 3 guidelines. It is probably inappropriate to comment 4 about the detail of the trial ... worth pointing out the 5 defence for Mrs Misra did use an IT expert with regard 6 [to] comments on the Horizon system and a clear decision 7 was arrived at by the court. 8 "[Mr] Singh ... explains the charges were ..." 9 Then they're set out. 10 Then if we go over the page, please, second 11 paragraph, there's a confiscation hearing. Some 12 information about the standard of proof. Lots of 13 adjournments, whilst Mrs Misra's solicitors kept asking 14 for more and more evidence, which was supplied, it is 15 said: 16 "It is probably inappropriate to comment to the MP 17 about the detail of the trial [but point out that an IT 18 expert was used] and a clear decision was arrived at by 19 the court." 20 There's nothing in here about the receipts and 21 payments mismatch bug, is there? 22 A. No. 23 Q. There's nothing in here, take it from me, in the rest of 24 the briefing to the Government, about the fact that 25 Fujitsu can tamper with branch accounts without the 39 1 subpostmaster being able to see that they've done so, is 2 there? 3 A. No. No, there isn't. 4 Q. Did you raise that point? 5 A. I don't know. 6 Q. You knew about that, as you've accepted, having been at 7 the meeting on 15 November 2010. When you received this 8 email, "This is what we're going to brief the 9 Government", did you think to say, "Hold on, I've got 10 some new information"? 11 A. No, I don't think I did. In hindsight, I can see that 12 I probably should've but I don't think I did, no. 13 Q. Can we look, please, at POL00088956. This is an email 14 exchange in the next month, December 2010 and it's quite 15 a complicated chain, this email. But the essentials of 16 it, if we scroll down, please, to the email at the foot 17 of the page, are Lynn Hobbs -- you remember her, don't 18 you? 19 A. Yes, I do. 20 Q. What function did she perform? 21 A. She was some sort of a leader within Post Office Network 22 team. 23 Q. Is emailing John Breeden, yes? You remember him? 24 A. Yeah, I can't remember his exact -- 25 Q. Contracts' Manager -- 40 1 A. Oh, yeah. 2 Q. Saying: 3 "This the last email exchange I had with Mike 4 Granville about the BIS meeting [I think that's the one 5 we've just referred to]. The attached documents are 6 what Mike was proposing sending to BIS and I commented 7 as below. I am also forwarding two further emails, one 8 from Rod Ismay, which is the final report he produced." 9 Then, over the page, please: 10 "The second from Mike Granville with a document that 11 was sent to BIS in advance as a briefing ..." 12 Then can you see she's cut in to the email there -- 13 A. Yes. 14 Q. -- an email to you, yes -- 15 A. Yeah. 16 Q. -- which looks to have been written either, as I think 17 we established on the last occasion, before your report 18 was finalised or after your report was finalised, but 19 most probably before? 20 A. I don't know, I'd say it was most probably before my 21 report. I would think that this email probably related 22 to that thing where you've showed me a table that was 23 undated but a meeting in the 15 November. So, and now 24 I -- looking at this, I imagine that Lynn was 25 probably -- one of her team was perhaps at that meeting 41 1 and had said to Lynn that that was one of those three 2 options that came up but they were after -- they were 3 after my report. They were not before the Ismay Report. 4 Q. You told us on the last occasion that this email here 5 that's cut in to this email chain was a really important 6 statement because it was explaining that things could be 7 written into the branch system, which you had said in 8 your report could not happen? 9 A. Yeah. 10 Q. So this statement here from Lynn Hobbs undermined your 11 report, yes? 12 A. Looking at it now, yes, I can see that undermines my 13 report. 14 Q. You agreed on the last occasion that your report was 15 founded on the incorrect assertion that branch systems 16 could not be amended or written into remotely and it 17 ought to have been corrected, yes? 18 A. I did say that. That report was written before this, 19 I think and, at the time, my understanding was that 20 there wasn't remote access, when I did that report 21 that's become known as the Ismay Report. Yes, looking 22 at it in hindsight, I might wish that I'd revisited it, 23 but I was asked at short notice to produce a report with 24 a load of other competing priorities going on, and 25 didn't produce a report, wasn't asked to produce 42 1 a report, I'd just been asked to produce a one-off to 2 help Dave understand the other context, that, if he sees 3 these allegations in the press, what are the other 4 reasons why people think the system works? 5 Q. So I think you agreed on the last occasion that your 6 report was founded on a false assertion that ought to 7 have been corrected in the light of this email here, if 8 this was received after you'd written your report? 9 A. Well, in hindsight, yes. It would have been probably 10 helpful to have notified people that this other matter 11 has come to light that wasn't in there but, in the 12 context of everything that I was doing, I don't think it 13 occurred to me to do that at the time. 14 Q. A bit beyond helpful, maybe essential? 15 A. Yeah, yeah. 16 Q. Can we look, please, at -- and this is a document we 17 didn't have last time -- POL00120475. This is written 18 by you on 29 November 2010, yes? 19 A. Yeah, this is the one that I referred to earlier. 20 Q. Yeah. 21 A. Yeah. 22 Q. You say: 23 "This note is to respond to some recent concerns 24 about data during branch balancing processes. 25 "In draft as yet to ensure it makes sense to those 43 1 not so closely involved ... 2 "The issue [is] sometimes known as the 'Receipts and 3 payments mismatch' ..." 4 Yes? 5 A. Yeah. 6 Q. "[It] has come up in some recent emails. There have 7 been several business discussions about how to resolve 8 it and an option had been referred to which, if adopted, 9 would have led to adjustments being made direct in 10 Horizon." 11 That shows that you had clocked, you had realised -- 12 A. Yeah. 13 Q. -- you that completely understood the significance of 14 Solution One -- 15 A. Yeah. 16 Q. -- doesn't it? 17 A. Yeah. 18 Q. "For clarity, whilst this was (for completeness) flagged 19 as an option, my understanding is that it has always 20 been rejected as it would undermine the longstanding 21 principle that all entries in Horizon be initiated or 22 authorised by the branch." 23 So it seems that you had an understanding, by late 24 November 2010, that Solution One, essentially covert, 25 remote access, had been rejected? 44 1 A. Yeah. 2 Q. "It is undoubtedly possible with any IT system that 3 special mechanisms could be developed to adjust users 4 systems and data, however, [Post Office] colleagues have 5 remained satisfied. 6 "(A) that [Post Office] would not wish this facility 7 to be built for Horizon, and 8 "(B) that there are segregations of duties and 9 change management controls which would prevent Fujitsu 10 from deploying such functionality." 11 Dealing with (A), why were you speaking about 12 a facility being built, if the documents, as we have 13 seen, had revealed to you that the facility already 14 existed? 15 A. Well, the way this thing is written, like we used the 16 word "conditionality" earlier, this written as if, at 17 the time, I'd got some perception in writing this that 18 perhaps it hadn't been built, that it was an option that 19 would require some build. 20 Q. Where had you got that perception from if the documents 21 that we've seen that you were passed made it clear that 22 there was no conditionality, it wasn't an "If Fujitsu 23 could do this, it would be a bad thing", it was, "They 24 could do this thing"? 25 A. Well, I can only think that it would have come from 45 1 a conversation with IT, but most -- there was a lot of 2 things that my team in the Finance Service Centre or 3 Product and Branch Accounting, as it was called, there 4 were a lot of things that, for our own SAP system we 5 were always asking for things to be changed, and most 6 things would always get aired as well, "You can do this 7 but we've got to build it". So I would have been quite 8 used to a concept of being given a number of options, 9 but all of them would have got a conditionality of "But 10 we've got to do something to enable this thing to 11 happen". 12 Q. Then you go on to (B), that there are segregations of 13 duties and controls which would prevent Fujitsu from 14 deploying such functionality. 15 A. Yes -- 16 Q. That speaks as if the thing already exists but it's 17 tightly controlled? 18 A. No, I think that's saying that, in the Post Office 19 change management processes, there was segregation of 20 duties so that, if you were trying to propose a change 21 to something, there'd got to be independent approval of 22 the proposal to do that thing, so -- 23 Q. It doesn't say that, Mr Ismay -- 24 A. No, that -- 25 Q. It says there would be if this facility was built, built 46 1 into it, segregations which would prevent Fujitsu from 2 deploying it. It speaks as if it already exists, 3 doesn't it? 4 A. I think you could read it with conditionality or not and 5 I think that there will be people who will look at it 6 one way and there will be people that look at it another 7 way and I think that the fact I've written this thing 8 with conditionality in it must have meant that I'd got 9 some feeling of conditionality when I was writing that. 10 And, as I've said, I'd got lots of changes that I was 11 often asking for, for my team, for POLSAP systems and 12 there was always an element of conditionality of "Yes, 13 we can do A, B or C but all of them we're going to have 14 to modify something and get approval to do that thing 15 for it". 16 So I was very used to being given options, all of 17 which would require some action ahead of them. I know 18 the narrative in here doesn't say that but one writes 19 what one writes and, in hindsight, you can wish there 20 was all sorts of things that you'd written into it and 21 I'm giving you the wider context of what I think would 22 have influenced my thinking, and that wider context 23 hasn't all been written in here, but this Inquiry is 24 trying to help to understand the wider context that 25 things were written in. 47 1 So I'm giving you had context of options always had 2 some conditionality on the build to them. I realise you 3 can read it and say "Odd, it doesn't say that", but that 4 is the wider context that change management processes 5 operated in. If you're given three options, usually all 6 of them need something to do with them. 7 Q. You carry on: 8 "The specific 'R&P' issue [receipts and payments 9 mismatch issue] has arisen from a non-compliant series 10 of user actions in branch." 11 A. Yeah. 12 Q. So you, you're blaming the subpostmasters there, aren't 13 you? 14 A. Not -- no, I think what -- 15 Q. What does -- 16 A. What -- 17 Q. What does "non-compliant series of user actions" mean? 18 A. Well, you'll see in the other documentation around the 19 receipts and payments mismatch that there was a sequence 20 of events that were trading periods and balancing 21 periods, which mean weeks and months, I think, you would 22 expect to do a certain sequence of events to close down 23 a period and roll into a new riot. "Non-compliant" 24 might be an unhelpful way of describing it but branches 25 knew what to do, or training should have helped branches 48 1 to understand what to do for the sequence of events to 2 close down your trading periods and roll into a new 3 period. 4 The analysis on this case, which is well documented 5 in another piece of evidence, I think one that Gareth 6 had written on it, shows that branches did something 7 that was an unexpected routine, ignoring something and 8 doing something different to what the routine should be 9 that all the other branches were following, and which 10 training material, I think, would have told people to do 11 about rolling new periods. So it's not -- 12 Q. So this was an attempt, this email, wasn't it, to cover 13 up your own, and indeed the Post Office's, knowledge of 14 remote access, wasn't it? 15 A. No, I don't think it was. 16 Q. Did you understand the importance of the remote access 17 issue in relation to claims against or prosecutions of 18 subpostmasters? 19 A. Oh, yeah, I understood it. If remote access existed, 20 then I understand that that's, you know, that's a really 21 bad thing. We don't want that. And I was very clear in 22 future things as well, such as when we had an aborted 23 tender for another IT supplier, that one of my inputs 24 into requests for that was always there must absolutely 25 not be an ability for remote access; subpostmasters must 49 1 be absolutely in charge of the creation of the entries 2 that go into their system. I'm sorry that -- 3 Q. You were in possession now of two sources of 4 information, the Lynn Hobbs email and, at the very 5 least, the meeting on 15 November, that undermined the 6 narrative that you've just described? 7 A. Well, I don't know if it had been built, I don't know if 8 the functionality existed. As I've said, my 9 recollection of stuff was that there was always 10 a conditionality of, if something is not working and 11 you've got to do changes for it, you've always got to do 12 something to enable -- 13 Q. Just stop there Mr Ismay, if you may. Do you agree (a) 14 that the document that was exchanged in October 2010 15 included no conditionality in it? 16 A. That document didn't use conditional wording. 17 Q. Do you agree (b) that the three solutions that were set 18 out in the email of 15 November 2010 included no 19 conditionality in it? 20 A. I agree that those documents didn't. But this one I've 21 written, which would have come from conversations with 22 IT, does include it. So I've got different documents in 23 a similar time frame. 24 SIR WYN WILLIAMS: But I'm sorry, option one, which is where 25 all this started with, was revealed at a meeting between 50 1 Post Office and Fujitsu. 2 A. Yeah. 3 SIR WYN WILLIAMS: Fujitsu must have said at that meeting 4 "We can do it", ie access remotely, in some form or 5 another. Functionality had nothing to do with it after 6 that, did it, because they told you they could do it? 7 When I say "told you", I mean told the Post Office. 8 A. Yeah. 9 SIR WYN WILLIAMS: So whatever may have been chatted about 10 in the IT Department of the Post Office is completely 11 irrelevant because all they had to do was to recheck, if 12 necessary, with Fujitsu, "Can we do it or not?" 13 A. I should have gone back and said "So does this 14 functionality actually exist" because Fujitsu could have 15 sat there and said "We can turn the screens orange", the 16 screens weren't orange but they could have sat there and 17 said "We can turn the screens orange", and they would 18 have had to do something to make them go orange. 19 SIR WYN WILLIAMS: All right. Okay, thank you. 20 MR BEER: Just look at the top of the email, four paragraphs 21 in. You say in the third paragraph there had been 22 several discussions about how to resolve it, and 23 an option which, if adopted, would have led to 24 adjustments being made direct in Horizon. Then in the 25 fourth paragraph, you say: 51 1 "Whilst this was flagged as an option ... it's 2 always been rejected." 3 Not "It's been rejected as an option because Fujitsu 4 would have to build some functionality in the system to 5 allow the very thing to happen and we don't want that to 6 happen", do you? You're saying "It's there on the table 7 but we've rejected it as an option"? 8 A. Well, those words aren't there but I don't know, at the 9 time, whether that functionality did exist or didn't. 10 It's clearly been said in there and referred to. 11 Whether it needed building or not, I don't know. 12 I don't know and I'm sorry. I don't know. 13 Q. You knew that a subpostmaster facing prosecution, if 14 they knew about the possibility of such remote access, 15 would be able to say to a court "There's scope for doubt 16 as to the cause of the alleged shortfalls in the system. 17 They emanated not from me, but from the system", didn't 18 you? 19 A. Well, I wasn't thinking about disclosure, I don't think, 20 in these things. I know a lot of this matter is talking 21 about disclosure matters but I was looking at internal 22 control environments and things, not about what should 23 or shouldn't be disclosed. Disclosure wasn't something 24 that was my role, my responsibility in there, and so 25 I wouldn't have been looking at these documents through 52 1 a concept of -- which I probably wouldn't have 2 understood at the time -- what are the requirements of 3 disclosure? 4 I'm learning quite a lot about them through the 5 context of this Inquiry but I wouldn't have been 6 thinking, "Oh, what's the disclosure aspect of this?" 7 That just wasn't my -- I was not the lawyer. I was not 8 the disclosure person. I was unaware of some of the 9 aspects of disclosure and I'm learning about them now. 10 Q. Do you recall that, by March 2011, a number of different 11 parts of the Post Office were involved in the response 12 still to the receipts and payments mismatch bug? 13 A. There's lots of people in those emails, yeah. 14 Q. I'm moving forward now, Mr Ismay, to March 2011. Let's 15 look at an email that might help you. POL00029611. 16 You'll see at the top of the page there that this was 17 a chain sent on to you in June 2013, and we're going to 18 come back to that later because that's just before the 19 publication of the Second Sight Report. 20 A. Okay. 21 Q. I'm going to suggest in a moment that this is part of 22 the backwards look -- 23 A. Oh, right, okay. 24 Q. -- to see what we knew and who knew about the receipts 25 and payments mismatch bug. So you got this eventually. 53 1 A. Okay. 2 Q. But if we go down, please, thank you, if we just scroll 3 up to get the email header. We can see from Mr Russell, 4 who is a Commercial Advisor within Service Delivery, he 5 sends an email out to Lesley Sewell. You'll know she 6 was Head of IT, yes? 7 A. Yes. 8 Q. Can you see Andy McLean; do you know who he was? 9 A. He was -- I think his title was Head of Service 10 Delivery. 11 Q. "Quite a lot of info here but I will outline what we 12 agreed. 13 "Word documents attached are the letters going out 14 to branches on Monday. They have been approved by Legal 15 and [Product and Branch Accounting], (Andy Winn) and 16 [Service Delivery, Tony Jamasb]", I think that is, yes? 17 A. Yeah. 18 Q. "I ran Mike [Granville], Mike [Young] and Andy [I'm not 19 sure who Andy M is] through the detail last week. We 20 have agreed to write all of the losses and repay the 21 gains via subpostmaster pay. We have a document from 22 Fujitsu on what happened. This provides audit trail and 23 shows what happened for a branch ... I am awaiting 24 clearance from Network (Anita Turner) [in relation to] 25 how to approach [the Federation]. 54 1 "Matt Hibbard ..." 2 Do you know who he was? 3 A. Yes, he was a direct report to me at some point, yes. 4 Q. "... was happy for the process and the Fujitsu document 5 as Rod [I think that's you] was off. Andy Mac has taken 6 action from Mike [Young] to ensure we maintain closer 7 links with [Product and Branch Accounting and you]. 8 Tony is already working on issue management and how P&BA 9 raise issues with [Service Delivery], and this will help 10 [Service Delivery] to formally raise and resolve them 11 with Fujitsu. 12 "Both Mikes were keen we use this as a positive, 13 eg old Horizon would not have picked this up, yet the 14 logs in Data Centre, and Event alerting meant we picked 15 this up, and can demonstrate what has happened ... 16 "We are writing to branches ... with walk through of 17 the detail as required." 18 Yes? 19 A. Yes. 20 Q. So it's quite a cast of people that knew about, at least 21 at this time, the receipts and payments mismatch bug: 22 IT, with the references to Sewell and Young; do you 23 agree? 24 A. Yes. 25 Q. Network, in relation to Anita Turner, yes? 55 1 A. Yes. 2 Q. Product and Branch Accounting, with a reference to you 3 and Hibbard? 4 A. Yes. 5 Q. The Live Service and Problem Team, the reference to 6 Mr Jamasb, yes? 7 A. Yes. 8 Q. And Commercial, because this email is from Mr Russell, 9 yes? 10 A. Yes. 11 Q. Also that Legal were aware; they've approved the letters 12 that are going to go out to branches, yes? 13 A. Right yes, yeah. 14 Q. This acknowledges that old Horizon wouldn't have picked 15 this up, yes? 16 A. Yes. That's what it says, yes. 17 Q. Was that your understanding at the time, that, if this 18 receipts and payments mismatch bug or something similar 19 had been present in Legacy Horizon, it would not or may 20 not have been picked up by the system? 21 A. I don't know. I don't know if that was the thought 22 process I went through or not. 23 Q. If that was the case, would that not provide a question 24 or raise a question mark over Horizon data that had been 25 relied on in past prosecutions? 56 1 A. Well, I see what you say. I don't know whether that 2 occurred to me or to anybody else in this at the time. 3 I think there was some of these issues, this -- well, 4 this issue and that other one, that got fixed, I think 5 we would have had a focus on that was a failure at the 6 time, it's got fixed, we've moved on, now we're going 7 back and pulling out correspondence around that fix. 8 But I think mine and my team's thought process would 9 have moved away from this. 10 We were being invited to come back to share 11 documents related to it but I think once the fix had 12 been done and these letters had been gone out, we'd have 13 moved on to many of the others topics we were dealing 14 with. 15 Q. This email was forwarded to you at the time -- 16 A. Yeah. 17 Q. -- by Lesley Sewell, we can see that if we scroll up? 18 A. Yeah. 19 Q. On 7 March 2011. Then two years and three months later, 20 you were forwarding it to Simon Baker and Susan 21 Crichton, yes? 22 A. Yes, yes. 23 Q. That was in the context of the Second Sight 24 investigation, wasn't it? 25 A. I don't know, the timeline would say it is. I don't 57 1 know why, but, yes, the timeline would say that. 2 Q. Presumably because of a need to investigate who knew 3 what and when about the receipts and payments mismatch 4 bug? 5 A. Well, I don't know. It could have been that or it could 6 have been that the Second Sight Report, rightly, and 7 Second Sight would have been alerted to this issue and 8 the other issue and, therefore, I think there was 9 probably questions being asked of "Well, let's just 10 explain do we all understand what this topic was that's 11 going into the report? So you could be right. I don't 12 know whether it was about who knew or whether it was 13 what exactly was this topic because it would -- and 14 we've seen something somewhere else, where it's about, 15 "How do you kind of put a plain English description on 16 this?" 17 I don't think a lot of people would have understood 18 what on earth this receipts and payments issue was. So 19 I think there were often questions about accounting 20 processes where people would say, "Can you just explain 21 that again? Where's that thing that explains what this 22 was?" So you might be right. I don't know. I don't 23 know. 24 Q. So if either of us is right, either it's a chain which 25 seeks to explain what the problem was -- 58 1 A. Yeah. 2 Q. -- or a chain which seeks to explain who knew what and 3 when? 4 A. Yeah. 5 Q. You were able to access it in 2013, just before the 6 publication of the Second Sight Report, and forward it 7 to Simon Baker and General Counsel, yes? 8 A. Yes, I can't remember what date the Second Sight Report 9 was. I know you said earlier but, yes, I've forward 10 this to those people to, yeah. 11 MR BEER: Thank you. 12 Sir, that's an appropriate moment. I'm not sure 13 what time your clock says. 14 SIR WYN WILLIAMS: Well -- 15 MR BEER: I've got two different times on the go here. 16 SIR WYN WILLIAMS: I'm saying 11.05. 17 MR BEER: Can we break until 11.15 then, please? 18 SIR WYN WILLIAMS: Sure. 19 MR BEER: Thank you. 20 (11.05 am) 21 (A short break) 22 (11.17 am) 23 MR BEER: Thank you, sir. 24 Mr Ismay, can we turn, please, to POL00296795. 25 We'll see that this is an email of 28 June 2013 from 59 1 Andrew Winn, forwarded to, amongst other people you, 2 with a couple of attachments, the receipts and payments 3 notes and, I think, an Excel document maybe, yes? 4 A. Yes. 5 Q. If we just look at the chain, then, by going back to the 6 foot of page 2 and the top of page 3 -- a bit more, 7 thank you. Andrew Winn forwards on 28 June to the Duty 8 Manager a document, and says: 9 "I found problem [he gives a number] which was 10 assigned ... Not sure if this is the problem or not from 11 the description." 12 Then underneath it: 13 "The first mail I can find from Tony ..." 14 That's Antonio Jamasb: 15 "This is the first ... I can find from Tony 16 referring to this. 17 "Lesley Sewell needs a summary of the issue ... when 18 Fujitsu first alerted [the Post Office] and when this 19 was first escalated as a major incident." 20 Then if we scroll up, please, Emma Langfield, part 21 of the Branch and IT Systems Team, says to Mr Winn -- 22 and eventually, as I say, this is forwarded to you: 23 "There has been significant archiving ... so we 24 cannot access the full incident history ... from our 25 personal emails we have determined the following. 60 1 "The call was raised with the Service Desk on 2 1 October 2010. 3 "Initial conference call with Fujitsu and [Product 4 and Branch Accounting] as was for discussion of the 5 issue and assessment of the impact was scheduled for 6 Monday, 4 October at 1.00 pm. This delay was due to 7 details from Fujitsu on issued being experienced needing 8 to be shared. 9 "The incident was logged on remedy Monday, 4 October 10 2010 during the conference call at 1.00 pm. 11 "Following on from the initial call, a follow up was 12 scheduled for 4.00 pm. 13 "I would say the 1.00 pm call was a sense check of 14 the information collated from Thursday, 29 September 15 (documentation of Fujitsu investigations created by 16 Gareth Jenkins) and Friday, 1 October branch lists. 17 Tony and I agree that the 4.00 pm call was the first 18 initiation of the major incident process our reasoning 19 being that from this a working group -- from this call 20 a working group was formed to manage the incident to 21 resolution." 22 Then she attaches some material. 23 If we scroll up, please. It's forwarded to you and, 24 amongst others, Simon Baker. Would the fact that this 25 chain about knowledge of and escalation of the receipts 61 1 and payments mismatch issue forwarded to Simon Baker 2 mean to you that this was related to or relevant to 3 Second Sight's work? 4 A. I can't remember what Simon Baker was doing. I know of 5 him and I think he's in various other documents, as part 6 of Second Sight, isn't he? And so, if -- and, sorry, 7 I can't remember out of the thousands of pages you've 8 given me -- but if Simon Baker was in the Second Sight 9 work then yes, yes. 10 Q. If Second Sight, you agree, had seen the meeting note of 11 October 2010, the email of 15 November 2010 or any 12 similar documents, they would have found out that 13 Fujitsu could tamper with branch accounts without the 14 subpostmaster knowing, wouldn't they? 15 A. Yeah, clearly, we had that earlier conversation but, 16 yes, they would have thought that, yes. 17 Q. To your knowledge, were those documents which revealed 18 that Fujitsu could tamper with branch accounts without 19 the subpostmaster knowing sent to Second Sight? 20 A. I don't know. 21 Q. When you received this, did you have any responsibility 22 for ensuring that the material was sent to Second Sight? 23 A. No. 24 Q. Who had that responsibility? 25 A. Well, I think that the relationship with Second Sight 62 1 was being managed out of the Legal Team. Simon, if he's 2 involved in it, may have come in as a project manager to 3 assist in that. I was being involved from a point of 4 view of a subject matter expert responding to things 5 like the suspense accounts, which we may well talk 6 about, and some of the spot reviews. So I -- and I can 7 only remember meeting with Second Sight once -- sorry if 8 I met with them more -- but I wasn't the main interface 9 with them. 10 Q. You know that Second Sight spoke about remote access 11 through the prism of Simon (sic) Rudkin having given 12 an account -- 13 A. Right, yeah, yeah. 14 Q. -- of visiting a basement in Fujitsu, Bracknell 15 headquarters -- 16 A. Yeah. 17 Q. -- and witnessing something, which to him looked and 18 smelt like remote access, yes? 19 A. Yes. 20 Q. Do you know why the documents that we've looked at, that 21 revealed knowledge by Post Office of the facility for 22 such remote access, were not revealed to Second Sight -- 23 A. No. No I don't. 24 Q. -- and, instead, there was a denial of his account? 25 A. I can only think because there was so many things going 63 1 on and so many documents but it's a fair question. 2 I don't know why it wasn't. 3 Q. At all events, when Second Sight were looking into the 4 issue of remote access, you didn't ensure that they were 5 given the attachments to this email or the documents 6 that we looked at earlier, revealing that such remote 7 access was possible by Fujitsu? 8 A. No, no. 9 Q. You said that Legal, to your mind, had the 10 responsibility for dealing with issues of disclosure to 11 Second Sight. Would that include Rod Williams, who is 12 included on this chain? 13 A. I think so, I'm not exactly sure what the sort of lead 14 point of contact was but I think it was Legal or 15 a Project Manager assigned to the matter. 16 Q. So the short point, is this right, that correction of 17 your report back in 2010 does not occur when you are 18 given documents that reveal Fujitsu's facility for 19 remote access and, in 2013, when Second Sight are 20 reporting, those documents don't get revealed either? 21 A. No, that looks to be the case, yeah. 22 Q. Can we move forwards, please, then. POL00098797. Thank 23 you. Can we look at the second page, please. We're 24 here, very shortly before publication, this isn't 25 an email exchange including you but it does concern you. 64 1 A. Yeah. 2 Q. It's between Alwen Lyons and Paula Vennells, of 28 June 3 2013, and the next steps on Horizon issues update reads: 4 "Paula 5 "Rod Ismay and Lesley [Sewell] are working the 6 detail of the 2 bugs, to understand them and then get 7 them into language that is clear and can be 8 communicated." 9 Is that right, that, shortly before the Second Sight 10 Report, you were working on the detail of the two bugs 11 to understand them? 12 A. Well, I can't remember my timeline of things but, 13 clearly, there are bits of correspondence in here that 14 say that, so yeah. 15 Q. Were you part of a team that was seeking to recreate 16 Post Office's corporate knowledge of the two bugs that 17 the Second Sight Report was going to break into the 18 open? 19 A. Well, I think, looking at this, that I would have had 20 corporate memory and understanding and so was somebody 21 who could try to put into plain English something to 22 explain to other people who might have had no 23 involvement or might not even -- I don't know even know 24 if some people were kind of employed or in roles at 25 an earlier point in time. So yes, I would get asked and 65 1 this looks like an example where I would have been asked 2 to help to narrate and summarise what a particular thing 3 was that had happened before and, in this case, this -- 4 these particular bugs, yes. 5 Q. When you were putting it into plain English, did you 6 include, within the plain English, the fact that you had 7 found out, you knew, that Fujitsu could tamper with 8 branch accounts without a subpostmaster knowing? 9 A. I don't know. I don't know whether what I put together 10 said that or not. I don't know. 11 Q. There is no document of which the Inquiry is aware of 12 you ever having said that. 13 A. Right. I don't know. 14 Q. That can come down. Thank you. 15 Stepping back, do you agree that in 2010 and 2011 16 the receipts and payments mismatch bug was known across 17 every major relevant department in the Post Office, 18 including the Legal Team? 19 A. Yes, it looks like it was, yes. 20 Q. Do you agree it was known about by number of senior Post 21 Office employees within those departments? 22 A. Yeah, it looks like it, yeah. 23 Q. Do you agree those senior Post Office employees had been 24 brought in, in 2010 and 2011, to consider the options 25 available to rectify the bug? 66 1 A. Yeah, looks like it, yeah. 2 Q. Do you agree there was, at the time of the Second Sight 3 Report, an investigation, a look-back, to see who had 4 known about the receipts and payments mismatch bug and 5 how high within the organisation such knowledge went? 6 A. Yeah, it looks like it, yeah. 7 Q. Do you agree, despite that investigatory work, the Post 8 Office took a position that the bug had been discovered 9 or revealed by Second Sight, as a result of a disclosure 10 made to it by Gareth Jenkins? 11 A. It looks like it, from the bits of evidence that you've 12 shared with me, where I think something says that Gareth 13 revealed it to -- not to Fujitsu -- to Second Sight. 14 Q. Do you know, additionally, that Second Sight themselves 15 were asking the question of the Post Office in 2013, in 16 the run-up to the publication of their report: who, 17 within Post Office, knew about the receipts and payments 18 mismatch bug? 19 A. No, can you ask me that question again? 20 Q. Yes. We've looked at what the Post Office, in fact, 21 knew. 22 A. Right. 23 Q. We have looked at the extent to which that was revealed 24 to Second Sight. 25 A. Yeah. 67 1 Q. I'm asking a related question. Do you know that, in 2 2013, Second Sight themselves were pursuing the same 3 question that I'm pursuing now: who within the Post 4 Office knew about the receipts and payments mismatch 5 bug? 6 A. Oh, right. No, I don't know. 7 Q. Can we look, please, at POL00029618. Can we start, 8 please, with page 2. Scroll down a little bit. Ron 9 Warmington to Simon Baker, under the heading "Two 10 Systems Defects", on 25 June 2013: 11 "Simon. 12 "This is the draft section of the report dealing 13 with the two defects. Please let me know if I've got 14 anything wrong. I'm afraid that the [Post 15 Office]/Fujitsu reports on the defects don't cover 16 everything I need to know. I also need to know whether, 17 after the defects were detected the subpostmasters who 18 had made good shortages that they should not have made 19 good were reimbursed and if so how many months later. 20 I think you said they were all reimbursed in due course. 21 "Also, the first report (on the receipts and 22 payments problem) mentions, on 2 of 30, 'this will 23 assist in explaining the issue to senior management and, 24 if necessary, the press'. Can you please let me know 25 whether, when and who (at Board level) was informed 68 1 about this defect (and also the later local suspense 2 defect) and whether any press release was issued in 3 respect of either of them? [And] can I see a copy?" 4 Yes? 5 A. Yes. 6 Q. So Mr Warmington for Second Sight was asking, 7 essentially, how high within the organisation knowledge 8 went -- 9 A. Yes, I can see that. 10 Q. -- of both bugs, yes? 11 A. Yes, I can see that, yes. 12 Q. If we scroll up, please. Mr Baker replies: 13 "I will get back to you tomorrow. I need to double 14 check a few things first." 15 Then scroll up, please: 16 "Just got this from Ron. I can get back to him on 17 most of the questions but your help on who in the Post 18 Office knew about it. I know from the email that Rod 19 sent that Mike Young knew but don't know if it went any 20 higher." 21 Then scroll up. Lesley Sewell replies: 22 "I don't know if it went any higher than Mike, Andy 23 Mc also managed service at the time ... 24 "I can't say if we said anything to the press. 25 "Other points -- our Board at the time would have 69 1 been Royal Mail as we didn't have an independent Board. 2 Paula [Vennells] would have been Network Director at the 3 time with Dave Smith as MD." 4 Were you made aware of this search for information 5 at the time by Second Sight, how far up did corporate 6 knowledge of the receipts and payments mismatch bug go? 7 A. I don't think I was. My recollection of what I was 8 doing with Second Sight was, like I said, responding to 9 questions about the suspense account and specific spot 10 reviews. 11 Q. You see this is 25 June 2013, yes? 12 A. Yes. 13 Q. Can we look, please, at POL00029611, the chain that we 14 looked at earlier; do you remember? 15 A. I remember you had this email up earlier, yes. 16 Q. This is dated 19 June 2013. Was this part of a search 17 for how far up the organisation knowledge went? 18 A. I don't know. I think what we talked about earlier was 19 that it was either that or it was an attempt to describe 20 what the issue was, and I don't know which was the case. 21 Q. Thank you. That can come down. 22 Can I turn to the local suspense account bug. Were 23 you involved in work conducted in June 2013 to create 24 a timeline of events concerning the discovery of the bug 25 and the Post Office's response to it? 70 1 A. If I've got the bug right, then I think I was. I think 2 there was other correspondence where I was asking Gareth 3 Jenkins if he could construct a sort of a column or 4 analysis of what things would look like at each stage of 5 it. So if that's the one you're asking about, then yes. 6 Q. Can we look, please, at POL00029641. 7 If we scroll to the foot of the page, please, 3 July 8 2013, an email from Rodric Williams to you and Lesley 9 Sewell, copied to others, "Timeline for Local Suspense 10 Problem": 11 "... here's my summary of a call with Andy Winn." 12 He was to amend or correct as necessary: 13 "Issue [we're talking about the local suspense bug 14 here] first surfaced at [the Post Office] Finance Centre 15 on 6 February 2012, at the close of a branch trading 16 period." 17 Yes? 18 A. Yes. 19 Q. Then second bullet point from the bottom: 20 "Not perceived to be a significant issue given the 21 small number of branches affected ..." 22 Then last bullet point: 23 "A subpostmaster contacted NBSC to report the same 24 discrepancy in branch trading as the previous year." 25 Yes? 71 1 A. Yes, I can see that. 2 Q. So the timeline suggests that the first that the Post 3 Office knew of the bug was 6 February 2012, yes? 4 A. Yes, it looks like that, yes. 5 Q. We can see from this email that the Post Office knew 6 that 13 other branches were affected but didn't regard 7 the issue as significant, given that number of branches 8 being involved, yes? 9 A. Yeah. 10 Q. And that then, in 2012, they didn't pass the problem to 11 Fujitsu but only did so when, a year later, the same 12 problem came up again, yes? 13 A. Well, I don't know whether there was any reference to 14 Fujitsu earlier or not -- 15 Q. I should have gone over the page. 16 A. It's not included in this timeline, clearly. 17 Q. Just go over the page, please. I should have read you 18 this: 19 "NBSC passed this on to Fujitsu." 20 Yes? 21 A. Right, yeah. 22 Q. Can you help us as to who within the Post Office knew 23 about the suspense account bug, following its discovery 24 in February 2012? 25 A. No, I don't know who knew about it, no. 72 1 Q. In 2013, when, amongst other things, you were copied in 2 on this email, did you make it clear to your line 3 management or to anyone else that the Post Office had 4 first discovered the suspense account bug in February 5 2012, actually a year before Fujitsu knew anything about 6 it? 7 A. I don't know whether I did that. I don't know. 8 Q. To the extent that the Post Office suggested on and 9 after publication of the Second Sight Report that it 10 knew about the local suspense account bug because of 11 Second Sight's investigation, that would be wrong, 12 wouldn't it? 13 A. Sorry -- 14 Q. To the extent that the Post Office made a suggestion 15 that it only knew about the local suspense account 16 problem because Second Sight were revealing it to 17 them -- 18 A. Yeah, that would be wrong. 19 Q. -- that would be wrong? 20 A. Yeah, we clearly knew about it. I don't know how many 21 people knew about it but the Post Office and me clearly 22 knew about it before that, yeah, from these emails, 23 yeah. 24 Q. It would be incorrect, a false impression to create, 25 that it was Mr Jenkins revealing these issues to Second 73 1 Sight, rather than the Post Office already knowing about 2 them for years? 3 A. Well, it seems -- I don't know why Gareth, as opposed to 4 Post Office, I don't know why the sequence of events of 5 who raised it with them was what it was. I don't know 6 if Second Sight had asked the question had there been 7 some bugs that were known about? And, for example, my 8 Ismay Report did refer to certain things in there that 9 would have predated these. If Second Sight had asked, 10 I would have thought the Post Office would have 11 responded and not waited for Gareth to respond. So 12 I don't know who raised something first or not with 13 Second Sight. 14 Q. Can we turn to the Callendar Square or Falkirk bug. 15 That document can come down, thank you. Were you aware 16 in June and July 2013 that the Post Office had known 17 about the Callendar Square bug right back in 2006? 18 A. I'm aware now, looking at all this information. There's 19 so much -- and I used to get 200 emails a day -- I can't 20 remember what I got at a time and what the dates were, 21 but I can see, I think, from some other evidence that 22 you've shared, that Post Office knew of something else 23 back in -- whether it was 2005 or 2006, and if that's -- 24 is that what the Callendar Square bug was? 25 Q. Yes. 74 1 A. Right, yeah. 2 Q. We can look at it at FUJ00083721. If we scroll down -- 3 thank you -- Anne Chambers to Mike Stewart, about 4 Callendar Square in 2006. Yes? 5 A. Yes. I don't know which company they worked for, 6 though. Are they both Post Office or Fujitsu people or? 7 Q. Can you help us, please, as to your knowledge of how 8 high within the organisation knowledge of the Callendar 9 Square or Falkirk bug went in 2006? 10 A. Sorry, I've got no idea. 11 Q. When did you first become aware of it? 12 A. I don't know when I first became aware of it and, if you 13 hadn't shared all this information with me, I don't 14 think that the name would even have been in my head. So 15 I could any go from whatever dates, documentation is in 16 here. I'm sorry but I've got so many, many things that 17 I was involved in, I can't remember. Sadly, even with 18 the gravity of some of these issues, I can't remember 19 them. 20 Q. Thank you. That can come down. 21 Were you aware of a move at about the time of the 22 Second Sight Interim Report, in fact in the months 23 leading up to it, that senior management in the Post 24 Office decided to move from a position that there were 25 no bugs in Horizon to a position saying, "Yes, there may 75 1 have been some known bugs but none of them, in fact, 2 disadvantaged subpostmasters"? 3 A. I can't remember that but I can clearly see it in some 4 of the correspondence that you've shared with me or that 5 I've seen on social media in the last few days. 6 Q. Were you party to discussions that, "We need to pivot 7 our position corporately from the 'No bugs' position to 8 'Yes, there are bugs but it's just like every computer 9 system; it had bugs in it and has bugs in it, but none 10 of them disadvantaged subpostmasters in any way'"? 11 A. I don't know if I was party to that but I would -- sat 12 here now, I would say, yeah, all systems have got 13 problems in them. 14 Q. I'm talking about the pivot, the change in approach? 15 A. Right, okay. 16 Q. Were you party to discussions and decisions that this is 17 what the Post Office needed to do in the run-up to 18 Second Sight? 19 A. I don't know, I can't remember that I was but I don't 20 know. 21 Q. Can we look, please, at POL00105632. This is the end of 22 May 2013. It doesn't include you on the distribution 23 list. It's from Alwen Lyons to Paula Vennells, copied 24 to others. "James brief", and I think this is in 25 readiness for a meeting with James Arbuthnot MP: 76 1 "Paula the only thing that is not in the brief for 2 James is our move away from 'there are no bugs in 3 Horizon' to 'there are known bugs in every computer 4 system this size but they are found and put right and no 5 subpostmaster is disadvantaged by them'. It would be 6 good to be able to go on and say 'or has been wrongly 7 suspended or prosecuted'." 8 Again, were you part of a team or a group of people 9 that discussed moving from position A to position B? 10 A. I can't recall being part of one, no. I was involved in 11 all sorts of meetings on all sorts of different topics 12 with all sorts of people, so, sorry, but I can't 13 remember being one. 14 Q. You can't recall being part of a group or a team that 15 were essentially giving instructions or giving 16 information to managers and directors above you that we 17 need to pivot here, we need to change direction? 18 A. I can't remember being part of that, no. 19 Q. Okay, that can come down. Thank you. 20 Were you aware, after the publication of the Second 21 Sight Report on 8th July 2013, of legal advice being 22 given by an employed barrister called Simon Clarke? 23 A. No. I've read -- and I know he's been here recently, so 24 I've seen all sorts because I've happened to look at 25 some things, but I don't think that I can remember any 77 1 involvement or awareness of either him or the other 2 gentleman, whether I've had documents -- Mr Altman, 3 I don't think either of them were things that I don't 4 think I'd got any involvement or awareness of. 5 Q. I'm not, in the interests of time, going to take you to 6 Mr Clarke's Advice of 15 July 2013. 7 A. Right. 8 Q. It sounds as if you're now familiar with it. 9 Essentially, he said that the expert from Fujitsu, 10 Mr Jenkins, upon whom reliance had been placed by Post 11 Office in written witness statements in a series of 12 cases and who had given evidence orally in one case, 13 Seema Misra's, his evidence was fatally undermined, that 14 he couldn't be used as a witness in relation to any more 15 prosecutions concerning subpostmasters because he'd 16 breached his duties to the court in failing to reveal 17 his own knowledge of bugs, errors and defects. Okay? 18 A. Yes, so I've seen that. I've read the two reports which 19 have been shared with me and the Rule 10 which cover 20 that, yes. 21 Q. Is this something of which you ought to have been made 22 aware at the time? 23 A. Well, I wasn't leading prosecutions or disclosure, so 24 I'm not sure that it is something that I should have 25 been made aware of. You can say that I did that report, 78 1 collated that report, back in 2010 but I moved on and my 2 job was covering all sorts of stuff of managing 3 a broader finance service centre, putting in accounts 4 payable functions and other things, and my job was kind 5 of further away from all of this. So I don't think that 6 there was a reason that should have been made aware of 7 it because I didn't have a role, other than being called 8 back for subject matter expertise on spot reviews and 9 the suspense accounts. 10 Q. I'm not suggesting that you had any responsibility for 11 prosecutions -- 12 A. Right. 13 Q. -- or that you needed to be told about it in that 14 capacity. 15 A. Right, of course. 16 Q. But you, as an individual, were continuing to place 17 reliance on what Gareth Jenkins had told you, weren't 18 you? 19 A. Well, Gareth did lots of things supporting our POLSAP 20 system, as well, so he was somebody who did various 21 change deliveries for lots of things on central finance 22 systems. So he was somebody that my team had a lot of 23 dialogue with. My team wouldn't have been relying on 24 him, because we weren't leading prosecutions. We 25 wouldn't have been relying -- what he did or didn't do 79 1 in court wouldn't have been a matter for the operation 2 or running of my team. It's just -- it was a separate 3 thing, totally. 4 Q. You'd relied on him in your report, hadn't you? In one 5 of your appendices you essentially cut and paste or 6 exhibited -- 7 A. So in that -- 8 Q. -- what he had said about the integrity of Horizon, 9 hadn't you? 10 A. Well, I have somewhere -- yeah, is that in my 2010 11 report? 12 Q. Yes -- 13 A. Right, yeah, yeah, I've included something from him in 14 that, yeah. 15 Q. Would you accept that the information from Mr Clarke and 16 as supplemented by Mr Altman, who had concluded that 17 Mr Jenkins was a tainted witness and his position was 18 untenable as a witness, amounted to an acknowledgement 19 that the Post Office's evidence as to the integrity of 20 the Horizon system was unsafe, didn't it? 21 A. Yes, it does. But you're referring to my report as well 22 in there, and my report was an internal document not 23 something that was part of a court case. I'd prepared 24 something that was for internal use at the MD's request, 25 not knowing the wider context of how this was suddenly 80 1 going to become such a pivotal thing people keep 2 referring to in lots of contexts. 3 Q. At all events, you were not made aware of either 4 Mr Clarke's advice or Mr Altman's general review? 5 A. No, I don't think I was, no. I don't think I was. 6 Q. Thank you. Can we turn to some broader issues, please, 7 and look, firstly, at your witness statement at 8 paragraph 7, please. 9 SIR WYN WILLIAMS: I take it you mean the second one? 10 MR BEER: Yes, second witness statement, please. Thank you. 11 Paragraph 7, which is page 3. 12 You're here dealing with, in this part of your 13 statement, your recollection of your involvement and 14 giving instructions in relation to the Cleveleys case 15 involving Julie Wolstenholme, yes? 16 A. Yes. 17 Q. You say, in the fourth line: 18 "My recollection is that I asked members of the IT 19 Directorate what their view was about such articles and 20 that Cleveleys came up in that conversation, with the IT 21 directorate firmly of a view that the criticism was 22 unfounded." 23 Yes? 24 A. Yes. 25 Q. You say a few lines further on: 81 1 "My recollection ... is that the Post Office Head of 2 IT, Dave Smith, did not agree with these opinions and he 3 disagreed with the validity of the approach adopted by 4 the IT expert to reach their opinion. Rightly or 5 wrongly, I trusted that internal opinion, from someone 6 I understood to be an expert on Horizon." 7 So you're essentially saying there, if I can 8 summarise, that you became aware of an expert report 9 prepared in the Cleveleys case. You, instead of 10 accepting what was in that report, took your view from 11 the Head of Post Office IT, Dave Smith, who you trusted. 12 A. Yes, yes. I don't know whether I'd read the particular 13 reports there, although there's clearly an email where 14 I forwarded one of them and asked somebody else if 15 they'd got the other one but I -- yeah, I relied and 16 they probably -- the organisational culture was that you 17 don't all try to second guess what somebody else is 18 doing in the management team. I trusted somebody who 19 I understood was an expert who'd overseen the sort of 20 implementation phases and Go Live of that system. 21 That may have been wrong, in hindsight, I accept. 22 Maybe I should have been more sceptical but, yeah, 23 I trusted Dave, IT Dave's judgement at that time. 24 Q. Why were you involved in the Cleveleys case at all? 25 A. Well, I don't -- I'm not sure that I was involved in the 82 1 Cleveleys case. I think, in my role in risk, because 2 I could see these comments being made in press cuttings, 3 I think I approached Dave to ask him about well, what do 4 you think about these things I can see in the press? 5 And I think he would have then raised Cleveleys in 6 response to that, to say, "Well, particular topics were 7 raised in that one and it was just totally unfounded". 8 So I think that was -- I think that was the context 9 of which I became aware of the Cleveleys case. I wasn't 10 involved in the -- wasn't kind of involved in the case; 11 it was an awareness of it, I think. 12 Q. I mean, you tell us here that you, a little further down 13 the page after the second bit of highlighting, you 14 escalated counsel's opinion to David Miller? 15 A. Yeah. 16 Q. Why were you doing that? What had that got to do with 17 you? 18 A. Well, I think something had been sent to me, there's 19 some sort of email in the pack that indicates the 20 Finance Director wasn't there at the time, somebody had 21 been trying to share something with him, so they came to 22 me and, given that the Finance Director was on holiday, 23 I think, at that time, or he certainly wasn't there, 24 then, whatever it was that people were trying to 25 escalate to the Finance Director, I must have decided, 83 1 well, in his absence, I'm going to escalate this to the 2 Chief Operating Officer because this is something that 3 clearly was intended for director level. 4 Q. You say, if we go over the page, please, to page 6, 5 paragraph 12, that your understanding was that: 6 "... there had been a large team of experts involved 7 in developing the Horizon system, that it had undergone 8 extensive testing and that the independent consultancy, 9 Gartner, had reported positively on the deployment of 10 the system. I do not believe I took any further action 11 in relation to the concerns raised in Mr Coyne's report 12 nor [were you] asked to. The organisation 13 responsibilities agreed for [you] at the time focused on 14 Financial Services regulatory compliance", et cetera? 15 A. Yes. 16 Q. "If the Horizon system was a priority, it would have 17 been a responsibility for IT." 18 Yes? 19 A. Yes. 20 Q. Why did you decide that the Gartner report and its 21 contents were more reliable than another report, that of 22 Mr Coyne, that raised issues about the integrity of 23 Horizon? 24 A. Perhaps because of false reliance on the tone from Dave 25 Smith, where I think Dave -- I mean, I would have had no 84 1 idea what consultancies had been involved when Horizon 2 was deployed but I think it would have been Dave that 3 raised with me that there was this report, this analysis 4 that Gartner did and, in hindsight, yeah, you can look 5 at it and say, "Well, what happened about looking at 6 Mr Coyne's" -- 7 Q. What was the approach taken at the time to Mr Coyne's 8 report? Did anyone investigate the concerns raised in 9 Mr Coyne's report? 10 A. Well, I presume, from the way that Dave, IT Dave Smith, 11 replied to me at the time, that he didn't -- he thought 12 that the approach to it and the conclusions were 13 inappropriate. I presume that he'd looked into what 14 Mr Coyne had said. 15 Q. Can we move forwards in time, please, and look, please, 16 at POL00326799, and start by looking at page 4, please. 17 This chain of emails -- sorry, if we can scroll down, 18 please -- sent by Andy Hayward, and if we scroll up, 19 please. Thank you, stop there. 20 In February 2010, from Andy Hayward to Mandy Talbot 21 and, amongst others, you -- can you see that -- 22 A. Yes, I can. 23 Q. -- with the subject heading "Challenges to Horizon", 24 yes? 25 A. Yes, yes. 85 1 Q. It says: 2 "Following our conference call today ..." 3 So it seems like at the end of February 2010 you had 4 a conference call about challenges to Horizon: 5 "... below is a brief summary of the agreed key 6 activities to progress next steps ..." 7 Yes? Can you see that? 8 A. Yes, I can. 9 Q. Then, if we scroll down to number 2: 10 "Information security (SL&DK) ..." 11 Do you know who that is a reference to: sue Lowther 12 perhaps? 13 A. I would imagine it's Sue Lowther and Dave King. 14 Q. Okay, Dave King, okay: 15 "... to conduct initial investigations and provide 16 terms of reference outlining remit and requirements to 17 carry out a full investigation, (resource, timescales 18 and any associated ancillary costs). (NB agreement by 19 all that with [Dave King] and our 'banking consultant', 20 we have far more expertise and knowledge than anyone 21 else likely to pus for this initial piece of work). 22 Then 3: 23 "Subject to the agreement of 2, conduct full 24 investigations into integrity issues, with conclusions/ 25 report to be provided. Once investigated and 86 1 conclusions drawn, gain external verification to give 2 a level of 'external gravitas' to the response to these 3 challenges. (Recommend Ernst & Young as the most 4 suitable partner to complete this ... [to be advised])." 5 Then if we scroll up, please: 6 "Can we make sure that Rob Wilson is kept appraised 7 ..." 8 Yes? Then scroll up a little further, please, just 9 to the first line of Mr Wilson's reply: 10 "If it is thought that there is a difficulty with 11 Horizon then clearly the action in the memo is not only 12 needed but it is imperative." 13 Can you help us, there's a reference there to 14 a conference call having taken place on that day, 15 26 February 2010. We haven't got a minute of it, and 16 this is the best evidence, I think, that we've got as to 17 what was discussed and what happened. Can you recall 18 joining a conference call about Horizon integrity issues 19 in February 2010? 20 A. No. I was involved in loads of conference calls. 21 There's some weeks I was back-to-back on conference 22 calls all week but, what they were, I'm sorry, you know, 23 you could ask me where I'd gone on holiday that year and 24 there is all sorts I can't remember from then. I can't 25 remember being on a call about challenges to Horizon 87 1 but, clearly, I'm cc'd on something I'm referring to it, 2 so I must have been, but I can't remember the -- 3 Q. Do you know what prompted a decision to conduct a "full 4 investigation" into Horizon integrity issues? 5 A. No. 6 Q. If we just go back down to look at what the agreed 7 actions were said to be. Keep going, please. There, 8 stop. 9 Under 2: 10 "Information security ... to conduct initial 11 investigations and provide terms of reference outlining 12 remit and requirements to carry out full investigation 13 ..." 14 So it was going to be, it seems, a pre-investigation 15 to settle the terms of reference and remit of a full 16 investigation, yes? 17 A. Yeah. 18 Q. 3, then "conduct full investigation into integrity 19 issues". Can you help us, what would have prompted 20 a decision to conduct a full investigation into 21 integrity issues? 22 A. Well, I don't know what prompted it. I can only assume 23 that, because of allegations being made in cases, that 24 it must have been a response to that. 25 Q. Was such a full investigation carried out? 88 1 A. I don't know. 2 Q. You would know if one was, wouldn't you? 3 A. Well, possibly. As I say, there are so many things that 4 were going on, so many reviews of different things, but 5 I can't remember one and I think the tone of what you 6 get further down from Rob Wilson seems to lead on to 7 kind of challenging the review. 8 Q. Yes, he says, "Plainly it's got to be done but", and 9 then he lists, I think, five buts, yes? 10 A. Yes, so I don't know -- I don't know if 11 an investigation -- 12 Q. You know very well that no investigation was carried out 13 and, instead, what happened was you were asked to report 14 and provide a one-sided view, weren't you? 15 A. Oh, no, so I was asked to -- I was asked to put the 16 reasons for assurance in a context where a new Managing 17 Director had heard allegations, and my recollection is 18 being asked to put together "Well, what's those other 19 reasons that -- why do management feel confident about 20 the system?" And that was a gathering of -- and it 21 wasn't an audit, it wasn't a testing of stuff. It was 22 gathering assertions of why -- what elements of the 23 training infrastructure, the call centre environment, 24 other things that are well documented in that report 25 were reasons that one might have confidence in the 89 1 system. That was what I was asked to put together and 2 what I did. 3 So you're probably right, there probably was no 4 review on the back of this one and maybe it -- you know, 5 further down the line when Dave came in and asked "I can 6 hear all this in the news, what's the other side of the 7 story?" 8 Q. You, according to this email chain, had been part of 9 a conference call -- 10 A. Yeah. 11 Q. -- the outcome of which was to set up a train of events 12 that would have led to a full investigation of Horizon's 13 integrity with external verification. Agreed? 14 A. Yeah, yeah. 15 Q. I'm asking you to help us: what happened to that 16 agreement? 17 A. I don't know. Sounds like nothing happened. 18 Q. Can you help us as to why? Was it Mr Wilson's 19 intervention? 20 A. I presume so. I don't know. 21 Q. Did you understand Mr Wilson's intervention? 22 A. Well, looking at it now -- 23 Q. If you scroll up to it, just to remind you. 24 A. Yes, let's see what was his intervention. Let's see it 25 again. 90 1 Q. Scroll up, thank you. So the first line is: 2 "If it's thought there's a difficulty then not only 3 is a full investigation needed but it's imperative." 4 Then he sets out what I've described as five buts. 5 A. Yeah. 6 Q. "The consequence will be that to commence or to continue 7 to proceed with any criminal proceedings will be 8 inappropriate." 9 That's But 1. You can read the rest of that 10 paragraph to yourself. 11 Paragraph 2: 12 "What is being suggested is that an internal 13 investigation is conducted. That will be disclosable as 14 undermining evidence on the defence in the cases 15 proceeding through the courts." 16 That's But 2: 17 "Inevitably the defence will argue that if we are 18 carrying out investigation, we do not have confidence in 19 Horizon and, therefore, to continue to prosecute will be 20 an abuse of process", But 3. 21 "Alternatively, we could be asked to stay the 22 proceedings", But 4. 23 "The potential impact is much wider for the Post 24 Office, in that every office in the country will be seen 25 to be operating a compromised system with untold damage 91 1 to the business", But 5. 2 Then scroll down, please: 3 "To continue prosecuting ... offenders knowing that 4 there is an ongoing investigation could also be 5 detrimental to the reputation of my team. If we were to 6 secure convictions in the knowledge that there was 7 an investigation, we would be open to criticism and 8 appeal to the Court of Appeal, who would be highly 9 critical of any prosecutor's decision to proceed in the 10 knowledge that there could be an issue with the 11 evidence." 12 Is it those five things that stopped an independent 13 investigation in its tracks? 14 A. I don't know. Probably. 15 Q. Well, you've been party to a decision to carry out 16 an investigation that was going to be independently 17 verified. You must have thought "Well, hold on, why 18 isn't this happening? This is quite a big piece of 19 work. Horizon integrity would be on the line. Are we 20 going to do it or not"? 21 A. I think we've got so much -- in hind -- I mean, this is 22 massive, this whole topic of Horizon, obviously, in the 23 context of this Inquiry and what happened to people, but 24 there were so many things that were going on in changes 25 within the organisation, that this would have been one 92 1 of many things leading to possibilities of reviews for 2 stuff. 3 My team and the Finance Service Centre, or Product 4 and Branch Accounting, as it was called, probably at the 5 time of this email, were constantly subject to reviews 6 of different things, and so a meeting suggesting 7 a review here, there would have been lots of meetings 8 about lots of different reviews that were going on and, 9 sadly, in the context of all of those different reviews 10 going on, not everything went ahead. My team was 11 relentlessly subject to reviews, ahead of 12 pre-privatisation, ahead of efficiency reviews, 13 continual headcount reduction targets, just relentless 14 reviews that were going on in my team. 15 MR BEER: Sir, that's an hour or so gone. Can we take the 16 second break until 12.20, please? 17 SIR WYN WILLIAMS: Yes. 18 MR BEER: Thank you. 19 (12.09 pm) 20 (A short break) 21 (12.20 pm) 22 MR BEER: Thank you, sir, good afternoon. 23 In my excitement, Mr Ismay, I went too fast through 24 some of the Cleveleys material. Can we just go back 25 a little bit and look at a few more documents on that. 93 1 I've asked you so far about how you responded to the 2 Jason Coyne report -- 3 A. Right, yes. 4 Q. -- and the assurance you took from Post Office's own IT? 5 A. Yes. 6 Q. Can we look at some documents at the time, please. 7 POL00158511. We can see from the top of the page there 8 that this is a chain of emails which was eventually sent 9 to you in July 2004, yes? 10 A. Yes. 11 Q. If we look at the foot of the page, please. We can see 12 an email from Carol King to Jim Cruise, who was the 13 lawyer in the case, acting on behalf of the Post Office, 14 and she says: 15 "I have read the notes and spoken to Jennifer Robson 16 about this case and wonder if you could clarify 17 something for us please? If we were to settle (and we 18 are not stating at this point that we will) could we ask 19 for this to be without prejudice and settle without 20 admitting that Horizon was at fault. There have been 21 a number of postmasters who have not been able to use 22 the equipment though trained fully at the time of 23 installation and it has frequently been used as 24 an excuse for errors. We would not want this case to 25 set a precedent for similar cases in the future." 94 1 Carol King, was she part of your department at that 2 time? 3 A. Not at that time. When I took over the Product and 4 Branch Accounting team, I don't know, it was couple of 5 years after that, she was part of my team then but not 6 in 2004. I think I was managing the Branch Audit Team 7 then and Carol wasn't part of that team. 8 Q. If we scroll up, we see at the top to of the page that 9 this email chain was sent to you, she says: 10 "Rod 11 "As before. 12 "Cheers 13 "Carol." 14 A. Yeah. 15 Q. It appears that Carol King asked was asked by you to 16 send her this correspondence, wasn't she? 17 A. Yeah, looks like it, yeah. 18 Q. That, late July 2004, was at the time that a settlement 19 was taking place, wasn't it, of the Cleveleys case? 20 A. It looks like settlement was going on. Well, no, the 21 settlement correspondence is March, in this email, so 22 that thing to me is three months later. I don't know 23 when the settlement was going on but that email was four 24 months later. 25 Q. If we go back down the page, the part about 95 1 subpostmasters not having been able to use the 2 equipment, despite being fully trained and using that as 3 an excuse for errors and not wanting the Cleveleys case 4 to set a precedent for similar cases in the future, was 5 that a concern of yours? 6 A. Well, I don't know. I think -- I expect that me 7 corresponding with Carol would have come about for the 8 same reasons as me looking at press cuttings and saying 9 to Dave "What's going on with these allegations here", 10 and, similarly, I probably said to Carol, because we 11 were -- well, she didn't report to me, we were based in 12 the same building, I probably said, "Well, I'm new, what 13 was this case? What was Cleveleys? Or what is 14 Cleveleys?" 15 Q. But weren't you involved, in July 2004, with taking the 16 lead in getting a settlement agreed within the Post 17 Office? 18 A. I don't know, was I? 19 Q. I'm finding out at the moment why these questions were 20 being asked in March 2004 about a concern that 21 settlement of the case might set a precedent. Was that 22 something you were concerned about? 23 A. I don't know. I don't know whether I was but I can see 24 from other correspondence that's related to this in the 25 packs that I've had, that there was a concern that 96 1 there'd been a lack of document retention and, if I'm 2 referring to the right case, such that Post Office 3 couldn't respond to something because there was no 4 documentation going back, and it looks like it led to 5 a request to Fujitsu to retain documentation for longer. 6 So me looking at it, it looks to me like, yeah, Post 7 Office weren't wanting to set a precedent but, because 8 there was a case where they'd got no documentation to 9 refer to, to support the case they were making, not that 10 they were confirming there had been a problem with the 11 system. They just couldn't get the old documentation 12 back. 13 Q. If we go to the top of the page and just remember the 14 date -- 15 A. Yeah. 16 Q. -- 26 July at 5.09. 17 A. Yeah. 18 Q. Can we look, please, at POL00142503. Can we see the 19 same date, 26 July -- 20 A. Yeah. 21 Q. -- about half an hour later, yes -- 22 A. Yeah. 23 Q. -- 5.48 pm? An email from you, and just help us with 24 who all of the people are on the distribution list? 25 A. So the "To" list, so I think Donna Parker was the PA, 97 1 I think, to Dave Miller. 2 Q. He was a director? 3 A. So David Miller was Chief Operating Officer, I think, he 4 was a director. I think Donna was his PA. 5 Q. Yes. 6 A. Mandy, you know, in Legal; Tony, Head of Security; and 7 Carol managing a team -- 8 Q. We've discussed? 9 A. Yeah. 10 Q. The subject is the Cleveleys case? 11 A. Yeah. 12 Q. You say: 13 "Donna -- as discussed here is the correspondence re 14 the legal case. 15 "The first arrow below contains a note from Group 16 Legal today ... This is counsel's opinion. 17 "The other arrow sections below contain some more 18 background from Carol King ... 19 "In summary we suspended Mrs Wolstenholme. We 20 claimed for the value of these losses ... she 21 counterclaimed ... Within her claim was an 'experts 22 opinion' which was unfavourable concerning Horizon and 23 Fujitsu. 24 "We have lodged £25,000 in court but she has no 25 legal representation and is pursuing the full amount. 98 1 Goes to court next month. 2 "Mandy -- Peter Corbett is on holiday. I am now 3 escalating it to Dave Miller ... 4 2tony, please can you advise who is leading ... 5 "Carol, thanks for your correspondence ..." 6 I think that's the correspondence we just looked at: 7 "... please do not circulate this any further than 8 is necessary than to support Dave and Group Legal with 9 the case." 10 You were taking a coordinating role here, weren't 11 you? 12 A. Well, I think the email that's off the bottom of the 13 screen refers to the Finance Director not being there, 14 and what I've said earlier was I think I was forwarding 15 this to the Chief Operating Officer in the absence of 16 the Finance Director. Probably, if this was indeed 17 about a decision about making a settlement, I'd expect 18 that would have been something of the gravitas of going 19 up to an authority that would have been at a director 20 level to approve -- 21 Q. Where was the authority to settle level? 22 A. Well, I don't know but I would expect that something of 23 this significance -- and I've seen in some other 24 correspondence reference to -- which I can't remember 25 what the settlement amount was but I've seen some other 99 1 correspondence that says that it was over 100,000, and 2 I'm sure that would have been something that would have 3 been requiring a director to sign that off. I don't 4 know what the delegated authority levels were but 5 I think it would have required that. 6 Q. Again, why were you taking a coordinating or central 7 role here in this case? 8 A. Well, I think this came to me because the Finance 9 Director wasn't there. 10 Q. You say at the end: 11 "... do not circulate this any further than is 12 necessary to support Dave and Group Legal ..." 13 Why was that? 14 A. Well, I don't know why I've said that in there. I think 15 probably there's a sensitivity to names and not wanting 16 wider audiences to be aware of, you know -- take even 17 Mrs Wolstenholme's position in there. I doubt we'd have 18 been wanting to have a name of somebody in wide 19 circulation around the organisation in respect to them. 20 Q. Is this effectively you seeking authority for 21 settlement? 22 A. No, I think I'm escalating it up -- I wouldn't -- 23 I didn't have a budget. I managed the -- I think, at 24 that time, I was managing the branch Audit Team, so my 25 budget would have been the payroll costs of the branch 100 1 Audit Team, and the costs of running its database. 2 I wouldn't have had a budget and be responsible for the 3 settlement they'd made in a case. So I'd be escalating 4 this to somebody who would be the budget holder for such 5 a case. 6 Q. Mr Ismay, you appreciate that I'm investigating why your 7 footprint -- 8 A. Yeah, yeah. 9 Q. -- or your fingerprints are on a number of Horizon 10 integrity cases -- 11 A. Yes. 12 Q. -- across time? 13 A. Oh, yes, yeah. 14 Q. And I'm asking at the moment why are you here? Why are 15 you involved here? 16 A. Well, I think for the reasons that I've articulated 17 there. 18 Q. Okay, can we move to a different series of cases then 19 and look at POL00184236. Look at page 2, please. We're 20 in the following year. An email from Mandy Talbot to, 21 amongst other people, you -- can you see that -- 22 A. Yes, I can. 23 Q. -- under the heading "Challenge to Horizon" -- 24 A. Yeah. 25 Q. -- can you see that? 101 1 A. Yeah, I can see that, yes. 2 Q. Mrs Talbot summarises the facts of the Castleton case; 3 can you see that? 4 A. I can see this is about the Castleton case, yes. 5 Q. Then if we scroll down, a summary of Mr Bajaj's case; 6 can you see that? 7 A. Yes, I can see that. 8 Q. If we scroll on, please, some "Issues": 9 "In each case, the postmasters are challenging the 10 validity of data provided by Horizon and the cases 11 became litigious before that evidence could be properly 12 investigated." 13 Then under "Suggestions" -- do you see that? 14 A. Yes. 15 Q. If we scroll down, please, to number 5: 16 "Identify current numbers of [Post Office] or 17 Fujitsu staff who can provide statements in the two 18 current cases which (a) validate the system (b) explain 19 the Horizon process from end-to-end and (c) explain why 20 each and every point made by the Defendants is 21 irrelevant or can be explained." 22 Again, why were you involved at this stage? 23 A. So I think at this point, when I joined Post Office 24 I took over a team that included the Branch Audit Team, 25 for a brief period of time I'd also got the 102 1 Investigation Team with me, and I think at the time of 2 this case -- so I wasn't close to the detail of 3 particular cases but my understanding -- and I realise 4 this changes in light of what other attendees at this 5 hearing have said -- I understood, and it was shared 6 with me in the witness -- in the pack for the previous 7 hearing, that there was a branch in this correspondence 8 where the Auditors went in and the safe door was open, 9 the doors to the branch were open and a whole chain of 10 events which somebody has now said "That was a template, 11 I shouldn't have used that template for it". 12 But I was in a position where I'd got the 13 Investigations and Audit Team reporting to me, they were 14 saying they'd had reasons for going to a particular 15 branch, they'd had findings when they were at the branch 16 and then, suddenly, we were on the receiving end of 17 a counterclaim, when there was lots of evidence or 18 evidence that the Post Office believe was evidence of 19 there having been a loss in the branch. 20 Q. Mr Ismay, can I just try and cut through things and ask: 21 why were you being asked, through the distribution of 22 this email chain to you, to contribute to the 23 suggestions made by Mandy Talbot? 24 A. Possibly because Tony Utting reported to me at that 25 time, who is in that chain. So it would be quite common 103 1 that somebody would be cc'd -- if you were in a bit of 2 correspondence, your boss might be cc'd in it as well -- 3 Q. So a lawyer is raising two cases in which subpostmasters 4 have separately -- 5 A. Right. 6 Q. -- made accusations -- 7 A. Yeah. 8 Q. -- about the reliability of the Horizon system -- 9 A. Yeah, yeah. 10 Q. -- and she says "We need to identify people in Post 11 Office or Fujitsu who can explain why each and every 12 point they've made is irrelevant or can be explained". 13 A. Yes. 14 Q. Is that the approach that Post Office took, generally? 15 A. Well, I think -- 16 Q. If somebody raised a problem -- 17 A. Right, yeah. 18 Q. -- we need to explain why it's irrelevant or can be 19 explained away? 20 A. I'm not sure that that was the case but, clearly, I can 21 see in hindsight we didn't listen and I've said in my 22 statement there was a failure of listening to -- 23 Q. Failure of? 24 A. Organisationally, a failure of listening to the 25 allegations that were being made. 104 1 Q. Would you agree that the way that that's formulated in 2 paragraph 5 is particularly close minded or deaf? 3 A. That does look close minded but the -- but people in the 4 organisation, just like my conversation with Dave Smith, 5 had got a lot of misplaced -- perhaps misplaced 6 confidence, misplaced faith in Horizon, but lots of 7 things about the whole way it had been designed, rolled 8 out, tested, test environments, lots of stuff that would 9 have been reasons that made the organisation and 10 individuals in it more assured about the system. 11 Q. This formulation in paragraph 5, do you agree, 12 presupposes that the Horizon system had no issues or 13 bugs within it, doesn't it? 14 A. Well, it's looking for people who can provide statements 15 to validate the system. Well, yes, so, to -- so, in 16 point C -- I guess point C does say that, yes. Yeah. 17 Q. How did the Post Office, in fact, satisfy itself that 18 the system had no bugs in it and why each and every 19 point made by defendants was either irrelevant or could 20 be explained away? 21 A. I would think either because, if an allegation about the 22 system was quite clear, then maybe that could be 23 explained as not an issue for certain reasons. Often, 24 I think the response was, well, Horizon must be wrong, 25 and it wasn't pinpointing, well, what is it that's 105 1 wrong? So my involvement in awareness of cases was 2 often more about the high value cases, so we'd be 3 talking like six-digit cases that were going through, 4 and we'd have a belief that there were indicators of -- 5 suspicions that had caused Auditors to go out to 6 a branch, were often what were confessions at branches 7 when the Auditors went out there. 8 And, as I've said in my statement, I would talk to 9 subpostmasters and representatives of subpostmasters 10 a lot -- and I know there will be listeners who don't 11 believe what I'm about to say -- but I felt passionately 12 about subpostmasters and did a lot to try to make stuff 13 easy for subpostmasters to do their work. I was 14 absolutely passionate about it. And, as I've said in my 15 statement, I'd got people from the NFSP and other 16 multiple partners who were confident that they were 17 users of the system, their staff were users of the 18 system, and they weren't experiencing the issues that -- 19 they weren't experiencing the issues that were being 20 raised or feeling that there were issues to be raised. 21 So this may be wrong and this, just like I could 22 have had misplaced confidence in what Mr Smith was 23 saying to me, but when you've got representatives, trade 24 union representatives of subpostmasters and individual 25 subpostmasters saying, "I don't have a problem with the 106 1 system, it works fine for me", that, possibly wrongly, 2 amplified itself to lead to a view that, well, the 3 majority of cases where there's an allegation about the 4 system -- it can't be right, you know -- 5 Q. Is the truth of the matter -- 6 A. I can see that's wrong but there was that amplification 7 of lots of people saying, "The system works for me", 8 many, many. 9 Q. Is the truth of the matter revealed by the sentence two 10 paragraphs above, "Suggestions", where Ms Talbot says: 11 "If the challenge is not met, the ability of Post 12 Office to rely on Horizon for data will be compromised 13 and the future prosperity of the network compromised." 14 That's an irrelevant consideration, isn't it, in 15 whether or not we investigate fairly and impartially 16 whether there is substance in the complaints made? 17 A. Yeah -- 18 Q. Do you agree? 19 A. A case should be looking at the individual in the case 20 and hearing what's going on in there. That should be 21 separate to the specifics of that case. Commercially, 22 the fact is an organisation would be concerned about 23 that but that should have been kind of separate to the 24 case, yeah. 25 Q. Bringing that into account is the tail wagging the dog, 107 1 isn't it? 2 A. Well, it does look like that, yeah. 3 Q. Can we see what was done about this and look at 4 POL00142539, remembering we were just then at the end of 5 November, 23 November 2005; we're now in the early part 6 of December 2005. 7 A. Okay. 8 Q. This is a record of a meeting in Coton House in Rugby; 9 can you see that? 10 A. Yes, I can. Yeah. 11 Q. Or it's an agenda for such a meeting. 12 A. Right. 13 Q. Can you see, second down, Marie Cockett? 14 A. Yes. 15 Q. Did she report to you? 16 A. She didn't at that time. When I took over Product and 17 Branch Accounting, which I think was the following year, 18 she was a report to me then but I think I took over 19 Product and Branch Accounting in March or April or June 20 2006, I think. So she wasn't -- so I don't think she 21 was a report to me then because I didn't have P&BA then. 22 Q. Graham Ward reported to Tony Utting, didn't he? 23 A. Yes. I think so, yes. Yeah. 24 Q. Can you see the purpose of the meeting is set out under 25 "Background", under the heading "Horizon Integrity"? 108 1 A. Yes. 2 Q. "There have been several recent cases where 3 subpostmasters have cited errors in the Horizon system 4 as explanations for discrepancies in their accounts -- 5 either as part of a challenge against the termination of 6 their contract or challenging the right to recover error 7 notices/transaction corrections from their remuneration. 8 "Recently, a letter was published in The 9 SubPostmaster asking readers to send in details of 10 incidents where they believe Horizon caused errors in 11 their accounts. Lawyers acting on behalf of 12 a subpostmaster currently in dispute with the Post 13 Office have written stating they are contemplating 14 a joint action on behalf of number of current and former 15 subpostmasters. This would challenge the accounting 16 integrity of the Horizon system and Post Office's right 17 to make transaction corrections and recover resulting 18 debts based on Horizon data. 19 "In one past case (Cleveleys) Post Office settled 20 out of court following an adverse report on Horizon's 21 potential to cause errors from an expert appointed by 22 the court. Fujitsu [said] that the report was not well 23 founded, but Post Office and Fujitsu were not able to 24 persuade the expert to change it." 25 Then if we go down, please, "Meeting purpose": 109 1 "To review the above issues and recommend ... 2 "1. Who manages dealings with subpostmasters and 3 their lawyers relating to actual or potential civil 4 cases? What processes are required to identify as early 5 as possible those cases that [have] a Horizon aspect? 6 Who needs to be involved, and how they will be 7 coordinated? 8 "2. Are new processes required with Fujitsu to 9 obtain data, analysis, reports or witness statements for 10 civil cases? 11 "3. Is there a need for an independent expert to be 12 appointed in advance who could on request provide 13 evidence to the court in such cases? If so what exactly 14 would the expert's role be, what qualifications and 15 qualities are needed, how would we go about appointing 16 one? What preliminary work would be required to get the 17 expert 'up to speed'? 18 "4. Who will act as client briefing external 19 lawyers ..." 20 Then over the page: 21 "5. What are the budget implications ..." 22 Would you agree that, on the face of this, that's 23 a rather open minded and fair approach to the issue of 24 how do we respond to complaints about Horizon and its 25 integrity that we are now facing? 110 1 A. Well, it looks like it wants to look at that. I'm 2 surprised that some of the roles aren't clear, though, 3 where it says who leads on particular things, because 4 I would have thought that was clear. 5 Q. But it's asking a series of sensible questions, isn't 6 it? 7 A. Go back up to it. 8 Q. Yes, please. Bottom of page 3, please. 9 A. Thank you. Yes, yeah, yeah. 10 Q. It's saying, "What information do we need from Fujitsu?" 11 A. Yes. 12 Q. "What data, what analysis, what reports? What witness 13 statements are required?" It's talking about 14 an independent expert. 15 A. Yes. 16 Q. So it's not the close-minded approach that we saw 17 previously, is it? 18 A. No. No. 19 Q. Were any of the people on page 1 required to report back 20 to you? If we just go back to page 1, please, at the 21 top. 22 A. I don't know if people were required to report back to 23 me. 24 Q. Would you expect any of them to report back on a meeting 25 like this to you, given your involvement, in particular, 111 1 in Cleveleys and the Castleton case? 2 A. Well, I think my involvement in those was not as a prime 3 lead on those cases. So Cleveleys, I've said I have 4 seen press cuttings that led me to ask questions to Dave 5 about IT systems, and so what was this case that was 6 raising these things, and what do you think about the IT 7 expert's opinion that's come back on that? 8 So, yes, I did ask about that case and the other 9 case, but that was two cases and there were lots of 10 cases that were going on and I was doing it lots of 11 other things. So this is significant, the Horizon 12 integrity, but Horizon integrity was a matter for the IT 13 Team to make sure that the system was robust. So there 14 would be representatives who might have been in teams 15 that I would manage who would go to meetings now and 16 again, again, as subject matter experts to contribute to 17 something, but it wouldn't necessarily mean that the 18 line manager needed to get a report of every meeting 19 that everybody went to. 20 So, in the big context of where we are today, yes, 21 it looks like something that should have been reported 22 to me at the time. With lots of people going to lots of 23 meetings, it wasn't the case that one would expect 24 everybody to report back to their line manager about 25 there they'd been to. So in the context of where we 112 1 were back then, I'm not sure whether it would have been 2 something that should have been reported back to me. 3 Q. Can we look at the minutes of the meeting, please. 4 POL00119895. We can see the attendees that in fact went 5 to the meeting. 6 A. Right, yeah, right. 7 Q. Were any of those in your team? 8 A. Well, as I say, at some point, which I think was later 9 than this, Marie became part of -- or I took over the 10 team that included Marie. I think possibly Alvin was 11 probably part of my team at that time, I think. 12 Q. Thank you. Can we go to page 4, please. I'm not going 13 to read all of the minutes, apart from paragraph 4: 14 "Appointing an external expert is likely to give the 15 best results in court. The expert will need to be able 16 to testify both on overall status of Horizon and related 17 systems and on the analysis of data relating to 18 individual cases ... may be needed for the Castleton 19 case after 7 February. Therefore discussions with 20 Fujitsu should be initiated on the role, terms of 21 reference and access to Fujitsu staff and information 22 for such expert advice should be obtained from Peter 23 Corbett on the desirability of using our external 24 auditors to provide such an expert, even though such 25 a person may be seen as less independent by a court." 113 1 Then "Specific Actions", can you see number 5: 2 "KB ..." 3 I think that's Keith Baines, yes? 4 A. Um -- 5 Q. "... to discuss the need for and [terms of reference] of 6 an external report with Fujitsu." 7 A. Right. Yeah. 8 Q. Was the result of this meeting fed back to you -- 9 A. I don't know. 10 Q. -- ie -- 11 A. I think there's another bit of correspondence that does 12 suggest it was but I'm not sure. I've got so many 13 documents in my head, I'm not sure. 14 Q. In any event, in late 2005, were you aware of a decision 15 having been taken that the appointment of an expert who 16 was external to Post Office and Fujitsu, who was 17 independent, was likely to give the best results in 18 court and should, therefore, be commissioned? 19 A. I don't know. I can't remember that. But I wouldn't 20 dispute that, that an independent expert would be 21 an appropriate thing to carry gravitas and independence 22 in a court case. Whether I knew that at the time, I'm 23 sorry, I've got so many documents and so many things in 24 my mind, I'm not sure whether I did or I didn't, but it 25 would make sense. 114 1 Q. Yes, apologies for the number of documents. In the 2 Inquiry, we like to give people full disclosure. 3 A. Yeah. 4 Q. When he gave evidence, Mr Utting said that "Mr Ismay 5 [you] should have approached Peter Corbett, the Finance 6 Director, on where to go with this list of actions". So 7 we asked him -- 8 A. Right. 9 Q. -- "Who should have made these actions happen?", and he 10 said you. Is that right? 11 A. Well, I wasn't at the meeting. I didn't manage most of 12 the people, so no. 13 Q. Why would he think it was you who had responsibility on 14 where to go with these actions? Who should make them 15 happen? 16 A. Well, I don't know. I could only imagine that, because 17 I reported to the Finance Director, Peter, who's named 18 earlier, that perhaps he thought I'd be best able to 19 explain these to Peter. But I wasn't in that meeting 20 itself, and I don't know why it didn't just go from 21 whoever led that meeting to Peter. I don't know. 22 Q. His evidence to the Inquiry was that it was up to you to 23 make the actions from this December 2005 meeting happen, 24 in particular in relation to the obtaining of an expert 25 report. 115 1 A. Well, I genuinely can't remember that. 2 Q. Did you do anything to take any of these actions, and, 3 in particular, the obtaining of an expert independent 4 report about Horizon, forwards? 5 A. I can't remember doing like that but it looks like -- 6 well, no. I mean, Gareth is not an independent expert, 7 is he, so no. 8 Q. Do you bury the actions in order to avoid Horizon coming 9 under scrutiny? 10 A. No. 11 Q. Why wasn't this one taken forwards? 12 A. I don't know. I can only say like I've said before, 13 that there were so many, many things going on. 14 Q. Were you concerned that an external report might 15 actually uncover problems with Horizon -- 16 A. No, I don't think so. 17 Q. -- that the Horizon edifice might start to crumble? 18 A. No, I don't think so and I think, if there was doubt 19 about the system, then it would be right to have had 20 somebody independent to look at it, so -- 21 Q. So why wasn't somebody independent asked to look at it? 22 A. I don't know. But I don't think that I -- I evidently 23 didn't take these things forward but I'm not sure that 24 I should have been -- that I was the person who should 25 be. This was a thing about Horizon system, there were 116 1 IT representatives who were on that list of attendees, 2 presumably somebody at IT had convened the thing in the 3 first place. I don't know why they didn't take that 4 forward and I don't know why Tony said it was for me, 5 who wasn't at this meeting, to be the one to take 6 forward actions arising from a meeting that I wasn't at. 7 Q. You did report to Peter Corbett, didn't you? 8 A. Yes, I did. I reported to Peter Corbett. 9 Q. He's right that, if you were to approach anyone for 10 authority, it would be Peter Corbett, the Finance 11 Director, wouldn't it? 12 A. If I was approaching somebody, I would approach Peter 13 but I don't know why it's thought that I should be the 14 person who was taking this forward. 15 Q. Thank you. That can come down. 16 At the same time that this was going on, the 17 Castleton litigation was rumbling on, wasn't it? 18 A. That was in '05 or '06. 19 Q. Yes. 20 A. Right. 21 Q. Across this period. 22 A. Right. 23 Q. Now, you've already answered quite a lot of questions 24 about the Castleton case and, in particular, I think on 25 the last occasion, I asked you about an email from Mandy 117 1 Talbot, POL00113909. If we scroll down, please, and 2 keep scrolling. So we can see there that's the end of 3 her email, I think, dated 9 December 2006. If we go 4 back to the first page of the email. I'm afraid it's in 5 a hard copy. If we go down, please. 6 Thanks. 9 -- did I say December? I meant November. 7 2006. Can you see you're copied in there? 8 A. Yes, I can, yeah. 9 Q. Yes. She says she's received some very good news about 10 the case? 11 A. Yeah. 12 Q. Yes? 13 A. Yes. 14 Q. I asked you about this last time but, if we can just 15 remind ourselves of my questions and your answers, and 16 the point we're going to come to in a moment is we 17 didn't have your reply last time to this email; we now 18 do. 19 Can we have a look, please, at INQ00001064, page 10, 20 please. You will see that I'm quoting on the left-hand 21 side page, page 37 on the internal pagination, line 18, 22 from this email: 23 "That last line, the last two lines of that 24 paragraph, "the benefit of having a judgment is that the 25 Post Office will be able to use this to demonstrate 118 1 things to the network and it will be of tremendous use 2 in convincing other postmasters to think twice about 3 their allegations ..." 4 Then I ask: 5 "... does that reflect your understanding of the 6 Post Office's approach to Mr Castleton's case in 7 general?" 8 You said: 9 "It doesn't reflect my recollection of it. However, 10 the language that's used in that, I would agree, is 11 similar to the language that's used in the thing that 12 you've shown me that's four or five years later and is 13 not pleasant." 14 A. Yes, yeah. 15 Q. You're cross-referring to the Misra "bandwagon" email 16 there and saying that the language used is not pleasant. 17 A. Right, okay. Right. 18 Q. I carry on: 19 "It's again suggesting that the result from 20 a [civil] case can be weaponised, isn't it?" 21 You say: 22 "Yes." 23 Q. I say: 24 "'Postmasters take note, look what happens to you if 25 you deign to take us on'. That was the feeling wasn't 119 1 it?" 2 Then you say: 3 "I don't recall that being the feeling but, clearly, 4 that is the -- that's a fair interpretation/description 5 of the sort of tone of those two lines that you've 6 referred to ..." 7 Then if we scroll on, please, and then again. Thank 8 you, I think that was the end of it. 9 Can we turn, please, to POL00158577. Can we look at 10 the foot of the page, please, and just scroll to a bit 11 of the next page, the Mandy Talbot email of the 12 9 November 2006, "I have received some very good news", 13 et cetera, okay? 14 A. Yes. 15 Q. It's the same email. If we go to the top of the first 16 page, you replied: 17 "Mandy -- I would also support your 18 recommendations -- your closing paragraph below captured 19 it very well." 20 You say: 21 "This should be a considerable addition to our 22 armoury in responding to the number of other cases that 23 may have been stirred up by Mr Castleton's letters into 24 the SubPostmaster Magazine seen. One letter tried to 25 get something like 'class actions'. He certainly had 120 1 other agents writing in reply to him and suggesting more 2 cases. Thanks, Rod." 3 So, firstly, you were an important voice in giving 4 Mandy Talbot instructions in the case, weren't you? 5 A. I wouldn't give Mandy instructions but I've fed back in 6 a way that I'm not proud of, looking it that reply, but 7 I would not be giving Mandy instructions. 8 Q. You say that you support her recommendations, don't you? 9 A. Well, there's a difference between supporting and 10 instructing somebody. So Mandy must have made 11 a proposal about something and I've agreed with it. 12 Q. You were an enthusiastic adopter of her advice that the 13 case should be weaponised to use against others, weren't 14 you? 15 A. I think we believed that, when there were shortages 16 found at audit, possibly wrongly, my belief, from what 17 Auditors were saying to me that they'd found, was that, 18 actually, there was a genuine theft of something. So -- 19 Q. When I suggested on the last occasion that Mrs Talbot 20 was seeking to use the result, weaponise it for other 21 subpostmasters and make them wary of taking the Post 22 Office on, I obviously had no idea that you would say 23 that it would be an addition to your armoury; that's how 24 you viewed it, didn't you? 25 A. Well, yeah, I mean, that's what I've said. Yeah. Yeah. 121 1 Q. Why did you view the Post Office as having an armoury to 2 be used against subpostmasters? 3 A. Well, I don't know why I've used that language there. 4 That's not pleasant language but I've said -- 5 Q. The last time you were criticising Mandy Talbot for 6 using unpleasant language and, far from you doing that 7 at the time, you gleefully adopted it, didn't you? 8 A. Well, clearly, I have in there and I can't -- I couldn't 9 remember having said -- but you've produced this email 10 and I did. So I'm sorry, I'm not proud of what's in 11 that email but I felt not proud of what you'd shown me 12 before of what other people were saying, and now, 13 evidently, I've said something similar. 14 Q. Were your answers, that I've just read to you, on the 15 last occasion truthful, where you suggested that 16 Mrs Talbot was being unpleasant and that you rather 17 disagreed with what she was suggesting? 18 A. Sorry, what do you mean there? 19 Q. Well, you said "Well, where Mandy Talbot is speaking 20 about using this case against other subpostmasters" -- 21 A. Right, right. 22 Q. -- "to put them off from taking us on, that was 23 unpleasant". 24 A. Yes, that sounded like that and I couldn't remember the 25 reply that I'd made here and, in light of the reply that 122 1 I've made here, now I can see that, which I couldn't 2 remember when we spoke before, and say, well, neither of 3 us said something very nice there. 4 Q. You wanted to use Mr Castleton's case as something to be 5 used to suppress complaints from other people who were 6 having trouble with Horizon, didn't you? 7 A. I understood in this case -- and I've hesitated to use 8 the complete narrative out of the witness statement that 9 was shared with me before -- but I understood in this 10 case that the safe doors were open, the office doors 11 were open and somebody came back in a state into the 12 office there, and that there'd been all sorts of audit 13 satisfaction that money had been stolen. So, in 14 hindsight, that may have been totally wrong and what's 15 been said by the person who had written that witness 16 statement suggests that it was not a reliable witness 17 statement to have been put. But that was the kind of 18 stuff that was influencing my perspective, where we'd 19 got this particular case in this item here. 20 And, I mean, you may not agree with me but that 21 context of Auditors went to a branch because things -- 22 there was some suspicion that led them to go there and 23 when they found all the doors open and the things that 24 were in that statement, that would reinforce, "Well, 25 probably there was a theft had happened", and so, 123 1 perhaps wrongly in the whole context of it, that was the 2 context of what was in my mind at the time and, because 3 Auditors would also say, "We've had confessions in one 4 of these visits but later on, months down the line, 5 somebody retracted a confession", that wrongly, perhaps, 6 was amplifying itself into my head to think, "Well, if 7 allegations are being made, it's a change of response 8 late in the day", and perhaps is an inappropriate 9 response, and I and others doubted the validity of those 10 allegations that were being made. 11 In hindsight, we should have been listening to them. 12 It was probably a wrong context but I and others in 13 management were operating on a context where Auditors 14 went to branches because there was some suspicion and 15 the statements that they were getting from them 16 reinforced that suspicion -- 17 Q. Who was responsible for signing off the expenditure of 18 very high levels of legal costs on civil litigation at 19 this time? 20 A. I don't know but I would expect that would have been up 21 to a legal director at Board level. 22 Q. There were costs that had been incurred of some £300,000 23 on the Post Office's side -- 24 A. Right. 25 Q. -- to seek to recover a debt of £25,000-odd. We've 124 1 heard previously from Alan Cook that it would have been 2 the Network Director -- he wrongly named Paula Vennells 3 as being the relevant Network Director at that time -- 4 is it right that it would be the Network Director that 5 would be responsible for signing off the expenditure of 6 legal costs, to your understanding? 7 A. Well, I don't know who was. I would have had expected 8 it would have been somebody in the legal line, who would 9 have been responsible for signing legal expenses with 10 something that was of big magnitude. They may well have 11 consulted other people but I would have expected 12 somebody at the legal line to sign off. 13 Q. Did the lawyers always have a client, ie a non-lawyer, 14 as somebody that gave them instructions? 15 A. I don't know. 16 Q. Were you ever that client? 17 A. No. I wasn't a client -- I wasn't giving lawyers 18 instructions. We debated instruction quite a lot in the 19 last hearing. My understanding is that the lawyers 20 would have been defining what was going on in taking 21 forward these cases, based on the evidence that had come 22 out of audits and been submitted to them, as to whether 23 it was right to take a case forward or not. 24 Q. Just as a point of information, if we scroll down, 25 please, we can see, at this is time, November 2006, that 125 1 Richard Parker was the acting Network Director. 2 A. Okay. Right. 3 Q. Would he be responsible, to your understanding, for 4 signing off the expenditure of large legal fees? 5 A. I'm sorry, I don't know. Again, I would have thought 6 that the Legal Team would have been responsible for 7 signing off large legal fees but I don't know whether 8 Richard would or not. I don't know. 9 MR BEER: Thank you. 10 Sir, it's 1.10 now, might we break until 2.00 pm, 11 please? 12 SIR WYN WILLIAMS: Where do we think we're going this 13 afternoon, Mr Beer? Because I want to be frank with 14 everyone: yesterday took it out of me and I have no 15 intention of sitting beyond our normal finishing time on 16 a Friday which is between 3.00 at 3.30. I just wanted 17 everybody to know that. 18 MR BEER: Sir, I've given that information to some of the 19 representatives who might want to ask questions already, 20 so they can calibrate their questions accordingly. 21 SIR WYN WILLIAMS: All right. Thank you. 22 (1.09 pm) 23 (The Short Adjournment) 24 (2.00 pm) 25 SIR WYN WILLIAMS: As I walked in, Mr Beer, there were 126 1 smiles in the room, which tends to suggest that people 2 might share my view that we have a truncated afternoon. 3 MR BEER: No, they were thinking about an entirely different 4 thing, sir! 5 Mr Ismay, can we begin, please, where we left off, 6 which is about delegated authority for the management of 7 legal claims and settlement authorities and incurment of 8 legal costs, by looking at POL00294897, please. 9 This is a freestanding minute of 14 October 2011 and 10 it's a request for delegated authority, as regards costs 11 of legal action, and it says, "We" -- the context of who 12 the "we" is isn't completely clear but it says: 13 "We request POL IC approval ..." 14 What would POL IC mean? 15 A. That would mean Post Office Limited's Investment 16 Committee. 17 Q. So who was on the Investment Committee? 18 A. I don't know who was on the Investment Committee but 19 I think it probably would have been the Finance 20 Director. I think there would have been a -- one of the 21 business partners in Finance, sort of a -- somebody who 22 would communicate and kind of challenge budget holders. 23 Q. I see. 24 A. Yeah, and some of the senior management. 25 Q. "We request [Post Office Investment Committee] approval 127 1 for delegated authority to [Kevin Gilliland] ..." 2 Very careful over the pronunciation there, 3 I understand I have mispronounced it before: 4 "... to approve the initiation of legal action and 5 subsequent legal costs in the defence of challenges made 6 by Shoosmiths. These challenges are on behalf of former 7 subpostmasters who have been dismissed for financial 8 irregularities and who have challenged the integrity of 9 the Horizon system in their defence. Post Office is at 10 an early stage of action. However, costs of defence for 11 the current 'Letters before action' are estimated at 12 [X], current upper estimate of costs, should more cases 13 proceed, is [X]." 14 Then "Background": 15 "Throughout the last 10 years, the Horizon 16 accounting system has been subject to a number of 17 unfounded criticisms in the national press. It has also 18 faced questions in the Houses of Parliament and 19 allegations in court by former subpostmasters and their 20 legal defence teams. Post Office has consistently won 21 its prosecutions, and presiding judges have made 22 statements which had been expected to deter further 23 baseless allegations, however the challenges continue to 24 be made." 25 Then under "Current situation", second paragraph: 128 1 "[Post Office] had around 20 cases which it wished 2 to take to court where the defence blamed Horizon. 3 [Post Office] is confident that Horizon is not at fault, 4 however, some of the predicted legal costs outweigh the 5 debts being pursued. [The Post Office] could not 6 economically justify individual cases but to abandon 7 such cases risked giving unwarranted credence to the 8 JFSA's allegations. 9 "The counterclaims have now brought these to a head. 10 Post Office Legal now has to defend onerous request from 11 Shoosmiths and consider its response." 12 Then underneath "Steering Group": 13 "[The Post Office] has now established a steering 14 group chaired by Rod Ismay and involving representatives 15 from legal, IT, Network and Security, with reference to 16 Press Office and other teams as considered necessary." 17 Over the page, please: 18 "The terms of reference [second paragraph] of the 19 group are as follows: 20 "To propose to the defined business decision makers 21 and subsequently manage, a coordinated litigation plan 22 to address existing challenges and deter future 23 challenges in the most pragmatic and efficient manner. 24 This group to review the status of the overall response 25 and be empowered to make decisions on tactical matters." 129 1 Were you chosen to chair this steering group? 2 A. It looks like it, yeah. 3 Q. Do you know why you were chosen to chair the steering 4 group to deter future challenges to Horizon? 5 A. Well, I think because I've seemed to have had 6 an involvement at various points and an understanding of 7 the whole chain of events, and there was quite a rapid 8 turnover of people in different departments and, for 9 better or worse, I seem to have been a person who's been 10 there through the whole chain of events, whereas most 11 other functions, staff left and joined quite rapidly and 12 that kind of corporate memory was lost in many 13 functions. 14 Q. Or was it because you, as we've seen in 2005/2006 and 15 again through your report in 2010, were regarded as 16 a pair of hands who would always defend Horizon on 17 behalf of the Post Office? 18 A. Well, no, I think I was a common person, as I've said, 19 because of that kind of common knowledge through the 20 whole thing. There's some other stuff that you've got 21 as documents that sort of challenge -- like, where it 22 said this person needs putting through his paces, there 23 were quite a few things that I had as feedback that 24 I wasn't a great chair of meetings and that I'd ramble 25 on and drone on about things. 130 1 So there were quite a few things, there's other 2 documents, that one would be quite surprised that I'd be 3 called to lead a group like this. 4 Q. Were you equipped to lead a steering committee to run 5 the strategy for litigation? 6 A. No. 7 Q. Did you run the steering group? 8 A. It looks like I was put forward and probably started 9 something here but I think I pretty quickly slipped out 10 of it and other people took this thing forward, as I've 11 seen from lots of other documents. I don't think that 12 I did this for very long. 13 Q. Do you remember what you did when you were the leader or 14 chairman of the steering group for litigation? 15 A. I can't remember specifically what I was doing in those 16 forums but I do know that when we had the -- what was it 17 called -- the letter of action that came in from 18 Shoosmiths, I think I was approached for 19 an understanding of what were the cases that were 20 involved in it because my team, where a case had gone 21 through and there may have been, rightly or wrongly, 22 whatever you call it, a debt that was being chased, 23 often my team would have got the more complete summary 24 of historic cases. 25 Whereas Legal were focused on cases that were live 131 1 and future, sometimes the history of what cases happened 2 a few years ago would come to my team because we've got 3 a record of former subpostmasters, and I think that 4 would have influenced me being invited to some of these 5 things because of that corporate knowledge that was more 6 complete in my team than some others teams. 7 Q. At this time, 2011, were you still maintaining the line 8 set out in your August 2010 Horizon report that 9 Horizon -- 10 A. I think -- 11 Q. -- integrity was robust -- 12 A. Yes, I think I was, yes. 13 Q. -- and its data could be relied on? 14 A. Yes, I think. 15 Q. So could we would move forward a year, please, to late 16 2013 and look at POL00146823, and look at the bottom of 17 the page, please, an email from Charles Colquhoun to you 18 of 15 November 2013, under the heading "Sparrow": 19 "Rod, 20 "Just had a meeting on Sparrow. We need a paper to 21 explain the accounting around Horizon at a high level. 22 One of the points I want to make is that Horizon has few 23 errors with clients -- does such a paper exist? If not 24 could one be produced next week? High level one." 25 Then up the page, you say on the same day: 132 1 "Hi. Am on BlackBerry. No [document] to hand today 2 but front page of exec [summary] of paper I did for Dave 3 Smith's ExCo still holds good ..." 4 So, stopping there, the "front page of executive 5 summary of paper I did for Dave Smith's ExCo", that's 6 a reference to your August 2010 report, isn't it? 7 A. Yes, I think it is, yes. 8 Q. You're saying in November 2013 that the paper, or the 9 executive summary of your Ismay Report of August 2010, 10 still holds good, aren't you? 11 A. Yes, I am. 12 Q. Do you think it was right to say, in the light of the 13 knowledge that you had by November '13, that what you 14 had written about the integrity of Horizon still holds 15 good? 16 A. In light of what we now know in hindsight, no, I wish 17 that I'd been able to write that and say, "But you 18 should note that there were these issues that we've now 19 become aware of", but I think with everything that was 20 going on at the time, I've given probably an 21 off-the-cuff response, and, yeah, I hesitate to keep 22 saying I forget things but, even couple of years 23 onwards, there are so many things going on you don't 24 remember everything that happened but, yes, you'd be 25 right to say it would be better if I had thought of 133 1 those other -- those issues that had arisen and it would 2 be better if this email, if I had put those in it but 3 I don't think I did think of them, and I clearly didn't 4 put them in there. 5 Q. Mr Ismay, you didn't need hindsight to say that. By 6 this time, you had gone through the Second Sight 7 process -- 8 A. Right, yes. 9 Q. -- and the two bugs that they identified had come to at 10 least your knowledge by then? 11 A. Yeah. 12 Q. You knew, through all of the documents we looked at this 13 morning, that what you had written about remote access 14 was unsupportable. Why were you still peddling the line 15 in your August 2010 report? 16 A. Well, because I'd just got so many things going on and 17 I would have kept referring back to that paper, I think. 18 When somebody comes up at short notice and says, "Ooh, 19 I need a paper about Horizon", my natural instinct would 20 be to think, "Oh, right, okay, yeah, I did one of those 21 a few years ago, I'll refer you to that". I'm sorry -- 22 Q. Did you knowingly regard that as your guiding star, your 23 report, knowing that, in fact, plenty of information had 24 emerged, to your knowledge, that directly undermined it? 25 A. Clearly, other things had arisen that did undermine it 134 1 but they weren't resonating in my mind to that level, 2 and that -- and I -- 3 Q. Why weren't they resonating? Sorry to speak over to 4 you. 5 A. No, I understand. Yeah, I'd just got so many things 6 that were going on, and I know that, in the context of 7 this individual huge matter that the Inquiry is looking 8 at, that sounds bad. But I just had so many, many 9 things that I was doing and this sort of email wanting 10 something immediately was a common thing on so many, 11 many topics, loads of people across the Post Office 12 loads of things, want, "Can I have this by today? Can 13 I have this by tomorrow?" 14 Q. Mr Ismay, you're answering my question as if, because of 15 the pressure of the moment, you wouldn't have realised 16 that things had emerged in the intervening two years 17 that undermined the conclusions of your report. Isn't 18 the better way to look at it that, over those two years, 19 you would have realised that things had emerged that 20 undermined the conclusions of your report? This wasn't 21 a snap decision to be made in replying on a BlackBerry, 22 was it? It was a drip, drip, drip over those two years 23 that meant you knew your report had been substantially 24 undermined, didn't you? 25 A. Those things did undermine my report but this is a small 135 1 number of emails out of hundreds of thousands -- or tens 2 of thousands of emails that I was getting and I was 3 being asked to respond to lots of stuff at short notice, 4 and, sadly, sometimes I didn't put all of the things 5 together that were in there and I did, sadly, kind of 6 constantly have that thing in my mind of, "Well, there 7 were all these reasons for assurance that were 8 articulated, and the, whatever you call it, 14 bug and 9 the 64 bug did get fixed", and so because technical 10 changes had been done to stop the recurrence of them, 11 sadly they probably went off my radar a bit thinking, 12 well, that's been sorted, when, in this context, we 13 should have been looking at it, even though they'd been 14 sorted, they weren't sorted at some point at time, and 15 so, in the kind of whole time frame, we should have 16 still been considering them. 17 But I think because I was very focused on 18 operational processes of today, how do you keep today's 19 operation going, I was often looking at, well, if 20 a problem has been convicted, what are we doing about 21 today's processes? And that focus on today's processes, 22 I think, was to the detriment of thinking about, 23 evidently, the disclosure of some things that were 24 happening in yesterday's processes. 25 I was absolutely, you know, required to be keeping 136 1 a focus on today's processes, where the Product and 2 Branch Accounting team was on a constant knife edge of 3 how could its -- the daily data processing of what came 4 out of the Horizon system that needed to be converted 5 into a format for clients was constant knife edge of the 6 time to process the files and get that sorted. So I was 7 always, and had to be, very focused on today and the 8 systems that work today. And, sadly, that was to the 9 detriment of issues that I did know about, about systems 10 earlier, but I was very focused on today's systems and 11 today's processing. 12 Q. Was it that you were proud of your report, and that you 13 continued to trade off it afterwards -- 14 A. No. No. 15 Q. -- or you thought your stock in the company had risen 16 because you had written a report -- 17 A. No -- 18 Q. -- defending Horizon? 19 A. No, I'd got lots of reports that I'd written. That 20 report I think I had probably moved on from. I do 21 accept that there's a thing where, in my annual 22 appraisal, I've referred -- and you've got it, I've 23 referred it to the Chairman saying, "Good report". That 24 had happened but I wasn't looking at this as my stock. 25 My stock, that I rated myself on and my team, was the 137 1 satisfaction that we were getting, a regular feedback 2 out of forums, such as with the NFSP and with multiple 3 partners, where those colleagues in the Network were 4 satisfied that the back office efficiency programme and 5 the way we were improving systems, whilst still going 6 through headcount reduction, how we were improving the 7 quality of service in today's service with that, so that 8 was what I rated myself on. 9 Q. Did you consider it a feather in your Post Office cap 10 that you were able to continually rebut Horizon claims? 11 A. No, I know I've referred to that in my -- in that annual 12 appraisal, but -- 13 Q. Let's wait for that question to arise. I'm asking: did 14 you consider it a feather in your Post Office cap that 15 you personally were able continually to rebut Horizon 16 claims? 17 A. I don't think I was responding to allegations from 18 subpostmasters. There was often articles that were 19 coming along and general questions, and I was able to 20 respond with "These are the reasons for assurance about 21 the system, these are the reasons that certain processes 22 and controls work". I was satisfied that I was 23 responding with those things, I wasn't taking 24 satisfaction from closing down an individual 25 subpostmaster's case. 138 1 Q. Can we look, please, at POL00296291. You'll see at the 2 top it's the "Pre Year End PDR", I think that means 3 performance development review -- is that right -- 4 A. That's correct, yeah. 5 Q. -- for you for 2012/2013, and this is written by you, 6 yes? 7 A. That's correct, yes. 8 Q. Just help us to try to date it, where it says, "Pre Year 9 End PDR"? 10 A. So I think the appraisal year in the Post Office was 11 like the financial year to March. So I would probably 12 have written something like this as a pre-year end 13 discussion but I'd have probably had a pre-year end 14 conversation with my boss and I would have submitted 15 that ahead of that conversation, so this would probably 16 have been done in February or March, of -- sorry -- 17 Q. February or March 2013? 18 A. Yes, I think so, yes. 19 Q. If we look, you say it's been a "good year" for you. 20 Then, "Highlights of my year", if we scroll down 21 a little bit, please, do you see three bullet points 22 from the bottom -- 23 A. Yes, I do, yeah. 24 Q. -- which is, I think, the thing that you knew I was 25 going to ask you about. 139 1 A. Yeah. 2 Q. "JFSA -- praise from Chairman for 'the Ismay Report' and 3 being able to continually rebut claims." 4 A. Yeah. 5 Q. Was the Chairman you were referring to at that time 6 Alice Perkins? 7 A. Yes. 8 Q. Was it she that praised you for your August 2010 Ismay 9 Report? 10 A. Yes, and what I've put in the statement -- 11 Q. When did she praise you for your August 2010 report? 12 A. I don't know, but if I've put it in my '12/'13 13 appraisal, it would have been some time between April 14 2012 and March 2013. 15 Q. What did Alice Perkins say to you? 16 A. So my recollection of what she's said in my statement 17 and I think that she said something like "Oh, you're the 18 author of the Ismay Report, a good report". I don't 19 remember her -- 20 Q. In what context did she say it? 21 A. So I think that I was being shown around a building, and 22 I think that we'd just moved from Old Street to 23 Moorgate. I think I'd come down and probably the 24 Finance Director was probably saying "Right, let's walk 25 you round the building so you can familiarise yourself 140 1 with the new place we're in", and one of the offices we 2 went to was where Alice was, and so I think that when we 3 walked in to her office, I would have been introduced, 4 "This is Rod Ismay", and, you know -- and I think that's 5 what she said in response to that. I don't think there 6 was anything more to it than that. 7 Q. The second part of the sentence is capable of two 8 interpretations. 9 A. Yeah. 10 Q. It could mean: (a) that a highlight of your year was 11 being able to continually rebut claims; or it could mean 12 (b) that the Chairman, Alice Perkins, praised you for 13 being able to continue to rebut claims? 14 A. Oh, right. Okay. 15 Q. Which is it? 16 A. I don't think I'd written it in a sense of that she was 17 praising me for rebutting them. I think I'd written it 18 in the sense of where I was responding to things like 19 press comments and being invited to list out reasons for 20 assurance. 21 Q. Why was it a highlight that you were able to continually 22 rebut claims? 23 A. Well, because I was being asked "Rod, what are the 24 reasons for assurance about the whole control 25 environment here?" So a positive for me that I was 141 1 continually able to, in plain English, describe what the 2 control environment was. 3 Q. So a matter of personal and professional pride that you 4 can bat claims against Horizon off? 5 A. That I was able to summarise control environments in 6 plain English that other people could understand. 7 Q. Was the answer to my question: yes, it was a matter of 8 personal and professional pride to you that you were 9 able to bat claims making allegations against Horizon 10 off? 11 A. No, it was a matter of pride to me and putting this into 12 it that I was able to describe a controlled environment 13 to give people assurance about it, which did lead to 14 rebutting allegations that were being made in the press, 15 or the organisation felt that it was rebutting those 16 allegations. 17 Q. You've, in your evidence just now, badged this up 18 about -- as relating to press claims? 19 A. Yes. 20 Q. Yes, you had been the leading member of the litigation 21 steering group, hadn't you? 22 A. Yeah, yeah. 23 Q. Is that not what you're referring to here? 24 A. I think I'm referring across the whole gamut. 25 Q. So including "I have been able to rebut legal claims 142 1 consistently -- continually"? 2 A. I've been able to continually explain a controlled 3 environment which would provide assurance for 4 whatever -- 5 Q. That's a different thing, Mr Ismay. That's -- 6 A. But that's what -- 7 Q. That's "I'm a technical person, and yet I have been 8 able, in plain English, to translate technical knowledge 9 into plain English". 10 A. Yeah. 11 Q. That's not what you're saying here. You're saying, 12 "It's a matter of pride to me that I've been able to 13 continually rebut claims", aren't you? 14 A. One shortens one's in things, so no doubt there could 15 have been a whole paragraph written for this but, in 16 a few words I've got for an executive summary, I've only 17 put a few words in, and you'll see this is one line out 18 of a three-page document where the majority of my time 19 was going on other things. What was I proud of in the 20 year? I was proud of the things that were higher up 21 that list in a rank order coming down it. 22 Q. The Ismay Report was prepared in just under two weeks, 23 I think we established last time. You were instructed 24 just before the 21 July 2010 and published to 25 an internal audience on 2 August 2010? 143 1 A. I was given a pretty short turnaround to do it. 2 Q. Did you receive feedback from other very senior people 3 in the company, short of the chairman herself? 4 A. So I think when I compiled and circulated that report to 5 the addressees on it, I think some of them replied to 6 say, "Thank you". I don't know -- 7 Q. Did you get any pats on the back "Well done, Rod"? 8 A. I don't know what the email said but I think they were 9 along the lines of thank you. I don't think they were 10 very long emails but there were some thanks came back 11 from some of that audience for sharing that report. 12 Q. We've seen this morning a series of occasions where 13 people have raised the question "Should we?", and the 14 answer came back "Yes, I think we should", get 15 an independent external report into Horizon? 16 A. Right, yeah. 17 Q. Was your report something that essentially put that 18 issue to bed? 19 A. I don't think my report would have put that to bed. 20 That would -- 21 Q. Were you asked by any member of the Post Office Board 22 for your own view on whether an independent 23 investigation into the reliability of Horizon should be 24 commissioned after your report? 25 A. I don't know. Maybe we've got correspondence about 144 1 people like Deloitte coming in and looking at something. 2 So I was clearly -- 3 Q. Did Mr Smith, for example, speak to you about whether it 4 was necessary to get an independent report after yours? 5 A. No, so I don't think that that Dave -- I don't think he 6 came to me and said, "After your report, Rod, we need to 7 do that", no I don't think so. 8 Q. He has told us there was no merit in commissioning 9 an independent expert or indeed a forensic accountant to 10 test the reliability of Horizon, because your report 11 adopted a clear-cut position on that, at that point? 12 A. Well, I didn't know that he'd said that but my report 13 was not an investigation. My report was a summary of 14 speaking to different people and different teams to say, 15 "Can you explain the control environment? Can you 16 explain training? Can you explain how call centres 17 works, so that I can kind of summarise what are the 18 things that influence our thinking to think we can rely 19 on this system". So I'd be surprised that somebody 20 would look at that and say, "Ooh, that's actually 21 an investigation of stuff", because it wasn't 22 an investigation; it was a summary of existing 23 understanding. 24 Q. So you'd be surprised if somebody looked at your 25 document and thought that it was a balanced and fair 145 1 representation of all of the evidence? 2 A. I imagine in the world that the Post Office was working 3 in, and people probably read things quite quickly and 4 thought, "Oh, that answers something", without thinking, 5 "Hold on, this isn't an independent audit that's been 6 done on this, that might not have gone through the 7 thought process", and it should have because it wasn't 8 an audit, it wasn't challenging whether things were true 9 or not. It was taking assertions from different teams 10 to put into a summary of these reasons in these 11 categories of things that give us confidence about the 12 system. 13 Q. Are you saying that people in the Post Office generally 14 read things too quickly? 15 A. I think some things probably were read too quickly. 16 Q. Why was that? Why did Post Office not contain some slow 17 and careful readers? 18 A. I think because the Post Office was challenged with the 19 number of things about the -- that its whole financial 20 solvency, the restructuring of its network, deployment 21 of an IT tower strategy to reinvent the whole model of 22 how technology worked across the whole organisation, pay 23 negotiations, constant strikes. 24 There was all sort of stuff, left, right and centre, 25 that was -- all of these things were really big, and so, 146 1 sadly, I think part of this whole chain of events was -- 2 and, you know, this will not be assuring and close 3 things for subpostmasters at all, but there were too 4 many things going on, too many massive things in the 5 organisation and, sadly, I think sometimes that would 6 have led to things not being read or scoped in 7 a particular way, that, in hindsight, one might say 8 "Well, I wish that had been done". 9 Q. Does it amount to this, that, on a number of occasions 10 from 2005 onwards, direct consideration was given to 11 obtaining an expert report that was independent of the 12 Post Office and, on every occasion that was raised, it 13 was rejected? 14 A. Well, it looks like it. It looks like there's been 15 several points, as you say, where consideration has been 16 given and a third-party report hasn't happened so -- 17 Q. Instead, your report was commissioned, which I think 18 you've accepted was limited and one sided? 19 A. It would be -- could be perceived and I think I said it 20 could be seen as having been one sided but that was in 21 the context of a new MD who was hearing things in the 22 press and said, "Right, I'm hearing these in the press, 23 how robust is Horizon? What are these other factors 24 that influence management to think in the way that 25 they're thinking?" 147 1 So, yes, it looks one sighted but the very context 2 of it was "I've heard the other side of it, please give 3 me that other side of it so a default" -- 4 Q. Then, between it being written over the following years, 5 a series of events occurred and information was revealed 6 to you which undermined its contents? 7 A. Yes, yeah. 8 Q. You didn't correct it -- 9 A. No, I -- 10 Q. -- but continued to hawk around its conclusions as if 11 they still held true? 12 A. Yes, I did and, with all the things going on, yes, 13 I did. Yeah. In hindsight, I might wish that I'd put 14 those R&P issues and others together but, in the heat of 15 the moment with things, no, I didn't. But I did still 16 take comfort from the controls that were narrated, they 17 weren't tested but the fact that we'd got all those 18 things around recruitment, around training, around call 19 centres, around escalation processes. All those things 20 did continue to make me think, "Well, there are lots of 21 routes for support and control to be in place". 22 Q. Last topic, please. When you gave evidence in Phase 3 23 last year, you gave evidence about the Seema Misra 24 "bandwagon" email; do you remember? 25 A. I remember us talking about -- 148 1 Q. Shall we look at the transcript. INQ00001064. If we 2 can look, please, at page 7, please, and internal 3 page 28, which is bottom right. If we scroll down -- 4 scroll up. 5 I was showing you the Seema Misra email exchange 6 from Jarnail Singh and read the last sentence of it: 7 "'It is to be hoped the case will set a marker to 8 dissuade others from jumping on the Horizon bashing 9 bandwagon'." 10 I put to you that that was a sentiment with which 11 you no doubt very much approved at the time and you 12 said: 13 "I'd been involved in collating that thing about the 14 reasons to be assured about Horizon. I would hope that 15 I wasn't using language like 'Horizon bashing'. I was 16 focused on reasons for integrity of the system and, 17 clearly, there's a number of things that have come out 18 that are contrary to the concept of integrity of it, for 19 language like 'Horizon bashing' isn't -- well, it's 20 unpleasant language to use again." 21 Yes? 22 A. Yeah. 23 Q. I think, at the time, we didn't have your reply to that 24 email but we do now. Can we look, please, at 25 POL00169170. Look at page 2, please. We can see 149 1 Jarnail Singh's email at the top of the page there, 2 second paragraph: 3 "It is hoped that the case will set a marker to 4 dissuade other defendants from jumping on the Horizon 5 bashing bandwagon." 6 Yes? 7 A. Yes, I can see that. 8 Q. Then page 1, foot of the page, David Smith -- that's the 9 David Smith that commissioned you to write the Ismay 10 Report, isn't it? 11 A. That's the Managing Director. 12 Q. MD David Smith? 13 A. Yeah. 14 Q. He forwards that on to you, even though you were 15 a recipient of it originally, but I think adds in Mike 16 Moores, who wasn't a recipient of it; Mike Young, who 17 wasn't a recipient of it; and Paula Vennells, who wasn't 18 a recipient of it, and says: 19 "Rod 20 "Brilliant news. Well done. Please pass on my 21 thanks to the team." 22 Then up the page, please. You, I think, send it 23 back, that chain, to all of the people who were included 24 on the original chain and add people in -- don't you -- 25 A. Yeah, it looks like it, yeah. 150 1 Q. -- and say: 2 "... please note Dave Smith's [Managing Director] 3 thanks to you all for your work on this important case. 4 "Dave and the [Executive Team] have been made aware 5 of the significance of these challenges and have been 6 supportive of the excellent work going on in so many 7 teams to justify the confidence that we have in Horizon 8 and in our supporting processes. 9 "This is an excellent result and a big thanks to 10 everyone." 11 So, far from thinking that the language that 12 Mr Singh had used was unpleasant, you jumped on the 13 bandwagon too, didn't you? 14 A. Well, I hadn't used the word "bandwagon" but 15 I forwarded -- as Dave Smith asked, forwarded the thanks 16 and I have referred to the significance and confidence 17 in Horizon, so I -- 18 Q. You've joined in the back slapping. 19 A. Yeah, I've -- yes, I've -- I have congratulated people 20 for their input to that, yeah, yeah. 21 Q. Was it the case that the Executive Team and the Managing 22 Director had been watching the Misra case very closely? 23 A. Well, it looks like it. I don't know how closely they 24 were watching it, but it looks like they were. 25 Q. You saw the Misra case, didn't you, as a vindication of 151 1 what you had concluded in your report, didn't you? 2 A. No, I think the two things -- you can link them but 3 I think they were separate. I didn't see the Misra case 4 as a justification of my report. I'd done my report 5 and, rightly or wrongly, I might have been kind of 6 assured that there were those reasons in there. The 7 Misra case was a separate thing to that. I wouldn't see 8 the Misra case as a justification of my report. 9 Q. You saw it, at the very least, as a case the outcome of 10 which justified the confidence that the Post Office had 11 in Horizon, didn't you? 12 A. Yeah, that's what I've said. The evidence that went 13 into it must have supported the organisation's 14 confidence in Horizon and Dave's asked me to forward 15 those thanks, and I have, to the wider audience who'd -- 16 who were in that email. 17 MR BEER: Mr Ismay, thank you very much once again for 18 answering my questions. 19 A. Okay. 20 MR BEER: Sir, the Core Participants have some questions. 21 I think, given the timing of them, it will be acceptable 22 just to sit through until we finish. 23 SIR WYN WILLIAMS: Right. Who is going first? 24 MR BEER: I think Mr Jacobs is first. 25 MR JACOBS: I think I'm first, sir. I'm not switched on ... 152 1 SIR WYN WILLIAMS: I hope you are, in both senses. 2 Questioned by MR JACOBS 3 MR JACOBS: Mr Ismay, I want to ask you about suspense 4 accounts. 5 A. Okay, right. 6 Q. You deal with that at paragraph 74 of your statement. 7 Can we just quickly put that up on screen. 8 WITN04630200, page 33 of 61, please. While we're 9 waiting for that to come up -- I'll read it. 74: 10 "Second Sight posed the question as to whether SPMs 11 may have paid for alleged shortfalls that became profits 12 in POL's or its clients' suspense accounts. I was 13 involved in compiling POL's responses to that question, 14 and POL00025783 included product examples, process 15 explanations and a rationale for why this was considered 16 not to be the case." 17 So if we can now go to that document, that's 18 POL00025783. You might be familiar with this document, 19 Mr Ismay. 20 A. I remember lots about suspense -- I don't know that 21 particular document but, yeah, it'll probably remind me 22 when I see it. 23 Q. It'll come up on the screen in a second. So here we 24 have it. 25 A. Yeah. 153 1 Q. I'll just go through the summary quickly, just so you 2 will be familiar -- 3 A. Yeah. 4 Q. -- with it. So reading through: 5 "Second Sight's principal concern is that credit 6 amounts in the Suspense Account are absorbed by Post 7 Office as profit rather than being returned to branches 8 to balance out losses in those branches." 9 That's what Second Sight are concerned with -- 10 A. Yes. 11 Q. -- and that's what you were addressing. 12 A. Yes. 13 Q. "Whether the cost of the unresolved discrepancy between 14 Post Office and a client (whether held, in the suspense 15 account or otherwise) falls on a branch is not 16 necessarily dependent on the position between Post 17 Office and its client but principally turns on the 18 actions of the branch in following, or not, the correct 19 branch accounting process." 20 So the discrepancy is down to whether the 21 subpostmaster or their assistants made an error is what 22 you're saying here, isn't it? 23 A. Yes, I'm saying there would have been some anomaly in 24 recording something, for example recording a deposit as 25 £20 when it was £10, or something like that. 154 1 Q. "As set out in the Post Office's previous paper, so long 2 as a subpostmaster submits the applicable evidence from 3 their branch records to show that there was no error on 4 their part (that they followed the correct branch 5 accounting processes), the Post Office will not charge 6 that branch (or will withdraw any related charge) 7 arising from a discrepancy even where a client maintains 8 that there is a discrepancy." 9 So here, what you're saying is that the 10 subpostmaster has to prove they didn't make a mistake in 11 order not to have to pay? 12 A. Well, I think the subpostmaster we would expect to 13 provide something because we wouldn't know what the 14 subpostmaster did. We would any see the record of what 15 the subpostmaster had recorded in Horizon. We would 16 your see the record of what paperwork got sent to the 17 check processing unit, for example. 18 Q. It's proving a negative, isn't it? 19 A. Try me again, sorry. 20 Q. They've got to show they didn't make a mistake in order 21 to get themselves out of trouble? 22 A. Yeah, yeah. 23 Q. Then, finally: 24 "Post Office's processes are therefore designed so 25 that subpostmasters are not disadvantaged by the 155 1 operation of its suspense accounts and, if operated 2 correctly, Post Office will not take into its own profit 3 money that should have been credited to branches." 4 So, if the subpostmaster doesn't make a mistake, 5 Post Office don't take the cash, effectively? 6 A. Yeah. 7 Q. Right. So now let's move on because this is really the 8 point I wanted to ask you about. If we go to page 3 in 9 the document, and there's a section that says, "Credits 10 to the suspense account", and you can see the 11 penultimate paragraph. If we could just highlight that 12 that begins "Credits in the suspense account that remain 13 unresolved". So: 14 "Credits in the suspense account that remain 15 unresolved for 3 years are moved to the Post Office 16 profit and loss and account. Effectively, Post Office 17 absorbs these credits as profit. The operation of 18 a suspense account in this way is standard practice for 19 most businesses." 20 This what is you wrote, isn't it? 21 A. Yes, it is, yes. 22 Q. Now, the point that our clients wanted me to put is that 23 it's never a profit, is it? Money that is held in 24 a suspense account cannot be a profit, can it? 25 A. The money in the suspense account, the examples that 156 1 I worked through, show that often a client would say 2 that they were owed a certain amount, the Post Office 3 records said a higher amount so, if the client said, "No 4 you don't owe us that amount of money", then we did take 5 those amounts to profit, but we would have -- in my 6 team, the Product and Branch Accounting team, I know 7 where people would look as many records as they could to 8 try to make calls to individual branches, to find out 9 was this something that should be corrected in 10 an individual branch, so there would have been a lot of 11 work that went on before something -- 12 Q. I accept that, but -- I accept that you say that but the 13 main point, the question that I'm asking you, is that 14 what's in the suspense account is money that might make 15 up for a genuine shortfall, so it would balance to zero 16 and then it wouldn't show as a positive, or it's money 17 that belongs to the subpostmaster, because that money 18 was never due because there was an error in the system. 19 Do you see what I'm saying? 20 A. Yeah, I do see what you're saying. I think there's 21 another "there" within that as well, that, if there that 22 been a shortfall at some point and a subpostmaster had 23 put money in to make a shortfall good and they shouldn't 24 and then something went the other way, then absolutely 25 the subpostmaster should get that money and because they 157 1 put money in but, often, I think these things were not 2 that way round and, actually, it's the customer's money 3 or the client's money. 4 So if, if a thing was keyed in the wrong way, then 5 there was not money that the subpostmaster should take 6 out of the till because, actually, it's the customers 7 that should have been credited to their bank account. 8 Q. I'm talking about subpostmasters money here, that's all 9 I'm talking about because the money that subpostmasters 10 paid in to the Post Office on account of Horizon 11 shortfalls, shortfalls that didn't exist, that were 12 illusory, that is their money that the Post Office 13 turned into profit and that is what so many 14 subpostmasters are so angry about, that Post Office took 15 their money. It's a serious matter, isn't it? 16 A. Oh, that's a serious matter but my understanding was 17 that we've looked at the 62 and the 14 branch issues and 18 I thought they were narrowed to those branches only, 19 where things arose in other branches and we could see 20 that Fujitsu confirmed it didn't relate to those 21 branches, then I think I've come back to our expectation 22 that this affected the customer or the client. 23 The money that's in the till in a post office, if 24 a subpostmaster has made a shortage good, then yes, 25 there's a situation that they shouldn't have had to make 158 1 that good and they should be entitled to money back. 2 But a lot of errors would arise where something hadn't 3 been a shortage in the first place and that money is 4 effectively money that, on trust, the subpostmaster has 5 got it in the till, where, actually, it's customer money 6 en route to a customer's bank account. It's not the 7 subpostmaster's money, it's not Post Office's money, 8 it's customers' money. 9 Q. I've got the point. Your wording is "The operation of 10 a suspense account in this way" which is it goes into 11 the profit and loss account after 3 years, "is standard 12 practice for most businesses". 13 A. Right. 14 Q. These were not, Mr Ismay, most businesses? 15 A. No, no. 16 Q. These were financially stricken people -- 17 A. Yeah. 18 Q. -- who were having to borrow, who were having to find 19 money that they were struggling to find, at the expense, 20 sometimes, of not being able to feed their families. 21 This was an overly rigid corporate approach and, 22 essentially, this took money from the postmasters and 23 ploughed it into Post Office's own profits. That was 24 what Second Sight and Sir Anthony Hooper wanted to find 25 out, isn't it? 159 1 A. That's what they were asking but we believed that the -- 2 there'd been a miskey, something like that, in a branch, 3 and we'd done everything we could to try to pin down 4 what was the branch -- so the examples I've given in 5 here reference to things where, say, cheque paid into -- 6 I'm sorry that I'm speaking too fast, I'll try to 7 slow down. 8 We did as much as we could but, if there was no 9 record of what the branch number was and, sometimes, the 10 cheque processing centre, IPSL, they sometimes raised 11 issues where they received, like, a blank envelope with 12 cheques in it and you've got no idea which the Post 13 Office was that had sent them, so -- 14 Q. Mr Ismay, I apologise, but we don't have much time. 15 I just want to take you, finally, because I think this 16 might help you with the answers you're giving -- 17 A. Okay, yeah, yeah thanks. 18 Q. -- to paragraph 79 and 80 of your statement. 19 A. Right. 20 Q. WITN04630200. Then I'll have couple of questions and 21 then I'm finished, okay? 22 A. Okay, yeah. 23 Q. Paragraph 79, please. So you're talking about this 24 process, page 36 of 61, 79. 25 "At the time, based on the general but perhaps 160 1 misplaced confidence in Horizon and its related 2 processes, and in light of the credits or write offs 3 agreed for the known issues disclosed to Second Sight 4 and referenced in their Interim Report, my recollection 5 is that neither nor POL believed that there were 6 illusory losses nor that SPMs were paying for alleged 7 shortfalls that generated profits for POL." 8 Moving down to 80, the last sentence: 9 "However, I would be less confident to say [what 10 you're saying] now, with hindsight, in light of the 11 increased concern about Horizon that has risen through 12 this Inquiry." 13 A. Yeah. 14 Q. My final questions for you are these: you predicated all 15 your responses to Second Sight on the assumption that 16 there could never be any illusory loss because you 17 needed to demonstrate that Horizon was robust because 18 that's what you said in your report in 2010. That's 19 what you did, isn't it? 20 A. I did, but we were -- we didn't believe there were 21 illusory losses because we thought the processes worked, 22 and I know there was the 62 and the 14 but we did 23 compensation to those branches to deal with that. So we 24 didn't think that it applied in other branches. 25 Q. Let me put this to you, then: you were asked to respond 161 1 to a legitimate concern and you provided a one-sided 2 view and what you were doing here is you were rebutting, 3 you were not investigating, because you predicated your 4 answers on the presumption that there could not be 5 illusory losses, which suited the Post Office position. 6 It wasn't a balanced response, was it, Mr Ismay? 7 A. It doesn't look a balanced response but we didn't 8 believe that there were illusory losses and, therefore, 9 the way of conducting it was to try to summarise some 10 individual product transactions and describe them with 11 a belief that there weren't illusory losses. I wasn't 12 doing it to rebut an allegation about Horizon; I was 13 doing to it to describe, if we look at Camelot, if we 14 look at ATMs, if we look at cheques, whatever it was, 15 the products that I've now related in the 406-page 16 suspense account document, I and my team, we didn't 17 believe that there were illusory losses. We just 18 didn't. 19 MR JACOBS: I haven't got any more questions for you but 20 thank you very much. 21 A. Okay, thank you. 22 Questioned by MS PATRICK 23 MS PATRICK: Good afternoon, Mr Ismay. My name is Angela 24 Patrick and I act with Mr Moloney KC and Hudgell 25 Solicitors for a number of subpostmasters who were 162 1 convicted and have since had their convictions quashed. 2 I want to be very quick. I want to ask you about 3 one document. It's POL00294931. If we can look midway 4 down the page, if we can scroll down a little to start 5 with, and stop around here, you see, that's an email 6 from Emily Springford, who we know is a lawyer who is in 7 the Royal Mail Group. 8 A. Okay, right. 9 Q. I think you've been saying this morning you're familiar 10 with the Inquiry, you've been following some of the 11 evidence. Is this is an advice you've seen before? 12 A. Well, it's in my pack, I think, this. 13 Q. Yeah. I'm going to try and take it quickly. I just 14 wanted to check if it was something you were familiar 15 with. If we scroll down a little way, we can see she's 16 advising on four letters of claim that had been received 17 from former subpostmasters, we've talked about them this 18 morning, the Shoosmiths claim of 2011. 19 A. Right, okay, yeah. 20 Q. This is 20 October 2011 and she starts talking about 21 document preservation. But if we can roll up a little 22 way, you see there she's saying: 23 "Please ensure this communication reaches everyone 24 in your department who has access to, or is in the 25 position to create, documents relating to the issues", 163 1 the issues being subpostmaster claims. 2 A. Yes. 3 Q. "... arising in these claims. I've started a list of 4 teams", and so on. 5 If we scroll up a little way, we see, again, she 6 deals with document creation. Sorry, down, into her 7 email a little further, please, over the page. If we go 8 down to "Document creation", so I can see the end of 9 those bullets, please. Thank you. You see here she is 10 dealing with document creation and she says: 11 "It is very important that we control the creation 12 of documents which relate to the above issues and which 13 might be potentially damaging to POL's defence to the 14 claims, as these may have to be disclosed if these 15 claims proceed to litigation. Your staff should 16 therefore think very carefully before committing to 17 writing anything relating to the above issues, which is 18 critical of our own processes or systems, including 19 emails, reports or briefing notes. We appreciate that 20 this will not always be practicable ..." 21 If we go to the bullets she gives some guidance on 22 what she thinks needs to be done to understand whether 23 or not a document might attract legal privilege. She 24 says: 25 "If the dominant purpose of the communication is not 164 1 to obtain legal advice, try to structure the document in 2 such a way that its dominant purpose can be said to be 3 evidence gathering for use in litigation; 4 "Mark every such communication 'legally privileged 5 and confidential'." 6 Then she goes on to give some more guidance. At the 7 end, she says: 8 "Where possible and appropriate, copy a member of 9 Legal Services into the communication, and make clear 10 that you are doing so to enable them to advise on the 11 content. Please note that copying a member of Legal 12 Services into the communication alone will not 13 necessarily suffice." 14 Then just to top it off, she says: 15 "If in doubt, call Legal Services before committing 16 anything to writing which relates to these issues and 17 contains critical wording." 18 She ends by giving some advice on particular 19 documents they want to be sourced and provided to the 20 Legal Team. 21 Now, if we scroll right back up to the top of the 22 document, beyond the top of Ms Springford's email and 23 stop there for a moment. Now, this advice that was 24 coming, Mr Ismay, from the Legal Team, on privilege in 25 connection with proposed civil proceedings on the 165 1 creation of documents which would be critical of Post 2 Office systems, you'd have treated it with some 3 significance, wouldn't you? 4 A. Yeah, yeah. 5 Q. You would have expected anybody else receiving it to 6 treat it seriously? 7 You're nodding. The transcriber likes you to say 8 "yes" or "no"? 9 A. Okay, yes. 10 Q. Yes. Ms Springford's advice there she's giving, it's 11 meant to be disseminated by those who read it who 12 receive it, trickled down and cascaded through the 13 business; is that right? 14 A. (The witness nodded) 15 Q. If we see there, her email isn't addressed to you, 16 you're not on the original list of recipients. 17 A. Yeah. 18 Q. But, in this document, we can see somehow you've 19 received it and you're forwarding it on. You're 20 cascading it, you're sending it to Mr David X Gray? 21 A. Yeah. 22 Q. Was he somebody in your team? 23 A. I think he was in the IT Team. 24 Q. Yes. So it was being cascaded through the business, 25 wasn't it? 166 1 A. Yeah, so I expect my boss is in the audience for it, 2 I imagine my boss has cascaded it to me. 3 Q. Okay, by this point, you knew that some subpostmasters 4 had been prosecuted by the Post Office on the basis of 5 Horizon data -- 6 A. Yeah. 7 Q. -- including some who were in the Shoosmiths group? 8 A. Yeah. 9 Q. Yeah. Did anybody ever, whether around the time of the 10 Springford advice or later, cascade down to you, and on 11 to your team, any advice, first, about Post Office's 12 continuing duties as a prosecutor? 13 A. I don't think about duties as a prosecutor, because 14 that's a matter for the Legal Team to be considering, so 15 I don't think that people would have approached my team 16 about matters of that -- 17 Q. Separately, did anybody cascade in the way that this 18 advice was, any advice to you on the relationship 19 between any duties the Post Office might have as 20 a prosecutor and their relationship between those duties 21 and this Springford advice on the care to be taken in 22 relation to documents critical of Post Office systems? 23 A. Well, I don't think so and I say that because my team 24 weren't, like, the prosecutor, we weren't Legal. So 25 I don't think it would have been relevant to us. 167 1 Q. Okay. Did you understand that Post Office had 2 continuing duties towards those that they had 3 prosecuted? 4 A. I think my understanding would have been that 5 a prosecution had been completed and that was it. I can 6 see now from all the correspondence that I've had, that 7 when one has become aware of something that should have 8 been disclosed, then you need to go back. But I think 9 at the time, that wouldn't have understood disclosure 10 like that. 11 MS PATRICK: Thank you very much, Mr Ismay. I have no 12 further questions for you. 13 Questioned by MS PAGE 14 MS PAGE: Mr Ismay. 15 A. Hello. 16 Q. Were you the Post Office's gatekeeper for the remote 17 access secret? 18 A. No. 19 Q. It was your team in Chesterfield that actually signed 20 off when Fujitsu sought approval for tampering remotely 21 with branch accounts, wasn't it? 22 A. We were one of the people approached in that three 23 options paper. 24 Q. No, I'm talking about when, routinely, Fujitsu would 25 tamper with branch accounts and seek Post Office 168 1 approval to do so. It was your team that gave that 2 approval, wasn't it? 3 A. No, I don't think so. 4 Q. Well -- 5 A. I don't think -- 6 Q. -- Mr Andrew Winn, when he gave evidence at this 7 Inquiry, admitted it. He said this: 8 "I could see myself being the voice that would give 9 Post Office Limited approval, yes." 10 That's what he said. 11 A. Well, we didn't think that we'd got -- we didn't think 12 that Fujitsu had got access to do that, then. 13 Q. Well, Mr Winn has admitted it. He wouldn't have taken 14 on that role without you knowing about it, would he? 15 A. Well, I don't think he did have that role. 16 Q. You may remember, Mr Ismay, the last time I asked you 17 questions, I asked you about the Lynn Hobbs email to you 18 and Mr Granville, which told you about the facility to 19 remotely tamper with accounts and I asked you why it had 20 only survived in the form of a cut and paste into 21 another email; do you remember that? 22 A. I don't remember your exact question but I'm aware that 23 thing doesn't have a date on it and I don't know why it 24 doesn't. I don't know why it's a cut and paste without 25 a date. 169 1 Q. Mr Ismay, you knew that that email had to be deleted, 2 didn't you? 3 A. No. 4 Q. Not only because it undermined your report, the Ismay 5 Report, but also, more importantly, because you 6 understood that it undermined the safety of all of those 7 past convictions. You knew that, didn't you? 8 A. No. 9 Q. So you tried to cover your tracks back in 2010, didn't 10 you? 11 A. No. 12 Q. The only email that you left to posterity was the one 13 that Mr Beer KC took you to this morning, in which you 14 tried to introduce conditionality, as you put it. 15 That's the only email you left for posterity, Mr Ismay. 16 A. No, it's not and you've, through Post Office, have got 17 access to all sorts of documents. I was very meticulous 18 in my file, in that I didn't delete stuff. 19 Q. That's the only one in which you admit your knowledge 20 remote access. 21 A. I didn't go round deleting my history of emails on this 22 topic. So no. 23 Q. Was that email that introduced conditionality another 24 mini whitewash, Mr Ismay, another attempt at 25 a whitewash? 170 1 A. No, the other thing wasn't an attempt at a whitewash and 2 this wasn't either. 3 Q. In 2011, you made a bit of a slip on this. You'll have 4 been given the documents about the 2011 Ernst & Young 5 audit and, of course, as a qualified accountant, you'll 6 understand about audits, won't you? 7 A. Yes, I do. 8 Q. Well, that 2011 audit made it clear that at Fujitsu 9 there was a failure to keep track of Horizon users and 10 those who could access different parts of the system, 11 yes? 12 A. There was a long management letter with those kind of 13 things in, yes. 14 Q. To put it simply, that was about remote access, 15 Mr Ismay; do you understand that? It was about the 16 controlled environment, as you would put it? 17 A. It was about the controlled environment but, having 18 looked at -- and I couldn't remember it until you sent 19 me that document to look at in the Rule 10 pack but I'm 20 not sure if that document in there actually talks about 21 remote access. 22 Q. It does not use those words -- 23 A. Does it say that in it? 24 Q. No, it does not use those words. This is what it says, 25 in the executive summary, in the main area for the 171 1 management to focus upon, the Post Office Management to 2 focus upon, it says this -- I won't take you to it 3 because it's short. 4 A. Okay. 5 Q. "This may lead to the processing of erroneous or 6 unauthorised transactions." 7 Do you understand the import of that sentence? 8 A. Yes, I do, yeah, yeah. 9 Q. All right, now I'm going to just take you to one 10 document, please. It's POL00295091 and if, when it 11 comes up we could scroll to the bottom half of page 1, 12 please. From Sarah Hall to you and a number of other 13 people: Chris Day, Mike Granville, Susan Crichton, Mike 14 Young, Lesley Sewell, and copied to David X Gray: 15 "RMG ARC paper draft re Horizon -- urgent for review 16 by [Thursday] midday." 17 What it says is: 18 "The RMG ARC requested a paper on the IT controls 19 and the Horizon claims. With input from various experts 20 this has now been drafted but it is clearly a sensitive 21 area so I attach the draft for your review and comments 22 before it goes to the group for circulation to the ARC." 23 She goes on to describe that the meeting is on 24 8 December, and she talks about their approach, the 25 history of the relationship with Fujitsu, what Horizon 172 1 does. 2 "... we in POL are satisfied with the controls 3 around it, then what we have done to improve the EY IT 4 controls audit and then finally the position on the 5 claims." 6 All right? So that's making it clear, isn't it, 7 that there's going to be a presentation, in effect, to 8 the ARC committee about these issues that have been 9 raised by the EY audit, yes? 10 A. Yes, looks like it, yeah. 11 Q. All right. Now if we scroll up to your reply, please. 12 Bearing in mind it's been acknowledged as 13 a sensitive area, hasn't it, and what you say is this in 14 your paragraph 1, you are basically commenting on the 15 slides that are going to be shown in the ARC committee 16 and you say this: 17 "Paragraph 1 -- to add a sentence along the 18 following lines 'The IT control issues identified during 19 the audit did not question the integrity of accounting 20 data in the system. Rather, they were recommendation 21 about the documentation and authorisation of changes to 22 the system and about opportunities for streamlined 23 assurance'." 24 Now this, and this is your slip, Mr Ismay: 25 "The rationale for this is that [the] purposes of 173 1 ongoing RMG Criminal Prosecution activity, Rob Wilson, 2 (RMG Head of Criminal Law) has advised that were that 3 not the case then current prosecutions would have to be 4 stayed. It is important to make clear EY did not 5 challenge the integrity of accounting data in the 6 system." 7 A. Yes, you'll see that, and I don't consider that to be 8 a slip. What I would say is that this refers to the 9 changes to systems, that EY weren't saying that the 10 accounting data didn't have integrity in it and so I was 11 then clarifying and forwarding something that Rob Wilson 12 had said before, so if it was the case that this wasn't 13 identifying errors in the data, we wouldn't want it to 14 look like it was identifying errors in the data because 15 it hadn't identified errors in the data, so it wasn't 16 a slip, it was a genuine forwarding and, for 17 completeness, of input from the lawyer on that, to 18 clarify that EY hadn't challenged the integrity of the 19 accounting and the data and wouldn't want somebody to 20 read this and think it was challenging the integrity of 21 the accounting data. So not a slip. 22 Q. You understood, Mr Ismay, and you were making it clear 23 to the others, that if there were inadequate controls 24 and audit data could not be guaranteed as an authentic 25 record of what had taken place in branch, that there 174 1 would be massive implications for past convictions. You 2 understood that, didn't you, and you were making that 3 clear in this email? 4 A. But in a context of the EY recommendations hadn't 5 identified errors in the data. So I was -- 6 Q. Yes, but let's just concentrate on what you understood 7 and what's happened here. Having understood that, 8 you've spoken to Rob Wilson, yes? 9 A. Um, no, I don't think I did -- 10 Q. You have had spoken to -- 11 A. -- because Rob Wilson, as we've seen in earlier 12 documentation, had made that indication in the email 13 that Mr Beer shared a couple of hours ago in the 14 Inquiry. So I don't think I've gone to Rob Wilson on 15 30 November 2011 to ask him that. I think I've recalled 16 that that thing was something that Rob Wilson had said 17 and I've referred back to it. 18 Q. I see. So you'd seen that email chain, had you? 19 A. Well, I've referred to that same stuff in the Ismay 20 Report. 21 Q. Yes, okay. Well, there's a lack of controls, that's 22 what you understood from the EY report, and the EY 23 report said that that could lead to unauthorised 24 transactions. So that does affect the integrity of the 25 accounts, doesn't it? 175 1 A. It indicates it could lead to it. They haven't 2 identified that it did lead to it and I don't think -- 3 Q. You were giving false comfort here to the ARC Committee, 4 weren't you, because you were suggesting that there had 5 been no question about the integrity of accounting data 6 when, in fact, the EY report said that there might be 7 unauthorised transactions as a result of the lack of 8 controls. 9 A. No, I think I've clarified something, and the ARC would 10 have -- I imagine the ARC would have got the whole EY 11 reports. So the ARC would be able to read all the 12 things that Ernst & Young had said and have just 13 contextualised this. 14 Q. You were massaging what the EY report said, weren't you? 15 A. No, I think I was clarifying stuff for the reader on it 16 and -- 17 Q. What's more, you knew that Fujitsu could and did tamper 18 with branch accounts, use that remote access facility; 19 you knew that? 20 A. No. I've seen emails that -- and that thing about 21 option A, B, C, that refer to that but I don't know that 22 it had been built and I don't know that they used it. 23 I don't know that they used it. 24 Q. Rob Wilson knew, as well. He had received the email, 25 the same one, with those Solutions One, Two and Three, 176 1 the Friday before Seema Misra's trial started on the 2 Monday. He knew and you knew about that facility. This 3 email shows that you and he were deliberately covering 4 up what you knew about remote access -- 5 A. No. 6 Q. -- and doing so because you knew about the implications 7 for past convictions, didn't you? 8 A. No, and in the answers that I've given to you already, 9 I've explained why that's not the case. 10 MS PAGE: Thank you, sir. 11 MR BEER: Sir, unusually, I've got a couple of supplemental 12 questions, with your permission, and looking very 13 carefully at the time. 14 SIR WYN WILLIAMS: To be snookered by one's own counsel, eh? 15 MR BEER: I think that was a "yes". 16 SIR WYN WILLIAMS: I may not listen! Carry on. 17 Further questioned by MR BEER 18 MR BEER: Mr Ismay, it's a continuation of the theme of 19 knowledge of remote access, and it's a series of 20 questions that I ought to have put to you earlier but 21 didn't. It concerns 2014. 22 Do you remember I asked you about the emerging 23 picture of remote access coming in 2010 in October and 24 November, through the showing to you of Solutions One, 25 Two and Three? 177 1 A. Yes, yes. 2 Q. Yes? Then in 2011 as well? 3 A. Yeah. 4 Q. Then again in 2013. I just want to look at 2014, 5 please. 6 A. Okay. 7 Q. Do you remember the Project Zebra Report? 8 A. Having seen all these documents, it's kind of bringing 9 that back to my mind, yeah. 10 Q. Can you remember what Project Zebra was? 11 A. I think it was some sort of -- there was a Deloitte 12 review. You've sent me -- I can't remember exactly what 13 the document -- 14 Q. It was a report commissioned by the Post Office -- 15 A. Yeah. 16 Q. -- of Deloitte -- 17 A. Yes, yeah. 18 Q. -- which, amongst other things, addressed the Horizon 19 system? 20 A. Yeah, yeah. 21 Q. I'm not going to look at the report; I just want to look 22 at the summary of it -- 23 A. Right. 24 Q. -- that was distributed after the report had been 25 delivered to the Post Office. Can we look at 178 1 POL00031409. Can you see that's called "Zebra Action 2 Summary"? 3 A. Yes, I can. 4 Q. Can you see it's version 0.3, yes, dated 12 June? 5 A. Yes. 6 Q. Can we then next look at an email, POL00346958. Can you 7 see this is an email of 17 June to you, 9.00 in the 8 morning from Julie George, attaching Zebra Action 9 Summary version 0.3? 10 A. Yes, yeah. 11 Q. So the report I've just showed you? 12 A. Yes. 13 Q. "I have tried to call you Rod ... a summary of draft 14 actions arising from Deloittes recent piece of work on 15 the Horizon systems. 16 "Clearly ... no blame attached anywhere", et cetera. 17 Okay? 18 A. Yes, yeah. 19 Q. Can we look at the action summary that you were sent 20 then, back to POL00031409. Look at page 6, please, and 21 look at paragraph 4.2.2 under "Data Logging": 22 "One point raised in the report was that it was 23 possible for someone with privileged access to delete 24 data from specific areas of Horizon. This was always 25 a risk with individuals using admin or power user 179 1 accounts and is a persistent risk, one that needs to be 2 catered for in almost any organisation." 3 A number of witnesses to the Inquiry have told us 4 that they did not realise, on reading the 2014 Deloitte 5 report, a conclusion expressed -- it was on page 31 -- 6 about remote access and the facility to delete data, 7 a facility owned by people with admin or power user 8 rights. This Post Office summary of the Deloitte report 9 specifically raises that issue, doesn't it? 10 A. It does, and that function shouldn't exist but it does. 11 Q. It specifically -- 12 A. And -- 13 Q. -- draws to the reader's attention, out of all of the 14 pages of the Deloitte report, that facility, doesn't it? 15 A. Sorry, this document that we're looking at, is this 16 something that Post Office has written in response to 17 Deloitte? 18 Q. Yes. 19 A. Right, okay. Right. 20 Q. It's a summary of actions arising from the Deloitte 21 report. 22 A. Right. Okay, right. 23 Q. This is a narrative part of it. 24 A. Right. 25 Q. The point I'm making is that a number of people have 180 1 said, "We, the Post Office, didn't spot these paragraphs 2 tucked away in a Deloitte report about remote access. 3 We didn't realise those until Jonathan Swift pointed 4 them out to us in 2016." 5 I'm saying this document here flags that issue up, 6 doesn't it? 7 A. It does, yeah. 8 Q. It was sent to you, wasn't it? 9 A. I don't know, was it? 10 Q. We just looked at the email attaching it. 11 A. Okay, right. Yes. 12 Q. Yeah? 13 A. Yes. 14 Q. It was sent to you? 15 A. Yeah. 16 Q. This undermined your report yet again, didn't it? 17 A. Well, yes. 18 Q. So what did you do about it? 19 A. Well, I don't think I did anything about it. I don't 20 remember it. But what I remember about the Zebra Report 21 was the other thing that's in the evidence where 22 I challenged one of the actions, Action 4A, I think, at 23 the end of the report, where there'd been 24 a misunderstanding that said that Product and Branch 25 Accounting had got the ability to put transactions 181 1 directly into Horizon, and I said that needs changing 2 because it doesn't. That's a complete misunderstanding 3 and I proposed a very onerous alternative piece of work, 4 and I think my focus on this document was that that just 5 leapt out so much to me to say, "You've got 6 a misunderstanding in there, that you think Financial 7 Services" -- 8 Q. Mr Ismay, you said in your report there were no 9 backdoors into Horizon. 10 A. In the 2010 report, yes. Yeah. 11 Q. This is the fourth occasion on which you were being told 12 there are such backdoors. 13 A. Right. Yeah. 14 Q. Why did you do nothing on each of those four occasions? 15 A. Well, I'm sorry, I think I've just got so many things 16 going on, this just hasn't registered with me either, 17 and that's no good saying that. That's not 18 a satisfactory thing, but it didn't. 19 MR BEER: Thank you very much, Mr Ismay. 20 That was the supplemental topic, sir. 21 SIR WYN WILLIAMS: Thank you. 22 So that brings today's proceedings to an end. 23 Thank you, Mr Ismay, for making a second witness 24 statement and for coming back to give evidence today. 25 I'm grateful to you. 182 1 Thank you to the legal representatives of Core 2 Participants who curtailed themselves admirably. 3 We'll meet again on Tuesday. I think it's Mr Mark 4 Davies on Tuesday? 5 MR BEER: That's right, sir. Full day. 6 SIR WYN WILLIAMS: Fine. Thank you. 7 (3.15 pm) 8 (The hearing adjourned until 9.45 am 9 on Tuesday, 14 May 2024) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 183 I N D E X RODERICK MARK ISMAY (re-sworn) ................2 Questioned by MR BEER .........................2 Questioned by MR JACOBS .....................153 Questioned by MS PATRICK ....................162 Questioned by MS PAGE .......................168 Further questioned by MR BEER ...............177 184