The Lee Castleton Case

All in my opinion …. please insert the word ‘allegedly’ where appropriate ….

Most, if not all of you, visiting this page will be subpostmasters I guess.   You will be aware of all the publicity surrounding the ‘Horizon Scandal’ and the work of the Justice for Subpostmasters Alliance (www.jfsa.org.uk).

I became aware of the JFSA years ago – my initial thoughts were that these were a bunch of discredited subpostmasters who were trying to blame the computer system for their own errors.    But my opinion has changed.   There is overwhelming evidence now to support their arguments that they did indeed suffer losses attributable to the system.    They may well have made a mistake in covering the branch losses by signing off incorrect amounts and thereby committing the offence of ‘False Accounting’.   But there is no doubt in my mind that none of them profited as a result of the discrepancies that appeared at their branch.

The Lee Castleton Case stands out though, because here is a SPMR who did not attempt to hide his branch’s losses.  He called for an Audit as soon as he became aware of discrepancies and when further discrepancies appeared he advised POL immediately.  Just as he should have done.

In total the amount of discrepancies reached nearly £23,000.   POL could not pursue Lee for False Accounting because he had declared the correct amounts in his balances.  Nor could they pursue a Theft charge because they could not prove Lee had stolen the money – for a start the money may never have actually existed as the mistakes that caused the error could have been a simple case of miskeying a transaction.

But POL in their wisdom – after sacking Lee – decided to pursue him in the courts for the amount of the discrepancy £23k.

Don’t you think this is strange if as I have stated POL couldn’t prove the amount actually existed in cash?

Not to POL though and Lee elected to represent himself when the case came to the High Court in December 2006.

He lost the case and POL were awarded not only the amount of the discrepancy but also costs which totalled I believe in excess of £350k – Lee lost everything.

Lee followed the letter and spirit of his contract but when the push came to the shove, POL didn’t help or assist – they wanted their money back even though the couldn’t prove it wasn’t their fault.  So if you are sitting there thinking this couldn’t happen to me – read on – because it could and does happen on a regular basis.   Which one of you hasn’t had unexplained losses at your branch that you have had to make good?   Some are small losses , some are not so small and some are huge like Lee’s.   POL don’t publish the accounts of individual Subpostmasters who have had to repay thousands do they?  That wouldn’t be good for business and certainly would not attract new investors thinking of buying a PO.

So back to Lee’s story.

The reason I am writing this today is that, over the weekend, I found and analysed the Judge’s decision on Lee’s case.  It is a complete travesty of justice and I am certain that had Lee taken on legal representation rather than fighting the case himself he would have won.

The Judge’s decision can be found here http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/QB/2007/5.html&query=lee+and+castleton&method=boolean

And I will refer to it with necessary extracts from now on….

The first point to note is that POL relied on Lee’s subpostmaster contract to show that it was Lee’s responsibility to prove that the error was not his or any of his assistants.    It appears that Lee did not challenge this and the Judge refers to Shaw v Picton to decide that it was Lee’s responsibility to prove POL could be held responsible for the losses.

Well in my opinion this is where the Judge gets it wrong.

“It is quite clear, that if an agent (employed to receive money, and bound by his duty to his principal from time to time to communicate to him whether the money is received or not,) renders an account from time to time which contains a statement that the money is received, he is bound by that account unless he can shew that that statement was made unintentionally and by mistake. If he cannot shew that, he is not at liberty afterwards to say that the money had not been received, and never will be received, and to claim reimbursement in respect of those sums for which he had previously given credit.”

There are obviously two parties to Lee’s contract, Lee and POL.   The extract above supports POL’s position that Lee would be liable under the terms of his contract BUT this extract does not take into account the extenuating circumstances of working for POL as a subpostmaster and the other conditions of his contract that apply.  The Judge at the end of the decision actually cites this from the subpostmaster’s contract Section 22 clause 3 provides that the subpostmaster will be responsible for ensuring that transactions will be carried out accurately…..and that all documentation is properly completed and despatched at the due time. 

It is possible for instance that the mistake(s) were made by miskeying a transaction which was supported by a paying in slip – say a Giro deposit.    The assistant keyed in £1000 instead of £100 which left the branch accounts short of £900.

Under the terms of Lee’s contract he is obliged to remit to POL at the time of the last collection the documentation relevant to the transactions his branch has performed that day.   Which would include the erroneous pay in slip.

At the close of business, AFTER the documentation has left his branch, he is expected to make a cash declaration.  At which time the error would become apparent but would remain untraceable because the documentation Lee needs to investigate the discrepancies has left his branch.

POL as the principal, under the terms of Lee’s contract, have made it impossible for Lee to show that the statement was made unintentionally and by mistake.

Clause 22 that the Judge cites, is unenforceable as one condition ensures that the other cannot be met.

There are two inescapable facts in this case.   Lee to this day does not know what happened to the money, and POL probably don’t know either (I have to say ‘probably’ because having won the case and received settlement there is a huge financial incentive for them not to reveal later evidence to the contrary).

And then there is more.  The utter misconceived arrogance of POL and their employees could not be highlighted more than by the words of their star witness in this case,

Mr. Andrew Wise, of the Network Directorate of the claimant, had worked for the Post Office since 1991 and had a working knowledge of the Horizon computer system. He wrote in his witness statement that he thought that every transaction (apart from online banking such as withdrawing or depositing cash at the counter) recorded by the clerk on to their computer has a corresponding physical document, such as TV licence counterfoil, savings bank deposit [or] withdrawal slip or cheque. After explaining the matter in some detail, he wrote this

Accordingly, it can be seen that if the clerk or subpostmaster makes a mistake when imputing [sic: inputting?] transaction details into their computer, there are a number of points at which this can be picked up, because there are daily and weekly reports that the subpostmaster[s] have to produce at which stage they have to check and satisfy themselves that the physical documents evidencing transactions (for example, cheques, giros, pensions and allowances) match what they have entered on the system. In addition to that, there are various teams responsible for different sorts of paperwork produced by the branch, including a giro bank team, cheques team and pension team. For example, if the clerk records an item incorrectly on the system, they should pick this up on either their daily or weekly report. However, if they fail to do so, this will be picked up at the Processing Centre. If an item has been wrongly recorded, an error notice would be generated, although this can easily take up to 12 weeks or so. This will mean that if a transaction has been over or under stated there will be either a claim error or a charge error respectively. That evidence was not challenged, and I accept it.

First of all Mr Wise kindly points out that not only the Subpostmaster but POL themselves require access to the ‘different sorts of paperwork’ in order to determine if an error has been made.

But he also excludes from his description the possibility that the Processing centre could themselves make a mistake – possibly even the same error that Lee and/or his staff may have made in the first place.

And then he makes matters completely worse and in my opinion the Judge should have dismissed the case when Mr Wise stated that it take up to 12 weeks for such an error to be noticed.   We, in Duns, waited over a year for a transaction correction in our favour.

There is also evidence that not only do the Processing Centre make mistakes they end up crediting the wrong branch back!

Lee was fighting this case by himself.   After the Judge had decided that he was responsible for showing that the errors were not his fault he tried to show that it was possible it was a Horizon error.  There is no doubt that the Horizon computer system has bugs but trying to prove in a court of law that this was indeed the likely cause of the discrepancies wasn’t going to work and hasn’t worked for the many who have tried before and since.   POL have all the evidence and they are not going to release it although I have two or three easily demonstrable examples.  I don’t think Lee had much of a chance in court without presenting the argument I have put forward here.    It would certainly lead to POL having to prove the origin and consequences of the error and that is something they cannot do.

……………….

We all make mistakes.   Whether or not Lee or his staff did, I don’t know.   Was it miskeying a transaction or a Horizon computer error I don’t know either.  But what is and must be clear that Lee (and others in the JFSA cases) did not benefit personally from these mistakes.   At the end of this sorry saga we still don’t know what caused the errors and most importantly it is likely that POL don’t know either.  Surely it is not only the responsibility of POL to find out without reasonable doubt what the errors were but to put in practice a system where these errors could not occur again.

What is without doubt in my opinion is the fact that POL could never again seek in court a similar judgement based on Lee’s trial.

POL need to be taken to account for this travesty of justice.  Lee should be given the benefit of doubt and the money he has lost be re-imbursed.    There certainly needs to a full independent judicial enquiry into the running of this state owned organisation.

In a recent interview Paula Vennells remarked upon her Christian beliefs:

“My faith does not write the strategy. What my faith does is motivate me around how I deliver it. There is something around Christianity about being the best you can possibly be. If you can get everyone to work in that way you are bound to do your best for the organisation. It doesn’t mean to say you don’t take tough decisions.”

Being the best you possibly can be includes learning from mistakes past and present.   Ms Vennells as a Christian has to show compassion and understanding for the people whose lives her organisation has destroyed by reason of being employed by POL in the first place as a subpostmaster.   I can’t see God being too impressed with her track record in that regard.

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