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Claimants

Name of witness: Pamela Joan Stubbs


No of statement: 1st
No. of Exhibits: PS1
Dated: 10 August 2018

THE POST OFFICE GROUP LITIGATION

IN THETHE HIGH COURT OF JUSTICE Claim Nos: HQ16X01238, HQ17X02637& HQ17X04248

QUEEN'S BENCH DIVISION


BETWEEN:

ALAN BATES & OTHERS

Claimants

-and-

POST OFFICE LIMITED

Defendant

WITNESS STATEMENT OF PAMELA JOAN STUBBS

I, PAMELA JOAN STUBBS of 257 Barkham Road, Wokingham, Berkshire RG41 4BY WILL SAY
AS FOLLOWS:

1. I was the Subpostmistress of Barkham Post Office, 50 Bearwood Road, Wokingham,


Berkshire, RG41 4SY, FAD Code 2129396 ("the Branch"} between 4 August 1999 and 8
June 2010, prior to that I assisted my late husband, Martin, in his appointment as
Subpostmaster of that branch. I am now retired.

2. I am Claimant number 174 in these proceedings, and a Lead Claimant for the purposes of
the Common Issues trial. I make this Witness Statement in relation to the Common Issues
as defined in Schedule 1 of the First CMC Order.

3. The matters stated within this Witness Statement are true to the best of my knowledge
and belief. Unless otherwise stated, the facts contained in this witness statement are

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within my own knowledge and are true. Where they are not within my own knowledge
they are derived from the sources to which I refer and are true to the best of my
knowledge and belief.

4. Exhibited to this statement is a paginated bundle of documents marked "PS1".


References in this Witness Statement in the form [PS1/number] are to pages of that
exhibit.

A. BACKGROUND

5. Prior to my involvement in the Branch, I trained as a teacher and taught Physical


Education, English and Biology at a school in Twickenham for 18 years. In 1986 Martin
was offered early retirement from his position as an assistant bank manager and at that
point we decided to look into purchasing a Post Office branch and shop that we could use
as a retirement venture.

6. The Branch was advertised commercially and we were attracted to it because it was
suitably located and it serviced a large area of housing. While, from memory, it had not
performed well under its previous ownership, we felt we could make it profitable. In
February 1987 Martin and I purchased the premises in which the Branch was located,
which consisted of a general store (the "Retail Business"), the Post Office Branch itself
and domestic accommodation for £185,000. We funded partly by way of mortgage and
partly from monies received from the sale of mine and Martin's respective properties.

7. Martin employed and trained an assistant who worked at the Branch two days a week and
I was in position as an assistant for 12 years prior to Martin's death in August 1999.

8. During Martin's appointment we used a paper based accounting system and subsequently
in 1997 a system called 'Capture'. Given his professional background, Martin handled
most aspects of accounting at the Branch including the submission of weekly balances
and any financial statements. Capture was a semi-manual system into which figures were
entered by Martin or me when he asked me to from our paper records and it helped to
verify those figures.

9. I understand from two documents disclosed by Post Office in these proceedings [PS1/1-3] {E2/2/1}
{E2/3/1-2}
that an audit was carried out on 21 or 22 April 1998 and a shortfall of £13.69 was identified
(together with a surplus of 21p). Disparities of this nature happened on occasion, though

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Martin was meticulous in balancing accounts and as the report of that audit records, Post
Office was satisfied that we ran the Branch very professionally [PS1/3]. At the time the {E2/3/2}
practice accepted by Post Office in respect of minor 'shorts and overs' like this, was for
any 'over' to be kept in an envelope (or similar) in the Branch safe to be credited against
any future shortfall. I recall Martin doing this on occasion, though this own practice was to
try to avoid there being any disparity at all.

10. From around September 1998 onwards, I had been helping Martin to run the Branch
whilst he was in hospital. Martin was willing to trust the assistant he employed at the time,
who was experienced, and me to carry out weekly balances of stock and cash and submit
accounts to Post Office. I don't recall there being any particular problems with balancing
and our Branch accounts during that period and the Assistant and I made sure that we
followed the same practices as Martin used during that time so far as possible.

11 . During this period, I had also carried out some refurbishment works to increase available
space behind the Branch counter area, so that Martin could access it when he was not in
hospital and so that the shop could be run single-handedly if necessary.

B. MY APPOINTMENT

Taking over as Subpostmistress

12. Martin passed away on 3 August 1999. The following day, on 4 August 1999, I opened
the Branch and Retail Business, as the assistant had kindly offered to operate them as
normal that day despite the very difficult circumstances. Colin Woodbridge, our area
manager, came to visit me that day. My recollection is he was aiming to be supportive by
doing so, and others who knew Martin also called in on that day.

13. Colin and I had an informal discussion about the plans for the Branch and I explained that
I wanted to continue running it. My intention was to continue running the Branch for the
foreseeable future and carry out the plan that Martin and I had made in using it as a
means of supporting our retirement.

14. Given that I had been an Assistant at the Branch for 12 years, I understood my role would
continue as before, save that I would be the Subpostmistress. My intention was to
continue running it in the same way. I believed that Post Office would support me during
the difficult time of my husband's death and I placed a large amount of trust in them. Mr

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Woodbridge did not mention anything about whether I was in position as an employee or
agent, or about my liability for any alleged losses and he did not advise me to seek
independent legal advice.

15. Colin did not mention any Post Office 'Death in Service' policy or entitlement either during
our meeting on that day or subsequently and nor did anyone else at Post Office. I did not
receive any payment under any policy like that and have no recollection of receiving, for
example, any letter or other paperwork about it. I deal with this further below.

16. I was not asked to invest anything in the Branch at that time, nor was any deduction made
from my remuneration which continued to be paid.

17. During the time that Martin was appointed as the Subpostmaster, he was in contact with
the area manager (known as Retail Network Manager), Gill Tandy. I had understood that
she would continue to be involved with overseeing my running of the Branch. However, as
my appointment progressed (as I deal with further below) it became increasingly difficult to
speak to and obtain assistance from anyone at Post Office, let alone my manager.

18. I had understood that I would be continuing Martin's role, and that my agreement with
Post Office would mirror those prior dealings, particularly in light of the conversations that
I had with Mr Woodbridge in our informal meeting to which I refer above.

19. I understand that Post Office has suggested that there was/is a 'Death in Service' policy
which it follows in the event of a death such as my husband's. As I explain above, no
mention was made of this and indeed I do not understand what this policy is intended to
be. I do not believe that any such policy was followed during my appointment. It was
understandably a distressing time, but given that Martin had been in hospital for some
time, I had at least some opportunity to get used to running the Branch.

20. I believed that Post Office and I would continue to work as a 'partnership' in which I would
perform my role as a Subpostmistress and Post Office would provide support and
assistance in that. However, ultimately, it was mine and Martin's investment, so I
expected that I would be in a positon to control the running of the Branch, and in particular
at what point I sold our investment. I did not appreciate, nor did Post Office inform me,
that they could {and eventually would) suspend me, or terminate me without cause or
compensation or otherwise in a way that would affect the value of my long term
investments in it.

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21. My understanding was that the only situation in which Post Office could compel me to
leave was if I had done something fundamentally wrong. I understand that Post Office has
suggested that Subpostmasters contracted with it on a business to business basis and in
expectation of profiting from the business relationship. I am an individual who wanted to
continue running the Branch after the death of my husband (and indeed, I had little option
to do anything else). It was an investment for my retirement and not about making as
much profit as possible.

Terms of my Appointment

22. In the informal meeting with Colin Woodbridge which I describe above, he did suggest that
Post Office had a new policy, for those who were new to the Network, in which offices
were required to open from 9am to 5.30pm Monday to Friday with no closing for lunch,
and 9am to 12.30pm on Saturdays. I respectfully declined to operate those hours. This
was for a number of reasons, not least because we had traditionally closed the Branch on
Wednesday afternoons in order to carry out the weekly balance of the accounts and I
didn't want to be rushed into completing them at 5.30pm each week. I considered that
extending hours like that would expose me to considerable additional cost, and in any
event I felt our customers were serviced quite properly on the existing hours. Mr
Woodbridge conceded, and we agreed that the opening hours would remain the same.

23. From the start of my appointment, the services that the Branch provided remained the
same as Martin had been required to offer. Save for the opening hours, which Post Office
wanted to alter, I had no opportunity to negotiate any contractual terms. Indeed there was
simply no discussion of any particular terms of my appointment. Neither Colin, nor
anyone else, provided any particular explanation of how they worked in practice.
Furthermore, I was not advised to seek independent legal advice.

24. I recall that I signed something at the informal meeting with Mr Woodbridge. From
memory, this was a document which simply gave effect to my agreement to continue to
operate the Branch after Martin's death. I do not recall if this was an Acknowledgment of
Appointment document, but I note that Post Office· has not disclosed a copy of such a
document signed by me in these proceedings. Certainly I must have given bank details at
the time because my remuneration continued to be paid. It may well have been that the
document I signed was one that gave effect to that.

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25. During this meeting, Mr Woodbridge did not mention anything about contractual
documents and I was not provided with any. He did not inform me that I would need to
sign anything (other than the document that I signed on the day), he did not inform me
that he would be sending any further documents in the post (which I deal with further
below). He did not notify me of any terms, onerous or otherwise in the contract which it is
said by Post Office that I was engaged upon.

26. I am now aware of the Standard Subpostmaster Contract ("SPMC"), however I was not
provided with a copy, nor was I referred to it. Even if there had been a copy in the Branch
left over from Martin's appointment, I was not aware of this at the time of my appointment.
Martin maintained a filing cabinet that was well organised, but I do not recall it containing
a contract document like that, which would in any event (I presume) have dated from
1987.

27. The first time I read the SMPC was when I attended a Citizens Advice Bureau in
Wokingham on a date that I cannot presently recall in September or October 201 O after
my appointment had terminated. The Bureau was able to provide me with a partial copy of
the SPMC (an extract from it) which had been given to them, I presume, by another
Subpostmaster. I note from an internal email chain disclosed in these proceedings
[PS1/4] that Post Office still appeared to have difficulties locating any copy of my contract {E2/117/1}
as late as 2011. It is far from clear to me that they ever have done.

28. I am now aware of a number of terms that feature in the SPMC that I have since read that
could be very onerous depending upon how they were applied. In particular, my liability
for apparent losses. I had understood (despite not being provided with a contract) that I
would only be liable for losses in the event that I was negligent or done something wrong
that gave rise to losses. This view was reinforced when there was a burglary at the
Branch in around January 2001 , in which a member of my staff was forced with threat of
violence to hand over cash. Separately, on a previous occasion when Martin was
Subpostmaster, a member of my staff was also harassed and money was taken from the
Branch.

29. On both of these occasions, Post Office investigated what happened and concluded that
there was no negligence on mine or Martin's part, and as a result that we would not have
to repay stolen sums. In preparing this statement I have looked again at Post Office's
document dated 5 February 2001 [PS1/5] about the burglary in around January 2001 {E2/11/1}
where the loss is set out and the level of contributory negligence on our part was said to

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be "nil". I note in this document that there is also a reference to a "Losses & Gains Policy".
Post Office did not provide me with a copy of that document, nor did it at any stage
explain to me what it provides.

{D1.2/1/1-8}
30. I have been shown a copy of a letter dated 23 September 1999 [PS1/6-13] from Post
Office to me. 1 do not recall receiving this letter or its enclosures. I understand that Post
Office has said that a copy of the SPMC would have been included in this letter, but I can
see no basis in the letter for that presumption as it effectively lists what is included
(namely, the Conditions of Appointment). In any event, I don't recall receiving what would
have been quite a sizeable document and I note that Post Office has not disclosed signed
copies of the Conditions of Appointment in these proceedings. Furthermore, if what Post
Office says is right, this letter would apparently have been sent 6 weeks after my
appointment had actually commenced. The letter also refers to numerous things that did
not happen and were never discussed, including a branch closure, attendance of a
member of Post Office staff to transfer cash and stock, and the need to sign and return
written conditions. The letter is not signed by Colin either.

31. I understand that Post Office also says that I would have requested a copy of the SPMC
and the Branch Operations Manual had I not received them. In short, I did not request a
copy of either document, and I had no particular reason to think that I needed to. Had
Post Office considered it important that I be provided with specific terms, or further .
documents or information, then it should have provided me with copies of them.

32. I also understand that Post Office speculates that I 'would have' received a number of
other standard template documents, as follows:

32.1 ARS 11 O - which lists various documents within it. I did not receive a copy of this
standard correspondence and I did not sign it either. I note that Post Office has
not disclosed a signed copy. I am clear on this because some of the documents
listed within the ARS110 are not even applicable to my branch, and I would not
have signed something that did not reflect the true position. For example, the
"letter scales" belonged to me and not Post Office and I did not have a "tape for
measuring parcels". I also did not receive a copy of the 'Counters Operations
Manuals' referred to. Ultimately this document is an inventory, and no such
inventory was ever taken at my Branch anyway. The first time I saw a copy of
this document is during these proceedings.

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32.2 ARS 44 and ARS 43 - the Subpostmasters Information Sheet. Again, I was not
provided with a copy of this, and the first time I saw a copy was during these
proceedings. Many of the points mentioned in it, like induction training, simply
did not apply to me (because induction training was not provided) and the second
document, ARS 43, is a job description and I do not think that Post Office would
have sent that to me in the circumstances, particularly as I had already taken
over the Branch.

32.3 SERV 135 - apparently drawing my attention to various extracts of the SPMC. I
was not provided with a copy of this letter and I did not sign it. Again, the first time
I saw a copy is during these proceedings.

33. I also did not receive a copy of the Operations Manual. I do not know what this particular
document looks like. Martin and I kept records, but I have no recollection of it including
this.

34. During the course of my appointment, I received various Counter News reports which
identified new products and services I was expected by Post Office to offer. I followed
(and before me Martin followed) the instructions we were given in this respect. I recall
keeping these documents at the time, but I no longer have copies of them.

35. No uniform or composite set of contractual documents were given to me, that I would
have been able easily to refer to and familiarise myself with, even if it were the case that
these were contained in multiple documents. Ultimately I was obliged, and had no option
but to accept, my appointment on Post Office's terms without being aware of what those
terms comprised, at the beginning of my appointment at least. By the time I began to
appreciate the significance of the contractual documents, I had already been in position
for a number of years and started receiving letters from Post Office regarding apparent
shortfalls on Horizon, which caused me to look into it. I explain this further below.

36. My remuneration varied depending upon the volume of sales at the Branch and other
factors, but in one year I was able to earn £30,000, before tax and expenses. I knew this
was also variable in part at Post Office's behest as changes were made to the rates
received during the currency of my appointment and also before that in Martin's time.

37. As I describe below, at one point during my appointment Post Office suggested that I
owed them £26,000 which was nearly my full annual remuneration. Certainly I had no

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idea that I was likely to be held liable under the terms of my appointment. for sums of that
order. Post Office made profits from having the benefit of their counter in my premises,
and they did not pay me any rent or maintenance for that. So it strikes me that the
relationship, on the terms that I have since read and on my understanding of how Post
Office applied them, was fundamentally imbalanced in this respect.

Introduction of Horizon

38. During the course of 2001, Horizon was installed in my Branch. This fundamentally
changed the way in which my assistants and I worked. All transactions had to be carried
out on Horizon. This made it more difficult to verify our weekly balances and Post Office
ultimately had control of the system and the data within it. It became even more difficult
when Post Office changed the Horizon system so that it no longer produced paper
receipts. So only the transaction figures were shown on Horizon, and the paper records
of each transaction were no longer there to check. Previously, I could go back and check
every transaction for the day and it was apparent from them where a mistake, if any, had
occurred. What I could see on Horizon were transaction logs which only showed front
office entries, such as cash and stock entries, and receipts and payments made in the
Branch. What I could not see was data relating to back office processes, such as
changes to local suspense accounts and other transactions or entries put in by Post
Office. I have no idea if these were put in manually or automatically, but I do know that
cash remittances must have been accounted for somewhere by entries that I would not
have seen. All this was controlled by and visible to Post Office, even though it fed into the
balance of my Branch accounts.

39. Post Office also controlled how it dealt with apparent losses and gains and what
information that was available to me in the Branch. Post Office changed the requirements
upon me from submitting weekly balances, to the requirement being to submit trading
statements periodically, usually each 4 weeks. The trading statement did not contain
sufficient information, on an itemised basis, from which it was possible to identify any
underlying mistake in the figures that may have arisen. The transactions were presented
as totals which were difficult to disaggregate. Furthermore, National Lottery transactions
were aggregated for periods that did not align with the trading periods used by Post
Office, so without more information it was very difficult to reconcile the figures.

40. I refer, for example, to a trading statement for the period 11 November 2009 to 10
December 2009 at [PS1/14-16]. While an apparent shortfall of £2,584.65 appears at the {E2/36/1-3}

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bottom line of the statement, the remainder consists of totals from which it is not possible,
without knowing more, to ascertain the source of that disparity. While it was possible to
print from a given Horizon terminal complete transaction logs for a limited number of days,
they appeared on a 2.5 inch roll of paper and reconciling the totals in the trading
statement with it would be an onerous and complex manual exercise (from a print out)
which would itself be vulnerable to mistakes. Further, after they were phased out, there
were no receipts to check the validity of those transactions against. Certainly, this was
impossible after transaction information was no longer available on Horizon.

41. I was not consulted about whether I wanted the system installed in my branch, nor the
change to trading statements, and I was not informed about the extent to which these
changes would alter the way we worked. I certainly was not informed that I would be
responsible (or that Post Office would consider me responsible) for all losses that the
system showed pursuant to my contract, howsoever caused, or that these could amount
to thousands of pounds.

42. I remember that Martin and I had been aware that an electronic system was being rolled
out across the Branches, and we had a discussion about trying to put that off for as long
as possible because Martin in particular believed that it would cause difficulties.

C. SPECIFIC ISSUES AND ASPECTS OF THE RELATIONSHIP

Expectations and Reliance upon Post Office

43. I understand that at the Common Issues trial, the nature of my working relationship with
Post Office will be considered, and, in particular, the degree of mutual commitment made
to that relationship and, for example, the extent of my reliance upon Post Office in it.

44. My expectation and understanding before accepting the appointment, based upon my
experience as an assistant at the Branch, was that I would be heavily reliant on Post
Office in a number of respects. I would be reliant upon the products and services offered
by Post Office for income and for custom at the Branch and for the Retail Business. I
understand Post Office wish to characterise me and Post Office as separate businesses,
but in reality it was expected that we would work together on Post Office business and
that I would be remunerated for it.

10

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45. Beyond what I had learnt as an Assistant, I was reliant on Post Office prior to and
throughout my appointment for adequate training, assistance, support and information to
enable me to carry out the role, particularly using Horizon, as I described further in this
statement, below. I believe that this expectation was entirely mutual between myself and
Post Office.

46. I made substantial investments in the Branch and in my relationship with Post Office on
that basis, as did my husband and I together while he was Subpostmaster. They were
investments that only made sense over the long term and in circumstances where I was
able confidently to rely upon Post Office in the way I describe above.

47. In around February 1994 and then in late 1998 / early 1999, Martin and I carried out refits
of the Branch and shop, as it was in an extremely dilapidated state. At first we converted
the Branch into a two position branch; prior to this, it was essentially a small room with no
proper counter. Latterly, we reduced the retail area in the Branch in favour of the space
occupied by the Branch counters and working space behind them. While the latter
renovation was to provide better access for Martin, it also improved the Branch layout and
therefore its capacity for Branch business [PS1/17-32]. {E2/5/1-16}

48. Taken together, the costs of these renovation works was around £30,000. We considered
these investments to be worthwhile as they were likely to be reflected in the value of the
Branch and shop that could be achieved on sale and also improve the business,
particularly Branch business. The only input that Post Office had in our plans was that
they provided new armoured / bullet proof glass windows and new parcel hatch.

49. In June 2009, following a long period of consultation and negotiation with the local
planning authorities, I made a difficult decision to carry out works to transform the Branch.
I had promised my customers that I would keep the Branch and shop open, though the
building was in poor condition and needed significant work as well as overdue
renovations.

50. To me this was to be a significant investment in the Branch for the medium to long term. I
was mindful of the fact I was approaching retirement age, and I would likely need to sell
the Branch and shop as part of my retirement plan. I could have sold the entire plot to a
developer without renovating the Branch, though I would not recovered all that I had
invested in it by doing that and I also wanted the Branch to stay open. I estimate that the

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C1/2/11
cost of the redevelopment to the Branch and retail business was around £125,000. I also
invested around £150,000 in developing a three bed house adjoining the Branch.

51 . I therefore proposed to Post Office that I would demolish and rebuild the Branch. On 23
June 2009, Craig Knowles of Post Office visited to discuss the proposed development and
I requested confirmation that Post Office would supply a two counter position portacabin.
A Network Change Advisor at Post Office, Karen Averiss, informed me by letter dated 30
June 2009 [PS1/33-37] that Post Office could only supply a one position portacabin. Ms {E2/28/1-5}
Averiss also made clear that there were technical requirements that needed to be followed
regarding Horizon and the temporary move to the portacabin, which included that the
second Horizon terminal installed at the Branch at that time remain 'live' at all times.

52. Costs to me estimated by Post Office were £1,410 for portacabin delivery and installation
and a further £1,410 for it to be recovered. For the cost of moving Post Office equipment,
I assume including Horizon terminals, it was estimated I was to pay £3.083.13. A weekly
hire charge of £125 was to be paid for the hire of the portacabin. VAT was to be paid on
all the foregoing figures as well. The cost to Post Office was said to be £800.

{E2/48/1}
53. Part of the works included the installation of fortress counters by Post Office's favoured {E2/49/1-5}
contractor. The cost to me of these works was £7,246 plus VAT [PS1/38-44]. The Post {E2/50/1}
Office completed a 'Property Projects Operational Business Change Document' setting
out the authorisations required [PS1/45-46]. I was required to enter into a S106 unilateral {E2/26/1-2}
undertaking in relation to the works [PS1/47-56). {E2/27/1-10}

54. I received a letter from Mr Knowles of Post Office on 14 September 2009 outlining Post
Office's expectations of me, and a Contribution Form providing details of the updated
costs that I would have to pay [PS1/57-64]. {E2/29/1-7}
{E2/38/1}

55. I would not have invested in any of these works had I known or suspected that I could or
would be suspended, or that my contract with Post Office could be terminated without
cause or compensation. I also knew that if I did want to sell the Branch in the future, that
it would need to be sold as a going concern in order to achieve the best value from it. I
could never have made that investment had I thought that there was a risk that might not
be possible.

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56. There were also costs associated with the relocation back to the Branch after the works
were complete in around May-June 2010 [PS1/65-76], however, I was suspended around
{E2/59/1-11}
this time and did not make a contribution to this.
{E2/58/1}

Horizon and Helpline as Services

57. While I did not give particular thought at the time to whether Horizon and the Helpline
were being provided to me as services by Post Office, Horizon was a system which Post
Office owned and controlled and required me to use. As I set out above I was required to
pay for its relocation to the portacabin. I was fully reliant upon its provision to me in
discharging the requirements of my role and Helpline was the only immediate source of
advice. I relied upon on Post Office to provide both and for both to be safe and reliable. I
also relied upon and initially expected the Helpline to escalate matters where necessary,
and to see my issues through to a resolution. However, it seems that Helpline staff only
dealt with queries in isolation, and didn't attempt to resolve matters.

How Post Office Ran its Business

58. I have seen that it is Post Office's case at paragraph 13 of its Defence to my claim that
because I had worked for many years as an assistant at the Branch I would have been
aware of what it regards as "the nature of the relationship between Post Office and its
agent Subpostmaster", including a range of matters it will contend were aspects of that
relationship at the Common Issues trial.

59. For the reasons I have given above, I was not aware of the specific terms of the SPMC, to
which Post Office refers, when I accepted the appointment. While I was aware that
products and services could be changed by Post Office and that my remuneration could
be varied as a result, I was not aware that I was responsible for losses and gains in
Branch accounts, save to the extent I have set out above. I set out what I understood to
be the position with regard to termination of my appointment and any requirement to
follow an Operations Manual, above. I had no clear understanding that my role was to be
that of an agent, as such, and considered the relationship to be far more like being an
employee in respect of Branch business. As far I was aware, Post Office employed me,
they paid my remuneration and effectively sacked me.

60. In reality however, prior to my appointment I had very little idea that Post Office ran its
business in the way that I experienced during the course of my appointment. I did not

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C1/2/13
expect there to be serious limitations in the training and support provided to me with
regard to Horizon, or the way in which Horizon operated to give rise to unexplained
discrepancies. I also had no reason to anticipate Post Office's subsequent approach to
auditing my Branch, requiring me to pay unexplained shortfalls, investigating disputed
shortfalls, or its approach to suspension and tennination.

Training

61. I was not provided with any training at the beginning of my appointment as
Subpostmistress. However, I had been an assistant at the Branch for 12 years and had
learned on the job. Nevertheless, prior to the introduction of Horizon, my understanding
was that I would be provided with adequate training to use Horizon for all purposes it was
being provided to me for. Indeed, I needed that to be able to comply with Post Office's
requirement that I use Horizon.

62. Approximately two weeks before Horizon was installed in my Branch, I attended a one day
training course provided by Post Office. At the same time, my (then) two assistants also
attended half a day of training each. A number of terminals were set up in a pub in
Sonning and the course was attended by 12-15 other Subpostmasters. The format of the
training session was to work through example customer transactions, and how they were
entered.

63. There were insufficient trainers to provide adequate support to the Subpostmasters who
were working through these, nor was there the time to address these thoroughly.
Furthermore there were a great number of different types of transactions undertaken in
Post Office branches, so there was no chance this training could cover even a small
proportion of them. My assistants found the training particularly difficult to follow.

64. The training course did include how to carry out a balance of cash and stock at the end of
a week and also the procedure to be followed at the end of the day. I tried to pay careful
attention to this as would be my role to follow these procedures. But to my recollection,
the training cover did not deal specifically with shortfalls, how you may get to the root
cause of them, or even how you might dispute them. (I should point out that at this stage,
I had never experienced the sort of unexplained shortfalls that later transpired.)

65. It was obviously important that Subpostmasters in my position received adequate training,
particularly as my assistants had found their training very hard to follow and I did feel a bit

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disappointed by the quality of the training that I was offered, although I had no idea at the
time how important this would turn out to be. I did not to request any further training as it
had been so ineffective and I didn't think attending a further session would be any better.
I assumed that the system would work and thought that I would be able to use it. Horizon
was equipped with a training mode, but it took a long time to load and use it. Switching
out of it, so that the terminal could be used for customer transactions, was neither easy
nor convenient. So, it was totally impractical to use it during opening hours and it
effectively relied on the Subpostmaster trying out different transactions.

66. Aside from my assistants' half-day training on Horizon, I carried out the rest of their
training on the job, as best I could but I admit that I approached this on the basis that the
system worked. It was easier to train assistants by shadowing them while customer
transactions were undertaken and that was what I did. My assistants were not provided
with any training materials by Post Office. Learning how to use Horizon and training my
assistants would have been quite impossible within normal working hours alone.

67. I understand that Post Office has suggested that it was particularly my responsibility to
train assistants from July 2006 onwards - although this was not explained to me at the
time and I was not aware of any variation in July 2006. I took it upon myself to train my
assistants throughout my appointment, because I was not satisfied with the training
provided by Post Office and wanted to make sure that things were done properly.

68. As I mention above, I do not recall having a copy of an Operations Manual for the Branch,
and even if there had been, it would not have been relevant to Horizon if it had originally
been given to Martin. I can't remember personally being provided with any training
manuals (apart from a training booklet for client counter procedure, which I requested in
around November 2009, because I could not locate a copy [PS1I77]), or having my {E2/33/1}
attention drawn to any training updates. If it was, it certainly was not done prominently
enough for me to remember it now.

Helpline

69. I had understood from my training that I should contact the Helpline for help and advice on
all issues I experienced at the Branch, including with Horizon, in the first instance. I note
that in the letter dated 23 September 1999 that Post Office claims to have sent me it says
" The Helpline number below is your first point of contact and the staff in our Regional
Office will be only too pleased to help and advise you on any matter."

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70. Prior to the introduction of Horizon, Helpline was available for advice on products and
services. I rarely needed to use it for any advice on accounting matters. Given what I had
been told about the need to use Helpline for Horizon related questions, my expectation,
when Horizon was introduced, was that Helpline would always be available and be able to
provide me with answers to any questions about Horizon, particularly where those arose
when balancing stock and cash weekly or submitting trading statements. There was in
fact no alternative and clearly this was both necessary, and Post Office's obvious
expectation as well.

71. The fact Helpline fell far short of these expectations as I describe below again shows me
just how reliant I was always going to be on Post Office for support about Horizon and, in
particular, unexplained shortfalls in Branch accounts. I have been shown two documents
disclosed by Post Office, which lists various calls that I made to the Helpline between 09
June 2009 and 29 May 2010 [PS1/83-93] and 27 October 2009 and 8 June 2010 {E2/118/1}
[PS1/77-82]. I cannot verify the accuracy of everything these logs record, and indeed I do {E2/33/1}
not know how they were selected or how complete and accurate they are. For example,
these call logs contain a number of entries that are not included in the call log that was
provided to me as part of the mediation scheme [PS1/94-97] and I set out some other {E2/32/1}
specific examples below.

72. Nevertheless, from my own recollections and from looking at these documents, I would
give the following examples of how Post Office operated Helpline in practice, of which I
was not aware prior to accepting my appointment.

72.1 Helpline could not be contacted at all times, particularly on balancing days. On a _
number of occasions I left voicemails requesting an urgent call back to assist,
including when I was trying to balance cash and stock. I recall that the Helpline
had a generic message which played when the lines were too busy to get
through. Over time, the Helpline appeared to adopt a policy of saying that they
would call back within 48 hours, although this did not always happen. The
Helpline either did not return my call until the next day, after the time I needed to
complete the balance, or did not return my call at all. I spent long periods on hold
and often I was told that they would look into something and call me back, which
they didn't. For example, on 30 January 2010 I called the Helpline chasing a
response to a previous Helpline call I had made, and provided them with the
relevant reference number [PS1/78]. I called again on 3 and 5 February 2010 {E2/33/1}
requesting a call back from my Branch manager in order to discuss disputing a

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loss, which I had recently been notified I should do (see paragraph 91 below). I
also note that the call log states "HSH... had found a major faulf' [PS1/78]. I {E2/33/1}
believe that 'HSH' may stand for Horizon System Helpline.

72.2 Helpline was needed most for advice about balancing problems and
discrepancies, but on these matters the advice given was lacking. For example,
on 9 and 10 December 2009 I called the Helpline to report a discrepancy of
£2,584.65. There appears to be no entry for calls of this nature on Post Office's
call log. I was advised by the Helpline that in order to open the next day for
trading, I could either settle this sum centrally, or pay it in cash or by cheque. It
was suggested settling centrally would give me more time to find the error. I was
not informed of any option to dispute it.

72.3 Further, despite being a significant sum, I note that one entry in Post Office's call
logs for 23 January 201 O indicates that an apparent shortfall of £9,000 (which I
know to have been, more accurately, £9,033.79) which I had asked to be
investigated was to be given "low priority" [PS1/77]. {E2/33/1}

72.4 Helpline was often unable to provide any helpful advice at all. For example, I
called the Helpline on 28 October 2009, shortly after I relocated to the portacabin.
The new safe in the portacabin had a time delay lock installed in it, which
prevented me from performing a weekly balance accurately, because I could not
check its contents once the lock had engaged. Rather than addressing the
problem, Helpline told me effectively to ignore it by balancing my lottery figures
on a Thursday morning, and rolling over office transactions to the next week
regardless [PS1/98]. {E2/30/1}

72.5 There was no continuity of service on a given problem. For example, on or


around 30 January 2010, in the call that I mention at paragraph 72.1 above, I
spoke to the Helpline and specifically asked to speak to Nigel Allen my Retail
Line Manager about the apparent shortfalls I was experiencing [PS1ns]. I was {E2/33/1}
informed that he did not involve himself with balance issues.

73. I cannot recall a time when the Helpline was able to resolve fully any important issue I had
raised , and Helpline staff were simply unable to assist me in getting to the bottom of the
cause of apparent shortfalls, even when they escalated matters. Further, the Helpline did
not notify me that other Subpostmasters were experiencing apparent shortfalls like I was
facing.

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Horizon

74. I understand that a further issue to be determined at the Common Issues trial is the extent
to which apparent losses arise on Horizon in the ordinary course of things without fault or
error on the part of Subpostmasters, Post Office's case on this being that they do not. As
I describe above, in my experience the position on this changed fundamentally following
the introduction of Horizon at my Branch.

75. When Horizon was introduced, I did not expect apparent shortfalls to arise any more than
they did when manual accounting was used and I certainly did not expect to be left unable
to identify the cause of any apparent shortfall, either on my own or following a proper
investigation by Post Office. In fact unexplained shortfalls started to occur shortly after
installation and, later, when the Branch was relocated to the portacabin pending works.
was never able to ascertain the cause of the problem completely using Horizon.

76. First, shortly after the system was installed, in 2000 - 2001 , an electrical installation fault
caused short circuits to occur many times a day which resulted in power outages to the
Branch, shop and my home. On one particular day there were 36 power outages. Since it
was Post Office that had required the installation of the system and, as I describe below,
varied the terms of my contract so as to require its' use, my expectation and
understanding was that they would be responsible for resolving this.

77. When I reported the issues, Post Office was initially unwilling to help, eventually sending
out an engineer when it was clear hardware was at risk. Fluctuating apparent shortages
and gains had become apparent in weekly balances and overall and an unexplained
£1,000 loss was showing. I paid these apparent shortfalls.

78. Clearly I did not have, nor would any Subpostmistress in my position have had, any way
of ascertaining their actual cause. They appeared to me to be entirely associated with
power outages. I have since been shown an internal Post Office email in November 2000,
acknowledging the fact that the power outages were indeed "Horizon related' [PS1/99- {E2/10/1-2}
100J and, in this same email, recording that "the balances are a mess (in pre Horizon
times - the Postmistress virtually achieved a clean balance every week)... I worry that
something like 25 re-boots in one day is having an effect overalf. However, Post Office
did not notify me of this view at the time.

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79. On 20 July 2000 and 1 November 2000 I received letters from Post Office [PS1/101-102] {E2/6/1}
purporting to give me the authority to hold two small shortages of £393 and £578.02 {E2/9/1}
respectively in my account for a period of eight weeks. However, this permission was only
for as long as no other error notices were issued, in which case it would cease and those
further error notices would be processed immediately. I had no idea that Post Office had
the contractual right to do that, or would be able to operate its contract with me in that
way. Not only did Post Office seek to control whether I could hold shortages while they
were being looked into, but it also wanted to do so on the basis that any further error
notice would be paid immediately, in other words without investigation. I confess I did not
understand how or why this was possible or necessary at the time.

80. In November 2004, I received a write off authority voucher for £2 [PS1/103]. Whilst the {E2/23/1}
amount is not significant, the fact is that Post Office determined whether or not this sum
could be written off and on what basis. I note in this document that there is a further
reference to a 'Losses and Gains Policy'. As I state above at paragraph 29 Post Office
did not provide me with a copy of that document. I still do not know what it contains,
though I imagine it contained criteria Post Office applied in deciding whether to 'write off'
an apparent loss. If so, I was never made aware of those criteria or whether they were
part of my terms.

81. I have however seen copies, since these proceedings, of two 'Product Statements'
[PS1/104-105] which apparently set out how Post Office calculates whether it has {E2/78/1}
suffered a financial loss/gain in respect of National Lottery prize sums disbursed at the {E2/76/1}
Branch and how it attributes liability to me for it. These two documents appear to show
that where an incorrect sum was entered, for some reason, on Horizon for prize money
given to customers over a given period, Post Office believed it was owed the difference
whether the incorrect sum was less than what was paid out, or more than that sum. The
first document sets out a transaction involving a £10 prize. It seems from the description
that Post Office is in fact referring to an apparent gain as opposed to an apparent loss.

82. I have since seen an internal Post Office document [PS1/106-107] which seems to be a {E2/39/1-2}
running record of actions taken by Post Office during a period in which they were
apparently monitoring perceived shortfalls in my Branch accounts. The alleged National
Lottery disparities to which I refer above were recorded under 'Actions' as relevant to their
monitoring. It seems as if the £10 mentioned above is dealt with as a loss rather than a
gain, particularly as a later entry identifies the total "debt = £28,829.05'. This appears to

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be reiterated in a Statement of Discrepancy disclosed by Post Office (PS1/108] and the {E2/92/1}
Statements of Debt dated 23 March 2011 and 29 March 2011 [PS1/109-110]. {E2/114/1}
{E2/116/1}

83. I can only assume from this, with some concern, that the process of preparing these
documents was manual and obviously prone to error and that Post Office had a practice
of holding me liable for all discrepancies regardless. If that is the case I was not made
aware of that at any stage before I accepted my appointment or when Horizon was
introduced. Importantly, I would have had no way of knowing whether Post Office was
requiring me to pay sums to it based on errors like this, or checking the figures to see
what had happened.

84. Another document that has been disclosed by Post Office is a screen-shot (possibly a
Transaction Correction) apparently showing a disparity between Camelot and Horizon
figures of £272 [PS1/111]. The screenshot relates to a period ending on 9 June 2010, {E2/68/1}
when, as I explain below, I was suspended and not operating the Branch. To my
recollection the Branch was in fact closed on 9 June 2010. Therefore I did not see this
documenUscreen shot and had no opportunity to dispute it.

85. Thereafter, on 23 June 2010, I note that Post Office has identified £272 in a spreadsheet
with reference to "hardship" next to these entries [PS1/112]. {E2/91/1}

86. There are a number of such references to hardship in the running record of actions to
which I refer above [PS1/106-107], but I am unsure on what basis hardship is determined, {E2/39/1-2}
or whether I had a contractual right to that being considered or determined in my favour in
respect of any given loss. Such references are also made in a number of statements of
debt prepared/updated after my appointment had concluded [PS1/112-113). I do not {E2/91/1}
understand the basis upon which Post Office was able to determine which apparent {E2/122/1}
losses caused financial hardship to me and whether or not they should be pursued and
was never told this at the time I took over as Subpostmistress or when Horizon was
introduced.

87. Aside from the power issues that I experienced and a relatively small shortage which Post
Office apparently identified at an audit after the burglary to which l refer above [PS1/114], {E2/16/1}
but which I believe could have been related to the burglary, l did not experience any major
issues with shortfalls until l relocated the Branch into the portacabin.

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88. At my first full balance on 11 November 2009 there was an apparent shortage of £388.88.
I sought the Helpline's advice - the representative said that it was probably because some
paperwork had gone missing in the move and that it would probably right itself in time.
Believing what the Helpline told me, I put the cash in to cover the apparent shortage.

89. The following trading statement on 9 December 2009 showed a shortage of £2,584.65. As
I mention above, I attempted to call the Helpline, but without success. The Helpline
advised, the following day, that there was nothing they could do, and I had no option to
make a payment to Post Office by cheque. I was not advised that I could dispute the
shortfall. As I mention above, there does not appear to be a record of my call the following
day in Post Office's disclosed call logs.

90. During December 2009 I closed the office for three days before Christmas for my
daughter's wedding. We were closed over Christmas and New Year. Nonetheless, the
trading statement on 5 January 201 O showed a shortage of £9,033.79. This was entirely
unexpected as I knew that there had not been this amount of cash unaccounted for in the
Branch during the trading period and the Branch had been closed for a number of days. I
immediately reported it to the Helpline, who gave no assistance apart from to inform me to
double check my figures, which I had already done. As I mentioned above, the Helpline
marked this as '/ow priority'.

91. I believed I had accurately accounted for the cash and stock held at the Branch and I was
able to confirm this when I reviewed the records that I had retained, which I refer to below.
Helpline advised me that unless I had formally declared that I wished to dispute a shortfall,
then it would not be considered disputed. I had not been informed of this before, either. I
naturally assumed that I had a right to dispute any alleged losses and that calling Helpline
to question an apparent shortfall would give rise to an investigation. My understanding
was that Post Office would be obliged to do so as that was necessary in order to get to the
bottom of the problem.

92. As I mention below, I understand the extent to which the cause of shortfalls was a matter
within my knowledge is to be considered at the Common Issues Trial. Given the concerns
I had, from 6 January 2010, I obtained as much transaction information as was available
to me on Horizon, specifically, transaction logs going back 42 days prior to that day, for
example, a transaction log for 5 January 2010 [PS1/115-131]. I sought to retain this{E2/37/1-17}
paperwork in an attempt to assist me in finding the problem. I also prepared hand written
accounts for myself to attempt to keep track of the apparent shortfalls [PS1/132-185]. {E2/35/1-54}

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93. But despite carefully reviewing that information, I was still unable to find out for myself
whether the apparent shortfall of £9,033.79 was a real or just an apparent loss and why it
had occurred. I was simply unable to do that without having full information from Horizon,
to which Post Office had access and not me.

94. Though I had disputed the apparent shortfall, I began receiving demand letters from Post
Office, which stated that I was contractually obliged to repay it, asked me to settle the sum
and threatened to deduct it from my remuneration if I did not do so within seven days
[PS1/186-187]. {E2/40/1-2}

95. Post Office did not set out or quote my apparent contractual obligation to make good any
losses. At the time I was appointed and upon introduction of Horizon my clear
understanding was that there would need to be at least some kind of negligence on my
part for Post Office to demand money from me, not least because of the manner in which
they handled the stolen money, which I describe above.

96. I continued to contact the Helpline about my concerns, and each time they said either that
they were unable to assist, or that they would look into the matter and call me back, which
they didn't. Eventually I requested direct access to Fujitsu, who I knew handled the
Horizon system for Post Office, so that I could discuss the problem, but this was refused.

97. Instead I was told by the Helpline that Post Office would contact Fujitsu themselves.
Having apparently spoken to Fujitsu, Post Office said that there was nothing wrong with
Horizon, though they had not asked me to produce the evidence I had assembled, to
which I refer above, nor attended the Branch at this point (PS1n9]. {E2/33/1}

98. I am aware from Post Office's call logs that it appears that in late January 2010, Fujitsu or
Post Office had identified a further large cash shortfall. I asked the helpline if Post Office
had accounted for a cash remittance of £26,000 which had occurred on 5 January 201 O.
Despite Helpline staff saying that they would check this and confirm, they never came
back to me and I have since seen from Post Office's call logs that it had no record of this
cash remittance at that time. I do not understand how I could ever have been expected to
investigate and conclude either way why there was an apparent shortfall when Post Office
did not have a record of one, straightforward, transaction and a remittance going back to
its own Cash Centre. Out of concern at the missing cash remittance in early February
2010 I called Post Office's cash centre and was told that the £26,000 cash remittance had
in fact been received on 8 January 2010.

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99. I am now aware from Post Office's documents that it has disclosed in this case that details
of my concerns were forwarded to Fujitsu on 12 March, "Fujitsu ...responded on [the]
same day saying that SSC are insistent there are no software issues at the branch and it
is down to user error' [PS1/188-190]. I cannot understand how Fujitsu could have {E2/86/1-3}
investigated and concluded this on the same day. Despite being asked again on 26 April, I
have seen no evidence that Fujitsu reviewed the position after 12 March. I continued to
receive demands for payment in respect of the appa~ent £9,033.79 shortfall, together with
a threat that it be deducted from my remuneration, if that was approved by my Contract
Manager [PS1/191-192]. I have never been told the basis, contractual or otherwise, upon {E2/41/1-2}
which a decision of that nature would be taken.

100. Post Office's attempt to impose liability upon me was a matter of obvious significance to
me both financially and as a matter of principle. My unwillingness to let this go reflects the
understanding I have always had that Post Office was obliged to carry out a fair
investigation into it and only require me to pay where losses had occurred and were my
fault. I refer to my correspondence with Mr Paul Kellett of Post Office in this regard in
February 2010 [PS1/193] in which he confirmed on 11 February 2010 that "this matter {E2/42/1}
[was] being investigated' [PS1/194-195]. Despite this, I continued to_ receive demand {E2/44/1-2}
letters for varying amounts, quoting my apparent contractual obligation to make good any
{E2/45/1}
losses [PS1/196-205]. {E2/47/1-3}
{E2/70/1-2}
{E2/46/1-2}
101. I understand that Post Office's case is that it was my responsibility to prove that a shortfall {E2/55/1-2}
did not result from losses for which I was responsible. I have been shown paragraphs 93
and 94 of Post Office's Generic Defence, which are adopted in the Defence in my case (at
paragraph 78(1)) where it is said by Post Office, as I note above, that "losses do not arise
in the ordinary course of things without fault or error on the part of Subpostmasters or their
Assistants" but also that ".. .the truth of the matter. .. [whether losses arose for which a
Subpostmaster is responsible] lies peculiarly within the knowledge of Subpostmasters as
the persons with responsibility for branch operations...".

102. I can say categorically that the truth of the matter was not within my knowledge. I had
investigated the shortfalls to the full extent possible, but I was unable to ascertain the
cause of these shortfalls, or whether they arose from anything that was in fact my
responsibility at all. Nor do I believe it could it possibly have been envisaged when
Horizon was installed that I would have been able to. In fact only Post Office had access
to full transaction data on Horizon and to information that is apparently only available
through Fujitsu, to whom I was denied access. I made it clear to Post Office at the time

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about the unexplained nature of the apparent shortfalls I had experienced and the
exhaustive enquiries I had carried out [PS1/193] and it was clear that Post Office's {E2/42/1}
assistance was absolutely necessary. For example, I was able to identify from my own
transaction records that transactions were appearing out of chronological order - such as
a number of entries at 09:52 followed by one at 09:49, and then back to 09:51. This is not
something I could investigate further without support from Post Office and Fujitsu
[PS1/206-218]. {E2/60.1}

103. I experienced a further shortfall of £8,436.86 on 13 February 201 O which again arose,
apparently in the ordinary course, and, I believe, without any fault or error on my part.
Again, I reported this to the Helpline and agreed to settle it centrally on the condition that it
was "in dispute". Within two months I experienced a yet further shortfall of £924.22, which
I would characterise in the same way, and I received another letter of demand dated 27
{E2/51/1-2}
April 2010 for that sum [PS1/219-220].

104. Finally, after I had tendered my resignation (which I deal with below) it appears two further
unexplained shortfalls of £5,006.21 (15 May 2010) and £3,218.36 (25 May 2010)
appeared. I contacted the Helpline to report the discrepancy and agreed to settle them
centrally on the condition that they were "in dispute". I received demand letters, but did not
pay.

Audits and Investigation

105. Though I understand it is a matter for the Court, in my view it goes without saying that a
proper and fair investigation had to be carried out into the cause of any apparent shortfall
before my liability on the basis of negligence or error could arise. Based on my
experiences in relation to the burglary to which I refer above, that was my expectation
prior to commencing my appointment and when Horizon was introduced. Audits were
carried out at my Branch, but I have serious misgivings about them, and the extent to
which they properly and fairly investigated the position at my Branch.

106. First, I note also with some concern that Post Office's internal communications in around
May 2001 [PS1/221) show a serious lack of precision with respect to an audit that was {E2/15/1}
carried out at my Branch following the burglary, and I remain unsure whether any accurate
assessment of my Branch accounts was carried out.

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107. Second, following the occurrence of the series of unexplained shortfalls to which I refer
above, Mr Junaid Tanveer, a Post Office Network Support Field Advisor came to the
Branch to carry out a "non-audit intervention" on 16 February 2010. This I understood to
be an attempt to assist me with the cause of the alleged shortfalls. Mr Tanveer looked at
the information available from the Horizon terminal in my Branch and took away the
trading statements and weekly Horizon balance reports that I had kept to look at the
matter further.

108. He returned on 19 February 2011 , but told me he had been unable to identify the cause of
the apparent shortfalls. He said this was to be expected since the paperwork he had
taken away with him contained information taken from Horizon and would simply show
what Horizon showed. Mr Tanveer also confirmed to me having looked at what was
available to him that there was no evidence of any suspicious activity either.

109. However, on 28 April 2010 my Retail Line Manager, Mr Allen, [PS1I222-223] wrote to me {E2/52/1-2}
to request that I pay apparent shortages, then said to be in the sum of £18,594.87, by 7
May 2010. Mr Allen said that I was obliged to pay the losses pursuant to section 12,
paragraph 12 of the Subpostmaster Contract and directly quoted this paragraph:

"The Subpostmaster is responsible for all losses caused through his own negligence,
carelessness or error and also for losses of all kinds caused by his Assistants.
Deficiencies due to such losses must be made good without delay. "

110. So far as I can recall, this was the first time Post Office had drawn my attention to the
specific wording of the clause imposing liability for branch account shortfalls.

111. Mr Allen's letter appeared to suggest it fell to me to produce evidence that a fault with
Horizon was the cause, and said that Fujitsu had advised Post Office that there were no
software issues with the Horizon system at my Branch and that Mr T anveer could find
nothing of relevance in my paperwork, to which I replied by letter dated 30 April 2010
[PS1I224-226]. But I note from some internal emails disclosed by Post Office that as late {E2/54/1-3}
as November 2010, there were still anomalies in the Horizon data for my Branch
[PS1I227] and it is clear to me from this that a proper investigation by Post Office would {E2/109/1}
always be necessary.

112. At my insistence, on 19 May 2010, Mr Rajinder Gihir, a Post Office Auditor came to the
Branch to observe. Mr Gihir observed every transaction carried out and himself carried

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out cash declarations in my Branch at 09:00 and 13:00. These identified an apparent
shortfall of £190 that had arisen during that time alone. Mr Gihir was not able to identify
the cause of the apparent shortfall while he was there or at all.

113. Mr Gihir returned to carry out an audit at my Branch on 25 May 2010. Mr Gihir struggled
to match the figures that he himself produced in his own audit report on his lap top
[PS1/228-231]. As part of his audit he was to enter those figures into the Horizon terminal {E2/61/1-2}
and they should have reconciled with those on Horizon. {E2/62/1-2}

114. Mr Gihir told me that for reasons he didn't understand the figures did not in fact match. I
have since seen that he reported this problem by internal email [PS1/232] in which he {E2/65.1}
said that "the audit figures in the Horizon [did] not match the figures on [his] spreadsheer,
and after attempting to get to the bottom of it "for two hours without any success", he
"finally accepted the Horizon figures which came to overall shortage of the office
£3218.36''. He accepted those Horizon figures using the Horizon terminal in my Branch
himself. I have since become aware from the internal email discussion I refer to above
that Mr Gihir also then later amended the figures again after the audit, without my input.

115. Mr Gihir arrived at the Branch at a time when I was part way through carrying out a cash
remittance. I had already entered the remittance on Horizon, but not sealed a second
cash bag. Mr Gihir was happy for this to be sent out provided he could himself check it.
He emptied the bag and was replacing it when Cash Co arrived to collect remittances. So
far as I am aware, in the rush to complete the exercise Mr Gihir left £7,000 of the cash in
the cash draw and did not seal it into the bag. It was later discovered by us. Mr Gihir
himself investigated ways in which this could be remitted, and eventually it was agreed
between him and the Cash Centre that it could be sent with my next remittance from the
Branch.

116. Mr Gihir was the only person using the terminal at the Branch that day and I assumed that
he had accounted for his error in my records on Horizon because I heard nothing more. I
sent the £7,000 in my next remittance, and I have since seen that a Post Office action list
which records that it was received by Post Office on 11 June 2010 [PS1/234-235], though {E2/85.1}
I was not told this at the time. I understand that Post Office's case is that it issued a
transaction correction in respect of the £7,000 on 11 June 2010. If it did, that was after I
had been suspended and was in no position to take action upon it.

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117. In any case, £7,000 was regarded as missing in a letter from the Cash Centre dated 27 {E2/66/1}
May 2010 [PS1/236] in a Post Office 'Statement of Debf dated 23 March 2011 [PS1/109], {E2/114/1}
in a breakdown of apparent losses updated on various dates to 30 November 2011
[PS1/237] and in a further 'Statement of Debf produced as late as 6 August 2014 {E2/122/1}
{E2/128/1}
[PS1/238], such that Post Office was still trying to pursue me for it some four years after
the Cash Centre had confirmed that it had been received. The Statements of Debt to
which I refer credit the sum of £2, 162.13 described as a 'final account surplus', and debit
the £7,000 figure. So the attempt made by Post Office to account for the £7,000 in its
Defence in my case at paragraph 34 is nonsensical.
{E2/106/1}
{E2/112/1-25}
118. I now understand from a number of Post Office internal emails in October and November {E2/56/1-4}
{E2/104/1-13}
2010 [PS1/239-281] and a letter dated letter dated 16 July 2010 [PS1/282], that Post {E2/56/1-4}
Office had not in fact investigated the shortfalls during the period when they assured me {E2/104/1-13}
that they were "thoroughly investigating the issues". I now know from looking at internal {E2/98/1}
Post Office emails that Post Office is able to obtain detailed information from Fujitsu
regarding apparent discrepancies in branch accounts set out in a document known as an
'ARO', for which it is charged by Fujitsu. [PS1/240-264 and PS1/283-288]. I'm extremely{E2/112/1-25}
{E2/99/1-6}
concerned to note from this email that requests for ARO data were only made after my
suspension, and not during the previous year when I had been complaining about the
issues. Far from the cause of shortfalls being something peculiarly within my knowledge,
Post Office had access to, but did not obtain, detailed information to help ascertain this by
reason, I assume, of the associated cost.

119. Indeed, I later identified three entries on an ARO provided to me by Post Office, that did
not appear on my own transaction logs printed from Horizon, to which I refer above
[PS1/289-290]. This showed to me that there were some entries in my Branch accounts{E2/129/1-2}
which I was unable to see and would have been entirely unaware of had I not had sight of
the ARO, which has since been disclosed by Post Office in this case.

120. I recall that when I began working at the Branch when Martin was Subpostmaster, audits
were a mechanical exercise at which the auditor simply added everything up in the
branch, and matched them with the transactions, which we were then asked to agree. My
expectation when I began my appointment was that this would continue, and that the
audits, and indeed investigations would be fairly conducted. Upon the introduction of
Horizon, the audits did not appear to be 'true' audits, but a review of what was held in
branch, and if this matched the Horizon figures which were taken to be accurate (and it

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seems that those figures were also matched against Post Office's figures which I did not
have access to).

Suspension and Termination

121. I tendered my resignation on 12 May 2010, g1vmg 3 months' notice which I had
understood that I was entitled to pursuant to my agreement with Post Office [PS1/291]. {E2/57/1}
The reason for my resignation was as a result of the persistent shortfalls and continued
lack of assistance from Post Office, but also because I had informed the Helpline that I
wanted to sell the Branch, but was informed that I could not do so until I had resigned
[PS1/292). This is recorded in the Helpline call logs disclosed by Post Office [PS1/82]. {E2/73/1}
{E2/33/1}

122. I received a letter from Post Office dated 2 June 2010 [PS1/293-296] which set out a {E2/69/1-4}
number of terms and obligations in the application process for the incoming SPM - Post
Office dictated the timescales, the manner in which the transfer would take place and
whether or not the prospective purchaser that I had identified would ultimately be
appointed and be permitted to purchase the branch from me. I was also expected to
ensure the prospective purchaser's compliance with a schedule of events set out in the
letter. At the time I took the Branch over I was not told the circumstances in which Post
Office may or may not appoint any successor to whom I may later sell the Branch and
retail business.

123. Irrespective of my resignation, I was determined to resolve the apparent shortfalls and I
continued to push Post Office to help me with this. After my suspension, I agreed to send
some paper work that I was able to easily copy and post. I was told by the temporary
Subpostmaster that later replaced me that he was instructed to destroy all paperwork that
I had kept in the Branch, that related to my appointment. He was willing to give it back to
me instead, so I retained what he let me have and those documents have been searched
as part of my disclosure in this case.

124. Despite having given my notice to Post Office and the fact that I was planning to finish
work in around mid-August, an auditor turned up at the Branch unexpectedly on 8 June
201 0 and simply said that he was there to carry out a closing audit as I was being
suspended.

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125. The following day I was sent a letter [PS1/297-298] which confirmed my suspension,{E2/81/1-2}
which was apparently under section 19 paragraph 4 of the SPMC. This letter stated "it
does not mean that your contract has terminatecf', however I was never reinstated and it
was clear that reinstatement was not going to be an option for me. Again, this was the first
time that I was made aware of that particular provision of the SPMC. I was not paid
remuneration during my period of suspension.

126. Despite being suspended, and not receiving remuneration, I was still required to maintain
the Premises, and received only £30 per week from the temporary Subpostmaster,
Newrose limited, for use of the Branch.

127. I note from Post Office's 'Final Trading Statement' dated 8 June 2010 [PS1/299-300] that {E2/79/1-2}
there was a surplus in the final statement of £2,162.13, which served to reduce the sum
that Post Office considered I was required to pay in respect of which I continued to receive
demands [PS1/301-303]. {E2/100/1}
{E2/102/1
{E2/115/1}
128. As I explain at paragraph 21 above, prior to my appointment, I did not believe that Post
Office could suspend or terminate me for no reason (subject to notice provisions), unless I
had been negligent in some way or committed gross misconduct. I did not believe that
Post Office could terminate me without providing compensation for loss of office. I was not
made aware of this by Post Office, even if that is a right Post Office says it has. I also
expected that Post Office would thoroughly investigate matters in order to come to such a
conclusion.

129. I did not consider whether Post Office could or would suspend (and essentially terminate)
me in relation to alleged losses, as I did not expect them to occur, particularly not at the
levels that they did, unless, as I say, I had been negligent in some way. However, my
handling of Branch matters did not change after the relocation to the portacabin, I
continued to run the Branch as I had done previously when I did not experience any
difficulties, and when Post Office described me as running it "professionally" (as I detail at
paragraph 9 above). I believed, particularly as my husband and I had invested so much
into the Branch, that unless there had been some serious wrongdoing on my part, I would
be in control of the conclusion of my appointment. Post Office never explained otherwise
until the events I describe above.

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Comparative Knowledge about Transactions

130. I understand that one of the matters the Court will determine at the Common Issues trial
relates to relative knowledge about transactions as between Subpostmasters and Post
Office, and I have been shown paragraphs 76(4) to (6) of Post Office's Generic Defence
where Post Office states the alleged limits of its knowledge in relation to transactions
undertaken in branches.

131. I believed, and still do, that Post Office has access to all the relevant data for my branch.
This, I understood, would be obtained from Fujitsu and Post Office's third party clients. At
the beginning of my appointment, I believed that monitoring could only be carried out by
auditors arriving at the Branch, or if a third party client had raised an issue with Post
Office, at which point Post Office notified us of the same.

132. I now believe that Fujitsu carried out some form of monitoring, and I specifically asked
Post Office if I could have direct contact with Fujitsu to help get to the bottom of the issues
that I was experiencing. Post Office refused this request, and said that they would ask
Fujitsu to check the transaction logs for me. I now know that Fujitsu and/or Post Office can
remotely access branch accounts without the Subpostmaster being aware of it.

133. As I explain above (particularly at paragraphs 102 and 119), I investigated matters as far
as I possibly could. However, I was unable to ascertain the possible cause(s) of the
shortfalls without assistance from Post Office. I was able to review the data printable from
the Horizon system, but I could not interrogate it without access to the data that Post
Office held or had access to. When you are looking for a reason for an error, you need to
have all the information. I explained to Post Office on a number of occasions that I
needed to be able to compare the data held on my Horizon system, with the data held at
Fujistu / Post Office's head office. However, as I mention above, it was not until I saw
some limited ARQ data, that I realised it contained some entries that were not accessible
or viewable by a Subpostmaster. There is simply nothing you can do if you do not have
sight of the other end of the transactions - particularly if the person who does is requiring
you to find and prove the cause of the problem. The transaction logs gave me no more
information than was showing on the Horizon system so I was unable to investigate
further.

134. My difficulties in interrogating data were compounded by the Helpline, as I have explained
above. It was made worse because I was not always able to speak to them until I had

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already completed by balance, but also because they gave me conflicting advice and
didn't appear to make any effort to help me investigate.

135. One example of the underlying difficulties is a Transaction Correction on 11 June 2010.
As I explain above at paragraph 116, I am now aware that my office received this
Transaction Correction on 11 June 2010, which was after I had been suspended from the
branch. So I had no way of dealing with this TC, or disputing it. I also explain above the
difficulties with the auditor who was responsible for a £7,000 'loss' that Post Office chased
me for a number years, despite Post Office having received it in its Cash Centre and failed
to confirm that to me. At the time, I had no way of knowing what the problem was, and no
way of knowing whether, for example, one of hidden back office cash remittance entries
was missing or wrong.

136. Before Horizon was introduced, transactions were straightforward, albeit there were
hundreds of them. As long as we stayed within the guidelines of the respective
product/service/transaction then we did not experience problems. Each transaction was
carried out exclusive to any other transaction, and I simply had to calculate it all at the end
of the day. On the occasions when I came across a discrepancy, I was able to revisit the
end of day receipt, and resolve the issue. I assumed that Horizon would operate in the
same way. However, in fact Horizon only provided me with the totals of transactions, and
therefore it did away with my only means of cross-checking the transactions at the end of
the day.

137. What is more, my training on Horizon did not extend to accessing information on Horizon
that would enable me to investigate the possible origin of any apparent discrepancy. I
was not given any practical help as to how to prevent the problems I was experiencing or
how to identify their cause.

Interpretation of Section 12 Clause 12

138. I understand that another important matter to be determined at the Common Issues trial is
how section 12 clause 12 of the SMPC is to be interpreted, and I have been shown
paragraphs 93 of Post Office's Generic Defence where Post Office states its case as to
the proper interpretation of this clause.

139. For the reasons I have given above, losses clearly did arise in the ordinary course of
things for me, without fault or error on my part. The volume and level of most of the

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discrepancies were simply too large to be mistakes. However I believe that if I had had
sufficient support from Post Office, we ought to have been able to resolve those losses,
and at least given me a fair opportunity to have a thorough investigation carried out.

Variations to the terms of my appointment

140. The principal variation to the terms of my appointment was the introduction of Horizon in
2000 and the imposition of a requirement upon me that I use it for Branch transactions
and to submit Branch Trading Statements. This, and the effect it had upon the way in
which I was able to operate the Branch, I describe in detail above.

141. I am aware now that other minor variations were apparently given effect by Post Office
sending copies of Counter News through the post to the Branch periodically, from
recollection, monthly. Counter News, on occasion, contained instructions about new
products and services that Post Office required me to sell. These requirements were not
brought specifically to my attention, unless I happened to pick up on them in Counter
News. But I did understand that I was obliged to offer all new products and services that
Post Office wanted me to. I was not aware at the time that this was a formal variation to
any contractual arrangement with me, and there was no period of discussion or
negotiations, I simply had to effect the change. Post Office also withdrew services from
time to time although at this distance in time I can't recall specific examples.

142. The new services included financial products unique to the Post Office, which I was asked
to suggest to customers or make people aware they were available. If customers asked
me about those products, I provided them with information that Post Office had given me,
however I was never particularly comfortable with any 'hard sell'.

143. I recall that when Martin was appointed as Subpostmaster, Post Office refused our
request to install an ATM. On a number of occasions, I requested permission to issue
Motor Vehicle Licences [PS1/304-305]. In response, Post Office said in a letter dated 10 {E2/21/1-2}
June 2004 that there were certain criteria that a branch had to meet in order to be able to
offer these licenses, and it was said that the Branch did not fit them [PS1/306-307]. Post {E2/22/1-2}
Office controlled the products and services that we were able to offer, even though t
believed that there was a good business case for selling the licences, and it would have
helped to increase the profits. The increased footfall would also have assisted in
increasing profits for the shop.

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144. I understand that Post Office has suggested that there was a fonnal variation to my
contract in July 2006, at which point I was contractually obliged to train my assistants.
Martin and I had always provided training, as best we could, to all of our assistants before
July 2006 and I continued to do so after that (with the exception of a half day training on
Horizon, which I deal with below). I am at a loss as to what this apparent variation to my
contract entailed and I was not specifically informed of it and not otherwise aware of it.
Post Office has not disclosed any details of this apparent variation but at all times during
my appointment (and indeed during Martin's appointment) I had understood that we were
responsible for assistants, and training them.

STATEMENT OF TRUTH

I believe that the facts stated in this witness statement are true.

Signed ....... ..
Pamela Joan Stubbs

Dated this lO~f August 2018

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