Post Office ‘dishonestly’ withheld evidence when suing subpostmaster, court told

The Post Office obtained a High Court judgment against a former subpostmaster almost 20 years ago by “consciously and dishonestly withholding material evidence” in the case, the High Court has been told.

Lee Castleton, from Bridlington, East Yorkshire, was sued by the Post Office in 2005 for money it said was missing from his branch in Marine Drive, with a judge at the High Court ordering Mr Castleton to pay £25,858.95 in 2007.

The two-year legal fight saw him declared bankrupt following legal costs of £321,000, with Mr Castleton beginning legal proceedings against the Post Office and Fujitsu last year in the wake of the Horizon scandal.

Around 1,000 people were wrongfully prosecuted and convicted as part of the scandal, which is the subject of a public inquiry and has led to £1 billion of compensation being paid to victims.

At the first hearing in Mr Castleton’s claim on Friday, his barristers said that he is seeking the 2007 judgment be “set aside” on the basis that it was “obtained by fraud” by evidence being withheld, including a record of known bugs and defects in the Horizon system.

The Post Office and Fujitsu are defending the claim, with their barristers claiming that a 2019 agreement to settle more than 500 claims against the Post Office bars Mr Castleton from suing.

Friday’s hearing concerns preliminary matters in the claim, including whether there should be a separate trial to decide whether the settlement agreement prevents Mr Castleton from proceeding with his claim.

Attending the hearing at the Rolls Building in London, Mr Castleton said he was “so happy” and that it was a “great day for the Castleton family”, telling reporters: “It’s the first step, but it is nice to get to this point.”

In written submissions, Paul Marshall KC, for Mr Castleton, said that the claim arose from “the most extensive and enduring series of miscarriages of justice in recent English history”, but was “simple and straightforward”.

He said: “(The Post Office) obtained judgment by consciously and dishonestly withholding material evidence from the court that, had it been disclosed, would have materially affected the judgment of the court.”

He continued: “Mr Castleton further claims, relatedly, that he was the victim of an unlawful means conspiracy between the Post Office and Fujitsu to injure him where the unlawful means was perverting the course of justice.”

Mr Marshall also rejected the need for a separate trial, stating there was “no principled basis for placing a series of hurdles in front of Mr Castleton that he is required to overcome before the court considers the substance of his claim”.

The barrister added that Fujitsu has spent “extraordinary sums of £700,000” in “considering, but not responding to”, the claim.

In the 2007 judgment, Judge Richard Havery QC said that Mr Castleton was appointed as a subpostmaster at Marine Drive in June 2003, and noticed shortfalls in January 2004.

He covered the shortfalls with his own money and reported the issues, but was suspended in March 2004.

In the ruling, Judge Havery said that Mr Castleton’s case was that the losses were “illusory, not real” and were “nothing more than accounting errors arising from the operation of the Horizon system”.

But the judge ruled the shortfalls were “real deficiencies” and were “irrefutable evidence that Marine Drive was not properly managed at the material time”.

“The losses must have been caused by his (Mr Castleton’s) own error or that of his assistants,” the judge concluded.

Mr Castleton was one of 555 subpostmasters who sued the Post Office years later, and whose claims were settled in 2019.

James Bailey KC, for the Post Office, said in written submissions that the organisation was “more than willing” to set aside the 2007 judgment, but “does not accept that Mr Castleton’s claim in this litigation is a good one”.

He said: “It should be observed that the Post Office is defending this claim not because Mr Castleton is not entitled to redress, he plainly is, but rather because the Post Office considers that the correct route to that redress is through the compensation scheme designed specifically to support postmasters.”

The barrister also said that there should be a separate trial, stating that if the 2019 settlement was found to bar Mr Castleton from suing, “this would dispose of the entirety of the proceedings” and save time and money.

Laura Newton, for Fujitsu, also said in written submissions that there should be a split trial.

She said: “If the defendants are correct that the settlement deed has settled Mr Castleton’s claim against the Post Office and Fujitsu and that there are no grounds to rescind it, the entire claim falls away.”

At the end of the hearing, Mr Justice Trower and Judge Francesca Kaye ordered that a separate trial should take place, and said they would provide written reasons for their decision at a later date.

Mr Justice Trower said that this should take place “as soon as possible”, adding: “We are very conscious about what has been said on Mr Castleton’s behalf about having this hanging over him.”