This is not a case where there is allegations of estoppel or waiver, we are dealing with interpretation and implication.
What has happened over the last four weeks is much akin to a public inquiry into the Subpostmaster contract [SPMC], which is wrong.
DC really doesn’t want any judgements made on the basis of the Lead Claimants evidence.
MLF yesterday twice he said he was going to take you through basis for admission for all these post-contractual evidence. He has not.
Questions about the robustness of Horizon are the wrong question. This trial is about the contract.
J by corporate do you mean board level?
DC no that’s a question of construction
J I’m not sure it is Mr Cavender. If we turn to the Common Issues [CI]
I know there’s various versions of these floating around..
J now… it is of course correct a court can and often does construe contractual terms without evidence, but the wording of these CIs was agreed by the parties.
J so far as evidence being irrelevent as to how an SPMR operated their branch… I’m struggling as to see how that evidence in law can be irrelevant to 13 or indeed 12
J well let’s look at the defence 91.1 which describes the functions
DC in agent, fiduciary
J surely its relevant to what the SPM is doing
DC what they are doing is unpacking their fiduciary…
J exactly. The way in which they are doing it, how...
DC we say in this relationship if an agent disputes an account when making it - obviously he’s not stating that part of the account he disputes. That is a simple statement of law.
J on an individual basis?
DC on any basis. it’s not an issue for this trial. yes you need an understanding of how the system worked, but all you need to know is there is a branch accounting system
J so I don’t need to look at the accept, settle to cash etc?
DC not at a granular level
J so you accept I need to consider the process of how...
DC i suppose it’s question of degrees
[suggests doesn’t have all the evidence to make an informed decision]
DC all this will be disclosed at the breach trial
DC I think, my Lord you have. MLF hasn’t got a case that the SPMs were unable to dispute matters they didn’t want. They could. They could ring the helpline.
DC no that’s wrong. there is no sense the PO tried to disapply agency principles. SPMs had to account monthly or 5 weekly...
DC moves on. dealing with the way the parties presented and dealt with the evidence. In closing they give lip service to the correct test...
DC suspension is a contractual right - we can determine whether it is applied correctly when it comes to breach. This is not that trial. The C’s approach is wholly inappropriate.
J I don’t think there is
DC when you look at implied terms MLF is fascinated by looking at this in the guts of the dispute… it’s wrong… at stage of contracting you know much less so the notion of implied terms for what might happen down the line.
MLF makes a category error in the way he presents this case. The common reference we get from MLF is “commercial reality” this is...
Relational contract is a step along the way to look at certain types of contract. It’s not a warrant card to tear up case law.
DC this is not a jury trial, but it seems by the partial and inaccurate presentation of the evidence he hopes to make certain points.
[DC hands up inaccurate...
DC says C are cynical in their approach especially as there has not been full disclosure on both sides.
DC it was only very high level. not proper evidence
J there is no distinction between evidence and proper evidence
DC yes but very high level. you can’t make a judgement on that. [says anyway whole issue of training is irrelevant...
J well - i’ll just have to take a view on that...
DC but they’re not relevant to this trial - it’s not a normal trial on all the issues. I did xe on breach...
DC I think we are… there’s no debate about what buttons you press. I think MLF is arguing that he wants the clock to stop on settle centrally or whatever. We say...
[J is really pushing on nuance of accepting/settling/seek evidence issues of mechanically making an account to PO]
J you are not inviting me to make adverse findings on the LC credibility
J when you xe’d them
DC treat them with caution. a lot of this evidence is very very old and when you look at documents, you’d probably prefer the documents.
J some of them
DC yes Mrs Dar and Mrs S did receive and sign
J that’s why I said some of them
J so far as LC evidence goes - treat it all with caution but do not make any findings on their credibility
DC quite so, as to do so you would...
They have submitted evidence and can be questioned on it during the breach trial, but you shouldn’t make findings on it in this trial.
J those are classic features to take into account the credibility of a witness
J it seems I have to consider AB’s credibility
J but you have made submissions on credibility [points out where]
[J arguing he has to make findings on credibility as there are two different accounts of what happens and what LCs...
Mr Green intercedes to say that DC says he might say Mr Abdulla lied and notes DC says he lied in his submission.
J lets him speak but warns him not make interjections too often “store them up”
J to DC so you basically don’t...
DC or any comments that could lead towards findings
DC serious error by MLF in demonstrating his case in that he has failed to insert his 21 implied terms into the lacuna between express and agreed implied terms.
DC well - there has been no disclosure is more correct
J yes the Post Office has the doucments
DC yes but they haven’t been searched for
[DC now goes to case law - notes JFSA QC failed to quote the leading authority on construction in contracts once - very worrying and should ring alarm bells at once]
[inference being - your job is to apply the law, but it does sound funny to the lay person. Remember it’s not a direct quote, but I will...
This expressly rebuts MLF’s suggestion that this starts and ends with commercial common sense. It doesn’t.
DC and that is what MLF is asking you to do. And this case is about people leasing holiday homes. Ordinary people, another test...
[judge takes DC to 17 of AvB]
"The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case...
J asks about that
DC says well these were standard leases. SPM have an advantage...
[this causes a very strong gasp of disbelief from the two SPMs sitting in the public area]
DC accepts they are funded by PO but they do negotiate contract on SPMs behalf
J you are saying effectively Arnold and Wood are the bedrock on which I should read this [case]
DCyes my lord
This goes 5 times. The judge asks DC if he is happy to continue
DC [ironically] “I’m loving this."
Right. Judge is here… my bow was exceptional. We’re off...
"a term should not be implied into a detailed commercial contract merely because it appears fair or...
DC [QC for the PO btw] says JFSA QC did this.
“The courts’ usual role in contractual interpretation is, by resolving ambiguities or reconciling ..
v) The judge also concluded that the proposed terms were unnecessary to give business efficacy to the contract, because the contract was “effective without such terms”: [356(viii)]. However, ...
J it is - what point are you making
DC I can point to many thousands of others who operate on this contract without the need to write in the 21 implied terms...
DC also there must be a gap or hole in the contract which needs filling. It is a high hurdle to overcome.
DC I’m going to go to construction in a minute, but yes
DC We are at now at the so-called Yam Seng term
J well it is the Yam Seng term isn’t it
DC well not entirely
J we can go round in circles on this..
[all agree express terms first and then second and third could be considered together]
J says you seemed in your opening to query existence of relational contracts at all
DC the danger of rolling it up in the way that attracted my Lord…
J why did you say that?
DC because you seem to be saying that you are going to consider them as a piece
[getting pointy-headed here tho judge accepts this could be a semantic or miscom]
J whether it’s a relational contract or not, the Post Office say there is no duty of good faith in it
J I understood PO opening was that relational contract don’t exist at all
DC my lord, no
J as I understand it now you accept as a legal species there is a type of contract...
J so what should I call a relational contract which does have good faith and one which doesn’t
DC a relational contract!
J what if they are exactly the same except for good faith?
J so the PO case is that the SPMC can be a relational contract, but it doesn’t imply any good faith.
DC we now get to construction point [wrt to the infamous clause 12.12]
as in - he didn’t say infamous. I did.
DC there is no material difference that is relevant to construction
J the JFSA had been created pre-2012. the parliamentary inquiry was pre 2 x cases
DC it is
DC we say the point of departure for construction is that this is an agent contract
J but if I keep an eye on Horizon aren’t I employing hindsight?
DC for the purposes of argument. let’s look at the meaning of the clause, then look at burden of proof and then how it might affect errors in Horizon
Deficiencies have often been refrred to as shortfalls...
DC in 12.12, but if there is a loss generated by Horizon it is not a deficiency
[judge totally not buying this]
J yep [judge appears to accept]
DC so to accept that H losses exist - they do not fall within 12.12 and CANNOT be recovered under it
DC - PO have the legal burden of proving a deficiency - that it was not a Horizon generated loss. When you get to discussing burden within 12.12 - H losses have to be dealt with outside it. So you don’t need to alter the construction of 12.12
So at this stage of the argument you’re dealing with all losses except Horizon
J no you’re not - you’re only dealing with carelessness, negligence or error
DC goes back to “infamous” par 93 in generic defence. He did use the word “infamous” then. Who knew?
93. Putting Horizon to one side, it is important to recognise the fundamental difference between Post Office’s case on clause 12 and the case advanced by Cs...
94. A loss caused by Horizon would not quality under section 12, clause 12
94. Post Office pleads at GDXC, para. 41 a meaning for the word “loss” in the context of the
accounting relationship between the parties...
DC - standing back… put H losses to one side. If there is a loss the PO says overwhelming likelihood it is an error in branch.
J if that’s right tho where does your inference come in?
J that’s what the PO has done since it was rolled out in 2000
DC yes that’s the situation on the ground, but I’m looking at the construction
J yes I’m aware it’s the PO case that H is generally reliable - it’s part of the reason why we are here..
DC no it’s not a burden. It’s the law of agency…
J but it’s still on them. So apart from the declaration of the account how is the process any...
DC because the SPM can’t just say all my accounts are all wrong - they have to identify where it is wrong. it is not a burden. it is a process - if there needs to be necessary co-operation, the PO would provide that. it has to.
[goes to AvdB WS]
you’ll see there the number of transactions per branch 900 to 2500 depending on the size of the branch.
DC well it is slightly different in that it makes the liability strict on the SPM’s assistants and the SPM
DC what 4.1 does include both what was in 12.12 and 12.5
J it does seem to roll them all up together
liability for any cash and stock loss except loss arising from third party which SPM could not have prevented or taking reasonable care
J that’s a mirror, reflection or evolution of SPMC 12.4
DC also any deficiencies or shortfall...
J clarifying on scope of liability
DC pointing out strict liability in 4.1 - there is no carve out for negligence or error
DC that bit is only about robbers
J is part B strict liability as well?
They agree 4.1 is strict liability
J but 12.12 is not because carelessness, negligence or error connotes fault
J some transferred onto the NTC and those who did so gave up their rights on the SPMC. Mr Green’s suggestion NTC is the child of the SPMC might seem a bit ambitious.
We won’t be on it long tho as judge indicates he has to leave at 1615.]
from the defendants closing: 248. The Necessary Cooperation Term is in many respects similar to the Stirling v Maitland Term. ...
249. In James E McCabe v Scottish Courage Ltd136, Cooke J expressed the essence of a duty to cooperate as follows at para. 18"
Says they are onerous - eg to investigate shortfalls
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