Like hundreds of others, Tony Downey’s dream of running a rural Post Office turned into a nightmare.
Continuing shortfalls in his branch accounts – caused by the faulty Horizon accounting system – led to him losing his livelihood, declaring himself bankrupt and suffering from crippling anxiety and depression.
Such was the impact on life, he and his wife Caroline moved abroad, feeling they could no longer live in a community which believed him to be a thief.
Seventeen years on, they have been living off his incapacity benefit in rented accommodation in Spain, as he has never been able to face working again. So when a letter landed on his doormat from the Post Office last summer offering compensation, he felt he was finally beginning to secure some form of redress.
That was until he read on.
The Post Office only offered to pay him £10,000 for his personal suffering, with the rest going to the Official Receiver to pay off bankruptcy debts.
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Couple took business loan to buy business
Tony and Caroline paid around £80,000 for Hawkshead Post Office in Cumbria in 2001, taking a business loan of £60,000 to do so, which was guaranteed against Caroline’s parents’ home.
However, from the very first week, and over the next six years, the business proved a nightmare as persistent shortfalls showed in accounts, which auditors insisted he ‘repay’ to avoid closure and suspension.
Overall the couple were forced to put more than £35,000 of their personal savings into accounts to balance the books, until in 2007, with another £7,000 shortfall showing, they were unable to keep ploughing their own money in, and Tony resigned.
The couple sold the business for £100,000, using it to pay off the initial business loan, and to repay some other business debts. Still left with around £40,000 debt between them, they declared themselves bankrupt on professional advice and lived off benefits.
Now, despite pledging to offer ‘full and fair compensation’ to all, the Post Office is denying being the cause of them going bankrupt, claiming they should have paid off other debts before the business loan, which was guaranteed on Caroline’s parents’ home.
It means more than £140,000 of the damages offered to Mr Downey has instead been handed to the Official Receiver to be distributed to historic creditors.
‘Ridiculous’
“It’s absolutely ridiculous,” said Mr Downey, who has told his story to BBC News.
“I had a letter saying that my compensation had been assessed at over £150,000, but that I could only be given £10,000.
“An offer of £150,000 was a huge disappointment in itself for all the lost years of our lives and the continuing impact it has on us today. The offer was little more than replacing my own money with interest.
“That amount wouldn’t come anywhere near compensating for everything we lost. We lost our business, our livelihood, our income, our home as well as our minds and good health.
“It is also a complete nonsense for the Post Office to say they didn’t cause our bankruptcy.
“We had no choice but to pay off the business loan which we had used to buy the Post Office as Caroline’s parents’ home was at risk if we didn’t keep up the repayments, which we simply couldn’t do as we were penniless.
“The remaining £35,000 was then used to repay suppliers and catch up with arrears.
“We paid what we could, and, then we were advised to declare ourselves bankrupt as we had more than £40,000 debt between us.
“How can this be held against us now? If it were not for the Post Office’s faulty accounting system, we would have had a successful business and never been any financial difficulty at all.”
Solicitors seeing ‘many similar cases’
The situation is not one Mr Downey, 56, faces alone, as many other former subpostmasters are now coming forward to say the lion’s share of their offers – through the Post Office’s Historical Shortfall Scheme -are being held back and handed to the Official Receiver to distribute to creditors.
Solicitor Neil Hudgell, of Hudgell Solicitors, represents Mr Downey, and said: “In Mr Downey’s case the Historical Shortfall Scheme has quite simply got this wrong. It admits that Horizon was the reason for the shortfalls and that was the cause of him having to resign, causing him further losses.
“The couple had to repay the business loan. It wasn’t a choice, they were forced into that position as it was a commercial loan they had used to buy the Post Office. If they hadn’t paid off the loan, other members of their family could have lost their home.
“Sadly we are seeing many cases similar to this, leaving many victims standing to receive little, no, or hugely delayed compensation, which is a travesty given the devastating impact the scandal has had on their lives.
“It is a particularly cruel irony for subpostmasters to be deprived of compensation the Post Office is due to pay given it was the Post Office which, in many cases, caused the financial collapse which preceded these bankruptcies.
“The fact that they have been at the back of the queue waiting for offers only adds to that injustice. Had these cases been given greater priority we could have been a lot closer to resolving them by now. As it stands this process is far from over.”
‘The suffering doesn’t seem to end’
Mr Downey is still on medication for depression and anxiety, and he has been unable to work since the trauma of what happened to him and his family.
He said: “We had no option but to go abroad to escape everything, because I could not function living in England. I needed to be as far away as possible from the community that thought I had let them down. Moving abroad seemed to be the only option.
“For many years I convinced myself that it was my fault that our business failed. I feel like I have lost everything as a result of the Horizon Scandal.
“It has impacted every aspect of my life, and I will never return to the person I used to be. The stresses associated with my application to the Historical Shortfall Scheme has also had an impact on my wellbeing.
“It has been extremely difficult to comprehend so many years later that I was not alone, and that I was not to blame.
“Our plans of living in the Lake District and retiring when selling our business were all ruined. It gets me angry and upset when I start to think about how this devastated our life and plans and what has been taken away from us.
“This year I should be considering retirement and the sale of my retail business. I should be mortgage-free and financially stable, but instead at the age of 56 I live in a 55 square metre apartment trying to live off £120 peanuts.
“None of this would have happened if someone had believed me and the hundreds of other postmasters when we had problems. Now it’s a fight to secure the compensation we deserve. The suffering doesn’t seem to end.”
Hudgell Solicitors has now helped 76 former subpostmasters to have their convictions quashed in the courts.
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