Case No. CR-2019-LDS-000669

261.To understand the allegations against Lisa and how they emerged, it is helpful to set out the accounting position as it operated within the Companies in the relevant 4 or 5 years prior to 2015, that being the period in relation to which investigations took place and allegations were subsequently made.262.The accounting position regarding drawings from the Companies for the benefit of members of the family is described by Mr Gregory in his witness statement. I do not understand this account to be contentious but, if it is in any respect, I have no hesitation in accepting his account in full.263.In short, the accounting function was under the control of Lisa. Up until about August 2015, a directors’ loan account was operated as a joint account in the sense that all family expenses/drawings for family members over and above any salaries, was debited to the directors’ loan account. This loan account, usually in debit from the perspective of the account holder at the accounting year end was then historically cleared by crediting to the account the proceeds of a dividend declared annually in favour of Nora and Charles, as shareholders.264.The sort of personal expenses debited to the account included, by way of example, costs incurred in relation to vehicles used by the family, including related hire purchase payments; credit card payments and other payments made for the benefit of family members.265.From about November 2015 onwards, the directors loan accounts were split into separate sub loan accounts covering each of Nora, Charlie, John, Lisa and James. This enabled the tracking of balances owed by individuals.266.It is also helpful to set out, in a little more detail, what Lisa says was taking place in the period prior to the investigations concerning her drawings (and thereafter) regarding the sale of stock for cash and the failure to account to the Companies for the proceeds of sale.267.The Companies operated a Pegasus accounting system but that system did not and/or was not used to record daily stock movements. Instead, the accounting records for stock were kept on a separate laptop maintained by another employee, Mr Steve Mower, and recorded on an Excel spreadsheet outside the immediate control of the accounts department under the control of Lisa.268.As regards the monthly management accounts prepared with the assistance of Mr Gregory, the latter explains that purchase and expense invoices were stamped with a company authorisation grid/grid checklist (completed in the main by Lisa) and supported by delivery notes and weighbridge tickets. Sales invoices and credit notes were also generated by the team working under Lisa and entered onto the accounting software. They were kept sequentially and supported by delivery notes and weighbridge tickets. A stock figure would separately be provided to Mr Gregory at the month end, which was mainly unsupported and consisted of primarily a handwritten value. This was usually provided by John. At the year end a full stock sheet was made available to the audit team, initially at John S Ward and later at Smith Craven.269.In brief, Lisa says that John operated a separate system of “internal tickets” in order to misappropriate stock from LWC without it being traced as missing from the records of LWC.270.In her witness statement, Lisa said that at some point between August and October 2015 she had become suspicious about missing stock. In cross-examination, she was not able to explain what it was that triggered her suspicions. Indeed, her evidence that she was under a duty to check the stock position on a Friday (and Monday) appears to have been put forward as the reason that she discovered the alleged missing stock. However, she ultimately accepted that this was not part of her duties as employee or director. She decided to do this and/or, she said, was asked to do this, by her mother to keep an eye on the situation. Accordingly, what prompted this decision to check the position was not made clear.271.She goes on to say that on most Fridays, after the employees had left for the day, she was under a duty to and would inspect the warehouse to check the quality of finished stock. On a Monday she would re-inspect the warehouse to check stock levels. On several occasions, she says, she noticed that substantial amounts of finished stock was missing. She says that this came to her attention by checking the finished copper stock ready for dispatch on a Friday, and then looking at the dispatches made on a Monday and comparing the two. 272.As regards the checking process, Lisa explained that there were bags of finished stock which would usually have a label on with a weight and description. She would usually be more interested in the high value finished stock, copper and would “jot down” what she had counted. However such notes were not produced and she confirmed that she did not give them to or make enquiry of Steve Mower who actually kept the stock records. She did say that she gave the information to Nora.273.I should add that this evidence was in substance inconsistent with Charlie’s witness statement. In that statement, he said that he was employed from 2008 and carried out a similar process to that described by Lisa. On many occasions he says he found missing stock and he reported that to Lisa and Nora. It is difficult to believe that Lisa and Charlie were carrying out the same sort of process with the same result in any period and also difficult to believe that Nora was told about their findings when stealing of stock (or not accounting for the cash proceeds) is not an allegation that Nora ever seems to have raised.274.In their Defence, the Relevant Respondents had made the point that the relevant areas were covered by CCTV cameras so that of stock had been removed on a Saturday that would show upon on the CCTV recordings. Lisa had not answered this point is her points of reply. When asked about CCTV cameras in cross-examination she said that John had turned off the CCTV on Saturdays so that the movements of stock sold by way of illicit cash sales were not recorded. This was the first time that this allegation was made. She later went on to allege that Kevin Taylor from security had told her that John had turned off the CCTV cameras. Later again, she said that she asked Mr Taylor if it was John who turned off the CCTV cameras and he said that he did not know. I do not accept this late and internally inconsistent evidence.275.Lisa was also asked in cross-examination whether existing stock might need to be weighed (e.g. for stock takes). She accepted that this might happen and that in those circumstances an “internal” weighbridge ticket would be used. She asserted however that internal tickets were also used illicitly. 276.She continued in her witness statement to say that she confronted John and asked him where the missing granules were. He told her that the finished stock was not good enough and that it had had to be “re-run”. She says that she later learned that John was selling stock at the weekends for cash and that she “understood” that stock was loaded onto vehicles on Saturday mornings or early Monday mornings for delivery.277.Lisa says that she understands that a lot of employees were aware of Johnny’s weekend dealings in stock and cash and that she reported her brother’s dealings to her mother and also discussed it with her son Charlie and that she told Paul Gregory at Smith Craven.278.In her witness statements she then refers to a Mr Robert Andrew, a driver, formerly at LWC and now working at Remet Processing. She says that she spoke to him on a monthly basis until 2020. She says that he has confirmed to her that he, Mr Andrew, is aware of several regular customers who routinely bought substantial amounts of stock from LWC in cash, usually on Saturdays; that John regularly instructed employees at LWC to load vehicles under his instruction without the correct paperwork “including weighbridge tickets” for the stock; that the stock sale was recorded on an “internal” ticket instead of the normal “outs” ticket; the cash sales were on Saturday and not properly accounted for all under the instruction of John; and finally that one of the regular Saturday customers was a firm called Booths.279.Her witness statement was the first time that these allegations by Robert Andrew were raised. He was not called to give evidence.280.Lisa’s evidence was that she had challenged John (again) about the sales of missing stock at a meeting on 6 November 2015 when she was, in effect suspended. However, in her defence and counterclaim in the Recovery Proceedings, in recounting what occurred at this meeting she did not mention this matter even though, if it was true, it would have been the first thing one would expect to have been said. Instead she pleaded that at the meeting, the focus of her remarks had been how the sums paid for her benefit from the companies had been agreed and that John too had had sums paid on his behalf by the Companies. 281.I will come onto the evidence regarding the investigations by Smith Craven and the course of communications thereafter. It is telling that despite saying that she told Smith Craven about the thefts they have no recollection of that and it is not minuted. Further, she says that she refused to hand over the evidence (or copies of the evidence) of such cash sales to Smith Craven, although this seems an inconsistent approach to that she says she took of informing Smith Craven of what was going on in terms of illicit cash sales.282.Finally, I note that although she says she had very full records of what had been taken and the relevant “false” weighbridge tickets by which this scheme was purportedly operated, she was unable to produce much documentation and that which she did produce was, to my mind, of little assistance.