This is a very basic Faq, by adding a namespace you have changed the
name of your input elements.

<hov:template match="report">


matches report in no-namespace but your report is in
"http://xml.smg-uk.com/schema/cases/report

so it does not match.

Either add

xmlns:r="http://xml.smg-uk.com/schema/cases/report"

to xsl:stylesheet and add r: prefix to all relevant patterns and xpath
eg


<hov:template match="r:report">

or, since you are using xslt 2, you could set the
xpath-default-namespace="http://xml.smg-uk.com/schema/cases/report"
again on xsl:stylesheet (or hov:stylesheet for you)

David



David