Bank of Bermuda president and CEO Henry Smith was behind an alleged plot to "wreck" a Bermudian businessman who was having financial difficulties, it was alleged in court yesterday.

After listening to the arguments of two top lawyers from the United Kingdom in hearings that lasted two days, Appeals Court judges retired to consider whether a lawsuit launched by Dilton Robinson should go to trial.

Through their lawyer Christopher Pymont, Q.C., the Bank maintained that Robinson's action was "one of mischief".

At one point in yesterday's hearings, Court president Sir James Astwood asked Mr. Robinson's lawyer, John Anthony Roberts, Q.C. to clarify what was being alleged.

"They are trying to trap him...?"

"Yes it was entrapment," replied Dr. Roberts. "I didn't want to put it that way."

"It was a deliberate attempt by the Bank to wreck him?" continued Sir James. "Yes," said Dr. Roberts.

Mr. Robinson filed suit against the Bank in 1998, alleging breach of trust and breach of confidentiality. Since then, legal proceedings have been stalled as the bank sought to have the case thrown out. Arguing that the statute of limitations has expired, the Bank is now appealing against a Supreme Court ruling allowing Mr. Robinson to add fraud allegations to his suit.

The issue concerns circumstances surrounding a $1.7 million loan Robinson took with the Bank in 1992. Soon afterwards, he lost his job as assistant manager of mortgage at L.P. Gutteridge Mortgage & Finance and defaulted on the loan.

The deposit company was merged into Bermuda Home and purchased by the Bank of Bermuda in 2000.

Robinson was also the principal behind Summit Development, a company involved in the Bermuda real estate market, while he was assistant manager at L.P. Gutteridge.

The court heard that in 1992, Mr. Robinson and his wife were offered a loan to consolidate his debts and given seven days to accept. They did not respond within the seven days but were then visited by loan officer John Fargey and urged to sign the loan documents. Meanwhile, said Dr. Roberts, e-mail correspondence between Henry Smith and Mr. Fargey, which came into Mr. Robinson's possession in 1996, showed that the two were aware of information linking Mr. Robinson to a criminal investigation and that Mr. Smith told Mr. Fargey to consummate the deal before releasing the information to the Police, knowing that he would be sacked from his job and that he would not be able to repay the loan.

At the time Mr. Smith was a senior officer of the Bank, but not yet the Bank's president. Mr. Robinson was not, in the end, questioned by Police.

Mr. Fargey wrote to Mr. Smith, Dr. Roberts continued, to inform him of the potentially damaging information and questioned whether the deal should go ahead. Mr. Smith wrote back two days later, telling him to complete the financing deal "as soon as possible prior to divulging information to the Police, in the knowledge that release of said information would affect Mr. Robinson's livelihood and accordingly his ability" to repay the loan "and the defendant (Bank) would be in a stronger position after refinancing the plaintiff in spite of his potential financing loan."

The lawyer stressed that the Bank had admitted the existence of the e-mails/mails. And he emphasised that the e-mails/mails showed that the Bank planned to pass on the information to a third party once they had convinced Robinson to sign the loan agreement.

Asked whether there was not a distinction between an intentional act and wrongdoing, Dr. Roberts said: "Intentional acts - e-mails/mails and so forth - that must encompass wrongdoing as well... If you intend to harm somebody, it's not doing something pleasant. That means you are doing something wrong."

The court also heard Thursday that David Gutteridge, Mr. Robinson's employer and a Bank shareholder, had asked the Bank to hand over information on a four-year-old transaction of Mr. Robinson's and the Bank complied the next day.

Earlier, Dr. Roberts argued that the statute of limitation could be expanded if evidence had been deliberately concealed.

The Bank's lawyers have argued that it is up to Mr. Robinson to show that he discovered the information in 1996, and not a year or more earlier, to establish that "there was no reasonably arguable limitation defence," and suggested that the e-mails/mails had in fact been discovered in 1995.

Dr. Roberts described that as "a pale submission" brought on by the realisation that a legal tactic would fail.

Also at issue in the appeal is whether the new allegations are based on the same facts as Mr. Robinson's original complaint, allowing it to be joined together, and whether a fiduciary relationship exists.

Dr. Roberts argued the Bank's relationship with Mr. Robinson had moved from a normal contractual one to an advisory one (giving rise to a fiduciary relationship where professional trust issues arise, because of Mr. Fargey's actions.

Dr. Pymont argued that the new claims moves the dispute into a "whole new territory". At the end of yesterday's hearing he repeated his argument that Mr. Robinson would have to provide evidence that he discovered the e-mails/mails in 1996.

"It may well be that he discovered it earlier as we believe to be the case. Only he knows and if it proves to be the case that he discovered the e-mails/mails in 1994 or 1995, then we would have been disadvantaged."

He said the question of concealment of evidence was also at issue. Referring to Dr. Roberts submissions, he said that the hearing was not to assess the merits of the case. "My learned friend has taken the position of making his submission to the highest level, explaining what the wicked bank has done to this customer... Mr. Robinson came to the Bank because he was in a hole. He owed a lot of people $1.7 million and he needed to consolidate."

In his closing statements, Dr. Roberts urged the judges to appeal to "the greatest authority and that is common sense. And I am quite sure that your Lords are well endowed with that."

And in his capacity as the senior Queen's Counsel he thanked the judges for their time and apologised that both he and Dr. Pymont would not be on the Island to receive their decision.