A union chief was yesterday put on the spot over $5,000 from a house loan which went into his personal bank account.

But Bermuda Industrial Union president Derrick Burgess claimed the cash had been used to buy materials for a house being built at Rosehill which he had agreed to buy from his employer, Delmont Talbot of construction firm Delro.

Mr. Perry also suggested that the bank loan -- $275,000 -- was being paid out in "dribs and drabs.'' But Mr. Burgess insisted he knew nothing of any arrangements to pay in instalments.

Mr. Burgess was called as a prosecution witness in the trial of former banker Arnold Todd, 56, who faces 17 charges of theft, fraud and false accounting at Supreme Court.

Ex-Bank of Bermuda executive Todd's defence counsel John Perry referred to a pre-trial statement to Police made by Mr. Burgess.

The statement said Mr. Burgess recalled a payment was made to real estate firm LP Gutteridge from the proceeds of a Bank of Bermuda loan through his current account -- which he assumed was the deposit.

A total of $32,500 was transferred into that current account in October 1985 -- but only $27,500 went to LP Gutteridge.

In the Police statement, Mr. Burgess said the balance of $5000 was "used for other purchases, the nature of which I can't now recall.'' But Mr. Burgess told the court yesterday: "I was buying supplies, tiles and things for the house. Mr. Talbot would verify that.

"I don't know the exact expenses at this point, but that was what that was for.'' And he told Mr. Perry: "I can answer for that $5000 -- whatever tree you are going up, you better come down.'' Mr. Perry suggested that it was strange that the purchaser of the house -- not yet the owner -- was prepared to make $5000 available for building materials.

But Mr. Burgess said that he was working for Mr. Talbot at the time and that "Delmont Talbot let me pick out the tiles for that house -- I picked out many things for that house.'' Mr. Burgess told the court that the house was eventually sold to someone else -- and that he discovered the property was conveyed in Mr. Talbot's name, not his.

He told the court that there had been problems with an access road which Government was supposed to build but had not.

He said that cut the expected profit, so the house was sold in Mr. Talbot's name to save paying legal fees to transfer the title to him, then the new owner.

Mr. Burgess added that he had made no money out of the deal.

He said: "I didn't expect a profit at that time -- I certainly didn't ask for any profit.'' Mr. Burgess agreed that when he discovered the original bank loan he had taken had not been paid back he approached Mr. Talbot.

And he agreed Mr. Talbot offered him a condominium in Winton Hill. Mr. Burgess added that when he refused the offer, Mr. Talbot offered to sell the condominium to clear the loan.

Mr. Burgess admitted he later became involved with Mr. Talbot again, in 1990 and lodging a $25,000 deposit with legal firm Vaucrosson's in respect of Windswept Cottage, St. George's. But he said the deal fell through and his money was returned.

Also in the dock with Todd are importer Varnel Curtis, 49, of St. Anne's Drive, Southampton, hotel security chief Milton Woods, 61, of Old Road, Southampton and businessman Cecil Durham, 56, of Ramgoat Hill, Smith's Parish.

All three face charges related to the counts against Todd. All four deny the charges.

Lawyer Julian Hall -- appearing for Cecil Durham -- pointed out his client was an official in the BIU.

Earlier in the trial, the court heard Mr. Burgess say he had probably signed blank forms at the bank.

Mr. Hall told Mr. Burgess: "There is something a little bit strange about signing your name to a document called a promissory note or a loan application when you don't even know what's on that form.'' Mr. Burgess said that -- with the benefit of hindsight -- he agreed. But he added he had no reason not to trust a senior bank official.

Under questioning from Mr. Hall, Mr. Burgess said he had sought legal advice over the house deal "because the loan wasn't paid.'' Mr. Hall pointed out that Mr. Burgess' choice of legal firm, Appleby, Spurling and Kempe, was the same firm which was acting for the Bank of Bermuda.

Under questioning, Mr. Burgess said he had met with top Bank of Bermuda official Henry Smith, who had legal representative Geoffrey Bell from Appleby, Spurling and Kempe with him, before he went to AS&K for advice.

Crown counsel Mr. Pert called Mr. Burgess' attention to a bank statement on his personal account from 1985.

And Mr. Burgess agreed with Mr. Pert that the $32,500 was transferred in and out of the account by credit and debit memorandums -- not by personal cheque.

The trial continues on Monday.