controller accused of stealing $54,000 from Davison's of Bermuda.

William Nicholson, a senior vice-president of Aon Insurance Management, told a Supreme Court jury he was one of four people authorised to counter-sign cheques for the Davison's chain of retail stores.

The managing director and president of Davison's, Norman Davison, his wife, and the financial controller, Colin Cave, were the only other persons with the same authority.

"I trusted Mr. Cave,'' said Mr. Nicholson. "He asked me to sign them (the blank cheques) so the staff could get paid.'' Defence lawyer Mark Pettingill also produced a cheque signed by both Mr.

Davison and Cave.

"This is the proverbial blank cheque? The one that anyone could have filled out?'' asked Mr. Pettingill.

"Yes,'' replied Mr. Nicholson.

Cave has denied 36 counts of stealing and creating false accounts during his eight-month employment with Davison's of Bermuda.

The 49-year-old Canadian accountant allegedly abused his position as financial director of the two holding companies for the retail store, BVH Ltd. and Bayland Ltd., to use company funds for personal travel, loans, credit card and overseas insurance payments, and unauthorised salary advances.

Mr. Nicholson yesterday explained he was Mr. Davison's long-time friend and had also entered a business partnership with him in 1991.

He said he owned shares in a local lumber and kitchen cabinet supply company begun by Mr. Davison.

Although BVH Ltd. handled payroll and administrative payments for the company, which were repaid on a quarterly basis, Mr. Nicholson told Crown counsel Peter Eccles the two companies were "almost exclusively independent''.

Mr. Nicholson said he had provided his signatures on a series of blank payroll cheques and one international bank transfer form a week before Cave was fired.

He also said Cave had told him there was a computer malfunction which meant no names or amounts appeared on the cheques.

"I assumed that everything was above board and there was a simple urgency to make these payments, especially since I was going to be out of bounds for a week at the hospital,'' he said. Earlier in the trial, Mr. Davison said he had received a letter from Cave's American lawyers. The letter claimed Mr. Davison had given a $25,000 cheque to Cave as settlement pay.

The letter went on to say Cave did not intend to cash the cheque as he had already been wired the money via bank transfer.

But Mr. Davison denied giving such a cheque to Cave or promising to give the money.

Yesterday, a Bank of Bermuda representative recalled the day Cave made the transfer.

Sonia Phipps told Crown counsel Charlene Scott that Cave's original transfer of roughly $32,000 had to be lowered to the $25,000 maximum.

And she said she involved her supervisor because she "sensed something was up''.

Davison's general manager, Kim Ballhagen, also testified yesterday.

She told the court she had given Cave, on the day he started, an employee handbook which outlined general terms of employment.

And she explained neither she nor anyone else employed by Davison's was given a written contract.

She also said Cave called her the day after he was fired.

According to Ms Ballhagen, Cave said he would not be able to work because he had had a stroke.

He went on to say that he "had to get out of here'', perhaps to England or South America to seek medical treatment, said Ms Ballhagen.

The trial continues on Tuesday before Justice Richard Ground.