Peniston after learning he was wanted in Bermuda for bankruptcy proceedings, Supreme Court heard yesterday.

Peniston's lawyer, Miss Victoria Pearman, was making an application to lift an arrest warrant issued for her client in July. He had failed to show up for his July 25 court date as a result of a "misunderstanding'', she submitted.

Peniston has been studying law at Buckingham in England since May and as a result of his suspension was unable to sit his final exams, the court heard.

Puisne Judge the Hon. Mrs. Justice Wade expressed concern at the tactics of official receiver Mr. Mark Diel in pursuing Peniston, saying she would never want to undermine anyone's educational goals.

But Mr. Diel said it had not been his intention to prevent Peniston from attending law school.

"As official receiver, I have a duty to the creditors to preserve their assets,'' he said.

In following up a lead on Peniston's whereabouts, he had contacted the university. And in order to get information from the officials, he had to explain who he was, he said.

"We did not say he couldn't attend the university,'' he said. "The steps taken were in my respectful submission, taken to preserve assets of the creditors.'' Peniston had paid his university tuition after receiving a cheque for $23,000 from BF&M, he claimed.

Mrs. Justice Wade said it was unfortunate Peniston had not tidied up his affairs before going abroad because he was now in effect being "punished'' by the university.

Miss Pearman asked for the warrant to be set aside, saying Peniston would attend the continuation of the bankruptcy proceedings against him in Bermuda.

She filed two affidavits in support of her motion, one from Peniston and one from lawyer Mr. Ian Kawaley.

"I submit on the basis of those affidavits it was Mr. Peniston's belief that in the circumstances he was not compelled to attend personally on July 25,'' she said. "His failure to do so was a result of a misunderstanding rather than a deliberate failure to abide by the court's orders.'' But Mrs. Justice Wade said that as a result of previous hearings attended by Peniston, she had a "strong feeling'' Peniston had "mislead the court'' so he could "slip'' out of Bermuda to attend university.

Peniston was a "highly intelligent'' man and should have known he had to attend the July 25 hearing, she said.

Mr. Diel noted Mrs. Justice Wade had said she was "99 percent certain'' she told Peniston he had to attend the July 25 hearing.

But Miss Pearman argued Peniston had asked Mr. Kawaley if he had to attend and the lawyer had said it was entirely a matter for him to decide.

She pointed out though, Mr. Kawaley had spoken to Peniston without the benefit of having seen the court papers because he was not his lawyer on record.

Mr. Diel added that the phrase did not necessarily amount to advice that Peniston did not have to attend the hearing.

Mrs. Justice Wade said she wanted Mr. Kawaley to expand on his affidavit and explain what advice he did or did not give Peniston.

She adjourned the hearing until he was able to testify. In the meantime, she ordered the warrant to remain in place.

A continuation date was not set.

The warrant was issued in July after the former Government senator and travel and shipping company boss failed to show up for bankruptcy proceedings, having been taken to court by his former business partner Robert Thomson.

It is alleged Peniston owes an estimated $760,000.