A Crown witness came under fire from the defence counsel for former banker Arnold Todd yesterday.

Painter and carpenter Merkell Smith earlier told Supreme Court he had been approached by his boss to buy a house he was working on.

Mr. Smith told Supreme Court Delro Ltd. chief Delmont Talbot -- the witness' uncle -- approached him when he was working on Windswept Cottage in St.

George's, in 1995.

The witness added he had agreed to the deal -- but that a Bank of Bermuda loan form had not been filled in by him and that details referring to a substantial rental income and $60,000 on deposit were wrong.

Yesterday, Mr. Smith admitted he had signed three blank cheques on an account opened around the time he agreed to buy the house.

The court heard that cheques were later made out in favour of the Bank of Bermuda -- one of them being for the massive sum of $64,000.

Mr. Smith added he had received some statements -- but said he could not remember on which account.

He said: "I got statements on an overdrawn account -- it was not my personal account, it was another one.'' He added: "Several times I contacted Mr. Todd to try and find out what it was. He really wouldn't say anything. He just had me fill out something.'' Crown counsel Mr. Pert asked Mr. Smith who was making the decisions on the running of the account.

Mr. Smith said: "Not me -- I guess Mr. Todd.'' Todd, 56, of Pearman's Hill, West Warwick, is accused of 17 counts of theft, fraud and false accounting, allegedly committed between 1985 and 1990.

Also in the dock 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 allegations against Todd. The charges against the four men, involving around $1.2 million in total, are all denied.

Mr. Smith said that the house was later sold, but that he had no input into that decision and made no profit on the sale.

But English barrister John Perry QC -- appearing with Kim White for Todd -- questioned Mr. Smith's testimony.

Mr. Smith agreed with Mr. Perry that his plan had been to buy the house, keep it for a while and sell it on at a profit.

And he agreed that when tenants in one of the apartments at Windswept fell into rent arrears he had visited the tenant to discuss the matter and later sued them in court.

Mr. Perry said: "This is Bermuda -- there is no way a house can be sold without the landowner being involved.'' Under cross-examination, Mr. Smith admitted visiting the offices of lawyer Charles Vaucrosson before the sale -- but insisted he did not know what the appointment was about.

Mr. Perry pointed out that, in a pre-trial statement made by Mr. Smith, he had said he had placed tenants in Windswept -- but Mr. Smith insisted in court that Delro had placed the tenants.

The defence QC put it to Mr. Smith that Todd had only agreed to look after the paperwork on a business transaction between Mr. Smith and Mr. Talbot.

Mr. Smith agreed that when he went to visit real estate firm LP Gutteridge -- a visit which later resulted in a $125,000 mortgage agreement -- Todd was not there, but Mr. Talbot was.

Mr. Perry pointed out that the LP Gutteridge form also mentioned $60,000 savings, although that had been crossed out.

And he put it to Mr. Smith that Mr. Talbot might have mentioned $60,000 as his reward for taking part in the deal.

Mr. Smith said that it was Mr. Talbot who had asked for -- and been given -- the three signed and blank cheques.

But he added that, from talks with both Todd and Mr. Talbot, he understood that Todd's role in the matter was greater than just taking care of paperwork.

Answering questions from Mr. Pert, Mr. Smith said that he had never got any rent income or profit from the sale of Windswept Cottage and that he had never paid a $1400-a-month charge relating to the Bank of Bermuda loan form from any account controlled by him.

The trial continues.