When his father passed away four years ago, Alex Scrymgeour thought he had inherited a luxury cottage — but he also landed himself in a legal wrangle threatening to cost him hundreds of thousands of dollars.

Before he died, John Scrymgeour set up a trust so that the $2 million-rated Bermuda property could become the new home of his son and his family.

According to Mr. Scrymgeour Jr., his father also made numerous promises in the last few months of his life that the cottage would soon be his.

Now, the son is facing a legal challenge which could see him ending up having to pay back a huge sum of cash to his father’s estate.

The middle men involved in the transfer — lawyer Wendell Hollis and insurance executive Joseph Johnson, of The Interior Trust — claim the dying man had only meant to lend his son money to buy the home, and would have expected it to be returned.

They are taking action against Mr. Scrymgeour Jr. in a hearing at Appeals Court. It follows a civil trial in which a judge ruled that Mr. Scrymgeour Sr. had intended the pledge as a gift to his son — not a loan.

Monday’s hearing was told the saga began more than five years ago, when Mr. Scrymgeour Sr. transferred the building — named in court as Greensleeves Cottage — to The Interior Trust, for which his son was the sole beneficiary.

Andrew Martin, representing Mr. Hollis and Mr. Johnson, said the father then paid $1.1 million into the trust. The son then borrowed from the Bank of Bermuda for the remaining balance for the purchase.

After Mr. Scrymgeour Sr. died from cancer in August 2003, a dispute broke out between Mr. Scrymgeour Jr. and the other members of The Interior Trust, said Mr. Martin.

Mr. Hollis and Mr. Johnson claimed the $1.1 million was a loan from father to son and needed to be repaid; Mr. Scrymgeour Jr. argued it was a gift.

Following a court hearing, a judge decided Mr. Scrymgeour Sr. had intended the cash as a gift, stating: “It was not a loan because John wanted Alex to have it and he would not have wanted him to be saddled with loan payments.”

On Monday, Mr. Martin challenged this statement, claiming there was not enough evidence to prove that Mr. Scrymgeour Sr. had meant the gesture as a gift.

Appeal Court President Edward Zacca suggested otherwise, stating: “He would be out of pocket if it was a loan. If you are giving your son a gift and it’s his house, I’m satisfied that it was not a loan.”

Mr. Scrymgeour Jr.’s lawyer, John Milligan-Whyte, refused to give any details of the whereabouts of Greensleeves Cottage, saying it was “against the rules” to speak to the press. A property of that name exists in Tucker’s Town.

The two-day hearing is expected to conclude today.