The Bermuda Housing Corporation is being sued by a contractor who claims his BHC work was terminated after he refused to pay a $10,000 kickback, The Royal Gazette has learned.

Contractor John Darrell's company, J & N Construction, was at work on a small repairs contract at a Pembroke home last year when he was approached by a BHC officer and asked for $10,000 in cash, Mr. Darrell's attorney Richard Horseman said yesterday.

"He didn't expressly say kickback but he wanted it in cash," Mr. Horseman said.

According to his lawyer, Mr. Darrell refused to pay the money and a few weeks later he received a letter from the same BHC officer sacking his company from the $75,000 job.

A writ was filed last Thursday against BHC and Carlton Simmons (the homeowner of the property where the work was done) by Mr. Horseman's firm Wakefield Quin on behalf of Mr. Darrell.

"The claim is basically about wrongful termination," Mr. Horseman said yesterday. "Mr. Darrell suffered losses as a result and we're seeking to obtain compensation for him."

Mr. Horseman said Wakefield Quin made contact with BHC early this year about Mr. Darrell's complaints and was originally told the file relating to the matter had gone missing.

They later learned BHC had contacted lawyers about the matter and started an internal investigation.

The property officer involved is currently under suspension from BHC.

Yesterday, Mr. Horseman said, at this stage, he did not wish to divulge the name of the BHC employee involved in the lawsuit due to the ongoing investigation in BHC operations by Government Auditor General Larry Dennis. "To BHC's credit, this matter was under internal investigation (before allegations of corruption in the Government quango surfaced)," Mr. Horseman told The Royal Gazette.

"We were actually in contact with BHC before all the press coverage came to light and were told the Corporation was investigating the matter."

An official investigation into allegations of corruption at BHC was launched in March by Premier Jennifer Smith and Mr. Dennis is expected to deliver his report to Parliament on his findings in mid-May. As Wakefield Quin have received no official position from BHC or the corporation's lawyers on the matter of Mr. Darrell's contract, they decided to take it to the courts.

"We've given the particulars of our claim and allegations to the corporation but we've had no response from them on the wrongful termination," Mr. Horseman said.

"As a result we had to issue this writ. We're now seeking the determination of the court whether this contract was breached."

Mr. Horseman said the letter of termination Mr. Darrell received from the BHC officer listed a number of grounds for ending the contract.

Among these were that Mr. Darrell failed to supply properly skilled workers and materials and that the company had not paid its subcontractors.

But Mr. Horseman said Mr. Darrell "was well on schedule to have the contract completed on time and all the works had been certified by Planning as being up to code".

He also said that all the subcontractors were being paid until the contract was breached.

"We're looking forward to our day in court," Mr. Horseman said.