The Appeals Court yesterday began hearings into a long-running dispute involving fraud allegations against senior officials of the Bank of Bermuda.

And serious conspiracy allegations surfaced against a Bank of Bermuda loan officer and David Gutteridge, a Bank shareholder.

The two, and at least one other not yet named, are being accused by Bermudian businessman Dilton Robinson of involvement in a plot to pressure him to accept a loan when they had information that he would be in default.

Besides being a Bank shareholder, Mr. Gutteridge was Mr. Robinson's employer.

Mr. Robinson filed suit against the Bank in 1998 alleging breach of trust and breach of confidentiality. Since then, legal proceedings have been stalled as the Bank sought to have the case thrown out.

The issue concerns a $1.3 million loan Robinson took with the Bank in 1992. Soon afterwards he lost his job as assistant manager of mortgage at L.P. Gutteridge Mortgage & Finance and defaulted on the loan.

The deposit company was merged into Bermuda Home and purchased by the Bank of Bermuda in 2000.

Robinson was also the principal behind Summit Development, a company involved in the Bermuda real estate market, while he was assistant manager at L.P. Gutteridge.

Last year, Supreme Court judge Vincent Meerabux ruled that Mr. Robinson could add fraud allegations to his writ and the Bank filed a notice to appeal against the decision, saying that the statute of limitations had expired.

At yesterday's appeal hearings, details of the dispute were heard in open court for the first time.

Mr. Robinson is represented by Clare Hatcher of law firm Francis and Forrest who have brought in top UK lawyer John Anthony Roberts, Q.C. as lead lawyer. On the Bank's side is Christopher Pymont, Q.C. hired by Appleby Spurling and Kempe.

Dr. Roberts argued that the statute of limitations would not apply in this case because crucial evidence in the form of e-mails/mails, which form the basis of the fraud and conspiracy allegations had been concealed from Mr. Robinson for four years after the alleged shady dealings took place.

And, he said, the period of limitation has to be extended where there has been deliberate concealment of relevant facts and it would up to the bank's lawyers to show during the trial that there was no concealment or that Mr. Robinson could reasonably have discovered the e-mails/mails on time.

"I have heard the abundance of cases mentioned by my learned friend and whose eloquence I admired... But he never mentioned those e-mails/mails at all," he said.

Dr. Roberts further argued that the Bank's case would not be prejudiced if Mr. Justice Meerabux's decision was upheld because there was still an opportunity for pretrial discovery proceedings and that the Bank would be entitled to apply for costs involved in Mr. Robinson's decision to add the additional allegations.

"There is no prejudice to anything. The decision will be compensated by costs so there is no suffering to this big Bank at all from this ordinary citizen."

His client was alleging that the Bank made an offer of financing to Mr. Robinson and his wife, who were in financial difficulties in May, 1992 giving him seven days to accept.

"It seems like an ultimatum," he said. But the Robinsons declined the offer by not taking it up within the time period. Later that month, John Fargey, a loan officer with the Bank visited the couple at their home to try to persuade them to take up the offer, even though it had formally expired.

"He who wants to go to the doctor, goes to the doctor... The doctor won't come to you (otherwise)."

Mr. Fargey had "taken on the role of financial adviser," the lawyer continued. "It was not the usual bank loan/mortgage scenario." And Mr. Fargey knew of the existence of the e-mails/mails and had even written one of them.

Mr. Robinson and his wife signed the loan agreement two months after it had expired. "The appellant purposefully ignored the expired period because it suited him - they knew what was happening."

Mr. Fargey made several phone calls urging Mr. Robinson to sign the agreement and then required him to disclose his financial matters before the loan was made.

"It is not usual for a loan officer to go and persuade somebody known as a client, because of the person's financial difficulties, to treat him in a fatherly way so that he can get to sign a document which at the end of the day would put him in jeopardy... He was one of the authors of the e-mails/mails which we are talking about was concealed."

After some resistance, the Robinsons gave their financial details which included his current income from his job, and liabilities.

While Mr. Robinson sought another way to finance his debts, he finally agreed to the loan under pressure from Mr. Fargey, the court heard.

In June or July of that same year "the defendant provided, in breach of their duty of confidentiality to the plaintiff, financial information to the plaintiff's employer L.P. Gutteridge." Days later Mr. Robinson was sacked from his job making it difficult to pay back the loan.

Further, Dr. Roberts said, the Bank breached its fiduciary duty by withholding information from Mr. Robinson to his detriment.

"The information withheld from the plaintiff by the defendant, namely that he was the subject of a criminal investigation by the Police... was of such vital importance" that the couple would not have taken the loan had they been made aware of it.

But the Bank disclosed the information to Mr. Robinson's employers who sacked him and he lost his property as a result.

Mr. Robinson was not in the end interviewed by the Police, the lawyer continued. Mr. Fargey, he said, was aware that disclosing the information could get him sacked and he would not be able to service the loan and lose all his property as a result.

"Unfortunately, (Mr. Robinson) did not know that all the cards were stacked against him before his wife and him signed the documents."

He also revealed that Mr. Gutteridge had asked the Bank to provide information on a bank draft that had been issued to Mr. Robinson some three years earlier, and the Bank complied the next day, without consulting their client.