the Island, turned up at Bermuda Supreme Court yesterday to purge his previous contempt of court.

Mr. Hardy's unexpected move now leaves him free to pursue an action in the United Kingdom to have his bankruptcy discharged.

He will ask the Privy Council in London to overturn a default judgment for $20 million awarded against him in Bermuda several months ago.

Mr. Hardy's lawyer, Mr. Julian Hall, said: "It's now clear his bankruptcy will be discharged automatically, as will the judgment for default.'' Mr. Hardy yesterday apologised to the court for selling a property in the US while there was a mareva injunction in place freezing his assets.

"I'm a little uncertain as to how to proceed with this thing,'' said the former boss of Focus Insurance, which is being liquidated by Cooper & Lines.

"I wish to apologise to the court.'' He added: "I did sell the property, but not until long after the motion to have me committed had been actually filed.

"I only sought to have the proceeds used to disperse and pay off creditors like American Express who had indicated they would petition for my bankruptcy.'' He went on: "It's my clear understanding that the mareva injunction is an adjunct to a lawsuit and is not an alternative means of either obtaining judgment or influencing an action. These words come from the rules of The Supreme Court.'' Mr. Hardy said he was "left with no choice but to contempt myself'' in order to provide for his family''.

The liquidators' efforts to deprive him of funds included "a somewhat staggering statement asking why I was still paying my life insurance premiums'', he said.

On his fight to clear his name in the UK, where he is representing himself, he added: "I've been through what can only be described as hell over the last few months. Litigating in person is not easy.'' He admitted to "errors of judgment'' in his bid to "get a trial on the merits and not judgment obtained by what I regard as improperly obtained mareva orders''.

"To the extent that my remarks have offended the rules of this court, I'm sincere in my apology,'' he said.

"I would ask your Lordship to consider the matter in light of horrendous litigation and other tactics on all fronts for nearly three years without there ever being any hearing on the merits whatsoever.'' After yesterday's sometimes-bitter hearing, Mr. Hall declared: "The time for defence is over. Mr. Hardy is now on the offence.'' Mr. Hardy has brought a lawsuit in the UK seeking 90 million from several defendants, including Cooper & Lines; lawyer Mr. Saul Froomkin, who represents the liquidators; and Mr. Froomkin's law firm, Mello, Hollis, Jones and Martin.

He alleges the defendants conspired to injure him by improperly having him declared bankrupt.

His bankruptcy, the default judgment and a mareva injunction, made nearly three years ago, freezing Mr. Hardy's assets were all "frivolous'' actions, said Mr. Hall.

"There's no benefit whatsoever either to the company's estate or the creditors of Focus from anything which has been done by the liquidators, through their attorney, to date,'' said Mr. Hall.

"This is a distressing, money consuming witch-hunt which appears increasingly to be personally motivated and which cannot reasonably be perceived as being of the slightest possible benefit to anyone other than the liquidators and their attorney.'' During the hearing, Mr. Hall said the Privy Council in London had declared the default judgment against Mr. Hardy to be "draconian''.

"Lord Templeman asked that all parties should be sensible so that the default judgment could be dropped and the action for $20 million against Mr. Hardy be proceeded with,'' said Mr. Hall.

"The Privy Council believes that much of what has gone on in Bermuda makes no sense.'' Mr. Hall said that Mr. Hardy had risked arrest by coming to Bermuda because "he wants his day in court when the full facts can be heard on their merits, rather than the current, on-going frustrations''.

"Mr. Hardy has been blocked from doing just about anything in the courts by his failure to purge his contempt,'' he said.

Mr. Froomkin, who was not allowed to cross-examine Mr. Hardy, warned Chief Justice, the Hon. Mr. Justice Ward, that Mr. Hardy would not return if he was allowed to leave Bermuda to continue his actions in London.

"Does he want him to go to jail or what?'' asked Mr. Hall.

Mr. Froomkin said: "It's not for me to suggest that Mr. Hardy goes to jail for two years or whatever.

"But if Hardy is unsuccessful in appealing to the Privy Council, there's no incentive whatsoever for him to come back to Bermuda.

"Your Lordship will not be able to fine him or imprison him or even tell him what a naughty boy he's been.'' He added: "He has been in breach of virtually every single order this court has made.

Supreme Court purges contempt "If he leaves this jurisdiction you will never see him again. History proves that. He makes a mockery of the whole system of justice in this country.

"The only reason he's here is because the Privy Council said that `if you want us to hear your appeal you must go to Bermuda first'.'' He told Mr. Justice Ward that the Bermuda Court was "not bound'' by the Privy Council, which he said was "confused to say the very least'' about Mr.

Hardy's affairs.

"Why should these proceedings in London take precedence over what the Bermuda court has ordered?'' said Mr. Froomkin. "I warn you that you will not see Mr.

Hardy again once he leaves.'' But Mr. Hall said: "It's my client's desire and intention to return to Bermuda but I cannot give any undertaking because you're talking about a man facing a $20 million judgment.'' After hearing both parties, Justice Ward said: "I adjourn the penalty for contempt until an appeal has been heard by the judicial committee of the Privy Council.''