Butterfield Bank is attempting to strike out a legal challenge that claims it was involved in “constructive fraud, reckless conduct and deliberate concealment” in a land grab case.

Representing the bank in a civil court hearing this week, Kyle Masters of Carey Olsen said a writ of summons served on the bank’s lawyers in October alleging the bank covered up fraudulent behaviour by other parties was “frivolous and vexatious, and ought to be struck out as an abuse” because the claims had previously been considered.

The writ was served by Charles and George Brown who claimed that “fresh and compelling evidence” presented during the 2021 Commission of Inquiry into Historical Land Losses pointed to forged property sale documents and warranted a full hearing.

The Brown family's decades-long fight centres around the fraudulent activity they say robbed them of their rightful property, which belonged to their uncle, John Augustus Alexander Virgil.

Mr Virgil, who passed away in 1972, was the great-uncle of the late Progressive Labour Party MP Walton Brown.

While the bank, which was appointed the estate’s sole executor after Mr Virgil’s death, acknowledged that wrongdoing likely took place, it has maintained that it was not culpable.

Mr Masters told the court that the case was “out of time”.

He added: “The order was to be made within six years. It wasn’t and we are now 40 years on — we are into our seventh set of proceedings and all of the previous proceedings have been struck out. We say this is an abuse.

"It stands to this court to exercise its jurisdiction to prevent that type of action from continuing."

The bank’s application is being considered by Larry Mussenden, the Chief Justice.

The property at Spring Benny in Sandys had been bequeathed to seven nieces and nephews of Mr Virgil, who retained the original deeds to the land.

The beneficiaries included Barbara Brown, who spearheaded the family’s battle for justice and who passed away in December.

The Browns, on behalf of two surviving beneficiaries, made a case before Mr Justice Mussenden that Butterfield Bank had breached its fiduciary duty by covering up the illegal actions of associates 50 years ago.

Their 11-page writ claims the bank took “intentional and deliberate steps to obstruct the pursuit of justice and conceal and cover up the fraudulent behaviour” of one of its legal agents and others in relation to land transactions in 1962 and 1969.

Mr Virgil’s will stated the four-acre plot was to be shared out equally among beneficiaries.

However, when they went to submit their claim to the property in the year of his death, they were told by the bank that the land had been sold by their uncle.

The beneficiaries since claimed that a conglomerate of lawyers, estate agents, government officials and financiers illegally conspired to seize the property.

This claim was supported in the Commission of Inquiry, which identified a "criminal conspiracy to dispose Mr Virgil of his property”.

A handwriting expert had been engaged ahead of the CoI, leading to the conclusion that the property documents were forged.

Mr Masters made a case that while documents may have been forged, it was not known at the time of Mr Virgil's death.

He said the bank had worked with the existing conveyance.

The two fraudulent transactions were an acquisition by Eric Jones, a lawyer, and the sale of the northern portion in 1969 to Russell Pearman, a real estate agent.

During a hearing on Monday, Mr Brown claimed that the late Robert Motyer, a lawyer, was “the architect and engineer” of the conspiracy.

Mr Brown said the bank’s choice of law firm Appleby, including Mr Motyer, for its investigation into the matter in 1978 presented a conflict of interest.

He said the bank acknowledged documents to support a fraudulent transfer were missing but maintained that they had no doubt they existed.

“We know that Robert Henry Motyer was involved in both transactions. It is the 1969 transaction that the handwriting expert confirmed that the signatures were forged.

“That point of confirmation has had this cascading effect of connecting the bank directly to the fraud through their lawyer, Robert Motyer.”

Mr Brown said: “We maintain that the claim submitted is sustainable and entirely triable.

“We also submit that the bank’s investigation was compromised and they had what we consider to be an associate of theirs who was conflicted.

“The bank was engaged upon, they were relied upon and we believe that relationship was breached.”

Mr Masters said that time limitations on a retrial were still applicable to the case because the plaintiffs could have sought the evidence earlier.

He added: “The problem is that he doesn’t rely on any real basis upon which he couldn’t have gotten the evidence earlier.”

Mr Masters said the reason previous cases had been struck out had nothing to do with the inability to obtain evidence but rather that the law at the time saw to it that the bank never received that property.

“It is not a question of whether the bank ought to have exercised its fiduciary obligations.

“The obligations didn’t go as far as the property because they didn’t exist.”

Mr Brown said: “It is only recently that we have been able to secure the services of a handwriting expert.”

Speaking on the defence’s assertion that the matter was vexatious and frivolous, Mr Brown added: “We believe that this is a very special case.

“It has been an arduous journey of 50 years. This represents what we believe to be a systemic and institutional, historically at least, injustice in Bermuda.”

George Brown added: “All the matters that have been in the court in regards to the bank that were struck out were not based on merit but technicalities and procedures. We never had our day in court.”

Despite the new evidence, Mr Masters claimed that a legal principal restricting re-litigation still applied to the case because the arguments being made now were the same as previously.

“[They] are that the bank, by hiring Appleby to carry out these examinations, assisted in the concealment of the fraud,” Mr Masters said.

The bank declined two recent invitations from the family to discuss potential settlements.

Mr Justice Mussenden reserved judgment, telling both sides it would be a few weeks before a decision could be made.

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