A senior civil servant and his wife who were ordered to repay almost $3 million in loans and interest have had a court order against them partly set aside on appeal.

Lieutenant-Colonel Edward Lamb, the Ministry of National Security’s permanent secretary, and Ruby Lightbourne-Lamb received $1,921,443 from Mrs Lightbourne-Lamb’s parents — Gwyneth and Willard Lightbourne — in four payments between 2003 and 2009.

The couple claimed that the bulk of that sum — $1,556,447 made in two payments in September and October 2009 — had been a gift from Mrs Lightbourne-Lamb’s terminally ill father.

Mrs Lightbourne initially maintained that those monies were a loan, but later testified that they were neither a loan nor a gift. Instead she claimed that her daughter had used “undue influence” to trick her parents into transferring the money.

In a ruling last July, Puisne Judge Shade Subair Williams concluded that the sum was a loan, but added that, had it been a gift, she would have been “bound to apply the presumption of undue influence” and that the couple were “unjustly enriched” by the transactions.

But the Court of Appeal has now set that ruling aside, claiming that it could not be sustained.

In a judgment handed down on Friday, Justice of Appeal Geoffrey Bell noted that Mrs Lightbourne’s initial claim that the payment had been a loan was eventually withdrawn, and it was therefore not possible for Mrs Justice Subair Williams to conclude that it was.

Describing the case as “an unfortunate family dispute”, Mr Justice Bell wrote: “The position in relation to Mrs Lightbourne’s evidence at trial does not begin to support the basis upon which the judge found there to have been a loan, quite apart from the fact that such was not, by that time, Mrs Lightbourne’s pleaded case.

“It was simply not open to the judge to make such a finding, and that finding must be set aside.

“That takes one to the undue influence claim, which of course the judge had treated as the alternative position. And the problem in relation to the undue influence claim is to work out exactly what was the factual basis for establishing undue influence.

“It simply is not possible to proceed to consider the undue influence claim on the basis of the judge’s findings made as to the loan. That finding was not supported by the evidence, and neither would it represent undue influence on the part of Mrs Lightbourne-Lamb.”

Mr Justice Bell pointed out that Mrs Lightbourne’s argument that she had been tricked into giving her daughter and son-in-law more than $1.5 million was “unclear” and conflicted with her original version of events.

He wrote: “Critically, there was no finding by the judge in relation to what the true position was. This was particularly important in circumstances where the pleaded case had moved from the transfer of funds being described as a loan, to a case where it was pleaded that Mrs Lightbourne had essentially been tricked out of funds which belonged to her.

“The finding of undue influence cannot stand, and since this court is not in a position to make its own findings on those matters, that finding on the part of the judge must be set aside and the matter remitted to the trial court for reconsideration.”

Mr Justice Bell’s judgment was supported by fellow Court of Appeal judges Sir Christopher Clarke and Ian Kawaley.

Dr Kawaley expressed sympathy for Mrs Justice Subair Williams, noting that the hearing was complex and had dragged on for more than a year.

But he added: “Although the learned judge accurately summarised the law on undue influence and identified matters which might potentially have supported a finding that the September 2009 transfer was vitiated by undue influence, the summary findings which were recorded as an alternative to her primary findings must be set aside.”

Mrs Lightbourne and Colonel Lamb — who is also a former Commander of the Royal Bermuda regiment and a one-time head of the prison service, were represented by attorney Victoria Greening for the appeal hearing.

During that hearing, Ms Greening had sought to have orders to repay three other loans overturned.

The couple had accepted that the cash, which totalled several hundred thousand dollars, had been loaned rather than gifted, but claimed that Mrs Lightbourne-Lamb’s father had written them off before the debt could be fully repaid.

The Court rejected those appeals.

An appeal against a fifth loan to Mrs Lightbourne-Lamb from her father’s company, Brightside Enterprises Ltd, was also dismissed.

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