THE Bank of Bermuda HSBC was forced to drop its claim against Harold Darrell after failing to provide evidence that it was owed nearly $1.6 million by the businessman, writes Gareth Finighan.

A press release from the bank sent out to the island's media last Thursday evening claimed that the company had decided to discontinue its counterclaim "since it has now received $640,000 from Mr. Darrell".

"We are pleased that Mr. Darrell has accepted that he owed the Bank at least $640,000 in outstanding loans", a bank spokeswoman said.

"Having received this payment we look forward to putting this longstanding matter behind us."

What the press release failed to mention was that Mr. Darrell has never disputed the fact that he owed the bank $640,000 ¿ and readily paid up that sum last September after winning an appeal against a former ruling which ordered him to pay close to $1.6 million.

The release also failed to mention that the bank then sought to have that decision overturned ¿ and in April 2008 was given seven days to come up with evidence that Mr. Darrell owed the company an additional $1 million. It also failed to acknowledge that it has been ordered to pay Mr. Darrell's legal costs.

Last week, three months after that deadline had passed, Mr. Darrell decided it was time for the bank to either "put up or shut up" and sought to have the matter struck out. As a result, the bank had no choice but to to seek permission to discontinue its claim.

Yesterday Mr. Darrell's lawyer, Richard Horseman of law firm Wakefield and Quinn, said the bank had no option but to back down because it had never been able to prove that his client owed $1.6 million.

He pointed out that the size of Mr. Darrell's debt shot up at alarming rate because of arbitrary interest rates.

"We weren't able to determine what interest rates they were using," Mr Horseman said.

"I had my accountant go through it and she couldn't even figure it out. Sometimes it was at 12 per cent, sometimes it was at 20 per cent. We have been asking them to show us the agreement where Mr. Darrell agreed to pay these rates - and the best the bank could ever do was to say that their finance department said the interest calculations were correct.

"So for the bank to now come out and say they are pleased that Mr. Darrell has paid $640,000, that's not a true state of affairs. In 2007 they were coming to court informing the court that he owed them $1.6 million. Mr. Darrell has always stated that he did owe the bank money and was always willing to pay what he owed which he did last September.

"Why has it taken the bank ten months to accept this? Well that's something that you will have to put to the bank. The Court of Appeal gave directions in April that the bank had seven days to provide a counter claim stating their particulars and outlining how it was entitled to this extra $1 million.

"We've been waiting ever since for that and here we are, three months later so we sought to have their claim struck out. "Lo and behold what we receive is a summons from the bank for leave to discontinue.

"But what the bank isn't saying is how they have backed down on nearly $1 million of their claim ¿ something that they were actively pursuing up until recently. It has folded up its hand and walked away from the table."

The Mid-Ocean News contacted the Bank of Bermuda yesterday asking why its press release failed to ackowledge that it had been seeking an additional $1 million and that it had effectively been forced to drop its case. Last night a bank spokeswoman replied: "The bank has no further comment from what was stated in last week's press statement."