Status changes made client take risks’
A computing tycoon was “caught out” when Parliament tightened laws on non-Bermudian land ownership, a court heard yesterday.
James Martin, an English-born businessman and philanthropist, was said to have taken a risk when he entered an agreement to buy Agar’s Island in 1997 at the same time as he became a tenant.
Myron Simmons, a senior Crown counsel, told the Supreme Court’s civil division that the legal position changed when Government introduced amendments to the Bermuda Immigration and Protection Act in 2007.
He made arguments during an application for judicial review hearing after lawyers for Dr Martin’s widow, Lillian, a US citizen, filed a motion to ask for a decision on her application for a licence to acquire the island, which the couple had made their home.
They also asked for an order or declaration that licence would be granted, or compensation paid, as an alternative.
The court earlier heard that Dr Martin entered a sale and purchase agreement for the island in 1997 and occupied it under lease from the Bermuda Transportation Co with the expectation that he would buy it when he got a restricted person’s licence.
Mr Simmons, on behalf of the Minister of National Security, the respondent in the action, said that an unknown risk assumed by the parties was government intervention, and in 2005 a moratorium on the purchase of land by non-Bermudians was introduced.
He added: “One of the ways, as an attorney, you will mitigate a loss, when there is an unknown, is, execute quickly.
“If you believe that there might be that risk, you get in and you get out.
“If you look at the structure of this arrangement, they were looking to do just that.”
The court heard later from Ms Martin’s legal team that four consecutive five-year leases were granted and that a planning problem at first prevented Dr Martin from applying for a licence before the end of his first rental period.
Mr Simmons said that the Bermuda Immigration and Protection Act was amended in 2007.
The new legislation made it unlawful for a restricted person to “appropriate land”, assume ownership rights, with the intention of occupation, or use or development of the land for profit.
Mr Simmons explained that there was a transition period of three-and-a-half years for people to “regularise” any arrangements if needed.
He said: “I mention this because there seems to be some sense that the applicant and her husband were not treated fairly and I’m trying to stress this was a historical move; it wasn’t something that was ... a surprise attack.”
Mr Simmons added: “Between 2012 when the moratorium came to an end and his death in 2013, there was a year when nothing was done.”
He added: “He took a risk, the Government made steps to put things in place and, unfortunately, he was caught out.”
Lauren Sadler-Best, also for the respondent, earlier told the court there were reasons to suspect another section of the legislation was breached.
That related to participation in a scheme that allowed a restricted person or trustee to hold, acquire or appropriate land in contravention of the law.
Michael Fordham QC, for Ms Martin, argued that the landlord maintained autonomy throughout the lease arrangements.
He told Assistant Justice Ian Kawaley: “In the end, you are back to asking whether, viewed objectively, in these arrangements you can find or see a scheme to extend the terms beyond five years, and there’s none.”
Mr Fordham claimed that to fall foul of the law, any prohibited scheme would have had to be entered after 2007 and continued to Ms Martin, who the court heard earlier only became a party in the arrangement in 2012.
He said that it would need to be the case that “she’s getting those leases not because a landlord is granting them, but because she has a behind-the-scenes entitlement to them”.
Mr Fordham added that the judge would have to find that the contract documents did not reflect what had been agreed.
He said: “The question is whether there is a basis for reaching that conclusion in this case and we submit that there is not.”
Mr Justice Kawaley reserved judgment.
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