The widow of a computing tycoon and philanthropist has won a legal battle to allow her to buy Agar’s Island.

The Supreme Court ruled that Lillian Martin, an American, should have been granted a licence to acquire the island, where she lived with her husband, James Martin.

Last night, Wayne Caines, the Minister of National Security, said the Government was taking advice on whether to appeal against the decision.

Assistant Justice Ian Kawaley said in a written judgment: “The arrangements initiated in 1997 would not now be lawful.

“But, objectively viewed in light of the object and purpose of the governing provisions, they were designed in a transparent way to enable Dr Martin, and his widow after his death, to apply for a licence to buy the property which they quite openly treated as their home before the purchase was completed.”

Mr Justice Kawaley said “positive evidence” was needed to dispute legally binding documents entered into by law-abiding citizens. He said in the July 31 ruling: “In this case, the minister assumed the heavy burden of persuading the court that on their face the agreements were not what they seemed, and the reality was informed by a sly ‘nudge-nudge, wink-wink’ understanding.

“Looked at superficially through the lens of hindsight, the series of five-year leases commencing in 1997 did excite suspicion that there was a scheme to renew the leases until Dr Martin obtained a licence or abandoned the scheme when the application was first effectively made in 2014.

“But this cynical first impression does not withstand careful and objective scrutiny because the arrangements entered into were not artificial or commercially inconsistent with Bermuda Transportation Company Limited retaining legal and beneficial ownership of the property after the 2007 amendments came into force.”

Dr Martin, who died in 2013, aged 79, was a major influence in the development of computer science and his work included the creation of some of the building blocks of modern IT systems, as well as teaching other businesses how to benefit from technology.

The English-born businessman and author moved to Bermuda in the 1980s and built a home on Agar’s Island in the Great Sound off Point Shares in Pembroke.

The Supreme Court heard that in 1997 he entered into an agreement which contemplated the purchase of Agar’s Island if he was able to obtain a licence.

The arrangement also said he would occupy the island as a tenant under a five-year lease and finance the development of the property.

Mr Justice Kawaley explained in his judgment: “The development was needed to raise the value of the property to the requisite land valuation threshold, which would enable a restricted person to obtain a licence to purchase the land under the Bermuda Immigration and Protection Act 1956.”

The Government announced a moratorium on any further licences for non-Bermudians to buy land in 2005 as part of an effort to end the practice of “fronting”.

Dr Martin did not apply for a licence until after the moratorium came into effect in 2007 and he died in 2013.

Ms Martin, his widow, applied for a licence in July of 2014, after the moratorium had ended.

But the application was refused. Government lawyers, acting for the Minister of National Security, claimed that there were suspicions that parts of Bermuda’s immigration law had been breached by Dr Martin’s arrangement.

Mr Justice Kawaley said the case turned on “a bland point of statutory construction”.

He added: “They were in my judgment obviously lawful arrangements when initially made.

“The critical legal question is, therefore, whether the arrangements, taking into account the way in which Dr Martin — and the applicant after him — occupied the property, were caught by the more restrictive regime introduced by the 2007 Act and became unlawful as a result.”

Mr Justice Kawaley found that the arrangements would have aroused suspicion “at first blush” in 2014, but were still lawful when the 2007 Act came into full effect.

He said legislation did not prevent people from entering into sale and purchase agreements before they obtained a licence to purchase land.

Mr Justice Kawaley added: “If it is permissible to enter into a sale and purchase agreement without a licence, it is impossible to identify any free-standing prohibition on occupying land as a tenant prior to making the licence application or while an application is pending.

He said: “A tenant does not cease to be tenant merely because they are also a prospective purchaser of the property being leased.”

“It is important to remember that the Department of Immigration had notice of the fact that Dr Martin was occupying the property he had contracted to buy and was a mortgagee of as long ago as 2010 and was unable to identify any straightforward basis for criticising these arrangements.”

Wayne Caines, the Minister of National Security, said: “The Government is taking advice and considering its options in relation to the decision by the Supreme Court in this matter, including whether to appeal.”

It is understood that the Martin case was the first ruling on the meaning and effect of the 2007 legislation, which was designed to prevent non-Bermudians from buying property illegally by the use of a resident as a “front”.

It was revealed in 2010 that the Bermuda Housing Corporation had obtained a $1.5 million waterfront property near Five Star Island in a settlement after suspicions of fronting were raised.

As part of the settlement, the Government agreed to rent the home back to the family, who had to pay $10,000 a month for five years.

Lieutenant-Colonel David Burch, the Minister of National Security when the settlement was made, said at the time: “I am not aware of all the details in this case, but clearly we got to the point where everybody agreed ‘OK, you got me’.”

• To view the judgment in full, click on the PDF link under “Related Media”