The man, named only as 'O', alleges that the abuse took place at the hands of John Allen, the owner of the Bryn Alyn home in Clwyd during the 1970s. He claims that for six years he was regularly raped by Allen, who also subjected him to beatings.
CICA dismissed his claim in July that year and the decision was upheld by an appeal panel on 26 February this year.
But today 'O' was given fresh hope of compensation, when Mr justice Wilson overturned the appeal panel's ruling and ordered the case to be reheard.
He said the panel had failed to have sufficient regard to expert evidence which detailed and gave credence to 'O''s claims of sexual and physical abuse at the home.
The judge added that two doctors clearly believed 'O''s account of what happened and, although the panel members had heard 'brief' evidence from 'O', they had not referred to a longer and more 'intensive report' in their decision.
The panel rejected O's claims because he had not made them earlier and had never been to the police with them.
But Mr justice Wilson said the panel would have been aware of the 'complex' psychological problems experienced by victims of sexual abuse which meant they often find it difficult to talk of their experiences.
'In order to reject 'O''s account on these grounds it had to show that it had considered the specific medical evidence,' he said.
Mr justice Wilson told the court that 'O' had received£2,000 in compensation for abuse he suffered at another children's home.
'O' moved from there to Bryn Alyn, which was investigated as part of a wide-ranging inquiry into abuse at north Wales children's homes in the 1970s.
The judge added that 'O' alleges Allen began abusing him almost immediately after his arrival, and once beat him in a cinema at the home in front of other children and staff.
Allen, it is alleged, only stopped abusing 'O' when he threatened to fight back upon reaching the age of 18 or 19.
Mr justice Wilson refused the appeal panel permission to appeal against his ruling.
STRAND NEWS SERVICE