grocery store from selling liquor.

Liquor Licensing Authority members took away the licence from Enterprise Grocery, Bailey's Bay, after hearing complaints of rummies gathering nearby and harassing residents.

But Puisne Judge the Hon. Mr. Justice Ground ruled yesterday they had made a legal mistake and must decide the matter all over again.

The ruling allows MarketPlace supermarkets to continue their battle to take over and re-open the store, complete with liquor licence.

The grocery closed last year after its manager retired, wearied by the fight against loiterers.

MarketPlace negotiated with the owners to take over running the store, and spent $136,000 on improvements. But their plans were stalled when the authority refused them a licence.

Mr. Justice Ground yesterday gave his ruling on an appeal by MarketPlace against the authority's decision.

He said the authority was right to take into account the views of objectors, including the fact that the rummie problem stopped when the store closed.

But the authority was wrong in deciding that the year-long closure broke the normal expectation that the licence would be renewed.

The authority members had seen their role as deciding whether liquor sales should start up again.

"I do not think that this was a correct analysis of the position,'' he said.

"I think that they should have proceeded on the basis that this was a renewal, coupled with a transfer. I think that this is properly to be regarded as an error in the law they applied to the matter.'' He sent the matter back to the authority for a re-hearing, with the instruction that they regard it as an application for renewal of a licence.

Objectors to the licence point to the knifing of a manager during a robbery in 1990. The nearby Bermuda Perfumery has complained of vandalism and abandoned syringes, while the Grotto Bay Beach hotel alleges guests were harrassed and property stolen. Police also object to the store getting a licence again.

But Mr. Michael Mello, lawyer for MarketPlace, says a liquor ban could mean a death sentence on the 40-year-old store.

Without a licence it would make 25 percent less profit and might not be able to stay open, he says.