The election will be held in District 5 in the Municipality of Argyle.
Justice Pierre Muise handed down his ruling in a written decision after a hearing was held in Yarmouth Supreme Court last Thursday.
Challenger Nicole Albright had won the seat over incumbent Malcolm Madden 302 votes to 300.
However, the court heard that two people were told by deputy returning officers at a polling station that they were to vote in District 1 when they actually lived in District 5.
The court says it must assume had they voted in the right district, and had they voted for Madden, the election result would have been a dead heat.
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