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And instead of requiring Mr Bain to satisfy the judge he was innocent, Mr Binnie imposed an onus on the Crown whenever the Crown suggested facts inconsistent with Mr Bain's innocence.
He therefore skewed the findings towards innocence, Ms Collins said.
The minister today released the report written by Mr Binnie, a retired Supreme Court judge of Canada, and the highly critical peer review by former High Court judge Robert Fisher.
- Reports are available here
At issue is whether David Bain - who was acquitted in 2009 for murdering his family in 1994 - should be compensated for wrongful imprisonment.
Dr Fisher's report said "logic and experience suggest that if a suspect has lied in denying his responsibility for the crime itself, he will scarcely shrink from lying about the details.
"For the purposes of drawing inference from surround facts, most decision-makers will prefer sources other than the suspect.''
Ms Collins also released Mr Binnie's highly critical response to Dr Fisher's review which was emailed to Ms Collins office this morning.
He says Dr Fisher's complaints are "academic and theoretical and indicate little familiarity of the case.''
Mr Binnie also makes reference to the Herald story of September 10 saying that Mr Binnie's confidential report recommended compensation and suggests he has been blamed for a leak.
"What is particularly galling in Mr Fisher's commentary is reference to 'the well publicised recommendation that compensation be paid','' Mr Binnie said in his email to Ms Collins.
"At the time this 'publicity' appeared in the New Zealand press, the only people who had my report were the ministry and myself. If the leak occurred, it had nothing to do with me.''
At a press conference today Ms Collins, referring to Dr Fisher's report, said the errors in Mr Binnie's report were extensive and serious.
• Items of evidence that did not prove a subsidiary fact on the balance of probabilities were disregarded, which meant important evidence like blood stains on Mr Bain's clothing and broken glasses were excluded.
• Justice Binnie regarded the acquittal as something that was relevant to whether Mr Bain had proved his innocence.
• An acceptance of Bain's version of events without question, except where it directly contradicted other witnesses.
• Justice Binnie arrived at a provisional conclusion of innocence based on one item (luminol footprints), followed by a serial testing of that conclusion, instead of considering the cumulative effect of all evidence - an approach Ms Collins said skewed the findings towards innocence.
• Justice Binnie's approach was generous to Mr Bain in its reliance on background facts sourced from him.
• Instead of requiring Mr Bain to satisfy him on the balance of probabilities, Justice Binnie imposed an onus on the Crown whenever the Crown suggested a factual possibility inconsistent with Mr Bain's innocence.
• He relied on innocent openness' defences to turn incriminating admissions or clues into points thought to support Mr Bain's genuineness and credibility.
• Going beyond his mandate, Mr Binnie did not have authority to conclude whether there were extraordinary circumstances, or make a recommendation on whether compensation should be paid.
• Instead of founding conclusions on the evidence available to him, Justice Binnie drew an adverse inference to the Crown where, in his view, the police ought to have gone further in their investigations.
• In finding serious wrongdoings by authorities, Justice Binnie paid no regard for the need for an official admission or judicial finding of misconduct, and treated as 'serious misconduct' actions that were not deliberate, not done in bad faith.
• Justice Binnie criticised named individuals without giving them the right to respond.
Police say they do not accept Justice Binnie's opinion that the police investigation contained egregious errors.
''The Dunedin police were experienced officers,'' a statement says. "They had dealt with the Aramoana tragedy in which 13 adults and children were shot and killed, and had investigated two other familial homicides in close proximity to the Bain murders.
"This was a multiple homicide with a difficult scene. Reviews of that 1994 investigation found it was conducted in accordance with the standards or the day and without fear or favour.''
The statement acknowledged that some errors were made in the investigation, all of which had been thoroughly traversed by the courts.
"This is one of the most scrutinised police investigations and cases in New Zealand. It has been through two high courts, two courts of appeal and the Privy Council.
"No new points were raised by Justice Binnie that haven't already been extensively debated through the court process.''
In regard to Justice Binnie's opinion that police had failed to investigate the possibility of innocence, the statement said: "Police investigators work on the weight of evidence. As the investigation progressed, the weight of evidence pointed to David as the killer. That evidence was put before the court.''
- by Audrey Young of The New Zealand Herald
THE STORY SO FAR
- June 20, 1994: Five Bain family members shot to death at 65 Every St, Dunedin: Robin, 58; Margaret, 50; Arawa, 19; Laniet, 18; Stephen, 14.
- May 1995: David Cullen Bain found guilty of murder on five counts. Sentenced to life imprisonment with 16-year minimum.
- December 1995: Court of Appeal dismisses appeal.
- April 1996: A petition to appeal to the Privy Council was dismissed.
- December 2000: Governor General refers six questions to the Court of Appeal following application by Bain to the Governor General for the exercise of mercy (a pardon) and the court considers there could have been a miscarriage of justice.
- February 2003: Governor-General refers convictions back to the Court of Appeal, case heard in September and dismissed in December 2003.
- June 2006: Privy Council gives leave to appeal convictions.
- May 2007: Privy Council quashes convictions and orders retrial after hearings in March 2007.
- June 2009: Bain acquitted in retrial in Christchurch after almost 13 years in prison.
- March 2010: Bain lodges application for compensation fro wrongful imprisonment.
- November 2011: Then Justice Minister Simon Power appoints former Supreme Court judge of Canada Ian Binnie to assess claim.
- September 2012: Justice Binnie delivers report to new Justice Minister Judith Collins.
- September 2012: Collins sends Binnie report to former NZ High court Judge Robert Fisher for peer review.
- December 2012: Collins publicly criticises Binnie report for errors and misunderstanding of New Zealand law. Binnie complains about an improper process and Collins releases both reports.