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Michael Lance, a former Queen's Counsel and district court judge, was charged with scratching a Volkswagen Golf which was blocking the driveway to his North Shore apartment block.
He was acquitted on a wilful damage charge in March last year, and has now successfully sued the police to pay part of his legal bill.
Judge Kevin Phillips awarded Mr Lance $8000, and said the former deputy commissioner of the Police Complaints Authority might not have been charged if police had "critically investigated" all the evidence.
A judge does not automatically award costs when someone is acquitted, but takes into account factors such as whether the police properly investigate any evidence that suggests the defendant is not guilty.
In the Lance case, barrister John Haigh, QC, took the unusual step of giving police the entire defence case - including witness statements - before the charge was laid in August 2009.
The evidence, gathered by private investigators, questioned the reliability of crucial prosecution witnesses and gave other possible leads of inquiry.
One of those was a neighbour of Mr Lance, Martin Treadwell, who gave evidence for the defence, He said the scratched Volkswagen had blocked a silver BMW driven by a man with drug-world connections. An employee from a nearby restaurant also knew of the drug dealer. Police were given a name and address but this was not followed up.
Judge Phillips dismissed the wilful damage charge, saying the evidence given by witnesses David and Anna Burn - in which Mr Burn claimed he saw Mr Lance scratch the car - "was not the type of evidence that I could find Mr Lance guilty of this charge on".
In his costs judgement, issued last week, Judge Phillips said the police failed to thoroughly follow up on the matters raised before Mr Lance was charged.
"The police can quite clearly be criticised for the way in which its investigation proceeded after the police had the information from Mr Haigh on behalf of Mr Lance," he said. "I find that matters were not appropriately investigated ... if more attention had been paid by the police to the matters raised by Mr Haigh, then the police might very well not have proceeded with the prosecution." Speaking publicly about the case for the first time, Mr Lance said the $8000 award towards his legal costs was a "complete vindication".
He did not criticise the police for acting on the complaint, but described the investigation as "casual" - particularly in light of the evidence given to the police.
He had been hugely embarrassed by the publicity of the investigation and resulting criminal charge.
"It's a relief this is finally over. The police case hinged on the credibility of the two so-called eyewitnesses. John Haigh wrote to the police and set out our case in so much detail, which is a very unusual thing to do. "We weren't hiding anything; we had nothing to hide. Not only did we point out the flaws in the police case, but we provided our own witness statements. And the police skimmed over them."
In response to the costs application, Inspector Alistair Murray said the case was decided on a "technical point" after prosecution witnesses did not to testify to the expected standard and as in their brief of evidence.
Judge Phillips rejected this. He also dismissed Mr Haigh's submission the police acted in bad faith if investigating officers did not follow the legal advice of the Crown Solicitor for Wellington, Grant Burston.
The police refused to reveal whether Mr Burston advised against prosecuting Mr LanceJudge Phillips said the officer in charge, Detective Inspector Bruce Scott, was in an invidious position because of the publicity the case attracted.
Mr Haigh had sought $14,000 for legal costs.
- The New Zealand Herald