Paddon claimed victory in style as the NZRC returned to Southland roads for the first time in two decades.
The Hyundai star won by a shade over 3min, winning each of the 10 special stages on the fast and flowing southern gravel.
Paddon closed the gap to championship leader Robbie Stokes to 24 points as he fought to overcome missing the opening round in April due to commitments in Europe.
Just one point separates the two leading drivers in the NZRC standings.
Ben Hunt (Skoda Fabia Rally 2), who was second to Paddon at the weekend, managed to edge Stokes (Ford Fiesta AP4) by 7.9sec in a terrific event-long battle, which leaves Stokes clinging to a one-point lead as the series takes a break until September.
Otago Rally winner Jack Hawkeswood (Toyota GR Yaris) completed a solid drive for fourth place and remains in the title fight, 21 points adrift of Stokes.
Dunedin driver Emma Gilmour picked up fifth place in her Citroen C3 and sits 25 points off the title lead, while Zeal Jones (Skoda Fabia R5) was fifth and is a further two points back from Gilmour.
Dylan Thomson (Ford Fiesta) overcame some early troubles to win the NZRC 2WD class for the third straight event.
He held off Ford Fiesta drivers Jack Stokes and Bryn Jones, who completed the class podium.
Dave Strong (Honda Jazz) won the open 2WD class ahead of Willy Hawes (Toyota 86) and Murray Percival (Ford Escort).
Hawes remains in charge of the class championship.
Paul Fraser’s domination of the historic 2WD class in his Ford Escort continued as he banked maximum points yet again, while Mike Cameron (Mitsubishi Lancer) showed his consistency to claim second place and stay in the title fight.
Southland local Andrew Graves held off the challengers in the rally challenge 4WD battle to win in his Mitsubishi Lancer Evo 3.
He beat home Caleb Macdonald (Mitsubishi Evo 6) and Carter Strang (Mitsubishi Evo 10).
Defending class champion Jared Parker (Toyota Corolla) overcame several issues to win the rally challenge 2WD class and pick up the drive of the rally for his efforts.
Pat Norris (Toyota Yaris) was second in the class.
The championship returns after the winter break in mid-September with the Daybreaker Rally in Manawatu.
