The charges were withdrawn on the same day the case was set to be re-tried in the Christchurch District Court.
The first trial was abandoned in March because of a "legal issue", forcing the judge to declare a mistrial, the reasons of which were suppressed.
Details were heard of how a dispute over payment developed between the pair in the days following their encounter after they met on the dating app Grindr.
Judge Paul Kellar today dismissed prospective jurors ahead of the re-trial's scheduled empanelling procedures.
Later in the day, the judge told the court and the defendant that the charge had been withdrawn, under section 146 of the Criminal Procedure Act.
Both the public figure and the former accused were granted permanent name suppression.
During the previous trial, prosecutors said prior to the pair having sex, the defendant had mentioned being "rewarded" for the encounter, but they had not agreed on an amount or method of payment.
The pair exchanged messages after the encounter about the amount of money.
However, when no payment had been made by the next day, the defendant went to the complainant's house and put up a cardboard sign demanding payment, and saying a lack of payment would equate to sexual assault, according to the Crown.
Later that day, the complainant paid the other man $250.
After that, the pair continued to exchange messages, which the complainant said equated to blackmail.
In one of the messages, the accused said he was feeling discontented with their encounter and felt like he had two options: Either going public, or going on an overseas trip to take his mind off his troubles. However, he could not afford a holiday, he wrote.
The defendant's lawyer Nikki Hansen said the question for the jury was whether her client was attempting blackmail, or simply letting the complainant know he was unhappy and wanted an apology.
She questioned whether the accused had consented to all of the sex acts. In some of the messages from the accused, there were references to sexual assault.
Hansen said an accusation of blackmail would be an excellent defence to a charge of sexual assault.
