Child, Youth and Family (CYF) is in the gun after repeatedly and wrongly claiming a young girl's father was violent.
The girl had been living with her mother, who was taking drugs and in an abusive relationship with a violent boyfriend - who was not the father.
The misinformation lengthened the man's battle get to his daughter back who by that stage had gone to live with her grandmother.
It is unclear where the family lived.
In his decision, Judge Anthony Walsh dismissed the CYF reports about the father as unsubstantiated and unverified, Radio New Zealand (RNZ) reported today.
"CYF acknowledged it had provided incorrect information about the father being violent. Understandably the misleading information distressed the father and compounded his frustration particularly with CYF," Judge Walsh wrote.
CYF has apologised but the man is now suing the agency to recoup more than $10,000 in legal costs and to pay for therapy for his daughter.
The agency said yesterday the father could seek a review by the Chief Executive's Advisory Panel if he was not satisfied.
But the father told RNZ the panel would be a waste of time.
The father had told CYF 13 times over three years he was worried about his child's safety.
In 2015, Social Development Minister Anne Tolley replied to a letter he sent her, saying she had been assured by the agency's chief executive that a thorough investigation "has not found concerns requiring action to be taken".
Documents show social workers dismissed his concerns, saying he appeared to be acting maliciously and would be considered abusive if he did not stop.
The man's sister, whom the court praised for helping arbitrate between the father and the mother, said social workers told them if her brother made any more complaints they would put him on supervised access.
In a later court hearing the mother admitted the father was right to be concerned: her boyfriend was charged with raping the mother at the family home in 2015.
A psychologist reported to the court that the father had no history of aggressive behaviour or drug abuse, was a good carer for the girl, and this compared with multiple concerns about the mother's ability to keep the girl safe.
The agency said last night that it would take a close look at its practice, as it always did if the Family Court raised concerns.
It refused to give an interview to RNZ, citing the need to protect people's privacy.