Police said he fell "face forward to the ground" while in the escort hold, as if "he were dead weight".
At the Manukau police station he was asked to undergo breath screening procedures, the decision says.
Police said it couldn't be completed, so they asked a medical practitioner to be called in.
A doctor arrived to assess Yoganathan's capability to drive. He said on arrival he found Yoganathan behaving strangely, on the floor calling for a Ventolin inhaler.
Yoganathan refused to walk on his own, only walking on his knees, the decision says.
He declined the doctor's request to undertake a physical examination.
The Court of Appeal accepted there was insufficient evidence that the police constable made Yoganathan aware of the need to accompany him immediately following the positive result from the breath screening test.
The officer's evidence was simply that he requested Yoganathan to accompany him and, in the absence of a response or comment, he physically removed him from the car.
The court also concluded Yoganathan's consumption of alcohol was not in dispute, but on its own, did not establish the charge.
Police evidence that Yoganathan's speech was slurred and eyes bloodshot carried "little weight" considering the street was dark.
The court said a screening test was "simply that", and was not a reliable guide as to intoxication, as it is a preliminary process.
The Court of Appeal set aside Yoganathan's drink-driving charge.
It added that the events that followed Yoganathan's unlawful detention were "a cause of considerable concern".
They raised questions about the circumstances in which he suffered serious injuries while unlawfully in police custody.
The court assumed the Crown Law Office would refer its judgment for further consideration by the appropriate authorities.
Spokeswoman Michelle Brown for the Solicitor-General confirmed the Crown Law Office had followed up the judgment, however any further queries were "for the New Zealand police to respond to".
A police spokeswoman said the matter was referred to police on Thursday.
"[It's] now the subject of internal inquiries, which we cannot comment on while the matter is ongoing".