To be eligible for compensation, Mr Bain needed to have his conviction quashed on appeal without order of retrial or to have been given a free pardon. Because his claim did not pass this test, he had to prove that his compensation bid met the standard of "extraordinary circumstances".
Justice Binnie was recruited to decide the claim in November, and interviewed Mr Bain in Auckland in July.
Mr Bain's advocate Joe Karam, who fought for his acquittal, last night said he could not comment on the compensation case.
Criminal law experts have previously estimated that Mr Bain's compensation could be up to $3 million, if his claim passed the stricter test demanded by Cabinet.
His trial cost $3 million, but he did not receive legal aid for his compensation bid.
In 2011, Cabinet granted Aaron Lance Farmer $350,000 after he was wrongfully imprisoned for two years and three months on a rape conviction. He had been sentenced to eight years in prison, but the Court of Appeal quashed his conviction in 2007. Shortly afterwards, new DNA tests excluded Mr Farmer as the attacker.
In 2001, David Dougherty was awarded almost $900,000 after being wrongfully imprisoned for three years for the abduction and rape of an 11-year-old girl.