David Dougherty was supposed to face court on theft and burglary charges yesterday - but instead ended up behind bars before his sentencing even began.

Dougherty was arrested in a central Palmerston North street close to the courthouse shortly before his case was called.

The Herald understands he arrived at court about two-and-a-half hours before his case was due to avoid media outside.

A source said he appeared fine then but was later arrested nearby. He was understood to be intoxicated, but it was not clear if that was the reason he was arrested.

The 44-year-old was wrongly jailed for the rape and abduction of an 11-year-old girl in 1993 and later won compensation of $868,728.80 from the Government. He spent nearly eight years in jail before his convictions were quashed.

After his release he fell on hard times and was supposed to be sentenced yesterday for stealing beer and DVDs from a house, alcohol from a local bar and taking a wallet containing a large sum of money from a car.

His lawyer Simon Hewson said Dougherty was not in a position to be brought to court but gave no details. But when Judge Les Atkins asked him if that was because Dougherty was in custody, the lawyer said: "I assume so."

Outside court a woman whose wallet was stolen by Dougherty said she was disappointed sentencing had been delayed.

The woman, who asked not to be named, wanted to see him in court because he had changed since she discovered him leaning into her car, stealing her wallet.

"He took off running and I charged off behind him ... He turned back and threw the wallet back at me," she said.

He was agitated and was punching the air and screaming obscenities. "He was screaming about how he was homeless and had no money and I said, 'Well you're not having mine."'

Dougherty will stay in custody until his next court appearance on June 9. Before then Judge Atkins ordered a pre-sentence report and an alcohol and drug assessment be completed.