Teina Pora has won his legal challenge to the Government's decision not to add an adjustment for inflation to his compensation payout.
Pora was wrongfully convicted of the 1992 rape and murder of Susan Burdett. He spent 20 years in jail before being released on parole in 2014.
His convictions were quashed by the Privy Council in 2015, and in 2016 he received $2.52 million and a government apology.
But that payout - based on a $100,000 figure for each year of incarceration - was never adjusted for inflation, despite former High Court judge Rodney Hansen's recommendations to that effect.
Pora's lawyers argued the sum should have been considerably higher and said he had been "short-changed".
Pora then sought a judicial review against the Government's decision not to add inflation to compensation paid to him.
New Zealand's High Court has now decided that Justice Minister Amy Adams was in error over the amount of compensation due to Pora.
Justice Ellis said the minister had made an error in interpreting the guidelines around compensation.
"That error caused, or was compounded by, further errors in the minister's advice to Cabinet and in the reasons for the Cabinet decision itself."
Pora's lawyer, Jonathan Krebs, said in a press conference this afternoon that the Cabinet got it wrong when it did not consider the issue of inflation.
Krebs said an actuary had estimated the inflation would add an additional $500,00 to $600,000 to the compensation payment.
Krebs said Justice Ellis pointed out that Pora was 17 when he was arrested and 40 when his convictions were finally quashed by the Privy Council and there was no other case in New Zealand legal history where it had been accepted by the Crown that a person had been wrongly imprisoned for anywhere near that length of time.
The judge ruled the guidelines for compensation permitted adjustment for inflation, Krebs said.
"What she has effectively said is that Cabinet got it wrong when they simply didn't consider this," he said.
Krebs said the Cabinet had the discretion not to adjust the compensation for inflation or only partly pay for inflation "but the words I hope will echo in the minister and the cabinet's mind that to do otherwise would be anomalous and unjust and wouldn't be fair".
Investigator Tim McKinnel said there has been no reaction from Pora at this stage, saying they had learnt over the years to deliver the news softly and would sit down with him tonight.
He implored the minister to do the right thing and do it very quickly.
McKinnel thanked Pora's lawyers and acknowledged Labour leader Jacinda Ardern, who, he said, went to work on the case in the shadows when nobody particularly cared and took the fight to the Minister of Justice.
Krebs said the ruling also said decisions of the Cabinet could be reviewed by the High Court, which was not thought to be the position before this case.
In the High Court decision the judge had "considerable reservations" about granting the relief sought by Pora's lawyer, Gerard McCoy, QC, which would include quashing the Cabinet decision.
While the judgment stops short of ordering more compensation be granted, it does say there is nothing stopping the minister from taking the case back to the Cabinet.
Justice Ellis suggested that "the real error here lay not in the Cabinet decision itself but in the advice that preceded it", and that the Cabinet had not had a chance to properly consider Pora's case.
The judge said the guidelines allow for compensation payouts to be adjusted for inflation "where it is in the interests of justice to do so".
"I also invite the minister to consider whether, in the circumstances of Mr Pora's case, the interests of justice require the benchmarks in the guidelines to be inflation-adjusted. I am unable to see any impediment to her taking the matter back to Cabinet should that be seen as the proper outcome.
"The application for judicial review succeeds accordingly. I can see no reasons why costs should not follow the event."
Justice Minister Amy Adams said she had only just received the decision.
"The judge has declared that the guidelines do not prevent inflation adjustment, which is consistent with my understanding of the guidelines, and has invited Cabinet to consider whether the interests of justice require such an adjustment in Mr Pora's case," she said.
"I will be taking time to consider the detailed judgment, and further public comment on the case would be inappropriate at this stage."
Ponsonby man Malcolm Rewa was convicted in 1998 of sex attacks on 25 women including Susan Burdett. But two juries couldn't agree whether he murdered her.
After the second hung jury, the Solicitor-General stayed a third prosecution. Rewa will be eligible for parole in 2018.
In May this year police announced plans to prosecute Rewa for Burdett's 1992 murder.
March 23, 1992
Susan Burdett - an avid ten-pin bowler - returned late from club night at the Manukau Superstrike. After showering, she was raped and battered to death.
Pora convicted of the rape and murder of Susan Burdett.
2000 Convicted again, after earlier conviction quashed.
2014 Pora was released from prison at his 13th appearance before the Parole Board.
2015 The Privy Council quashed Pora's convictions.
March 2016 A retired High Court judge, hired by the Government to review the case, finds Pora innocent on the balance of probabilities.
June Government awards $2.5 million compensation.
2017 Pora challenges decision not to adjust his compensation for inflation.