It was a civil matter at best, and should not have entered the criminal arena, she said.
The wrangle dates back to March 2011 when Miller was charged with theft and obtaining by deception after a dispute with former boss James Chapman.
Miller told police he had a verbal agreement to be paid for two roles, but Chapman laid a complaint with police.
Wright, the investigating officer, recorded a phone conversation with an ex-employee of the company who said it was possible the pair had a verbal agreement because "that is how they operated", the judgment said.
During that conversation, Wright said: "And then, because, the problem that I've got, if I make a call on it, one of them is going to be really upset because they have lost, whereas if I hand it on to the courts, well, if one of them wins and one of them loses I can't be blamed for that. Yeah, we put it through the justice system, you know, and it's, that's what it's there for."
Miller's lawyer, Paul Wicks QC, told the court that conversation proved the officer knew he did not have enough evidence.
Miller went on trial in 2013 but that was aborted after recording equipment failed and crucial cross-examination of a witness was lost.
Judge Johns reheard the case later that year and because the Crown failed to produce any evidence that implicated Miller , he was discharged.
In her judgment, Judge Johns said the police and Crown were "negligent in bringing in and continuing with this prosecution".
Superintendent Graham Emery told the Herald on Sunday that Counties Manukau Police and the investigating constable had acknowledged the court's findings and "taken on board the judge's comments".