Teina Pora has won his High Court case challenging the $2.5 million compensation he was paid by the government for wrongful imprisonment.
Photo: RNZ
Mr Pora asked the court to review the compensation because it was not adjusted for inflation.
The compensation paid to him was based on 1998 guidelines that award $100,000 a year for loss of liberty.
The retired High Court judge who considered Mr Pora's compensation claim had recommended the figure take inflation into account but the government rejected that, saying the original offer was fair.
In a judgment released today, Justice Ellis said the Cabinet guidelines do allow for inflation adjustment, where it is in the interests of justice to do so.
Justice Minister Amy Adams said she would take time to consider the judgment.
An assessment commissioned by Mr Pora's legal team suggests he should receive an extra $500,000 to $600,000 on top of the $2.5 million paid out last year.
His lawyer Jonathan Krebs said the guidelines for compensation permitted an adjustment for compensation and the High Court judgement had confirmed that.
Mr Krebs told Checkpoint with John Campbell he was urging Justice Minister Amy Adams to reconsider the earlier decison.
"Justice Ellis has said yes, that the cabinet didn't have the right information before it when it made the decision not to inflation adjust and has sent it back for Cabinet to reconsider it," - Teina Pora's lawyer Jonathan Krebs and private investigator Tim McKinnel
"If the minister thinks it's approppriate Cabinet will need to reconsider it.
"Of course, the minister can simply say 'we accept that we are wrong and we did have the power to inflation adjust and we agree to do that immediately'.
"I mean, she can do that and we think that's what she should do."
Mr Krebs said the decision was enormous in terms of administrative law.
"Because what it says is that decisions of Cabinet can be reviewed when Cabinet is making decisions against a set of guidelines or criteria as they were doing here.
"Previous authority that says the High Court can't interfere with what Cabinet's decided has been overturned.
"It's new, and very big."
Mr Krebs said the justice minister was a fair woman and he hoped she would act as soon as possible to make the inflation adjustment.
Mr Pora's supporter, former police officer and private investigator Tim McKinnel, said they planned to talk to Mr Pora about the ruling tonight.
"He'll be blown away, I mean he's been incredibly patient, he's far more patient than what we are but it will mean the world to him.
"We'd implore the minister now to - after almost quarter of a century of injustice for Teina - to do the right thing and to do it very very quickly."
Mr Pora spent nearly 22 years in prison after he was convicted in 1994 for the killing and rape of Susan Burdett in Auckland two years before.
He was again found guilty at retrial in 2000 but the convictions were overturned in 2015.
Mr Pora and his legal team went to the High Court to challenge the amount paid. The court was told during the case the amount worked out to be less than the minimum-wage hourly rate.