Police are to review how they carry out covert operations after fooling a court into prosecuting an undercover officer who had infiltrated the Red Devils motorcycle club.
Justice Simon France on Wednesday ordered a stay of proceedings in prosecutions of those arrested as part of Operation Explorer. It was a police crackdown on motorcycle gang members.
An undercover officer using the name Michael 'Wiremu' Wilson infiltrated the Red Devils in Nelson and police orchestrated a false arrest to boost his criminal credentials.
As a part of the operation Justice France said a fake warrant was prepared.
"However one looks at it, a fraud is being committed on the courts," he said.
He also said it appeared the police conduct had components of committing criminal offences.
In a second case charges against 28 people were dropped after another judge had concerns about a raid on the club's Nelson premises during a barbecue in 2010.
The Nelson case also had implications in the prosecution of the former president of the Hells Angels gang, Philip Ernest Schubert, on P charges.
He was accused of offering to supply drugs to Wilson, who was undercover in another operation.
But Schubert's lawyer, Eb Leary, believed the charge would be dropped because of Justice France's ruling this week.
The Solicitor General Michael Heron had 10 days in which to appeal.
Assistant commissioner Malcolm Burgess said police would reassess ''aspects'' of undercover operations following the judgment.
He said officers understood they were acting on the authority and approval of then-Chief District Court Judge Russell Johnson. Two senior officers had visited the judge.
Justice France said they didn't act in bad faith but their approach was inadequate.
''The High Court has since reviewed this aspect of the operation and found that the actions of police were a breach of the court process,'' Burgess said. ''We are reviewing our processes to ensure this does not happen again.''
But he reiterated the police were still discussing ''legal options for an appeal''.
He said police were ''absolutely committed'' to making sure undercover work operated within the law. The review would make sure the courts were not put ''in this position again.''
''Our staff work tirelessly every day, at times involving personal risk, to keep communities safe from serious criminal offending,'' he said. ''The undercover programme is an integral part of those efforts to investigate serious organised crime and those who operate outside the law. It is difficult and often dangerous work.''
The Organised and Financial Crime Agency of New Zealand - OFCANZ - used a fake warrant to search a lock-up for stolen goods and drug-related items. They then prosecuted Wilson - who even failed to appear at court, prompting warrants for his arrest.
Police believed gang leaders were suspicious about his credentials and wanted to boost his standing.
OFCANZ also led the raid on internet mogul Kim Dotcom - and a court ruled the search warrants in that case were unlawful.
Both operations were headed by Detective Inspector Grant Wormald.
Police Minister Anne Tolley defended police, saying she had no concerns about how OFCANZ operated.
Police were acting to protect an undercover agent, she said.
- Fairfax Media