In what has been coined the worst police prosecution in Australia, a man maliciously pursued as a suspect in the disappearance of toddler William Tyrrell will be paid $1.8 million.
Tradesman Bill Spedding was awarded the compensation in December after police accused him of historical child sexual abuse in 2015 to pressure him to give evidence about the three-year-old's whereabouts.
This strategy, created by then-inspector Gary Jubelin, consisted of "concocted and false" allegations against Spedding for a collateral purpose, NSW Supreme Court Justice Ian Harrison said in December when awarding $1.5 million in damages.
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Since then, a further $300,000 has been added in interest.
A panel of three NSW Court of Appeal judges on Wednesday upheld Harrison's ruling, as a nervous Spedding watched on.
"The high-handed, self-serving, grand-standing undermining of the criminal justice system by the relevant police officers in arresting, charging, opposing bail and maintaining the prosecution against Mr Spedding has no relevant comparator in the reported cases in NSW," the judges said.
"One can only hope that its standing as the worst case is never repeated and is never superseded by conduct that is even worse."
During a June appeal hearing, the State of NSW argued that while the three police officers who pursued Mr Spedding were named in his lawsuit, no one in the Office of the Director of Public Prosecutions – which ran the doomed child sexual abuse case in the courts – was identified.
This meant Harrison erred in ordering the $1.5 million in damages because it was impossible to tell whether anyone in the prosecutions office had also acted maliciously towards Spedding or had colluded with police, the state submitted.
The Court of Appeal rejected this, saying police had continued to play a role in running the case after it was handed to prosecutors because they had withheld crucial information from the director, including issues with evidence and witnesses of the claimed child sexual abuse.
"Further, there was never any disclosure of the police's improper purpose in arresting Mr Spedding for the purposes of advancing their investigation of him in relation to wholly unrelated events, namely the disappearance of William Tyrell," the judges wrote.
Outside court, Spedding said that after a long, difficult and financially straining nine years, he was very happy with the outcome.
"NSW Police destroyed my livelihood and my family. But today for me, justice is done," he told reporters.
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His lawyer Peter O'Brien said this had to be the worst police prosecution Australia had seen.
"To be labelled a paedophile, to be given the sort of public opprobrium that he had to face is absolutely overwhelming and should obviously properly be condemned. And that's what's happened," he said.
Spedding's legal costs total millions of dollars, and he will pursue the state to pay these expenses on an indemnity basis.
O'Brien described the failed appeal as "lunacy" by the state, which now has the option to appeal this further to the High Court.
A NSW Police spokesperson said the force was reviewing the judgment but declined to comment further.
With officers unable to link Spedding to William's 2014 disappearance, they have not formally charged anyone.
In June, a police leak alleged that William's foster mother had been recommended for prosecution.
Police alleged the woman, who cannot be named for legal reasons, might have disposed of William's body following a fatal accident at a property in Kendall, on the NSW Mid North Coast.
The foster mother has always denied having anything to do with William's disappearance.
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