The way thousands of drivers were notified about losing their licences when they racked up too many demerit points was illegal, the Court of Appeal says.
In a ruling issued this week, the court has upheld a ruling that police and the New Zealand Transport Agency didn't go through the proper procedure when telling drivers they would lose their right to drive.
The issue is whether the NZTA was meant to notify drivers under the law when they received their 100th demerit point or whether it was legal for police officers to give drivers the bad news.
The decision confirms a 2015 District Court ruling which essentially said that the way police were notifying drivers on behalf of the agency didn't actually match up to what was required in the Land Transport Act.
At the appeal hearing in July, the solicitor-general argued that an error in the process would be more superficial than substantial, but that was rejected by the court.
It said parliament had made the NZTA the agency responsible for licensing.
"Alone it maintains driver licensing records, including records of demerit points. The agency must 'send' notice of the accumulation of 50 points. And it must give notice of the accumulation of 100," it said.
Dozens of drivers have lodged appeals since the original decision, looking to overturn prosecutions for driving while suspended.
The NZTA in mid-2015 reviewed its policies following the District Court decision, meaning no currently suspended drivers are likely to be affected.