Ms Collins - when asked to identify the errors in the report - told Parliament that Justice Binnie had wrongly accepted the submission of Bain advocate Joe Karam that adverse inferences should be drawn against the Crown on the basis that evidence was no longer available.
She said that was "incompatible with the onus of proof being on Mr Bain" and was clearly wrong.
He responded in a statement to the Herald: "I mentioned the failure to preserve evidence (and thus the inability of any other expert to verify the primary evidence) as one of the aggravating or 'extraordinary circumstances' which the minister's instructions asked me to identify as something the Cabinet may want to consider in exercising its compensation discretion."
Neither Ms Collins nor Justice Binnie alluded to the actual evidence to which they were referring but a strong part of the Bain case has been the police investigation and destruction of evidence.
The controlled burning of the house and crime scene at Every St in Dunedin soon after Mr Bain's parents, two sisters and brother had been killed with a .22 rifle destroyed much evidence including the footprints made by bloodied socks.
Justice Binnie's revelation last night caps an extraordinary few days of clashes through the media between Ms Collins and the former Canadian Supreme Court judge who was commissioned to investigate the compensation claim.
She criticised his report as containing errors and misunderstandings in an explanation of why she had sought a peer review of it but so far has refused to release the report.
Justice Binnie issued a lengthy rebuttal yesterday and claimed it was "most improper" for a client to attack a lawyer's advice while claiming privilege to protect it from disclosure.
He was commissioned by former Justice Minister Simon Power to investigate the compensation claim, which if accepted would be at least $2 million on the basis of previous awards.
There is no obligation on the Cabinet to pay anything for wrongful imprisonment but it has set itself guidelines for applications. Mr Bain's case falls outside the guidelines but there is a precedent for paying out in spite of a case falling outside the guidelines in the case of "extra circumstances" - and that was explicitly part of Justice Binnie's brief.
Ms Collins is now reconsidering her decision not to release Justice Binnie's reports. She may also release the report of Robert Fisher, QC, the former High Court judge who is peer-reviewing the Binnie report.
