Justice Wylie acknowledged the assessment he made about Mrs Banks was "an error" and asked the former MP to pass on his apologies to his wife.
The judge would also make reference to it in his final written decision, he told the court.
Banks' counsel David Jones, QC, said his client had suffered a "grave injustice" and was "seeking justice for a level of recompense for costs incurred in this court".
The lawyer said the Crown exhibited a "blinkered approach" in terms of the prosecution and made reference to "perjured evidence".
Clearly the evidence was false by Mr Dotcom, Mrs Dotcom and indeed [Dotcom's former bodyguard Wayne] Tempero. It can't have been true," Jones said.
"Mr Dotcom has been caught out blind and it's plain to see he can influence others, particularly his erstwhile wife."
But John Billington, QC, for the Crown, hit back at those claims.
"There was no evidence available to the Crown that suggested what was being said by Mr Dotcom, Mrs Dotcom and Mr Tempero was fabricated. On the contrary, the other evidence supported it," he said.
In determining the application, Mr Billington said Justice Edwin Wylie had one thing to consider:
"Was this case reasonably and properly brought on the evidence available to the Crown at the time of trial?"
The case related to donations Mr Banks received from Dotcom for his 2010 Auckland mayoral campaign that were not disclosed on his electoral return and which Banks claimed were anonymous.
But the Court of Appeal quashed his conviction after Mrs Banks' leg work.
At a second hearing, the Crown had argued a retrial should go ahead and the new evidence in the document decided on by the trial judge. However, the Court of Appeal disagreed and said there had been a "serious error of process" but put that down to misjudgment rather than malice on the part of the Crown.
In March, the ex-Act MP was awarded $66,200 in costs from the Crown for the Court of Appeal hearings that resulted in his acquittal.
Today's application sought to compensate Banks for the costs of the original trial. "It's difficult to imagine a more worthy applicant than someone who's been the victim of fabricated evidence," Jones said.
"Any credible system of justice must recompense a person who has suffered a conviction as a result of false evidence."