It happens alright. Happened to me. I got given two tickets, at 35 demerit points each, plus the maximum fine. I didn't actually do what they said, but one eye witness, who was just pissed off I passed him, decided to call the cops.
Of course, I didn't do any of the things he said he did. And I couldn't get those demerit points as I would lose my license.
So, I did get the lawyers involved. In addition to that, the case was in Taupo, and I'm in Welly, so my lawyer in Welly had to retain a lawyer in Taupo to represent me. And so it went, the best thing ended up just pleading on one of the charges, as it was going to be a 50/50 call on the day.
And so it went. So, yeah, it does happen. I don't blame the police, they were just basing it on what they were told, but that little botherer in the silver holden station wagon, I won't forget you and your plaid shirt in a hurry.