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John Nuttall and Amanda Korody embrace after a Supreme Court judge ordered their release in Vancouver on July 29, 2016.BEN NELMS/Reuters

Five months after a B.C. judge threw out terrorism convictions against a husband and wife, ruling RCMP officers had led the plot and manufactured the crime, lawyers for the couple say the Crown is relitigating the case through its pursuit of a peace bond.

But prosecutors say the B.C. Supreme Court judge's ruling is not final because it is being appealed, and it's up to the Provincial Court judge hearing arguments about the peace bond to reach his own conclusions about the evidence.

The peace-bond hearing – which was last in court in September – is the latest development in a case that has already weaved through a jury trial, then a lengthy entrapment argument, and still awaits an appeal.

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John Nuttall and Amanda Korody were found guilty by a jury in June, 2015, of conspiring to murder persons unknown and making or possessing an explosive substance – in both cases for the benefit of or at the direction of a terrorist group. They were arrested on July 1, 2013, hours after they placed potentially explosive pressure-cooker devices outside the B.C. Legislature.

After they were found guilty, Mr. Nuttall and Ms. Korody argued they were entrapped by police.

When Justice Catherine Bruce overturned their convictions last July it marked the first time an entrapment argument had been successful in a Canadian terrorism case.

Justice Bruce said of the RCMP's conduct: "Simply put, the world has enough terrorists. We do not need the police to create more out of marginalized people who have neither the capacity nor sufficient motivation to do it themselves."

The Crown's appeal is expected to be heard in September. The peace bond hearing returned to Vancouver Provincial Court on Thursday.

Marilyn Sandford, Mr. Nuttall's lawyer, told the court the Crown cannot "cherry-pick" the elements of the case it likes and challenge Justice Bruce's findings to obtain a peace bond.

"This is the Crown trying to have a second chance on a matter where the prosecution was resoundingly found to be ill-considered," she said.

Ms. Sandford said the Crown might argue Mr. Nuttall bringing a marble gun to a May, 2013, meeting with the primary undercover RCMP officer – who cannot be identified – suggests he is dangerous.

She said such a conclusion would be incorrect.

"It's a snippet out of context from the entire conversation, and the context of what happened the day before, and the day before that, and all of the proceedings that led up to it," she said.

Justice Bruce cited the May, 2013, meeting in her ruling and noted Mr. Nuttall had feared he was about to be killed after he proposed hijacking a train that was found to no longer be in service. She said the officer gave him "confusing and mixed messages."

"On the one hand, [the officer] told Mr. Nuttall forcefully and in a raised voice that his partner was angry that the plan turned out to be misconceived. His failure to research the plan had embarrassed [the officer] who had vouched for Mr. Nuttall. [The officer] took on an angry demeanour and tone of voice with Mr. Nuttall. He told Mr. Nuttall that he was now beyond the point of no return regarding the plan; there was no going back now," she wrote.

"On the other hand, when Mr. Nuttall explained that he brought his marble gun to the meeting because he believed that [the officer] was going to kill him on instructions from his brothers, [the officer] laughed and assured Mr. Nuttall that he was not going to kill him and he vouched for all his brothers."

Ms. Sandford said the Crown might also argue Mr. Nuttall and Ms. Korody were offered opportunities to back out on the plan, though defence lawyers have said the couple did not actually believe they could.

Prosecutor Sharon Steele told the court Justice Bruce's findings should not be viewed as final, due to the pending appeal.

"Your honour is entitled to look at the evidence and to come to your own conclusions about the significance of that evidence to the decisions that you have to make," she said.

Ms. Steele said the real question at Thursday's hearing was what forms of evidence will be admissible during the peace bond process. She said the Crown would like to be able to put before the judge transcripts of the interactions between the couple and undercover police, as well as some of the recordings themselves. She said she would also like to enter some of the notes the undercover officers took.

Ms. Steele will continue her submission Friday.

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