Emails reveal police knew tea thought to be drugs was not an illegal substance while mother and daughter were sitting in jail

A Sydney mother and daughter who spent five months in jail accused of importing drugs were imprisoned on what turned out to be an inaccurate test, new emails have revealed.

Malaysian nationals Connie Chong and Melanie Lim were refused bail in January after a raid on their Greenacre home which uncovered what police believed was the stimulant Phenmetrazine imported from China.

In actual fact, it was ginger sugar cubes, used to make herbal tea.

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A costs hearing at Downing Centre today heard an email exchange between the officer in charge of the investigation, Detective Tara Conaghan, and an AFP agent, revealed NSW Police knew as early as February the initial hazmat test was inconclusive.

Further emails from the AFP in April confirmed they had tested the shipment themselves and "no prohibited substances were detected".

Detective Sergeant Daniel Burncile told his state colleague they were informed by the Australian Border Force the initial result was due to a training issue with how their own staff interpreted the result.

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When asked by barrister Stephen Boland why the information wasn't acted on, the officer in charge told the court it didn't form part of their own investigation.

It wasn't until NSW Police analysed the product themselves that the charges were dropped. By then both women had wrongly spent five months behind bars.

They're now suing police for legal costs. The case will return to court next March.