Robert Mitrevski had a writ of sale put on his Jesmond investment property after he was mistaken for a man of the same name locked in a $3 million legal battle with a Sydney couple.

The writ was lifted in May and Mr Mitrevski applied to the NSW Attorney-General's Department for an ex gratia payment to recoup the $10,500 he spent in legal fees clearing his name but received a letter through Charlestown MP Matthew Morris last week saying his application had been denied.

He was told that while he had suffered financially because of the mix up, he was not entitled to an ex gratia payment because, "it is not as a result of an error by the Supreme Court . . . Mr Mitrevski could still take action to mitigate the loss".

Mr Mitrevski, who only realised the court order was in place when he applied for a car loan and was told he owed almost $3 million, said he was outraged at the decision.

"You can't do this, you can't just make a mistake like this then turn around and say you're not going to do anything about it," he said.

"I'm an innocent man who is still suffering, this is just a slap in the face, saying 'shut up and go away'."

While he said he initially waived his rights to seek costs from the other party he is seeking further legal assistance with the help of Charlestown MP Matthew Morris.

The letter urged Mr Mitrevski to seek legal assistance and request costs from the other party.

Mr Morris, who raised the issue in State Parliament, said he was disappointed with the decision but would not to give up.

"It's frustrating but I'm looking at this more like round one," he said. "I've contacted the Attorney-General's Department about how we can all sit down and discuss where to from here."

A Supreme Court spokeswoman said they did not make a mistake in issuing the writ and Mr Mitrevski had other legal avenues by which he could seek compensation.