A man arrested twice for the 1974 killing of Beverly Smith was acquitted on Monday, meaning Durham Region's oldest cold case remains unsolved.

Alan Dale Smith was acquitted of first-degree murder. The Crown withdrew its case because the judge excluded key evidence — putting a controversial police tactic into the spotlight.

"I'm actually glad the ordeal is over with," said Smith as he walked out of an Oshawa, Ont., court a free man after the Crown determined there was no reasonable prospect of conviction. "I'm looking forward to spending much time with my family and that's all I have to say this morning."

Beverly Smith

Beverly Lynn Smith, pictured, was 22 at the time of her death. (Submitted)

Beverly Smith was fatally shot in 1974, and Alan Dale Smith, no relation, lived across the street.

Beverly Smith, who was 22 at the time of her death, was shot and killed in her small brick home in Raglan, just north of Oshawa. Her 10-month-old daughter Rebecca was in the house at the time.

Her husband, Douglas, last saw his wife holding Rebecca and waving goodbye as he went to work at the General Motors plant on Dec. 9, 1974.

Alan Dale Smith was first arrested in 2008, but the charges were dropped.

After that, police started what's known as a Mr. Big sting, in which undercover officers befriended Smith and convinced him he was part of a criminal organization.

'They not only crossed the line, they trampled it.' - Alison Craig, defence lawyer

The defence argued police went too far, when they staged a fake murder to convince Smith to confess.

The judge found Smith's confession was riddled with holes and coerced, so he excluded that evidence.

"They not only crossed the line, they trampled it," said defence lawyer Alison Craig. "It resulted in a false confession and an innocent man being in jail for many years."

Homicide victim Beverly Smith

Beverly Smith is seen in an undated photo. She was fatally shot in December 1974. (Submitted)

In a statement to CBC News, Beverly Smith's twin sister, Barbra Brown, said: "I know who killed my twin sister and I know why. The courts cannot take that away from me."

Rebecca Smith told CBC News in a written statement that she believes Alan Dale Smith's confession "was real."

"It was not provoked. It was volunteered, and he was not scared," her statement said.

Mr. Big operations operate in a legal grey area that could be soon cleared up by the Supreme Court.

With a report from the CBC's Steven D'Souza