Dotcom Prosecutors Urged to Cooperate in N.Z. Lawsuit

Kim Dotcom’s prosecutors in New Zealand must cooperate with the indicted Internet entrepreneur’s lawyers to expedite his lawsuit over illegal wiretaps and a police raid on his home, an appeal court said.

A three-judge panel of the Court of Appeal of New Zealand in Auckland today affirmed a lower court decision that Dotcom can sue the Government Communications Security Bureau, New Zealand’s spy agency, for illegally intercepting his communications before last year’s police raid on his mansion in an Auckland suburb and the seizure of his equipment.

The judges said prosecutors ignored proper procedures in filing the appeal before a decision was made on compensation, referred to as a Baigent claim, according to today’s ruling. Dotcom was indicted in what was dubbed a “Mega Conspiracy” by U.S. prosecutors, who accused his Megaupload.com website of generating more than $175 million in criminal proceeds from the exchange of pirated film, music, book and software files.

“We urge the parties to cooperate,” the judges wrote in the ruling. Prosecutors “should have asked the chief judge to determine the position in relation to the police Baigent claim before this appeal,” they said.

Dotcom, 39, faces as long as 20 years in prison for each of the racketeering and money-laundering charges in the indictment, with the U.S. seeking his extradition for a trial in Virginia.

An extradition hearing in New Zealand is scheduled for August.

“We look forward to holding GCSB spy org accountable,” Dotcom’s lawyer Ira Rothken said on Twitter today. “Doing so will not only protect @KimDotcom’s rights but the rights of all NZ residents.”

Document Release

The appeal court also overturned the lower court judge’s order that all documents collected by the spy agency be turned over to Dotcom’s lawyers.

“We do not accept that it is sufficient for counsel to say that he or she needs to see information before he or she can identify whether it is relevant,” the appeal panel wrote. The spy agency doesn’t have to turn over information that hadn’t already been given to the police, the panel said.

New Zealand’s attorney general’s office objected to including GCSB as a defendant, saying it would distract from the core issue in dispute, according to the lower court’s December judgment.

John Pike, a lawyer representing the attorney general, also objected to disclosure of information sharing with the U.S., saying it would compromise New Zealand’s national security interests and reveal sharing protocols with allies, according to the judgment.

Commando Raid

New Zealand police raided Dotcom’s home using two helicopters and 27 officers, some armed with assault rifles and gas canisters. Police seized mobile phones, hard drives, computers and 18 luxury vehicles, including a 1959 pink Cadillac. Dotcom spent four weeks in jail before winning his release on bail in February last year.

High Court Justice Helen Winkelmann ruled on June 28 that warrants police used to search Dotcom’s home were overly broad and invalid.

During an August hearing into whether the search itself was unreasonable and employed disproportionate force, the GCSB conceded it unlawfully intercepted Dotcom’s communications before the raid, Winkelmann wrote in the December ruling.

“At least some of the material gathered by GCSB through the interceptions will be the subject of consideration in the proceeding in one form or another,” Winkelmann said. “There is a risk that the addition of the GCSB to this proceeding will delay the extradition proceeding, but in reality I think that is not a likely outcome.”

The GCSB contributes to the security of New Zealand by providing foreign intelligence to the government and protecting its electronic information resources, according to a statement on its website.

The case is Between Kim Dotcom and Attorney General. CIV2012-404-001928. High Court of New Zealand (Auckland).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net

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