Dotcom, Batato, Ortmann and Van Der Kolk v The United States of America

• Jurisdiction: New Zealand
• Judge: Elias CJ,McGrath,Blanchard JJ,McGrath J,William Young J,Glazebrook J
• Judgment Date: 21 March 2014
• Neutral Citation: [2014] NZSC 24
• Docket Number: SC 30 /2013
• Court: Supreme Court
• Date: 21 March 2014

Between

Kim Dotcom, Finn Batato, Mathias Ortmann and Bram Van Der Kolk

Appellants

and

The United States of America

First Respondent

The District Court at North Shore

Second Respondent

[2014] NZSC 24

Court:

Elias CJ, McGrath, William Young, Glazebrook and Blanchard JJ

SC 30 /2013

IN THE SUPREME COURT OF NEW ZEALAND

Bill of Rights, Criminal Procedure Catch lines: Appeal from a Court of Appeal (“CA”) decision which overturned disclosure orders first made by the District Court (“the second respondent”) and upheld in judicial review to the High Court — appellants sought disclosure of documents relied on to establish eligibility for surrender under Part 3 Extradition Act 1999 (“EA”) (extradition from New Zealand to certain treaty countries) — first respondent sought extradition of the appellants on criminal charges of copyright infringement, money laundering and wire fraud arising out of Megaupload — whether s25 EA (record of case may be submitted by exempted country at hearing) required provision of copies of the documents relied on to establish a prima facie case if their effect was summarised in the summary of evidence in the record of the case — whether the request for extradition meant the appellants had been charged with an offence so as to engage s24 New Zealand Bill of Rights Act 1990 (“NZBORA”) (rights of persons charged) and s25 NZBORA (minimum standards of criminal procedure) — whether s27 NZBORA (right to natural justice) applied — whether the Criminal Disclosure Act 2008 applied to extradition proceedings — whether the DC had power to make orders for disclosure against a requesting state under s22 EA (powers of Court) — whether the first respondent was a party.

Counsel:

P J Davison QC, W Akel and R C Woods for the Appellant Dotcom

G J S R Foley and L F Stringer for the Appellants Batato, Ortmann and van der Kolk

Solicitor-General M R Heron QC and F R J Sinclair for the First Respondent

JUDGMENT OF THE COURT

• A. The appeal is dismissed.

• B. Costs are reserved.

REASONS

Elias CJ	[1]
McGrath and Blanchard JJ	[89]
William Young J	[201]
Glazebrook J	[246]

Elias CJ

1 This interlocutory appeal is concerned with disclosure of documents relied on to establish eligibility for surrender under Part 3 of the Extradition Act 1999. Eligibility for surrender is established under s 24 if a judge of the District Court is satisfied that the evidence given or produced would justify the person's trial in New Zealand and that no restrictions on surrender apply. The determination is made at a hearing conducted on the same basis as a committal hearing for an offence committed in New Zealand. Although the final decision whether to surrender someone found to be eligible is a government decision, the question of eligibility for surrender is determined by judicial process and according to New Zealand law, as is made clear by both the Act and the extradition treaty between New Zealand and the requesting country in this case, the United States of America. 1

2 The Minister of Justice has applied for extradition of the appellants to the United States on criminal charges of copyright infringement, money laundering, racketeering, and wire fraud arising out of the operations of the Megaupload group of companies which provided storage of electronic files. These storage sites are said to have been used for massive sharing of files, in evasion of copyright.

3 Since the United States is an “exempted country” under the Act, 2 the judicial hearing to determine eligibility for surrender is being conducted, in accordance with s 25 of the Act, on the basis of a “record of the case”. Under s 25(2) such record must include both “a summary of the evidence acquired to support the request for the surrender of the person” and “other relevant documents, including photographs and copies of documents”. Once the formalities of production required by s 25 are complied with, 3 the record of the case is admissible as evidence without further proof of the matters summarised or the documents contained in it.

4 Two principal questions arise on the appeal. First, whether documents evidencing the commission of the offence charged which are relied upon to justify the person's trial may be summarised or must be provided in the record of the case. Secondly, whether the court determining eligibility for surrender may require additional material to be disclosed.

5 The Court of Appeal 4 has overturned orders for disclosure first made in the District Court 5 and upheld on judicial review to the High Court. 6 It held that s 25 does not require provision of copies of the documents relied on to establish a prima facie case if their effect is summarised in the summary of evidence in the record of the case. 7 It held also that the court may require disclosure of documents not included in the record of the case only where necessary “to protect the integrity of its processes”. 8 The Court accepted that someone resisting a prima facie case might be “able to point to gaps or flaws in the material summarised or analysed in the record of the case, or … to point to documentary or other evidence which causes the extradition court to doubt the reliability of the material proffered by the requesting state” and to conclude that a prima facie case is not established. 9 But it considered that “a challenge which does not go to the reliability of the material in the record but to its interpretation — that is, to the inferences that should be taken from it — is more appropriate to a trial than to an extradition hearing”. 10 Because of this analysis of the limited functions of the extraditing court, the Court of Appeal concluded that the disclosure orders in the case had been wrongly made.

6 For the reasons given in what follows, I disagree with both conclusions in the Court of Appeal. I consider that s 25(2) requires the provision to the person against whom extradition is sought of the documents relied upon to establish a prima facie case justifying trial and therefore extradition. Since it is accepted that the record of the case on this view is incomplete, the deficiency must be remedied if the Minister wishes to proceed on it. That conclusion would be sufficient to dispose of the

appeal, since the disclosure ordered in my view does not go further than to remedy the deficiency in the record of the case and I consider the court has power to require compliance with s 25(2). 11 Mine is however a minority conclusion in this Court. It is therefore necessary for me to explain why I consider that the court determining eligibility for surrender has inherent power to compel disclosure for the purpose of the fair determination whether a prima facie case of commission of the offence has been established. Such powers in my view clearly extend to documents which are relied on to evidence the commission of the offence and justify putting the person on trial (and which, in the case of an exempted country, may be provided in the record of the case)

7 Since I consider that the disclosure ordered here goes no further than the disclosure necessary to inform those who are the subject of the hearing of the prima facie case against them, I would allow the appeal from the Court of Appeal and substantially reinstate the orders made in the District Court. On that basis, recourse to a power to order wider disclosure than is required by s 25(2)(b) was not necessary to make the orders here (although it is necessary for me to express disagreement with the views expressed by other members of the Court that there is no such power available to the court which it may exercise in an appropriate case).

The disclosure ordered by the District Court

8 In the District Court, Judge DJ Harvey held that the record of the case submitted on behalf of the United States did not comply with s 25(2)(b) because it did not contain the relevant documents. 12 He treated this as important background when considering the application for disclosure. Although it may make no difference in result, I consider non-compliance with s 25(2)(b) is better treated as a stand-alone deficiency which the court may order remedied rather than immediately declining to admit the record of the case as evidence.

9 As Winkelmann J in my view correctly identified, the orders made by Judge DJ Harvey were limited to the documents relied on as evidence to justify committal for trial on the charges, determination of which was the responsibility of

the Judge under s 24(2)(d)(i). 13 The orders made, which are attached as a schedule to these reasons, were structured on the elements of the offence and were in substance limited to disclosure of documents which evidenced those elements of the offence on which the court was required to be satisfied that a prima facie case had been demonstrated

10 The disclosure ordered by the District Court Judge was grouped under the charges of criminal breach of copyright, money laundering, racketeering and wire fraud. 14 The documents relating to the criminal breach of copyright charge were broken down into those evidencing copyright ownership, those evidencing infringement, those evidencing the “commercial element” of benefit to Megaupload and its employees and “premium” users and those documents evidencing “knowledge/wilfulness”. The documents required to be disclosed for the purposes of the “money laundering” charges were those evidencing the transfer or handling of funds for the purpose of money laundering and those containing descriptions of transactions or recording financial transactions undertaken (directly or indirectly) “for the purpose of money laundering”. The documents ordered to be disclosed in relation to the charges of “racketeering” were all those which evidenced “the formation and/or existence of an enterprise involved in ‘racketeering activity’”, all documents said to evidence participation by those charged...