HM Attorney-General v Kim Dotcom

• Jurisdiction: New Zealand
• Judge: White J
• Judgment Date: 19 February 2014
• Neutral Citation: [2014] NZCA 19
• Docket Number: CA420/2013
• Court: Court of Appeal
• Date: 19 February 2014

BETWEEN

Her Majesty'S Attorney-General

Appellant

and

Kim Dotcom

First Respondent

and

Finn Batato

Second Respondent

and

Mathias Ortmann

Third Respondent

and

Bram Van Der Kolk

Fourth Respondent

[2014] NZCA 19

Court:

Ellen France, Randerson and White JJ

CA420/2013

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against a High Court (“HC”) decision that search warrants were invalid and that the removal of clones of hard drives from New Zealand was contrary to a direction of the Solicitor-General that items seized by held pending a decision by the Attorney-General — warrants were executed under the Mutual Assistance in Criminal Matters Act 1992 (“MACMA”) at the request of the Department of Justice of the United States — HC held that the warrants did not adequately describe the offences to which they related, did not identify what was to be seized with sufficient specificity and were defective in form — also held that s49 MACMA (custody and disposal of things seized) did not just refer to the physical hard drives seized but included their data — whether the warrants were saved by s204 Summary Proceedings Act 1957 (proceedings not to be questioned for want of form) — whether information in the arrest warrants could be used to fill out information in the search warrants — whether “things seized” under s49 MACMA referred to only to the physical items or included the cloned hard drives

counsel

D J Boldt F Sinclair and M J Cooke for Appellent

P J Davison QC, W Ake and H D L Steele for first Respondents

G J Foley and L Stringer for Second, Third and Fourth Respondents

• A The appeal is allowed in respect of the declaration as to the invalidity of the search warrants, but dismissed in respect of the declaration as to the unauthorised removal of the clones from New Zealand.

• B The order made in the sealed judgment of the High Court at 1 declaring the search warrants invalid is set aside.

• C The orders made in the sealed judgment of the High Court at 3.1 and 3.2.1 are confirmed.

• D Leave is reserved to any of the parties to apply to this Court for any further relief that may be necessary in respect of the remaining orders in the sealed judgment of the High Court.

• E The respondents are to pay 60 per cent of the costs of the appellant for a standard appeal on a band A basis. We certify for two (not three) counsel. The liability of the respondents for costs is joint and several.

• F Leave is reserved for the parties to apply to the High Court for costs in that Court in light of this judgment.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by White J)

Table of Contents

	Para No
Introduction	[1]
The validity of the search warrants	[10]
The search warrants	[10]
The High Court judgments	[12]
Submissions	[21]
Principles	[24]
The application of the MACMA	[37]
The terms of the search warrants	[51]
The terms of the arrest warrants	[55]
The execution of the search warrants	[60]
A miscarriage of justice?	[67]
The validity of the removal of the clones	[74]
Background	[74]
The Solicitor-General's direction	[76]
Mr Dotcom's claim	[79]
The High Court judgments	[82]
Submissions	[85]
The issues	[88]
Interpretation of s 49	[90]
Did the Solicitor-General's direction prevent removal?	[112]
Application of s 49	[113]
Consequential orders	[115]
Result	[120]

Introduction

1 On 20 January 2012 the police executed search warrants at the properties of the first and fourth respondents, Messrs Kim Dotcom and Bram van der Kolk. Acting under the warrants, which had been obtained the previous day from a District Court Judge, the police seized more than 135 electronic items, including laptops, computers, portable hard drives, flash storage devices and servers, containing an estimated 150 terabytes of data.

2 The search warrants were obtained under the Mutual Assistance in Criminal Matters Act 1992 (the MACMA) at the request of the Department of Justice of the United States of America which is seeking the extradition of the four respondents to face charges in the United States District Court for the Eastern District of Virginia of criminal copyright offending and money laundering involving substantial sums of money.

3 The police also obtained warrants for the arrest of the four respondents and they were arrested at the same time. The second and third respondents were guests of Mr Dotcom when they were arrested.

4 Following the seizure of the items under the search warrants, the Solicitor-General, acting on behalf of the Attorney-General, directed under s 49 of MACMA that the items “remain in the custody and control of the Commissioner of Police until further direction from [the Crown Law] Office”.

5 Without further direction from the Crown Law Office, the Commissioner of Police permitted the United States Federal Bureau of Investigation (the FBI) to make forensic copies (clones) of some of the electronic items seized during the searches and to remove one set of the clones to the United States.

6 In High Court judicial review proceedings, the four respondents successfully challenged the validity of the search warrants and the removal of the clones fromNew Zealand. 1 Consequential orders were also made in respect of items not yet cloned as well as the items already cloned. 2

7 The respondents did not challenge the validity of the decision of the Commissioner of Police to permit the FBI to make the clones of the items seized.

8 The Attorney-General appeals against the declarations of invalidity in respect of the search warrants and the unauthorised removal of the clones from New Zealand as well as two aspects of the consequential orders.

9 This appeal is concerned only with these issues. 3

The validity of the search warrants

The search warrants

10 The search warrants issued by the District Court under s 44 of the MACMA are set out in full in the first High Court judgment. 4 In authorising any constable to enter and search the properties of Messrs Dotcom and van der Kolk, District Court Judge McNaughton stated in the warrants that he was satisfied that there was reasonable ground for believing that things in “Appendix A” to the warrants were there:

(upon or in respect of which an offence of Breach of Copy Right and Money Laundering has been or is suspected of having been committed)

(or which there is reasonable ground to believe will be evidence as to the commission of an offence of Breach of Copy Right and Money Laundering)

11 Appendix A to the warrants read:

• All evidence, fruits, and instrumentalities of the crimes being investigated including, but not limited to, the following:

• Indicia of occupancy or residence in, and/or ownership of, the property;

• All documents and things in whatever form relating to the reproduction and distribution of copyrighted works, including, but not limited to, motion pictures, television programs, musical recordings, electronic books, images, video games, and other computer software;

• All records and things in whatever form, including communications, relating to the activities of the Mega Conspiracy, including, but not limited to, Megaupload, Megavideo, and Megastuff Limited;

• All bank records, deposit slips, withdrawal slips, cheques, money orders, wire transfer records, invoices, purchase orders, ledgers, and receipts;

• All documents that reference shipments, imports, exports, customs or seizures;

• All digital devices, including electronic devices capable of storing and/or processing data in digital form, including, but not limited to;

  • o Central processing units;

  • o Rack-mounted, desktop, laptop, or notebook computers;

  • o Web servers;

  • o Personal digital assistants;

  • o Wireless communication devices, such as telephone paging devices;

  • o Beepers;

  • o Mobile telephones;

  • o Peripheral input/output devices, such as keyboards, printers, scanners, plotters, monitors, and drives intended for removable media;

  • o Related communication devices, such as modems, routers, cables, and connections;

  • o Storage media, including external hard drives, universal serial bus (“USB”) drives, and compact discs;

  • o Security devices.

The High Court judgments

12 In the first High Court judgment, the Chief High Court Judge, Winkelmann J, accepted the submissions for the four respondents that the search warrants were invalid because: 5

• (a) they were general warrants that did not adequately describe the offences to which they related; and

• (b) they authorised the seizure of such very broad categories of items that unauthorised irrelevant material would inevitably be captured.

13 Winkelmann J was also critical of the District Court Judge for issuing the warrants without conditions. She said:

[82] To achieve an appropriate balance between the investigative needs of the FBI and the right of the plaintiffs to be free from unreasonable search and seizure of their property and correspondence, it may well have been appropriate to impose conditions. The failure to do so meant that the subjects of the warrants were left unsure of their rights in relation to the material taken offsite, and also risked irrelevant material being released to the FBI, beyond the jurisdiction of the New Zealand Courts to order its return.

14 In the absence of any evidence of significant volumes of privileged material, the Judge considered that the conditions did not need to be as onerous as those suggested by this Court in A Firm of Solicitors v District Court at Auckland. 6 Nor did she consider that conditions were needed to keep the content of the hard drives from the FBI. 7 Instead she expressed the views that: 8

The conditions should have provided for the cloning exercise and extraction of relevant material, what was to be done with irrelevant material,...