Ortmann and Others v United States of America and Another

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeKós P,French,Miller JJ
Judgment Date05 July 2018
Neutral Citation[2018] NZCA 233
Date05 July 2018
Docket NumberCA302/2015 CA128/2017 CA493/2017 CA494/2017 CA495/2017 CA511/2017

[2018] NZCA 233

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Court:

Kós P, French and Miller JJ

CA302/2015

CA127/2017

CA128/2017

CA493/2017

CA494/2017

CA495/2017

CA511/2017

Between
Mathias Ortmann
First Appellant
Bram Van Der Kolk
Second Appellant
Finn Habib Batato
Third Appellant
Kim Dotcom
Fourth Appellant
and
United States of America
First Respondent
District Court at North Shore
Second Respondent
Counsel:

G M Illingworth QC, A K Hyde and PJK Spring for Messrs Ortmann and van der Kolk

S S Masoud-Ansari for Mr Batato

R M Mansfield and S L Cogan for Mr Dotcom

K Raftery QC, M J Ruffin, FRJ Sinclair and Z A Fuhr for the United States of America

No appearance for District Court at North Shore

Civil Procedure — appeal against a High Court (“HC”) decision which upheld a District Court (“DC”) finding that the appellants were eligible for extradition — appellants operated a business known as Megaupload which allowed users to upload and share files of copyright material — whether double criminality is required in extradition between New Zealand and the United States — whether copyright infringement by disseminating infringing copies online could found an extradition offence under s24(2)(c) Extradition Act 1999 (“EA”) (determination of eligibility for surrender — how eligibility was determined under the record of case procedure in the EA

The Court approached the issue of double criminality differently because the HC had been obliged to follow United States of America v Cullinane [2003] 2 NZLR 1 (CA) which the Court of Appeal decided to overrule. The EA expressly adopted the principle of double criminality in s4 (meaning of extradition offence) and made it clear in s5(2)(b) EA (interpretation provisions relating to offences) that the elements of the foreign and domestic offences did not need to match. It was not necessary to read down s24(2)(d) EA to reconcile it with the definition. Double criminality was required under the EA and the Treaty on extradition between New Zealand and the United States of America (“the Treaty”).

The United States relied upon a pathway under s131 Copyright Act. Reproduction of a copyright protected work in any material form amounted to primary infringement unless authorised by the copyright owner. Secondary infringement under s36 Copyright Act (possessing or dealing with infringing copy) was criminalised in s131(1) Copyright Act where the defendant knowingly dealt with an “object” that was an “infringing copy” which was in the person's possession. Parliament could not have intended to limit infringing copies to tangible, physical articles. The means by which that copying occurred was not of critical concern, so long as there had been copying. The existing 1994 definition of copying was broad enough before the Copyright (New Technologies) Amendment Act 2008 to prohibit unauthorised copying of material in digital form.

Sections 131(1)(c) and (d)(ii) and (d)(iii) Copyright Act created criminal liability where a person, in the course of business: was knowingly in possession of an infringing copy of a copyright work with a view to committing any act infringing the copyright or knowingly exhibited or distributed an infringing copy of a copyright work regardless of the form that copy took. For those purposes, digital file copies of copyright protected works could constitute infringing copies for the purposes of the Copyright Act. Retention of the file with a view to internet transmission itself would amount to an act infringing the exclusive communication copyright of the owner.

Section 249 Crimes Act 1961 (“Crimes Act”) (accessing computer system for dishonest purpose) and s228 Crimes Act (dishonestly taking or using document) provided an available extradition pathway with conspiring to commit copyright infringement through Megaupload and associated sites for financial gain. The “dishonesty” element was met by the wilful infringement of copyright. As in the case of s249 Crimes Act, dishonest use of a document for the purpose of s228 Crimes Act was not predicated upon another criminal offence having been committed, such as under s131 Copyright Act. Conspiracy to commit an offence against s131(1) Copyright Act might be established by possession and use (or intended use) of a digital file copy of a copyright protected work. conspiring to commit copyright infringement was an extradition offence.

Section 246 Crimes Act (receiving) was an available pathway for the count of conspiracy to commit money laundering. The essential allegation was that the appellants obtained money payments as a result of criminal copyright infringement and other dishonest acts. It was an offence for the purposes of the EA.

Section 25(2) EA (record of case may be submitted by exempted country at hearing) only required a summary of the evidence. It did not require the briefs of evidence to be provided nor a detailed account of how the witnesses were able to give that evidence. The complaint about the absence of evidence of copyright protection and infringement overlooked that, for the purpose of the conspiracy counts, what was essential was evidence of an agreement to infringe copyright. The exact works to be infringed need not be known or identifiable for the conspiracy to exist. The Record of Case (“ROC”) must be read in a practical way. The duty of candour did not require a requesting state to include all potentially exculpatory evidence in the ROC. None of the matters relied upon demonstrated a manifest unreliability in the ROC. A prima face case had been established.

The essential conduct with which the appellants were charged in each count was an extradition offence for the purposes of s 4(2)(c) EA.

The appeal was dismissed.

  • A Mr Dotcom's, and Messrs Ortmann and van der Kolk's, applications for leave to adduce further evidence on appeal are declined.

  • B Leave to file the submissions referred to in the memorandum of Mr Illingworth QC dated 24 April 2018 is declined.

  • C The questions of law on which Gilbert J granted leave are answered as follows:

    • (a) Question 1: Was the High Court Judge correct to find that the essential conduct with which the appellants are charged in each count constitutes an extradition offence for the purposes of s 24(2)(c) of the Extradition Act 1999?

      Answer: Yes, though for somewhat different reasons.

    • (b) Question 2: Was the High Court Judge correct to conclude that copyright in a particular work does not form part of the accused person's conduct constituting the extradition offences correlating to counts 4 to 8; and to conclude that proof of this is not required for the purposes of s 24(2)(d) of the Extradition Act 1999?

      Answer: Yes. Copyright in a particular work was not part of the appellants' conduct constituting the extradition offences alleged in counts 4–8 of the superseding indictment and it need not be proved for the purposes of s 24(2)(d) of the Extradition Act. Rather, it is a circumstance transposed when determining whether the offence is an extradition offence.

  • D The remaining applications for leave to appeal on the questions of law raised by the appellants are declined.

  • E The application for leave to appeal on the questions of law raised by the United States is declined.

  • F The eligibility determination made by the District Court is confirmed. The District Court should now proceed without further delay to complete its duties under s 26 of the Extradition Act in accordance with the determination.

  • G The appeal against Gilbert J's decision to decline judicial review is dismissed.

  • H The appeal in CA302/2015 is dismissed.

  • I The parties are granted leave to file memoranda of no more than two pages in length, excluding the cover page, in relation to costs within 10 working days of the delivery of this judgment. The appellants are encouraged to file a joint memorandum.

JUDGMENT OF THE COURT
REASONS OF THE COURT
TABLE OF CONTENTS

A INTRODUCTION

[1]

The Megaupload business model

[6]

B THE ALLEGATIONS

[6]

The United States charges

[18]

Illustrations from the ROC

[22]

C OUR APPROACH TO THE APPEALS

[23]

D THE EXTRADITION ACT

[26]

The statutory scheme

[26]

Interpretation principles

[59]

The Extradition Act's legislative antecedents

[60]

The New Zealand – United States Treaty

[67]

Extradition in practice under the 1965 Act and the Treaty

[72]

Parliamentary history of the Extradition Act

[78]

E DOUBLE CRIMINALITY IN EXTRADITION BETWEEN NEW ZEALAND AND THE UNITED STATES

[82]

Cullinane

[82]

Interpretation

[84]

Simplicity of extradition process

[86]

The Treaty's enumerative approach and double criminality

[89]

The Treaty language and double criminality

[90]

Reciprocity of New Zealand – United States extradition practice

[94]

The position in other jurisdictions

[96]

Conclusion: double criminality is required under the Extradition Act and the Treaty

[104]

F DETERMINING ELIGIBILITY UNDER THE ROC PROCEDURE

[105]

The Supreme Court decision in Dotcom

[106]

A meaningful judicial process

[107]

The Canadian cases on the ROC procedure

[110]

The New Zealand committal process

[115]

Transposition

[124]

G ARE THE ALLEGED OFFENCES “EXTRADITION OFFENCES”?

[133]

Analytical approach

[133]

Copyright

[135]

Judgment below

[138]

Submissions

[141]

Analysis

[143]

Limitation

[157]

Conspiracy

[163]

Count 2

[170]

The essential conduct

[170]

First pathway — Crimes Act, s 249

[173]

Second pathway — Crimes Act, s 228

[182]

Third pathway — Copyright Act, s 131

[186]

The Treaty

[190]

Conclusion

[195]

Counts 4–8

[196]

Count 3

[202]

The essential conduct

[202...

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6 cases
  • Mathias Ortmann v United States of America
    • New Zealand
    • Supreme Court
    • 4 November 2020
    ...[DC judgment]. Ortmann v The United States of America [2017] NZHC 189 (Gilbert J) [HC judgment]. Ortmann v United States of America [2018] NZCA 233, [2018] 3 NZLR 475 (Kós P, French and Miller JJ) [CA Ortmann v United States of America [2018] NZSC 125 [SC jurisdiction judgment]. Ortmann v U......
  • Mathias Ortmann v United States of America
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    • 4 November 2020
    ...[DC judgment]. Ortmann v The United States of America [2017] NZHC 189 (Gilbert J) [HC judgment]. Ortmann v United States of America [2018] NZCA 233, [2018] 3 NZLR 475 (Kós P, French and Miller JJ) [CA Ortmann v United States of America [2018] NZSC 125 [SC jurisdiction judgment]. Ortmann v U......
  • Ortmann v United States of America
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    • 20 December 2018
    ...(Gilbert J) [ Ortmann (HC)]. 3 Ortmann v The United States of America [2017] NZHC 1809 (Gilbert J). 4 Ortmann v United States of America [2018] NZCA 233, [2018] 3 NZLR 475 (Kós P, French and Miller JJ) [ Ortmann 5 As well as the appeals pursuant to ss 68 and 69 of the Extradition Act, ther......
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    ...discharged. Ortmann v United States of America [2020] NZSC 120, [2020] 1 NZLR 475 [SC judgment]. Ortmann v United States of America [2018] NZCA 233, [2018] 3 NZLR 475 [CA 2018 Ortmann v United States of America [2021] NZSC 9 at [8]. [4] In dismissing the appeals on the remittal back, the Co......
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