9.04.2018

Dotcom v United States of America [2014] NZSC 24

Kim Dotcom’s anticipated Political Party aspirations may have taken a hit when the Supreme Court delivered a judgment against Dotcom.  Most New Zealanders are no strangers to Dotcom and the storm of controversy his situation has raised around issues such as surveillance and police search powers.  For those of you that have been out of the loop, the United States government requested extradition orders for Kim Dotcom, Finn Batato, Mathias Ortmann and Bram van der Kolk to face criminal charges for various crimes ranging from copyright infringement, money laundering, racketeering and wire fraud through the operation of their file sharing companies called Megaupload.  On 21 March 2014, the Supreme Court delivered its ruling on the scope of information that must be disclosed by a state requesting extradition and the powers of a District Court judge to order disclosure.

Legal Context

The Extradition Act 1999 (“the Act”) aims to create a regime around the surrender of an accused or convicted person between New Zealand and a country seeking extradition.  The Act creates a system that preserves state sovereignty and responds to the need for international cooperation in cases of criminal offending.

The request made by United States falls into Part 3 of the Act, which applies to requests from Commonwealth Countries and countries that have an extradition treaty with New Zealand.  Pursuant to s 18, requests by an extradition country must be transmitted to the Minister of Justice, who then transfers this request to the District Court.   A District Court judge then determines whether a person is eligible for surrender for extradition according to the requirements in s 24 of the Act.

One of the requirements under s 24 (d) (i) is that the requesting state must satisfy the Court, that, under New Zealand law, the evidence produced would justify the person’s trial if the conduct constituting the offence had occurred within New Zealand.  This section is cross-referenced in s 25 of the Act which allows an exempted country to submit evidence by way of a record of the case procedure. As United States is an “exempted country” under the Extradition Order 1999, s 25 of the Act comes into play.

Under s 25, the requesting state is required to produce a summary of the evidence that has been gathered against the appellants and other relevant documents including photographs and copies of documents.  The provision is designed to expedite the process by circumventing issues around trying to harmonise different rules of evidence in different jurisdictions.

Against this background, the Supreme Court heard arguments on the following two issues:

  1. What is the scope of information that must be provided in the rocord of the case?
  2. Does a District Court Judge have the power to order a requesting state to disclose all the documents relating to an extradition case?

Information required in a record of the case

The majority judgments began by canvassing the historical background to the Act.  In order to overcome the differences between the rules of admissibility, which prevailed in different jurisdictions, the record of the case procedure was created to give flexibility around the type of evidence that could be adduced in Court.

Against that background, the majority held that a record of the case under s 25 of the Extradition Act did not require the requesting state to disclose copies of all the documents it summarised.  The legislative history of s 25 indicated that the words “other relevant documents” in s 25 (2) (b) were inserted to make a provision for including documents (such as photographs) that could not readily be summarised.  Thus the subsection operated to supplement the summary of evidence that a state was required to provide instead of overriding it by mandating disclosure of all the documents that were referred to in the summary of evidence.  In addition, the Act did not impose any general obligations of disclosure upon an extradition state or grant an extradition Judge the power to order such a disclosure.

The Court went on to note that while the Act did not impose a general duty of disclosure upon the requesting state, inherent in the record of the case procedure was the assumption that the requesting state would act in good faith. The Court held that the requesting state owed a duty of candour to disclose any information that would undermine the evidence upon which the state was relying.  The New Zealand authorities and agencies that were assisting the requesting state also had a correlating duty to ensure that the requesting state was complying with its obligations.  In this case, the summary provided by the United States contained email extracts, information about the data stored on servers, network analysis of website operations, pertinent financial transactions and testimony of field agents and experts which provided circumstantial evidence supporting the charges pressed by the United States. The majority held that such a summary provided a full overview of the case that satisfied the requirements posed by s 25.

Powers of a District Court Judge to make disclosure orders against a requesting state

The majority held that the District Court had no inherent power to order disclosure.  McGrath and Blanchard JJ stated that while principles of natural justice enshrined in s 27 of the New Zealand Bill of Rights Act 1990 applied to extradition hearings, the power to order disclosure turned on the question of whether it was necessary for the Court to have such powers in order to prevent abuse of process and to ensure fairness in the extradition hearing.

On the facts, the appellants had failed to establish and particularise any disadvantage they would face if disclosure was denied.  The majority thought that the Act was oriented towards a government-to-government request for information.  It was held that cases where an extradition judge required additional information would be exceptional.  In the event that an extradition judge required further information, the appropriate process was for the Court to inform counsel for the requesting party that the Court wished to receive further particulars.  It was then the duty of counsel to approach the relevant New Zealand Minister to request information through the appropriate diplomatic channels.  However, where the context of a document was necessary to understand the evidence being relied on then it would be prudent for the requesting government to provide a copy of the document as failure to do so may result in the evidence being disregarded by the Court.

Dissent by Elias CJ

The interpretation of s 25 adopted by the Chief Justice was aligned with the decisions of the District Court and the High Court. In considering the legislative history of the relevant provisions, the Chief Justice stated that the provisions were intended to relax the technical rules of evidence around issues such as certification but not to limit the scope of evidence required. Therefore, the requesting state must provide an overview of their case in a summary document as well as all the evidence that supported the request for extradition.

Comment

The contrasting position of the majority and the minority appears to be very wide.  On the one hand, the approach of the majority seems to place an overemphasis on the requesting state to act in good faith by allowing only a summary instead of placing the onus on our own judges to make an assessment on the information that is required.  That puts New Zealand in a position where if the exempted requesting state does not act in good faith, which appears to be the allegations for Dotcom’s New Zealand and US lawyers, the person subject to the application would seem to have no legal recourse.  That does not seem entirely satisfactory.

On the other hand, the Chief Justice’s approach to s 25 would require an exempted requesting state to provide not only a summary of the case, but also all supporting material.  Although the supporting material would not need to satisfy strict New Zealand evidentiary requirements, the exempted state would still need to give a comprehensive outline of the case.  While many of us may have hoped for a moderate position for the sake of law, the judgment of the majority is a definitive strike against Dotcom.  The saga continues in the meantime as we wait to see if the Supreme Court grants Dotcom leave to appeal on the issue of whether the search warrants issued for the search of Dotcom’s Coatesville mansion were legal.

 

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