Commissioner of Police v Dotcom [2012] NZHC 487 (16 March 2012)

High Court of New Zealand

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Commissioner of Police v Dotcom [2012] NZHC 487 (16 March 2012)

Last Updated: 26 March 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-33 [2012] NZHC 487

BETWEEN THE COMMISSIONER OF POLICE Applicant

AND KIM DOTCOM First Respondent

AND BRAM VAN DER KOLK Second Respondent

AND MEGASTUFF LIMITED Third Respondent

Hearing: 3 February 2012

Counsel: A Toohey and D Boldt for Applicant

W Akel and R Gapes for Respondents

R N Harris and A Lloyd for Mrs Dotcom

Judgment: 16 March 2012

JUDGMENT OF POTTER J

on application by respondents to set aside order for registration

_{of Foreign Restraining Order}

In accordance with r 11.5 High Court Rules

I direct the Registrar to endorse this judgment with a delivery time of 3 p.m. on 16 March 2012.

Solicitors: Simpson Grierson, Auckland – [e-mail] and [e-mail]

Crown Law, Wellington – [e-mail]

Minter Ellison Rudd Watts, Auckland – [e-mail]

_{Copy to: P Davison QC, Auckland –} [e-mail]

THE COMMISSIONER OF POLICE V KIM DOTCOM HC AK CIV-2012-404-33 [16 March 2012]

Introduction

[1] The respondents Kim Dotcom, Bram van der Kolk and Megastuff Limited applied on 3 February 2012 to have the Court set aside the order of the Court for registration of a Foreign Restraining Order made on 18 January 2012 (the order).

[2] The grounds for the application are that the order was never validly made, as it was made without notice and without jurisdiction and therefore is null and void and has no legal effect. The respondents submit that as a consequence, the restraint and seizure of the respondents’ property, the subject of the order, was unlawful.

[3] The applicant, The Commissioner of Police, accepts that the order was “procedurally premature” and “may well be a nullity”. In any event, the Commissioner accepts that the order can have no effect. He submits that a declaration to this effect will sufficiently address the issue, particularly as the property the subject of the order is now lawfully restrained.

Background

[4] On 10 January 2012, the United States District Court for the Eastern District of Virginia requested the New Zealand authorities to obtain an order temporarily restraining the various accounts and assets listed in the order. On 17 January 2012, the Commissioner of Police filed an application without notice to register the United States foreign restraining order, pursuant to s 54 of the Mutual Assistance in Criminal Matters Act 1992 (MACMA).

[5] On 18 January 2012, the order was purportedly made.

[6] As the applicant and the respondents acknowledge, the order was invalid because it was applied for, and granted, under the wrong statutory provisions. The application should have been made for an interim foreign restraining order pursuant to s 60 of MACMA and ss 128-131 of the Criminal Proceeds (Recovery) Act 2009

(CPRA). The order that was actually applied for was the registration of a foreign restraining order pursuant to s 54 of MACMA and ss 132-135 of CPRA.

[7] The major differences between interim foreign restraining orders under s 60 and the registration of a foreign restraining order under s 56 of MACMA, following application under s 54, is that the former is a temporary order made without notice by a New Zealand Court, while the latter is the on-notice registration of an order that has been made by a foreign Court. If the foreign restraining order was made without a hearing in the foreign Court (or without the respondent having an opportunity to be heard), a right of appearance is conferred on the person who is subject to the order.[1]

[8] Here, the Commissioner has confused the processes. He applied for the incorrect order (on-notice order for registration of a foreign restraining order), using the without-notice procedure for an interim foreign restraining order.

[9] On 25 January 2012, a second request to obtain an order for temporary restraint was received from the United States District Court for the Eastern District of Virginia. This request related to additional property. On 30 January 2012, the Commissioner filed a without-notice application for an interim foreign restraining order, pursuant to s 60 (the correct procedure). This request related to both the property the subject of the order and the property the subject of the second request. The memorandum filed by the Commissioner in support of the application explained that the original application was “premature”, and sought to correct it by applying for the property that was the subject of the original application to now be included with the additional property in the interim order sought.

[10] On 1 February 2012, this Court made an Interim Foreign Restraining Order on the Commissioner’s without-notice application filed on 30 January 2012. This order has been extended on 28 February 2012 and 29 February 2012 until 5 p.m. on

21 March 2012, subject to certain conditions. The property of the respondents is

_{currently being restrained pursuant to this order.}

Parties’ positions

[11] The parties agree that the order made on 18 January 2012 has no effect. However, the parties disagree on the consequences that follow. The respondents submit that some, or all, of the restrained property must be released, as it was unlawfully seized and restrained under the order. The applicant submits that a declaration by this Court that the order has no effect is sufficient; and that the property cannot in any case be released, as it is now under valid and lawful restraint pursuant to the order made on 1 February 2012.

[12] Since 8 February 2012, further submissions have been filed. A further hearing was held on 29 February 2012 which was related to this issue and also the Commissioner’s on-notice application filed on 30 January 2012 to register the foreign restraining orders pursuant to s 54 of MACMA. In their submissions, the parties have addressed further arguments regarding the consequences of the order having no effect and have raised further, related issues.

[13] I consider it preferable to consider and determine those issues in the context

of the Commissioner’s application to re-register the foreign restraining orders. .

Orders

[14] There will be a declaration that the order of this Court dated 18 January 2012 for the registration of a foreign restraining order is null and void and has no legal effect.

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[1] Sections 134(4) CPRA, which provides that ss 23 and 33(3) apply.