Under a warrant issued under the Mutual Assistance in Criminal Matters Act (MACMA), 135 electronic devices were seized. Each of these devices contained approximately 300 components, including external storage. This is just one aspect of this intricate legal web. Dotcom was the owner of the majority of the devices, and at least some of them had been encrypted.

Background on the Controversial Device

In March of 2012, FBI agents traveled to New Zealand in order to make clones of 19 electronic devices that Kim Dotcom had indicated were most likely to contain evidence pertinent to the investigation. The Federal Bureau of Investigation brought one group of clones back to the United States and left the other group in New Zealand.

Dotcom stated that in exchange for access to a set of clones, he would be willing to hand over passwords that would allow him to view the encrypted content. Dotcom contested the legality of the search warrants that had initially authorized the authorities to seize the electronic devices after the aforementioned event did not take place.

In June of 2013, a judge ruled that the search warrants were invalid because they covered an excessively large area. A remedies judgment was issued a year later, declaring the MACMA warrants to be unlawful.

The judge ruled that the seized devices should not have any more data removed from them, and that the police should conduct an investigation to remove any content that was deemed to be irrelevant before giving it back to Kim Dotcom. Negotiations to facilitate the exchange of device passwords were unsuccessful, despite the fact that approximately 99 devices were returned and 36 devices were retained by the New Zealand police.

In February of 2014, the Court of Appeal determined that the warrants did, in fact, comply with the law. Dotcom filed an appeal with the Supreme Court, but that court upheld the decision of the Court of Appeal in December 2014, which meant that the order that prevented data from leaving New Zealand was no longer in effect.

In response, the United States Department of Justice demanded access to the original devices so that it could be brought up to the appropriate level for use as evidence in the United States. The New Zealand Deputy Solicitor-General stated in 2017 that the United States could only receive clones of the original files, but in 2022, after the New Zealand Supreme Court ruled that Dotcom was eligible for extradition, the official from New Zealand stated that the United States could have the original files.

The Attorney General added that four former or current police officers who had signed undertakings promising not to provide any of Dotcom's encryption codes to anyone, especially the United States, should be released from those undertakings and allowed to renege on their previous promises. Dotcom has responded with an application seeking a judicial review, maintaining the stance that he will challenge anything and everything.

Dotcom's Application Was Turned Down by the High Court

The High Court, after considering the application to release the former and current officers from their undertakings regarding encryption codes, came to the conclusion this summer that there were good grounds to release the officers from their undertakings because the decision of the Court of Appeal was upheld by the Supreme Court. This was the conclusion reached after the High Court considered the application to release the officers from their undertakings.

The court then proceeded to conduct an exhaustive investigation into Dotcom's request for judicial review. Dotcom asserted, among other things, that the decision made in 2022 to send the original devices to the United States was improper because there had been no significant development in his case since 2017.

The court stated that it was obvious by the year 2022 that the devices had evidence of behavior that, if proven, would constitute criminal activity in both New Zealand and the United States. Dotcom's request for judicial review was denied by the court, and it was determined that the Attorney-Office General's and the Deputy Solicitor-General were entitled to costs. These decisions were based on this and many other considerations.

The Parties Were Unable to Come to an Agreement on Quantum

Because Dotcom and the Attorney General were unable to reach an agreement regarding the total amount of costs, the matter was submitted to the discretion of the High Court. In the same manner as all of the other aspects of the Megaupload case, additional disagreements were brought to the court's attention.

In a filing, Kim Dotcom asserted that the judge's statement, in which he stated that the Attorney-General and the Deputy Solicitor-General (collectively referred to as "the Crown parties") were entitled to costs, was "simply an observation of the general rule that costs follow the event, rather than as a final determination of liability for costs."

In a decision that was issued on October 20, 2022, Justice Campbell stated that when the High Court found that "the Crown parties" were entitled to costs, it meant exactly that. This was stated in the judgment that Justice Campbell issued.

"That was a statement that cannot be disputed. According to the decision written by Justice Campbell, this "was not (as is sometimes the case) a merely provisional view as to liability for costs."

"Her Honor's direction for the filing of memoranda lends credence to the notion that she was weighing factors related to responsibility for costs. That direction was predicated on the fact that the parties were unable to come to an agreement regarding the amount. Regarding the question of liability, Her Honor did not believe that there was anything else that needed to be agreed upon.

Acceptance of liability — a discount of fifty percent?
Dotcom's filing anticipated this outcome, noting that if the court came to the conclusion that he was liable, then he should receive a reduction of 50% due to the fact that the Crown parties produced a single set of evidence in response to two applications. Dotcom's filing was in response to the fact that the Crown parties produced a single set of evidence in response to two applications. The request was denied by the Judge after extensive consideration and written justification were presented.

Following this, he issued an order requiring Dotcom to pay the Crown parties a total of NZ$39,016.75 in costs as well as NZ$595.65 in disbursements.

The Crown parties demanded that the amount be paid within 21 days, pointing out that Dotcom "does not have a record of paying costs awards in a timely manner." The judge commented that there was no need for that.

"Costs awards are payable as soon as they are fixed, which is something that the Crown parties have acknowledged. The failure to make a payment results in a number of consequences, one of which is the requirement to make interest payments. The judge came to the conclusion that the requested order would push back the date on which those consequences would take effect.