Dotcom – bad budgeting or botched basket case?

Kim Dotcom’s legal team is holding up his extradition hearing, arguing for a stay of proceedings.

One argument is that Dotcom is being prevented from mounting an adequate defence because his funds have been frozen. They say he needs $750,000 to pay for expert witnesses from the US.

However a Herald report says that Kim Dotcom sold shares to pay for defence.

Dotcom’s US attorney Ira Rothken said they would need about US$500,000 to get the people they needed and it could take up to six months to gather all the evidence required from them.

Kim Dotcom sold shares in his new companies for about $20 million in 2013 to pay for his defence team and provide for his family, he has told a court.

He told the court about setting up Mega Ltd with Ortmann and van der Kolk and music company Baboom in 2013, shares in which he sold for about $20 million.

Dotcom said the ventures were “born out of necessity” to pay for the drawn-out extradition battle and also to secure his family’s future with contributions to the family trust, the Trust Me Trust.

So Dotcom wants yet another delay because he hasn’t got $750k left out of $20 million to pay for his defence.

Dotcom said he donated up to $4.8 million during its brief existence and Mr Ruffin asked why he had not put some of that money aside to pay for US legal experts he now claimed were vital to defending his case.

“If I had a crystal ball and I could see the future, in hindsight I could have done that,” Dotcom said.

“But at the time, for me, there was no reason to believe there wasn’t more unrestrained funds coming from my business ventures.”

Didn’t he already already have restraints on funds internationally?

In any case why wouldn’t he make sure he had budgeted adequately from available funds to do what he wanted to defend himself from extradition?

His ill-fated involvement in the Internet Party was also discussed.

Dotcom said he donated up to $4.8 million during its brief existence and Mr Ruffin asked why he had not put some of that money aside to pay for US legal experts he now claimed were vital to defending his case.

“If I had a crystal ball and I could see the future, in hindsight I could have done that,” Dotcom said.

“But at the time, for me, there was no reason to believe there wasn’t more unrestrained funds coming from my business ventures.”

Of course if he had a crystal ball he would have seen that pouring $4.8 million into a political attempt to hold the balance of power in New Zealand’s Parliament was nuts and wouldn’t have wasted it.

Mr Ruffin also asked the defendant why he had not used money from living costs to pay for the experts he claimed he needed.

“If I wanted to be homeless and sack all my staff and kick my kids out of school I could’ve done that, yes,” Dotcom said.

Maintaining a lavish lifestyle was more important to him than budgeting to defend his extradition?

Does he think he’s doomed anyway so might as well spend his money before it is taken from him?

I hope his lawyers have checked that he has budgeted to pay them.

Or – was Dotcom banking on buying political power to prevent his extradition and put all his eggs in that basket so didn’t worry about funds for a legal defence?

His political eggs are broken and on his face.

The court will decide whether his budgeting story stacks up. To me it looks like a case of botched optimism in the Internet Party play.

Recorded conversations sound bad for Dotcom

Conversations recorded between co-accused of Kim Dotcom sound bad for them but this is before the defence has addressed them. 3 News reported on the second day in court:

Prosecutors: Skype conversations show Dotcom guilty

Judge Nevin Dawson is hearing evidence in Auckland District Court on whether Dotcom, Mathias Ortmann, Finn Batato and Bram van der Kolk should be surrendered to US authorities.

Dubbed the “Mega Conspiracy” by the FBI, US authorities allege the four made $US175 million by facilitating and encouraging piracy on their file storage website, Megaupload, and related sites.

On Friday Christine Gordon QC, who is acting for the US, read an extensive series of Skype conversations and emails between the men, arguing they revealed they knew the business was a criminal enterprise from the start.

And here are excerpts from some of the conversations.

“The fact is when there’s no way out, Kim will also grab the last couple of millions and go on hiding mode again when that happens,” Van der Kolk was quoted as telling Ortmann.

“The likeliness of us getting in trouble for some reason is getting bigger.”

Ms Gordon read a message from Dotcom suggesting the group urgently hire a lawyer to fend off lawsuits.

Ortmann replied they should just “promise some kind of technical filtering crap and then never implement it”.

In dozens of other quotes Ms Gordon went over, Dotcom described the group as “evil”, Van der Kolk said he always lived from “piracy” and the accused acknowledged the vast majority of the content going through their site was piracy.

“If copyright holders would really know how big our business is they would surely try to do something against it,” Ortmann was quoted as saying.

More than half of the viewing traffic on the site was associated with repeat infringers and Dotcom called them “the special people”, Ms Gordon said.

“That’s the big flaw in the rewards programme: we are making profit off more than 90 per cent infringing files,” Van der Kolk told Ortmann over Skype.

Some of this doesn’t sound good but the defence is yet to respond.

Ms Gordon said the site paid bonuses to copyright infringers using the service, rather than banning them, and then presented an innocent facade while defrauding copyright holders by telling them files were being taken down – when in reality they were uploaded in other locations.

The company paid more than $3 million to uploaders, according to the FBI.

This is basically how I understood the case to be.

While it sounds bad I have no idea how this stacks up against extradition law. I do know that extradition has a lower burden of proof than a trial, it just has to show there is a case to answer.

Eighteen months ago I posted on the responsibilities and record of the Minister of Justice (then Judith Collins) on extraditions which has links to extradition information plus has links to case details.

Dotcom to face extradition starting Thursday

Kim Dotcom has failed in delaying his extradition hearing any more and it will begin on Thursday.

3 News reports: Dotcom loses bid to delay extradition hearing

A last-minute attempt to delay the extradition hearing for internet entrepreneur Kim Dotcom and his co-accused has been rejected.

Judge Nevin Dawson has released a decision that means evidence will be heard when the case resumes in Auckland District Court on Thursday.

On the first day of the hearing yesterday, lawyers for Dotcom and his co-accused asked for the extradition evidence to be pushed back so several applications to stay the case could be heard beforehand.

They alleged an FBI freeze on money being paid into the US has kept them from hiring legal and industry experts in the country.

But Christine Gordon QC, for the Crown, told Judge Dawson many of the claims were “speculative” and would only unnecessarily delay proceedings by weeks.

She asked for them to be heard as part of the hearing, or afterwards.

In his decision, Judge Dawson said the applications by Dotcom and his co-accused would be better heard during the main hearing because it would put them in context.

The outcome of their applications would not be prejudiced by the order and they could always appeal, he said.

If extradited and found guilty in the US, the four men face charges that carry decades of jail time.

They include conspiracy to commit racketeering, conspiracy to commit money laundering, wire fraud and two kinds of criminal copyright infringement based on an FBI investigation going back to 2010.

Judge Dawson doesn’t have to decide whether the four are guilty or not, only if they could be surrendered to the US to face charges there. The justice minister then makes a decision on the matter.

So nearly four years after being raided and detained Dotcom finally faces actual extradition proceedings. I expect this will be lengthy, and if Dotcom is unsuccessful it’s very likely he will appeal.

Minto’s letter to Dotcom – everyone else’s fault

John Minto has posted an Open letter to Kim Dotcom at The Daily Blog – wishing Dotcom luck in his extradition case and blaming everyone else for everything that’s gone wrong.

He prominently promotes the revolution that failed:


Kia ora Kim,

Good luck with defending the government’s extradition case against you this week. Whatever the outcome in the District Court I’m sure it will end up in the Supreme Court eventually so there’ll be a lot of water to go under the bridge yet.

You are facing the wealth, power and wrath of corporate America because you provided an efficient means for people to share files on line which allegedly included some copyrighted songs and movies as is done on many internet platforms.

A class struggle. The poor people should be able to take what they like.

But instead of taking a civil claim against you Hollywood’s corporate moguls want to make an example of you. They want you in jail forever as the modern-day equivalent of the body left hanging on the scaffold for the vultures or the severed head on a pike… Don’t mess with us is their Mafiosi-type message.

A fairly extreme comparison. It’s possible (but is currently unproven) that Dotcom and his company profited from the encouraging of illegal downloads.

The political environment in which your case is heard is more critical than what the law says. A case of alleged copyright infringement has no basis for extradition hence the desperate claims of “conspiracy” and “racketeering”. If our courts have honesty, courage and backbone they will toss this out as a corporate-inspired abuse of legal process.

I’m not sure that’s how extradition law works. Conspiracy theories don’t count unless backed by evidence.

The truly embarrassing aspect is just how our GCSB (Government Communications Security Bureau) and police fell over themselves to help out corporate America with their keystone-cops raid on your home. That’s an issue which will be addressed only when New Zealand withdraws from the five eyes network and develops an independent foreign policy. It won’t happen tomorrow but it will happen.

Off on a hobby horse tangent.

Your millions and uber-capitalist lifestyle are a turnoff to me but during the election campaign I was impressed with what I took as your genuine commitment to the progressive policies of Internet MANA.

A commitment by providing his millions – noted by many as an embarrassing contradiction for Mana.

Had you wanted us to change MANA policies – even with a single comma – we wouldn’t have had a bar of any relationship with the Internet Party. From our point of view your campaign donations that came with no strings attached were welcome. In contrast Labour and National’s very existence depends on corporate money which in turn depends on them adopting corporate-friendly policies.

Money from multiple donors to National and Labour bad. Millions from one donor with obvious self interest good. Good grief.

I have always disagreed with your analysis of the election outcome. It was not your so-called “poisonous politics” which defeated Internet MANA or lost Hone Harawira his seat as MANA MP. In fact the strategy MANA adopted in our decision to go into a strategic alliance with the Internet Party was a successful strategy. Hone gained more votes in last year’s election than he gained in the previous 2011 election and Internet MANA gained significantly more party votes than MANA received by itself in 2011.

(Hone’s vote in Te Tai Tokerau increased from 8,121 in 2011 to 8,969 in 2014 while the MANA vote in the Maori electorates increased from 25,889 to 29,207. The Internet MANA party vote increased by roughly 50% from the MANA 2011 party vote – up from 24,168 to 34,094)

The strategy failed. Harawira lost his seat and Internet-Mana failed to reach the 5% threshold by a long way. That’s not successful.

What lost Hone his seat was the political establishment of right-wing Labour MPs, the Prime Minister, National Party, Maori Party and Winston Peters all urging their supporters to back Labour MP Kelvin Davis. For most of the Labour Party leadership the highest priority at the election was to drive MANA out of parliament. Had Labour been able to get close to government it would have needed the extra seats Internet MANA could have brought to a Labour-Green-Internet MANA government. However Kelvin Davis preferred to be a backbench MP in a losing party than be part of a winning team to change the government.

Blaming Davis for campaigning hard and winning Te Tai Tokerau on merit for himself and his own party instead of rolling over for Mana and Dotcom is politically very naive.

Despite the election outcome I remain proud of the risk MANA took in the relationship with the Internet Party. We did so with our eyes open and as I said that aspect of our campaign was successful.

Failure is not success for most people. Perhaps for Minto it is.

I think where the Internet Party made a serious error of judgement was in the handling of the “moment of truth” meeting at the Town Hall a week out from the election. It was a “moment of truth” in its revelations of mass surveillance of New Zealanders by the US National Security Agency but this was buried in the media’s expectation of a more detailed revelation of John Key’s knowledge of your case much earlier than he claimed.

I agree on that, Dotcom’s grand campaign killer blow strategy was a disaster.

In any case that issue was never going to go far. Key has lied and dissembled so often about his memory on a whole range of issues that he would simply have shrugged his shoulders and most media would have accepted it and moved on quickly.

Fixated as they are on trivial political sideshows the mainstream media ignored the issue of mass surveillance and launched a tsunami of negative publicity – led by the Herald and TV3 – which swamped the Internet MANA campaign and dropped the party vote to less than two percent when it had been up to four percent a month earlier.

Blaming failure that was supposedly a success on everyone’s scapegoat, the media. An essential part of politics and election campaigns is managing media. Internet-Mana failed at that too.

Fixated as they are on trivial political sideshows the mainstream media ignored the issue of mass surveillance and launched a tsunami of negative publicity – led by the Herald and TV3 – which swamped the Internet MANA campaign and dropped the party vote to less than two percent when it had been up to four percent a month earlier.

The media did cover mass surveillance to an extent but it was sideshow amongst many election issues. Hoping to succeed in an election on a single issue that most people don’t care about is failure.

Your case has already been of importance to this country in helping reveal the extent of lying and illegal mass surveillance of New Zealanders conducted by the GCSB.

To an extent, yes.

This week it will be important for another reason. It will be a litmus test not of yourself and your internet activities but of just how independent our courts are.

Every court case is a test of the independence of our courts. Cases with well funded PR campaigns involved in particular.

Going by the way Minto has blamed everything and everyone else for Internet-Mana’s election failure there’s a high chance that if Dotcom fails to avoid extradition our courts will be blamed along with the evil USA and big business.

Minto is like others on the far left fringe thinking their cause is so just that if everyone was informed properly they would have their revolution – failure is success that is everyone else’s fault.

Dotcom faces extradition in court

Kim Dotcom ran a PR campaign through media last week but finally faces the reality of extradition in court today.

This is receiving international attention. Reuters UK reports:

After years of delay, Mega founder Kim Dotcom facing extradition

Nearly four years after dozens of black-clad police rappelled into his New Zealand mansion and cut him from a safe room, flamboyant German tech entrepreneur and would-be hip-hop star Kim Dotcom may finally be about to face the music.

A New Zealand court hearing starting on Monday will determine whether Dotcom will face charges of copyright infringement, racketeering and money laundering in the United States related to the Megaupload file-sharing site he founded in 2005.

U.S. authorities say Dotcom and three co-accused Megaupload executives cost film studios and record companies more than $500 million and generated more than $175 million by encouraging paying users to store and share copyrighted material, such as movies and TV shows.

This item is more Dotcom defence orientated, because “New Zealand Crown Law service declined to comment”.

“The U.S. … took down the entire Megaupload site, went ahead and froze all their assets and did this with great publicity and public fanfare and did it in coordination with the very powerful force in the United States, from Hollywood,” Dotcom’s lawyer, Ira Rothken, told Reuters.

“We feel as though Kim Dotcom … will not have a fair procedural playing field because he won’t have any assets with which to mount a defence for the largest copyright case in history.”

Monday’s hearing will be watched by developers like Dotcom working in the grey areas of the law prevalent at the Internet’s cutting edge for signs of how far Washington is willing to go to protect U.S. copyright holders, said Tom Pullar-Strecker, who covers technology for Fairfax Media in New Zealand

“You just have to look at what the U.S. has achieved already through this action. Kim Dotcom’s business, Megaupload, has been destroyed really through simply taking the action,” he said.

“It had an immediate chilling effect.”

Megaupload accounted for about 4 percent of total traffic on the Internet in its heyday as users stored and shared files containing everything from wedding videos to Hollywood films.

Local coverage – 3 News: Dotcom heads to court

Kim Dotcom is heading to court today to fight a battle which if he loses, could see him kicked out of the country.

A judge will decide whether there’s a case for the internet entrepreneur to be extradited to face copyright infringement and racketeering charges in the US.

University of Canterbury law professor Chris Gallavin says Dotcom can still appeal if the judgement goes against him.

“This could be just another step in the on-going Dotcom saga, as opposed to the end of it for both him and the courts and all the rest of us. I’m sure that most New Zealanders are getting pretty sick of it.”

Legal arguments will rule now, until any probable appeals.

UPDATE: Dotcom has tweeted this morning:

I’m going to court today. The question is innovator or pirate. The answer will be Internet freedom or censorship.

I think the legal arguments are a bit more complex than that.

UPDATE: Delay arguments kick off Dotcom hearing

The extradition hearing of Kim Dotcom and three co-accused has begun in Auckland with legal arguments about whether applications from the four to delay the hearing should be considered.

Christine Gordon, acting for the Crown on behalf of the United States, said the issues raised by the men could be dealt with as part of the main hearing, or at a trial if it went ahead.

Professor/Activist: no grounds to extradite Dotcom

David Fisher at NZ Herald reports: No grounds to extradite Kim Dotcom, says Harvard Law professor Lawrence Lessig.

One of the world’s leading experts on copyright has reviewed the Kim Dotcom case and says there is no ground for extradition.

But the Herald don’t reveal that Lessig is also described as a ‘political activist’ who has promoted law change to free up use of digital information on the Internet (see below).

Harvard Law professor Lawrence Lessig has weighed into the Megaupload prosecution with a legal opinion which condemns the prosecution case against the filesharing website.

In an opinion released by Dotcom’s lawyers, Professor Lessig said the allegations and evidence made public by the US Department of Justice “do not meet the requirements necessary to support a prima facie case that would be recognised by United States federal law”

Professor Lessig is internationally regarded as an expert in copyright and fair use.

Professor Lessig said the US case against the Megaupload defendants was a collection of “facts from multiple sources and over a wide span of time” which had been organised “to create an impression of coherence and substance”.

But he said study of the US indictment which detailed evidence and charges – the same case to be presented in NZ courts – showed the actions were “not prohibited by criminal statutes of the United States”.

“Filings of the DOJ attempt to create a false impression of criminal guilt and are not reliable.”

Professor Lessig said it was accepted the US was unable to extradite on the charge of copyright violation which meant the conspiracy claims had a central importance.

However, he said the copyright charges were the underlying legal foundation on which the rest of the case was built. He pointed to a finding from he said NZ district court judge David Harvey which said the case would “hang upon the establishment of criminal copyright infringement”.

But Professor Lessig said “no individual Megaupload defendant is shown to have so ‘willfully’ or criminally copied or distributed a copyrighted work”.

He said there was no legal basis for Megaupload staff being held criminally responsible for a third-party copyright violation. “A crime of conspiracy requires an agreement with criminal infringers. No such agreement is shown.”

His total review of the case concluded with the finding there was no legal basis for extradition.

The full affidavit from Lessig as submitted to the North Shore District Court is at the Herald link.

Presumably Dotcom sought this affidavit from Lessig. As well as being a Professor he is also described as a political activist on Wikipedia:

Lawrence “Larry” Lessig (born June 3, 1961) is an American academic, political activist, and attorney.

Lessig is a candidate for the Democratic Party’s nomination for president in the 2016 U.S. presidential election.

He is a proponent of reduced legal restrictions on copyright, trademark, and radio frequency spectrum, particularly in technology applications, and he has called for state-based activism to promote substantive reform of government with a Second Constitutional Convention

On ‘Free Culture’ on the Internet:

On March 28, 2004 he was elected to the Free Software Foundation‘s Board of Directors.

He proposed the concept of “Free Culture“. He also supports free software and open spectrum.

Lessig claimed in 2009 that, because 70% of young people obtain digital information from illegal sources, the law should be changed.

So Lessig appears to have fairly strong (activist) views to one side of the Dotcom extradition issue.

Fisher, who wrote the Herald article, has had a close interest in the Dotcom case, and he has collaborated in writing a book on Dotcom – The Secret Life of Kim Dotcom: Spies, Lies and the War for the Internet

Dotcom extradition hearing to go ahead

It is over three years since the raid on Kim Dotcom’s residence in January 2012 and his arrest. Since then there has been a long running legal battle with many delays.

Today the Court of Appeal rejected Dotcom’s latest arguments and ruled that the extradition hearing will go ahead, starting next Monday 21 September.

NZ Herald reports:

Kim Dotcom extradition hearing to go ahead September 21 after latest arguments rejected

Kim Dotcom and his former Megaupload colleagues have lost their latest battle in the fight against extradition to the United States.

An extradition hearing will go ahead as planned in North Shore District Court next Monday, after the Court of Appeal rejected the latest arguments from Dotcom and three co-accused.

Dotcom joined chief technological officer Mathias Ortmann, computer programmer Bram Van Der Kolk, and fellow Megaupload alumnus Finn Batato in applying to stay the extradition proceedings.

The four men claimed there had been abuse of process and that the US had blocked their proper defence of the extradition application.

Batato, Ortmann and Van Der Kolk applied to the Court of Appeal on August 7 and Dotcom did so a fortnight later.

A half-day hearing was set down for last Tuesday but the hearing took longer than expected and the Court of Appeal reserved its judgment for a few days.

The Court of Appeal judges said the appellants’ submissions regarding technical evidence were “vague” and failed to explain how evidence of cloud storage industry practice affected their eligibility for extradition.

The court also said it did not have the resources “urgently to resolve a dispute which was not straightforward and involves fundamental disagreement between the parties”.

For three reasons, the Court of Appeal decided to reject the appeal.

First, the judges said the district court had been managing the issue appropriately and in line with the extradition treaty.

Second, the court said it had to be careful about “interfering” in district court pre-hearings.

“Micro-management of pre-trial procedure by higher courts risks delaying and fragmenting the criminal process,” the Court of Appeal said.

Third, the Court of Appeal said it was satisfied going ahead with the stay application and extradition hearing together on September 21 would not deprive the appellants of adequate remedies.

The Court of Appeal said if a district court judge decided the US had deprived the appellants of American expertise they needed, then “inevitably” that judge would have to adjourn the extradition hearing.

The appeals were dismissed and the appellants were ordered to pay the US’s costs.

So the next step in trying to extradite Dotcom and co takes a significant step forward next week but expect a log battle still.

Ultimate endorsement for Trump

Donald Trump has announced he will join the presidential circus in the US. What better endorsement could he have but this?

Kim Dotcom @KimDotcom

Don’t underestimate @realDonaldTrump. America loves a self-made success. There’s a good chance that we will see Donald vs Hillary in 2016.

Perhaps Dotcom can organise a link up between Trump and the Tea Party, and put on a promotional show with Glen Greenwald and Edward Snowden as guest speakers.

I wonder if the US loves a self made success as much as New Zealand did.

The Hon J A Banks v the Crown

Flipper at Kiwiblog posts

CA428/2014. The Hon J A Banks v the Crown.

Has the Crown capitulated?

That question will be answered today just after 10 am when the Court of Appeal sits in the Wellington HC’s courtroom #6.

He asks that because Paul Dacre QC, who has run the Crown’s case, has been replaced by Mike Heron, the Solicitor Genera – details here. We might find out this morning.

Flipper also recaps the case.

To recap, the Crown sent solicitor Rowan Butler to interview Dotcom over the new evidence (from two US businessmen) that Banks would present to the CoA. Banks’ counsel had observed the rules and disclosed that to the Crown.

The interview with Dotcom (in the presence of his then counsel, P Davison) took place on September 29, 2014, and Butler reported to Crown Counsel Dacre in a memorandum, also on September 29. The “Butler Memorandum” introduces a new Dotcom claim – that there were two meetings with Mr and Mrs Banks, one of June 5, 2010 and the other on June 9, 2010. He had earlier asserted that there was only one meeting on June 9. Wylie J, however, found that the lunch was on June 5, as later also attested by the US businessmen.

The crux of the date issue is that both Mr and Mrs Banks were proven to have been elsewhere on June 9, and could not have been at a “second” meeting/luncheon with Dotcom on that date.

Now, understand this: This information was known to the Crown on September 29, 2014. It was not disclosed to Jones/Banks, nor to the Court of Appeal when it heard the case on October 29, 2014 – one month later. In fact the
existence of the Butler memorandum was kept secret by the Crown until finally it was released (received by) to David Jones (Banks) on February 27, 2015.

On March 2, 2015 (the weekend intervened) David Jones filed a memorandum with the High Court requesting a section 347 (discharge) hearing. David Jones then went back to the Court of Appeal because it appears, on the face of evidence now belatedly disclosed by the Crown, that the Court was deliberately misled.

It has been reported that ‘the Court’ was very unhappy.

The Crown seem to be in a very awkward position on this.

It would be ironic if a Graham McCready instigated prosecution is thrown out after an appeal the day before he files for another prosecution, this time against John Key.

Using the courts for political hit jobs seems to be McCready’s aim these days.

Case aimed at bringing down the Government crashes

A private prosecution resulted in John Banks being convicted, and that forced his resignation from Parliament. There seemed significant intent to bring down the Government.

Mixed in with that was Kim Dotcom whose testimony was deemed reliable by the judge and contributed to the guilty verdict.

The case went to the Court of Appeal who overturned the verdict and ordered a re-trial.

The case has now crashed, and the Crown prosecution could get burned – there are claims they deliberately withheld evidence from the Court of Appeal. And there’s also claims there are some very unhappy judges.

NZ Herald reports John Banks retrial: Urgent hearing ordered.

The Court of Appeal has ordered an urgent hearing about whether John Banks should face a retrial on his false electoral return charge following the discovery of evidence which the Crown failed to disclose.

The Court of Appeal quashed the conviction after the “obsessed” detective work of Mr Banks’ wife, Amanda, who was stung by the trial judge’s opinion of her credibility when he preferred Dotcom’s wife Mona’s evidence about a lunch which was crucial to the case.

The Court of Appeal has now ordered a new hearing after Mr Banks’ lawyer David Jones, QC, filed an application to recall its ruling in October after he received fresh material from the Crown about the contentious lunch at the Dotcom mansion.

“If this material had been before the Court of Appeal, which it should have been, it is submitted it would have been a critical factor not only on the substantive appeal but also in the decision whether to order a retrial or not,” Mr Jones wrote in a separate application to the High Court.

In finding Mr Banks guilty, Justice Edwin Wylie said Dotcom was a good witness but was wrong about the date of the lunch and ruled it must have happened on June 5.

But when interviewed by Mr Butler about the new affidavits before the Court of Appeal hearing, Dotcom accepted the evidence of the US businessmen – including that donations were not discussed at the June 5 lunch. Instead, he said there was a second lunch – again on June 9 – at which the donations were discussed.

The interview with Dotcom was never disclosed to Banks’ legal team before the Court of Appeal hearing. The newly disclosed material contradicts all the evidence given at trial by the Dotcom witnesses, wrote Mr Jones.

And more, from ‘Flipper’ at Kiwiblog.

It is seems that Tuesday’s Chambers telephone conference with Justice Fogarty was about procedural matters over the section 347 application – matters that have now been overtaken by the CoA formally advising that it has recalled its earlier decision ordering a retrial.

This follows a request by Banks’ counsel David Jones, and in turn follows the belated disclosure of Dotcom’s invention of yet another luncheon date – a clumsy attempt to circumvent the US evidence that the luncheon took place on June 5, 2010 not June 9 as the Crown/Dotcom had claimed.

In mid-March Flipper posted:
”Flipper hears that there are some very upset people (seriously p****d off is the way one source describes them) at the Court of Appeal, particularly Justices E France, J Wild and F Miller.
Now, understand this: This information was known to the Crown on September 29, 2014. It was not disclosed to Jones/Banks, nor to the Court of Appeal when it heard the case on October 29, 2014 – one month later. In fact the existence of the Butler memorandum was kept secret by the Crown until finally it was released (received by) to David Jones (Banks) on February 27, 2015.
On March 2, 2015 (the weekend intervened) David Jones filed a memorandum with the High Court requesting a section 347 (discharge) hearing. Flipper hears that the Crown has now agreed to this hearing. But that is not all the bad news for the Crown. It is also said that David Jones has gone back to the Court of Appeal because it appears, on the face of evidence now disclosed by the Crown, that the Court was deliberately misled.”

Flipper awaits further whispers and will report ASAP. But the Crowns case and standing in the eyes of the CoA seem to have turned into custard – another major embarrassment for Crown Law.

It sounds very poor from Crown Law – they must be able to be trusted to act correctly and honourably and their credibility here has crashed.

Dotcom may not come out of this looking very good either. Is he just an inaccurate unreliable witness? Or has he deliberately lied to inflict his vindictiveness on Banks?

Some more lawyerly opinions.

Alex Masterly:

Mike Heron might have blown his chance for appointment to the High Court!

Complaints in these matters will be sent to the National Standards Committee in Wellington, chaired by Nigel Hampton QC rather than a branch standards committee.

If the conduct is considered by the National Standards committee to be misconduct, and concealing (as seems to be the case here) material information could be considered to be such especially in the case of appellate litigation.

If a complaint is made then because of the confidentiality provisions in the LCA regarding the conduct of standards committee business the matter will disappear until a decision is made as to whether the conduct complained of is a) not sufficient to be unsatisfactory conduct, b) is unsatisfactory conduct or is c) considered to be misconduct resulting charges being laid in the LCDT.
If it is a or b you might never hear about it. if c you might hear about it in 18-24 months unless the tribunal puts name suppression orders in place as it does from time to time.


1. Dotcom and Mona said that the conversation to which you referred took place at the dinner table during the lunch session.
2. Mona says that she was there and heard it.
3. Dotcom said that that Mona was not there and did not hear it.
4. John Banks says that that the discussion did not take place in those terms and he denies asking for 2 cheques. As I recall, Banks said that he had a private conversation with Dotcom which was inconclusive and, according to Banks, gave him no assurance that any money would be coming let alone $50,000 let alone two payments of $25,000.
5. Banks says that there were a couple of American businessmen at the table. Dotcom says that that there were not a couple of American business people at the table.
6. The judge believed Dotcom but says he was mistaken about the date of the meeting and the presence of Mona.
7. The two American businessmen have surfaced. They say that they were present at the meeting. They heard everything that was discussed. There was no discussion about campaign contributions. This directly contradicts Dotcom’s evidence.
8. The Court of Appeal concluded that if the evidence was produced at the first hearing, it may very well have resulted in a different outcome altogether.
9. The Crown knew that Dotcom had reversed his evidence, accepted that the Americans were present, accepted that there was no campaign discussions at that meeting but has now invented another luncheon meeting a few days later. The date he asserts as the date of the discussion is a day on which Mr Banks established, to the unquestioned satisfaction of the court, that he was campaigning elsewhere and that Mrs Banks, also to the unquestioned satisfaction of the court, was working.
10. Keeping Stock’s theory, and indeed the theory of a considerable number of people, is that the revelations of the American business people raise very serious doubts about the credibility of Mr Com. When you add the undisclosed evidence, you have Mr Com doing a complete about face on his denials about the presence of the American business people and adding an entirely new dimension, namely a second meeting on a date already rejected by the court as untenable. At no stage, over the very prolonged period that this matter has been debated, has anybody ever suggested that there was a second meeting.
11. Which ever way you look at it, the introduction of the new evidence from the Americans, the backdown by Mr Com and what appears to be a complete fabrication in the face of compelling evidence from the Americans do somewhat undermine the veracity of what Mr Com has been saying.

Some, of course, disagree.

Alex Masterly:

Well said.
A fair summary of the essential evidence.
I suspect that the Court of Appeal will not be happy with the late provision of the Barristers report.


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