The Auckland High Court has ruled the police raids on Megaupload founder Kim Dotcom's mansion earlier this year was illegal.
In a major victory for Dotcom's legal team in both its New Zealand and pending US court cases, presiding judge Justice Helen Winkelmann found the raid, which saw luxury cars and bank accounts seized, was based on faulty warrants and effectively unlawful.
The warrants, she said, "fell well short" of sufficiently describing the related offences.
“They were general warrants, and as such, are invalid,” she said in her judgment (pdf).
The group behind the Megaupload file-sharing site were subject to raids in January under allegations of breaching copyright. They are subject to potential extradition to the US for further litigation as part of cooperation between New Zealand Police and the FBI.
But Justice Winkelmann said use of phrases like “breach of copyright” in the warrants did not comply with New Zealand law, as they provide no detail of the offence alleged to have been committed.
She also found the removal of cloned hard drive images by the FBI to the United States was unlawful.
The FBI had cloned and sent the drives to the US despite an ongoing NZ hearing and an agreement with Dotcom’s legal team preventing such action before a hearing on the matter had been concluded.
In what Justice Winkelmann labelled “an unreasonable search and seizure”, NZ Police were found to have exceeded their legal authority, as they continued to hold material they had deemed irrelevant to the case.
Police said they intended to let the FBI sort the evidence in the US, but Winkelmann argued this is “an approach that is not available to them”.
Justice Winkelmann ordered NZ Police and the FBI return all seized assets deemed irrelevant to the case. No further material would be shipped to the United States without the court's consent.
The judgment vindicates attempts by legal counsel for Dotcom and his co-accused to seek a judicial review of the three search warrants used to authorise the raid.
Intellectual property lawyer Rick Shera told iTnews that Justice Winkelmann's ruling was "a real body blow to the prosecution — not just here in New Zealand but in the US as well".
However, Shera said the extent of the ruling's effect will not be known until after a follow-up July 4 court hearing, which is set to decide the future of the New Zealand case.
A successful hearing for Dotcom could mean the case would not proceed further due to the amount of inadmissable evidence, Shera said.
However, given the adverse consequences for the prosecution, Shera said an appeal to Justice Winkelmann's judgment today was likely.
NZ Police said in a statement that they would consider the judgment, and "are in discussions with Crown Law to determine what further action might be required".