Kim Dotcom has temporarily staved off attempts by the United States to seize the last vestiges of his fortune - money which was to pay legal bills in the upcoming extradition case.

A High Court decision released today has allowed alleged internet pirate Dotcom and his three co-accused to attack a legal process which was intended to restrain his remaining funds in New Zealand.

The decision from Justice Rebecca Ellis described its legal action against Dotcom as "vexing and costly for the Crown" and suggested it had likely strained New Zealand's relationship with the United States in terms of executing legal orders here.

The decision comes amid a welter of legal cases which share the same possible outcome - keeping Dotcom away from money.


It directly stemmed from an order in a US court that Dotcom's assets should be seized, which led to New Zealand authorities attempting to get the court's legal blessing for it to apply here.

The money which would be seized and returned to the US is about $11m - the remaining government bonds, the house in which Mona Dotcom now lives and about $3m in luxury cars. The money has remained frozen while the court cases are being argued although Dotcom did recently get permission in another High Court case to use $700,000 to cover legal and living expenses.

It was this cash which would be hit by the US seizure order and the ability to defend against extradition was cited by Justice Ellis when ordering a stop to efforts to seize Dotcom's money.

Justice Ellis said there would be "very real consequences" if she did not stop the seizure order and grant a judicial review into issues raised by Dotcom's legal team. She said refusing to act or allow the judicial review "might deprive (Dotcom and others) of any ability to defend the extradition or to pursue their appeals against the forfeiture order in the United States".

Issues raised by Dotcom's legal team focus on the decision making by Deputy Solicitor General Brendan Horsley, the legal officer who authorised the orders in New Zealand.
Dotcom's lawyers said he should have taken into account the US courts decision to hear no objection from Dotcom because it considered his resistance to extradition made him a "fugitive".

It has also laid a claim of bias against the Crown because of the multitude of roles its has adopted since the arrests in January 2012. The three years since have seen the criminal team of the Crown Law Office acting for the US in the extradition proceeding, advising the Minister of Justice on extradition, acting for the Police - which was meant to be working for US interests - on the restraining orders while also acting for the Attorney General in a court case relating to the search of Dotcom's home. It is also advising the Deputy Solicitor-General Brendan Horsley on the use of powers delegated from the Attorney General.

Justice Ellis said: "I would be inclined to add that the Dotcom litigation in all its manifestations has, undoubtedly, proved vexing and costly for the Crown and, in all likelihood, difficult in terms of the New Zealand government's mutual assistance relationship with the government of the United States."

The case is a strand of a legal action also playing out in Hong Kong and the US. Dotcom still has about $60m in restrained assets - most of it held in Hong Kong but about $10m remaining in New Zealand.

There is still no new date set for the extradition hearing after an appeal by new lawyers for the accused which delayed the proceeding so they could prepare.