RE KIM DOTCOM AND OTHERS

RE KIM DOTCOM AND OTHERS

The court exercised its discretion to permit variation of the restraint order to allow reasonable living expenses and subject to appropriate conditions because the applicants had made sufficient disclosure and prior New Zealand High Court findings supported inability to meet expenses from unrestrained assets; however, historic legal costs to identified unsecured creditors (Haldanes in Hong Kong; Simpson Grierson and Paul Davison QC in New Zealand) were disallowed because unsecured creditors should not be paid absent ample assets to meet potential confiscation orders.

Citation
RE KIM DOTCOM AND OTHERS
Parties
1st Defendant: Kim Dotcom (also known as Kim Schmitz, Tim Vestor and Kim Tim Jim Vestor); 2nd Defendant: Megaupload Limited; Interested Party/respondent: Secretary for Justice
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
1 December 2015
Case Number
HCMP116/2012
Procedural Posture
Application to Vary Restraint Order Under Mutual Legal Assistance in Criminal Matters Ordinance (cap.525) / Chamber Application and Decision on Variation of Restraint Order (post Hearing Decision)
Outcome
Application partially allowed: restraint order varied to permit reasonable living expenses and subject to conditions; application to pay certain historic legal costs refused.
Legal Topics
Variation of Restraint Orders, Full and Frank Disclosure, Payment of Legal Expenses, Living Expenses, Priority of Unsecured Creditors, Deference to Foreign Judgments
Source Language
EN
Criminal Law Mutual Legal Assistance Asset Restraint and Forfeiture Procedural Law Variation of Restraint Orders Full and Frank Disclosure Payment of Legal Expenses Living Expenses +2 more

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Parties

Kim Dotcom (also known as Kim Schmitz, Tim Vestor and Kim Tim Jim Vestor)

1st Defendant

Megaupload Limited

2nd Defendant

Secretary for Justice

Interested Party/respondent

Procedural Posture

Application to Vary Restraint Order Under Mutual Legal Assistance in Criminal Matters Ordinance (cap.525) / Chamber Application and Decision on Variation of Restraint Order (post Hearing Decision)

Legal Issues

  1. 1 Whether the restraint order should be varied to permit payment of historic and future legal expenses
  2. 2 Whether the restraint order should be varied to permit payment of reasonable living expenses
  3. 3 Whether the applicants have made full and frank disclosure of assets

Ratio Decidendi

The court exercised its discretion to permit variation of the restraint order to allow reasonable living expenses and subject to appropriate conditions because the applicants had made sufficient disclosure and prior New Zealand High Court findings supported inability to meet expenses from unrestrained assets; however, historic legal costs to identified unsecured creditors (Haldanes in Hong Kong; Simpson Grierson and Paul Davison QC in New Zealand) were disallowed because unsecured creditors should not be paid absent ample assets to meet potential confiscation orders.

Court Disposition

Application partially allowed: restraint order varied to permit reasonable living expenses and subject to conditions; application to pay certain historic legal costs refused.

Orders

  • Restraint order varied to permit the 1st defendant a living allowance of NZ$80,000 per month.
  • Restraint order varied to permit payment of reasonable legal expenses subject to conditions and proof of necessity (general grant) pending specific order as to form.