THE REPUBLIC OF KAZAKHSTAN v MEGA LIMITED [2016] NZHC 1898

THE REPUBLIC OF KAZAKHSTAN v MEGA LIMITED [2016] NZHC 1898 [16 August 2016]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2015-404-002909[2016] NZHC 1898BETWEEN THE REPUBLIC OF KAZAKHSTANApplicantAND MEGA LIMITEDRespondentHearing: 9 August 2016Appearances: Daniel Kalderimis and Ashley Gray for the ApplicantFletcher Pilditch and Thomas Refoy-Butler for the RespondentJudgment: 16 August 2016JUDGMENT OF MOORE JThis judgment was delivered by me on 16 August 2016 at 1:00 pmpursuant to Rule 11.5 of the High Court Rules.Registrar/ Deputy RegistrarDate:Introduction[1] On 12 May 2016 I delivered my judgment in respect of The Republic ofKazakhstan's ("the Republic") application to this Court for assistance in obtainingevidence for overseas proceedings conducted before the District Court for the Southern District of New York ("SDNY"). The Republic's application was brought under s 185 of the Evidence Act 2006 ("the Act").1[2] At [123] of my judgment I directed the production of the information detailedin paragraph 14 of the SDNY's Letter of Request ("the Request") (per Judge Ramos) dated 28 October 2015.[3] The information described in paragraph 14 of the Request falls into two categories which are separately described in paragraphs 11.2 and 11.5 of the Request.[4] In my judgment I granted leave to counsel to apply for such further or other orders/directions as counsel considered necessary to give effect to the orders I made.[5] Mr Kalderimis, for the Republic and Mr Pilditch, for the respondent MegaLimited ("Mega"), filed a joint memorandum on 16 June 2016. They agreed that a summons should issue requiring Mr Stephen Hall, as the authorised representative of Mega, to attend the High Court for examination. The memorandum recorded thatcounsel had communicated extensively in relation to Mega's obligation to providethe information detailed in paragraph 11.5 of the Request. No resolution, however, was achieved.[6] Mega's position was that it intended to apply to this Court to clarify the order in respect of the information contained in paragraph 11.5 with reference to the content of that information and the intention of the Request. The Republic's positionwas that my order was clear, had not been appealed and did not require variation.1 The Republic of Kazakshtan v Mega Limited [2016] NZHC 963.[7] In order to advance matters counsel agreed that a two hour fixture before me should be convened for the purposes of resolving this impasse.Background[8] In the Request, Judge Ramos used the expression "stolen materials". Thisterm, coined by the Republic in its submissions to me, referred to:"Misappropriated government emails and other documents containingsensitive, proprietary and highly confidential government documents."[9] Judge Ramos stated there was good cause to find that the hackers, or othersworking in concert with the hackers, had posted some of the "stolen materials" on Mega's website.[10] Between paragraphs 8 and 11 of the Request, Judge Ramos described thelinks to the "stolen materials" including those on Mega's website.[11] In paragraph 11.2 he stated:"A user who clicks on the hyper links is redirected to a specific Megaarchive, which contains a portion of the stolen materials. There are at least 23 files/archives on Mega that contain or once contained stolen materials andthat are located at the following [hyper links (a)-(w)]."[12] In paragraph 11.5 he stated:"A user who clicks on the hyper links is redirected to a specific Mega archive, which contains articles containing screen shots of excerpts of the stolen materials. There are at least 27 files/archives on Mega that containthese articles and that are located at the following [hyper links (a)-(aa)]."[13] Paragraph 14 of the Request, which embodies its essence, specifically asked this Court for assistance by issuing a subpoena requiring the production of documents:" sufficient to identify [the account information] of the users of the Mega accounts who posted the stolen materials belonging to the plaintiffs at the URLs set forth above in paragraphs 11.2 and 11.5 during the time periodfrom August 1, 2014 to the present."[14] As a consequence of the Request I directed a subpoena issue requiring Mega to produce documents sufficient to identify account information connected to theaccounts of certain users of Mega's website "as detailed in paragraph 14 of the Letter of Request".2[15] In relation to the paragraph 11.2 links Mega has confirmed that these links lead to compressed file archives of email folders such as "Inbox" and "Sent". Megaaccepts this information could be characterised as raw information. Mega thus accepts these documents could fall within the description of "stolen materials" in thesense that expression was used in the Request.[16] The user information identified by Mega for all the paragraph 11.2 links canbe attributed to "User A". Mega advised it was prepared to be examined and produce information relevant to the paragraph 11.2 links and User A.[17] However, in the course of collating this material subsequent to my judgment, it became apparent to Mr Hall and Mega that the paragraph 11.5 links did not lead to"stolen materials" as they are described in paragraph 3 of the Request but, rather, to PDFs of media articles on other websites which were and remain publicly available.[18] Through Mr Hall Mega has established there are four users associated with the paragraph 11.5 links. It described these as Users B, C, D and E. None of the user information for these users is in common with User A and the paragraph 11.2 links. Conversely, there is nothing to link Users B, C, D and E to User A or the paragraph 11.2 links.[19] The essence of Mega's reservations is that the paragraph 11.5 material, whichcomprises five articles, are not "stolen materials". They are media reportsreferencing some of the raw material but are not, in themselves, raw material. Rather than creating a link to hacked government emails or other documents the links lead to published and publicly available news content.2 The Republic of Kazakshtan v Mega Limited, above n 1, at [123](a).Mega's submissions[20] More particularly, Mr Pilditch submits, as he did at the substantive hearing, that s 185 of the Act does not provide a general discovery power but provides for the"taking of evidence" in New Zealand to give effect to a request from a foreign Court seeking evidence for a trial. He submits that because s 185 is directed at the taking of evidence the normal rules of evidence apply to the examination of a witness. It is in that context he raises the broad submission that the paragraph 11.5 material is not relevant to the inquiry which Judge Ramos will be required to undertake. He submits that the issue is ultimately whether or not the material identified in paragraph 11.5 is capable of falling within the spirit and intent of the Request which forms the basis of this Court's order. He submits that the paragraph 11.5 material is not "stolen material". Instead, it is a series of articles written about the governmentof Kazakhstan where there is some reference to emails that may or may not be stolen. In essence the paragraph 11.5 content is journalistic and so Mr Pilditch questions whether it falls within the scope and terms of Judge Ramos' request asreflected in the orders I made.[21] He submits all that was done was someone took something which was already in existence on the internet and incorporated it with editorial comment. Thus, he submits all that can be inferred is that users B, C, D and E have, at some point, posted the articles in question to Mega's website but that needs to bedistinguished from what Mr Pilditch describes as "the raw material". Thus he submits there is no proper or legitimate basis to infer that if a person publishes a media article they are the hacker or someone closely associated with or working in concert with the hacker.[22] Furthermore, Mr Pilditch points out that the injunction obtained in the SDNY specifically excluded the activities of Respublika3 but in this Court, the Republic'sposition appears to be that by mere dint of the fact of publication on Mega's website,the posters must be associated with the hacker or hackers; an implicit concession by the Republic that the mere fact of publication was insufficient to prove that nexus.3 Subject to leave being given to the Republic if it found evidence that Respublika was responsible for the hacking.[23] Mr Pilditch accepted these were matters previously litigated in relation to the substantive judgment. He observed, however, now the paragraph 11.5 material has been examined by Mega, in the circumstances he felt duty bound to alert the Court toMega's concerns.Decision[24] While I have no doubt Mr Pilditch's submissions are based on Mega'ssincerely held concerns that the paragraph 11.5 material does not fall within the scope of the Request, I am satisfied this material is relevant and thus admissible and should be produced to the SDNY pursuant to Judge Ramos' Request. My reasonsfollow.[25] First, the extent to which I can re-open the order made in my judgment of 12 May 2016 is necessarily constrained. The ability of this Court to vary its judgment is limited.4 In the present case the only available basis to vary would be if I was to find a material change of circumstances or some other special circumstanceshad arisen since my judgment was issued. Neither of those procedural gateways wassuggested as applying nor has any application be made under r 7.49 of the HighCourt Rules. No appeal has been filed and no application for recall has been made.In the circumstances that is understandable.[26] Secondly, I am of the view that the paragraph 11.5 material is relevant. I determined the question of relevance in the course of my judgment and, in particular, at [79] I observed:" The Request is a narrow one which identifies a relatively modest numberof specific categories of information. No judgement is required in the exercise of compliance. To comply requires the adoption of a mechanical process of obtaining the specific information sought, and compiling it into aform which permits it to be presented to the Court."[27] The essence of Mega's argument on relevance at the substantive hearing was that the Request was expressed too broadly and the documents sought were not actually relevant or capable of identifying the hackers. I determined otherwise and concluded that the material, including the paragraph 11.5 material, met the level of4 High Court Rules, r 7.49; Carter v Coroner's Court at Wellington [2015] NZHC 2998 at [11].relevance necessary in a s 185 application. That finding, of course, reflects the limited assessment of relevance a Court is engaged in in this context. Primary questions of relevance for the purposes of the New York proceedings will be matters for the trial Judge in that jurisdiction.[28] Thirdly, I accept Mr Kalderimis' submission that the paragraph 11.5 material remains relevant to identifying the hackers and/or those working in concert with them and thus the identification of the proper defendant or defendants in the New York proceedings.[29] Fourthly, I do not accept that it can be inferred that all of the stolen materials or emails appearing in the paragraph 11.5 articles are sourced from the paragraph 11.2 archived materials. The evidence filed by the Republic for the purposes of this hearing contradicts this inference. It suggests that the paragraph 11.5 materials are not based on the paragraph 11.2 information. The inference is that the paragraph 11.5 information must have been sourced from elsewhere.[30] Fifthly, the Republic's evidence provides an answer to Mega's claim that thelinks in the paragraph 11.5 material do no more than lead to commentary and information publicly available on the internet. For that submission to be correct the public commentary and information needed to be available on the internet before the paragraph 11.5 material was composed and posted. That does not appear to be the case, although I accept this is difficult to prove conclusively.[31] Mr Kalderimis submits that the real question is whether or not, if the links referred to in other parts of paragraph 11 are followed through to the paragraph 11.5 documents, could those links have been located by some form of public search, i.e. was someone simply reposting what was already out there in the ether of the internet. I agree with him that the converse appears, on its face, to be the position. Mega seems to have been the route by which the paragraph 11.5 materials were made available on the internet as the evidence filed by the Republic indicates. In other words, wherever the person or persons who created the paragraph 11.5 documents got the embedded emails from, it was not through a casual browsing of the internetand discovering the paragraph 11.2 archives. They must have been accessed from somewhere else.[32] Two suggestions for alternative sources were proffered. The first was the Facebook page referred to in Judge Ramos' Request and whether the person whoposted the article may have found the information on Facebook and then inserted it into the archive. The second option is that the person could have gone to the Respublika website, discovered the information there and posted it onto the paragraph 11.5 archives. The evidence filed by the Republic satisfies me that no-one could have discovered the material through the Facebook page. While it may be possible to locate the article via Facebook, the Facebook page itself does not contain the information. The same applies to Respublika because the Respublika article displays only excerpts of the first page of the report and then directs the reader to the Mega website to read it or to the Facebook page which also directs people to theMega website itself. I thus accept Mr Kalderimis' submission that whoever put thescreen shots into the paragraph 11.5 archives is likely to have had independent access to the emails.[33] If that is the case then the paragraph 11.5 material does have the capacity to identify the hacker or hackers or those acting in concert with them. That is all I need to concern myself with for the purposes of the present exercise.[34] I thus find that the paragraph 11.2 and 11.5 material is relevant and should be disclosed or otherwise provided to Judge Ramos in terms of his Request.Mode of transmission[35] After legal argument Mr Pilditch called Mr Hall who produced the links for paragraphs 11.2 and 11.5. Neither is voluminous. Each runs to just two pages.[36] Having determined that Mr Hall's evidence and both documents should be provided to Judge Ramos the question for me is how this material should best be transmitted.[37] Mr Kalderimis has been provided with the email address of Judge Ramos'assistant. He has her name and contact details.[38] He has indicated a willingness to assume responsibility for transmitting the examination and the documents produced by Mr Hall subject to the terms of the undertaking provided on 20 January 2016. He submits that the most effective and practical mode of transfer is for Chapman Tripp to email the examination evidencedirectly to the Judge's assistant via a password-protected attachment or link, copied to the Registrar of this Court and to Mr Pilditch, requesting an acknowledgement of receipt. I did not understand Mr Pilditch to object to this proposal.[39] Mr Kalderimis also suggested that there is no good reason not to also copy the material to the Republic's New York counsel who are subject to the protective order issued by the SDNY. I am not prepared to permit the Republic's New Yorkcounsel to have access to this material. While I have no reason to believe they would not comply with the protective orders made in that jurisdiction, the Request was made by Judge Ramos to this Court. Now I have made orders which give effectto SDNY's request it is appropriate this Court's communication should be confinedto the requesting Court, albeit facilitated by Mr Kalderimis.[40] I propose to adopt Mr Kalderimis' suggestion as to the mechanism oftransmission, but with some modifications.[41] At the foot of each of the exhibits produced by Mr Hall is a paragraph 3 which is highlighted in bold. It records that the information is provided under protest and in strict confidence to the New Zealand High Court pursuant to its obligations under the order I made. It then records specific reservations which Mega holds. These issues were fully argued before me and are the subject of reasoned findings in my substantive judgment. In relation to the contents of paragraph 3 I raised my concerns with Mr Pilditch because Mr Hall's statements, on their face,could be interpreted as a criticism of the Court's decision which has not been appealed.[42] I accept Mr Pilditch's explanation that Mr Hall's paragraph 3 addendum wasa recitation of evidence Mr Hall had previously given and he wishes his concerns to be conveyed to the SDNY. As I advised Mr Pilditch these concerns are fully recorded in my judgment, a copy of which will be transmitted to the SDNY together with a copy of this decision. As a consequence, both documents are to be transmitted with paragraph 3 redacted.Orders[43] I therefore direct as follows:(a) Mr Hall's evidence and the two exhibits he produced are to be transmitted to the SDNY (per Judge Ramos).(b) In respect of each of the documents produced by Mr Hall paragraph 3 is to be removed prior to transmission.(c) A copy of my judgment of 12 May 2016 is also to be transmitted to the SDNY together with a copy of this decision.(d) Mr Kalderimis is to supervise the transmission of the examination evidence, exhibits and my decisions of 12 May 2016 and this decisiondirectly to Judge Ramos' assistant via a password-protected attachment or link, copied to the Registrar of this Court and to Mr Pilditch, requesting an acknowledgement of receipt.Costs[44] In the circumstances I am inclined to the same preliminary view I reached inrelation to the substantive judgment, namely that costs should lie where they fall.However, in the event the parties are unable to agree on the question of costs I makethe same timetabling directions as those contained at [124] of my earlier judgment.[45] Leave is reserved for either party to apply for such further orders or directions as may be necessary to give practical effect to this decision.Moore JSolicitors/Counsel:Chapman Tripp, WellingtonLowndes Jordan, AucklandMr Pilditch, Auckland