A New Zealand court has sided with IT tycoon Kim Dotcom, confirming his right to sue the national spy agency for damages over illegally gathering intelligence on him.

The Court of Appeal upheld last year’s ruling of the High Court, which the country’s attorney general was seeking to overturn.

The Government Communications Security Bureau (GCSB) was spying on Dotcom prior to the police raid on his home in 2012. The agency did so illegally, believing that the German national had no residency in New Zealand.

The blunder led to Prime Minister John Key apologizing to Dotcom, saying New Zealand “failed to provide that appropriate protection for him.” Dotcom wants to include GCSB in a suit he plans against the police alleging wrongful arrest.

The ruling also means GCSB will have to disclose to Dotcom’s attorneys detail of information sharing arrangements it had with foreign agencies, particularly US authorities. American law enforcers seek extradition of Dotcom to the US for trial over alleged internet piracy and wire fraud. The charges carry a maximum sentence of 20 years, if proven. Extradition hearings are scheduled to begin later in March.

A view at the "Dotcom Mansion" (AFP Photo / Michael Bradley)

Dotcom’s defense team questions the legality of evidence seized in the raid after the warrants for it were declared invalid.

Earlier the Appeals Court ruled that the US authorities are not obliged to present their entire corps of evidence against Dotcom to his attorneys. A summary of the case is sufficient, the judges decided.

Dotcom’s file storage service Megaupload was taken down in January 2012 by authorities over its use to store pirated movies, music, software and other content. US officials say he and six associates caused damages amounting $500 million to copyright holders and encouraged users to engage in piracy, allegations Dotcom denies.

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