Under the Extradition Act 1999 the United States must, among other things, satisfy the District Court that there is a prima facie case against Mr Dotcom and his associates – that they have a case to answer. The United States is entitled to do this by summarising the evidence against Mr Dotcom in what is called the record of the case. The question for the Court was whether the record of the case procedure contemplated disclosure on the basis ordered by the District Court. The Court decided that it did not.

The Court gives the U.S. the benefit of the doubt on matters of good faith:

Moreover, a state requesting extradition owes a duty of candour and good faith in making its request...In the absence of cogent evidence to the contrary, an extradition court is entitled to expect that a requesting state will have met its obligations of candour and good faith when compiling the record of the case.

The Court says while it accepts that the U.S. Government affidavits were filed in good faith, that doesn't mean they cannot be challenged:

The more streamlined process does not mean that when considering the factual and legal background to an extradition application, an extradition court must accept everything said by the requesting state at face value, however. A suspect is entitled to challenge the reliability of the record of the case through evidence or argument. But, given the nature of extradition hearings, the role of the extradition court is a limited one. If further documents are required, the proper process in most cases is that the court request the Minister of Justice to seek them from the United States in accordance with the extradition treaty between the two countries.

It seems to me it would be pretty hard to effectively challenge the Government's factual assertions without having an opportunity to review the documents the assertions are based on, but that's the ruling.

Dotcom's lawyer, QC Paul Davidson, says he will appeal to the NZ Supreme Court.