Lawyers for Kim Dotcom and the Crown are at odds over whether an attempt to extradite Mr Dotcom and three other men should even go ahead.
Kim Dotcom arrives at court for his extradition hearing Photo: RNZ/Kim Baker Wilson
The well-known internet businessmen and three co-accused, Bram van der Kolk, Mathias Ortmann and Finn Batato, were arrested in January 2012 in a raid on Mr Dotcom's mansion in Coatesville, north of Auckland.
The FBI claims the men's website, Megaupload, was wilfully breaching copyright on a mass scale, by hosting illegally-created movie, music and software files.
The men are seeking a temporary or even permanent stay in proceedings, saying it was unfair that they're unable to use frozen funds to pay expert witnesses.
The Crown, which is acting on behalf of the United States, said if the lack of expert evidence created an unfairness, that could be taken into account when the court decides whether the men are eligible for extradition.
If the four men are extradited to the United States, they will face charges including conspiracy to commit copyright infringement, money-laundering and racketeering.
Christine Gordon, acting for the US, makes a submission to Judge Nevin Dawson Photo: RNZ/Kim Baker Wilson
Christine Gordon, acting for the Crown on behalf of the United States, said the issues raised by the men could be dealt with as part of the main hearing, or at a trial if it went ahead.
Ms Gordon has also accused Mr Dotcom of deliberating using delaying tactics.
Mr Dotcom's legal team filed an application just last week claiming Crown Law should not be acting on behalf of the US, because it was also acting for the New Zealand Police and the GCSB in a compensation claim Mr Dotcom had made.
That created a conflict of interest, the application claimed.
Those allegations were baseless, Ms Gordon said.
"[They] are a barely disguised attempt to disrupt this hearing [and] the court should not entertain them," she said.
Defence lawyer Grant Illingworth in court. Photo: RNZ/Kim Baker Wilson
The lawyer for Mr Ortmann and Mr van der Kolk, Grant Illingworth, said the US had refused to let the men spend some of their frozen funds on international expert witnesses.
Mr Illingworth said allowing the extradition hearing to go ahead without resolving that problem would be an abuse of process.
However, Ms Gordon said that if Judge Nevin Dawson determined that the lack of expert evidence had made the hearing unfair, he could take that into account when making his decision about extradition.
Mr Dotcom, Mr Ortmann and Mr van der Kolk observed proceedings from desks at the back of court; Mr Dotcom seated in a black leather armchair brought to court from his Coatesville mansion. He told Radio New Zealand last week he needed the chair because of his ongoing back problems.
Mr Batato, who is defending himself, was seated with the other mens' defence lawyers.
Mr Dotcom sat in a leather chair brought to court from his Coatesville mansion. Photo: RNZ/Kim Baker Wilson
Mr Dotcom's lawyer, Ron Mansfield, questioned whether the US could even pursue the men.
New Zealand's Copyright Act provided safe harbour to internet service providers, protecting them from criminal sanction if their users breached copyright, Mr Mansfield said.
That provision applied to Megaupload, he said.
If Judge Dawson agreed, that would bring the entire extradition attempt to an end, Mr Dawson said.