A Kiwi court has ruled that Megaupload founder Kim Dotcom can sue New Zealand's spy agency for illegal spying. The move will embarrass the New Zealand government because it will show the extent that it bent over backwards to assist the FBI.

The New Zealand Appeals Court rejected an application from the attorney general, acting on behalf of the Government Communications Security Bureau (GCSB), to exclude the agency from the lawsuit. New Zealand's High court ruled last year the agency could be held liable for illegally spying on Dotcom. Dotcom is seeking damages from the government for its role in a raid in January 2012, when New Zealand police helicopters swooped raided his home.

The raid was conducted at the request of the US FBI which was under pressure from Big Content to arrest Dotcom for piracy. The FBI claimed that Dotcom was a big US gangster, something which is proving a little hard to prove. The GCSB was found to have spied on Dotcom in the run-up to the 2012 raid, prompting an apology from the prime minister.

Dotcom was a German national but with residency in New Zealand, which made it illegal to spy on him. Dotcom and his mates are fighting extradition to the United States to face charges of online piracy, fraud and money laundering. New Zealand once had a tradition of telling the US to sling its hook but has since been acting as a puppet state bringing in some rather silly anti-piracy laws to make its US masters happy. When they bought the laws it was clear that the politicians were not aware of what they were approving. One of the most "enthusiastic backers" of the new law admitted to Parliament that she regularly copied content. Oops.