The whole New Zealand-based spying operation against Kim Dotcom and his Megaupload co-defendants was illegal, the High Court has ruled. The revelation appears in a newly released decision, which shows the GCSB spy agency refusing to respond to questions about its activities on the basis that could jeopardize national security.

In the months that preceded the January 2012 raid on file-storage site Megaupload, authorities in New Zealand used the Government Communications Security Bureau (GCSB) spy agency to monitor Kim and Mona Dotcom, plus Megaupload co-defendant Bram van der Kolk. When this fact was revealed it developed into a crisis. The GCSB was forbidden by law from conducting surveillance on its own citizens or permanent residents in the country, which led to former Prime Minister John Key later apologizing for the error.

With Dotcom determined to uncover the truth, the entrepreneur launched legal action in pursuit of the information illegally obtained by GCSB and to obtain compensation. In July, the High Court determined that Dotcom wouldn't get access to the information but it also revealed that the scope of the spying went on much longer than previously admitted, a fact later confirmed by the police. This raised the specter that not only did the GCSB continue to spy on Dotcom after it knew it was acting illegally, but that an earlier affidavit from a GCSB staff member was suspect.

With the saga continuing to drag on, revelations published in New Zealand this morning indicate that not only was the spying on Dotcom illegal, the entire spying operation – which included his Megaupload co-defendants – was too.