Kim Dotcom appeal: 'We were not heard'

Six years after his dramatic arrest, internet entrepreneur Kim Dotcom's battle against extradition to the United States has reached New Zealand's second-highest court.

The German-born tech mogul's appeal against a decision clearing his extradition began at the Court of Appeal in Wellington on Monday morning.

The Megaupload founder and his three co-accused - Mathias Ortmann, Bran van der Kolk and Finn Botato - were arrested in 2012 in a police raid and charged with a series of copyright-related offences on behalf of authorities in the US over their roles in running the file-sharing website.

Last year, the High Court at Auckland upheld an earlier ruling the group were eligible for extradition on charges of racketeering, wire fraud and money laundering - although it found they couldn't be sent to the US on copyright infringement charges alone.

Starting their appeal against the ruling, Van der Kolk and Ortmann's lawyer, Grant Illingworth, on Monday told the appeals court the case had "gone off the rails" during the initial 10-week extradition hearing in 2015.

He argued New Zealand's extradition laws made it clear deciding whether someone could be extradited was not just a rubber-stamping exercise, but required "meaningful" consideration by a judge - which had not been given.

"It all went wrong. It went absolutely, totally wrong," Mr Illingworth said.

"We were not heard."

Under New Zealand law someone could only be extradited for conduct that would have merited a criminal trial domestically, he argued.

Mr Illingworth also raised the prospect the Minister of Justice had been misled when the arrest warrants for the men were issued in 2012, saying it posed questions about the validity of the whole process.

"We say that there was misleading conduct at that stage, because there was no reference to the fact information had been gathered illegally by the GCSB."

Dotcom was not in attendance on Monday.

The hearing has been set down for two weeks.

The US Federal Bureau of Investigation has led the investigation and claims Megaupload was a criminal conspiracy that earned the men $175 million. If extradited and found guilty in the US, the quartet could face decades in jail.

Meanwhile, Dotcom's lawyers last month said they were suing New Zealand's government for billions of dollars in damages over his arrest.