This is silly. If they misfile it, they'll ask for it again. If you say "I already gave it to you but you lost it, nyah nyah," they'll find you in contempt of court.
For that matter, if you're in the middle of trial and give them what they asked, but in the most massively inconvenient way you can think of, they'll find you in contempt of court.
There is nothing saying you can't then use the defence of you forgot the encryption key. Having previously provided it your obligation to the law is extinguished.
Judges are not stupid, not the easiest job to get and takes alot of work. They may not be experts in every feild they have to deal with though and in that they depend on expert witness's.
The point being that it is a silly flawed law and the approach I outlined is one which is just as silly, yet still compitulates with the letter of the law fully.
Now if your in a situation were you are having to defend raw random encrypted looking data that is just raw data, then is the onus upon yoruself to prove it's just random data and if not anybody could say its not encyrpted its random data, could they not?
Question is how should the law actualy handle the situation were some data from a criminal activity is encrypted and would requitre 1000 years to brute force? This law was a way to cover those situations. It's not perfect and in many respects is down right offencive. But it's like this - if you have nothing to hide then why should you be made to feel like a criminal. That is the real crux of the matter, though some people may view it entirely differently. Heck a badly spelt/grammer document could be deemed as hiding encrypted data when it is just bad spelling/grammer or it could actualy be encypted/obfiscated data hidden within the document. you just can't tell and that is were it starts to get realy realy messy.
For that matter, if you're in the middle of trial and give them what they asked, but in the most massively inconvenient way you can think of, they'll find you in contempt of court.
Judges are not (usually) stupid.