A v B HC Auckland CIV-2011-404-003945 [2011] NZHC 1968 (8 December 2011)

Last Updated: 6 February 2012

NOTE: ORDER PROHIBITING PUBLICATION OF NAME, ADDRESS OR IDENTIFYING PARTICULARS OF PLAINTIFF.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV-2011-404-003945}

BETWEEN A Plaintiff

AND B Defendant

Hearing: 5 December 2011

Appearances: I M Gault for Plaintiff

C C Mansell for Defendant

Judgment: 8 December 2011

JUDGMENT OF WHATA J ON SECURITY FOR COSTS

This judgment was delivered by Justice Whata on

8 December 2011 at 4.00 p.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Bell Gully, PO Box 4199, Auckland 1140

Martelli McKegg, PO Box 5745, Wellesley Street, Aukland 1141

A V B HC AK CIV-2011-404-003945 8 December 2011

[1] A is a university student. B was a director and is now an employee of a publisher. A was paid to do two photo shoots. The photographs were published in a magazine and on the internet, including on a Facebook page. A says these publications breached an agreement that the photographs would not identify her and would only be published in the hard copy version of the magazine. A sues for breach of contract, breach of confidence and unconscionable bargain. B says that A signed two release forms permitting publication. He says there was no agreement to limit publication. B now seeks security for costs. A says an order for security would almost certainly prevent her from pursuing her claim.

Background

[2] The respective versions of events are key to the understanding of this case. I

will set out the plaintiff’s view of events and then set out the defendant’s position.

Plaintiff ’s view

[3] In September 2009 the plaintiff was experiencing severe financial hardship. On about 24 September 2009 the plaintiff approached the defendant about doing a photo shoot for X Magazine in exchange for $700. B provided A with contact details of a photographer who worked for B. A was concerned to keep her identity confidential in the photographs. The photographer agreed with A that she could wear a wig for the photographs and use a pseudonym so that she would not be identifiable. The explicit photo shoot then took place.

[4] After the photo shoot the photographer asked A to sign a document entitled “Model Release and Certification”. That release and certification states, among other things:

I hereby give all clearances, copyright and otherwise, for use of my name, likeness, image, voice, appearance and performance embodied in the product.

[5] In November 2009, A was again experiencing financial hardship. She sent a text message to B agreeing that she would participate in a photo shoot to appear in

the magazine in exchange for $700. B proposed that a term of this agreement be that A does not wear a wig and that the photo shoot would be filmed. A was again concerned about her confidentiality of her identity and did not agree to those terms and communicated this to B by text message. B assured her that it was unlikely that she would be identified.

[6] B’s contact details were passed on to another photographer and the photo shoot commenced on 21 November 2009 with B wearing a wig, pursuant to the condition she had stipulated. It then transpires that B contacted the photographer and told him to cancel the shoot because A was wearing a wig. A and the photographer then discussed how to go forward. During these discussions the photographer made oral representations to A that it was unlikely she would be recognised in the photographs because:

(a) The magazine was mainly sold in the [X] Island; (b) The magazine was targeted at older buyers; and (c) The magazine was sold in plastic film.

[7] The photographer also promised A that the photographs would not be used on the cover of the magazine. The photo shoot then took place and then following the photo shoot A was asked to sign a second release. The second release was executed between XYZ Ltd and A. It transpires that XYZ Ltd did not exist. In any event the release form records:

4. The Model acknowledges that the Company has explained to him/her and that the[sic] he/she has understood the nature and style of the Material, their appearance in the Material and the Company’s business.

[8] A was subsequently paid $350.

[9] In January 2010 B left a comment on an unrelated photograph of the plaintiff on Facebook, which directed A’s family and friends to the magazine’s website. At the same time B published A’s photograph on the front cover of the January issue of

the magazine. The photographs from the first photo shoot were published in a February issue of the magazine in which B was identifiable from references on the cover and within the magazine. Photographs from the second shoot were then published on the magazine’s website and on the magazines facebook fan page. A complains that the use of these photographs breached the agreements between them and was an unlawful breach of confidence and unconscionable.

Defendant’s view

[10] A approached B, twice, not the other way around. B accepts that the photo shoots took place, but denies that there was any agreement to limit publication. The model release forms transfer all rights to the photographs to the magazine. B also satisfied himself that A was 21 years old before the photo shoots took place. A did not express any concern until well after publication. A also flatted with B’s photographer, during which time A was engaged in prostitution. There was never any undue influence, unconscionability or breach of confidence.

Jurisdiction

[11] There is a broad discretion to order security for costs.1 The purpose of security rule is to protect a party who may win a case against the risk of being unable to enforce a costs order. The Court of Appeal in A S McLachlan Ltd v MEL Network Ltd2 has emphasised the breadth of this discretion and cautioned against rote application of principles apparently arising out of the authorities. In particular, the Court observed:

[14] While collections of authorities such as that in the judgment of Master Williams in Nikau Holdings Ltd v BNZ (1992) 5 PRNZ 430, can be of assistance, they cannot substitute for a careful assessment of the circumstances of the particular case. It is not a matter of going through a check list of so-called principles. That creates a risk that a factor accorded weight in a particular case will be given disproportionate weight, or even treated as a requirement for the making or refusing of an order, in quite different circumstances.

1 _{Rule 5.45.}

2 A S McLachlan Ltd v MEL Network Ltd [2002] NZCA 215; (2002) 16 PRNZ 747 (CA).

[12] And further:

[15] The rule itself contemplates an order for security where the plaintiff will be unable to meet an adverse award of costs. That must be taken as contemplating also that an order for substantial security may, in effect, prevent the plaintiff from pursuing the claim. An order having that effect should be made only after careful consideration and in a case in which the claim has little chance of success. Access to the Courts for a genuine plaintiff is not lightly to be denied.

[13] It might be said however that there are touchstones that might usefully assist in determining whether or not an order should be made which include: 3

(a) Balancing the interest of both parties;

(b) The merits of the case, particularly whether the plaintiff has a meritorious case;

(c) Whether there has been any delay by the defendant in filing the application for an order for security; and

(d) Whether the plaintiff’s impecuniosity resulted from the defendant’s

actions.

[14] I propose to work through these touchstones, and then step back and evaluate whether overall an order for security accords with the wider public interest considerations, and if so, on what basis.

The plaintiff ’s financial position

[15] The plaintiff has said that she would need to borrow to pay costs if she was unsuccessful at trial. Her position also is that an order for security would most likely prevent her from proceeding. While the defendant has not produced any evidence about A’s financial status, given A’s admissions, there is a very real risk that, without an order for security, she will be unable to meet a costs order in favour of the

_defendant.

3 See commentary of Rule 5.45 McGechan on Procedure (online ed) at [5.45.03].

[16] The defendant stresses however that if A can borrow money, she should do so now, rather than waiting until the trial has finished. I consider that the defendant is misconstruing the plaintiff’s position. A is simply saying she would have to borrow to pay costs, not that she can borrow now to pay them. Her evidence confirms that she is a student with very limited resources.

[17] In summary, the significance of this is that:

(a) B has satisfied me that there is a real risk that it will not be able to recover its costs; and

(b) Security of costs will very likely prevent A from ventilating her claim.

Merits

[18] This is not the occasion to make any definitive findings on the merits of the case. At best, I can only form an impression of them. Applying orthodox principles of contractual interpretation, the first media release form is a significant hurdle to a claim by A based on prior oral representations. Those representations jar heavily against the express language of the media release form, and subject to issues of unconscionability, the case for the defendant appears strong. As to

unconscionability:4

So, in cases on unconscionability and economic duress the inequality must be great in extent, and there must be conduct by the stronger party which amounts to taking advantage of that inequality. The Courts allow reliance on these doctrines only in clear and very strong cases.

[19] At first blush, the evidence before me does not lend itself obviously to this categorisation. On this aspect too, my first impression is that the defendant’s case is a strong one. However, that impression presupposes that the law of unconscionability is beyond refinement in this context, which is disputable. I will

_{later return to this issue.}

4 Burrows, Finn & Todd (ed) Law of Contracts in New Zealand (3rd ed, Lexis Nexis, Wellington,

2007) at [2.2.3], citing O’Connor v Hart [1985] 1 NZLR 159.

[20] The position in respect of the second photo shoot is not so clear cut. There is clear evidence that the plaintiff rallied against a photo shoot that would overtly reveal her identity and reluctantly acceded to a photo shoot without a wig, on the basis that there would be limitations on publication. A coherent picture emerges, again at first blush, that A participated in the photo shoot only because such limitations were to be put in place. Clause 4 could be read to incorporate pre- contractual representations as to how the material might be used. B then has the difficulty that the release form was executed on behalf of a company in liquidation. It would appear arguable that the release form is either void or unenforceable against the plaintiff. On first impression, therefore, it cannot be said that this part of A’s case is without merit.

[21] On the basis of the foregoing, I am satisfied that A’s case, at least in one respect, has a plausible basis; and I factor that into my overall consideration. I also accept that A is genuine about her claims. It may be contextually relevant that she is merely seeking the photographs and no further publication.

Delay

[22] While there has been some procedural delay, that is in part due to the plaintiff’s summary judgment action. I am satisfied that to the extent there has been delay, it is not a factor determinative against the defendant.

Plaintiff ’s impecuniosity

[23] There is no obvious nexus between the defendant’s actions and the plaintiff’s

impecuniosity.

Public interest

[24] I afforded counsel an opportunity to file further submissions on whether or not there is a public interest in the possible need for development in the law relating

to vulnerable persons5 entering arrangements involving unfettered publication of a person’s image on the internet. While A is not suing in the public interest, it might be said that her claim raises a matter of public importance and that, if so, this should be taken into account.6

[25] Ms Mansell argued strongly that the factual scenario before the Court is not unique and that there are no special circumstances that require the Court to develop the case law in this area.7 She says A is over 20 years of age, well educated and has signed forms which she could read and understand authorising dissemination of her image. She emphasised that it would be paternalistic to afford protection to A and that such paternalism would ultimately place unwarranted pressure on the adult industry. She says further that if changes were needed to the age limits of persons entering this industry, that Parliament is the place for such initiatives.

[26] This case is, however, characterised by claims of A’s vulnerability to B, and the effect on A of limitless and damaging publication of the photographs by B. I agree with Ms Mansell that I am not in a position to determine the merits of these allegations or indeed the consequences of publication for A. But, in my view, there is a wider public interest in assessing whether or not common law principles dealing with unconscionability can be applied, or if necessary, extended to support A’s claim. It might be paternalistic to do so. But the question remains as to whether the Court ought to intervene and, if so, on what basis. The cases cited by Ms Maunsell have little bearing on this specific issue.

[27] Furthermore, the nature of A’s claims, carefully framed by Mr Gault, require a cautious approach to security, as mandated by the Court of Appeal in A S McLachlan Ltd v MEL Network Ltd,8 particularly in circumstances where an order for security will in effect prevent their ventilation. It is also trite, though relevant to

_{recall that access to the Courts to ventilate such claims is a fundamental right that is}

5 _{Refer for discussion of principle, Burrows, Finn & Todd, above n 4, at [12.4.1]-[12.4.4].}

6 _{See McGechan on Procedure, above n 3, at [5.45.05].at HCR 5.45.05 (12) and commentary.}

7 _{Referring to, among other cases, Douglas v Hello Ltd [2007] UKHL 21}

8 Above n 2.

itself in the public interest;9 while of course recognising also that security for costs is a legitimate fetter on that right.

[28] I accept that pornography is a lawful form of expression (subject only to specified legislative constraints that are not relevant here). It also has been said that pornography is a form of free speech that must be protected by the Courts. But this case is not about the legitimacy or legality of pornography or, for that matter, A’s alleged prostituton. It is about the proper scope of this Court’s power to intervene where allegations of vulnerability, unconscionability and potentially boundless publication are in issue. Those circumstances, combined with the apparent merits of at least one cause of action, militate strongly against the imposition of an order for security for costs that would prevent the claims from being ventilated.

Conclusion

[29] On balance, therefore, I am of the view that in order to do justice between the parties, I should not grant an order for security for costs. The grant sought by B would very likely prevent A from proceeding with her claim. The scope of the law dealing with vulnerable persons, including whether A is a vulnerable person, is also a matter of public importance.

Costs

[30] I invite submissions on costs on this application within seven days, failing which I will make an order.

_{Whata J}

9 R v Lord Chancellor ex p Witham [1985] QB 575; Raymond v Honey [1983] 1 AC 1.