Sexy Kiwi Girls - AJ Park & the Entrepreneur's Challenge

Associate Judge Sargisson of the Auckland High Court - allows a ridiculous law suit bought by a large sex industry player against a much smaller new entrant drag on for 5-6 months before the Plaintiff finally admits they have no case and drops proceedings. How can our High Court Judges be happy to allow cases which are an obvious attempt to frustrate competition to occupy courts time? When the Plaintiff finally gave up and folded- Judge Sargisson refused to allow any costs to the Defendant, despite the law suit having held up their business plan for 6 months and cost them around $10,000 in time and expense. By not awarding costs or expenses to the Defendant- Judge Sargisson sent a clear message to unethical lawyers and companies that our High Court system can be used as a tool of anti-competitive behaviour without fear of punishment. In our opinion, her ruling actually provides an incentive for lawyers and large companies to come and waste Court time and tax payers’ money to try and manipulate and control their markets.

The Facts

The leading online escort website in NZ (NZG- run by Robin Greenslade of New Age Advertising) ) has around 400 listings, all paying around $150/week (according to their rate card)

In August 2010, SexyKiwiGirls.co.nz introduced a more modern website which gave girls the ability to manage their own listings and thus charge a lot less to the advertisers (escorts).

Within 2-3 weeks of the new release, Sexy Kiwi Girls received a threatening/ bullying email from NZG, printed below in full:

----- Original Message -----

From: New Zealand Girls

To: Sexy Kiwi Girls

Sent: Thursday, September 09, 2010 9:48 AM

Subject: Re: sexykiwigirls.co.nz: Proceed with Caution

To late big mouth,

I am taking your name and your companies names through the high court,

I am going to sue you for as much as I can get now, you pushed me into this, I tried to reason with you.

ignorance is not a defence, I hope you have lots of money and a good lawyer, because I do :-)

see you in court hot shot

……………………………………………………..

Sure enough, within a few days we received a formal warning from their lawyer, Kim McLeod of AJ Park Ltd, claiming that we were breaching his client’s copyright by having photos on our website that they owned the copyright to. The letter demanded we pay the legal bill thus far (4 figures $$) and remove all such content immediately or face High Court action.

SKG responded that our advertisers believed the images they had submitted to us for listing belonged to them and that we were happy to rely on their assurance.

AJ Park Ltd then hired a private investigation firm to show up at every address our business has been associated with (5 in total) and bang on doors, hassle residents and neighbours, telling them all they were looking for the owner of SKG and that they had Court papers to serve on him. This was obviously the first part of their harassment strategy, as I had passed flatmates, neighbours and business partners all phoning me to ask me what I was “in trouble for”. Their investigator from (ICIL Ltd) eventually (after at least a week of harassing people at my other addresses) gained illegal access into my apartment building in the City and left the Court Docs setting outside my door.

These documents were a Statement of Claim from NZG claiming over $200,000 for “copyright breach” and a few other things which the Court never took seriously.

It is important to note here that AJ Park Ltd describe themselves on their website as “Zealand’s leading specialist IP law firm”. Kim McLeod, the lead Counsel and person signing all the AJ Park docs is described on their website as follows: “Kim first joined A J Park in 1987 and has been a partner in our Auckland office since 2002. Kim is an intellectual property litigation and enforcement specialist.…Kim leads the intellectual property litigation team in our Auckland office.”

SKG were required to then submit a Statement of Defence and engage in Court proceedings. We applied to represent ourselves and then had to read over around 50 pages of documents submitted by AJ Park/ Kim McLeod, research the claims they were making in terms of NZ Commercial Law, then produce formal replies to each of their submissions (using High Court rules which we also had to research), then show up at the High Court for 2 hearings. All told, around 100 hours plus of our time, dragged over 5 months. During this whole process it was almost impossible for SKG to promote its new website and sign up new advertisers, as we were facing the possibility of a $200,000 law suit and bankruptcy if NZG won the case – for the duration of this law suit, NZG were successful in almost shutting down our website and tying up myself, the manager of SKG from document to document & week to week.

SKG made it clear in our original Statement of Defence and in all 6 of our subsequent court memos that we would be relying on the fact that our advertisers had all paid for the photos they submitted to our website and has all given us their formal assurance that they owned the copyright to those photos, and not NZG.

The Judge who initially heard our case (in the first hearing- Justice Lang) , seemed to very quickly pick up on what was going on here and firstly told NZG off for the email they had sent me above- then instructed them to go away and detail all photos they thought were a copyright breach and submit them to both myself and the Court. Despite almost daily requests from myself for details on which photos they were concerned about, NZG had never specifically identified them. Judge Lang seemed to suggest that he understood this whole case was somewhat suspect and gave both parties instruction and declared he would schedule the next hearing “at a later date to allow more time ….and try and resolve at minimal expense to both parties”.

The next hearing scheduled by Justice Lang was heard by Associate Judge Sargisson at the later time set down. Unfortunately, Judge Sargisson showed very little interest in this legal case between two purveyors of online sex and declared within minutes of the hearing that she had “to be somewhere else” & the whole thing was over within minutes. This was unfortunate as Associate Judge Sargisson seemed to miss then fact that NZG had not complied with Justice Lang’s instruction and had still not identified any photos of concern to them. I would presume that at 3pm in the afternoon, Associate Judge Sargisson was probably racing off to pick up the kids from Auckland Grammar in the range Rover or late for a facial treatment perhaps- but regardless, she missed the failure by NZG to comply with Justice Lang’s instruction, nor did she allow the extra time Justice Lang had wisely suggested we have in Court on the second hearing. Associate Judge Sargisson instead cut me off in mid-sentence and set down another date for the case to go ahead- given we had agreed on anything. That set in motion a further 3 months of submissions, stretching right through Xmas and NY’s break. I had a fantastic Xmas and NY’s break reading over the court docs Kim McLeod submitted 2 or 3 days before Xmas and wondering if I would be bankrupt in the NY with a $200,000 court ruling against me. I wonder what the honourable Associate Judge Sargisson did with her Xmas break?

Associate Judge Sargisson had ignored both Justice Lang’s decision to allow more time to go over this case as well as the failure by NZG to follow the instruction he had given in regards identifying images & set down future dates in February for the case to go forth. This case then dragged on through Xmas and NY’s with numerous more documents and submissions drafted, served and replied to in anticipation of the case being heard in full and then decided on.

It was one night in late January when I decided I should actually read the NZ Copyright Act to prepare for the final hearing. After just 5 minutes reading I came across section 21 which seemed to state quite clearly that any person who paid for photos would own the “first right of ownership” over those photos and that those rights could not be contracted away from them without consideration. I submitted another memo to the High Court detailing/ quoting this section of the copyright act and stressing again that NZG had still not identified any images of concern. I had emails from almost every girl on the website by that stage all stating clearly that they had purchased their photos and given me permission to use them.

NZG withdrew their law suit within a few days of this submission by me. The last legal bill I had received from them was for just over $14,000, but could have risen to in access of $20,000 given the documentation submitted by AJ Park since that last bill/indication. No reason was given for the withdrawal and Associate Judge Sargisson then took around 3 weeks to formally notify myself that the case had indeed been dropped (again, no reason given).

The obvious- how could a self-declared “expert” on IP law not be aware of section 21 of the Copyright Act? The very piece of legislation he says he is a specialist in? How could this lawyer instruct his client to go ahead and spend $20,000 on legal fees, knowing full well section 21 would pretty much guarantee failure? And how could a High Court Judge miss the numerous emails and statements I submitted showing girls had all given their permission and paid for the photos they provided, and also apparently be totally unaware of Section 21 of the Copyright Act? Perhaps it is not her place to spot holes in cases before they are fully heard, but I cannot help but wonder if she may have made some better decisions if she had of actually stayed for the time Justice Lang had allocated and read over my submissions and not had to race off to “something more important”

I immediately drafted up an estimate of the costs I had endured and the time I had wasted preparing for this rubbish law suit and submitted that to Associate Judge Sargisson, requesting she order NZG compensate me for 100 odd hours at my standard rate of $100/ hour (the rate I charge out for my own work- work I could not do for at least 100 hours over the past 5 months). I did not claim for the stress, harassment, and fact I could not work on the business while it was being held up in her Court etc.

Associate Judge Sargisson (in her infinite wisdom) acknowledged that the case had been dropped by NZG without any apparent reason being given, and that costs would therefore normally be awarded by default to a defendant in such circumstances, but decided however that I would not be awarded a cent for my time and expense on the basis that I was representing myself anyway and that some of my submissions to the Court were not of the high standard she was used to (or something along those lines). Not one cent was awarded in my favour.

(As a side note- once the law suit was dropped by NZG, we had a large number of girls pull out of our site stating to us that NZG was threatening to remove them from their site if they were seen to be supporting us- we got the Commerce Commission onto that and it seems to have stopped now- Mr Greenslade’s next strategy was to email 14,500 odd industry people and tell them I was a convicted criminal who had done time in jail for drugs and violence charges - those false & defamatory statements will now form part of defamation lawsuit. This guy Mr Greenslade made his intentions clear above in regards his phoney law suit, and has since tried other equally unethical strategies to ward off any healthy competition. His track record speaks for itself and there should be no doubt he is a highly unethical person prepared to do anything to maintain his outrageous pricing on his website. Similar complaints can be found from other escort website owners who feel they have been harassed and bullied as we have been).

Conclusions and Comments

To most observers, it would be very clear that what we had here was a clear case of a bullying, larger industry player -being upset by new competition to the market they have a strangle hold on – hiring a less than ethical “IP expert” lawyer to bring a seriously flawed (if not outright negligent in terms of his legal advice) law suit before the High Court, designed purely (and as even stated in Robin Greenslade’s threatening email) to “drag” a smaller competitor or incumbent “through the High Court” because they have “lots of money” and the smaller player probably does not. Kim McLeod of AJ Park and NZG were successfully able to “drag” myself through the High Court and drag proceedings on for a total of around 5 months, right under the very nose of Associate Judge Sargisson, on the basis mostly of a copyright issue which expressly contradicted actual copyright law, then ditch the case suddenly without reason, having wasted 5 months of my time, put off competition to their market for a further 5 months, and wasted an estimated $40,000 of court resources with the 15 court submissions, 2 hearings, filing, court staff etc.

And yet Associate Judge Sargisson didn’t think it appropriate to award a cent in the defendant’s favour- sending a clear message to any unethical lawyers or “IP Experts” such as Kim McLeod, that the Court will tolerate rubbish law suits with no basis, designed simply with the objective of attacking your competition and scaring them off or delaying them from competing with you.

I would suggest that we need judges who do not have “more important things to do” and actually take the time to read over submissions and evidence (even if not quite to their high standards) and be both smart enough and motivated enough to sniff out phoney law suits – or at least award costs to the defendant as a means of warning off other cases with similar unethical and anti-competitive intentions.

Associate Judge Sargisson has instead sent a message to Kim McLeod and companies like NZG that the High Court will not punish you if you wish to use them as a tool of anti-competitive behaviour and in doing so leaves the door wide open (with a big Welcome mat) for such clowns to abuse the tax payer funded commercial law system via the High Court.

Associate Judge Sargisson- asleep at the wheel, with “better things to do”? You can decide, but in the least be warned of lawyers like Kim McLeod who would seemingly either a) never have read the legislation he says he is an expert in or b) give clients the wrong advice and cost them $20,000 in legal fees on a doomed law suit, or c) and worse even still is willing to guide a client on how to use the Courts he has a duty of Candour towards as a tool for screwing your competition and wasting tax payers money. Either way, I believe Kim McLeod of AJ Park comes out of this scenario looking every bit the stereotypical lawyer that is the subject of jokes and ridicule Wold Wide- either completely unethical or completely negligent in terms of his expertise. And if this guy is smart enough to take our judges and High Court system for a ride- then no doubt others are doing it to- wasting tax payers money and being let off Scott free by our judges.

Well done High Court of Auckland and Justice Sargisson – let’s hope for the sake of tax payers that you don’t have “something more important to do” next time this creep “drags” another “Copyright” case in front you.

Details of other cases and situations in which the ethics of Kim McLeod of AJ Park are bought into question can be found below. We would also welcome any case links where it appears our Judges are asleep at the wheel and more worried about collecting their kids from the private school in the Range Rover instead of protecting tax payers from these types of rorts, as they should be.

www.nzx.com/news/3695481/Raid-over-copyright-allegations-criticised

http://scambusters.co.nz/forum/viewtopic.php?f=9&t=5366

Court Documents here:

http://www.sexykiwigirls.co.nz/featured-articles/kim-mcleod-lawyer-ajpark-escorts-sex-industry-claim.html

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