The case involved two videos imported from the United States by Living Word Distributors Limited. The videos were titled Gay Rights/Special Rights: Inside the Homosexual Agenda and AIDS: What You Haven't Been Told. The videos opposed awarding equal rights to gay, lesbian, bisexual and transgendered individuals, and blamed homosexuality for the spread of HIV and AIDS.
The Office of Film and Literature Classification classified the videos as R18. That classification was challenged by the Wellington-based Human Rights Action Group, which sought to have the videos banned.
The Film and Literature Board of Review classified the videos as objectionable, reasoning that they dealt with 'matters such as sex' (in the form of sexual orientation and sexual behaviour) and represented particular classes of persons as inferior to others by reason of a prohibited ground for discrimination.
Living Word Distributors Limited appealed to the High Court, which upheld the legal process followed by the Board. The distributor then appealed the High Court decision to the Court of Appeal.
The Court of Appeal determined that the Classification Office only has jurisdiction over publications that fit through one of the five subject matter gateways of sex, horror, crime, cruelty, and violence, which were defined as activities rather than mere expressions of opinion or attitude. For example, matters such as sex have to show sexual activity rather than just a sexualised pose.
The Classification Office cannot use any of the criteria listed in section 3(3) of the Act to expand the scope of the gateways.
The Court of Appeal considered that the subject matter provision was intended to limit the reach of censorship laws to activities involving sex, horror, crime, cruelty or violence. It called this the 'subject matter gateway'. The decision threw doubt on the ability of censorship authorities to classify some types of material that did not depict activity but were likely to be injurious to the public good.
As a result of this decision, in 2005 Parliament amended the Films, Videos, and Publications Classificatin Act to permit the Classification Office to restrict some publications which do not fit into the gateway defined by the Court of Appeal. It also redefined matters of sex in section 3(1) to include visual images of children and young persons who were fully or partially nude. Other implications of the decision were changes to the Crimes Act to cover secret filming of people (eg in swimming pool changing rooms).