(2-part post):
First point:
If your friend (or her daughter) made the request for the computer artwork on the understanding that they'd pay your nephew for his work, then they entered into a contract to make such payment. If no such payment was made, they've broken the contract and (unless they now make payment) your nephew has the right to sue them.
That first paragraph might not be directly relevant to your question but the fact that your friend (or her daughter) owe your nephew money could be a useful bargaining point if they seek to get money from him.
Second point:
An analogy might help here. Anyone is free to photograph any other person (except in very restricted circumstances which aren't relevant here) if the photographer is in a public place (or anywhere else where they have permission to take photographs). So, for example, a press photographer can take pictures of celebrities, or demonstrators in Trafalgar Square, irrespective of whether the people are happy with such actions. Further, the press photographer can publish those photographs in his newspaper, on the newspaper's website or in the window of the newspaper office without any payment or restrictions. He can also sell the images to, say, the manufacturer of 'Woofy' dog food, without having to make any payment to the people in the photographs. But if that manufacturer wishes to use one of the celebrity photographs to advertise 'Woofy' he would be unwise to do so without obtaining a 'model consent' from the person in the photograph. The celebrity could charge for providing such consent (or, of course, refuse to grant it). So, if the advert was published without the celebrity's consent, the celebrity could sue to get the money they'd otherwise have been entitled to.