Former Blue Sky director Elaine Stead furious after Fairfax dropped truth defence in Joe Aston defamation case

Dr Elaine Stead says Fairfax dropping its truth defence in her Joe Aston defamation suit denied her the chance to prove his claims were not true.

Dr Elaine Stead, formerly of Blue Sky Venture Capital.

Former Blue Sky director Elaine Stead said she was “very angry” when Fairfax dropped its truth defence in her defamation case against columnist Joe Aston, because it denied her the chance to prove his claims about her were incorrect, the Federal Court has heard.

Dr Stead is suing The Australian Financial Review columnist Joe Aston and his employer Fairfax, now Nine Entertainment Co., over a series of articles which she says made her look “reckless” and “stupid’’.

Fairfax’s original defence was going to rely on truth as well as “honest opinion”, however the truth defence was dropped in October.

Dr Stead said she felt relief when the truth defence was dropped, but she believed that Fairfax’s explanation, that it didn’t want to inconvenience the court and to limit costs in the matter, was “disingenuous’’.

“Their justification … was claimed to be that it would be an inconvenience to the court because of the volume of documents or expense to prosecute that particular defence,’’ Dr Stead told the Court.

“But, this happened … a month before the trial was set to start.

“Secondly, I know how many documents they sought to subpoena from various different parties to prove their truth defence and the costs that had already been expended.

“I had to go through every single one of those almost 13,000 documents myself, and I know that there was nothing to support their defence in those documents.

“So I felt like these reasons were disingenuous.

“If they felt like they had a strong honest opinion defence, I don’t understand why that decision wasn’t made much earlier in the process.’’

Court records show that documents sought by the defence included the financial statements of several of Blue Sky’s investee companies, such as online wine retailer Vinomofo and the now-defunct Shoes of Prey.

Vinomofo chief executive Justin Dry.

Dr Stead said she was “livid’’ that despite Fairfax having dropped the truth defence, it was maintaining that the imputations claimed were “substantially true’’.

She said she felt like Fairfax was “trying to have their cake and eat it too’’.

She said one of the reasons she took the matter to court, was that she knew she would be able to “defend any such truth defence’’.

“I feel like that has been taken away from me, despite having spent a lot of money, and a lot of people’s time and resources to prepare for that.

“I feel like my right to prove that the things that were said about me were not true, has been taken away.’’

Dr Stead, responding to one of Aston’s articles which described her as “cretinously stupid’’ and that she “wilfully destroyed capital’’ said she was “horrified” by the former and felt “terror” when she read the latter.

Dr Stead said she felt “blind panic” when she read a tweet from Aston, which copied in South Australian Premier Steven Marshall, because she felt like it was a “direct request on the Premier of South Australia to call for my sacking’’ from her role managing the South Australian Venture Capital Fund.

The tweet included the quote “WTF Mr Premier”, the court heard.

Sandy Dawson SC, for the defence, showed the court a video of Dr Stead in which she said in an interview “we don’t expect any of our companies to fail’’ and said that Blue Sky was targeting a 30 per cent year on year return.

Dr Stead said she believed she miss-spoke when asked about her comments that she expected all of their companies to be successful.

Dr Stead agreed with Mr Dawson that she presented Blue Sky as having a different approach to some VC firms, in which it targeted later stage investments, aiming for a lower failure rate.

Blue Sky failed in May last year following an attack by short-seller Glaucus Research, which released a report claiming among other things that it had inflated its fees under management.

The matter continues.

Originally published as Former Blue Sky director Elaine Stead furious after Fairfax dropped truth defence in Joe Aston defamation case