Aston defamation trial: Stead tweets caused concern at Blue Sky

The high-profile venture capital investor this week told a court she felt targeted and “mocked” by an AFR columnist, particularly after he went after her social media postings.

Elaine Stead a former director with Blue Sky Venture Capital. Picture: Lyndon Mechielsen

Elaine Stead’s errant tweets were cause for concern among senior Blue Sky executives after allegations of impropriety were flung at the funds manager by short sellers, a court has heard in a high-profile defamation case.

Dr Stead alleges Australian Financial Review columnist Joe Aston defamed her in two columns he published in February and October last year.

The high-profile venture capital investor and former Blue Sky executive director this week told the court she felt targeted and “mocked” by Aston, particularly after he went after her social media postings.

Mr Aston, in one of his columns, said Dr Stead “tweeting banalities such as ‘Go to bed Lainey, you have a 6am flight’ ” was “riveting”.

“That feeling when your first coffee is bad. Real bad,” Dr Stead said in another tweet referred to by Mr Aston.

The court heard on Friday that Dr Stead had been told to cease using Twitter.

Nine’s Lawyer Sandy Dawson SC put it to her that she had been warned by Blue Sky chief Kim Morison that her tweeting was “bringing unwanted attention to Blue Sky” while the business was reeling from short sellers’ allegations.

Dr Stead agreed with that.

On Thursday Dr Stead accepted that her social media postings were likely to be scrutinised by the media.

In mid-2018 short seller Glaucus Research published allegations that Blue Sky had overvalued its assets under management by almost $3.5bn.

Glaucus also alleged Blue Sky had misrepresented the performance of its investments and gouged investors with high fees.

Following the publication of the report, Blue Sky’s share price crashed, and the company was eventually placed in administration and delisted from the ASX.

Dr Stead agreed senior management at Blue Sky had been frustrated by her tweeting.

The court heard Dr Stead had been so aggrieved by the “heated” reprimand she received from Mr Morison that she had engaged lawyers to assist her in writing a complaint.

It was put to Dr Stead by Mr Dawson that she was put forward to be “the fall guy” by senior Blue Sky figures in the fight with Glaucus.

“I think I was being polite by calling it senior people. It was one person. It was Kim Morison,” Dr Stead said.

Dr Stead said before the publication of her social media postings she “didn’t think it was of general interest”.

“When he (Mr Morison) asked me to stop I felt that was fair enough,” she said.

However, when Dr Stead was asked when she had “put the keyboard away”, she said she had only stopped for a matter of months.

“The Easter long weekend of that year (2018) is when we put it away, to use your term, and late May was when I tweeted those tweets,” she said.

Questioning also focused on Mr Aston’s noting of Dr Stead’s resignation from the board.

“It would be unfortunate, wouldn’t it, if there were to be an impression in the market that you had resigned in the face of the Glaucus allegations?” Mr Dawson asked.

“Yes,” Dr Stead responded.

“Did you want Blue Sky to take some action to correct that impression you believed in the public domain about your resignation?” Mr Dawson asked.

“No,” Dr Stead responded.

The court heard following the publication of the Glaucus report, tensions had escalated at Blue Sky so much so that Dr Stead had contemplated resigning, including drafting an email which she did not send.

The second half of the day focused on the wording of the articles, with Nine’s lawyers arguing they should be seen as opinion.

“There’s a distinction between defamatory communication and vulgar abuse. Its defamatory quality is very low,” Mr Dawson said.

“It’s clearly meant to be a witty way of dealing with the issue.”

Nine’s lawyers abandoned a truth defence in October and are defending the case on the basis of “honest opinion”.

Dr Stead’s barrister, Sue Chrysanthou, SC, told the Court her client had to live with the consequences of “a poorly written article”.