Both were ‘feminist cretins’: Joe Aston takes to witness box in Elaine Stead defamation case
Joe Aston was on Monday cross-examined for the first time in the defamation case brought by venture capitalist Elaine Stead.
Joe Aston on Monday took the witness box for the first time in the defamation case brought by venture capitalist Elaine Stead. See how the day unfolded here.
Lachlan Moffet Gray 4.30pm: Couldn’t see the returns
Justice Lee asked Aston whether his opinion that some Blue Sky investments were “simply absurd” extended back to the first funding round of some of the companies.
“At the beginning I wouldn’t presume to claim that it was fatuousness, and to say it would definitely never make money,” Aston said.
“But I certainly would have confidence to say I couldn’t see a business like Shoes of Prey ... ever deliver the compound volume that Blue Sky said it would.”
The case was then adjourned until 10.15am on Tuesday, when Aston will return to give evidence.
Lachlan Moffet Gray 4.21pm: ‘I regret not having given it more thought’
Ms Chrysanthou said that as Aston asked a source “what other Elaine businesses have gone to shit?” while researching an article, he must have known there were some businesses that had succeeded.
Aston responded that the implication of the question was “that most of Elaine’s businesses have gone to shit” but did say he had little specific knowledge of Dr Stead’s professional history in venture capital going back to 2003.
Ms Chrysanthou said that Aston’s mention of Dr Stead’s previous workplace, CM Capital, going into liquidation was designed to “make my client look bad”.
Aston said this wasn’t the case but regretted that he may have communicated that sentiment.
“I regret not having given it more thought,” he said.
Ms Chrysanthou said the reason Aston did not investigate CM Capital thoroughly was because he sought only to display Dr Stead negatively and ignored all “positive” accomplishments by her.
“I didn’t have anything at my disposal that fit that [positive] description,” Aston said, but he did agree that he should not have implied she was “stupid at venture capital” without further investigating her time at CM Capital.
Ms Chrysanthou said it was unfair to describe Dr Stead as a “cretin” based on one year of her professional life in which she felt significant pressure.
Aston replied: “Again, I point to the conduct, the extraordinary conduct on social media juxtaposed what happened at Blue Sky — the meltdown, the allegations of wrongdoing and the performance values of fatuous investments.”
As an example, Aston said the Shoes of Prey investment was a “Cinderella” company and only Blue Sky put money into the company when it was “clearly dead.”
Lachlan Moffet Gray 4.03pm: Can’t pay mortgages with awards
Ms Chrysanthou asked Aston whether he knew that in his now abandoned truth defence, he did not plead that Dr Stead was stupid and a cretin.
Aston said that may have been the case, but he still held the opinion that Dr Stead was stupid.
“No, I don’t think a person of your client’s conduct, I don’t believe it’s ridiculous to assert they are stupid,” Aston said.
Ms Chrysanthou asserted that Aston never asked his sources about any successful investments Blue Sky had made, but Aston said he did but the outcome was “inconclusive”.
He also said that the report by short seller Glaucus on Blue Sky, that he relied upon for some of his columns, displayed internal Blue Sky reports, making it hard for the short seller to manipulate any positive investments Blue Sky may have made.
Ms Chrysanthou noted that Aston never mentioned the successful HatchTech investment in his articles and never mentioned Dr Stead’s two venture capital awards she received.
“There wasn’t a lot of positive information to find,” Aston said of the investments, adding that the rewards were not relevant.
“Her unit holders can’t pay their mortgages with the statutes she receives from her peers.”
However, Aston did concede that if he “had his time again” he may have referenced her prestigious academic accomplishments.
“I think I might have actually included that fact.”
Lachlan Moffet Gray 3.46pm: Needed a hug
In reference to a tweet Dr Stead sent out after Blue Sky was suspended from trading due to fraud allegations where she stated needed “a hug”, Aston said it was a safe assumption that it was in reference to Blue Sky’s troubles.
But even if it wasn’t, Aston said it was a stupid thing for a company director to tweet at that time.
“Whether or not it did, it was a stupid thing to do. I mean, what a thing to do,” he said.
Justice Lee asked Aston that if he accepted the Instagram post soliciting funds for Mongolia was a joke, would he had reacted differently in his columns about Dr Stead.
“I think if it was a joke, as you know I don’t accept, the proportionality of my response would change with relation to just merely someone going on social media to talk about how hard things are and how much humanity she’s felt from the sisterhood,” Aston said.
Aston also defended his comparison of Dr Stead to Steve Carrell’s character Brick Tamland from the Anchorman movie, saying although he said it to “be amusing,” he considered the comparison apt.
“That was the level of idiocy coming from these social media posts,” Aston said.
Justice Lee, who previously interjected to clarify Tamland featured in both Anchorman 1 and Anchorman 2, asked: “but you agree that that character is a gaping moron?”
Aston did agree.
Lachlan Moffet Gray 3.38pm: ‘It was the behaviour of a stupid person’
Ms Chrysanthou is now drilling down on Aston’s description of Dr Stead as a “venture capital pyromaniac”.
“It was obviously part of the larger thematic of the article. Fire was a theme,” Aston said.
“I certainly didn’t intend to suggest that Dr Stead was purposely setting fire to money.”
Ms Chrysanthou asked Aston if he thought Dr Stead was a “cretin” and “stupid” at the time he wrote his first article on her.
“Yes,” Aston replied more than once.
Justice Lee asked if he ever instructed his solicitors of this belief.
“I definitely believe I instructed them that I believed that she was stupid and that she behaved stupidly,” Aston replied.
“She was clearly not academically stupid, she had a PhD, but then her behaviour was patently stupid and that surprised me. But it was the behaviour of a stupid person.”
Ms Chrysanthou referred Aston to his affidavit where he said it was the “banality” of her Instagram posts that made her “appear” to be a cretin, and asked if he understood the difference between someone acting stupid and being stupid.
“Someone who does stupid things that many times repeatedly, I don’t see how you avoid the conclusion that they are a stupid person,” Aston said.
Ms Chrysanthou said outside of Dr Stead’s social media posts Aston, had no ground to assert Dr Stead was stupid.
“I don’t agree with that,” Aston said, referencing investments Blue Sky made.
Lachlan Moffet Gray 3.22pm: ‘No point in seeking answers’
Aston said it never occurred to him to contact Elaine Stead to clarify if the Instagram post was serious or not, or seek a right of reply as he didn’t consider it “necessary as a commentator.”
“In circumstances where she continued to maintain for example that Blue Sky collapsed through no wrongdoing of its own and her own continued rejection of responsibility I didn’t consider that any answers I got from her would be very useful,” Aston said.
He also continued to maintain that it was appropriate to report on a private Instagram post.
“It wasn’t private enough to not end up with me,” he said.
Justice Lee asked Aston why he couldn’t have linked Dr Stead and Clementine Ford by referring to their gender rather than their feminism.
“Again, it was a segue,” Aston said, conceding that the latter part of “feminist cretin” was insulting, when pushed on the issue by Ms Chrysanthou.
“The latter part was insulting,” he said, adding that the label “feminist” was not an insulting one.
Lachlan Moffet Gray 3.14pm: Both were feminists
Ms Chrysanthou asked Aston what he considered a “feminist” to be given he called Dr Stead a “feminist cretin” in an article.
Aston said he considered a feminist to be “someone who believes in gender equality” and considered Dr Stead to be one because she used the word “staunch sister” which was feminist “language.”
Aston said he used the term because it was “a device with which to link the two subjects of the column,” the other being well-known feminist author Clemintine Ford, who was also asking for money online.
“It happened to be an accurate descriptor,” Aston added.
“That they were both feminists and they were both stupid?” Ms Chrysanthou asked.
“Uh, Yes,” Aston replied.
Lachlan Moffet Gray 3.10pm: ‘I don’t think it was a joke’
Aston has defended reporting on a private Instagram post of Elaine Stead’s — despite not being a follower of her private account — where she proposed a $5000 crowd-funding operation for a venture capital trip to Mongolia, with Aston saying it was in the public interest.
Justice Michael Lee and Ms Chrysanthou noted that the post appeared to be a joke and asked Aston whether he saw it as such.
“I didn’t think that it was a joke,” Aston said.
“Did you seriously think it was a solicitation of funds?” Justice Lee asked.
“Yes,” Aston replied.
Re-examining the picture, a selfie of Dr Stead where she claims to be broke and needs donations to go on a venture capital trip to Mongolia, Ms Chrysanthou asked: “Do you still maintain that you didn’t understand that it was a joke?”
“Yes,” Aston replied.
“Really?” responded Ms Chrysanthou, incredulously.
“It was inappropriate of you to call my client a cretin because of a personal Instagram post like this,” she said.
“I disagree,” Aston replied.
Lachlan Moffet Gray 3.01pm: ‘Her conduct was stupid’
Ms Chrysanthou is now quizzing Aston on his command of the English language, asking him if he considered a business which had been around for years and drew millions in revenue as a “start-up.”
Aston said he did, and then Ms Chrysanthou asked whether “peanut start-up” meant “worthless”.
Aston said it meant “silly” although in the context of business, a silly start-up could be considered worthless.
Aston said even though he called Elaine Stead’s investments in “peanut start-ups” “fatuous,” he never meant to cause her offence, said he was sorry and regretted Dr Stead’s feelings were hurt as “a by-product of a public interest debate.”
Aston said that although he called Dr Stead a “cretin” he did not consider her an “academically stupid person.”
“I considered that she made stupid investments, and I considered that her self delusion and social ineptitude was kind of so outstanding to me that it was almost a form of stupidity, or of cretinousness, if I’ve deployed that term correctly,” Aston said.
“Her behaviour, her conduct was stupid.”
Lachlan Moffet Gray 2.55pm: ‘Addressing an injustice’
Ms Chrysanthou asked Aston whether he gave a speech once describing himself as a “gossip columnist,” to which Aston said he did once seven years ago, but said the column has undergone change in the interim and also changes based on what he is writing about.
When asked whether his column expresses his views on the news of the day, Aston agreed it was “a large part of the column,” and agreed with Ms Chrysanthou when she said the social media posts of Dr Stead’s he wrote about was not news.
“So there was no news so to speak about Blue Sky or my client’s work for the SA Venture Capital fund that prompted either of those stories,” she asked.
“No,” Aston replied.
Aston denied he used “offensive” language to sell papers and said people generally have a right to privacy with the usual qualifications of calling out hypocrisy and self-delusion.
Ms Chrysanthou asked whether Aston targeted individuals over “months or years” in his column to which Aston said he did. Then she asked whether the individuals he targets die “a slow death at your hands on your page.”
Aston said continuing to write about an individual is “justified when I’m continuing to address an injustice.”
Lachlan Moffet Gray 2.43pm: ‘What kind of columnist am I?’
Ms Chrysanthou asked Aston what kind of columnist he was.
“Not a very popular one,” Aston laughed, insisting he didn’t know how well read Rear Window was or how it compared to other articles.
“I’m a columnist who is preoccupied very much with calling out wrongdoing and general misbehaviour - it’s, look,...but I have to say it’s quite a difficult question to answer because I don’t know how to self-identify myself.
“What kind of columnist am I? I’m lost,” Aston said before Justice Lee corrected him on his tone.
Aston then said he is a columnist with “leeway” to “target and address all types of corporate and political hypocrisy.”
Lachlan Moffet Gray 2.39pm: Risk v reward
Ms Chrysanthou has changed tack to ask Aston for his definition of a venture capitalist, which Aston described as an investor who makes typically riskier investments in companies with growth potentials, and is successful if they meet the promises they make.
Ms Chrysanthou then asked Aston whether Blue Sky could be judged on this basis given it never made specific promises.
“On the basis of the way we differentiated between target and promise, I think that’s fair to say,” Aston replied.
Ms Chrysanthou questioned whether a venture capitalist was a “failure” as a venture capitalist “merely because one fund they were involved with didn’t do well.”
Aston replied: “I think some of this is arguable, but I’m inclined to believe with you.”
Lachlan Moffet Gray 2.34pm: ‘It hasn’t failed’
Elaine Stead’s barrister Sue Chrysanthou SC has begun questioning Aston about his knowledge of HatchTech.
Mr Aston said he knew “it had been part realised by Blue Sky venture capital.
“It was a $1m investment and it had been part realised at an IRR (internal rate of return)...of 50 per cent, gross of fees,” Aston said.
Ms Chrysanthou asked Mr Aston whether Blue Sky’s investment in PetCircle not receiving a 30 per cent IRR target was indeed a failure when the IRR is only a target.
“I do accept that it hasn’t failed, but it has failed to perform adequately as targeted by the fund,” Aston said of the investment.
Aston said that he weighted the investments made by Blue Sky when making judgments of Blue Sky holistically.
“The largest failures were so large as to completely make irrelevant the small successes..the one success,” Aston said.
“If only one had failed, but many did.”
Aston also said that Blue Sky’s investment in Vinomofo was “absolutely” a failure due to its “failure to perform at the target” and the fact that Blue Sky’s $25m investment for 25 per cent of the company could be considered a failure as it is now only worth around $30m on a 12x EBITDA multiple.
But Aston said that multiple was “generous” given the lack of revenue growth at the company.
Lachlan Moffet Gray 2.22pm: Aston sworn in
Joe Aston has been sworn in as a Federal Court witness.
Nine’s barrister Sandy Dawson SC has begun by asking whether he wanted to correct anything in his affidavit.
Aston said he wanted to correct an assertion he made about not being able to find a single successful investment made by Blue Sky under direction from Elaine Stead.
“I knew there was one success, which was HatchTech,” Aston said.
Lachlan Moffet Gray 1.00pm: Lunch break
The court has adjourned for lunch. Aston is now due to appear in the witness box at 2.15pm.
Lachlan Moffet Gray 12.50pm: Whose money?
Elaine Stead’s barrister Sue Chrysanthou SC has taken the stand to assert Aston’s tweet about Dr Stead is defamatory.
“The fact that an allegation might be frankly unbelievable doesn’t mean it is not carried as a matter of ordinary meaning to the objective reader,” she said.
She dismissed the idea that if Aston or the AFR wanted to imply Dr Stead was purposefully losing the money of unit holders in Blue Sky, they would have come out and said so, arguing the court should not “impose knowledge on that reader on what the AFR is or what it is likely to do or not do”.
Justice Lee noted that Aston never made a distinction between capital and investors’ money in his articles, complicating how a reader might interpret her actions as described by him.
Lachlan Moffet Gray 12.27pm: ‘Nothing witty about it’
Justice Lee has said there was nothing “witty” about the phrase “venture capital pyromaniac”.
“I must say, I don’t think there was anything witty about it. Setting fire to other people’s money is a provocative phrase, which was used deliberately to draw attention to the article,” he said.
“When you say [the phrase was] witty, gossipy, entertaining whatever … that obviously is an important contextual matter to the extent that those descriptions are accurate to someone who [reads the article].
Justice Lee acknowledged Nine had a different view on the phrase.
“I hear the force of what you say but … I just don’t think it was distinguished in your submissions as much as possible on Friday, so I wanted to give you the opportunity to say what you wanted to say on it today.”
Lachlan Moffet Gray 12.18pm: Context matters
Nine barrister Sandy Dawson SC has continued to argue Aston’s Twitter comments on Elaine Stead’s appointment to South Australia’s government VC fund cannot be interpreted other than them saying ‘WTF someone as hopeless as this has been imposed on the South Australian fund, are you joking?’”
But Justice Lee said the tweet was in a “different category” to Aston’s columns about Dr Stead as they are “shorn of context”.
“The difficulty of the tweet, it seems to me, is that it doesn’t have any of the additional context you find in the second matter.”
Counsel for Nine disagreed, saying the tweet contained a link back to the AFR’s website, and was clearly referring to an article published on the site.
Lachlan Moffet Gray 12.09pm: Money ‘lost, wasted, burnt’
The court is considering the question of intent, in relation to Dr Stead’s involvement in Blue Sky’s capital losses, as described by Aston.
Mr Dawson denied that Aston’s description of Elaine Stead as a “venture capital pyromaniac” who “set fire to other people’s money” in a tweet did not imply she purposefully lost money of the unit holders in Blue Sky.
“It’s a metaphor — it’s a way of creating in the mind of the reader of money being lost, wasted, burnt,” he said, adding that it was “crazy” anyone would infer Aston meant she deliberately lost money.
“There’s no way that a reader could possibly take that from this tweet.”
Lachlan Moffet Gray 11.52am: Truth defence
Justice Lee has questioned whether Nine may have maintained its truth defence had a lower definition of recklessness been agreed on by the court.
“I didn’t come down in the last shower Mr Dawson,” Justice Lee told Nine barrister Sandy Dawson SC.
Lachlan Moffet Gray 11.40am: A question of intent
The case has resumed, with Justice Lee considering the differing definitions of recklessness, saying “something objectively reckless is quite a different thing from subjectively reckless.”
Questions of intent hinge on this differentiation.
Justice Lee said that subjective recklessness was a “lower” form of the term as it implied a non-purposeful action, and asked Nine barrister Sandy Dawson SC whether Nine would have maintained its truth defence “had a lower recklessness” meaning been plead. Mr Dawson confirmed Nine may have done so.
Nine’s barrister Sandy Dawson SC told the court Aston’s article made “a distinction between the wanton loss of money and the incompetent loss of money.”
Lachlan Moffet Gray 10.50am: Time to get a move on
Justice Lee has decided to move past issues of imputation for the time being, telling the court: “I don’t want Mr Aston hanging around like a stale bottle of beer waiting to be cross-examined.
“I think I want to get on with the evidence now,” he said.
The case has been adjourned until 11.15am.
Lachlan Moffet Gray 10.35am: What does ‘wanton’ mean?
Proceedings have begun with a discussion between Elaine Stead’s lawyer Sue Chrysanthou SC over the objective meanings of words used by Joe Aston in his columns.
Justice Michael Lee argued with Ms Chrysanthou over the objective meaning of “wantonly” when Aston in one column wrote Dr Stead “wantonly lost millions of dollars entrusted to her.”
Justice Lee argued “that reckless is substantially different from wantonly” in meaning while Ms Chrysanthou argued to the contrary, attempting to hand up documents supporting her position but Justice Lee chided her for not making an application to reopen her case last week.
“It wastes my time,” Justice Lee said, before granting leave to reopen and apologising for becoming irritated.
Lachlan Moffet Gray 10.00am: Aston to appear in witness box
Elaine Stead’s defamation case against Australian Financial Review Columnist Joe Aston will resume shortly, with Aston set to appear in the witness box for the first time.
Dr Stead, a former executive director with the now collapsed ASX-listed fund manager Blue Sky, alleges that the Nine-Fairfax columnist defamed her in two Rear Window columns published in February and October last year as well as in a tweet.
Aston’s columns stated Dr Stead “deliberately destroyed the capital of business ventures with which she was associated” and “wantonly lost millions of dollars entrusted to her”.
Dr Stead’s lawyer Sue Chrysanthou on Friday alleged the columns from Aston conveyed a range of defamatory meanings, including that she was “cretinously stupid” and “made stupid investments in two worthless companies” including Shoes of Prey.
Giving evidence last week Dr Stead told the court that Aston’s characterisation of her as “stupid’’ and as having made “fatuous” investments in “peanut start-ups” was something that “embarrassed and mortified’’ her.
She said she was particularly hurt by Aston’s claim that she was a “venture capital pyromaniac’’.
Fairfax’s original defence was going to rely on truth as well as “honest opinion”, but the truth defence was dropped shortly ahead of the trial.
Instead, Aston’s lawyer Sandy Dawson, SC said venturing those statements was “classic language of opinion”.
“It’s clearly meant to be a witty way of dealing with the issue,” Mr Dawson said.
Aston was scheduled to Friday Mr Dawson asked for this to be delayed until Monday as the columnist had only been released from two weeks of hotel quarantine.
Lachlan Moffet Gray 9.50am: Recap of the trial
In day one of the trial, in the Federal Court on Tuesday, Sue Chrysanthou SC’s opening submissions, argued that Elaine Stead was a “highly educated”, well-respected venture capital investor, who had a good track record.
On day two, Dr Stead told the court she had “suicidal thoughts” and took a month off to get psychological help after her mental health was “obliterated” by a column by Financial Review journalist Joe Aston.
The third session heard Dr Stead said 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.
On day four, Nine’s Lawyer Sandy Dawson SC said Dr 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.
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