Fairfax looking down the barrel of millions in court costs after telling Elaine Stead to ‘bugger off’

A decision to bluntly reject Elaine Stead’s settlement offers in the Joe Aston defamation case is now likely to cost Nine well over $2 million.

Journalist Joe Aston leaving Federal Court with his lawyer Sandy Dawson in December.

Nine Entertainment could have settled Elaine Stead’s defamation claim against Joe Aston for as little as $140,000 plus costs early last year, but instead told her to “bugger off” three times, her lawyer has told the Federal Court.

Instead Fairfax, the Nine-owned entity named in the complaint, will be forced to pay double that figure, plus their portion of the costs which could run well beyond $2m depending on how Justice Michael Lee decides to apportion costs in the matter.

If Dr Stead is awarded all of her costs, as her lawyer Sue Chrysanthou is arguing should be the case, Fairfax’s total costs including the payout are likely to be in the order of $2.5m at least.

Ms Chrysanthou told the court Dr Stead’s costs ran to $1.1m, and Justice Lee said “you’d expect” Fairfax’s costs to be even greater.

Once the $280,000 judgment, plus interest is factored in, the sum would sit at about $2.5m.

Dr Stead, a former Blue Sky executive who last week was awarded $280,000 in ordinary and aggravated damages relating to two articles published in The Australian Financial Review and a tweet penned by Aston, made two offers to settle the matter in April last year. Dr Stead was also the former manager of South Australia’s $50 million venture capital fund as a delegate of Blue Sky.

The first offer, for $190,000 plus legal costs, was rejected within a day, and a follow-up offer with the amount reduced to $140,000 plus costs and an apology, was also rejected the day after it was made, the Court heard.

In arguing that Dr Stead should have all of her costs covered by Fairfax in the matter, Ms Chrysanthou said that following her three attempts to settle the matter, she received a “bugger off letter’’ in response each time.

Ms Chrysanthou also said that the AFR had put out a “highly misleading” press release following last week’s judgment, and had published an article almost every day since the trial ended, in a “petulant campaign of an unsuccessful party, riddled with errors’’.

Former Blue Sky executive Elaine Stead enters the Federal Court in Sydney, during her defamation case against the AFR.

Fairfax has removed Aston’s articles from the internet since Justice Lee ruled on the case last week, however his tweet, which now does not link to any articles, remains.

Justice Michael Lee laid out the timeline of the matter before it made it to court in December.

In late 2019 Dr Stead asked Fairfax to remove the articles from the internet, pay her legal costs and publish an apology.

Fairfax refused to do so and said it would “vigorously’’ defend the allegation that Aston had defamed Dr Stead.

In April the following year Dr Stead offered to settle for $190,000, the removal of the matters from the internet and costs - forgoing the apology.

That offer, and a subsequent offer to settle for $140,000 plus an apology a few days later, was rejected almost immediately by Fairfax, the Court heard.

In early November 2020 Fairfax came back with its own offer, of $200,000 inclusive of costs, and the publication of a clarification.

In mid-November Dr Stead countered with an offer to settle for $650,000, no order as to costs, an apology and the removal of the matters from the internet.

Fairfax came back with its own counter offer, upping the figure to $250,000.

Ms Chrysanthou said Dr Stead deserved all of her costs to be met, due to the “overwhelming victory in her favour’’.

“Costs should follow the event,’’ Ms Chrysanthou said, adding that Fairfax had made no attempt to expedite the process.

“What we had, was, to put it colloquially, every time we tried to settle, a ‘bugger-off’ letter, three times,’’ she said.

Ms Chrysanthou said there were “a lot of leaps’’ in the press release Fairfax put out following Justice Lee’s judgment in Dr Stead’s favour.

“There’s a reference to class actions (against Blue Sky) in paragraph one. My understanding is none of those have actually been commenced or filed,’’ she said.

“There’s a quote from your honour’s judgment about how impressive Mr Aston was ...

“Then there’s an assertion that the damages awarded are low compared to many other judgments in this area.’’

Ms Chrysanthou said there was also a “highly misleading” statement that the court had already granted leave to appeal.

“There's been an article I think every day, if not more than one article every day, in the AFR since your honour’s judgment, including yesterday.’’

The judge agreed that there was a factual error in one of those articles.

Justice Lee said both sides had taken a “conscientious” approach to the legal process and his determination would turn on whether rejecting the $190,000 offer was reasonable.

Justice Lee will deliver his judgment on costs on Monday.