Joe Aston takes to witness box in Elaine Stead defamation case
Court hears - at length - about Joe Aston’s social posts on hangovers, his feet, and Arnott’s biscuits. But he’s also taken to task about why he tagged SA Premier Steven Marshall.
The Australian Financial Review columnist Joe Aston was back in the witness box on Tuesday in a defamation case brought by venture capitalist Elaine Stead. Dr Stead, a former executive director with the now collapsed ASX-listed fund manager Blue Sky, alleges Aston defamed her in two Rear Window columns he published in February and October last year, as well as in a tweet. The hearing has now been adjourned for the day but you can catch up on the lively examination of Mr Aston in our coverage below. (All post times are AEDT)
4.24pm: ‘WTF, Mr Premier’
Ms Chrysanthou asked whether Aston had to provide any justification or evidence to any editor or legal advice before the column was published.
“If there’s any question and It’s asked of me I’ll provide it but I don’t remember that happening in this case,” Aston said.
Moving on to another article of Mr Aston’s where Dr Stead is called a “venture capital pyromaniac” and referenced the Shoe of Prey management fees, Ms Chrysanthou asked if it was fair to “suggest impropriety” in relation to $1.6m in fees.
Aston said he was suggesting impropriety in relation to the undrawn fund monies tipped into a bridge funding round, not the fees specifically.
“I think it’s established that the wording is imperfect...It could be better,” Aston said of his own writing - though he did not agree that the implication was “unfair.”
Further on in the article Aston outlines “shrewder” funds that were not taking part in the bridging round. Ms Chrysanthou again said Aston could not have known the motive for them not taking place as he did not contact them, but Aston said he was making a reasonable assumption.
Aston also refused to agree that his description of South Australia’s decision to employ Dr Stead at the state Venture Capital fund as “downright embarrassing” was “unfair” but said he realised it was offensive and would impact her reputation.
“I wrote it in order to express outrage,” Aston said.
Ms Chrysanthou noted that Aston tweeted the story and included SA Premier Steven Marshall’s Twitter handle, and suggested he wanted the Premier’s staff operating the account to see the story.
“We are talking about South Australia,” Aston joked, implying Steven Marshall operated the account personally.
Although conceding the story and tweet, also subject to the proceedings, was “highly offensive,” he denied it was done with the intention of shaming Dr Stead. This is despite it containing the phrase “WTF, Mr Premier?!”
“You knew, didn’t you, that people reading the twitter account wouldn’t necessarily read the article, and just see this?” Ms Chrysanthou asked.
“Well, the point of posting articles on Twitter is to get people to click on them,” Aston replied.
“You have to put something - you can’t just put a link in....The practice is to use some words from the article.”
“WTF Mr Premier wasn’t in the article,” Ms Chrysanthou said.
“No, evidently. You really have to compact it down with 180 characters,” Aston replied.
Ms Chrysanthou ended her questioning at that point and Mr Aston stoood down.
The case has adjourned with Aston set to return at 10.10am tomorrow morning.
3.53pm: ‘White girl photo op’ description qustioned
Ms Chrysanthou has returned to the interpretation of a private Instagram post of Dr Stead’s - sent to Aston by an anonymous source - where she suggests a crowdfunding campaign for funds to pay for a venture capital trip to Mongolia.
Aston maintains that the post, which he had mentioned in an article was serious. Ms Chrysanthou says it was clearly a joke.
Ms Chrysanthou asked Aston why he called the trip a “white girl photo op” in an article. “It’s an expression - the idea is cultural appropriation, the idea of white people, in her case a girl, going to a poor place in the world and getting a picture op with the eagles and the nomadic herders...and the yurts,” Aston said, confirming that his intention was to “mock” Dr Stead.
“The only reason you wrote this is because you were trying to find a way to ridicule her...It had nothing to do with any decision she made.
“You agree this wasn’t news,” Ms Chrysanthou said.
“News is an extremely ambiguous concept...It was column-worthy,” Aston said.
Ms Chrysanthou said the article was written not to inform but to “harm her reputation and upset her.”
“That’s not right,” Aston said.
3.38pm: ‘What do you mean by untrustworthy?’
Aston has returned to the witness box and Ms Chrysanthou has asked if Dr Stread “is untrustworthy as a venture capitalist” because management fees accrued from Shoes of Prey were yet to be returned to Blue Sky investors and likely never would be.
“Um, what do you mean by untrustworthy?” Aston asked.
“That she is not a person that can be relied upon to carry out her promises,” Ms Chrysanthou replied. “I think that means she is untrustworthy,” Aston answered.
Ms Chrysanthou said this made “no sense” given Dr Stead had no ultimate control over returning the management fees that were tipped into the bridging funding round because they were yet to be earned. Part of the management fees Blue Sky received from Shoes of Prey was paid five years in advance
“The option was should they be invested in the company or be paid for Blue Sky for management services,” Ms Chrysanthou said of the unearned management fees.
“Well, I now sit here and I can absolutely see your point but I didn’t know that when I wrote the piece,” Aston said.
“The reason you didn’t know is because you didn’t bother to ask my client,” Ms Chrysanthou responded.
Aston said fellow AFR colleague Jonathan Shapiro had engaged with Blue Sky at the time on this issue, and he had consulted with him to get it “right.”
3.21pm: ‘Not careless, but stupid’
Ms Chrysanthou has focused on Aston’s continued insistence that Blue Sky’s participation in the Shoes of Prey bridging round of funding was “inexplicable”.
“You didn’t have any information … from which you could draw the conclusion that the bridging round investment arose on the part of carelessness on the part of my client,” Ms Chrysanthou asked.
“No,” Aston replied, also agreeing that Shoes of Prey was not a “worthless” business at “the original point of investment by Blue Sky” in 2015.
But when asked whether the decision to invest came about because of carelessness, Aston said: “At the time I was starting to write about in 2018 and 2019, I certainly thought … the concept of it was a stupid idea,” before ultimately clarifying:
“Not carelessness, but it was a really stupid decision.”
Ms Chrysanthou began to suggest it was premature to claim that equity holders would not receive back management fees if Blue Sky emerges from liquidation - Aston had previously written this had not occured - but Justice Lee interjected to suggest it was “fantasyland” to think they might.
Ms Chrysanthou began asking Aston whether he believed such a situation was due to Dr Stead being untrustworthy, but Mr Dawson objected and Aston was absented from the room.
3.02pm: Shoes of Prey funding ‘almost inexplicable.
Aston continues to be quizzed on what made Vinomofo viable or unviable, and continued to define a business’s success by whether it meets internal rate of return target.
Ms Chrysanthou put it to Aston that a business achieved “success” when it made money for its investors, but Aston said this meant a business could be deemed as such if its investors made just one dollar.
Aston he did not believe Blue Sky was acting carelessly in investing in Vinomofo, clarifying to say that he only “strongly” disagreed with its decision to do so.
But when asked if the Shoes of Prey investment was due to carelessness, Aston said: “To be honest on the Shoes of Prey later bridging round, I think to me that one is almost inexplicable.”
2.44pm: Vinomofo would never deliver, says Aston
The hearing has resumed with Elaine Stead’s barrister Sue Chrysanthou continuing to question Aston’s knowledge of Blue Sky’s investments and whether when writing articles about companies and describing them as such, he considered them to be “unviable” from the first round of investments.
“I specifically referred to Vinomofo and Shoes of Prey,” Aston said.
“Vinomofo was just a business in my view that could never meet the growth targets that were set - but Shoes of Prey, as we’ve discussed at length, had different funding rounds and the one I wrote about was the last one,” Aston said.
“How would one know from the time of investment that it (growth targets) could not be met?” Ms Chrysanthou asked.
“A business by Vinomofo by its very structure is simply not going to compound,” Aston said, pointing to the lack of fixed costs of the wine delivery company.
Lachlan Moffet Gray 1.03pm: What does ‘unviable’ mean?
Ms Chrysanthou has returned to critiquing Aston’s opinion of Blue Sky’s investments, noting that calling these investments “unviable” implied that they were not suitable investments from the start. She also suggests Aston failed to acknowledge that others at Blue Sky besides Dr Stead had a hand in investment decisions.
Aston defended his reporting on Blue Sky’s investments, noting that investments in Thrive and Shoes of Prey are now worth nothing. He said he meant ‘unviable’ in the sense that they had no hope of delivering the returns that investors had been led to believe that they could expect from the company.
Meanwhile, Bronte Capital short seller John Hempton has responded to Ms Chrysanthou’s characterisation of his communications with Dr Stead as “harassment” on Twitter.
“The allegation that I wrote a series of harassing messages to Elaine Stead is defamatory and I wish that the lawyer who stated that would repeat it out of court,” Mr Hempton said.
“For the avoidance of doubt - when I messaged Elaine Stead I had no short position in Blue Sky.”
The allegation that I wrote a series of harassing messages to Elaine Stead is defamatory and I wish that the lawyer who stated that would repeat it out of court.
— John_Hempton (@John_Hempton) December 8, 2020
Lachlan Moffet Gray 12.44pm: ‘Have you ever posted anything banal?’
Ms Chrysanthou is firing back at Aston’s opinion that Dr Stead’s “banal” social media posts conveyed idiocy.
“Have you ever posted anything banal on Instagram, Mr Aston?” Ms Chrysanthou said listing off “pictures of food” “selfies” and posts “about how hungover you are”
“Yes, Certainly not while my company was in a trading halt ,” Aston said.
Ms Chrysanthou rebuked Aston for the remark before listing further “banal” posts of Aston’s including “fettuccine with meat” “pictures of your feet” “milkshakes” and “Arnott’s biscuits combined with chocolate” that are “delicious.”
Aston objected, saying he described the biscuits as a “crime against food”, something to which Justice Lee agreed.
Nine’s barrister Sandy Dawson said that although he is a descendant of William Arnott, the founder of Arnott’s biscuits, he wouldn’t take offence.
Ms Chrysanthou then tabled the Instagram photos and made Aston look at several of them.
Aston agreed that they were generally banal.
“What I want to suggest to you that a huge percentage of the population that use social media are purveyors of banality - including you,” Ms Chrysanthou said.
“To label someone cretinously stupid, or stupid or a cretin because of their social media posts is ridiculous.”
Aston said the difference was that Dr Stead’s banal posts were poorly judged in the context of Blue Sky going into liquidation and noted that people at Blue Sky were also vexed by her social media posts at the time.
Lachlan Moffet Gray 12.35pm: A joke in poor taste
Ms Chrysanthou has raised Aston’s communications with an anonymous “Source 2” and questioned whether he was an appropriate source given communications between him and Aston where Dr Stead is described by the source as “unemployable”, “friendless” and a “proper retard.”
Additionally the source said “Elaine Stead is just an idiot who thinks she is smart,” that she is “Swallowing pinot gris tonight, wondering whether to kill herself,” and that “ “She may describe herself as a scientist but she’s not smart”.
Aston said he took the source’s “negative” opinion of Dr Stead into account, but Ms Chrysanthou countered by mentioning a communication where Aston, responding to a post by Dr Stead’s mother being treated for brain cancer, told the source:”Elaine’s scan would show she doesn’t have a brain.”
Ms Chrysanthou asked what the message meant, and whether it was meant to be funny.
“It was a poor joke, I admit that,” Aston said, shifting in his seat.
“The punchline is that she doesn’t have a brain.
“At the time I thought it was amusing, but obviously in private messages read in court it doesn’t seem so humorous now.”
Lachlan Moffet Gray 12.21pm: Relying on John Hempton
Dr Stead’s barrister Sue Chrysanthou has continued to question the motives of Aston’s sources for his stories on Blue Sky, noting that some of his sources had short positions.
“Anyone’s short position I took into account, just as I took into account anyone’s long position,”Aston said, adding that only one source had a short position on Blue Sky.
Ms Chrysanthou said there was more than one as short seller John Hempton had a short position and was a source, but Aston said he only relied on a blog post by Mr Hempton for any information.
Ms Chrysanthou questioned why Aston would use information from Mr Hempton despite describing him as a “socially maladroit short seller” in a column due to his constant “hectoring” or Dr Stead on social media.
“Yes, I took it into account,” Aston said.
Justice Lee interjected to say he received an email from an individual at Bronte Capital, John Hempton’s fund, asking whether it could make responses to the court.
“It’s only the parties who have the ability to be represented,” Justice Lee said, acknowledging that sometime proceedings could refer to third parties not able to answer for themselves. Justice Lee however said he was very confident that counsels would behave ethically in relation to such parties.
Lachlan Moffet Gray 12.09pm: A question of motives
The hearing has resumed after a long adjournment to work out technical issues.
A video was played of Aston speaking at a Melbourne Press Club event in 2018 where he said some of the people he went after often became his sources, while others continued to be subjected to a “slow death” on the pages of the AFR.
Aston said he was referring to a specific incident regarding Eddie McGuire where a Melbourne Cup shirtfronting over a previous article resulted in a subsequent article.
It was put to Aston that he intended to put Dr Stead to “a slow death” because “she didn’t ring up and suck up to you like the other people you referred to.”
“I don’t think that’s fair,” he responded.
Dr Stead’s barrister Sue Chrysanthou SC was permitted to characterise Aston’s sources about Dr Stead as “men lurking in the shadows” and she questioned the reliability of them given they did not go on the record.
“It’s not like I only relied on these sources, as per my affidavit I collected information in many different ways,” Aston said.
“Everyone who is giving you information has a motive for handing it to you … and you choose to keep that in mind.”
“It’s not fair to suggest that just because someone is a confidential source that their motive has to be negative.”
Lachlan Moffet Gray 11.25am: ‘Men lurking in the shadows’
Ms Chrysanthou then asked Aston if his anonymous sources for his articles on Dr Stead were all men.
“Yes, I believe they are all men,” Aston said.
Ms Chrysanthou asked Aston if it occurred to him that the “attitude” displayed by some of these sources towards Dr Stead derived from her being a woman, and that some of the remarks made by them would not have been made had Dr Stead been a man.
“I’m not sure if it occurred to me or not,” Aston said.
Ms Chrysanthou clarified that all of these sources were in fact anonymous.
“Did it not concern you that these men lurking in the shadows making allegations about my client were not willing to go on the record?” Ms Chrysanthou asked.
Aston’s barrister Sandy Dawson SC made an objection and Aston was sent out of the room so the court could discuss the characterisation and substance of the question.
Lachlan Moffet Gray 11.13am: What is gossip?
Ms Chrysanthou suggested that Aston’s former description of himself as a “gossip columnist” still applied.
Aston said it was not totally accurate but said the label didn’t offend him. Ms Chrysanthou suggested that he was dodging the label because it would harm his honest opinion defence but Aston said he didn’t know what impact the label might have on his defence.
Ms Chysanthou questioned Aston on the nature of gossip, and the degree of truth attributed to information labelled as gossip. She asked Aston whether gossip could also be comment.
Aston said gossip was news, and not comment.
Lachlan Moffet Gray 11.08am: ‘Doomed to fail’
Ms Chrysanthou turned to Aston’s affidavit, where he claimed Shoes of Prey would likely never have made money, and suggested that Aston “pivoted” in his evidence yesterday by saying the last bridging round made it very clear the company wouldn’t last.
Furthermore, Ms Chrysanthou said Aston claimed yesterday that only Blue Sky invested in the bridging round of Shoes of Prey, although Greycroft also invested.
Additionally, Ms Chrysanthou said in an AFR article Aston wrote that “shrewd” fund managers had abandoned Shoes of Prey by the bridging round, despite knowing Greycroft was taking part.
Aston replied: “By the definition of their inclusion in this round, it brings their shrewdness into question,” denying he intended to imply that all other VC funds had abandoned Shoes of Prey.
“You didn’t sit there twisting it to make my client look as bad as possible?” Ms Chrysanthou asked.
“No, I didn’t think that was needed,” Aston said.
Lachlan Moffet Gray 10.59am: ‘Is Cannon-Brookes stupid?’
Aston was quizzed on his exact knowledge of Blue Sky’s investment funds and the origination of capital used in different investments Blue Sky made, including in collapsed retailer Shoes of Prey.
Ms Chrysanthou asked Aston if he considered other investors in Shoes of Prey like MLC, IFM, Blackbird and Mike Cannon-Brooks to be “stupid,” to which Aston said he didn’t. “Now BlueSky invested in late 2015 — in that round Greycroft also invested … any reason to think they are stupid?” Ms Chrysanthou asked.
“No,” Aston replied.
Ms Chrysanthou noted that US retailer Nordstrom was an investor in one round: “Do you think Nordstrom knows more about the sale of women’s shoes than you do, Mr Aston?”
“I suspect they do, yes,” Aston said.
Lachlan Moffet Gray 10.51am: Short sellers help the market
Ms Chrysanthou said of Blue Sky that a short selling report “which includes serious representation of dishonesty”. And when those “allegations were picked up and repeated by journalists such as Mr Aston over time” it impacts a company.
Justice Michael Lee cited the “efficient market hypothesis” and stated it was a common view that short sellers help a market function.
Lachlan Moffet Gray 10.46am: ‘Blue Sky thesis was accurate’
Ms Chrysanthou has asked whether Aston’s continual focus on Dr Stead after she left Blue Sky was vindictive and that “enough was enough”.
“My articles were responsive to continued public statements by your client. I was addressing — no, I obviously didn’t think enough was enough,” Aston said.
Shortly after this the court’s live stream muted for a time but upon resumption Ms Chrysanthou continued to question Aston’s reporting on Blue Sky, asking if he knew the Glaucus short seller report on the company was a “self-serving document” that a source told Aston contained “errors”.
Ms Chrysanthou said other AFR journalists wrote about the errors in the Glaucus report and that as a US based firm, the short seller had no obligation under Australian law to “check their facts.”
“They had no legal obligation, that’s right,” Aston said.
Ms Chrysanthou said that Aston mentioned Blue Sky’s alleged fraud in the witness box yesterday despite knowing the Glaucus report contained errors and implied Aston’s reporting hastened the decline of Blue Sky.
“I thought its overarching thesis was accurate and I think it was proven to be accurate,” Aston said.
Lachlan Moffet Gray 10.20am: ‘Stupid is as stupid does’
The hearing has begun and Joe Aston has returned to the witness box to be questioned by Elaine Stead’s barrister Sue Chrysanthou SC, following on from the evidence he gave yesterday.
Ms Chrysanthou asked Aston to look at his affidavit where he stated that Dr Stead’s time at CM Capital reflected poorly on her. Ms Chrysanthou said Aston had yesterday said Stead was “stupid” and expressed some contrition over writing about CM Capital’s liquidation in his columns in a way that could reflect on Dr Stead.
“I think I thought at the time with the amount of time I put into the CM capital issue, that is what I considered at the time very, very briefly,” Aston said.
Ms Chrysanthou suggested that the fact the column remains online and unedited means Aston’s regret is “disingenuous.”
Ms Chrysanthou then noted that despite not pleading truth to the imputation that Dr Stead is stupid in his affidavit, Aston called her stupid at times yesterday, “escalating” his evidence on the topic.
“I don’t see the issue … Stupid is as stupid does. Someone who repeatedly does stupid things is by definition stupid,” Aston said.
Ms Chrysanthou suggested that Aston “escalated” his evidence on Dr Stead’s stupidity because he knew the media would report on his evidence, humiliating her client.
“I’m here as the respondent to the proceedings, I’m not trying to do anything but answer questions,” Aston replied.
Justice Lee asked if Aston accepted that the use of the term “cretin” was offensive.
“Yes. I mean, your honour, the messages and the denial of any responsibility at all for what occurred at Blue Sky … the collapse of Blue Sky in 2018 was a major event in the Australian investment market and Dr Stead was the director of the company,” Aston said.
Lachlan Moffet Gray 10.00am: Doubling down
Elaine Stead’s defamation case against Australian Financial Review Rear Window columnist Joe Aston will resume shortly, with Aston set to appear in the witness box for a second day.
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 he published in February and October last year as well as in a tweet.
Mr 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” as well as referring to her as “stupid” and a “feminist cretin.”
Aston and his barrister Sandy Dawson dropped the truth defence to the defamation allegations in October and are relying on an “honest opinion” defence — namely that Aston honestly believes that Dr Stead is stupid and a bad venture capitalist.
In court yesterday Aston doubled down on everything he wrote about her, asserting that calling her and feminist writer Clemetine Ford “feminist cretins” was accurate and that he truly believed Dr Stead was stupid despite her academic qualifications due to her business activities and social media posts.
“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,” Aston said.
“Someone who does stupid things that many times repeatedly, I don’t see how you avoid the conclusion that they are a stupid person.”
Caroline Overington 9.55am: ‘What kind of columnist are you?’
“You describe yourself as a columnist; what kind of columnist are you?” inquired Elaine Stead’s barrister, Sue Chrysanthou SC, of Joe Aston.
“Not a very popular one,” he cheerfully replied.
It was a nice, light quip, one of several to punctuate the evidence being given at a Federal Court defamation trial involving The Australian Financial Review’s star columnist and the venture-capitalist. Read more.
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