Venture capitalist Elaine Stead targeted by AFR’s Joe Aston over gender, Federal Court hears

Federal court told AFR columnist ignored Elaine Stead’s ‘remarkable’ reputation and targeted her because she was a woman.

Dr Elaine Stead, formerly a director of Blue Sky Venture Capital, is suing Australian Financial Review columnist Joe Aston for defamation.

Financial Review columnist Joe Aston’s claim that former Blue Sky director Dr Elaine Stead was a “prodigious destroyer of capital’’ and invested in “peanut start-ups’’ ignored her “remarkable” reputation and track record of success, the Federal Court has heard.

Dr Stead, who was also previously the manager of the South Australian Venture Capital Fund, is suing Aston for defamation over a series of columns which she claims made her look “reckless” and “stupid”.

In opening submissions in the Federal Court on Tuesday, Sue Chrysanthou SC, argued that Dr Stead was a “highly educated”, well-respected venture capital investor, who had a good track record.

Mr Aston’s columns, which Dr Stead’s statement of claim says made her out to look “cretinously stupid’’, were “highly offensive and damaging’’ Ms Chrysanthou said.

“The hurt that she’s suffered your honour will find distressing to hear,’’ Ms Chrysanthou said.

Ms Chrysanthou said there was no expert evidence tendered in Mr Aston’s defence filed to date to make the case that Dr Stead’s track record was poor. Instead there was a “feeble attempt’’ to list a number of companies which didn’t perform well, she said.

Fairfax columnist Joe Aston speaking at the Sydney Institute.

Ms Chrysanthou said investors such as Atlassian co-founder Mike Cannon-Brookes had invested in Shoes of Prey – one of the companies which Mr Aston characterised as a “peanut start-up”, and that at the time of that investment by Blue Sky, it was performing well and had good prospects.

Dr Stead made successful investments in companies such as Hatchtech and Pet Circle, Ms Chrysanthou said, and won back to back Australian Venture Capital Association (AVCAL) awards in 2016 and 2017 for those investments.

Dr Stead was also not the sole decision maker in Blue Sky’s investment decisions, the court heard, with an investment committee needing to make an unanimous decision to invest.

Ms Chrysanthou told the Court that there had been “no such personal attacks” on the men who were previously on the Blue Sky board.

“We say that Mr Aston targeted my client because she is a woman,’’ Ms Chrysanthou said, adding he used “regrettable terms’’ to refer to her.

The series of articles had caused “significant and permanent damage’’ and Ms Chrysanthou argued that the maximum possible defamation payout, of $421,000 without aggravation, should be in play.

Nine will also rely on “honest opinion” as a defence.

Dr Elaine Stead at her former office at Blue Sky in Brisbane. PICTURE: Lyndon Mechielsen.

Mr Aston’s lawyers are yet to address the Court.

In preparing its defence, Nine applied for, and was granted access to a wide range of documents, including “all board papers and minutes, financial statements and reports and/or accounts sent to or made available to Blue Sky’’ before August 1, 2019 relating to nine businesses, including the now-shuttered Shoes of Prey.

The Court has also ordered that Blue Sky’s internal ruminations on a Glaucus Research report, which was released in early 2018 and argued that Blue Sky had massively overvalued its portfolio, be handed over to Aston’s legal team.

The request included “all board agendas, papers and minutes referring to: the report issued by Glaucus Research Group in about March 2018 in relation to Blue Sky, including (but not limited to) Blue Sky’s written responses to that report and the rebuttal report issued by Glaucus Research Group in about April 2018’’.

The report issued by Glaucus caused a precipitous fall in the Blue Sky share price. Having once topped $14.60, it was down to less than $1 within the year – with the result that the business eventually failed and was placed in receivership by creditor Oaktree Capital Management in May last year. The matter is scheduled to continue until December 14.