FEDERAL COURT OF AUSTRALIA
Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15
File number: NSD 2153 of 2019 Judgment of: LEE J Date of judgment: 27 January 2021 Catchwords: DEFAMATION – proceeding against journalist and publisher of Australian Financial Review in respect of five publications – eight imputations alleged to have been conveyed – applicant a former director and head of venture capital at listed company – journalist published multiple articles critical of applicant and her conduct and calling her a feminist cretin – consideration of whether imputations conveyed – consideration of whether meanings not substantially different to pleaded imputations conveyed – where Court determined during course of hearing that certain imputations were conveyed – where defence of honest opinion pleaded pursuant to s 31 of Defamation Act 2005 (NSW) – consideration of relevant principles – whether matters an expression of opinion or statements of fact – whether opinions related to a matter of public interest – whether opinions based upon proper material – whether opinions honestly held – four defamatory imputations conveyed – defence of honest opinion not successful
DAMAGES – where applicant sought general damages for non-economic loss – where applicant sought aggravated damages – assessment of general damages – where alleged unjustifiable conduct said to support award of aggravated damages – consideration of principles concerning construction of s 35 of Defamation Act 2005 (NSW) – where circumstances of publication and conduct of proceeding relied upon as aggravating conduct – where journalist engaged in sustained campaign of offensive mockery and bullying of applicant – where defence of justification abandoned shortly prior to trial yet respondents did not concede truth could not be proved – circumstances relating to publication warrant award of aggravated damages
Legislation: Corporations Act 2001 (Cth) Ch 7, ss 761G, 761GA
Evidence Act 1995 (Cth) s 131
Federal Court of Australia Act 1976 (Cth) s 37P
Judiciary Act 1903 (Cth) s 79
Federal Court Rules 2001 (Cth) rr 16.02, 16.06, 16.08, 16.41
Defamation Act 1974 (NSW) s 40A
Defamation Act 2005 (NSW) ss 8, 25, 26, 31, Pt 4 Div 3, ss 34, 35, 37, 39, 40
Defamation Amendment Act 2020 (NSW) s 31
Defamation Practice Note (DEF-1)
Cases cited: Attrill v Christie [2007] NSWSC 1386
Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125; (2019) 271 FCR 632
Axon v Axon (1937) 59 CLR 395
Bauer Media Pty Ltd v Wilson (No 2) [2018] VSCA 154; (2018) 56 VR 674
Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183
Briginshaw v Briginshaw (1938) 60 CLR 336
Carolan v Fairfax Media Publications Pty Ltd (No 6) [2016] NSWSC 1091
Channel Seven Adelaide v Manock [2007] HCA 60; (2007) 232 CLR 245
Crampton v Nugawela (1996) 41 NSWLR 176
Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135
Feldman v Polaris Media Pty Ltd as trustee of The Polaris Media Trust trading as The Australian Jewish News (No 2) [2018] NSWSC 1035; (2018) Aust Torts Reports ¶82-395
Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171
Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165
Hayson v The Age Company Pty Ltd (No 3) [2020] FCA 1163
John Fairfax Publications Pty Ltd v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484
John Fairfax Publications Pty Ltd v O’Shane [2005] NSWCA 164; (2005) Aust Torts Reports ¶81-789
Jones v Dunkel (1959) 101 CLR 298
London Artists Ltd v Littler [1969] 2 QB 375
Nationwide News Pty Ltd v Rush [2020] FCAFC 115; (2020) 380 ALR 432
Oliver v Nine Network Australia Pty Ltd [2019] FCA 583
Rogers v Nationwide News Pty Ltd [2003] HCA 522; (2003) 216 CLR 327
Rush v Nationwide News Pty Limited(No 9) [2019] FCA 1383
Sims v Wran [1984] 1 NSWLR 317
Suttcliffe v Pressdram Ltd [1991] 1 QB 153
Anchorman: The Legend of Ron Burgundy
Anchorman 2: The Legend Continues
Gatley on Libel and Slander (Wildy & Sons Ltd, 10th ed, 2004)
Huey E B, Backward and Feeble-Minded Children: Clinical Studies in the Psychology of Defectives, with a Syllabus for the Clinical Examination and Testing of Children (Warwick and York, Inc., 1912)
Macquarie Dictionary Online
Oxford English Dictionary (3rd ed, 2009)
Division: General Division Registry: New South Wales National Practice Area: Other Federal Jurisdiction Number of paragraphs: 317 Date of last submissions: 14 December 2020 Date of hearing: 1–4, 7–9 and 11 December 2020 Counsel for the Applicant: Ms S Chrysanthou SC and Mr B Dean Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondents: Mr ATS Dawson SC and Ms L Barnett Solicitor for the Respondents: Banki Haddock Fiora ORDERS
NSD 2153 of 2019 BETWEEN: ELAINE STEAD
Applicant
AND: FAIRFAX MEDIA PUBLICATIONS PTY LTD (ACN 003 357 720)
First Respondent
JOE ASTON
Second Respondent
ORDER MADE BY:
LEE J
DATE OF ORDER:
27 JANAURY 2021
THE COURT ORDERS THAT:
1.The proceeding be adjourned to 9am on 3 February 2021 for the making of final orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
LEE J:
A INTRODUCTION AND OVERVIEW
Mr Joe Aston, together with a colleague, writes a column entitled “Rear Window” for The Australian Financial Review (AFR) published by Fairfax Media Publications Pty Ltd (Fairfax).
It is common ground Mr Aston is a talented and oftentimes highly entertaining wordsmith. He is no respecter of persons. He gave evidence he has a “blank canvass” to “target and address” hypocrisy, cant, farce and misfeasance in the corporate and political world. From the perspective of readers who inhabit those worlds, Mr Aston’s work, with its characteristic acerbity, is no doubt often amusing; but one suspects the mirth of some readers might be mixed with a vague sense of disquiet that their behaviour might someday become the subject of his mocking focus. It was perhaps for this reason that Mr Aston blithely (but self-revealingly) gave evidence that he was “not a very popular” columnist.
But a writer targeting and addressing the perceived folly or sins of others walks a fine line. It is a line which reflects the tension between two important rights which the law of defamation seeks to balance: the right to freedom of expression and the right to reputation. Consistently with protecting the right to expression, which is fundamental to the exchange of ideas, is that liberty is given to express ideas provocatively. As Sir Fredrick Jordan observed in Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171 (at 174), “a critic is entitled to dip his pen in gall for the purpose of legitimate criticism; and no one need be mealy-mouthed in denouncing what he regards as twaddle, daub or discord”. But the counterbalance is that for a writer’s opinion to attract protection it must, in truth, be an opinion, be related to a matter of public interest, and be properly based – these requirements mean a freedom to express one’s views, however foolish or malignant, does not become a licence to defame without lawful excuse. In essence this case is about whether this line the law draws was crossed.
In 2018 and 2019, Mr Aston directed his focus to Blue Sky Alternative Investments Limited (Blue Sky), a listed asset manager, of which Dr Elaine Stead was a director and the Head of Venture Capital. For reasons I will explain, given the focus of his column, it is unsurprising that Blue Sky came into his ken.
Dr Stead asserts that she was singled out from the others associated with Blue Sky and that in doing so, not only did Mr Aston cross the line the law draws, but that he pole vaulted it. As a consequence, she brings this proceeding in relation to five publications reproduced in the schedules to these reasons, being:
(1)a column entitled “Fairfax dead, feminist self-interest lives” published in the AFR newspaper on 4 February 2019 (First Article);
(2)a column entitled “Clementine Ford, Elaine Stead ensure self-interest lives” published on the AFR website from 3 February 2019 (First Internet Matter);
(3)a column entitled “Fox in Steven Marshall’s burning henhouse” published in the AFR newspaper on 29 October 2019 (Second Article);
(4)a column entitled “Fox in Steven Marshall’s burning henhouse” published on the AFR website from 28 October 2019 (Second Internet Matter); and
(5)a Twitter post published by Mr Aston on 28 October 2019 (Third Matter).
Dr Stead alleges that the matters conveyed various imputations detailed below, each of which she alleges is defamatory. Issue has been joined by Fairfax and Mr Aston denying that the pleaded (or substantively similar) meanings were conveyed. Further, Fairfax and Mr Aston relied upon, and only relied upon, the defence of honest opinion pursuant to s 31 of the Defamation Act 2005 (NSW) (Act), being the opinion of Fairfax’s employee, Mr Aston.
For the reasons that follow, Dr Stead has established that some of the imputations pleaded (or imputations substantially similar to them) have been conveyed, and that they are defamatory. The pleaded defence of honest opinion has not been made out by Fairfax or Mr Aston and, as a consequence, Dr Stead is entitled to relief.
In explaining these conclusions, the balance of these reasons will be divided into the following headings:
·Part B: The Imputations Conveyed and the Defamation
·Part C: The Evidence of Dr Stead and Mr Aston Generally
·Part D: Honest Opinion
·Part E: Relief
·Part F: Conclusion and Orders.
B THE IMPUTATIONS CONVEYED AND THE DEFAMATION
B.1 The Pleaded Imputations and the Separate Determination
Dr Stead pleaded the following defamatory imputations:
(1)as to the First Article and the First Internet Matter (First Matter), that:
(a)the applicant is a cretinously stupid person (First Alleged Imputation);
(b)the applicant wilfully destroyed the capital of business ventures with which she was associated causing enormous losses to unitholders (Second Alleged Imputation);
(c)alternatively to (b), the applicant recklessly destroyed the capital of business ventures with which she was associated causing enormous losses to unitholders (Third Alleged Imputation);
(d)the applicant is a venture capitalist, who made stupid investments in two worthless companies, Shoes of Prey and Vinomofo, which had no business and no prospects of success (Fourth Alleged Imputation);
(2)as to the Second Article and the Second Internet Matter (Second Matter), that:
(a)the applicant deliberately destroyed the capital of business ventures with which she was associated causing enormous losses to investors (Fifth Alleged Imputation);
(b)the applicant, a venture capitalist, wantonly lost millions of dollars entrusted to her by unsuspecting investors by channelling their funds into a string of hopeless investments (Sixth Alleged Imputation);
(c)the applicant is an untrustworthy venture capitalist who fails to deliver on her promises to shareholders and investors (Seventh Alleged Imputation); and
(3)as to the Third Matter, that the applicant is not competent to hold the position of VC fund manager for South Australia because she deliberately and shamelessly lost other people’s money (Eighth Alleged Imputation).
There was no issue Dr Stead was identified in the publications and despite initially adopting a different approach, by the time of the filing of their opening submissions, Fairfax and Mr Aston did not contest that the pleaded imputations are defamatory of Dr Stead, allowing the Court to move directly to considering the issue of meaning.
The parties agreed that it would be expedient to determine the issue of meaning at the conclusion of Dr Stead’s case. This course was embraced as it would mean, consistently with the overarching purpose of civil litigation in this Court, that any defence case and any final submissions were directed only to the meanings actually conveyed, and not to irrelevancies.
Accordingly, on 4 December 2020, an order was made by consent and pursuant to s 37P(2) of the Federal Court of Australia Act 1976 (Cth), that the issues joined by paragraphs 5, 8 and 10 of the statement of claim and the second further amended defence be determined separately and before any other issue in the proceeding. It may be obvious, but it is worth stressing, that the task upon which the Court was engaged in deciding this separate question was not the legal issue as to whether the matters were reasonably capable of bearing the defamatory meaning or meanings alleged, but rather the final determination of whether the publications did in fact convey the meanings for which Dr Stead contends.
Argument took place immediately, and on the following hearing day, prior to the opening of the defence case, I determined the separate question. To avoid any bifurcation of the proceeding but preserve the rights of the parties, I made orders granting leave to appeal (to the extent it is necessary), and extending time to allow any separate question appeal to be filed contemporaneously with any appeal from the orders made at the conclusion of this proceeding. Set out in the balance of this section are my reasons for my determination of meaning.
B.2 The Relevant Law
The three matters were pored over repeatedly during the hearing, but it is erroneous to approach the question of meaning by scrutinising the publications with the intensity of deconstructing a haiku. The principles to apply were not in dispute, and I explained them in Oliver v Nine Network Australia Pty Ltd [2019] FCA 583 (at [19]–[20]) as follows:
The relevant principles … are summarised, with respect helpfully and comprehensively, by White J in Hockey v Fairfax Media Publications Pty Limited [2015] FCA 652; (2015) 237 FCR 33 at 49-51 [63]-[73]. More recently, as the High Court (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ) relevantly explained in Trkulja v Google LLC [2018] HCA 25; (2018) 92 ALJR 619 at 627 [31]-[32]:
The test for whether a published matter is capable of being defamatory is what ordinary reasonable people would understand by the matter complained of. In making that assessment, it is necessary to bear in mind that ordinary men and women have different temperaments and outlooks, degrees of education and life experience. As Lord Reid observed in Lewis v Daily Telegraph Ltd, “[s]ome are unusually suspicious and some are unusually naïve”. So also are some unusually well educated and sophisticated while others are deprived of the benefits of those advantages. The exercise is, therefore, one of attempting to envisage a mean or midpoint of temperaments and abilities and on that basis to decide the most damaging meaning that ordinary reasonable people at the midpoint could put on the impugned words or images considering the publication as a whole.
… it is often a matter of first impression. The ordinary reasonable person is not a lawyer who examines the impugned publication over-zealously but someone who views the publication casually and is prone to a degree of loose thinking. He or she may be taken to “read between the lines in the light of his general knowledge and experience of worldly affairs”, but such a person also draws implications much more freely than a lawyer, especially derogatory implications, and takes into account emphasis given by conspicuous headlines or captions. Hence, as Kirby J observed in Chakravarti v Advertiser Newspapers Ltd, “[w]here words have been used which are imprecise, ambiguous or loose, a very wide latitude will be ascribed to the ordinary person to draw imputations adverse to the subject”.
(Citations and footnotes omitted)
Hence my task, as the tribunal of fact, is addressing the question as to whether the ordinary reasonable viewer would have understood the matters complained of in the defamatory sense pleaded: Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716 at 1720 [11], 1721 [17]. Meaning is to be determined objectively, by reference to the hypothetical construct of the ordinary reasonable viewer, who is taken to glean the ordinary meaning conveyed … It necessarily follows that the meaning the respondents intended to convey is irrelevant, as is any evidence as to how the publication was actually understood: Wagner v Harbour Radio Pty Ltd [2018] QSC 201 at [33] (Flanagan J).
It is worth summarising some further principles relevant to meaning because during argument, there was extensive debate as to reformulations and whether they differed in substance to the pleaded imputations. There was also debate as to the distinct question as to whether it was possible for Dr Stead to depart from the pleading. To ensure there was no misunderstanding as to how these issues were to be resolved, I prepared (and the parties eventually agreed) a summary of the relevant principles, largely but not exclusively drawn from Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125; (2019) 271 FCR 632. It was as follows:
(1)procedural fairness requires that a respondent is entitled to know what defamatory imputations are relied upon by an applicant, thus requiring the imputations to be pleaded specifically: see Federal Court Rules 2001 (Cth) (FCR) 16.02, 16.08 and 16.41;
(2)an applicant may allege that a published matter conveys distinct defamatory imputations, and may allege imputations in the alternative: see FCR 16.06;
(3)it is open to an applicant to choose the imputations relied upon, which will generally confine the questions of meaning and will determine the metes and bounds of the contest at trial;
(4)these boundaries extend to meanings that are not substantively different in that they are comprehended in, or are a shade or nuance of, the pleaded meaning;
(5)if a variant imputation is proposed to be relied upon, whether, and to what extent, a departure from the pleaded meanings is permitted is to be resolved by considerations of fairness and practical justice;
(6)if a respondent is, or might reasonably be thought to be, prejudiced, embarrassed or unfairly disadvantaged by the proposed departure to a variant meaning, the applicant will be held to the meaning pleaded;
(7)in considering the question of prejudice or fairness as between the parties, it is relevant to bear in mind that when an applicant makes a forensic choice to plead a more serious or “higher” meaning than others that are available, a consequence of this forensic choice is to render more difficult the task of a respondent in proving the imputation is substantially true (it necessarily follows that allowing a less serious meaning to be relied upon by an applicant at trial could, depending upon the circumstances, visit an unfairness upon a respondent);
(8)the Court at trial is required to determine the meaning which the matter conveyed to an audience or readership composed of ordinary decent persons, being reasonable people of ordinary intelligence, experience and education who bring to the question their general knowledge and experience of worldly affairs;
(9)given that meaning is to be determined objectively, the audience is taken to have a uniform view of meaning and although different people might in fact have understood the meanings conveyed in different ways, the Court must arrive at a single objective meaning; and
(10)in considering the defences that may have been run, the statutory defence of truth under s 25 of the Act requires the respondent to prove that the imputations carried are substantially true and hence a respondent is limited to justifying a meaning upon which the applicant might have succeeded.
With all these principles in mind, it is appropriate to deal with each pleaded imputation in turn.
B.3 Were the Imputations Conveyed?
First Alleged Imputation
Although formally put in issue, at trial there was no contest that the First Alleged Imputation was conveyed in a substantially similar form (but removing the tautology). It became common ground that the imputation that Dr Stead is a cretin was conveyed.
Second Alleged Imputation
The imputation that “Dr Stead wilfully destroyed the capital of business ventures with which she was associated causing enormous losses to unitholders” was said to arise from the phrase “a prodigious destroyer of capital” in [4] (emphasis added), and the sentence commencing “[t]he losses accrued in FY18” in [6], and what was said to be the overall tone of the First Matter. In addition, in the First Internet Matter, this meaning is said to be further advanced by the by-line “a tax loss specialist” in [8].
This contention is unpersuasive. The hypothetical referee would not understand the First Matter to convey that Dr Stead wilfully, that is, deliberately, destroyed capital causing enormous losses to unitholders. As set out above, a meaning that the ordinary reasonable reader would understand from the First Matter is that Dr Stead is a cretin. The ordinary reasonable reader would also understand Mr Aston to be saying that she had made silly or maladroit decisions, such as investing in the companies known as Shoes of Prey and Vinomofo (at [6]). The impression conveyed is one of stupidity and want of care and skill, and this is inconsistent with the notion that she was engaging in the wilful destruction of property. Although the focus is always on what was conveyed to the ordinary reasonable reader, it is noteworthy that in her final submissions (at [232]) Dr Stead agreed that destroying capital, causing enormous losses to investors, amounted to an allegation of “criminal conduct”. Although the correctness of that characterisation would depend upon the circumstances, it points to the seriousness of an assertion in the terms of the Second Alleged Imputation, which I do not consider was conveyed.
Third Alleged Imputation
Necessarily, given it eschews deliberate conduct, the imputation that Dr Stead “recklessly destroyed the capital of business ventures with which she was associated causing enormous losses to unitholders”, is a true alternative to the Second Alleged Imputation. Dr Stead asserts that it arises from the same content. The primary submission of Fairfax and Mr Aston is that given the notion that Dr Stead made silly or pointless decisions is conveyed, this impression is contrary to the suggestion that her conduct is reckless. This submission should be rejected. Given the ordinary meaning of the relevant adverb is the action of taking steps “[w]ithout regard to consequences or risk, rashly, imprudently” (Oxford English Dictionary, 3rd ed, 2009 (OED)), this captures accurately what was conveyed to the ordinary reasonable reader. Having said this, recklessness is a somewhat nebulous concept: it can mean subjective recklessness (being conduct engaged in without any regard to the consequences of the conduct); but it can also describe objective recklessness, a concept which might otherwise be described as rash or imprudent conduct. Dr Stead submitted that the meaning pleaded was directed to the latter of these conceptions, and accepted that to avoid any ambiguity, the word “rashly” better captured what was conveyed.
The more substantive submission of Fairfax and Mr Aston was that the pleader had simply missed the mark. It was submitted that the ordinary reasonable reader would understand that the capital that is destroyed ([4]) is that of the VC unitholders ([6]), that is, the investors’ money, rather than the capital of the businesses with which Dr Stead is associated or with which she invests. The contention in the First Matter is that Dr Stead’s investments had caused the loss of investors’ money. It says nothing whatsoever, it was submitted, of Dr Stead’s management or involvement in any business invested in, or whether or not her conduct led to the loss of the capital of those businesses.
At first glance it might be thought that there is something in the difference between the focus on the destruction of the capital of the business ventures with which Dr Stead was associated and the destruction of the value of unitholders’ investments. For this reason, argument as to the Third Alleged Imputation transformed into debate as to whether an imputation with certain textual differences was substantively different in that it was comprehended in, or amounts to a shade or nuance of, the pleaded meaning.
When Dr Stead is introduced at [4], she is described as a “prodigious destroyer of capital”. The capital to which reference is being made is not specified. It is a somewhat loose expression to use in the context. In the abstract, a reader would most likely understand the term “capital” to mean the cash that comes into a business or conceptualise it as working capital, being an excess of current assets over current liabilities in a business. But colloquially, and leaving aside any accounting niceties, to an ordinary reasonable reader, the concept could no doubt also be conceived as the amount invested in a fund from which an investor sought to obtain a return.
We are not dealing with the abstract. It is trite that the matter must be read as a whole, and the imputations pleaded are to be construed in the context of the entire matter. When one attends to this task, the meaning conveyed to the hypothetical construct emerges tolerably clearly. After the reference to capital in [4] and the reference to Dr Stead’s Instagram posts in [5], reference is then made at [6] to the losses accrued by the “VC unitholders”. The whole thrust of the matter is the proffering of a “begging bowl” ([4]) by someone who has rashly destroyed the wealth of others, being the unitholders ([6]), and the ridicule conveyed as a consequence ([7]).
The ordinary reasonable reader does not engage in over-elaborate analysis and given the mocking tone, notwithstanding the AFR is a serious publication, it is less likely that the ordinary reasonable reader would read the First Matter with a high degree of analytical care.
The sting of rash destruction of capital causing enormous losses to unitholders was conveyed. The issue was whether allowing Dr Stead to rely on the recast imputation that “Elaine Stead rashly destroyed capital causing enormous losses to unitholders” is either: (a) sufficiently similar to be comprehended within the original pleaded meaning; or (b) a departure from the pleaded meaning, which nonetheless should be permitted when regard is had to considerations of fairness and practical justice.
When one has regard to the whole context of the article, the meaning that Dr Stead rashly destroyed capital causing enormous losses to unitholders is not substantively different in that it is comprehended within the terms of the pleaded meaning. As was explained by Mahoney ACJ in Crampton v Nugawela (1996) 41 NSWLR 176 (at 183), an applicant should not fail if the error is not pleading with complete accuracy the imputation that is in the published material. This is a case where the pleader, in attempting to respond to an ambiguous publication, has attempted to translate the imputation from the published material to the pleading (although it might have been done with more precision).
But even if I was wrong in this view, it would not matter. In contrast to the position in relation to the Second Matter to which I will come, if it is the case that the imputation that Dr Stead rashly destroyed capital causing enormous losses to unitholders is not comprehended within the original pleaded meaning, the supposed relevant unfairness articulated by Fairfax and Mr Aston had a high degree of unreality about it. It was not contended, nor could it be, that the cross-examination of Dr Stead would have been conducted differently in any specified way. Nor would I accept that any earlier recasting would have caused other or further enquiries to be made prior to trial. This is a case where a statutory truth defence was initially pleaded to this and other imputations. Over a score of subpoenas were issued and a vast array of material was inspected.
Fairfax and Mr Aston incorporated extensive particulars to justification (no less than 194 of them) of the imputation that there was a reckless destruction. Any fair reading of those particulars demonstrates that Fairfax and Mr Aston were prepared to run a truth defence which went beyond, but incorporated, losses to investors; moreover, and perhaps more relevantly, in the honest opinion defence maintained to the matter which was said to convey the Third Alleged Imputation, the particulars were, in part, directed to the role of Dr Stead in the management and deployment of funds of investors and her “overall responsibility” for exiting those investments realising gains or losses (particular 6), and particularisation was given of the losses in various funds by investors (see, eg, particulars 18, 30, 43, 44, 47).
Any notion that Fairfax and Mr Aston were labouring under the view that the capital of investors in the funds was somehow irrelevant to the issues to be determined must be rejected.
I find an imputation not substantially different to the imputation pleaded was conveyed in the terms identified. But in the event I am wrong to characterise the imputation in that way, no relevant unfairness or unjustness is occasioned to Fairfax and Mr Aston in allowing it to be relied upon.
Fourth Alleged Imputation
Finally, as to the First Matter, the imputation that Dr Stead “is a venture capitalist, who made stupid investments in two worthless companies, Shoes of Prey and Vinomofo, which had no business and no prospects of success” is said to be conveyed from the reference to “feminist cretin” in [4], the sentence commencing “[t]he losses accrued” in [6], and the overall tone of the First Matter in belittling Dr Stead. In the First Internet Matter, this meaning also is advanced by the by-line “a tax loss specialist” in [8].
Although conceding that the word “peanut” supports the notion “worthless” in the imputation, Fairfax and Mr Aston submit that nothing in the First Matter is addressed to whether the two companies had a business or prospects of success at the time of the investment.
This submission is without merit. A stupid investment in a worthless business would plainly be understood by the ordinary reader to be an investment that was misconceived at the time the decision was made by Dr Stead and others to invest. Although the businesses are identified as “start-ups” and are labelled as devoid of worth (that is, “peanut”), the notion they had “no business” might be thought to be subtly different to “no business of any worth”. The imputation conveyed to the ordinary reasonable reader was that “Elaine Stead is a venture capitalist, who made stupid investments in two worthless companies, Shoes of Prey and Vinomofo, which had no prospects of success”. This is not substantively different to what is pleaded.
Fifth Alleged Imputation
Turning to the Second Matter, it is said that the imputation was conveyed that Dr Stead “deliberately destroyed the capital of business ventures with which she was associated causing enormous losses to investors”.
Dr Stead submitted that this imputation arises from the entire Second Matter, including: the heading “Fox in Steven Marshall’s burning henhouse” in [2]; the phrase “venture capital pyromaniac” in [6]; the statement in [7] that Dr Stead “raised $9.1 million … to feed into Fox’s furnace”; the whole of [8], especially the statement “Stead set fire to other people’s money”; the answer “no” to the question “whether I did the right thing” in [9]; the suggestion that it was “scandalous” to allow Dr Stead to remain involved with the South Australian Venture Capital Fund (SAVCF) in [10]; the last sentence in [12], being “[i]n her case, it’s nothing Ventured, nothing lost”; and the overall tone of the Second Matter.
In a reprise of the arguments made in relation to the Second Alleged Imputation, Fairfax and Mr Aston contended the Second Matter would not convey that Dr Stead deliberately destroyed capital. The idea that a venture capitalist would deliberately destroy capital was said to be absurd, requiring such a meaning to be spelt out in plain terms and the pleaded meaning attributes a state of mind to Dr Stead that would simply not be understood by the ordinary reasonable reader. Considered as a whole, it was said that it does not reasonably convey that the loss of money was deliberate, as opposed to a result of bad decisions (see [9]). The use of the term “pyromaniac” does not, they submitted, convey an intention to destroy or cause damage.
As noted above, consideration must be given to tone and context. The tone was one of criticism but laden with an attempt to convey such criticism in what was intended to be a “clever” way. The criticism of Dr Stead was trenchant, but read as a whole it does not convey that she was engaged in a process of the deliberate destruction of the money of others. This can be seen in part by [7] which compares her actions to other venture capitalists that are described as “shrewder”; that is, better able to identify when the point had been reached that good money should not be thrown after bad. Similarly, in [9], the ordinary reasonable reader would discern that the article was conveying that although Dr Stead was an “arguably” good person who did the wrong thing, she did not take care of shareholders and investors, did not return capital in the way in which Blue Sky had targeted and failed to make good decisions. What was conveyed was that Dr Stead was behaving rashly or stupidly, not that she was intent on the seriously wrongful conduct of deliberately destroying money.
In addition to the necessity to consider context generally, specific reference should be made to two matters. The first is that in reaching my conclusion, the heading “Fox in Steven Marshall’s burning henhouse”, caused me some pause. The reference to a “fox” must be understood by a reader to refer to Dr Stead rather than Ms Jodie Fox, the other woman referred to in the article, because Ms Fox had nothing to do with the SAVCF or any activity or responsibility of the Premier of South Australia (as is made plain in [10]–[12]). The use of the descriptor “fox” is oft used to connote a cunning or sly person. Taking the word in isolation (used metaphorically to refer to a person), it does suggest some element of deceit or slyness. Read in context, however, such a reading would be strained. Reasonable people of ordinary intelligence, experience and education reading the whole article would not attach such significance into a play on words which, as the reader would understand, has its origin in the name of the other principal target of the article, Ms Fox.
The second is the danger in also reading too much into the term “pyromaniac”, or setting fire to money, or the notion of feeding cash into a furnace. A pyromaniac is, obviously enough, someone suffering from pyromania which, as would be known to the ordinary reasonable reader, is a type of mental disorder characterised by the impulse to set fire to things. Although the actions of a pyromaniac are intentional, pyromania is well understood as being a pathological or compulsive disorder. In this sense, the ordinary reasonable reader would distinguish it from arson, which is also an intentional act but well understood as being motivated by some non-pathological desire or purpose, such as material gain or revenge. Fire was used by the author as an extended metaphor (hence the references to setting fire to other people’s money or feeding cash into the furnace of Shoes of Prey), which references would all be understood as a fancy.
The Fifth Alleged Imputation was not conveyed.
Sixth Alleged Imputation
This imputation, that Dr Stead, “a venture capitalist, wantonly lost millions of dollars entrusted to her by unsuspecting investors by channelling their funds into a string of hopeless investments” was the subject of extended debate, much of it focussed on the word “wantonly”.
Notably, in relation to the Second Matter, a cognate of the Third Alleged Imputation, which had made reference to Dr Stead acting “recklessly”, was avoided by the pleader.
The OED relevantly defines wanton as being: “without regard for right or consequences; in a way that betrays delight in wrongdoing or mischief, wilfully; recklessly; gratuitously”.
The Macquarie Dictionary Online relevantly defines wanton as:
adjective 1. done, shown, used, etc., maliciously or unjustifiably: *my father, appalled by the wanton destruction of the bird life he loved, brought in a bill for its protection – MARY DURACK, 1959.
2. deliberate and uncalled for: why ruin your career in this wanton way?
3. reckless or disregardful of right, justice, humanity, etc., as persons.
4. lawless or unbridled with respect to sexual behaviour; loose, lascivious, or lewd.
5. extravagantly luxurious or self-indulgent, as a person, way of life, etc.
…
– noun 9. a wanton or lascivious person, especially a woman.
– verb (i) 10. to act, grow, etc., in a wanton manner.
– verb (t) 11. to squander (away), as in pleasure.
[Middle English wantowen, literally, undisciplined, from wan- not + Old English togen disciplined]
–wantonly, adverb
–wantonness, noun
It was put by Dr Stead that wanton meant nothing more than reckless. Given the pleader’s apparently deliberate forensic decision not to use this latter adjective (as has been done in relation to the Second Alleged Imputation), understandably, oral argument revolved around the questions as to whether: (a) an imputation expressed in terms of objective recklessness did not differ in substance to the pleaded meaning; and (b) if it did so, whether it was a variant imputation that could be relied upon.
Why the word wantonly was used was never really explained save that it was said (at T449.3–5) “that wantonness carries with it a notion that it’s extensive or out of control which is carried by the references in the article to the burning and the pyromaniac”. But this was an incomplete answer because Dr Stead was explicit that the notion of investments being excessive or out of control could accurately be characterised as being reckless. Of course, the pleading of a meaning is, in the first instance, a matter for the applicant and the adequacy of that pleading cannot be determined by reference to other forensic choices that could have been made. But the consequence, as counsel for Dr Stead, Ms Chrysanthou SC, rightly accepted (at T452.1–2), was that “the term wantonness could give rise to some ambiguity”.
This ambiguity created challenges. Of course, in previous times in New South Wales it was not uncommon for the “form” of imputations to be attacked on the basis they were “ambiguous” or lacked sufficient certainty (cf Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 (at 137–8 per Gleeson CJ)). But given the real issue as to any alleged form deficiency is always whether there is likely to be confusion either at the pleading stage or at the trial, no strike out application relying on “ambiguity” was made (an entirely understandable and appropriate course since all issues were to be determined in this case by a judge). In any event, despite this admitted ambiguity, one must do the best one can while recognising that the meaning of the imputation must be seen in the entire context of the publication.
Without losing sight of the overall task, it is useful to consider initially whether the meaning that Dr Stead “wantonly lost millions of dollars entrusted to her by unsuspecting investors by channelling their funds into a string of hopeless investments” is substantively different to a meaning Senior Counsel for Dr Stead embraced as the pleader’s “intention”: that Dr Stead “recklessly (in the sense of rashly) lost millions of dollars entrusted to her by unsuspecting investors by channelling their funds into a string of hopeless investments”.
Despite Dr Stead’s submissions to the contrary, I think these meanings are quite different. Used in context and accompanied by the notion of “channelling”, the concept of Dr Stead operating wantonly is a meaning which conveys some form or aspect of deliberate conduct, not “mere” rashness or stupidity. As I have explained above, I do not consider that the Second Matter, taken as whole, conveys this former charge to the ordinary reader.
But this is not the end of the question as to whether a revised version of this imputation inserting a word which conveys objective recklessness or a want of due care can be relied upon. As explained above, whether and to what extent a departure from the pleaded meaning is permitted is to be resolved by considerations of fairness and practical justice.
In this regard, as noted above, it is relevant to bear in mind that when an applicant makes a forensic choice to plead a more serious or “higher” meaning than others that are available, a consequence of this forensic choice is to render more difficult the task of a respondent in proving the imputation is substantially true. It is fair to assume that rather than pleading an alternative of recklessness, the pleader chose the word wanton advisedly – and the consequence of this choice of the pleader was that it would (or at least may) be more difficult for truth to be proved in relation to this imputation. Obviously enough, the statutory defence of justification under s 25 of the Act would have required Fairfax and Mr Aston to prove that the imputations carried are substantially true.
Let us assume for a moment that I had found the “deliberateness imputations” and the Sixth Alleged Imputation had been conveyed and further assume that Fairfax and Mr Aston had run a justification defence and had proved, inter alia, that Dr Stead had negligently or rashly lost millions of dollars, but failed relevantly to prove that she had lost the money of investors deliberately. In that scenario one can see Senior Counsel for Dr Stead, with her customary skill and vigour, submitting that they had fallen short of the mark, including as to this imputation, because wantonly means more than mere negligence or rashness. For forensic reasons the pleader made a choice (and an understandable choice), but the result was to pitch the imputation too highly. In this regard, in response to a question directed by me, Senior Counsel for Dr Stead fairly conceded (at T466–7) that Fairfax and Mr Aston “may have” taken a different approach to whether or not they maintained the originally pleaded justification defence in respect of a variant of the Sixth Alleged Imputation being “the applicant, a venture capitalist, rashly or negligently lost millions of dollars entrusted to her by unsuspecting investors by channelling their funds into a string of hopeless investments”.
The pleaded Sixth Alleged Imputation was not only not conveyed, but considerations of fairness prevent reliance by Dr Stead upon the recast meaning proposed during argument.
Seventh Alleged Imputation
The notion of Dr Stead being untrustworthy and failing to deliver upon her promises is clearly conveyed by [7] and [9]. Mr Aston, after all, made plain that the answer to the question of whether Dr Stead “did the right thing” (which, given the context of the additional questions, must go beyond simply taking care of investors and delivering returns) was “no”. Although I have already explained that the heading, which refers to Dr Stead as a “fox”, was a play on words and does not go far enough contextually to impute deceit, it does reinforce a notion that Dr Stead is someone in whom one could not repose confidence. It would be clear to the ordinary reasonable reader that Dr Stead is described as somebody who acts in a way which is not “classy” and is somebody who did not do the right thing, did not take care of shareholders and investors, was not able to return capital in the way that had been hoped and did not make good decisions. It follows that the ordinary reasonable reader would have understood the matter in the way pleaded.
I do not consider there is any tension in accepting this imputation was conveyed with my rejection of the Fifth and Sixth Alleged Imputations (which connoted some form of behaviour which went further than objective recklessness or rashness). It must be borne in mind that one is required to consider the response of a non-legally trained audience of readers who were receiving the information in an impressionistic way and, at least in some respects, are prone to a degree of loose thinking.
I am satisfied that the imputation that Dr Stead is an untrustworthy venture capitalist who fails to deliver on her promises to shareholders and investors was conveyed.
Eighth Alleged Imputation
It is now necessary to turn to the Third Matter and the pleaded imputation is that “Dr Stead is not competent to hold the position of VC fund manager for South Australia because she deliberately and shamelessly lost other people’s money”.
The Third Matter has an important difference to the other publications. It is a tweet devoid of any context other than contained in the tweet is the “teaser” link to the Second Internet Matter. The tweet asserts in terms that Dr Stead has “an unenviable record setting fire to other people’s money”. Dr Stead’s submission was that it is difficult to see how the ordinary reasonable reader would not take this assertion as meaning anything other than that Dr Stead deliberately or wantonly destroyed the money. Further, unlike the Second Matter, there is no emollient reference to the fact that Dr Stead might arguably be a good person; nor is there reference to the fact that other venture capitalists did make similar investment decisions initially, but were sufficiently shrewd to have adopted another course when further information became available. Further, immediately juxtaposed to this assertion is the notion that the Premier of South Australia is insisting on imposing Dr Stead on South Australia’s “new VC fund manager”. This is followed by an expletive, the precise terms of which will be conveyed to the ordinary reasonable reader, demonstrating incredulity at the course adopted by the Premier. In this sense the tweet is a crude reduction of similar assertions made in the Second Matter.
The position of Fairfax and Mr Aston was that there is nothing in the tweet which suggests that the loss of money was the intended result of Dr Stead’s investments.
It is necessary to put out of mind the content of the Second Matter for the purpose of seeking to ascertain the meaning conveyed by the tweet. Considered solely on its own account, on balance, I do not believe it conveys the meaning that Dr Stead deliberately and shamelessly lost other people’s money. The sting of the tweet is obvious and the message is conveyed provocatively. The difficulty is that deliberately and shamelessly losing the money of others is conduct that would be considered by an ordinary reasonable reader as wicked, and not merely irresponsible or stupid conduct. The audience or readership of the tweet, composed of ordinary decent persons, of unexceptional intelligence, experience and education, would consider the tweet as conveying the notion that the Premier was making an inexplicable decision worthy of criticism by insisting on the continuing involvement with the SAVCF of someone said to be incompetent. The Eighth Alleged Imputation is pitched too highly, and given it is the only pleaded meaning of the publication, Dr Stead must fail in this aspect of her case.
B.4 Conclusions as to Meaning
It follows from the above, that on 7 December 2020, orders were made recording findings that the following imputations were conveyed:
(1)as to the First Matter, that:
(a)Elaine Stead is a cretin (Imputation 1A);
(b)Elaine Stead rashly destroyed capital causing enormous losses to unitholders (Imputation 1B);
(c)Elaine Stead is a venture capitalist, who made stupid investments in two worthless companies, Shoes of Prey and Vinomofo, which had no prospects of success (Imputation 1C);
(2)as to the Second Matter, that Elaine Stead is an untrustworthy venture capitalist who fails to deliver on her promises to shareholders and investors (Imputation 2).
Having found these imputations were conveyed in relation to Dr Stead and they were defamatory, it is necessary to examine the only defence that was pressed: the statutory defence of honest opinion. But before doing so in detail, it is convenient to deal with some aspects of the evidence.
C THE EVIDENCE OF DR STEAD AND MR ASTON GENERALLY
It will be necessary below to make specific findings when it comes to considering the defence and the question of damages. But it is well to commence by making some general findings about the credit and aspects of the evidence of the main protagonists, Dr Stead and Mr Aston; and also explain how it is necessary to deal with one aspect of the evidence.
C.1 Dr Stead
Dr Stead presented as a witness of the truth. Save for two aspects of her evidence which I will deal with below, I generally found her evidence to be impressive. She was responsive and presented as someone doing her best to give honest answers. Dr Stead obviously (and unsurprisingly) felt the weight of this litigation heavily and her testimony as to her subjective hurt was compelling. I will return to those specific aspects of her evidence when I deal with damages.
It is worth commencing by mentioning two (to an extent connected) aspects of Dr Stead’s personal and business life that received a good deal of attention during the course of the evidence. The first was that Dr Stead had been, well prior to 2019, an enthusiastic and, at least in some respects, indiscriminate user of social media. This had caused some disquiet within Blue Sky and some criticism in the AFR. For example, in a Rear Window article written by Mr Aston on 28 May 2018 (“For Blue Sky, plausibility remains illusive”), the following appeared:
Blue Sky’s VC boss Elaine Stead remains the worst (remaining) enemy of the company’s negligible plausibility …
To Future Fund chief executive David Neal’s comments last week that he wanted to put more capital into “global grade” Australian VC managers, Stead tweeted (to the headline, not the words in the article itself, naturally) that “no there’s not” any shortage of local VC capital. Gold, given Neal’s next line, that “it’s not in our interests or the interests of the taxpayer I don’t think for us to be investing in organisations that don’t meet that grade”.
Better still, though, were her thought bubbles on Sunday. “Lowest of lows today,” she admitted at 3:19pm.
“OMFG I just heard the best news but it’s a secret!” she tweeted at 6:54pm, turning on a dime, like a parody of a tween at a slumber party.
The only reassuring part of this unhinged drivel is just how late Blue Sky brings its VC chief into VC deals. Could there yet be financial redemption across the caravan parks of the Sunshine State?
Oh, and then she tweeted: “Yep, pretty sure I’ve lost my passport.”
(Emphasis in original).
Devoid of any context (a topic to which I will return), the sending of these tweets does seem unusual conduct for a public company director in the midst of an existential crisis for the company on whose board she sat. Perhaps unsurprisingly, the next day, a shareholder and Ord Minnett investment advisor communicated with Blue Sky’s then interim Chief Executive Officer, Mr Kim Morison in the following terms:
Someone kindly should perhaps take Dr Elaine Stead’s mobile off her to stop tweeting… see below… is this for real?
If this is real…this only damages Blue Sky credibility further… if not, take Mr Aston to court.
Cheers
Mr Morison showed Dr Stead this communication (which had been copied to others within both Ord Minnett and Blue Sky) and reprimanded her. Mr Morison then communicated with the shareholder:
Appreciate your concerns. Yes, we’ve done what we need to do. Elaine no longer has a twitter account.
Regards
Kim
The disciplining of Dr Stead arising from her tweeting was perceived by her to have been conducted by Mr Morison in “heated” terms and amounted to mistreatment. Indeed, she considered it sufficiently serious to cause her to engage solicitors to provide her with advice. Notwithstanding this, although she gave evidence she considered it was “fair enough” for Blue Sky management to have asked her to stop tweeting, she also said that prior to the meeting with Mr Morison, she believed the media would leave her tweeting alone and not report on it. This was surprising evidence, given that a few weeks earlier, on 7 May 2018, the following insulting comments had been published in a Rear Window article written by Mr Aston entitled “Blue Sky meltdown continues, untruths now official”:
Poor Elaine Stead, Blue Sky’s own Brick Tamlin, sure doesn’t sound happy. “So angry”, she tweeted on Sunday evening, before adding, an hour later, “today sucked dogs (sic) balls.” How fitting that on March 24 she tweeted that “your reputation and integrity is all you have.” Lord knows what she’ll do next – maybe go back and finish primary school?
(Emphasis in original).
That Dr Stead apparently held the view there was likely to be a lack of media interest in her tweeting was doubly peculiar given the issue had been previously raised with her by Mr Morison. This can be seen by her reference to a previous discussion in a draft email complaint she composed in relation to her upbraiding (the final version of which was not in evidence). The email records:
Although you did ask me to stay off Twitter until media interest dies down, I assumed that was in relation to Blue Sky related matters. The tweets you raised were personal tweets which were not related to Blue Sky and not inappropriate or unprofessional. I had also assumed the media focus had died down. When I resumed tweeting, it wasn’t to go against your request, it was because I believed it was safe and that the tweets were innocuous and of a personal nature … I had reasonably thought these tweets were not news worthy as they were not work related … However I understand that in the current environment, every piece of information can be twisted negatively by those with an agenda so I have deactivated my account as you have requested.
Although I do not go so far as rejecting Dr Stead’s evidence that prior to the meeting with Mr Morison she believed the general media would leave her tweeting alone and not report on it, given the contemporaneous intense media scrutiny of Blue Sky (arising from matters explained below) and her important role within Blue Sky as a public company director, it was, at best, a naïve view for Dr Stead to hold.
Before moving on, it is worth tarrying to observe a few matters including the distinction that Dr Stead drew in her complaint between “personal” and “professional” tweets. The supposed division raises interesting questions. What actually is personal in this context? To those of an age and cast of mind who have not embraced social media, the demarcation between what is private and public may be quite different to those more attuned to the contemporary zeitgeist. Speaking generally, to those accustomed to restricting one’s private musings to family and a circle of close friends, the inclination and apparent readiness of social media users to “share” their feelings and their views on everything from fascism to fish fingers seems decidedly odd. For some on social media, emoting or the recounting the mundane often seems to co-exist with commentary on issues of public significance or discussion of professional matters of moment. But to be too quick to stigmatise a tweet as banal is to fail to recognise that often seems the point of the exercise. Those forming the community of social media users, or a sub-set of them, might have quite a different conception from others as to what is noteworthy or inappropriate, silly, or even risible. Mr Aston was emphatic in denouncing what he perceived to be Dr Stead’s asinine posts, but anyone wishing to glance though the evidence of his tweets on foot massages or milkshakes might rationally form the view that they were without redeeming social importance.
Three points worth noting emerge from this: first, the context of a post on social media is important (which, as a habitué, Mr Aston would readily understand); secondly, it is unrealistic to assume that a mundane post by a newsworthy figure would necessarily stay within a community of social media users (something which Dr Stead should have understood); and thirdly, connected to the last point, given the nature of social media, characterising any post as being “private”, if made by a person who has a role of public interest, is problematical.
The notion of context is important when one considers the second aspect of Dr Stead’s evidence to which significant attention was directed: her connexion to, and communication with, her peers.
Dr Stead describes herself as a “Venture Capitalist”. She and her colleagues repeatedly referred in their evidence to being part of an “ecosystem”. This was not a reference to an ecosystem in the conventional sense, but rather, a buzzword used to describe the “open environment” where professionals with similar and different skills work collaboratively to assist one another in “raising new companies”. Dr Stead was evidently an enthusiastic participant in the “ecosystem”: she explained she was “a subscriber to the concept of ‘give first’” and that she “believe[s] wholeheartedly in being that person for others in our ecosystem”; she did this by “volunteering my time and expertise to mentoring entrepreneurs and start-ups”. Reciprocally, the evidence suggests her fellow participants within the “ecosystem” were a source of support to her. Part of this support and community, according to a fellow enthusiast and friend, Ms Monica Bradley (an investment advisor and company director), involved interactions on Twitter. Ms Bradley explained “all of us in the ecosystem, Australia wide, follow each other on Twitter”. When asked why, she responded:
I think it’s the nature of the Twitter technology, is the following kind of constitutes people of interest or what we would have called in the old days, communities of practice. So numbers of us follow each other, and that way then we share observations, learnings, information. But you know, I have – and everyone has very different interest groups. The ecosystem is one of mine, but I also have, you know, other people I follow on equality, or women’s rights or the Eurocarbon community. So I follow a variety of people, but ecosystem communicates a lot via Twitter, and direct messages on Twitter.
Like many other communities of like-minded individuals, it is apparent from the evidence that those within the “ecosystem” communicated in a singular way that was apparently understood and appreciated by those within this so-called “community of practice”. A good example has an especial relevance to this case, being a flyer from the Queensland Office of the Chief Entrepreneur’s so-called “Adventurer-in-Residence”, who entreated those “active in the Queensland entrepreneurial ecosystem” who wished to “improve their physical resilience and mental stamina” to travel to Mongolia to:
… summit a challenging local Khentii Mountain and learn about nomadic life - with interviews and hands-on experience with local families, along with progressing through introspective strategy and leadership workshops, all facilitated by The Nomadic School of Business team.
We will focus our immersion around the concepts of clarity, purpose and agility. Taking inspiration from our surroundings and the nomadic families we meet, the team will be guided through reflection on their own territory and season, the purpose of their team and organisation, and the qualities of agility needed to be truly responsive to your environment. We aim to help attendees see the world and themselves in a completely different way. We will also be meeting local entrepreneurs and Australians and other businessmen and women based in Ulaanbaatar.
To an outsider to the “ecosystem” and its interactions on social media, the public expression of private ruminations and the sometimes cloying expressions of support and mutual regard might seem easy to mock; but, as explained above, when considering the content and tone of Dr Stead’s social media posts, it is necessary to bear in mind the context of the communications: they are thoughts primarily shared with persons likely to have a similar “mind-set”.
From before her reprimand, Dr Stead had a “private” Twitter account. Mr Aston was aware of this from April 2018 when he received a message (“Elaine has gone private on Twitter! Say it ain’t so!!”: Ex 1, p 2990). But, as noted above, the label “private” is apt to mislead: the posts were still available to be viewed by her many “followers” (numbering about 5,000). Unlike Twitter, Dr Stead’s Instagram account had never been available to the general public; she gave thought to whom she “accepted” on Instagram and indeed Mr Aston’s request to follow her was rejected in April 2018. But it could hardly be said that the 500 to 600 followers she had on this medium amounted to a circle of intimacy.
As noted above, when the extent of her social media cohort is borne in mind, notwithstanding Dr Stead was directing her communications to the “ecosystem”, it must have been apparent by at least mid-May 2018, that her social media comments may, given the public interest in the travails of Blue Sky, be decontextualised and be the subject of critical media interest and comment. Indeed, as the extract from her complaint to Mr Morison belatedly recognised, in an environment where Blue Sky was the subject of focus, “every piece of information can be twisted negatively by those with an agenda”.
The reason why Dr Stead’s comments were likely to be of public interest leads me to an aspect of her evidence which did cause me concern, that is, the evidence relating to her activity as a director of Blue Sky. To explain why, it is necessary to go into a little detail.
Dr Stead originally joined Blue Sky as the Head of Venture Capital. Blue Sky was a listed alternative asset manager (ASX: BLA) operating as a holding company for fund managers that invested in four alternative asset classes: private equity and venture capital, real estate, hedge funds and agriculture and resources. Between September 2016 and April 2018, Dr Stead was a director of Blue Sky (although she continued as a senior executive until her employment ended on 30 September 2019). Regrettably, in the submissions of both parties there was a repeated tendency to elide distinctions between: (a) Blue Sky the listed entity; (b) Blue Sky Venture Capital, which was not a legal entity, and which was described in the Agreed Background Facts (ABF) as a “division of Blue Sky”, of which Dr Stead was “Investment Director” (defined as “BSVC”: ABF at [7]; Ex 2, p 383); (c) the entity BSVC Pty Ltd, in respect of which Dr Stead was apparently appointed an executive director in July 2013 (ABF at [9]); and (d) the entity Blue Sky Private Equity Pty Ltd (BSPE). BSPE was a wholly owned subsidiary of Blue Sky and operated as an investment manager.
The listed entity Blue Sky was, at one time, perceived by many participants in equity markets to be a spectacular success. By the first half of FY2014, revenue had reached $8.15 million with the company projecting more than $500 million in assets under management (AUM) by the end of that financial year. The details of further growth do not need recounting; it suffices to note that a succession of further capital raisings took place to fuel an ambitious and expansive investment strategy.
By contemporary accounts, many seemed to think the strategy had worked. In June 2017, an article was published written by Mr Anthony Boyd, of the AFR’s “Chanticleer” column. The column is prominent; indeed it self identifies as “Australia’s pre-eminent business column”. Among other things, the article (“Blue Sky Alternatives CEO Rob Stand fights back”) reported:
There is no better example of the surge in interest in alternative assets than Blue Sky Alternatives, a Brisbane manager which has shot the lights out for the past five years. This week it revealed that its total funds under management had hit $3 billion, which is up about $1 billion from a year ago. It lifted its funds under management by about $1 billion in the previous year.
Blue Sky has about $1 billion in private equity, $1 billion in real estate and about $1 billion in water and agriculture. It has a small amount in hedge funds.
Blue Sky is well on the way to meeting its target of having $10 billion in funds under management and being the home-grown version of Wall Street alternative asset giants Blackstone and KKR.
Any company with the words Blue Sky in its name will have its fair share of sceptics …
There is no suggestion that Blue Sky Alternatives has any [‘speccy’] features in its operations. First, it is not involved in mining. Second, its accounts are audited by respected firms and, third, its board includes respected Queensland business people.
But it has had its fair share of sceptics. In October and November last year, the short interest in the stock was equal to about 3.5 per cent of the issued capital.
Also, over the years Blue Sky has come under attack from bloggers and analysts claiming it is too reliant on asset revaluations and that its investment vehicles carry too much debt.
Chanticleer believes there is an element of the tall poppy syndrome wrapped up in the negativity towards Blue Sky. Many of the rumours have been proven to be wrong.
Chief executive Rob Shand is happy to deal with all the criticisms head-on. His arguments are quite persuasive, as shown by the fact that the level of institutional investment in Blue Sky’s range of funds has jumped from zero five years ago to 37 per cent in 2016.
In response to the claim that returns are driven by unrealistic valuations of assets, Shand says that 28 of the 31 asset realisations made by Blue Sky since 2006 have been at valuations higher than book value. He says this shows an inherent conservatism in the accounting for the value of assets.
In response to claims that valuations are too easily pumped up, Shand says each asset must go through four separate sets of eyes. It starts with KPMG as valuer, then EY as auditor, then the board of the fund and then the board of the head stock, Blue Sky Alternatives.
…
(Emphasis added).
There are a number of reasons why this article was significant. First (and perhaps explaining why there was some short interest in Blue Sky shares) was that aspects of the business of Blue Sky were opaque; it had apparently not provided, by way of periodic or continuous disclosure, either a breakdown between gross AUM and fee earning AUM, nor a breakdown as between various asset classes. Secondly, as a consequence, the communication of an aspect of this information (that Blue Sky “has about $1 billion in [the] private equity” asset class) in a prominent article, was arguably information of some moment. Thirdly, given its apparent source and publication in the AFR, it was information likely to come to the attention of investors or potential investors. Fourthly, it was information which might arguably be thought to be of significance to those investing, including in the VC funds (leaving aside anything else, it may matter to a potential investor in a venture capital fund to understand the quantum of total private equity assets under management, as compared to say, the real estate assets or agriculture and resources assets – even though they all may be generating upstream fee income).
Dr Stead gave evidence she was not happy about the article because “it was incorrect”; indeed, she believed it was an inaccurate estimate of AUM for any of the business units. The following evidence was then given:
MR DAWSON: It would be a bit of a worry, wouldn’t it, Dr Stead, if the financial world reading the [AFR] thought that that was the official company position when it wasn’t?---Yes.
Didn’t you think it was important to correct it if the company disagreed with it?---It was difficult to correct if we can’t actually say the number for each of the assets under management.
HIS HONOUR: Why couldn’t you say the number?---We had never disclosed the individual assets under management for each of our business units individually. We had only ever talked about it in its totality.
But that was a commercial decision - - -?---Yes.
- - - that was made?---Yes.
So up until the time … the information that the company had concerning the amount it had in private equity was information that was not generally available to the market?---Yes.
…
Did it concern you that given that in June [2017] it was – it had been conveyed inaccurately that Blue Sky had about 1 billion in private equity, that it may be appropriate for the communication to be made to the market to make it clear that the true position concerning the assets held in private equity were lower?---So the question was did it concern us, and the answer is yes.
Yes?---And there was much discussion about what to do, if anything.
Yes?---The consensus from the board in the end was to maintain our position, which was to not disclose assets under management by asset class, and because he hadn’t said anything materially different to what we had disclosed in totality of about three billion under management the decision was made to just let it go.
…
MR DAWSON: If Mr Shand was responsible for the breakdown in that Financial Review article I showed you, namely one billion in private equity, et cetera, if he had told the Australian Financial Review that it follows from what you’re saying that Mr Shand would have been misrepresenting the position, doesn’t it?---Yes.
And did you take up with Mr Shand as a director of Blue Sky the fact that this was inaccurate and information going into the public domain that was wrong? ---Yes.
Right. And your evidence is that there was a discussion at board level, was there, to let it lie?---Yes.
A curious aspect of this case is that although the business and ultimate demise of Blue Sky was the subject of voluminous evidence, according to the parties (as recorded in a document filed in advance of the trial), the limited factual findings that need to be made as to the underlying business of Blue Sky (and its failure) are related to the substantial truth of aspects of the alleged proper material relied upon by Mr Aston.
Consistently with this, in support of a submission that Fairfax and Mr Aston had failed to prove that Dr Stead had a “poor track record”, the following was said on behalf of Dr Stead:
The issue of why Blue Sky collapsed is not relevant to the facts in issue in this proceeding but … the March-April 2018 short-seller attack and related media coverage, including by Mr Aston and the AFR, affected the fundamentals of Blue Sky shortly thereafter.
The “attack” to which Dr Stead was referring was a report on Blue Sky by Glaucus Research Group California LLC (Glaucus), an activist short seller based in the United States, published on 28 March 2018 (Glaucus Report). The Glaucus Report was damning as to a range of matters, including the lack of transparency of Blue Sky. Dr Stead left the board shortly thereafter, but it was common ground that this was about redressing a deficiency of non-executive directors and had nothing to do with: (a) the publication of the Glaucus Report; (b) Blue Sky’s attempted rebuttal of it; nor (c) any disagreement she had with the Board as to inaccurate AUM information being in the public domain.
Just as it is beyond the scope of this case to make findings as to why Blue Sky collapsed or the accuracy of the Glaucus Report, given the way the case is pleaded, it is also beyond my role to make findings as to the legal or moral appropriateness of Dr Stead and the other directors letting misleading information as to the extent of fee earning AUM, and the breakdown of AUM as between various asset classes, to be left unaddressed – notwithstanding people were investing in funds managed by Blue Sky and were buying the listed entity’s shares.
During the course of the trial, at times, it seemed to be suggested that the failure of Blue Sky could be simply put down to the publication of the Glaucus Report and the consequent loss of investor confidence fuelled by the media (although, as noted above, Dr Stead’s evidence was somewhat more nuanced on close examination). In her evidence in chief, Dr Stead was highly critical of Glaucus in noting:
By publishing what I believe to be biased opinions in [the Glaucus Report] that are not based on facts, Glaucus’ aim was to panic Blue Sky investors and destroy their confidence in the company with a view to driving its share price down and exploiting the fall in the share price to make a significant profit. By doing so, it significantly improved its odds of being able to sell Blue Sky shares at a high price and buy at a low price …
I also believe Glaucus relies on the media to achieve its aim.
But when addressing why Blue Sky failed, in an article she wrote published on the website SmartCompany on 31 October 2019 (“The mainstream media sneers at success and revels in failure – and it feeds a culture of mediocrity”), to which she was taken in cross-examination, Dr Stead gave a somewhat more comprehensive response than simply blaming short sellers. She identified three main reasons for the debacle being:
[o]ur growth rate prior to the attack, combined with an activist short seller attack which was false, misleading and deceptive, and the board’s mistakes in the wake of the attack. I wear part responsibility for at least one of these reasons.
Dr Stead did not resile from this statement in cross-examination, and confirmed that the reason for which she wore “part responsibility” was the company’s growth rate. But to the extent it is relevant to credit, even this somewhat more complete account seems likely to miss the mark. Dr Stead accepted that Blue Sky’s shares traded efficiently. The so-called “efficient market hypothesis” in its “pure” (or even “semi-strong”) form has its persuasive critics, and no doubt distortions from fair market value can be caused by short sellers for a period (such as “short and distort” participants), but in the present case, Blue Sky ultimately responded to the Glaucus Report by placing further information into the market. Even assuming the Glaucus Report was inaccurate in material respects, ultimately one would expect investors acting rationally to have placed a fair value on Blue Sky shares based on the present value of projected future cash flows. The apparent problem for Blue Sky was that when additional information was revealed, the value placed by the market on the stock was very different than the heady days before, and immediately after, the “Chanticleer” column.
At this point it is convenient to identify and dismiss a submission made by Dr Stead connected to the activities of short sellers. It was suggested that it was somehow “improper” for Mr Aston to rely on information provided to him by anyone with a short position in Blue Sky. Speaking generally, market participants with long positions can be as biased as those holding short positions. Their perspective is different, but each perspective may be valid, provided one appreciates the respective partialities. It is unnecessary to go into the details, but it has been compellingly argued by financial economists that constraints on short selling can slow the dissemination of information into the market which, by impeding timely price responses to new information, undermines market efficiency. Leaving aside short term distortions, if the share price is seen as an equilibrium or fair value arrived at by all market participants, to exclude short sellers can systematically reduce the amount of information which should be reflected in the fair value share price. To submit, as Dr Stead did, that Mr Aston could not rely on any source or information to the degree he did, simply because it came or originated from a short seller is, with respect, jejune and I reject the notion that a journalist like Mr Aston was somehow obliged to ignore their views of the company or its officers in an a priori fashion.
The final matter to which preliminary comment should be made relates to the context of Dr Stead’s social media posts and, in particular, the context of one Instagram post that followed on from the efforts of the Chief Entrepreneur’s “Adventurer-in-Residence” to have members of Queensland entrepreneurial ecosystem gain “clarity” and “agility” by undergoing “immersion” in Mongolian nomadic life.
I referred earlier to the support Dr Stead perceived she received from those within her “community of practice”. Following the release of the Glaucus Report, which was discussed widely in the “ecosystem”, she attended a function and thereafter posted to Instagram a photo of herself with Ms Bradley, in which post she observed that Ms Bradley was a support to her, and explained:
When the chips were down, I was overwhelmed with love support and community. This woman is one of the awesome peeps [scil. people] in the Queensland ecosystem who has been a staunch sister.
She then went on to say that:
Along with many other sisters and brothers, many of whom I had the joy to see again tonight. You all know who you are. Thank you.
Now, given I’m currently broke, how am I going to crowd source $5k to go on the venture mission to Mongolia?
(Emphasis added).
As to the emphasised paragraph of her post, it was said by Fairfax and Mr Aston that Dr Stead did not give any direct evidence that this part of the post was a joke, despite having opportunities to do so. Moreover, the comments on the post in evidence do not appear to indicate that that was how it was understood by the two followers who responded to it (in fact they take issue with the fact that she referred to herself as “broke”) (Ex 1, p 3893). It followed, it was contended, the Court ought to be slow to conclude the emphasised remark was a joke.
But to the extent subjective intentions are actually relevant, it was made plain on behalf of Dr Stead throughout the case that this aspect of the post was not to be taken literally. This was put to Mr Aston (no doubt on instructions), and was asserted to be patent from any fair reading. I have little doubt, given the context of the post, that by her last paragraph Dr Stead was attempting to be light-hearted and was speaking in a jocular way to persons she considered colleagues and fellow enthusiasts of such “bonding” sessions. This was someone primarily conversing with “peeps” she considered her “brothers” and “sisters” in an emotional way. The joke might be perceived by some as being self-indulgent or injudicious (given that investors in Blue Sky and the funds she had managed had suffered financially), and two people may have taken issue with any assertion she was broke, but any want of tact did not mean this aspect of the post was not an attempt at levity. It follows, contrary to the complexion Mr Aston put on the post, I do not accept that Dr Stead’s post was an exercise in panhandling by a cadger trying to procure a free trip to East Asia.
C.2 Mr Aston
Mr Aston was an intelligent, self-possessed witness who sparred effectively with his cross-examiner.
Without objection, and without any limitation on its use, a 50-minute video went into evidence (Ex D) recording Mr Aston (together with two other journalists) being interviewed and taking questions at the Melbourne Press Club. It was both instructive and revealing. It provided a candid account of how Mr Aston regards his role, how he perceives his “inside Baseball” readership (at 30:20), and his modus operandi generally, including how he sometimes will (at 18:07):
… bite off a really big story and pursue it for months and months and stay on it and I think it’s important to do that, to own something and to pursue it to its ungainly end.
Taking the evidence as a whole, I am satisfied that although within the “ecosystem” there was considerable “chatter” about the adverse publicity Dr Stead received including the First and Second Matters, there is support and continuing regard for Dr Stead as a valued member of the VC community. This no doubt is the legacy of her enjoying the position, prior to the publications, of being a person widely liked and respected within the “ecosystem”. What is also evident is that she has suffered reputational damage which bites when it comes to those with whom she has not previously been closely connected, or with persons outside the “ecosystem” with whom she has dealings. In this way, I am satisfied that she has suffered some real reputational harm.
The Nature and Gravity of the Imputations
In the context of making findings as to meaning, I have already described the nature and gravity of Imputations 1A, 1B, 1C and 2 and accordingly can be brief. Imputation 1B (Elaine Stead rashly destroyed capital causing enormous losses to unitholders) and Imputation 2 (Elaine Stead is an untrustworthy venture capitalist who fails to deliver on her promises to shareholders and investors) have obvious similarities and amount to reflections on Dr Stead’s professional competence, as does Imputation 1C (Elaine Stead is a venture capitalist, who made stupid investments in two worthless companies, Shoes of Prey and Vinomofo, which had no prospects of success) which is a more particular type of attack on her ability as a venture capitalist. Imputation 1A (Elaine Stead is a cretin) is a highly offensive allegation, but is more akin to vulgar abuse than serious commentary on Dr Stead’s track record or professional competence (although it is relevant that acumen and judgment are of first importance for a person in the position of Dr Stead).
A further point should be made: although Imputation 2 is that Dr Stead is an untrustworthy venture capitalist who fails to deliver on her promises to shareholders and investors, it would be erroneous to consider that this was an allegation of dishonesty. Context can clarify the sting of a facially benign, or facially malignant, pleaded imputation: see Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165 (at 172–3 [21]–[22] per Mason P). Read in context, the sting was that Dr Stead was untrustworthy because she was a person in whom one could not repose trust or confidence in doing a competent job.
Having said this, they are all defamations of some seriousness going to the heart of Dr Stead’s reputation.
The Extent of Publication
Publication was very extensive. There were 32,418 copies sold of the edition of the AFR newspaper which contained the First Article, the estimated number of readers of which was 283,000. As at 10 February 2020 there were 8,591 page views of the webpage on which the First Internet Matter appeared. The figures for the Second Matter were similar: 32,919 copies were sold of the edition containing the Second Article (with an estimated readership of 300,000). As at 10 February 2020, there were 6,244 page views of the Second Internet Matter.
It is appropriate to make a finding as to the Third Matter because it is relevant to the distribution of the Second Internet Matter, and is relied upon in relation to aggravated damages. The relevant analytics of were follows: (a) 11,505 “impressions” (being the number of times a tweet or group of tweets appears on a user’s Twitter feed); and (b) 802 “interactions”, including 463 links through to the Second Internet Matter (such number being included in the number of page views referred to above), 27 likes, 6 retweets and 4 comments.
The publications remain accessible on the internet.
Findings Relevant to Aggravated Damages: Alleged Unjustifiable Conduct
Consistently with the principles explained above, in final submissions, Dr Stead relied upon eight alleged aspects of the conduct of Fairfax and/or Mr Aston which were said to be relevantly unjustifiable, improper or lacking in bona fides such as to attract an entitlement to aggravated damages: four of these bases relate to the circumstances of publication; and four to post-publication conduct. I consider each below.
Circumstances of the Publications
First, it is asserted that Fairfax and Mr Aston conducted a campaign of vilification against Dr Stead who pointed to the following Rear Window articles in evidence containing offensive or derogatory references to her:
(a)on 3 April 2018, Mr Aston said that “Stead was appointed last month to advise the Queensland government’s $6.2 million “shark tank” initiative by Treasurer Curtis Pitt. Of course she was.” (Ex 1, p 1946);
(b)on 4 April 2018, Mr Aston said that “the esteemed Dr Elaine Stead, has taken her Twitter profile private, to the widespread dismay of every Australian money manager with half a sense of humour.” (Ex 1, p 1957);
(c)on 12 April 2018, Mr Aston said that Dr Stead was “the last person you’d ever ask about the asset manager’s financial health.” (Ex 1, p 2111);
(d)on 16 April 2018, Mr Aston referred to Dr Stead as “the esteemed Dr Elaine Stead” (Ex 1, p 2157);
(e)on 22 April 2018, Mr Aston referred to Dr Stead as “the Brick Tamland of Queensland’s fledgling Venture Capital scene and tireless Tweeter of fridge magnet banalities” (Ex 1, p 2183);
(f)on 23 April 2018, Mr Aston referred to “Elaine Stead (AKA Brick Tamlin)” (Ex 1, p 2194);
(g)on 7 May 2018, Mr Aston referred to Dr Stead as “Blue Sky’s own Brick Tamlin” and said that “[h]ow fitting that on March 24 she tweeted that ‘your reputation and integrity is all you have’”, adding “Lord knows what she’ll do next – maybe go back and finish primary school?” (Ex 1, p 2276);
(h)on 28 May 2018, Mr Aston said that “Elaine Stead remains the worst (remaining) enemy of [Blue Sky’s] negligible plausibility” (Ex 1, p 2387); and
(i)on 10 July 2018, Mr Aston said that “VC peanut Elaine Stead writes monthly cheques for daft start-ups as patently unscaleable, unprofitable and unflippable as a local custom shoemaker” and referred to Dr Stead as “the Brick Tamland of capital allocation” (Ex 1, p 2669–70).
For the uninitiated, Brick Tamland is a fictional “weather man” played by the actor Mr Steve Carell and appears in the films “Anchorman: The Legend of Ron Burgundy” and “Anchorman 2: The Legend Continues”. All one needs to know about the offensiveness of the comparison can be gleaned from reproducing a quotation from the script of Anchorman when the character is introduced to the audience:
I’m Brick Tamland. People seem to like me because I am polite and I’m rarely late. I like to eat ice cream and I really enjoy a nice pair of slacks. Years later, a doctor will tell me that I have an I.Q. of 48 and am what some people call ‘mentally retarded’.
In the submission of Fairfax and Mr Aston it was noted that until April 2018 Dr Stead was a director of Blue Sky and until August 2019 remained an executive in the role of Head of Venture Capital. The collapse of Blue Sky was a major event in the Australian investment market. The final submission made by Fairfax and Mr Aston was that Mr Aston’s reasons for continuing to write about Blue Sky, Dr Stead, and other officers of Blue Sky were given in response to a question I asked Mr Aston, enquiring as to whether he accepted that to call Dr Stead a cretin was a “very offensive thing to say about someone”. The answer relied upon (at T549.45–T550.17) was as follows:
Yes. But, I mean, the – your Honour, the messages and the denial of any responsibility at all for what had occurred at Blue Sky – I know, Ms Chrysanthou, you don’t read the Fin Review unless it’s in a brief, but the collapse of Blue Sky in 2018 was a major event in the Australian investment market and Dr Stead was a director of a company that mislead the market, it is alleged. Well, it collapsed 13 months after – after it was alleged that they inflated the values of their assets. And by the way, during those 40 articles, I said that the CEO of that company, Rob Shand, should go to gaol. I said that Phil Hennessy, the chairman of the audit committee of the board, who received an Order of Australia award for accounting, services to accounting, I pointed out the absurdity of that. But Dr Stead was the only one, only senior member personnel of Blue Sky, who continued to go out and give public statements that Blue Sky collapsed through no fault of its own. Now, it’s obvious from Dr Stead’s own evidence that that’s not possible. I mean, her own evidence about an efficient market, that if – you know, short sellers can’t just say bad things about a company and then it collapses if they’re not true or if they’re rebutted appropriately. So Dr Stead was the only one who was continuing to assert that Blue Sky was completely innocent, and everyone involved in it was completely innocent. And I – you know, I know this predates, but that’s the foundation when I – with the tweets that were occurring for me to think that you would have to have rocks in your head to be actually thinking you could make that argument fly.
It is submitted that “[t]here is no basis to disbelieve his evidence” and, as a consequence, Dr Stead has failed to establish that Fairfax and Mr Aston have conducted a campaign of vilification against her, or that their conduct in continuing to report on her was unjustifiable, improper or lacking in bona fides.
The difficulty with this submission is that it conflates two matters which ought not be elided. It is plain beyond peradventure that what went on at Blue Sky was significant and raised very serious issues of corporate performance and governance that warranted, among other things, the focus and comment of persons such as Mr Aston. Mr Aston believed Dr Stead was both denying the reality of the real reason for the collapse of Blue Sky and had demonstrated obtuseness, indeed stupidity, by engaging in discordant social media posts. Indeed, without making findings going beyond what is necessary to determine this case, it might be said there was a rational basis for Mr Aston to be highly critical of aspects of the performance of the officers of Blue Sky including Dr Stead; it was not irrational to think it was strange and dissonant for a former director and senior executive of a public company that had performed in the way Blue Sky had performed to engage in social media in the terms she did. Further, as I have noted above, Mr Aston was not shy about being highly critical of other officers.
However, the problem is that it does not address the real issue raised by Dr Stead in this part of the case. The reality is Dr Stead did become the focus of the “slow death” sometimes suffered by targets chosen by Mr Aston (at T574). He did single her out for focus and engaged in a sustained campaign of offensive mockery which amounted, in my view, to a form of bullying. Although not referred to in submissions, there was one aspect of Mr Aston’s evidence that I considered to be somewhat telling. After being asked by Senior Counsel for Dr Stead whether he agreed it was highly offensive to refer to Dr Stead as “Brick Tamland” (at T529.20–23), he responded:
I can imagine she would have found that unpleasant, yes. But, although, I note she did make a joke of it herself. She changed her own profile picture on social media to the character of Brick Tamland. She changed her profile picture to Steve Carell in that character. So, she seemed to be running with the joke as well.
One might ask, what was she supposed to do? She was being serially mocked in Australia’s leading financial daily as being, in effect, a gaping moron. There was an asymmetry of power and Dr Stead was sufficiently astute to understand that Mr Aston was “the one with the column inches” (as he himself recognised). To describe Dr Stead’s experience as likely to be “unpleasant” might be thought to be an exercise in considerable understatement. After hearing evidence of Dr Stead’s hurt feelings, I am entirely satisfied that her actions in changing her profile picture were not “running with the joke”, but rather a way of mitigating what no doubt was embarrassment and humiliation, by attempting to give the impression of rolling with the punches, or at least appearing to cope with what was occurring.
Dr Stead described how this campaign contributed to her reaction to the First Matter (at T216.6–12):
[I]t was the straw that broke the camel’s back, and I just could not continue to do my role. I had to go see a psychologist because I was having suicidal thoughts. I felt like the core thing that was my purpose on a daily basis – which, as a venture capitalist, my reputation is everything. It’s the only thing I have. It’s the only thing any fund manager has. I just couldn’t see a way to get out from under the harassment and the bullying and the mocking and the humiliation.
I accept this evidence.
It is necessary to bear in mind that aggravated damages are compensatory and not punitive and are awarded when the circumstances in which the defamatory matter was published, or the conduct of the defendant, has made the injury worse. In Suttcliffe v Pressdram Ltd [1991] 1 QB 153, Lord Donaldson observed (at 170) that “[a]ggravated damages are awarded precisely because other conduct by the defendants, which may or may not take the form of another libel, rubs salt in the wounds inflicted by the libel sued upon”.
The targeted campaign of offensive mockery of Dr Stead was unjustified and improper and meant the manner in which Fairfax and Mr Aston committed the tort of publishing the defamatory matters caused damage and was conduct sufficiently oppressive to warrant some compensatory sum to be awarded for aggravated damages.
Secondly, it is said Fairfax and Mr Aston’s conduct is unjustifiable by relying on a person known as “Source 2”, who provided information about Dr Stead used by Mr Aston. Information might be too generous a word – some of the exchanges (for example, Source 2 telling Mr Aston that Dr Stead was “a proper retard”), are better described as puerile trash-talk. Dr Stead submits the relevance of all of this is “Mr Aston’s surrender of objectivity about Dr Stead to Source 2” and the exchanges do not indicate that Mr Aston approached Source 2’s commentary “with an appropriate degree of circumspection for an anonymous source with a clear animus towards Dr Stead”.
These private exchanges do not reflect well on Mr Aston and reflect even more poorly on Source 2 (although it is fair to say they would not be alone in being embarrassed by public disclosure of private text messages). But having heard evidence from Mr Aston, I not only have no doubt that he knew Source 2 had a very poor opinion of Dr Stead (that was blindingly obvious), but also I accept he exercised judgment and utilised Source 2’s information only when it reflected his own opinion. Further, the allegation that Mr Aston “surrendered objectivity about Dr Stead to Source 2” was not put to Mr Aston. This conduct does not trigger any aggravation of damages.
For reasons I have already explained, the third aspect of the conduct relied upon by Dr Stead as being improper, that “Mr Aston also knowingly relied on those with a short position in Blue Sky for information”, is misconceived.
Fourthly, it is alleged that the First Matter and the Second Matter went well beyond a robust prosecution of Mr Aston’s opinions and that they “were gratuitously offensive, devoid of wit and rife with falsehoods”. For the First Matter, Dr Stead relies on the following features as aggravation, being the reference to: (a) “fox” in a burning henhouse in the headline; (b) a “feminist cretin” that was “proffering a begging bowl” in [4]; (c) making “fatuous investments in peanut start-ups” in [6]; (d) engaging in a “white girl photo op” in [7]; “falling hard for the next big dairy fad: yak yoghurt” in [7]; and a “tax loss specialist” in [8] of the First Internet Matter. As to the Second Matter, Dr Stead relies upon the references to: (a) Dr Stead as a “venture capital pyromaniac” in [6]; (b) raising money to “feed it into Fox’s furnace” in [7]; (c) setting fire to people’s money through many unviable enterprises in [8]; (d) being so stupid that she would invest in a “DVD rewinder” or “motorised ice-cream cones” in [11]; (e) the suggestion that the Premier of South Australia pay Dr Stead $1 million a year not to invest people’s money in [12]; and (f) the “attribution of responsibility to Dr Stead for the liquidation of her former employer” implicit in [8].
Finally, Dr Stead also relies upon the Third Matter as conduct going to aggravation in that it was for the purpose of publicising the Second Matter to a large audience (about 15,000 Twitter followers) while specifically bringing it to the attention of the Premier of South Australia by tagging his Twitter “handle” in the Tweet.
One can immediately see the partial overlap between this particular conduct and the overall campaign of vilification against Dr Stead, in respect of which I have already made findings. As has been explained, opinions may be obstinate, offensive and trenchant. The inclusion of such language is not unjustifiable or improper in and of itself. Nor was publishing the Third Matter (tweeting the Second Internet Matter) conduct of a character which, absent anything else, was unjustifiable. In this regard, it was not suggested to Mr Aston that his evidence in relation to the Third Matter (at T639.44–T642.15) was false, and I accept the submission that the evidence discloses no basis for an award of aggravated damages as a result of the publication of the Third Matter.
There is one element of the Second Matter that does give me some pause. I have already noted my rejection of Mr Aston’s evidence at trial as to his comment at [8], that “[h]er previous employer, CM Capital Investments, was liquidated in 2014”. He did seek to imply that there was some causal connexion, and there was no reasonable basis for him to do so. Although in of itself this would have not have amounted to conduct of a character to allow for aggravated damages, it reinforces my finding that there was something unjustifiable about the broader campaign against Dr Stead.
Further, as to some of the matters relied upon by Dr Stead, it is important not to confuse what might be described as “aggravating factors” which concern the nature and gravity of the imputations (and which need to be taken into account in assessing the ordinary damages to compensate injury to feelings), with improper conduct which has the necessary character to give rise to aggravated damages.
Conduct of the Proceeding
Turning to post-publication conduct, the fifth aspect of conduct relied upon by Dr Stead is said to be a “baseless allegation of criminal conduct”. As noted above, somewhat opportunistically, and with some forensic dexterity, it was said Dr Stead now agrees with the comment of Senior Counsel for Fairfax and Mr Aston (at T476.13–15) that the notion Dr Stead deliberately destroyed investor capital should be characterised as follows:
It’s criminal conduct to take someone else’s money and invest it in order to lose it. I mean, it’s an outrageous allegation to make against somebody no matter what the context.
It was submitted that “despite there not being a skerrick of evidence showing it was even [in] the realm of possibility that this allegation was true, Fairfax and Mr Aston repeatedly alleged in their defences … that Dr Stead was guilty of criminal misconduct”.
There is a degree of unreality about this submission made in the terms it was advanced. Plainly, for reasons I will come to, the terms and conduct of the justification defence and the circumstances in which it was not pressed are highly relevant, but separately from that more general argument, it does not assist to fasten acontextually upon the submission made on behalf of Fairfax and Mr Aston when they were always contending (correctly, as it happened) that any imputation connoting deliberateness was not conveyed.
This brings me to the sixth and more substantive aspect of the post-publication conduct relied upon: the maintenance, or more properly, the non-abandonment, of the justification defence. This aspect of the case was singular. It is, of course, common to have a debate as to whether a justification defence was raised in good faith and conducted appropriately while recognising that an award of aggravated compensatory damages should not be made merely by reason of a respondent unsuccessfully defending the action. But that is not what happened here.
Despite not “pressing” the truth defence, and hence not calling any evidence (despite engaging in what Dr Stead described, somewhat unfairly, as “an industrial scale fishing expedition to find evidence to support it”), Fairfax and Mr Aston never resiled from their position that the imputations the subject of their justification defence are true. This included the truth defence pleaded to the “deliberateness” imputations. It is necessary to explain this in a little detail.
The starting point is a letter from the solicitors for Fairfax and Mr Aston to the solicitors for Dr Stead sent on 14 October 2020 (that is, a little over a month and half before the start of the hearing):
We refer to the further amended defence filed on behalf of the respondents on 9 March 2020 …
Our clients are conscious of what the Court of Appeal has said in Harbour Radio Pty Limited v Ahmed (2015) 90 NSWLR 695 at [46]-[48] in relation to the approach to be taken in cases involving defences of justification and honest opinion …
Our clients are confident that the Court will find that the matters complained of would be understood by the ordinary reasonable reader to be expressions of opinion as opposed to statements of fact. In these circumstances, it is possible that the justification defence may not call for determination.
Having regard to:
a.the volume of documents that would be required to be before the Court in order for it to determine the justification defence;
b.the Court time that will be required to be taken in relation to the justification defence;
c.the resources of the parties that will be required to be expended in relation to the justification defence; and
d.our clients’ confidence in their case in relation to the questions of meaning and the defence of honest opinion,
our clients have instructed us not to press the justification defence.
In coming to this position, the respondents are keenly aware of the overarching purpose of the civil practice and procedure provisions, being the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible under section s37M and 37N of the Federal Court of Australia Act 1976 (Cth). The respondents take seriously their obligation to consider at all times the best way to run their case conformably with this overarching purpose.
We will shortly send to you a proposed second further amended defence that gives effect to the withdrawal of the justification defences so that you may consider whether to consent to our clients having leave to file it. Our clients will consent to an order that they pay your client’s costs thrown away by virtue of the filing of the second further amended defence.
…
(Emphasis added).
On reading this letter, it seemed to me there was no unqualified withdrawal of the justification defence. After I indicated in the course of Dr Stead’s opening that I was somewhat unsure precisely what to make of this letter, I indicated (at T209.38–T210.5) to Senior Counsel for Fairfax and Mr Aston that:
HIS HONOUR: … I’ll just give you my indication of how I read the representations in that letter.
MR DAWSON: Certainly, your Honour.
HIS HONOUR: This is a letter signed by experienced solicitors, no doubt on instructions, which makes it clear that the justification defence is not one which is being withdrawn because of a perceived inability to prove truth, but rather, a determination was made that it is unnecessary to press it because: (a) the honest opinion defence is of a particular character, and (b) that it’s regarded as being consistent with the overarching purpose obligations to do so. So that means that there’s no withdrawal of the suggestion that it would … be possible to prove truth. So that’s the way I’m proceeding.
This characterisation was not the subject of any dispute and, following the evidence, it became evident that the considered position of Fairfax and Mr Aston was (as I then summarised it) that “notwithstanding Mr Aston’s evidence, the position taken formally in the Court is that [Fairfax and Mr Aston] still say that there is a basis to make out the truth of those more serious imputations” (at T711).
The sincerity or otherwise of the claim that the justification defence was abandoned out of concern for Court and party resourcing was, it is fair to say, disputed. In Dr Stead’s view, it was abandoned because nothing in the nearly 13,000 documents inspected supported the defence (at T240.16–18). This view is an overstatement, but to the extent it is relevant to make a finding, it seems to me the reason why the defence was not pressed is fairly clear: although properly pleaded by highly experienced counsel and thought initially to be arguable, after investigation, the view was formed there was an insufficiency of evidence available to allow it to succeed at trial – it is a pity that is not what was said explicitly when the defence was amended.
The decision not to accept that the justification defence could not succeed, while not advancing any evidence to support it looks, on one view, like being willing to wound, and yet afraid to strike. However characterised, it is conduct that was said to have made Dr Stead “[l]ivid” (at T240.28–36):
I feel like they’re trying to have their cake and eat it … I knew that, if that was pressed, I would be able to prove or defend any such truth defence. And now I feel that has been taken away from me despite having spent a lot of money and a lot of people’s time and resources to prepare for that. So I am very angry and I feel like I have been - I feel like my right to prove that the things that were being said about me were not true has been taken away.
On balance, however, and not without some hesitation, I have not reached the level of satisfaction that this conduct was unjustifiable, improper or mala fide. It was not suggested the pleading was improper and the decision not to press the defence did at least serve to narrow issues considerably. The amendment was consistent with the overarching purpose and had cost consequences. I hesitate to elevate an artfully drafted letter and a subsequent unwillingness to concede that the defence would likely fail, to something more.
Seventhly, Dr Stead alleged that during his evidence, Mr Aston aggravated the serious hurt he had caused her by “sensationally and gratuitously insulting her intelligence” in a way likely to, and which did, attract media coverage. This related to Mr Aston departing from his evidence in chief that he believed that Dr Stead appeared cretinous or was almost cretinous, instead testifying to an unqualified belief that she was (at T524.15), including by his Forrest Gump quote (at T548.29), which caused, it was said, “further untold harm to Dr Stead’s reputation”. Given Mr Aston was aware of the trauma suffered by Dr Stead in response to him calling her a cretin, it was, it is said, “grossly improper of him to mock her intelligence further, all the more so in full knowledge that they were likely to be repeated by major newspapers covering the trial”.
I do not accept that Mr Aston used his evidence to insult Dr Stead’s intelligence in a sensational and gratuitous manner. Mr Aston was sued by Dr Stead in relation to an imputation that Dr Stead was a cretin (or a cretinously stupid person). From the outset he has defended on the basis that that was his honestly held opinion. Senior Counsel for Dr Stead repeatedly cross-examined Mr Aston on the question (or a variation of the question) as to whether her client was a cretin. This implies no criticism, the questions had an understandable forensic purpose. But it can hardly be improper conduct for Mr Aston to respond by giving answers relevant to this topic, even if at times the evidence was given somewhat colourfully and occasionally (but infrequently) non-responsively.
To the extent there was a so-called escalation of his evidence, I am satisfied that this was not for a sensationalist purpose. Although his evidence was no doubt hurtful to Dr Stead, I am not satisfied that in giving his evidence Mr Aston gratuitously insulted Dr Stead’s intelligence.
Eighthly, and finally, Dr Stead relies on Fairfax and Mr Aston’s refusal to make any amends for the articles, or even address admitted deficiencies in the First and Second Matters that remain online. In this regard, after a request by Dr Stead after publication of the Second Matter that sought removal of the article, an apology, an end to the harassment campaign and no more money than her reasonable legal costs (Ex 1, p 3612), Fairfax replied saying it stood by the stories as published and that any proceeding would, in the time honoured phrase, “be vigorously defended” (one wonders if solicitors ever say their clients are going to defend proceedings other than vigorously).
Similarly, Dr Stead says that the failure to remove the matters pending the proceeding or to correct allegations Mr Aston accepts are “imperfect”, or the subject of his regret, aggravated her hurt, such as: (a) not including reference to Dr Stead’s educational qualification in the online version in which he calls her a cretin (at T533.29–30); (b) not removing the implicit allegation that Dr Stead made a causal contribution to the liquidation of her former employer, CM Capital (at T536.41–43); and (c) not removing the allegation that Dr Stead was untrustworthy because she did not procure the return of $1.6 million in fees to investors (at T623.29–32).
This was not conduct which in the circumstances of this case was improper or lacking in bona fides. Fairfax and Mr Aston have maintained their position in relation to meaning (which was vindicated in part by the Third Matter and a number of meanings rejected), pleaded a truth defence (which Dr Stead did not suggest was improper when pleaded) and have consistently maintained their position that the publications are defensible on the basis of honest opinion. It was not improper to refuse to make an offer of amends in these circumstances, nor to leave a publication, the subject of a good faith defence, available online pending the quelling of the controversy as to whether it is defensible.
It follows that for the reasons explained at [264]–[274], Dr Stead is entitled to aggravated damages by way of compensation for injury resulting from the circumstances and manner of the publication of the First and Second Matters.
As a consequence, the issue of construction as to whether the circumstances of publication that engage s 35(2) might extend to post-publication conduct need not be considered and, if it was otherwise appropriate, an order for damages for non-economic loss that exceeds the cap in respect of both pure compensatory damages and aggravated compensatory damages could be made.
Assessment
As authorised by s 39 of the Act, and given the close connexion between the causes of action upon which Dr Stead has succeeded, I propose to assess damages in a single sum. Although I have explained above the relevant principles and findings relevant to the impressionistic process of fixing upon an appropriate solatium for hurt to feelings, damage to reputation and vindication in one lump sum, in this assessment it is worth stressing two aspects which have particular importance.
Dr Stead is unmarried and has no children. She gave evidence (at T216), which had some evident force, that “the only thing I had in my life was my work”; she also gave evidence that “as a venture capitalist, my reputation is everything … It’s the only thing I have. It’s the only thing any fund manager has”.
This is an example of a case where the damage to reputation has occurred in circumstances where a person’s professional standing is affected, like in Crampton, where Mahoney ACJ said (at 193A):
In some cases, a person’s reputation is, in a relevant sense, his whole life. The reputation of a clerk for financial honesty and of a solicitor for integrity are illustrations of this.
It follows that the appropriate and rational relationship between the harm sustained and the amount of damages awarded should reflect the fact that the law places a high value upon reputation and in particular upon the reputation of those whose work and life depends upon, among other things, their judgment: see Crampton (at 195D per Mahoney ACJ).
Further, as I have explained, this is a case where Dr Stead did experience a high degree of subjective hurt to feelings aggravated by the campaign that had been and was being maintained against her.
It is difficult to identify comparables, but in considering the appropriate and rational relationship between harm and amount, I have had regard to the general tenor of awards (including those where a person’s professional standing is affected) as part of the process of synthesis of the relevant matters to which I have referred. Weighing up all the factors, I have concluded that the appropriate award of ordinary and aggravated compensatory damages is $280,000.
E.2 Interest
At the time of publication of the First Matter, the rate for pre-judgment interest was 5.5%, but by the time of publication of the Second Matter it was 5.25% (and since then has come down to 4.25%). As Fairfax and Mr Aston correctly point out, this roughly equates to an average rate of 5% across the period. Given the extent to which the damages award in this case relates to subjective hurt, and the fact that this hurt was suffered upon publication, I have some difficulty accepting the broad brush submission of Fairfax and Mr Aston that the proper approach is simply awarding 2.5% for the entire period, which is premised on the notion that “Dr Stead’s damage was suffered over time”. My preliminary view is that the amount of 3% over the entire period is appropriate. Having said this, if interest cannot be agreed, I will hear short argument on the issue.
E.3 Injunction
The relevant principles as to the grant of permanent injunctions were set out comprehensively by Wigney J in Rush v Nationwide News Pty Limited(No 9) [2019] FCA 1383 (at [9]–[46]). If an injunction is to run, it will be because I am satisfied that there is a real apprehension that there will be a republication of the imputations that have been found to be defamatory.
As I indicated to the parties during the hearing, in the case of a newspaper publication, the course I would adopt is to address the need for such relief after the parties have had the opportunity to consider these reasons and at the same time as dealing with any other residual issues (and on the basis of evidence available at that time).
F CONCLUSION, COSTS AND OTHER ORDERS
At the end of final submissions, in the context of discussing the words used by Mr Aston, and seeing the extent of the distress of Dr Stead in the Courtroom, I said (at T779.19–24):
… but that’s why words matter … your client is entitled to very trenchant criticism and to be entertaining and to be acerbic …, but I can’t help feeling that we wouldn’t be here after almost two weeks of a hearing if he had have chosen his words with less – how can I put it – vitriol. And I realise the force of what you say about [cases such as Gardiner v John Fairfax & Sons Pty Ltd] – and no one has more respect than me for whatever Sir Frederick Jordan says, but it’s unfortunate.
What occurred at Blue Sky was a legitimate (indeed, one might think important) matter of public interest – particularly for a newspaper like the AFR. However, given the offensive way that Mr Aston expressed himself, it appears Dr Stead felt she had no choice but to resort to the blunt instrument of defamation litigation, which, despite the best efforts of the Court, was unable to be resolved consensually.
This does not mean there is a need for opinion or leader writers to be mealy-mouthed in denouncing hypocrisy, cant, farce or misfeasance, but unless one is prepared to prove the truth of what is said (or invoke some other recognisable defence), the opinion needs to be properly based on facts stated in what is written or be otherwise evident. In the end, that was the problem with the First and Second Matters.
I will stand the matter over for seven days for the purpose of the parties bringing in orders to give effect to these reasons and to deal with any argument as to the grant of any relief enjoining Fairfax and Mr Aston, and as to interest and costs.
I will make three further short points, two of which directly, and one of which indirectly, concern costs. First, subject to any offers of compromise or evidence of settlement negotiations admissible by reason of s 131(2)(h) of the Evidence Act 1995 (Cth), my preliminary view is that costs should follow the event, notwithstanding Dr Stead did not succeed in relation to the Third Matter.
Secondly, special costs provisions designed to promote settlement are included in the Act. Section 40, modelled on s 40A of the Defamation Act 1974 (NSW), provides that in awarding costs, the Court may have regard to the way in which the parties have conducted the case (including any misuse of a party’s superior financial position), and other matters considered relevant: s 40(1). I am conscious that Bromwich J, in Hayson v The Age Company Pty Ltd (No 3) [2020] FCA 1163, recently held (at [39]) that these provisions were “picked up” under s 79 of the Judiciary Act 1903 (Cth). It is unnecessary at present for me to express any view as to this point as it is unclear whether these provisions are said to be relevant.
Thirdly, this proceeding has been able to be resolved within 12 months from it first being before the Court – notwithstanding it had some complexity and involved considerable third party disputation over production and inspection of documents. This has been possible because the solicitors and barristers for both parties have acted in a skilled and highly co-operative fashion. Given the nature of defamation proceedings, even more acutely than in some other areas of the law, justice delayed is justice denied. The conduct of the parties and their lawyers was consistent with the resolution of this dispute as quickly, inexpensively and efficiently as possible and helped facilitate the intention of the Defamation Practice Note (DEF-1) to fashion procedures to bring defamation cases to trial as promptly as can be done justly, and consistently with the other demands on the Court.
I certify that the preceding three hundred and seventeen (317) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee. Associate:
Dated: 27 January 2021
SCHEDULE A: FIRST ARTICLE
SCHEDULE B: FIRST INTERNET MATTER
SCHEDULE C: SECOND ARTICLE
SCHEDULE D: SECOND INTERNET MATTER
SCHEDULE E: THIRD MATTER
- AGLC
- Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15
- Case
- [2021] FCA 15
- Decision Date
CaseChat Overview and Summary
The court examined the evidence provided by Dr Stead and Mr Aston, finding that certain imputations were indeed conveyed. It was determined that four specific defamatory imputations were present in the publications. The defence of honest opinion was rejected by the court as it found that the opinions expressed were not based on proper material and were not honestly held. Furthermore, the court assessed the damages sought by Dr Stead, concluding that the circumstances of publication and the conduct of the proceeding warranted an award of aggravated damages due to the sustained campaign of offensive mockery and bullying directed at her by Mr Aston.
Following the determination of the defamatory imputations and the unsuccessful defence of honest opinion, the court moved to address the damages. Dr Stead's compelling testimony regarding her subjective hurt and the nature of the publication and proceeding led the court to award both general and aggravated damages. The court found that the circumstances of publication and the conduct of the proceeding supported the award of aggravated damages.
Orders
Orders of the court
1. The proceeding be adjourned to 9am on 3 February 2021 for the making of final orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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