Stead wins legal costs battle against AFR

Greta Stonehouse
·2-min read

A news organisation which lost a defamation suit has also been lumped with most of a million-dollar legal bill on top of its own.

Venture capitalist Elaine Stead, a former director of failed Blue Sky Alternative Investments, sued the Australian Financial Review and its columnist Joe Aston following a series of offensive articles.

She was awarded $280,000 in damages plus $16,500 in interest but the looming question was whether they would foot her legal bill worth more than $1.1m.

Justice Michael Lee on Monday weighed in her favour for costs to be paid on an indemnity basis from the day after her first proposed offer to settle with the news organisation was rejected in April 2020.

The AFR said damages awarded were dwarfed by both sides' legal fees, which surpassed $2 million, while lawyer Sue Chrysanthou SC confirmed her client's legal fees alone were upwards of $1.1 million.

Ms Stead originally asked for $190,000 and legal costs and the removal of matters complained of, but this was flatly refused.

Another offer of $140,000 including a published apology was offered and also rejected.

The AFR, which is published by Nine Entertainment Co, argued it should only be liable for 75 per cent of Dr Stead's costs on a non-indemnity basis because it was successful in some matters of the case.

Lyndelle Barnett, who appeared for the AFR, argued the businesswoman was not vindicated on some of her most serious accusations, including that Aston was being misogynistic.

But Justice Lee ruled that his judgment overall had been more favourable towards Dr Stead than her first offer which was rejected by the AFR, despite it being "unreasonable" to do so.

"I have accepted that Mr Aston had genuine and cogent grounds for his concerns as to what had occurred at Blue Sky and Dr Stead's behaviour did ... demonstrate an apparent unwillingness to face up to the true reasons as to why Blue Sky failed," Justice lee said.

But the "snag" for the publication was in their pleading of truth and honest opinion, with the former lacking in evidence and the latter not properly based on "facts stated in what was written".

"The problem always came back to the colourful, but less than adroit way the articles were originally put together.

"The lack of proper material being evident in the publications meant the risks associated with making out the honest opinion defence were always high."

Dr Stead was described by Aston in his Rear Window column as a feminist cretin and a venture capital pyromaniac who set fire to other people's money and invested in peanut start-ups, among other offensive terms.

"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," Justice Lee said when awarding damages.

All articles in question have now been taken down.