A judge has criticised a “half-baked” legal bid to block a $1.55 million loan from the Victorian Liberals intended to assist former leader John Pesutto in settling a defamation debt owed to MP Moira Deeming.
Pesutto faced a significant legal blow when he was ordered by the Federal Court to pay $2.3 million to Deeming for defamation, stemming from comments he made that implied her association with neo-Nazi groups. To date, Pesutto has managed to pay $315,000 in damages and has raised around $750,000 through a GoFundMe campaign and donations from wealthy supporters. However, he still faces bankruptcy without the intended loan.
The recent legal challenge was initiated after the Liberal Party’s administrative committee agreed to lend Pesutto the necessary funds. Colleen Harkin, a member of the committee, filed documents in the Supreme Court arguing that the loan contravenes party regulations and named the party entity Vapold as a defendant. Justice Michael McDonald, overseeing the case, remarked that the challenge had been poorly constructed, suggesting that all committee members should have been named as defendants.
During the hearing, Justice McDonald expressed his discontent, stating, “You have come to this court half-baked,” and questioned the urgency of the case, while noting that the funds had already been disbursed to Deeming’s legal representatives. He adjourned the matter until July 4.
Pesutto’s precarious situation extends beyond financial worries; if declared bankrupt, he would be forced to resign from parliament, leading to a by-election in his Hawthorn seat. The court proceedings proved indicative of the wider tensions within the party; Opposition Leader Brad Battin, who supported the loan, urged party members to resolve ongoing disputes.
Notably, Deeming had previously been expelled from the Liberal party room due to the fallout but was readmitted later after Pesutto lost his leadership role. An agreement that would have temporarily deferred part of Pesutto’s legal costs in exchange for Deeming securing guaranteed preselection ultimately fell through.
Pesutto’s payment deadline looms this Friday, and with the weight of both legal and political pressures intensifying, the situation within the Victorian Liberal Party remains fraught with complications.