A judge has expressed criticism towards a flawed legal challenge aimed at blocking a $1.55 million loan provided by the Victorian Liberal Party to assist former leader John Pesutto with his defamation payment to MP Moira Deeming. This legal action follows Pesutto’s hefty $2.3 million defamation costs imposed by the Federal Court, which ruled he had defamed Deeming by incorrectly linking her to neo-Nazi groups.
As part of his efforts to meet this financial burden, Pesutto has managed to secure $315,000 in damages and raised approximately $750,000 through donations and crowdfunding, but still faces significant financial strain. Legal documents submitted to the Supreme Court sought to obstruct the loan, contending it may violate party regulations, with party entity Vapold named as a defendant. Colleen Harkin, an administrative committee member, is behind this legal action.
During a hearing led by Justice Michael McDonald, he pointed out that the challenge was inadequately prepared, stating the need for all committee members to be named as defendants and describing the case as “half-baked.” He highlighted that the loan had already been transferred to Deeming’s lawyers, prompting questions about the urgency of the court’s involvement. The judge adjourned the case until July 4 and remarked that it did not adequately address the required legal criteria.
Barrister Cam Truong, representing Harkin, maintained that the case was properly filed prior to the loan transfer, asking for additional time to include all relevant committee members in the challenge. Daryl Williams KC, representing some defendants, raised concerns regarding the case’s timing, noting that the committee’s decision had been made a week prior.
If Pesutto cannot resolve his financial issues, he risks bankruptcy, which would trigger his resignation from parliament and lead to a by-election in the competitive seat of Hawthorn. The repayment deadline for the loan is set for Friday, and despite the contentious situation, Opposition Leader Brad Battin has endorsed the loan arrangement, emphasising the need for colleagues to move past the ongoing disputes.
Deeming, previously expelled from the Liberal Party but readmitted after Pesutto’s leadership changed hands, had earlier sought to delay some of Pesutto’s legal fees in return for securing her preselection, though the arrangement ultimately fell through. As the matter progresses, both Pesutto and Deeming have been approached for their comments.