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Court to hear bid to thwart Victorian Liberal party’s John Pesutto bailout despite debt having been paid Judge criticises bid to thwart Victorian Liberal party’s John Pesutto bailout as ‘half baked’ waste of court time
(about 2 hours later)
Move comes as former state opposition leader avoids bankruptcy with court-ordered costs payment to fellow Liberal Moira Deeming Hearing comes after former state opposition leader avoids bankruptcy with court-ordered costs payment to fellow Liberal Moira Deeming
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The former Victorian Liberal leader John Pesutto has paid $2.3m in legal costs owed to his colleague Moira Deeming, but a last-ditch effort by a fellow party member to block the payment will still head to the supreme court. A legal application to stop the Victorian Liberal party’s loan of $1.5m to its former leader John Pesutto has been strongly criticised by a supreme court judge, who accused lawyers of lodging a “half-baked” injunction with “a remarkable oversight” that wasted the court’s time.
The payment, confirmed to Guardian Australia by a source not authorised to speak publicly about the matter, was made with the assistance of a $1.5m loan from the Victorian Liberal party. The loan, to help cover $2.3m in legal costs owed to Pesutto’s colleague Moira Deeming, was approved by the Victorian Liberal party’s 19-person administrative committee late last week.
It means Pesutto will avoid bankruptcy and be able to remain in state parliament as the member for Hawthorn. Two separate payments were made to Deeming’s lawyers on Thursday morning to ensure Pesutto avoids bankruptcy and a byelection in his seat of Hawthorn.
According to the source, two separate payments were made to Deeming on Thursday morning: one by the Liberal party’s investment vehicle, Vapold, and another by Pesutto personally. But lawyers acting on behalf of one member of the Victorian Liberals’ administrative wing, Colleen Harkin, lodged an urgent injunction application in the supreme court to stop the loan from being transferred. The matter was heard after the money had been sent.
An originating motion, filed in the supreme court by Harkin and seen by Guardian Australia, asked for an injunction “restraining” the directors of the party’s finance vehicle, Vapold, from transferring “the amount of $1,550,000.00 belonging to the Liberal party” to either Pesutto or Deeming.
In a letter sent on Wednesday to Vapold’s directors, seen by Guardian Australia, lawyers for Harkin argued the loan breached the Liberal party’s constitution and claimed committee members were not given adequate notice or sufficient details about it, either before or during last Thursday’s meeting where a vote to approve it occurred.
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But Justice Michael McDonald said the application would not “get off the runway” until each member of the administrative committee had been served as defendants in proceedings.
“It’s quite a remarkable oversight, if I may say so,” McDonald said.
“I’m not going to make any orders in this matter until you get your house in order,” McDonald said. “You have come to this court half baked. You’ve failed to name the proper defendants. It doesn’t get much worse.”
McDonald said out-of-hours hearings were reserved for urgent matters and that this injunction did not qualify as such, given the loan had already been processed and the funds were in Deeming’s lawyer’s account. “The reality is, those moneys … will not leave that account without Ms Deeming’s say-so.”
The matter has been deferred until 4 July with the costs of the four respondents, Vapold Pty Ltd, Alan Stockdale, Karyn Sobels and Christopher Pearce, to be covered by the applicants. Sobels, who is overseas, is also a member of the Liberal party’s administrative committee.
Last month, the federal court ordered Pesutto to pay $2,308,873 of Deeming’s legal costs after it found in December that he repeatedly defamed the upper house MP by falsely implying she sympathised with neo-Nazis and white supremacists.Last month, the federal court ordered Pesutto to pay $2,308,873 of Deeming’s legal costs after it found in December that he repeatedly defamed the upper house MP by falsely implying she sympathised with neo-Nazis and white supremacists.
The costs were in addition to $300,000 in damages and $15,000 in interest Pesutto paid after the federal court judgment, after which he lost the leadership of the party.The costs were in addition to $300,000 in damages and $15,000 in interest Pesutto paid after the federal court judgment, after which he lost the leadership of the party.
Pesutto launched a fundraising campaign to help pay the bill but had to rely on the $1.5m Vapold loan, which was approved by the Victorian Liberal party’s administrative committee last Thursday.
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The loan, which has several strict conditions, will see Pesutto repay about $10,000 a month and could reap the party $1m in interest by the time it is repaid.
After the loan’s approval, Pesutto’s successor as opposition leader, Brad Battin, said it would “avoid further financial and reputational damage” for the party and also declared the matter – which has dragged on since March 2023 – resolved.
But earlier this week, lawyers acting on behalf of a member of the administrative committee flagged plans to take legal action to stop Vapold from providing the loan.
In a letter sent on Wednesday to Vapold’s directors, seen by Guardian Australia, the lawyers argued the loan breached the Liberal party’s constitution and claimed committee members were not given adequate notice or sufficient details about it, either before or during last Thursday’s meeting where a vote to approve it occurred.
The letter requested a meeting of the state council be convened “as soon as practicable”, and asked for confirmation by 9am Thursday that “no payment of Liberal party funds has been or will be made” to Pesutto unless agreed by the state council or ordered by a court.
“In the event you fail or are unwilling to provide the undertaking required, we hold instructions to immediately make an application for injunctive relief,” the letter stated, adding that the matter would be brought urgently before the supreme court.
Several Liberal party sources said they believe there is no prospect of a court challenge now that the costs have been paid.
But an application for an injunction will be heard in the supreme court at 4.15pm on Thursday before Justice Michael McDonald.
An originating motion, filed in the supreme court by committee member Colleen Harkin and seen by Guardian Australia, has asked for an injunction “restraining” Vapold’s directors from transferring “the amount of $1,550,000.00 belonging to the Liberal party” to either Pesutto or Deeming.
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It is unclear whether this possible after the costs payment has already been made. The loan, which has several strict conditions, will see Pesutto repay about $10,000 a month and could reap the party $1m in interest by the time it is repaid.
It also seeks a declaration that the “motions purportedly passed by the administrative committee on 19 June concerning Mr Pesutto were invalid and/or void” and costs. After the loan’s approval, Pesutto’s successor as opposition leader, Brad Battin, said it would “avoid further financial and reputational damage” for the party and also declared the matter – which has dragged on since March 2023 – resolved.
The New South Wales property developer Hilton Grugeon, who loaned Deeming funds to pursue her defamation action, urged it to continue.
“I would be disappointed for the people of Victoria and the Liberal party if those responsible for this whole fiasco were not be brought to account,” he told Guardian Australia.
“[Pesutto’s] bankruptcy would trigger them being brought to account for having supported him and his activities.”
Grugeon said as of midday Thursday he had not personally received the money he is owed.
The payment of Pesutto’s debt comes a day before there was expected to be an escalation in bankruptcy proceedings against him, which were initiated by Deeming earlier this month.The payment of Pesutto’s debt comes a day before there was expected to be an escalation in bankruptcy proceedings against him, which were initiated by Deeming earlier this month.
Bankruptcy would have disqualified Pesutto from parliament and triggered a byelection in his seat of Hawthorn, which the Liberals hold by a slim margin of 1.74%.Bankruptcy would have disqualified Pesutto from parliament and triggered a byelection in his seat of Hawthorn, which the Liberals hold by a slim margin of 1.74%.
Avoiding a costly byelection and potential loss of the seat was a key reason many within the party backed the move to bail the MP out with a loan.Avoiding a costly byelection and potential loss of the seat was a key reason many within the party backed the move to bail the MP out with a loan.
On the loan, the former Victorian opposition leader Matthew Guy said the “issue’s been put to bed. The admin committee put it to bed last week.
“If some people want to … hark on about something that’s, I understand, concluded – let them … because we’ve got a job to do and that is to defeat the Labor government.”
Deeming, Pesutto, Harkin and Battin have been approached for comment.Deeming, Pesutto, Harkin and Battin have been approached for comment.