Legal fight over whether loan paid to John Pesutto was above board or a misapplication of funds
Lawyers representing Brad Battin and other members of the Liberal Party’s governing committee are seeking to kill off a Supreme Court challenge to John Pesutto’s $1.5m rescue loan.
Lawyers representing the bulk of the Liberal Party’s governing committee, including leader Brad Battin, have sought to knock out a Supreme Court challenge to the $1.5m rescue loan paid to John Pesutto.
In a bid to kill the case, and avoid a potentially damaging public trial in the midst of an election year, lawyers representing the majority of the party’s state executive told the court the case had no grounds and should be struck out.
However, lawyers acting on behalf of a small group of members of the Liberal Party’s administrative committee Colleen Harkin, Erin Hunt, Anthony Schneider, Ian Pugh, and Marcus Li told argued it was a “complex trust case” and argued that “at its core it’s a case of misapplication of funds”.
They are arguing that Vapold – a Liberal Party entity – directors Alan Stockdale, a former Victorian treasurer, current party treasurer Karyn Sobels and Christopher Pearce acted in breach of the party’s constitution when it paid the money to Moira Deeming’s lawyers as it belonged to the party and “has to act in the best interests of the party”.
But the opposing counsel acting for the committee’s other 14 members argued that the payment was above board, and that the plaintiff didn’t have a basis for the case as Vapold was a separate legal entity from the Party, and the case should be thrown out.
They said the plaintiffs “couldn’t grapple at all” with the concept that Vapold “was not and never will be” a Liberal Party trustee.
If the case were to go ahead and be successful former Liberal leader John Pesutto — who was loaned $1.55m from the party to help repay the $2.3m he owed Mrs Deeming as a result of an earlier defamation case loss — would face a renewed bankruptcy threat which could see him booted out of parliament.
Ms Deeming, also a Liberal MP, had sued Mr Pesutto for defamation after he falsely implied that she was a Nazi sympathiser.
Mr Pesutto was ordered to pay Mrs Deeming $2.3m in legal costs on top of the $300,000 defamation penalty.
But he was unable to pay the cost prompting the $1.5m loan from Vapold to be debated by the 19-member administrative committee in June, and endorsed after a secret ballot.
The payment was made to Ms Deeming’s lawyers.
The case was adjourned on Tuesday afternoon with a ruling expected in the coming days.
Originally published as Legal fight over whether loan paid to John Pesutto was above board or a misapplication of funds
