Legal challenge to block $1.55m to John Pesutto hits Supreme Court

A legal challenge seeking to block a $1.55m loan to John Pesutto has been filed in the Supreme Court amid reports the former Victorian Liberal Party leader has cleared his debt to Moira Deeming.

Brad Battin is set to become the second consecutive leader of the Victorian Liberal Party dragged to court by a party member.

Just a week after Mr Battin called for party unity, ongoing internal factional warfare will see him named as a defendant in a Supreme Court case brought by senior Liberal Colleen Harkin.

Ms Harkin and Mr Battin both sit on the party’s powerful administrative committee which last week approved a $1.55m loan to former leader John Pesutto.

The loan was to allow him to repay his $2.3m debt to colleague Moira Deeming, avoid bankruptcy, and prevent a potentially damaging by-election in his seat of Hawthorn.

But Ms Harkin on Thursday launched legal action against the decision of the administrative committee to approve the loan, saying it was invalid under the party’s constitution.

That application _ which was lodged after the $2.3m debt was transferred to lawyers for Mrs Deeming _ was lashed by Justice Michael McDonald for being half baked.

He said it would need to be revised given the debt had been paid and was being held in trust, and said each of the administrative committee’s members would have to be named as defendants.

“You have come to this court half baked, you’ve failed to name the proper defendants, it doesn’t get much worse,” he said.

The promised $1.55m loan to John Pesutto could be blocked. Picture: Diego Fedele

“I’m going to have to hear from the members of the Administrative Committee in order to form a view about whether or not there is a serious issue to be tried, because unless I can come to that conclusion, there’s no basis for any interlocutory relief.”

Lawyers for Ms Harkin had want the matter to be heard urgently, but Justice McDonald said there was no rush to hear the case.

“I don’t see in substance, any urgency in this matter as things presently stand,” he said.

“I could understand that this morning, but the moment the money’s hit Mrs Deeming’s solicitors’ trust account, I don’t see any basis for this court to be convening an out of hours hearing. “We both know the reality is that the money sitting in Mrs Deemings solicitors’ trust account will not leave that account without Mrs Deeming’s say so.”

The matter will return to court next Friday, July 4, skewering the hopes of Mr Battin that the loan would end the ongoing feuding within the party.

It could also interfere with plans he has to announce a significant shadow cabinet reshuffle as part of a general reset aimed at squarely focusing on next year’s election.

Former leader Matthew Guy slammed the Liberals behind the latest court challenge as “stupid”.

“I don’t know why it’s going to the Supreme Court, my understanding is it’s been paid, what are you gonna do injunct something that’s occurred?” he said.

“Do they want to win or what? Because I do, because Victoria needs a change, Brad does, I do, my colleagues do, and it’s about time we focused on changing the government.”

Mr Pesutto owed $2.3m to Moira Deeming. Picture: Andrew Henshaw

Mr Guy said it was time for the party to just “get on with the job”.

“Get on with the job of opposing the Labor government and providing an alternative to Victoria that they want and that they need,” he said.

“The state is desperate for a change of government, the state is desperate for new thinking inside Spring St.”

The Herald Sun understands parties connected to the loan were put on notice on Wednesday night about the pending Supreme Court matter and asked to make no financial transfers.

Party president Phil Davis and immediate past president Greg Mirabella are also expected to be named as defendants and served in coming days.

Mr Davis last week claimed the controversial loan agreement would end the long-running feud between Mr Pesutto and Mrs Deeming which has plagued the party for more than two years.

Mr Pesutto was ordered to pay Mrs Deeming $2.3m in legal costs after she successfully prosecuted a defamation case against him.

It was prompted by his assertions that she had links to neo-Nazis following her attendance at a women’s rights rally on the steps of parliament in March 2023.

Mr Pesutto has already paid Mrs Deeming $315,000 in damages.

Originally published as Legal challenge to block $1.55m to John Pesutto hits Supreme Court