Howard, Abbott mooted as Deeming peacemakers in abandoned deal

Opposition Leader John Pesutto was prepared to outsource Moira Deeming’s readmission to the Victorian Liberal party room to former prime ministers John Howard and Tony Abbott in a desperate bid to prevent her defamation case against him from ending up in court.

However, the radical proposal was ultimately not enough to sway the ousted MP, who wanted a guarantee she would be welcomed back into the party fold before she abandoned her Federal Court proceedings.

John Pesutto and Moira Deeming.Credit: The Age

The previously undisclosed details of Pesutto’s settlement plan, which were confirmed by two sources familiar with negotiations, and Deeming’s best pre-trial offer to her former leader will be weighed by Liberal MPs as they prepare for the Friday morning vote on Deeming’s return.

The revelations may also influence Federal Court judge David O’Callaghan’s deliberations on how the multimillion-dollar costs arising from the year-long litigation should be split between the parties.

On Tuesday, Pesutto’s lawyers served notice on Deeming’s team seeking the identity of all donors who funded her case and the amount of financial support she received. Deeming’s lawyers are likely to follow suit, setting off another round of legal manoeuvres.

It comes amid intense backroom politicking among Liberal MPs over whether to invite Deeming back into their party room following her emphatic Federal Court win. An organiser of a snap party-room vote called to decide the matter, Bill Tilley, said the special meeting was not intended to challenge Pesutto’s leadership.

Bill Tilley says Friday’s vote on Moira Deeming is not a challenge to John Pesutto’s leadership.Credit: Jason Robins

“It is not seeking a leadership change, it is righting a wrong,” Tilley said. “They are two completely different things.

“Whatever happens after this meeting on Friday, if people want to push on and have a leadership change, that is a completely separate issue and not what this is designed to do.

“There is no one in the group that wants to bring on a spill. We want to keep this absolutely professional and separate. It is not about John.”

Another MP backing Deeming’s return said that once the meeting was convened, no rules precluded a leadership challenge. “It is a party-room meeting, anything can happen,” they said. “But it is not intended.”

When Deeming was expelled from the party room in May 2023, 18 of 30 MPs supported the move. With two anti-Deeming MPs expected to be absent from Friday’s vote and some MPs shifting sides, the gap has narrowed. If the vote is locked, Pesutto carries the casting vote.

An MP who spoke on the condition of anonymity to discuss internal party matters said that if the party voted to bring back Deeming, Pesutto’s leadership would become untenable.

Pesutto frustrated others in his party room by refusing to apologise to Deeming or display any contrition after Justice O’Callaghan found his central allegation that precipitated her expulsion – that she knowingly associated with neo-Nazis – was baseless.

Pesutto repeatedly made the claim after a group of neo-Nazis gatecrashed a Let Women Speak event, which Deeming addressed on the steps of state parliament on March 18, 2023. Pesutto was ordered last Thursday to pay her $300,000 in damages for the severe harm and damage inflicted on her reputation.

Where Pesutto has been castigated by some party colleagues for refusing to accept a February 8 offer from Deeming in which he could have settled the case for $99,000 plus costs, the undisclosed dealbreaker was Deeming’s additional stipulation that he must concede judgment against him on every point.

Negotiations that took place over the next two weeks between lawyers for Deeming and Pesutto show the lengths to which the opposition leader went to reach terms with the estranged MP.

Two sources familiar with the negotiation, who requested anonymity to discuss internal matters, said that under terms proposed by Pesutto, Deeming’s political future would have been decided by a panel of three “distinguished Liberals” acceptable to both parties. John Howard and Tony Abbott, a public supporter of Deeming, were among the possible panel members suggested.

Had Deeming agreed to drop her case, Pesutto would have paid $150,000 to $200,000 towards her legal costs and issued a mutually agreed-upon statement in which he would retract his defamatory claim that she knowingly associated with neo-Nazis. Under the proposed settlement, both parties would be bound by a non-disparagement clause.

The panel of distinguished Liberals would have received submissions from Deeming, but not Pesutto, and taken three months to consider all relevant matters and make recommendations to the party room.

The proposal faltered over Deeming’s concerns that deferring to a panel – even one where she picked the majority of members – and discontinuing her case ahead of their recommendations would give her no certainty of outcome.

Liberal MP Sam Groth quit the opposition frontbench on Friday after Pesutto responded to the defamation judgment by vowing to remain as leader, saying he could no longer “in good conscience” serve in the shadow ministry.

Veteran MP Kim Wells said on Friday that “an essential first step” to rebuilding the Victorian Liberal Party “would be to readmit Moira Deeming back into the party room because a court has proven that she did nothing wrong”.

Liberal state president Philip Davis wrote to all party members acknowledging O’Callaghan’s judgment and expressing his “deep personal disappointment and frustration” that he was unable to broker a settlement between Pesutto and Deeming before the matter reached open court.

“For this I must apologise to all our members and supporters. It is an understatement to say the political efforts of both staff and volunteers to activate fundraising and engagement has been challenging with this matter so prominent in the minds of many of our members.”

He urged the party to put the litigation behind it and for MPs to “demonstrate a renewed vigour and collaboration”.

Deeming has not made it clear whether she wants to return to the party room, but after the judgment she said there was no reason for her not to be invited back. She is also pushing for Pesutto and the party to formally retract the statements that defamed her.

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