Josh Frydenberg and Gladys Liu's election win cleared

Two sitting federal MPs have been exonerated by a trio of Federal Court judges over election signage that mimicked posters from Australia's independent election body.

Treasurer Josh Frydenberg and Liberal MP Gladys Liu's election wins in May were challenged by failed candidate Oliver Yates, who ran against Mr Frydenberg in Kooyong, and climate campaigner Vanessa Garbett.

Oliver Yates alleged Liberal party signage used in Chisholm and Kooyong was designed to mislead Chinese speakers.Credit: Chris Hopkins

Former Victorian Liberal Party director Simon Frost, however, could be prosecuted for breaching the Electoral Act, with the Federal Court finding that the corflutes were “plainly misleading or deceptive”.

Mr Yates and Ms Garbett argued Chinese-language signs, which told voters in Kooyong and Chisholm the "correct" way to vote was to put the Liberal Party first, were likely to mislead or deceive voters.

They had asked the Court of Disputed Returns – sitting in the Federal Court in Melbourne –to void the election wins of Mr Frydenberg and Ms Liu.

But on Christmas Eve, the Federal Court dismissed the pair's petition, handing an early Christmas present to the government.

Mr Frost has been ordered to make a written submission, by February 7, outlining why the Federal Court shouldn’t direct the High Court to find the corflutes illegal.

Mr Frost had earlier admitted the signs were deliberately created in the same colours used by the AEC, but the party’s lawyer Philip Solomon, QC, argued there was no suggestion he had misled or sought to mislead voters in casting their ballots.

Mr Frost said the signs, written in both simplified and traditional Chinese script, were different to the translation that had been approved by the party.

In a written statement, the judges said they were “prepared to accept” that Mr Frost had intended for voters who could read Chinese to think that the AEC was stating that people should vote 1 for the Liberal Party to make their “vote count”.

But the court accepted that Mr Frost had authorised the corflutes, “though without actual knowledge of the change of meaning that had taken place”.

“There was no sign on the corflute making it identifiable as separate from the clearly marked AEC sign,” the judges said. “It was intended to look like an AEC sign when placed adjacent to it.

“The corflutes are plainly misleading or deceptive in at least two respects. First, as was the intention of Mr Frost, at least when placed adjacent to AEC signage, it purports to be a sign of, and convey a message from, an independent government agency concerned with the supervision, in a general sense, of the election, when in fact the message is from the Liberal Party.

“Secondly, if understood as a statement or message by the AEC, it is palpably misleading or deceptive to say that putting the Liberal Party first is the ‘correct’ or ‘right’ way to vote, impliedly stating the way to cast a valid vote is to vote Liberal.”

The judges cleared Mr Frydenberg and Ms Liu of involvement.

“As to Mr Frydenberg, based on the evidence and the findings made earlier there is no basis to find that he knew of the correct English translation or that he caused, permitted or authorised the printing, publishing or distribution of the corflutes and hence no basis to find that he caused, permitted or authorised the printing, publishing or distribution of any matter or thing that was likely to mislead or deceive and elector in casting a vote,” they said.

“There is no basis to find either Ms Liu or Mr Frydenberg were accessorily liable for Mr Frost’s conduct, a submission briefly made by the applicant in their written submissions but not pursued in the hearing.”

In hearings last month, the Australian Electoral Commission asked the court to throw out the case, arguing there was no evidence any Chinese-speaking voters had changed their minds after encountering the signs at polling booths.

The commission's lawyer James Renwick, SC, argued it was hard to imagine a constituent giving the election enough thought to turn up and vote, and then being so "gullible and naive" as to be fooled into believing Australia was a one-party state.

"It is an outlandish proposition," he told the court.

Last month, one of three Federal Court judges deciding the case said even if Chinese-speakers in Kooyong changed their votes, Mr Frydenberg would still have won by a margin of 4329.

"What you want us to do is say, notwithstanding that case, taken at its highest, accepting everything, we should declare Mr Frydenberg not elected," Justice Andrew Peter Greenwood told the challengers' lawyer Lisa De Ferrari, SC, on Friday.

"How can we possibly do that?"

Mr Yates labelled the decision as a win for him, saying the court had found the Liberal Party had engaged in illegal misleading and deceptive conduct, and that the party should be “ashamed” of itself.

“This was not about the result in Kooyong as it’s a safe seat, but about proving that a major political party knowingly engaged in misleading and deceptive conduct,” he said.

with AAP