Battin had legal advice that Pesutto loan could breach Liberal Party constitution

Opposition Leader Brad Battin had legal advice that lending John Pesutto $1.55 million to spare him from bankruptcy could breach the Liberal Party constitution, but did not share the information with the committee that voted to support the payment, Supreme Court documents claim.

Lawyers for aggrieved members of the party’s administrative committee made the assertion in a statement of claim on Monday, in a case seeking to have the loan thrown out.

Victorian Opposition Leader Brad Battin.Credit: Wayne Taylor

The 19-member committee last month supported the loan to ensure that Pesutto could pay the legal fees of his party room colleague Moira Deeming, sparing him bankruptcy and a byelection in his marginal seat of Hawthorn.

Pesutto was ordered to pay her legal costs after the Federal Court found he repeatedly defamed her by falsely implying she associated with neo-Nazis.

The party loan requires Pesutto to repay the money at a market-based interest rate.

Committee members Colleen Harkin, Erin Hunt, Anthony Schneider, Ian Pugh and Marcus Li have argued in the Supreme Court the loan would constitute a “benefit” in breach of the Liberal Party’s constitution.

Former Victorian opposition leader John Pesutto arriving at the party’s administrative committee meeting in Melbourne, where Liberal powerbrokers voted to lend him money to pay Moira Deeming’s costs in a defamation lawsuit.Credit: Luis Enrique Ascui

Their statement of claim said Battin had sought his own legal advice, which said as much, but that this advice was not provided to the committee.

“On or around 13 June 2025, in response to a request from the seventh defendant, Brad Battin MP (Battin), the Leader of the Opposition in Victoria and the state member for Berwick, a legal opinion was provided by Stuart Wood, KC, and Paul Jeffreys of Counsel on whether a proposed loan to Mr Pesutto would comply with clause 18.8 of the constitution,” the claim states.

“In the legal opinion, a copy of which was not provided to the administrative committee, Mr Wood, KC, and Mr Jeffreys expressed the view that the proposed loan to Mr Pesutto would constitute payment by the party by way of benefits (both financial and non-financial) to Mr Pesutto and concluded that there was an argument that the proposed loan would contravene clause 18.8 but that they could not definitively say that the party would be acting beyond its power if the proposed loan was made.”

While that legal advice was not provided to the committee, advice that a loan was constitutionally permissible was shared at the June 19 meeting.

Moira Deeming leaving a Liberal Party meeting in May.Credit: Wayne Taylor

Battin, a member of the administrative committee, does not set the agenda for its meetings.

The Age asked Battin’s office whether he had shared the legal advice with the meeting chairman, Victorian Liberal Party president Phil Davis. A spokeswoman for Battin said: “As the matter is before the courts, it would be inappropriate to comment.”

His office declined to provide a copy of the legal advice to The Age.

Davis said the statement of claim was a claim only.

“We completely reject the assertions in it and note it contains errors and omissions which will be strongly contested in the appropriate forum,” Davis said in a statement.

The respondents have not yet filed a defence, due next month.

The statement of claim asserted that Davis did not chair the meeting in good faith.

The vote was conducted by a secret ballot, rather than a show of hands, and the statement of claim asserts members of the committee did not have details of the proposal before the meeting, or proper time to consider it.

The document further claimed the ballots were counted away from the committee members with no scrutineer, and that the split was never announced despite a request for the count.

Battin last month confirmed that he supported the committee’s decision to lend Pesutto the money, declaring that it protected the party from further financial and reputational damage, and would allow the opposition to refocus its efforts on holding the government to account.

“Throughout this process, I have acted in accordance with the rules, maintained my impartiality, and ensured the confidentiality, welfare and dignity of my colleagues,” he said at the time.

“With this matter resolved, our focus is firmly on the future. United, disciplined and determined, we are focused on earning the trust of Victorians and winning government in 2026.”

The Liberal Party entity Vapold paid Deeming $1.55 million in line with the committee’s decision, while Pesutto paid the balance of the $2.3 million debt from fundraising efforts.

However, the fees have been held in a trust with Deeming’s lawyers while the dispute over its validity proceeds to mediation in the Supreme Court.

Deeming declined to comment. Pesutto was contacted for comment.

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