Deeming chases colleagues, ex-Liberal premiers for Pesutto costs

Former premier Jeff Kennett has blasted weak leadership in the Victorian Liberals after MP Moira Deeming threatened to expand her defamation victory over John Pesutto to recover costs from other members of the party in the 26th month of the saga.

Liberal headquarters came under renewed pressure to step in on Wednesday when it was revealed Deeming’s lawyers had given notice seeking to recoup her legal costs from two of her party room colleagues and from former premiers Kennett, Ted Baillieu and Denis Napthine if Pesutto is bankrupted.

Moira Deeming leaving a Liberal party room meeting on Tuesday.Credit: Wayne Taylor

Pesutto has been fundraising in an attempt to avoid bankruptcy – which would force his exit from parliament and spark a byelection in his marginal seat of Hawthorn, held by just 1.7 per cent – after the Federal Court ordered he pay $2.3 million of Deeming’s legal fees.

Deeming intends to serve Pesutto with a bankruptcy notice on Friday if her costs remain outstanding, leaving Pesutto three weeks to pay if he is to remain in parliament.

He has already paid Deeming $315,000 in damages after he was found to have repeatedly falsely implied Deeming was a Nazi sympathiser. But he is yet to pay all his own legal costs, as well as Deeming’s.

The Age revealed in March that NSW developer Hilton Grugeon, who bankrolled Deeming’s case through a loan, said he had written her a “blank cheque” to pursue costs from Pesutto and everyone who had financially supported him.

John Pesutto after a party room meeting on Tuesday.Credit: Wayne Taylor

In a letter to Pesutto’s team last week, seen by The Age, Deeming’s solicitor Patrick George of Giles/George said donors who supported Pesutto could be liable.

It named Baillieu, Kennett and Napthine; Charles Gillies, the former chair of the Liberal Party’s fundraising arm, Enterprise Victoria; Liberal MPs David Southwick and Georgie Crozier; former MP Margaret Fitzherbert; developer Jason Yeap; and Pesutto’s former staffer Xavier Boffa.

To pursue costs from the third parties, Deeming’s team flagged its intention to seek subpoenas for Pesutto’s communications with his donors.

“Without those gifts, Mr Pesutto would not have been able to defend the proceedings or continue with his defence of the proceedings, particularly in the exhaustive manner he did,” George wrote in the letter to MinterEllison, which is representing Pesutto, as first reported by The Australian.

Kennett told The Age he held no concerns about the legal threat and that he had only given a “token donation” to Pesutto last year to show his support for the then-leader. But he said he was deeply disappointed and angry for the thousands of volunteers who give their time to the Liberal Party and for MPs Crozier and Southwick.

“I’m not sure the party room will ever get over this,” Kennett said.

“I am deeply concerned about the way they are conducting themselves and what I would call the lack of clear leadership in resolving this matter.”

Two sources unable to speak publicly said a senior member of the Hawthorn electorate conference formally wrote to the party’s administrative committee on Wednesday to seek support for Pesutto, including through a loan, to protect the seat from a byelection. Defending Hawthorn would cost the Liberal Party upwards of $500,000.

Office bearers at the administrative committee were having a regular meeting on Wednesday night and expected the matter to be raised. However, the full administrative committee would need to approve any support, and no meeting has been scheduled to do so.

A crowdfunding page set up to help the former Liberal leader pay the legal costs has so far received more than $185,000, and Pesutto has separately secured about $500,000. But attempts to get the Liberal Party or its investment arm, the Cormack Foundation, to financially contribute have so far been unsuccessful.

Southwick, who was Pesutto’s deputy, told reporters the former leader was a fighter and needed to remain a strong local member for Hawthorn.

“The real enemy is the Labor government … I don’t get distracted by that. I don’t think any of us should get distracted by that. It does annoy me. It frustrates me when people play other games and get involved in other things – from all sides of politics,” Southwick said.

Current Opposition Leader Brad Battin, who took over the role from Pesutto in December of last year, rejected that it would be a failure of his leadership if the matter were not resolved with Pesutto remaining in parliament.

“There’s some things that will be within my control and not within my control, and I’m working towards the things that are in my control,” Battin said. “You can’t go to bed worrying about the things you can’t control.”

Battin insisted the party room was united but encouraged MPs to “stick on message”. He has refused to go into any confidential conversations but said he hoped to take the full team to the 2026 election, though Pesutto supporters doubted his commitment to finding a solution.

Grugeon, the developer who bankrolled Deeming’s case, questioned why Pesutto’s wealthy backers weren’t stepping in if they wanted to spare him from bankruptcy.

“The whole thing could be settled within a day,” Grugeon told The Age on Wednesday.

He said Pesutto’s supporters were now attempting to shift the blame on Battin. “He never made the mess.”

In a statement, Deeming said there were no lawsuits against anyone other than Pesutto and that it appeared he had run the case without the necessary money.

“The letter simply seeks to understand who aided him to do so because I may have to seek cost recovery through them. Being a lawyer, John knew better than anyone the legal and financial risks in refusing to apologise and retract his defamatory claims against me,” she said.

“His defences failed, I won my case, and he agreed to pay my costs last year. Time has progressed, but he still has 21 days from Friday to pay. He also still enjoys the ongoing public support of at least three powerful multi-millionaire backers who can easily afford to pay it.”

Nine, the publisher of this masthead, sought costs from billionaire Kerry Stokes in its defamation victory against Ben Roberts-Smith after arguing Australian Capital Equity and the Seven Network controlled Roberts-Smith’s litigation.

Pesutto’s internal supporters argue that the donations in that case are distinct from the donations Pesutto received. They view drawing more of the party into Deeming’s costs recovery as untenable and an existential threat to the party.

Pesutto told reporters that those named by Deeming’s solicitors had provided “in the scheme of things, relatively modest amounts” of donations.

Baillieu, Crozier, Gillies and Boffa have been contacted for comment. Fitzherbert and Napthine declined to comment.

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