Victorian Liberal MP John Pesutto fails to raise $1.5 million for Moira Deeming defamation; faces bankruptcy

Former Victorian Liberal leader John Pesutto failed to raise the money he needs to meet a $2.3 million debt due Friday to fellow MP Moira Deeming, likely triggering bankruptcy proceedings against him as early as Friday or Monday.

A party source close to Mr Pesutto said he had only secured about one third of the money needed to pay Ms Deeming’s legal costs.

What to do about the debt will now shift to the Victorian Liberal Party, which is expected to schedule a meeting of its administrative committee to discuss whether it should help cover the bill.

That decision could be made as soon as next week, the source said, and may involve money from the party’s campaign-financing arm, the Cormack Foundation.

The legal process to declare Mr Pesutto bankrupt is expected to take three weeks, and would force his resignation and trigger a by-election in a Melbourne seat many observers are convinced the Liberal Party will lose.

The case has damaged the party’s credibility in Victoria, a state where it has only held power for four years this century, and could help Premier Jacinta Allan’s unpopular Labor government survive an election next November.

Although the debt is from a defamation lawsuit lost by Mr Pesutto, the case has become a front in a bitter, generation-long power struggle for control of the party by conservatives and social liberals.

“They hate each other more than they hate the other side,” said businessman Hilton Grugeon, who financed Ms Deeming’s lawsuit against her former leader.

Going to war

This week, a letter from Ms Deeming’s lawyers was leaked to the press revealing she had taken preliminary steps to sue three ex-premiers, Jeff Kennett, Denis Napthine and Ted Baillieu, and other party figures over Ms Deeming’s legal costs.

The leak did not come from Ms Deeming’s camp, according to sources, and may have been intended to create the impression Ms Deeming is going to war with the wider Liberal Party.

Both sides see themselves as victims. A critic of the trans-gender movement, two years ago Ms Deeming helped organise a pro-women protest outside the Victorian Parliament. After nazis gatecrashed the rally, Mr Pesutto suspended her from the party and accused her of associating with the far-right activists.

She was able to sue Mr Pesutto for defamation because of the financial support of Mr Grugeon, a long-time Liberal donor in NSW and influential business figure in the city of Newcastle.

This week, the 78-year-old former professional lawn mower gave a long and somewhat rambling interview to The Nightly in which he attributed his involvement to the biblical story of the Good Samaritan, a lower-caste man who aids a stranger robbed and beaten up by a street gang.

“I’d never heard of Moira Deeming in my life and I got to hear of her dilemma when one of my colleagues was in London and he was told about it by some Australians over there that were concerned about it,” Mr Grugeon said.

“I’m an old fashioned guy that doesn’t believe in beating up on women. She was being bullied and harassed and abused for standing up for the rights of women in particular girls and to me it just sounded totally wrong.

“I am talking to you as one of the most staunch supporters of the Liberal Party movement in Australia. Guess what? They all looked the other way.”

Trans-gender rights

A former high school teacher, Ms Deeming opposes trans-gender women (people born male who choose to take on female appearances) being allowed use women’s change rooms and play sport against them.

Her stance is popular in the Liberal Party’s conservative wing, and Sky News commentator Peta Credlin and former Prime Minister Tony Abbott have expressed support for her.

But the ongoing damage to the party’s reputation, and the threats to the ex-premiers, has left many Liberal supporters and donors aghast.

“You got your wish,” a person called Helen Costas wrote on X this week.

“Pesutto’s gone, but now you want to bankrupt him. And suing Baillieu, Napthine, Kennett among others for supporting him? You’re digging the Liberal’s grave.”

Ms Deeming replied: “I don’t ‘want’ anything except my loan repaid. Third party costs orders are just a legal process, because John ran the case while insolvent.”

When another person abused Ms Deeming for pursuing the case, she wrote: “It’s $2.3m. I’ll go bankrupt if he doesn’t pay…“

Who pays?

Mr Pesutto has already paid her $300,000 in court-ordered damages. He has commitments of approximately $700,000.

Even if his supporters can find the estimated $1.5 million extra needed to cover the rest of her lawyers’ fees, Mr Pesutto has his own costs to cover.

The amount is unclear, but he chose one of the Melbourne’s top barristers, and legal observers say his legal bill could be as big as Ms Deeming’s. How Mr Pesutto will pay his lawyers without going bankrupt is a mystery.

A former industrial relations lawyer and political adviser, Mr Pesutto has received criticism and sympathy for his plight.

His decision to expel Ms Deeming from the party, supported by other senior MPs at the time, is now seen as a disastrous over-reach. But the prospect of financial ruin for a misguided leadership decision is regarded by many Victorians as unfair.

Car trouble

In a separate case, the Liberal Party’s deputy leader reportedly used a government-chauffeured car for a 100km trip home from the Australian Open tennis tournament last year.

The Herald Sun reported Friday Sam Groth was allowed to use the car, which was assigned to a colleague, after telling her he needed transport to a work event. Mr Groth denied the paper’s reporting that he was drunk.

“Everything was and is above board,” he said, according to the ABC.

The colleague whose car he borrowed, Georgie Crozier, said Mr Groth needed to explain what happened. “I’m incredibly disappointed,” she said.

Leader Brad Batten acknowledged the party was in turmoil. “I think it’s pretty obvious we’ve had some tensions in the party at the moment,” he told reporters. “And I’m continuing to work through that. As a leader, it’s not always easy, and I’ll take on the challenge that’s put forward.”