Friends of the former Victorian opposition leader John Pesutto have launched an online fundraiser in a bid to help him “avoid the possibility of bankruptcy” after he was ordered to pay more than $2.3m in costs following his loss in a defamation case brought by the Liberal MP Moira Deeming.
The federal court registrar Alison Legge handed down the decision during a short hearing on Friday in which she ordered Pesutto pay $2,308,873.11 in legal costs.
Pesutto will need to pay in a lump sum or face bankruptcy, which would disqualify him from being a member of parliament and trigger a byelection in his seat of Hawthorn, which the Liberal MP holds by a slim margin of 1.74%.
Friday’s costs are in addition to the$300,000 in damages Pesutto paidafter the federal court found in December that he had repeatedly defamed Deeming by falsely implying she sympathised with neo-Nazis and white supremacists.
In a statement posted on X, Pesutto said he would take time to review the court’s decision.
“I am determined to continue serving the people of my electorate of Hawthorn and the people of Victoria for as long as they will have me,” he said.
“I am grateful for the support I am receiving from the community and am hopeful with this support that I will be able to fulfil these obligations and continue serving the people of Victoria.”
A GoFundMe page was set up by Pesutto’s friends on Friday, in which they wrote he faces “significant legal fees and a costs order” he must pay “in order to avoid the possibility of bankruptcy”.
They said they were raising money to “prevent this worst-case scenario”.
“JP has always been there for us, so now we are here for him,” it reads.
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Donors so far include the upper house MP Georgie Crozier, who gave $500, and Rochelle Pattison, aLiberal partymember and trans woman who previously sought preselection in the overlapping federal seat of Kooyong, who gave $200.
The former Liberal premier Jeff Kennett also urged the public and his party to step in to support Pesutto. According to Pesutto’s register of interests, Kennett and former premiers Ted Baillieu and Denis Napthine have provided him with financial support.
Friday’s costs order is close to the $2.4m Deeming’s team had sought, mostly to pay back a loan that the New South Wales property developer Hilton Grugeon offered Deeming to cover her legal expenses.
Pesutto’s lawyers had argued the costs should be closer to $1.8m and sought to have donations to Deeming considered.
But Legge said the money “gifted or lent to Ms Deeming” was “not relevant” to her decision, which depended on whether the claimed legal costs matched what the MP owed to her lawyers, and whether those costs were fair and reasonable.
She said the costs reflected the scale of the defamation proceeding, which involved senior and junior counsel, 19 hearing days, 40 affidavits, 800 exhibits and 1,000 pages of closing submissions.
“It is uncontroversial that the purpose of a costs order is not to punish the unsuccessful party. The purpose, no more and no less, is to compensate the successful party,” Legge said.
In her written reasons, Legge said donations made to Deeming were described as “gifts” and she was entitled to “spend (or save) the funds … as she thinks fit”.
“Whether the ‘gifts’ … were expended in direct payment of her legal fees or on the costs of childcare while she attended court, or saved for a rainy day, it was up to Ms Deeming how she chose to manage her finances,” Legge said.
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Both parties hired top defamation barristers for the trial, with Sue Chrysanthou SC representing Deeming and Dr Matthew Collins KC representing Pesutto.
According to Legge’s reasons, Chrysanthou’s fee alone was almost $430,000 for the duration of the proceeding.
Chrysanthou appeared for Deeming on Friday and said they would also be applying for Pesutto to pay the fees of the legal expenses associated with the costs hearings.
She flagged that she may seek cost orders against third parties who supported Pesutto to recover the fees.
Pesutto’s lawyer, Daryl Williams KC, requested a short stay on the payment to allow Pesutto time to consider whether he wished to seek a review of the decision.
There are fears within the Liberal party if Pesutto is bankrupted that it would lose Hawthorn at a byelection, given he won the seat by only 1,544 votes in 2022.
He had previously lost the seat to Labor in 2018 and changing demographics in the area have added to the uncertainty since, withKooyong electing the teal independent Monique Ryantwice.
The Victorian Liberal leader, Brad Battin, would not be drawn on the prospect of a Hawthorn byelection, describing it as “hypothetical”.
“It’s a bit early to pre-empt,” Battin told reporters. “All the conversations I’ll have with my team around this will remain confidential.”
He added that he would “like to see John at the next election”.
But Liberal MPs have already begun planning for the possibility, with several telling Guardian Australia thatAmelia Hamer, who ran unsuccessfully for the seat of Kooyongin the recent federal election, could be asked to stand.
Pesutto lost the Liberal leadership after achallenge by Battinafter the defamation judgment in December. Deeming, who had beenexpelled from the Liberal party room in 2023amid the stoush with Pesutto, was also returned to the fold.