The court rejected Pesutto's defenses of public interest and honest opinion, concluding that his statements were defamatory.

The Federal Court has ruled that Victorian Liberal leader John Pesutto defamed former party member Moira Deeming, jeopardizing his leadership position.

As a result of the court's judgment, Pesutto has been ordered to pay $300,000 in damages for his defamatory statements.

The court found that Pesutto had injured Deeming's reputation by falsely implying her associations with neo-Nazis during his testimony and in various public forums.

The defamation case stemmed from remarks Pesutto made after Deeming organized the Let Women Speak rally, which was disrupted by neo-Nazi protesters.

The controversy began when Deeming attended the rally in Melbourne, where neo-Nazis gatecrashed the event, leading to her expulsion from the Liberal Party.

Deeming expressed that the judgment vindicated her and criticized the treatment of rally attendees, reaffirming her commitment to advocating for women's rights.

Following her expulsion, Deeming, now serving as an Independent Liberal MP, indicated she would be open to rejoining the party after the ruling.

Despite the judgment, Pesutto intends to remain in his role, believing that the scandal is not a priority for voters and that he has not received requests for his resignation.

This trial has highlighted existing rifts within the Victorian Liberal party, potentially prompting leadership challenges as some MPs consider a leadership spill.

A faction within the party, including former Prime Minister Tony Abbott, advocates for Deeming's return, although significant opposition remains among other party members.

Pesutto's legal costs may exceed $1.5 million since the Liberal Party refused to indemnify him, and the case could have been settled earlier for $99,000.