The Morrison government's controversial sports grants scheme is set to go under the legal spotlight with a case launched over a rejected application.
Maurice Blackburn lawyers on Thursday started a bid in the Federal Court against the Australian Sports Commission over the $100 million scheme.
The lawyers want Beechworth Lawn Tennis Club's failed grant application to be overturned and for the ASC to reconsider it lawfully.
Maurice Blackburn principal Josh Bornstein says the court will be asked to determine if the ASC acted unlawfully and breached its statutory duties.
"Under the ASC Act, the ASC is required to make decisions to award community sports grants independent from government and party political considerations," he said.
The lawn tennis club had applied for a $500,000 grant to build facilities and a club house, and was rejected despite meeting the criteria.
The legal bid also challenges a $36,000 grant given to Wangaratta Clay Target Club, which then sports minister Bridget McKenzie was a member of.
That grant prompted her to step down as minister as she hadn't registered her interests in the club.
It comes as a NSW soccer club boss told a Senate inquiry into the scheme how furious he is at how his taxpayer money is spent.
Newcastle Olympic Football Club director Kosta Patsan was initially disappointed when the group's application was rejected, but that turned to anger when he realised the politics of the process.
Mr Patsan said the club didn't miss out on a grant for its grandstand rebuild because the project wasn't worthy, but because Newcastle is a safe Labor seat.
"I expect you to spend my money better," he said.
The club has put its project on hold without money to rebuild its seats and change rooms.
The Newcastle ground have been chosen as a training venue for the 2023 Women's World Cup and fears tents will have to be used for dressing sheds.
He implored the government to fund projects that missed out.
An auditor-general's report criticised Senator McKenzie's office for using the scheme to funnel money into marginal seats at the 2019 election.
Nearly three-quarters of approved grants were not recommended by Sport Australia.
The auditor-general also raised questions over whether Senator McKenzie was entitled to award the money.
Former deputy secretary of the finance department Stephen Bartos does not believe she was authorised and that while she should have checked, the public service was also at fault.
Given the minister's lack of authority a court could find the grants were awarded invalidly, and the money could be returned, he added.
Australian Associated Press