The Morrison government’s controversial sports grants scheme has come 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.

Tweet from @political_alert

Maurice Blackburn principal Josh Bornstein said the court would 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, of which then sports minister Bridget McKenzie was a member.

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 has been spent.

Newcastle Olympic Football Club director Kosta Patsan was initially disappointed when the group’s application was rejected. 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 has been chosen as a training venue for the 2023 Women’s World Cup and there are fears tents will have to be used for dressing sheds.

Mr Patsan implored the government to fund projects that missed out.

A former finance official said Senator McKenzie did not have the legal authority to award money under a controversial government sports grants scheme.

The allocations went disproportionately to marginal electorates held by the Coalition or to seats it was targeting in the 2019 election.

An auditor-general report into the $100 million scheme also raised questions about whether Senator McKenzie was entitled to award the money.

Former deputy secretary of the finance department Stephen Bartos does not believe she was authorised.

During his career, Mr Bartos was instructed that money could not be spent unless an appropriation had been made under law.

“That is, ministers can’t spend money unless the Parliament has given them the authority to spend the money,” he told a Senate inquiry on Thursday.

“Without that clear authority, ministers just can’t spend as they wish.”

Mr Bartos said while Senator McKenzie should have checked if she had the authority, the public service was also at fault.

“They shouldn’t do the bureaucratic equivalent of standing on the sidelines with their fingers in their ears whilst the minister walks into a minefield,” he said.

“They actually should be providing warnings.”

Mr Bartos said given the then minister’s lack of authority, it could be possible for a court to find the grants were awarded invalidly, and the money ought to be returned.

Constitutional expert Anne Twomey has previously told the inquiry the minister did not have legal authority to award money under the program.

Bridget McKenzie had no legal authority to award the sports grantt, a Senate inquiry has heard. Photo: AAP

The auditor-general’s report criticised the minister’s office for using the scheme to funnel money into marginal Coalition seats and those it was targeting at the 2019 election.

The report found nearly three-quarters of the grants approved were not recommended by Sport Australia’s merit-based assessment process.

In stark contrast, Prime Minister and Cabinet secretary Philip Gaetjens found the program was not used for political purposes.

-with AAP