Mr Pesutto's barrister Matthew Collins KC said the damage was done well before the opposition leader made any comments or moved to expel Ms Deeming from the party.
Dr Collins spent much of Tuesday morning outlining his case in the defamation trial against Mr Pesutto in the Federal Court of Australia.
Ms Deeming claims Mr Pesutto defamed her in media releases, a press conference and broadcast interviews following her attendance at the Let Women Speak rally in March 2023.
Matthew Collins KC said Moira Deeming's reputation was damaged before John Pesutto's comments. (James Ross/AAP PHOTOS)
That rally was gatecrashed by neo-Nazi's who performed the Nazi salute on the steps of the state parliament.
Dr Collins said Ms Deeming had damaged her own reputation by organising and attending the rally, before Mr Pesutto made any commentary or official statement.
The barrister provided examples of tweets sent to Ms Deeming drawing links to rally organisers and Nazi sympathisers, as well as others sent to Mr Pesutto calling for him to axe Ms Deeming from the party.
He agreed Ms Deeming's reputation had been tarnished, but said it had "nothing to do with Mr Pesutto".
"Ms Deeming's reputation had suffered very serious damage, and it suffered that damage by reason of her conducting, organising, promoting and speaking at the rally," he said.
Video footage of the rally, including chants and Nazi salutes was described by Dr Collins as "utterly chilling" and he said the appropriate response for a member of a mainstream political party was to loudly and clearly denounce it.
Instead, he said Ms Deeming was shown in videos drinking champagne with organisers and indulging in "bizarre conspiracy theories" after the rally.
"Politics is a rough game," Dr Collins told the court, arguing that political parties needed to secure the mainstream vote to win elections.
"Associations of this kind are absolutely toxic, it drives people from the centre a mile away and that's why he acted."
He then argued it was fair and reasonable for Mr Pesutto to clarify publicly why he had moved to expel Ms Deeming from the party, given the event and uproar had been covered by mainstream media in great detail.
Mr Pesutto, who denies any wrongdoing, is expected to be questioned later on.
