Liberal MPs Josh Frydenberg and Gladys Liu will keep their seats after a court dismissed a challenge to their election wins — but a senior party official could still face further action for authorising misleading election signage in their seats.

Key points: The court dismissed the applications to declare the victories void but did find the signs were misleading

The court dismissed the applications to declare the victories void but did find the signs were misleading The court has asked former Liberal Party acting state director Simon Frost to explain why further action should not be taken

The court has asked former Liberal Party acting state director Simon Frost to explain why further action should not be taken Prime Minister Scott Morrison declared the case a "smear job"

The Federal Court found the election result was not influenced by the Chinese-language signs, which used similar colours to the Australian Electoral Commission (AEC) and told voters "the correct way to vote" was to put a "1" by the Liberal candidate's name.

But the court has asked the party's former state director, Simon Frost, to explain why he should not be referred to the High Court for "the committal of an illegal practice under ... the Commonwealth Electoral Act 1918".

"The AEC occupies an independent place and role under the Act of some importance," the court judgement says.

Josh Frydenberg and Gladys Liu had their election results challenged in court. ( ABC News )

"Its independence should not be appropriated or undermined by trickery or misleading or deceptive material whereby the AEC is, in effect, impersonated."

The court found that even though Mr Frost "did not have knowledge of the translation of the final version of the corflute ... he had full knowledge of the essence of the misrepresentation that the corflute appeared to be a sign of the AEC".

The court, however, found only a "handful" of people were likely to have been influenced to change their votes by the signs, which were posted at 13 polling stations in Mr Frydenberg's seat of Kooyong and 29 polling booths in Ms Liu's seat of Chisholm.

The case was brought against Ms Liu and Mr Frydenberg, who is the Treasurer, by defeated independent Kooyong candidate Oliver Yates and Chisholm voter Vanessa Garbett.

The posters used similar colours to those used by the AEC. ( ABC News: Gemma Hall )

Ms Garbett and Mr Yates had petitioned for the results of the election to be declared void.

Mr Frost would not comment when he left court in Melbourne.

He has until February 7 to make submissions to the court.

Prime Minister criticises 'smear job'

Mr Yates's lawyer, Michael Bradley, said his client was extremely happy with the outcome.

"His intent was that this issue be exposed and resolved and there be a line in the sand by the courts," Mr Bradley said.

"There was a lot of behaviour in the most recent federal election that was appalling, both on social media and in terms of what was happening at polling booths.

"This particular incident was among the worst, and it was indicative of a trend that was anti-democratic."

Simon Frost admitted in court the signs were designed to look like official AEC material. ( ABC News )

But Prime Minister Scott Morrison said he did not have any concerns about the Liberal Party's conduct.

"I mean it was a smear job and it's been chucked out," Mr Morrison said.

In the seat of Chisholm, one in five residents claims Chinese ancestry and more than a quarter of the population speak Mandarin or Cantonese.

Ms Liu defeated Labor's Jennifer Yang in Chisholm by 1,090 votes on a two-party preferred basis — 48,005 votes to 46,915.

Her victory in Chisholm made her the first female Chinese-Australian member of the Federal Parliament.

Mr Frydenberg won his seat easily — 55,159 compared to 43,870 votes for Greens candidate Julian Burnside — but he did not win on first preferences.

The case was heard by Justices James Allsop, Anthony Besanko and Andrew Greenwood.

Read the judgement in Garbett v Liu:

Loading...