Papua New Guinea's former solicitor-general is allowed to apply for a protection visa in Australia, a court ruling has found, based on fears of harm after raising corruption allegations in what has been called the country's "biggest" alleged fraud case.

Key points: Neville Devete was a whistleblower in a high-profile alleged corruption investigation in PNG

Neville Devete was a whistleblower in a high-profile alleged corruption investigation in PNG He and his family say they have received anonymous death threats

He and his family say they have received anonymous death threats Federal Circuit Court of Australia overturns "illogical" decision to deny the family visas

The Federal Circuit Court (FCC) of Australia heard that when Neville Devete was the solicitor-general in 2012, he made a complaint to PNG's National Fraud and Anti-Corruption Squad in relation to alleged "improper payments" made to PNG's biggest law firm, Paul Paraka Lawyers.

The court heard Mr Devete received a death threat and that he and his family faced intimidation following the complaint.

In a judgement just published, the FCC ordered his application for an Australian protection visa be allowed to proceed.

The Anti-Corruption Squad alleged the PNG Government paid about $30 million to Paul Paraka and his law firm for inflated or invented legal cases.

In a letter before the court, detective chief superintendent Matthew Damaru called it Papua New Guinea's "biggest" alleged fraud case so far and stated Mr Devete was the initial complainant in the case against Mr Paraka.

The scandal embroiled a number of PNG Government members, including Prime Minister Peter O'Neill, although an arrest warrant against him was quashed late last year.

Mr O'Neill has long argued the allegations were politically motivated, and in August, the police officially closed the case against him.

PNG's Anti-Corruption Squad has closed its investigation into Peter O'Neill. ( AAP: Lukas Coch )

Mr Paraka announced in March this year he would be launching a lawsuit to clear his name, saying his citizen's rights had been breached, but the Anti-Corruption Squad's case against him remains open.

According to the letter from Mr Damaru, Mr Devete had been due to be a witness in upcoming prosecutions related to the alleged corruption, where he would have to provide evidence against members of the PNG Government, including Mr O'Neill, and was concerned for his safety if he returned.

He has been living in Australia since 2013 as a student, along with his wife and children, all of whom are seeking protection visas to stay in the country.

The FCC ordered the family be allowed to apply for asylum, after immigration officials and the Administrative Appeals Tribunal (AAT) initially rejected their claims in 2017.

The ruling does not automatically grant Mr Devete the visas, and the family will need to have their applications for protection visas assessed again by the AAT.

Court hears of PNG's 'payback' and 'retaliation' culture

A letter seen at both the FCC and AAT from Mr Damaru said when witnesses appear in court in PNG, "they will be exposed and are most likely to be subjected to threats and intimidation and physical harm".

The letter said "the practice of retaliation is inevitable" across court cases in PNG.

"Which results in loss of many high-profile cases when witnesses succumb to such threat and intimidation," he said.

"[They] refuse to give evidence in fear of retaliation by accused's family members or kinsmen or tribesmen."

The judgement was handed down at the Federal Circuit Court in Brisbane. ( ABC TV News )

The letter said Mr Devete "will be targeted because he was the one who exposed the matter" and that the "security of all the witnesses … is not guaranteed".

There was no evidence, however, that Mr Devete would be targeted by Mr Paraka, Mr O'Neill or members of the Government.

Judge Paul Howard referred to PNG's "culture of 'payback' and 'retaliation'", as outlined in Mr Damaru's letter, throughout his judgement.

Mr Devete, his wife, and five children applied for protection visas on the grounds they claim they would "face harm" if they returned to PNG.

All seven family members initially submitted applications for the visas in 2014, but those applications were refused by a delegate of then-minister for immigration and border protection Peter Dutton.

The refusal decision was also upheld by the AAT in 2017, but last month the FCC ruled the AAT decision was "illogical and irrational".

The AAT found in its 2017 decision it had "difficulty" believing "there was a risk of 'payback' to the applicant given no harm or threats to date" and found inconsistencies in the evidence provided by Mr Devete and his family.

But Judge Howard said there was evidence of intimidation against Mr Devete's family, including an incident where one of his sons was followed by a vehicle and an anonymous death threat directed at Mr Devete.

In the decision, Judge Howard found there was "legal unreasonableness" in the AAT ruling, and any inconsistencies were minor.

The family's lawyer, Nilesh Nandan, said that was because the AAT had not considered the "clear" and "corroborated evidence" about the case.

The ABC's Pacific Beat program has been given permission by Mr Devete — who was referred to using pseudonyms in judgement — to identify him.

It is expected the AAT will assess the protection visa applications again in 2019.