A disgruntled former Palmer United Party (PUP) member says he will take his complaint to Tasmania's Integrity Commission after his legal challenge failed.
Former candidate Marti Zucco claims the PUP was registered in the state without the 100 financial members required.
A Supreme Court appeal against the Tasmanian Electoral Commission's (TEC) decision allowing the registration, was dismissed on Monday.
The action had threatened the party's capacity to register in time for the March 15 state election.
The PUP, which is now free to contest the poll, denies it did anything wrong.
"The members that we submitted with our application are all members of the party," state director James McDonald said outside the Hobart court.
"They signed statutory declarations."
Mr Zucco quit the party over the issue and after receiving phone messages he says were abusive from PUP senator-elect Jacqui Lambie.
The local alderman and former pizza restaurateur, who is now running as an independent, denied his motivation was personal.
"This is, as far as I'm concerned, (about) process," he said.
Representing himself, Mr Zucco had wanted to withdraw his appeal before Chief Justice Alan Blow. But the TEC argued they would prefer the legal action to be dismissed, since this would clear the way for the party to register in time for the coming state election. Justice Blow agreed.
"We could actually win the argument but ... the court has the right to determine it by discretion - ridiculous," Mr Zucco said.
PUP founder Clive Palmer in turn branded Mr Zucco's action "ridiculous."
Integrity Commission CEO Diane Merryfull cast doubt on the success of Mr Zucco's planned next move, when she commented that the Integrity Commission could only deal with alleged misconduct by "a public officer".
In a further twist, the Integrity Commission's inaugural CEO, Barbara Etter, is now the PUP's deputy state leader and was present in court.
The PUP needs to be registered by 6pm (AEDT) on Wednesday to make the cut-off for the state election.
The party won a Tasmanian Senate spot in last year's federal election and has around five per cent support in opinion polls ahead of the state poll.
The party's lawyers are seeking court costs and this will be decided after the election.