OTTAWA — The Conservative Party's “in-and-out” election spending scheme was not a “sham," lawyers argued in federal court today.

The Tories asked for a judicial review of a decision by Elections Canada to deny certain refunds for advertising costs incurred during the 2006 campaign.

Elections Canada ruled the media buys by some Tory candidates were national ads that should have been paid by Conservative Party headquarters.

"In, out, we submit is perfectly legal," said lawyer Michel Decary, who represents Gerry Callaghan and David Pallet, two official agents for Conservative candidates in the 2006 election.

Decary argued the local candidates received monies from the national party to help pay for "real" expenses for advertising targeted to their own ridings and although they included the national message 'Stand Up for Canada,' the ads also featured the candidates’ names.

Elections Canada has yet to present its case.