Right-wing independent MP Mark Latham was found in September 2024 to have defamed Sydney MP Alex Greenwich in an explicit tweet during the 2023 state election.
He posted the tweet - which described a sex act - in response to a news article in which Mr Greenwich described Latham as a "disgusting human being".
The Federal Court found the post exposed Mr Greenwich, who is gay and a vocal LGBTQI advocate, to hatred and ridicule.
Latham was ordered to pay $140,000 in damages as well as an estimated $400,000 to cover a large portion of Mr Greenwich's legal costs.
The former NSW One Nation leader sought to quash the court's ruling, claiming that calling someone gay or saying gay men have sex was not defamatory.
Mr Greenwich filed a cross-appeal to increase the damages on the basis the post implied he was unfit to sit in parliament.
On Wednesday, three Federal Court appeal judges dismissed both the appeal and cross-appeal.
For Mr Greenwich, the decision means the damages he's owed for the defamatory social media post about him won't increase.
For Mr Latham, it means he's still on the hook for more than $500,000 - but it could have been more.
At the end of a legal stoush that spanned years, the judgment delivery lasted barely more than 60 seconds.
"Justice is a long game. More than three years ago, Mr Latham defamed me in a sexually aggressive social media post that subjected me to an avalanche of homophobic hate," Mr Greenwich said in a statement.
"Today, justice prevailed ... it makes clear there is no place in Australian civil discourse for the kind of conduct Mr Latham engaged in."
Mr Latham was contacted for comment.
The decision comes after the former prime-ministerial hopeful was directed to pay the maximum $100,000 penalty to his fellow MP.
The NSW Civil and Administrative Tribunal gave the order in April after ruling the same defamatory tweet incited hatred based on Mr Greenwich's sexuality.
Mr Latham slammed NCAT's decision as a "woke, leftwing political judgement" and described the proceedings as a "Mad Hatter's Tea Party" in a post on X.
He and Mr Greenwich were ordered on Wednesday to confer on the costs of the appeal and submit to the court by June 17.
The online sparring match between the two politicians followed violent protests outside a church in Sydney's southwest, where Mr Latham was giving a pre-election speech in March 2023.
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