Independent NSW MP Alex Greenwich was awarded $140,000 in damages in September after he successfully sued the former federal opposition leader.

Latham, now a right-wing independent MP, was found to have defamed his left-wing colleague in a tweet that explicitly described a sex act.

Latham rejected a settlement offer a month after the tweet was posted, the Federal Court was told.

The offer involved a retraction of the comments, $20,000 in compensation and an apology that Greenwich’s barrister said was not “grovelling or humiliating” or requiring an admission the comments were defamatory.

Instead, they recognised it caused distress, Matt Collins KC said.

A court later found Latham’s homophobic tweet exposed Greenwich, who is gay and a prominent LGBTQI community advocate, to a torrent of hateful abuse including death threats.

It was posted at the time of the 2023 state election in response to a post that quoted Greenwich describing Latham as a “disgusting human being”.

Latham’s lawyer argued the former One Nation MP should only have to pay a quarter of his rival’s costs because it was not unreasonable for him to refuse the settlement offer.

He noted an apology to a political rival “could be used against” Latham for the rest of his career, and stressed the difficulty of complying with the requirement to disable and monitor commentary on his apology.

Justice David O’Callaghan agreed it was not unreasonable for Latham to reject the offer, finding the undertakings sought were “very broad and unlimited in time”.

But the judge ordered the former Labor leader pay his rival’s legal costs on a party-party basis, which normally covers about 70 per cent of the fees incurred.

Greenwich’s legal costs have been estimated to exceed $600,000.

The tweet also cost Latham politically after the governing Labor party cited it as a reason it would not engage with him on legislation in the evenly balanced upper house.

His eight-year term – attracting an annual base salary of $172,500 – runs until 2031.