Oscar winner Geoffrey Rush will receive a record $2.9 million in damages after Nationwide News lost its appeal against a defamation finding and award.
The full bench of the Federal Court on Thursday dismissed all grounds of the appeal.
The Daily Telegraph's publisher and journalist Jonathon Moran were found to have been reckless regarding the truth when they reported Rush had been accused of inappropriate behaviour during a 2015 Sydney theatre production of King Lear.
In 2019, Justice Michael Wigney ruled a poster and two articles contained defamatory meanings - including that Rush was a pervert and sexual predator - and the publisher hadn't proved they were true.
The actor was awarded $850,000 in general damages and about $2 million in special damages to cover past and future economic loss - the largest ever payout to a single litigant in Australia.
In dismissing the appeal, Justices Richard White, Jacqueline Gleeson and Michael Wheelahan said the non-economic loss award was appropriately high, rejecting a claim it was manifestly excessive.
"The harm caused to Mr Rush's reputation was the result of a sensationalised tabloid crusade by the appellants with aggravating features of a most serious kind," they said.
"In our view, based upon the Judge's findings, the harm caused to Mr Rush as a result of the publications warranted a very high award of damages for non-economic loss."
The amount had to take account of the subjective response of the actor to the publications which left him "devastated and distressed and consumed by grief".
Nationwide challenged Justice Wigney's finding that Erin Jean Norvill, who played the role of Cordelia and alleged Rush sexually assaulted her, was an unreliable witness.
It claimed the judge made errors including finding Norvill's positive statements to journalists about Rush were generally inconsistent with the occurrence of the conduct she was describing.
The court found "there was some force" in the submission that the judge attached greater significance to her statements in the promotional interviews than the circumstances warranted.
"The purpose of the interviews was obvious, namely, the promotion of the STC's production of King Lear," the court said.
It would have been natural for Norvill to make positive statements about performing with the pre-eminent actor, whatever her private feelings.
Justice Wigney's findings as a whole were "not glaringly improbable, contrary to compelling inferences or inconsistent with incontrovertible facts or other uncontested testimony".
The court also rejected a claim the judge should have allowed the defence to be amended late in the trial to include evidence of a woman, later revealed to be Australian actor and Orange Is The New Black star Yael Stone.
She later publicly alleged Rush had exposed himself to her backstage in 2010-11 season of The Diary of a Madman, sent her sexually suggestive text messages and tried to spy on her while she was showering.
Rush denied the claims.
The Daily Telegraph later said it had published an article based on a public statement by the STC that an actor had made a complaint against Rush.
"While we respect the findings of the Full Court the Rush case exposes the inadequacies of Australia's defamation laws and heightens the need for urgent legislative reform to enable public debate and to encourage women to come forward with their concerns," said editor Ben Engish.
" In that context we are very disappointed that the appellate court did not reverse Justice Wigneys findings as to the credibility of Eryn Jean Norvill or reverse His Honour's decision to exclude the testimony of Yael Stone."
Australian Associated Press