Matthew Etnyre and his wife Irmgard Pagan sued over a 2019 Foreign Correspondent episode titled "Motherland" and a website article titled "Damaged babies and broken hearts: Ukraine's commercial surrogacy industry leaves a trail of disasters".

The US citizens were said to have first engaged the services of Biotexcom, a company providing surrogacy services, in about 2015 when Mr Etnyre was aged 36 and his wife was 59.

"As the result of publication of the matters complained of, the applicants have been subjected to hatred, ridicule and contempt, and have suffered and continue to suffer, distress and damage to their reputations," according to their statement of claim.

Justice Wendy Abraham in June ordered them to pay $100,000 into court within 28 days as security for the ABC's legal costs.

The Federal Court proceedings would be stayed until the security was paid.

Their lawyer on Tuesday told the judge his clients were unable to raise the money and wouldn't be continuing with the case, but asked that they not be ordered to pay the ABC's costs to date.

But Justice Abraham agreed with the ABC that there was no reason why the usual rule should not apply and the party abandoning the case should foot the other side's legal bill.

She had made the security order on the basis they were "impecunious", resided outside the jurisdiction, had no assets in Australia and had admitted they would be unlikely to be able to pay any costs order if they lost their case.

In the statement of claim, they said the publications conveyed the defamatory meanings that Mr Etnyre heartlessly abandoned a child, of which he was the biological father, around the time of birth, "because he did not like the child's appearance".

Ms Pagan's similar claim related to "a child whose birth was achieved for her by a surrogate mother".

The ABC's defence included a claim of "substantial truth" and refers to sworn statements made by the husband and wife in Puerto Rico.

In early 2016, they were informed that the surrogate, who was impregnated with embryos created using Mr Etnyre's sperm, had given birth prematurely to twins at about 25 weeks gestation.

The male twin had died while the female, named Bridget Irmgard Etnyre-Pagan, had serious health complications, was hospitalised and required medical treatment for physical and mental impairments.

The ABC referred to other documents including a direction by the couple that medical treatment of Bridget be ceased so she could die.

Reference was made to medical opinions including one which said the baby was "totally physically and mentally disabled and with no chance of recovering".

The ABC said since becoming aware that Bridget was alive, the couple didn't go to Ukraine to see her, hadn't organised for her to be transferred to the USA, or organised for her to be removed from a group children's home to be cared for privately.

They hadn't provided financially for her, nor given her any love, affection or attention.

They did engage Biotexcom for a second time and in 2017 were told a surrogate had given birth to twin boys, who now live with them in the USA.

As well as substantial truth, the ABC submitted the information in the publications were matters of proper and legitimate public interest.

Australian Associated Press