Senator Pauline Hanson's right-hand man James Ashby's chances of having the Morrison government pay his $4.54 million legal bill have slimmed after a judge dismissed an arm of his case.
He appealed to the Federal Court after the federal finance department rejected his bid for a grace payment to cover his costs when suing former parliamentary Speaker Peter Slipper over alleged harassment.
Mr Ashby said the department had failed to properly address his status as a whistleblower - a claim the Federal Court rejected on Friday.
"Doubtless Mr Ashby considered that his asserted status as a whistleblower, and his asserted public interest motive in bringing the proceeding against Mr Slipper and the Commonwealth, were of great and even determinative significance in his application for an act of grace payment," Justice Robert Bromwich said.
"However, the delegate (of the Finance Minister) was not obliged to share that view or to treat such claims as being significant, let alone determinative."
Mr Ashby sued Mr Slipper in 2012, claiming his boss sent inappropriate text messages and made lewd remarks.
After two years in the courts, Mr Ashby dropped the sexual harassment legal action against the former Queensland MP as it approached trial, citing the cost of litigation.
A minister from the Gillard government in 2012 permitted a grace payment for Mr Slipper's legal costs, creating what Mr Ashby said was a power imbalance.
Justice Bromwich on Friday also dismissed Mr Ashby's claim that the department made an irrational decision beyond its jurisdiction when rejecting his act of grace payment.
He took issue with the department's finding that approving Mr Slipper's grace payment did not influence the court proceedings and a finding that the 2012 proceedings did not become highly political.
He also failed to convince the court the appointment of a decision-maker inside the finance department was flawed.
A second arm of the case will proceed in February.
It centres on Mr Ashby's claim that the rejected grace payment application was an adverse action contrary to the Fair Work Act.
