Western Australian Premier Mark McGowan has been ordered to pay $5000 to mining magnate Clive Palmer but also won his own damages claim after a court ruled the pair defamed each other.

A Federal Court judge found on Tuesday that neither man had made out valid defences for defamatory public statements in 2020.

Justice Michael Lee ordered Mr Palmer to pay $20,000 in damages to WA’s Labor premier, with costs to be determined at a hearing next week.

He noted there was a “glaring disproportion” between the damages awarded and the considerable cost of the legal proceedings to both Mr Palmer and WA taxpayers, who will pay for the Premier’s involvement.

“The game has not been worth the candle,” Justice Lee said.

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Mr Palmer sued Mr McGowan in 2020, claiming public comments the Premier had made about him – including labelling him an “enemy of the state” – had damaged his reputation.

The Queensland businessman sought aggravated damages, which would have allowed for a payout above the $432,500 cap.

He accused Mr McGowan of being consumed by malice and seeking to “blacken his name at every opportunity”.

But Justice Lee found while the insults against Mr Palmer could not be considered trivial, they ultimately caused little damage to the billionaire magnate’s reputation.

Mr McGowan, who countersued for defamation, had made his own appeal for aggravated damages.

Justice Lee said Mr McGowan had had a “bully pulpit” as highly popular premier and Mr Palmer’s attacks on him, including claims he had acted corruptly, had probably only enhanced his reputation.

He described Mr McGowan as generally an impressive witness but noted he had evaded answers to questions.

The judge was more critical of Mr Palmer’s testimony, saying it appeared the billionaire had been willing to “fashion his evidence” to best suit his case.

It emerged in 2020 that Mr Palmer was seeking up to $30 billion in damages over a 2012 decision by the former Liberal state government not to assess his proposed Balmoral South iron ore project.

The McGowan government subsequently rushed through extraordinary legislation to prevent Mr Palmer from suing the state.

In his evidence, Mr Palmer said he was scared because provisions in the legislation protected the government from criminal prosecution.

Referring to the fictional character James Bond and his “licence to kill”, Mr Palmer told the court: “I didn’t know what the limits might be.”

Justice Lee described this claim as being so outlandish that it undermined Mr Palmer’s entire testimony.

The judge was also critical of WA attorney-general John Quigley, who was forced to give evidence a second time after admitting he made errors in his initial testimony.

Justice Lee described Mr Quigley’s evidence as “confused and confusing” but stopped short of calling him a dishonest witness.

In private text messages made public during the trial, Mr McGowan described Mr Palmer as “the worst Australian who’s not in jail”.

Mr Quigley privately labelled Mr Palmer a “big fat liar”.

The parties will return to court on August 11 to deal with costs arising from the proceedings.

– AAP