Disgraced former NSW minister Eddie Obeid and three of his sons acted unreasonably, inappropriately and unjustifiably in their lawsuit against the former boss of the corruption watchdog, a judge has ruled.
On top of paying their own legal costs, the Obeids have now been ordered to pay the fees of their six opponents, which could set them back more than $2 million.
They unsuccessfully sued David Ipp, a former commissioner of the Independent Commission Against Corruption, and others over the investigation into the granting of a coal exploration licence.
In the NSW Supreme Court on Monday, Justice David Hammerschlag ordered the Obeids to pay the legal costs of all the defending parties on the ordinary basis, but to pay higher or "indemnity basis" costs in relation to Mr Ipp.
In December, Obeid Snr, 73, was jailed for at least three years after being found guilty of lobbying a senior public servant in 2007 about lucrative Circular Quay leases without revealing his family's stake in the outlets.
In September, Justice Hammerschlag dismissed all the claims made by Obeid and his sons Moses, Paul and Eddie Jnr, against ICAC, Mr Ipp, former counsel assisting Geoffrey Watson SC and other former ICAC officers.
They claimed they were targeted unfairly in Operation Jasper, which investigated the issuing of the licence on Obeid family land at Mount Penny in the Bylong Valley near Mudgee.
ICAC found the licence enabled the Obeid family to make $30 million.
Justice Hammerschlag said indemnity costs may properly be ordered where there has been "unreasonable, inappropriate or otherwise unjustifiable behaviour of significance" in connection with the conduct of proceedings.
"The conduct of the plaintiffs, in this case, satisfied all three of those descriptions," he said.
"The plaintiffs made allegations against the commissioner, in his capacity as the holder of significant public office, of misconduct of the gravest kind."
Among other claims, they alleged Mr Ipp engaged in conduct designed to cause injury, reputational and financial harm to the Obeids, was biased and used his power in "bad faith".
"These allegations were abandoned without explanation," the judge said.
"They were unmaintainable and irresponsibly made.
"The plaintiffs have not seen fit to come to court to defend their behaviour."
He concluded "this is a clear case in which indemnity costs are appropriate, indeed necessary."
The costs have yet to be assessed.
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