The settlement was reached during a mediation in the Federal Court on Thursday.

Under the walk-away settlement, the parties will cover their own costs and Molan will receive nothing in damages.

The Full Court sent the matter back for a retrial earlier this month after finding Justice Robert Bromwich had failed to properly consider the publisher’s defence of contextual truth.

Molan won $150,000 in damages for defamation after she sued the Daily Mail over an article and two tweets concerning a remark she made on 2GB’s Continuous Call Team radio program about the pronunciation of National Rugby League Polynesian player names in which she uttered the phrase “hooka looka mooka hooka fooka”

During an appeal hearing. the court concluded that “something miscarried” in Justice Bromwich’s decision. The Daily Mail argued that Justice Bromwich had failed to consider material from the Continuous Call program which supported a finding that Molan “engaged in racist behaviour” on the show and justified reducing her damages award “to a vanishing point.”

The Full Court ordered a new trial before Justice Bromwich, subject to certain admissions by the parties, including that the imputation that Molan is a racist was not carried and that the publisher’s defence of honest opinion is not available.

They also agreed that the impugned article carried the contextual imputations that Molan “engaged in racist behaviour” as well as “conduct that was likely to offend persons because of their race or ethnic origin” during the Continuous Call Team program.

In his August judgment, Justice Bromwich rejected Molan’s primary argument that the Daily Mail story painted her as a racist, but did find the article defamed Molan by suggesting that she deliberately mocked the names of Pacific Islanders on air, lied about it, characterised it as an inside joke and refused to apologise, and is an arrogant woman of white privilege who refused to learn how to pronounce the names of Polynesian NRL players.

Justice Bromwich rejected seven of the Daily Mail’s eight contextual truth imputations – all except the imputation that Molan “engaged in conduct that was likely to offend persons because of their race or ethnic origin”.

In its appeal, the Daily Mail argued Justice Bromwich erred by failing to consider or find a number of imputations alleged in its contextual truth defence – including that Molan engaged in racist behaviour during the radio show – and that the judge failed to consider eleven other Continuous Call Team broadcasts relied upon by the Daily Mail at trial.

The Daily Mail also argued on appeal that having found that the contextual truth imputation was conveyed, Justice Bromwich erred in failing to determine whether the substantial truth of the imputation meant that the defamatory imputations found to be conveyed did not further injure Molan’s reputation.

Molan is represented Kieran Smark SC and Jessie McKenzie, instructed by Kennedys. Dailymail.com Australia is represented by Matthew Richardson SC and David Helvadjian, instructed by Mark O’Brien Legal.

The appeal is Dailymail.Com Australia Pty Limited v Erin Molan. The original case is Erin Molan v Dailymail.com Australia Pty Limited.

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