Former army commando Heston Russell was defamed by reports alleging members of the platoon he led in Afghanistan executed a prisoner because they would not fit on a helicopter.
The allegation came from a US marine, who heard a "pop" over the radio in mid-2012 followed by advice there would be six prisoners, not seven.
Mark Willacy believed the reporting was in the public interest, but his belief was not reasonable.
The claim was published in October 2020 and revived in November 2021 when the ABC reported the Defence Department had confirmed a criminal investigation into November platoon, which the department later disputed.
Justice Michael Lee awarded Mr Russell damages of $390,000 plus interest in the Federal Court on Monday.
ABC Investigations, an enclave within the news division held out to be an elite corps of journalists, circled the wagons in defence against criticism of the reports, later acknowledging obvious steps could have been taken to further corroborate the claims before publication, the judge said.
The criticism came from other media described as "bottom feeders" by ABC journalists, as well as from the broadcaster's own Media Watch program.
The broadcaster also sought to convey the court was overreaching when it abandoned a defence in the case, issuing a misleading press release holding up ABC Investigations as an exemplar of journalism ethics because it would not identify a source.
"The press release was an exercise in damage control," Justice Lee said.
"It was ABC Investigations' own editorial choices that prevented its journalists being able to rely on (journalist privilege)."
The press release was notably silent on an offer to reveal the source to Mr Russell's legal team and the ABC had published a photo of them, the judge said.
He said journalist Mark Willacy believed the reporting was in the public interest, but his belief was not reasonable given the seriousness of the allegations and the information he had about them.
Colleague Josh Robertson, who spoke to Mr Russell when he progressed Willacy's advanced draft to publication, did not prove his own reasonable belief.
Their boss Jo Puccini demonstrated a desire to win a skirmish in what she considered to be a broader culture war against the ABC and prove Mr Russell's supporters wrong, the judge said.
"In fighting back against critics and seeking to justify its earlier story, those responsible within ABC Investigations did not do all they should have done prior to publishing the November article conveying, as it did, such serious allegations," the judge said.
"Even critics one does not respect, or whose motives are perceived to be unworthy, may have a point."
Nine radio broadcaster Ben Fordham was among Mr Russell's media supporters.
Justice Lee was not persuaded by Mr Russell's own evidence about the substantial hurt he suffered, finding he had embraced the ensuing public controversy to further his own causes and profile.
However, the judge accepted evidence from 17 others, including Senator Hollie Hughes and broadcaster Alan Jones.
Australian and US troops also spoke of his prior good reputation in the military community.
Mr Russell had not rushed into litigation, but self-identified himself as the platoon leader and procured his own media platform to push back, the judge said.
"(He) was no shrinking violet in drawing attention to himself and the publications in respect of which he makes complaint," Justice Lee said.
Nine radio broadcaster Ben Fordham was among Mr Russell's media supporters after the ABC's publications and sat next to him in court on Monday.
Costs for the legal battle and orders to remove the publications will be subject to further hearings.
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