While the portrayal of Daniel Taylor was "unflattering", Justice Anna Katzmann found the 24-page spread did not convey the three defamatory meanings put forward by his lawyers.
Rather, he came across as "a petulant young man with a sense of entitlement, who has a complicated and at times turbulent relationship with his father, a foul mouth, a fondness for wisecracks and a predilection for making jokes in poor taste".
Mr Taylor, also known as Daniel Ibrahim, sued Nationwide News in the Federal Court over the report headed "Inside the house of Ibrahim Unauthorised" published in The Sunday Telegraph on June 23, 2019.
The judge rejected his lawyer's contention that the report made him out to be a mobster, a member of the Mafia and a criminal involved in organised crime.
"I emphatically reject the submission that the report suggests that Mr Taylor was a prominent underworld figure."
The 31-year-old testified he was devastated by the report and became a recluse, stopped getting invited places and was asked not to go to his friend's wedding or to certain venues.
The cover depicted five figures in front of a sports car - John Ibrahim, his son Daniel, his brother Fadhi and wife Shayda, and his brother Michael who was wearing a tracking device around his foot.
Daniel Ibrahim was described as his "wise guy son" and "a key player" who "was charged with handling a suitcase containing $2 million of cash but was cleared after a committal hearing".
In her judgment published on Tuesday, Justice Katzmann said the report was a "classic example of tabloid journalism" which was voyeuristic and sensationalises the information.
"It encourages readers with a prurient interest in other people's affairs, particularly "underworld figures" and so-called celebrities, to nourish that interest."
The judge acknowledged the article didn't paint Mr Taylor in a favourable light", but the impression it created was not that of a Mafia figure, mobster or criminal engaged in organised crime.
"It is true that the publication discloses that he is close to his uncle, Michael, who is a notorious criminal, and that he was in contact with a prisoner with whom he was apparently on friendly terms.
"But Mr Taylor does not complain that the publication conveys the imputation that he is an associate of criminals."
The judge accepted that the Ibrahim family is "depicted as an organisation involved in nefarious activities, including serious crime".
The inclusion of gratuitous references - many used in movies about Mafia lore and the language of organised crime - does suggest "the Ibrahim clan" operated like the American mob, she said.
But the question was not whether the publication had the effect of diminishing Mr Taylor's reputation because he is a member of the Ibrahim family, but whether he was portrayed in the three ways contended.
"The fact that another (or other) members of his family are or may be involved in organised crime does not mean that Mr Taylor is too," she said.
"And I am not persuaded that the matter complained of suggests that he is.
"The ordinary reasonable reader would know that you cannot choose your relatives."
Nationwide had denied the publication conveyed the meanings, but if the judge found they did they submitted it was substantially true.
The judge said her findings meant it was not only unnecessary to deal with the defence of substantial truth, "it is desirable to do so".
"The question it raises does not arise and, if I were to find the defence made out, it could seriously damage Mr Taylor's reputation for no good reason."
She ordered Mr Taylor to pay the newspaper's legal costs.
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