Judge Salvatore Vasta will be liable to personally pay part of the compensation offered to the Brisbane man, known only by the pseudonym Mr Stradford.
The father-of-two was jailed in December 2018 for a minimum of six months for not obeying orders to provide financial documents during divorce proceedings.
The sentence was overturned and the man was released after six nights after the decision to jail him was strongly criticised by an appeals court.
On Wednesday, a Federal Court judge also blasted Judge Vasta's serious errors in imprisoning Mr Stradford as he ordered the $309,500 in damages.
"The applicant in this proceeding was the victim of a gross miscarriage of justice," Justice Michael Wigney said in his ruling.
"He was detained and imprisoned for contempt following what could fairly be described as little more than a parody of a court hearing."
Judge Vasta, a Federal Circuit Court judge, made "a number of fundamental and egregious errors" in jailing the man for contempt without first finding that he had failed to comply with the court's orders.
"He erroneously believed that another judge had made that finding, though exactly how he could sensibly have arrived at that position in the circumstances somewhat beggars belief," Justice Wigney said.
The court found Judge Vasta could not rely on judicial immunity to protect himself from paying damages because he had acted outside his jurisdiction in imprisoning Mr Stradford.
"His Honour acted without or in excess of jurisdiction in the requisite sense," Justice Wigney said.
"There was no proper foundation in law for the making of the imprisonment order."
The Commonwealth and Queensland were found to be vicariously liable for Mr Stradford's imprisonment and ordered to also pay part of the compensation for an ordeal that left the Brisbane man with PTSD and major depressive disorder.
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