In the Federal Court on Wednesday, Justice Robert Bromwich said comments made by Ms Hanson on Nine's Today Show in March 2019 were "seriously damaging" to Mr Burston's reputation.
As well as incorrectly stating that Mr Burston sexually abused a female colleague, Ms Hanson also falsely claimed he had assaulted One Nation chief of staff James Ashby without provocation in the Great Hall of Parliament.
"I find that both (imputations) were seriously damaging to Mr Burston's reputation, being broadcast on a nationally broadcast television program watched by over 290,000 people at the time. They were both false," the judge said.
Mr Burston failed to prove that a number of other imputations made by Ms Hanson were defamatory, including that he sexually harassed staff in his office, that he harassed a female staffer in his office, and that he brought the senate into disrepute by his shocking behaviour towards staff.
Justice Bromwich was scathing towards Mr Burston's behaviour, calling it "objectively wrong and inappropriate". Conduct included telling one female staffer Wendy Leach, "Oh Wendy, you probably just need a good f***".
"Mr Burston had apparently not kept up with changes in society in relation to the rights of women, with the tide having turned even more decisively in recent years, most particularly in relation to the conduct of and around elected representatives and their staff," the judge wrote.
During a seven-day trial in June, the court heard the former senator also cupped the face of another staffer Terri-lea Vairy before giving her a "long, hard kiss" and then shoved $100 between her breasts on a separate occasion.
"I am in no doubt that Ms Vairy suffered continued harassment from Mr Burston during her employment, predominantly of a sexual nature. Nor am I in any doubt that Mr Burston sexually propositioned Ms Leach," Justice Bromwich wrote.
"Ms Leach and Ms Vairy gave evidence that was full of adjectives to describe the profoundly unbearable workplace they endured under the employ of Mr Burston."
The former senator launched the lawsuit in June 2020 over what he said were defamatory claims of sexual harassment made against him on Facebook, via text to his wife and on the Today Show.
The 74-year-old has repeatedly denied the allegations of misconduct, saying the events described never occurred.
Ms Hanson filed her own counter-suit in the Federal Court in November 2020 claiming Mr Burston's defamation case and sexual harassment allegations made against her amounted to sexual discrimination.
On Wednesday, Justice Bromwich allowed this case to proceed, tossing Mr Burston's bid to entirely dismiss the lawsuit on grounds that the court did not have jurisdiction to hear it.
Ms Hanson said she was considering appealing the claims established against her, while thanking Ms Leach and Ms Vairy "for their courage and resilience in extremely difficult circumstances" of the sexual harassment case.
"Defamation litigation is expensive and no longer uniform throughout Australia - today's mixed result is an example of how complicated the law is," Ms Hanson said in a statement.
"The Federal Government needs to step up and pass Commonwealth legislation in this area that can be consistently applied in every jurisdiction and that introduces measures to reduce the costs to individuals involved in these types of disputes."
Mr Burston quit Ms Hanson's One Nation to join United Australia Party in June 2018 after falling out with his former colleagues over his stance on then prime minister Malcolm Turnbull's proposed tax cuts. He failed to retain his seat at the 2019 federal election.
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