Liberal Democrat senator David Leyonhjelm has lost his bid to have Greens senator Sarah Hanson-Young's defamation case against him thrown out.

Key points: David Leyonhjelm ordered to pay Sarah Hanson-Young's legal costs

David Leyonhjelm ordered to pay Sarah Hanson-Young's legal costs The costs relate to his bid to have her defamation case against him thrown out — not to that case itself

The costs relate to his bid to have her defamation case against him thrown out — not to that case itself The Federal Court ruled the defamation case can go ahead

Senator Hanson-Young launched legal proceedings against Senator Leyonhjelm in August, accusing him of attacking her character in a media statement he issued in June and during radio and television interviews in July.

She claims Senator Leyonhjelm suggested she was a misandrist and a hypocrite and that he repeatedly falsely accused her of claiming that all men are rapists.

Last month Senator Leyonhjelm's lawyer Kurt Stoyle called on the Federal Court to stay the proceedings, arguing that the case amounted to an abuse of process because his client could not mount a defence without breaching parliamentary privilege.

"The thrust and current starting point is that the court can't adjudicate on the claim presently before it without the parties inevitably being placed in breach of parliamentary privilege," Mr Stoyle told the court.

Senator Hanson-Young's lawyer, Sue Chrysanthou, told the court parliamentary privilege would not be contravened and there was no basis to the application.

She said her client never said all men were rapists and Senator Leyonhjelm had not produced any evidence to support that allegation.

"A person is not entitled to walk out of Parliament and fabricate an assertion as to what was said and attempt to defend a defamation claim under the guise of parliamentary privilege," Ms Chrysanthou said.

On Wednesday, Justice Richard White dismissed the application for the proceedings to be thrown out.

He also ordered Senator Leyonhjelm to cover the cost of Senator Hanson-Young's legal fees relating to the failed application.

Neither senator was present in the Adelaide courtroom for the decision and their lawyers appeared via videolink from Sydney and Brisbane.

Counsel for Senator Leyonhjelm flagged that his client may lodge an appeal against the decision.

The matter returns to court on December 18 for a case management hearing.