Mr Ashby, a former political staffer in the speaker's office, is appealing Justice Steven Rares' judgment, which found his claim was intended to severely damage Mr Slipper's reputation and enhance his own career.

In December, Justice Rares dismissed Mr Ashby's case as an abuse of the judicial process.

Michael Lee, SC, on Thursday told the full bench of the Federal Court in Sydney Mr Ashby was denied procedural fairness and that Justice Rares determined a substantive case on an "incomplete evidentiary basis".

"His honour's approach to fact finding fundamentally miscarried," Mr Lee said.

Mr Slipper was in court for the hearing, accompanied by his wife.

Mr Lee said there was evidence contrary to Justice Rares' finding that Mal Brough, who won LNP preselection for Mr Slipper's seat of Fisher last year, and Mr Ashby's solicitor, Michael Harmer, were "co-conspirators" in the alleged political attack.

Mr Brough simply sought the legal advice of prominent QC and Liberal Party member David Russell on behalf of Mr Ashby, Mr Lee said.

He said Mr Brough and Mr Harmer had never met.

"I'm going to make a suggestion at the end of the day was that one of the reasons his honour failed in his fact finding exercise ... was the only evidence about Mr Brough was evidence contrary to the notion he was involved in a conspiracy," he said.

Mr Harmer, who Justice Rares said made "scandalous and irrelevant" allegations, is also appealing the judgment on the basis the findings seriously affect his professional reputation.

Mr Lee said there was not a "jot or tittle" of evidence showing professional misconduct and that finding was not open for Justice Rares to make.

He also argued Justice Rares had made his judgment without having all the evidence before him.

"We might lose if this matter proceeds to trial because a trial judge could come to the conclusions that [Justice Rares] did," Mr Lee said.

"But he would be doing so in full fairness of the judicial [process], hearing all the evidence."

The hearing continues before Justices John Mansfield, Antony Siopis and John Gilmour.