It was a court case pitting the might of Melbourne’s RMIT university bureaucracy against the artists that lend them credibility, and for once the creative community came up trumps.

The champagne was flowing freely in local art circles this morning after sacked RMIT lecturer Steve Cox — feted internationally for his searing portraits of murderous social decline — chalked up a free speech triumph against his former employer in the Magistrates’ Court.

In December, Crikey revealed how Cox’s tussles with School of Art head Elizabeth Grierson began when he posted images and comments critical of Grierson and the administration on the popular “Save Art from RMIT” Facebook page, which urges members to “vent your thoughts and frustrations”.

The page says the fine art course is “under threat” and that “teaching hours, teachers, facilities & courses are being cut”, leading to its global blackballing. In early February, following his sacking for disciplinary reasons, Cox posted a photo-shopped image of Grierson with the title “Her Legacy Shall Be Ashes” and another caricature called “Grierson Out“.

But in yesterday’s out-of-court settlement, highlighting the vexed issues of modern day cyberstalking, the university was forced into an humiliating backdown, agreeing not to visit Cox’s personal Facebook page for the next 20 years. For his part, Cox will remove three Facebook entries and agree not to post anything “with malice” in the future. The clear legal implication is that if someone doesn’t want to be offended online they should avert their gaze.

The rancour had increased after Cox took the fight to his personal Facebook page, which unlike most profiles is set to public and viewable by anyone. Last month, University lawyers issued an interim intervention order preventing him from posting any references to Grierson anywhere on Facebook and from physically approaching the RMIT building in Melbourne’s CBD.

Grierson and RMIT’s lawyers spent hours compiling a massive dossier on Cox’s activities, printing out posts from his Facebook wall and monitoring the activist page. They were apparently perturbed by links to Margaret Thatcher-themed YouTube clips including UK band Hefner’s 2000 single The Day That Thatcher Dies featuring Darren Hayman’s classic “she wrapped an ankle chain round my left wing heart” lyric.

Grierson bears a passing visual resemblance to the ailing Tory hardwoman, although Cox claims any allusions were purely coincidental and the objections ridiculously precious.

Cox told Crikey this morning that RMIT remained a “draconian organisation”. “All of the staff members who were privately saying to me ‘oh, good on you’ would never dream of stepping up and criticising Grierson for fear of losing their jobs,” he said. “So I was the lamb to the slaughter, but I was actually happy to be, and it worked out well.

“RMIT has been for some time desperate to shut me me up and they haven’t been able to in other ways, so they’ve launched this personalised attack and that’s backfired.

“I’m now free to say anything about RMIT that I want. She’s not allowed to go to my Facebook page for 20 years which is great.”

In the original intervention order, obtained by Crikey, Grierson states Cox had “cast my reputation into a terrible place” and that she had felt “assaulted and abused”: “It is also causing anxiety and it is affecting my health and feeling of safety. I feel that I need an interim order in place for my personal safety and wellbeing.”

The academic said Cox’s body of artwork in general had displayed “an obsession with murder” and that he had used “words of violence” in relation to another staff member. RMIT lawyers originally cited posted images from a 2011 series “Repulsive Insects” and “Horrors of the Deep”, but later retreated, saying they only wanted the comments removed.

Cox was well prepared for yesterday’s hearing, tapping crack silk Tim North and calling on former Queensland Art Gallery director and current Australian Commissioner for the Venice Biennale Doug Hall for expert testimony. When the university got wind of the dual offensive, they quickly backed down.

Hall told Crikey this morning that RMIT had erred in its zealotry: “It would be quite astonishing if Alfred Hitchcock had a scrap with a Hollywood producer and then had a restraining order against him because he produced Psycho. The suggestion that an artist can’t separate their conduct in real life from their imagination is pretty weird stuff.”

Cox, who shot to fame through exhibitions exploring the Moors murderers and children who kill other children, posted the following message on “Save Art from RMIT” late last night after the finding:

“I have had a significant victory today in the court case that Elizabeth Grierson launched against me. She has today dropped the intervention order she brought against me. This is a major victory for freedom of speech and freedom of artistic expression.

“I now urge all Fine Art students to continue their campaign to get real answers from RMIT about the changes to their course. Take heart in the fact that truth will prevail and those who seek to hide the answers will be discredited.”

Grierson did not respond to calls and an email requesting comment.