"It is a particularly weak case on the merits, a very extensive delay of three years and prejudice caused to Cricket Tasmania in that the employees named have moved on," Mr McTaggart told the court.
After a brief pause in the hearing, Mr McTaggart said his client was prepared to go to mediation under certain conditions.
Those referred to in the lawsuit include Paine and his brother-in-law and former cricketer Shannon Tubb, but the document detailing the allegations was not provided to the media.
"We're both f--ked if this got out," the woman texted, according to the Herald Sun.
Paine also sent an image of his penis with the caption "true, so f--ked" in reference to the messages becoming public.
He had also sent a series of explicit messages, including: "I'm about to give something firm a pull, myself I think (wink emoji) Well I was going to anyway ha."
Paine has previously said the messages were consensual.
Paine played 35 Test matches for Australia and was considered the country's best wicketkeeper.
In November he stepped down as captain and apologised to his teammates, saying he didn't want to derail the team's chances of winning the Ashes.
"I do not want this to become an unwelcome disruption to the team ahead of what is a huge Ashes series," he said.
In the teary press conference he apologised to his family and others involved.
"I am deeply sorry for the hurt and pain that I have caused to my wife, my family and to the other party," he said.
"I am sorry for any damage this does to the reputation of our sport and I believe it is the right decision to stand down as captain, effective immediately."
Cricket Australia chairman Richard Freudenstein said at the time of the resignation: "Tim felt it was in the best interests of his family and Australian cricket to take this decision to step down as captain."
Justice Mordy Bromberg ordered the parties to submit documents ahead of any potential mediation by the end of February and early March.
