In a decision handed down on Tuesday, the court found the government did not need to enact legislation to close about two kilometres of track between Wickham and Newcastle stations.

And in a further blow for the community group, the court has ordered it to pay the government’s legal costs.

In their joint judgment, Acting Chief Justice Margaret Beazley, Justice Robert Macfarlan and Justice Anthony Meagher found the closure of the section of track did not amount to the closure of a railway line, which requires Parliament’s approval under the provisions of the Transport Administration Act.

‘‘To foreshorten a railway passenger service within a metropolitan region by a few kilometres, whilst potentially giving rise to inconvenience to passengers, does not have the same public policy implications calling for parliamentary oversight,’’ Acting Chief Justice Beazley instead found.

The decision had been pending since a hearing in July. 

But rather than wait for the ruling, the government passed the legislation anyway in October, with the support of the Shooters and Fishers Party in the upper house.

The court noted the passing of the legislation "renders the proceedings moot except as to costs".

Save Our Rail president Joan Dawson said the costs order in particular was "devastating".

She said the government could have withdrawn from the proceedings after it passed the legislation to close the line and before the court's decision was handed down, but accused it of choosing to continue in the hope of crushing Save Our Rail.

"This was to send a message to community organisations- don't stand in the government's way," she said.