A majority of the High Court has ruled that a Newcastle sperm donor is the legal father of his child because he was involved in her life.
The case heard in April came down to whether state law should apply instead of commonwealth laws.
The state law in question says a sperm donor isn't a parent.
But lawyers for Robert Masson, the man's court pseudonym, argued the state laws should not apply as there was no gap in the commonwealth law.
Under the commonwealth law Mr Masson is considered a parent, as he is the biological father and is involved in the child's life.
The High Court agreed, saying in a summary of its judgment on Wednesday: "The majority held that no reason had been shown to doubt the primary judge's conclusion that the appellant was a parent of the child."
The case has its beginnings in late 2006, when Mr Masson and Susan Parsons (her court pseudonym) agreed to have a child through artificial insemination.
Mr Masson agreed on the understanding he would parent, provide financial support and financial care.
He is named as the girl's father on her birth certificate.
He was actively involved in the girl and her younger sister's life, with both calling him "Daddy".
Issues arose when the mother and her partner wanted to move to New Zealand with the girls.
Mr Masson stopped them through the Family Court as he was found to be a parent, but on appeal state laws were used to rule him as purely a sperm donor.
Solicitor General Stephen Donaghue QC argued the commonwealth definition should be used.
"State law is just not relevant," he told the court.
Lawyers for Ms Parsons and her partner say the man is a sperm donor and not a parent.
Australian Associated Press