Barrister Christopher Griggs said in the past it had been very rare for vaccination status to be used as a ground for discharge from the armed forces.
The group's application was founded on the claim that the chief of defence force must follow a statutory process before taking action against personnel, Briggs said.
The directive was unlawful and breached the group's right to refuse medical treatment under the Bill of Rights Act, he said.
But retired law professor Bill Hodge said it would be difficult for the Defence Force personnel to convince the courts they did not have to get the Covid-19 vaccine.