The woman – who was in the midst of a manic episode - walked into the liquor store and put the large axe on the counter, demanding alcohol and tobacco.
The staff member on duty gave her a carton of cigarettes while she removed two packs of pre-mixed bourbons from the fridge.
She was arrested soon after and explained to police that her flatmate, who worked at the store, had not been paid and she had a "right" to take what she did.
The woman claimed she took the axe for her safety and she feared there were Mongrel Mob members in the neighbourhood.
Seven months after sentencing, Justice Robert Osborne in the High Court agreed the outcome was fair, ruling the consequences of a conviction were not out of all proportion to the gravity of the offending.
The problem for the defendant was that she was unable to point to any specific impacts on her future should the conviction be entered.
Her counsel Brian Kilkelly took the argument to the Court of Appeal last month arguing that the law had been interpreted too narrowly.
A discharge without conviction – normally the realm of young offenders looking to preserve their future career prospects – should equally apply to more mature defendants, he said.
That was especially true, Kilkelly suggested, when the crime would not have occurred had it not been for a psychotic episode.
The Court of Appeal, made up of Justices Denis Clifford, Simon Moore and Jillian Mallon, considered the seriousness of the offending as low, given the background.
The woman was "plainly deeply embarrassed" and the staff member who served her told police he was not worried or affected by the incident.
The court noted the woman's mental health had stabilised in recent years and clinicians had no concerns regarding the risk she posed to herself or others.
"While the courts have tended to more readily accept the existence of general consequences where young people are involved, the principle is not to be constrained in that way," said Justice Moore in a judgement released this week.
"For [the defendant] to carry the stigma of a conviction for a serious criminal offence in these circumstances amounts, in our assessment, to a miscarriage of justice requiring the appeal to be allowed."
