Israel Folau's war with Rugby Australia has concluded for the day, but a result will not eventuate from the Saturday hearing this weekend as the polarising fullback attempts to save his career.

Rugby Australia (RA) announced its intent to terminate Folau's employment over a breach of contract claim following an April 10 Instagram post that RA claims is a "high level" breach of the sport's "inclusiveness" commitment as outlined in the players' code of conduct, agreed to by the players' union and RA officials in the collective bargaining agreement.

"It is not expected that any further witnesses will be called to provide evidence on Sunday," a statement from Rugby Australia read.

"The panel is not expected to deliver its decision tomorrow."

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Rugby Australia has nothing short of the code's survival on the line in Folau's all-encompassing case.

Folau argues it is unlawful for the governing body to have moved to tear up his four-year contract, reportedly worth $4 million.

Folau arrived in St Leonards on Sydney's North Shore just after 9am (AEST) to commence what will be a lengthy hearing.

According to a report in The Daily Telegraph on Saturday, the future of rugby in Australia could be decided if Folau is successful in his challenge of RA's move to rip up his contract.

The report claims Rugby Australia is privately bracing for a $12 million financial loss for the upcoming season — pushing the code to the brink of collapsing.

RA would face "financial ruin" if it is forced to face a projected $8 million loss and pay out the full $4 million owed to Folau in his long-term contract.

According to The Australian, the legal fees and costs associated with fighting Folau in a conduct hearing and expected follow-up legal challenges through the courts will also cost RA at least $100,000.

A full $12 million hit would leave RA "on the precipice of insolvency," according to The Daily Telegraph's Jamie Pandaram.

MICHAEL CHEIKA MAKES SHOCK APPEARANCE AT ISRAEL FOLAU HEARING

Michael Cheika made a surprise appearance at Israel Folau's code of conduct meeting in Sydney.

The Wallabies coach was spotted driving his car out of Rugby Australia headquarters at 12.50pm Sydney time, presumably after giving evidence, reports AAP.

Cheika said last month he wouldn't pick Folau for the Wallabies after the star fullback's homophobic post on social media, saying it would be "difficult".

"I think as it stands right now, considering what I just said, you wouldn't be able to," Cheika said.

AMATEUR BLUNDER COULD SAVE FOLAU MILLIONS

Israel Folau has reportedly been armed with a legal loophole that could see his legal team tear down Rugby Australia's argument that he breached the terms of his contract significantly.

Preliminary, widespread reports initially claimed Folau's contract was terminated on the grounds that his Instagram post breached the terms of his individual playing contract and the players' code of conduct.

It was reported that Folau's 2018 contract extension included a personalised social media clause that held Folau to a certain standard of acceptable public comments after he last year caused uproar across Australian rugby with social media commentary ahead of the marriage equality vote.

It was reported at the time that major sponsor Qantas had threatened to walk away from its multi-million dollar deal with Rugby Australia unless action was taken to discipline the 30-year-old star.

Fresh reports, however, claim Rugby Australia failed to get Folau to sign off on the social media clause in his playing contract, weakening the governing body's claim that Folau's social media post constitutes a high-level breach of his contract.

Rugby Australia will only be able to lawfully rip up Folau's contract if the hearing's independent panel rules Folau's actions seriously violated the terms of the deal.

Pandaram told Fox Sports News on Saturday that Rugby Australia took the extraordinary step of trying to go back to Folau to sign off on the social media clause after he had already signed his contract extension.

"It looks very bad for them," Pandaram said of the failure to include the clause in Folau's new contract.

"You're talking about a guy who showed he was a liability in the social media space last year, and then you go and sign him up for four years on a $4 million deal. You want to make sure you have everything in place. You need to dot your I's and cross your T's across everything. They didn't.

"They went back and said, 'Oh, we need you to sign this with the additional social media clauses,' and Israel Folau said, 'Na, I've already signed a contract'. That's what Israel Folau's lawyers will use."

HOW RUGBY'S FUTURE WILL BE DECIDED

The fate of both Folau and RA now rests in the hands of the three-person panel of chair John West QC, RA representative Kate Eastman SC and the Rugby Union Players' Association- elected John Boultbee.

RA has already declared the panel is not expected to deliver a decision on the weekend.

A final verdict could in fact take months or even years to reach, according to an employment law expert.

Giuseppe Carabetta, from the University of Sydney Business School, described the complex case as a "perfect storm of conflicting religious, corporate sponsorship and moral issues".

Folau, 30, was issued with a "high-level" breach notice last month for taking to Instagram to proclaim "hell awaits drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists and idolators" unless they repent and turn to Jesus.

The three-times John Eales Medallist had been warned last year following a similar post claiming gays were destined for hell, before signing a rich contract extension in October.

Folau and his barrister Adam Casselden will argue that RA did not include a specific social media clause in his new contract and that his posts were merely passages from the Bible and not directly his words.

RA, to be represented by Justin Gleeson SC, is expected to argue that, regardless of no such apparent clause, Folau seriously breached the governing body's broader code of conduct policy and its inclusion policy.

Point 1.3 of the players' code of conduct policy says: "Treat everyone equally, fairly and with dignity regardless of gender or gender identity, sexual orientation, ethnicity, cultural or religious background, age or disability. Any form of bullying, harassment or discrimination has no place in Rugby".

If the tribunal determines that Folau has in fact breached his contract, the panel must then decide if the breach was severe enough to terminate his career. The losing party will have until 72 hours after any decision is handed down to appeal.

And even after that, the matter could well drag on for months — or years.