The challenge has been launched by an Iranian man who is fighting the legality of his removal from Christmas Island to Papua New Guinea (PNG) after he claimed asylum.
His lawyers say the Government's offshore processing laws set up a situation where the international convention on refugees could be ignored.
The minister is required to consider assurances about the treatment of asylum seekers, but these do not have to be legally binding.
The court heard in this case there is a semblance of compliance with the international convention but no legal guarantee and that risks Australia breaching its obligations.
The lawyers have also targeted a law allowing the declaration of PNG as a regional processing country.
The court heard the process of declaration is at odds with several sections of the Constitution, with regards to aliens, immigration and external powers.
Lawyers have told the court the law only requires the minister to weigh the national interest in making a declaration.
The case will continue next week when the Government will argue its laws are constitutionally sound.
Picture source: ABC