The Federal Court has dismissed an appeal by the government to overturn a decision that allowed an organisation helping sufferers of a rare hereditary disease to keep $10 million in funding.
Indigenous Affairs Minister Nigel Scullion was handed a note in Parliament advising him his appeal was unsuccessful.
"I've just had a short note telling me it was a two to one [decision] and so, obviously, I haven't considered the matter," Nigel Scullion said in an Indigenous Affairs estimates hearing.
"It's unlikely this would be appealed at the High Court."
The organisation assists sufferers of Machado-Joseph Disease, a rare degenerative brain disease that affects around 500 Indigenous people in the Top End of the Northern Territory, according to the MJD Foundation.
In November 2015, a landmark Federal Court decision found the government didn't have the power to withdraw funding the MJD Foundation had been granted under the previous Labor government.
The $10 million in funding was drawn from the Aboriginal Benefit Account.
When the Coalition came to power, Minister Scullion said he would withdraw the funding, citing his concern it was an inappropriate use of ABA funds.
His decision resulted in the legal battle with the MJD Foundation.
"Health services should be provided by the Department of Health, not by the Aboriginal Benefits Trust Account," Minister Scullion said in estimates to Senator Malarndirri McCarthy.
"We were looking for some certainty around the capacity for ministers to effectively make decisions that were not necessarily supported by the Aboriginal Benefits Trust Account Committee," he said.
Since 2014, the MJD Foundation has received more than $750,000 in Commonwealth funding, .
