The lawyer for the Anglican Bishop of Auckland says tribunals and courts have no place telling churches what they should believe.
The Human Rights Tribunal is considering whether Bishop Ross Bay discriminated against Geno Sisneros, who is gay, when he rejected his application to train as a priest.
Mr Sisneros says the bishop turned down his application as he is in a same-sex relationship.
But Mr Bay's lawyer, Bruce Gray, says freedom of thought, conscience and religion is protected in the Bill of Rights Act and the tribunal cannot rule on church doctrine and beliefs.
Mr Gray told the hearing on Monday that the Anglican Church is not deaf or blind to the issue of gay priesthood, and is considering what its position should be.
He said the Church should be left to carry on with those discussions.
Geno Sisneros has a theology degree, works at St Matthew in the City in Auckland, and occasionally preaches at the church.
Mr Sisneros said the bishop rejected his application because he was neither married nor celibate, but he believes his relationship is equal in nature to marriage.
He said because the Anglican Church has no way to officially recognise his relationship, he cannot meet the training programme's criteria - and that is discriminatory.
Mr Sisneros said there are already priests in openly gay relationships in Auckland and other parts of New Zealand, and that he has the full support of the congregation at St Matthew.
Reverend Clay Nelson, a priest at St Matthew, told the tribunal there is nothing in the rules of the Anglican Church preventing committed people in same-sex relationships from becoming ordained.
The hearing is likely to take several days.