A decision to dissolve the parish of the first black female deacon in the Church of England is "indirectly discriminatory", a court has heard.
Reverend Yvonne Clarke was ordained as a deacon in 1987 and has served All Saints Shirley, in the diocese of Southwark, for more than 20 years.
Under cost-cutting proposals, the diocese is set to dissolve her parish and divide it between two others.
The appeal is being heard by the Privy Council.
The action was brought by All Saints Spring Park Parochial Church Council (ASSP) and Mrs Clarke against the Church of England church commissioners.
At a hearing on Tuesday, the council's judicial committee were told the abolition of the parish of All Saints Spring Park would have a "disproportionate impact" on Black, Asian and minority ethnic (BAME) parishioners relative to white people, as it is "currently providing a distinctive and beneficial ministry to BAME people in the local area".
Speaking for the ASSP, Leslie Thomas KC said in written submissions: "There is overwhelming evidence that the congregation at All Saints Spring Park is predominantly BAME, that the parish has a particular outreach to the BAME community, and that the parish's BAME leadership is important to many BAME people."
The barrister also told the justices the bishop and other diocesan officials have made "no real effort to work co-operatively with All Saints to resolve its financial problems".
However, Victoria Wakefield KC, representing the commissioners, said in written submissions that church authorities concluded ASSP was "no longer viable as a parish and was unable to provide effectively for the cure of souls and the church's mission", with its position "consistently among the worst" of the diocese's three parishes based on finances and attendance.
She added ASSP's case was a "misguided attempt to render religious functions subject to human rights law", which would have "wide-ranging, undesirable, and unintended implications for the church".
Ms Wakefield also said the commissioners had "adequate regard to the potential equality impacts" of the scheme.
The hearing was told training and support had been offered to the parish to help remedy concerns raised, and time was given for it to improve matters, according to the commissioners.
Ms Wakefield said the draft proposals would create "two effective and stable parish units in the Shirley area with no reduction in ministerial provision".
She told the hearing no "serious alternative" had been put forward by ASSP and Mrs Clarke beyond maintaining the status quo.
The hearing before Lords Hodge, Sales, Hamblen, Leggatt and Richards will continue on Wednesday, with a decision expected in writing at a later date.