The decision leaves pending cases, such as the case against Brian Lane for indecency and assaulting a superior officer, in limbo.

Opposition spokesperson and shadow attorney-general George Brandis has called for the Rudd government to institute a Military Division of the Federal Court and of the Federal Magistrates Court.

The Federal Magistrates court faces abolition after the Federal Budget announcement, and Brandis has been agitating for its reinstatement since May.

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"The Opposition will work in bipartisan fashion with the Government to address this problem urgently," Brandis said.

"It urges the Government to revisit the abolition of the Federal Magistrates Court, and reconsider the utility of preserving a Commonwealth court of summary jurisdiction to deal with the wide range of matters, including military justice, which could be most conveniently dealt with by such a court."

The Australian Military Court was established after a parliamentary inquiry in 2005 highlighted deficiencies with the military justice system.

The Australian Military Court has been declared constitutionally invalid by the High Court of Australia.