Christian guest house owners have appealed against a judge's ruling that they acted unlawfully in refusing to allow a gay couple to stay in a double room.
Peter and Hazelmary Bull, who run Chymorvah House in Marazion, Cornwall, challenged a ruling, made in January by Judge Andrew Rutherford at Bristol County Court, at the Court of Appeal in London.
Judge Rutherford said the Bulls acted unlawfully in turning away Martyn Hall and his civil partner Steven Preddy, both from Bristol, in September 2008. He ordered the Bulls to pay the couple a total of £3,600 damages. Mr Hall, who is in his 40s, and Mr Preddy, in his 30s, had claimed sexual orientation discrimination under the Equality Act (Sexual Orientation) Regulations 2007.
Mr Bull, 71, and Mrs Bull, 67, were in court for the start of the appeal hearing, which lawyers expect to end on Wednesday. Mr Hall and Mr Preddy were not in court.
James Dingemans QC, for the Bulls, told three appeal judges that his clients had no wish to "undermine" Mr Hall and Mr Preddy nor to disrespect them. But he argued: "The learned judge erred in failing to balance the respective rights in this case."
He said the Bulls believed that "unmarried sexual behaviour was wrong" but were not prejudiced against homosexuals.
Mr Dingemans said the law should be capable of accommodating Mr Hall and Mr Preddy's rights under equality legislation and the Bulls' rights to beliefs about sex before marriage.
"(The Bulls) have prevented hundreds of unmarried couple sharing double beds," said Mr Dingemans. "(Their) beliefs may be considered outdated, uneconomic, for those operating a private hotel but, we respectfully submit, they are entitled to manifest those beliefs."
He said the Bulls had an "absolute right" to believe that "unmarried sexual behaviour is wrong" and a "qualified right" to "manifest that belief".
"If human rights is to have any value at all, it must be respecting of all rights," added Mr Dingemans. "It should not be beyond the ability of the courts to accommodate both sides."