Malcolm Roberts’ lawyer has defended his failure to renounce his British citizenship by arguing when his Australian citizenship was recognised in 1974 Britain was not a foreign power and both countries had the same sovereign.

In tense questioning in the court of disputed returns on Thursday, Robert Newlinds was accused of attempting to put a gloss on earlier findings by justice Patrick Keane that Roberts knew of the “real and substantial prospect” that he was British when he nominated for the Senate in 2016.

The third and final day of hearings into the eligibility of seven parliamentarians concluded on Thursday afternoon, with chief justice Susan Kiefel noting the need to provide a decision “as soon as possible” but stating it was not always possible to immediately do so.

No indication was given of when the outcome of the case will be decided, with the fate of the deputy prime minister, Barnaby Joyce, senators Matt Canavan, Fiona Nash, Nick Xenophon and Roberts still unclear.

Earlier, Newlinds claimed cross-examination of Roberts had “misfired” by doubting his assertion that he always believed he was Australian.

Newlinds submitted that Roberts, who was born in India to a Welsh father, was a British subject who gained Australian nationality by his decision to move to Australia not by a process in 1974. That process did not naturalise Roberts but rather formally recognised his citizenship, he claimed.

The solicitor general, Stephen Donaghue, rejected that conclusion, noting that British subjects were still “aliens” until they were naturalised.

Newlinds suggested it was “un-Australian” to recognise a difference between “natural-born” and naturalised Australians, who he termed “immigrant Australians”, and said that in 1974 there was no concept of “British citizenship” because “we all had the same sovereign, and none of us were a foreign power”.

Donaghue, on behalf of the attorney-general, has submitted that Roberts is ineligible because he had a level of knowledge of his foreign citizenship sufficient to make retention of the citizenship a voluntary act.

Newlinds said that, according to the 1999 case of Sue v Hill, Britain was defined as a foreign power in 1986 but at the time “no bells rang out in the community” to alert people of the legal change.

“Without doing anything, [Roberts] went from qualified to disqualified,” Newlinds said in what amounted to a “mystical process” decided by the high court.

Repeated questions from the bench cast doubts on the relevance of historical cases on citizenship before 1974 and directed Newlinds to make submissions on Roberts’ citizenship status in 2016.

Newlinds defended the focus on 1974, arguing the state of the law at the time meant that Roberts’ perception that he was an Australian and only Australian was “perfectly reasonable”.

“I accept that by the time we get to 2016, times have changed, the red line has either moved or the world has moved around Roberts,” Newlinds said, but suggested it was “not reasonable to expect him to have noticed” his change in status as a citizen of a foreign power.

Roberts’ case argues that because he always believed he was not British he did not have the actual level of knowledge that should be the bar for ineligibility.

Newlinds noted that Keane had not found Roberts knew he was British, only that there was a “real and substantial prospect” that he was. He argued that the commonwealth had never shown that that level of knowledge was sufficient to disqualify him.

Under questioning from Keane, Newlinds conceded that an “honest belief” that was “irrational or unreasonably held” would not save a dual national from ineligibility.

Earlier, the friend of the court Geoffrey Kennett warned that the commonwealth’s construction of section 44 required the court to determine the subjective state of mind of parliamentarians, and factual questions over their knowledge could lead to difficulties judging the credibility of witnesses and even turn on “accidental factors” like whether a contradictor subjected a politician to cross-examination.

Kennett conceded that the fact that Xenophon’s status as a “British overseas citizen” did not grant him a right to enter and live in the UK “may be a reason to find Xenophon isn’t a citizen” for the purposes of section 44.

Nevertheless, Kennett submitted that Xenophon could be expected to owe a duty of loyalty and gain some protection from Britain as a result of that status. Justice Keane suggested the fact Britain gives a different label to “overseas citizens” may tend to suggest a “real difference of substance” and that overseas citizens are “distinctly not” full citizens.

In submissions in reply, Donaghue returned to historical material that showed at the time of constitutional convention debates the framers did not evidence an intention to exclude dual citizens who were unaware of their allegiance to a foreign power.

Brett Walker, counsel for Joyce and Nash, argued that a “literal, hard-line” reading of section 44 would allow foreign laws to prevent dual Australian citizens standing for parliament, even if they had no real connection to countries of their distant ancestry.