It is the nature of the legal system to interpret law, not merely the letter of the law, but also the spirit of the law. That is why we have different levels of law, from lower courts and tribunals to higher courts.
Higher courts DO make law, by their interpretation of what is MEANT by the laws they are enforcing. Justice Kirby, as a High Court justice, was in a position to interpret what he believed was the INTENTION of the law. the preamble of the constitution is much spoken about and is a good example of the meaning of the constitution. the preamble is not law in itself, but is meant to give an idea of what is intended in the constitution. The same is the case in other law. It is then up to the judge to interpret both the letter of the law and what is intended by it. An interpretation of the law can be appealed to a higher court, ultimately the High Court. Previous cases in higher courts are used to interpret what is meant by a particular law. Justice Kirby's decisions, alongside those of his colleagues on the bench, are used as precedents in deciding later cases. Precedents from higher courts are more persuasive than lower courts. That is MAKING law.
To claim that courts don't make law is naive and that ONLY the parliament makes law is simply incorrect and a misunderstanding of the Australian legal system.