Although the Morling Inquiry clearly stated that there was absolutely no evidence indicating anything but the Chamberlains' innocence, the Northern Territory government attempted to dilute the effect of the Commission's inquiry when Attorney-General, Daryl Manzie told the Legislative Assembly that the Morling report "makes no declaration of innocence but rather points to doubts and problems in the way of proving guilt. The report stops a long way from saying that a dingo took Azaria. It says the contrary has not been proved."
Papers reflected this view on 2 June and 3 June 1987, which printed headlines such as "Lindy Gets Pardon: Convictions Stand"
A debate now ensued in the Northern Territory parliament about whether the findings of the trial and appeals be quashed or not. Ian Tuxworth, who had resigned as Chief Minister one month before the findings of the inquiry were released, stated to the Assembly that he believed that the Chamberlains should have the findings of all of the trials quashed and be able to completely clear their names.
Interestingly, Marshall Perron, the former Attorney General, resigned his office one month prior to the report being filed as well. Five weeks before that, Jim Robertson had resigned as Attorney General. By the end of 1986, Paul Everingham, Chief Minister and Attorney General when the case first opened, who was considered to be in the running for the future Prime Ministership of Australia, suddenly quit politics all together to return to practicing law.
Finally, a bill was established by the Northern Territory Assembly that permitted the Chamberlains to apply to the Court of Criminal Appeal to have their convictions quashed. The bill was passed unanimously on 21 October 1987, yet when the Chamberlains made the application, the Northern Territory government contested it.
On 29 February 1988, Adams (assisting Barker at the inquiry) was given until 16 June 1988 to make a written submission "drawing attention to sections of the commissioner's finding that should be queried, further examined or rejected." John Winneke QC, (the Chamberlains' lawyer during the inquiry) was allowed two months to reply by Chief Justice Asche and two fellow judges
At 10.00 am 15 September 1988, Lindy and Michael Chamberlain returned to the Darwin courthouse where they had been convicted six years earlier. The three judges of the Court of Criminal Appeal took less than two minutes to announce their unanimous decision to quash the Chamberlains' convictions. The finding being that "the convictions having been wiped away, the law of the land holds the Chamberlains to be innocent." The Chamberlains emerged from the courthouse in triumph with smiles and Michael's victory sign.
Despite this declaration of innocence, the findings of the Second Inquest were not quashed, nor was the Northern Territory government willing to pay compensation to the Chamberlains.
At the end of 1988, Tipple made a formal application for compensation for the sizeable sum of $4 million. On this issue the nation was again divided, with public, private and political debate as strong as it had ever been. It was not until 1992 that the Northern Territory Court of Criminal Appeal finally awarded the Chamberlains compensation. The Northern Territory government was ordered to pay Lindy and Michael Chamberlain the sum of $1.3 million.
In December 1995, the Chamberlains again went to court to in an attempt to finalise the incomplete inquest of 1982. Lindy and Michael Chamberlain had divorced and Lindy had since remarried and changed her name to Lindy Chamberlain-Creighton. The Northern Territory Coroner, John Lowndes, found that the "cause of death cannot be determined, and must remain unknown." The greatest significance of this verdict is that if another child is killed by a dingo in similar circumstances, the Azaria Chamberlain case could not be referred to in court as a precedent because it had not been an official ruling that a dingo attack was the cause of death. It was this same lack of official documentation that had prevented the Chamberlains from referring to past cases during the first and second inquests into their daughter's death.