The court has also awarded costs to the Dunedin City Council.
The anti-stadium group led by Bev Butler took its case to the Court of Appeal, seeking to quash a decision to go ahead with Carisbrook's replacement, despite the piles already being in the ground for the controversial Awatea St project.
The group argued the Dunedin City Council was in breach of the Local Government Act when it resolved to proceed with the stadium.
However, the court said in its decision released this morning it was satisfied the council had not acted contrary to the Act when signing the construction contract.
The appeal followed an earlier court action, when Justice Lester Chisholm ruled the group had "failed to get past first base" in its April High Court attempt to challenge Dunedin City Council support of the project.
The group appealed in May, and said Justice Chisholm erred in finding the council's decision to enter into a contract with Hawkins Construction to build the stadium was not prohibited by the Local Government Act.
