But Calvin Fisher, the director of Saddle Views Estate Ltd, which owns the quarry, is vowing to continue the fight - and the quarrying - despite the setback.
The fighting talk came after the Court of Appeal released its ruling, dismissing an application by Saddle Views Estate to appeal an earlier High Court ruling which backed the council.
Last July, the High Court upheld an earlier Environment Court decision from 2016, which found the quarry was limited to 50,000 cubic yards (38,000 cubic metres) of rock for the purpose of building a new airport at Momona.
That was based on a resource consent issued in 1960 which, the Environment Court found, was no longer in force.
In a judgement made public yesterday, the Court of Appeal said none of the arguments for Saddle Views Estate had ``any real prospects of success''.
Council chief executive Dr Sue Bidrose said the ruling exhausted the rights of appeal and brought clarity to the long-running legal dispute.
``Our position is that the ridgeline is now well protected by this decision.
``This hasn't been an easy process and there was quite some debate about whether seeking to have this legal declaration was the right move.
``I think this really shows that it was,'' she said.
Mr Fisher said the ruling was ``extremely disappointing'' but not the end of the matter.
He accepted the rights to appeal were exhausted, but the company would explore existing-use rights to continue the quarry.
He hoped to discuss the extent of those rights with council representatives soon, but further legal action could follow if talks failed.
Mr Fisher criticised the ``selective'' court process.
The outcome ignored the ``critical'' need for competition and proximity within the city's quarrying industry, Mr Fisher said.
``But we've still got a quarry.
``I believe existing-use [rights] is the continuing pathway, and we'll be pursuing that.''
Dr Bidrose said existing-use rights would not allow the scale or intensity of the quarry to increase, and the company ``will have to demonstrate to us what they believe their existing-use rights to be''.
``The onus is on them ... to prove their existing-use rights,'' she said.
Saddle Views Estate had maintained its quarry was permitted by both a 1960 resource consent and existing-use rights.
Dunedin Mayor Dave Cull welcomed the outcome yesterday, saying the community would be ``very pleased'' to see the social and cultural significance of Saddle Hill protected.
``It's a relief we have certainty.''
