Judge Dwyer discharged Lyders (75) without conviction but with conditions, including an order to pay costs of $7028.82.
''I'm delighted but not so delighted about the $7000,'' he said after the hearing.
Last month, Lyders was found guilty of altering a flood bank on the true left of the Meggatburn without gaining a resource consent.
Lyders said in an affidavit presented to court his actions in modifying the bank were a last resort and the only way to protect the farm if a large flood occurred, having suffered losses of nearly $40,000 in the May 2010 flood.
''I have been prosecuted for a small `victimless' breach of a regional rule, at a large personal cost, purely for trying to protect my property.''
Judge Dwyer said the charge was the culmination of a dispute between Lyders and the Otago Regional Council regarding flood protection along the Meggatburn.
Lyders believed the 170m-long stop bank was not at its design height so acted as a spillway during floods.
''It is clearly a matter of grievance and frustration for you and part of an ongoing dispute.''
In 2010, Lyders arranged for the section of flood bank to be increased to the design height without applying for a resource consent.
The work did not put the wider stop bank system at risk but a specialist witness believed it had weakened the bank, Judge Dwyer said.
However, if it did fail there would be no threat to human life, just Lyders' crops and stock.
''I've reached the view, the wider environmental effect potentially at its worst is minor.''
His actions were deliberate and publicly so by inviting the Otago Daily Times to write an article and sending the Otago Regional Council a bill for the work.
Lyders could have avoided the whole situation by applying for a resource consent.
''You allowed your emotions and sense of grievance to override.''
Lyders said after the hearing yesterday he would think about applying for a consent and take legal advice.
It was Lyders' second appearance in court on similar charges. In 1977 he was convicted on seven charges relating to unauthorised work he did in the Waipori River.
Judge Dwyer noted Lyders extensive community involvement and said it was a finely balanced decision to grant the requested discharge without conviction given Lyders' previous conviction, deliberate nature of the offence against his good character and the lack of a wider impact. The uniqueness of the case meant it was unlikely the decision would set a precedent.
Judge Dwyer ordered the judgements and sentencing notes of the case be forwarded to the Dunedin City Council so they could form part of the land information memorandum on Lyders' property. It could be removed if and when a consent was granted for the work.
Lyders was ordered to pay solicitors costs of $1534.85, witness costs of $5361.08 and court costs of $132.89.
