The council had sought a ruling to prevent further clearing of native vegetation on Peter Chartres' property, Te Anau Downs Station.
The judgment ruled in Chartres' favour and the council was notified about the costs awarded on Tuesday.
Its chief executive Cameron McIntosh said the council accepted the judgment after what had been an "incredibly challenging" case.
"This has highlighted the difficulties of operating in the realm of the Resource Management Act and associated government regulations," he said.
"While it is the responsibility of councils to follow up on complaints made by members of the public, there are no winners here.
"In the new year we intend to raise these matters with the Ministry for the Environment - Manatū Mō Te Taiao to highlight the complexities of the situation."
