A dwelling can be added to a property in Currie Rd, near Woodside, after the court ruled the project should have been granted a resource consent.
Insufficient attention was paid to biodiversity benefits arising from a planned tree-planting programme, the judge of the case decided.
The case cost the council $57,747.99 in legal fees and it will not be lodging an appeal.
"We are still considering the implications of the decision, and so we’re not in a position to comment in detail, but each resource consent application is considered on its merits and we don’t believe a precedent arises," a council spokesman said.
The council had raised concerns about the possibility of a precedent when it made legal submissions.
It has historically been cautious about allowing development on high-class soils and council staff signalled this broad stance was not in jeopardy.
"We also note the recent national policy statement on highly productive land aims to protect highly productive land for primary production, both now and into the future," the spokesman said.
The national policy would result in changes to Dunedin’s district plan, including about land use and subdivisions on highly productive land, he said.
Implications of the court’s ruling would be considered as part of this wider work.
The proposal in Currie Rd was designed to enable a modestly sized "farm-shed-style" dwelling to be built, accompanied by restorative indigenous planting on the 2.8ha property.
The rural zone has a minimum site size of 25ha for residential activity.
This resulted in a hearing, and the council’s hearings committee was not persuaded the restoration proposal would make a significant contribution to biodiversity values at a local level.
It is expected more than 5000 plants will be needed for the proposal.
The court granted a resource consent, subject to conditions.
