The decision by independent commissioners Dr Rob Lieffering, Sharon McGarry and Philip Milne on behalf of the Otago Regional Council was released yesterday.
Reasons for rejecting the application included the potential for "some overflows to have short lived but significant adverse effects on the environment".
In April the QLDC applied for a 35-year permit to discharge from its wastewater network when blockages, breakages, system failures, extreme storm events, and over-capacity in its network of pipelines occurred.
Freshwater bodies affected would include Lakes Wakatipu, Wanaka, Hawea and Hayes, the Kawarau, Shotover, Clutha, Hawea, Cardrona and Arrow Rivers, and Luggate Creek.
The commissioners said there was insufficient evidence to be able to determine the extent of adverse effects from future overflows.
The application had little support from the objectives and policies of both the statutory and non-statutory planning documents it was being tested under, they said in their decision.
Queenstown Lakes Mayor Jim Boult said the outcome was "expected".
"I think we anticipated this outcome might come from the hearing."
He only learned of the decision yesterday and the council had not had time to decide whether to appeal, he said.
"It’s been an interesting exercise, we’ve learned a lot."
The consent "would have been a good thing to have", but the council could move forward without it.
The ORC said it would not comment during the appeals period; its chairwoman Marian Hobbs reiterated this.
That period ends on January 31.
In a statement, ORC deputy chairman Michael Laws said it was a "good day" for the area’s environment.
"Today’s verdict sends a very strong message to territorial authorities that they will be held to the same standards as anybody else. That's no bad thing."
Yesterday’s decision reflected a report by regional council principal consents officer Peter Christophers and senior consents officer Charles Horrell, who wrote the application was "overwhelmingly inconsistent with all relevant planning documents".
The regional council received 200 submissions in relation to the application, of which 197 were opposed, one was neutral and two were in support.
The ORC’s counsel Janette Campbell told the commissioners at the hearing such a consent was the "responsible and transparent option" for managing overflows, and would give the regional council a greater level of scrutiny than it had now.
