The High Court has declined to uphold Forest & Bird's challenges to the Director-General's decision to revoke the conservation park status of the Forest Park land.
Forest & Bird sought the review following the decision made by DoC's director general Lou Sanson to swap 22ha of the Ruahine Forest Park for 170ha of land the Hawke's Bay Regional Investment Company (HBRIC) will potentially buy from Smedley Station.
The environmental group claims the land deal is unlawful as DoC has the power to swap stewardship land but not specially-protected conservation parkland.
Justice Matthew Palmer said he agreed with some of Forest & Bird's submissions on the law, however what was proposed may create an obligation to reserve marginal strips from the sale or disposition of the Forest Park land.
"Such disposition has not yet occurred so a challenge to that is premature," he said.
Justice Palmer was reluctant to order costs against Forest & Bird.