Craddock 'Family' Farm: Abusing animals for over 50 years from Farmwatch on Vimeo.
Spokeswoman Deidre Sims said it was a "massive victory".
"We've campaigned tirelessly for the last two years to stop Craddock Farms building a giant caged hen hellhole that would've entrenched colony cages as the future of egg production in New Zealand."
Craddock Farms general manager Stefan Craddock told the Environment Court that the Animal Welfare Code of Welfare 2012 required changes to the way hens were housed, and the new facility would allow them to relocate the hens and comply with the new rules.
Mr Craddock said their appeal was focused only on concerns about potential odour.
"Obviously we are disappointed.
"We only received the decision yesterday so we are spending time reviewing it and looking at our options."