But they said the council was "fully accountable" as both applicant and appellant as well as a consent authority.
"We leave open the possibility that in other circumstances the issue of whether it is lawful or appropriate for a council to appeal against its own decision may need to be decided," the judge said, especially if no one else is involved.
Auckland Council has spent at least $660,000 on engineering, design and legal fees relating to the wall.
Figures released to Hibiscus Matters under the Official Information Act show legal fees alone have totalled more than $140,000.
Both parties were given until last week to file memorandum on proposed terms and conditions for a hearing.