Simon Bird QC, counsel for Elmbridge Borough Council, which granted permission for the redevelopment of the Jolly Boatman site, was responding to claims by architect and conservationist Keith Garner that the scheme would be immensely damaging.
Bird told Mr Justice Ouseley that the council had reached an adequately reasoned decision which should be upheld.
Garner wanted the judge to quash the decision to approve Gladedale Group and Network Rail's scheme.
This will involve a hotel, residential units, a care home and a refurbished Hampton Court station (Planning, 14 November 2008, p2).
Garner, who has mounted the action on behalf of local objectors, claimed that the development will urbanise the parkland setting and block views of the historic palace that once belonged to Henry VIII.
His lawyer Richard Drabble QC argued that the council failed to adequately publish its reasons for granting permission, which rendered it unlawful. The judge is expected to deliver his verdict before the year end.