Gill Taylor had asked the Court of Appeal in London to overturn a High Court judge’s ruling withdrawing village green status for the land to the south west of Weymouth known as Markham and Little Francis.
However, Lords Justices Patten, Sullivan and Carnwath have ruled that it was "just" for High Court judge Mr Justice Morgan to order rectification of the register of town and village greens to remove the site.
In November 2010, Mr Justice Morgan said that he fully understood the disappointment local residents of Wyke Regis would suffer at his decision, but ruled that the land between Wyke Road to the south and Chickerell Road to the north should never have been registered as a village green in the first place, nine years earlier.
The ruling effectively opened the way for landowner Betterment Properties to pursue building projects on the site, subject to local planning restraints.
Taylor, a member of the Society for the Protection of Markham and Little Francis, had argued at the Court of Appeal that the withdrawal of village green status after nine years was "unjust".
However, giving the Court’s main ruling, Lord Justice Patten said: "The judge was entitled in my view to conclude that it would be just to order rectification in this case."
He said that to deprive the landowner of the unrestricted use of his property by way of a village green registration that never should have been made required "considerable justification", which was not present in this case.
He said that the fact that residents may have bought houses in the area overlooking Markham and Little Francis believing it to be a protected village green was not enough.
He said: "What they will lose by the rectification of the register is not the open space comprised in the registered land, but their right to unrestricted use of it for recreational purposes.
"Since they were never entitled to those rights, no injustice can follow from their removal.
The High Court judge found that the use by the public of the land over a 20 year period was not "as of right", as required by the laws on village greens, because the previous landowners, the Curtis family, had erected signs saying ‘Private’ and ‘Keep Out’ and because some people had accessed the land by making gaps in the fences and hedges and had committed acts of vandalism and worried cattle.
In a separate case, the Court of Appeal overturned a High Court ruling last summer which had withdrawn town green status for a 2.4ha field on the edge of Huddersfield.
Although Lord Justice Sullivan and Lord Justice Carnwath agreed with the High Court judge that the registration should never have been made, they ruled that "justice" required that the decision should not be overturned.
Lord Justice Sullivan said: "While it must be desirable, in principle, that errors in a public register should be rectified, the delay of over 12 years in seeking rectification of the register in this case was, by the standards of any reasonable legal process, so excessive as to make it not just to rectify the register."
He added: "All other things being equal, the longer the delay in seeking rectification the less likely it is that it will be just to order rectification."
The third judge, Lord Justice Patten, said that he would not have allowed the appeal.