Developer Crystal Property (London) Ltd hoped to build the four and five-storey block on a site adjoining 130 Kingsland High Street.
But the London Borough of Hackney refused outline permission and that decision was upheld by a planning inspector in September 2014.
The inspector ruled that the height and general mass of the development would "dominate rather than complement" the nearby Rio Cinema.
Crystal Property's challenge to that decision was rejected by a High Court judge last year and now that ruling has been confirmed by the Court of Appeal.
The case raised an interesting point of law concerning applications for outline planning permission.
All matters of detail relating to the application - including the "scale" of the development - had been reserved for further consideration by the council.
And Crystal Property argued that the inspector had trespassed outside his brief by considering the height and mass of the proposed block.
The outline application specified floor areas for which permission was sought and was accompanied by drawings of a 4/5 storey building.
But the developer argued that those drawings were "indicative" and for "illustrative purposes" only.
In rejecting the appeal, Lord Justice Lindblom, sitting with Lord Justice Tomlinson, found that the inspector's decision was sound in law.
He took the proposals before him at face value and was perfectly entitled to consider the height, bulk and mass of the planned development when analysing its potential impact on the listed building.
He had not pre-empted any subsequent consideration of scale as a reserved matter.
The judge concluded that the inspector rightly informed his decision by reference to the indicative drawings, as the developer had invited him to do, and had clearly recognised that he was considering an application for outline consent, with all matters reserved.
Crystal Property (London) Limited v Secretary of State for Communities and Local Government & Anr. Case Number: C1/2015/0448