About 100 people gathered at the site known locally as "Wallum" on Monday to hear a livestream of the judgment. The court dismissed the application by conservation group Save Wallum Inc, which had sought to permanently halt the project.

Save Wallum spokesperson Luciana Bowen described the ruling as "incredibly disappointing".

"You have to wonder what credibility our environmental laws have at a national level if we can't protect threatened species and their habitat from extinction," she said. "The community has spent hundreds of thousand of dollars and countless hours trying to protect this place through the Federal Court system."

The judgment follows a temporary injunction granted in 2024 that stopped work on the development just as the developer was preparing to bring in heavy machinery. That injunction has been extended for one week to allow both parties to consider the ruling.

Clarence Property Group chief executive Simon Kennedy said the company felt vindicated.

"The applicant was suggesting that there were matters of national significance with respect to the species and the level of endangerment that may have occurred as a result of the development, and her honour has found is that is actually not true," he said.

Kennedy noted the company had been ready to start for 26 months. "There have been people looking to buy houses, young families ready to build houses and we've been held up for no reason. So we are very keen to get on site and commence works."

If no appeal is lodged by 5pm on September 14, Clarence Property can begin stage one, which involves clearing vegetation and constructing 36 artificial frog ponds. The development has been in planning since 2013, when the site's previous owner lodged concept plans. Clarence Property bought the land in 2021 and has approval to build 124 housing lots on 12 of the 30-hectare site.

Save Wallum's lawyers are reviewing the judgment to determine whether there is a legal basis for an appeal.