Opposition planning spokesman Mark Parton said the decision to approve, then revoke, permission for the first stage of Capital Recycling Solutions proposed Fyshwick rail freight terminal had "undermined trust in the planning system" and "caused significant problems for all stakeholders."

The Supreme Court last week ruled the ACT Planning and Land Authority did not have the power to overturn an earlier approval for a concrete slab next to the rail line. The authority's decision was made following an internal review, which determined the application should not have been given the green light because the proposed works were not permitted on the site.

In a damning judgment, Associate Justice Verity McWilliam said the planning system would be "unworkable" and reduced to a "state of anarchy" if government's could revoke existing development approvals. That power must rest with the courts, she said.

The government will not appeal the decision, and has been ordered to pay costs to the waste management firm. The sum of those costs are yet to be determined.

In the wake of the decision, Mr Parton said the government needed to explain its handling of the process.

“There are no winners from the ACT government’s mishandling of the issue," Mr Parton said.

“The Government should explain how it could possibly get this so wrong. I’ll be asking questions about that. The ACT ratepayer is funding this debacle and they have a right to know why."

Capital Recycling Solutions director Adam Perry criticised the government's conduct throughout the saga, particularly the lack of communication surrounding the internal review process.

Mr Perry said the company was poised to strike a deal with the government to secure land crucial to the project when it was informed the approval was being reconsidered. Its option to buy the land was revoked when the approval was overturned.

He claimed it was never made clear why, and on what grounds, the review was undertaken, and said it appeared to be a "unilateral decision made by a couple of individuals".

"The court action, too, could have been avoided," he said.

"We tried many, many times to sit down with them and discuss this. We also said to them that if there was a particular issue with our application, then maybe a condition could be added."

"But they rejected all of that. It was a pretty clear case of being stonewalled if you ask me."

Mr Perry said he would meet with government officials in the coming weeks to discuss the project's future following the Supreme Court ruling, including the process to restart negotiations to buy the parcel of land adjacent to the rail corridor.

The Canberra Times on Tuesday reported the waste management firm had lodged plans for a $1.2 million rail freight terminal at the site.

ACT chief planner Ben Ponton said the authority would "review and monitor its processes as a matter of course" in the wake of the judgment, but indicated that would not extend to an investigation into this particular case.

"The authority did review the decision and associated process that led to the approval of the original development application," Mr Ponton said.

"The review led the authority to revoke the original approval and that decision was then the subject of judicial review. The authority notes that the Supreme Court has now provided judicial clarification on this matter. The authority accepts the findings of the court and notes that the court has specifically found the development proposal was not for a prohibited use."

ACT Law Society president Chris Donohue made no criticism of the government for arguing its case, but said the judgment made it clear the authority never had the power to overide the decision.

Mr Donohue agreed with the associate judge's warning that allowing governments to rescind approvals would undermine the planning system.

"Once you get a planning approval, its becomes a property right," Mr Donohue said.

"People make decisions to act when they have an approval, whether that's to start work on that project or not start work on another."

Planning Institute of the ACT president Ian Wood-Bradley said the Supreme Court's decision was significant.

"Certainty in decision making by the planning authority is important to the credibility of the ACT planning system," Mr Wood-Bradley said.