Two high court judges were asked to decide "what is football?" after neighbours fell out over a kick-about in an exclusive, residents-only garden.
Christopher Fleming-Brown, 46, from Kensington, west London, was taken to court by Paula Lawton, 63, after playing ball with his son, aged five.
She accused him of turning the lawn garden into a recreation ground and breaching local by-laws.
Magistrates dismissed Ms Lawton's claim but she is challenging their ruling.
The case concerned the alleged breach of by-laws governing the Arundel and Elgin gardens in the area close to Notting Hill.
Last November West London Magistrates said the banker's kick-abouts with his son did not amount to football in the eyes of the law.
She successfully challenged the magistrates' ruling before two senior judges at the High Court on Wednesday but was denied a retrial.
Lord Justice Waller, sitting with Mr Justice Treacy, said: "We think the justices took too narrow a view of what constituted football or a similar game by paying too much attention to the dictionary definition, which referred to two teams seeking to put the ball into the opposition's goal.
"By any common-sensical, natural interpretation the respondent and his son were playing football or a similar game."
But the judge said a retrial would be "inappropriate" and Mr Fleming-Brown's acquittal would still stand.
The garden by-laws have now been changed to allow ball games between parents and children.
Ms Lawton told the judges: "You got the decision right, but still found against me. This is very shocking."
Mr Fleming-Brown said he had to defend himself as a conviction could have affected his ability to fly to the US on business trips.
His solicitor Andrew Gregg said the case was frivolous and a waste of time and public money.
"Think of the cost of two High Court judges, magistrates, court clerks and the rest employed in a dispute that has dragged on for two years", he added.