A class action against the Victorian government's plan to demolish and rebuild all 44 of Melbourne's public housing towers by 2051 was thrown out by the Supreme Court in April.
Towers in Flemington and North Melbourne were the first slated to be emptied for demolition but evictions were halted after an appeal was launched.
The Court of Appeal on Friday found Supreme Court Justice Melinda Richards had not erred in her ruling that Homes Victoria did not legally have to consult with residents on the plan.
The plan, unveiled by former premier Daniel Andrews in September 2023, will lead to the relocation of more than 10,000 residents.
Homes Victoria staff doorknocked every tower resident after the announcement but residents also found out through a televised press conference and flyers under their doors.
While residents weren't owed procedural fairness, the three-justice bench was critical of the government agency's approach.
"The decision to implement the housing policy without consultation caused significant grief to residents within the housing estates," Chief Justice Richard Niall said.
The court dismissed Homes Victoria's request to recoup $10,000 in legal costs, with Justice Niall noting the case was of public interest and sufficiently cogent to warrant an appeal.
The appeal was led Inner Melbourne Community Legal on behalf of Jason Mallard, a disability pensioner who has lived in a public housing tower on 120 Racecourse Road in Flemington for 27 years.
More than 91 per cent of families from 33 Alfred Street, North Melbourne and 120 Racecourse Road and 12 Holland Court in Flemington have already relocated to new homes.
The dismissal of the case paves the way for notices to vacate to be served on remaining residents, Inner Melbourne Community Legal managing lawyer Louisa Bassini said.
"Some of our clients will be facing the prospect of eviction leading up to the Christmas period," she told reporters.
Ms Bassini has flagged possibly taking the case to the High Court after considering Friday's judgment, although acknowledged it would leave residents hanging in limbo even longer.
"It's been a really hard fight," she said.
"We've constantly asked for documents, we've been shut out of all the decision-making processes."
The Victorian government argues the towers cannot be refurbished but a parliamentary inquiry found it was impossible to justify the decision due to its refusal to produce all evidence.
R-Coo Tran, founder and leader of 44 Flats United, said the movement was growing and had a warning for the Allan government heading into a state election year in 2026.
"We will continue to fight them at every door, on every floor, of every building, on every estate until they abandon these plans," she said.
Victorian Greens housing spokeswoman Gabrielle de Vietri said the community would stand in front of bulldozers if required.
"This isn't the end of that fight," she said.
Housing Minister Harriet Shing said families deserved homes they could be proud of and accused the Greens of being vocal critics of housing shortages without solutions.
"The families who have called the towers home deserve better than scare campaigns and misinformation," she said.
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