The court has quashed the development permit and ordered the process back to the drawing board. It also said the public was not adequately consulted and more public hearings should be held.
"It was a very technical and complicated deal ... between the city and developer and the public needed more information than what it got," said Nathalie Baker, the lawyer representing the Community Association of New Yaletown.
The city had planned to allow the tower to be built on the edge of the popular green space at Emery Barnes Park, on the site of a city-owned social housing building at 508 Helmcken Street.
In return, Brenhill Developments would give a parcel of land across the street for a new social housing complex at 1099 Richards Street.
However, the association claimed the public was never given enough information about the land swap and is worried about hundreds of new people using the already busy green space.
Developer, City of Vancouver disappointed
Both the developer and the city said they were disappointed with the court's decision.
"We're terribly disappointed with the way the court viewed the process that brought this project to fruition and that the decision has now halted a project already under construction," said a spokesperson for Brenhill Developments in an email.
"The overall project is one that offers many benefits to the people of Vancouver, not the least of which is the 162 new non-market housing units that replace and expand the decrepit Jubilee House that has long provided housing for people in need.
"It also delivers much needed market rental housing in Vancouver's downtown core. It's much easier to attack complex city development approval processes than it is to build affordable housing for those who really need it."
The city said it will review its options including whether there are any grounds for appeal.