The project involved building a spillway and stopbanks to divert part of the river during floods.
Floodwater will bypass a dog-leg in the river by flowing over a spillway about 300m downstream of the SH10 bridge, across farmland and over a waterfall, finally rejoining the river 650m downstream of Rainbow Falls. On average the farmland will be flooded twice a year for 12 hours at a time.
NRC said the scheme would greatly reduce flood risk for 41 buildings and 108 properties, mostly along Waipapa Rd and Waitotara Drive.
It will also reduce flood levels at Waipapa Landing. However, it will increase flood levels - by 10cm - at some already flood-prone downstream properties, including Quail Ridge, properties on Amokura Drive, Tuatahi Place and Peacock Gardens, and the historic Kerikeri Basin.
The scheme was to have been paid for by a targeted rate over the 4300 properties in the Kerikeri-Waipapa catchment of about $80 per property for 10 years.
In January, NRC advised the court it would no longer proceed with the scheme as originally proposed and that it would surrender the resource consents.
NRC said design work for the scheme was based on evidence that showed increased flooding downstream was likely but would not be significant. Further work indicated those effects had been understated, it said.
NRC said the scheme has not been abandoned but needed to be revisited and re-assessed to see whether it may be re-initiated in the same or a different manner.
Mr Brownlie said his company was keen to help NRC reduce flooding for all residents in and around Kerikeri but certain aspects of the scheme was wrong from the very outset.
He said the proposed scheme would have diverted as much water that went through the Huka Falls through and across his company's property in times of serious flood.
"This would have cut off access for us to most of our property and really stopped us from using the land as we wanted.
"We are pleased that we will receive $37,000 in costs however, it cost us in excess of $60,000 to assess the proposed scheme, attend council hearings and explain our concerns and put forward possible proposals to solve the issues to the council and the court," Mr Brownlie said.