His company is applying for resource consent to create four residential lots from the 1.9ha block.
The council's planners opposed the subdivision at the consent hearing on Thursday and Friday.
They said it was on part of a lapsed concept subdivision consent granted to the Duders 11 years ago.
Mr Morgenstern said council officers changed their tune from earlier meetings when they said the concept consent was still alive.
"I signed on the property, went through a long due diligence with Auckland Council which supported everything I was doing, only to find out six months later that they really had no intention of me buying the property.
"So, it's highly disappointing and frustrating."
He said the concept subdivision intended that part of the land would be used to create legal public access from the beach to the public reserve, which the public do not have presently.
Environment lawyer Sue Simons said the council was declining an obvious opportunity to provide an access road to land it had bought for public reserve.
She said the subject of the court case was that the title to the land was encumbered by a requirement that the council would have a right of first refusal to purchase.
"The council has been offered the land many times over recent years between the decision by the vendor to sell and the agreement by the applicant to buy. On all occasions the council has declined.
"Once it became clear that the land was to be purchased by a third party the council sought then to exercise its right to purchase."
The Duder family transferred 148ha to the former Auckland Regional Council for the park but kept some land from the old farm along the edge of Umupuia Beach for future family homes.
Ian Duder said members of the family shared lots in the 2002 concept plan but struggled to get actual council consent to subdivide into house sections.
The fees were so high to keep extending the life of the concept consent that some family members gave up.
One brother sold to the council last year and his sister was given the impression that the council did not want her land.
"The neighbouring properties are now public land and it's not in the public interest that this land should be subdivided into multiple private land lots."
The hearing for the subdivision consent carried on despite the result of the court case and a decision is expected by the end of the year.