The plane was wrecked after Dovey landed on a grass runway and hit a cherry picker. He was not injured.
The High Court heard Dovey did not have insurance for his aircraft and was entitled to expect that he would be alerted to any hazards by the display director on duty.
Justice Jillian Mallon found Dovey's approach when he came into land was professional and skillful.
"A pilot takes risks when display flying, but one of those should not be that there will be a large stationary object on an available runway," she said.
"I conclude that Mr Dovey was not negligent in adopting the landing technique he did."
Warbirds over Wanaka and the NZDF were set to appeal Justice Mallon's High Court decision in the Court of Appeal in Wellington today, but the case has since been abandoned after notice was filed to the court.
An NZDF spokesperson said the matter had "been settled by the respective insurers of the appellants, and the settlement agreement is subject to confidentiality".
Open Justice spoke with Dovey's lawyer Chris Chapman who confirmed the appeal had been formally abandoned after all parties reached a confidential settlement.
The settlement was reached last week, according to Chapman, and Warbirds over Wanaka and the Attorney General, acting on behalf of the Air Force, filed for abandonment yesterday in the High Court.
Warbirds general manager Ed Taylor also confirmed to Open Justice that the matter had been resolved and didn't wish to make any further comment.
