Lord Justice Henry said the RSPCA prosecution - a test case to establish that a master of foxhounds could be held responsible for the actions of hunt servants - had come "nowhere near" proving its case.
Capt Farquhar, 48, of Acton Turville, Badminton, Avon, had been convicted by North Avon magistrates in September last year under the 1992 Badger Protection Act. He was given a two-year conditional discharge and ordered to pay £4,000 costs.
The High Court upheld argument that Capt Farquhar, having given a lawful instruction, could not be held liable if it was carried out unlawfully.
The case arose out of the blocking off of two setts on National Trust land, the day before a meet, by using hard clay soil, which is not legal. The entrances were damaged and the badgers inside died.