Judges ruled Phillipa Bennett could have no legal complaint about Croydon LBC's stance that she is 'intentionally homeless' and has no right to be re-housed at public expense.
And the judge, sitting at London's Appeal Court with Lord Justice Tuckey, added: 'I hope the council will give sympathetic consideration to the rather unusual circumstances in which Mrs Bennett has found herself homeless'.
Mrs Bennett had since 1991 been a secure tenant of a Lambeth LBC flat in Charters Close, Gipsy Hill. But, in March 2003, she went to live with her sick and elderly mother in Moore Road, Upper Norwood, in order to give her the care she needed.
Her counsel, Iain Colville, told the judges she had done so to ensure that her mother would not have to go into a care home.
Her husband and two children, who at first stayed at Charters Close whilst Mrs Bennett struggled to maintain two households, finally moved to Moore Road in February 2004.
But, in the very same month, Mrs Bennett's mother died unexpectedly, the court heard.
Lord Justice Tuckey said Croydon later ruled that Mrs Bennett had no legal right to remain in her mother's three-bedroom home and that, by giving up her secure tenancy of Charters Close, she had made herself 'intentionally homeless'.
Although Mrs Bennett disputed it, the council said she had given notice to quit Charters Close after her mother's death and that her reason for doing so was that she considered her mother's larger home 'more suitable' for her family than their former council flat.
Dismissing Mrs Bennett's appeal, Lord Justice Tuckey said she had 'burnt her boats' when she surrendered her secure tenancy on the Charters Close flat whilst having no legal right to occupy her mother's home after her death.
Describing her challenge as 'misconceived', the judge said it was clear that the voluntary surrender of her tenancy had been the 'proximate and direct cause of her becoming homeless'.
Mrs Bennett and her family were evicted from Moore Road in April last year and they are currently staying with relatives.
And, despite the court's expressions of sympathy for her, the ruling means Mrs Bennett still bears the stigma of intentional homelessness and has no legal right to a new council home for herself and her family.
STRAND NEWS SERVICE