Jane Burke, then a 29-year-old student at Blackpool and Fylde College, was about to take part in a keep-fit class when the chairs tumbled onto her, dislocating her knee.
Mrs Burke sued the college and Lancashire County Council as owners of the Andsell Campus building where the accident happened and a County Court judge ruled in her favour in September last year.
But that victory was today snatched from her grasp by Appeal Court judges, Lord Justice Schiemann and Lord Justice Waller, who ruled neither the college, nor the council, could be blamed.
Mrs Burke now faces having to pay the heavy legal costs of the case and must also reimburse a pnds 10,000 'interim payment' she had received after the original County Court ruling.
Lord Justice Waller overturned the earlier ruling that there had been a negligent failure to warn students, all of whom were 18 or older, of the dangers of failing to stack chairs properly.
Although expressing 'some sympathy' for Mrs Burke, the judge said it would have been difficult to forsee that a student would suffer such a serious injury as the 'highly unlikely result' of a stack of chairs falling over.
To give the type of warning that Mrs Burke's lawyers claimed should have been given would have been 'no more than stating the obvious so far as adult students were concerned,' he added.
The judge concluded: 'In our view it would be wrong to hold the defendants liable... and we would allow this appeal.'
Mrs Burke was refused leave to appeal further to the House of Lords but may still petition the Law Lords directly for an appeal hearing.
MEMO: WE REGRET THAT THE COURT DID NOT HAVE AN ADDRESS FOR MRS BURKE
STRAND NEWS SERVICE