Five new members had challenged the National Executive Committee (NEC) decision that they could not cast ballots because they joined less than six months before July 12.
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Commentators believe it would benefit Jeremy Corbyn rather than Owen Smith if the 130,000 are able to vote as there are reports that many of those who signed up later are supporters of the Labour leader.
Mr Justice Hickinbottom added that that was the basis upon which the five joined Labour, and the basis of their contract with the party.
They also argued that when the members joined, the Labour website and other communications said they would be “a key part of the team”, and thus eligible to vote in any leadership election.
Labour’s NEC had ruled that party members who joined after 12 January could not vote in the contest.
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And a High Court judge ruled in the Labour leader’s favour – ordering Mr Foster to pay three legal bills for himself, Labour and Mr Corbyn.
Peter Oldham QC, representing the party, argued that the NEC had “specific power” to impose a freeze as party of its role in issuing an election timetable.
“Rather than patronising members and peddling baseless conspiracy theories about “Trotsky entryists”, he should be working with Jeremy to unite our party so that we can get back to campaigning to dislodge this Tory Government, and help elect a Labour government in its place”.
The party has been in turmoil since Britain’s 23 June vote to leave the European Union, with critics of party leader Jeremy Corbyn saying he did not do enough to support the campaign to stay in the bloc and would not be able to win a general election.
The change to the system paved the way for Mr Corbyn’s victory a year ago, with hundreds of thousands of new members and registered supporters signing up to support the left-wing candidate.
The high court has ruled that the Labour Party did not have the right to bar new members from voting in the leadership election.
“This already looked an unequal contest, but this new ruling seems to spell the death knell for Smith’s hopes”, said a spokesman.
For the second time in a month, the High Court has ruled on matter concerning the Labour Party’s leadership contest.
To gain the right to vote, members were given a window of opportunity, between 18 and 20 July, to become “registered supporters” upon payment of an additional fee of £25.
Once again Corbyn and Shadow Chancellor John McDonnell held out an olive branch to the right.
Labour’s leadership battle has intensified as Jeremy Corbyn and Tom Watson entered a war of words over the deputy leader’s claims that “Trotsky entryists” were manipulating young party members.
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Mr Leir said: ” The Labour Party has seen the greatest surge in membership of any party in decades, with people joining to support a process of change in this country – a change that is desperately needed both politically and economically.
