In the common law system that's judges' job, to via precedent create law for things that aren't clearly specified in legislation. If the populace/legislature dislike it, then they can pass explicit legislation on the issue, which will override the precedent set by the judge.
Aren't UK-style law systems kind of built upon precedents set by the interpretation of the law by judges? I don't like it either but that's how I've seen the differences explained
I am not a lawyer, but if I recall correctly there are three types of law : statute (what parliament legislates), common law (that which has built up over the centuries as "just the way we expect the law to work" and precedent ("this was unclear at one point but courts down the years have been convinced that what it means is x"). Appeals are usually on the basis that the court has misunderstood or misapplied the law and the outcome of these appeals form the precedents for future cases.
The law exists; the judge didn't make it. But the law is expressed using loose terms that aren't closely-defined, so it falls to the judge to interpret the law within the circumstances of the case.
This case is an appeal; if a judge in an appeal case interprets the law in a particular way, that sets a precedent that should be followed by judges in lower courts, if the circumstances are similar. That's not "making law"; laws here are written to be interpreted by judges, because that's how it works.