Royalburn Farming Company has appealed to the Environment Court after being declined a resource consent to subdivide more than 100ha on the Crown Terrace into 20 lots.
Company spokesman Hamish Ryan said he had lodged an appeal to the Environment Court this month.
He was declined resource consent by commissioners Trevor Shiels and Gillian MacLeod, who heard the application in a three-day hearing in Queenstown in June and July.
"They did not give a good enough reason for declining the application. They said they weren't against some development, just the level of development," Mr Ryan said.
He hoped the consent could be granted through mediation talks.
He said the company had agreed to reduce the number of lots to 18 during the hearing process.
"We are farmers, not property developers. We want to retain the land as a working farm but we need to diversify the land use to make the farm viable," he said.
In their decision, the commissioners said a smaller scale subdivision with fewer building platforms might be acceptable but were "uncertain" whether any residential development was appropriate in this location.
They said some of the proposed dwellings would be visible from the Crown Range road, Frankton Rd, the Remarkables skifield road and from Coronet Peak skifield.
The proposal would more than double the number of residences in the area.
"The proposal would have an adverse cumulative effect when considered with existing and consented dwellings . . . There would be an inevitable change in the perception of domestication, which we consider would amount to overdomestication," they said.
The plan was to subdivide 111ha of the 482ha farm into 20 lifestyle sections and retain 89ha for farming.
