Northlake Investments Ltd is being taken to the High Court in Invercargill over its covenant which prevents residents objecting to development in the company's Northlake subdivision.
Wanaka Community Supporting Our Northlake Neighbours Inc filed a civil court application for a declaratory order on August 15.
In its statement of claim, the society said the High Court had ''wide jurisdiction'' under the Declaratory Judgments Act 1908 to consider whether the no-objection covenant ''is invalid and/or unlawful''.
The society said that while the courts had upheld ''no-complaints'' covenants before, Northlake's no-objection covenants ''go well beyond what has previously been accepted as valid and/or lawful''.
Also, it said while a covenant preventing objections to an existing lawful activity might well be valid and lawful, Northlake's covenants ''go much further than this''.
''They prevent the residents from objecting to anything, no matter how inappropriate, or great the effects are on them, or how far the activity departs from the scheme promised to the residents ...''
''The society contends that the Northlake Investments Ltd no-objection covenants are contrary to public policy and therefore ... invalid and/or unlawful.''
The society also contends that residents should be able to object to Northlake's proposed hotel in the subdivision, because when they bought their properties, a hotel was not part of the subdivision's master plan.
The Environment Court granted Northlake consent for a 113-room hotel earlier this year.
Society president Niamh Shaw said although the Environment Court had the authority to challenge the validity of the no-objection clauses, ''the no-objection clauses do not permit residents to represent their position in Environment Court without threat of liability for costs''.
Ms Shaw said nobody was holding Northlake Investments to account, and the case was brought by the society on behalf of ''the Northlake residents who are members of the society''.
The society hopes most of its legal fees will be paid for from the Ministry for the Environment's environmental legal assistance fund.
It is being represented by James Gardner-Hopkins, a Wellington-based barrister with extensive experience in resource management, environment, planning and natural resources law, Ms Shaw said.
She believed the case had the potential to change New Zealand case law.
The society has requested the Environment Court put the society's appeal against the proposed hotel on hold until the High Court case is resolved.
A spokeswoman for Northlake said the company had no comment.
