The Friendly Bay Society plans to challenge the Waitaki District Council's Forrester Heights subdivision in the High Court - if it can get funding from the Ministry for the Environment.
But council acting chief executive Richard Mabon believes that will be a waste of public money.
Court action has already cost ratepayers more than $11,000.
The society believes the way the council has handled the 23-section residential subdivision on 5.84ha of land on Cape Wanbrow - which is expected to yield $3 million to help pay for the $9.7 million Opera House redevelopment - is unlawful and has already made an unsuccessful attempt at challenging it in the Environment Court.
At the weekend, about 20 society members at its annual general meeting decided to apply to the Ministry for the Environment's environmental legal assistance fund for a grant to ask the High Court for a judicial review of the processes the council followed.
Spokesman Barry Monks yesterday emphasised the society was not opposed to development.
"We just want it to be processed lawfully with appropriate notifications," he said.
The subdivision also depended on the land's reserve status - which the council believes was mistakenly granted in the 1930s - being lifted with the passage of Reserves and Other Lands Disposal Bill, due to go before Parliament.
That would enable the council to develop the subdivision and issue titles for sections.
Mr Monks said, if necessary, the society would make a submission to Parliament's local government select committee, opposing lifting the reserve status if the land was included in the Bill.
The society went to the Environment Court in June seeking a declaration over various aspects of the way the council had processed the subdivision.
The court found it did not have jurisdiction, the society withdrew its application and $3000 in costs was imposed against it.
The issues being raised by the society could only be dealt with by the High Court, it was found.
Mr Monks said the society's annual meeting had decided to apply to the ministry fund for financial assistance to enable it to seek a High Court judicial review.
The fund provides non-profit groups with financial assistance to advocate for environmental issues of public interest in resource management cases.
If funding was obtained, the society would employ a barrister to seek the review under provisions of the Local Government, Reserves and Resource Management Acts.
The issues the society wanted reviewed involved public notification of the subdivision, disposal of a reserve and removal of the reserve's designation over Lookout Point.
"The principal issue we are trying to get across to the public is that Lookout Point land was included and also land below Test St, in the subdivision," he said.
The society had been contacted by Oamaru councillor Peter Garvan to see if the issues could be resolved, and Mr Monks said the society had agreed to this.
Mr Mabon was not surprised, but "terribly disappointed" to hear the society was ready to pursue the matter in the High Court.
