A Queenstown businessman's bid to build a cottage on his Lower Shotover property is headed for the Environment Court.
Phil Dunstan's publicly notified consent application to build the cottage and a garage on his rural general-zoned property in Slope Hill Rd was refused by the Queenstown Lakes District Council last November.
Commissioner Denis Nugent said in his decision the crucial issue was the proposal's effect on the rural character of the road and the wider Wakatipu Basin.
"Adding a further dwelling in a third location would create a density of development on the site similar to that provided for in the rural lifestyle zone.
"That would effectively change the site from a rural site to a rural living site.''
There was a point where development altered an area's character from rural to rural-residential, Mr Nugent said.
"To grant consent to this proposal would have that effect.''
Mr Dunstan told a hearing last November he wanted to live in the cottage.
If the consent was granted, he planned to give two lots to his children so he could live near them.
Six neighbours opposed the application, and one, Val Miller, accused Mr Dunstan of using his control of the local water supply as a lever to discourage neighbours from objecting.
A council planner recommended the application be refused because it would lead to "over-domestication'' and could set a precedent for further development.
Mr Dunstan's notice of appeal, lodged with the Environment Court last month, said the commissioner had erred in his interpretation of provisions of the operative district plan, his conclusions on the weighting of the operative and proposed district plans, his conclusion that approving the consent would create a precedent, and his conclusion that the activity would have adverse direct and cumulative effects on rural character.