A developer has lodged plans to build 16 townhouses on former Anglican Church land at Mayfield which was the subject of a court battle last year.
The development application relates to land next to heritage-listed St Andrew's Church which the Land and Environment Court ruled last year could be carved off and sold to developers.
The proposed townhouse development by KBA Mayfield Pty Ltd will occupy land which now houses a 1960s-era parish hall, another older hall building and part of a former graveyard.
The Anglican Church of Australia appealed to the court over City of Newcastle's deemed refusal of its subdivision plans.
Documents lodged with the council said the parish halls and former cemetery land were "superfluous" to the needs of the church and rectory.
The council argued subdividing the land would decouple the church and cemetery, breaking the historical association between the two and causing an unacceptable heritage impact.
Commissioner of the Court Tim Horton said in his judgement that the connection between the cemetery and church had been broken when headstones were removed as early as 1950 and when the church sold off the presbytery and part of the cemetery in the 1970s.
"I do not accept that the subdivision imposes any effect upon the heritage significance of the site at all," the commissioner said in his judgement.
Mr Horton imposed easements to provide for stormwater maintenance and repair, another issue raised in court by the council.
